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EXHIBIT 10.14
COLLABORATION AGREEMENT
This Collaboration Agreement (the "Agreement") is dated as of February 26,
1999 by and between EXELIXIS PHARMACEUTICALS, INC., a Delaware corporation
having its principal place of business at 000 Xxxxxxxxxxx Xxxxxx, Xxxxx Xxx
Xxxxxxxxx, Xxxxxxxxxx, XXX 00000 ("Exelixis"), and PHARMACIA & UPJOHN AB, a
corporation organized and existing under the laws of Sweden having a place of
business at Xxxxxxxxxxxxxxx 000, X-000 00 Xxxxxxxxx, Xxxxxx ("P&U"), to become
effective on the date specified in Section 13.1 (the "Effective Date").
Exelixis and P&U are sometimes referred to herein individually as a "Party" and
collectively as the "Parties."
Recitals
A. P&U is a multinational health care company that has expertise and
capability in developing and marketing human pharmaceuticals and has research
and development programs in the areas of, inter alia, metabolic syndrome and
Alzheimer's disease.
B. Exelixis is a biotechnology company that has expertise and proprietary
technology relating to genetic model systems, genomics and computational biology
and is applying such technology to discover and validate targets for drug
discovery in a variety of disease areas, including metabolic syndrome and
Alzheimer's disease.
C. P&U and Exelixis desire to establish a collaboration to apply such
Exelixis technology and expertise to the identification and characterization of
biochemical pathways and targets in specific research areas relevant to
metabolic syndrome and Alzheimer's disease, and to provide for the development
and commercialization of novel prophylactic and therapeutic products based on
such research.
D. P&U is making a concomitant investment in Exelixis pursuant to a Stock
Purchase Agreement (the "Stock Purchase Agreement") and a Note Purchase
Agreement (the "Note Purchase Agreement"), each of which is executed concurrent
with the execution of this Agreement.
NOW, THEREFORE, the Parties agree as follows:
1. DEFINITIONS
The following terms shall have the following meanings as used in this
Agreement:
1.1 "Abandoned Target" means a Target not being pursued for the reasons
set forth in Section 4.4.
1.2 "Affiliate" means, with respect to a particular Party, a person,
corporation, partnership, or other entity that controls, is controlled by or is
under common control with such Party. For the purposes of the definition in this
Section 1.2, the word "control" (including, with correlative meaning, the terms
"controlled by" or "under the common control with") means the actual power,
either directly or indirectly through one or more intermediaries, to direct or
cause the direction of the management and policies of such entity, whether by
the ownership of at least fifty percent (50%) of the voting stock of such
entity, or by contract or otherwise. The Parties agree that Artemis
Pharmaceuticals GmbH is an Affiliate of Exelixis except for purposes of Section
13.14.
1.3 "Alzheimer's Disease" means senile dementia associated with
characteristic neuropathology including without limitation amyloid plaques,
neurofibrillary tangles, and atrophy.
1.4 "Annual FTE Rate" means the amount to be paid over one year by P&U to
Exelixis to support one FTE. The Annual FTE Rate will be [ * ] per year for
calendar year 1999. For each subsequent calendar year, this rate will be [ * ]
1.5 "Applicable Field" means the Field of the Research Program in which a
particular Selected Target was identified.
1.6 "Candidate Target" [ * ]
1.7 "Central Nervous System Research" means research concerning [ * ].
1.8 "Collaboration" means all the research-related activities performed
by or on behalf of Exelixis or P&U pursuant to the Research Programs under this
Agreement.
1.9 "Collaboration Compound" means any molecule that (a) has a molecular
weight less than or equal to [ * ], (b) has the ability to inhibit, activate or
otherwise modulate the activity of a Selected Target or its encoded protein and
(c) is discovered, identified or synthesized by or on behalf of P&U or its
Affiliate or sublicensee.
1.10 "Controlled" means, with respect to any gene, protein, compound,
material, Information or intellectual property right, that the Party owns or has
a license to such gene, protein, compound, material, Information or intellectual
property right and has the ability to grant to the other Party access, a license
or a sublicense (as applicable) to such gene, protein, compound, material,
Information or intellectual property right as provided for herein without
violating the terms of any agreement or other arrangements with any Third Party
existing at the time such Party would be first required hereunder to grant the
other Party such access, license or sublicense.
1.11 "Diligent Efforts" means the carrying out of obligations or tasks in
a sustained manner consistent with the efforts a Party devotes to a product or a
research, development or marketing project of similar market potential, profit
potential or strategic value resulting from its own research efforts, based on
conditions then prevailing. Diligent Efforts requires that the Party: (i)
promptly assign responsibility for such obligations to specific employee(s) who
are
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held accountable for progress and monitor such progress on an on-going basis,
(ii) set and consistently seek to achieve specific and meaningful objectives for
carrying out such obligations, and (iii) consistently make and implement
decisions and allocate resources designed to advance progress with respect to
such objectives.
1.12 "Field" means either (a) the Field of Alzheimer's Disease or (b) the
Field of Metabolic Syndrome.
1.13 "Field of Alzheimer's Disease" means all areas of research based on a
mutually acceptable definition of a clinical indication, biochemical pathway or
biological process [ * ].
1.14 "Field of Metabolic Syndrome" means all areas of research based on a
mutually acceptable definition of a clinical indication, biochemical pathway or
biological process [ * ].
1.15 "FTE" means the equivalent of one researcher working full time for or
on behalf of Exelixis for one 12-month period.
1.16 "Genetic Assay" means an in vivo system of elucidating, for the
purpose of Candidate Target identification, the functions of the Genetic Entry
Point and of other genes or gene products in the same or related pathway, such
analysis involving: (a) comparing [ * ] with [ * ], and (b) using such
comparison to determine whether [ * ].
1.17 "Genetic Entry Point" means the gene or gene product that is the
focus of a Genetic Screen or Genetic Assay.
1.18 "Genetic Screen" means a systematic analysis, for the purpose of
Candidate Target identification, of the functions of the Genetic Entry Point and
of other genes or gene products in the same or related pathway, such analysis
involving: [ * ].
1.19 "Homolog" means a gene or gene product that has [ * ] homology to a
Selected Target.
1.20 "Independent Research" means research that is conducted by Exelixis
outside the scope of this Agreement either independently or pursuant to an
agreement with a Third Party that (i) is not in conflict with Article 6 or (ii)
is permitted by Sections 5.3 and 5.4.
1.21 "Information" means information, results and data of any type
whatsoever, in any tangible or intangible form whatsoever, including without
limitation, databases, inventions, practices, methods, techniques,
specifications, formulations, formulae, knowledge, know-how, skill, experience,
test data including pharmacological, biological, chemical, biochemical,
toxicological and clinical test data, analytical and quality control data,
stability data, studies and procedures, and patent and other legal information
or descriptions.
1.22 "Joint Inventions" means any and all inventions, developments,
results, know-how and other Information, and all intellectual property relating
thereto, made jointly by employees or agents of both Parties pursuant to work
conducted in the Research Program.
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1.23 "Joint Management Team" or "JMT" means the committee described in
Section 2.2.
1.24 "Joint Patent Committee" or "JPC" means the committee described in
Section 2.4.
1.25 "Joint Scientific Committee" or "JSC" means one of the committees
described in Section 2.3.
1.26 "Major Market" means the United States, Canada, the United Kingdom,
Japan, France, Germany, Italy, Spain or Sweden.
1.27 "Net Sales" means the amount billed by P&U or its Affiliate or
sublicensee for sales of a Product to a Third Party purchaser, less the
following to the extent actually allowed or incurred with respect to such sales:
(i) discounts, including cash discounts (including quantity discounts), charge-
back payments and rebates granted to managed health care organizations or to
federal, state and local governments (or their respective agencies, purchasers
and reimbursers) or to trade customers, including but not limited to,
wholesalers and chain and pharmacy buying groups (provided that if any such
discounts or reductions are based on sales to the customer of multiple products,
the amount of such discount or reduction that may be allocated to the Products
sold shall be on the basis of a methodology approved by the JMT); (ii) credits
or allowances actually granted upon rejections or returns of Products, including
for recalls or damaged goods; (iii) freight, postage, shipping and insurance
charges actually allowed or paid for delivery of Products, to the extent billed;
and (iv) taxes, duties or other governmental charges levied on, absorbed or
otherwise imposed on sale of Products, including without limitation value-added
taxes, or other governmental charges otherwise measured by the billing amount,
when included in billing, as adjusted for rebates and refunds, and specifically
excluding taxes based on net income of the seller, and all of the foregoing to
the extent calculated in accordance with generally accepted accounting
principles consistently applied throughout the party's organization.
1.28 "Patent" means (i) unexpired letters patent (including inventor's
certificates) which have not been held invalid or unenforceable by a court of
competent jurisdiction from which no appeal can be taken or has been taken
within the required time period, including without limitation any substitution,
extension, registration, confirmation, reissue, re-examination, renewal or any
like filing thereof and (ii) pending applications for letters patent, including
without limitation any continuation, division or continuation-in-part thereof
and any provisional applications.
1.29 "Pre-existing Technologies" means any and all inventions,
developments, results, know-how and other Information, and all intellectual
property relating thereto, made, created or invented by a Party, its employees
or its agents prior to the Effective Date.
1.30 "Product" means any human therapeutic or prophylactic product that
comprises or incorporates a Collaboration Compound, but excluding products where
(i) [ * ] and (ii) [ * ].
1.31 "Regulatory Approval" means any and all approvals (including
supplements, amendments, pre- and post-approvals, pricing and reimbursement
approvals), licenses,
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registrations or authorizations of any national, supra-national (e.g., the
European Commission or the Council of the European Union), regional, state or
local regulatory agency, department, bureau, commission, council or other
governmental entity, that are necessary for the manufacture, distribution, use
or sale of a Product in a regulatory jurisdiction.
1.32 "Research Program" means, with respect to a particular Field, all
current or terminated Research Projects relating to such Field.
1.33 "Research Project" means the planning, execution, and analysis of a
research project focused on a particular area of research within a Field based
on a mutually acceptable definition of a clinical indication, biochemical
pathway or biological process or related clinical indications, biochemical
pathways or biological processes. A Research Project will typically be defined
by [ * ] and will be initiated with [ * ].
1.34 "Research Plan" means the plan that sets forth the research work to
be performed by Exelixis and P&U in the course of a particular Research Program.
1.35 "Research Term" means the period during which research activities of
the Parties under the Collaboration shall be conducted, as set forth in Section
3.2.
1.36 "Selected Target" means a Candidate Target that has been selected as
set forth in Section 4.1. As used in this Agreement, rights and obligations of
the Parties with respect to a particular Selected Target shall also apply to
[ * ].
1.37 "Sole Inventions" means any and all inventions, developments,
results, know-how and other Information, and all intellectual property relating
thereto, made, discovered or developed solely by a Party and its employees or
agents pursuant to work performed in the Collaboration under the Agreement.
1.38 "Target" means any gene or gene product that is identified in the
course of a Research Program and that may include, without limitation, a
Candidate Target, Selected Target or Abandoned Target.
1.39 "Third Party" means any entity other than (i) Exelixis, (ii) P&U or
(iii) an Affiliate of either of them.
1.40 "Third Party Contract Research" means research conducted for the
benefit of the Collaboration, approved and managed by the JMT as set forth in
Section 3.9, and funded by P&U as set forth in Section 7.3.
1.41 "Top 20 Pharmaceutical Company" means a Third Party listed in Exhibit
A, which the Parties agree to revise in good faith as needed during the term of
the Agreement.
2. MANAGEMENT OF THE COLLABORATION
2.1 Overall Management Structure. The Parties agree to establish a
multi-level committee structure to manage and direct the Collaboration and the
relationship of the Parties in pursuing the research and development goals of
this Agreement. The committee structure is intended to facilitate decision
making and management of the various Collaboration activities of the Parties,
and each Party agrees to use good faith, cooperative efforts to facilitate and
assist the
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efforts of such committees. The overall management of the Collaboration shall be
vested in the Joint Management Team (the "JMT"), with responsibility, as further
discussed in Section 2.2, for establishing the strategic direction of the
Collaboration and for managing and directing the research efforts of the Parties
under the Collaboration. The day-to-day management and direction of each
Research Program shall be managed by a Joint Scientific Committee (a "JSC")
dedicated to each such Research Program, and the Joint Scientific Committees
shall report to and be managed by the JMT. In addition, the Parties shall
establish a Joint Patent Committee (the "JPC"), reporting to the JMT, which
shall be responsible for managing and directing the securing of appropriate
intellectual property protection for the Sole Inventions and Joint Inventions
arising from the Collaboration. Each JSC shall cease to exist after its second
meeting after the termination of the Research Term, but the JMT and the JPC
shall continue to meet throughout the term of the Agreement.
2.2 Joint Management Team.
(a) Membership. The Joint Management Team (the "JMT") shall be
composed of six members, three members appointed by each Party. Within 30 days
after the Effective Date, each Party shall appoint three representatives from
its senior management team to the JMT; at least one representative from each
Party shall also be the Party's Head of Research or a mutually agreeable
designate. With the exception of the Party's Head of Research, each Party may
replace its JMT representatives at any time upon written notice to the other
Party. P&U will designate one of its representatives as Chairperson of the JMT.
The Chairperson shall be responsible for scheduling meetings, preparing and
circulating an agenda in advance of each meeting, and preparing and issuing
minutes of each meeting within 30 days thereafter.
(b) Responsibilities. During the term of this Agreement, the JMT
shall meet a minimum of two times per year as provided in Section 2.5. The JMT
shall operate by [ * ] and in accordance with the principles set forth in this
Article 2. It shall determine the overall strategy for the Collaboration and
shall be make all major business and strategic decisions. The JMT shall evaluate
the progress of the Research Programs and monitor compliance with the diligence
provisions set forth in Section 4.2, and it will make the final decisions
regarding: (i) significant modification of a Research Program or Research Plan,
(ii) approval of Third Party Contract Research proposed by a JSC; and (iii)
approval of expenditures proposed by the JPC regarding the management of
Collaboration intellectual property portfolio. To the extent necessary to carry
out its responsibilities, the JMT members shall be granted access to the other
Party's relevant confidential information. In particular, it is expected that
members of the JMT, in assessing modifications to a Research Program, shall be
granted access to higher levels of the proprietary or confidential information
of the other Party than is provided to the other committees or to the employees
of such Party working on the Collaboration. The JMT shall discuss in good faith
and agree on the level of such access that is needed to achieve the goals and
intent of the Parties.
2.3 Joint Scientific Committees.
(a) Membership. For each Research Program, the Parties shall
establish a separate Joint Scientific Committee (a "JSC") composed of four
representatives, two members appointed by each of the Parties. One
representative from each Party on a JSC shall be the
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individual at the Party with primary responsibility for the day-to-day
management and execution of the Research Program. Exelixis' other representative
shall be its Head of Research or such person's designee; P&U's other
representative shall be the person who heads research in the therapeutic area of
the Research Program or such person's designee. Each JSC will report directly to
the JMT and shall take its direction from the JMT. Each Party may replace its
appointed JSC representatives at any time upon written notice to the other
Party. Exelixis shall designate one of its representatives as Chairperson of the
JSC, and P&U shall designate one of its representatives as Vice-Chairperson. The
Chairperson shall be responsible for scheduling meetings and preparing and
circulating an agenda in advance of each meeting. The Vice-Chairperson shall be
responsible for preparing and issuing minutes of each meeting within 30 days
thereafter.
(b) Responsibilities. During the Research Term and for two quarters
thereafter, each JSC shall meet on a quarterly basis as provided in Section 2.5.
Each JSC shall operate by consensus and in accordance with the principles set
forth in this Article 2. It shall be responsible for the planning and execution
of the Research Program. At its meetings, the JSC shall review the progress of
current Research Projects and consider adopting new Research Projects and
modifying or canceling current Research Projects. At the next JMT meeting, the
JSC shall summarize for the JMT the progress of the Research Program since the
last JMT meeting, bring to the attention of the JMT any overarching issues or
significant changes in a Research Program, address any issues raised by the JMT
at its previous meeting, and present Third Party Contract Research proposals, if
any. The JSC shall also decide whether to select a Candidate Target as a
Selected Target pursuant to Section 4.1. Leaders of individual Research Projects
will be encouraged to communicate with the JSC as appropriate to facilitate the
successful execution of their respective Research Projects. In addition, each
JSC will represent the initial forum for conflict resolution regarding the
research under the Collaboration as set forth in Section 2.6.
2.4 Joint Patent Committee. The Joint Patent Committee (the "JPC"), in
consultation with the JMT, will devise a strategy for the protection of
intellectual property arising from the Collaboration. This committee will
consist of one member from each Party's senior management team or the Party's
designated alternate. The P&U representative will serve as the Chairperson of
the JPC. The JPC shall report directly to the JMT. During the term of this
Agreement, the JPC will meet at least once per year, as provided in Section 2.5,
and may hold additional meetings at the request of either Party.
2.5 Meetings. The Parties shall endeavor to schedule meetings of the
JMT, JPC, and the JSCs at least one year in advance. Meetings for the JSCs shall
be held on the same day or consecutive days in New Jersey or, with the consent
of P&U, in San Francisco. When possible, the meetings of the JMT and JPC should
occur at the same location as the JSC meetings, with the JMT meeting occurring
after the meetings of the JSCs and the JPC, if applicable. With the consent of
the representatives of each Party serving on a particular committee, other
representatives of each Party may attend meetings of that committee as nonvoting
observers. A meeting of a committee may be held by audio or video teleconference
with the consent of each Party, provided that at least half of the minimum
number of meetings for that committee shall be held in person. Meetings of a
committee shall be effective only if at least one representative of
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each Party is present or participating. Each Party shall be responsible for all
of its own expenses of participating in the committee meetings.
2.6 Research-Related Dispute Resolution. Any dispute regarding the
research under the Collaboration that may arise during the Research Term shall
be brought to the attention of the applicable JSC, and the JSC shall attempt in
good faith to achieve a resolution. If the JSC is unable to resolve the dispute,
it shall present the dispute to the JMT. If the JMT is unable to resolve the
dispute despite the good faith efforts of its members, then P&U shall have the
authority to make a final decision. This Section 2.6 shall not apply to disputes
regarding the allocation of FTEs following P&U's termination of a Research
Program pursuant to Section 3.5.
2.7 Obligations of Parties. Exelixis and P&U shall provide the JSCs, JPC
and JMT and their authorized representatives with reasonable access during
regular business hours to all records, documents, and Information relating to
the Collaboration which any such committee may reasonably require in order to
perform its obligations hereunder, provided that if such documents are under a
bona fide obligation of confidentiality to a Third Party, then Exelixis or P&U,
as the case may be, may withhold access thereto to the extent necessary to
satisfy such obligation.
2.8 Collaboration Guidelines.
(a) General. In all matters related to the Collaboration, the
Parties shall be guided by standards of reasonableness in economic terms and
fairness to each of the Parties, striving to balance as best they can the
legitimate interests and concerns of the Parties, to further the Research
Programs and to realize the economic potential of the Products.
(b) Independence. Subject to the terms of this Agreement, the
activities and resources of each Party shall be managed by such Party, acting
independently and in its individual capacity. The relationship between Exelixis
and P&U is that of independent contractors and neither Party shall have the
power to bind or obligate the other Party in any manner, other than as is
expressly set forth in this Agreement.
3. RESEARCH PROGRAMS
3.1 Overview. The general goals and intent of the Collaboration are to
apply the Exelixis technology to discovering Candidate Targets that may be
useful as tools for the discovery and development of drugs useful in the
prevention, treatment or cure of Metabolic Syndrome or Alzheimer's Disease. The
Collaboration will consist of two Research Programs, one in the Field of
Metabolic Syndrome and the other in the Field of Alzheimer's Disease. Each
Research Program will involve a number of specific Research Projects, each
focused on a [ * ]. Exelixis hereby covenants that it will apply in its
performance of work under the Research Programs: (a) all of its relevant
technology now existing or developed during the Collaboration (including Third
Party technology as to which Exelixis holds a license permitting its use in the
Research Programs) and (b) any data Controlled by Exelixis, including without
limitation [ * ], useful to the Research Programs.
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3.2 Research Term. The Research Term shall commence on the Effective
Date and shall continue until terminated as set forth in this Section 3.2 or
until the Agreement is terminated pursuant to Section 10.2. The FTE funding
commitments of P&U and Exelixis set forth in Section 3.4 and the payment
obligations of P&U set forth in Sections 7.3 and 7.4 shall remain in force until
the termination of the Research Term. If there are no Selected Targets as of the
termination of the Research Term, this Agreement shall then expire pursuant to
Section 10.1.
(a) Each Party shall have the right, exercisable no later than 30
days prior to the date two and a half years after the Effective Date, to
terminate the Research Term by providing written notification thereof to the
other Party. If a Party decides to terminate the Research Term, such termination
shall be effective on the third anniversary of the Effective Date. If neither
Party decides to terminate the Research Term, such Research Term shall continue
at least until the fifth anniversary of the Effective Date.
(b) If neither Party decides pursuant to Section 3.2(a) to terminate
the Research term, each Party shall have the right, exercisable no later than
30 days prior to the fourth anniversary of the Effective Date, to terminate the
Research Term by providing written notification thereof to the other Party. If a
Party decides to terminate the Research Term, such termination shall be
effective on the fifth anniversary of the Effective Date. If neither Party
decides to terminate the Research Term, such Research Term shall continue at
least until the sixth anniversary of the Effective Date.
(c) Starting with the fifth anniversary of the Effective Date and
continuing on each anniversary for so long as neither Party decided on the
previous anniversary to terminate the Research Term, at each Party shall have
the right, exercisable no later than 30 days prior to that anniversary of the
Effective Date, to terminate the Research Term by providing written notification
thereof to the other Party. If a Party decides to terminate the Research Term,
such termination shall be effective on the next anniversary of the Effective
Date. If neither Party decides to terminate the Research Term, such Research
Term shall continue for at least two years beyond the anniversary associated
with such failure to decide.
(d) If Xxxxxxxx Xxxx ceases to be employed by Exelixis at any time
during the Research Term, Exelixis will use Diligent Efforts to find a
replacement acceptable to P&U. If no replacement acceptable to P&U is identified
within six months of the departure of Xxxxxxxx Xxxx, then P&U shall have the
right to terminate the Research Term by providing written notification thereof
to Exelixis. Such termination shall be effective three months after such
notification is received by Exelixis.
(e) If Third Party technology rights come to the attention of the
Parties after the Effective Date which prevent Exelixis from carrying out the
Research Programs in a practical manner, then P&U shall have the right to
terminate the Research Term on six (6) months advance notice to Exelixis. If
the Third Party technology rights in question apply to a particular Research
Program, but not both, then the Parties shall endeavor to substitute a new
Research Program under Section 3.5 rather than terminate the Research Term. If
the Parties fail to agree upon a new Research Program within four (4) months of
the initiation of such discussions, then P&U shall then have the right to
terminate the Research Term on three (3) months advance notice to Exelixis.
3.3 Research Plans. Initial Research Plans for the Research Programs in
the Field of Metabolic Disease and the Field of Alzheimer's Disease have been
approved by the Parties concurrent with the execution of this Agreement. Each
Research Plan may be amended by the
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applicable JSC, during the course of a particular Research Program, based upon
the results achieved in the Research Program. Any such amendments shall be
reviewed and approved by the JMT, and the amended Research Plan shall thereafter
be in effect.
3.4 FTE Commitments.
(a) For the first three years of the Research Term, P&U shall fund
research under this Agreement for the number of Exelixis FTEs set forth in Table
1. The Parties anticipate that, in the first year of the Research Term, [ * ]
[ * ]
(b) From the third anniversary of the Effective Date until the
termination of the Research Term, there shall be no less than [ * ] FTEs in the
Research Program in Alzheimer's Disease and [ * ] FTEs in the Research Program
in Metabolic Syndrome as determined by the JMT. P&U shall fund [ * ] such FTEs.
(c) At any time during the Research Term, P&U may fund, at the
Annual FTE Rate, up to [ * ] additional FTEs (or more with the consent of
Exelixis) for a minimum commitment of one year (but not more than an aggregate
of [ * ] FTEs), such FTEs to be allocated between the Research Programs at the
discretion of the JMT. Exelixis shall have a reasonable time in which to locate
resources to fill such FTE positions.
3.5 Termination of a Research Program. At any time during the Research
Term after [ * ], P&U may terminate a Research Program by providing written
notice thereof to Exelixis, the JMT and the applicable JSC. Termination of the
Research Program shall be effective [ * ] following such notice, and it shall
have no effect on the total number of FTEs funded by P&U. The Parties shall
mutually agree in writing whether to transfer the FTEs allocated for the
terminated Research Program to (i) current or new Research Project(s) in the
remaining Research Program, (ii) a new Research Program within the field of
Central Nervous System Research or the Field of Metabolic Syndrome or (iii) a
new Research Program in another field (such as aspects of [ * ]) upon such terms
as are mutually agreed by the Parties, such agreement not to be unreasonably
withheld. In no case shall a new Research Project(s) or a new Research Program
be based upon or an extension of Independent Research. If the Parties choose
option (i), then the JMT shall amend the applicable Research Plan to include any
additional Research Projects. If the Parties choose option (ii), then they shall
agree to a new Research Plan and they will in good faith amend the applicable
definitions and the other relevant provisions of this Agreement to conform it to
such changes in research. If the JMT does not receive written, mutually agreed-
upon instructions from the Parties prior to the termination effective date, the
JMT will automatically transfer the FTEs allocated for the terminated Research
Program to one or more current Research Projects in the remaining Research
Program.
3.6 Conduct of Research. The Parties shall use Diligent Efforts to
conduct their respective tasks, as assigned under the Research Plans, throughout
the Collaboration and shall conduct the Collaboration in good scientific manner,
and in compliance in all material respects with the requirements of applicable
laws, rules and regulations and all applicable good laboratory practices to
attempt to achieve their objectives efficiently and expeditiously.
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COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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3.7 Records. Each Party shall maintain complete and accurate records of
all work conducted under the Collaboration and all results, data and
developments made pursuant to its efforts under the Collaboration. Such records
shall be complete and accurate and shall fully and properly reflect all work
done and results achieved in the performance of the Collaboration in sufficient
detail and in good scientific manner appropriate for patent and regulatory
purposes. Each Party shall have the right to review and copy such records of the
other Party at reasonable times to the extent necessary for such Party to
conduct its research or other obligations under the Agreement.
3.8 Reports. During the Research Term, each Party shall report to the
JSCs no less than once per quarter and will periodically submit to the other
Party and the relevant JSC a written progress report summarizing the work
performed under each Research Program in relation to the Research Plan and goals
of the Research Program. The Parties agree that the Information to be delivered
by Exelixis to P&U in these reports shall include, without limitation, sequence
information and associated annotations about targets, but shall not include the
Exelixis Flytag(TM) database or other Exelixis databases generated outside of
the Research Programs.
3.9 Third Party Contract Research. At any time during the Research Term,
a JSC may formulate a proposal for Third Party Contract Research that would
further the goals of the Research Plan for the applicable Field. The JSC shall
present such proposal to the JMT at the next meeting of the JMT and the JMT
shall decide whether to approve such Third Party Contract Research. P&U will
fund such Third Party Contract Research as set forth in Section 7.3. All Third
Party Contract Research shall be managed by the JMT and shall occur pursuant to
contractual arrangements that are mutually agreeable to the Parties and that
allocate intellectual property rights in a manner that is consistent with the
allocation of rights provided for under this Agreement with respect to research
performed by Exelixis under this Collaboration.
3.10 Use of In-Licensed Technology. Attached hereto as Exhibit B is an
identification of all Third Party technology which as of the Effective Date
Exelixis expects to use in the course of the Research Programs (excluding
general use research tools licensed by Exelixis on a nonexclusive basis and not
pertaining specifically to any genes of interest in the Research Programs),
together with the identity of the Third Party which to the best knowledge of
Exelixis is the owner of such technology. Exelixis represents and warrants to
P&U that [ * ]. Exelixis shall maintain [ * ] so long as such technology is
required for its performance of the Research Programs. If Exelixis desires to
apply any additional Third Party technology to its performance of the Research
Programs (again excluding general use research tools of the nature described
above), it shall give prior written notice to the JMT and shall satisfy the JMT
that it holds a valid license thereunder prior to the use of such additional
Third Party technology in a Research Program.
4. SELECTION, PURSUIT AND ABANDONMENT OF TARGETS
4.1 Selection of Targets. Exelixis shall present to the applicable JSC
at its quarterly meeting the data concerning each Candidate Target identified in
the course of a particular Research Program during the previous research period.
At its next quarterly meeting, the JSC shall decide whether to select such
Candidate Target as a Selected Target. During the period between the meeting at
which a Candidate Target is presented by Exelixis and the meeting at
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COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
11.
which the JSC decides whether to select such Candidate Target, P&U may search
for mammalian orthologues of such Candidate Target. No other work may be
performed by or on behalf of P&U or its sublicensees on the Candidate Target
unless and until it is selected by the JSC as a Selected Target. Within [ * ] of
the selection of a Selected Target, P&U shall [ * ]. With respect to each
Selected Target, P&U shall have the rights set forth in Sections 5.1 and 5.4(a)
and the obligations set forth in Section 4.2 and Exelixis shall have the rights
and obligations set forth in Sections 5.3 and 5.4(a).
4.2 Pursuit of Selected Targets. P&U must use good faith Diligent
Efforts to validate Selected Targets, develop assays to assess the activity of
Selected Targets, use assays to discover Collaboration Compounds directed at
particular Selected Targets, develop and commercialize [ * ] Product per
Selected Target, and pay the applicable royalties set forth in Section 7.5.
P&U's diligence obligations under this Section 4.2 for the period prior to the
initiation of an active research and development program for a Collaboration
Compound active against a particular Selected Target will be deemed satisfied if
P&U: (i) develops a screening assay for the activity of a Selected Target and
initiates screening for modulators of the activity of the Selected Target within
[ * ] of the date on which the JSC selected such Selected Target, provided that,
upon reasonable request by P&U, the JMT shall grant up to an additional [ * ]
and (ii) initiates a program of lead optimization and/or medicinal chemistry
around lead compounds active in such assay within [ * ] of the date on which P&U
initiates screening for modulators of the activity of such Selected Target.
4.3 Sharing of Biological Data. P&U shall provide Exelixis with copies of
all data generated by or on behalf of P&U or its Affiliate or sublicensee in the
course of validating a Selected Target, characterizing the biological function
of a Selected Target or identifying other genes or proteins that interact with a
Selected Target. Exelixis may use such data for any purpose other than
developing for use in the Applicable Field products comprising or incorporating
small molecule compounds directed at such Selected Target.
4.4 Target Abandonment.
(a) A Selected Target will become an Abandoned Target if any of the
following circumstances arise: (i) such Target is selected by the applicable JSC
as a Selected Target but P&U fails to [ * ]; (ii) P&U designates it for
abandonment pursuant to Section 4.4(b); (iii) P&U uses a Selected Target for any
purpose other than that permitted in Section 5.1; or (iv) P&U fails to fulfill
its obligations set forth in Section 4.2 with respect to such Selected Target.
P&U shall lose all rights set forth in this Agreement with respect to each
Selected Target that becomes an Abandoned Target hereunder, unless such
abandonment is then the subject of an unresolved dispute that is in the process
of being resolved under the dispute resolution procedures set forth in Section
13.2.
(b) If there are more than [ * ] Selected Targets on [ * ], P&U
shall reduce the number of Selected Targets to [ * ] by designating as Abandoned
Targets a number of Selected Targets equal to the number in excess of [ * ]. If
there are more than [ * ] Selected Targets on [ * ], P&U shall reduce the number
of Selected Targets to [ * ] by designating as Abandoned Targets a number of
Selected Targets equal to the number in excess of [ * ].
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4.5 Targets Other Than Selected Targets. Exelixis shall retain all
rights to any Target that (i) does not fulfill the criteria for a Candidate
Target or (ii) is not selected by the applicable JSC as a Selected Target, and
such Targets shall not be subject to any terms of this Agreement other than
those set forth in Section 5.4(b).
4.6 Records. P&U shall maintain complete and accurate records of all
scientific and development work conducted on Selected Targets, Collaboration
Compounds and Products and all results, data and developments made pursuant to
its research and development efforts under this Agreement. Such records shall be
complete and accurate and shall fully and properly reflect all work done and
results achieved in sufficient detail and in good scientific manner appropriate
for patent and regulatory purposes. Prior to the filing of a New Drug
Application for a particular Product, Exelixis shall have the right to review
and copy the records regarding that Product at reasonable times to the extent
necessary for Exelixis to evaluate P&U's compliance with its diligence
obligations set forth in Section 4.2.
4.7 Reports. Every six months during the term of the Agreement, P&U will
submit to Exelixis and the JMT a written progress report summarizing the
research and development work performed on each Selected Target.
5. LICENSES AND RELATED RIGHTS
5.1 License to P&U. Subject to the terms of this Agreement, Exelixis
hereby grants P&U an exclusive, worldwide, royalty-bearing license (with the
right to sublicense) under the Pre-existing Technologies and Sole Inventions
Controlled by Exelixis and under Exelixis' interest in the Joint Inventions (i)
to use each Selected Target to search for Collaboration Compounds directed at
such Selected Target for activity within the Applicable Field, (ii) to develop,
for use in the Applicable Field, Products comprising or incorporating such
Collaboration Compounds, (iii) to develop, following [ * ], such Product for any
human indication, and (iv) to make, have made, use, sell, offer to sell and have
sold such Products.
5.2 License Limitations. P&U hereby covenants that it will not use a
Selected Target, Collaboration Compound or Product for a purpose other than that
permitted in Section 5.1 except the foregoing restriction shall not prevent P&U
from being able to perform independent research on Collaboration Compounds for
activity against targets other than Selected Targets or Homologs, or to develop,
make, have made, use, sell, offer to sell and have sold products comprising or
incorporating a Collaboration Compound where (i) the only intended use of such
product is due primarily to the activity of such Collaboration Compound against
a target discovered by P&U outside the scope of the Agreement and (ii) such
activity is not the modulation of activity of a Homolog and does not otherwise
directly affect a pathway of the Selected Target against which such
Collaboration Compound is also active. For example, but not by way of
limitation, P&U covenants that (i) it will not use a Selected Target to search
for a Collaboration Compound for incorporation in a Product to be used outside
the Applicable Field, and (ii) prior to its initiation of a clinical trial of a
Product for the Applicable Field, it will not perform preclinical experiments or
conduct clinical trials on that Product for an indication outside the Applicable
Field. Exelixis acknowledges that once P&U has commenced human clinical trials
of a Product, P&U shall thereafter have the right to develop such Product for
any and all indications (including without limitation the pursuit of preclinical
research for the purpose of determining potential additional uses).
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COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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5.3 License to Exelixis.
(a) Selected Targets. P&U hereby grants to Exelixis an exclusive,
worldwide, royalty-free license (with the right to sublicense) under the Sole
Inventions of P&U and under P&U's interest in the Joint Inventions to use each
Selected Target to: (i) search for small molecule compounds directed at such
Selected Target solely for use outside the Applicable Field; (ii) develop, for
use outside the Applicable Field, products comprising or incorporating such
small molecule compounds; (iii) make, have made, use, sell, offer to sell, have
sold and import such products; (iv) develop, make, have made, use, sell, offer
to sell, have sold and import products based on the Selected Target for all
agricultural and non-human applications; and (v) develop, make, have made, use,
sell, offer to sell, have sold and import, for use in any field, any other
products not meeting the definition of a Product, including without limitation
therapeutic protein products (including secreted proteins or peptides and
therapeutic antibodies), antisense products, vaccine products, gene therapy
products or diagnostic products based on the Selected Target.
(b) Abandoned Targets. P&U hereby grants to Exelixis an exclusive,
worldwide, royalty-free license (with the right to sublicense) under the Sole
Inventions of P&U and under P&U's interest in the Joint Inventions to use each
Abandoned Target: (i) to search for small molecule compounds directed at such
Abandoned Target and to develop, make, have made, use, sell, offer to sell, have
sold and import products comprising or incorporating such small molecule
compounds; (ii) to develop, make, have made, use, sell, offer to sell, have sold
and import products based on the Abandoned Target for all agricultural and non-
human applications; and (iii) to develop, make, have made, use, sell, offer to
sell, have sold and import, for use in any field, therapeutic protein products
(including secreted proteins or peptides and therapeutic antibodies), antisense
products, vaccine products, gene therapy products or diagnostic products based
on the Abandoned Target. P&U hereby covenants that it will not develop or
commercialize any compounds isolated with respect to an Abandoned Target and
grants to Exelixis the right of first negotiation for a license to such
compounds. P&U also grants to Exelixis a nonexclusive license to all
intellectual property Controlled by P&U related to the use of assays to screen
for modifiers of an Abandoned Target.
5.4 P&U's Rights of First Negotiation.
(a) Selected Targets. Prior to offering any Third Party the
opportunity to acquire a license to develop and commercialize a [ * ] identified
by Exelixis pursuant to its rights under [ * ]or a [ * ], Exelixis shall provide
P&U with the opportunity to consider whether it wishes to acquire such a
license. P&U shall have [ * ] following such offer in which to inform Exelixis
in writing that it is interested in acquiring such a license. Thereafter, the
Parties shall negotiate in good faith for [ * ] to reach agreement on the terms
of a license agreement which shall be set forth in either an executed license
agreement or an executed legally binding heads of agreement. If P&U fails to
notify Exelixis of its interest or the Parties fail to execute a license
agreement within the applicable period, then P&U shall have no rights with
respect to such use of said Selected Target and Exelixis shall have unrestricted
rights to pursue (without compensation to P&U) these applications of the
Selected Target, including, but not limited to, conducting Independent Research
on said Selected Target and developing or commercializing products
incorporating, based upon or identified using said Selected Target. The
foregoing
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rights shall terminate for each Selected Target [ * ] after the date the JSC
selected that Selected Target.
(b) Targets Not Selected. With respect to a Target that is
presented to the JSC as a Candidate Target but is not selected by the JSC as a
Selected Target, prior to [ * ] wherein Exelixis [ * ] would pursue such Target
with the intent of developing, for use in the Applicable Field, products
incorporating small molecules, Exelixis shall provide P&U with the opportunity
to consider whether it wishes to acquire such a license. P&U shall have [ * ]
following such offer in which to inform Exelixis in writing that it is
interested in acquiring such a license. Thereafter, the Parties shall negotiate
in good faith for [ * ] to reach agreement on the terms of a license agreement
which shall be set forth in either an executed license agreement or an executed
legally binding heads of agreement. If P&U fails to notify Exelixis of its
interest or the Parties fail to execute a license agreement or a legally binding
heads of agreement within the applicable period, then P&U shall have no further
rights with respect to said Target and Exelixis shall have unrestricted rights
to pursue (without compensation to P&U) the Target, including, but not limited
to, conducting Independent Research on said Target and developing or
commercializing products incorporating, based upon or identified using said
Target. The foregoing rights shall terminate for each Target [ * ] after the
date the JSC decided not to select it as a Selected Target.
5.5 Exelixis Undertaking To Grant Necessary Sublicenses. The licenses
granted by Exelixis herein do not include sublicenses under technology licensed
to Exelixis by Third Parties. In the event P&U concludes, during the Research
Term or within three years thereafter, that it is necessary or desirable for P&U
to obtain a sublicense under particular Third Party technology then Controlled
by Exelixis in order to search for Collaboration Compounds directed at a
Selected Target or to develop, manufacture or sell Products comprising or
incorporating such Collaboration Compounds, P&U shall so advise Exelixis and
Exelixis shall grant P&U a sublicense under the Third Party technology in
question, subject to negotiation of a mutually agreeable sublicense agreement.
Such sublicense shall specify the particular targets to be pursued by P&U, shall
[ * ], and shall contain other terms and conditions necessary to constitute the
grant of a valid sublicense. The sublicense to P&U shall automatically terminate
if P&U ceases its discovery, development or commercialization program within the
scope of the sublicense.
6. EXCLUSIVITY
6.1 P&U. Except as provided in this Section 6.1, during the Research
Term, P&U will work exclusively with Exelixis for research, information and
services in the Fields using genetics or molecular biology in model organism
systems. If Exelixis is not willing to provide such research, information or
services or is not capable of initiating such work within six months of a
request by P&U, then P&U may procure such research, information or services from
a Third Party. The exclusivity obligation set forth in this Section 6.1 does not
apply to work performed internally by P&U or pursuant to a pre-existing
collaboration between P&U and a non-profit research or academic institution.
6.2 Exelixis. Except as otherwise provided in Sections 5.3 and 5.4,
during the Research Term Exelixis will not perform Independent Research directed
at [ * ]. Notwithstanding the previous sentence, although Exelixis shall use
Diligent Efforts to maintain exclusivity, in view of the nature of the Exelixis
technology, it is impossible for Exelixis to
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assure exclusivity with respect to the individual elements of data that Exelixis
generates, delivers and licenses to P&U hereunder. Two examples of overlapping
research are presented below to demonstrate the principles by which Exelixis
will resolve such issues:
(a) Exelixis may start Independent Research involving [ * ], and
subsequently discover that the Independent Research involves [ * ]. Under these
circumstances, Exelixis may continue such Independent Research independent of
the Collaboration. If such Independent Research is funded by a Third Party,
separate experiments would be performed for the Collaboration and the
Independent Research, and Exelixis would not share the results of or other
Information concerning the Collaboration with any Third Party involved in the
Independent Research nor would Exelixis share the results of or other
information concerning the Independent Research with P&U or the JMT, JPC or any
of the JSCs. In such case, Exelixis would be free to disclose and license the
results of such Independent Research to such Third Party, provided, however,
that Exelixis would not be entitled to grant any license to a Third Party to use
a target that had been first identified in a Research Program, and had not yet
been designated as an Abandoned Target, to search for small molecules (i.e.,
molecular weight of less than or equal to [ * ]) for use within the Field. Such
Third Party license shall not necessarily restrict such Third Party's
development of a pharmaceutical product once [ * ] (i.e., the Third Party
license may contain provisions comparable to those set forth in Section 5.2 of
this Agreement).
(b) Exelixis may be engaged by a Third Party to identify the target
of a compound under an arrangement whereby the identity of the compound is
unknown to Exelixis. Exelixis will reveal the identity of the target to the
Third Party and the Third Party shall be entitled to use that information for
any purpose. If the target is [ * ], Exelixis will inform the Third Party that,
on account of its exclusivity obligations to another party, Exelixis is unable
to perform further work on this target.
The exclusivity of the license granted to P&U in Section 5.1 shall be subject to
the grant of licenses to Third Parties consistent with paragraphs (a) and (b) of
this Section 6.2. Upon request of the JMT, Exelixis shall consult with the JMT
from time to time regarding its procedures for seeking to avoid overlapping
research activities on behalf of multiple Third Parties.
7. COMPENSATION
7.1 License Fee. P&U shall pay Exelixis a license fee of $5 million as
follows: $3 million on the Effective Date and $2 million on the first
anniversary of the Effective Date. Without limiting the rights of P&U under
Section 10.2, any license fee payments made by P&U to Exelixis pursuant to this
Section 7.1 shall be noncreditable and nonrefundable.
7.2 Equity and Note Purchase. Pursuant to the separate Stock Purchase
Agreement and Note Purchase Agreement entered into concurrent with this
Agreement, P&U shall make a $7.5 million equity investment in Exelixis and shall
purchase a $7.5 million promissory note which shall convert into Exelixis equity
securities upon terms specified therein. The terms of such stock and note
purchase shall be governed exclusively by such other agreements and related
documents executed pursuant thereto.
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7.3 Research Support. During the Research Term, P&U will make quarterly
advance payments to Exelixis equal to one-quarter of the Annual FTE Rate
multiplied by the number of P&U-funded FTEs for that quarter as set forth in
Table 1 and Section 3.4. During the Research Term, P&U will also fund, on an as-
needed basis, up to [ * ] per year of Third Party Contract Research approved by
the JMT pursuant to Section 3.9. Without limiting the rights of P&U under
Section 10.2, any research support payments made by P&U to Exelixis hereunder
shall be noncreditable and nonrefundable.
7.4 Milestone Payments. Within [ * ], P&U shall make the applicable
milestone payment to Exelixis as set forth below. Without limiting the rights of
P&U under Section 10.2, any milestone payments made by P&U to Exelixis hereunder
shall be noncreditable and nonrefundable.
(a) For [ * ] of this Agreement (that is, until [ * ], P&U shall
pay [ * ] for [ * ]. No payment shall be required for [ * ].
(b) Starting with [ * ] of the Research Term and continuing until [
* ], P&U's milestone payment obligations shall be as follows:
(i) If [ * ] and [ * ], P&U shall pay [ * ]. Such milestone
payments shall continue until [ * ]. Thereafter, P&U shall pay [ * ].
(ii) If [ * ] or [ * ], P&U shall pay [ * ] for each Selected
Target.
7.5 Royalty Payments. Exelixis shall receive a running royalty on Net
Sales of Products at the royalty rates stated below. Except as set forth in
Section 7.7, these royalty rates shall not be subject to adjustment or reduction
for any reason.
(a) [ * ] Product. For [ * ], P&U will pay royalties to Exelixis at
the following rates [ * ]:
Annual Net Sales of Product Royalty Rate
--------------------------- ------------
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
(b) Other Products. For each Product other than [ * ], P&U will pay
royalties to Exelixis at the following rates:
Annual Net Sales of Product Royalty Rate
--------------------------- ------------
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
(c) Example. By way of example, if in a particular calendar year, P&U
sells two Products, with one Product having [ * ] and the other Product having
[ * ], then P&U shall make royalty payments to Exelixis during that year
totaling [ * ] with respect to the first Product and [ * ] with respect to the
second Product.
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All royalty payments to Exelixis hereunder shall be noncreditable and
nonrefundable. For the purposes of royalty payments, all dosage forms and
formulations containing the same Collaboration Compound shall be deemed a single
Product. The measure of annual sales set forth in this Section 7.5 shall be the
sum of Net Sales of a particular Product in all countries, and the royalty rate
indicated shall apply to all Net Sales for that Product during the calendar
year.
7.6 Quarterly Payments. All royalties due under Section 7.5 shall be
paid quarterly, on a country-by-country basis, within [ * ] of the end of the
relevant quarter. Royalties shall be calculated for each of the first three
calendar quarters of a calendar year on the basis of the royalty rate actually
earned in the previous calendar year. (For the first calendar year of sales
under this Agreement, the royalty rate to be used for purposes of royalty
payments for the first three calendar quarters shall be [ * ].) At the end of
the calendar year, P&U shall calculate the royalties due for the year as a
whole, using the actual royalty rate applicable based on that year's sales, and
shall pay to Exelixis all royalties due for that year, less amounts previously
paid in the first three quarterly payments.
7.7 Term of Royalties. Exelixis' right to receive royalties under
Section 7.5 shall expire on a country-by-country basis upon the later of (i)
fifteen years from the first commercial sale of such Product in such country,
or (ii) expiration of the last to expire Patent in such country [ * ]. If (ii)
occurs prior to (i), then P&U's royalty payments under Section 7.5 shall be
[ * ] for the remainder of such fifteen-year period following the expiration of
such last to expire Patent.
7.8 Royalty Payment Reports. All royalty payments under this Agreement
shall be made to Exelixis or its designee quarterly within [ * ] following the
end of each calendar quarter for which royalties are due. Each royalty payment
shall be accompanied by a statement stating the number, description, and
aggregate Net Sales, by country, of each Product sold during the relevant
calendar quarter.
7.9 Payment Method. All payments due under this Agreement to Exelixis
shall be made by bank wire transfer in immediately available funds to an account
designated by Exelixis. All payments hereunder shall be made in U.S. dollars.
7.10 Taxes. Exelixis shall pay any and all taxes levied on account of all
payments it receives under this Agreement. If laws or regulations require that
taxes be withheld, P&U will (i) deduct those taxes from the remittable payment,
(ii) pay the taxes to the proper taxing authority, and (iii) send evidence of
the obligation together with proof of tax payment to Exelixis within 60 days
following that tax payment.
7.11 Blocked Currency. In each country where the local currency is
blocked and cannot be removed from the country, royalties accrued in that
country shall be paid to Exelixis in the country in local currency by deposit in
a local bank designated by Exelixis, unless the Parties otherwise agree.
7.12 Sublicenses. In the event P&U grants licenses or sublicenses to
others to sell Products which are subject to royalties under Section 7.5, such
licenses or sublicenses shall include an obligation for the licensee or
sublicensee to account for and report its sales of Products on the same basis as
if such sales were Net Sales by P&U, and P&U shall pay to
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Exelixis, with respect to such sales, royalties as if such sales of the licensee
or sublicensee were Net Sales of P&U.
7.13 Foreign Exchange. Conversion of sales recorded in local currencies
to U.S. dollars will be performed in a manner consistent with P&U's normal
practices used to prepare its audited financial statements for internal and
external reporting purposes, which uses a widely accepted source of published
exchange rates.
7.14 Records; Inspection. P&U shall keep complete, true and accurate
books of account and records for the purpose of determining the payments to be
made under this Agreement. Such books and records shall be kept for at least
three years following the end of the calendar quarter to which they pertain.
Such records will open for inspection during such three year period by
independent accountants, solely for the purpose of verifying payment statements
hereunder. Such inspections shall be made no more than once each calendar year,
at reasonable time and on reasonable notice. Inspections conducted under this
Section 7.14 shall be at the expense of Exelixis, unless a variation or error
producing an increase exceeding 5% of the royalty amount stated for any period
covered by the inspection is established in the course of such inspection,
whereupon all costs relating to the inspection for such period and any unpaid
amounts (plus interest) that are discovered will be paid promptly by P&U.
8. INTELLECTUAL PROPERTY
8.1 Ownership.
(a) Each Party shall own the entire right, title and interest in and
to any and all of its Pre-existing Technologies, and Patents covering such Pre-
existing Technologies.
(b) Each Party shall own the entire right, title and interest in and
to any and all of its Sole Inventions, and Patents covering such Sole
Inventions. P&U and Exelixis shall each own an undivided one-half interest in
and to any and all Joint Inventions and Patents and other intellectual property
rights claiming or covering or appurtenant to such Joint Inventions (the "Joint
Patents"), with inventorship to be determined under the patent laws of the
United States. P&U and Exelixis as joint owners each shall have the right to
grant licenses under such Joint Patents, but only to the extent as provided for
in this Agreement.
8.2 Disclosure. Each Party shall submit a written report to the JPC
within 60 days of the end of each quarter describing any Sole Invention or Joint
Invention arising during the prior quarter in the course of the Collaboration
which it believes may be patentable. The JPC, in consultation with the JMT,
shall decide whether to file a patent application for a Joint Invention, as
discussed in Section 8.3(b).
8.3 Patent Prosecution and Maintenance; Abandonment.
(a) Pre-existing Technologies. Each Party shall retain control over
and bear all expenses associated with the filing, prosecution and maintenance of
all Patents claiming its Pre-existing Technologies.
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(b) Sole Inventions and Joint Inventions. The JPC shall establish
the patent strategy for all Joint Inventions arising from the Collaboration.
Each Party shall direct the filing, prosecution and maintenance of all Patents
covering its Sole Inventions consistent with such strategy. The JPC shall
supervise and direct the filing, prosecution and maintenance of all Patents
covering Joint Inventions. The JPC shall provide each Party with (i) drafts of
any new patent application that covers a Joint Invention prior to filing that
application, allowing adequate time for review and comment by the Party if
possible; provided, however, the JPC shall not be obligated to delay the filing
of any patent application; and (ii) copies of all correspondence from any and
all patent offices concerning patent applications covering Joint Inventions and
an opportunity to comment on any proposed responses, voluntary amendments and
submissions of any kind to be made to any and all such patent offices. P&U shall
bear the expenses associated with the filing, prosecution (including any
interferences, reissue proceedings and reexaminations) and maintenance of
Patents covering [ * ]. P&U may elect not to pay any such costs and expenses
with respect to a Patent covering [ * ], provided that P&U notifies Exelixis not
less than two months before any relevant deadline. If Exelixis assumes the
expenses associated with the Patent, Exelixis will [ * ].
8.4 Enforcement of Patent Rights.
(a) Except at set forth in this Section 8.4, each Party shall have
the sole right, but not the obligation, to institute, prosecute or control any
action or proceeding with respect to infringement by a Third Party of one or
more issued Patents covering the Party's Pre-existing Technologies.
(b) At any time during the Research Term, if either Party becomes
aware of [ * ] that is performed by a Third Party commercial entity [ * ] and
that appears to utilize [ * ], such Party shall inform the other Party in
writing within thirty (30) days after having knowledge of such research.
Following consultation within thirty (30) days of such notice, the following
conditions shall apply:
(i) If the [ * ] is being performed [ * ], neither Party shall
have any obligation to take any action with respect to such research. If either
Party believes it has a basis for a suit against such Third Party arising from
such research, it may proceed on its own accord and at its sole expense.
(ii) [ * ] Exelixis shall retain the right to grant sublicenses
[ * ] under the [ * ] technology owned or Controlled by it under the following
circumstances:
(1) No single sublicensee shall be entitled to have more
than [ * ] persons at any time (measured on an FTE basis) performing [ * ]
within [ * ];
(2) Each such sublicense shall prohibit the sublicensee
from performing [ * ];
(3) Exelixis shall not initiate any new discussions with
any Third Party regarding a sublicense [ * ] until [ * ] after the Effective
Date;
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(4) Exelixis may grant a sublicense [ * ] to the Third
Party with which Exelixis entered negotiations for a sublicense prior to the
Effective Date, provided such sublicensee would not thereby be permitted to
conduct [ * ] until at least [ * ] after the Effective Date; and
(5) Prior to the grant by Exelixis of any sublicense that
fulfills the criteria set forth in Section 8.4(b)(ii)(1)-(4), Exelixis shall
inform the JMT of its intent to grant such a sublicense, provided that Exelixis
shall not be required to identify the intended sublicensee and that the JMT
shall not have any right to interfere with the grant of such a sublicense by
Exelixis.
Following [ * ], Exelixis may freely grant sublicenses for [ * ].
(iii) If the [ * ] in question is being performed [ * ], then
Exelixis, if requested by P&U, shall [ * ] use Diligent Efforts to stop the
conduct of such [ * ] including, if necessary, the commencement and prosecution
of litigation against [ * ] in accordance with the applicable Federal Rules of
Civil Procedure. Litigation commenced under this Section 8.4(b)(iii) shall be [
* ], provided that [ * ]. Any recovery from such litigation shall be applied
first to reimburse each Party for its out-of-pocket costs of the litigation, and
the balance shall be [ * ]. Following consultation with P&U, Exelixis may end
such litigation at any time but Exelixis shall not consent to a settlement of
such dispute in a manner that permits [ * ], without the consent of P&U, except
for the grant of a license permitted under Section 8.4(b)(ii). This Section
8.4(b)(iii) shall expire [ * ], at which point Exelixis shall have exclusive
control over any litigation that previously commenced pursuant to this Section
8.4(b)(iii).
(iv) If the [ * ] in question is being performed [ * ], then
Exelixis, upon written request by P&U, shall [ * ], use Diligent Efforts to stop
the conduct of such commercial research within the Fields and, if necessary and
requested in writing by P&U, shall bring litigation in accordance with the
applicable Federal Rules of Civil Procedure against such Third Party to stop the
[ * ]. Such litigation shall be managed by Exelixis using outside counsel
approved by P&U. Prior to the initiation of a litigation under this Section
8.4(b)(iv), the Parties must agree to a budget for such litigation that the
outside counsel selected as lead counsel deems a reasonable budget. [ * ]
responsible for all expenses incurred during such litigation (including
reimbursement of [ * ] within 30 days after submission of each invoice together
with reasonable supporting documentation) not in excess of such budget. If [ * ]
becomes aware at any time that the litigation expenses are likely to exceed such
budget, it shall notify [ * ] and provide [ * ] with the opportunity to approve
an increased budget. [ * ] shall be responsible for all expenses incurred during
such litigation that are in excess of the increased budget or, if no increased
budget is approved by [ * ], the original budget. Any recovery shall be applied
first to reimburse each Party for its out-of-pocket costs of the litigation, and
the balance shall be [ * ]. If such recovery is [ * ], then such recovery shall
be [ * ]. P&U shall also indemnify and hold harmless Exelixis for any costs or
losses arising from claims brought against it by the Third Party in the course
of litigation commenced under this Section 8.4(b)(iv), except to the extent
Exelixis had been aware of a factual basis for counterclaims from the Third
Party which it had failed to bring to the attention of P&U prior to the
commencement of the suit. Exelixis shall have the right to be represented by
counsel of its choice and to control its defense of such claims. If Exelixis
continues a litigation initiated under this Section 8.4(b)(iv) despite
instructions from P&U to end
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such litigation, then, provided the Third Party in such litigation did not
refuse to sign a mutual release in which no party to the litigation was required
to provide another party with monetary or other compensation, Exelixis shall
indemnify and hold harmless P&U for any costs or losses arising from claims
brought against it by the defendant(s) in the course of such litigation and any
recovery from such litigation shall be for the sole benefit of Exelixis.
(v) As used above, a [ * ] shall mean a [ * ]. This Section
8.4(b) shall have no effect with respect to research being conducted by non-
commercial entities, or being conducted solely [ * ], or being conducted [ * ].
Any litigation to enforce patents Controlled by Exelixis by reason of license
agreements shall be subject to the terms and conditions of such license
agreements, including without limitation rights of the licensor to conduct or to
consent to such litigation.
(c) If any issued Patent covering [ * ] is infringed by Third Party
activity that [ * ], then Exelixis shall have the primary right, but not the
obligation, to institute, prosecute or control any action or proceeding with
respect to such infringement by counsel of its own choice and P&U shall have the
right to participate in such action and to be represented by counsel of its own
choice. If Exelixis fails to bring an action or proceeding within [ * ] after
having knowledge of that infringement, then P&U shall have the right, but not
the obligation, to bring and control any such action by counsel of its own
choice, and Exelixis shall have the right to participate in such action and to
be represented by counsel of its own choice.
(d) If either Party becomes aware of any Third Party activity that
infringes an issued Patent covering [ * ], then that Party shall give prompt
written notice to the other Party within thirty (30) days after having knowledge
of such infringement. P&U shall have the primary right, but not the obligation,
to institute, prosecute or control any action or proceeding with respect to such
infringement by counsel of its own choice and Exelixis shall have the right to
participate in such action and to be represented by counsel of its own choice.
If P&U fails to bring an action or proceeding within a period of [ * ] after
such notice, then Exelixis shall have the right, but not the obligation, to
bring and control any such action by counsel of its own choice, and P&U shall
have the right to participate in such action and to be represented by counsel of
its own choice.
(e) If either Party brings any such action or proceeding hereunder,
the other Party agrees to be joined as a party plaintiff and to give the first
Party reasonable assistance and authority to control, file and prosecute the
suit as necessary. Except [ * ], each Party shall bear its own costs and
expenses for any action or proceeding brought under this Section 8.4. Any
damages or other monetary awards recovered shall be applied first to reimburse
the reasonable costs and expenses of the Parties in connection with such
litigation, and except [ * ], the balance shall be retained by the Party which
controlled the litigation. No settlement or consent judgment or other voluntary
final disposition of a suit under Section 8.4(c) or 8.4(d) may be entered into
without the [ * ].
8.5 Defense of Third Party Claims.
(a) If a claim is brought by a Third Party that any activity related
to the Collaboration or a Product infringes the intellectual property rights of
such Third Party, each
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Party will give prompt written notice to the other Party of such claim. If the
Third Party claim arises from Exelixis' activities under the Collaboration,
Exelixis shall control and bear the expense of its own defense and, except as
set forth in Section 8.5(b), Exelixis shall defend, indemnify and hold harmless
P&U, which shall include costs or judgments whether for money or equitable
relief, and reasonable legal expenses and reasonable attorney's fees. Exelixis
shall not enter into a settlement agreement with such Third Party without the
written consent of P&U, which shall not be unreasonably withheld. If the Third
Party claim arises from P&U's activities under the Agreement or from a Product,
P&U shall control and bear the expense of its own defense and P&U shall defend,
indemnify and hold harmless Exelixis, which shall include costs or judgments
whether for money or equitable relief, and reasonable legal expenses and
reasonable attorney's fees. P&U shall not enter into a settlement agreement with
such Third Party without the written consent of Exelixis, which shall not be
unreasonably withheld.
(b) The indemnity obligation of Exelixis under Section 8.5(a)
shall not apply to alleged infringement of Third Party technology rights by
Exelixis in the course of performing work under this Agreement where (i) prior
to the conduct of such work Exelixis submitted to the JMT a written description
of the Third Party technology in question and the work that Exelixis proposed to
conduct, (ii) the JMT approved Exelixis' conduct of such work, and (iii) the
alleged infringement arose by reason of such work. In such case, each Party
shall be responsible for its own defense of such Third Party claims, at its own
expense and without indemnification by the other Party. In any event, neither
Party shall be required to conduct any work under this Agreement which it
believes may infringe Third Party rights. In the event Third Party rights
effectively prevent Exelisis from carrying out the Research Programs in a
practical manner, P&U shall have the right to terminate the Research Term
pursuant to Section 3.2(e). In the event the Third Party claim arises from the
manufacture, sale or use of a Product by P&U or its licensee, the indemnity
obligations of P&U under Section 8.5(a) shall apply, and Exelixis shall not have
any indemnity obligation to P&U in respect of such claims.
9. CONFIDENTIALITY
9.1 Nondisclosure of Confidential Information. All Information disclosed
by one Party to the other Party pursuant to this Agreement shall be
"Confidential Information." The Parties agree that during the term of this
Agreement, and for a period of five years after this Agreement expires or
terminates, a Party receiving Confidential Information of the other Party will
(i) maintain in confidence such Confidential Information to the same extent such
Party maintains its own proprietary industrial information of similar kind and
value (but at a minimum each Party shall use commercially reasonable efforts),
(ii) not disclose such Confidential Information to any Third Party without prior
written consent of the other Party, except for disclosures made in confidence to
any Third Party pursuant to Third Party Contract Research or other arrangements
approved by the JMT, and (iii) not use such Confidential Information for any
purpose except those permitted by this Agreement.
9.2 Exceptions. The obligations in Section 9.1 shall not apply with
respect to any portion of the Confidential Information that the receiving Party
can show by competent written proof:
(a) Is publicly disclosed by the disclosing Party, either before or
after it is disclosed to the receiving Party hereunder; or
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(b) Was known to the receiving Party, without obligation to keep it
confidential, prior to disclosure by the disclosing Party; or
(c) Is subsequently disclosed to the receiving Party by a Third
Party lawfully in possession thereof and without obligation to keep it
confidential; or
(d) Has been published by a Third Party; or
(e) Has been independently developed by the receiving Party without
the aid, application or use of Confidential Information.
9.3 Authorized Disclosure. A Party may disclose the Confidential
Information belonging to the other Party to the extent such disclosure is
reasonably necessary in the following instances:
(a) Filing or prosecuting Patents relating to Sole Inventions, Joint
Inventions or Products;
(b) Regulatory filings;
(c) Prosecuting or defending litigation;
(d) Complying with applicable governmental regulations; and
(e) Disclosure, in connection with the performance of this
Agreement, to Affiliates, sublicensees, research collaborators, employees,
consultants, or agents, each of whom prior to disclosure must be bound by
similar obligations of confidentiality and non-use at least equivalent in scope
to those set forth in this Article 9.
The Parties acknowledge that the terms of this Agreement shall be treated as
Confidential Information of both Parties. Such terms may be disclosed by a
Party to investment bankers, investors, and potential investors, each of whom
prior to disclosure must be bound by similar obligations of confidentiality and
non-use at least equivalent in scope to those set forth in this Article 9. In
addition, a copy of this Agreement may be filed by Exelixis with the Securities
and Exchange Commission in connection with any public offering of Exelixis
securities. In connection with any such filing, Exelixis shall endeavor to
obtain confidential treatment of economic and trade secret information.
In any event, the Parties agree to take all reasonable action to avoid
disclosure of Confidential Information except as permitted hereunder.
9.4 Termination of Prior Agreements. This Agreement supersedes the
Mutual Nondisclosure Agreement between Exelixis and P&U dated October 8, 1997
and the Mutual Nondisclosure Agreement between Exelixis and Pharmacia & Upjohn,
Inc. dated July 15, 1998. All Information exchanged between the Parties under
those earlier Agreements shall be deemed Confidential Information and shall be
subject to the terms of this Article 9 and shall be included within the
definition of Pre-existing Technologies.
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9.5 Publicity. The Parties agree that the public announcement of the
execution of this Agreement shall be substantially in the form of the press
release attached as Exhibit C. Any other publication, news release or other
public announcement relating to this Agreement or to the performance hereunder,
shall first be reviewed and approved by both Parties; provided, however, that
any disclosure which is required by law as advised by the disclosing Party's
counsel may be made without the prior consent of the other Party, although the
other Party shall be given prompt notice of any such legally required disclosure
and to the extent practicable shall provide the other Party an opportunity to
comment on the proposed disclosure.
9.6 Publications. Neither Party shall publish or present the results of
studies carried out under this Agreement without the opportunity for prior
review by the other Party. Subject to Section 9.3, each Party agrees to provide
the other Party the opportunity to review any proposed abstracts, manuscripts or
presentations (including verbal presentations) which relate to any Selected
Target or Product at least 30 days prior to its intended submission for
publication and agrees, upon request, not to submit any such abstract or
manuscript for publication until the other Party is given a reasonable period of
time to secure patent protection for any material in such publication which it
believes to be patentable. Both Parties understand that a reasonable commercial
strategy may require delay of publication of information or filing of patent
applications. The Parties agree to review and consider delay of publication and
filing of patent applications under certain circumstances. The JPC will review
such requests and recommend subsequent action. Neither Party shall have the
right to publish or present Confidential Information of the other Party which is
subject to Section 9.1. Nothing contained in this Section 9.6 shall prohibit the
inclusion of information necessary for a patent application, except for
Confidential Information of the nonfiling Party, provided the nonfiling Party is
given a reasonable opportunity to review the information to be included prior to
submission of such patent application. Any disputes between the Parties
regarding delaying a publication or presentation to permit the filing of a
patent application shall be referred to the JMT.
10. TERM AND TERMINATION
10.1 Term. This Agreement shall become effective on the Effective Date
and shall remain in effect until the earlier of: (i) the time, not prior to the
expiration of the Research Term, at which there are no Selected Targets and (ii)
the expiration of the last royalty payment obligation with respect to any
Product, as provided in Section 7.7. Termination of the Research Term shall not
constitute termination of this Agreement unless no Selected Targets then exist.
10.2 Termination for Material Breach.
(a) If either Party believes that the other is in material breach
of this Agreement (including without limitation any material breach of a
representation or warranty made in this Agreement), then the non-breaching Party
may deliver notice of such breach to the other Party. In such notice the non-
breaching Party shall identify the actions or conduct that such Party would
consider to be an acceptable cure of such breach. The allegedly breaching Party
shall have [ * ] to either cure such breach or, if cure cannot be reasonably
effected within such [ * ] period, to deliver to the other Party a plan for
curing such breach which is reasonably sufficient to effect a cure. Such a plan
shall set forth a program for achieving cure as rapidly as
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practicable. Following delivery of such plan, the breaching Party shall use
Diligent Efforts to carry out the plan and cure the breach.
(b) If the Party receiving notice of breach fails to cure such
breach within the [ * ] period, or the Party providing the notice reasonably
determines that the proposed corrective plan or the actions being taken to carry
it out is not commercially practicable, the Party originally delivering the
notice may declare a breach hereunder upon [ * ] advance written notice.
(c) If a Party gives notice of termination under this Section 10.2
and the other Party disputes whether such notice was proper, then the issue of
whether this Agreement has been terminated shall be resolved in accordance with
Section 13.2. If as a result of such dispute resolution process it is determined
that the notice of termination was proper, then such termination shall be deemed
to have been effective [ * ] following the date of the notice of termination. If
as a result of such dispute resolution process it is determined that the notice
of termination was improper, then no termination shall have occurred and this
Agreement shall have remained in effect.
10.3 Effect of Termination; Survival.
(a) In the event of termination of this Agreement for any reason
other than material breach pursuant to Section 10.2, the following provisions of
this Agreement shall survive: Article 1, Article 4 (except Section 4.1), Article
5, Article 8, Article 9, Section 11.3, Article 12 and Article 13.
(b) In the event of termination of this Agreement pursuant to
Section 10.2, the provisions of this Agreement referenced in Section 10.3(a)
shall survive, provided, however, that any licenses granted under this Agreement
in favor of the breaching Party shall terminate. In such case, the non-breaching
Party shall continue to hold the licenses granted hereunder, subject to the
royalties set forth herein.
(c) In any event, termination of this Agreement shall not relieve
the Parties of any liability which accrued hereunder prior to the effective date
of such termination nor preclude either Party from pursuing all rights and
remedies it may have hereunder or at law or in equity with respect to any breach
of this Agreement nor prejudice either Party's right to obtain performance of
any obligation.
11. REPRESENTATIONS AND COVENANTS
11.1 Mutual Authority. Exelixis and P&U each represents and warrants to
the other that (i) it has the authority and right to enter into and perform this
Agreement and (ii) its execution, delivery and performance of this Agreement
will not conflict in any material fashion with the terms of any other agreement
to which it is or becomes a party or by which it is or becomes bound. Exelixis
represents and warrants that [ * ].
11.2 Rights in Technology. As of the Effective Date, each of Exelixis and
P&U has sufficient right in and to its Pre-existing Technologies, free and clear
of any liens or encumbrances, to grant the rights set forth in this Agreement.
During the term of this
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Agreement, each Party will use Diligent Efforts not to diminish the rights under
its Pre-existing Technologies, Sole Inventions or Joint Inventions granted to
each other herein, including without limitation by not committing or permitting
any acts or omissions which would cause the breach of any agreements between
itself and Third Parties which provide for intellectual property rights
applicable to the development, manufacture, use or sale of Products. Each Party
agrees to provide promptly the other Party with notice of any such alleged
breach. As of the Effective Date, each Party is in compliance in all material
respects with any aforementioned agreements with Third Parties.
11.3 Performance by Affiliates. The Parties recognize that each may
perform some or all of its obligations under this Agreement through Affiliates,
provided, however, that each Party shall remain responsible and be guarantor of
the performance by its Affiliates and shall cause its Affiliates to comply with
the provisions of this Agreement in connection with such performance. In
particular, if any Affiliate of a Party participates in research under this
Agreement or with respect to Collaboration Compounds, (i) the restrictions of
this Agreement which apply to the activities of a Party with respect to Selected
Targets and Collaboration Compounds shall apply equally to the activities of
such Affiliate, and (ii) the Party affiliated with such Affiliate shall assure,
and hereby guarantees, that any intellectual property developed by such
Affiliate shall be governed by the provisions of this Agreement (and subject to
the licenses set forth in Article 5) as if such intellectual property had been
developed by the Party. Notwithstanding the foregoing, [ * ] shall not apply to
Artemis Pharmaceuticals GmbH ("Artemis"). Prior to the performance of any work
under the Collaboration by Artemis, Exelixis shall enter into a license
agreement with Artemis providing for P&U to receive rights under resulting
Artemis discoveries consistent with the terms of this Agreement, which license
agreement shall be in a form reasonably acceptable to P&U.
11.4 [ * ]. Except as disclosed to P&U, Exelixis represents and warrants
that, [ * ].
11.5 [ * ]. Exelixis represents and warrants that, [ * ].
12. INDEMNIFICATION AND LIMITATION OF LIABILITY
12.1 Indemnification.
(a) P&U hereby agrees to defend and hold harmless Exelixis and its
agents and employees from and against any and all suits, claims, actions,
demands, liabilities, expenses and/or loss, including reasonable legal expenses
and reasonable attorneys' fees ("Losses") resulting directly or indirectly from
the manufacture, use, handling, storage, sale or other disposition of chemical
agents, Selected Targets, Collaboration Compounds or Products by P&U or its
Affiliates, agents or sublicensees except to the extent such Losses result from
the negligence or wrongdoing of Exelixis.
(b) In the event that Exelixis is seeking indemnification under
Section 12.1(a), it shall inform P&U of a claim as soon as reasonably
practicable after it receives notice of the claim, shall permit P&U to assume
direction and control of the defense of the claim (including the right to settle
the claim solely for monetary consideration), and shall cooperate as requested
by P&U (at the expense of P&U) in the defense of the claim.
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12.2 Limitation of Liability. EXCEPT AS SPECIFICALLY PROVIDED IN SECTION
12.1, IN NO EVENT SHALL EITHER PARTY, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS
OR AFFILIATES BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL,
SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, WHETHER BASED UPON A CLAIM OR
ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT, OR
OTHERWISE, ARISING OUT OF THIS AGREEMENT. For clarification, the foregoing
sentence shall not be interpreted to limit or to expand the express rights
specifically granted in the sections of this Agreement.
13. MISCELLANEOUS
13.1 Effective Date. This Agreement shall become effective upon the
closing of the purchase by P&U of (i) 2,500,000 shares of Exelixis Series D
Preferred Stock pursuant to the Stock Purchase Agreement and (ii) a $7.5 million
promissory note pursuant to the Note Purchase Agreement. The date on which this
Agreement becomes effective under this Section 13.1 shall be the "Effective
Date." If for any reason such closings do not occur on or before March 1, 1999,
then this Agreement shall become automatically null and void, and shall have no
further force or effect, without any further action by either Party.
13.2 Dispute Resolution. In the event of any controversy or claim arising
out of, relating to or in connection with any provision of this Agreement, other
than a dispute addressed in Section 2.6 or Section 13.4, the Parties shall try
to settle their differences amicably between themselves first, by referring the
disputed matter to the respective heads of research of each Party and, if not
resolved by the research heads, by referring the disputed matter to the
respective Chief Executive Officers of each Party. Either Party may initiate
such informal dispute resolution by sending written notice of the dispute to the
other Party, and, within 20 days after such notice, such representatives of the
Parties shall meet for attempted resolution by good faith negotiations. If such
personnel are unable to resolve such dispute within 30 days of their first
meeting of such negotiations, either Party may seek to have such dispute
resolved in any United States federal court of competent jurisdiction and
appropriate venue. The Parties hereby consent to jurisdiction in the United
States federal courts. If, notwithstanding such consent, United States federal
courts would not have proper jurisdiction over a dispute, then such dispute may
be submitted to any state court in the United States with proper jurisdiction
and venue. The Parties agree that, except as provided in Section 13.4, any
dispute under this Agreement shall be submitted exclusively to a state or
federal court in the United States.
13.3 Governing Law. Resolution of all disputes arising out of or related
to this Agreement or the performance, enforcement, breach or termination of this
Agreement and any remedies relating thereto, shall be governed by and construed
under the substantive laws of the State of Delaware, as applied to agreements
executed and performed entirely in the State of Delaware by residents of the
State of Delaware, without regard to conflicts of law rules.
13.4 Patents and Trademarks. Any dispute, controversy or claim relating
to the scope, validity, enforceability or infringement of any Patent rights
covering the manufacture, use or sale of any Product or of any trademark rights
related to any Product shall be submitted to a court of competent jurisdiction
in the territory in which such Patent or trademark rights were granted or arose.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
28.
13.5 Entire Agreement; Amendment. This Agreement sets forth the complete,
final and exclusive agreement and all the covenants, promises, agreements,
warranties, representations, conditions and understandings between the Parties
hereto and supersedes and terminates all prior agreements and understandings
between the Parties. There are no covenants, promises, agreements, warranties,
representations, conditions or understandings, either oral or written, between
the Parties other than as are set forth herein and therein. No subsequent
alteration, amendment, change or addition to this Agreement shall be binding
upon the Parties unless reduced to writing and signed by an authorized officer
of each Party.
13.6 Export Control. This Agreement is made subject to any restrictions
concerning the export of products or technical information from the United
States of America or other countries which may be imposed upon or related to
Exelixis or P&U from time to time. Each Party agrees that it will not export,
directly or indirectly, any technical information acquired from the other Party
under this Agreement or any products using such technical information to a
location or in a manner that at the time of export requires an export license or
other governmental approval, without first obtaining the written consent to do
so from the appropriate agency or other governmental entity.
13.7 Bankruptcy.
(a) All rights and licenses granted under or pursuant to this
Agreement, including amendments hereto, by each Party to the other Party are,
for all purposes of Section 365(n) of Title 11 of the U.S. Code ("Title 11"),
licenses of rights to intellectual property as defined in Title 11. Each Party
agrees during the term of this Agreement to create and maintain current copies
or, if not amenable to copying, detailed descriptions or other appropriate
embodiments, to the extent feasible, of all such intellectual property. If a
case is commenced by or against either Party (the "Bankrupt Party") under Title
11, then, unless and until this Agreement is rejected as provided in Title 11,
the Bankrupt Party (in any capacity, including debtor-in-possession) and its
successors and assigns (including, without limitation, a Title 11 Trustee)
shall, at the election of the Bankrupt Party made within 60 days after the
commencement of the case (or, if no such election is made, immediately upon the
request of the non-Bankrupt Party) either (i) perform all of the obligations
provided in this Agreement to be performed by the Bankrupt Party including,
where applicable and without limitation, providing to the non-Bankrupt Party
portions of such intellectual property (including embodiments thereof) held by
the Bankrupt Party and such successors and assigns or otherwise available to
them or (ii) provide to the non-Bankrupt Party all such intellectual property
(including all embodiments thereof) held by the Bankrupt Party and such
successors and assigns or otherwise available to them.
(b) If a Title 11 case is commenced by or against the Bankrupt Party
and this Agreement is rejected as provided in Title 11 and the non-Bankrupt
Party elects to retain its rights hereunder as provided in Title 11, then the
Bankrupt Party (in any capacity, including debtor-in-possession) and its
successors and assigns (including, without limitations, a Title 11 Trustee)
shall provide to the non-Bankrupt Party all such intellectual property
(including all embodiments thereof) held by the Bankrupt Party and such
successors and assigns or otherwise available to them immediately upon the non-
Bankrupt Party's written request therefor. Whenever the Bankrupt Party or any of
its successors or assigns provides to the non-Bankrupt
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
29.
Party any of the intellectual property licensed hereunder (or any embodiment
thereof) pursuant to this Section 13.7, the non-Bankrupt Party shall have the
right to perform the obligations of the Bankrupt Party hereunder with respect to
such intellectual property, but neither such provision nor such performance by
the non-Bankrupt Party shall release the Bankrupt Party from any such obligation
or liability for failing to perform it.
(c) All rights, powers and remedies of the non-Bankrupt Party
provided herein are in addition to and not in substitution for any and all other
rights, powers and remedies now or hereafter existing at law or in equity
(including, without limitation, Title 11) in the event of the commencement of a
Title 11 case by or against the Bankrupt Party. The non-Bankrupt Party, in
addition to the rights, power and remedies expressly provided herein, shall be
entitled to exercise all other such rights and powers and resort to all other
such remedies as may now or hereafter exist at law or in equity (including,
without limitation, under Title 11) in such event. The Parties agree that they
intend the foregoing non-Bankrupt Party rights to extend to the maximum extent
permitted by law and any provisions of applicable contracts with Third Parties,
including without limitation for purposes of Title 11, (i) the right of access
to any intellectual property (including all embodiments thereof) of the Bankrupt
Party or any Third Party with whom the Bankrupt Party contracts to perform an
obligation of the Bankrupt Party under this Agreement, and, in the case of the
Third Party, which is necessary for the development, registration and
manufacture of licensed products and (ii) the right to contract directly with
any Third Party described in (i) in this sentence to complete the contracted
work. Any intellectual property provided pursuant to the provisions of this
Section 13.7 shall be subject to the licenses set forth elsewhere in this
Agreement and the payment obligations of this Agreement, which shall be deemed
to be royalties for purposes of Title 11.
13.8 Force Majeure. Both Parties shall be excused from the performance of
their obligations under this Agreement to the extent that such performance is
prevented by force majeure and the nonperforming Party promptly provides notice
of the prevention to the other Party. Such excuse shall be continued so long as
the condition constituting force majeure continues and the nonperforming Party
takes reasonable efforts to remove the condition. For purposes of this
Agreement, force majeure shall include conditions beyond the control of the
Parties, including without limitation, an act of God, voluntary or involuntary
compliance with any regulation, law or order of any government, war, civil
commotion, labor strike or lock-out, epidemic, failure or default of public
utilities or common carriers, destruction of production facilities or materials
by fire, earthquake, storm or like catastrophe; provided, however, the payment
of invoices due and owing hereunder shall not be delayed by the payer because of
a force majeure affecting the payer.
13.9 Notices. Any notice required or permitted to be given under this
Agreement shall be in writing, shall specifically refer to this Agreement and
shall be deemed to have been sufficiently given for all purposes if mailed by
first class certified or registered mail, postage prepaid, express delivery
service or personally delivered. Unless otherwise specified in writing, the
mailing addresses of the Parties shall be as described below.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
30.
For Exelixis: Exelixis Pharmaceuticals, Inc.
000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxx Xxxxxxxxx, XX 00000
Attention: Chief Executive Officer
With a copy to: Cooley Godward LLP
Five Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
For P&U: Pharmacia & Upjohn
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Attention: General Counsel
With a copy to: Pharmacia & Upjohn AB
Xxxxxxxxxxxxxxx 000, X-000 00
Xxxxxxxxx, Xxxxxx
Attention: Associate General Counsel
13.10 Consents Not Unreasonably Withheld or Delayed. Whenever provision is
made in this Agreement for either Party to secure the consent or approval of the
other, that consent or approval shall not unreasonably be withheld or delayed,
and whenever in this Agreement provisions are made for one Party to object to or
disapprove a matter, such objection or disapproval shall not unreasonably be
exercised.
13.11 Maintenance of Records. Each Party shall keep and maintain all
records required by law or regulation with respect to Products and shall make
copies of such records available to the other Party upon request.
13.12 United States Dollars. References in this Agreement to "Dollars" or
"$" shall mean the legal tender of the United States of America.
13.13 No Strict Construction. This Agreement has been prepared jointly
and shall not be strictly construed against either Party.
13.14 Assignment. Neither Party may assign or transfer this Agreement or
any rights or obligations hereunder without the prior written consent of the
other, except a Party may make such an assignment without the other Party's
consent to an Affiliate or to a successor to substantially all of the business
of such Party, whether in a merger, sale of stock, sale of assets or other
transaction. Any permitted successor or assignee of rights and/or obligations
hereunder shall, in a writing to the other Party, expressly assume performance
of such rights and/or obligations. Any permitted assignment shall be binding on
the successors of the assigning Party. Any assignment or attempted assignment by
either Party in violation of the terms of this Section 13.14 shall be null and
void and of no legal effect.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
31.
13.15 Hardship. If, during the term of the Agreement, performance of the
Agreement should lead to unreasonable hardship for one or other Party taking the
interests of both Parties into account both Parties shall endeavor to agree in
good faith to amend the Agreement in the light of the change in circumstances.
13.16 Electronic Data Interchange. If both Parties elect to facilitate
business activities hereunder by electronically sending and receiving data in
agreed formats (also referred to as Electronic Data Interchange or "EDI") in
substitution for conventional paper-based documents, the terms and conditions of
this Agreement shall apply to such EDI activities.
13.17 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13.18 Further Actions. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
13.19 Severability. If any one or more of the provisions of this
Agreement is held to be invalid or unenforceable by any court of competent
jurisdiction from which no appeal can be or is taken, the provision shall be
considered severed from this Agreement and shall not serve to invalidate any
remaining provisions hereof. The Parties shall make a good faith effort to
replace any invalid or unenforceable provision with a valid and enforceable one
such that the objectives contemplated by the Parties when entering this
Agreement may be realized.
13.20 Ambiguities. Ambiguities, if any, in this Agreement shall not be
construed against any Party, irrespective of which Party may be deemed to have
authored the ambiguous provision.
13.21 Headings. The headings for each article and section in this
Agreement have been inserted for convenience of reference only and are not
intended to limit or expand on the meaning of the language contained in the
particular article or section.
13.22 No Waiver. Any delay in enforcing a Party's rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such Party's rights to the future enforcement of its
rights under this Agreement, excepting only as to an express written and signed
waiver as to a particular matter for a particular period of time.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
32.
IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate
originals by their proper officers as of the date and year first above written.
PHARMACIA & UPJOHN AB EXELIXIS PHARMACEUTICALS, INC.
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxxx X. Xxxxxxx, Ph.D.
------------------------------------- -----------------------------
Attorney-in-Fact
Title: Executive Vice President, Title: President & CEO
Pharmacia & Upjohn, Inc. --------------------------
-----------------------------
Date: Feb. 23, 1999 Date: Feb. 18, 1999
----------------------------------- --------------------------------
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED
33.
EXHIBIT A
TOP 20 PHARMACEUTICAL COMPANIES
Merck & Co., Inc.
Xxxxxxx & Xxxxxxx
Novartis Group
Xxxxxxx-Xxxxx Squibb Co.
American Home Products Corp./Monsanto Co.
Glaxo Wellcome Plc.
SmithKline Xxxxxxx Plc.
Pfizer, Inc.
Xxxxxx Laboratories
Roche Holding Ltd.
Hoechst Group
Xxx Xxxxx and Co.
Bayer Group
Schering-Plough Corp.
Pharmacia & Upjohn, Inc.
Xxxxxx-Xxxxxxx Co.
BASF Group
Xxxxxx International, Inc.
Astra XX
Xxxxx-Xxxxxxx S.A.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
EXHIBIT B
THIRD PARTY TECHNOLOGY
TECHNOLOGY/1/ LICENSOR AGREEMENT TITLE AGREEMENT DATE
[ * ] [ * ] Letter Agreement [ * ]
[ * ] [ * ] License Agreement [ * ]
Amendment to License [ * ]
Agreement
[ * ] [ * ] License Agreement [ * ]
Amendment to License [ * ]
Agreement
[ * ] [ * ] Non-Exclusive License [ * ]
Agreement for Internal
Research Use Only
[ * ] [ * ] License Agreement [ * ]
[ * ] [ * ] License Agreement [ * ]
[ * ] [ * ] License Agreement [ * ]
[ * ] [ * ] License Agreement [ * ]
--------------------------------
/1/ A general description of the technology licensed by Exelixis. Please see
cited license agreement(s) for more detailed information regarding the scope of
Exelixis' rights with respect to such technology.
/2/ [ * ]
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED
EXHIBIT C
PRESS RELEASE
DRAFT- 2/23/99
EXELIXIS PHARMACEUTICALS AND PHARMACIA & UPJOHN FORM RESEARCH COLLABORATION
-------------------------------------------------------------------------------
Collaborative Research Agreement to Focus on the Identification of Novel Targets
in the Areas of Alzheimer's Disease and Metabolic Syndrome.
South San Francisco, CA and Bridgewater, NJ, February 24, 1999 - Exelixis
Pharmaceuticals, Inc. and Pharmacia & Upjohn, Inc. announced today the signing
of a five-year research collaboration focused on the identification of novel
targets for small molecule therapeutics in the areas of Alzheimer's disease and
Metabolic Syndrome, including diabetes and obesity.
Exelixis will utilize its proprietary PathFinder(TM) Technology coupled with
genomic and computational biology technologies to identify and validate novel
targets for drug discovery. It is anticipated that Exelixis' affiliate, Artemis
Pharmaceuticals GmbH, will also participate in the collaboration.
"This collaboration with P&U is our first in what we anticipate will be a series
of relationships with major pharmaceutical companies," said Xxxxxx Xxxxxxx,
Ph.D. President and Chief Executive Officer of Exelixis. "Pharmacia & Upjohn's
investment in the broad-based technology platform and intellectual capital
provided by Exelixis is an endorsement of our ability to focus the power of
genetics and genomics towards the acceleration of drug discovery."
Added Xxxxxxxx Xxxx, M.D., Ph.D. Chief Scientific Officer at Exelixis: :"Genetic
tools offer the most definitive biological test of the therapeutic potential of
modulating the activity of a candidate target. Targets selected on this basis
will increase the likelihood that compounds directed against the target will
result in an effective new therapeutic agent."
"The ability to efficiently and accurately identify controlling genes in disease
and physiologic pathways is a critical success factor in drug discovery," said
Xxxxx Xxxx, M.D., Executive Vice President and President of Research and
Development at Pharmacia & Upjohn "Exelixis is well qualified to complement
Pharmacia & Upjohn drug discovery expertise in this regard."
Under the terms of the agreement, Exelixis will receive substantial committed
funding in the form of research support, upfront payment and equity during the
initial five-year term. Exelixis also will potentially receive milestone
payments, as well as royalties based on the future sales of products arising
from the collaboration. A portion of Pharmacia & Upjohn's equity investment in
Exelixis will be made after Exelixis' Initial Public Offering. Financial details
of the agreement were not disclosed.
[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
Within the collaboration, and subject to certain rights of P&U, Exelixis has
retained the rights to develop small molecule therapeutics outside the field of
the sponsored research as well as in the field(s) of research for targets not
selected by Pharmacia & Upjohn. In addition, Exelixis retains all rights with
respect to agriculture, animal health, and, subject to certain rights of P&U,
rights for the development of potential biotherapeutic products arising from the
collaboration.
Exelixis Pharmaceuticals, Inc., together with its affiliate, Artemis
Pharmaceuticals GmbH, represent the premiere model system genetics
biopharmaceutical organization focused on the identification and validation of
novel screening targets and proteins for the pharmaceutical, diagnostic,
agricultural, and animal health industries. Their PathFinder(TM) Technology
utilizes a systematic genetics approach in model organisms including Drosophila,
C. elegans, zebrafish and mice to identify critical genes in disease and
physiological pathways, determine functional relationships and select optimal
targets for intervention. Exelixis' drug discovery programs include the areas of
CNS, inflammation, metabolic disease, and oncology. Information about Exelixis
including news releases are available on the Company's website at:
http//xxx.xxxxxxxx.xxx.
Pharmacia & Upjohn is a global innovation driven pharmaceutical and health care
company. Pharmacia & Upjohn's products, services and employees demonstrate its
commitment to improve wellness and quality of life for people around the world.
2.
