Exhibit 10.33
[NOTE: CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN MARKED TO INDICATE THAT
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT. THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]
LICENSE AND RESEARCH COLLABORATION AGREEMENT
BETWEEN
MERCK & CO., INC.
AND
DECODE GENETICS, EHF.
LICENSE AND RESEARCH COLLABORATION AGREEMENT
THIS RESEARCH COLLABORATION AND LICENSE AGREEMENT (this "Agreement"),
which shall be effective as of February 25, 2004 (the "Effective Date"), is
entered into by and between deCODE genetics, Ehf., a corporation organized under
the laws of Iceland ("deCODE") and Merck & Co., Inc., a corporation organized
under the laws of the State of New Jersey, having an office located at Xxx Xxxxx
Xxxxx, Xxxxxxxxxx Xxxxxxx, Xxx Xxxxxx 00000 ("MERCK").
PRELIMINARY STATEMENTS
A. deCODE has expertise in conducting research in the field of human
genetics and genomics and in the conduct of clinical trials.
B. MERCK has certain expertise in drug development and in the design and
conduct of clinical trials to demonstrate the safety and efficacy of its
pharmaceutical products.
C. deCODE and MERCK wish to collaborate on the design and conduct of
Information Rich Clinical Trials (terms with initial capitals as hereafter
defined) on selected MERCK compounds in specified Disease Areas in accordance
with the attached Work Plan.
D. deCODE Parent (as hereinafter defined) and MERCK are simultaneously
entering into a separate Stock and Warrant Purchase Agreement whereby MERCK
shall purchase shares of stock of deCODE Parent pursuant to the terms and
conditions set forth in that agreement.
NOW, THEREFORE, in consideration of the foregoing Preliminary Statements and the
mutual agreements and covenants set forth herein, the Parties hereby agree as
follows:
1. DEFINITIONS
Unless specifically set forth to the contrary herein, the following
terms, whether used in the singular or plural, shall have the respective
meanings set forth below:
1.1 "AFFILIATE" shall mean as to deCODE or MERCK, as the case may be (i)
any corporation or business entity of which fifty percent (50%) or more
of the securities or other ownership interests representing the equity,
the voting stock or general partnership interest are owned, controlled
or held, directly or indirectly, by MERCK or deCODE; or (ii) any
corporation or business entity which, directly or indirectly, owns,
controls or holds fifty percent (50%) (or the maximum ownership
interest permitted by law) or more of the securities or other ownership
interests representing the equity, the voting stock or, if applicable,
the general partnership interest, of MERCK or deCODE.
1.2 "ASSOCIATED INFORMATION" shall mean information about [CONFIDENTIAL
TREATMENT REQUESTED] in an IRCT performed as part of the Research
Program which [CONFIDENTIAL TREATMENT REQUESTED] in an Exclusive
Disease Area or a Non-exclusive Disease Area where the [CONFIDENTIAL
TREATMENT REQUESTED] is associated with the [CONFIDENTIAL TREATMENT
REQUESTED] within the Disease Area being studied in that IRCT.
1.3 "BUDGET" shall mean the projected expenditures for the upcoming year
set out in Schedule 2.6
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and more fully described in Section 2.6.
1.4 "CALENDAR QUARTER" shall mean the respective periods of three (3)
consecutive calendar months ending on March 31, June 30, September 30
and December 31.
1.5 "CALENDAR YEAR" shall mean each successive period of twelve (12) months
commencing on January 1 and ending on December 31.
1.6 A "CHANGE IN CONTROL" shall mean the occurrence of any of the
following:
(a) An acquisition of any voting securities of deCODE Parent (the
"Voting Securities") by any "Person" (as the term "person" is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")), immediately after which such
Person has "Beneficial Ownership" (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than fifty percent (50%) of
(1) the then-outstanding shares of common stock of deCODE Parent (or
any other securities into which such shares of common stock are changed
or for which such shares of common stock are exchanged) (the "Shares")
or (2) the combined voting power of deCODE Parent's then-outstanding
Voting Securities;
(b) The individuals who, as of Effective Date, are members of the board
of directors of deCODE Parent (the "Incumbent Board"), following a
Merger (as hereinafter defined), do not for any reason constitute at
least a majority of the members of the board of directors of (x) the
corporation resulting from such Merger (the "Surviving Corporation"),
if fifty percent (50%) or more of the combined voting power of the
then-outstanding voting securities of the Surviving Corporation is not
Beneficially Owned, directly or indirectly, by another Person (a
"Parent Corporation") or (y) if there is one or more than one Parent
Corporation, the ultimate Parent Corporation; PROVIDED, HOWEVER, that,
any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by such company's shareholders,
was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the board of directors of deCODE Parent (a "Proxy
Contest"), including by reason of any agreement intended to avoid or
settle any Proxy Contest;
(c) At least eighty (80%) percent of voting securities of deCODE are no
longer owned directly or indirectly by deCODE Parent; or
(d) The consummation of:
(i) A merger, consolidation or reorganization (1) with or
into deCODE Parent or a direct or indirect subsidiary of deCODE Parent
or (2) in which securities of deCODE Parent are issued (both
1.5(c)(i)(1) and (2) are defined as a "Merger"), unless such Merger is
a "Non-Control Transaction." A "Non-Control Transaction" shall mean a
Merger in which:
(A) the stockholders of deCODE Parent immediately
before such Merger own directly or indirectly immediately following
such Merger at least fifty percent (50%) of the combined voting power
of the outstanding voting securities of (x) the Surviving Corporation,
if there is no Parent Corporation or (y) if there is one or more than
one Parent Corporation, the
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ultimate Parent Corporation;
(B) the individuals who were members of the
Incumbent Board immediately prior to the execution of the agreement
providing for such Merger constitute at least a majority of the members
of the board of directors of (x) the Surviving Corporation, if there is
no Parent Corporation, or (y) if there is one or more than one Parent
Corporation, the ultimate Parent Corporation; and
(C) no Person other than (1) deCODE Parent, or
(2) any Person who, immediately prior to the Merger had Beneficial
Ownership of fifty percent (50%) or more of the then outstanding Shares
or Voting Securities, has Beneficial Ownership, directly or indirectly,
of fifty percent (50%) or more of the combined voting power of the
outstanding voting securities or common stock of (x) the Surviving
Corporation, if fifty percent (50%) or more of the combined voting
power of the then outstanding voting securities of the Surviving
Corporation is not Beneficially Owned, directly or indirectly by a
Parent Corporation, or (y) if there is one or more than one Parent
Corporation, the ultimate Parent Corporation; PROVIDED, HOWEVER, that
any Person described in clause (2) of this subsection (C) may not,
immediately following the Merger, Beneficially Own more than thirty
percent (30%) of the combined voting power of the outstanding voting
securities of the Surviving Corporation or the Parent Corporation, as
applicable, for the Merger to constitute a Non-Control Transaction.
(ii) A complete liquidation or dissolution of
deCODE Parent; or
(iii) The sale or other disposition of all or
substantially all of the assets of deCODE Parent and its Subsidiaries
taken as a whole to any Person (other than (x) a transfer under
conditions that would constitute a Non-Control Transaction, with the
disposition of assets being regarded as a Merger for this purpose or
(y) the distribution to deCODE Parent's stockholders of any other
assets).
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the then
outstanding Shares or Voting Securities as a result of the acquisition
of Shares or Voting Securities by deCODE Parent which, by reducing the
number of Shares or Voting Securities then outstanding, increases the
proportional number of shares Beneficially Owned by the Subject
Persons; provided that if a Change in Control would occur (but for the
operation of this sentence) as a result of the acquisition of Shares or
Voting Securities by deCODE Parent and, after such share acquisition by
deCODE Parent, the Subject Person becomes the Beneficial Owner of any
additional Shares or Voting Securities and such Beneficial Ownership
increases the percentage of the then outstanding Shares or Voting
Securities Beneficially Owned by the Subject Person, then a Change in
Control shall occur.
1.7 "COLLABORATION DATE" shall be February 25, 2004.
1.8 "COLLABORATION INFORMATION AND INVENTION" shall mean any discoveries,
Improvements, processes, methods, protocols, formulas, data,
inventions, know-how and trade secrets, patentable or otherwise, that
arise from the Research Program.
1.9 "COLLABORATION PATENTS" shall mean any and all patents and patent
applications in the Territory (which for the purposes of this Agreement
shall be deemed to include certificates of invention
4
and applications for certificates of invention) that a Party or its
Affiliates owns, Controls or through license or otherwise acquires
rights during the term of this Agreement which claim, cover or relate
to Collaboration Information and Inventions or are divisions,
continuations, continuations-in-part, reissues, renewals, extensions,
supplementary protection certificates, utility, models and the like of
any such patents and patent applications and foreign equivalents
thereof.
1.10 "COMBINATION PRODUCT" shall mean a Product which includes one or more
active ingredients other than IRCT Compound or Related IRCT Compound in
combination with IRCT Compound or Related IRCT Compound. All references
to Product in this Agreement shall be deemed to include Combination
Product.
1.11 "COMPETITIVE PRODUCT" shall mean a product containing the IRCT Compound
or Related IRCT Compound which has or attains on a Calendar Year basis
a market share of [CONFIDENTIAL TREATMENT REQUESTED] or more in a
country of sale as measured by prescriptions or other similar
information in the country of sale.
1.12 "COMPETITOR" shall mean a company in the pharmaceutical business sector
with reported annual gross revenues from the sale of pharmaceuticals in
excess [CONFIDENTIAL TREATMENT REQUESTED] for each of its [CONFIDENTIAL
TREATMENT REQUESTED].
1.13 "CONTROL", "CONTROLS" OR "CONTROLLED BY" shall mean either (a) being an
Affiliate of either MERCK or deCODE; or (b) with respect to any item of
or right under Collaboration Patents, Patents or Know-How, the
possession of (whether by ownership or license, other than pursuant to
this Agreement) or the ability of a Party to grant access to, or a
license or sublicense of, such items or right as provided for herein
without violating the terms of any agreement or other arrangement with
any Third Party existing at the time such Party would be required
hereunder to grant the other Party such access or license or
sublicense.
1.14 "deCODE INFORMATION AND INVENTIONS" shall mean all Collaboration
Information and Inventions developed or invented solely by employees of
deCODE or other persons not employed by MERCK acting on behalf of
deCODE.
1.15 "deCODE KNOW-HOW" shall mean all secret, substantial and identified
information and materials, including, but not limited to, discoveries,
Improvements, processes, formulas, data, inventions(including without
limitation deCODE's Information and Inventions and deCODE's rights in
Joint Information and Inventions), know-how and trade secrets,
patentable or otherwise, which arise from the Research Program and
during the term of this Agreement (i) are in deCODE's possession or
control, (ii) are not generally known and (iii) are necessary or useful
to MERCK in connection with the Research Program or the research,
development, manufacture, marketing, use or sale of IRCT Compound,
Related IRCT Compound, Tests or Product in the
4
Territory.
1.16 "deCODE COLLABORATION PATENTS" shall mean Collaboration Patents that
claim, cover or relate to deCODE Information and Inventions excluding
deCODE Information and Inventions relating to deCODE Generalized
Technology.
1.17 "deCODE COMPOUNDS" shall mean compounds[CONFIDENTIAL TREATMENT
REQUESTED].
1.18 "deCODE GENERALIZED TECHNOLOGY" shall mean any Technical Information
relating to generalized methods for conducting genomics research and
characterizing the function of genes or any raw data useful in
generalized genomics research tools which at any time is owned or
controlled by deCODE or its Affiliates (provided deCODE or its
Affiliates have the right to license or otherwise make available such
Technical Information to MERCK).
1.19 "deCODE GENOMICS DATA" shall mean (a) [CONFIDENTIAL TREATMENT
REQUESTED] as may be created, developed or acquired by deCODE from time
to time during the term of this Agreement or as may be existing or have
been created as of the Effective Date, and (b) deCODE's proprietary
inventions, processes and other assets directly relating to the use,
creation, maintenance, development, operation, access, analysis,
reporting, storage, protection, and/or transmission of such proprietary
databases, including proprietary methods, procedures and techniques,
procedure manuals, personal and scientific data, computer technical
expertise and software, in each case independently developed by or on
behalf of deCODE and such software useful for the analysis of the
information included in such databases.
1.20 "deCODE PARENT" shall mean deCODE genetics, Inc., a corporation
organized and existing under the laws of the State of Delaware.
1.21 "deCODE PATENTS" shall mean Patents, that deCODE or its Affiliates
Control prior to the Effective Date or during the term of this
Agreement, including but not limited to those listed on Schedule 1.21,
that are necessary or useful to MERCK in connection with the Research
Program or the research, development, manufacture, marketing, use or
sale of IRCT Compound, Tests or Product in the Territory including
Patents claiming deCODE Genomics Data but excluding any part of Patents
claiming deCODE Generalized Technology.
1.22 "deCODE PRIOR KNOW-HOW" shall mean all secret, substantial and
identified information and materials, including, but not limited to,
discoveries, Improvements, processes, formulas, data, inventions,
know-how and trade secrets, patentable or otherwise, which existed
prior to the Effective Date and during the term of this Agreement (i)
are in deCODE's possession or control, (ii) are not generally known and
(iii) are necessary or useful to MERCK in connection with the
4
Research Program or the research, development, manufacture, marketing,
use or sale of IRCT Compound, Tests or Product in the Territory
including deCODE Genomics Data but excluding deCODE Generalized
Technology and deCODE Know-How.
1.23 "DISEASE AREAS" shall mean Exclusive Disease Areas and Non-exclusive
Disease Areas.
1.24 "EXCLUSIVE DISEASE AREAS" shall mean at least one of the following:
[CONFIDENTIAL TREATMENT REQUESTED].
1.25 [CONFIDENTIAL TREATMENT REQUESTED]
1.26 [CONFIDENTIAL TREATMENT REQUESTED]
1.27 [CONFIDENTIAL TREATMENT REQUESTED]
1.28 "NON-EXCLUSIVE DISEASE AREAS" shall mean [CONFIDENTIAL TREATMENT
REQUESTED].
1.29 [CONFIDENTIAL TREATMENT REQUESTED]
1.30 "ELECTED DISEASE" shall have the meaning set out in Section 3.1(d).
1.31 "EXCLUSIVE LICENSE FEE" shall have the meaning set out in Section
3.1(d).
1.32 "EXECUTIVE COMMITTEE" shall mean the committee made up of one senior
executive of each Party as more fully described in Section 2.5.1.
1.33 "FILING" of an NDA shall mean the acceptance by a Regulatory Authority
of an NDA for filing.
1.34 "FIRST COMMERCIAL SALE" shall mean, with respect to any Product or
Test, the first sale for end use or consumption of such Product or Test
in a country after all required approvals, including Marketing
Authorization, have been granted by the Regulatory Authority of such
country.
4
1.35 "FULL TIME EQUIVALENT" or "FTE" shall mean the equivalent of a
full-time scientist's work time over a twelve-month period (including
normal vacations, sick days and holidays). The portion of an FTE year
devoted by a scientist to the Research Program shall be determined by
dividing the number of full days during any twelve-month period devoted
by such employee to the Research Program by the total number of working
days during such twelve-month period.
1.36 "IMPROVEMENT" shall mean any enhancement, whether or not patentable, in
the manufacture, formulation, ingredients, preparation, presentation,
means of delivery, dosage or packaging of IRCT Compound, Related IRCT
Compound, Tests or Product.
1.37 "INFORMATION" shall mean any and all information and data, including
without limitation all MERCK Know-How, deCODE Know-How, and all other
scientific, pre-clinical, clinical, regulatory, manufacturing,
marketing, financial and commercial information or data, whether
communicated in writing or orally or by any other method, which is
provided by one Party to the other Party in connection with this
Agreement.
1.38 "INFORMATION RICH CLINICAL TRIAL OR IRCT" shall mean a clinical trial
which includes the following, as specified in the protocol for such
clinical trial: [CONFIDENTIAL TREATMENT REQUESTED]
1.39 "INVENTION" means any process, method, composition of matter, article
of manufacture, discovery or finding that is conceived and reduced to
practice.
1.40 "IRCT COMPOUND" shall mean a Selected Compound that has [CONFIDENTIAL
TREATMENT REQUESTED] in accordance with the Agreement.
1.41 "JOINT INFORMATION AND INVENTIONS" shall mean all discoveries,
Improvements, processes, methods, protocols, formulas, data,
Inventions, know-how and trade secrets, patentable or otherwise,
arising from the Research Program developed or invented jointly by
employees of MERCK and deCODE or others acting on behalf of MERCK and
deCODE.
1.42 "JOINT COLLABORATION PATENTS" shall mean Collaboration Patents that
claim, cover or relate to Joint Information and Inventions.
1.43 "MARKETING AUTHORIZATION" shall mean any approval (including without
limitation all applicable pricing and governmental reimbursement
approvals) necessary to receive permission from the relevant Regulatory
Authority to market and sell a Product or Test in any country.
1.44 "MERCK COMPOUND OPTION" shall have the meaning set out in Section
3.1(e) (i).
1.45 "MERCK COMPOUND PATENT" shall mean any Patent that claims, covers or
relates to an IRCT Compound, Related IRCT Compound, Test or Product
Controlled by MERCK.
1.46 "MERCK EXERCISE NOTICE" shall have the meaning set out in Section
3.1(e) (iii).
1.47 "MERCK INFORMATION AND INVENTIONS" shall mean all discoveries,
Improvements, processes,
4
methods, protocols, formulas, data, Inventions, know-how and trade
secrets, patentable or otherwise, arising from the Research Program
developed or invented solely by employees of MERCK or other persons not
employed by deCODE acting on behalf of MERCK.
1.48 "MERCK KNOW-HOW" shall mean any information and materials, including
but not limited to, discoveries, Improvements, processes, methods,
protocols, formulas, data, inventions (including without limitation
MERCK's Information and Inventions and MERCK's rights in Joint
Information and Inventions), know-how and trade secrets, patentable or
otherwise, which arise from the Research Program and during the term of
this Agreement, (i) are in MERCK's possession or control, (ii) are not
generally known and (iii) are in MERCK's opinion necessary to deCODE in
the performance of its obligations under the Research Program.
1.49 "MERCK COLLABORATION PATENTS" shall mean Collaboration Patents that
claim, cover or relate to MERCK Information and Inventions.
1.50 "MERCK PATENTS" shall mean Patents Controlled by MERCK prior to the
Effective Date or during the term of this Agreement (provided MERCK has
the right to license or otherwise make available such Patents to
deCODE) and are necessary or useful to deCODE in connection with the
Research Program.
1.51 "MERCK PRIOR KNOW-HOW" shall mean any information and materials,
including but not limited to, discoveries, Improvements, processes,
methods, protocols, formulas, data, inventions, know-how and trade
secrets, patentable or otherwise, which existed prior to the Effective
Date and during the term of this Agreement, (i) are in MERCK's
possession or control, (ii) are not generally known and (iii) are in
MERCK's opinion necessary to deCODE in the performance of its
obligations under the Research Program excluding MERCK Know-How.
1.52 "MERCK SHARE" [CONFIDENTIAL TREATMENT REQUESTED].
1.53 "NET SALES" shall mean the gross invoice price of Product or Tests sold
by MERCK or its Related Parties to the first Third Party after
deducting, if not previously deducted, from the amount invoiced or
received:
(a) trade and quantity discounts other than early pay cash
discounts;
(b) returns, rebates, chargebacks and other allowances;
(c) retroactive price reductions that are actually allowed or
granted;
(d) sales commissions paid to Third Party distributors and/or
selling agents;
(e) a fixed amount equal to [CONFIDENTIAL TREATMENT REQUESTED] of
the amount invoiced to cover bad debt, sales or excise taxes, early
payment cash discounts, transportation and insurance, custom duties,
and other governmental charges; and
(f) the standard inventory cost of devices or delivery systems used
for dispensing or administering Product or Tests, as applicable. With
respect to sales of Combination Products, Net Sales shall be calculated
on the basis of the gross invoice price of Product(s) containing the
same strength of IRCT Compound or Related IRCT Compound sold without
other active ingredients. In the event that Product is sold only as a
Combination Product, Net Sales shall be calculated on the basis of the
gross invoice price of the
4
Combination Product multiplied by a fraction, the numerator of which
shall be the inventory cost of IRCT Compound or Related IRCT Compound
in the Product and the denominator of which shall be the inventory cost
of all of the active ingredients in the Combination Product. Inventory
cost shall be determined in accordance with MERCK's regular accounting
methods, consistently applied. The deductions set forth in paragraphs
(a) through (f) above will be applied in calculating Net Sales for a
Combination Product. In the event that Product is sold only as a
Combination Product and either Party reasonably believes that the
calculation set forth in this Paragraph does not fairly reflect the
value of the Product relative to the other active ingredients in the
Combination Product, the Parties shall negotiate, in good faith, other
means of calculating Net Sales with respect to Combination Products.
1.54 "PARTY OR PARTIES" shall mean either MERCK or deCODE or both as the
context requires.
1.55 "PATENT RIGHTS" shall mean deCODE Collaboration Patents, and deCODE's
interest in Joint Collaboration Patents.
1.56 "PATENTS" shall mean any and all patents and patent applications in the
Territory (which for the purposes of this Agreement shall be deemed to
include certificates of invention and applications for certificates of
invention) that a Party owns, Controls or through license or otherwise
acquires rights prior to the Effective Date or during the term of this
Agreement which: (i) claim, cover or relate to a Selected Compound,
Test and/or Product; or (ii) claim, cover or relate to Inventions; or
(iii) are divisions, continuations, continuations-in-part, reissues,
renewals, extensions, supplementary protection certificates, utility,
models and the like of any such patents and patent applications and
foreign equivalents thereof.
1.57 "PRODUCT(s)" shall mean any therapeutic preparation in final form
containing (a) an IRCT Compound for sale by prescription,
over-the-counter or any other method for any and all uses that arise
from the [CONFIDENTIAL TREATMENT REQUESTED] in the Disease Area or (b)
a Related IRCT Compound, including without limitation in the case of
either 1.57(a) or (b) any Combination Product.
1.58 "RELATED PARTIES" shall mean a Party's Affiliates or sublicensees, but
shall not mean a Party's distributors.
1.59 "REGULATORY AUTHORITY" shall mean any applicable government regulatory
authority involved in granting approvals for the manufacturing,
marketing, reimbursement and/or pricing of a Product or Test, as
applicable, in the Territory, including, in the United States, the
United States Food and Drug Administration and any successor
governmental authority having substantially the same function.
1.60 "RELATED IRCT COMPOUND" shall mean a compound Controlled by MERCK that
[CONFIDENTIAL TREATMENT REQUESTED].
1.61 "RESEARCH PROGRAM TERM" shall mean the duration of the Research Program
and "Extended Research Program Term" shall mean any period of the
Research Program as it may be extended by mutual agreement of the
Parties, as described more fully in Section 2.10.
1.62 "RESEARCH PROGRAM" shall mean the research activities undertaken by the
Parties hereto as set forth in Article 2 and Attachment 2.1.
1.63 "SELECTED COMPOUND" shall mean any compound proposed by MERCK and
accepted by the
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Operating Committee to be evaluated in Information Rich Clinical
Trials.
1.64 "OPERATING COMMITTEE" shall mean the joint research committee
established to facilitate the Research Program as more fully described
in Section 2.5.1.
1.65 "SUCCESSFUL CLINICAL RESULT" shall mean result(s) [CONFIDENTIAL
TREATMENT REQUESTED].
1.66 "TECHNICAL INFORMATION" shall mean information, data or know-how
(whether patentable or unpatentable), including without limitation,
formulas, manufacturing methods, procedures, designs, compositions of
matter, plans, applications, specifications, drawings, techniques,
materials (including without limitation biological materials such as
tissue samples, plasma samples, cell lines, RNA, DNA, DNA fragments,
organisms, proteins, polypeptides, plasmids, vectors and the like),
compounds, samples, inventions, discoveries, and the like, as well as
improvements related thereto.
1.67 "TERRITORY" shall mean all of the countries in the world, and their
territories and possessions.
1.68 "THERAPEUTIC FIELD" shall mean any and all application of technology to
[CONFIDENTIAL TREATMENT REQUESTED].
1.69 "TESTS" shall mean pharmacogenomic tests aimed at predicting the
response or non-response and side-effects to an IRCT Compound that are
developed, discovered or identified through the Research Program.
1.70 "THIRD PARTY" shall mean an entity other than MERCK and its Affiliates,
and deCODE and its Affiliates.
1.71 "VALID PATENT CLAIM" shall mean a claim of an issued and unexpired
patent included within the MERCK Compound Patent which claims IRCT
Compound, Related IRCT Compound, Tests or Product as a composition of
matter, which has not been revoked or held unenforceable or invalid by
a decision of a court or other governmental agency of competent
jurisdiction, and which is not appealable or has not been appealed
within the time allowed for appeal, and which has not been disclaimed,
denied or admitted to be invalid or unenforceable through reissue,
re-examination or disclaimer or otherwise.
1.72 "WORK PLAN" shall mean Schedule 2.1-X describing the tasks to be
performed by each of the Parties in furtherance of the Research
Program. It is anticipated that there will be separate work plans
relating to each IRCT conducted by the Parties which shall be appended
to the Agreement in sequential order.
2. RESEARCH PROGRAM
2.1 GENERAL
deCODE and MERCK shall engage in the Research Program upon the terms
and conditions set forth in this Agreement. The activities to be
undertaken in the course of each IRCT pursuant to the Research Program
will be set forth in a Work Plan (Schedule 2.1-X) wherein X shall begin
with 1 continue in succession. Prior to the initiation of any IRCT
herein the Parties shall agree in writing signed by members of the
Executive Committee or their designees on what is a Successful Clinical
Result and the signed writing shall become part of the corresponding
Work
4
Plan for that IRCT. The Work Plan may be amended from time to time upon
the mutual written agreement by authorized representatives of the
Parties. All Work Plans including Schedule 2.1-0 attached hereto are
part of the Agreement. Notwithstanding any provision of the Agreement
to the contrary, neither Party shall be obligated to conduct any
activities which it reasonably believes would be in violation of any
statute, regulation, law, or terms of any ongoing deCODE project in a
Non-exclusive Disease Area.
2.2 CONDUCT OF RESEARCH
deCODE and MERCK each shall conduct the Research Program in good
scientific manner, and in compliance in all material respects with all
requirements of applicable laws, rules and regulations and all
applicable good laboratory practices to attempt to achieve their
objectives efficiently and expeditiously. deCODE and MERCK each shall
proceed diligently with the work set out in the Work Plan by using
their respective good faith efforts to allocate sufficient time,
effort, equipment and facilities to the Research Program and to use
personnel with sufficient skills and experience as are required to
accomplish the Research Program in accordance with the terms of this
Agreement and Work Plan.
deCODE and MERCK shall be entitled to utilize the services of their
Affiliates to perform their respective Research Program activities.
Each Party shall also be entitled to utilized the services of Third
Parties to perform their respective Research Program activities only
upon the prior written consent of the other Party or as specifically
set forth in Work Plan. Notwithstanding any such consent, both Parties
shall remain at all times fully liable for its respective
responsibilities under the Research Program.
2.3 INFORMATION RICH CLINICAL TRIALS
Each IRCT shall be conducted in accordance with the Work Plan and a
detailed protocol. A proposed protocol and a draft proposal for what a
Successful Clinical Result will be, shall be prepared initially by the
Operating Committee. These draft proposals shall be further reviewed
internally by the appropriate committees within MERCK and deCODE. The
draft proposals, with any changes or revisions made by MERCK or deCODE,
shall then be considered and revised by the Operating Committee for
submission to the Executive Committee. deCODE shall be obligated to
provide support needed to conduct no more than five (5) IRCTs
concurrently at any time during the Research Program. Each IRCT shall
be conducted under the direction and control of the Operating Committee
in accordance with the terms and conditions set forth in Schedule 2.3
and a Study Protocol for that Selected Compound. In any given IRCT that
is conducted under this Agreement the Parties may modify and/or
supplement the terms and conditions set forth in Schedule 2.3 in
accordance with Section 10.7 herein. All data and results pertaining to
any Selected Compound may be used by MERCK in filings with Regulatory
Authorities and all other rights to any intellectual property that are
embodied by those data and results shall be governed by Article 3.
2.4 COMPOUND SELECTION
MERCK shall nominate MERCK compounds during the Research Program for
which Information Rich Clinical Trials shall be conducted by the
Parties according to the Work Plan. deCODE shall be given the
opportunity to review each proposed compound to confirm that deCODE's
conduct of one or more IRCTs on such compound under this Agreement
would not
4
conflict with any other ongoing deCODE project(s). The Operating
Committee shall select which MERCK nominated compounds will become
Selected Compounds; PROVIDED, HOWEVER, that solely with respect to
compounds in the Non-exclusive Disease Area, deCODE shall not be
obligated to perform development efforts with respect to any such
compounds if it reasonably believes that the performance of such
efforts will conflict with any ongoing deCODE project(s).
2.5 GOVERNANCE OF THE COLLABORATION.
The Parties hereby establish process to govern the conduct of the
Research Program and each party's contribution to the Research Program
as follows:
2.5.1 MANAGERIAL OVERSIGHT.
There will be two levels of managerial oversight of the Research
Program. There will be an Executive Committee and an Operating
Committee. In addition each Party shall designate Project Leaders for
the Research Program.
(a) EXECUTIVE COMMITTEE
The Executive Committee shall consist of one senior executive
from each of MERCK and deCODE. The Executive Committee shall
have the ultimate authority for decisions regarding the
Research Program. The matters that require approval by the
Executive Committee shall include approval of financial
statements such as the Budget and approval of the Work Plan.
(i) Any disputes where the Executive Committee cannot
reach a mutually acceptable decision within thirty (30)
days after the matter was referred to them shall be
decided by the President of MERCK Research Laboratories
and the final determination of the issue that shall be
binding on the Parties and the Research Program;
PROVIDED, HOWEVER, as set forth below in Section 2.5.1
(a)(ii) regarding implementation of such decisions and in
all cases that to the extent such disputes materially
affect the rights or obligations of the Parties under
this Agreement, MERCK shall consult with deCODE and the
Parties shall agree on a course of action to lawfully
avoid or minimize such effects upon the rights or
obligations of the Parties, to the extent practicable.
(ii) Any disputes arising with respect to the manner in
which decisions of the Operating Committee, the Executive
Committee or the President of Merck Research Laboratories
will be implemented that will affect relations with
patients participating in the Research Program, research
sites, consultants, investigators or vendors all of which
are in Iceland, or any governmental authority in Iceland
("Implementation Disputes"), shall be decided by the
Chief Executive Officer of deCODE (or his designee) and
the final determination of the issue that shall be
binding on the Parties and the Research Program, who
shall give good faith consideration to the comments of
MERCK's Executive Committee member (or their respective
designees) in resolving such matter; PROVIDED, HOWEVER,
that to the extent such disputes materially affect the
rights or obligations of the Parties under this
Agreement, deCODE shall consult with MERCK and the
Parties shall agree on a course of action to lawfully
avoid or minimize such effects upon the rights or
obligations of the Parties, to the extent practicable.
4
(b) OPERATING COMMITTEE
The Operating Committee shall be based in Iceland and
composed of MERCK representatives and deCODE
representatives and shall exist for [**] after
termination or expiration of the Research Program Term.
The Operating Committee shall perform the following
functions (i) approve and, as the need arises, determine
the necessity to remove personnel working on the Research
Program, (ii) prepare the Budget, (iii) formulate and
adjust Work Plans, (iv) select Compounds; (v) oversee
progress of the Research Program and exchange of data
between the Parties; and (vi) appoint sub-committees of
equal representation to fulfill any of the enumerated
tasks set forth in this Section 2.5.1(b). Each Party
shall have 1 vote. Each Party shall appoint its
representatives to the Operating Committee from time to
time, and may substitute one or more of its
representatives, in its sole discretion, effective upon
notice to the other Party of such change. These
representatives shall have, individually or collectively,
appropriate technical credentials, experience and
knowledge, and ongoing familiarity with the Research
Program. Additional representatives or consultants may
from time to time, by mutual consent of the Parties, be
invited to attend Operating Committee meetings, in the
case of consultants subject to such consultant's written
agreement to comply with the requirements of Section 4.1.
Any member of the Operating Committee may designate a
substitute to attend and perform the functions of that
member at any meeting of the Operating Committee. A
chairperson and secretary of the Operating Committee
shall serve co-terminus one (1) year terms, commencing on
the Collaboration Date or an anniversary thereof, as the
case may be. deCODE shall have the right to name the
chairperson and MERCK shall have the right to name the
secretary of the Operating Committee. Decisions of the
Operating Committee shall be made unanimously by the
members. In the event that the Operating Committee cannot
or does not, after good faith efforts, reach agreement on
an issue, the resolution and/or course of conduct shall
be referred to the Executive Committee. Each Party shall
bear its own expenses related to the attendance of such
meetings by its representatives and invitees.
2.5.2 MEETINGS AND MINUTES.
Meetings of the Operating Committee require the participation of at
least one member of the Operating Committee from each Party. During the
Research Program Term, the Operating Committee shall meet in person at
least once during every Calendar Year. From time to time, a Party may
give the other Party reasonable notice of its desire to hold a meeting
of the Operating Committee. Unless otherwise agreed by the Parties,
meetings of the Operating Committee shall be held in person and shall
alternate between the offices of the Parties, or meet in such other
place as agreed by the Parties. Instead of meeting in person, the
members of the Operating Committee may, for purposes of holding a
Operating Committee meeting, convene or be polled or consulted from
time to time by means of telecommunications, video conferences,
electronic mail or correspondence, as deemed necessary or appropriate
by the Parties.
With the sole exception of specific items of the meeting minutes to
which the chairperson and the secretary cannot agree and which are
escalated as provided below, definitive minutes of all Operating
Committee meetings shall be finalized promptly after the meeting to
which the minutes pertain, as follows:
Promptly after each Operating Committee meeting, the secretary shall
prepare and distribute to all members of the Operating Committee draft
minutes of the meeting. Such minutes shall provide a description, in
reasonable detail, of the discussions at the meeting and a list of any
actions,
4
decisions or determinations approved by the Operating Committee and a
list of any issues to be resolved by the Executive Officers.
The chairperson shall then promptly after receiving such draft minutes
collect comments thereon from the members of his or her Party and
provide them to the secretary.
The chairperson and the secretary of the Operating Committee shall then
discuss each other's comments and finalize the minutes. The secretary
and chairperson shall each sign and date the final minutes. The
signature of the chairperson and the secretary upon the final minutes
shall indicate each Party's assent to the minutes.
If at any time during the preparation and finalization of the Operating
Committee meeting minutes, the secretary and the chairperson do not
agree on any issue with respect to the minutes, such issue shall be
resolved by the decision making process as provided in Section
2.5.1(a). The decision resulting from the decision making process shall
be recorded by the secretary in amended finalized minutes for said
meeting.
2.5.3 PROJECT LEADERS.
MERCK and deCODE each shall appoint a person (a "Project Leader") from
the Operating Committee to coordinate its part of the Research Program.
The Project Leaders shall be the primary contact between the Parties
and the Operating Committee with respect to the Research Program. Each
Party shall notify the other within thirty (30) days of the date of the
Agreement of the appointment of its Project Leader and shall notify the
other Party as soon as practicable upon changing this appointment.
2.6 ANNUAL BUDGET .
All costs in personnel time, expenses, goods and Third Party services
shall be estimated in advance for the subsequent Calendar Year
according to the Budget to be set forth in Schedule 2.6. The Budget
shall be prepared by the Project Leaders under the direction and
control of the Operating Committee by September 30th of the year
preceding the Calendar Year of the Budget.
2.7 RECORDS AND REPORTS
2.7.1 RECORDS.
Each Party shall maintain records, in sufficient detail and in good
scientific manner appropriate for patent and regulatory purposes, which
shall fully and properly reflect all work done and results achieved in
the performance of the Research Program by that Party.
2.7.2 COPIES AND INSPECTION OF RECORDS.
(a) MERCK shall have the right, during normal business hours and upon
reasonable notice, to inspect and copy all such records of deCODE
referred to in Section 2.7.1. MERCK shall maintain such records and the
information disclosed therein in confidence in accordance with Section
4.1. MERCK shall have the right to arrange for its employees and/or
consultants involved in the activities contemplated hereunder to visit
the offices and laboratories of deCODE and any of its Third Party
contractors as permitted under Section 2.2 during normal business hours
and upon reasonable notice, and to discuss the Research Program work
and its results in
4
detail with the technical personnel and consultants of deCODE. Upon
request, deCODE shall provide copies of the records described in
Section 2.7.1 above.
(b) At least once per Calendar Year during the term of the Agreement,
MERCK shall provide deCODE with information about the status of any
IRCT Compounds in development at MERCK including a review of any
significant developmental milestones achieved or setbacks encountered
since the previous year's review and such other information as may be
reasonably requested by deCODE so as to enable deCODE to monitor or
confirm MERCK's compliance with the provisions of Section 3.4 hereof.
deCODE shall have the right, during normal business hours and upon
reasonable notice, to inspect and copy all such records of MERCK
referred to in Section 2.7.1 that are necessary to deCODE to perform
its obligations under this Agreement. deCODE shall maintain such
records and the information disclosed therein in confidence in
accordance with Section 4.1.
2.8 COMPLIANCE
deCODE shall conduct the Research in accordance with all applicable
laws, rules and regulations, including, without limitation, all current
governmental regulatory requirements concerning Good Laboratory
Practices. In addition, if animals are used in research hereunder,
deCODE will comply with the Animal Welfare Act or any other applicable
local, state, national and international laws or regulations relating
to the care and use of laboratory animals. MERCK encourages deCODE to
use the highest standards, such as those set forth in the Guide for the
Care and Use of Laboratory Animals (NRC, 1996), for the humane
handling, care and treatment of such research animals. Any animals
which are used in the course of the Research, or products derived from
those animals, such as eggs or milk, will not be used for food
purposes, nor will these animals be used for commercial breeding
purposes. deCODE shall notify MERCK in writing of any deviations from
applicable regulatory or legal requirements. deCODE hereby certifies
that it will not and has not employed or otherwise used in any capacity
the services of any person debarred under Section 21 USC 335a in
performing any services hereunder.
2.9 RESEARCH PROGRAM TERM
Except as otherwise provided herein, the term of the Research Program
shall commence on the Collaboration Date and continue for a period of
seven (7) years. Following the initial seven (7) year term, the
Research Program will renew annually for successive one (1) year terms
("Extended Research Term") unless either Party sends a written notice
of termination at any time to the other Party PROVIDED, HOWEVER, that
MERCK may send such written notice of termination at any time beginning
five (5) years after the Collaboration Date. Such notice of termination
shall be sent at least [**] prior to the date of termination. In the
event that deCODE exercises its right to terminate under this Section
2.9, such termination shall not affect any ongoing IRCTs which shall be
completed at MERCK's discretion, PROVIDED HOWEVER that deCODE shall not
be obligated to begin any new IRCT which has been approved by the
Operating Committee but not yet begun. From time-to-time, the Parties
shall amend the Work Plan as applicable. In the event of a Change of
Control pursuant to which a Competitor Controls deCODE, MERCK shall
have the right to terminate the Research Program at any time on written
notice to deCODE. In the event that the term of the Research Program
expires or the Research Program is terminated during the pendency of an
IRCT or in the event that the Parties elect to abandon or terminate any
IRCT during the course of the Research Program, the Parties shall
arrange for orderly completion or
4
early termination of such IRCT over a reasonable period of at least 90
days, including making provision for payment for all non-cancelable
expenses associated therewith.
2.10 EXCLUSIVE EFFORTS
(a) During the Research Program Term, deCODE shall work exclusively
with MERCK in efforts to conduct IRCT [CONFIDENTIAL TREATMENT
REQUESTED] and shall not otherwise facilitate or assist any Third Party
to conduct IRCT [CONFIDENTIAL TREATMENT REQUESTED] by providing rights
to, either through license or any agreement to forgo enforcement of,
deCODE Patents or deCODE Prior Know-How. This Agreement does not
prohibit deCODE from (i) conducting IRCT [CONFIDENTIAL TREATMENT
REQUESTED]; or (ii) conducting clinical trials [CONFIDENTIAL TREATMENT
REQUESTED]. In the event that MERCK and deCODE begin an IRCT with a
Selected Compound in a Non-exclusive Disease Area, deCODE shall not
commence any IRCT with [CONFIDENTIAL TREATMENT REQUESTED].
(b) Beginning after the first anniversary of the Effective Date, if
during any [**] period the Parties do not commence or continue an IRCT
in any one of the Exclusive Disease Areas, and if during such two-year
period the Operating Committee neither plans nor conducts at least five
concurrent IRCT's during at least [**] of such [**] period, then such
specific Disease Area shall thereafter become a Non-Exclusive Disease
Area for all purposes under this Agreement. Notwithstanding the
preceding sentence, the Parties may agree to create exceptions to, or
the tolling of, the foregoing for special circumstances.
2.11 EXCHANGE OF INFORMATION
During the Research Term, deCODE promptly shall disclose on an ongoing
basis to MERCK in English and in writing all deCODE Know-How. MERCK
shall promptly disclose to deCODE during the Research Program Term all
MERCK Know-How.
2.12 USE OF HUMAN MATERIALS
With respect to any human cell lines, tissue, human clinical isolates
or similar human-derived materials that have been or are to be
collected and/or used in the Research Program ("Human Materials"), each
Party represents and warrants (i) that it has complied, or shall
comply, with all applicable laws, guidelines and regulations relating
to the collection and/or use of the Human Materials and (ii) that it
has obtained, or shall obtain, all necessary approvals and appropriate
informed consents, in writing, for the collection and/or use of such
Human Materials. deCODE shall provide documentation of such approvals
and consents upon MERCK's request. Each Party further represents and
warrants that such Human Materials may be used as contemplated in this
Agreement without any obligations to the individuals or entities
("Providers") who contributed the Human Materials, including, without
limitation, any obligations of compensation to such Providers or any
other Third Party for the intellectual property associated with, or
commercial use of, the Human Materials for any purposes.
2.13 PHARMACOGENOMICS TESTS.
(a) TESTS FOR USE IN CLINICAL TRIALS. MERCK shall have the sole and
exclusive right to direct and control the development and
commercialization of Tests for use with Selected Compounds. deCODE
shall have the first right to perform the work needed to develop such
Tests for use in the
4
conduct of IRCT's under this Agreement as set forth below. MERCK shall
identify and prioritize the Tests it wishes to have developed and Merck
shall have the right to solicit bids from Third Parties including
deadlines for the achievement of defined events in the development of
such Tests ("Test Milestones"). Prior to accepting any specific bid
from a Third Party, MERCK shall inform deCODE about the bid by
providing deCODE with a written notice including sufficient information
about the Test Milestones in the Third Party bid. deCODE shall have
thirty days from MERCK's notice to agree to the Test Milestones set
forth in the Third Party bid for a particular Test or MERCK may enter
into an agreement for the development of that Test with the Third
Party.
(b) TESTS FOR USE WITH MARKETED COMPOUNDS. In the event that MERCK
desires to have developed and marketed a Test for use with a Product,
MERCK shall have the right to solicit bids including Test Milestones
from Third Parties. If a Test has not been previously developed under
Section 2.13(a) for the IRCT Compound in the Product by a Third Party,
then prior to accepting any specific bid from a Third Party, MERCK
shall inform deCODE about the bid by providing deCODE with a written
notice including sufficient information about the Test Milestones in
the Third Party bid. deCODE shall have thirty days from MERCK's notice
to agree to the Test Milestones set forth in the Third Party bid for a
particular Test or MERCK may enter into an agreement for the
development of that Test with the Third Party.
(c) REVERSION OF RIGHTS TO TEST DEVELOPMENT. In the event that deCODE
exercises its rights under either Section 2.13 (a) or 2.13 (b) to
develop a Test and deCODE at any time fails to achieve a Test
Milestone, then the Parties shall meet within [**] to discuss the
reasons for failure to achieve the Test Milestone and any proposals for
revised Test Milestones provided, however, MERCK shall have the right
in its sole discretion to continue on in the development of such Test
either with deCODE, by itself or to enter into an agreement with a
Third Party for such Test. deCODE shall cooperate with MERCK in
providing reasonable assistance necessary to insure a rapid and
efficient transfer of technology related to the Test to allow the
continued development of the Test by MERCK or its contractor.
(d) RETAINED RIGHTS. MERCK's rights to develop pharmacogenomic tests
set forth in this Section 2.13 and Article 3 are limited to Tests and
no license under Article 3 shall be construed to grant to MERCK or any
sublicensee any rights under deCODE Patents, deCODE Generalized
Technology, deCODE Collaboration Patents, deCODE Know-How, deCODE
Genomics Data with respect to research and development of
pharmacogenomic tests or diagnostics generally.
3. LICENSE; EXCHANGE OF INFORMATION; DEVELOPMENT AND COMMERCIALIZATION
3.1 LICENSE GRANT
(a) COMMERCIALIZATION GRANTS. deCODE hereby grants to MERCK an
exclusive license in the Territory under deCODE Collaboration
Patents, Joint Collaboration Patents, and deCODE Know-How, with
a right to sublicense (i) to make, have made, use, offer to
sell, sell or import IRCT Compound and Product(s) and related
Tests and (ii) to practice any other invention claimed in the
foregoing patents solely with IRCT Compounds and Products or
use any licensed Know-How solely with IRCT Compounds and
Products and related Tests.
(b) COMPOUND DEVELOPMENT GRANTS.
4
(i) deCODE hereby grants to MERCK an exclusive license in the
Territory under deCODE Collaboration Patents, Joint
Collaboration Patents and deCODE Know-How with a right to
sublicense for the development of compounds Controlled by
MERCK and related Tests in the Therapeutic Field for (1)
Disease Areas and (2) Associated Information.
(ii) deCODE hereby grants to MERCK an non-exclusive license in
the Territory under deCODE Prior Know-How and deCODE
Patents with a right to sublicense for the development of
compounds Controlled by MERCK and related Tests in the
Therapeutic Field for (1) Disease Areas and (2)
Associated Information.
(iii) Subject to Section 3.1 (d), upon expiration or
termination of the Research Program under Section 2.9,
the licenses granted in this Section 3.1(b)(ii) under the
deCODE Collaboration Patents, Joint Collaboration
Patents, and deCODE Know-How, shall become non-exclusive.
(c) MUTUAL COVENANTS. Subject to Section 3.1(d), each Party
covenants that for the Research Program Term neither it nor its
Affiliates shall practice any invention covered by the deCODE
Collaboration Patents, the MERCK Collaboration Patents and the
Joint Collaboration Patents nor will it or its Affiliates use
deCODE Know-How or MERCK Know-How for any purposes other than
in furtherance of the Research Program. The covenants made in
this Section 3.1(c) are intended to include each Party's
promise not to use its Collaboration Patents or its Know-How
for purposes other than the Research Program and in the case of
MERCK additionally to include a right to develop and market
Products.
(d) MERCK OPTION - INTELLECTUAL PROPERTY.
At any time but no later then the expiration or termination of
the Research Program under Section 2.9, MERCK may (1) retain
exclusive rights granted in Section 3.1(b)(i) and (2) deCODE
will release MERCK from its covenant under Section 3.1 (c) by
payment of an exclusive license fee of [CONFIDENTIAL TREATMENT
REQUESTED] for which MERCK elects to retain exclusivity. MERCK
may exercise this option by providing notice and payment to
deCODE at any time prior to or concurrently with the expiration
or termination of the Research Program. Upon payment of the
Exclusive License Fee, deCODE hereby releases MERCK from the
covenant made in Section 3.1 (c) with respect to the Elected
Disease.
(e) MERCK OPTION - DECODE COMPOUNDS.
(i) RIGHTS GRANTED. In the Non-exclusive Disease Areas deCODE
may research and develop deCODE Compounds. During the
Research Term, for each deCODE Compound in a
Non-exclusive Disease Area that deCODE Controls, deCODE
grants to MERCK an exclusive option to negotiate for an
exclusive license to that deCODE Compound in the
Territory ("MERCK Compound Option"), subject only to any
conflicting or superceding rights of Third Parties with
respect to that deCODE Compound that were granted prior
to the Effective Date or as a condition of deCODE
obtaining rights to such deCODE Compound. As to deCODE
Compounds in a Non-Exclusive Disease Area that are not
subject to conflicting or superceding rights of Third
Parties, deCODE agrees it will not engage in any
discussions with a Third Party for commercial rights of
any kind to
4
a deCODE Compound before first offering such rights to
MERCK as set forth in the succeeding provisions of this
Section 3 1(e).
(ii) deCODE NOTICE. From time to time and prior to discussions
with any Third Party concerning the sale, licensing or
commercial relationship involving a deCODE Compound, at
deCODE's sole discretion it may provide MERCK with notice
that it intends to license rights to commercialize a
deCODE Compound("deCODE Notice"). The deCODE Notice shall
contain a commercially reasonable offer in writing
containing the financial terms under which deCODE is
willing to license the deCODE Compound to MERCK and will
include relevant information about the deCODE Compound
including but not limited to any chemical, biological and
clinical data. deCODE will provide MERCK an opportunity
to review any and all relevant information about the
deCODE Compound including but not limited to the
foregoing chemical, biological and clinical data.
(iii) CONDITIONS TO OPTION EXERCISE; OPTION TERM. The MERCK
Compound Option may be exercised at any time but no later
then the earlier of [**] after the deCODE Notice or the
end of the Term. MERCK may exercise the MERCK Compound
Option by sending written notice ("MERCK Exercise
Notice") to deCODE that MERCK wishes to engage in
negotiations for an exclusive license to the deCODE
Compound. MERCK shall have [**] to negotiate in good
faith principal business terms to be enumerated in a
non-binding term sheet and [**] thereafter ("Negotiation
Period") to negotiate in good faith and execute a
definitive agreement for an exclusive license to the
deCODE Compound in the Territory, which may be extended
by the Parties on mutual consent.
(iv) OPTION LAPSE AND REVIVAL. In the event that the Parties
fail to reach agreement on the terms and conditions of an
exclusive license during the Negotiation Period, deCODE
shall have the right to negotiate with Third Parties for
rights to that deCODE Compound; PROVIDED, HOWEVER, that
if deCODE has not licensed rights to that deCODE Compound
within [**] after the end of the Negotiation Period, and
if the Term has not yet expired or been terminated,
deCODE grants to MERCK another MERCK Compound Option for
that deCODE Compound exercisable in accordance with
Sections 3.1(e) et seq.
(f) deCODE LICENSES.
(i) During the Research Program, MERCK grants to deCODE a
non-exclusive license under MERCK Collaboration Patents,
MERCK Know-How, MERCK Prior Know-How and MERCK Patents
solely to perform its obligations under the Research
Program.
(ii) In the event the Research Program expires or terminates
and (1) MERCK has not made at least one payment under
Section 3.1(d)(i) or (2) a Change of Control pursuant to
which a Competitor obtains Control of deCODE has not
occurred, MERCK grants to deCODE a non-exclusive,
royalty-free license to practice any and all inventions
covered by MERCK Collaboration Patents.
4
3.2 NON-EXCLUSIVE LICENSE GRANT
In the event the making, having made, use, offer for sale, sale or
import by MERCK, its Affiliates or permitted sublicensees of IRCT
Compound(s), Test(s) or Product(s) would infringe during the term of
this Agreement a claim of issued letters patent which deCODE owns or
has the rights to license and which patents are not covered by the
grant in Section 3.1, deCODE hereby grants to MERCK, to the extent
deCODE is legally able to do so, a non-exclusive, sublicensable,
royalty-free license in the Territory under such issued letters patent
solely for MERCK to develop, make, have made, use, sell, offer for sale
or import IRCT Compound(s), Test(s) and Product(s) in the Territory.
3.3 NO IMPLIED LICENSES.
The Parties do not intend to grant rights under patents or know-how
except as expressly set forth herein and the grant of rights herein
does not imply a grant of rights to patents and know-how Controlled by
a Party that may be necessary to practice the full scope of any right
granted herein. Except as otherwise expressly qualified herein all
exclusive licenses granted herein are exclusive even as to the grantor
and no implied rights are retained.
3.4 DEVELOPMENT AND COMMERCIALIZATION.
MERCK shall use reasonable efforts, consistent with the usual practice
followed by MERCK in pursuing the commercialization and marketing of
its other pharmaceutical products of a similar commercial value, at its
own expense, to develop and commercialize a Product or Test on a
commercially reasonable basis in such countries in the Territory where
in MERCK's opinion it is commercially viable to do so.
3.5 EXCUSED PERFORMANCE.
In addition to the provisions of Article 7 hereof, the obligation of
MERCK with respect to any Product or Test under Section 3.4 are
expressly conditioned upon the continuing absence of any adverse
condition or event relating to the safety or efficacy of the Product or
Test, and the obligation of MERCK to develop or market any such Product
or Test shall be delayed or suspended so long as in MERCK's opinion any
such condition or event exists.
3.6 RIGHT OF FIRST NEGOTIATION.
In the event that MERCK determines that neither it nor its Affiliates
will commercialize an IRCT Compound and in its sole discretion
determines that it will license the commercial rights to a Third Party,
it shall notify deCODE of such decision and shall negotiate exclusively
with deCODE in good faith on the terms and conditions on which it is
willing to license commercial rights to such IRCT Compound for a period
of [**]. In the event that deCODE does not agree upon principal
business terms to be enumerated in a non-binding term sheet within [**]
or the Parties do not execute a definitive agreement on such terms and
conditions within [**] thereafter, MERCK shall have the right to
negotiate with Third Parties for the commercial rights to that IRCT
Compound; PROVIDED, HOWEVER, that if MERCK has not licensed commercial
rights to such IRCT Compound to a Third Party within [**] after the end
of the [**] period and if the Term has
4
not yet expired or been terminated, MERCK grants to deCODE another
right of first negotiation exercisable in accordance with this Section
3.6. In connection with the rights granted under this Section 3.6,
MERCK will provide deCODE with reasonable opportunity to review any and
all relevant information about the IRCT Compound including but not
limited to chemical, biological and clinical data. deCODE's rights
under this Section 3.6 shall be subject only to any conflicting or
superceding rights of Third Parties with respect to a particular IRCT
Compound that were granted prior to the compound's selection under
Section 2.4.
4. CONFIDENTIALITY AND PUBLICATION
4.1 NONDISCLOSURE OBLIGATION.
All Information disclosed by one Party to the other Party hereunder
shall be maintained in confidence by the receiving Party and shall not
be disclosed to non-Party or used for any purpose except as set forth
herein without the prior written consent of the disclosing Party,
except to the extent that such Information:
(a) is known by receiving Party at the time of its receipt, and not
through a prior disclosure by the disclosing Party, as
documented by the receiving Party's business records;
(b) is properly in the public domain;
(c) is subsequently disclosed to the receiving Party by a Third
Party who may lawfully do so and is not under an obligation of
confidentiality to the disclosing Party;
(d) is developed by the receiving Party independently of
Information received from the disclosing Party, as documented
by the receiving Party's business records;
(e) is disclosed to governmental or other regulatory agencies in
order to obtain patents or to gain or maintain approval to
conduct clinical trials or to market Product or Tests, but such
disclosure may be only to the extent reasonably necessary to
obtain patents or authorizations.
Any combination of features or disclosures shall not be deemed to fall
within the foregoing exclusions merely because individual features are
published or available to the general public or in the rightful
possession of the receiving Party unless the combination itself and
principle of operation are published or available to the general public
or in the rightful possession of the receiving party.
4.1.2 Notwithstanding the obligations of confidentiality and prohibitions on
use, it shall not be a breach of a Party's obligations under this
Section 4.1 to disclose Proprietary Information:
(a) to Third Parties under confidentiality provisions at least as
stringent as those in this Agreement, for consulting, manufacturing
development, manufacturing, external testing, marketing trials and to
Third Parties who are sublicensees or other development/marketing
partners of the Parties with respect to any of the subject matter of
this Agreement; or
(b) in compliance with applicable laws or regulations (including
the disclosure requirements of the U.S. Securities and Exchange
Commission, NASDAQ or any stock exchange on which securities issued by
such Party or its Affiliates are traded) or order by a court or other
regulatory
4
body having competent jurisdiction; provided that if a Party is so
required to disclose Information that is subject to the non-disclosure
provisions of this Section 4.1 or 4.2, such Party shall promptly inform
the other Party of the disclosure that is being sought in order to
provide the other Party an opportunity to challenge or limit the
disclosure obligations except where impracticable for necessary
disclosures (for example, to physicians conducting studies or to health
authorities). Information that is disclosed by judicial or
administrative process shall remain otherwise subject to the
confidentiality and non-use provisions of this Section 4.1 and Section
4.2, and the Party disclosing Information pursuant to law or court
order shall take all steps reasonably necessary, including without
limitation obtaining an order of confidentiality, to ensure the
continued confidential treatment of such Information.
4.2 deCODE KNOW-HOW.
deCODE agrees to use its best efforts to keep all deCODE Know-How and
deCODE Prior Know-How confidential except as may be agreed by the
Parties under Section 4.3. deCODE agrees that to the extent deCODE
Prior Know-how will be disclosed to Third Parties for use outside of
the Disease Areas that such disclosure to a Third Party will be subject
to obligations of non-disclosure similar to those in Section 4.1 above.
4.3 PUBLICATION.
MERCK and deCODE each acknowledge the other Party's interest in
publishing the results of its research in order to obtain recognition
within the scientific community and to advance the state of scientific
knowledge. Each Party also recognizes the mutual interest in obtaining
valid patent protection and in protecting business interests and trade
secret information. Consequently, except for disclosures permitted
pursuant to Section 4.1, either Party, its employees or consultants
wishing to make a publication shall deliver to the other Party a copy
of the proposed written publication or an outline of an oral disclosure
at least sixty (60) days prior to submission for publication or
presentation. The reviewing Party shall have the right (a) to propose
modifications to the publication or presentation for patent reasons,
trade secret reasons or business reasons or (b) to request a reasonable
delay in publication or presentation in order to protect patentable
information. If the reviewing Party requests a delay, the publishing
Party shall delay submission or presentation for a period of ninety
(90) days to enable patent applications protecting each Party's rights
in such information to be filed in accordance with Article 7 below.
Upon expiration of such ninety (90) days, the publishing Party shall be
free to proceed with the publication or presentation. If the reviewing
Party requests modifications to the publication or presentation, the
publishing Party shall edit such publication to prevent disclosure of
trade secret or proprietary business information prior to submission of
the publication or presentation.
4.4 PUBLICITY/USE OF NAMES.
No disclosure of the existence of, or the terms of, this Agreement may
be made by either Party, and no Party shall use the name, trademark,
trade name or logo of the other Party or its employees in any
publicity, news release or disclosure relating to this Agreement or its
subject matter, without the prior express written permission of the
other Party. Nothing in this Agreement shall prevent either Party from
issuing statements that such Party determines to be necessary to comply
with applicable law (including the disclosure requirements of the U.S.
Securities and Exchange Commission, NASDAQ or any other stock exchange
on which securities issued by such Party are traded); provided,
HOWEVER, that, the disclosing Party shall provide the other Party with
a copy of
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the proposed text of such statements sufficiently in advance of the
scheduled release thereof to afford such other Party a reasonable
opportunity to review and comment upon the proposed text and the
disclosing Party shall take all reasonable steps to limit such
disclosure solely to fulfill its legal obligations.
4.5 IMPROPER DISCLOSURES.
In the event that either Party discloses Information other than in
accordance with Sections 4.3 and 4.4, the non-breaching Party shall
have the right to seek compensation from the breaching Party in
addition to and not in place of any other non-monetary remedies
available for such breach of Sections 4.3 and 4.4. Entitlement to
compensation and the amount of the compensation shall be submitted to
dispute resolution in accordance with Section 10.6.
5. PAYMENTS; ROYALTIES AND REPORTS
5.1 RESEARCH PROGRAM FUNDING
(a) PARTY CONTRIBUTIONS. As set forth herein each Party has an ongoing
financial obligation to support the Research Program. Neither Party
shall be obligated to provide a higher level of support than agreed
upon in the Budget for any Calendar Year. In accordance with the Budget
and with funding process set out in Schedule 5.1, MERCK shall be
responsible for [**] of the operational expenses of the Research
Program and deCODE shall be responsible for [**] of the operational
expenses. These shared operational expenses shall be limited solely to
[CONFIDENTIAL TREATMENT REQUESTED], as reflected in Schedule 5.1, and
the Parties contemplate that deCODE shall provide approximately
[CONFIDENTIAL TREATMENT REQUESTED] provided by MERCK. Without its
consent, deCODE shall not be obligated to share responsibility for
operational expenses that result from aggregate [CONFIDENTIAL TREATMENT
REQUESTED]. Subject to the methodology set forth in Schedule 5.1, such
other methodologies as the Operating Committee may expressly approve
and in accordance with the Budget, operational expenses incurred by
either Party shall be determined in accordance with that Party's
regular accounting methods, consistently applied.
(b) BUDGET PREPARATION. The estimated expenditures for that portion of
the first Calendar Year beginning on the Effective Date and ending on
December 31st shall be set forth in the Budget which will be attached
hereto as Schedule 2.6 following its preparation by the Operating
Committee and approval by the Executive Committee. By the initial
September 15th following the Effective Date of the Agreement and for
each subsequent September 15th, the Operating Committee shall prepare a
Budget for the upcoming Calendar Year for approval by the Executive
Committee.
(c) RESEARCH PAYMENTS. MERCK shall pay to deCODE, in advance on a
quarterly basis at the beginning of each Calendar Quarter its estimated
MERCK Share for that Calendar Quarter. The initial payment shall be
made within thirty days of approval of the initial Budget by the
Executive Committee. Within sixty (60) days following the end of a
Calendar Quarter, the Parties shall meet and determine actual
expenditures in employee time and expenses properly attributable to the
Research Program for that Calendar Quarter. The combined total of
expenditures shall be the Research Program Expenditures for that
Calendar Quarter. The MERCK Share shall be determined in accordance
with Schedule 5.1 and the Parties shall reconcile the
4
differences between contribution obligations and expenditures by
payment of the appropriate amount of money from one Party to the other
Party in accordance with Schedule 5.1.
(d) ANCILLARY PAYMENTS BY MERCK. Certain expenditures directly
associated with the conduct of the IRCT in accordance with Section 2.3
shall be borne solely by MERCK and shall not be considered part of the
Research Program funding subject to the defined contributions of the
Parties. These expenditures shall include [**] and only those costs of
a similar nature agreed to in writing by the parties.
(e) PAYMENT FOR ABANDONED IRCT COMPOUNDS. If MERCK in its sole
discretion for reasons other than safety or efficacy elects to abandon
development of an IRCT Compound, and provided that (i) MERCK has
elected not to offer commercialization rights to deCODE pursuant to
Section 3.6, and (ii) there is or will be no Product in the same
Disease Area as the abandoned IRCT Compound for which deCODE has
received or may receive payments under either Section 5.3 or 5.4, THEN
MERCK shall be obligated to pay deCODE [**] of its costs and expenses
incurred to provide the FTEs dedicated to the development of that IRCT
Compound under the Research Program PROVIDED, HOWEVER, that MERCK shall
not be obligated to pay deCODE until the later of the end of the
Research Program Term including any Extended Research Program Term or
the date on which no other IRCT Compounds in the same Disease Area as
the abandoned IRCT Compound are being developed by MERCK.
5.2 CONSIDERATION FOR LICENSE
In partial consideration for the licenses granted herein under the
Patent Rights and deCODE Know-How, upon the terms and conditions
contained herein, MERCK shall pay to deCODE a total of [**] dollars as
a non-refundable exclusivity license and technology access signature
fee for all of the diseases within the Disease Area within thirty (30)
days of the Effective Date. This payment is comprised of [**] dollars.
If deCODE rejects the initial [**] MERCK nominated compounds from
[CONFIDENTIAL TREATMENT REQUESTED] for an Information Rich Clinical
Trial pursuant to Section 2.4, THEN at any time prior to deCODE's
acceptance of a subsequent MERCK nominated compound in the
[CONFIDENTIAL TREATMENT REQUESTED], MERCK may demand by written notice
to deCODE the payment of [**] dollars. deCODE shall make such payment
to MERCK within thirty (30) days of the notice. Effective when MERCK
gives such notice, this Agreement shall be deemed terminated with
respect to such Non-Exclusive Disease Areas, after which time neither
MERCK nor deCODE shall have further rights or obligations with respect
to the conduct of the Research Program in such Non-Exclusive Disease
Area under Section 2, and all licenses, options and other rights
granted to either Party under Section 3 with respect to such
Non-Exclusive Disease Area shall terminate.
5.3 MILESTONE PAYMENTS
Subject to the terms and conditions in this Agreement, MERCK shall pay
to deCODE the following milestone payments:
(a) MERCK will pay a milestone of [CONFIDENTIAL TREATMENT
REQUESTED].
(b) MERCK will pay a milestone of [CONFIDENTIAL TREATMENT
REQUESTED].
4
4
MERCK shall notify deCODE in writing within thirty (30) days upon the
achievement of the milestone for each Product or Test, and shall make
the appropriate milestone payment within thirty (30) days of the
achievement of such milestone. The milestone payment shall be payable
only upon the [**] achievement of such milestone for any Test or
Product containing a unique IRCT Compound and no amounts shall be due
hereunder for [**] achievement of such milestone with other Tests or
Products containing that IRCT Compound. No milestone payment shall be
due under 5.3 (a) for any Product containing a Related IRCT Compound if
a milestone under Section 5.3(a) has been paid for a Product containing
an IRCT Compound that the Related IRCT Compound was derived from or
that the Related IRCT Compound is [CONFIDENTIAL TREATMENT REQUESTED]
unless the Product also contains an IRCT Compound that would otherwise
qualify for the milestone under this Section 5.3. In the event that
MERCK makes a payment under Section 5.3(a) for a Product containing a
Related IRCT Compound, it shall have no further obligation to make
milestone payments under Section 5.3(a) for (i) any other Product
containing that Related IRCT Compound; (ii) the IRCT Compound that it
is a [CONFIDENTIAL TREATMENT REQUESTED] of under Section 1.60(a); or
(iii) any other compound that is a Related IRCT Compound because it is
a [CONFIDENTIAL TREATMENT REQUESTED] of the IRCT Compound of (ii).
5.4 ROYALTIES
5.4.1 ROYALTIES PAYABLE BY MERCK.
(a) Subject to the terms and conditions of this Agreement, MERCK shall
pay to deCODE royalties on a country-by-country basis in an amount
equal to:
(i) MERCK will pay a royalty of [**] to deCODE on MERCK's Net Sales of
Product.
(ii) In the event there is no Valid Patent Claim of a MERCK Compound
Patent in a country, the royalty due for Net Sales in that country
shall be [**] percent of those royalty rates set forth in Section 5.4.1
(a)(i).
(iii) Royalties on each Product at the rate set forth above shall be
effective as of the date of First Commercial Sale of Product in a
country and shall continue until the later of (A) the expiration of the
last Valid Patent Claim of a MERCK Compound Patent in that country or
(B) until the tenth (10th) anniversary of the First Commercial Sale in
such country, subject to the following conditions:
(1) that only one royalty shall be due with respect to the
same unit of Product;
(2) that no royalties shall be due upon the sale or other
transfer among MERCK or its Affiliates or sublicensees, but in
such cases the royalty shall be due and calculated upon MERCK's
or its Affiliate's or sublicensee's Net Sales to the first
independent Third Party; and
(3) no royalties shall accrue on the disposition of Product
in reasonable quantities by MERCK or its Related Parties as
samples (promotion or otherwise) or as donations (for example,
to non-profit institutions or government agencies for a
non-commercial purpose).
(b) Subject to the terms and conditions of this Agreement, MERCK
shall pay to deCODE royalties on a Test-by-Test and a
country-by-country basis of [**] of MERCK's Net Sales of Tests.
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5.4.2 CHANGE IN SALES PRACTICES.
The Parties acknowledge that during the term of this Agreement, MERCK's
sales practices for the marketing and distribution of Product or Tests
may change to the extent to which the calculation of the payment for
royalties on Net Sales may become impractical or even impossible. In
such event the Parties agree to meet and discuss in good faith new ways
of compensating deCODE to the extent currently contemplated under
Section 5.4.1.
5.4.3 ROYALTIES FOR BULK COMPOUND.
In those cases where MERCK sells bulk IRCT Compound or Related IRCT
Compound rather than Product in packaged form to an independent Third
Party, the royalty obligations of this Section 5.4 shall be applicable
to the bulk IRCT Compound or Related IRCT Compound.
5.4.4 COMPETITIVE PRODUCT.
In the event a Competitive Product is sold in a country, then the
royalty term set out in Section 5.4.1.(a)(iii) for the corresponding
Product shall be [**] from First Commercial Sale without regard to the
existence of a Valid Patent Claim and royalties shall be reduced in
accordance Section 5.4.1(a)(ii) .
5.5 REPORTS; PAYMENT OF ROYALTY
During the term of the Agreement following the First Commercial Sale of
a Product or Test, MERCK shall furnish to deCODE a quarterly written
report for the Calendar Quarter showing the Net Sales of all Products
or Tests subject to royalty payments sold by MERCK and its Related
Parties in the Territory during the reporting period and the royalties
payable under this Agreement. Reports shall be due on the sixtieth (60)
day following the close of each Calendar Quarter. Royalties shown to
have accrued by each royalty report shall be due and payable on the
date such royally report is due. MERCK shall keep complete and accurate
records in sufficient detail to enable the royalties payable hereunder
to be determined.
5.6. AUDITS
5.6.1 Upon the written request of deCODE and not more than once in each
Calendar Year, MERCK shall permit an independent certified public
accounting firm of nationally recognized standing selected by deCODE
and reasonably acceptable to MERCK, at deCODE's expense, to have access
during normal business hours to such of the records of MERCK as may be
reasonably necessary to verify the accuracy of the royalty reports
hereunder for any year ending not more than twenty-four (24) months
prior to the date of such request. The accounting firm shall disclose
to deCODE only whether the royalty reports are correct or incorrect and
the specific details concerning any discrepancies. No other information
shall be provided to deCODE.
5.6.2 If such accounting firm correctly identifies a discrepancy made during
such period, the appropriate Party shall pay the other Party the amount
of the discrepancy within thirty (30) days of the date deCODE delivers
to MERCK such accounting firm's written report so correctly concluding,
or as otherwise agreed upon by the Parties. The fees charged by such
accounting firm shall be paid by deCODE, PROVIDED, HOWEVER, if the
payments made or payable were at least
4
[**] dollars below and less than [**] of the amount that should have
been paid during the period in question, MERCK shall also reimburse
deCODE for the reasonable costs of such audit.
5.6.3 MERCK shall include in each sublicense granted by it pursuant to this
Agreement a provision requiring the sublicensee to make reports to
MERCK, to keep and maintain records of sales made pursuant to such
sublicense and to grant access to such records by deCODE's independent
accountant to the same extent required of MERCK under this Agreement.
Upon the expiration of twenty-four (24) months following the end of any
year, the calculation of royalties payable with respect to such year
shall be binding and conclusive upon deCODE, and MERCK and its
sublicensees shall be released from any liability or accountability
with respect to royalties for such year.
5.6.4 Upon the expiration of twenty-four (24) months following the end of any
year, the calculation of royalties payable with respect to such year
shall be binding and conclusive upon deCODE, and MERCK and its Related
Parties shall be released from any liability or accountability with
respect to royalties for such year.
5.6.5 deCODE shall treat all financial information subject to review under
this Section 5.6 or under any sublicense agreement in accordance with
the confidentiality and non-use provisions of this Agreement, and shall
cause its accounting firm to enter into an acceptable confidentiality
agreement with MERCK and/or its Related Parties obligating it to retain
all such information in confidence pursuant to such confidentiality
agreement.
5.7 PAYMENT EXCHANGE RATE
All payments to be made by MERCK to deCODE under this Agreement shall
be made in United States dollars and may be paid by check made to the
order of deCODE or bank wire transfer in immediately available funds to
such bank account in the United States designated in writing by deCODE
from time to time. In the case of sales outside the United States, the
rate of exchange to be used in computing the amount of currency
equivalent in United States dollars due deCODE shall be made at the
rate of exchange and on the periodic schedule used by MERCK for its own
financial reporting purposes at such time.
5.8 INCOME TAX WITHHOLDING
If laws, rules or regulations require withholding of income taxes or
other taxes imposed upon payments set forth in this Article 5, MERCK
shall make such withholding payments as required and subtract such
withholding payments from the payments set forth in this Article 5.
MERCK promptly shall notify deCODE of such withholding and shall submit
appropriate proof of payment of the withholding taxes to deCODE within
a reasonable period of time.
6. REPRESENTATIONS AND WARRANTIES
6.1 REPRESENTATION AND WARRANTY
(a) deCODE represents and warrants to MERCK that as of the date of
this Agreement:
(i) it has the full right, power and authority to enter into this
Agreement, to perform the Research Program and to grant the
licenses granted under Article 3 hereof;
4
(ii) it has not previously assigned, transferred, conveyed or
otherwise encumbered its right, title and interest in Patent
Rights, deCODE Know-How or deCODE Prior Know-How;
(iii) to the best of deCODE's knowledge, it is the sole and exclusive
owner of the Patent Rights and deCODE Know-How(excluding those
rights included in the foregoing on basis that deCODE has
Control solely through license rights from a Third Party), all
of which are (and shall be, in the case of deCODE Information
and Invention) free and clear of any liens, charges and
encumbrances, and no other person, corporate or other private
entity, or governmental entity or subdivision thereof, has or
shall have any claim of ownership whatsoever with respect to
the Patent Rights and deCODE Know-How;
(iv) there are no claims, judgments or settlements against or owed
by deCODE or pending or threatened claims or litigation
relating to the Patent Rights, deCODE Know-How and deCODE Prior
Know-How(excluding those rights included in the foregoing on
basis that deCODE has Control solely through license rights
from a Third Party); and
(v) deCODE has disclosed to MERCK all reasonably relevant
information regarding the Patent Rights and deCODE Know-How
licensed under this Agreement, including without limitation the
existence of any patent opinions obtained by deCODE related
thereto.
(b) MERCK represents and warrants to deCODE that as of the date of this
Agreement:
(i) it has the full right, power and authority to enter into this
Agreement, to perform the Research Program and to grant the
licenses granted under Article 3 hereof;
(ii) it has not previously assigned, transferred, conveyed or
otherwise encumbered its right, title and interest in MERCK
Patents, MERCK Collaboration Patents, Joint Collaboration
Patents, MERCK Know-How or MERCK Prior Know-How;
(iii) to the best of MERCK's knowledge, it is the sole and exclusive
owner of MERCK Patents, MERCK Collaboration Patents, MERCK
Know-How or MERCK Prior Know-How(excluding those rights
included in the foregoing on basis that MERCK has Control
solely through license rights from a Third Party), all of which
are (and shall be, in the case of MERCK Information and
Invention) free and clear of any liens, charges and
encumbrances, and no other person, corporate or other private
entity, or governmental entity or subdivision thereof, has or
shall have any claim of ownership whatsoever with respect to
MERCK Patents, MERCK Collaboration Patents, Joint Collaboration
Patents, MERCK Know-How or MERCK Prior Know-How;
(iv) there are no claims, judgments or settlements against or owed
by MERCK or pending or threatened claims or litigation relating
to the MERCK Patents, MERCK Collaboration Patents, Joint
Collaboration Patents, MERCK Know-How or MERCK Prior
Know-How(excluding those rights included in the foregoing on
basis that MERCK has Control solely through license rights from
a Third Party).
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7. PATENT PROVISIONS
7.1 OWNERSHIP, FILING, PROSECUTION AND MAINTENANCE OF PATENTS
7.1.1 deCODE shall retain all right, title and interest in and to deCODE
Generalized Technology, deCODE Genomics Data, deCODE Know-How, deCODE
Prior Know-How, deCODE Collaboration Patents and deCODE Patents,
subject to the licenses granted to MERCK pursuant to Section 3.1.
7.1.2 MERCK shall retain all right, title and interest in and to the MERCK
Know-How, MERCK Collaboration Patents and MERCK Patents, subject to the
licenses granted to deCODE pursuant to Section 3.1.
7.1.3 Subject to the licenses granted hereunder:
(i) rights to deCODE Information and Inventions shall belong to
deCODE;
(ii) rights to MERCK Information and Inventions shall belong to
MERCK; and
(iii) rights to Joint Information and Inventions shall belong jointly
to deCODE and to MERCK.
Except as expressly set forth in this Agreement, the Parties shall
follow United States laws of inventorship, ownership, and patenting
rights including a Party's ability to exploit joint inventions without
accounting to each other.
7.1.4 deCODE agrees to file, prosecute and maintain in the Territory, upon
appropriate consultation with MERCK, the Patent Rights licensed to
MERCK under this Agreement; PROVIDED, HOWEVER, with respect to Joint
Information and Inventions, MERCK shall have the first right to file
patent applications for such Joint Information and Inventions. With
respect to deCODE Information and Inventions, deCODE may elect not to
file and if so MERCK shall have the right to file patent applications.
In such event, deCODE shall execute such documents and perform such
acts at deCODE's expense as may be reasonably necessary to effect an
assignment of such Patent Rights to MERCK in a timely manner to allow
MERCK to continue such prosecution or maintenance. In each case, the
filing Party shall give the non-filing Party an opportunity to review
the text of the application before filing, shall consult with the
non-filing Party with respect thereto, and shall supply the non-filing
Party with a copy of the application as filed, together with notice of
its filing date and serial number. deCODE shall keep MERCK advised of
the status of the actual and prospective patent filings and upon the
request of MERCK, provide advance copies of any papers related to the
filing, prosecution and maintenance of such patent filings. deCODE
shall promptly give notice to MERCK of the grant, lapse, revocation,
surrender, invalidation or abandonment of any Patent Rights licensed to
MERCK for which deCODE is responsible for the filing, prosecution and
maintenance. With respect to all filings hereunder, the filing Party
shall be responsible for payment of all costs and expenses related to
such filings, except with respect to filings related to Joint
Collaboration Patents, the costs and expenses of which shall be borne
equally by the Parties.
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In the event that a Party elects not to contribute to the costs and
expenses incurred in connection with a filing related to a Joint
Collaboration Patent in any country, such Party shall be deemed to have
abandoned its rights with respect to such Joint Collaboration Patent in
such country.
7.2 OPTION OF MERCK TO PROSECUTE AND MAINTAIN PATENTS
deCODE shall give notice to MERCK of any desire to cease prosecution
and/or maintenance of Patent Rights on a country by country basis in
the Territory and, in such case, shall permit MERCK, at its sole
discretion, to continue prosecution or maintenance of such Patent
Rights at its own expense. If MERCK elects to continue prosecution or
maintenance or to file based on deCODE's election not to file pursuant
to Section 7.1 above, deCODE shall execute such documents and perform
such acts at deCODE's expense as may be reasonably necessary to effect
an assignment of such Patent Rights to MERCK in a timely manner to
allow MERCK to continue such prosecution or maintenance.
7.3 INTERFERENCE, OPPOSITION, REEXAMINATION AND REISSUE
(a) deCODE shall, within ten (10) days of learning of such event,
inform MERCK of any request for, or filing or declaration of, any
interference, opposition, or reexamination relating to Patent Rights.
MERCK and deCODE shall thereafter consult and cooperate fully to
determine a course of action with respect to any such proceeding. MERCK
shall have the right to review and approve any submission to be made in
connection with such proceeding.
(b) deCODE shall not initiate any reexamination, interference or
reissue proceeding relating to Patent Rights without the prior written
consent to MERCK, which consent shall not be unreasonably withheld.
(c) In connection with any interference, opposition, reissue, or
reexamination proceeding relating to Patent Rights, MERCK and deCODE
will cooperate fully and will provide each other with any information
or assistance that either may reasonably request. deCODE shall keep
MERCK informed of developments in any such action or proceeding,
including, to the extent permissible by law, consultation and approval
of any settlement, the status of any settlement negotiations and the
terms of any offer related thereto.
(d) deCODE shall bear the expense of any interference, opposition,
reexamination, or reissue proceeding relating to Patent Rights, except
with respect to proceedings related to Joint Collaboration Patents, the
costs and expenses of which shall be borne equally by the Parties. In
the event that a Party elects not to contribute to the costs and
expenses incurred in connection with a proceeding in a country related
to a Joint Collaboration Patent, such Party shall be deemed to have
abandoned its rights with respect to such Joint Collaboration Patent in
that country.
7.4 ENFORCEMENT AND DEFENSE
(a) deCODE shall give MERCK notice of either (i) any infringement
of Patent Rights, or (ii) any misappropriation or misuse of deCODE
Know-How, that may come to deCODE's attention. MERCK and deCODE shall
thereafter consult and cooperate fully to determine a course of action,
including but not limited to the commencement of legal action by either
or both MERCK and deCODE, to terminate any infringement of Patent
Rights or any misappropriation or misuse
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of deCODE Know-How. However, deCODE, upon notice to MERCK, shall have
the first right to initiate and prosecute such legal action in the name
of deCODE and MERCK, or to control the defense of any declaratory
judgment action relating to Patent Rights or deCODE Know-How. deCODE
shall promptly inform MERCK if it elects not to exercise such first
right and MERCK shall thereafter have the right to either initiate and
prosecute such action or to control the defense of such declaratory
judgment action in the name of MERCK and, if necessary, deCODE. Each
Party shall have the right to be represented by counsel of its own
choice. The Party initiating a prosecution relating to Patent Rights
shall bear the expense of such prosecution, except with respect to
prosecutions related to Joint Collaboration Patents, the costs and
expenses of which shall be borne equally by the Parties. In the event
that a Party elects not to contribute to the costs and expenses
incurred in connection with a prosecution related to a Joint
Collaboration Patent in a country, such Party shall be deemed to have
abandoned its rights with respect to such Joint Collaboration Patent in
that country.
(b) In the event that deCODE elects not to initiate and prosecute
an action as provided in paragraph (a), and MERCK elects to do so, the
costs of any agreed-upon course of action to terminate infringement of
Patent Rights or misappropriation or misuse of deCODE Know-How,
including without limitation the costs of any legal action commenced or
the defense of any declaratory judgment, shall be shared equally by
deCODE and MERCK.
(c) For any action to terminate any infringement of Patent Rights
or any misappropriation or misuse of deCODE Know-How, in the event that
MERCK is unable to initiate or prosecute such action solely in its own
name, deCODE will join such action voluntarily and will execute and
cause its Affiliates to execute all documents necessary for MERCK to
initiate litigation to prosecute and maintain such action. In
connection with any action, MERCK and deCODE will cooperate fully and
will provide each other with any information or assistance that either
may reasonably request. Each Party shall keep the other informed of
developments in any action or proceeding, including, to the extent
permissible by law, the consultation and approval of any settlement
negotiations and the terms of any offer related thereto.
(d) Any recovery obtained by either or both MERCK and deCODE in
connection with or as a result of any action contemplated by this
section, whether by settlement or otherwise, shall be shared in order
as follows:
(i) the Party which initiated and prosecuted the action shall
recoup all of its costs and expenses incurred in
connection with the action;
(ii) the other Party shall then, to the extent possible,
recover its costs and expenses incurred in connection
with the action; and
(iii) the amount of any recovery remaining shall then be
allocated between the Parties on a PRO RATA basis taking
into consideration the relative economic losses suffered
by each Party. By way of example and not limitation,
MERCK may suffer lost profit from the loss of sales of
Product or Tests and deCODE may suffer lost royalty
income on the loss of sales.
(e) deCODE shall inform MERCK of any certification regarding any
Patent Rights it has received pursuant to either 21 U.S.C. Sections
355(b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) or it successor provisions or
any similar provisions in a country in the Territory other than the
United States and shall provide MERCK with a copy of such certification
within five (5) days of receipt. deCODE's and MERCK's rights with
respect to the initiation and prosecution of any legal action as a
result
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of such certification or any recovery obtained as a result of such
legal action shall be as defined in paragraphs 7.4(a)-(d) hereof;
PROVIDED, HOWEVER, deCODE shall exercise its first right to initiate
and prosecute any action and shall inform MERCK of such decision within
ten (10) days of receipt of the certification, after which time MERCK
shall have the right to initiate and prosecute such action.
7.5 PATENT TERM RESTORATION
The Parties hereto shall cooperate with each other in obtaining patent
term restoration or supplemental protection certificates or their
equivalents in any country in the Territory where applicable to Patent
Rights. In the event that elections with respect to obtaining such
patent term restoration are to be made, MERCK shall have the right to
make the election and deCODE agrees to abide by such election.
8. TERM AND TERMINATION
8.1 TERM AND EXPIRATION.
This Agreement shall be effective as of the Effective Date and unless
terminated earlier pursuant to Sections 8.2 or 8.3 below, this
Agreement shall continue in effect until expiration of all payment
obligations hereunder. Upon expiration of this Agreement due to the
expiration of all payment obligations, MERCK's licenses pursuant to
Section 3.1 and 3.2 shall become fully paid-up, perpetual licenses.
8.2 TERMINATION BY A PARTY.
Notwithstanding anything contained herein to the contrary, after the
Research Program has ended or been terminated and if no IRCT Compounds
are being sold as Products and no IRCT Compounds are in development,
MERCK shall have the right to terminate this Agreement at any time in
its sole discretion by giving ninety (90) days' advance written notice
to deCODE. Not later than thirty (30) days after the date of such
termination, each Party shall return or cause to be returned to the
other Party all Information in tangible form received from the other
party and all copies thereof, except that each party may retain one
copy in its confidential files for records purposes. In the event of
termination under this Section 8.2: (i) each Party shall pay all
amounts then due and owing as of the termination date; and (ii) except
for the surviving provisions set forth in Section 8.4 hereof, the
rights and obligations of the parties hereunder shall terminate as of
the date of such termination; PROVIDED, HOWEVER, that MERCK retain all
licenses granted under Section 3.1 in the scope that existed
immediately prior to termination.
8.3 TERMINATION FOR CAUSE
8.3.1 CAUSE FOR TERMINATION.
This Agreement may be terminated at any time during the term of this
Agreement upon written notice by either Party if the other Party is in
breach of its material obligations hereunder by causes and reasons
within its control and has not cured such breach within ninety (90)
days after notice requesting cure of the breach; PROVIDED, HOWEVER, in
the event of a good faith dispute with
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respect to the existence of a material breach, the ninety (90) day cure
period shall be tolled until such time as the dispute is resolved
pursuant to Section 10.6 hereof.
8.3.2 EFFECT OF TERMINATION FOR CAUSE ON LICENSE.
(a) If MERCK terminates this Agreement under Section 8.3.1, MERCK's
licenses pursuant to Sections 3.1 and 3.2 shall be subject only to
MERCK's continuing obligations of compensation, reporting and
confidentiality to deCODE under Sections 2.7.2(a), 4, 5.3 and 5.4 and
otherwise may not be terminated nor circumscribed for any other reason.
In addition, deCODE shall at MERCK's request promptly return or cause
to be returned to MERCK all Products and Tests, IRCT Compounds, Related
IRCT Compounds, Information in tangible form, and all substances or
compositions delivered or provided by MERCK, as well as any other
material provided by MERCK in any medium. If deCODE terminates this
Agreement under Section 8.3.1, (1) if MERCK has not paid any Exclusive
License Fees prior to termination then MERCK's licenses under Section
3.1(b) and (d) become non-exclusive; (2) if MERCK pays an Exclusive
License Fee at any time prior to the date of termination, then its
license rights under Section 3.1 (b) and (d) to the corresponding
Elected Disease become exclusive licenses; (3) MERCK's licenses under
Section 3.1(a) survive any termination of the Agreement by deCODE and
to the extent that any IRCT Compounds, Related IRCT Compounds, Tests or
Products exist, subject to MERCK's continuing obligations of
compensation, reporting and confidentiality to deCODE under Sections
2.7.2, 4, 5.3 and 5.4.
(b) If this Agreement is rejected by or on behalf of deCODE under
Section 365 of the United States Bankruptcy Code (the "Code"), all
licenses and rights to licenses granted under or pursuant to this
Agreement by deCODE to MERCK are, and shall otherwise be deemed to be,
for purposes of Section 365(n) of the Code, licenses of rights to
"intellectual property" as defined under Section 101(35A) of the Code.
The Parties agree that MERCK, as a licensee of such rights under this
Agreement, shall retain and may fully exercise all of its rights and
elections under the Code, and that upon commencement of a bankruptcy
proceeding by or against deCODE under the Code, MERCK shall be entitled
to a complete duplicate of or complete access to (as MERCK deems
appropriate), any such intellectual property and all embodiments of
such intellectual property. Such intellectual property and all
embodiments thereof shall be promptly delivered to MERCK (i) upon any
such commencement of a bankruptcy proceeding upon written request
therefore by MERCK, unless deCODE elects to continue to perform all of
its obligations under this Agreement or (ii) if not delivered under (i)
above, upon the rejection of this Agreement by or on behalf of deCODE
upon written request therefore by MERCK. If the Agreement is rejected
by or on behalf of deCODE under any provisions of bankruptcy or
insolvency law of any other country, it is the Parties intent that the
licenses of rights of intellectual property shall not be subject to
termination and that MERCK shall be entitled to a complete duplicate of
or complete access to (as MERCK deems appropriate), any such
intellectual property and all embodiments of such intellectual property
or to the maximum protections afforded to licensees under the
applicable law.
The foregoing provisions of Subsection 8.3.2(a) are without prejudice
to any rights MERCK may have arising under the Code or other applicable
law.
8.4 EFFECT OF EXPIRATION OR TERMINATION; SURVIVAL
Expiration or termination of the Agreement shall not relieve the
Parties of any obligation accruing prior to such expiration or
termination. Any expiration or termination of this Agreement shall be
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without prejudice to the rights of either Party against the other
accrued or accruing under this Agreement prior to expiration or
termination, including without limitation the obligation to pay
royalties for Product(s), Tests, Related IRCT Compounds or IRCT
Compound sold prior to such expiration termination. In the event this
Agreement expires or is terminated during the pendency of an IRCT, the
Parties shall arrange for orderly completion or early termination of
such IRCT, including making provision for payment for all
non-cancelable expenses associated therewith. The provisions of Article
4 shall survive the expiration or termination of the Agreement and
shall continue in effect for ten (10) years. In addition, the
provisions of Articles 1, 4, 5, 6 and 7, and Sections 2.7, 8.4 and 10.6
shall survive any expiration or termination of this Agreement.
9. INDEMNIFICATION; INSURANCE; LIABILITY
9.1 INDEMNIFICATION
9.1.1 INDEMNIFICATION BY MERCK.
MERCK shall indemnify and hold harmless deCODE, its Affiliates, any
present or future parent or subsidiary of them, and their respective
officers, directors, employees, agents and Affiliates (collectively in
this Section 9.1 referred to as "deCODE") from and against any and all
losses, liabilities, damages including, but not limited to, reasonable
counsel fees, actually incurred by deCODE in defending against any
litigation or any claim whatsoever by a Third Party and any and all
amounts reasonably paid in settlement of any claim or litigation, any
settlement payments (which shall first be subject to MERCK's prior
written consent, not to be unreasonably withheld) (collectively in this
section referred to as "deCODE Losses"), PROVIDED such deCODE Losses
arise solely out of (i) the promotion, marketing, distribution and
sale, whether directly or through distributors, of the Products or
Tests, or (ii) the negligence, recklessness or wrongful intentional
acts or omissions of MERCK, its Affiliates or its sublicensees, if any,
or their respective directors, officers, employees or agents, in
connection with the performance by MERCK under this Agreement; and
PROVIDED further, that this obligation by MERCK shall not apply in the
event that such deCODE Losses are attributable in any manner to any
intentional act or negligence, willful or otherwise, of deCODE.
9.1.2 INDEMNIFICATION BY deCODE.
deCODE shall indemnify and hold harmless MERCK, its Affiliates, any
present or future parent or subsidiary of them, and their respective
officers, directors, employees, agents and Affiliates (collectively in
this Section 9.1.2 referred to as "MERCK") from and against any and all
losses, liabilities, damages including, but not limited to, reasonable
counsel fees, actually incurred by MERCK in defending against any
litigation or any claim whatsoever by a Third Party and any and all
amounts reasonably paid in settlement of any claim or litigation, any
settlement payments (which shall first be subject to deCODE' prior
written consent, not to be unreasonably withheld) (collectively in this
section referred to as "MERCK Losses"), PROVIDED such MERCK Losses
arise solely out of (i) the promotion, marketing, distribution and
sale, whether directly or through distributors, of the Products or
Tests by deCODE or (ii) the negligence, recklessness or wrongful
intentional acts or omissions of deCODE, its Affiliates or its
sublicensees, if any, or their respective directors, officers,
employees or agents, in connection with the performance by deCODE under
this Agreement; and PROVIDED further, that this obligation by deCODE
shall not apply in the event that such MERCK Losses are attributable in
any manner to any intentional act or negligence, willful or otherwise,
of MERCK.
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9.1.3 NOTICE OF CLAIM OF INDEMNIFICATION - THIRD PARTY CLAIMS
(a) A Party (the "Indemnified Party") seeking indemnification under
this Agreement for a claim made against it by a Third Party ("Third
Party Claim") shall notify the other Party (the "Indemnifying Party")
in writing of the Third Party Claim within thirty (30) days after
receipt by the Indemnified Party of written notice of the Third Party
Claim; however, failure to give such notification shall not affect the
indemnification provided under this Agreement, except to the extent the
Indemnifying Party shall actually in a material manner have been
prejudiced by the failure. Thereafter, the Indemnified Party shall
deliver to the Indemnifying Party, promptly after the Indemnified
Party's receipt thereof, copies of all notices and documents (including
court papers) received by the Indemnified Party relating to the Third
Party Claim.
(b) The Indemnifying Party shall have the right, within thirty (30)
days after being so notified, to assume the defense of such Third Party
Claim with counsel reasonably satisfactory to the Indemnified Party. In
any such proceeding the defense of which the Indemnifying Party shall
have so assumed, the Indemnified Party shall have the right to
participate therein and retain its own counsel (without otherwise
affecting the rights of the Parties under Section 9.1) at its own
expense unless (i) the Indemnified Party and the Indemnifying Party
shall have mutually agreed to the retention of such counsel, (ii) the
Indemnified Party shall have reasonably concluded that there may be one
or more legal defenses available to it which are different from or
additional to those available to the Indemnifying Party, or (iii) the
named parties to any such proceeding (including the impleaded parties)
include both the Indemnifying Party and the Indemnified Party, and
representation of both Parties by the same counsel would be
inappropriate in the opinion of the Indemnified Party's counsel due to
actual or potential differing interests between them; in any such case,
one firm of attorneys separate from the Indemnifying Party's counsel
may be retained to represent the Indemnified Parties at the
Indemnifying Party's expense. Any settlement of such a Third Party
Claim, the defense of which has been assumed by the Indemnifying Party,
shall not be entered into by the Indemnifying Party without prior
written consent of the Indemnified Party, which consent shall not be
unreasonably withheld.
(c) With respect to all Third Party Claims, the Indemnified Party
shall cooperate in all reasonable respects with the Indemnifying Party
in connection with any Third Party Claims and the defense or compromise
thereof. Such cooperation shall include the retention and (upon the
Indemnifying Party's request) the provision to the Indemnifying Party
of records and information reasonably relevant to the Third Party
Claim, making employees available on a mutually convenient basis to
provide additional information, and explanation of any material
provided under this Agreement. If the Indemnifying Party shall have
assumed the defense of a Third Party Claim, the Indemnified Party shall
not, without first waiving the indemnity as to such claim, admit any
liability with respect to, or settle, compromise, or discharge, the
Third Party Claim, without the Indemnifying Party's prior written
consent; PROVIDED that admissions of facts which a Party may reasonably
be required to make shall not be deemed to be admissions of liability.
9.1.4 COOPERATION.
The Parties shall cooperate with each other with respect to resolving
any claim or liability with respect to which one Party is obligated to
indemnify the other Party under this Agreement, including, without
limitation, by taking reasonable efforts to mitigate or resolve any
such claim or liability.
9.2 INSURANCE.
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Each Party shall maintain adequate insurance against liability and
other risks associated with its activities contemplated by this
Agreement, including but not limited to its indemnification obligations
herein, in such amounts and on such terms as are customary in the
industry for the activities to be conducted by it under this Agreement.
Each Party shall furnish to the other Party evidence of such insurance,
upon request.
10. MISCELLANEOUS
10.1 FORCE MAJEURE
Neither Party shall be held liable to the other Party nor be deemed to
have defaulted under or breached the Agreement for failure or delay in
performing any obligation under the Agreement when such failure or
delay is caused by or results from causes beyond the reasonable control
of the affected Party including, but not limited to, embargoes, war,
acts of war (whether war be declared or not), insurrections, riots,
civil commotions, strikes, lockouts or other labor disturbances, fire,
floods, or other acts of God, or acts, omissions or delays in acting by
any governmental authority or the other Party. The affected Party shall
notify the other Party of such force majeure circumstances as soon as
reasonably practical, and shall promptly undertake all reasonable
efforts necessary to cure such force majeure circumstances. The Party
giving such notice shall thereupon be excused from such of its
obligations under this Agreement as it is thereby disabled from
performing for so long as it is so disabled and the thirty (30) days
thereafter. To the extent possible, each Party shall use reasonable
efforts to minimize the duration of any force majeure.
10.2 ASSIGNMENT/ CHANGE OF CONTROL
(a) Neither Party shall be entitled to assign its rights or delegate
its obligations hereunder without the express written consent of the
other Party hereto, except that (i) MERCK may assign its rights and
transfer its duties hereunder to an Affiliate or to any assignee of all
or substantially all of its business (or that portion thereof to which
this Agreement relates) or in the event of MERCK's merger,
consolidation or involvement in a similar transaction and (ii) deCODE
may assign its rights and transfer its duties hereunder to an Affiliate
or to any assignee of all or substantially all of its business (or that
portion thereof to which this Agreement relates) or in the event of
deCODE's merger, consolidation or involvement in a similar transaction,
PROVIDED HOWEVER, during the Research Program Term deCODE may not
assign its rights and obligations under the Agreement without MERCK's
written consent which shall not be unreasonably withheld. It shall be
reasonable for MERCK to withhold consent of an assignment to a
Competitor. No assignment and transfer shall be valid or effective
unless done in accordance with this Section 9.2 and unless and until
the assignee/transferee shall agree in writing to be bound by the
provisions of this Agreement.
(b) In the event that deCODE enters into an agreement resulting in a
Change of Control pursuant to which a Competitor obtains Control of
deCODE, then (1) MERCK shall have the right to terminate the Agreement
under Section 8.3.1 and; (2) deCODE shall adopt procedures to be agreed
upon in writing by MERCK to prevent the disclosure of deCODE Know-How,
deCODE Information and Inventions, MERCK Information and Inventions,
Joint Information and Inventions and MERCK Know-How (collectively,
"Sensitive Information") beyond the deCODE personnel having access to
and knowledge of Sensitive Information prior to the Change of
4
Control and deCODE shall adopt procedures approved in writing by MERCK
to control the dissemination of Sensitive Information disclosed after
the Change of Control. The purposes of all such procedures shall be to
strictly limit such disclosures to only those personnel having a need
to know Sensitive Information in order for deCODE to perform its
obligations.
10.3 SEVERABILITY
If any one or more of the provisions contained in this Agreement is
held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby, unless the
absence of the invalidated provision(s) adversely affects the
substantive rights of the Parties. The Parties shall in such an
instance use their best efforts to replace the invalid, illegal or
unenforceable provision(s) with valid, legal and enforceable
provision(s) which, insofar as practical, implement the purposes of
this Agreement.
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10.4 NOTICES
All notices which are required or permitted hereunder shall be in
writing and sufficient if delivered personally, sent by facsimile (and
promptly confirmed by personal delivery, registered or certified mail
or overnight courier), sent by nationally-recognized overnight courier
or sent by registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to deCODE, to: deCODE genetics, Ehf.
Sturlugata 0, XX-000
Xxxxxxxxx, Xxxxxxx
Attention: President
Facsimile No.: x000 000 0000
and: Attention: Legal Department
Facsimile No.: x000 000 0000
if to MERCK, to: Merck & Co., Inc.
Xxx Xxxxx Xxxxx
X.X. Xxx 000, XX0X-00
Xxxxxxxxxx Xxxxxxx, XX 00000-0000
Attention: Office of Secretary
Facsimile No.: (000) 000-0000
And Merck & Co., Inc.
One Merck Drive
Attention: Chief Licensing Officer
X.X. Xxx 000, XX0X-00
Xxxxxxxxxx Xxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
or to such other address as the Party to whom notice is to be given may
have furnished to the other Party in writing in accordance herewith.
Any such notice shall be deemed to have been given: (a) when delivered
if personally delivered or sent by facsimile on a business day; (b) on
the business day after dispatch if sent by nationally-recognized
overnight courier; and/or (c) on the fifth business day following the
date of mailing if sent by mail.
10.5 APPLICABLE LAW
The Agreement shall be governed by and construed in accordance with the
laws of the State of New Jersey and the patent laws of the United
States without reference to any rules of conflict of laws or renvoi.
The United Nations Convention on the Sale of Goods shall not apply.
10.6 DISPUTE RESOLUTION
(a) The Parties shall negotiate in good faith and use reasonable
efforts to settle any dispute, controversy or claim arising from or
related to this Agreement or the breach thereof. If the Parties do not
fully settle, and a Party wishes to pursue the matter, each such
dispute, controversy
4
or claim that is not an "Excluded Claim" shall be finally resolved by
binding arbitration in accordance with the Commercial Arbitration Rules
and Supplementary Procedures for Large Complex Disputes of the American
Arbitration Association ("AAA"), and judgment on the arbitration award
may be entered in any court having jurisdiction thereof.
(b) The arbitration shall be conducted by a panel of three persons
experienced in the pharmaceutical business: within 30 days after
initiation of arbitration, each Party shall select one person to act as
arbitrator and the two Party-selected arbitrators shall select a third
arbitrator within 30 days of their appointment. If the arbitrators
selected by the Parties are unable or fail to agree upon the third
arbitrator, the third arbitrator shall be appointed by the AAA. The
place of arbitration shall be New York, New York, and all proceedings
and communications shall be in English.
(c) Either Party may apply to the arbitrators for interim
injunctive relief until the arbitration award is rendered or the
controversy is otherwise resolved. Either Party also may, without
waiving any remedy under this Agreement, seek from any court having
jurisdiction any injunctive or provisional relief necessary to protect
the rights or property of that Party pending the arbitration award. The
arbitrators shall have no authority to award punitive or any other type
of damages not measured by a Party's compensatory damages. Each Party
shall bear its own costs and expenses and attorneys' fees and an equal
share of the arbitrators' and any administrative fees of arbitration.
(d) Except to the extent necessary to confirm an award or as may be
required by law, neither a Party nor an arbitrator may disclose the
existence, content, or results of an arbitration without the prior
written consent of both Parties. In no event shall an arbitration be
initiated after the date when commencement of a legal or equitable
proceeding based on the dispute, controversy or claim would be barred
by the applicable New York statute of limitations.
(e) The parties agree that, in the event of a dispute over the nature
or quality of performance under this Agreement, neither party may
terminate the Agreement until final resolution of the dispute through
arbitration or other judicial determination. The parties further agree
that any payments made pursuant to this Agreement pending resolution of
the dispute shall be refunded if an arbitrator or court determines that
such payments are not due.
(f) As used in this Section, the term "Excluded Claim" shall mean a
dispute, controversy or claim that concerns (i) the validity or
infringement of a patent, trademark or copyright; or (ii) any
antitrust, anti-monopoly or competition law or regulation, whether or
not statutory.
10.7 ENTIRE AGREEMENT; AMENDMENTS
The Agreement contains the entire understanding of the Parties with
respect to the Research Program and licenses granted hereunder. All
express or implied agreements and understandings, either oral or
written, with regard to the Research Program and the licenses granted
hereunder are superseded by the terms of this Agreement. The Agreement
may be amended, or any term hereof modified, only by a written
instrument duly executed by authorized representatives of both Parties
hereto.
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10.8 HEADINGS
The captions to the several Articles and Sections hereof are not a part
of the Agreement, but are merely for convenience to assist in locating
and reading the several Articles and Sections hereof.
10.9 INDEPENDENT CONTRACTORS
It is expressly agreed that deCODE and MERCK shall be independent
contractors and that the relationship between the two Parties shall not
constitute a partnership, joint venture or agency. Neither deCODE nor
MERCK shall have the authority to make any statements, representations
or commitments of any kind, or to take any action, which shall be
binding on the other Party, without the prior written consent of the
other Party.
10.10 WAIVER
A waiver (whether express or implied) by one of the Parties of any of
the provisions of this Agreement or of any breach of or default by the
other Party in performing any of those provisions shall not constitute
a continuing waiver and that waiver shall not prevent the waiving Party
from subsequently enforcing any of the provisions of this Agreement not
waived or from acting on any subsequent breach of or default by the
other Party under any of the provisions of this Agreement.
10.11 CUMULATIVE REMEDIES
No remedy referred to in this Agreement is intended to be exclusive,
but each shall be cumulative and in addition to any other remedy
referred to in this Agreement or otherwise available under law.
10.12 WAIVER OF RULE OF CONSTRUCTION
Each Party has had the opportunity to consult with counsel in
connection with the review, drafting and negotiation of this Agreement.
Accordingly, the rule of construction that any ambiguity in this
Agreement shall be construed against the drafting Party shall not
apply.
*
*
*
*
*
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10.13 COUNTERPARTS
The Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first set forth above.
MERCK & CO., INC. DECODE GENETICS, EHF.
BY: /s/ Xxxxxxx X. Xxxxxxxxx BY: /s/ Xxxx Xxxxxxxxxx
------------------------ -------------------
Xxxxxxx X. Xxxxxxxxx Xxxx Xxxxxxxxxx
TITLE: Chairman, President and Chief TITLE:
Executive Officer
DATE: DATE:
-------------------- -----------------
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SCHEDULES
SCHEDULE 1.21 DECODE PATENTS
[CONFIDENTIAL TREATMENT REQUESTED]
4
SCHEDULE 2.1-0 INITIAL WORK PLAN
[CONFIDENTIAL TREATMENT REQUESTED]
4
Schedule 2.3
[CONFIDENTIAL TREATMENT REQUESTED]
4
APPENDIX 1.3.1.b: [CONFIDENTIAL TREATMENT REQUESTED]
4
APPENDIX 3.5 [CONFIDENTIAL TREATMENT REQUESTED]
4
SCHEDULE 2.6 BUDGET
4
SCHEDULE 5.1 Research Program Funding
[CONFIDENTIAL TREATMENT REQUESTED]
4
