EXHIBIT 10.1
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[CERTAIN INFORMATION HAS BEEN OMITTED HEREIN PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER RULE 24b-2. THE REDACTED MATERIAL HAS BEEN
SEPARATELY FILED WITH THE COMMISSION.]
COLLABORATIVE RESEARCH AND DEVELOPMENT AGREEMENT
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THIS AGREEMENT, dated as of April __, 1997 (the "Effective Date") between
GENSIA SICOR INC., a Delaware corporation having its principal place of business
at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Gensia Sicor"), and
SANKYO CO., LTD., a Japanese corporation having its principal place of business
at 5-1 ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇, ▇-▇▇▇▇▇, ▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ("Sankyo"),
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS Gensia Sicor and Sankyo desire to develop products for treatment of
Diabetes (as such term is hereinafter defined); and
WHEREAS Sankyo desires to sponsor research by Gensia Sicor and to develop
and commercialize with Gensia Sicor products resulting from such research;
NOW, THEREFORE, in consideration of the premises and of the covenants
herein contained, the parties hereto mutually agree as follows:
ARTICLE 1.
DEFINITIONS
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For purposes of this Agreement, the terms defined in this Section shall
have the meanings specified below:
1.1 "Affiliate" shall mean, in respect of a party hereto, any corporation
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or other entity which controls, is controlled by, or is under common control
with such party. A corporation or other entity shall be regarded as in control
of another corporation or entity if it owns or directly or indirectly controls
more than fifty percent (50%) of the voting stock or other ownership interest of
the other corporation or entity, or if it possesses, directly or indirectly,
the power to direct or cause the direction of the management and policies of the
corporation or other entity or the power to elect or appoint fifty percent (50%)
or more of the members of the governing body of the corporation or other entity.
1.2 "Candidate Compound" shall mean a Recommended Compound which has been
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selected by the appropriate research and development committee of Sankyo under
Section 4.3 hereof for further development and evaluation under this Agreement.
1.3 "Compound" shall mean a Research Compound, Recommended Compound,
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Candidate Compound or Licensed Compound.
1.4 "Diabetes" shall mean insulin-dependent diabetes mellitus (Type I
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Diabetes), noninsulin-dependent diabetes mellitus (Type II Diabetes) and other
conditions of high blood glucose.
1.5 "Field" shall mean the treatment of Diabetes by means of lowering
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blood glucose levels by [CONFIDENTIAL TREATMENT REQUESTED].
1.6 "First Commercial Sale" of any Product shall mean the first sale for
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use or consumption by the general public of such Product in a country after
required marketing and pricing approval has been granted by the governing health
authority of such country.
1.7 "IND" shall mean an Investigational New Drug Application filed with
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the Food and Drug Administration, or any successor agency, in the United States
pursuant to 21 C.F.R. Part 312, or any successor provision thereto (or the
equivalent application with the governing health authority of any other Primary
Country, as defined in Section 4.2 hereof).
1.8 "License Agreement" shall mean the license agreement regarding a
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Licensed Compound, prepared and executed by the parties (or their respective
permitted assignees) pursuant to Section 4.4, which shall incorporate all
applicable terms and conditions of this Agreement, together with those such
other terms and conditions as the parties mutually agree and are consistent with
the terms and conditions of this Agreement. If the parties cannot mutually
agree on the terms and conditions of any such License Agreement, such License
Agreement shall be on the terms and conditions as set forth in this Agreement.
1.9 "Licensed Compound" shall mean a Candidate Compound which Sankyo has
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exercised its option to license under Section 4.4 below.
1.10 "NDA" shall mean an application to market a new drug filed with the
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Food and Drug Administration, or any successor agency, in the United States
pursuant to section 505 of the Federal Food, Drug and Cosmetic Act and 21 C.F.R.
Part 314, or any successor provisions thereto (or the equivalent application
with the governing health authority of any other Primary Country).
1.11 "Net Sales" with respect to any Product shall mean the invoiced sales
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price of such Product billed to independent customers (who are not Affiliates),
less, to the extent such amounts are included in the invoiced sales price,
actual credited allowances to such independent customers for such Product which
was
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spoiled, damaged, out-dated or returned, and less actual (a) freight and
insurance costs incurred in transporting such Product to such customers; (b)
quantity and other trade discounts (including prime vendor rebates) actually
allowed and taken; (c) customs duties and surcharges and other governmental
charges incurred in connection with the exportation or importation of such
Product in final form; and (d) liabilities incurred resulting from any
government (or agency thereof) mandated rebate program, whether Federal, State,
Municipal or Local; provided, however, that, with respect to any Product in any
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country, the sum of the amounts in clauses (a), (b), (c) and (d) with respect to
such Product in such country, when expressed as a percentage of the invoiced
sales price of such Product in such country, shall not exceed the average of the
sum of the amounts in clauses (a), (b), (c) and (d) with respect to all other
comparable Sankyo product sold in such country, when expressed as a percentage
of the invoiced sales price of such other products in such country.
1.12 "Patent Rights" shall mean all patent applications heretofore or
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hereafter filed or having legal force in any country within the Territory owned
by or licensed to Gensia Sicor or Sankyo or to which Gensia Sicor or Sankyo
otherwise acquires rights, which claim a Product or Licensed Compound, or the
process of manufacture or use of a Product or Licensed Compound for use in the
Field, together with any and all patents that have issued or in the future issue
therefrom, including utility model and design patents, extensions or
restorations, including Supplementary Protection Certificates or the equivalent
thereof, certificates of invention and any and all divisions, continuations,
continuations-in-part, reissues or additions to any of the aforesaid patents and
patent applications; all to the extent and only to the extent that Gensia Sicor
or Sankyo now has or hereafter will have the right to grant licenses, immunities
or other rights thereunder. Patent Rights shall also include technology
respecting the subject matter of the patents and patent applications embraced by
Patent Rights necessary to carry out the purposes of this Agreement in the
Field.
1.13 "Products" shall mean pharmaceutical compositions incorporating a
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Licensed Compound. All formulations of the same drug substance for the same
route of administration, such as oral, parenteral or intravenous, shall
constitute a single Product.
1.14 "Recommended Compound" shall mean a Research Compound which has
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utility in the Field and which has been selected by the Steering Committee under
Section 4.2 hereof for further development under the Research Program.
1.15 "Recommended Compound Criteria" shall mean the detailed scientific
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criteria set forth in Appendix A for determining whether a Research Compound has
utility in the Field and is suitable for further development and evaluation as a
Recommended Compound under this Agreement.
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1.16 "Research Compound" shall mean a compound that is selected by the
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party which owns or licenses (with a right to sublicense) such compound (or in
the case of jointly-owned compounds, selected jointly) and that is evaluated as
part of the Research Program.
1.17 "Research Program" shall mean the research program described generally
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in the research work plan set forth in Appendix A hereto, as revised from time
to time as provided in this Agreement.
1.18 "Research Program Term" shall mean the period of time indicated in
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Section 3.4 as modified by the termination provisions in Article 14.
1.19 "Research Year" shall mean each twelve-month period during the
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Research Program with the first Research Year beginning as of the date of this
Agreement.
1.20 "Royalty Term" shall mean, with respect to each Product in each
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country, the period of time equal to the longer of (a) [CONFIDENTIAL TREATMENT
REQUESTED] from the date of the First Commercial Sale of such Product in such
country or (b) if the manufacture, use or sale of such Product in such country
was at the time of the First Commercial Sale in such country covered by a Valid
Patent Claim, the term for which such Valid Patent Claim remains in effect and
would, if in a granted patent, be infringed but for the license granted by this
Agreement.
1.21 "Steering Committee" shall mean the joint research committee composed
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of representatives of Gensia Sicor and Sankyo described in Section 5.1 hereof.
1.22 "Stock Purchase Agreement" shall mean the Stock Purchase Agreement
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prepared and executed between the parties (or their respective assignees)
pursuant to Section 7.3.
1.23 "Territory" shall mean the entire world.
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1.24 "Third Party" shall mean any entity other than Gensia Sicor or Sankyo
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and their respective Affiliates.
1.25 "Valid Patent Claim" shall mean either (a) a claim of an issued and
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unexpired patent included within the Patent Rights, which has not been held
permanently revoked, unenforceable or invalid by a decision of a court or other
governmental agency of competent jurisdiction, unappealable or unappealed within
the time allowed for appeal, and which has not been admitted to be invalid or
unenforceable through reissue or disclaimer or otherwise or (b) a claim of a
pending patent application included within the Patent Rights, which claim was
filed in good faith and has not been abandoned or finally disallowed without the
possibility of appeal or refiling of said application.
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ARTICLE 2.
REPRESENTATIONS AND WARRANTIES
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2.1 Authorization. Each party warrants and represents to the other that
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it has the legal rights and power to extend the rights and licenses granted to
the other in this Agreement, that it has the full right to enter into this
Agreement, and to fully perform its obligations hereunder, and that it has not
made nor will it make any commitments to others in conflict with or in
derogation of such rights or this Agreement. Except as otherwise disclosed,
each party further represents to the other that it is not aware of any legal
obstacles, including patent rights of others, which could prevent it from
carrying out the provisions of this Agreement.
2.2 Patent Validity. Nothing in this Agreement shall be construed as a
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warranty or representation by either party as to the validity or scope of any
Patent Rights.
ARTICLE 3.
RESEARCH PROGRAM
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3.1 Research Procedures.
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3.1.1 Conduct of Research. The Research Program shall be conducted in
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good scientific manner, and in compliance with all applicable legal
requirements, to attempt to achieve efficiently and expeditiously its
objectives. Gensia Sicor and Sankyo shall proceed diligently with the work set
out in the Research Program by using their respective good faith efforts
considering, in the case of Gensia Sicor, the research funding received from
Sankyo hereunder.
3.1.2 Use of Research Funding. Gensia Sicor shall apply the research
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funding it receives from Sankyo under this Agreement for the sole purpose of
discovering, identifying, studying, improving and testing Research Compounds in
accordance with the Research Program (including overhead expenses related
thereto) set forth on Appendix A hereto, and amended from time to time by the
parties, with the goal of identifying candidate compounds for designation as
Recommended Compounds. In each of the first two Research Years during the term
of the Research Program, Gensia Sicor shall allocate an average of approximately
fourteen (14) to (16) full time equivalent researchers and staff to perform its
obligations under the Research Program. In the third Research Year during the
term of the Research Program, Gensia Sicor shall allocate an average of the
proportionate number of full time equivalent researchers and staff to perform
its obligations under the Research Program to reflect the proportionate amount
of funding to be received by Gensia Sicor during the third Research Year during
the term of the Research Program. Gensia Sicor's staffing obligations
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during the term of the Research Program shall be subject to adjustment at the
recommendation of the Steering Committee.
3.1.3 Other Work. During the Research Program Term, neither Gensia Sicor
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nor Sankyo shall perform any research and development work for any Third Party
in the Field, except that a party may use for any purpose outside the Field any
Research Compounds made or obtained by such party that are not designated as
Recommended Compounds or are no longer being evaluated for designation as
Recommended Compounds, any Recommended Compounds made or obtained by such party
that are not selected as Candidate Compounds, and any Candidate Compounds made
or obtained by such party that are not licensed as Licensed Compounds. It is
understood that Gensia Sicor and Sankyo each presently conducts, and will
conduct during the Research Program Term, research for itself and for others
outside the Field.
3.1.4 Subcontracts. Gensia Sicor may subcontract portions of the
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Research Program with the prior approval of the Steering Committee.
3.1.5 Data. Gensia Sicor and Sankyo shall each maintain records in
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sufficient detail and in good scientific manner appropriate for patent purposes
and as will properly reflect all work done and results achieved in the
performance of the Research Program (including all data in the form required
under any applicable governmental regulations). Such records shall include
books, records, reports, research notes, charts, graphs, comments, computations,
analyses, recordings, photographs, computer programs and documentation thereof,
computer information storage means, samples of materials and other graphic or
written data generated in connection with the Research Program including any
data required to be maintained pursuant to applicable governmental regulations.
Gensia Sicor and Sankyo shall each provide the other the right to inspect
records, and shall provide copies of all requested records, to the extent
reasonably required for the performance of the requesting party's obligations
under this Agreement; provided that each party shall maintain such records and
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the information of the other contained therein in confidence in accordance with
Section 11.1 below and shall not use such records or information except to the
extent otherwise permitted by this Agreement.
3.1.6 Delivery of Compounds. Gensia Sicor will promptly identify and
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deliver to Sankyo, at no additional cost to Sankyo, information on the structure
of, data generated on, and (if so requested) reasonable quantities (for research
and preclinical pharmacology use) of, any Research Compound meeting the criteria
for development set forth in Appendix A hereto or any Recommended Compound or
any Candidate Compound, for development and evaluation by Sankyo in accordance
with the Research Program. The parties shall discuss in good faith any
requested arrangements for the synthesis and supply to Sankyo of larger
quantities of materials for use under the Research Program.
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3.1.7 Gensia Sicor and Sankyo Quarterly Reports. Gensia Sicor and Sankyo
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shall each provide to the members of the Steering Committee quarterly written
reports which shall reasonably detail and evaluate the work each has performed
during such calendar quarter under the Research Program and the results thereof.
In addition, each quarterly report by Gensia Sicor shall set forth, in
reasonable detail, (a) the goals of the Research Program for such calendar
quarter, (b) the results actually achieved by Gensia Sicor under the Research
Program during such calendar quarter, (c) the number of full time equivalent
researchers and staff allocated to perform Gensia Sicor's obligations under the
Research Program during such calendar quarter, (d) Gensia Sicor's estimated
fully burdened cost for such full time equivalent researchers and staff
allocated to perform its obligations under the Research Program during such
calendar quarter, (e) a summary of the costs and expenses of any subcontractors
and outside consultants incurred by Gensia Sicor under the Research Program
during such calendar quarter, and (f) the goals of the Research Program for the
next calendar quarter. Such reports shall be sent to each member of the
Steering Committee fourteen (14) days subsequent to the end of a calendar
quarter.
3.1.8 Steering Committee Quarterly Reports. Within fourteen (14) days
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following a Steering Committee meeting held pursuant to the provisions of
Section 5.1 hereof, the Steering Committee shall prepare and send to each party
to this Agreement minutes of such meeting, together with a reasonably detailed
written report which shall (a) describe the work performed to date on the
Research Program, (b) evaluate the work performed in relation to the goals of
the Research Program and (c) state any determination of the Steering Committee
not to proceed with a Research Compound and the reasons therefor.
3.2 Other Options.
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3.2.1 Screening of Third Party Compounds. Gensia Sicor may screen
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compounds obtained from a Third Party ("Third Party Research Compounds") with a
view to finding Recommended Compounds. The Steering Committee shall decide
whether such evaluation of Third Party Research Compounds can be carried out
within the existing budget of the Research Program, or if additional funding is
required for such evaluation. If the Steering Committee decides that additional
funding is required, Sankyo may at its sole option agree to provide the
necessary additional funding, in which case such evaluation shall be treated as
part of the Research Program. In the event Sankyo does not agree to provide
such funding, Gensia Sicor may provide the funding, and shall be entitled to a
royalty, in an amount to be negotiated between the parties in good faith, in
addition to that set forth in Section 7.1.1 hereof on any Products resulting
from such Third-Party Compounds.
3.2.2 Sankyo Compounds. At its option, Sankyo shall supply Gensia Sicor
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with available Sankyo compounds for screening, and shall designate a Sankyo
employee whose responsibility shall be the
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procurement of compounds for screening from within Sankyo and from other
sources.
3.3 Funding of the Research Program.
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3.3.1 Amount of Funding. In consideration of Gensia Sicor's performance
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of its obligations under the Research Program, Sankyo shall pay Gensia Sicor (a)
a research fee of [CONFIDENTIAL TREATMENT REQUESTED] for each of the first two
Research Years during the term of the Research Program, and (b) a research fee
in an amount (which shall not be less than [CONFIDENTIAL TREATMENT REQUESTED]
determined by the mutual agreement of the parties not less than ninety (90) days
prior to the commencement of the third Research Year, for the third Research
Year during the term of the Research Program. The Steering Committee shall
discuss during the third quarter of the second Research Year, and recommend to
the parties, the level of funding for the third Research Year necessary to
conduct the Research Program for the third Research Year.
3.3.2 Payment Terms. The research fee for the first Research Year shall
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be paid in equal quarterly installments: the first installment shall be paid
within thirty (30) days after the Effective Date, and subsequent installments
upon the first business day of the fourth, seventh and tenth month thereafter.
The research fee for subsequent Research Years shall be paid in equal quarterly
installments on the first business day of the first, fourth, seventh and tenth
months in that Research Year.
3.3.3 Audit.
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(a) Upon the written request of Sankyo at Sankyo's expense and not more
than once in each calendar year, Gensia Sicor shall permit an internationally
recognized independent public accountant selected by Sankyo and reasonably
acceptable to Gensia Sicor, to have access during normal business hours to such
supporting financial records of Gensia Sicor as may be reasonably necessary to
verify the accuracy of the allocable expense calculations set forth in Gensia
Sicor's reports under Section 3.1.7 above in respect of any fiscal year ending
not more than twenty-four (24) months prior to the date of such request.
(b) The fees charged by such accountant shall be paid by Sankyo unless the
audit discloses that the allocable expense calculations reported by Gensia Sicor
for the audited period are more than one hundred five percent (105%) of the
actual allocable expense calculations for such period, in which case Gensia
Sicor shall pay the reasonable fees and expenses charged by the accountant.
(c) Upon the expiration of twenty-four (24) months following the end of any
fiscal year, the expense calculations with respect to such year shall be binding
and conclusive upon Sankyo. Sankyo agrees that all information subject to
review under this
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Section 3.3 is confidential and that Sankyo shall cause its accountant to retain
all such information in confidence.
3.3.4 Adjustments to Second and Third Year Funding. Notwithstanding
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anything to the contrary in this Section 3.3, if the aggregate expenditures by
Gensia Sicor in performing its obligations under the Research Program during the
first or second Research Year are greater than [CONFIDENTIAL TREATMENT
REQUESTED], or are less than [CONFIDENTIAL TREATMENT REQUESTED], of the
aggregate [CONFIDENTIAL TREATMENT REQUESTED] in research funding received by
Gensia Sicor from Sankyo under Section 3.3.1 above for such Research Year, then
the research funding from Sankyo to Gensia for the immediately following
Research Year shall be increased or decreased, as appropriate, to account for
such variance.
3.4 Term of Research Program.
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3.4.1 Term. Except as provided herein, the term of the Research Program
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shall commence as of the first day of the month following the Effective Date,
and continue for [CONFIDENTIAL TREATMENT REQUESTED].
3.4.2 Extension. Within three months following the expiration or
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termination of the Research Program (other than under Section 14.2 hereof),
Gensia Sicor and Sankyo shall prepare a written report describing Research
Compounds that have not, as of the date of such expiration or termination, been
recommended as Recommended Compounds. Sankyo shall have the right during the
three (3) month period after receipt of such report to fund further research and
development of such Research Compounds by so notifying Gensia Sicor. In the
event Sankyo so funds further research and development of such Research
Compounds, such further research and development shall be carried out under the
terms and conditions of this Agreement, with appropriate amendments, mutually
acceptable to the parties, to reflect such additional funding and extended
period of research and development as mutually agreed to by the parties.
ARTICLE 4.
FURTHER EVALUATION AND DEVELOPMENT
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OF RESEARCH COMPOUNDS
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4.1 Research and Evaluation of Research Compounds. The parties shall
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conduct such research and evaluation under the Research Program of a Research
Compound until such time as it is determined whether or not such Research
Compound meets the Recommended Compound Criteria.
4.2 Designation of Recommended Compounds. Within [CONFIDENTIAL TREATMENT
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REQUESTED] after identification by either party of a Research Compound which is
believed to meet the Recommended Compound Criteria, each party shall present to
the Steering Committee all data and other evidence available to such
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party regarding such Research Compound for use in the Field. The Steering
Committee promptly shall review all such data and other evidence and shall
determine whether such Research Compound meets the Recommended Compound
Criteria. If the Steering Committee determines that such Research Compound
meets the Recommended Compound Criteria, such Research Compound shall be
designated as a Recommended Compound.
4.3 Selection of Candidate Compounds. For a period of [CONFIDENTIAL
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TREATMENT REQUESTED] after designation of a Recommended Compound, Sankyo shall
have the right to conduct further preclinical development and evaluation of such
Recommended Compound under the Research Program, and to determine in its sole
discretion whether such Recommended Compound is appropriate to conduct more
extensive preclinical development under this Agreement to evaluate its potential
as a clinical candidate. If, within such [CONFIDENTIAL TREATMENT REQUESTED]
period, Sankyo gives written notice to Gensia Sicor that the appropriate
research and development committee of Sankyo has selected such Recommended
Compound to conduct further preclinical development under this Agreement,
thereafter such Recommended Compound shall be a Candidate Compound.
4.4 Exercise of Option to License Licensed Compounds. For a period of
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[CONFIDENTIAL TREATMENT REQUESTED] after selection of a Candidate Compound,
Sankyo shall have the right to conduct more extensive preclinical development
and evaluation of such Candidate Compound as a clinical candidate, and to
exercise in its sole discretion its option to license such Candidate Compound in
accordance with the provisions of this Agreement. If, within such [CONFIDENTIAL
TREATMENT REQUESTED] period, Sankyo gives written notice to Gensia Sicor of the
exercise of its option to license such Candidate Compound in accordance with the
provisions of this Agreement, thereafter such Candidate Compound shall be a
Licensed Compound, and the parties promptly shall prepare and execute a License
Agreement for such Licensed Compound.
4.5 Clinical Development.
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4.5.1 Responsibility to Develop. Sankyo is to be responsible for all
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clinical development and regulatory approvals and shall own all such approvals,
provided that in the event that Gensia Sicor terminates this Agreement pursuant
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to Section 14.2 hereof, Sankyo shall transfer all such registrations to Gensia
Sicor. Gensia Sicor may attend meetings held by Sankyo respecting development
of Licensed Compounds, and Sankyo will provide notice to Gensia Sicor of such
meetings in a reasonable and timely manner and solicit Gensia Sicor input, but
no such development meetings need be delayed, postponed or altered to
accommodate participation by Gensia Sicor. Notwithstanding the foregoing,
Sankyo shall neither commence human clinical trials of any Compound, nor file
any regulatory application therefor, unless and until such Compound is a
Licensed Compound, and the parties have prepared and executed a License
Agreement for such Licensed Compound.
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4.5.2 Clinical Development and Marketing. The preclinical and clinical
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development of Licensed Compounds shall be the responsibility of Sankyo. For
each Licensed Compound, Sankyo shall use reasonable diligence and scientific
judgment to evaluate and develop such Licensed Compounds in a timely manner in
accordance with industry standards and Sankyo's internal practices and advise
Gensia Sicor as to the status of such Licensed Compounds. Sankyo agrees to
conduct such preclinical and human clinical trials as are necessary to obtain
all regulatory approvals to manufacture and market Products in each Primary
Country in the Territory, and diligently, consistent with industry standards
generally, develop, obtain necessary approval to market and commence marketing
each such Product in Primary Countries. For the purposes of this Agreement,
"Primary Countries" shall mean Australia, the Benelux countries, Canada, France,
Germany, Italy, Japan, the Scandinavian countries, Spain, Switzerland, the
United Kingdom and the United States. Sankyo shall use reasonable diligence,
consistent with industry standards generally, to develop and market Products in
other countries ("the non-Primary Countries") in the Territory unless in its
reasonable business judgment such development and marketing is not practical or
strategically inadvisable. Notwithstanding anything to the contrary in this
Agreement, if Sankyo does not diligently develop and market a Product
incorporating a Licensed Compound in a Primary Country, or in a non-Primary
Country where Sankyo has not made a reasonable business judgment that to develop
and market such Product is not practical or strategically inadvisable, then
following one hundred eighty (180) days' written notice by Gensia Sicor to
Sankyo if such breach has not been remedied, (a) the license and other rights
granted to Sankyo with respect to such Licensed Compound and such country shall
become co-exclusive with Gensia Sicor, and (b) Sankyo automatically shall grant
to Gensia Sicor a nonexclusive license, with the right to sublicense, to use
Sankyo's data and regulatory filings as necessary to develop, make, use, import
and sell Products incorporating such Licensed Compound in such country.
4.5.3 Development Information. Sankyo shall keep Gensia Sicor informed
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as to the progress of Sankyo in the development and testing of all Licensed
Compounds and Products and the preparing, filing and obtaining of the approvals
necessary for marketing. In addition, Sankyo shall provide Gensia Sicor with a
minimum of three (3) months' advance notice of the contemplated filing of an IND
or an NDA. Sankyo shall also provide Gensia Sicor with a report on all
regulatory submissions, communications or meetings on or prior to the date of
such submissions and a copy of any INDs, NDAs or other regulatory communication
within five (5) days of filing thereof, which material shall be subject to non-
disclosure obligations as provided for in Article 11 hereof except as otherwise
set forth herein.
4.6 Rights to Compounds.
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4.6.1 Any Research Compounds that are not designated as Recommended
Compounds, any Recommended Compounds that are not
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selected as Candidate Compounds, any Candidate Compounds that are not licensed
as Licensed Compounds, and any Licensed Compounds that have been dropped by
Sankyo or have not been diligently developed or commercialized by Sankyo, its
Affiliates or sublicensees, shall revert to Gensia Sicor if such Compounds were
Gensia Sicor compounds or Gensia Sicor's Third Party Compounds, and shall revert
to Sankyo if such Compounds were Sankyo compounds or Sankyo's Third Party
Compounds. Thereafter, the parties shall be free to develop such Compounds
without restriction other than the confidentiality obligations which may be
applicable under Article 11 or as otherwise set forth in this Agreement.
4.6.2 Notwithstanding the above, if within a period of [CONFIDENTIAL
TREATMENT REQUESTED] after reversion of any such Compound to Sankyo under
Section 4.6.1 above, Sankyo, its Affiliates or (sub)licensees develop such
Compound for use in the Field, or within a period of [CONFIDENTIAL TREATMENT
REQUESTED] after termination of this Agreement, Sankyo, its Affiliates or
(sub)licensees develops any other compound for use in the Field, then such
Compound or compound will be subject to the payment obligations, co-promotion
rights and other rights in favor of Gensia Sicor under this Agreement.
4.6.3 Notwithstanding the above, for a period of [CONFIDENTIAL TREATMENT
REQUESTED] after reversion of any such Compound to Gensia Sicor under Section
4.6.1 above, Gensia Sicor shall not license to, or otherwise collaborate with
any Third Party to develop and commercialize, such Compound for use in the
Field; provided, however, that (a) after the expiration of the Research Program
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Term, Gensia Sicor and its Affiliates shall have the right to develop and
commercialize such Compound for use in the Field, and (b) if, after the
expiration or termination of this Agreement, Sankyo is not diligently developing
or commercializing at least one Licensed Compound or Product, then Gensia Sicor
shall have the right without restriction to license to, or otherwise collaborate
with any Third Party to develop and commercialize, such Compound for use in the
Field.
4.6.4 If Gensia Sicor, its Affiliates or (sub)licensees develops and
commercializes any Compound which has reverted to Gensia Sicor under Section
4.6.1 above, Gensia Sicor shall pay to Sankyo the following royalties based on
Net Sales by Gensia Sicor, its Affiliates or (sub)licensees of products
incorporating such Compound for use in the Field:
(a) [CONFIDENTIAL TREATMENT REQUESTED], if Sankyo has exercised its option
to license at least one Licensed Compound which Sankyo is diligently
developing and commercializing in accordance with the provisions of this
Agreement; or
(b) [CONFIDENTIAL TREATMENT REQUESTED], if Sankyo has not exercised its
option to license at least one Licensed Compound, or is not diligently
developing and commercializing
-12-
at least one Licensed Compound in accordance with the provisions of this
Agreement.
The provisions of Section 7.5 and Articles 8 and 9 shall apply to Gensia Sicor
mutatis mutandis.
------- --------
ARTICLE 5.
MANAGEMENT OF THE PROGRAM
-------------------------
5.1 Steering Committee. A joint research committee comprised of three
------------------
named representatives of Sankyo and three named representatives of Gensia Sicor
(the "Steering Committee") shall meet once each calendar quarter during the term
of the Research Program within forty-five (45) days of the end of the preceding
calendar quarter. Such meetings shall be at times and places agreed to by
Gensia Sicor and Sankyo, alternating between San Diego and Tokyo, or such other
locations as the parties shall agree. At such meetings, the Steering Committee
will discuss the Research Program, set priorities thereunder and make any
necessary modifications to the research workplan therefor. Members of the
Steering Committee may be represented at any meeting by another member of the
Steering Committee, or by a deputy. Any approval, determination or other action
agreed to by all of the members of the Steering Committee or their deputies
present at the relevant Steering Committee meeting shall be the approval,
determination or other action of the Steering Committee, provided that at least
--------
two representatives of each party are present at such meeting. Each party shall
bear its own costs in connection with the Steering Committee meetings. The
Steering Committee shall have only such powers as are specifically delegated to
it hereunder, and, notwithstanding the creation of the Steering Committee, each
party to this Agreement shall retain the rights, powers and discretion granted
to it hereunder, and the Steering Committee shall not be vested with any such
rights, powers or discretion except as expressly provided herein or as expressly
agreed to by the parties in writing. The Steering Committee shall not have the
power to amend this Agreement, which may be amended only by the parties as
provided in Section 20.3 hereof.
5.2 Disagreements. All disagreements within the Steering Committee shall
-------------
be subject to the following:
5.2.1 The representatives of the Steering Committee shall promptly
present the disagreement to the executive of each of Gensia Sicor and Sankyo who
has the principal responsibility for his respective company's work under this
Agreement;
5.2.2 Such executives shall meet to discuss each party's view and to
explain the basis for such disagreement;
-13-
5.2.3 If such executives cannot promptly resolve such disagreement, then
such disagreement shall be referred to the chief executive officers of Gensia
Sicor and Sankyo;
5.2.4 If such chief executive officers cannot promptly resolve such
disagreement, then (a) any disputes concerning the early screening or synthesis
of a Research Compound (other than as to matters set forth in Sections 3.2.1,
4.3 and 4.4 hereof) shall be finally determined by Gensia Sicor, and (b) any
disputes concerning the determination of whether a compound will be a Candidate
Compound under Section 4.3 hereof or Licensed Compound under Section 4.4 hereof
shall be determined by Sankyo.
5.3 Project Leaders. Gensia Sicor and Sankyo shall each appoint a project
---------------
leader to coordinate its part of the Research Program. Project leaders shall be
the primary contact between the parties with respect to the Research Program.
Each party shall notify the other within thirty (30) days of the date of this
Agreement of the appointment of its project leader and shall notify the other
party as early as practicable before changing this appointment.
5.4 Availability of Employees. Each party agrees to make its employees
-------------------------
and nonemployee consultants reasonably available at their respective places of
employment to consult with the other party on issues arising during the Research
Program and in connection with any request from any regulatory agency, including
regulatory, scientific, technical and clinical testing issues.
5.5 Visit of Facilities. Representatives of Gensia Sicor and Sankyo may,
-------------------
upon reasonable notice and at times reasonably acceptable to the other party (a)
visit the facilities where the Research Program is being conducted, and the
facilities where the other party manufactures any Product or active compound
contained therein (or has a Product or such a compound manufactured) to the
extent relating to such Product or compound, (b) consult informally, during such
visits and by telephone, with personnel of the other party performing work on
the Research Program, and (c) with the other party's prior approval, which
approval shall not be withheld unreasonably, visit the sites of any clinical
trials or other experiments being conducted by such other party in connection
with the Research Program or Products, but only to the extent in each case as
such trials or other experiments relate to the Research Program or Products. If
requested by the other party, Gensia Sicor and Sankyo shall cause appropriate
individuals working on the Research Program or Products to be available for
meetings at the location of the facilities where such individuals are employed
at times reasonably convenient to the party responding to such request.
-14-
ARTICLE 6.
LICENSE -- RESEARCH, DEVELOPMENT,
---------------------------------
MARKETING AND MANUFACTURING
---------------------------
6.1 License Grant to Sankyo.
-----------------------
6.1.1 Sankyo's License Rights. In the event Sankyo exercises its option
-----------------------
under Section 4.4 hereof to license a Licensed Compound, Gensia Sicor shall
grant to Sankyo, subject to the provisions of this Agreement, an exclusive
license (or, in the case of licensed Third Party Patent Rights, when permissible
an exclusive sublicense), including the right to grant sublicenses to Affiliates
under any part of the Patent Rights licensable or sublicensable by Gensia Sicor,
including Gensia Sicor's rights in any jointly owned Patent Rights, to make,
have made, use and sell Products incorporating such Licensed Compounds, and such
Licensed Compounds for use in Products, in the Territory; provided, however,
-------- -------
that no license or sublicense is granted to Sankyo or its Affiliates for any use
outside the Field covered by claims of patents or patent applications of Gensia
Sicor or its Affiliates directed to uses outside the Field. Any sublicense to a
non-Affiliate shall require the consent of Gensia Sicor, which consent shall not
be unreasonably withheld.
6.1.2 Sankyo's Right to Negotiate Further Licenses. In the event that
--------------------------------------------
Gensia Sicor or its Affiliates owns or has licensed (with the right to grant
sublicenses) any patents or patent applications (other the Patent Rights) which,
if in an issued patent, would be infringed by making, using or selling such
Licensed Compound, or any Product incorporating such Licensed Compound, outside
the Field, then upon the written request of Sankyo, the parties in good faith
shall attempt to negotiate a mutually acceptable royalty bearing license to
Sankyo under such patents and patent applications to make, use and sell such
Licensed Compound, or any Product incorporating such Licensed Compound, outside
the Field.
6.2 Joint Development and Marketing.
-------------------------------
6.2.1 Co-Promotion Option. Gensia Sicor shall have the option to co-
-------------------
promote each Product in the United States, Canada and Mexico in accordance with
terms and conditions of a co-promotion agreement to be negotiated in good faith
between Gensia Sicor and Sankyo.
6.2.2 Notification to Gensia Sicor. In the event that Sankyo plans to
----------------------------
file an NDA on a Product in the United States or Canada, it shall so inform
Gensia Sicor in writing of its intention to file an NDA at least three (3)
months prior to such filing. Included with such written notification by Sankyo
will be all information Sankyo has on the Product which has not previously been
provided to Gensia Sicor relevant to Gensia Sicor's making a decision as to
whether it wishes to co-promote Product pursuant to
-15-
Section 6.2.1 above. Such decision shall be communicated, in writing, to Sankyo
not more than sixty (60) days after Gensia Sicor has received the notification
and information referred to in the preceding sentence.
6.2.3 Brand of Product. The parties agree that all co-promoted Products
----------------
shall be sold and marketed under a common brand chosen and owned by Sankyo.
6.2.4 Development Committee. Promptly after exercise of Sankyo's option
---------------------
to license a Licensed Compound pursuant to Section 4.4, the parties shall
designate a committee (the "Development Committee"). In addition to any other
responsibilities designated herein, the Development Committee shall meet from
time to time on an as-needed basis to discuss at such meetings the preclinical
or clinical development, or the marketing, of Licensed Compounds or Products, as
well as any anticipated regulatory filings with respect to possible Products.
The parties may designate and appoint any reasonable number of scientific or
technical personnel of the parties to interact with each other regarding the
Licensed Compounds or the Products to be marketed hereunder. Members of the
Development Committee may be represented at any meeting by another member of the
Development Committee, or by a deputy. Any approval, determination or other
action agreed to by all of the members of the Development Committee or their
deputies present at the relevant Development Committee meeting shall be the
approval, determination or other action of the Development Committee, provided
--------
that at least two representatives of each party are present at such meeting.
Each party shall bear its own costs in connection with the Development Committee
meetings. The Development Committee shall have only such powers as are
specifically delegated to it hereunder, and, notwithstanding the creation of the
Development Committee, each party to this Agreement shall retain the rights,
powers and discretion granted to it hereunder, and the Development Committee
shall not be vested with any such rights, powers or discretion except as
expressly provided herein or as expressly agreed to by the parties in writing.
The Development Committee shall not have the power to amend this Agreement,
which may be amended only by the parties as provided in Section 20.3 hereof.
6.2.5 Disagreements. All disagreements within the Development Committee
-------------
shall be subject to the following:
(a) The representatives of the Development Committee shall promptly present
the disagreement to the executive of each of Gensia Sicor and Sankyo who has the
principal responsibility for his respective company's work under this Agreement;
(b) Such executives shall meet to discuss each party's view and to explain
the basis for such disagreement;
(c) If such executives cannot promptly resolve such disagreement, then such
disagreement shall be referred to the chief executive officers of Gensia Sicor
and Sankyo;
-16-
(d) If such chief executive officers cannot promptly resolve such
disagreement, then any dispute concerning the preclinical development necessary
or desirable for the preparation of filing of an IND or the clinical development
of Licensed Compounds or Products (other than disputes concerning Sankyo's
diligence or reasonable business judgment in developing Licensed Compounds or
Products which disputes shall be resolved under the provisions of Section
20.2.2) shall be determined by Sankyo.
6.3 Manufacturing. Except as otherwise provided in this Agreement,
-------------
Sankyo, its Affiliates and permitted sublicensees shall have the exclusive
license to manufacture Licensed Compounds and Products; provided, however, that
-------- -------
if Sankyo desires to have a Third Party manufacture a Licensed Compound, then
Gensia Sicor shall have the right of first refusal to manufacture such Licensed
Compound under the same terms as required generally by Sankyo with Third
Parties.
ARTICLE 7.
ROYALTIES, SIGNING FEE,
-----------------------
EQUITY PURCHASE AND MILESTONE PAYMENTS
--------------------------------------
7.1 Royalties Payable by Sankyo.
---------------------------
7.1.1 Subject to the other provisions in this Section 7.1, in
consideration of licenses granted to Sankyo herein, during the royalty term,
Sankyo shall pay to Gensia Sicor a royalty equal to (a) [CONFIDENTIAL TREATMENT
REQUESTED] of Net Sales of Products by Sankyo, its Affiliates, permitted
sublicensees or distributors in Japan and [CONFIDENTIAL TREATMENT REQUESTED] of
Net Sales of Products by Sankyo, its Affiliates, permitted sublicensees or
distributors in the rest of the Territory, with respect to those Products, the
manufacture, use or sale of which is covered by a Valid Patent Claim, and (b)
[CONFIDENTIAL TREATMENT REQUESTED] the royalty rate set forth above with respect
to those Products, the manufacture, use or sale of which is not covered by a
Valid Patent Claim.
7.1.2 If Gensia Sicor chooses to co-promote the Products in accordance
with Section 6.2 hereof, the royalty payable by Sankyo shall be [CONFIDENTIAL
TREATMENT REQUESTED] instead of the percentages set forth in Section 7.1.1 for
such country or countries for which the right to co-promote was exercised.
7.1.3 Royalties shall be paid in respect of Net Sales of each Product in
a country for a period equal to the Royalty Term for such Product in such
country.
7.1.4 In the event that a Product is covered by more than one Patent
Right claiming the composition, manufacture or method of use of such Product,
only the royalties set forth in Section 7.1.1 above, shall be paid with respect
to such Product.
-17-
7.1.5 In the event that either party owns or controls patented technology
that could be used to significantly improve the pharmacokinetics of a Product or
extend the patent life of such Product, as determined by the Steering Committee
or the Development Committee, the parties will meet to determine whether such
technology will be incorporated into such Product (the resulting product
hereinafter referred to as an "Improved Product") and, if so, will negotiate an
increase in the royalty payable to Gensia Sicor (in the case of technology owned
or controlled by Gensia Sicor) or a decrease in the royalty payable to Gensia
Sicor (in the case of technology owned or controlled by Sankyo). If Sankyo
declines to incorporate such technology, Gensia Sicor shall have the exclusive
right to develop and market the Improved Product upon payment of a reasonable
royalty to Sankyo.
7.2 Signing Fee. Sankyo shall pay to Gensia Sicor a signing fee of
-----------
US $1,375,000 within thirty (30) days after the execution of this
Agreement.
7.3 Equity Purchase. At Gensia Sicor's option, Sankyo shall purchase that
---------------
number of shares of common stock of Gensia Sicor (or its assignee) having an
aggregate purchase price of [CONFIDENTIAL TREATMENT REQUESTED] and a purchase
price per share equal to [CONFIDENTIAL TREATMENT REQUESTED] of the fair market
value of such shares. The fair market value of such shares shall equal (a) the
average of the per share closing price for such shares as reported on the Nasdaq
National Market System on each of the twenty (20) trading days ending three (3)
business days before the closing date of such equity purchase, or (b) if such
shares are not reported on the Nasdaq National Market System, the fair market
value of such shares as determined by an independent investment banking firm
selected by Gensia Sicor and reasonably acceptable to Sankyo. The costs of any
such determination by an independent investment banking firm shall be shared
equally by Gensia Sicor and Sankyo. Within ninety (90) days after Gensia Sicor
(or its assignee) delivers to Sankyo a draft Stock Purchase Agreement, Sankyo
shall purchase such shares pursuant to the final Stock Purchase Agreement
obligating Sankyo to purchase such shares in accordance with the provisions of
this Section 7.3 and containing such other terms and conditions as the parties
mutually agree. During such ninety (90) day period, Sankyo shall have the right
to conduct due diligence regarding the business and financial condition of the
issuer of such shares. Sankyo's obligation to purchase such shares shall be
subject to its completion, during such ninety (90) day period, of satisfactory
due diligence regarding the business and financial condition of the issuer of
such shares.
7.4 Development Milestone Payments. Sankyo shall make the following
------------------------------
development milestone payments to Gensia Sicor (a) for the first Compound which
achieves the milestone events set forth in the table below, in the amounts and
in accordance with the table below, and (b) for each additional Compound which
achieves the milestone events set forth in the table below, in one-half (1/2)
the amounts and in accordance with the table below; in each case other
-18-
than for Compounds which have properties, results and effects that are
substantially similar to a Compound (a "Back-up Compound") for which Sankyo has
previously made milestone payments. Sankyo shall not make milestone payments
for any Back-up Compound unless it replaces a Compound which has been selected
as either a Candidate Compound or a Licensed Compound which has not gone to
market, and in this instance, the only milestone payments due are those which
have not been made for the Compound it replaces. After any such previously
unpaid milestone payments have been paid, such Back-up Compound shall no longer
be a Back-up Compound. Notwithstanding the above, if such Back-up Compound is
subsequently developed in addition to the Compound it was meant to replace, all
appropriate milestone payments (for those milestones which such Back-up Compound
already has achieved) shall be promptly paid upon initiation of Phase III
clinical studies (or its regulatory equivalents in the United States or in a
Primary Country) for that Back-up Compound.
[CONFIDENTIAL TREATMENT REQUESTED]
7.5 Combination Product. In the event a Product is sold in a combination
-------------------
product with other pharmacologically active components, Net Sales, for purposes
of royalty payments on the combination product, shall be calculated by
multiplying the Net Sales of that combination by the fraction A/B, where A is
the gross selling price of the Product sold separately and B is the gross
selling price of the combination product. In the event that no such separate
sales are made by Sankyo or a permitted sublicensee, Net Sales for royalty
determination shall be calculated by multiplying Net Sales of the combination by
the fraction C/(C+D) where C is the fully allocated cost of the Product and D is
the fully allocated cost of such other pharmacologically active components. In
no event shall Net Sales of any Product calculated under this Section 7.2 with
respect to any combination product be less than fifty percent of the Net Sales
of such combination product.
ARTICLE 8.
ROYALTY REPORTS AND ACCOUNTING
------------------------------
8.1 Reports, Exchange Rates. During the term of this Agreement following
-----------------------
the First Commercial Sale of a Product, Sankyo shall furnish to Gensia Sicor a
written quarterly report showing, on a country by country basis, (i) the gross
sales of all Products sold by Sankyo and its sublicensees in the Territory
during the reporting period and the calculation of Net Sales from such gross
sales; (ii) the royalties payable in U.S. dollars, which shall have accrued
hereunder in respect of such sales; (iii) withholding taxes, if any, required by
law to be deducted in respect of such royalties, provided that Sankyo will take
--------
reasonable action to seek to minimize any such withholding taxes; (iv) the dates
of the First Commercial Sales of any Products in any country in the Territory
-19-
during the reporting period; and (v) the exchange rates used in determining the
amount of United States dollars. For sales which took place outside of the
United States, its territories and possessions, the royalty obligation of Sankyo
shall be determined on the basis of Sankyo's monthly standard account of sales
which shall be interpreted as representing the result of conversion of all local
currency sales to U.S. Dollars at the rate equal to the average of the rate
published in the London Times for the close of business in London on the last
-----
business day of each of the three (3) months of the calendar quarter for which
the payments are reported. Reports shall be due on the thirty-fifth (35th) day
following the close of each respective quarter. If no royalty is due for any
royalty period hereunder, Sankyo shall so report. Sankyo shall keep accurate
records in sufficient detail to enable the royalties payable hereunder to be
determined.
8.2 Audits.
------
8.2.1 Upon the written request of Gensia Sicor at Gensia Sicor's expense
and not more than once in each calendar year, Sankyo shall permit an
internationally recognized independent public accountant selected by Gensia
Sicor and reasonably acceptable to Sankyo, to have access during normal business
hours to such of the records of Sankyo as may be reasonably necessary to verify
the accuracy of the royalty reports hereunder in respect of any fiscal year
ending not more than twenty-four (24) months prior to the date of such request.
8.2.2 In the event such accountant concludes that additional royalties
were owed during such period, the additional royalty shall be paid within thirty
(30) days of the date Gensia Sicor delivers to Sankyo such accountant's written
report so concluding. The fees charged by such accountant shall be paid by
Gensia Sicor unless the audit discloses that the royalties payable by Sankyo for
the audited period are more than one hundred five percent (105%) of the
royalties actually paid for such period, in which case Sankyo shall pay the
reasonable fees and expenses charged by the accountant.
8.2.3 Sankyo shall include in each sublicense granted by it pursuant to
this Agreement a provision requiring the sublicensee to make reports to Sankyo,
to keep and maintain records of sales made pursuant to such sublicense and to
grant access to such records by Gensia Sicor's independent accountant to the
same extent required of Sankyo under this Agreement. Upon the expiration of
twenty-four (24) months following the end of any fiscal year, the calculation of
royalties payable with respect to such year shall be binding and conclusive upon
Gensia Sicor, and Sankyo and its sublicensees shall be released from any
liability or accountability with respect to royalties for such year.
8.3 Confidential Financial Information. Gensia Sicor agrees that all
----------------------------------
information subject to review under this Article 8 or under any sublicense
agreement is confidential and that Gensia
-20-
Sicor shall cause its accountant to retain all such information in confidence.
ARTICLE 9.
PAYMENTS
--------
9.1 Payment Terms. Royalties shown to have accrued by each royalty report
-------------
provided for under Article 8 of this Agreement shall be due and payable on the
date such royalty report is due. Payment of royalties in whole or in part may
be made in advance of such due date. Royalties determined to be owing, and any
overpayments to be credited, with respect to any prior quarter shall be added,
together with interest thereon under Section 9.4 below from the date of the
report for the quarter for which such amounts are owing, or credited, as the
case may be, to the next quarterly payment hereunder.
9.2 Exchange Control. Except as hereinafter provided in this Section 9.2,
----------------
all royalties due and other payments hereunder shall be paid in United States
dollars. If at any time legal restrictions prevent the prompt remittance of
part or all royalties with respect to any country of the Territory where the
product is sold, payment shall be made through such lawful means or methods as
Sankyo may determine. When in any country the law or regulations prohibit both
the transmittal and deposit of royalties on sales in such a country, royalty
payments shall be suspended for as long as such prohibition is in effect
(provided, however, that such suspended payments shall bear interest at the
--------- -------
initial rate stated in Section 9.4 hereof), and so soon as such prohibition
ceases to be in effect, all royalties that Sankyo or its sublicensees would have
been obligated to transmit or deposit, but for the prohibition, shall forthwith
be deposited or transmitted promptly to the extent allowable, as the case may
be. If the royalty rate specified in this Agreement should exceed the
permissible rate established in any country, the royalty rate for sales in such
country shall be adjusted to the highest legally permissible or government-
approved rate.
9.3 Payment Method. Except as provided in Section 9.2, all payments by
--------------
Sankyo to Gensia Sicor under this Agreement shall be made by bank wire transfer
in immediately available funds to such account as Gensia Sicor specified to
Sankyo before such payment is due.
9.4 Late Payments. Any payments by Sankyo that are not paid within thirty
-------------
(30) days of when such payments are due under this Agreement shall bear
interest, to the extent permitted by applicable law, at ten (10) percentage
points above the London Interbank Offered Rate (LIBOR) calculated on the
respective dates such payments are due.
-21-
9.5 Withholding Taxes.
-----------------
9.5.1 Royalties. Sankyo may withhold from the royalties due to Gensia
---------
Sicor hereunder amounts for payment of any withholding tax that Sankyo has paid
to any taxing authority with respect to the royalty amounts due to Gensia Sicor
hereunder; provided, however, that the net amount payable to Gensia Sicor for
-------- -------
any royalty period shall in no event be reduced by more than ten percent (10%)
of the royalties owing to Gensia Sicor for such royalty period. Sankyo agrees
to reasonably cooperate with Gensia in obtaining a foreign tax credit in the
United States with respect to such withholding tax on royalties due to Gensia
Sicor hereunder on the sale or manufacture of Products.
9.5.2 Other Payments. All amounts payable by Sankyo to Gensia Sicor
--------------
hereunder, other than royalties due on the sale or manufacture of Products,
represent the actual net proceeds to be received by Gensia Sicor. Gensia Sicor
agrees to reasonably cooperate with Sankyo in obtaining a refund of any
withholding taxes paid by Sankyo with respect to any such amounts payable to
Gensia Sicor hereunder. In the event that Gensia is successful in obtaining any
refund of withholding taxes paid by Sankyo with respect to any such amounts
payable to Gensia Sicor hereunder, Gensia agrees to promptly remit the amount of
such refund to Sankyo.
ARTICLE 10.
INFRINGEMENT ACTIONS BY THIRD PARTIES
-------------------------------------
10.1 Defense. If Gensia Sicor or Sankyo, or any of their respective
-------
Affiliates, shall be named as a defendant in a legal proceeding by a Third Party
for infringement of a patent because of the manufacture, use or sale of Products
or Licensed Compounds (but only to the extent such manufacture, use or sale is
claimed in the Gensia Sicor Patent Rights), the party which has been sued shall
promptly notify the other party in writing of the institution of such suit. The
party which has been sued may, at its option and at its sole expense, control
and defend such suit. The controlling party may not settle such suit or
otherwise consent to an adverse judgment in such suit that diminishes the right
or interests of the non-controlling party, or subjects the non-controlling party
to any liability for contribution pursuant to Section 10.3 hereof, without the
express written consent of the non-controlling party. The party which has been
sued shall keep the other party at all times reasonably informed as to the
status of the suit. The party which is not controlling such legal proceedings
shall have the right to be represented by advisory counsel of its own selection
(such counsel's opinion shall be reasonably considered by the controlling
party), at its own expense, and shall cooperate fully in the defense of such
suit and furnish to the party controlling such legal proceedings all evidence
and assistance in its control.
-22-
10.2 Defense of Actions Against Gensia Sicor and Sankyo. If Gensia
--------------------------------------------------
Sicor and Sankyo, or any of their respective Affiliates shall be jointly named
as defendants in a legal proceeding by a Third Party or shall be joined in the
same litigation for infringement of a patent because of the manufacture, use or
sale of Products or Licensed Compounds (but only to the extent such manufacture,
use or sale is claimed in the Gensia Sicor Patent Rights), Gensia Sicor shall be
entitled to control the defense of such suit, and all expenses including costs,
attorney fees, adverse judgements or settlement amounts incurred on account of
Sankyo or Gensia Sicor or both shall be paid as set forth under Section 10.3
below. Sankyo shall have the right to be represented by counsel of its own
selection, but at its sole expense, and shall cooperate fully in the defense of
such suit and furnish to Gensia Sicor all evidence and assistance in its
control. Gensia Sicor shall, however, not be entitled to settle such suit or
otherwise consent to an adverse judgment in such suit without the express
written consent of Sankyo if such settlement or adverse judgment diminishes any
right or interest of Sankyo hereunder, or subjects Sankyo to any liability for
contribution pursuant to Section 10.3 hereof.
10.3 Contribution. With respect to any judgments, settlements or damages
------------
payable with respect to legal proceedings covered by Sections 10.1 and 10.2
above, Gensia Sicor shall contribute an amount, equal to twenty-five percent
(25%) of such judgments, settlements or damages (not to exceed in the aggregate
the amount of royalties actually paid by Sankyo to Gensia Sicor through the date
of such judgment, settlement or damage with respect to the alleged infringing
Product in the country where the legal action was maintained), and Sankyo shall
pay the remainder. With respect to any legal proceedings covered by Section
10.2 above, Gensia Sicor may deduct the actual expenses paid by Gensia Sicor in
such suit, including costs, attorney fees, advance judgments or settlement
amounts, for the purpose of determining the amount of its contribution under the
previous sentence.
ARTICLE 11.
CONFIDENTIALITY
---------------
11.1 Nondisclosure Obligations. Except as otherwise provided in this
-------------------------
Article 11, and subject to Article 12 hereof, during the term of this Agreement
and for a period of five (5) years thereafter, both parties shall maintain in
confidence and use only for purposes of this Agreement confidential information
and data, received from the other party, resulting from or related to the
development of Research Compounds or Products.
For purposes of this Article 11, information and data described above shall
be referred to as "Information." To the extent it is reasonably necessary or
appropriate to fulfill its obligations or exercise its rights under this
Agreement, a party may disclose Information it is otherwise obligated under this
-23-
Section not to disclose to its Affiliates, sublicensees, consultants, outside
contractors and clinical investigators, on a need-to-know basis on condition
that such entities or persons agree to keep the Information confidential for the
same time periods and to the same extent as such party is required to keep the
Information confidential; and a party or its sublicensees may disclose such
Information to government or other regulatory authorities to the extent that
such disclosure is reasonably necessary to obtain patents or authorizations to
conduct clinical trials with and to commercially market the Product. The
obligation not to disclose Information shall not apply to any party of such
Information that (i) is or becomes patented, published or otherwise part of the
public domain other than by acts of the party obligated not to disclose such
Information or its Affiliates or sublicensees in contravention of this
Agreement; or (ii) is disclosed to the receiving party or its Affiliates or
sublicensees by a Third Party, provided such Information was not obtained by
--------
such Third Party directly or indirectly from the other party under this
Agreement; or (iii) prior to disclosure under this Agreement, was already in the
possession of the receiving party or its Affiliates or sublicensees, provided
--------
such Information was not obtained directly or indirectly from the other party
under this Agreement; or (iv) can be shown by written documents to have been
independently developed by the receiving party or its Affiliates without breach
of any of the provisions of this agreement.
11.2 Terms of This Agreement. Gensia Sicor and Sankyo each agrees not to
-----------------------
disclose any terms or conditions of this Agreement to any Third Party without
the prior consent of the other party, except as required by applicable law or to
persons with whom Sankyo or Gensia Sicor has entered into or proposes to enter
into a business relationship. Notwithstanding the foregoing, prior to execution
of this Agreement, Sankyo and Gensia Sicor shall agree upon the substance of
information that can be used to describe the terms of this transaction, and
Sankyo and Gensia Sicor may disclose such information, as modified by mutual
agreement from time to time, without the other party's consent.
ARTICLE 12.
PUBLICATION
-----------
12.1 During the terms of this Agreement, Gensia Sicor and Sankyo each
acknowledge the other party's interest in publishing certain of its results to
obtain recognition within the scientific community and to advance the state of
scientific knowledge. Each party also recognizes the mutual interest in
obtaining valid patent protection. Consequently, either party, its employees or
consultants wishing to make a publication (including any oral disclosure made
without obligation of confidentiality) relating to work performed by such party
as part of the Research Program (the "Publishing Party") shall transmit to the
other party (the "Reviewing Party") a copy of the proposed written publication
at
-24-
least sixty (60) days prior to submission for publication, or an abstract of
such oral disclosure at least thirty (30) days prior to submission of the
abstract or the oral disclosure, which ever is earlier. The Reviewing Party
shall have the right (a) to propose modifications to the publication for patent
reasons, (b) to request a delay in publication or presentation in order to
protect patentable information and (c) to propose modifications to the
publication to protect valuable know-how and technology of the Receiving Party.
If the Reviewing Party requests such a delay, the Publishing Party shall
delay submission or presentation of the publication for a period of ninety (90)
days to enable patent applications protecting each party's rights in such
information to be filed in accordance with Article 13 below. Upon the expiry of
sixty (60) days, in the case of proposed written disclosures, or thirty (30)
days, in the case of an abstract of proposed oral disclosures, from transmission
of such proposed disclosures to the Reviewing Party, the Publishing Party shall
be free to proceed with the written publication or the oral presentation,
respectively, unless the Reviewing Party has requested the delay described
above.
ARTICLE 13.
PATENTS
-------
13.1 Ownership of Inventions, Applications for Patent, Patents and
-------------------------------------------------------------
Copyrights. The entire right and title in all writings, inventions,
----------
discoveries, improvements and other technology directed to the manufacture or
use of a Product, or constituting a Product; whether or not patentable or
copyrightable, and any patent applications, patents or copyrights based thereon
(collectively, the "Inventions") that are made or conceived during and as a
result of the Research Program (i) solely by employees or others acting on
behalf of Gensia Sicor shall be solely owned by Gensia Sicor ("Gensia Sicor
Inventions") (ii) solely by employees of Sankyo or others acting on behalf of
Sankyo shall be solely owned by Sankyo ("Sankyo Inventions"), or (iii) jointly
by employees or others acting on behalf of Gensia Sicor and Sankyo shall be
owned jointly by Sankyo and Gensia Sicor ("Joint Inventions"). Each party shall
promptly disclose to the other party the making, conception or reduction to
practice of Inventions by employees or others acting on behalf of such party.
Each party represents and agrees that, all employees and other persons acting on
its behalf in performing its obligations under this Agreement shall be obligated
under a binding written agreement to assign to such party or as such party shall
direct, all Inventions made or conceived by such employee or other person, or in
the case of non-employees working for other companies or institutions on behalf
of Gensia Sicor or Sankyo; Gensia Sicor or Sankyo, as applicable, shall have the
right to license all Inventions made by such non-employees on behalf of Gensia
Sicor or Sankyo, as applicable, in accordance with the policies of said company
or institution. Gensia Sicor and Sankyo
-25-
agree to undertake to enforce such agreements (including, where appropriate, by
legal action) considering, among other things, the commercial value of such
inventions.
13.2 Patent Applications.
-------------------
13.2.1 Priority Filings. When a Gensia Sicor Invention or Joint Invention
----------------
has been made which may reasonably be considered to be patentable, Gensia Sicor
promptly shall file a United States priority patent application, and, in the
case of a Joint Invention, shall assign such patent application jointly to
Sankyo and Gensia Sicor. When a Sankyo Invention has been made which may
reasonably be considered to be patentable, Sankyo promptly shall file a Japanese
priority patent application. Gensia Sicor shall give Sankyo an opportunity to
review the text of an application for a Joint Invention before filing, and shall
supply Sankyo with a copy of the application as filed, together with a note of
its filing date and serial number.
13.2.2 Foreign Filing Decisions. No later than nine (9) months following
------------------------
the filing date of a priority patent application filed according to Section
13.2.1 above, the parties shall consult together, through the Steering Committee
or otherwise, and agree whether such priority application should be abandoned
without replacement; abandoned and refiled; proceeded within the country of
filing only; or used as the basis for a claim of priority under the Paris
Convention for corresponding applications in other countries.
13.2.3 Prosecution and Maintenance.
---------------------------
(a) Gensia Sicor shall control the preparation, filing, prosecution and
maintenance of all patent applications and patents which claim Gensia Sicor
Inventions and Joint Inventions. Sankyo shall control the preparation, filing,
prosecution and maintenance of all patent applications and patents which claim
Sankyo Inventions.
(b) Gensia Sicor shall bear all applicable costs associated with the
preparation, filing, prosecution and maintenance of patents and patent
applications which claim Gensia Sicor Inventions in the United States, its
territories and possessions. All applicable costs associated with the
preparation, filing, prosecution and maintenance of patents and patent
applications which claim Joint Inventions in the United States, its territories
and possessions shall be split evenly between the parties. Sankyo shall bear
all applicable costs associated with the preparation, filing, prosecution and
maintenance of all other patents and patent applications subject to this Section
13.2.
13.3 Cooperation. Each party shall make available to the other party or
-----------
its authorized attorneys, agents or representatives, its employees, agents or
consultants necessary or appropriate to enable the appropriate party to file,
prosecute and maintain patent applications and resulting patents with respect to
Inventions for
-26-
a period of time sufficient for such party to obtain the assistance it needs
from such personnel. Where appropriate, each party shall sign or cause to have
signed all documents relating to said patent applications or patents at no
charge to the other.
13.4 No Other Technology Rights. Except as otherwise provided in this
--------------------------
Agreement, under no circumstances shall a party hereto, as a result of this
Agreement, obtain any ownership interest or other right in any technology, know-
how, patents, pending patent applications, products, vaccines, antibodies, cell
lines or cultures, or animals of the other party, including items owned,
controlled or developed by the other, or transferred by the other to said party
at any time pursuant to this Agreement. It is understood and agreed by the
parties that this Agreement does not grant to either party any license or other
right in basic technology of the other party except to the extent necessary to
enable the parties to carry out their party of this Agreement.
13.5 Enforcement of Patent Rights.
----------------------------
13.5.1 Gensia Sicor and Sankyo shall promptly notify the other in writing
of any alleged or threatened infringement of Patent Rights in the Field of which
they become aware. The Parties shall then confer and may agree jointly to
prosecute any infringement described in this Section 13.5. The party owning the
Patent alleged or threatened to be infringed shall control the joint litigation
in the event of any dispute between the parties with respect to any aspect of
the litigation. With respect to Joint Inventions, Gensia Sicor shall control
such joint litigation.
13.5.2 If the parties do not agree on whether or how to proceed with
enforcement activity within (i) ninety (90) days following the notice of alleged
infringement or (ii) ten (10) days before the time limit, if any, set forth in
the appropriate laws and regulations for the filing of such actions, whichever
comes first, then either party may act in its own name to commence litigation
with respect to the alleged or threatened infringement. The non-controlling
party shall reasonably cooperate with the party bringing such enforcement
action, at the sole expense of the party bringing such enforcement action.
13.5.3 In the event a party brings an infringement action, the other party
shall reasonably cooperate, including, if required to bring such action, the
furnishing of a power of attorney. Neither party shall have the right to settle
any patent infringement litigation under this Section 13.5 in a manner that
diminishes the rights or interests of the other party without the express
written consent of such other party.
13.5.4 The costs of any joint litigation commenced pursuant to Section
13.5.1, including attorneys' fees and expenses, shall be borne equally by the
parties (unless they agree to a different cost sharing arrangement in any
particular matter), with such costs to be accounted for by equalizing payments
to be made on a quarterly
-27-
basis. Only out-of-pocket costs shall be accounted for and reimbursed under
this Section 13.5.4, without an allocation for internal resources devoted to the
litigation. The costs of any sole litigation commenced pursuant to Section
13.5.2, including attorneys' fees and expenses, shall be borne solely by the
party bringing such infringement action.
13.5.5 Except as otherwise agreed to by the parties as part of a cost
sharing arrangement, any recovery realized as a result of any joint litigation
commenced pursuant to Section 13.5.1 shall be shared equally by the parties
(unless they agree beforehand to a different sharing of such recovery). Any
recovery realized as a result of any sole litigation commenced pursuant to
Section 13.5.2 shall be retained by the party bringing such infringement action.
ARTICLE 14.
TERM, TERMINATION
-----------------
14.1 Expiration. Unless terminated earlier pursuant to Section 14.2 below,
----------
and subject to termination of the Research Program according to Article 3
hereof, this Agreement shall expire on the expiration or earlier termination of
Research Program Term.
14.2 Termination for Cause. Either party may terminate this Agreement upon
---------------------
the occurrence of any of the following:
14.2.1 Upon written notice by one party to the other, if the other party
files or has filed against it a petition under the Bankruptcy Act, makes an
assignment for the benefit of creditors, has a receiver appointed for it or any
of its assets, provided that, notwithstanding anything herein to the contrary, a
--------
party shall not be able to terminate this Agreement pursuant to this Section
14.2.1 for any period during which the other party is proceeding in good faith
to reorganize under Chapter 11 of the United States Bankruptcy Code. In the
event Sankyo terminates this Agreement pursuant to this Section 14.2.1, Sankyo
shall retain all rights to make, have made, use and sell the Products, subject
to the payment to Gensia Sicor of a royalty under the terms and conditions set
forth in Article 6 hereof.
14.2.2 Upon the failure of either party to comply with any material
obligation set forth in this Agreement (a "Default"), the non-defaulting party
shall give to the defaulting party written notice (the "Notice of Default")
specifying the nature of the Default and requesting that the defaulting party
cures such Default within one hundred eighty (180) days. If the defaulting
party shall dispute the existence, extent or nature of any Default set forth in
a Notice of Default, the parties shall use good faith efforts to resolve the
dispute. In the event any Default shall not be cured within one hundred eighty
(180) days of the defaulting party's receipt of a Notice of Default, the non-
defaulting party shall be entitled to terminate this Agreement in its entirety
and
-28-
the licenses granted hereunder, but only after the Chief Executive Officers of
the parties have conferred as provided in Section 20.2.2 hereof.
(a) If the non-defaulting party under this Section 14.2.2 is Sankyo, Sankyo
shall retain (i) all rights under this Agreement and any License Agreements to
make, have made, use and sell all Licensed Compounds and Products incorporating
such Licensed Compounds in accordance with the terms hereof and thereof, and
(ii) all rights under this Agreement with respect to all Recommended Compounds
that are identified in the most recent Steering Committee minutes, and all
Candidate Compounds, in accordance with the terms hereof, subject to the payment
to Gensia Sicor of royalties and other amounts under the terms and conditions
set forth in this Agreement; provided, however, that such payment to Gensia
-------- -------
Sicor shall be at one-half (1/2) the rates set forth in Section 7.1.1 hereof in
the event of Gensia Sicor's default.
(b) If the non-defaulting party under this Section 14.2.2 is Gensia Sicor,
all rights to compounds shall revert to Gensia Sicor if such compounds were
Gensia Sicor compounds or Third Party Compounds or revert to Sankyo if such
compounds were Sankyo compounds (subject to the restrictions set forth in
Section 4.6 hereof).
14.3 Effect of Termination. Expiration or termination of this Agreement
---------------------
shall not relieve the parties of any obligation accruing prior to such
expiration or termination and the provisions of Section 4.2, 4.3, 4.4, 4.6 and
7.4, and Article 11, 12 and 15 shall survive the expiration of this Agreement.
Upon the termination of the Research Program, (i) Sankyo's obligation to fund
the Research Program pursuant to Section 3.3 hereof shall terminate; and (ii)
for so long as at least one (1) Licensed Compound is in development, all
Licensed Compounds and Products resulting therefrom shall continue to be
governed by the terms and conditions set forth in this Agreement and the
applicable License Agreement.
ARTICLE 15.
INDEMNITY
---------
15.1 Sankyo Indemnity Obligations. Sankyo agrees to defend, indemnify and
----------------------------
hold Gensia Sicor, Gensia Sicor's Affiliates and their directors, officers,
employees and agents harmless from all losses, liabilities, damages and expenses
(including reasonable attorneys' fees and costs) incurred as a result of any
claim, demand, action, or other proceeding by any Third Party arising as a
result of (a) breach of representation or warranty by Sankyo; (b) breach of any
of its obligations under this Agreement by Sankyo; (c) actual or asserted
violations of any applicable law or regulation by Sankyo, its Affiliates or
sublicensees by virtue of which Products manufactured, distributed or sold by
Sankyo, its Affiliates or sublicensees shall be alleged or determined to be
-29-
adulterated, misbranded, mislabeled or otherwise not in compliance with any
applicable law or regulation; (d) bodily injury, death or property damage
attributable to the manufacture, distribution, sale or use of Products by
Sankyo, its Affiliates or sublicensees or otherwise attributable to a Product
manufactured in accordance with specifications provided by Sankyo; or (e)
Product recall ordered by a governmental agency, or required by a confirmed
Product failure as reasonably determined by the parties hereto, with respect to
a Product manufactured by Sankyo, its Affiliates or sublicensees; in each case
except to the extent such loss, liability, damage or expense was attributable to
Gensia Sicor's gross negligence or willful misconduct.
15.2 Gensia Sicor Indemnity Obligations. Gensia Sicor agrees to defend,
----------------------------------
indemnify and hold Sankyo, Sankyo's Affiliates and their directors, officers,
employees and agents harmless from all losses, liabilities, damages and expenses
(including reasonable attorneys' fees and costs) incurred as a result of any
claim, demand, action, or other proceeding by any Third Party arising as a
result of (a) breach of representation or warranty by Gensia Sicor; (b) breach
of any of its obligations under this Agreement by Gensia Sicor; (c) actual or
asserted violations of any applicable law or regulation by Gensia Sicor, its
Affiliates or licensees (other than Sankyo, its Affiliates or sublicensees) by
virtue of which Products manufactured, distributed or sold by Gensia Sicor, its
Affiliates or licensees (other than Sankyo, its Affiliates or sublicensees)
shall be alleged or determined to be adulterated, misbranded, mislabeled or
otherwise not in compliance with any applicable law or regulation; (d) bodily
injury, death or property damage attributable to the manufacture of Products by
Gensia Sicor, its Affiliates or licensees (other than Sankyo, its Affiliates or
sublicensees), unless manufactured in accordance with specifications provided by
Sankyo; or (e) Product recall ordered by a governmental agency, or required by a
confirmed Product failure as reasonably determined by the parties hereto, with
respect to a Product manufactured by Gensia Sicor, its Affiliates or licensees
(other than Sankyo, its Affiliates or sublicensees), unless manufactured in
accordance with specifications provided by Sankyo; in each case except to the
extent such loss, liability, damage or expense was attributable to Sankyo's
gross negligence or willful misconduct.
15.3 Procedure. A party or any of its Affiliates or their employees or
---------
agents (the "Indemnitee") that intends to claim indemnification under this
Article 15 shall promptly notify the other party (the "Indemnitor") of any loss,
claim, damage, liability or action in respect of which the Indemnitee intends to
claim such indemnification, and the Indemnitor shall assume the defense thereof
with counsel mutually satisfactory to the parties; provided, however, that an
-------- -------
Indemnitee shall have the right to retain its own counsel, with the fees and
expenses to be paid by the Indemnitor, if representation of such Indemnitee by
the counsel retained by the Indemnitor would be inappropriate due to actual or
potential differing interests between such Indemnitee and any other
-30-
party represented by such counsel in such proceedings. The indemnity agreement
in this Article 15 shall not apply to amounts paid in settlement of any loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Indemnitor, which consent shall not be withheld unreasonably.
The failure to deliver notice to the Indemnitor within a reasonable time after
the commencement of any such action, if prejudicial to its ability to defend
such action, shall relieve such Indemnitor of any liability to the Indemnitee
under this Article 15, but the omission so to deliver notice to the Indemnitor
will not relieve it of any liability that it may have to any Indemnitee
otherwise than under this Article 15. The Indemnitee under this Article 15, its
employees and agents, shall cooperate fully with the Indemnitor and its legal
representatives in the investigation of any action, claim or liability covered
by this indemnification. In the event that each party claims indemnity from the
other and one party is finally held liable to indemnify the other, the
Indemnitor shall additionally be liable to pay the reasonable legal costs and
attorneys' fees incurred by the Indemnitee in establishing its claim for
indemnity.
15.4 Insurance. Sankyo and Gensia Sicor shall each maintain product
---------
liability insurance with respect to development, manufacture and sales of
Products by Sankyo or Gensia Sicor, respectively, in such amount as Sankyo or
Gensia Sicor, respectively, customarily maintains with respect to the
development, manufacture and sales of its other products. Sankyo or Gensia
Sicor, as applicable, shall maintain such insurance for so long as it continues
to develop, manufacture or sell any Products, and thereafter for so long as
Sankyo or Gensia Sicor, as applicable, customarily maintains insurance for
itself covering the development, manufacture or sale of its other products.
ARTICLE 16.
FORCE MAJEURE
-------------
Neither party shall be held liable or responsible to the other party nor be
deemed to have defaulted under or breached this Agreement for failure or delay
in fulfilling or performing any term of this Agreement when such failure or
delay is caused by or results from causes beyond the reasonable control of the
affected party including but not limited to fire, floods, embargoes, war, acts
of war (whether war be declared or not), insurrections, riots, civil commotions,
strikes, lockouts or other labor disturbances, acts of God or acts, omissions or
delays in acting by any governmental authority or the other party.
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ARTICLE 17.
ASSIGNMENT
----------
This Agreement may not be assigned or otherwise transferred by either
party without the consent of the other party; provided, however, that either
-------- -------
Gensia Sicor or Sankyo may, without such consent, assign this Agreement and its
rights and obligations hereunder to its Affiliates or in connection with the
transfer or sale of all or substantially all of its business to which this
Agreement pertains, or in the event of its merger or consolidation or change in
control or similar transaction. Any purported assignment in violation of the
preceding sentences shall be void. Any permitted assignee shall assume all
obligations of its assignor under this Agreement. Notwithstanding the
foregoing, in the event of a merger, consolidation, change of control or similar
transaction by Gensia Sicor, Sankyo shall not be required to provide to Gensia
Sicor's successor the information described in Sections 4.3 and 5.5 hereof if,
in Sankyo's reasonable judgment, the provision of such information to such
successor could cause material competitive harm to Sankyo.
ARTICLE 18.
NOTIFICATION OF PATENT TERM RESTORATION
---------------------------------------
Gensia Sicor shall notify Sankyo of (i) the issuance of each United States
patent included within the Patent Rights, giving the date of issue and patent
number for each such patent, and (ii) each notice pertaining to any patent
included within the Patent Rights which it receives as patent owner pursuant to
the Drug Price Competition and Patent Term Restoration Act of 1984 (the "Act"),
including notices pursuant to sections 101 and 103 of the Act from persons who
have filed an abbreviated NDA. Such notices shall be given promptly, but in any
event within fifteen (15) calendar days of each such patent's date of issue or
receipt of each such notice pursuant to the Act, whichever is applicable.
Gensia Sicor shall notify Sankyo of each filing for patent term restoration
under the Act, any allegations of failure to show due diligence and all awards
of patent term restoration (extensions) with respect to the Patent Rights.
Likewise, Sankyo will inform Gensia Sicor of patent extensions and periods of
data exclusivity in the rest of the world regarding any Product.
ARTICLE 19.
SEVERABILITY
------------
Each party hereby agrees that it does not intend to violate any public
policy, statutory or common laws, rules, regulations, treaty or decision of any
government agency or executive body thereof of any country or community or
association of countries.
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Should one or more provisions of this Agreement be or become invalid, the
parties hereto shall substitute, by mutual consent, valid provisions for such
invalid provisions which valid provisions in their economic effect are
sufficiently similar to the invalid provisions that it can be reasonably assumed
that the parties would have entered into this Agreement with such valid
provisions. In case such valid provisions cannot be agreed upon, the invalidity
of one or several provisions of this Agreement shall not affect the validity of
this Agreement as a whole, unless the invalid provisions are of such essential
importance to this Agreement that it is to be reasonably assumed that the
parties would not have entered into this Agreement without the invalid
provisions.
ARTICLE 20.
MISCELLANEOUS
-------------
20.1 Notices. Any consent, notice or report required or permitted to be
-------
given or made under this Agreement by one of the parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by personal delivery or courier) or courier, postage prepaid (where
applicable), addressed to such other party at its address indicated below, or to
such other address as the addressee shall have last furnished in writing to the
addressor and shall be effective upon receipt by the addressee.
If to Gensia Sicor: Gensia Sicor Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Copy to: General Counsel
If to Sankyo: Sankyo Co., Ltd.
▇-▇▇, ▇▇▇▇▇▇▇▇▇, ▇-▇▇▇▇▇
▇▇▇▇▇▇▇▇▇-▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇
Attention: ▇▇. ▇. ▇▇▇▇▇▇,
Deputy Director,
Research Institute
20.2 Applicable Law; Arbitration.
---------------------------
20.2.1 Applicable Law. This Agreement shall be governed by and construed
--------------
in accordance with the laws of the state of California.
20.2.2 Arbitration. Any disputes arising between the parties relating to,
-----------
arising out of or in any way connected with this Agreement or any term or
condition hereof, or the performance by either party of its obligations
hereunder, whether before or after termination of this Agreement, shall be
promptly presented to the
-33-
chief executive officers of Gensia Sicor and Sankyo for resolution and if the
chief executive officers cannot promptly resolve such disputes, then such
dispute shall be finally resolved by binding arbitration. Whenever a party
shall decide to institute arbitration proceedings, it shall give written notice
to that effect to the other party. The party giving such notice shall refrain
from instituting the arbitration proceedings for a period of sixty (60) days
following such notice. Any arbitration hereunder shall be conducted under the
International Chamber of Commerce Arbitration Rules. Each such arbitration
shall be conducted in the English language by a panel of three arbitrators
appointed in accordance with such rules. Any such arbitration shall be held in
Los Angeles, California. The arbitrators shall have the authority to grant
specific performance, and to allocate between the parties the costs of
arbitration in such equitable manner as they determine. Judgment upon the award
so rendered may be entered in any court having jurisdiction or application may
be made to such court for judicial acceptance of any award and an order of
enforcement, as the case may be.
20.3 Entire Agreement. This Agreement, together with the Stock Purchase
----------------
Agreement, contains the entire understanding of the parties with respect to the
subject matter hereof. All express or implied agreements and understandings,
either oral or written, heretofore made are expressly merged in and made a part
of this Agreement. This Agreement may be amended, or any term hereof modified,
only by a written instrument duly executed by both parties hereto.
20.4 Headings. The captions to the several Articles and Sections hereof
--------
are not a part of this Agreement, but are merely guides or labels to assist in
locating and reading the several Articles and Sections hereof.
20.5 Independent Contractors. It is expressly agreed that Gensia Sicor and
-----------------------
Sankyo shall be independent contractors and that the relationship between the
two parties shall not constitute a partnership, joint venture or agency.
Neither Gensia Sicor nor Sankyo shall have the authority to make any statements,
representations or commitments of any kind, or to take any action, which shall
be binding on the other, without the prior consent of the party to do so.
20.6 Waiver. The waiver by either party hereto of any right hereunder or
------
the failure to perform or of a breach by the other party shall not be deemed a
waiver of any other right hereunder of any other breach or failure by said other
party whether of a similar nature or otherwise.
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20.7 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
GENSIA SICOR INC.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇, Ph.D.
______________________________
By: ▇▇▇▇ ▇▇▇▇▇▇▇, Ph.D.
Title: Vice President
SANKYO CO., LTD.
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, Ph.D.
______________________________
By: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, Ph.D.
Title: Managing Director, Director of
Research Institute
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APPENDIX A
[CONFIDENTIAL TREATMENT REQUESTED]
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