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EXHIBIT 10.19
COLLABORATION AGREEMENT
BETWEEN
COMBICHEM, INC.
AND
TEIJIN LIMITED
March 29, 1996
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TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS................................................................................................... 1
ARTICLE 2 COLLABORATION RESEARCH AND SCREENING.......................................................................... 7
2.1 Collaboration Research Activities............................................................................. 8
2.2 Research Plan................................................................................................. 9
2.3 Option to Expand the Research Program or to Extend the Research
Program Term.................................................................................................. 9
2.4 Records....................................................................................................... 9
2.5 Permitted Activities.......................................................................................... 9
2.6 Post-Research Program Activities.............................................................................. 10
2.7 Reports....................................................................................................... 10
2.8 Excluded Products............................................................................................. 10
2.9 Retained Rights............................................................................................... 11
2.10 Restricted Activities; Rights Following Termination of Exclusivity............................................ 11
ARTICLE 3 MANAGEMENT.................................................................................................... 12
3.1 Research Committee............................................................................................ 12
3.2 Membership of RC.............................................................................................. 12
3.3 RC Meetings................................................................................................... 12
3.4 Decision Making............................................................................................... 12
ARTICLE 4 ***........................................................................................................... 13
4.1 ***........................................................................................................... 13
***
4.2 ***........................................................................................................... 13
***
4.3 ***........................................................................................................... 14
ARTICLE 5 LICENSES...................................................................................................... 14
5.1 Licenses to Teijin............................................................................................ 14
5.2 Licenses to CombiChem......................................................................................... 15
5.3 *** ............................................................................................... 15
5.4 *** ............................................................................................... 15
5.5 No Liability Regarding Third Party Rights..................................................................... 16
5.6 Research License.............................................................................................. 16
5.7 No Other Products............................................................................................. 16
ARTICLE 6 PAYMENTS...................................................................................................... 16
6.1 *** Payment.............................................................................................. 16
6.2 Collaboration Funding......................................................................................... 16
6.3 Milestone Payments............................................................................................ 17
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6.4 Royalties to CombiChem........................................................................................ 18
6.5 ***......................................................................................................... 19
6.6 ***......................................................................................................... 20
ARTICLE 7 PAYMENTS; BOOKS AND RECORDS................................................................................... 20
7.1 Royalty Reports and Payments.................................................................................. 20
7.2 Method for Payments........................................................................................... 20
7.3 Place of Royalty Payment and Currency Conversions............................................................. 20
7.4 Records; Inspection........................................................................................... 21
7.5 Tax Matters................................................................................................... 21
ARTICLE 8 DUE DILIGENCE................................................................................................. 22
8.1 Due Diligence................................................................................................. 22
8.2 License Back.................................................................................................. 22
8.3 Regulatory Filings............................................................................................ 22
ARTICLE 9 INTELLECTUAL PROPERTY......................................................................................... 23
9.1 Ownership of Inventions....................................................................................... 23
9.2 Patent Prosecution............................................................................................ 24
9.3 Enforcement and Defense....................................................................................... 26
ARTICLE 10 CONFIDENTIALITY............................................................................................... 26
10.1 Confidential Information...................................................................................... 27
10.2 Permitted Use and Disclosures................................................................................. 27
10.3 Nondisclosure of Terms........................................................................................ 28
10.4 Publication................................................................................................... 28
ARTICLE 11 REPRESENTATIONS AND WARRANTIES................................................................................ 28
11.1 Teijin........................................................................................................ 28
11.2 CombiChem..................................................................................................... 29
11.3 Disclaimer.................................................................................................... 29
11.4 No Consequential Damages...................................................................................... 29
ARTICLE 12 ***........................................................................................................... 30
12.1 ***......................................................................................................... 30
12.2 ***......................................................................................................... 30
12.3 ***......................................................................................................... 30
ARTICLE 13 DISPUTE RESOLUTION............................................................................................ 31
13.1 General Arbitration........................................................................................... 31
13.2 Arbitration Procedures........................................................................................ 31
13.3 Disqualification.............................................................................................. 32
13.4 Confidentiality............................................................................................... 32
13.5 Equity........................................................................................................ 32
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ARTICLE 14 TERM AND TERMINATION.......................................................................................... 32
14.1 Term.......................................................................................................... 32
14.2 Termination for Cause......................................................................................... 33
14.3 Termination for Insolvency.................................................................................... 33
14.4 Effect of Breach or Termination............................................................................... 33
14.5 Survival...................................................................................................... 34
ARTICLE 15 MISCELLANEOUS................................................................................................. 34
15.1 Governing Laws................................................................................................ 34
15.2 No Implied Licenses........................................................................................... 34
15.3 Waiver........................................................................................................ 34
15.4 Assignment.................................................................................................... 34
15.5 Independent Contractors....................................................................................... 35
15.6 Compliance with Laws.......................................................................................... 35
15.7 Patent Marking................................................................................................ 35
15.8 Notices....................................................................................................... 35
15.9 Severability.................................................................................................. 36
15.10 Force Majeure................................................................................................. 36
15.11 Complete Agreement; Amendment................................................................................. 36
15.12 Headings...................................................................................................... 36
15.13 Counterparts.................................................................................................. 36
Exhibits
Exhibit A Research Plan
Exhibit B Libraries
Exhibit C Initial Representatives on the Research Committee
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COLLABORATION AGREEMENT
This COLLABORATION AGREEMENT (the "Agreement"), effective as of March 29,
1996 (the "Effective Date"), is made by and between CombiChem, Inc., a
California corporation, having a principal place of business at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇. ("CombiChem"), and Teijin Limited,
an entity organized and existing under the laws of Japan, having a principal
place of business at ▇-▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇-▇▇▇▇▇, ▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇
("Teijin").
BACKGROUND
A. Teijin has discovered lead compounds that are ***
*** .
B. CombiChem has developed novel proprietary methods for the generation
of compound libraries. CombiChem believes that its technology, by rapidly
producing diverse and targeted compound libraries, will accelerate the drug
discovery process and increase productivity of drug discovery programs.
C. Teijin and CombiChem desire to collaborate to design, synthesize and
screen compound libraries to identify Collaboration Compounds (as defined
herein).
D. CombiChem desires to ***
***
***
*** .
NOW, THEREFORE, for and in consideration of the covenants, conditions, and
undertakings hereinafter set forth, it is agreed by and between the Parties (as
defined below) as follows:
ARTICLE 1
DEFINITIONS
The following capitalized terms used herein shall have the respective
meanings set forth below. Certain other capitalized terms are defined elsewhere
in this Agreement.
1.1 "Affiliate" shall mean any corporation or other business entity
which during the term of this Agreement controls, is controlled by or is under
common control with CombiChem or Teijin, but only for so long as such entity
controls, is controlled by or is under common control with CombiChem or Teijin.
For this purpose, control means the possession of the power to direct or cause
the direction of the management and the policies of
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an entity whether through ownership directly or indirectly of over fifty percent
(50%) of the stock entitled to vote, and for non-stock organizations, the right
to receive over fifty percent (50%) of the profits by contract or otherwise, or
if not meeting the preceding requirement, any company owned or controlled by or
owning or controlling CombiChem or Teijin at the maximum control or ownership
right permitted in the country where such company exists.
1.2 "Aggregate Annual Research Fee" shall mean the aggregate Annual
Research Fee for a contract year as set in Sections 1.3 and 6.2, unless modified
by mutual agreement of the Parties.
1.3 "Annual Research Fee" shall mean on a per scientist full-time basis
(a) for the first year of the Research Program, *** per CombiChem
scientist, (b) for the first year of the Research Program, *** per
Teijin scientist sited at CombiChem's facility and (c) for any subsequent year
of the Research Program, the Annual Research Fee per scientist for the previous
year increased by *** of the percentage increase during the previous
year in the CPI. If such index ceases to be published, then such index shall be
replaced with the index which most closely resembles the performance of such
index, as determined by the mutual agreement of the Parties.
1.4 " *** Active Compound" shall mean a Library Compound
screened during the *** Exclusivity Period which has ***
Receptor Activity.
1.5 " *** Compound" shall mean any (a) *** Active
Compound or (b) Derivative Compound which demonstrates *** Receptor
Activity as well as any compositions-of-matter claimed in patent applications
filed or patents issued under Article 9 of this Agreement with respect to
compounds described in (a) or (b) above.
1.6 " *** Exclusivity Period" shall mean the period of time
*** *** .
1.7 " *** Receptor Activity" shall mean *** ***
*** .
1.8 "Collaboration" shall comprise the activities described in Article 2
below.
1.9 "Collaboration Compounds" shall mean *** *** .
1.10 *** *** .
1.11 "CPI" means the Consumer Price Index, All Urban Consumers, as
published by the U.S. Bureau of Labor Statistics.
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1.12 "Derivative Compound" shall mean any compound that demonstrates
activity against a particular molecular target, which compound is derived from a
Library Compound active against that molecular target by CombiChem, or Teijin or
its Affiliates, or by a third party under authority from Teijin. A compound
shall be deemed to have been "derived from" a Library Compound if it: (i)(A)
results from a chemical synthesis program based on a Library Compound or (B) is
based on structure-activity data relating to a Library Compound ***
, and (ii) is a compound synthesized during the ***
Exclusivity Period (with respect to a Library Compound with ***
) or the *** Exclusivity Period (with respect to a
Library Compound with *** ). It is understood that
"Derivative Compound" shall include compounds derived from a Library Compound or
from another Derivative Compound.
1.13 "Due Diligence" shall have the meaning set forth in Section 8.1 of
this Agreement.
1.14 "Europe" shall mean the geographic territory encompassed on the date
of this Agreement by all of those countries which are the members of the
European Free Trade Association or the European Union (formerly the European
Community), all countries that were formerly members of COMECON, the independent
republics of the former Republic of Yugoslavia, and all of the former republics
of the Union of Soviet Socialist Republics, together with any additional nations
or states that may be created in such geographical territory after the date of
the Agreement.
1.15 "Excluded Product" shall mean any product in the Field with ***
*** , which, prior to the Effective Date, Teijin has synthesized
and either tested or has expressed an intention to test for ***
*** , as shown by contemporaneous documentation, subject to reasonable
verification.
1.16 "Existing Patent Rights" shall mean (i) all patents and patent
applications existing as of the Effective Date that claim a Collaboration
Compound or method of use or process thereof or composition-of-matter thereof,
(ii) any divisions, continuations, continuations-in-part, reissues,
reexaminations, extensions or other governmental actions which extend any of the
subject matter of a patent in subsection (i) above, (iii) all patents and patent
applications listed in subsections (i) or (ii) above that are subsequently
withdrawn and re-filed, and (iv) any substitutions, confirmations,
registrations, revalidations, or additions of any of the foregoing, in each
case, which is owned or controlled, in whole or part, by license, assignment or
otherwise by CombiChem during the term of this Agreement.
1.17 "Existing Know-How" shall mean all ideas, inventions, data,
know-how, instructions, processes, formulas, expert opinion and information,
existing as of the Effective Date owned or controlled in whole or part by
CombiChem, by license, assignment or otherwise, in each case, which are
necessary for the development, manufacture, use, sale or commercialization of a
Collaboration Compound or Product, in each case, to the extent CombiChem has the
right to license or sublicense the same, and subject to any limitations or
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prohibitions of any license or sublicense. Excluded from Existing Know-How are
any inventions otherwise included in the definition of any Existing Patent
Rights in this Agreement.
1.18 "Field" shall mean the therapeutic or prophylactic treatment or
prevention of diseases and conditions in humans and animals.
1.19 "FDA" shall mean the U.S. Food and Drug Administration or any
corresponding foreign registration or regulatory authority.
1.20 "Future Patent Rights" shall mean (i) all patents and patent
applications that claim a Collaboration Compound or method of use or process
thereof conceived and reduced to practice by CombiChem in the period from the
Effective Date until the expiration of the Exclusivity Period and (ii) any
divisions, continuations, continuations-in-part, reissues, reexaminations,
extensions or other governmental actions which extend any of the subject matter
of the patent applications or patents in (i) above, and any substitutions,
confirmations, registrations, revalidations or additions of any of the
foregoing, in each case, which is owned or controlled, in whole or part, by
license, assignment or otherwise by CombiChem or its Affiliates during the term
of this Agreement. Excluded from Future Patent Rights are patents and patent
applications otherwise included in Existing Patent Rights in this Agreement.
1.21 "Future Know-How" shall mean all ideas, inventions, data, know-how,
instructions, processes, formulas, expert opinion and information owned or
controlled by CombiChem in whole or part by license, assignment or otherwise in
the period from the Effective Date until the expiration of the ***
*** which are necessary for the development, manufacture, use or sale or
commercialization of a Collaboration Compound or Product, in each case, to the
extent CombiChem or its Affiliates has the right to license or sublicense the
same, and subject to any limitations or prohibitions of any license or
sublicense. Excluded from Future Know-How are any inventions otherwise included
in the definition of any Future Patent Rights in this Agreement.
1.22 "IND" shall mean an Investigational New Drug application, as defined
in the U.S. Food, Drug, and Cosmetic Act and the regulations promulgated
thereunder for initiating human clinical trials in the United States, or any
corresponding foreign application, registration or certification.
1.23 "In Vitro Activity" shall mean: *** *** ***
*** .
1.24 "In Vivo Activity" shall mean *** *** .
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1.25 "Library" shall mean a chemical compound library whose design has
been approved by the Research Committee (as defined below) containing
approximately *** *** molecules prepared by CombiChem
specifically for screening in the Collaboration based on proprietary structures
(a) with activity disclosed by Teijin to CombiChem or (b) generated by CombiChem
on behalf of Teijin, in each case, in connection with the Collaboration.
1.26 "Library Compound" shall mean any compound which is contained in a
Library provided by CombiChem to Teijin in connection with the Collaboration.
1.27 "Licensed Technology" shall mean Existing Patent Rights, Future
Patent Rights, Existing Know-How and Future Know-How.
1.28 " *** Active Compound" shall mean a Library Compound
screened during the *** .
1.29 " *** Activity" shall mean *** *** .
1.30 " *** Compound" shall mean any (a) *** Active
Compound or (b) Derivative Compound which demonstrates *** Activity as
well as any compositions-of-matter claimed in patent applications filed or
patents issued under Article 9 of this Agreement with respect to compounds
described in (a) or (b) above.
1.31 " *** Exclusivity Period" shall mean the period of time
*** *** .
1.32 "NDA" shall mean a New Drug Application, as defined in the U.S.
Food, Drug, and Cosmetic Act and the regulations promulgated thereunder, or any
corresponding foreign application, registration or certification.
1.33 "Net Sales" shall mean the invoice price billed by a Party, its
Affiliates or Sublicensees to third parties for the sale of Products, after
deduction of (i) cash, trade and/or quantity discounts actually allowed; (ii)
amounts repaid or credited- by reason of rejections or returns of goods,
recalls, chargebacks, defects, or rebates; (iii) freight, postage, and duties
paid for and separately identified on the invoice or other documentation
maintained in the ordinary course of business; and (iv) excises, sales taxes,
value added taxes, and duties paid for and separately identified on the invoice
or other documentation maintained in the ordinary course of business. Net Sales
shall also include the amount or fair market value of all other consideration
received by a Party, its Affiliates or Sublicensees in respect of Products,
whether such consideration is in cash, payment in kind, exchange or another
form; provided, however, Net Sales shall not include up-front payments,
reimbursements or payments in connection with research and development
activities or payments for equity or other securities of a Party. A "sale" of an
Product is deemed to occur upon the earliest of invoicing, shipment or transfer
of title in the Product by a Party to a person other than such Party or its
Affiliate or Sublicensee, unless such Affiliate or Sublicensee is an end user of
the Product. In
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the event that an Product is sold bundled with one or more other products
(Products or otherwise) or provided in conjunction with any services, in either
case, in connection with a capitation pricing arrangement or any other
aggregated payment agreement or program, Net Sales from such bundled sales
and/or services for purposes of calculating Net Sales allocated to the Product
shall be equal to the bona fide list price of the Product when sold separately
in comparable quantities.
1.34 "Other Library Compounds" shall mean Library Compounds other than
Collaboration Compounds.
1.35 "Party" shall mean CombiChem or Teijin, and their permitted
successors and assigns, as the case may be.
1.36 "Phase I", "Phase II", and "Phase III" shall mean Phase I (or Phase
I/II), Phase II (or Phase II/III), and Phase III clinical trials, respectively,
in each case as prescribed by applicable FDA IND Regulations, or any
corresponding foreign statutes, rules or regulations.
1.37 "Product(s)" shall mean any product containing a Collaboration
Compound. Products shall not include Excluded Products or products containing an
Other Library Compound.
1.38 "Product Development Candidate" shall mean any ***
*** which (a) merits initiation of expanded animal toxicology studies, data
of which are required to be submitted to FDA for an IND, including, without
limitation: (i) formulation/stability studies; (ii) pharmacokinetic studies;
(iii) drug metabolism studies; (iv) dose ranging (prior to toxicology) studies;
and (v) one-month toxicology studies in two species; and (b) has satisfied, in
Teijin's reasonable judgment, the following criteria (and any other criteria
which may seem relevant to Teijin in its reasonable judgment, excluding criteria
set forth in (a) above): (i) demonstrated In Vitro Activity; (ii) demonstrated
In Vivo Activity; (iii) demonstrated safety pharmacology in two species (e.g.,
rat and dog) showing satisfactory therapeutic index and efficacy as compared to
a central nervous system and cardiovascular profile; (iv) demonstrated an
appropriate cellular toxicity profile; (v) demonstrated appropriate mutagenicity
results; and (vi) demonstrated appropriate single dose and two-week non-GLP
toxicology results in two species (e.g., rat and dog).
1.39 "Research Committee" or "RC" shall mean the oversight committee
described in Article 3.
1.40 "Research Plan" shall mean the written overall plan (a copy of which
is attached hereto as Exhibit A) for the Research Program the Parties will
conduct to optimize Library Compounds with *** during the Research
Program Term. The Research Plan may be revised as necessary by agreement of the
RC.
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1.41 "Research Program" shall mean the research to be conducted in
accordance with the Research Plan as part of the Collaboration, and shall
include the activities and items set forth in Section 2.1 of this Agreement.
1.42 "Research Program Term" shall mean the period commencing on March
29, 1996 and terminating on the *** thereof, unless extended pursuant
to Section 2.3.
1.43 "Sublicensee" shall mean, with respect to a particular Product, a
third party to whom a Party has granted a license or sublicense under the
Licensed Technology or the Teijin Technology and/or the Teijin Know-How, as the
case may be, to make, use and/or sell such Product, including, without
limitation, a collaborative partner of Teijin or CombiChem. As used in this
Agreement, it is understood that "Sublicensee" shall also include a third party
to whom a Party has granted the right to distribute such Product, provided that
such third party has the primary responsibility for marketing and promotion at
its expense of such Product within the field or territory for which such
distribution rights are granted, which marketing and promotional activities are
not subsidized directly or indirectly by a Party or its Affiliates.
1.44 "Teijin Technology" shall mean any patent application or patent (a)
arising in connection with or out of the Research Program or (b) necessary to
make, use or sell a Collaboration Compound or Product, and is owned or
controlled, in whole or in part, by Teijin or its Affiliates at any time during
the term of this Agreement that claims the synthesis, composition-of-matter or
method of use of a Library Compound, a Collaboration Compound or a Product.
1.45 "Teijin Know-How" shall mean all ideas, inventions, data, know-how,
instructions, processes, formulas, expert opinion and information owned or
controlled in whole or in part by Teijin, by license, assignment or otherwise
during the term of this Agreement, which are necessary for the development,
manufacture, use or sale or commercialization of a Collaboration Compound or
Product, to the extent Teijin has the right to license or sublicense the same,
and subject to any limitation and prohibitions of any license or sublicense.
Excluded from Teijin Know-How are any inventions otherwise included in the
definition of Teijin Technology in this Agreement.
1.46 "Territory" shall mean *** *** ***
*** *** *** .
ARTICLE 2
COLLABORATION RESEARCH AND SCREENING
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2.1 Collaboration Research Activities. Subject to the terms and
conditions set forth herein, the Parties shall conduct research under the
Research Plan with respect to Collaboration Compounds on a collaborative basis
with the goal of developing Products.
2.1.1 CombiChem Responsibilities.
(a) During the Research Program Term, CombiChem shall
*** . Such Libraries shall be provided to Teijin
according to the schedule set forth in the Research
Plan. The Libraries shall be provided in 96-well plates
or Eppendorf tubes, and shall contain the quantities of
Library Compounds set forth on Exhibit B;
(b) During the Research Program Term, CombiChem shall keep
the RC fully informed of its activities performed in
connection with the Collaboration, including, without
limitation, by providing the RC with data and
information regarding Libraries, Collaboration Compounds
and structures thereof;
(c) During the Research Program Term, CombiChem shall
provide an *** *** under the Research
Program; and
(d) During the Research Program Term, CombiChem shall
provide space and resources to accommodate ***
*** .
2.1.2 Teijin Responsibilities.
(a) Teijin shall use reasonable efforts to provide CombiChem
with support and assistance useful or necessary for the
conduct of the Research Plan, including, but not limited
to, providing chemical intermediates, if available,
information concerning assay methods and screening data;
(b) During the Research Program Term Teijin shall keep the
RC fully informed of its activities performed in
connection with the Collaboration, including, without
limitation, by providing the RC with data and
information regarding Collaboration Compounds, and
structures thereof, and *** assays developed
and used by Teijin to test Library Compounds;
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(c) During the Research Program Term, Teijin shall provide
an *** *** at CombiChem's facility
under the Research Program;
(d) During the Research Program Term and during the ***
*** , Teijin shall screen the Libraries
for *** *** . Any compound
identified as having *** Activity as a result
of such screening shall be considered ***
*** Compound for all purposes of this Agreement,
and any compound identified as having ***
Receptor Activity as a result of such screening shall be
considered a *** Compound for all purposes of
this Agreement; and
(e) During and following the Research Program Term, Teijin
shall use Due Diligence to optimize Collaboration
Compounds into Products, as set forth in Section 8.1
below.
2.2 Research Plan. The Parties hereby agree that the Research Program
shall be carried out in accordance with the Research Plan, a copy of which is
attached hereto as Exhibit A. The RC shall review the Research Plan on an
ongoing basis and may make changes to the Research Plan; provided, however, the
Research Plan shall not be modified except as mutually agreed by CombiChem and
Teijin.
2.3 Option to Expand the Research Program or to Extend the Research
Program Term. Teijin shall have the right to expand or extend the term of the
Research Program for up to *** . To expand the Research Program,
Teijin shall promptly notify CombiChem of its desire. To extend the Research
Program Term, Teijin must notify CombiChem no later than *** prior to
the then current expiration date for the Research Program Term. Following such
notification, the Parties shall negotiate the terms of any such expansion or
extension in good faith.
2.4 Records. CombiChem and Teijin and their respective Affiliates shall
maintain records of the Research Program (or cause such records to be
maintained) in sufficient detail and in good scientific manner 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 and as directed by the RC). Each Party shall allow the
other to have reasonable access to all pertinent materials and data generated by
or on behalf of such Party with respect to each Collaboration Compound in
connection with the Research Program, as set forth in the Research Plan.
2.5 Permitted Activities. Subject in all cases to Section 2.10, each of
Teijin and CombiChem may screen the Libraries, both during the Research Program
Term and thereafter, for activity other than *** . CombiChem and
Teijin may further collaborate with respect to any Other Library Compounds
discovered pursuant to
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this Section 2.5 and the terms and conditions of any such further collaboration
shall be subject to good-faith negotiations.
2.6 Post-Research Program Activities. Except as expressly provided
elsewhere under the terms of this Agreement, Teijin shall, at Teijin's or its
Affiliates or Sublicensees' expense, be responsible for conducting all
development and commercialization of Collaboration Compounds and Products to
which Teijin retains rights under this Agreement following the Research Program
Term.
2.7 Reports.
2.7.1 Collaboration Compounds. Following the Research Program Term,
Teijin shall keep CombiChem fully informed of its activities with respect to
Collaboration Compounds. Teijin shall provide CombiChem with ***
*** providing at least the following information regarding the status of
all Collaboration Compounds: (i) description of the status of the research and
development activities conducted with respect to each Collaboration Compound,
including decisions made to discontinue development of any Collaboration
Compound; and (ii) the status of all patent applications claiming such
Collaboration Compounds. Such reports shall contain sufficient information to
allow CombiChem to monitor Teijin's obligations under this Agreement, including,
without limitation, Teijin's obligations with respect to Due Diligence set forth
in Section 8.1 below and the accomplishment of the milestones set forth in
Section 6.2 below. Until first commercial introduction of each royalty-bearing
Product by or on behalf of Teijin hereunder, Teijin shall keep CombiChem
apprised of the status of the pre- clinical, clinical and commercial development
of that Product by *** providing CombiChem with a written report
detailing such activities with respect to each applicable Product during the
term of this Agreement.
2.7.2 Library Compounds. During the Research Program Term, Teijin
shall keep CombiChem fully informed of its activities with respect to Library
Compounds, including, without limitation, notification by Teijin to CombiChem of
its intent to screen such Library Compound against an assay other than an assay
designed to determine *** *** prior to performing any such
screening. Teijin shall provide CombiChem with *** ***
providing such information.
2.7.3 Confidentiality. All reports and information provided under
this Section 2.7 shall be deemed Confidential Information of Teijin.
2.8 Excluded Products. Within thirty (30) days of the filing of an IND
with respect to each Excluded Product, Teijin shall notify CombiChem of such
filing, and provide a detailed description of why such Excluded Product is not
an Product hereunder. If a dispute arises between the Parties which the Parties
are unable to resolve regarding whether or not a product is an Excluded Product,
the dispute shall be settled by binding arbitration pursuant to Article 13
herein.
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2.9 Retained Rights. CombiChem shall retain ownership of the tangible
property embodied in the physical Libraries and in the Library Compounds
provided to Teijin hereunder.
2.10 Restricted Activities; Rights Following Termination of Exclusivity.
2.10.1 *** Exclusivity. During the ***
Exclusivity Period, CombiChem will not (i) knowingly make compounds or
combinatorial libraries for or with any third person or entity specifically for
screening for *** Activity, (ii) enter into contract screening for or
with any third person or entity with respect to *** Activity or (iii)
perform for its own account any screening with respect to ***
Activity; *** , *** *** *** ***
*** ***
2.10.2 *** Exclusivity. During the ***
Exclusivity Period, CombiChem (a) will not enter into contract screening for or
with any third person or entity of the Libraries, any Library Compound or any
Derivative Compound with respect to *** Receptor Activity and (b) will
not perform for its own account any screening of the Libraries, any Library
Compound or any Derivative Compound with respect to *** Receptor
Activity; *** *** *** *** ***
*** *** .
2.10.3 All Other Molecular Targets. During the Research Program
Term, *** *** *** *** .
2.10.4 Commercialization Rights. Teijin's rights to develop and
commercialize each Collaboration Compound as set forth in and subject to the
terms and conditions of this Agreement, shall be *** ***
*** .
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2.10.5 Rights Following Termination of Exclusivity. After the
expiration of the *** Exclusivity Period, the ***
Exclusivity Period or the Research Program Term, as the case may be, CombiChem
and Teijin shall *** *** *** ***
*** .
ARTICLE 3
MANAGEMENT
3.1 Research Committee. Teijin and CombiChem will establish a RC to
oversee, review and coordinate the conduct of the Research Program, including,
without limitation, the design of the Libraries, and provide advice regarding
prosecution of patent applications.
3.2 Membership of RC. The RC shall be comprised of representatives from
each of Teijin and CombiChem, each Party's members selected by that Party. The
initial representatives of each Party are listed on Exhibit C attached hereto.
Each Party shall designate the chief representative for its members ("Chief
Representative"). CombiChem and Teijin may change its RC representatives at any
time, upon written notice to the other Party. The RC shall be chaired as agreed
by the Parties. From time to time, the RC may establish subcommittees to oversee
particular projects or activities, and such subcommittees will be constituted as
the RC agrees.
3.3 RC Meetings.
3.3.1 Research Program Term. During the Research Program Term, the
RC shall meet up to four (4) times per year at regular intervals, or more often
as agreed by the Parties, at such locations as the Parties agree. At such
meetings, the RC will formulate and review the Research Program objectives,
monitor the progress of the Research Program toward those objectives, and take
such other actions as may be specified under this Agreement or as the Parties
deem appropriate. With the consent of the Parties, other representatives of
CombiChem or Teijin or their Affiliates or Sublicensees may attend such RC
meetings as observers. Each Party shall be responsible for all of its own
expenses. The first meeting of the RC shall occur as soon as practicable after
the Effective Date, but in no event later than forty-five (45) days after the
Effective Date.
3.3.2 After Research Program Term. After the Research Program Term
and during the term of this Agreement, the RC shall meet as mutually agreed by
the Parties. At such meetings, the RC will take such other actions as may be
specified under this Agreement or as the Parties deem appropriate. Each Party
shall be responsible for all of its own expenses.
3.4 Decision Making. Decisions of the RC shall be made by agreement
between the Teijin Chief Representative and the CombiChem Chief Representative.
Certain decisions
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must be approved by CombiChem's Chief Executive Officer and Teijin's General
Manager of the Planning and Research Division, Medical and Pharmaceutical Group.
In the event that agreement is not achieved, the dispute will be referred to
CombiChem's Chief Executive Officer (or designee of similar rank) and Teijin's
General Manager of the Planning and Research Division, Medical and
Pharmaceutical Group (or designee of similar rank), who shall promptly meet and
endeavor to resolve the dispute in a timely manner.
ARTICLE 4
***
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4.1 ***
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4.2 ***
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4.3 ***
***
***
***
***
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***
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***
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ARTICLE 5
LICENSES
5.1 Licenses to Teijin.
5.1.1 *** Licensed Technology in the Territory. Subject to
the terms and conditions of this Agreement, CombiChem agrees to grant, and
hereby grants, to Teijin *** *** *** ***
*** *** .
5.1.2 *** Relating to Collaboration Compounds and Products
in the Territory. Subject to the terms and conditions of this Agreement,
CombiChem agrees to grant, and hereby grants, to Teijin *** ***
*** *** .
5.1.3 *** Term for Collaboration Compounds. Such licenses
shall be *** *** *** .
5.1.4 *** . Subject to the terms and conditions of this
Agreement, CombiChem agrees to grant and
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hereby grants to Teijin, effective upon the expiration of the ***
Exclusivity Period, *** Exclusivity Period or the Research Program
Term, as the case may be, *** *** *** *** .
5.2 Licenses to CombiChem.
5.2.1 *** Teijin Technology and Teijin Know-How ***
. Subject to the terms and conditions of this Agreement, Teijin agrees to
grant, and hereby grants, to CombiChem *** *** ***
*** *** *** .
5.2.2 *** *** . Subject to the terms and
conditions of this Agreement, Teijin agrees to grant, and hereby grants, to
CombiChem *** *** *** *** .
5.2.3 *** *** . Subject to the terms and
conditions of this Agreement, Teijin agrees to grant, and hereby grants, to
CombiChem, effective upon the expiration of the *** Exclusivity
Period, the *** Exclusivity Period or the Research Program Term, as
the case may be, *** *** *** .
5.2.4 Physical Transfer. In the event that elements or components of
Teijin Technology and/or Teijin Know-How are to be physically transferred to
CombiChem, its Affiliates or Sublicensees in connection with the license grants
contained herein, CombiChem and Teijin shall negotiate in good faith the terms
and conditions for such physical transfer.
5.3 *** *** *** ***
5.4 *** *** ***
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*** *** ***
5.5 No Liability Regarding Third Party Rights. It is understood and
agreed that even if CombiChem complies with its obligations under this
Agreement, that compounds provided to third parties in the course of CombiChem's
other business activities may result in third party patent applications and
patents, including patent applications and patents owned by such third parties,
or owned jointly by CombiChem and such third parties, which could conflict with
patent applications and patents owned by Teijin, or jointly owned by Teijin and
CombiChem hereunder. CombiChem will use its reasonable efforts to avoid such
conflict; provided, that unless Teijin is damaged as a proximate result of a
material breach by CombiChem of the terms of Article 2 or any of the
representations and warranties in Article 11, then CombiChem shall have no
liability under this Agreement with respect to any such conflict.
5.6 Research License. Notwithstanding Section 5.1 above and subject to
Section 2.10, CombiChem shall retain the right under the Licensed Technology to
make, have made and use Library Compounds for its own research purposes.
5.7 No Other Products. Except as otherwise agreed or specifically
provided in the terms of this Agreement, neither Teijin *** shall
commercialize any Library Compound or Collaboration Compound, other than as a
Product in accordance with this Agreement.
ARTICLE 6
PAYMENTS
6.1 *** Payment. In consideration of the licenses contained in
this Agreement, Teijin agrees to pay to CombiChem *** ***
*** *** *** .
6.2 Collaboration Funding. In consideration for CombiChem's performance
of its obligations under the Research Program, within *** of the
Effective Date and within *** of the Research Program Term, Teijin
shall pay CombiChem an amount equal to *** *** the Aggregate
Annual Research Fee set forth below:
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Aggregate
Contract Year Annual Research Fee
------------- -------------------
*** ***
***
***
***
***
***
***
***
***
6.3 Milestone Payments.
6.3.1 Collaboration Compound Milestones. Teijin agrees to pay to
CombiChem the amounts set forth in Table 6.3.1 below upon completion by Teijin,
*** *** of each of the milestones set forth in Table 6.3.1 with respect to the
first *** Compound to reach such milestone and the first *** Compound to reach
such milestone. *** *** with respect to *** Compounds or *** Compounds directed
at the same molecular target, regardless of how many applicable Products are
commercialized. No milestone payments shall be due to CombiChem in respect of
(a) Excluded Products in any event or (b) a ***
***
***
***
***
***.
Table 6.3.1
***
***
***
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***
***
***
6.3.2 Payments. Except as set forth in Section 6.3.1 solely with
respect to *** Compounds, all payments made to CombiChem by Teijin
pursuant to this Section 6.3 shall be due within thirty (30) days after the
occurrence of the corresponding milestone. Except as otherwise specifically set
forth in this Agreement, *** *** *** . It is
understood that the milestone payments set forth above shall be made with
respect to the first *** Compound and *** ***
*** *** *** *** *** ***
*** *** .
6.4 Royalties to CombiChem.
6.4.1 Base Royalty on Products. Teijin shall pay to CombiChem in
respect of Net Sales of Products by Teijin, *** , royalties of
*** of Net Sales of each Product within the Territory.
6.4.2 *** *** *** ***
*** ***
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6.4.3 *** *** *** ***
6.4.4 Royalty Term. Teijin's obligation to pay royalties to
CombiChem under this Section 6.4 shall continue for each Product, on a
country-by-country basis, until the date which is the later of (i) ***
after the first commercial sale of such Product in such country by Teijin, its
Affiliates or Sublicensees, (ii) the expiration of the last-to-expire issued
patent within the Licensed Technology containing any claim which would be
infringed by making, using or selling the applicable Product in the applicable
country in the absence of the license grants in this Agreement.
6.4.5 Currency of Payments. All payments made pursuant to this
Section 6.4 shall be made in U.S. dollars.
6.5 ***
6.5.1 *** *** ***
6.5.2 *** *** *** ***
***
6.5.3 *** *** ***
6.5.4 *** *** *** ***
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6.5.5 *** ***
6.6 *** *** *** *** ***
ARTICLE 7
PAYMENTS; BOOKS AND RECORDS
7.1 Royalty Reports and Payments. After the first commercial sale of a
Product on which royalties are payable by *** hereunder, ***
shall make quarterly written reports *** *** , stating in
each such report the number, description, and aggregate Net Sales of each
Product sold during the *** upon which a royalty is payable ***
*** . Concurrently with the making of such reports, ***
*** shall pay to *** royalties due at the rates specified
*** *** .
7.2 Method for Payments. All payments due under this Agreement shall be
made by bank wire transfer in immediately available funds to an account
designated *** *** . Any payments that are not paid on the
date such payments are due under this Agreement shall bear interest to the
extent permitted by applicable law at the prime rate as reported by the Chase
Manhattan Bank, New York, New York, on the date such payment is due, ***
, calculated on the number of days such payment is delinquent.
7.3 Place of Royalty Payment and Currency Conversions. If any currency
conversion shall be required in connection with the calculation of royalties
hereunder, such conversion shall be made using the selling exchange rate for
conversion quoted for current transactions reported in the Western edition of
The Wall Street Journal for the last business day of the calendar quarter to
which such payment pertains. If at any time legal restrictions prevent the
prompt remittance of any royalties owed on Net Sales in any jurisdiction, the
payor may make such payments by depositing the amount thereof in local currency
in a bank account or other depository in such country in the name of the payee.
The payor shall promptly notify the payee of the circumstances leading to such
deposit and, at the payee's request, cooperate with the payee to repatriate such
amounts.
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7.4 Records; Inspection. *** shall keep complete, true and
accurate books of account and records for the purpose of determining the royalty
amounts payable under this Agreement. Such books and records shall be kept at
the principal place of business of *** *** *** to
which they pertain. Such records will be open for inspection during such
*** period by a public accounting firm mutually acceptable to Teijin and
CombiChem, solely for the purpose of verifying royalty statements hereunder.
Such inspections may be made no more than once each calendar year, at reasonable
times and on reasonable notice. Inspections conducted under this Section 7.4
shall be at the expense of the inspecting Party, unless a variation or error
producing an increase exceeding *** of the amount stated for any
period covered by the inspection is established in the course of any such
inspection, whereupon all reasonable costs relating to the inspection for such
period and any unpaid amounts that are discovered will be paid promptly by the
other Party together with interest thereon from the date such payments were due
at the prime rate as reported by the Chase Manhattan Bank, New York, New York,
*** . The public accounting firm employees shall sign a customary
confidentiality agreement as a condition precedent to their inspection, and
shall report to the inspecting Party only that information which would be
contained in a properly prepared royalty report by the other Party.
7.5 Tax Matters.
7.5.1 Withholding Taxes Paid by Teijin. All amounts required to be
paid by Teijin pursuant to this Agreement shall be paid with deduction for
withholding for or on account of any taxes (other than taxes imposed on or
measured by net income) or similar governmental charge imposed by a jurisdiction
other than the United States (collectively, "Teijin Withholding Taxes") to the
extent CombiChem and/or its Affiliates or their successors has the lawful rights
to utilize the Teijin Withholding Taxes paid by Teijin as a credit against
CombiChem and/or its Affiliates regular U.S. tax liability. Teijin shall provide
CombiChem a certificate evidencing payment of any Teijin Withholding Taxes
hereunder.
7.5.2 *** *** *** ***
*** ***
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7.5.3 Sales Taxes. Any sales taxes, use taxes, transfer taxes or
similar governmental charges required to be paid in connection with the transfer
of the Libraries by CombiChem to Teijin shall be the sole responsibility of
Teijin. In the event that CombiChem is required to pay any such amounts, and
reasonably documents payment, Teijin shall promptly remit payment to CombiChem
of such amounts.
ARTICLE 8
DUE DILIGENCE
8.1 Due Diligence. The selection of Collaboration Compounds and Products
for development and commercialization in the Territory shall be in the sole
discretion of Teijin. Teijin shall, at Teijin's expense, be responsible for
conducting all development of Collaboration Compounds and Products in the
Territory, and all commercialization of Products in the Territory. Teijin shall
use its reasonable efforts, comparable to other internal development candidates
of comparable value, to develop and commercialize Products as expeditiously as
practicable and take such other actions as are necessary to obtain government
approvals to market each Product in the Territory (which shall include, without
limitation, the filing of an IND with respect to a Product Development Candidate
within *** of designation of such Library Compound as a Product
Development Candidate as long as Teijin does not suspend the development of such
Product Development Candidate due to a biological profile problem and thereafter
to promote each Product and meet the market demand therefor in such markets)
("Due Diligence"). The Parties acknowledge and agree that any requirements
necessary to meet Due Diligence may be modified with the mutual written consent
of the Parties.
8.2 License Back. If (a) Teijin does not use Due Diligence pursuant to
Section 8.1 of this Agreement to actively develop and commercialize a
Collaboration Compound or Product or (b) determines that it will not
commercialize a Collaboration Compound or Product associated with a specific
molecular target and in each case so notifies CombiChem, and in each case
*** , then the *** *** to such particular Collaboration
Compound or Product associated with such molecular target shall terminate and
CombiChem shall have *** *** to such Collaboration Compound
or Product associated with such molecular target. CombiChem shall have the
*** the Teijin Technology and the Teijin Know-How, *** such
particular Collaboration Compound or Product in the Territory.
8.3 Regulatory Filings. If the *** respect to a Collaboration
Compound or Product shall terminate under Section 8.2, Teijin shall (i) promptly
provide to CombiChem a complete listing and description of all governmental
permits and health registrations and other rights pertaining to the Product,
(ii) without undue
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delay provide CombiChem with access to all regulatory filings made by Teijin
*** *** to the extent possible with respect to such Product,
together with the underlying pre-clinical and clinical data with respect to such
Product, and (iii) (A) agree and assist CombiChem, *** in obtaining
government permits and health registrations pertaining to the Product and
necessary to practice the *** rights granted to CombiChem by Teijin
under Section 8.2 or (B) if CombiChem acquires *** rights under
Section 8.2 and if possible, without undue delay *** ***
*** *** . The Parties shall negotiate in good faith to reach
agreement regarding sharing of costs. No non-clinical or clinical data including
those for such Collaboration Compound or Product may be submitted to the
regulatory authorities for IND or NDA applications by CombiChem, ***
without agreement with Teijin on terms applicable to such submission, including
sharing of the cost of the generation of the data; provided, that Teijin,
*** will provide free of charge to CombiChem, *** any information
or data required by law to be reported to the relevant regulatory authorities
outside of any drug approval process. In such event, CombiChem, ***
may use and incorporate such filings and data in support of applications for
approval of such Product in the Territory, provided that such filings and data
are not those of the pivotal studies which CombiChem, *** are required
to conduct if such filings and data are not available.
ARTICLE 9
INTELLECTUAL PROPERTY
9.1 Ownership of Inventions. Title to all inventions and other
intellectual property made solely by employees of Teijin or its Affiliates, but
not CombiChem or its Affiliates, in connection with and arising out of the
Research Program ("Teijin Inventions") shall be deemed owned by Teijin. Title to
all inventions and other intellectual property made solely by employees of
CombiChem or its Affiliates, but not Teijin or its Affiliates, in connection
with and arising out of with the Research Program ("CombiChem Inventions") shall
be deemed owned by CombiChem. Subject to Section 9.2.1(c), title to all
inventions and other intellectual property made jointly by employees of Teijin
or its Affiliates and employees of CombiChem or its Affiliates in connection
with and arising out of the Research Program ("Joint Inventions") shall be
deemed jointly owned by CombiChem and Teijin.
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9.2 Patent Prosecution.
9.2.1 Responsibilities.
(a) *** . Subject to Sections 9.2.2 and 9.2.3,
*** shall be responsible for (i) preparing, filing, prosecuting and
maintaining in such countries designated by the RC patent applications and
patents relating to all *** *** included within the Licensed
Technology and (ii) conducting any interferences, re- examinations, reissues,
oppositions or requests for patent term extension or governmental equivalents
thereto relating to such Inventions.
(b) *** . Subject to Sections 9.2.2 and 9.2.3,
*** shall be responsible for (i) preparing, filing, prosecuting and
maintaining in such countries designated by the RC patent applications and
patents relating to all *** included within the *** and (ii)
conducting any interferences, re-examinations, reissues, oppositions or requests
for patent term extension or governmental equivalents thereto relating to such
Inventions.
(c) Joint Inventions. Subject to Sections 9.2.2 and 9.2.3,
each Party shall be responsible for (i) preparing, filing, prosecuting and
maintaining *** *** patent applications and patents relating
to all Joint Inventions and (ii) conducting any interferences, re-examinations,
reissues, oppositions or requests for patent term extension or governmental
equivalents thereto relating to such Inventions *** *** . On
agreement between CombiChem and Teijin, either Party may, on behalf of the other
Party, prepare, file, prosecute and maintain patent applications and patents
relating to Joint Inventions *** . In the event of such an agreement,
Joint Inventions for which a Party makes filings *** ***
*** * shall continue to be jointly owned by CombiChem and Teijin only if
the non-filing Party reimburses the filing Party for all of any reasonable costs
incurred with respect to such activities, such reimbursement to occur within a
reasonable time following receipt of an invoice and verification thereof.
CombiChem and Teijin shall keep the RC informed concerning such activities with
respect to Joint Inventions *** .
9.2.2 Failure to Prosecute.
(a) *** Failure. *** may elect upon
*** *** prior notice to discontinue prosecution of any patent
applications filed pursuant to
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*** above and/or not to file or conduct any further activities with
respect to the patent applications or patents subject to such Sections. In the
event CombiChem declines to file or having filed fails to further prosecute or
maintain any patent applications or patents subject to *** above, or
conduct any interferences, re- examinations, reissues, oppositions, then,
subject to *** agreements with third parties, *** shall have
the right to prepare, file, prosecute and maintain such patent applications and
patents *** *** it deems appropriate, and conduct any
interferences, re-examinations, reissues or oppositions at its sole expense;
*** *** .
(b) *** Failure. *** may elect upon
*** prior notice to discontinue prosecution of any patent applications
filed pursuant to *** *** above and/or not to file or
conduct any further activities with respect to the patent applications or
patents subject to such Sections. In the event Teijin declines to file or having
filed fails to further prosecute or maintain any patent applications or patents
subject to *** above, or conduct any interferences, re-examinations,
reissues, oppositions, then, subject to *** agreements with third
parties, *** shall have the right to prepare, file, prosecute and
maintain such patent applications and patents *** ***
*** it deems appropriate, and conduct any interferences, re-examinations,
reissues or oppositions at its sole expense; *** ***
*** .
9.2.3 Cooperation. Each of Teijin and CombiChem shall keep the other
fully informed as to the status of patent matters described in this Article 9,
including, without limitation, by providing the other the opportunity to fully
review and comment on any documents as far in advance of filing dates as
practicable which will be filed in any patent office, and providing the other
copies of any substantive documents that such Party receives from such patent
offices promptly after receipt, including notice of all interferences, reissues,
re-examinations, oppositions or requests for patent term extensions. Teijin and
CombiChem shall each reasonably cooperate with and assist the other at its own
expense in connection with such activities, at the other Party's request.
9.2.4 Costs. Subject to Section 9.2.2, *** shall pay all
costs incurred pursuant to Section 9.2.1(a) and *** shall pay all
costs incurred pursuant to Section 9.2.1(b).
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9.2.5 Copies. Teijin shall promptly provide to CombiChem a copy of
any patent applications filed by Teijin and its Affiliates during the term of
this Agreement with respect to any Library Compound, Collaboration Compound
and/or Product, except with respect to Excluded Products. CombiChem, shall
promptly provide to Teijin a copy of any patent applications filed by CombiChem
and its Affiliates during the term of this Agreement with respect to any
Collaboration Compounds and/or Products.
9.3 Enforcement and Defense.
9.3.1 Enforcement. Each Party shall promptly notify the other of its
knowledge of any potential infringement of the Licensed Technology or the Teijin
Technology by a third party. Each Party agrees to render such reasonable
assistance as the prosecuting Party may request. Costs of maintaining any such
action and damages recovered therefrom shall be paid by and belong to the Party
bringing the action.
(a) *** has the right, but not the obligation, to
take reasonable legal action necessary to protect the Licensed Technology
against infringements by third parties *** . If within six (6) months
following receipt of notice of infringement, Teijin fails to take such action to
halt a commercially significant infringement *** , ***
shall, in its sole discretion, have the right, at its expense, to take such
action as it deems warranted in its own name or in the name of *** or
jointly to cease any infringement with respect to the Licensed Technology.
(b) *** has the right, but not the obligation, to
take reasonable legal action necessary to protect the *** against
infringements by third parties *** . If within six (6) months
following receipt of notice of infringement, *** fails to take such
action to halt a commercially significant infringement *** , ***
shall, in its sole discretion, have the right, at its expense, to take such
action as it deems warranted in its own name or in the name of *** or
jointly to cease any infringement with respect to the *** ***
.
9.3.2 Defense. Each Party shall be solely responsible for defending
at its own expense any infringement suit brought against itself for infringement
of third party intellectual property rights (whether or not covered by patent or
other protection) by manufacturing, selling or using any Product.
ARTICLE 10
CONFIDENTIALITY
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10.1 Confidential Information. Except as otherwise expressly provided
herein, the Parties agree that, for the term of this Agreement and for ***
thereafter, the receiving Party shall not, except as expressly provided in
this Article 10, disclose to any third party or use for any purpose any
confidential information furnished to it by the disclosing Party hereto pursuant
to this Agreement ("Confidential Information"), except to the extent that it can
be established by the receiving Party by competent proof that such information:
(a) was already known to the receiving Party, other than
under an obligation of confidentiality, at the time of
disclosure;
(b) was generally available to the public or otherwise part
of the public domain at the time of its disclosure to
the receiving Party;
(c) became generally available to the public or otherwise
part of the public domain after its disclosure and other
than through any act or omission of the receiving Party
in breach of this Agreement;
(d) was independently developed by the receiving Party as
demonstrated by documented evidence prepared
contemporaneously with such independent development; or
(e) was subsequently lawfully disclosed to the receiving
Party by a person other than a Party.
10.2 Permitted Use and Disclosures. Each Party hereto may use or disclose
information disclosed to it by the other Party to the extent such information is
included in the Licensed Technology, the Teijin Technology or the Teijin
Know-How, as the case may be, and to the extent such use or disclosure is
reasonably necessary and permitted in the exercise of such rights granted
hereunder in filing or prosecuting patent applications, prosecuting or defending
litigation, complying with applicable governmental regulations or court order or
otherwise submitting information to tax or other governmental authorities,
conducting clinical trials, or making a permitted sublicense or otherwise
exercising license rights expressly granted by the other Party to it pursuant to
the terms of this Agreement, provided that if a Party is required to make any
such disclosure of another Party's Confidential Information, other than pursuant
to a confidentiality agreement, it will give reasonable advance notice to the
other Party of such disclosure and, save to the extent inappropriate in the case
of patent applications, will use its reasonable best efforts to secure
confidential treatment of such information in consultation with the other Party
prior to its disclosure (whether through protective orders or otherwise) and
disclose only the minimum necessary to comply with such requirements.
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10.3 Nondisclosure of Terms. Each of the Parties hereto agrees not to
disclose the terms of this Agreement to any third party without the prior
written consent of the other Party hereto, which consent shall not be
unreasonably withheld, except to such Party's attorneys, advisors, investors and
others on a need to know basis under circumstances that reasonably ensure the
confidentiality thereof, or to the extent required by law. Notwithstanding the
foregoing, the Parties shall agree upon a press release to announce the
execution of this Agreement, together with a corresponding Q&A outline for use
in responding to inquiries about the Agreement; thereafter, CombiChem and Teijin
may each disclose to third parties the information contained in such press
release and Q&A without the need for further approval by the other. In addition,
Teijin and CombiChem may make public statements regarding the progress of the
Research Program and the achievement of milestones and fees with respect
thereto, following consultation and mutual agreement, the consent of neither
Party to be unreasonably withheld.
10.4 Publication. Any manuscript by CombiChem or Teijin or its Affiliates
describing the scientific results of the Research Program to be published at any
time or within *** after the end of the Research Program Term shall be
subject to the prior review of the Parties *** prior to submission.
Further, to avoid loss of patent rights as a result of premature public
disclosure of patentable information, the receiving Party shall notify the
disclosing Party in writing within *** after receipt of any disclosure
whether the receiving Party desires to file a patent application on any
invention disclosed in such scientific results. In the event that the receiving
Party desires to file such a patent application, the disclosing Party shall
withhold publication or disclosure of such scientific results until the earlier
of (i) a patent application is filed thereon, or (ii) the Parties determine
after consultation that no patentable invention exists, or (iii) ***
after receipt by the disclosing Party of the receiving Party's written notice of
the receiving Party's desire to file such patent application, or such other
period as is reasonable for seeking patent protection. Further, if such
scientific results contain the information of the receiving Party that is
subject to use and nondisclosure restrictions under this Article 10, the
disclosing Party agrees to remove such information from the proposed publication
or disclosure. Following the filing of any patent application with respect to
the Licensed Technology or the Teijin Technology, in the eighteen (18) month
period prior to the publication of such a patent application neither Party shall
make any public disclosure regarding any invention claimed in such patent
application without the prior consent of the other Party.
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
11.1 Teijin. Teijin represents and warrants on its own behalf and on
behalf of its Affiliates that: (i) it has the legal right and power to extend
the rights granted in this Agreement; (ii) it has the legal power, authority and
right to enter into this Agreement and to fully perform its obligations
hereunder; (iii) it has not previously granted, and during the term of this
Agreement will not knowingly make any commitment or grant any rights, which in
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any material way conflict with the rights and licenses granted herein; (iv) to
the best of its knowledge as of the Effective Date, there are no existing or
threatened actions, suits or claims pending against it with respect to the
Teijin Technology or the Teijin Know-How; and (v) to the best of its knowledge
as of the Effective Date, neither the Teijin Technology nor the Teijin Know-How
includes intellectual property licensed from third parties that would require
CombiChem to pay to such third parties a royalty *** .
11.2 CombiChem. CombiChem represents and warrants on its own behalf and
on behalf of its Affiliates that: (i) it has the legal right and power to extend
the rights granted in this Agreement; (ii) it has the legal power, authority and
right to enter into this Agreement, and to fully perform its obligations
hereunder; (iii) it has not previously granted, and during the term of this
Agreement will not knowingly make any commitment or grant any rights, which in
any material way conflict with the rights and licenses granted herein; (iv) to
the best of its knowledge as of the Effective Date, there are no existing or
threatened actions, suits or claims pending against it with respect to the
Licensed Technology; and (v) to the best of its knowledge as of the Effective
Date, the Licensed Technology does not include intellectual property licensed
from third parties that would require Teijin to pay to such third parties a
royalty *** .
11.3 Disclaimer. Teijin and CombiChem specifically disclaim any guarantee
that the Research Program will be successful, in whole or in part. The failure
of the Parties to successfully develop Collaboration Compounds or Products will
not constitute a breach of any representation or warranty or other obligation
under this Agreement. Neither Teijin nor CombiChem makes any representation or
warranty or guaranty that the Research Program will be successful. EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, COMBICHEM AND TEIJIN AND THEIR
RESPECTIVE AFFILIATES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OR
CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE LICENSED
TECHNOLOGY, TEIJIN TECHNOLOGY, TEIJIN KNOW-HOW, LIBRARIES, ***
COMPOUNDS, *** COMPOUNDS, INFORMATION DISCLOSED PURSUANT TO ARTICLE 10
OR PRODUCTS INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF ANY LICENSED TECHNOLOGY, TEIJIN
TECHNOLOGY OR TEIJIN KNOW-HOW, PATENTED OR UNPATENTED, OR NONINFRINGEMENT OF THE
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.
11.4 No Consequential Damages. In no event shall either Party to this
Agreement have any liability to the other for any special, consequential or
incidental damages arising under this Agreement under any theory of liability.
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ARTICLE 12
***
12.1 ***
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12.2 ***
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12.3 ***
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ARTICLE 13
DISPUTE RESOLUTION
13.1 General Arbitration. Any and all disputes between the Parties
arising in connection with or relating in any way to the validity, construction,
meaning, enforceability or performance of this Agreement or any of its
provisions, or the intent of the Parties in entering into this Agreement, or (to
the extent permitted by applicable law) any dispute relating to patent validity
or infringement arising under or in connection with this Agreement, shall be
settled by final and binding arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association ("AAA").
13.2 Arbitration Procedures.
13.2.1 Any Party electing to refer a matter to arbitration pursuant
to this Article (the "Petitioner") shall promptly notify the other Party in
writing that it wishes to commence an arbitration proceeding under this Article
13 (the "Arbitration Notice"). The Arbitration Notice shall set forth: (i) the
matter being referred to arbitration, (ii) the applicable Section of this
Article 13 and (iii) the name of the individual selected by the Petitioner as
one of the arbitrators.
13.2.2 Except as otherwise provided in this Article 13, there shall
be three (3) arbitrators. Each Party shall select one (1) arbitrator. The
Petitioner having appointed the first arbitrator in the Arbitration Notice, the
other Party shall appoint the second arbitrator within twenty (20) days of
receipt of the Arbitration Notice and shall notify the Petitioner of such
appointment and submit its counter statement, if any, of the matter being
referred to arbitration; provided, however, that if the other Party fails to
make such appointment within such period, the Petitioner may request the AAA
President to appoint a second arbitrator. Within twenty (20) days dafter the
appointment of the second arbitrator, the two arbitrators shall appoint the
third arbitrator; provided, however, that if the two arbitrators are unable to
agree upon the third arbitrator within such period, either Party may request the
AAA President to appoint the third arbitrator, who shall have appropriate
qualifications in relation to the matter(s) in dispute.
13.2.3 The arbitration proceedings shall be conducted ***
*** , unless otherwise agreed by the Parties, in accordance with the
AAA Rules then in effect. *** *** . In any arbitration, the
award of the arbitrators shall be final and binding upon the Parties and
judgement upon the award may be entered in and enforced by any court of
competent jurisdiction in accordance with the New York Convention on the
Recognition and Enforcement of Arbitral Awards. The successful Party in such
arbitration, in addition to all
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other relief provided, shall be entitled to an award of all its reasonable costs
and expenses including attorney fees and deposits and payments to the AAA.
Neither Party shall be required to provide security or post bond in respect of
such costs, expenses and fees prior to rendering of an award.
13.3 Disqualification. Notwithstanding anything to the contrary herein,
no person may serve as an arbitrator pursuant to this Article 13 if such person
has a material interest or relationship (through employment, stock ownership,
business dealings or otherwise) in or with a Party involved in the arbitration
or any of its Affiliates, directors, officers or employees; provided, however,
that serving as an arbitrator hereunder shall not constitute such a material
interest or relationship for purposes of future arbitrations.
13.4 Confidentiality. All arbitration proceedings under this Article 13
shall be confidential and the arbitrators may issue appropriate protective
orders to safeguard the Parties' Confidential Information (as such capitalized
term is defined in Section 10.1 hereof). Except as required by law, neither
Party shall make (or instruct any arbitrator to make) any public announcement
with respect to the proceedings or decisions of any arbitration without the
prior written consent of the other. The existence of any dispute submitted to
arbitration pursuant to this Article 13, and the award of the arbitrators, shall
be kept in confidence by the Parties and the arbitrators, except as required in
connection with the enforcement of such award of implementation of such
decisions, as mutually agreed by the Parties or as required by law.
13.5 Equity. This Article 13 shall not limit the rights of any Party to
seek in any court of competent jurisdiction equitable relief in the
circumstances referred to herein and/or such interim relief, and only such
interim relief, as may be needed to maintain the status quo or otherwise protect
the subject matter of the arbitration until the arbitrators shall have been
appointed and shall have had an opportunity to act.
ARTICLE 14
TERM AND TERMINATION
14.1 Term. Except as set forth below, the term of this Agreement shall
begin as of the Effective Date, and shall continue in full force and effect
*** *** unless terminated as provided in this Article 14 until
Teijin or CombiChem, *** , have no remaining royalty payment
obligations *** , at which time the Agreement shall expire in its
entirety *** *** .
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14.2 Termination for Cause. Either Party to this Agreement may terminate
this Agreement in the event the other Party shall have materially breached or
defaulted in the performance of any of its material obligations hereunder, and
such default shall have continued for *** after written notice thereof
was provided to the breaching Party by the nonbreaching Party. Any termination
shall become effective at the end of such *** *** period
unless the breaching Party (or any other party on its behalf) has cured any such
breach or default prior to the expiration of the *** ; provided in the
case of a failure to pay any amount due hereunder, such default may be the basis
of termination *** *** following the date that notice of
such default was provided to the breaching Party.
14.3 Termination for Insolvency. If voluntary or involuntary proceedings
by or against a Party are instituted in bankruptcy under any insolvency law, or
a receiver or custodian is appointed for such Party, or proceedings are
instituted by or against such Party for corporate reorganization or the
dissolution of such Party, which proceedings, if involuntary, shall not have
been dismissed within *** after the date of filing, or if such Party
makes an assignment for the benefit of creditors, or substantially all of the
assets of such Party are seized or attached and not released within ***
thereafter, the other Party may immediately terminate this Agreement effective
upon notice of such termination.
14.4 Effect of Breach or Termination.
14.4.1 Accrued Obligations. Termination of this Agreement for any
reason shall not release either Party hereto from any liability which, at the
time of such termination, has already accrued to the other Party or which is
attributable to a period prior to such termination nor preclude either Party
from pursuing all rights and remedies it may have hereunder or at law or in
equity with respect to any breach of this Agreement.
14.4.2 Return of Materials. Subject to the terms and conditions of
this Agreement, upon any termination of this Agreement, Teijin and CombiChem
shall promptly return to the other all Confidential Information (including,
without limitation, all Licensed Technology (in the case of Teijin) and all
Teijin Technology and Teijin Know-How (in the case of CombiChem)), received from
the other Party (except one copy of which may be retained for archival
purposes); provided, however, in the event licenses remain in effect pursuant to
Section 14.4.4 hereunder, the licensee under such license may retain all
Confidential Information required to practice under such license.
14.4.3 Post-Termination Product Sales. In the event of the
cancellation or termination of any license rights with respect to an Product
prior to the expiration of this Agreement, inventory of the Product may be sold
for up to *** after date of termination, provided earned royalties are
paid thereon.
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14.4.4 Licenses. The licenses granted to *** herein shall
terminate in the event of a termination by *** pursuant to Section
14.2 or 14.3. ***
***
***
***
***
***
the terms and conditions of this Agreement. If more than one Product is being
commercially developed or exploited by *** hereunder and a breach
entitling *** to terminate this Agreement relates solely to a single
Product, then *** shall be entitled to terminate this Agreement only
with respect to the applicable Product.
14.5 Survival. Articles 6, 7, 8, 9, 10, 11, 12, 13 and 15 of this
Agreement, as well as Sections 2.4, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 5.3, 14.4 and
this Section 14.5 shall survive the expiration or termination of this Agreement
for any reason.
ARTICLE 15
MISCELLANEOUS
15.1 Governing Laws. This Agreement and any dispute arising from the
performance or breach hereof shall be governed by and construed and enforced in
accordance with, the laws of the state of California, without reference to
conflicts of laws principles.
15.2 No Implied Licenses. Only the licenses granted pursuant to the
express terms of this Agreement shall be of any legal force or effect. No other
license rights shall be created by implication, estoppel or otherwise.
15.3 Waiver. It is agreed that no waiver by either Party hereto of any
breach or default of any of the covenants or agreements herein set forth shall
be deemed a waiver as to any subsequent and/or similar breach or default.
15.4 Assignment. This Agreement shall not be assignable by either Party
to any third party hereto without the written consent of the other Party hereto,
*** except either Party may assign this Agreement, without such
consent, to an entity that acquires all or substantially all of the business or
assets of such Party to which this Agreement pertains, whether by merger,
reorganization, acquisition, sale, or otherwise. This Agreement shall be binding
upon and accrue to the benefit any permitted assignee, and any such assignee
shall agree to perform the obligations of the assignor.
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15.5 Independent Contractors. The relationship of the Parties hereto is
that of independent contractors. The Parties hereto are not deemed to be agents,
partners or joint venturers of the others for any purpose as a result of this
Agreement or the transactions contemplated hereby.
15.6 Compliance with Laws. In exercising their rights under this
Agreement, the Parties shall fully comply in all material respects with the
requirements of any and all applicable laws, regulations, rules and orders of
any governmental body having jurisdiction over the exercise of rights under this
Agreement including, without limitation, those applicable to the discovery,
development, manufacture, distribution, import and export and sale of
pharmaceutical products pursuant to this Agreement.
15.7 Patent Marking. Each Party agrees to ▇▇▇▇ *** all Products
sold pursuant to this Agreement in accordance with the applicable statute or
regulations relating to patent marking in the country or countries of
manufacture and sale thereof.
15.8 Notices. All notices, requests and other communications hereunder
shall be in writing and shall be personally delivered or by registered or
certified mail, return receipt requested, postage prepaid, in each case to the
respective address specified below, or such other address as may be specified in
writing to the other Parties hereto and shall be deemed to have been given upon
receipt:
CombiChem: CombiChem, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
U.S.A.
Attn: Chief Executive Officer
Teijin: Teijin Limited
▇-▇, ▇▇▇▇▇▇▇▇▇▇-▇▇▇ ▇-▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇
▇▇▇▇▇
Attn: General Manager of the Planning Department,
Medical and Pharmaceutical Group
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15.9 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision, and the Parties shall amend the Agreement to the extent
feasible to lawfully include the substance of the excluded term to as fully as
possible realize the intent of the Parties and their commercial bargain.
15.10 Force Majeure. Nonperformance of either Party (except for payment
obligations) shall be excused to the extent that performance is rendered
impossible by strike, fire, earthquake, flood, governmental acts or orders or
restrictions, failure of suppliers, or any other reason where failure to perform
is beyond the reasonable control and not caused by the negligence, intentional
conduct or misconduct of the nonperforming Party, provided such Party uses
diligent efforts to resume performance as promptly as possible.
15.11 Complete Agreement; Amendment. This Agreement with its Exhibits
constitutes the entire agreement between the Parties with respect to the subject
matter hereof. No amendment or change hereof or addition hereto shall be
effective or binding on either of the Parties hereto unless reduced to writing
and executed by the respective duty authorized representatives of CombiChem and
Teijin.
15.12 Headings. The captions to the several Sections hereof are not a part
of this Agreement, but are included merely for convenience of reference only and
shall not affect its meaning or interpretation.
15.13 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original and all of which together shall be
deemed to be one and the same agreement.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
duly executed by their authorized representatives and delivered in duplicate
originals as of the Effective Date.
TEIJIN LIMITED COMBICHEM, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
-------------------------------- ---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
------------------------------ -------------------------------
Title: Director, Member of the Board Title: President & CEO
----------------------------- ------------------------------
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EXHIBIT A
Research Plan
(Outline)
***
***
***
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Confidential Treatment and filed separately with the Commission.
A-1
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EXHIBIT B
Library Compounds
Each tube will contain a minimum of **** of a Library Compound
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
B-1
44
EXHIBIT C
Initial Representatives on the Research Committee
CombiChem: ***
***
***
Teijin: ***
***
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
C-1
45
AMENDMENT TO THE COLLABORATION AGREEMENT
This Amendment (the "Amendment"), effective as of the date March 29, 1997
(the "Effective Date"), is made by and between CombiChem, Inc., a California
corporation, having a principal place of business at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇. ("CombiChem") and Teijin Limited, an entity
organized and existing under the laws of Japan, having a principal place of
business at ▇-▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇-▇▇▇▇▇, ▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ("Teijin").
BACKGROUND
A. CombiChem and Teijin entered into the COLLABORATION AGREEMENT dated
March 29, 1996 relating to *** *** (hereinafter referred to
as Original Agreement); and
B. CombiChem and Teijin desire to amend the Original Agreement in order
to modify the Research Program (as defined in the Original Agreement) and
*** *** (as defined in the Original Agreement);
NOW THEREFORE, for and in consideration of the covenants, conditions, and
undertakings hereinafter set forth, it is agreed by and between CombiChem and
Teijin as follows:
ARTICLE 1
CombiChem and Teijin hereby agree that the ***
***
***
ARTICLE 2
CombiChem and Teijin agree to modify the Original Agreement as follows:
1.25 "Library" shall mean a chemical compound library whose design has been
approved by the Research Committee (as defined below) containing:
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i) for the *** period beginning *** ***
prepared by CombiChem
ii) for the *** period beginning *** ***
prepared by CombiChem
specifically for screening the Collaboration based on proprietary
structures (a) with activity disclosed by Teijin to CombiChem or (b)
generated by CombiChem on behalf of Teijin, in each case, in connection
with the Collaboration.
1.29 Section 1.29 will be amended so reflect the following:
*** Activity" shall mean
*** ***
***
***
2.1.1 (a) During the Research Program Term, CombiChem shall synthesize libraries
as follows:
i) for the *** period *** libraries
ii) for the *** period *** libraries
6.2 Section 6.2 will be amended to reflect the following:
Contact Year Aggregate Annual Research Fee
------------ -----------------------------
*** ***
***
EXHIBIT A Exhibit A attached to the Original Agreement will be supplemented
with the attached Exhibit A-2 for *** period beginning
*** .
EXHIBIT B Exhibit B attached to the Original Agreement will be supplemented
with the attached Exhibit B-2 for *** period beginning
*** .
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Confidential Treatment and filed separately with the Commission.
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EXHIBIT C Exhibit C attached to the Original Agreement will be supplemented
with the attached Exhibit C-2 for *** period beginning
*** .
ARTICLE 3
This Amendment shall be effective as of the Effective Date.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their authorized representatives and delivered in duplicate
originals as of the Effective Date.
TEIJIN LIMITED COMBICHEM, INC.
By: /s/ Tatsuyuki Naruchi By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
------------------------------- -----------------------------------
Name: Tatsuyuki Naruchi Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
Title: Managing Director, General Manager Title: President & C.E.O.
Planning & Research Division
Medical & Pharmaceutical Group
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EXHIBIT A-2
Research Plan (Outline)#
***
***
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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EXHIBIT B-2
LIBRARY COMPOUNDS
Each tube will contain a minimum of *** of a Library Compound.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
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EXHIBIT C-2
Representatives on the Research Committee
Teijin: ***
***
***
CombiChem: ***
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.