EXHIBIT 10.27
(WITH CERTAIN CONFIDENTIAL INFORMATION DELETED AND MARKED WITH BRACKETED
ASTERIKS)
Collaboration and Option Agreement
BETWEEN
Vertex Pharmaceuticals Incorporated
AND
Taisho Pharmaceutical Co., Ltd
November 30, 1999
TABLE OF CONTENTS
PAGE
INTRODUCTION.............................................................................................1
ARTICLE I -- DEFINITIONS..................................................................................1
ARTICLE II -- RESEARCH PROGRAM............................................................................4
2.1 Commencement......................................................................................4
2.2 Joint Research Committee..........................................................................4
2.3 Exchange of Information...........................................................................4
2.4 Redirection of Research Program...................................................................5
2.5 Taisho Research...................................................................................5
2.6 Improvement.......................................................................................5
2.7 Exclusivity.......................................................................................6
ARTICLE III -- PAYMENT BY TAISHO..........................................................................6
3.1 Reimbursements....................................................................................6
3.2 Research Payment..................................................................................7
3.3 Research Records; Expenditure Reports.............................................................7
ARTICLE IV -- LICENSE AND DEVELOPMENT OPTIONS.............................................................8
ARTICLE V -- CONFIDENTIALITY.............................................................................10
5.1 Undertaking......................................................................................10
5.2 Exceptions.......................................................................................11
5.3 Publicity........................................................................................11
5.4 Survival.........................................................................................11
ARTICLE VI -- PATENTS....................................................................................11
6.1 Preparation......................................................................................11
6.2 Cost Reimbursement...............................................................................12
6.3 Failure to Reimburse.............................................................................12
6.4 License to Formulations and Use Inventions.......................................................12
ARTICLE VII -- INFRINGEMENT..............................................................................12
Collaboration and Option Agreement - Page 1
TABLE OF CONTENTS (CON'T)
PAGE
ARTICLE VIII -- TERM AND TERMINATION....................................................................13
8.1 Term of Agreement................................................................................13
8.2 Termination of Research Program by Taisho for Cause..............................................13
8.3 Termination by Vertex For Cause..................................................................14
8.4 Termination......................................................................................14
8.5 Effect of Termination or Expiration..............................................................15
ARTICLE IX -- DISPUTE RESOLUTION.........................................................................15
9.1 Governing Law, and Jurisdiction..................................................................15
9.2 Arbitration......................................................................................15
ARTICLE X -- MISCELLANEOUS PROVISIONS....................................................................16
10.1 Official Language................................................................................16
10.2 Waiver...........................................................................................16
10.3 Force Majeure....................................................................................16
10.4 Severability.....................................................................................16
10.5 Government Acts..................................................................................17
10.6 Government Approvals.............................................................................17
10.7 Export Controls..................................................................................17
10.8 No Warranty......................................................................................17
10.9 Third Party Actions..............................................................................18
10.10 Tax .............................................................................................19
10.11 Assignment.......................................................................................19
10.12 Counterparts.....................................................................................19
10.13 No Agency........................................................................................19
10.14 Notice...........................................................................................19
10.15 Headings.........................................................................................20
10.16 Authority........................................................................................20
10.17 Entire Agreement.................................................................................20
Schedule 1.4 -- [***]
Schedule 1.12 -- List of Vertex Patents
Schedule 1.13 -- List of Taisho Patents
Schedule 1.19 -- Summary of Research Activities
Schedule 1.20 -- Countries in the Territory
Schedule 2.2 -- Initial Members of Joint Research Committee
Schedule 3.3 -- Annual Report of Research Expenditures
Collaboration and Option Agreement - Page 2
COLLABORATION AND OPTION AGREEMENT
AGREEMENT made and effective this 30th day of November, 1999, between VERTEX
PHARMACEUTICALS INCORPORATED, a corporation duly organized and existing under
the laws of the Commonwealth of Massachusetts with its principal place of
business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, ▇.▇.▇.
("Vertex"), and TAISHO PHARMACEUTICAL CO., LTD., a corporation duly organized
and existing under the laws of Japan with its principal place of business at
▇▇-▇, ▇▇▇▇▇▇ ▇-▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇, ▇▇▇▇▇ ("Taisho").
INTRODUCTION
A. Vertex is engaged in the discovery, development and commercialization
of novel, small molecule pharmaceuticals using advanced biology,
biophysics, chemistry and information technologies. The Company has
been involved for some time in research aimed at designing certain
caspase inhibitors for acute intervention in stroke and other
therapeutic indications.
B. Taisho is a diversified pharmaceutical company with substantial
expertise in the areas of research, product development, the conduct of
preclinical and clinical trials, sales and marketing, and is interested
in the research, development, marketing and sale of pharmaceuticals for
acute intervention in stroke and other therapeutic indications.
C. Both parties desire to enter into a collaboration specifically
targeting an area in which Vertex has been working for some time --
the development of small molecule inhibitors of certain caspases --
applying the complementary skills and strengths which each party brings
to the transaction.
D. The purpose of this Agreement is to set forth the terms upon which
Vertex, together with Taisho, will attempt to design and develop novel,
small molecule inhibitors of certain caspases for acute intervention in
stroke and other therapeutic indications, with the financial and
technical assistance of Taisho, for development, formulation, marketing
and sale by Taisho and/or sublicensees in the Territory (as defined
below) upon the terms set forth herein and in the License and
Development Agreement attached as ExhibitA hereto.
In consideration of the mutual covenants set forth in this Agreement, and other
good and valuable consideration, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 "AFFILIATE" shall mean, with respect to any Person, any other
Person which directly or indirectly, by itself or through one
or more intermediaries, controls, is controlled by or is under
direct or indirect common control with, such Person.
Collaboration and Option Agreement - Page 1
The term "control" means the possession, direct or indirect,
of the power to direct or cause the direction of the
management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
Control will be presumed if one Person owns, either of record
or beneficially, fifty percent (50%) or more of the voting
stock of any other Person.
1.2 "PERSON" shall mean any individual, corporation, partnership,
association, limited liability company, trust, unincorporated
organization or government or political subdivision thereof.
1.3 "CASPASES" are
[*************************************************************
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******************************************************].
1.4 "COMPOUND" shall mean a small molecule inhibitor of a Caspase,
synthesized (a) by Vertex, prior to the Effective Date of this
Agreement in the course of its research program directed
toward the discovery of Caspase inhibitors; or (b) by Vertex,
Taisho, or Vertex together with Taisho, in the course of the
Research Program to which this Agreement relates. The term
"Compound" shall, however, exclude
[*************************************************************
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1.5 "CONTROLLED" shall mean the legal authority or right of a
party hereto to grant a license or sublicense of intellectual
property rights to another party hereto, or to otherwise
disclose or grant a right to use proprietary or trade secret
information to such other party, without breaching the terms
of any agreement with a Third Party, infringing upon the
intellectual property rights of a Third Party, or
misappropriating the proprietary or trade secret information
of a Third Party.
1.6 "EFFECTIVE DATE" shall mean the effective date of this
Agreement as set forth on the first page hereof.
1.7 "FIELD" shall mean the treatment or prevention of diseases in
humans using pharmaceutical products which inhibit one or more
Caspases.
1.8 "LICENSE AGREEMENT" shall mean a License and Development
Agreement substantially in the form attached hereto as Exhibit
A which shall become effective as set forth in Article IV
hereof.
1.9 "LICENSED COMPOUND" shall mean any Compound which becomes the
subject of Taisho's rights upon exercise of its license and
development option or is selected by the JDC (as defined in
Article IV (c)) in accordance with the provisions of Article
IV hereof.
Collaboration and Option Agreement - Page 2
1.10 "LICENSED PATENTS" shall mean any Vertex Patents which become
the subject of Taisho's rights upon exercise of its license
and development option or is selected by the JDC in accordance
with the provisions of Article IV hereof.
1.11 "PATENTS" shall mean all existing patents and patent
applications and all patent applications hereafter filed,
including any continuations, continuations-in-part,
divisionals, provisionals or any substitute applications, any
patent issued with respect to any such patent applications,
any reissue, reexamination, renewal or extension (including
any supplemental patent certificate) of any such patent, and
any confirmation patent or registration patent or patent of
addition based on any such patent, and all foreign
counterparts of any of the foregoing.
1.12 "VERTEX PATENTS" shall mean any Patents Controlled by Vertex
(or any of its Affiliates) claiming (i) a Compound or a method
of using a Compound (a "method of using" being deemed to
refer, here and hereafter in this Agreement, to a use patent),
or (ii) a Compound formulation or a manufacturing process or
packaging invention related to a Compound or (iii) an
improvement to the subject matter of a Patent covering a
Compound or a method of using a Compound or a manufacturing
process or packaging invention related to a Compound. A list
of Vertex Patents is appended hereto as Schedule 1.12 and will
be updated periodically to reflect additions thereto during
the course of this Agreement.
1.13 "TAISHO PATENTS" shall mean any Patents Controlled by Taisho
(or any of its Affiliates), excluding patent applications or
patents which Taisho has assigned to Vertex under Section 2.6
hereof, claiming (i) a Compound or a method of using a
Compound or (ii) a Compound formulation or a manufacturing
process or packaging invention related to a Compound or (iii)
an improvement to the subject matter of a Patent covering a
Compound or a method of using a Compound or a manufacturing
process or packaging invention related to a Compound. A list
of Taisho Patents is appended hereto as Schedule 1.13 and will
be updated periodically to reflect additions thereto during
the course of this Agreement.
1.14 "KNOW-HOW" shall mean all proprietary and confidential
material and information including data, technical
information, know-how, experience, inventions, discoveries,
trade secrets, compositions of matter and methods, whether
currently existing or developed or obtained during the course
of this Agreement and whether or not patentable, that are
Controlled by a party hereto or its Affiliates and that relate
to the development, utilization, manufacture or use of any
Compound, including but not limited to processes, techniques,
methods, products, materials and compositions.
1.15 "VERTEX KNOW-HOW" shall mean all Know-How of Vertex.
1.16 "TAISHO KNOW-HOW" shall mean all Know-How of Taisho.
1.17 "VERTEX TECHNOLOGY" shall mean all Vertex Patents and Vertex
Know-How.
1.18 "TAISHO TECHNOLOGY" shall mean all Taisho Patents and Taisho
Know-How.
Collaboration and Option Agreement - Page 3
1.19 "RESEARCH PROGRAM" shall mean research activities associated
with discovery or creation of Compounds hereunder, including
IN VITRO studies of Compounds, IN VIVO animal studies for
research purposes only (rather than for the generation of data
for regulatory submission), and related activities, as
described in the Summary of Research Activities attached
hereto as Schedule 1.19, as that Summary may be revised from
time to time by the Joint Research Committee.
1.20 "TERRITORY" shall mean those countries listed in Schedule 1.2
hereto.
1.21 "THIRD PARTY" shall mean any Person other than Vertex, Taisho
or their respective Affiliates or sublicensees of rights
conveyed under this Agreement.
ARTICLE II
RESEARCH PROGRAM
2.1 COMMENCEMENT. Vertex shall commence the Research Program
promptly upon the Effective Date and shall use its reasonable
best efforts to diligently conduct the Research Program during
the term of this Agreement in accordance with the provisions
hereof. The Research Program will continue for [*******] after
the Effective Date, and may be extended for a further period
by written agreement of the parties hereto.
2.2 JOINT RESEARCH COMMITTEE. Upon the execution of this
Agreement, Vertex and Taisho will establish a Joint Research
Committee (the "JRC") under the leadership of Vertex which
shall consist of three (3) persons designated from time to
time by Vertex and three (3) persons designated from time to
time by Taisho, or such additional number as may be mutually
agreed. The initial members of the JRC shall be those persons
designated on Schedule 2.2 hereto. The JRC shall operate by
consensus and in accordance with agreed joint resolutions, but
in the event of disagreement which cannot be resolved by
discussion among the parties,
[*************************************************************
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The JRC shall meet formally at least semi-annually, or with
such other frequency, and at such time and location, as may be
established by the JRC, for the following purposes:
(a) To receive and review reports by Vertex (and by Taisho if
it is conducting activities under the Research Program), which shall be prepared
and submitted to the JRC on a quarterly basis within thirty (30) days after the
end of the quarter, setting forth in general terms the results of work performed
by the reporting party and its Affiliates and sublicensees during the preceding
calendar quarter under the Research Program, including any planned or filed
Patents covering Compounds;
(b) To advise Vertex and Taisho concerning research strategy,
goals and activities, and to consider whether redirection of the Research
Program should be recommended to Vertex and Taisho under Section 2.4 of this
Agreement;
Collaboration and Option Agreement - Page 4
(c) To assist in coordinating scientific interactions between
Vertex and Taisho during the course of the Research Program;
(d) To discuss matters relating to Vertex Patents and Taisho
Patents (other than
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2.3 EXCHANGE OF INFORMATION. Vertex and Taisho will meet
informally on a regular basis to discuss the Research Program,
and each party will freely share with the other party,
technical and commercial information Controlled by the
disclosing party which is relevant to the subject matter of
the Research Program and the license and development option
referenced in Article IV hereof. Vertex will provide quarterly
written reports on the progress of the Research Program,
including information regarding possible Compound candidates,
to Taisho and to the JRC, within thirty (30) days after the
end of each calendar quarter during the term of the Research
Program. Taisho will make similar reports if it has conducted
activities in connection with the Research Program during the
reporting period. Each party will enable any of the other
party's representatives on the JRC, or other authorized
representatives, to review the ongoing research being
conducted by it under the Research Program and to discuss that
research with its officers, all at such reasonable times and
as often as may be reasonably requested. Any representatives
of Vertex or Taisho receiving information from representatives
of the other party shall sign appropriate agreements ensuring
that information disclosed to them is held in confidence as
required under Article V, or shall be subject to similar
obligations of confidentiality and non-use which cover the
information disclosed. In the event that Taisho is required
under any provision hereof to disclose to or provide Vertex
with data or information generated by Taisho, or at its
direction, during the Research Program, concerning a Compound,
Taisho shall provide a summary of that data and information,
in English, sufficient for Vertex to understand the general
content and significance of that data and information,
[*************************************************************
**************************************************************
**************************************************************
***********].
2.4 REDIRECTION OF RESEARCH PROGRAM. The primary focus of the
Research Program is to design Compounds having activity in the
inhibition of Caspases, for [****************]. If at any time
during the term of this Agreement, the JRC shall determine in
good faith that the Research Program or any portion thereof
cannot be successfully completed, or if so completed will not
produce a Compound that is commercially viable, or that the
goal of the Research Program has been attained prior to the
end of its [******], the JRC may suggest revision or
reorientation of the Research Program to each party's own top
management, and upon mutual consent Vertex and Taisho shall
thereafter promptly modify their respective activities in
connection with the Research Program accordingly.
Collaboration and Option Agreement - Page 5
2.5 TAISHO RESEARCH. Taisho will not be obligated to conduct any
part of the Research Program, and
[*************************************************************
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**].
If Taisho is conducting activities under the Research Program
pursuant to the foregoing, Vertex will supply Taisho with such
amounts of bulk Compound as shall be reasonably necessary for
any small-scale preclinical activities being undertaken by
Taisho hereunder, at [**************************].
2.6 IMPROVEMENT. Taisho shall use its reasonable best efforts to
keep Vertex promptly and fully informed of any Compounds
designed or discovered by Taisho or any of its Affiliates,
sublicensees and subcontractors as a result of work under the
Research Program ("Taisho Research Compounds"), and any
improvements other than the Formulation and Use Inventions
defined in Section 6.1 hereof, made by Taisho or its
Affiliates or sublicensees relating to Compounds and Know-How
during the term of the Research Program, whether patentable or
not ("Taisho Improvements"). Upon Vertex's written request
which shall be required to be made within three (3) months
from Taisho's notification, Taisho shall
[*************************************************************
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*****].
Vertex shall use its reasonable best efforts to keep Taisho
promptly and fully informed of any Compounds designed or
discovered by Vertex or any of its Affiliates, sublicensees
and subcontractors as a result of work under the Research
Program ("Vertex Research Compound"), and any improvements
made by Vertex or any of its Affiliates, sublicensees and
subcontractors relating to Compound and Know-How during the
term of the Research Program, whether patentable or not
("Vertex Improvement"). Such Vertex Research Compound and
Vertex Improvement shall be subject to Taisho's rights under
Article IV hereof. [******************************************
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****************************]. Vertex will not [**************
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***************************************].
2.7 EXCLUSIVITY. During the term of this Agreement,
[*************************************************************
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other than under the terms of this Agreement. The foregoing
provision shall only be applicable to the research,
development, manufacture or sale of small molecule compounds,
or pharmaceutical products containing small molecule
compounds, for which Caspase inhibition is a principal mode of
therapeutic action. Notwithstanding the foregoing, this
Section 2.7 shall
Collaboration and Option Agreement - Page 6
not apply to [******************************
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ARTICLE III
PAYMENTS BY TAISHO
3.1 REIMBURSEMENT. Taisho will make reimbursement to Vertex as
follows, on the dates referenced below, of certain of Vertex's
past research costs, in recognition of Vertex's research
program in the Field having achieved certain research
milestones through the Effective Date:
1. Not more than fifteen (15) [****]
business days after the later of
the Effective Date or the date
upon which the last party hereto
executes this Agreement:
2. On the first anniversary of the [****]
------
Effective Date: TOTAL [****]
At Taisho's request Vertex will provide Taisho with documentation which
support characterization of the payments made by Taisho under this Section 3.1
as reimbursement for research expenditures made by Vertex.
3.2 RESEARCH PAYMENT. Taisho will make research payment for
Vertex's research activities under the Research Program in the
form of the following payments to Vertex.
Research Year 1. October 1, 1999 - September 30, 2000 [****]
Research Year 2. October 1, 2000 - September 30, 2001 [****]
Research Year 3. October 1, 2001 - September 30, 2002 [****]
------
TOTAL [****]
The payments referenced in this paragraph shall be made in equal
quarterly installments of [***], each of which will be due not later than
[**********] the commencement of each three (3) month period (October 1, January
1, April 1 and July 1) during the referenced Research Year. The first payment
due for the period October 1 - December 31, 1999 shall be made not more than
[****************] the later of the Effective Date or the date upon which the
last party
Collaboration and Option Agreement - Page 7
hereto executes this Agreement. A "business day" for purposes of this
Agreement shall mean a day that is not a weekend day or a legal holiday in
Boston, Massachusetts or Tokyo, Japan or is customarily specified as a holiday
by Vertex or Taisho. All payments shall be made by wire transfer in United
States dollars to the credit of such bank account as may be designated by Vertex
in writing to Taisho. Any payment which falls due on a date which is not a
business day may be made on the next succeeding business day. Taisho's
obligation to make any of the foregoing payments which are due and payable on
the effective date of any termination of this Agreement pursuant to Section 8.1
hereof shall survive termination.
3.3 RESEARCH RECORDS; EXPENDITURE REPORTS. Each researcher
performing work under this Agreement, whether employed
directly by Vertex or Taisho or one of its Affiliates, or
subcontractors, shall keep and properly maintain a laboratory
notebook in which all work and experiments performed by him
are entered and kept separate and distinct from all other work
not related to this Agreement. Vertex shall provide to Taisho,
annually during the term of the Research Program, a research
expenditure report in the form attached hereto as Schedule
3.3, which shall be delivered to Taisho within ninety (90)
days following December 31 of each year of the Research
Program. The books and records of Vertex relating to such
research expenditures will be subject to inspection at all
reasonable times by Taisho with reasonable notice, for the
purpose of verifying the accuracy of the research expenditure
report referenced above. The books and records relating to a
reported research expenditure shall be retained by Vertex for
a period of not less than five (5) full fiscal years after the
year in which the research expenditure occurred.
ARTICLE IV
LICENSE AND DEVELOPMENT OPTION
Taisho has the exclusive license and development option to the
Compounds and by exercising its option may obtain an exclusive license to one or
more Licensed Compounds which Taisho is interested in developing, marketing and
selling in the Territory subject to the following terms and conditions.
(a) (i) During the course of the Research Program
[**************** ******************] Vertex will notify Taisho in writing if
and when Vertex has selected a Compound for development in the Field outside the
Territory. Taisho shall have a period of [*************************************]
(an "Option Exercise Period") after receipt of such written notice from Vertex
in which to exercise its option to obtain a license and to develop that Compound
as a Licensed Compound under the License Agreement, by written notice to Vertex.
Taisho shall use good faith efforts to decide as early as possible within the
[****] Option Exercise Period whether to exercise its option in each case, and
will communicate that decision to Vertex as soon as it is made. Taisho's option
with respect to a particular Compound shall expire if the option is not
exercised within the associated Option Exercise Period.
Collaboration and Option Agreement - Page 8
(ii) If during the term of the Research Program
Vertex does not designate any Compounds for development in the Field outside the
Territory, or if there are no Compounds under development outside the Territory
on the date the Research Program terminates, then Taisho shall have an option
exercisable during the [*******] after termination of the Research Program to
obtain a license and to develop any Compound as a Licensed Compound under the
License Agreement, whether or not thereafter selected by Vertex for development
outside the Territory, upon written notice to Vertex. Vertex shall not be
obligated in such event to develop that Compound, and if it chooses not to do
so, the full cost of development of that Compound in the Territory shall be
borne by Taisho.
(b) Promptly upon exercise of any such option by notice
in writing from Taisho to Vertex, the parties shall execute a License Agreement
covering the Licensed Compound to which the option exercise was directed,
substantially identical in form and substance to the form of License Agreement
attached hereto as Exhibit A. Subsequent Licensed Compounds, if any, as to which
Taisho exercises its option shall be added to the License Agreement as
contemplated therein. Taisho will develop that Compound as a Licensed Compound
in the Territory in accordance with the terms of the License Agreement.
(c) Taisho's option rights under this Article IV shall
expire upon the later of
[****************************************************************************]
provided that, even after [*****************] and so long as the option has
previously been exercised with respect to a Licensed Compound and development or
commercialization of that Licensed Compound is proceeding in accordance with the
terms of the License Agreement, Taisho may propose to the Joint Development
Committee (the "JDC," a committee established under the License Agreement,
details of which are provided in the License Agreement), at any time during the
[*************************************************************] that the JDC
select any other Compound for development under the License Agreement from among
those Compounds that were synthesized or had shown activity as Caspase
inhibitors in the Research Program. Any Compound so proposed by Taisho and
selected by the JDC will be developed by Taisho under the License Agreement,
except that Vertex shall not be obligated in such event to develop that
Compound, and if it chooses not to do so, the full cost of development of that
Compound in the Territory shall be borne by Taisho. Without reference to the
previously mentioned [*****] limitation or provisions of Article IV (d),
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respect to a Licensed Compound shall be exercisable for a period ending ninety
(90) days after the earlier of termination of the development of that Licensed
Compound or [********** *******] in the Territory with respect to that Licensed
Compound. The option shall also continue to be exercisable,
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with respect to that Licensed Compound, after which it will expire. For purposes
of the foregoing: (i) a [***** ******] shall mean a Phase II Clinical Trial
which contains one or more studies aimed at yielding preliminary data on the
efficacy of a Compound in a tested indication. ; (ii) a Designated Substitute
Compound for a Licensed Compound shall be those one or more Compounds
Collaboration and Option Agreement - Page 9
(presumptively one Compound, but more than one upon a demonstration that more
than one is reasonably necessary) selected by the JDC which in the opinion of
the JDC are the Compound or Compounds, if any, most likely on a scientific and
commercial basis to be selected for development as substitutes for a Licensed
Compound if development of that Licensed Compound should be terminated prior to
regulatory approval in Japan for the sale of a Drug Product containing that
Licensed Compound. If the JDC is unable to reach consensus on whether a Compound
so proposed by Taisho should be selected for development, or whether a Compound
should be substituted for a Licensed Compound the development of which has been
terminated, or which if any Compound should be selected as Designated Substitute
Compound for a Licensed Compound,
[*******************************************************************************
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********************].
(d) After the expiration of the [*****] period referenced
in (c) above, and so long as Taisho is developing or commercializing a Licensed
Compound in accordance with the terms of the License Agreement, Vertex will
attempt in good faith to negotiate with Taisho the terms under which Taisho
might obtain a license, to develop and commercialize in the Territory any
Compound in the Field, before Vertex shall license or otherwise transfer rights
to that Compound in the Territory to a Third Party. Notwithstanding the
foregoing, Vertex shall not license or otherwise transfer rights to any Compound
to a Third Party without adequate provisions to ensure that those Compounds
remain subject to Taisho's option or the JDC's option of substitution referenced
in (c) above, so long as that option is exercisable with respect to those
Compounds.
(e) Upon exercise by Taisho or the JDC of the option
under Article IV to develop a Compound, Taisho will be entitled to the exclusive
right to that Compound in the Territory under the terms of the License
Agreement, which right includes [*****************
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ARTICLE V
CONFIDENTIALITY
5.1 UNDERTAKING. During the term of this Agreement, each party
shall keep confidential, and other than as provided herein
shall not use or disclose, directly or indirectly, any trade
secrets, confidential or proprietary information (including
information embodied in sample materials), or any other
knowledge, information, documents or materials, owned,
developed or possessed by the other party, whether in tangible
or intangible form, the confidentiality of which such other
party takes reasonable measures to protect, including but not
limited to Vertex Technology and Taisho Technology. Each party
shall take any and all lawful measures to prevent the
unauthorized use and disclosure of such information, and to
prevent unauthorized persons or entities from obtaining or
using such information. Each party further agrees to refrain
from directly or indirectly taking
Collaboration and Option Agreement - Page 10
any action which would constitute or facilitate the
unauthorized use or disclosure of such information. Each party
may disclose such information to its directors, officers,
employees, consultants and agents, and in the case of Vertex,
to its licensees and subcontractors in the Field outside the
Territory, and in case of Taisho, to sublicensees under the
License Agreement, if any, and to subcontractors in connection
with the research, development or manufacture of Compounds, to
the extent necessary to enable such parties to perform their
obligations or exercise their rights hereunder or under the
applicable sublicense or subcontract, as the case may be;
provided, that such directors, officers, employees,
consultants, agents, licensees, sublicensees and
subcontractors have entered into appropriate confidentiality
agreements for secrecy and non-use of such information which
by their terms shall be enforceable by injunctive relief at
the instance of the disclosing party. Each party shall be
liable for any unauthorized use and disclosure of such
information by its directors, officers, consultants, employees
and agents and any such licensees, sublicensees and
subcontractors. Taisho may also provide a copy of this
Agreement to the Bank of Japan, Japan's Ministry of Finance,
Ministry of Health and Welfare, National Tax Office and other
governmental agencies, all as and only to the extent required
under applicable Japanese laws or government regulations.
5.2 EXCEPTIONS. Notwithstanding the foregoing, the provisions of
Section 5.1 hereof shall not apply to knowledge, information,
documents or materials which the receiving party can
conclusively establish: (i) have entered the public domain
without such party's breach of any obligation owed to the
disclosing party; (ii) have become known to the receiving
party prior to the disclosing party's disclosure of such
information to such receiving party; (iii) are permitted to be
disclosed by the prior written consent of the disclosing
party; (iv) have become known to the receiving party from a
source other than the disclosing party other than by breach of
an obligation of confidentiality owed to the disclosing party;
(v) are disclosed by the disclosing party to a Third Party
without restrictions on its disclosure; (vi) are independently
developed by the receiving party without breach of this
Agreement; or (vii) are required to be disclosed by the
receiving party to comply with applicable laws, to defend or
prosecute litigation or to comply with governmental
regulations, provided that the receiving party provides prior
written notice of such disclosure to the disclosing party and
takes reasonable and lawful actions to avoid or minimize the
degree of such disclosure.
5.3 PUBLICITY. The timing and content of any press releases or
other public communications relating to the Agreement and the
transactions contemplated herein will, except as otherwise
required by law, be determined jointly by Taisho and Vertex.
5.4 SURVIVAL. The provisions of this Article V shall survive the
termination of this Agreement.
Collaboration and Option Agreement - Page 11
ARTICLE VI
PATENTS
6.1 PREPARATION. Vertex will be responsible for the preparation,
filing, prosecution and maintenance of any and all Patents in
the Territory included in Vertex Patents,
[*************************************************************
**************************************************************
***].
Taisho will be responsible for the preparation, filing,
prosecution and maintenance of any and all Patents in the
Territory included in the Taisho Patents
[*************************************************************
**************************************************************
******************]
including without limitation any such Patents covering
formulations
[*************************************************************
*******************].
Vertex and Taisho shall each furnish to the other party copies
of significant documents relevant to any such preparation,
filing, prosecution or maintenance. Vertex and Taisho shall
cooperate fully in the preparation, filing, prosecution and
maintenance of all Vertex Patents and Taisho Patents,
executing all papers and instruments so as to enable the
responsible party to apply for, prosecute, and to maintain
patent applications and patents in its name in any country in
the Territory. The parties acknowledge the importance of
maintaining the confidentiality of any inventions or other
information relating to potential patent claims prior to the
filing of patent applications with respect thereto. Each party
shall provide to the other prompt notice as to all matters
which may affect the preparation, filing, prosecution or
maintenance of any such patent applications or patents.
6.2 COST REIMBURSEMENT. Taisho shall reimburse Vertex for the
following direct costs with respect to Vertex Patents
[*************************************************************
*********************************************************],
for the preparation, filing, prosecution and maintenance of
Vertex Patents in the Territory. "General patent preparation
and maintenance costs" shall include the direct costs of
preparation, filing and prosecution of any patent application
contained in Vertex Patents from which a patent application
filed in any country of the Territory claims priority, and any
patent application filed under the Patent Cooperation Treaty
(PCT). Vertex shall notify Taisho in writing from time to time
of its plans with respect to the preparation, filing,
prosecution and maintenance of Vertex Patents in each country
in the Territory which are, or have not yet become, Licensed
Patents, together with Vertex's estimate of the costs of such
preparation, filing, prosecution and maintenance and an
estimate of Vertex's general patent preparation and
maintenance costs. Taisho shall reimburse Vertex for
[*************************************************************
***************************************************]. In any
event, the provisions of Section 6.3 will apply to any patent
which is the object of the
Collaboration and Option Agreement - Page 12
foregoing notice from Taisho and which Vertex continues to
prosecute or maintain.
6.3 FAILURE TO REIMBURSE. If Taisho shall fail, without good
reason hereunder, to reimburse Vertex as required under
Section 6.2 above with respect to a patent application or
patent included within the Vertex Patents within sixty (60)
days after receipt of a written request for payment from
Vertex, Vertex may terminate Taisho's rights with respect to
that patent or patent application upon thirty (30) days
written notice thereof to Taisho, unless Taisho during such
30-day period shall have submitted payment pursuant to the
aforementioned request for payment.
6.4 LICENSE TO FORMULATIONS AND USE INVENTIONS. The license to the
Formulations and Use Inventions granted to Vertex under
Section 8.2 of the License Agreement shall be effective
hereunder subject to the limitations set forth in Section 8.2
of the License Agreement.
ARTICLE VII
INFRINGEMENT
Either party shall notify the other party promptly of any possible
infringements, imitations or unauthorized possession, knowledge or use of the
intellectual property embodied in any of the Vertex Technology by Third Parties
in any country in the Territory, of which it becomes aware. Either party shall
promptly furnish the other party with full details of such infringements,
imitations or unauthorized possession, knowledge or use, and shall assist in
preventing any recurrence thereof.
[*******************************************************************************
********************************************************************************
****************************].
Such suit may not be settled by Taisho without Vertex's consent, which shall not
be unreasonably withheld. Damages recovered in any actions referenced hereunder
shall be divided [*************] to Taisho and [********] to Vertex after
reimbursement to each party of their respective expenses in prosecuting such
actions as provided hereunder.
ARTICLE VIII
TERM AND TERMINATION
8.1 TERM OF AGREEMENT. This Agreement will extend until the later
of the expiration of Taisho's option rights or JDC's option
right under Article IV hereof, unless earlier terminated by
either party hereto in accordance with other applicable
provisions of this Agreement. Taisho may elect to extend the
term of the Research Program and this Agreement by written
notice given to Vertex not less than [*************] prior to
the expiration of the Research Program, upon
Collaboration and Option Agreement - Page 13
terms and conditions to be negotiated in good faith and agreed
upon in writing by the parties.
8.2 TERMINATION OF RESEARCH PROGRAM BY TAISHO FOR CAUSE. Upon
written notice to Vertex, Taisho may at its sole option
terminate the Research Program and this Agreement upon the
occurrence of any of the following events:
(a) Vertex shall materially breach this Agreement, which
shall include a failure to use its reasonable best efforts to pursue the
Research Program diligently (provided, however, that this provision shall not be
construed as a guarantee by Vertex that the Research Program will be
successfully completed or any Compounds successfully developed), and such
material failure to perform shall not have been remedied or steps initiated to
remedy the same to Taisho's reasonable satisfaction, within [**********] days
after Taisho sends written notice of failure to perform to Vertex; or
(b) Vertex shall cease to function as a going concern by
suspending or discontinuing its business for any reason except for interruptions
caused by strike, labor dispute or any other events over which it has no control
(unless termination of this Agreement is permitted under Section 10.3 hereof);
or
(c) A receiver for Vertex shall be appointed or applied
for, or a general assignment shall be made for the benefit of its creditors or
any proceeding involving Vertex shall be voluntarily commenced by it under any
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or
liquidation law or statute of the United States or any state thereof or such
proceedings shall be involuntarily instituted against it, and Vertex by any
action shall indicate its approval of or consent to, or acquiescence therein, or
the same shall remain undismissed for [*******].
In the event of any valid termination under this Section 8.2,
Taisho shall not be required to make any payments under Section 3.2 hereof which
are not due and payable prior to receipt by Vertex of the notice of failure to
perform referenced under Section 8.2(a), receipt by Vertex of the notice of
termination pursuant to Section 8.2(b), or the occurrence of the event
referenced in Section 8.2(c), as the case may be. Notwithstanding the foregoing,
any License Agreement then in effect under the provisions of Article IV of this
Agreement shall continue in effect in accordance with its terms.
8.3 TERMINATION BY VERTEX FOR CAUSE. In addition to rights of
termination which may be granted to Vertex under other
provisions of this Agreement, upon written notice to Taisho,
Vertex may at its sole option terminate this Agreement upon
the occurrence of any of the following events:
(a) Taisho shall materially breach this Agreement, and
such material failure to perform shall not have been remedied or steps initiated
to remedy the same to Vertex's reasonable satisfaction, within [**************]
after Vertex sends written notice of failure to perform to Taisho; or
Collaboration and Option Agreement - Page 14
(b) Taisho shall cease to function as a going concern by
suspending or discontinuing its business for any reason except for interruptions
caused by strike, labor dispute or any other events over which it has no control
(unless termination of this Agreement is permitted under Section 10.3 hereof);
or
(c) A receiver for Taisho shall be appointed or applied
for, or a general assignment shall be made for the benefit of its creditors or
any proceeding involving Taisho shall be voluntarily commenced by it under any
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or
liquidation law of Japan or such proceedings shall be involuntarily instituted
against it, and Taisho by any action shall indicate its approval of or consent
to, or acquiescence therein, or the same shall remain undismissed for
[************].
8.4 TERMINATION. If the parties shall determine in good faith (as
evidenced by a writing signed by each party), that there is no
further scientific basis to pursue research and development of
Compounds in the Field, and if either party shall propose, in
writing, to the JRC and the other party that the parties
consider redirection of the Research Program under Section 2.4
of this Agreement, and if within [*******] after such proposal
is received by the other party and the JRC, the Research
Program has not been redirected, then either party may
terminate this Agreement on [************] written notice to
the other party. On or after the effective date of any such
termination no further payments shall become due and payable
hereunder by one party to the other, except pursuant to
obligations which have accrued hereunder prior to the
effective date of such termination.
8.5 EFFECT OF TERMINATION OR EXPIRATION. Termination of this
Agreement for any reason, or expiration of this Agreement,
will not affect: (i) obligations which have accrued as of the
date of termination or expiration, and (ii) obligations and
rights under the following provisions, which shall survive
termination or expiration of this Agreement: the last sentence
of both Sections 3.2 and 3.3; Articles IV(d), V and IX.
ARTICLE IX
DISPUTE RESOLUTION
9.1 GOVERNING LAW, AND JURISDICTION. This Agreement shall be
governed and construed in accordance with the
[********************************]. Both parties agree that
any legal proceedings between the parties relating to this
Agreement other than a proceeding to which Section 9.2 is
applicable, shall be brought in the state or prefecture of the
principal office of the defendant party; provided that a
proceeding to enforce an arbitration award may be brought in
the state or prefecture of the plaintiff's principal office,
and each party agrees to submit to personal jurisdiction and
to accept venue in the courts of such state or prefecture
solely for the purpose of enforcement of any such award.
Collaboration and Option Agreement - Page 15
9.2 ARBITRATION. In the event of any controversy or claim arising
out of or relating to any provision of this Agreement or the
breach thereof, the parties shall try to settle their
differences amicably between themselves. Any such controversy
or claim which the parties are unable to resolve shall, upon
the written request for arbitration of one party delivered to
the Secretariat of the International Court of Arbitration (the
"Court"), be submitted to and be settled by arbitration
[*************************************************************
*************************************************************]
in accordance with the Rules of Arbitration of the
International Chamber of Commerce (the "Rules") then in effect
(except as hereinafter stated), and enforcement of the award
rendered by the arbitrators may be entered in any court having
jurisdiction thereof and shall be final and conclusive upon
both parties hereto. Notwithstanding anything to the contrary
which may be contained in the Rules of the Court, the parties
further agree as follows:
(i) [*************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
********************].
(ii) The arbitrators will consider the nature of the dispute, the
availability of information upon which resolution of the
dispute may be fairly based, and in view of those
considerations and such other facts and circumstances as they
may deem appropriate, shall determine the application of
discovery and, if decided it is applied, shall determine the
nature, scope and timing of any discovery which will be
permitted to the parties to any proceeding hereunder, and that
determination of the arbitrators shall be binding on such
parties. The costs of arbitration to each party will be
determined in accordance with Articles 30 and 31 of the Rules.
(iii) The arbitrators shall state the reasons upon which any award
is based. The arbitrators shall not be authorized to award
punitive damages to either party.
(iv) Upon receipt of the arbitrator's statement, either party will
have the right, within [***********] thereof, to apply to the
Secretariat for a correction and/or an interpretation of the
award, and the arbitrators thereupon will reconsider the
issues raised by said application and either confirm or alter
their decision, which will then be final and conclusive upon
both parties hereto.
Collaboration and Option Agreement - Page 16
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 OFFICIAL LANGUAGE. English shall be the official language of
this Agreement and the License Agreement, and all
communications between the parties hereto shall be conducted
in that language.
10.2 WAIVER. Any waiver by either party of the breach of any term
or condition of this Agreement will not be considered as a
waiver of any subsequent breach of the same or any other term
or condition hereof.
10.3 FORCE MAJEURE. Neither party will be in breach hereof by
reason of its delay in the performance of, or failure to
perform any of its obligations hereunder, if that delay or
failure is caused by strikes, acts of God or the public enemy,
riots, incendiaries, interference by civil or military
authorities, compliance with governmental priorities for
materials, or any fault beyond its control or without its
fault or negligence. In the event that any delay or failure to
perform by Vertex by reason of force majeure shall extend
[*************] Taisho may suspend any payment which would
otherwise become due and payable to Vertex during
[*************************************************************
**************************************************************
**************************************************************
**************************************************************
************************************************************].
10.4 SEVERABILITY. Should one or more provisions of this Agreement
be or become invalid, then the parties hereto shall attempt in
good faith to agree upon valid provisions in substitution for
the invalid provisions, which in their economic effect come so
close to the invalid provisions that it can be reasonably
assumed that the parties would have accepted this Agreement
with those new provisions. If the parties are unable to agree
on such valid provisions, the invalidity of such one or more
provisions of this Agreement shall nevertheless not affect the
validity of this Agreement as a whole.
10.5 GOVERNMENT ACTS. In the event that any act, regulation,
directive, or law of a government within the Territory,
including its departments, agencies or courts, should make
impossible or prohibit, restrain, modify or limit any material
act or obligation of Taisho or Vertex under this Agreement,
the party, if any, not so affected, shall have the right, at
its option, to suspend or terminate this Agreement as to such
country, if good faith negotiations between the parties to
make such modifications herein as may be necessary to fairly
address the impact thereof, are not successful after a
reasonable period of time in producing mutually acceptable
modifications to this Agreement.
10.6 GOVERNMENT APPROVALS. Taisho or its sublicensees will, if
necessary, obtain any government approval required in the
Territory to enable this Agreement to become effective, or to
enable any payment hereunder to be made, or any other
Collaboration and Option Agreement - Page 17
obligation hereunder to be observed or performed. Taisho will
keep Vertex informed of progress in obtaining any such
government approval, and Vertex will cooperate with Taisho in
any such efforts.
10.7 EXPORT CONTROLS. This Agreement is made subject to any
restrictions concerning the export of Compounds or Vertex
Technology from the United States which may be imposed upon or
related to either party to this Agreement from time to time by
the Government of the United States. Furthermore, Taisho will
not export, directly or indirectly, any Vertex Technology or
any Compounds utilizing such Technology to any countries for
which the United States Government or any agency thereof at
the time of export requires an export license or other
governmental approval, without first obtaining the written
consent to do so (of which Taisho will promptly inform Vertex)
from the Department of Commerce or other agency of the United
States Government when required by applicable statute or
regulation. As of the date hereof Vertex warrants that current
US export control regulations do not prohibit the disclosure
or delivery to Taisho of information, data, compounds, or
other materials required to be provided by Vertex to Taisho
hereunder, and if such regulations should become applicable,
Vertex will forthwith notify Taisho.
10.8 NO WARRANTY. Vertex makes no warranty of any kind whatsoever,
either express or implied, to Taisho, or any customer of
Taisho, as to the ability of Taisho to understand and utilize
the Vertex Technology. Taisho makes no warranty of any kind
whatsoever, either express or implied, to Vertex, or to any
customer of Vertex, as to the ability of Vertex to understand
and utilize the Taisho Technology.
[****************************************************
**************************************************************
**************************************************************
**********].
Should a party becomes aware of any unexpected serious adverse
reactions to any Compounds, Licensed Compounds or Drug
Products administered to humans or animals, the party shall
promptly notify the other and/or make a report to the U.S.
Food and Drug Administration ("FDA") or the Japanese Ministry
of Health and Welfare as required by applicable governmental
regulations.
10.9 THIRD PARTY ACTIONS. (a) To Vertex's knowledge
[*************************************************************
**************************************************************
*****************].
Nevertheless, each party will promptly notify the other in the
event any relevant Third Party patents come to its notice.
Neither party gives a warranty to the other regarding the
infringement of Third Party rights by the development,
manufacture, use or sale of the Licensed Compounds or the
practice of the Vertex Technology or the Taisho Technology,
and gives no indemnity against costs, damages, expenses or
other losses arising out of proceedings brought against the
other party or any other Person by any Third Party.
Collaboration and Option Agreement - Page 18
(b) In the event that the development of a Compound in any country
necessarily involves working within the scope of a Third Party's patent, which
would otherwise be infringed by the practice of a Vertex Patent in connection
with such development, then [***************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
***].
If the terms of a required license under a Third Party patent do not meet the
foregoing requirements and Vertex therefore elects not to assume its share of
any financial obligation, [***************************************
**************************************************************************]. If
the required license is either unavailable or its terms are unacceptable both to
Vertex and to Taisho, then Taisho may elect in its sole discretion to
discontinue sales of the Drug Product in such country or at its sole expense to
undertake the defense of a patent infringement action or the prosecution of a
declaratory judgment action with respect to the Third Party patents.
(c) In the event Taisho is sued for infringement of any rights of any
Third Party in the course of its development of the Compounds or its use of
Vertex Technology in connection therewith, Vertex shall extend to Taisho good
faith assistance and support in defending such action, and may participate in
the conduct of, and in discussions regarding strategic and business responses
to, the suit. Damages and out-of-pocket legal fees and expenses (including legal
fees and expenses of Taisho and Vertex) arising from such a legal action shall
be borne [**********************************************************************
********************************************************************************
*************].
10.10 TAX.[*********************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
******************].
10.11 ASSIGNMENT. This Agreement may not be assigned or otherwise
transferred by either party without the prior written consent
of the other party; PROVIDED, HOWEVER, that either party may
assign this Agreement, WITHOUT the consent of the other party,
(i) to any of its Affiliates, if the assigning party
guarantees the full performance of its Affiliates' obligations
hereunder, or (ii) in connection with the transfer or sale of
all or substantially all of its assets or business or in the
event of its merger or consolidation with another Person. Any
purported assignment in contravention of this section shall,
at the option of the nonassigning party, be null and void and
of no effect. No assignment shall release either party from
responsibility for the performance of any accrued obligations
of such party hereunder.
Collaboration and Option Agreement - Page 19
10.12 COUNTERPARTS. This Agreement may be executed in duplicate,
each of which shall be deemed to be original and both of which
shall constitute one and the same Agreement.
10.13 NO AGENCY. Nothing in this Agreement shall be deemed to create
an agency, joint venture, amalgamation, partnership or similar
relationship between Vertex and Taisho. Notwithstanding any of
the provisions of this Agreement, neither party to this
Agreement shall at any time enter into, incur, or hold itself
out to Third Parties as having authority to enter into or
incur, on behalf of the other party, any commitment, expense,
or liability whatsoever, and all contracts, expenses and
liabilities in connection with or relating to the obligations
of each party under this Agreement shall be made, paid, and
undertaken exclusively by such party on its own behalf and not
as an agent or representative of the other.
10.14 NOTICE. All communications between the parties with respect to
any of the provisions of this Agreement will be sent to the
addresses set out below or to other addresses as may be
designated by one party to the other by notice pursuant
hereto, by prepaid certified air mail (which shall be deemed
received by the other party on the seventh business day
following deposit in the mails), or by facsimile transmission
or other electronic means of communication (which shall be
deemed received when transmitted), with confirmation by first
class letter, postage pre-paid, given by the close of business
on or before the next following business day:
if to Taisho, at: Taisho Pharmaceutical Co., Ltd.
▇▇-▇, ▇▇▇▇▇▇ ▇-▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇-▇▇▇▇, ▇▇▇▇▇
Attention: General Manager, Licensing
Division
with a copy to:
General Manager, Legal Division
if to Vertex, at: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President and Chief Business
Officer
cc: Corporate Counsel
with a copy to:
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Fax: ▇▇▇-▇▇▇-▇▇▇▇
10.15 HEADINGS. The paragraph headings are for convenience only and
will not be deemed to affect in any way the language of the
provisions to which they refer.
Collaboration and Option Agreement - Page 20
10.16 AUTHORITY. The undersigned represent that they are authorized
to sign this Agreement on behalf of the parties hereto. The
parties each represent that no provision of this Agreement
will violate any other agreement that a party may have with
any Third Party. Each party has relied on that representation
in entering into this Agreement.
10.17 ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties relating to the matters referred
to herein, and may only be amended by a written document, duly
executed on behalf of the respective parties.
Collaboration and Option Agreement - Page 21
VERTEX PHARMACEUTICALS INCORPORATED
By:
---------------------------------------
Title:
-------------------------------------
Date of Signature:
--------------------------
TAISHO PHARMACEUTICAL CO., LTD.
By:
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
Title: PRESIDENT
-------------------------------------
Date of Signature:
-------------------------
Collaboration and Option Agreement - Page 22
SCHEDULE 1.4
--------------------------------------------------------------------------------
[*****************************************************************************
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CONFIDENTIAL- DRAFT- Collaboration & Option Agreement- Page 1
SCHEDULE 1.12
LIST OF VERTEX PATENTS
--------------------------------------------------------------------------------
[*******************************************************************************
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Research Agreement & License Option- Page ii
SCHEDULE 1.13
LIST OF TAISHO PATENTS
--------------------------------------------------------------------------------
NONE
SCHEDULE 1.19
SUMMARY OF RESEARCH ACTIVITIES
--------------------------------------------------------------------------------
[*******************************************************************************
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SCHEDULE 1.20
COUNTRIES IN THE TERRITORY
--------------------------------------------------------------------------------
[*******************************************************************************
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SCHEDULE 2.2
INITIAL MEMBERS OF JOINT RESEARCH COMMITTEE
--------------------------------------------------------------------------------
[*******************************************************************************
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SCHEDULE 3.3
ANNUAL REPORT OF RESEARCH EXPENDITURES
--------------------------------------------------------------------------------
VERTEX/TAISHO CASPASE PROGRAM
[*******************************************************************************
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EXHIBIT A TO COLLABORATION AND OPTION AGREEMENT
License and Development Agreement
BETWEEN
Vertex Pharmaceuticals Incorporated
AND
Taisho Pharmaceutical Co., Ltd
November 30, 1999
License and Development Agreement - Page 1
TABLE OF CONTENTS Page
Introduction....................................................................................1
ARTICLE I -- Definitions........................................................................1
ARTICLE II -- Rights and Licenses...............................................................5
2.1 TAISHO RIGHTS..........................................................................5
2.1.1 EXCLUSIVE LICENSE...............................................................5
2.1.2 [**************]................................................................5
2.2 IMPROVEMENT............................................................................6
2.3 EXCLUSIVITY............................................................................6
ARTICLE III -- Development......................................................................7
3.1 JOINT DEVELOPMENT COMMITTEE............................................................7
3.2 CORE DEVELOPMENT ACTIVITIES............................................................8
3.3 DEVELOPMENT ACTIVITIES EXCLUSIVELY FOR THE TERRITORY...................................8
3.4 DEVELOPMENT ACTIVITIES IN [****************************]...............................9
3.5 INFORMATION TRANSFER...................................................................9
3.6 BULK SUPPLY FOR DEVELOPMENT............................................................9
3.7 REGULATORY APPROVALS...................................................................9
3.8 DUE DILIGENCE.........................................................................10
ARTICLE IV -- Milestone Payments...............................................................10
ARTICLE V -- Supply Licensed Compound..........................................................11
5.1 SUPPLY................................................................................11
5.2 SUPPLY PRICE..........................................................................12
5.3 FORECASTS AND ADJUSTMENTS.............................................................12
5.4 SUPPLY AGREEMENT......................................................................13
5.5 PRICE REVISION........................................................................13
5.6 UNPATENTED PRODUCT....................................................................13
5.7 TAXES.................................................................................13
5.8 CO-LABELING...........................................................................13
ARTICLE VI -- Reporting........................................................................14
6.1 DEVELOPMENT REPORTS...................................................................14
6.2 SALES REPORTS AND RECORDS.............................................................14
6.3 PAYMENT DELAY.........................................................................14
License and Development Agreement - Page ii
Table Of Contents (con't)Page
ARTICLE VII -- Confidentiality.................................................................14
7.1 UNDERTAKING...........................................................................14
7.2 EXCEPTIONS............................................................................15
7.3 PUBLICITY.............................................................................15
7.4 SURVIVAL..............................................................................15
ARTICLE VIII -- Patents........................................................................15
8.1 PREPARATION...........................................................................15
8.2 LICENSE TO FORMULATION AND USE INVENTIONS.............................................16
8.3 COST REIMBURSEMENT....................................................................16
8.4 FAILURE TO REIMBURSE..................................................................17
8.5 COST REIMBURSEMENT FOR THE PATENTS COVERING THE FORMULATION AND USE
INVENTIONS............................................................................17
ARTICLE IX --Infringement......................................................................17
ARTICLE X -- Term and Termination..............................................................18
10.1 TERM..................................................................................18
10.2 TERMINATION OF RESEARCH PROGRAM BY TAISHO FOR CAUSE...................................18
10.3 TERMINATION BY VERTEX FOR CAUSE.......................................................19
10.4 TERMINATION...........................................................................19
10.5 EFFECT OF TERMINATION AND EXPIRATION..................................................19
ARTICLE XI -- Dispute Resolution...............................................................20
11.1 GOVERNING LAW, AND JURISDICTION.......................................................20
11.2 ARBITRATION...........................................................................20
ARTICLE XII -- Miscellaneous Provisions........................................................21
12.1 NO WARRANTY...........................................................................21
12.2 THIRD PARTY ACTIONS...................................................................21
12.3 OFFICIAL LANGUAGE.....................................................................22
12.4 TAX...................................................................................22
12.5 WAIVER................................................................................23
12.6 FORCE MAJEURE.........................................................................23
12.7 SEVERABILITY..........................................................................23
12.8 GOVERNMENT ACTS.......................................................................23
License and Development Agreement - Page iii
12.9 GOVERNMENT APPROVALS..................................................................23
12.10 EXPORT CONTROLS.......................................................................23
12.11 ASSIGNMENT............................................................................24
12.12 COUNTERPARTS..........................................................................24
12.13 NO AGENCY.............................................................................24
12.14 NOTICE................................................................................24
12.15 HEADINGS..............................................................................25
12.16 AUTHORITY.............................................................................25
12.17 ENTIRE AGREEMENT......................................................................25
License and Development Agreement - Page iii
SCHEDULE 1.9 -- LICENSED COMPOUNDs
LICENSE AND DEVELOPMENT AGREEMENT
This Agreement is made and entered into as of ________________ between
VERTEX PHARMACEUTICALS INCORPORATED, a corporation duly organized and existing
under the laws of the Commonwealth of Massachusetts with its principal place of
business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, ▇.▇.▇.
(hereinafter "Vertex"), and TAISHO PHARMACEUTICAL CO., LTD., a corporation duly
organized and existing under the laws of Japan with its principal place of
business at ▇▇-▇, ▇▇▇▇▇▇ ▇-▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇, ▇▇▇▇▇ (hereinafter
"Taisho").
INTRODUCTION
WHEREAS, Vertex and Taisho are parties to the Collaboration Agreement
(as defined below) under which Vertex is engaged in the design and discovery of
certain novel small molecule inhibitors of caspases, with the financial and
technical assistance of Taisho; and
WHEREAS, Taisho has exercised its option under the Collaboration
Agreement to develop and commercialize one or more Licensed Compounds in the
Territory.
NOW THEREFORE, in consideration of the foregoing premises, the parties
agree as follows:
ARTICLE I
DEFINITIONS
1.1. "AFFILIATE" shall mean, with respect to any Person, any other
Person which directly or indirectly, by itself or through one
or more intermediaries, controls, is controlled by or is under
direct or indirect common control with, such Person. The term
"control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting
securities, by contract or otherwise. Control will be presumed
if one Person owns, either of record or beneficially, fifty
percent (50%) or more of the voting stock of any other Person.
1.2. "COLLABORATION AGREEMENT" shall mean that certain
Collaboration and Option Agreement dated November 30, 1999 by
and between Vertex and Taisho.
1.3. "CORE DEVELOPMENT PLAN," "CORE DEVELOPMENT ACTIVITIES" and
"CORE DEVELOPMENT COSTS" shall have the meanings ascribed to
them in Section 3.1 hereof.
1.4. "DEVELOPMENT PROGRAM" shall mean activities associated with
development of Licensed Compounds for sale as Drug Products in
the Territory, including but not limited to (a) formulation of
Licensed Compounds for use in preparation for
License and Development Agreement - Page 1
preclinical studies; (b) preclinical animal studies performed
in accordance with "Good Laboratory Practices" (or the
applicable equivalent) in preparation for the filing of an
Investigational New Drug Application (or the applicable
equivalent); (c) formulation and manufacture of Licensed
Compounds for preclinical and clinical studies; (d) planning,
implementation, evaluation and administration of human
clinical trials; (e) manufacturing process development and
scale-up for the manufacture of bulk Licensed Compound and
Drug Product; (f) preparation and submission of applications
for regulatory approval; and (g) post-market surveillance of
approved drug indications, as required or agreed as part of a
marketing approval by any governmental regulatory authority.
1.5. "DRUG PRODUCT" shall mean a product prepared from bulk
Licensed Compound in finished dosage form ready for
administration to the ultimate consumer as a
pharmaceutical.
1.6. "COMMENCEMENT DATE" shall mean, with respect to the
application of this Agreement to a Licensed Compound, the date
on which Taisho exercises its option under Article IV of the
Collaboration Agreement with respect to that Licensed
Compound.
1.7. "CASPASES" are[***********************************************
*************************************************************
**************************************************].
1.8. "FIELD" shall mean the treatment or prevention of diseases in
humans using pharmaceutical products which inhibit one or more
Caspases.
1.9. "LICENSED COMPOUNDS" shall mean any Compounds as to which the
option rights granted under Article IV of the Collaboration
Agreement have been exercised in accordance therewith by
Taisho as identified on Schedule 1.9 hereto, as Schedule 1.9
may be updated from time to time by reason of the subsequent
exercise by Taisho or the JDC of such option rights with
respect to additional Compounds. "Compounds" shall have the
meaning ascribed to it in the Collaboration Agreement, and the
"JDC" shall have the meaning ascribed to it in Section 3.1
hereof.
1.10. "LICENSED PATENTS" shall mean any Vertex Patents which become
the subject of Taisho's rights under Article II of this
Agreement upon exercise of its license and development option
or selection by the JDC in accordance with the provisions of
Article IV of the Collaboration Agreement.
1.11. "PATENTS" shall mean all existing patents and patent
applications and all patent applications hereafter filed,
including any continuations, continuations-in-part,
divisionals, provisionals or any substitute applications, any
patent issued with respect to any such patent applications,
any reissue reexamination, renewal or extension (including any
supplemental patent certificate) of any such patent, and
License and Development Agreement - Page 2
any confirmation patent or registration patent or patent of
addition based on any such patent, and all foreign
counterparts of any of the foregoing.
1.12. "VERTEX PATENTS" shall mean any Patents Controlled by Vertex
(or any of its Affiliates) claiming (i) a Compound or a method
of using a Compound (a "method of using" being deemed to
refer, here and hereafter in this Agreement, to a use patent),
or (ii) a method of formulating, manufacturing, process
development or packaging related to a Compound or (iii) an
improvement to the subject matter of a Patent covering a
Compound or a method of using a Compound or a method of
manufacturing, process development or packaging related to a
Compound. A list of Vertex Patents is appended hereto as
Schedule 1.12 and will be updated periodically to reflect
additions thereto during the course of this Agreement.
1.13. "TAISHO PATENTS" shall mean any Patents Controlled by Taisho
(or any of its Affiliates) excluding patent applications or
patents which Taisho has assigned to Vertex under Section 2.6
of the Collaboration Agreement, claiming (i) a Compound or a
method of using a Compound or (ii) a method of formulating,
manufacturing, process development or packaging related to a
Compound or (iii) an improvement to the subject matter of a
Patent covering a Compound or a method of using a Compound or
a method of manufacturing, process development or packaging
related to a Compound. A list of Taisho Patents is appended
hereto as Schedule 1.13 and will be updated periodically to
reflect additions thereto during the course of this Agreement.
1.14. "KNOW-HOW" shall mean all proprietary and confidential
material and information including data, technical
information, know-how, experience, inventions, discoveries,
trade secrets, compositions of matter and methods, whether
currently existing or developed or obtained during the course
of this Agreement, and whether or not patentable, that are
controlled by a party hereto or its Affiliates and that relate
to the development, utilization, manufacture or use of any
Compound, including but not limited to processes, techniques,
methods, products, materials and compositions.
1.15. "VERTEX KNOW-HOW" shall mean all Know-How of Vertex.
1.16. "TAISHO KNOW-HOW" shall mean all Know-How of Taisho.
1.17. "VERTEX TECHNOLOGY" shall mean all Vertex Patents and Vertex
Know-How.
1.18. "TAISHO TECHNOLOGY" shall mean all Taisho Patents and Taisho
Know-How.
1.19. "NET SALES" shall mean, with respect to a Drug Product, the
gross amount invoiced by Taisho and any Taisho Affiliate,
sublicensee or marketing partner to Third Party customers for
the Drug Product, less:
[******************************************************************************
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License and Development Agreement - Page 3
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1.20. "RESEARCH PROGRAM" shall have the meaning ascribed to it in
the Collaboration Agreement.
1.21. "PERSON" shall mean any individual, corporation, partnership,
association, limited liability company, trust, unincorporated
organization or government or political subdivision thereof.
1.22. "PHASE II CLINICAL TRIALS" shall mean human clinical trials
conducted for inclusion in (i) that portion of the FDA
submission and approval process which provides for trials of a
Drug Product on a limited number of patients for the purposes
of collecting data on dosage, evaluating safety and collecting
preliminary information regarding efficacy in the proposed
therapeutic indication, as more fully defined in 21 C.F.R.
Section 312.21(b), and (ii) equivalent submissions with
similar requirements in other countries in the Territory.
1.23. "PHASE III CLINICAL TRIALS" shall mean human clinical trials
conducted for inclusion in (i) that portion of the FDA
submission and approval process which provides for the
continued trials of a Drug Product on sufficient numbers of
patients to generate safety and efficacy data to support
Regulatory Approval in the proposed therapeutic indication, as
more fully defined in 21 C.F.R. Section 312.21(c), and (ii)
equivalent submissions with similar requirements in other
countries in the Territory.
1.24. "REGULATORY APPROVAL" shall mean, with respect to a country in
the Territory, all authorizations by the appropriate
governmental entity or entities necessary for commercial sale
of a Drug Product in that country including, without
limitation and where applicable, approval of labeling, price,
reimbursement and manufacturing.
1.25. "THIRD PARTY" shall mean any Person other than Vertex, Taisho
or their respective Affiliates or sublicensees of rights
conveyed under this Agreement.
1.26. "LIVE CLAIM" shall mean a claim of any issued, unexpired
Patent which shall not have been withdrawn, canceled or
disclaimed, nor held invalid or unenforceable by a court of
competent jurisdiction in an unappealed or unappealable
decision.
License and Development Agreement - Page 4
1.27. "GMP" shall mean the current Good Manufacturing Practice
regulations promulgated by the FDA, published at 21 CFR Part
210 et seq., as such regulations may be amended, and such
equivalent foreign regulations or standards as may be
applicable with respect to bulk Licensed Compound or Drug
Product(s) manufactured or sold outside the United States.
1.28. "FIRST COMMERCIAL SALE" shall mean the first shipment of a
Drug Product to a Third Party by Taisho or an Affiliate or
sublicensee of Taisho in a country in the Territory following
applicable Regulatory Approval of the Drug Product in such
country.
1.29. "TERRITORY" shall mean those countries listed in Schedule 1.29
hereof.
ARTICLE II
RIGHTS AND LICENSES
2.1. TAISHO RIGHTS.
2.1.1. EXCLUSIVE LICENSE. Subject to the other provisions of this
Agreement (including the rights of Vertex under Articles III
and V hereof), Vertex grants to Taisho an -----------------
exclusive license, with the right to sublicense, under the
Vertex Technology to develop, use, sell, have sold, export
(within the Territory) and import the Licensed Compounds and
to develop, make, have made, use, market, sell, have sold,
export (within the Territory) and import for sale Drug
Products in each country in the Territory, except in
[******************]. Vertex hereby grants to Taisho a
semi-exclusive license (exclusive except as to Vertex or
Vertex's other permitted licensees hereunder) under the Vertex
Technology in [**********************] as set forth in Section
2.1.2 below. The foregoing licenses shall not extend to the
sale of Licensed Compounds in bulk form for purposes other
than manufacturing Drug Product. Taisho shall have the right
to grant sublicenses as stated above in each country in the
Territory, under terms not inconsistent with this Agreement,
and subject in each case to prior written notification to
Vertex. Any such sublicense shall be entered into by Taisho
and the sublicensee on an arms-length basis. In the event the
sublicensee breaches the sublicense, Taisho shall promptly
take all reasonable steps to enforce the same. In the event of
a continuing breach Taisho shall, if so requested by Vertex,
terminate that sublicense in accordance with the procedures
prescribed therein.
2.1.2. [**********]. Vertex and Taisho shall have semi-exclusive
rights in [*********************] under the Vertex Technology
to develop, make, have made, use, market and sell, have sold,
export (within the Territory) and import for sale Drug
Products. Vertex and Taisho each may further license its
semi-exclusive rights in [****************], to not more than
one licensee (in the case of Taisho, such license being a
sublicense subject to the terms and conditions
License and Development Agreement - Page 5
of this Agreement governing sublicensees). Either party shall
notify the other party of its grant of any such license in
advance, together with the name and address of any such
licensee.
2.2. IMPROVEMENTS. Taisho shall use its reasonable best efforts to
keep Vertex promptly and fully informed of any improvements
(other than improvements made solely by Taisho which are
Formulation and Use Inventions under Section 8.1 hereof)
relating to Licensed Compounds, made by Taisho or its
Affiliates or sublicensees during the term of the Development
Program, whether those improvements are patentable or not
("Taisho Improvements"). Upon Vertex's written request which
shall be required to be made within three (3) months from
Taisho's notification, Taisho shall
[************************************************************
*************************************************************
*************************************************************
*************************************************************
*************************************************************
*************************************************************
******************************************************].
Vertex shall use its reasonable best efforts to keep Taisho
promptly and fully informed of any improvement relating to
Licensed Compounds, made by Vertex or any of its Affiliates,
sublicensees and subcontractors as a result of activities
hereunder, and such improvement shall be included in the
Vertex Technology and shall be subject to Taisho's rights
under Section 2.1 hereof. [****
*************************************************************
**********]. Vertex will not
[************************************************************
*************************************************************
*******************].
2.3. EXCLUSIVITY. During the period ending
[************************************************************
*************************************************************
*************************************************************
**************] other than under the terms of this Agreement.
[************************************************************
*************************************************************
******]. The foregoing provisions shall only be applicable to
small molecule compounds, or pharmaceutical products
containing small molecule compounds, for which Caspase
inhibition is a principal mode of therapeutic action, and
[******************
******************************************************]. If
this Agreement is validly terminated by Vertex under Section
10.3 hereof, then Taisho and its Affiliates will refrain from
any of the foregoing activity for a period of [*******] after
such termination.
License and Development Agreement - Page 6
ARTICLE III
DEVELOPMENT
3.1. JOINT DEVELOPMENT COMMITTEE. As soon as practicable after the
Commencement Date with respect to a Licensed Compound, Vertex
and Taisho shall establish a Joint Development Committee (the
"JDC") comprised of an equal number of representatives. The
JDC shall coordinate the development efforts of both parties
with respect to development of a Licensed Compound, will
review the Core Development Plan submitted by Vertex as
specified below, and will review and approve the Taisho
Development Plan. When appropriate, Vertex and Taisho will
seek to form a committee or other group, with members
representing each party, to coordinate the development
activities, worldwide, being conducted with respect to
Licensed Compounds by Vertex, Taisho and any of its or their
Affiliates, licensees or sublicensees. The JDC shall operate
by consensus and in accordance with agreed joint resolutions,
but in the event of disagreement which cannot be resolved by
discussions among the parties, decisions shall be made as
follows:
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3.2. CORE DEVELOPMENT ACTIVITIES. Vertex and/or its licensees, if
any, will be undertaking development activities, including
preclinical and clinical studies and process development,
which Vertex deems necessary or appropriate in order to
obtain Regulatory Approval for the sale of Drug Products
outside the Territory from the U.S. FDA and the EMEA of
the European Union (the "Core Development Activities").
Vertex expects the Core Development Activities will be
undertaken applying standards which will allow the
results of those activities to be used by Taisho in its
regulatory filings in the Territory. If drug development
standards and practices in the Territory are substantially at
variance with usual and customary practices in the United
States or the European Union in connection with Core
Development Activities proposed to be conducted by Vertex,
Taisho shall so inform Vertex on a timely basis. Vertex shall
create a development plan for Core Development Activities with
respect to Licensed Compounds (the "Core
License and Development Agreement - Page 7
Development Plan"), which shall be provided to the JDC and
Taisho in advance for its review and comment. **
[************************************************************
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3.3. DEVELOPMENT ACTIVITIES EXCLUSIVELY FOR THE TERRITORY. Taisho
and/or its sublicensees, if any, will be responsible for and,
except as otherwise provided below with ** respect to
development activities by Vertex in [********************],
shall bear the cost of the Development Program for Licensed
Compound(s) in the Territory. The Taisho Development Program
shall be conducted in accordance with a development plan (the
"Taisho Development Plan") provided in advance to and reviewed
and approved by the JDC. The Taisho Development Plan shall
include, without limitation, the design and conduct of all
preclinical and clinical studies required to obtain regulatory
approval for Drug Products in the Territory that are not
otherwise required as part of the Core Development Plan
outside the Territory. The Taisho Development Plan may provide
for the conduct of development activities in countries outside
the Territory, as may be reasonably necessary or appropriate
in connection with Regulatory Approval in the Territory, so
long as those activities have been coordinated and are
consistent with the Core Development Plan and have been
approved by the JDC.[****************************************
*************************************************************
*************************************************************
*************************************************************
*].
3.4. DEVELOPMENT ACTIVITIES IN [**************]. Vertex and Taisho
will attempt to coordinate their respective development
activities in [***] but shall have the right to pursue
development of Licensed Compounds independently [*********] if
effective coordination is not achieved. Absent any agreement
to the contrary, each party will bear the cost of its own
activities which are undertaken exclusively for Regulatory
Approval in [*****]. Either party shall be free to use any
data and information generated by the other party and its
sublicensees, as permitted by law,
License and Development Agreement - Page 8
in connection with development activities in the Field for
Licensed Compounds [******] for the purpose of developing
Licensed Compounds in their respective territory.
3.5. INFORMATION TRANSFER. Vertex shall deliver to Taisho all
information (including raw data from clinical studies of
Licensed Compounds conducted by Vertex and its other licensees
outside the Territory) which is necessary or useful for
further development of the Licensed Compound, and for
manufacture, commercial exploitation and distribution of the
Drug Product in the Territory, to the extent that such
information is not subject to restrictions imposed by a Third
Party on disclosure to or use by the other party. Such
information shall include a summary of all material written
communications (copies of which Vertex will provide to Taisho
at Taisho's request and expense) between Vertex or (to the
extent available to Vertex) its other licensees and the U.S.
FDA concerning Licensed Compounds. This information shall also
include copies of all patents, patent applications,
copyrights, copyright registrations and applications therefor
and all other manifestations of the intellectual property
embodied in the Licensed Compounds, whether in human or
machine readable form.
3.6. BULK SUPPLY FOR DEVELOPMENT. Vertex will provide Taisho with
bulk Licensed Compound for development in the Territory,
[******************************]. For purposes hereof
[************************************************************
*************************************************************
*************************************************************
*************************************************************
*************************************************************
*************************************************************
*************************************************************
*************************].
3.7. REGULATORY APPROVALS. Taisho will be responsible for all
required Regulatory Approvals in the Territory, including all
interaction with Koseisho (Ministry of Health and Welfare) in
Japan. All filings with Koseisho will be made by Taisho and
approvals will be held in the name of Taisho. Taisho will keep
Vertex informed about the substance of all material written
communication between Taisho and Koseisho (copies of which
communications Taisho will provide to Vertex at Vertex's
request and expense) and may at Vertex's request attend
meetings between Taisho and Koseisho representatives. Taisho
shall have the right to cross-reference information and
regulatory filings arising out of development work which has
been conducted by Vertex and its Affiliates, licensees and
sublicensees outside the Territory, for the purpose of
regulatory filings in the Territory. Vertex and its licensees
shall have the reciprocal right to cross reference all
information and regulatory filings arising out of development
work conducted by Taisho and its Affiliates and sublicensees
hereunder. Taisho will supply Vertex at its request with data
based on all raw data from clinical
License and Development Agreement - Page 9
studies conducted by Taisho and any of its sublicensees with
respect to Licensed Compounds. In the event that Taisho is
required subject to any provision hereof to disclose or
provide Vertex with data or information generated by it during
the Development Program, concerning a Licensed Compound or a
Drug Product, Taisho shall provide a summary of that data and
information, in English, sufficient for Vertex to understand
the general content and significance of that data and
information, [***********************************************
*************************************************************
********************************************].
3.8. DUE DILIGENCE. Promptly upon exercise of its option with
respect to a Compound, Taisho shall commence the Development
Program in the Territory with respect to that Licensed
Compound and shall use its reasonable best efforts to effect
introduction of the Drug Product into the commercial market in
the Territory as soon as practicable, consistent with the
requirements of the Development Program and sound and
reasonable business practices and judgment. After the date of
the first Regulatory Approval for the sale of the Drug
Product(s) in the Territory, Taisho shall use reasonable best
efforts to effect introduction of the Drug Product(s) into
commercial use in the other countries of the Territory, and
following initial product introduction in each country shall
keep the Drug Product(s) reasonably available to the public
therein. In the normal course of development, a certain
Licensed Compound may be dropped from development and replaced
within a reasonable time with another Licensed Compound, and
such occurrence in the Development Program shall not
constitute a failure of due diligence. After Regulatory
Approval thereof and until the expiration of this Agreement,
Taisho shall endeavor to keep Drug Products reasonably
available to the public throughout the commercial market in
the Territory.
ARTICLE IV
MILESTONE PAYMENTS
Taisho shall make the following milestone payments with respect to each
Licensed Compound developed hereunder. Milestone payments shall be payable
[******************************************************************************
*******************************************************************************
*************].If two (2) (or more) Licensed Compounds are being developed at
the same time, the milestones specified below will be applicable to each such
Licensed Compound; PROVIDED, that [********************************************
*******************]. On the date any one of the milestone payments set forth
below is earned with respect to a particular Licensed Compound, any of the other
lower numbered milestones which have not yet been earned with respect to that
Licensed Compound shall be deemed to have been achieved and therefore payable
with respect to that Licensed Compound.
License and Development Agreement - Page 10
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ARTICLE V
SUPPLY LICENSED COMPOUND
5.1. SUPPLY. Vertex shall manufacture or have manufactured and
supply Taisho, its Affiliates and its sublicensees with their
entire commercial requirements for bulk Licensed Compound in
the Territory. Taisho shall purchase all of the requirements
(including those of its Affiliates and sublicensees) of bulk
Licensed Compound from Vertex for manufacture of Drug Products
containing the Licensed Compounds for sale in the Territory.
If Vertex shall be in material default of its supply
obligations hereunder, it will immediately meet with Taisho at
Taisho's request, and the parties shall agree on an
alternative supply arrangement, which shall include
manufacture of bulk Licensed Compound by Taisho, and shall
consider whether that arrangement shall apply for the long
term or until such time as the causes for Vertex's default
have been cured.
5.2. SUPPLY PRICE. The supply price for a unit of bulk Licensed
Compound supplied by Vertex for the manufacture of a Drug
Product sold in the Territory shall be determined [*****
*************************************************************
********].
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5.3. FORECASTS AND ADJUSTMENTS.
[******************************************************
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5.4. SUPPLY AGREEMENT. All bulk Licensed Compound supplied by
Vertex to Taisho hereunder shall be provided under the terms
of a supply agreement containing terms and ** conditions, in
addition to those provided herein, which are usual and
customary in the trade, as shall be agreed in good faith
between the parties hereto.
5.5. PRICE REVISION. If Taisho produces and submits to Vertex
supportive materials that show, with reference to market
pricing and/or cost factors (as appropriate), that Taisho is
unable to achieve a reasonable margin on sales of a Drug
Product, then it will notify Vertex and the parties shall meet
to discuss the matter. If it ** appears, as a result of those
discussions, that the cost to Vertex of producing the Licensed
Compound being sold to Taisho is significantly low in relation
to the ** supply price to Taisho under the circumstances of
this Agreement, then Vertex will consider reducing the supply
price. Similarly, Taisho shall consider upward ** revisions of
the supply price in the event that Vertex produces and submits
to Taisho supportive materials that show, with reference to
market pricing and/or cost ** factors (as appropriate), that
Vertex is unable to obtain a reasonable margin on sales of
Licensed Compound to Taisho.
5.6. UNPATENTED PRODUCT. In the event that [**********************
*************************************************************
*************************************************************
*************************************************************
***********] Vertex shall reduce the Applicable Percentage of
Net Sales, for Net Sales in that country, that is used to
compute the supply price under Section 5.2 above for the **
Licensed Compound which is incorporated in the Drug Product,
by [****************].
License and Development Agreement - Page 12
5.7. TAXES. The amounts payable under this Article V are net of any
applicable duties, government charges, or similar items, if
any, all of which shall be paid by ** Taisho.
5.8. CO-LABELING. All Drug Products sold in the Territory shall
bear reference to Taisho's and Vertex's logos and trademarks
with equal prominence or to the extent not ** prohibited by
local law. Vertex's name, where it shall appear, will be
written in the English language.
ARTICLE VI **
REPORTING **
6.1. DEVELOPMENT REPORTS. Taisho shall prepare and submit to
Vertex, on a quarterly basis, reports which set forth in
reasonable detail the progress of the Development ** Program
in the Territory and the results of work performed thereunder
during the preceding quarter. Vertex shall also report to
Taisho on a quarterly basis the ** results of any development
work which it may have undertaken with respect to Licensed
Compounds during the preceding quarter.
6.2. SALES REPORTS AND RECORDS. During the term of this Agreement
and after the First Commercial Sale of a Drug Product, Taisho
shall deliver to Vertex within forty five (45) days after the
end of each calendar quarter a written report showing actual
Net Sales of Drug Products by Taisho, its Affiliates and
sublicensees in each ** country in the Territory during such
calendar quarter, and any revision of the supply price for
bulk Licensed Compound to be recommended by Taisho, based on
the ** information in that report. All Net Sales shall be
divided in each such report into sales by Taisho and each
Affiliate and sublicensee, as well as on a **
country-by-country basis, shall be stated in U.S. dollars, and
shall state the rates of exchange used to convert the amounts
into United States dollars from the ** currency in which such
amounts are received by Taisho, using Taisho's then-current
standard exchange rate methodology applied in its external
reporting for the ** translation of foreign currency sales
into U.S. dollars. Taisho will keep complete, true and
accurate books of account and records for the purpose of
showing the ** derivation of Net Sales and all amounts payable
to Vertex under this Agreement. Such books and records will be
kept at Taisho's principal place of business for at ** least
three (3) years following the end of the calendar quarter to
which they pertain, and will be open at all reasonable times
and agreed by Taisho for inspection ** and copying by
representatives of Vertex for the purpose of verifying
Taisho's sales reports, or Taisho's compliance in other
respects with this Agreement. Such ** inspections shall be at
the expense of Vertex, unless a variation or error exceeding
[***********] or the equivalent, is discovered in the course
of any such ** inspection, whereupon the costs relating
thereto shall be for the account of Taisho. Taisho will
promptly pay to Vertex the full amount of any
License and Development Agreement - Page 13
underpayment, together with interest thereon at the rate of
[**************] assessed from the date payment was due.
6.3. PAYMENT DELAY. In case of a delay in any payments due from
Taisho to Vertex hereunder not occasioned by force majeure,
interest at the rate of [*******************], assessed
from the thirty-first day after the due date of the said
payment, shall be due by Taisho without any special notice.
ARTICLE VII
CONFIDENTIALITY
7.1. UNDERTAKING. During the term of this Agreement, each party
shall keep confidential, and other than as provided herein
shall not use or disclose, directly or indirectly, any
trade secrets, confidential or proprietary information
(including information embodied in sample materials), or any
other knowledge, information, documents or materials,
owned, developed or possessed by the other party, whether in
tangible or intangible form, the confidentiality of which such
other party takes reasonable measures to protect, including
but not limited to Vertex Technology and Taisho Technology.
Each party shall take any and all lawful measures to prevent
the unauthorized use and disclosure of such information,
and to prevent unauthorized persons or entities from obtaining
or using such information. Each party further agrees to
refrain from directly or indirectly taking any action which
would constitute or facilitate the unauthorized use or
disclosure of such information. Each party may disclose such
information to its directors, officers, employees, consultants
and agents, (and in the case of Vertex, to its licensees in
the Field outside the Territory, and in case of Taisho, to
sublicensees under this Agreement, if any), and to
subcontractors in connection with the development or
manufacture of Licensed Compounds and Drug Products, to the
extent necessary to enable such parties to perform their
obligations hereunder or under the applicable sublicense or
subcontract, as the case may be; provided, that such
directors, officers, employees, consultants, agents,
licensees, sublicensees and subcontractors have entered
into appropriate confidentiality agreements for secrecy and
non-use of such information which by their terms shall be
enforceable by injunctive relief at the instance of the
disclosing party. Each party shall be liable for any
unauthorized use and disclosure of such information by its
directors, officers, consultants, employees and agents and
any such sublicensees and subcontractors. Taisho may also
provide a copy of this Agreement to the Bank of Japan, Japan's
Ministry of Finance, Ministry of Health and Welfare,
National Tax Office and other governmental agencies, all as
and only to the extent required under applicable Japanese laws
or government regulations.
7.2. EXCEPTIONS. Notwithstanding the foregoing, the provisions of
section 7.1 hereof shall not apply to knowledge, information,
documents or materials which the
License and Development Agreement - Page 14
receiving party can conclusively establish: (i) have entered
the public domain without such party's breach of any
obligation owed to the disclosing party; (ii) have become
known to the receiving party prior to the disclosing party's
disclosure of such information to such receiving party; (iii)
are permitted to be disclosed by the prior written consent
of the disclosing party; (iv) have become known to the
receiving party from a source other than the disclosing party
other than by breach of an obligation of confidentiality
owed to the disclosing party; (v) are disclosed by the
disclosing party to a Third Party without restrictions on its
disclosure; (vi) are independently developed by the receiving
party without breach of this Agreement; or (vii) are required
to be disclosed by the receiving party to comply with
applicable laws, to defend or prosecute litigation or to
comply with governmental regulations, provided that the
receiving party provides prior written notice of such
disclosure to the other party and takes reasonable and lawful
actions to avoid or minimize the degree of such disclosure.
7.3. PUBLICITY. The timing and content of any press releases or
other public communications relating to the Agreement and the
transactions contemplated herein will, ** except as otherwise
required by law, be determined jointly by Vertex and Taisho.
7.4. SURVIVAL. The provisions of this Article VII shall survive the
termination of this Agreement.
ARTICLE VIII
PATENTS
8.1. PREPARATION. Vertex will be responsible for the preparation,
filing, prosecution and maintenance of any and all Patents in
the Territory included in Vertex Patents,[*******************
*******************************************************].
Taisho will be responsible for the preparation, filing,
prosecution and maintenance of any and all Patents in the
Territory included in the Taisho Patents
[************************************************************
*************************************************************
*************************************************************
**********] including without limitation any such Patents
covering formulations [**************************************
*************************************************************
*************************************************************
*************************************************************
**************************] Vertex and Taisho shall each
furnish to the other party copies of significant documents
relevant to any such preparation, filing, prosecution or
maintenance. Vertex and Taisho shall cooperate fully in the
preparation, filing, prosecution and maintenance of all Vertex
Patents and Taisho
License and Development Agreement - Page 15
Patents, executing all papers and instruments so as to
enable the responsible party to apply for, to prosecute and to
maintain patent applications and patents in its name in any
country in the Territory. The parties acknowledge the
importance of maintaining the confidentiality of any
inventions or other information relating to potential patent
claims prior to the filing of patent applications with
respect hereto. Each party shall provide to the other prompt
notice as to all matters which may affect the preparation,
filing, prosecution or maintenance of any such patent
applications or patents.
8.2. LICENSE TO FORMULATION AND USE INVENTIONS. Taisho shall use
its reasonable best efforts to keep Vertex promptly (but not
before filing of any planned patent application) and fully
informed, of any Formulation and Use Inventions. Upon Vertex's
written request which shall be required to be made within
three (3) months from Taisho's notice to Vertex, Vertex shall
have, and Taisho hereby grants to Vertex, a royalty-free,
exclusive license (with the right to sublicense) under
Patents covering the Formulation and Use Inventions to
make, have made, use, import for sale, sell and have sold,
Compounds and pharmaceutical products incorporating Compounds
worldwide outside the Territory. The foregoing license will
continue following expiration or termination (excluding the
case of Section 10.2) of this Agreement, and will extend
thereafter to the Territory. Provided, however, Vertex may
license or otherwise transfer its rights to apply the
Formulation and Use Inventions to the development and sale
in the Field of a Compound in the Territory, only after any
and all Taisho's rights to that Compound hereunder have
terminated.
8.3. COST REIMBURSEMENT. Taisho shall reimburse Vertex for the
following patent direct costs with respect to Vertex Patents
[************************************************************
*************************************************************
*************************************************************
*************************************************************
*******] for the preparation, filing, prosecution and
maintenance of Vertex Patents in the Territory. "General
patent preparation and maintenance direct costs" shall include
the costs of preparation, filing and prosecution of any patent
application from which a patent application filed in any
country of the Territory claims priority, and any patent
application filed under the Patent Cooperation Treaty (PCT).
Vertex shall notify Taisho in writing from time to time of its
plans with respect to the preparation, filing, prosecution and
maintenance of Vertex Patents in each country in the
Territory, together with its estimate of the costs of such
preparation, filing, prosecution and maintenance and an
estimate of Vertex's general patent preparation and
maintenance costs. Taisho shall reimburse Vertex for
[************************************************************
*************************************************************
**********************************************************].
In any event, the provisions of Section 8.3 will apply to any
patent which is the object of the
License and Development Agreement - Page 16
foregoing notice from Taisho and which Vertex continues to
prosecute or maintain.
8.4. FAILURE TO REIMBURSE. If Taisho shall fail, without good
reason hereunder, to reimburse Vertex as required under
Section 8.3 above with respect to a patent application or
patent included within the Vertex Patents within sixty (60)
days after receipt of a written request for payment from
Vertex, Vertex may terminate Taisho's rights with respect to
that patent or patent application upon thirty (30) days
written notice thereof to Taisho, unless Taisho during such
thirty (30) day period shall have submitted payment pursuant
to the aforementioned request for payment.
8.5. COST REIMBURSEMENT FOR THE PATENTS COVERING THE FORMULATION
AND USE INVENTIONS. In the event that Vertex is granted a
license to the Patents covering the Formulation and Use
Inventions under Section 8.2, Vertex shall reimburse Taisho
for the following patent direct costs with respect to such
licensed Formulation and Use Inventions: (a) two-thirds (2/3)
of all of Taisho's "general patent preparation and maintenance
direct costs;" and (b) all of the reasonable expenses (other
than "general patent prosecution and maintenance" costs) which
Taisho has incurred, or may in the future incur, for the
preparation, filing, prosecution and maintenance of the
Patents covering the Formulation and Use Inventions outside
the Territory. Taisho shall notify Vertex in writing from time
to time of its plans with respect to the preparation, filing,
prosecution and maintenance of the Patents covering the
Formulation and Use Inventions in each country outside the
Territory, together with its estimate of the costs of such
preparation, filing, prosecution and maintenance and an
estimate of general patent preparation and maintenance costs
of the Patents covering the Formulation and Use Inventions.
Section 8.4 shall be applied mutatis mutandis to this Section
8.5
ARTICLE IX
INFRINGEMENT
Either party shall notify the other party promptly of any possible
infringements, imitations or unauthorized possession, knowledge or use of the
intellectual property embodied in any of the Licensed Patents and Vertex
Know-How or Taisho Know-How related to the manufacture or use of Licensed
Compounds and Drug Products by Third Parties in any country in the Territory, of
which it becomes aware. Either party shall promptly furnish the other party with
full details of such infringements, imitations or unauthorized possession,
knowledge or use, and shall assist in preventing any recurrence thereof.
[******************************************************************************
*******************************************************************************
*******************************************************************************
*********] Such suit may not be settled by Taisho without Vertex's consent,
which shall not be unreasonably withheld. Damages recovered in any actions
referenced hereunder shall be
License and Development Agreement - Page 17
divided [*************] to Taisho and [**************] to Vertex after
reimbursement to each party of their respective expenses in prosecuting such
actions as provided hereunder.
ARTICLE X
TERM AND TERMINATION
10.1. TERM. The term of this Agreement with respect to any Licensed
Compound or Drug Product incorporating that Licensed Compound
shall extend in each country of the Territory until the later
of the last to expire in that country of any substance Patent
or use Patent which are Licensed Patents covering the Licensed
Compound or Drug Product, or [*****] from the date of First
Commercial Sale of the Drug Product in that country .
10.2. TERMINATION OF RESEARCH PROGRAM BY TAISHO FOR CAUSE. Upon
written notice to Vertex, Taisho may at its sole option
terminate this Agreement with respect to a Licensed Compound
upon the occurrence of any of the following events:
(a) Vertex shall materially breach this Agreement, which
shall include a failure to use its reasonable best efforts to pursue the
Development Program diligently (provided, however, that this provision shall not
be construed as a guarantee by Vertex that the Development Program will be
successfully completed or any Licensed Compounds successfully developed), and
such material failure to perform shall not have been remedied or steps initiated
to remedy the same to Taisho's reasonable satisfaction, within [************]
after Taisho sends written notice of failure to perform to Vertex; or
(b) Vertex shall cease to function as a going concern by
suspending or discontinuing its business for any reason except for interruptions
caused by strike, labor dispute or any other events over which it has no control
(unless termination of this Agreement is permitted under Section 12.6 hereof);
or
(c) A receiver for Vertex shall be appointed or applied
for, or a general assignment shall be made for the benefit of its creditors or
any proceeding involving Vertex shall be voluntarily commenced by it under any
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or
liquidation law or statute of the United States or any state thereof or such
proceedings shall be involuntarily instituted against it, and Vertex by any
action shall indicate its approval of or consent to, or acquiescence therein, or
the same shall remain undismissed for [***********].
In the event of any valid termination under this Section 10.2,
Taisho shall not be required to make any payments under Article IV hereof which
are not due and payable prior to receipt by Vertex of the notice of failure to
perform referenced under Section 10.2(a), receipt by Vertex of the notice of
termination pursuant to Section 10.2(b), or the occurrence of the event
referenced in Section 10.2(c), as the case may be. Notwithstanding the
foregoing, any License
License and Development Agreement-Page 18
Agreement then in effect covering another Licensed
Compound shall continue in accordance with its terms.
10.3. TERMINATION BY VERTEX FOR CAUSE. In addition to rights of
termination which may be granted to Vertex under other
provisions of this Agreement with respect to a Licensed
Compound, upon written notice to Taisho, Vertex may at its
sole option terminate this Agreement upon the occurrence of
any of the following events:
(a) Taisho shall materially breach this Agreement, and
such material failure to perform shall not have been remedied or steps initiated
to remedy the same to Vertex's reasonable satisfaction, [*************] after
Vertex sends written notice of failure to perform to Taisho; or
(b) Taisho shall cease to function as a going concern by
suspending or discontinuing its business for any reason except for interruptions
caused by strike, labor dispute or any other events over which it has no control
(unless termination of this Agreement is permitted under Section 12.6 hereof);
or
(c) A receiver for Taisho shall be appointed or applied
for, or a general assignment shall be made for the benefit of its creditors or
any proceeding involving Taisho shall be voluntarily commenced by it under any
bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or
liquidation law of Japan or such proceedings shall be involuntarily instituted
against it, and Taisho by any action shall indicate its approval of or consent
to, or acquiescence therein, or the same shall remain undismissed for
[**********].
10.4. TERMINATION. If the parties shall determine in good faith (as
evidenced by a writing signed by each party), that there is no
further scientific basis to pursue research and development of
a Licensed Compound in the Field, and if either party shall
thereafter propose, in writing, to the JDC and the other party
that the parties consider redirection of the Development
Program for such Licensed Compound, and if within
[***************] after such proposal is received by the other
party and the JDC, the Development Program has not been
redirected, then either party may terminate the License
Agreement regarding such Licensed Compound on [***********]
written notice to the other party. On or after the effective
date of any such termination no further payments shall become
due and payable hereunder by one party to the other, except
pursuant to obligations which have accrued hereunder prior to
the effective date of such termination.
10.5. EFFECT OF TERMINATION AND EXPIRATION. Termination of this
Agreement for any reason, or expiration of this Agreement,
will not affect: (i) obligations, including the payment of any
milestones or royalties, which have accrued as of the date of
termination or expiration, and (ii) rights and obligations
under the following provisions of this Agreement, which shall
survive termination or expiration of this Agreement: the last
sentence of Section 2.3, and Articles VII, XI and the last
License and Development Agreement-Page 19
sentence of Section 12.4. Following termination of this
Agreement under Section 10.1 hereof with respect to a
particular country, Taisho shall have a fully paid license
under the Vertex Technology to make, have made, use, sell,
have sold, and import for sale the Licensed Compound and Drug
Product in that country in the Territory.
ARTICLE XI
DISPUTE RESOLUTION
11.1. GOVERNING LAW, AND JURISDICTION. This Agreement shall be
governed and construed in accordance with the
[**********************************]. Both parties agree that
any legal proceedings between the parties relating to this
Agreement other than a proceeding to which Section 9.2 is
applicable, shall be brought in the state or prefecture of the
principal office of the defendant party; provided that a
proceeding to enforce an arbitration award may be brought in
the state or prefecture of the plaintiff's principal office,
and each party agrees to submit to personal jurisdiction and
to accept venue in the courts of such state or prefecture
solely for the purpose of enforcement of any such award.
11.2. ARBITRATION. In the event of any controversy or claim arising
out of or relating to any provision of this Agreement or the
breach thereof, the parties shall try to settle their
differences amicably between themselves. Any such controversy
or claim which the parties are unable to resolve shall, upon
the written request for arbitration of one party delivered to
the Secretariat of the International Court of Arbitration (the
"Court"), be submitted to and be settled by arbitration
[************************************************************
******************************************] in accordance with
the Rules of Arbitration of the International Chamber of
Commerce (the "Rules") then in effect (except as hereinafter
stated), and enforcement of the award rendered by the
arbitrators may be entered in any court having jurisdiction
thereof and shall be final and conclusive upon both parties
hereto. Notwithstanding anything to the contrary which may be
contained in the rules of the Court, the parties further agree
as follows:
(i)
[*************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
License and Development Agreement-Page 20
*************************************************************
*************************************************************
*************************************************************
*************************************************************]
(ii) The arbitrators will consider the nature of the dispute, the
availability of information upon which resolution of the
dispute may be fairly based, and in view of those
considerations and such other facts and circumstances as they
may deem appropriate, shall determine the application of
discovery and, if decided it is applied, shall determine the
nature, scope and timing of any discovery which will be
permitted to the parties to any proceeding hereunder, and that
determination of the arbitrators shall be binding on such
parties. The costs of arbitration to each party will be
determined in accordance with Articles 30 and 31 of the Rules.
(iii) The arbitrators shall state the reasons upon which any award
is based. The arbitrators shall not be authorized to award
punitive damages to either party.
(iv) Upon receipt of the arbitrator's statement, said written
opinion, either party will have the right, within
[***********] thereof, to apply to the Secretariat for a
correction and/or an interpretation of the award, and the
arbitrators thereupon will reconsider the issues raised by
said application and either confirm or alter their decision,
which will then be final and conclusive upon both parties
hereto.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1. NO WARRANTY. Vertex makes no warranty of any kind whatsoever,
either express or implied, to Taisho, or any customer of
Taisho, as to the ability of Taisho to understand and utilize
the Vertex Technology. Taisho makes no warranty of any kind
whatsoever, either express or implied, to Vertex, or to any
customer of Vertex, as to the ability of Vertex to understand
and utilize the Taisho Technology. [****************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
****]. Should a party becomes aware of any unexpected serious
adverse reactions to any Licensed Compounds or Drug Products
administered to humans or
License and Development Agreement-Page 21
animals, the party shall promptly notify the other and/or make
a report to U.S. FDA or MHW as required by applicable
governmental regulations.
12.2. THIRD PARTY ACTIONS. (a) To Vertex's knowledge, [*************
************************************************************].
Nevertheless, each party will promptly notify the other in the
event any relevant Third Party patents come to its notice.
Neither party gives a warranty to the other regarding the
infringement of Third Party rights by the development,
manufacture, use or sale of the Licensed Compounds or the
practice of the Vertex Technology or the Taisho Technology,
and gives no indemnity against costs, damages, expenses or
other losses arising out of proceedings brought against the
other party or any other Person by any Third Party.
(b) In the event that the development of a Licensed Compound
or the sale of a Drug Product in any country necessarily involves working within
the scope of a Third Party's patent, which would otherwise be infringed by the
practice of a Vertex Patent in connection with such development or sale, [******
********************************************************************************
********************************************************************************
********************************************************************************
********************************].
If the terms of a required license under a Third Party patent do not meet the
foregoing requirements and Vertex therefore elects not to assume its share of
any financial obligation, [*****************************************************
************************************]. If the required license is either
unavailable or its terms are unacceptable both to Vertex and to Taisho, then
Taisho may elect in its sole discretion to discontinue sales of the Drug Product
in such country or at its sole expense to undertake the defense of a patent
infringement action or the prosecution of a declaratory judgment action with
respect to the Third Party patents.
(c) In the event Taisho is sued for infringement of any
rights of any Third Party in the course of its development, manufacture,
marketing and sale of Licensed Compounds or Drug Products or its use of Vertex
Technology in connection therewith, Vertex shall extend to Taisho good faith
assistance and support in defending such action, and may participate in the
conduct of, and in discussions regarding strategic and business responses to,
the suit. Damages and out-of-pocket legal fees and expenses (including legal
fees and expenses of Taisho and Vertex) arising from such a legal action shall
be borne
[******************************************************************************
*******************************************************************************
****************************]
12.3. OFFICIAL LANGUAGE. English shall be the official language of
this Agreement and the License Agreement, and all
communications between the parties hereto shall be conducted
in that language
License and Development Agreement-Page 22
12.4. TAX. [*******************************************************
**************************************************************
**************************************************************
****************************]. At Taisho's request Vertex will
provide Taisho with such documentation as may be reasonably
available to it which support characterization of the payments
made by Taisho
12.5. WAIVER. Any waiver by either party of the breach of any term
or condition of this Agreement will not be considered as a
waiver of any subsequent breach of the same or any other term
or condition hereof.
12.6. FORCE MAJEURE. Neither party will be in breach hereof by
reason of its delay in the performance of or failure to
perform any of its obligations hereunder, if that delay or
failure is caused by strikes, acts of God or the public enemy,
riots, incendiaries, interference by civil or military
authorities, compliance with governmental priorities for
materials, or any fault beyond its control or without its
fault or negligence. In the event that any delay or failure to
perform by Vertex by reason of force majeure shall extend
beyond six (6) months, Taisho may terminate this Agreement
upon notice in writing to Vertex; provided that Taisho's right
to terminate hereunder shall end, if not exercised, at such
time as Vertex shall have eliminated any material delay or
failure to perform giving rise to the Taisho's termination
right under this Section 12.5, if Taisho does not exercise its
right to terminate this Agreement under this Section 10.3
within fifteen (15) days after the conclusion of the twelve
(12) month period.
12.7. SEVERABILITY. Should one or more provision of this Agreement
be or become invalid, then the parties hereto shall attempt in
good faith to agree upon valid provisions in substitution for
the invalid provisions, which in their economic effect come so
close to the invalid provisions that it can be reasonably
assumed that the parties would have accepted this Agreement
with those new provisions. If the parties are unable to agree
on such valid provisions, the invalidity of such one or more
provisions of this Agreement shall nevertheless not affect the
validity of the Agreement as a whole, unless the invalid
provisions are of such essential importance for this Agreement
that it may be reasonably presumed that the parties would not
have entered into this Agreement without the invalid
provisions.
12.8. GOVERNMENT ACTS. In the event that any act, regulation,
directive, or law of a government within the Territory,
including its departments, agencies or courts, should make
impossible or prohibit, restrain, modify or limit any material
act or obligation of Taisho or Vertex under this Agreement,
the party, if any, not so affected, shall have the right, at
its option, to suspend or terminate this Agreement as to such
country, if good faith negotiations between the parties to
make such modifications herein as may be necessary to fairly
address the impact thereof, after a reasonable period of time
are not successful in producing mutually acceptable
modifications to this Agreement.
License and Development Agreement-Page 23
12.9. GOVERNMENT APPROVALS. Taisho or its sublicensees will, if
necessary, obtain any government approval required in the
Territory to enable this Agreement to become effective, or to
enable any payment hereunder to be made, or any other
obligation hereunder to be observed or performed. Taisho will
keep Vertex informed of progress in obtaining any such
government approval, and Vertex will cooperate with Taisho in
any such efforts.
12.10. EXPORT CONTROLS. This Agreement is made subject to any
restrictions concerning the export of Licensed Compounds or
Vertex Technology from the United States which may be imposed
upon or related to either party to this Agreement from time to
time by the Government of the United States. Furthermore,
Taisho will not export, directly or indirectly, any Vertex
Technology or any Licensed Compounds utilizing such Technology
to any countries for which the United States Government or any
agency thereof at the time of export requires an export
license or other governmental approval, without first
obtaining the written consent to do so (of which Taisho will
promptly inform Vertex) from the Department of Commerce or
other agency of the United States Government when required by
applicable statute or regulation.
12.11. ASSIGNMENT. This Agreement may not be assigned or otherwise
transferred by either party without the prior written consent
of the other party; PROVIDED, HOWEVER, that either party may
assign this Agreement, WITHOUT the consent of the other party,
(i) to any of its Affiliates, if the assigning party
guarantees to full performance of its Affiliates' obligations
hereunder, or (ii) in connection with the transfer or sale of
all or substantially all of its assets or business or in the
event of its merger or consolidation with another company. Any
purported assignment in contravention of this section shall,
at the option of the nonassigning party, be null and void and
of no effect. No assignment shall release either party from
responsibility for the performance of any accrued obligations
of such party hereunder.
12.12. COUNTERPARTS. This Agreement may be executed in duplicate,
each of which shall be deemed to be original and both of which
shall constitute one and the same Agreement.
12.13. NO AGENCY. Nothing in this Agreement shall be deemed to create
an agency, joint venture, amalgamation, partnership or similar
relationship between Vertex and Taisho Notwithstanding any of
the provisions of this Agreement, neither party to this
Agreement shall at any time enter into, incur, or hold itself
out to Third Parties as having authority to enter into or
incur, on behalf of the other party, any commitment, expense,
or liability whatsoever, and all contracts, expenses and
liabilities in connection with or relating to the obligations
of each party under this Agreement shall be made, paid, and
undertaken exclusively by such party on its own behalf and not
as an agent or representative of the other.
License and Development Agreement-Page 24
12.14. NOTICE. All communications between the parties with respect to
any of the provisions of this Agreement will be sent to the
addresses set out below or to other addresses as may be
designated by one party to the other by notice pursuant
hereto, by prepaid certified air mail (which shall be deemed
received by the other party on the seventh business day
following deposit in the mails), or by facsimile transmission
or other electronic means of communication (which shall be
deemed received when transmitted), with confirmation by first
class letter, postage pre-paid, given by the close of business
on or before the next following business day:
if to Taisho, at: Taisho Pharmaceutical Co., Ltd.
▇▇-▇, ▇▇▇▇▇▇ ▇-▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇-▇▇▇▇, ▇▇▇▇▇
Attention: General Manager, Licensing
Division
with a copy to:
General Manager, Legal Division
if to Vertex, at: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President and Chief Business
Officer
cc: Corporate Counsel
with a copy to:
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Fax: ▇▇▇-▇▇▇-▇▇▇▇
12.15. HEADINGS. The paragraph headings are for convenience only and
will not be deemed to affect in any way the language of the
provisions to which they refer.
12.16. AUTHORITY. The undersigned represent that they are authorized
to sign this Agreement on behalf of the parties hereto. The
parties each represent that no provision of this Agreement
will violate any other agreement that a party may have with
any Third Party . Each party has relied on that representation
in entering into this Agreement.
License and Development Agreement-Page 25
12.17. ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties relating to the matters referred
to herein, and may only be amended by a written document, duly
executed on behalf of the respective parties.
VERTEX PHARMACEUTICALS INCORPORATED
By:_________________________________________
Title:______________________________________
Date of Signature:__________________________
TAISHO PHARMACEUTICAL CO., LTD.
By:_________________________________________
Title:______________________________________
Date of Signature:__________________________
License and Development Agreement-Page 26
SCHEDULE 1.9
LICENSED COMPOUNDS
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