Exhibit 10.1
NOTE: Certain portions of this Collaborative Discovery and Lead Optimization
Agreement and its appendix, which are identified by the symbol "[* *]",
have been omitted and filed separately with the Securities and Exchange
Commission pursuant to a confidential treatment request.
COLLABORATIVE DISCOVERY AND
LEAD OPTIMIZATION AGREEMENT REGARDING [* *]
This Collaborative Discovery and Lead Optimization Agreement (the
"Agreement") is made and effective as of August 12, 2002 (the "Effective Date"),
by and between 3-Dimensional Pharmaceuticals, Inc., a corporation having its
principal place of business at Three Lower Makefield Corporate Center, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇.▇.▇. ("3DP"), and ▇▇▇▇▇▇▇-▇▇▇▇▇
Squibb Company, a Delaware corporation having its principal place of business at
▇▇▇▇▇ ▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, Princeton, New Jersey 08543
("BMS"). 3DP and BMS may be referred to herein as a "Party" or, collectively, as
the "Parties."
WHEREAS, 3DP is engaged in discovery research for a variety of biologically
active compounds and the development of technologies to facilitate such
research, and 3DP has patented systems for generating chemical compounds having
desired pharmaceutical properties;
WHEREAS, BMS is engaged in research and development of human therapeutic
products;
WHEREAS, 3DP and BMS have been engaged in a research and development
collaboration to identify and develop compounds active against certain targets
pursuant to the DiscoverWorks(TM) Drug Discovery Collaboration Agreement entered
into by and between the Parties as of July 7, 2000, as amended (the "Existing
Discovery Collaboration Agreement").
WHEREAS, 3DP and BMS desire to enter into a research and development
collaboration to optimize qualified lead compounds that Directly Modulate human
[* *] and that are suitable for commercial development by BMS;
WHEREAS, 3DP and BMS desire to allocate and, from time to time, to
reallocate FTEs between the research program under the Existing Discovery
Collaboration Agreement (the "Existing Discovery Program") and the Research
Program under this Agreement.
NOW, THEREFORE, in consideration of the various promises and undertakings
set forth herein, the Parties agree as follows:
Article 1. DEFINITIONS
The terms in this Agreement with initial letters capitalized, whether used
in the singular or the plural, shall have the meaning set forth below or, if not
listed below, the meaning designated in places throughout this Agreement.
1.1 "Active Compound" means a Research Compound or a Derivative Compound
that has been selected by BMS for preclinical development.
1.2 "Affiliate" means (i) any corporation or business entity of which at
least fifty percent (50%) of the securities or other ownership interests
representing the equity, the voting stock or general partnership interest are
owned, controlled or held, directly or indirectly, by 3DP or BMS; or (ii) any
corporation or business entity which, directly or indirectly, owns, controls or
holds at least fifty percent (50%) of the securities or other ownership
interests representing the equity, the voting stock or, if applicable, the
general partnership interest, of 3DP or BMS.
1.3 "Agreement" means the present agreement including its Appendices.
1.4 "Confidential Information" means all information that has or could have
commercial value or other utility in a Party's business, or the unauthorized
disclosure of which could be detrimental to the Party's interests, including
without limitation research, technical, clinical development, manufacturing,
marketing, financial, personnel and other business information and plans,
proprietary information, inventions, know-how, data, and biological and other
materials; which relate to the Research Program or BMS's research activities in
the Field. "Confidential Information" shall also include without limitation
Research Compounds, Derivative Compounds, Qualified Lead Compounds, Active
Compounds, Licensed Products, and any research results and data associated with
any of the foregoing (including without limitation structure/activity data).
1.5 "Combination Product" means a Licensed Product which includes one or
more active ingredients other than Active Compounds.
1.6 "Derivative Compound" means any compound other than a Research
Compound, but which Directly Modulates the Target, the making, using or selling
of which is covered by a Valid Claim of a Research Program Patent and which is
first synthesized by either Party during the 3 year period that immediately
follows the expiration or termination of the Research Program.
1.7 "DirectedDiversity(R) Chemical Library" means a computer-generated
library of compounds containing integrated structure-activity and synthesis
data.
1.8 "Directly Modulates" means that a compound (i) has an [* *]
for the Target of [* *] or less; and (ii) for which the demonstrated
mechanism of action for the compound's intended therapeutic, prophylactic or
diagnostic effect is binding to and thereby modulating the activity of the
Target, as determined by an assessment of available data by the JSMC.
1.9 "Effective Date" means the effective date of this Agreement as set
forth above.
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1.10 "Field" means all therapeutic, prophylactic and diagnostic uses of
compounds that Directly Modulate the Target, including but not limited to the
therapeutic, prophylactic or diagnostic indications identified in the Research
Plan approved by the JSMC.
1.11 "First Commercial Sale" shall mean, with respect to a given Licensed
Product, the first sale for use or consumption by the public of such Licensed
Product in a country after all required approvals, including regulatory,
marketing and pricing approvals, have been granted by the applicable
governmental drug regulatory agency of such country.
1.12 "FTE" means a full time equivalent scientist (i.e., one full-time or
multiple part-time scientists aggregating to one full-time scientist) employed
by 3DP and assigned to work on the Research Program with such time and effort to
constitute one scientist working on the Research Program on a full time basis
consistent with normal business and scientific practice (at least 40 hours per
week of dedicated effort; on an annual basis, at least 40 hours per week of
dedicated effort for at least 48 weeks per year). In no event, does an FTE
include a subcontractor.
1.13 "Hit" shall have the meaning assigned to such term in Section 2(a) of
Appendix A.
1.14 "Joint Steering and Management Committee" or "JSMC" shall have the
meaning set forth in the Existing Discovery Collaboration Agreement, as such has
expressly been amended by Article 3 of this Agreement.
1.15 "Licensed Derivative Product" means any commercial product that is not
a Licensed Research Product and that contains one or more Derivative Compounds
as active ingredients.
1.16 "Licensed Product" means Licensed Derivative Product and Licensed
Research Product.
1.17 "Licensed Research Product" means any commercial product containing
one or more Research Compounds as active ingredients, including without
limitation such product that also contains one or more Derivative Compounds as
active ingredients in combination with such Research Compounds.
1.18 "NDA" means an application for the final approval required for
authorization for marketing of a Licensed Product in a given country (including
applicable regulatory, marketing and pricing approval) in accordance with the
applicable laws and regulations of a given country. In the U.S., NDA means a New
Drug Application or its equivalent in the Food and Drug Administration or
successor agency.
1.19 "Net Sales" means the aggregate gross invoiced sales price of Licensed
Product sold in the Territory by BMS, its Affiliates and any licensees or
sublicensees, to an independent Third Party, including but not limited to
distributors, in bona fide, arms-length transactions, after deduction of the
following items (to the extent actually incurred or reasonably estimated and
accrued and to the extent not already deducted in the amount invoiced): (i)
customary trade, quantity and cash discounts, wholesaler-charge backs, or
rebates (including without limitation
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rebates to governmental agencies); (ii) customary credits or allowances for
rejection or return of previously sold Licensed Products; (iii) any direct tax,
duties, surcharges or government charge (other than an income tax) levied on the
sale, transportation or delivery of a Licensed Product and borne by the seller
thereof; (iv) retroactive price reductions; and (iv) any charge for freight or
insurance if separately stated.
The disposition of Licensed Products in reasonable quantities by BMS, its
Affiliates or licensees as part of a compassionate use program, indigent care
program, as bona fide samples, or as donations to non-profit institutions or
government agencies for non-commercial purposes and for which BMS receives no
consideration shall be excluded from Net Sales and no royalties shall be due in
connection with any such disposition.
In the circumstance where all the active ingredients of a Combination
Product are also sold separately and in identical strengths to those contained
in the Combination Product, then the following shall apply:
Net Sales shall be calculated as set forth above on the basis of the gross
invoice price of a Licensed Product containing the same weight of Active
Compound sold independently ( A ) divided by the sum of the gross invoice price
of each of the active ingredients contained in the Combination Product sold
independently ( B + A ), multiplied by the gross invoice price of the
Combination Product, as shown by the following formula:
Net Sales = ( A ) x (gross invoice price of the Combination Product)
---------
( B + A )
In the event the Active Compound and/or any of the other active ingredients
of a Combination Product are not sold separately in identical strengths to those
contained in the Combination Product, then the Parties agree to negotiate in
good faith the calculation of Net Sales with regard to such Combination Product
based upon the relative value of the active ingredients as determined by the
Parties hereto in good faith.
1.20 "Patents" means all U. S. patent applications or issued patents,
including without limitation provisionals, divisionals, continuations,
continuations-in-part, reissues and extensions derived therefrom, such as patent
term restorations, supplementary protection certificates, etc., as well as all
foreign patents and foreign patent counterparts to the foregoing.
1.21 "Qualified Lead Compound" means a Research Compound or a Derivative
Compound that satisfies the criteria established by the JSMC from time to time,
which initially shall be the criteria set forth in Section 2(b) of Appendix A.
1.22 "Research Compound" means any compound (a) that is conceived or
synthesized by 3DP during the conduct of the Research Program and that Directly
Modulates the Target; (b) that is conceived or synthesized by 3DP in the conduct
of research activities outside the Field and which is found to Directly Modulate
the Target through 3DP's counterscreening activities against the Target
undertaken during the term of the Research Program, that, at 3DP's sole
discretion, becomes incorporated into the conduct of the Research Program; (c)
that is conceived
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or synthesized by BMS in the conduct of BMS's research activities in the Field
prior to the Effective Date or during the term of the Research Program, and that
Directly Modulates the Target; (d) that is conceived or synthesized by BMS in
the conduct of research activities outside the Field and which is found to
Directly Modulate the Target through BMS's counterscreening activities against
the Target undertaken prior to the Effective Date or during the term of the
Research Program, that, at BMS's sole discretion, becomes incorporated into
BMS's research activities in the Field or into the conduct of the Research
Program; or (e) that Directly Modulates the Target and is first synthesized by
either Party during the term of or within one year after the expiration or
termination of the Research Program, and which is derived through iterative
rational drug design based upon the biological activity of a Research Compound
with respect to the Target.
1.23 "Research Plan" means the detailed description of the research and
development activities of the Parties for the Target in the performance of the
Research Program. The Research Plan shall be prepared by the JSMC and shall be
updated in writing as changes are made to the Research Plan.
1.24 "Research Program" means the collaborative optimization activities of
the Parties, as described in Article 2, that are intended to lead to the
development of small molecule Qualified Lead Compounds and Active Compounds that
have an agreed upon level of activity, Directly Modulate the Target and are
suitable for commercial development by BMS.
1.25 "Research Program Patents" shall mean those Patents that claim
discoveries or inventions that are conceived by either Party in the conduct of
the Research Program and reduced to practice during either the term of this
Agreement or a period of one-year following the expiration or termination of the
Research Program, regardless of their ownership.
1.26 "Target" means [* *], whether discovered as
of the Effective Date orat any time during the term of the Research Program or
three years thereafter.
1.27 "Territory" means the entire world.
1.28 "Third Party" means an individual, corporation or other entity other
than the Parties and their Affiliates.
1.29 "3DP DirectedDiversity(R)Technology" means 3DP Patents and proprietary
know-how that relate to generating and utilizing a DirectedDiversity(R)Chemical
Library, including but not limited to U.S. Patent Nos. 5,463,564; 5,574,656; and
5,684,711, 5,901,069; 6,421,612; and 6,295,514.
1.30 "3DP Patents" means any Patents owned or controlled by 3DP by
assignment, license or otherwise, which 3DP has the right to license or
sublicense to BMS, other than Research Program Patents.
1.31 "Valid Claim" means a claim of a Patent that has not lapsed or
become abandoned or been declared invalid or unenforceable by a court or agency
of competent jurisdiction from which no appeal can be or has been taken.
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Article 2. RESEARCH PROGRAM
2.1 General Project Description. The Parties contemplate that the Research
Program will include the following steps and activities:
(a). BMS will furnish to 3DP the structure and activity data on compounds
developed or discovered by BMS prior to the Effective Date or during
the course of the Research Program that are to be tested against the
Target, including both compounds that are active against the Target,
including without limitation Hits, Research Compounds and Qualified
Lead Compounds, and compounds that are inactive against the Target.
(b). 3DP will perform lead optimization studies on Qualified Lead Compounds
with the objective of generating compounds which will be selected as
Active Compounds by BMS. 3DP will also carry out initial testing of
compounds in the primary biochemical assay as well as any secondary
assays, as determined by the JSMC.
(c). 3DP will supply to BMS between [* *] of each Qualified
Lead Compound in a manner to be determined by the JSMC for additional
in vitro testing at BMS as defined by the JSMC. These compounds will
meet a minimum purity of [* *] of the compounds
provided. Upon a reasonable request of BMS and approval by the JSMC,
3DP will provide additional quality control for individual compounds
as well as larger quantities of specific compounds for in vivo
evaluation, including, without limitation, with respect to Active
Compounds.
(d). 3DP will carry out protein expression and subsequent structural
studies with the Target (along with bound ligand as appropriate) as
defined by the JSMC.
(e). 3DP will provide BMS with a password-protected internet based
communication channel in order to share activity or other compound
related data with BMS.
2.2 Development of Active Compounds. BMS will conduct the preclinical and
clinical tests as it deems appropriate for the commercial development of Active
Compounds in the Field that are developed from Qualified Lead Compounds.
2.3 Alternative Targets. BMS, through the JSMC, shall have the option to
propose changing Targets, subject to mutual agreement of both Parties.
2.4 Research Efforts. Each Party shall use good faith commercially
reasonable and diligent efforts (as defined below) to perform its
responsibilities for the Research Program as set forth in the Research Plan. BMS
will provide funding to 3DP as set forth in the Existing Discovery Collaboration
Agreement and in accordance with Section 3.1(g), which funding shall be used by
3DP solely to support qualified FTEs at 3DP as allocated pursuant to this
Agreement to perform the Research Program. As used herein, the term
"commercially
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reasonable and diligent efforts" shall mean, unless the Parties agree in writing
otherwise, those efforts consistent with the exercise of prudent scientific and
business judgment in accordance with industry standards, as applied by each
Party, respectively, to other of its programs of similar scientific and
commercial potential.
Throughout the term of this Agreement, including any extensions thereof,
3DP shall assign the number of FTE qualified scientists specified in the
Research Plan to perform the work set forth in the Research Plan. The mixture of
education and experience of such FTEs shall be appropriate to the scientific
objectives of the Research Program and 3DP shall provide reasonable aggregated
information about the composition of such FTEs to the JSMC upon request. In the
event that BMS has reasonable concerns regarding the staffing of the Research
Program by 3DP, such concerns shall be communicated to and discussed by the
JSMC. The JSMC may make recommendations to 3DP regarding such Research Program
staffing concerns for 3DP's consideration.
Other than the research funding provided by BMS to 3DP under the Existing
Discovery Collaboration Agreement and in accordance with Section 3.1(g), and
except as otherwise specifically agreed in writing by 3DP and BMS, each Party
shall be responsible for all costs and expenses it incurs in its performance of
the Research Program.
2.5 3DP's Disclosure of Results; Reports; Progress Meetings. The results of
all work performed by the Parties as part of the Research Program shall be
disclosed to the other Party as soon as practical after such results are
obtained. The Parties will exchange at a minimum quarterly written reports (with
copies to the JSMC) presenting a meaningful summary of the work performed on the
Research Program. Progress with respect to the Research Plan milestones and
goals shall be included in the report. In addition, on reasonable request by
BMS, 3DP will make presentations of its activities under this Agreement to
inform BMS of the details of the work done under this Agreement. To better
facilitate communication and collaboration between the Parties, scientists from
3DP and BMS who are conducting work relating to the collaboration will meet
monthly in a manner convenient to all attendees to discuss the progress of the
Research Program. Such research team meetings should be scheduled as on-site
meetings with appropriate attendees from 3DP and BMS. As provided in Article 6,
know-how and other information regarding the Research Program disclosed by one
Party to the other Party pursuant hereto may be used only in accordance with the
rights granted under this Agreement. Within 30 days following the end of each
calendar quarter, the Parties shall each exchange and provide to the JSMC a
written report summarizing in reasonable detail the work performed by it under
the Research Program during the preceding calendar quarter.
2.6 BMS's Disclosure of Efforts. Following the end of the Research Program,
for so long as BMS undertakes development or commercialization activities with
respect to Active Compounds or Licensed Products, BMS shall provide 3DP with
periodic reports summarizing such activities.
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Article 3. RESEARCH PROGRAM GOVERNANCE
3.1 Joint Steering and Management Committee. 3DP and BMS agree that the
Joint Steering and Management Committee established under the Existing Discovery
Collaboration Agreement shall, in addition to its responsibilities under the
Existing Discovery Collaboration Agreement, be responsible for:
(a). Adopting, reviewing and amending the Research Plan to implement the
Research Program, subject to BMS approval. The Research Plan for the
Target agreed to by the Parties is described in Appendix A.
(b). Monitoring the progress of research in the Research Program.
(c). Proposing any change in Target selection, such change being subject to
mutual agreement of the Parties.
(d). Agreeing on and adopting criteria for the designation of Qualified
Lead Compounds and Active Compounds.
(e). Selecting Qualified Lead Compounds to be advanced for secondary in
vitro and in vivo biological testing.
(f). Reviewing and approving publications and other public disclosures
related to the subject matter of the Research Program.
(g). From time to time, reviewing and determining the allocation of the
[* *] FTEs specified in the Existing Discovery
Collaboration Agreement, as between the Research Program and the
Existing Discovery Program; such FTEs to be allocated optimally
between the Research Program and the Existing Discovery Program to
maximize the benefits to both Parties, given the available resources.
Until changed by a decision of the JSMC, the initial allocation of
FTEs to the Research Program shall be [* *] FTEs.
(h). Reviewing and determining whether the mechanism of action for a
compound's intended therapeutic, prophylactic or diagnostic effect has
been demonstrated as binding to and modulating the activity of the
Target, for purposes of satisfying the definition of "Directly
Modulates".
(i). Any other matter as may be mutually agreed from time to time.
3.2 JSMC Governance. As to the activities contemplated under this Agreement
and the allocation of FTEs to the Research Program, the terms of Sections 4.1,
4.3, 4.4 and 4.6 of the Existing Discovery Collaboration Agreement shall apply
to the JSMC; provided however, in the event, under Section 4.4 of the Existing
Discovery Collaboration Agreement, the specified officers of 3DP and BMS cannot
reach agreement within fifteen (15) days after a matter is referred to them for
resolution, to the extent such matter pertains to reallocating FTEs
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between the Research Program and the Existing Discovery Program under Section
3.1(g), then no change in the number of FTEs shall become effective without the
approval of 3DP, which approval shall not be unreasonably withheld or delayed;
and provided further, that in the event formal dispute resolution is called for
under such Section 4.4 of the Existing Discovery Collaboration Agreement
relating to a deadlock of the JSMC under this Agreement, then the dispute
resolution provisions of Article 12 of this Agreement shall apply. It is the
intent of the Parties to allocate the work being performed by the FTEs to allow
for the performance of all aspects of the Research Program and of the Existing
Discovery Program in a manner that is equitable to both Parties.
3.3 Management of Matters Outside the Jurisdiction of the JSMC. Matters
outside the scope of the Research Program are internal to each Party and are not
under the purview of the JSMC. Such matters include, but are not limited to the
following: internal personnel policies and programs, budgeting, finance,
commercial and marketing strategies, and business decisions. However, the
Parties agree to communicate with each other promptly on those matters which,
while outside the scope of the Research Program, nevertheless may reasonably be
expected to influence the conduct or term of this Agreement or the intended
commercialization of any Qualified Lead Compounds under this Agreement.
Article 4. FINANCIAL TERMS
4.1 Milestone Payments. BMS agrees to make milestone payments as set
forth below upon the first occurrence of each milestone event for each Research
Compound and Derivative Compound. Subject to the conditions set forth below, the
milestone payments as set forth below shall be paid only one time for each
Research Compound or Derivative Compound (regardless, for example, of the number
of clinical trials conducted and NDA approvals obtained for that particular
Research Compound or Derivative Compound). The applicable milestone payments due
for any Derivative Compound shall be [* *] of the milestone payment amounts
set forth below (such reduction shall be noted with an asterisk (*) below):
(a). [* *] upon each determination that a Research Compound or
Derivative Compound* is an Active Compound, as determined in
the sole discretion of BMS. (For example, as of the Effective
Date, such determination for purposes of achievement of this
milestone would documented by BMS as an Early Candidate
Nomination, or ECN, but in the future may be referred to by
some other designation);
(b). [* *] upon the first initiation of a Phase I clinical
trial (or its equivalent or non-U.S. counterpart) for each
Research Compound or Derivative Compound*;
(c). [* *] upon the first initiation of a Phase III clinical
trial (or its equivalent or non-U.S. counterpart) for each
Research Compound or Derivative Compound*;
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(d). [* *] upon the first filing of an NDA for each
Research Compound or Derivative Compound*;
(e). [* *] upon the first approval of an NDA for each
Research Compound or Derivative Compound*.
The milestone payments under (a) and (b) above shall be subject to both of the
following conditions: (1) The total amount of milestone payments under (a) and
(b) above for all Research Compounds and Derivative Compounds shall in no event
exceed [* *]; and (2) For all Research Compounds and Derivative Compounds,
all milestone payments under (a) and (b) above after the first payment of each
such milestone shall be deferred until the initiation of a Phase II clinical
trial (or its equivalent or non-U.S. counterpart) for any Research Compound or
Derivative Compound.
4.2 Royalty on Net Sales of Licensed Products. BMS agrees to pay a
quarterly royalty based on Net Sales of Licensed Derivative Products and
Licensed Research Products. Royalty payments shall be due within sixty (60) days
of the end of each calendar quarter in which applicable Net Sales are generated.
(a). The applicable royalty rate for Licensed Derivative Products
shall be [* *] on annual Net Sales of Licensed Derivative
Products below [* *] on annual Net Sales of Licensed
Derivative Products between [* *] and [* *]; and
[* *] on annual Net Sales of Licensed Derivative Products
above [* *].
(b). The applicable royalty rate for Licensed Research Products
shall be [* *] on annual Net Sales of Licensed Research
Products below [* *] ; [* *]on annual Net Sales of
Licensed Research Products between [* *] and [* *];
and [* *] on annual Net Sales of Licensed Research
Products above [* *].
In each calendar quarter of any calendar year, BMS shall pay 3DP royalties based
on Net Sales for such calendar quarter calculated on an annualized basis.
Following the end of the calendar year, BMS shall provide a reconciliation
pursuant to Section 4.6 of the actual royalties due and royalties that have been
paid.
4.3 Royalty Period. The royalty payments set forth above shall be
payable for each Licensed Product on a product-by-product and country-by-country
basis from the time of First Commercial Sale of such Licensed Product in such
country until the later of (i) 10 years from the time of First Commercial Sale
of such Licensed Product in such country or (ii) until the last to expire Patent
containing a Valid Claim that covers the making, using, or selling of such
Licensed Product in such country.
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4.4 Royalty Conditions. The royalties under this Article shall be
subject to the following conditions:
(a). that only one royalty shall be due with respect to the same unit
of Licensed Product;
(b). that no royalties shall be due upon the sale or other transfer
among BMS, its Affiliates or licensees, but in such cases the royalty
shall be due and calculated upon BMS's or its Affiliate's or licensee's
Net Sales of Licensed Product to the first independent Third Party; and
(c). notwithstanding the above royalty rates, upon BMS's request, the
Parties agree to discuss in good faith a reduction of such royalty rate
in any given country in the event the available patent protection
materially decreases the commercial viability of a Licensed Product
under such royalty rate.
4.5 Third Party Patents. In the event that during the term of the
royalty obligation for a Licensed Research Product under this Article IV, a
Third Party shall control a patent or patents in any country covering the sale
of such Licensed Research Product, and in the reasonable judgment of BMS, it
would be impractical or impossible for BMS (or its Affiliates or licensees or
sublicensees) to continue to sell such Licensed Research Product without
obtaining a royalty bearing license from such Third Party, then BMS shall be
entitled to a credit against the royalties due hereunder with respect to such
country in an amount equal to [* *] of the royalty paid to such Third
Party, said credit not to exceed [* *] of the royalty otherwise due under
this Agreement, arising from the sale of such Licensed Research Product in said
country. However, the foregoing royalty credit shall only be available when the
total royalty obligation owed by BMS (or its Affiliates or licensees or
sublicensees) to unaffiliated Third Parties exceeds [* *] of Net Sales of
such Licensed Research Product and shall only be available in the calendar
quarter for which the royalties are paid to the Third Party. Notwithstanding
anything else to the contrary in this Section 4.5, in no event shall any
royalty due on a Licensed Research Product fall below [* *] of Net Sales of
such Licensed Research Product.
4.6 Mode of Payment. All payments to 3DP hereunder shall be made by
wire transfer of United States Dollars in the requisite amount to such bank
account as 3DP may from time to time designate by notice to BMS. Milestone
payments shall be made within 45 days of occurrence of the relevant milestone
event and royalty payments for a given calendar quarter shall be made within 45
days following the end of the calendar quarter. Payments shall be free and clear
of any taxes (other than withholding and other taxes imposed on 3DP), fees or
charges, to the extent applicable. For purposes of computing royalty payments
for Net Sales made outside of the United States, such royalties shall be
converted into U.S. Dollars, by applying the rate of exchange as used by BMS's
global accounting system which reflects the average exchange rate for the
applicable payment period.
Within 90 days of the end of each full calendar year after the First
Commercial Sale, BMS shall deliver to 3DP a true accounting of Net Sales during
that calendar year and shall at
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that time inform 3DP of any reconciliation between the royalties paid that year
on the basis of annualized Net Sales and the royalties actually owed on the
basis of actual Net Sales. Reconciliation for the first partial calendar year
after the First Commercial Sale shall be based on annualized sales during that
first partial calendar year. Overpayments shall be credited against royalties
owed for the succeeding calendar quarter. Underpayments shall be paid up within
45 days of the end of the calendar quarter following the delivery of such
accounting to 3DP.
In case of any delay in payment by BMS to 3DP, interest on the overdue
payment shall accrue at an annual interest rate equal to the prime rate as
reported in The Wall Street Journal, as determined for each month on the last
business day of that month, assessed from the day payment was initially due. The
foregoing interest shall be due from BMS without any special notice.
4.7 Records Retention. With respect to any products for which royalties
are due pursuant to Section 4.2, BMS and its Affiliates and any licensees or
sublicensees shall keep records, for two years following each calendar year for
which royalties are owed, of such Net Sales in sufficient detail to confirm the
accuracy of the royalty calculations hereunder. At the request of 3DP, BMS shall
permit, and shall require its Affiliates and any licensees or sublicensees to
permit, an independent certified accountant of nationally recognized standing
appointed by 3DP and reasonably acceptable to BMS, at reasonable times and upon
reasonable notice, to examine these records solely to the extent necessary to
verify such calculations. Such investigation shall be at the expense of 3DP
unless it reveals a discrepancy in [* *] favor of more than [* *], in
which event it shall be at BMS's expense.
4.8 Taxes. The Party receiving royalties and other payments under this
Agreement shall pay any and all taxes levied on account of such payment. If any
taxes are required to be withheld by the paying Party, it shall: (a) deduct such
taxes from the remitting payment, (b) timely pay the taxes to the proper taxing
authority, and (c) send proof of payment to the other Party and certify its
receipt by the taxing authority within 60 days following such payment.
Article 5. EXCLUSIVITY, OWNERSHIP AND LICENSE OF RIGHTS
5.1 Exclusivity. Except in the case of early termination by BMS under
Section 9.2 or by 3DP under Section 9.3, during the period of time beginning on
April 15, 2002 and continuing until [* *] after the termination or
expiration of this Agreement 3DP shall work exclusively with BMS, and shall not
work independently of BMS, either alone or with any Third Party, with respect
to (i) the modeling, design, synthesis, screening and testing of compounds that
Directly Modulate the Target, and (ii) the screening and testing of compounds in
assays to detect compounds that Directly Modulate the Target.
5.2 Ownership of Research Compounds and Derivative Compounds; License
Grant to BMS Under 3DP Patents. BMS shall solely own all Research Compounds and
Derivative Compounds to the extent not covered by Valid Claims of 3DP Patents in
existence prior to April 15, 2002 or that result from research undertaken by 3DP
independently of the Research Program. In the case where any Research Compound,
Derivative Compound or Licensed Product is
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covered or claimed in a 3DP Patent in existence prior to April 15, 2002 or a 3DP
Patent that arose from research independently of the Research Program, 3DP
hereby grants to BMS a fully paid up, worldwide, exclusive license, with right
to sublicense, in the Field under such patent to develop, make, have made, use,
sell, offer for sale, have sold, import and have imported such Research
Compound, Derivative Compound or Licensed Product, as the case may be, provided
that 3DP is not contractually prohibited under a written agreement with a Third
Party from granting such an exclusive license. In the event that 3DP is so
contractually prohibited from granting such an exclusive license, 3DP shall
grant to BMS as broad a scope of license as it is permitted (for example, a
non-exclusive license) and 3DP shall use its commercially reasonable efforts to
assist BMS in securing for the benefit of BMS all necessary or useful rights
from such Third Party under such 3DP Patents on reasonable terms and conditions
and in the most efficient manner possible under the circumstances. Each Party
shall pay its own legal fees and other costs incurred by it in connection with
such negotiations. BMS shall pay all license fees incurred by 3DP and BMS in the
obtainment of such license and otherwise under the terms of such license
agreement.
5.3 Right of Negotiation [* *] After Termination of the Research
Program. After a period of [* *] following termination of the Research
Program, then upon receipt of notice from 3DP specifically citing this Section
5.3 and enclosing a copy of this Agreement, BMS and 3DP shall enter into good
faith negotiations regarding the licensing of some or all rights to any
compound(s) covered by Research Program Patents owned by BMS other than any
compound being developed by BMS or with respect to which BMS has bona fida
development plans or any analogs or other closely related compounds as
determined by BMS in its reasonable business judgment to any of the foregoing.
It is acknowledged by the Parties that this Section 5.3 in no way limits BMS's
ability to enter into negotiations or to execute agreements with any Third
Party regarding any such rights BMS may have at that time.
5.4 Non-assertion by BMS. BMS agrees that it shall not assert against
3DP any BMS patent claim, including but not limited to claims in Research
Program Patents, where (a) the patent claims priority of a patent application
filed during the Research Program or within 18 months following termination of
this Agreement and (b) the claim covers an invention which is an improvement or
enhancement to the 3DP DirectedDiversity(R) Technology and such invention falls
within the scope of the claims of those 3DP Patents specifically listed in
Section 1.29 and divisional, continuation or continuation-in-part applications
thereof that are filed as of Effective Date.
5.5 Grant-back of Rights to 3DP to Continue Drug Discovery and
Development. BMS hereby grants back to 3DP a fully paid up non-exclusive
license, without the right to sublicense, under the Research Program Patents
owned by BMS to undertake drug discovery and development efforts relating to any
compound for its own behalf and on behalf of any Third Party outside of the
Field, provided however, this license shall not extend any right whatsoever to
sell or transfer in any manner, including without limitation in exchange for any
monetary consideration or any other commercial gain, any compound or product
covered or claimed by any Research Program Patent; provided further, that (1) as
to screening of compounds in 3DP libraries as of the Effective Date or
thereafter or screening of compounds provided by a Third Party to 3DP prior to
or subsequent to the Effective Date, such license shall become effective
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upon the Effective Date, and (2) as to all other activities contemplated by this
Section 5.5, such license shall become effective one year after the expiration
or termination of the Research Program.
5.6 Right of Negotiation Upon Ceasing Substantially All Activities. If
at any time after the expiration or termination of the Research Program BMS
ceases substantially all discovery, development, and commercialization efforts
undertaken by it or a Third Party on its behalf in connection with all Research
Compounds, all Derivative Compounds, all compounds covered by the Research
Program Patents, and all compounds which Directly Modulate the Target, then upon
receipt of notice from 3DP specifically citing this Section 5.6 and enclosing a
copy of this Agreement, BMS and 3DP shall enter into good faith negotiations
regarding the licensing of all or a portion of the rights BMS has at that time
to undertake the same in order for 3DP to continue such discovery development
and commercialization efforts. It is acknowledged by the Parties that this
Section 5.6 in no way limits BMS's ability to enter into negotiations or to
execute agreements with any Third Party regarding any such rights BMS may have
at that time.
Article 6. CONFIDENTIAL INFORMATION
6.1 Confidentiality Obligations. The Parties agree that (i) during the
period of time beginning on April 15, 2002 and continuing until 10 years after
the term of this Agreement, either Party (a "Receiving Party") that pursuant to
this Agreement (a) receives Confidential Information from the other Party (a
"Disclosing Party") prior to or during the term of this Agreement or within
three years following the end of the term of this Agreement or (b) discovers or
develops Confidential Information in the conduct of the Research Program or
within the one year following the expiration or termination of the Research
Program, and (ii) for as long as BMS is developing or commercializing any
Research Compound, Derivative Compound, Qualified Lead Compound, Active Compound
or Licensed Product and for two years thereafter, either Party (a "Receiving
Party") that, pursuant to but more than 3 years after the term of this
Agreement, receives Confidential Information from the other Party (a "Disclosing
Party") that relates to the development, manufacturing or marketing of any
Research Compound, Derivative Compound, Qualified Lead Compound, Active Compound
or Licensed Product, shall keep completely confidential and shall not publish or
otherwise disclose and shall not use for any purpose (except as expressly
permitted hereunder) any such Confidential Information, except to the extent
that it can be established by such Receiving Party that such Confidential
Information:
(a). was already known to such Receiving Party, other than under an
obligation of confidentiality with the other Party;
(b). was generally available to the public or otherwise part of the
public domain at the time of its disclosure or development;
(c). became generally available to the public or otherwise part of the
public domain after its disclosure or development and other than
through any act or omission of the Receiving Party in breach of
this Agreement;
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(d). was subsequently lawfully disclosed to the Receiving Party by a
Third Party;
(e). can be shown by written records to have been independently
developed by the Receiving Party without reference to the
Confidential Information received from the Disclosing Party,
without reference to the Confidential Information developed by
either Party as part of the Research Program, and without breach
of any of the provisions of this Agreement; or
(f). the other Party has specifically agreed in writing that the
Receiving Party may disclose and/or use.
6.2 Written Assurances and Permitted Uses of Confidential Information.
(a). Each Party shall inform its employees and consultants who perform
substantial work on the Research Program, of the obligations of confidentiality
specified in Section 6.1 and all such persons shall be bound by the terms of
confidentiality set forth therein.
(b). The Receiving Party may disclose Confidential Information to the
extent the Receiving Party is compelled to disclose such information by a court
or other tribunal of competent jurisdiction, provided however, that in such case
the Receiving Party shall immediately give notice to the Disclosing Party so
that the Disclosing Party may seek a protective order or other remedy from said
court or tribunal. In any event, the Receiving Party shall disclose only that
portion of the Confidential Information that, in the opinion of its legal
counsel, is legally required to be disclosed and will exercise reasonable
efforts to ensure that any such information so disclosed will be accorded
confidential treatment by said court or tribunal.
(c). To the extent it is reasonably necessary or appropriate to fulfill
its obligations and exercising its rights under this Agreement, either Party may
disclose Confidential Information to its Affiliates, licensees and sublicensees
on a need-to-know basis on condition that such Affiliates, licensees and
sublicensees agree to keep the Confidential Information confidential for the
same time periods and to the same extent as the Parties are required to keep the
Confidential Information confidential under this Agreement.
(d). BMS or its licensees and 3DP may disclose such Confidential
Information to government or other regulatory authorities to the extent that
such disclosure is reasonably necessary to obtain patents covering any Research
Compound, Derivative Compound or Licensed Product or authorizations to conduct
clinical trials with and to commercially market any Licensed Product.
(e). The obligations of confidentiality and non-use set forth in
Section 6.1 shall not apply to and shall not limit BMS's disclosure or use in
any manner whatsoever of any Confidential Information (1) disclosed by BMS to
3DP, (2) discovered or developed by BMS, or (3) which is a Research Compound,
Derivative Compound, Qualified Lead Compound, Active Compound Licensed Product,
or any research result or data associated with any of the foregoing (including
without limitation structure/activity data).
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(f). The obligations of confidentiality and non-use set forth in
Section 6.1 shall not apply to and shall not limit 3DP's disclosure or use of
Confidential Information to the extent such disclosure or use is reasonably
necessary for 3DP's exercise of rights and obligations conferred and undertaken
under this Agreement; provided however, the expiration of the exclusivity
provisions set forth in Section 5.1, shall not give rise to any right of 3DP to
disclose or use Confidential Information in the Field.
(g). The existence and the terms and conditions of this Agreement which
the Parties have not specifically agreed to disclose pursuant to this Section
6.2 shall be treated by each Party as Confidential Information of the other
Party.
(h). If a Party is required to make any disclosure of the other Party's
Confidential Information, it will give at least 30 days written, advance notice
to the latter Party of such disclosure requirement. If a Party is required to
disclose Confidential Information to comply with applicable laws or governmental
regulations, including but not limited to submitting information to tax
authorities or to comply with any discovery or similar request for production of
documents in litigation or similar alternative dispute resolution proceedings,
such Party may make such disclosure, provided it gives prompt notice to the
other Party, and provided it makes all reasonable efforts to comply with all
administrative or other procedures or to establish a reasonable protective or
similar order under which the confidential nature of the information will be
maintained.
6.3 Permitted Disclosures for Business Development Purposes.
Notwithstanding the foregoing, or any other provision in this Agreement to the
contrary, 3DP may describe the financial terms of this Agreement in confidence,
in connection with capital raising or financing activities, or in connection
with a potential acquisition of 3DP, provided however, that any such recipient
of such disclosure shall agree in writing to keep such terms confidential for
the same time periods and to the same extent as 3DP is required to keep
Confidential Information confidential under this Agreement. Furthermore, BMS
acknowledges that 3DP may be obligated to disclose terms of this Agreement and
make public a copy of this Agreement in the event it becomes a public company as
required by applicable U.S. law; provided however, that the terms and copy of
this Agreement shall be redacted such that the extent of any such disclosure
shall be limited to that which in the opinion of 3DP's legal counsel is legally
required to be disclosed.
Article 7. PATENTS AND INTELLECTUAL PROPERTY
7.1 Title to Patents.
(a). Subject to the other provisions of this Agreement, all Research
Program Patents shall be solely owned by BMS, if they claim or
cover: (1) any Research Compound; (1) any Derivative Compound;
(3) any Qualified Lead Compound; (4) any Active Compound; or (5)
any Licensed Product. All other Research Program Patents shall be
individually or jointly owned, depending upon inventorship.
Inventorship will be determined under U.S. patent law. Joint
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ownership means that each Party shall have an undivided one-half
interest without an obligation of accounting to the other.
(b). In accordance with the grant of rights under this Agreement, all
employees and consultants who are inventors on any patents arising
under work carried out under the Research Program shall assign to such
Party or Parties all inventions made by such persons during the
conduct of the Research Program.
7.2 Filing of Patent Applications and Expenses.
(a). BMS has the right but not the obligation to pursue and maintain
Research Program Patents that it solely owns, at its own cost. 3DP has
the right but not the obligation to pursue and maintain Research
Program Patents that it solely owns, at its own cost.
(b). Where there is co-ownership of any Research Program Patents, the
Parties will decide who is in the best position to file and pursue
patent applications, shall regularly provide each other with copies of
all filings and other material submissions and correspondence with the
patent offices, in sufficient time to allow for review and comment.
The costs of prosecuting and maintaining patent applications that are
jointly owned shall be borne by the filing and maintaining Party.
7.3 Enforcement of Patents.
(a). If either Party considers that a Valid Claim of any of the Research
Program Patents claiming the manufacture, use or sale of any Active
Compound or any Licensed Product is being infringed by a Third Party,
it shall notify the other Party and provide it with any evidence of
such infringement which is reasonably available. BMS shall have the
right but not the obligation, at it own expense, to attempt to remove
such infringement by commercially appropriate steps, including without
limitation a lawsuit. If required by law, 3DP shall join such suit as
a party, at BMS's expense. In the event BMS fails to take commercially
appropriate steps with respect to such infringement within six months
following notice of such infringement, 3DP shall have the right to do
so at its expense, provided that BMS shall not be required to enforce
such Research Program Patents against more than one entity or in more
than one country at any one time.
(b). BMS shall pay 3DP [* *] of any amounts recovered by BMS
pursuant to subsection (a), above, whether by settlement or judgment.
If 3DP enforces such patents pursuant to subsection (a), then any
amounts recovered by 3DP shall be retained by 3DP.
(c). The Party not enforcing the Research Program Patents pursuant to
subsections (a) above, shall provide reasonable assistance to the
other Party, including without limitation providing access to relevant
documents and other evidence and making
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its employees available, subject to the enforcing Party's
reimbursement of any out-of-pocket expenses incurred by the other
Party.
(d). If either Party considers that a Valid Claim of any of the jointly
owned Research Program Patents other than those Research Program
Patents covered by subsections (a) above, is being infringed by a
Third Party, it shall notify the other Party and provide it with any
evidence of such infringement which is reasonably available. The
Parties agree to discuss in good faith the enforcement of any such
jointly owned Research Program Patents. If such Patents are enforced
by either Party, the Party not enforcing such Research Program Patents
shall provide reasonable assistance to the other Party, including
without limitation providing access to relevant documents and other
evidence and making its employees available, subject to the enforcing
Party's reimbursement of any out-of-pocket expenses incurred by the
other Party.
Article 8. INDEMNIFICATION
8.1 Indemnification by BMS. BMS shall indemnify, defend and hold 3DP and
its agents, employees and directors (the "3DP Indemnitees") harmless from and
against any and all liability, damage, loss, cost or expense (including without
limitation reasonable attorneys' fees) arising out of Third Party claims or
lawsuits related to (a) BMS's performance of its obligations under this
Agreement; or (b) the development, manufacture, use or sale of Research
Products, Derivative Products, Qualified Lead Compounds, Active Compounds, or
Licensed Products by BMS and its Affiliates, sublicensees, distributors and
agents, except to the extent such claims or suits result from the material
breach of any of the provisions of this Agreement, gross negligence or willful
misconduct by the 3DP Indemnitees.
8.2 Indemnification By 3DP. 3DP shall indemnify, defend and hold BMS and
its agents, employees and directors (the "BMS Indemnitees") harmless from and
against any and all liability, damage, loss, cost or expense (including without
limitation reasonable attorneys' fees) arising out of Third Party claims or
lawsuits related to 3DP's performance of its obligations under this Agreement,
except to the extent that such claims or suits result from the material breach
of any of the provisions of this Agreement, gross negligence or willful
misconduct by the BMS Indemnitees.
8.3 Procedure. Any of the 3DP Indemnitees or BMS Indemnitees, as the case
may be, (the "Indemnitee") that intends to claim indemnification under this
Article 8 shall promptly notify the other Party, BMS or 3DP as the case may be,
(the "Indemnitor") in writing of any liability, damage, loss, cost and/or
expense (including reasonable attorneys' fees) arising out of claims or lawsuits
in respect of which the Indemnitee intends to claim such indemnification, and
shall permit the Indemnitor to assume direction and control of the defense of
the claim (including the selection of counsel, reasonably acceptable to the
Indemnitee, and the right to negotiate a settlement, at the discretion of the
Indemnitor, provided that such settlement does not impose any material
obligation or detriment on the Indemnitee), and shall cooperate as requested (at
the expense of the Indemnitor) in the defense of the claim; provided however,
that an
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Indemnitee shall have the right to retain its own counsel, with the fees and
expenses to be paid by such Indemnitee. The failure to deliver written notice to
the Indemnitor within a reasonable time after the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve the
Indemnitor of any liability to the Indemnitee under this Article 8. At the
Indemnitor's request, the Indemnitee under this Article 8, and its employees and
agents, shall cooperate fully with the Indemnitor and its legal representatives
in the investigation of any loss covered by this indemnification and provide
true, correct and complete information with respect thereto.
Article 9. TERM AND TERMINATION
9.1 Term. This Agreement shall commence upon the Effective Date and
continue until it expires on July 7, 2003, unless extended by mutual agreement
of the Parties or terminated prior to such date.
9.2 Termination of the Research Program Without Cause. BMS may terminate
this Agreement upon 90 days advance written notice.
9.3 Termination for Breach. The failure by a Party to comply with any of
the material obligations contained in this Agreement shall entitle the other
Party to give notice to have the default cured. If such default is not cured
within 60 days after the receipt of such notice, or if by its nature such
default could not be cured within 60 days and a cure is not effectuated within
an additional 60 days, then the notifying Party shall be entitled, without
prejudice to any of its other rights conferred on it by this Agreement, and in
addition to any other remedies that may be available to it, to terminate this
Agreement, provided however, that such termination shall be stayed in the event
that, (i) during the initial 60 day period, the Party alleged to have in good
faith and upon a reasonable basis been in default shall have initiated
arbitration in accordance with Section 12.1, below, contesting the occurrence of
the alleged default and/or whether it is sufficiently material to permit
termination of this Agreement, and (ii) such Party shall diligently and in good
faith cooperate in the prompt resolution of such arbitration proceedings. The
foregoing stay shall expire on the date the arbitrators issue their decision. If
the arbitrators determine that a default occurred which was not cured within the
relevant cure period, and that such default was sufficiently material to justify
termination of this Agreement, the termination shall be immediately effective.
Otherwise, the notice of termination shall be ineffective and this Agreement
shall continue in full force and effect. The foregoing shall not limit any other
rights or remedies that may be available to the terminating Party on account of
the alleged breach, including, without limitation, the right to seek damages.
9.4 No Waiver. The right of a Party to terminate this Agreement, as
provided in Section 9.3, shall not be affected in any way by its waiver or
failure to take action with respect to any prior default.
9.5 Insolvency or Bankruptcy.
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(a). Either Party may, in addition to any other remedies available by law
or in equity, terminate this Agreement by written notice to the other
Party in the event the latter Party shall have become insolvent or
bankrupt, or shall have an assignment for the benefit of its
creditors, or there shall have been appointed a trustee or receiver of
the other Party or for all or a substantial part of its property or
any case or proceeding shall have been commenced or other action taken
by or against the other Party in bankruptcy or seeking reorganization,
liquidation, dissolution, winding-up, arrangement or readjustment of
its debts or any other relief under any bankruptcy, insolvency,
reorganization or other similar act or law of any jurisdiction now or
hereafter in effect, or there shall have been issued a warrant of
attachment, execution, distraint or similar process against any
substantial part of the property of the other Party, and any such
event shall have continued for 90 days undismissed, unbonded and
undischarged.
(b). All rights and licenses granted under or pursuant to this Agreement by
BMS or 3DP are, and shall otherwise be deemed to be, for purposes of
Section 365(n) of the U.S. Bankruptcy Code, licenses of right to
"Intellectual property" as defined under Section 101 of the U.S.
Bankruptcy Code. The Parties agree that the Parties as licensees of
such rights under this Agreement, shall retain and may fully exercise
all of their rights and elections under the U.S. Bankruptcy Code. The
Parties further agree that, in the event of the commencement of a
bankruptcy proceeding by or against either Parties under the U.S.
Bankruptcy Code, the Parties hereto which is not a party to such
proceeding shall be entitled to a complete duplicate of (or complete
access to, as appropriate) any such intellectual property and all
embodiments of such intellectual property, and same, if not already in
their possession, shall be promptly delivered to them (i) upon any
such commencement of a bankruptcy proceeding upon their written
request therefor, unless the Party subject to such proceedings elects
to continue to perform all of their obligations under this Agreement
or (ii) if not delivered under (i) above, upon the rejection of this
Agreement by or on behalf of the Party subject to such proceeding upon
written request therefor by a nonsubject Party.
9.6 Consequences of Termination. Upon the termination or expiration of
this Agreement, each Party shall promptly return all records and materials
relevant to the Research Program in its possession or control containing the
other Party's Confidential Information and to which the former Party does not
retain rights hereunder. Upon termination of this Agreement, all remaining
records and materials in its possession or control containing the other Party's
Confidential Information and to which the former Party does not retain rights
hereunder shall promptly be returned. Upon the termination of this Agreement
pursuant to Section 9.2 or by 3DP pursuant to Section 9.3, BMS's obligation
under the Existing Discovery Collaboration Agreement to fund the FTEs shall
continue and not be reduced, regardless of the number of FTEs then allocated to
the Research Program.
9.7 Survival of Obligations. The termination or expiration of this
Agreement shall not relieve the Parties of any obligations accruing prior to
such termination, and any such termination shall be without prejudice to the
rights of either Party against the other. The
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provisions of Article 1, Section 2.6, Articles 4 - 8, Sections 9.3, 9.4, 9.6,
9.7 and Articles 10 - 13 shall survive any expiration or termination of this
Agreement.
Article 10. DEVELOPMENT, REGULATORY AND COMMERCIALIZATION RESPONSIBILITIES
10.1 Development, Regulatory and Commercialization Responsibilities. BMS
shall be responsible for all development, regulatory filings and related
submissions that are made in connection with the commercialization of Licensed
Products, and all commercialization activities with respect to Licensed
Products, and shall do so at BMS's sole discretion and expense, subject to
Section 11.2.
Article 11. REPRESENTATIONS AND WARRANTIES
11.1 Authority. Each Party represents and warrants that it has the full
right, power and authority to execute, deliver and perform this Agreement.
11.2 Commercially Reasonable Efforts. BMS represents and warrants that it
will use good faith commercially reasonable and diligent efforts to develop and
to commercialize Active Compounds and Licensed Products, consistent with sound
business judgment.
11.3 No Conflicts. Each Party represents and warrants that the execution,
delivery and performance of this Agreement does not conflict with, or constitute
a breach or default under any of its charter or organizational documents, any
law, order, judgment or governmental rule or regulation applicable to it, or any
material agreement, contract, commitment or instrument to which it is a party.
11.4 No Existing Third Party Rights. The Parties represent and warrant that
their obligations under this Agreement are not encumbered by any rights granted
by either Party to any Third Parties, which are or may be inconsistent with the
rights and licenses granted in this Agreement.
11.5 Continuing Representations. The representations and warranties of each
Party contained in this Article 11 shall survive the execution and delivery of
this Agreement and shall remain true and correct at all times during the term of
this Agreement with the same effect as if made on and as of such later date.
11.6 No Warranty as to Commercial Success. 3DP makes no warranty that its
efforts under this Agreement will result in the successful identification,
development or commercialization of a Licensed Product.
11.7 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH HEREIN,
NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY TO THE OTHER, EXPRESS OR
IMPLIED, AS TO ANY MATTER COVERED BY THIS AGREEMENT, AND
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EACH PARTY SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING,
WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
11.8 No Rights to Third Parties. The representations, warranties, covenants
and agreements contained in this Agreement are for the sole benefit of the
Parties and their legal representatives, successors and assigns, and they shall
not be construed as conferring any rights to any Third Party.
Article 12. DISPUTE RESOLUTION
12.1 Dispute Resolution. Any dispute concerning or arising out of this
Agreement or concerning the existence or validity hereof, shall be determined by
the following procedure.
(a) Both Parties understand and appreciate that their long term mutual
interest will be best served by affecting a rapid and fair resolution of any
claims or disputes which may arise out of services performed under this contract
or from any dispute concerning the terms of this Agreement. Therefore, both
Parties agree to use their best efforts to resolve all such disputes as rapidly
as possible on a fair and equitable basis. Toward this end, both Parties agree
to develop and follow a process for presenting, rapidly assessing, and settling
claims on a fair and equitable basis which takes into account the precise
subject and nature of the dispute.
(b) If any dispute or claim arising under this Agreement cannot be readily
resolved by the Parties pursuant to the process described above, then the
Parties agree to refer the matter to a panel consisting of the Chief Executive
Officer of 3DP and the Senior Vice President of Early Discovery and Applied
Technology for BMS, or a comparable position selected by either Party from time
to time, for review and a non-binding resolution. A copy of the terms of this
Agreement, agreed upon facts (and areas of disagreement), and concise summary of
the basis for each side's contentions will be provided to both such officers or
their designees who shall review the same, confer, and attempt to reach a mutual
resolution of the issue.
(c) If the matter has not been resolved utilizing the foregoing process,
and the Parties are unwilling to accept the non-binding decision of the
indicated panel, either or both Parties may elect to pursue definitive
resolution through binding arbitration, which the Parties agree to accept in
lieu of litigation or other legally available remedies (with the exception of
injunctive relief where such relief is necessary to protect a Party from
irreparable harm pending the outcome of any such arbitration proceeding).
Binding arbitration shall be settled in accordance with the Rules of
Conciliation and Arbitration of the International Chamber of Commerce by a panel
of three arbitrators chosen in accordance with these Rules. This Agreement shall
be governed by and construed in accordance with the substantive laws of the
State of Delaware without regard to the conflicts of laws provisions of
Delaware. The arbitration will be held in Wilmington, Delaware. Judgment upon
the award rendered may be entered in any court having jurisdiction and the
Parties hereby consent to the said jurisdiction and venue, and further
irrevocably waive any objection which either Party may have now or hereafter to
the laying of venue of any proceedings in said courts and to any claim that such
proceedings have been brought in an
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inconvenient forum, and further irrevocably agree that a judgment or order in
any such proceeding shall be conclusive and binding upon the Parties and may be
enforced in the courts of any other jurisdiction.
Article 13. MISCELLANEOUS PROVISIONS
13.1 Entire Agreement of the Parties. This Agreement and its Appendices
constitute and contain the entire understanding and agreement of the Parties
respecting the subject matter of this Agreement and cancels and supersedes any
all prior negotiations, correspondence, understandings and agreements between
the Parties, whether oral or written, regarding such subject matter.
13.2 Further Actions. Each Party agrees to execute, acknowledge and deliver
such further instruments and to do all such other acts as may be necessary or
appropriate in order to carry out the purposes and intent of this Agreement.
13.3 Binding Effect. This Agreement and the rights granted herein shall be
binding upon and shall inure to the benefit of 3DP, BMS and their successors and
permitted assigns.
13.4 Assignment. This Agreement may be assigned by either Party in
connection with the sale or transfer of substantially all of its assets that
relate to this Agreement, or in the event of its merger or consolidation or
change of control or similar transaction. Any permitted assignee shall assume
all obligations of its assignor under this Agreement. If 3DP acquires, is
acquired by, merges with or otherwise combines with a company that has
substantial activities in the Field and is a significant competitor of BMS, BMS
may require 3DP to take reasonable actions necessary to ensure that any of BMS's
Confidential Information, trade secrets or proprietary information is not
disclosed to personnel within such company directly involved in such competitive
activities.
13.5 No Implied Licenses. No rights to any Patents, know-how or technical
information, or other intellectual property rights, other than as explicitly
identified herein, are granted or deemed granted by this Agreement. No right,
expressed or implied, is granted by this Agreement to a Party to use in any
manner the name or any other trade name or trademark of the other Party in
connection with the performance of this Agreement.
13.6 No Waiver. No waiver, modification or amendment of any provision of
this Agreement shall be valid or effective unless made in writing and signed by
a duly authorized officer of each Party. The failure of either Party to assert a
right hereunder or to insist upon compliance with any term or condition of this
Agreement shall not constitute a waiver of that right or excuse a similar
subsequent failure to perform any such term or condition.
13.7 Force Majeure. The failure of a Party to perform any obligation under
this Agreement by reason of acts of God, acts of governments, riots, wars,
strikes, accidents or deficiencies in materials or transportation or other
causes of a similar magnitude beyond its control shall not be deemed to be a
breach of this Agreement.
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13.8 Independent Contractors. Both Parties are independent contractors
under this Agreement. Nothing contained in this Agreement is intended nor is to
be construed so as to constitute 3DP or BMS as partners or joint venturers with
respect to this Agreement. Neither Party shall have any express or implied right
or authority to assume or create any obligations on behalf of or in the name of
the other Party or to bind the other Party to any other contract, agreement, or
undertaking with any Third Party.
13.9 Notices and Deliveries. Any formal notices, request, delivery,
approval or consent required or permitted to be given under this Agreement shall
be in writing and shall be deemed to have been sufficiently given when it is
received, whether delivered in person, transmitted by facsimile with
contemporaneous confirmation, or delivery by registered letter (or its
equivalent) or delivery by certified overnight courier service, to the Party to
which it is directed at its address shown below or such other address as such
Party shall have last given by notice to the other Parties.
If to BMS:
▇▇▇▇▇▇▇-▇▇▇▇▇ Squibb Company
▇▇▇▇▇ ▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: Vice President and Senior Counsel,
Pharmaceutical Research Institute
If to 3DP:
3-Dimensional Pharmaceuticals, Inc.
Three Lower Makefield Corporate Center
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: Chief Executive Officer
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ & Bockius
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
13.10 Public Announcements. The Parties shall consult with each other and
reach mutual written agreement before making any public announcement concerning
this Agreement or its subject matter. Notwithstanding the foregoing, the Parties
may disclose the existence and general nature of this Agreement and may make
disclosures for purposes of satisfying legal and
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regulatory requirements in accordance with Article 6; however, neither Party
shall use the name of the other Party for promotional purposes.
13.11 Headings. The captions to the sections and articles in this Agreement
are not a part of this Agreement, and are included merely for convenience of
reference only and shall not affect its meaning or interpretation.
13.12 Severability. If any provision of this Agreement becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision, so long as the Agreement, taking into account said voided
provision(s), continues to provide the Parties with the same practical economic
benefits as the Agreement containing said voided provision(s) did on the date of
this Agreement. If, after taking into account said voided provision(s), the
Parties are unable to realize the practical economic benefit contemplated on the
date of this Agreement, the Parties shall negotiate in good faith to amend this
Agreement to reestablish the practical economic benefit provided the Parties on
the date of this Agreement.
13.13 No Consequential Damages. Except as provided in Article 8, IN NO
EVENT SHALL EITHER PARTY OR ANY OF ITS RESPECTIVE AFFILIATES BE LIABLE TO THE
OTHER PARTY OR ANY OF ITS AFFILIATES FOR SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES, WHETHER IN CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT
LIABILITY OR OTHERWISE, INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS OR
REVENUE.
13.14 Applicable Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Delaware without reference to its
conflicts of laws provisions.
13.15 Advice of Counsel. BMS and 3DP have each consulted with counsel of
their choice regarding this Agreement, and each acknowledges and agrees that
this Agreement shall not be deemed to have been drafted by one Party or another
and will be construed accordingly.
13.16 Counterparts. This Agreement may be executed in counterparts, or
facsimile versions, each of which shall be deemed to be an original, and both of
which together shall be deemed to be one and the same agreement.
13.17 Existing Discovery Collaboration Agreement. The Existing Discovery
Collaboration Agreement shall remain in full force and effect. This Agreement
shall be deemed to amend the Existing Discovery Collaboration Agreement in
accordance with section 14.6 thereof only to the limited extent necessary to
effect the express provisions of this Agreement.
* * *
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their respective duly authorized officers as of the day and year first above
written, each copy of which shall for all purposes be deemed to be an original.
3 DIMENSIONAL ▇▇▇▇▇▇▇-▇▇▇▇▇ SQUIBB COMPANY
PHARMACEUTICALS, INC.
By: ______________________ By: ______________________
Name: ______________________ Name: ______________________
Title: ______________________ Title: ______________________
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Appendix A -- Research Plan for BMS - 3DP Research Program on [* *]
[* 1 entire page has been omitted pursuant to a confidential treatment request
*]
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3. Patents and Publications
A process for the preparation, review, approval and submission of publications,
both scientific manuscripts, presentations and patent applications, is required
to clarify responsibilities within the collaboration.
.. Patent Review and Submission
During the existence of the JSMC, all patent applications that are a
product of the collaboration should follow the process described below:
1. ▇▇▇▇▇ ▇▇▇▇▇ (BMS) and ▇▇▇▇▇ ▇▇▇▇ (3DP) will define the patent scope for
the patent attorneys.
2. Patent attorneys from both companies determine inventorship.
3. The JSMC reviews the progress of the committee and resolves disputes
regarding claims, scope, inventorship, etc.
4. BMS will prepare the applications for all Research Program Patents that
it owns. 3DP will prepare the applications for all Research Program Patents
that it owns.
.. Manuscript Preparation, Review and Submission
Both BMS and 3DP will benefit from publishing research resulting from the
collaboration. During the Research Program, and within one year after the end of
the Research Program, manuscripts describing the results of the Research Program
are subject to the other Party's review and approval. There is an additional
constraint if the research results relate to any Active Compound or any screens
developed or used in the Research Program. In this case, if the publication is
desired any time prior to launch of the relevant product, the publication is
subject to the other Party's prior review and approval. There is also an
absolute prohibition against publishing the subject matter of any patent
application until after the publication date of such application, i.e., eighteen
(18) months after filing, unless otherwise mutually agreed by the Parties. The
following process will be followed:
1. Manuscripts are prepared by participating BMS and 3DP scientists.
Disagreements with respect to content or authorship of the manuscript will
be promptly referred to the JSMC.
2. The JSMC reviews manuscript content, authorship, and acknowledgements
and proposes to accept or reject the manuscript.
3. ▇▇▇▇▇ ▇▇▇▇▇ (BMS) and ▇▇▇▇▇ ▇▇▇▇ (3DP) secure legal review and approval.
4. Author(s) submit for publication.
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