UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number: 0-15006
T CELL SCIENCES, INC.
(Exact name of registrant as specified in charter)
Delaware No. 13-3191702
(State of Incorporation) (I.R.S. Employer Identification No.)
119 Fourth Avenue, Needham, Massachusetts 02194-2725
(Address of principal executive offices) (Zip code)
(617) 433-0771
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No .
--- ---
Outstanding as of
Class November 12, 1997
----- -----------------
Common Stock, par value $.001 24,967,656
1
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
A. Exhibits
10.16 Option Agreement by and between the Company and Novartis
Pharma AG dated as of October 31, 1997, portions of which are
subject to a request for confidential treatment.
B. Reports on Form 8-K
The Company reported on Form 8-K, dated August 26, 1997, the findings of
the Superior court of Massachusetts in litigation relating to the Company's
former headquarters in Cambridge, Massachusetts.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
T CELL SCIENCES, INC.
BY: /s/ Norman W. Gorin
---------------------
Norman W. Gorin
Vice President, Finance
and Chief Financial Officer
3
OPTION AGREEMENT
by and between
T CELL SCIENCES, INC.
and
NOVARTIS PHARMA AG
Dated as of October 13, 1997
TABLE OF CONTENTS
-----------------
ARTICLE I DEFINITIONS.............................................................................2
ARTICLE II GRANT OF OPTION.........................................................................7
2.1 Option.........................................................................7
2.2 Sub-licensing..................................................................7
2.3 Rights in Japan................................................................8
2.4 Exercising the Option..........................................................9
2.5 Delivery of Schedules to the Stock Purchase Agreement.........................11
ARTICLE III OPTION PAYMENT.........................................................................11
ARTICLE IV EXTENSION OF OPTION PERIOD.............................................................12
4.1 Extension of the Option Period................................................12
4.2 Consideration for Extension of the Option Period..............................12
ARTICLE V SUPPLY OF TP-10 DURING OPTION PERIOD...................................................13
ARTICLE VI TRANSFER OF KNOW-HOW...................................................................13
ARTICLE VII INDEMNIFICATION AND HOLD HARMLESS......................................................14
7.1 Novartis Indemnity............................................................14
7.2 TCS Indemnity.................................................................15
7.3 Indemnity Procedure...........................................................15
7.4 Insurance ....................................................................16
ARTICLE VIII CONFIDENTIALITY........................................................................16
8.1 Confidentiality Obligations...................................................16
8.2 Prior Confidentiality Agreements..............................................17
8.2 Public Announcement...........................................................18
ARTICLE IX CLEARANCE OF PUBLICATIONS..............................................................18
ARTICLE X OWNERSHIP OF PATENT RIGHTS AND KNOW-HOW................................................19
ARTICLE XI NOTICES................................................................................19
ARTICLE XII TERM OF THIS AGREEMENT.................................................................21
ARTICLE XIII TERMINATION OF THIS AGREEMENT..........................................................21
13.1 Termination by NOVARTIS.....................................................21
13.2 Termination for Breach......................................................21
13.3 Termination for Insolvency..................................................21
13.4 Effect of Termination or Expiry of Option...................................22
ARTICLE XIV SURVIVABILITY..........................................................................22
ARTICLE XV RIGHT TO EXTEND TO AFFILIATES..........................................................23
ARTICLE XVI ASSIGNMENT.............................................................................23
ARTICLE XVII MUTUAL REPRESENTATIONS AND WARRANTIES..................................................23
17.1 Representations and Warranties..............................................23
17.2 Representation and Warranties of TCS........................................24
17.3 Warranties of Novartis......................................................25
17.4 Exclusion of Warranties.....................................................25
17.5 Exclusion of Consequential Loss.............................................26
ARTICLE XVIII ARBITRATION AND CONSTRUCTION...........................................................26
18.1 Law.........................................................................26
18.2 Dispute Resolution..........................................................26
18.3 Arbitration.................................................................27
ARTICLE XIX FORCE MAJEURE..........................................................................27
ARTICLE XX MISCELLANEOUS..........................................................................28
20.1 Severability................................................................28
20.2 No Exclusion of Legal Rights................................................28
20.3 Survival....................................................................28
20.4 Entire Agreement............................................................29
20.5 No License..................................................................29
20.6 Adverse Event Reporting.....................................................29
20.7 Waiver......................................................................30
20.8 Relationship to the Parties.................................................30
20.9 Language....................................................................30
20.10 Titles......................................................................31
APPENDICES
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APPENDIX A LICENSE AGREEMENT.....................................................................A-1
APPENDIX B LICENSED PROTEIN......................................................................A-2
APPENDIX C TCS PATENT............................................................................A-3
APPENDIX D SAMPLE INVOICE........................................................................A-4
APPENDIX E LIST OF CONTRACTING AGREEMENTS........................................................A-5
APPENDIX F JAPAN PATENTS.........................................................................A-6
APPENDIX G STOCK PURCHASE AGREEMENT..............................................................A-7
OPTION AGREEMENT
THIS AGREEMENT, made and entered into as of October 13, 1997 (the
"Effective Date") by and between T CELL SCIENCES, INC., a corporation organized
and existing under the laws of the State of Delaware, U.S.A., having its
principal offices at 119 Fourth Avenue, Needham, MA 02194, U.S.A. (hereinafter
referred to as "TCS") and NOVARTIS PHARMA AG, a corporation organized and
existing under the laws of Switzerland, having its principal offices at
Lichstrasse 35, CH-4002 Basel, Switzerland (hereinafter referred to as
"Novartis").
WHEREAS TCS owns or controls and/or has the right to grant licenses to
certain patent rights and know-how relating to a protein known as soluble
complement receptor type 1 ("sCR1") and derivatives thereof, methods of their
production, including recombinant methods employing genes coding for their
expression, and human therapeutic uses thereof, including uses of such genes in
gene therapy or genetically modified organs and tissues; and
WHEREAS Novartis wishes to evaluate its interest in undertaking,
independently and at its own cost, expense and risk, further developmental
studies of such protein, derivatives or genes with the objective of developing
products for use in the Field (as hereinafter defined), including both
allotransplantation (i.e., same species), and more particularly,
xenotransplantation (i.e., cross-species); and
WHEREAS Novartis wishes to obtain from TCS and TCS wishes to grant to
Novartis an exclusive option to enter into an exclusive worldwide license
relating to such protein, derivatives and genes and their use in the Field.
WITNESSETH
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NOW, THEREFORE in consideration of the covenants and obligations
hereinafter contained and intending to be legally bound the Parties (as
hereinafter defined) do hereby agree as follows:
ARTICLE I
---------
DEFINITIONS
-----------
Unless specifically provided otherwise, the terms in this Agreement
with initial letters capitalized, whether used in the singular or plural, shall
have the meaning set forth below or the meaning as designated in places
throughout the Agreement.
1.1 "Affiliate" of any Party shall mean any corporation or other business entity
controlling, controlled by or under common control with such Party. "Control"
(including "controlling", "controlled by" and "under common control with") of
any Party, corporation or other business entity shall mean the direct or
indirect beneficial ownership of more than fifty percent (50%) of the voting
stock of, or more than a fifty percent (50%) interest in the income of such
corporation or other business entity or such other direct or indirect interest
or relationship as in fact constitutes actual control.
1.2 "Effective Date" shall mean the date first set forth above.
1.3 "Field" shall mean transplantation, including both allotransplantation and
xenotransplantation, in humans. The Field shall not extend to genetically
modified cells expressing Licensed Protein for the purpose of treating diseases
not associated with the maintenance and/or sustenance of an organ or tissue
transplanted for the purpose of supplementing or replacing non functional or
dysfunctional organ and/or tissue.
1.4 "Japan Agreement" shall mean the Product Development and Joint License
Agreement, dated as of January 23, 1990, by and among TCS, SB (as hereinafter
defined) and YPC (as hereinafter defined).
1.5 "Japan Patents" shall mean the patents listed in Appendix F hereto.
1.6 "Japan Technology" shall mean any and all information which relates to
TP10-HD and the injectable non-colloidal dose form of TP10-HD sold for
therapeutic use in humans including without limitation biological,
pharmacological, preclinical, clinical, chemical, biochemical, toxicological,
manufacturing and formulation information, data and developments, whether or not
capable of precise separate description but which alone or when accumulated is
or may be useful in the study, testing, development,
production, formulation or use of TP10-HD or the injectable non-colloidal dose
form of TP10-HD sold for therapeutic use in humans which is known to and/or
possessed by TCS during the life of the Japan Agreement, subject to any
obligation of TCS to maintain information of third parties confidential
excluding information of third parties obtained under other agreements.
1.7 "Joint Patents" shall mean any patents and patent applications which are or
become controlled jointly by Novartis or an Affiliate and TCS or an Affiliate as
of the Effective Date or during the term of this Agreement or the License
Agreement and relating to Licensed Materials or Licensed Products, their
manufacture or use. Joint Patents shall include all divisionals, continuations,
continuations-in-part, reissues, extensions, re-examinations or registrations
thereof and any supplementary or complementary protection certificates and the
like.
1.8 "Know-How" shall mean all information and data, technical information, trade
secrets, specifications, instructions, processes, formulae, expertise and
information relating to the Licensed Materials or Licensed Products or any
improvement including, without limitation: (i) biological, chemical,
pharmacological, biochemical, toxicological, pharmaceutical, physical and
analytical, safety, quality control, manufacturing, preclinical and clinical
data, instructions, processes, formulae, expertise and information, including
Monitoring Technology, relevant to the manufacture, use or sale of and/or which
may be useful in studying, testing, the development, production, formulation or
use of the Licensed Materials or intermediates for the synthesis thereof, or the
Licensed Products; and (ii) copies of any IND or NDA or other health
registration documents and amendments or supplements thereto filed with the FDA
or other governmental, regulatory or health authorities in the Territory and all
correspondence to and from such agency relevant to the Licensed Materials or
Licensed Products which is known to and/or possessed and/or acquired by TCS, its
Affiliates or its licensees ("TCS Know-How") or Novartis, its Affiliates or its
sub-licensees ("Novartis Know-How").
1.9 "License Agreement" shall mean the License Agreement attached hereto as
Appendix A.
1.10 "Licensed Gene" shall mean a gene, whether natural or man-made, coding for
the expression of a Licensed Protein (as hereinafter defined).
1.11 "Licensed Gene Therapy Product" shall mean any product other than a
Licensed Organ or Tissue (as hereinafter defined), for use in gene therapy in
humans and comprising a Licensed Gene, the manufacture, use or sale of which
would, but for a license, constitute infringement of a Valid Claim (as
hereinafter defined) of TCS Patents or Joint Patents (as hereinafter defined) or
which incorporates or embodies TCS Know-How (as hereinafter defined).
1.12 "Licensed Materials" shall mean Licensed Proteins, Licensed Genes and
Licensed Organs or Tissues.
1.13 "Licensed Organ or Tissue" shall mean an organ or tissue, including an
animal organ or tissue, which has been genetically modified to insert a Licensed
Gene.
1.14 "Licensed Organ or Tissue Product" shall mean a product which is or
comprises a Licensed Organ or Tissue, for use in the Field, the manufacture, use
or sale of which would, but for a license, constitute infringement of a Valid
Claim of TCS Patents or Joint Patents or which incorporates or embodies TCS
Know-How.
1.15 "Licensed Products" shall mean Licensed Protein Products, Licensed Gene
Therapy Products and Licensed Organs and Tissue Products.
1.16 "Licensed Protein" shall mean sCR1 (having the amino acid sequence
identified in Appendix B hereto) and alleles thereof and analogs, fragments or
derivatives thereof, whether glycosylated, non-glycosylated or of altered
glycosylation (other than derivatives having a carbohydrate moiety which is a
ligand for a cell adhesion molecule, such as sialyl Lewis x. Licensed Protein
shall include the substance referred to by TCS as "TP-10" also known as
"TP10-HD".
1.17 "Licensed Protein Product" shall mean any product, in finished
pharmaceutical form, comprising a Licensed Protein, the manufacture, use or sale
of which would, but for a license, constitute infringement of a Valid Claim of
TCS Patents or Joint Patents, or which incorporates or embodies TCS Know-How.
1.18 "Monitoring Technology" shall mean all technology relating to the detection
or monitoring of levels of the Licensed Materials or Licensed Products, or
metabolites
thereof, in bodily fluids (such as blood), including, without limitation,
antibodies (such as monoclonal or polyclonal antibodies), hybridomas, haptens,
tracer compounds, immunogens, methods, assays (such as ELISAs, RIAs, FPIAs and
other solid phase immunoassays) and kits, and all proprietary data,
instructions, processes, formulae, expertise and information relating thereto.
1.19 "Novartis Patents" shall mean any patents and patent applications which are
or become owned or controlled by Novartis or an Affiliate thereof as of the
Effective Date or during the term of this Agreement or the License Agreement,
and relating to the Licensed Materials or Licensed Products, their manufacture
or use. Novartis Patents shall include all divisionals, continuations,
continuations-in-part, reissues, extensions, re-examinations or registrations
thereof and any supplementary or complementary protection certificates and the
like. Novartis Patents shall also include Novartis' or an Affiliate's share of
any Joint Patent or patent rights jointly owned by Novartis or such Affiliate
thereof in the event that Novartis or such Affiliate has not acquired the right
to license all joint owners' shares under such patent rights.
1.20 "Option Period" shall mean a period of two (2) years from the Effective
Date hereof and any extension thereof as set forth in Article 4.
1.21 "Option Year" shall mean a twelve (12) month period commencing on the
Effective Date and each twelve (12) month period thereafter during the term of
this Agreement.
1.22 "Party" shall mean either TCS or Novartis as the context requires and
"Parties" shall mean, collectively, TCS and Novartis.
1.23 "Proprietary Information" shall mean and include, without limitation,
information and data of one Party provided to the other in connection with this
Agreement, including TCS Know-How, TCS Patents, Novartis Know-How, Novartis
Patents, Joint Patents and all other scientific, clinical, regulatory,
marketing, financial, and commercial information or data, whether communicated
in writing or orally or by other means.
1.24 "Smithkline Agreement" shall mean the Product Development and License
Option Agreement, dated as of October 21, 1994, between TCS and SB pursuant to
which SB had rights under certain TCS patents in geographic areas other than
Japan.
1.25 "Stock Purchase Agreement" shall mean the Stock Purchase Agreement attached
hereto as Appendix G.
1.26 "TCS Patents" shall mean all patent and patent applications owned or
controlled (with the right to grant sub-licenses) by TCS or an Affiliate
thereof, as of the Effective Date or during the term of this Agreement or the
License Agreement, and relating to the Licensed Materials or Licensed Products,
their manufacture, or their use in the Field. TCS Patents existing as of the
Effective Date are set forth in Appendix C and TCS Patents obtained or acquired
by, or licensed to TCS or an Affiliate thereof during the term of this Agreement
or the License Agreement shall be promptly added to said Appendix. TCS Patents
shall include all divisionals, continuations, continuations-in-part,
re-examinations, reissues, extensions, registrations and supplementary or
complementary certificates and the like. TCS Patents shall also include TCS', or
an Affiliate's, share of any Joint Patent or patent rights jointly owned by TCS
or such Affiliate thereof in the event that TCS or such Affiliate has not
acquired the right to license all joint owners' shares under such patent rights.
1.27 "Territory" shall mean the world.
1.28 "Valid Claim" shall mean a claim from any issued patent which has not been
revoked or held invalid or unenforceable by a decision of a court or other
government agency of competent jurisdiction, which decision is unappealable or
unappealed within the time allowed for appeal.
ARTICLE II
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GRANT OF OPTION
---------------
2.1 Option
Subject to the terms of this Agreement, TCS hereby grants to Novartis
and Novartis hereby accepts the exclusive option to enter into an exclusive,
royalty-bearing
license, under and to the TCS Patents and TCS Know-How, to (a) develop, have
developed, import, make or have made for use, and to use, in the Territory, the
Licensed Materials, other than TP10-HD in an injectable non-colloidal dose form
in Japan, in the Field, (b) develop, have developed, import, use, make or have
made, offer for sale, sell and otherwise distribute in the Territory, Licensed
Protein in, or in connection with, Monitoring Technology in the Field and (c)
develop, have developed, import, make, have made for use, sale, distribution and
offer for sale and to use, sell, distribute and offer to sell in the Territory,
the Licensed Products, other than the injectable non-colloidal dose form of
TP10-HD in Japan, in the Field (hereinafter referred to as "License"); provided,
that, the limitations in the License on rights in Japan are subject to the terms
of Section 2.3 hereof and Section 2.3 of the License Agreement. Said exclusive
option shall be exercisable in accordance with Section 2.4 hereof.
2.2 Sub-licensing
The License shall include the right to sub-license provided that (i)
Novartis warrants that any sub-licensee agrees to be bound by the applicable
terms of this Agreement; and (ii) Novartis guarantees the performance of any
sub-licensee and TCS shall be entitled to treat as a breach of this Agreement by
Novartis any failure of performance or lack of performance by any sub-licensee
as the case may be, for all purposes and subject to Article 13 hereof. Such
sub-license shall not include the right to sub-license.
2.3 Rights in Japan
(a) Under the terms of the Japan Agreement, TCS granted to Smithkline
Beecham, p.l.c. ("SB") and Yamanouchi Pharmaceutical Co., Ltd. ("YPC") the
co-exclusive right (including the right to sub-license) to practice under the
Japan Patents and Japan Technology to make, have made, use and sell the
injectable non-colloidal dose form of TP10-HD sold for therapeutic use in humans
in Japan. In the Letter Agreement, dated April 7, 1994, between TCS and SB,
terminating the Smithkline Agreement, (i) TCS and SB acknowledged the continuing
existence of the Japan Agreement and the need to modify the Japan Agreement in
light of the termination of the Smithkline Agreement, and (ii) TCS assumed SB's
obligations to YPC under the Japan Agreement.
The Parties acknowledge and agree that, Novartis wishes to obtain from TCS, and
TCS wishes to grant to Novartis, an exclusive option to the rights more
specifically discussed in Section 2.3(c) below. Towards this end, TCS shall make
diligent efforts, during the Option Period to terminate all rights held by SB
under the Japan Agreement and to gain for TCS clear title to the rights now held
by SB under the Japan Agreement (the "SB Rights"), in such a way as to retain,
along with YPC, a co-exclusive right to make, have made, use and sell the
injectable non-colloidal dose form of TP10-HD in Japan. All costs and expenses,
including but not limited to, payments made to SB and/or YPC, associated with
these efforts shall be borne by TCS.
(b) In the event that TCS is not able to gain clear title to the SB
Rights by the end of the first Option Year; provided, that, TCS is not at that
time in negotiations which the Parties agree have a reasonable chance of success
within the next three (3) months, Novartis shall have the right, beginning at
the start of the second Option Year, to enter into negotiations directly with SB
and, if necessary, YPC to have the SB Rights revert to TCS. All payments made by
Novartis to SB, YPC and TCS in connection with these efforts to gain clear title
for TCS to the SB rights, or any of their respective Affiliates or sub-licensees
in connection with these negotiations, shall be deducted, at the time the
License Agreement and the Stock Purchase Agreement are entered into and the
license granted and stock issued, from (i) the down payment to be made by
Novartis to TCS pursuant to Section 3.1 of the License Agreement and (ii) if
such payments exceed the amount of such down payment, the payment to be made by
Novartis to TCS pursuant to Section 1.3 of the Stock Purchase Agreement.
(c) Upon TCS' obtaining clear title to the SB Rights, the License, as
defined in Section 2.1 hereof automatically shall be expanded to include a
co-exclusive with YPC, royalty-bearing license, in Japan, under and to the TCS
Patents and TCS Know-How, to (i) develop, have developed, import, make or have
made for use, and to use TP10-HD in an injectable non-colloidal dose form in the
Field and (ii) develop, have developed, import, make, have made for use, sale,
distribution and offer for sale and to use, sell, distribute and offer to sell
the injectable non-colloidal dose form of TP10-HD in the Field. The Parties
agree that, in the event that TCS assumes all of the rights and obligations of
SB under the Japan Agreement unless otherwise agreed to by the Parties in
writing, TCS shall extend to Novartis, and Novartis shall accept from TCS,
pursuant to the License Agreement, all rights required by Novartis to possess
the license described above in this paragraph and only those obligations of the
Japan Agreement (i)
reasonably acceptable to Novartis and (ii) related to the license granted to
Novartis under the License Agreement in connection with the injectable
non-colloidal dose form of TP10-HD in the Field in Japan. For example,
notwithstanding the terms of the Japan Agreement or any renegotiated version of,
or amendment to, the Japan Agreement, Novartis shall have no rights or
obligations in connection with making, using or selling a Licensed Product or
Licensed Protein in, or in connection with, Monitoring Technology outside the
Field.
2.4 Exercising the Option
(a) Updating Representations and Warranties of the Stock Purchase
Agreement. During the Option Period, Novartis shall have the right from time to
time to notify TCS in writing that it is contemplating exercising the option,
and requests TCS to provide it, within five (5) business days, with then current
Schedules provided for in Section 2 of the Stock Purchase Agreement, containing
such information concerning developments or occurrences since the Effective Date
of this Agreement as is necessary to cause the representations and warranties
contained in Section 2 of the Stock Purchase Agreement to be true and correct.
Such notification by Novartis and receipt of the Schedules as provided for in
this paragraph shall not obligate Novartis to exercise its option at that time.
(b) Exercising the Option. At such time as Novartis decides to exercise
the option, Novartis shall notify TCS in writing, and the Parties shall agree
upon a time and place for the execution of the License Agreement and the Stock
Purchase Agreement and the closing of the sale and purchase of the Shares (as
defined in the Stock Purchase Agreement) (the "Closing"). Unless otherwise
agreed to by the Parties, the date of the Closing (the "Closing Date") shall be
no later than ten (10) business days after the date on which Novartis notifies
TCS of its intention to exercise the option.
(c) The Closing.
(i) Deliveries by TCS. At the Closing, TCS shall deliver to
Novartis the following:
(A) An opinion of Goodwin, Procter & Hoar, counsel for TCS, in
a form reasonably acceptable to Novartis, addressed to Novartis and dated the
Closing Date, mirroring the representations and warranties of TCS set forth in
Sections 2.1, 2.2(a),(c) and (d), 2.3 (a) and (b)(ii)(iii), 2.4, 2.5 (with
respect to governmental agencies and bodies only), 2.7 (last sentence only) of
the Stock Purchase Agreement;
(B) An executed License Agreement and an executed Stock
Purchase Agreement, subject to the same Schedules of exceptions last provided to
Novartis pursuant to Section 2.4(a) of this Agreement; and
(C) The stock certificate, registered in the name of Novartis,
representing the Shares.
(ii) Deliveries of Novartis. Subject to TCS making the
deliveries set forth in Section 2.4(c)(i) of this Agreement, at the Closing,
Novartis shall deliver to TCS the following:
(A) An executed License Agreement and an executed Stock
Purchase Agreement, subject to the same Schedules of exceptions last provided to
Novartis pursuant to Section 2.4(a) of this Agreement; and
(B) The payments required pursuant to Section 3.1 of the
License Agreement and Section 1.3 of the Stock Purchase Agreement.
2.5 Delivery of Schedules to the Stock Purchase Agreement.
Attached as Appendix G hereto is a true and correct set of Schedules provided
for in Section 2 of the Stock Purchase Agreement. This set of Schedules is the
set which would be attached to the Stock Purchase Agreement if it were executed
as of the Effective Date hereof.
ARTICLE III
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OPTION PAYMENT
--------------
In consideration for the option granted in Section 2.1, Novartis shall
pay to TCS xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx per Option Year during the
Option Period. The first payment shall be due upon receipt by Novartis of an
invoice in the form of Appendix D hereto ("Invoice"), but in no case earlier
than the Effective Date, and payable to TCS within thirty (30) days after
receipt by Novartis of such Invoice, but in no case earlier than thirty (30)
days following the Effective Date. The second payment ("Second Option Payment")
shall be due upon receipt by Novartis of the related Invoice, but in no case
earlier than on the first day following the end of the first Option Year, and
shall be payable to TCS within thirty (30) days after receipt by Novartis of
such Invoice, but in no case earlier than the end of the first Option Year. All
payments under this Agreement shall be made in United States dollars and shall
be paid by wire transfer to a bank account designated by TCS within thirty (30)
days after receipt by Novartis of the related Invoices, but in no case earlier
than the date due, and the costs of such remittance shall be borne by Novartis.
Interest shall accrue on late payments compounded monthly at the prime lending
rate for United States dollars as published from time to time in the Wall Street
Journal plus two percent (2%) from the date payment fell due until the actual
date that payment is received by TCS.
ARTICLE IV
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EXTENSION OF OPTION PERIOD
--------------------------
4.1 Extension of the Option Period
Novartis, at its sole discretion, may elect to extend the Option Period
for a further term of up to one (1) year in increments ranging from one quarter
to one year in duration (i.e., to a total of three (3) years from the Effective
Date) by providing written notice thereof to TCS not less than ninety (90) days
prior to expiration of the Option Period or any such extension increment, as
appropriate.
4.2 Consideration for Extension of the Option Period
In consideration for said extension(s), Novartis shall pay to TCS
xxxxxxxxxxxx United States dollars xxxxxxxxxxxxxx for a one (1) year extension,
or, in the event Novartis elects to extend the Option Period for less than one
(1) full year, a pro rata amount(s) based on xxxxxxxxxxxxx per year. Such
payment shall be due upon receipt by Novartis of the related Invoice, but in no
case earlier than the first day following the end of the expiration of the
initial two (2) year Option Period or any such extension increment, as
appropriate, and shall be payable to TCS within thirty (30) days after receipt
by Novartis of such Invoice, but in no case earlier than thirty (30) days
following the expiration of the initial two (2) year Option Period or any such
extension increment, as appropriate.
ARTICLE V
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SUPPLY OF TP-10 DURING OPTION PERIOD
------------------------------------
5.1 TCS shall provide to Novartis, within thirty (30) days after the Effective
Date, xxxxxxxxxxxxxxxxx clinical grade TP-10 manufactured in accordance with
U.S. GMPs, at no cost to Novartis.
5.2 Novartis agrees during the course of 1998, to supply TCS, at no cost to TCS,
with such quantities of clinical grade TP-10 manufactured in accordance with
U.S. GMPs as TCS reasonably requires for clinical trials or other research and
development purposes outside the Field, xxxxxxxxxxxxxxxxxxxxxxxx.
5.3 In order to facilitate production of such TP-10, TCS hereby assigns to
Novartis, and Novartis hereby assumes from TCS, the agreements with third party
contractors for the manufacture and quality control release of TP-10 listed on
Appendix E hereto ("Contracting Agreements"). Novartis agrees that it shall not
make any changes to the terms and conditions of any Contracting Agreement
without TCS' prior written consent, which consent shall not be unreasonably
withheld, until the earlier of (i) the end of the Option Period and (ii)
Novartis' fulfillment of its obligation relating to supplying TP-10 to TCS
pursuant to this Article 5.
ARTICLE VI
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TRANSFER OF KNOW-HOW
--------------------
6.1 Subject to the provisions of Section 8, TCS shall, to the extent it is free
to share such information, promptly within three (3) months after the Effective
Date disclose to Novartis all TCS Know-How relevant to the Field then in its
possession that has not been disclosed prior to the Effective Date. From time to
time, during the term of this Agreement, each Party, to the extent such Party is
free to share such information, shall make available to the other Party Know-How
which the other Party reasonably requires to facilitate, in the case of
Novartis, its research, development and commercialization of the Licensed
Products and/or Licensed Protein in, or in connection with, Monitoring
Technology, in the Field, in the case of TCS, its research, development and
commercialization of Licensed Protein outside the Field. TCS shall have an
option to obtain from Novartis a license under and to the Novartis Patents and
Novartis Know-How on reasonable terms for such purposes. Each Party shall
provide its Know-How to the other Party in the form that it exists. It is
expressly understood that, for the purposes of this Article 6 only, Know-How
shall exclude all full reports of clinical and non-clinical studies other than
those relating to the Licensed Protein, registration files and the like
including correspondence with regulatory authorities, and summaries of clinical
and non-clinical studies other than those relating to Licensed Protein shall
replace full reports.
6.2 During the term of this Agreement, TCS shall not grant to any third party
any right or license in or to sCR1sLex in the Field.
ARTICLE VII
-----------
INDEMNIFICATION AND HOLD HARMLESS
---------------------------------
7.1 Novartis Indemnity
Subject to the provisions of Section 7.3, Novartis shall defend and
indemnify and hold harmless TCS and its Affiliates and their respective
directors, officers, agents and employees from and against any and all losses,
liabilities, claims, damages, penalties, fines, costs and expenses (including
reasonable legal fees and other litigation costs,
regardless of outcome) arising out of any and all governmental or private
actions (or their insurers under rights of subrogation or otherwise) that are
related in any way (i) to Novartis', its Affiliates' and/or sub-licensees'
development, importation, sale, manufacture, storage or use of the Licensed
Materials or Licensed Products; (ii) to any claim of failure by Novartis, its
Affiliates and/or sub-licensees to comply with governmental requirements
relating to the Licensed Materials and/or Licensed Products including, but not
limited to, the reporting of adverse events and safety information or (iii) to
Novartis', its Affiliates' and/or sub-licensees' negligence or any acts or
omissions by Novartis in connection with the Licensed Materials or Licensed
Products or in violation of its obligations under this Agreement.
7.2 TCS Indemnity
Subject to the provisions of Section 7.3, TCS shall defend and
indemnify and hold harmless Novartis, its Affiliates and sub-licensees and their
respective directors, officers, agents and employees from and against any and
all losses, liabilities, claims, damages, penalties, fines, costs and expenses
(including reasonable legal fees and other litigation costs, regardless of
outcome) arising out of any and all governmental or private actions (or their
insurers under rights of subrogation or otherwise) that are related in any way
(i) to the development, manufacture, packaging, storage, use, marketing,
promotion, distribution, importation and sale of the Licensed Materials and/or
Licensed Products by TCS, any Affiliate of TCS or any licensee of TCS other than
Novartis; (ii) to any claim of failure by TCS, any Affiliate of TCS or any
licensee of TCS other than Novartis to comply with governmental requirements
relating to the Licensed Materials and/or Licensed Products including, but not
limited to, the reporting of adverse events and safety information; and (iii) to
TCS', its Affiliate's or its licensee's negligence or any acts or omissions by
TCS, its Affiliate or any sub-licensee of TCS other than Novartis in connection
with the Licensed Materials or Licensed Products or in violation of its
obligations under this Agreement.
7.3 Indemnity Procedure
The Party to be indemnified (the "Indemnitee") shall notify the
indemnifying party (the "Indemnitor") in writing promptly, but no later than
fifteen (15) days after becoming aware, of any claims, suits, actions or
proceedings made or instituted against it or which may be made or instituted
against it in respect of which indemnification
may be sought hereunder. The Indemnitee shall cooperate with the Indemnitor in
the defense of any claim. The Indemnitor shall have the right to select defense
counsel and direct the defense or settlement of any such claim or suit. The
Indemnitee shall have the right to select and obtain representation by separate
legal counsel, at its own expense.
7.4 Insurance
(a) TCS hereby warrants that it maintains a policy or program of
insurance at levels no less than one million United States dollars ($1,000,000)
for each occurrence and in the aggregate, to support the indemnification
obligations assumed under this Article 7.
(b) Novartis hereby warrants that it maintains a policy or program of
insurance or self-insurance at levels sufficient to support the indemnification
obligations assumed under this Article 7.
ARTICLE VIII
------------
CONFIDENTIALITY
---------------
8.1 Confidentiality Obligations
Each Party shall receive and keep all Proprietary Information in
complete confidence in the same manner and with the same protection as such
Party maintains for its own proprietary information and hereby covenants not to
use such Proprietary Information or any part of it except for the purposes of
this Agreement or disclose or make such Proprietary Information or any part of
it available to third parties except:
(a) to its employees, Affiliates and responsible sub-contractors or
agents (including attorneys) who require such Proprietary Information for the
express purposes of this Agreement and who are bound in writing to the receiving
Party in a manner consistent with the confidentiality provisions of this
Agreement; provided, that, TCS shall not have the right to share Novartis
Proprietary Information in the Field with any of TCS' sub-licensees without the
prior written consent of Novartis;
(b) for disclosure to governmental health or regulatory agencies for
the purpose of obtaining and maintaining any necessary regulatory approvals for
the Licensed Materials or Licensed Products in the Territory (and then, to the
fullest extent possible, only under conditions of confidentiality);
(c) to the extent that the disclosing Party may agree in writing;
(d) to the extent that such can be clearly demonstrated by prior
written documents in its possession to be known to the receiving Party or an
Affiliate of the receiving Party from a source other than the disclosing Party
or an Affiliate of the disclosing Party who is not in breach or default of any
confidentiality obligation to the disclosing Party or an Affiliate of the
disclosing Party at the time of receipt from the disclosing Party hereunder;
(e) to the extent that such is a matter of public knowledge at the time
of disclosure hereunder or becomes a matter of public knowledge other than by
breach of this Agreement by the receiving Party, its employees or anyone that
received Proprietary Information from the receiving Party;
(f) to the extent that it is required by law or bona fide legal process
to be disclosed (and then, to the fullest extent possible, only under conditions
of confidentiality).
Each Party specifically agrees that, except as shall be necessary for
governmental notification purposes or to comply with applicable laws and
regulations, it will not provide a copy of this Agreement, the License
Agreement, the Stock Purchase Agreement or any other related agreement to any
third party except its employees, Affiliates and responsible sub-contractors or
agents (including attorneys) who require such copy for the express purposes of
this Agreement and who are bound in writing to the Party providing the copy in a
manner consistent with the confidentiality provisions of this Agreement without
the prior written consent of the other Party hereto.
8.2 Prior Confidentiality Agreements
Proprietary Information disclosed by either Party to the other Party
prior to the Effective Date of this Agreement under any previous agreements
between TCS and
Sandoz Pharma Ltd shall be treated as Proprietary Information under this Article
8 notwithstanding the expiration of the prior Confidentiality Agreements. All
Proprietary Information disclosed by either Party to the other Party after the
Effective Date of this Agreement shall be governed by this Article 8.
8.3 Public Announcement
Except as shall be necessary for governmental notification purposes or
to comply with applicable laws and regulations, and except as otherwise agreed
to by the Parties in writing, the Parties agree to keep the existence of this
Agreement, the transactions contemplated hereby, and any proposed termination
hereof strictly confidential. The Parties shall agree upon the text of an
initial public announcement relating to the transactions contemplated by this
Agreement as soon as possible after the Effective Date. Prior to making any
subsequent public announcements regarding this Agreement or the transactions
contemplated herein, each Party agrees to provide the other Party with a
reasonable opportunity to review and comment upon such proposed announcement.
Written agreement between the Parties shall be required prior to release of any
such subsequent public announcement and such agreement shall not be unreasonably
withheld.
ARTICLE IX
----------
CLEARANCE OF PUBLICATIONS
-------------------------
If either Party wishes to make any written or oral public disclosure
(e.g., speeches or publications in scientific journals or other publications)
relating to the Licensed Materials or Licensed Products in the Field, whether or
not such disclosure involves the disclosure of Proprietary Information of the
other Party, the Party seeking to make such public disclosure (the "Disclosing
Party") shall provide the other Party with details of the proposed written or
oral public disclosure and/or an advance copy of any proposed publication thirty
(30) days prior to the earlier of (i) the intended date of release or (ii) the
submission of written text or abstract of a speech for oral presentation or of
written material for publication. The other Party shall have thirty (30) days to
make any comments or recommend any changes it reasonably believes are necessary
to preserve intellectual property rights or Proprietary Information and the
incorporation of such changes shall not be unreasonably refused by the
Disclosing
Party; and if such other Party informs the Disclosing Party within thirty (30)
days of receipt of an advance notice of an oral public disclosure or copy of a
proposed publication (i) that such public disclosure or publication, in its
reasonable judgment, is expected to have a materially adverse effect on its
intellectual property rights or Proprietary Information, or (ii) of some other
reasonable objection, the Disclosing Party shall use its best efforts to delay
or prevent public disclosure or such publication. Such delay shall be
sufficiently long as to permit the timely preparation and filing of patent
applications if the reason given by the other Party for delaying public
disclosure or publication is that it would disclose patentable inventions.
ARTICLE X
---------
OWNERSHIP OF PATENT RIGHTS AND KNOW-HOW
---------------------------------------
Know-How and any resulting inventions (whether patentable or not) which
are made, conceived, reduced to practice or generated solely by TCS' employees
or agents including TCS Patents shall belong exclusively to TCS. Know-How and
any resulting inventions (whether patentable or not) which are made, conceived,
reduced to practice or generated solely by Novartis' employees or agents
including Novartis Patents shall belong exclusively to Novartis. TCS and
Novartis shall each own a fifty percent (50%) undivided interest in any Know-How
and any resulting inventions (whether patentable or not) made, conceived,
reduced to practice or generated (i) jointly by employees, agents or other
persons acting on behalf of both Parties including Joint Patents or (ii) either
solely by TCS' employees or agents or jointly by employees, agents or other
persons acting on behalf of both Parties while carrying out activities under the
terms of Section 4.2 of the License Agreement. Subject to the terms of this
Agreement, each joint owner may make, use and sell jointly owned inventions,
discoveries, Know-How including Joint Patents without accounting to the other
joint owner in accordance with its undivided rights hereunder.
ARTICLE XI
----------
NOTICES
-------
11.1 Any notice or other communication required or permitted to be given or made
hereunder shall be in writing in the English language and shall be deemed to
have been
duly given if sent by registered air mail (return receipt requested), facsimile
letter or delivered by hand to the Party to whom such notice or communication is
required or permitted to be given. Any such notice or other communications, if
mailed, shall be considered given or made when mailed, as evidenced by the
postmark at point of mailing. If sent by facsimile letter such notice shall be
deemed to have been given on the date that it is sent provided that a
confirmatory copy of the facsimile letter is mailed on the same day as the
facsimile letter is sent to the receiving Party. If delivered by hand, any such
notice or communication shall be considered given when delivered.
11.2 All notices to TCS or to any transferee or designee of TCS, pursuant to
this Agreement shall be addressed as follows:
T Cell Sciences, Inc.
119 Fourth Avenue
Needham, MA 02194
U.S.A.
Facsimile: XXXXXX
Attention: XXXXXX
11.3 All notices to Novartis shall be addressed as follows:
Novartis Pharma AG
Lichstrasse 35
Post Office Box
CH-4002 Basel
Switzerland
Facsimile: XXXXXX
Attention: XXXXXX
With copy to:
Novartis Pharma AG
Lichstrasse 35
Post Office Box
CH-4002 Basel
Switzerland
Facsimile: XXXXXX
Attention: XXXXXX
11.4 Either Party may change the address to which notice and other
communications to it are to be given by notice as provided herein.
ARTICLE XII
-----------
TERM OF THIS AGREEMENT
----------------------
Unless sooner terminated as provided herein, this Agreement shall
commence on the Effective Date hereof and shall continue in full force and
effect until the expiration of the Option Period.
ARTICLE XIII
------------
TERMINATION OF THIS AGREEMENT
-----------------------------
13.1 Termination by Novartis
Novartis may terminate this Agreement in its sole discretion effective
the end of the first Option Year by giving TCS ninety (90) days' prior written
notice.
13.2 Termination for Breach
In the event that either Party shall be in breach of any material
obligation hereunder, the non-breaching Party shall give written notice to the
other Party specifying the claimed particulars of such breach, and in the event
such material breach is not cured, or effective steps to cure such material
breach have not been initiated or are not thereafter diligently pursued, within
sixty (60) days following the date of such written notification, the
non-breaching Party shall have the right thereafter to terminate this Agreement
by giving thirty (30) days' prior written notice to the other Party to such
effect.
13.3 Termination in Insolvency
Either Party shall have the right to terminate this Agreement effective
upon written notice to the other Party in the event the non-notifying Party
becomes insolvent, or makes an assignment for the benefit of creditors, or has a
receiver or trustee appointed for substantially all of its property or in the
event that voluntary or involuntary bankruptcy proceedings are instituted
against the non-notifying Party or on the non-notifying Party's behalf.
13.4 Effect of Termination or Expiry of Option
Upon termination of this Agreement for whatever reason or upon
Novartis' election not to exercise its option during the Option Period or
Novartis' failure to exercise its option during the Option Period (i) all rights
granted to Novartis under this Agreement shall terminate and (ii) except as
provided below, each Party shall return to the other Party all tangible
materials comprising Proprietary Information of the other Party except that each
Party may retain one (1) copy of such Proprietary Information of the other Party
in its legal department in order to ascertain its continuing obligations under
Article 8. Upon termination of this Agreement for any reason other than
termination by Novartis for TCS' breach pursuant to Section 13.2 or upon
Novartis' election not to exercise its option during the Option Period or
Novartis' failure to exercise its option during the Option Period, Novartis
shall, at TCS' request, grant to TCS or its designee a non-exclusive, royalty
free license with the right to sub-license under and to the Novartis Patents and
Novartis Know-How relating to the Licensed Protein or a Licensed Protein Product
which exist at the time of termination.
In the event of termination by Novartis pursuant to Section 13.1 or
13.2 during the first Option Year, Novartis will not be required to pay to TCS
the Second Option Payment pursuant to Article 3.
ARTICLE XIV
-----------
SURVIVABILITY
-------------
Termination or expiry of this Agreement in whole or in part shall not
relieve the Parties of any obligation accruing prior to the effective date of
termination or expiry or with respect to limiting disclosure and use of
Proprietary Information.
ARTICLE XV
----------
RIGHT TO EXTEND TO AFFILIATES
-----------------------------
Either Party shall have the right to extend all or part of the rights
granted in this Agreement to any of its Affiliates; provided, that such Party
shall not then be in default with respect to any of its obligations under this
Agreement. All the terms and
provisions of this Agreement, except this right to extend, shall apply to such
Affiliate to which this option has been extended to the same extent as they
apply to either of Novartis or TCS, as the case may be.
ARTICLE XVI
-----------
ASSIGNMENT
----------
Unless consent in writing is first obtained from the other Party, such
consent not to be unreasonably withheld, this Agreement and the rights granted
herein shall not be assignable by either Party hereto, except to a successor to
all or substantially all of its pharmaceutical or biotechnology business. Any
attempted assignment without consent shall be void. Notwithstanding the
foregoing, the Parties agree that Novartis shall have the right to assign this
Agreement to an Affiliate without TCS' consent. Any permitted assigns shall
assume all obligations of its assignor under this Agreement; provided, that the
assignor shall remain primarily liable under this Agreement.
ARTICLE XVII
------------
MUTUAL REPRESENTATIONS AND WARRANTIES
-------------------------------------
17.1 Representations and Warranties
Each Party hereby represents and warrants for itself as follows:
(a) It is a corporation duly organized, validly existing and is in good
standing under the laws of the jurisdiction of its incorporation with the full
power to conduct its affairs as currently conducted and contemplated in this
Agreement.
(b) The execution, delivery and performance by it of this Agreement
have been duly authorized by all necessary corporate action and do not and will
not (i) require any consent or approval of its stockholders; (ii) violate any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having applicability to it or
any provision of its charter or by-laws; or (iii) result in a breach of, or
constitute a default under, any material agreement,
mortgage, lease, license, permit or other instrument or obligation to which it
is a party or by which it or its properties may be bound or affected.
(c) No authorization, consent, approval, license, exemption of, or
filing or registration with, any court or governmental authority or regulatory
body is required for the due execution, delivery or performance by it of this
Agreement, except as provided herein.
(d) This Agreement is a legal, valid and binding obligation of such
party, enforceable against it in accordance with its terms and conditions.
(e) It is not under any obligation to any person, contractual or
otherwise, that is conflicting or inconsistent in any respect with the terms of
this Agreement or that would impede the diligent and complete fulfillment of its
obligations hereunder.
(f) Any clinical investigations carried out with respect to any
Licensed Material or Licensed Product shall be conducted in accordance with good
manufacturing practices and good clinical practices applicable in the
jurisdiction in which such investigation is conducted, including but not limited
to, EEC and FDA good manufacturing and good clinical practice.
17.2 Representation and Warranties of TCS.
(a) TCS warrants that it has no information as of the Effective Date of
this Agreement to indicate that Novartis would not be free to make or have made
for use or sale in the Field, or to use and sell in the Field, in the Territory,
in accordance with the rights granted under Section 2.1 of this Agreement,
Licensed Materials and Licensed Products, without infringing any third-party
patent or any patent right of any Affiliate or parent company of TCS.
(b) TCS represents that as of the Effective Date it owns or possesses
all right, title and interest in and to the TCS Patents and the TCS Know-How, in
the sense of being able to convey to Novartis an exclusive license thereunder in
the Field in the Territory, in accordance with the rights granted under Section
2.1 of this Agreement,
other than with respect to the injectable non-colloidal dose form of TP10-HD in
the Field in Japan.
(c) The representations and warranties of TCS set forth in the Stock
Purchase Agreement, when read together with the set of Schedules to the Stock
Purchase Agreement attached hereto as Appendix G, are true and correct as of the
Effective Date hereof.
17.3 Warranties of Novartis
Novartis hereby warrants that the clinical grade TP-10 supplied by
Novartis to TCS pursuant to Article 5 of this Agreement shall be manufactured in
accordance with United States good manufacturing practices.
17.4 Exclusion of Warranties
Except as otherwise specifically set forth in this Agreement, neither
Party makes any representation, extends any warranties of any kind, either
express or implied, and assumes any responsibilities whatever with respect, in
particular (i) to the validity or scope of the TCS Patents, the TCS Know-How or
the Novartis Know-How; or (ii) that exploitation of the TCS Patents and the TCS
Know-How or the manufacture or use of the Licensed Materials or the manufacture,
use, sale, distribution or marketing of the Licensed Products will not infringe
the patent or other intellectual property rights of third parties.
17.5 Exclusion of Consequential Loss
Notwithstanding any provisions to the contrary in this Agreement, in no
event (including fault, negligence or strict liability of either Party) shall
either Party be liable to the other for indirect, incidental, consequential,
special, punitive or exemplary damages, loss of profit or loss of use related to
any claim, cause of action, proceeding or judgment arising in connection with
this Agreement.
ARTICLE XVIII
-------------
ARBITRATION AND CONSTRUCTION
----------------------------
18.1 Law
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York.
18.2 Dispute Resolution
Any controversy or claim arising out of or relating to this Agreement,
or the breach, termination or validity thereof which cannot be settled within
three (3) months of it having arisen shall be submitted to the respective
President or General Manager of each Party and if, within thirty (30) days or
such other period as may be agreed upon between the Parties following such
reference, the dispute remains unresolved, it shall be settled on application by
either Party by arbitration conducted in the English language, in New York City,
New York in accordance with the then-existing rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof.
18.3 Arbitration
In any arbitration pursuant to this Article the award shall be rendered
by a majority of three (3) arbitrators, one (1) of whom shall be appointed by
each Party and the third of whom shall be appointed by mutual agreement of the
two (2) Party-appointed arbitrators. In the event of failure of a Party to
appoint an arbitrator within sixty (60) days after commencement of the
arbitration proceeding or in the event of failure of the two (2) Party-appointed
arbitrators to agree upon the appointment of the third arbitrator within sixty
(60) days after commencement of the arbitration proceeding, such arbitrator
shall be appointed by the American Arbitration Association in accordance with
the then-existing Rules. The arbitrators shall apply the governing law set forth
in Section 18.1, and shall be required to give their conclusions in writing,
with an explanation of the facts and law on which they were based. The Parties
agree
that the service of any notice in the course of such arbitration at their
respective addresses as provided for in Article 11 shall be valid and
sufficient.
ARTICLE XIX
-----------
FORCE MAJEURE
-------------
Each of the Parties hereto shall be excused from the performance of its
obligations hereunder in any country or countries of the Territory in the event
such performance is prevented by force majeure, and such excuse shall continue
as long as the condition constituting such force majeure continues plus thirty
(30) days after the termination of such condition. For the purpose of this
Agreement, force majeure is defined as follows: causes beyond the reasonable
control of Novartis or TCS (as the case may be), including, without limitation,
acts of God, acts, regulations or laws of any government, war, civil commotion,
destruction of production facilities or materials by fire, earthquake or storm,
labor disturbances (whether or not any such labor disturbance is within the
power of the affected Party to settle), epidemic, and failure of suppliers,
public utilities or common carriers. In the event of force majeure lasting more
than six (6) months, the Parties agree to meet and discuss how this Agreement
can be justly and fairly implemented under the circumstances prevailing in such
country or countries and if the Parties are unable to agree upon how the
Agreement can be implemented then either Party may terminate the Agreement in
relation to such country or countries upon thirty (30) days' written notice.
ARTICLE XX
----------
MISCELLANEOUS
-------------
20.1 Severability
Should any part or provision of this Agreement be held unenforceable or
in violation of or in conflict with any applicable law or regulation of any
jurisdiction, the invalid or unenforceable provision shall be replaced with a
provision which accomplishes, to the extent possible, the original business
purpose and economic benefit of such part or provision in a valid and
enforceable manner, and the balance of this
Agreement (including any such replacement provision) shall continue in full
force and effect and be binding upon the Parties hereto. To implement the
requirements of this Section 20.1, Novartis and TCS agree to endeavor in good
faith to agree upon the wording of any replacement provision. If no agreement is
reached within ninety (90) days after written request by one Party for the
replacement of any such provision, the rewording and replacement thereof shall
be subject to arbitration in accordance with Article 18 and both Parties hereto
shall be deemed to have entered into and be bound by this Agreement as so
amended by the arbitrators.
20.2 No Exclusion of Legal Rights
Nothing in this Agreement is intended to nor shall it have the effect
of excluding, modifying or restricting any right or remedy available under any
relevant law which, by virtue of any such law, cannot be excluded, modified or
restricted.
20.3 Survival
Articles 5, 7, 8, 9 (with respect to written or oral public disclosures
containing information generated during the term of this Agreement only), 13.4,
14, 17.4, 17.5 and 18 shall be in force during the term of this Agreement and
any extension hereof and shall survive termination or expiration (as the case
may be) of this Agreement and shall remain in full force and effect. The
provisions of this Agreement which do not survive termination or expiration
hereof (as the case may be) shall nonetheless be controlling on, and shall be
used in construing and interpreting the rights and obligations of the Parties
hereto with regard to any dispute, controversy or claim which may arise under,
out of, in connection with, or relating to this Agreement.
20.4 Entire Agreement
This Agreement constitutes the entire understanding between the Parties
with respect to the subject matter hereof and supersedes and replaces all
previous negotiations, understandings and representations whether written or
oral including, but not limited to, prior Confidentiality Agreements between TCS
and Sandoz Pharma Ltd and such Confidentiality Agreements shall be terminated
upon the Effective Date of this Agreement. The Parties' obligations of
confidentiality, non-disclosure and non-use
under the Confidentiality Agreements shall continue with respect to confidential
information disclosed prior to their termination, and shall be subject to the
provisions of Article 8 hereof. This Agreement shall not be modified, altered or
amended except by a written document signed on behalf of and delivered by both
Parties hereto.
20.5 No License
Except as specifically set forth herein, neither Party is granted any
rights or license by implication or otherwise.
20.6 Adverse Event Reporting
TCS and Novartis shall cooperate with respect to the exchange of
adverse event and safety information associated with the Licensed Material and
Licensed Products. The cooperation between TCS and Novartis in the exchange of
such adverse event and safety information shall be coordinated on the side of
Novartis by its central Clinical Safety and Epidemiology organization. Details
of the cooperation in the handling of adverse event and safety information
related to the Licensed Material and Licensed Products shall be the subject of
an addendum agreed upon between the designated primary liaisons of the
respective Parties (in the case of TCS, the Vice President for Development, and,
in the case of Novartis, Head, Global Clinical Safety and Epidemiology). Said
addendum shall be agreed upon no less than thirty (30) days prior to the
commencement of the first clinical investigational study of the Licensed
Material or a Licensed Product in the Field.
20.7 Waiver
Any waiver on the part of either Party hereto of any right or interest
hereunder shall be effective only if made in writing and shall not (unless
expressly so stated) constitute or imply a waiver of any other right or
interest, or a subsequent waiver.
20.8 Relationship of the Parties
Novartis and TCS shall act solely as independent contractors and
nothing in this Agreement shall be construed to create a partnership or joint
venture or legal entity between TCS and Novartis, nor shall it give either TCS
or Novartis the power or authority to act for, bind or commit the other in any
way. Neither Party is authorized to make any statement, claims, representations
or warranties, or to act on behalf of the other, except as specifically
authorized in writing by the other Party. Accordingly, neither Party shall have
the right to use or refer to the name, tradenames, trademarks or logo of the
other or its Affiliates or agreements with the other without the prior written
consent of the other.
20.9 Language
This Agreement is entered into in the English language. In the event of
any dispute concerning the construction or meaning of this Agreement, reference
shall be made only to this Agreement as written in English and not to any
translation hereof into any other language, and this English language version
shall be controlling for all purposes.
20.10 Titles
The titles used herein are for illustration purposes only and shall not
be construed as part of this Agreement.
IN WITNESS HEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives.
T CELL SCIENCES, INC. NOVARTIS PHARMA AG
By: /s/ Una S. Ryan By: /s/ Jorg Reinhardt PhD
------------------------ ---------------------------
Name: Una S. Ryan Name: Jorg Reinhardt PhD
------------------------ ---------------------------
Title: President and CEO Title: Head Preclinical
------------------------ ---------------------------
Development and Project
Management
By: /s/ Paul Herrling
---------------------------
Name: Paul Herrling
---------------------------
Title: Paul Herrling
---------------------------
APPENDIX A to OPTION AGREEMENT
LICENSE AGREEMENT
LICENSE AGREEMENT
by and between
T CELL SCIENCES, INC.
and
NOVARTIS PHARMA AG
TABLE OF CONTENTS
-----------------
ARTICLE I DEFINITIONS.............................................................................2
ARTICLE II LICENSES................................................................................5
2.1 Grant..........................................................................5
2.2 Sub-licensing..................................................................6
2.3 Japan..........................................................................6
2.4 Limitations....................................................................7
ARTICLE III CONSIDERATION...........................................................................7
3.1 Down Payment..................................................................7
3.2 Milestone Payments............................................................8
3.3 Royalties.....................................................................9
3.4 Third Party Obligation - Reduction in Royalty................................14
3.5 Third Party Competition - Reduction in Know-How Royalty......................14
3.6 Payments.....................................................................15
ARTICLE IV DEVELOPMENT AND DISCLOSURE OF KNOW-HOW.................................................17
4.1 Research and Development by Novartis..........................................17
4.2 Research and Development by TCS...............................................18
4.3 Development Plan..............................................................18
4.4 Supply of TP-10...............................................................18
4.5 Progress Reports..............................................................19
4.6 Exclusivity...................................................................19
4.7 Disclosure of Know-How........................................................19
ARTICLE V REGULATORY APPROVALS AND COMMENCEMENT OF MARKETING.....................................20
5.1 Exchange of Clinical Investigation Information................................20
5.2 Failure by Novartis to obtain Regulatory Approvals............................21
5.3 Commenced to Market...........................................................21
ARTICLE VI ACCOUNTING PROCEDURE...................................................................22
6.1 Record-Keeping................................................................22
ARTICLE VII INDEMNIFICATION AND HOLD HARMLESS......................................................23
7.1 Novartis Indemnity............................................................23
7.2 TCS Indemnity.................................................................24
7.3 Indemnity Procedure...........................................................25
7.4 Insurance ....................................................................25
ARTICLE VIII CONFIDENTIALITY........................................................................26
8.1 Confidentiality Obligations...................................................26
8.2 Prior Confidentiality Agreements..............................................28
8.3 Public Announcement...........................................................28
ARTICLE IX CLEARANCE OF PUBLICATIONS..............................................................29
ARTICLE X PATENTS................................................................................30
10.1 Changes to Patent Rights.....................................................30
10.2 Ownership....................................................................31
10.3 Filing and Prosecution of Patents............................................31
10.4 Enforcement of Patents.......................................................31
ARTICLE XI TRADEMARKS.............................................................................33
ARTICLE XII DRUG PRICE COMPETITION AND PATENT TERM RESTORATION ACT
USA AND PATENT TERM EXTENSIONS IN OTHER COUNTRIES .....................................33
12.1 Avoidance of Loss of Rights..................................................33
12.2 TCS to Provide Patent Information............................................34
12.3 Cross-Reference Rights.......................................................34
12.4 Extension of TCS Patents.....................................................34
12.5 Patent Extensions............................................................34
12.6 Notice of Patent Certification...............................................34
12.7 No Actions or Agreements.....................................................35
12.8 Patent Term Restoration - Other Countries....................................35
ARTICLE XIII NOTICES................................................................................35
ARTICLE XIV TERM OF LICENSE AGREEMENT..............................................................37
14.1 Term.........................................................................37
14.2 Paid-Up License..............................................................37
14.3 Novartis' Right to Manufacture...............................................38
ARTICLE XV TERMINATION OF LICENSE AGREEMENT.......................................................38
15.1 Novartis' Right to Terminate................................................38
15.2 Termination for Breach......................................................40
15.3 Termination for Insolvency..................................................41
15.4 Consequences of Termination.................................................42
ARTICLE XVI SURVIVABILITY..........................................................................43
ARTICLE XVII RIGHT TO EXTEND TO AFFILIATES..........................................................43
ARTICLE XVIII ASSIGNMENT.............................................................................43
ARTICLE XIX MUTUAL REPRESENTATIONS, WARRANTIES AND EXCLUSION.......................................44
19.1 Representations and Warranties..............................................44
19.2 Representation and Warranties of TCS........................................45
19.3 Exclusion of Warranties.....................................................46
19.4 Exclusion of Consequential Loss.............................................46
ARTICLE XX ARBITRATION AND CONSTRUCTION...........................................................47
20.1 Law.........................................................................47
20.2 Dispute Resolution..........................................................47
20.3 Arbitration.................................................................47
ARTICLE XXI FORCE MAJEURE..........................................................................48
ARTICLE XXII MISCELLANEOUS..........................................................................49
22.1 Severability................................................................49
22.2 No Exclusion of Legal Rights................................................49
22.3 Survival....................................................................49
22.4 Entire Agreement............................................................50
22.5 No Further License..........................................................50
22.6 Adverse Event Reporting.....................................................51
22.7 Waiver......................................................................51
22.8 Relationship to the Parties.................................................51
22.9 EC Regulations..............................................................52
22.10 Language....................................................................52
22.11 Titles......................................................................53
22.12 Amendments..................................................................53
22.13 Tradenames..................................................................53
22.14 Successors and Assigns......................................................53
APPENDICES
----------
APPENDIX A TCS PATENTS...........................................................................A-1
APPENDIX B SAMPLE INVOICE........................................................................A-2
APPENDIX C ELEMENTS OF FULLY ABSORBED MANUFACTURING COSTS........................................A-3
L I C E N S E A G R E E M E N T
---------------------------------
THIS LICENSE AGREEMENT, made and entered into as of ______________ (the
"Effective Date") by and between T CELL SCIENCES, INC., a corporation organized
and existing under the laws of the State of Delaware, USA, having its principal
offices at 119 Fourth Avenue, Needham, MA 02194, USA (hereinafter referred to as
"TCS") and NOVARTIS PHARMA AG, a corporation organized and existing under the
laws of Switzerland, having its principal offices at Lichstrasse 35, CH-4002
Basel, Switzerland (hereinafter referred to as "Novartis")
WHEREAS TCS owns or controls and/or has the right to grant licenses to
certain patent rights and know-how relating to a protein known as soluble
complement receptor type 1 ("sCR1") and derivatives thereof, methods of their
production, including recombinant methods employing genes coding for their
expression, and human therapeutic uses thereof, including uses of such genes in
gene therapy or genetically modified organs and tissues; and
WHEREAS TCS has rights to grant licenses under the TCS Patents (as
hereinafter defined) and TCS Know-How (as hereinafter defined); and
WHEREAS TCS and Novartis have entered into an Agreement (hereinafter
referred to as the "Option Agreement") in which TCS has granted Novartis an
exclusive option to enter into an exclusive worldwide license relating to the
Licensed Materials (as hereinafter defined) and Licensed Products (as
hereinafter defined) in the Field (as hereinafter defined); and
WHEREAS Novartis desires to exercise its option under Section 2.1 of
the Option Agreement as set forth in Section 2.4 of the Option Agreement and to
obtain a license under the TCS Patents and TCS Know-How in accordance with the
terms and conditions set forth herein.
WITNESSETH
----------
NOW, THEREFORE in consideration of the covenants and obligations
hereinafter contained and intending to be legally bound the Parties (as
hereinafter defined) do hereby agree as follows:
ARTICLE I
---------
DEFINITIONS
-----------
Unless specifically provided otherwise, the terms in this License
Agreement with initial letters capitalized, whether used in the singular or
plural, shall have the meaning set forth in the Option Agreement or set forth
below or the meaning as designated in places throughout this License Agreement.
1.1 "Agency" shall mean any governmental regulatory authority responsible for
granting health or pricing approvals, registrations, import permits, and other
approvals required before the Licensed Materials or Licensed Products may be
tested or marketed in any country of the Territory.
1.2 "Agreement Year" shall mean each successive twelve (12) month period
commencing on the Effective Date during the term of this License Agreement.
1.3 "Calendar Quarter" shall mean the respective periods of three (3)
consecutive calendar months ending on 31 March, 30 June, 30 September and 31
December.
1.4 "Calendar Year" shall mean each successive period of twelve (12) months
commencing on 1 January and ending on 31 December.
1.5 "Combination Products" shall mean a multi-component product or service of
which a Licensed Product is a component that is not separately invoiced.
1.6 "Effective Date" shall mean the date first set forth above.
1.7 "FDA" shall mean the United States Food and Drug Administration or any
successor regulatory authority in the United States.
1.8. "First Commercial Sale" shall mean, with respect to a Licensed Product, the
first sale by Novartis, its Affiliates and/or sub-licensees for use or
consumption by the public of such Licensed Product in a country after all
required approvals, including marketing and pricing approvals, have been granted
by the governing health authority of such country.
1.9 "IND" shall mean an Investigational New Drug Application, or the like, as
defined in the applicable laws and regulations of the governmental drug
regulatory agencies in each country.
1.10 "JHU" shall mean The Johns Hopkins University.
1.11 "JHU Agreement" shall mean the License Agreement, effective as of November
25, 1988, by and between JHU and Brigham and Women's Hospital and TCS, as
amended.
1.12 "Major Market Country" shall mean USA, UK, Germany, France, Spain, Italy
and Japan.
1.13 "NDA" shall mean a New Drug Application in the US or the corresponding
application for authorization for marketing of the Licensed Product in any other
country, as defined in the applicable laws and regulations and filed with the
Agency of a given country.
1.14 "Net Sales" shall mean the gross invoice price of Licensed Product, sold by
Novartis, its Affiliates or sub-licensees to independent, non-Affiliate,
third-party customers in bona fide, arms-length transactions, after deducting,
if not previously deducted in the amount invoiced or received:
(a) quantity and/or cash discounts actually allowed or taken;
(b) freight, postage and shipping insurance invoiced to the customer;
(c) customs duties and taxes, if any, directly related to the sale;
(d) amounts repaid or credited by reason of rejections, return of
goods, retroactive price reductions specifically identifiable as relating to
Licensed Product; provided, that, deductions due to retroactive price reductions
in any Calendar Quarter shall not exceed fifty percent (50%) of royalties being
paid to TCS in such Calendar Quarter;
(e) amounts incurred resulting from governmental (or an agency thereof)
mandated rebate programs;
(f) third party rebates and chargebacks clearly related to the sale of
Licensed Product to the extent actually allowed; and
(g) as agreed by the parties in writing, any other specifically
identifiable amounts included in Licensed Product's gross sales that were or
ultimately will be credited and that are substantially similar to those listed
hereinabove.
The amount of Net Sales for any period shall be determined on the basis
of sales recorded in such period in accordance with U.S. Generally Accepted
Accounting Principles consistently applied.
1.15 "Party" shall mean either TCS or Novartis as the context requires and
"Parties" shall mean, collectively, TCS and Novartis.
1.16 "Regulatory Approvals" shall mean all permissions which are necessary for
the manufacture and use of the Licensed Materials and the manufacture, use,
distribution and sale of the Licensed Products including the definition of the
price of the Licensed Products and reimbursement conditions established by any
Agency in the Territory.
1.17 "Regulatory Submissions" shall mean any submissions related to the
investigative use and/or marketing approval of the Licensed Materials or
Licensed Products filed with any Agency with which the Licensed Materials or
Licensed Products must be registered or
approved for the manufacture and use of the Licensed Materials, and the
manufacture, use, distribution and sale of the Licensed Products in any country.
ARTICLE II
----------
LICENSES
--------
2.1 Grant
Subject to the terms of this License Agreement, TCS hereby grants to
Novartis and Novartis hereby accepts (a) an exclusive, royalty-bearing license
under and to the TCS Patents and TCS Know-How to (i) develop, have developed,
import, make or have made for use, and to use the Licensed Materials, other than
TP10-HD in an injectable non-colloidal dose form in Japan, in the Territory in
the Field (ii) develop, have developed, import, make or have made, offer for
sale, sell and otherwise distribute in the Territory, Licensed Protein in, or in
connection with, Monitoring Technology in the Field and (iii) develop, have
developed, import, make or have made for use, sale, distribution and offer for
sale and to use, sell, distribute and offer to sell in the Territory, the
Licensed Products, other than the injectable non-colloidal dose form of TP10-HD
in Japan, in the Field and (b) a co-exclusive with YPC, royalty bearing license
in Japan, under and to the TCS Patents and Know-How, to (i) develop, have
developed, import, make or have made for use, and to use TP10-HD in an
injectable non-colloidal dose form in Japan in the Field and (ii) develop, have
developed, import, make, have made for use, sale, distribution and offer for
sale and to use, sell, distribute and offer to sell the injectable non-colloidal
dose form of TP10-HD, in the Field (hereinafter referred to as "License").
2.2 Sub-licensing
The License shall include the right to sub-license provided that (i)
Novartis warrants that any sub-licensee agrees to be bound by the applicable
terms of this License Agreement;
and (ii) Novartis guarantees the performance of any sub-licensee and TCS shall
be entitled to treat as a breach of this License Agreement by Novartis any
failure of performance or lack of performance by any sub-licensee as the case
may be, for all purposes and subject to Article 15 hereof. Such sub-license
shall not include the right to sub-license.
2.3 Japan
(a) Novartis acknowledges that YPC also has co-exclusive rights
pursuant to the Japan Agreement to practice under the Japan Patents and the
Japan Technology to make, have made, use and sell the injectable non-colloidal
dose form of TP10-HD sold for therapeutic use in humans in Japan, and, that
YPC's rights are co-exclusive with those granted to Novartis in Section 2.1(b)
of this License Agreement. The royalty rate paid by Novartis to TCS on any sales
by Novartis, its Affiliates or sub-licensees under these co-exclusive rights
shall be calculated as set forth in Section 3.3 hereof.
(b) Should TCS recover, if ever, exclusive rights to the TCS Patents
and TCS Know-How, with respect to the injectable non-colloidal dose form of
TP10-HD in the Field in Japan, then TCS shall notify Novartis in writing and, at
no additional cost to Novartis save for milestone payments as set forth in
Section 3.2 and running royalties as set forth in Section 3.3 payable on Net
Sales of the Licensed Protein Product in such country, Novartis shall
automatically have an exclusive, royalty-bearing license (with the right to
sub-license) in Japan, under and to the TCS Patents and TCS Know-How, to
develop, have developed, import, make or have made for use, sale, distribution
and offer for sale and to use, sell, distribute and offer to sell the injectable
non-colloidal dose form of TP10-HD in the Field.
2.4 Limitations. Nothing in this License Agreement shall be construed to
abridge, infringe, or provide to Novartis the nonexclusive rights under TCS
Patents granted to CytoTherapeutics, Inc. ("CTI") to develop products
incorporating nucleic acid sequences encoding sCR1 in living cells which are
encapsulated in a permeable membrane, under the terms of the License Agreement,
effective as of April 24, 1996, by and between TCS and CTI.
ARTICLE III
-----------
CONSIDERATION
-------------
3.1 Down Payment
In consideration of the research and development investments made by
TCS in connection with the Licensed Protein, Novartis shall pay to TCS the sum
of XXXXXXXXXXXX , which payment shall be due and payable on the Closing Date.
Such payment shall be non-refundable and non-creditable.
3.2 Milestone Payments
In further consideration of the research and development investments
made by TCS, Novartis shall pay to TCS the following non-refundable,
non-creditable milestone payments upon the first achievement of the milestone
events set forth in Table I below with respect to a Licensed Product:
Table I
- ----------------------------------------------------------------------- -------------------------
Milestone Event Payment Due
- ----------------------------------------------------------------------- -------------------------
1. First non-rejected IND filing XXXXXXXXXX
in North America, EEU, Switzerland or a Major Market Country
- ----------------------------------------------------------------------- -------------------------
2. Initiation of first Phase III study in XXXXXXXXXX
either allotransplantation or xenotrans-
plantation, not both, in North America,
EEU, Switzerland or a Major Market Country(1)
- ----------------------------------------------------------------------- -------------------------
3. First NDA/PLA approval in a Major Market Country XXXXXXXXXXX
- ----------------------------------------------------------------------- -------------------------
4. First Commercial Sale in each of the first four (4) Major XXXXXXXXXXX
Market Countries
- ----------------------------------------------------------------------- -------------------------
- --------
(1) In the event no Phase III study has been initiated in North America, EEU,
Switzerland or a Major Market Country by the time Milestone Event 3 (First
NDA/PLA approval in any Major Market Country) occurs, the occurrence of
Milestone Event 3 shall trigger payment of Milestone 2 in addition to Milestone
3. If Novartis' payment of Milestone 2 is triggered in this way, Novartis will
not be obligated to repay Milestone 2 in the event that a Phase III study is
initiated in North America, EEU, Switzerland or a Major Market Country
thereafter.
The phrase "the initiation of first Phase III study" as used in this
Section 3.2, shall mean the date the first patient is dosed on behalf of
Novartis in the first pivotal Phase III clinical trial in the Field.
(a) Novartis shall notify TCS in writing within fifteen (15) days upon
the achievement of each milestone event and TCS shall send Novartis an Invoice
for the milestone payments due in accordance with the foregoing. Novartis shall
effect payments due within fifteen (15) days after receipt by Novartis of such
Invoice in accordance with TCS' instructions.
(b) For purposes of making said payments, Novartis shall promptly
advise TCS in writing of each IND and NDA filed by Novartis in each Major Market
Country relating to the Licensed Products as well as each IND and NDA approved
or received by it.
(c) The milestone payments shall only be payable if, at the time they
become due, this License Agreement is still in force.
3.3 Royalties
Novartis also shall pay to TCS royalties at the royalty rates set forth
below on aggregate Net Sales in the Territory of each Licensed Product or
Licensed Protein in, or in connection with, Monitoring Technology sold by
Novartis, its Affiliates and sub-licensees on a country-by-country and Calendar
Quarter basis, in the Territory as follows:
(a) a "patent royalty" on Net Sales shall be due as provided in Table
II below until the expiry of the last to expire of the TCS Patents granted in
such country which would be infringed by the sale of said Licensed Product in
that country but for the license granted hereunder, and for such additional
period (if any) for which the effective period of patent protection for such
product is extended by any patent term extension, prolongation or equivalent
measure (such as a Supplementary Protection Certificate in that Country).
Table II - Patent Royalties
- --------------------------------------------------------------- ----------------------------- -------------------
Net Sales (USD) Royalty
Licensed Product per Calendar Year (% of Net
Sales)
- --------------------------------------------------------------- ----------------------------- -------------------
In the Territory, excluding Japan until such time as Novartis' license in Japan
becomes exclusive:
- --------------------------------------------------------------- ----------------------------- -------------------
(A) Covered by one or more Valid Claims which are composition 1st 200 million XXXXXXXXX
of matter claims 2nd 200 million
increment above 400 million
- --------------------------------------------------------------- ----------------------------- -------------------
(B) Covered by one or more Valid Claims which are method 1st 200 million XXXXXXXXX
of use claims, but not covered by any Valid Claim which 2nd 200 million
is a composition of matter claim increment above 400 million
- --------------------------------------------------------------- ----------------------------- -------------------
In Japan until such time as Novartis' license becomes exclusive:
- --------------------------------------------------------------- ----------------------------- -------------------
(C) Covered by one or more Valid Claims which are composition All XXXXXXXXX
of matter claims and/or method of use claims
- --------------------------------------------------------------- ----------------------------- -------------------
(b) in non-patent countries with respect to TCS Know-How, and in patent
countries with respect to (1) patent applications which are pending but not yet
issued ("pending patent applications") and (2) expired patents, until such time
as (A) the TCS Know-How enters the public domain other than through the actions
of Novartis, its Affiliates or its sub-licensees or (B) in the case of a pending
patent application, the patent is issued or the pending patent application
abandoned, a "know-how royalty" XXXXXXXXXX of Net Sales shall be paid on a
country-by-country basis, with respect to sales made during the period
commencing with the date of the First Commercial Sale of any Licensed Product
in that country and terminating (i) twelve (12) years from the date of the First
Commercial Sale of any Licensed Product in that country, or (ii) in the case of
an EEA member state, ten (10) years from the date of the First Commercial Sale
of any Licensed Product in that country, or (iii) in either case, for such
shorter period as imposed by applicable law for an exclusive know-how license.
In the case of a pending patent application, if, at such time as a patent is
issued, no generic equivalent of the Licensed Product has been introduced into
the market in the related country, Novartis shall pay to TCS the difference
between the know-how royalty actually paid pursuant to this Section 3.3(b) and
the royalty which would have been paid pursuant to Section 3.3(a) had the patent
been issued for the period from the later of (1) the Effective Date hereof and
(2) the date such patent application was filed with the appropriate government
authority in such country through the date the patent was issued. Such payment
will be made by Novartis within thirty (30) days after it receives an Invoice
accompanied by appropriate documentation for such amount. Notwithstanding
anything in this Section 3.3(b) to the contrary, in the case of a pending patent
application which is abandoned, the "know-how royalty" as set forth herein will
continue to be paid in accordance with the terms of this Section 3.3(b).
(c) Combination Products
(i) Licensed Protein Products. In the event that the Licensed
Protein Products are sold by Novartis in Combination Products, the Net Sales
value of the Licensed Protein Products included in the Combination Products
shall be determined using the following formulae:
(A) If the Licensed Protein Products and other components
("Other Components") contained in the Combination Products are available
separately, the Net Sales value for the purpose of calculating royalty payments
shall be the result obtained by multiplying the Net Sales of the Combination
Products by the fraction A/A+B where A is the invoice price of the Licensed
Protein Products in the Combination Products and B is the price of all Other
Components in the Combination Products.
(B) If the Combination Products include Other Components
which are not sold separately, but the Licensed Protein Products contained in
the Combination Products are available separately, the Net Sales value for the
purposes of calculating royalty payments shall be the result of multiplying the
Net Sales of the Combination Products by the fraction A/C where A is the price
of the Licensed Protein Products and C is the invoiced price of the Combination
Products.
(ii) Licensed Gene Therapy Product or a Licensed Organ or
Tissue Product: In the event that a Licensed Gene Therapy Product or a Licensed
Organ or Tissue Product is sold in a Combination Product, then the Net Sales
value for the purposes of calculating royalty payments shall be based on the
portion of the total invoice price for the Combination Product which is fairly
allocable to the Licensed Gene Therapy Product or Licensed Organ or Tissue
Product in comparison with the Other Components. Such portion shall be set in
good faith negotiations between the Parties at such time as the filing of
applications for marketing approval of the Combination Product are seriously
being considered by Novartis and shall take into account all relevant factors,
including, but not limited to, relative cost and therapeutic contributions of
the components and the relative contributions of the Parties to the development
of the components. In the event that the Parties are unable to agree on such a
portion within six (6) months, the matter will be decided in accordance with the
dispute resolution procedures set forth hereinafter.
(d) Licensed Protein: Net Sales value of Licensed Protein sold in bulk,
in, or in connection with Monitoring Technology by Novartis, its Affiliates or
its sub-licensees to independent, non-Affiliate, third party customers in bona
fide, arms-length transactions shall be calculated as follows: The total Net
Sales of Licensed Products calculated in accordance with Section 1.16 shall be
divided by the total number of grams of Licensed Protein contained therein to
obtain the average Net Sales value per gram of Licensed Protein which shall then
be multiplied by the total number of grams of Licensed Protein sold in bulk, in,
or in connection with Monitoring Technology. This calculation shall be
made separately for each country in which Licensed Protein is sold in bulk, in,
or in connection with Monitoring Technology.
(e) Reduction in Patent Royalty for Licensed Gene Therapy Products and
Licensed Organ or Tissue Products. The royalty levels set forth in Sections
3.3(a)(i) and (ii) shall be reduced to one-fourth thereof in the case of
Licensed Products which are Licensed Gene Therapy Products or Licensed Organ or
Tissue Products; provided, that, in no event shall any such patent royalty rate
be reduced to less than XXXXXXXXXX of Net Sales in the Territory of such
Licensed Gene Therapy Product or Licensed Organ or Tissue Product.
(f) Net Sales - Retroactive Price Reductions. In the event that
calculated deductions due to retroactive price reductions for a particular
Calendar Quarter exceed fifty percent (50%) of royalties payable to TCS in such
Calendar Quarter, only the amount equal to fifty percent (50%) of such royalties
will be deducted in such Calendar Quarter and the excess amount will be applied
in subsequent Calendar Quarters.
3.4 Third Party Obligation - Reduction in Royalty
In the event Novartis is required to obtain a license from any
non-affiliated third party under any patent and is obligated to pay a royalty to
such non-affiliated third party or parties in any country in respect of any
Licensed Product or its method of use, for which royalties are due under Section
3.3, then Novartis shall have the right to deduct the amount of such royalties
which Novartis pays to such non-affiliated third party or parties for such
product in such country in a Calendar Quarter from the royalties to be paid to
TCS under Section 3.3 for such product in such country in a Calendar Quarter;
provided, that, (i) with respect to Licensed Protein Products, said reduction
shall not reduce the royalties payable by Novartis to TCS to below the "know-how
royalty" set forth in Section 3.3(b) and (ii) with respect to Licensed Gene
Therapy Products and Licensed Organ or Tissue Products, said reduction shall not
reduce the royalties payable by Novartis to TCS below XXXXXXXXXX as set forth in
Section 3.3(e) TCS shall remain responsible for any royalty obligations due to
third parties under the TCS Patents which have been licensed to TCS and are
sub-licensed to Novartis hereunder.
3.5 Third Party Competition - Reduction in Know-How Royalty
In the event substantial competition in the sale of a Licensed Product
arises in a country in which no patent royalty is due pursuant to Section
3.3(a), as a result of an independent third party market introduction of a
product containing the chemical or functional equivalent of a Licensed Materials
or Licensed Products, then any know-how royalty otherwise payable for said
country pursuant to Section 3.3(b) shall be reduced by an amount in compensation
for said competition as shall be negotiated in good faith by the Parties;
provided, that said reduction shall not exceed, on a quarterly basis, fifty
percent (50%) of said know-how royalty due for such country under Section 3.3(b)
or 3.3(e); and such reduction shall commence with the first full Calendar
Quarter following Novartis' written notification to TCS of the existence of said
substantial competition. "Substantial competition" as used in this Section 3.5
shall mean unit sales of the third party product which totals XXXXXXXXXX of the
unit sales of Licensed Product in such country over any three (3) month period.
Such substantial competition shall be measured by comparing Novartis' unit sales
and those of the third party, as reported by IMS America or another reputable,
independent market research firm acceptable to both Parties.
3.6 Payments
(a) All payments due to TCS under this License Agreement, other than
the royalty payments due pursuant to Section 3.3, shall be made in United States
dollars and shall be paid by wire transfer to a bank account designated by TCS
within thirty (30) days after receipt of the related invoice in the form of
Appendix B, hereto ("Invoice"), but in no case earlier than the date due and the
costs of such remittance shall be borne by Novartis. All royalty payments due
pursuant to Section 3.3 shall be paid in United States dollars by check, which
check shall be sent to TCS at the same time as the corresponding written
report sent pursuant to Section 3.6(b). Interest shall accrue on late payments
compounded monthly at the prime lending rate for United States dollars as
published from time to time in the Wall Street Journal plus two percent (2%)
from the date payment fell due until the actual date that payment is received by
TCS.
(b) Quarterly Royalty Obligations. During the term of this License
Agreement following the First Commercial Sale of a Licensed Product or Licensed
Protein in, or in connection with, Monitoring Technology, Novartis shall furnish
to TCS once each Calendar Quarter a written report for the Calendar Quarter
showing the sales of all Licensed Product(s) or Licensed Protein in, or in
connection with, Monitoring Technology subject to royalty payments sold by
Novartis, its Affiliates and its sub-licensees in each country during the
reporting period and the royalties payable under this License Agreement. Reports
shall be due sixty (60) days following the close of each Calendar Quarter.
Novartis shall keep complete and accurate records in sufficient detail to enable
the royalties payable hereunder to be determined.
(c) Royalty Exchange Rate. All royalty payments due under this License
Agreement shall be made in United States dollars and shall be determined on the
basis of Novartis' quarterly standard account of sales which represents the
conversion of all local currency sales for a Calendar Quarter to Swiss francs at
the "Average Quarterly Exchange Rate" (hereinafter defined) for such Calendar
Quarter in which the sales are recorded. The Average Quarterly Exchange Rate is
the average of the exchange rates published in the London Times at the close of
each business day in London over the last thirty (30) days of the Calendar
Quarter in which the sales are recorded. The exchange rate between the Swiss
franc and the United States dollar for the Calendar Quarter payment to TCS shall
be the Average Quarterly Exchange Rate for the Calendar Quarter in which the
sales are recorded.
(d) All amounts of royalties payable by Novartis pursuant to this
Article 3 shall be paid in United States dollars without deducting or
withholding therefrom any tax, duty,
charge, conversion or remittance fee. If Novartis is required by law to make any
deduction or withholding from any payment to TCS then:
(i) Novartis shall ensure that such deduction or withholding
does not exceed the minimum legal liability therefore and shall forthwith pay to
TCS such additional amount as will result in the receipt by TCS of the full
amount which would otherwise have been received hereunder had no such deduction
or withholding been made and shall remit the amount of such tax to the
appropriate taxation authority;
(ii) not later than thirty (30) days after each deduction or
withholding of any taxes, Novartis shall forward to TCS such documentary
evidence as may be reasonably required by TCS in respect of the deduction,
withholding or payment; and
(iii) if and whenever TCS determines in its discretion that it
has finally obtained a credit for any deduction or withholding as aforesaid
against its own liability for tax by setting the whole or part thereof against
payments made by it under deduction of tax, TCS shall notify Novartis, and shall
simultaneously pay to Novartis an amount such that TCS retains, taking into
account the original payment from Novartis and the tax credit, such amount as it
should originally have received from Novartis but for the withholding or other
deduction.
ARTICLE IV
----------
DEVELOPMENT AND DISCLOSURE OF KNOW-HOW
--------------------------------------
4.1 Research and Development by Novartis. Novartis shall use reasonable
commercial efforts, consistent with the usual practice followed by Novartis in
pursuing the commercialization and marketing of its other similar pharmaceutical
products, at its own expense, to develop and commercialize Licensed Product on a
commercially reasonable basis. Novartis shall, at its own cost and expense,
perform all research and development
activities necessary or appropriate to obtain and maintain in full force and
effect Agency approval in each Major Market Country for the marketing of
Licensed Product in the Field, whether allotransplantation or
xenotransplantation. Novartis shall at the earliest possible time, consistent
with sound scientific and business principles, file applications for Agency
approval to sell at least one Licensed Product in each Major Market Country and
other countries where there is a reasonable market opportunity. Without limiting
the generality of the foregoing, such activities shall include all toxicology,
pharmacology, pharmaceutical, physical and analytical, pre-clinical and clinical
studies and evaluations not already performed by TCS.
4.2 Research and Development by TCS. In the event Novartis and TCS agree that it
is appropriate for TCS to carry out research and/or development support
activities, the Parties will work together to develop a research plan for
carrying out such activities ("Research Plan"). TCS agrees that it will perform
all such research and/or development activities in strict accordance with the
Research Plan. Novartis shall provide the funding to carry out the activities
elaborated in the Research Plan.
4.3 Development Plan. Novartis shall prepare a development plan for the
development of Licensed Protein in the Field (the "Development Plan") and
provide TCS with a copy of it when it becomes available. The Development Plan
provided to TCS is subject to modifications as additional information becomes
available. Each major modification of the Development Plan shall be communicated
to TCS upon its approval by Novartis' management. TCS acknowledges and agrees
that the Development Plan will be provided to it by Novartis for informational
purposes only, and TCS shall have no right to approve or require changes to the
Development Plan.
4.4 Supply of TP-10
Novartis shall supply TCS free-of-charge with all quantities of TP-10
required by TCS to carry out the activities required under the Research Plan, if
any, pursuant to Section
4.2. TCS shall keep accurate records regarding use and disposition of such
material and shall provide Novartis with such reports and records as the Parties
mutually agree are required to verify such use and disposition.
4.5 Progress Reports
Within sixty (60) days after the end of each calendar half year TCS and
Novartis shall each provide to the other progress reports on the work performed
and actions taken in such calendar half year with respect to the Development
Plan and the Research Plan, if any, including, without limitation, updates on
clinical trials, results, Regulatory Submissions and Regulatory Approvals.
4.6 Exclusivity
During the term of this License Agreement, TCS shall not grant to any
third party any right or license in or to sCR1sLex in the Field.
4.7 Disclosure of Know-How
Subject to the provisions of Section 8, TCS shall, to the
extent it is free to share such information, promptly within three (3) months
after the Effective Date disclose to Novartis all TCS Know-How relevant to the
Field then in its possession that has not been disclosed prior to the Effective
Date. From time to time during the term of this Agreement, each Party, to the
extent such Party is free to share such information, shall make available to the
other Party Know-How which the other Party reasonably requires to facilitate, in
the case of Novartis, its research, development and commercialization of the
Licensed Products and/or Licensed Protein in, or in connection with, Monitoring
Technology in the Field, in the case of TCS, its research, development and
commercialization of Licensed Protein outside the Field. TCS shall have an
option to obtain from Novartis a license under and to the Novartis Patents and
Novartis Know-How on reasonable terms for such purposes. Each Party shall grant
to the other Party the right to cross-reference the safety and manufacturing
data in IND filings it makes in connection with a Licensed Product to the
extent such cross-reference is reasonably required by the other Party. Each
Party shall provide its Know-How to the other Party in the form that it exists.
It is expressly understood that, for the purposes of this Section 4.7 only,
Know-How shall exclude all full reports of clinical and non-clinical studies
other than those relating to the Licensed Protein, registration files and the
like including correspondence with regulatory authorities, and summaries of
clinical and non-clinical studies other than those related to Licensed Protein
shall replace full reports.
4.8 TCS shall, at Novartis' request, provide a letter to the FDA transferring to
Novartis sponsorship of TCS' INDs covering the Licensed Materials or Licensed
Products in the Field.
ARTICLE V
---------
REGULATORY APPROVALS AND COMMENCEMENT OF
----------------------------------------
MARKETING
---------
5.1 Exchange of Clinical Investigation Information
Each Party shall provide to the other Party a summary/outline of the
protocol for any clinical investigation involving the Licensed Protein to be
undertaken by, or on behalf of such Party, or, in the case of TCS, to be
undertaken by another licensee, other than protocols of investigations which
essentially duplicate earlier investigations in the same or different countries,
to the extent TCS is free to share such information. Novartis may provide such
summaries/outlines as part of the progress reports to be provided to TCS
pursuant to Section 4.5. These protocol summaries/outlines will be provided for
informational purposes only, and the receiving Party shall have no right to
approve or require changes to the related protocols. Each such protocol
summary/outline shall be considered the Proprietary Information of the Party
providing it and accordingly shall be kept confidential by the receiving Party.
5.2 Failure by Novartis to obtain Regulatory Approvals or Commence to Market
In the event that Novartis fails to submit any Regulatory Submission in
any Major Market Country within the Territory in accordance with Section 4.1
hereof, or having obtained Regulatory Approval Novartis fails to commence to
market a Licensed Product in any Major Market Country within the Territory
within one (1) year of having obtained such approval, then the licenses granted
with respect to that Major Market Country shall terminate and all rights with
respect to the Licensed Products and Licensed Protein in, or in connection with,
Monitoring Technology with respect to that Major Market Country shall revert to
TCS and TCS shall be free to market the Licensed Products and/or the Licensed
Protein in, or in connection with, Monitoring Technology in the Field in such
Major Market Country itself or through its sub-licensees, and the provisions of
Section 15.4 shall apply; provided, however, that the licenses granted hereunder
shall not terminate in such Major Market Country if (i) the failure is
attributable to causes beyond Novartis' control and Novartis is continuing in
good faith to obtain Regulatory Approval for, or to sell, the Licensed Products
in such Major Market Country or (ii) Novartis has a legitimate business reason
to postpone the launch of the Licensed Product. In the event that Novartis has
not made its First Commercial Sale within four (4) years of the Effective Date
of this Agreement, Novartis shall reimburse TCS for any amounts paid to JHU as
minimum annual royalty or otherwise up to a maximum of XXXXXXXXX per annum.
5.3 Commenced to Market
Novartis shall be deemed to have commenced to market a Licensed Product
commercially in the Territory only when it, its Affiliate or its sub-licensee
shall have commenced to promote the sale of the Licensed Product in the
Territory and have offered it regularly for sale in the Territory using the same
distribution channels and methods, exercising the same diligence and adhering to
the same standards that such entity employs in marketing its own pharmaceutical
products in the Territory. All costs and expenses of marketing, distributing and
selling the Licensed Products shall be borne by Novartis.
ARTICLE VI
----------
ACCOUNTING PROCEDURE
--------------------
6.1 Record Keeping
Novartis shall keep, and Novartis shall ensure that its Affiliates and
sub-licensees shall keep complete and accurate records in connection with the
payments provided for under this License Agreement. TCS shall have the right
upon written notice and only once per year to nominate an independent firm of
certified public accountants of nationally recognized standing and reasonably
acceptable to Novartis who shall have access to the books and records of
Novartis, its Affiliates and/or its sub-licensees as may be reasonably necessary
to verify the accuracy of the royalty reports hereunder for any Calendar Year
ending not more than twenty four (24) months prior to the date of such request
during reasonable business hours for the purpose of verifying any amounts
payable under this License Agreement. The accountants shall report only on the
accuracy of the information provided by Novartis and whether additional
royalties are owed. These rights with respect to any Calendar Year shall
terminate two (2) years after the end of such Calendar Year; provided, however,
that in the event that the accountants discover a material (i.e. greater than
five percent (5%)) discrepancy in the payments made to TCS by Novartis, TCS
shall have the right to have the accountants review the relevant books and
records of Novartis, its Affiliates and/or sub-licensees for the three (3) years
(or any portion thereof) immediately preceding the two (2) year period already
reviewed.
If such accountants conclude that additional royalties were owed by
Novartis during the period, Novartis shall pay the additional royalties within
thirty (30) days after receipt by Novartis of an Invoice for such royalties
accompanied by a copy of such accountants' written report so concluding. If such
accounts conclude that an overpayment of royalties was made by Novartis during
the period, TCS shall reimburse the amount of such
overpayment to Novartis within thirty (30) days after receipt by TCS of such
accountants' written report so concluding. The fees and expenses of the
accountants performing such verification shall be borne by TCS unless such
accountants discover a material (i.e. greater than five percent (5%))
discrepancy in the payments made to TCS by Novartis in which event the fees and
expenses of the accountants shall be borne by Novartis.
Novartis further agrees that, upon written request from TCS, it shall
provide a certified report from an independent firm of certified public
accountants to be generated during the next regularly scheduled external audit
of Novartis' business regarding the royalties owed by Novartis to TCS for the
period covered by such regularly scheduled audit. TCS acknowledges that any such
report will provide aggregated royalty information only and will not include
information on an individual Novartis Affiliate basis.
ARTICLE VII
-----------
INDEMNIFICATION AND HOLD HARMLESS
---------------------------------
7.1 Novartis Indemnity
Subject to the provisions of Section 7.3, Novartis shall defend and
indemnify and hold harmless TCS and its Affiliates and their respective
directors, officers, agents and employees from and against any and all losses,
liabilities, claims, damages, penalties, fines, costs and expenses (including
reasonable legal fees and other litigation costs, regardless of outcome) arising
out of any and all governmental or private actions (or their insurers under
rights of subrogation or otherwise) that are related in any way (i) to
Novartis', its Affiliates' and/or sub-licensees' development, importation,
manufacture, storage or use of the Licensed Materials or Novartis', its
Affiliates' and/or sub-licensees' development, importation, sale, manufacture,
storage, or use of the Licensed Products or Licensed Protein in, or in
connection with, Monitoring Technology; (ii) to Novartis' supplying of TP-10 to
TCS pursuant to Section 15.1; (iii) to any claim of failure by Novartis, its
Affiliates and/or
sub-licensees to comply with governmental requirements relating to the Licensed
Materials and/or Licensed Products including, but not limited to, the reporting
of adverse event and safety information; or (iv) to Novartis', its Affiliates'
and/or sub-licensees negligence or any acts or omissions by Novartis in
connection with the Licensed Materials or Licensed Products or in violation of
its obligations under this License Agreement.
7.2 TCS Indemnity
Subject to the provisions of Section 7.3, TCS shall defend and
indemnify and hold harmless Novartis, its Affiliates and its sub-licensees and
their respective directors, officers, agents and employees from and against any
and all losses, liabilities, claims, damages, penalties, fines, costs and
expenses (including reasonable legal fees and other litigation costs, regardless
of outcome) arising out of any and all governmental or private actions (or their
insurers under rights of subrogation or otherwise) that are related in any way
(i) to the development, manufacture, packaging, storage, use, marketing,
promotion, distribution, importation and sale of the Licensed Materials and/or
Licensed Products by TCS, any Affiliate of TCS or any licensee of TCS other than
Novartis; (ii) to any claim of failure by TCS, its Affiliate or any licensee of
TCS other than Novartis to comply with governmental requirements relating to the
Licensed Materials and/or Licensed Products including, but not limited to, the
reporting of adverse event and safety information; or (iii) to TCS', its
Affiliate's or licensee's negligence or any acts or omissions by TCS, any
Affiliate of TCS or any licensee of TCS other than Novartis in connection with
the Licensed Materials or Licensed Products or in violation of its obligations
under this License Agreement.
7.3 Indemnity Procedure
The Party to be indemnified (the "Indemnitee") shall notify the
indemnifying party (the "Indemnitor") in writing promptly, but no later than
fifteen (15) days after becoming aware, of any claims, suits, actions or
proceedings made or instituted against it or which may be made or instituted
against it in respect of which indemnification may be sought
hereunder. The Indemnitee shall cooperate with the Indemnitor in the defense of
any claim. The Indemnitor shall have the right to select defense counsel and
direct the defense or settlement of any such claim or suit. The Indemnitee shall
have the right to select and obtain representation by separate legal counsel, at
its own expense.
7.4 Insurance
(a) TCS hereby warrants that it maintains a policy or program of
insurance at levels no less than one million United States dollars
(US$1,000,000) for each occurrence and in the aggregate to support the
indemnification obligations assumed under this Article 7.
(b) Novartis hereby warrants that it maintains a policy or program of
insurance or self-insurance at levels sufficient to support the indemnification
obligations assumed under this Article 7.
ARTICLE VIII
------------
CONFIDENTIALITY
---------------
8.1 Confidentiality Obligations
Each Party shall receive and keep all Proprietary Information in
complete confidence in the same manner and with the same protection as such
Party maintains for its own Proprietary Information and hereby covenants not to
use such Proprietary Information or any part of it except for the purposes of
this License Agreement or disclose or make such Proprietary Information or any
part of it available to third parties except:
(a) to its employees and responsible sub-contractors or agents
(including attorneys) who require such Proprietary Information for the express
purposes of this
License Agreement and who are bound in writing to the receiving Party in a
manner consistent with the confidentiality provisions of this License Agreement;
provided, that, TCS shall not have the right to share Novartis Proprietary
Information in the Field with TCS' sub-licensees without the prior written
consent of Novartis which consent shall not be unreasonably withheld;
(b) for disclosure to governmental health or regulatory agencies for
the purpose of obtaining and maintaining any necessary regulatory approvals for
the Licensed Materials or Licensed Products in the Territory (and then, to the
fullest extent possible, only under conditions of confidentiality);
(c) to the extent that the disclosing Party may agree in writing;
(d) to the extent that such can be clearly demonstrated by prior
written documents in its possession to be known to the receiving Party or an
Affiliate of the receiving Party from a source other than the disclosing Party
or an Affiliate of the disclosing Party who is not in breach or default of any
confidentiality obligation to the disclosing Party or an Affiliate of the
disclosing Party at the time of receipt from the disclosing Party hereunder;
(e) to the extent that such is a matter of public knowledge at the time
of disclosure hereunder or becomes a matter of public knowledge other than by
breach of this License Agreement by the receiving Party, its employees or anyone
that received Proprietary Information from the receiving Party;
(f) to the extent that it is required by law or bona fide legal process
to be disclosed (and then, to the fullest extent possible, only under conditions
of confidentiality).
Each Party specifically agrees that, except as shall be necessary for
governmental notification purposes or to comply with applicable laws and
regulations, it will not provide a copy of the Option Agreement, this License
Agreement, the Stock Purchase Agreement or
any other related agreement to any third party except its employees, Affiliates
and responsible sub-contractors or agents (including attorneys) who require such
copy for the express purposes of this License Agreement and who are bound in
writing to the Party providing the copy in a manner consistent with the
confidentiality provisions of this License Agreement without the prior written
consent of the other Party hereto.
8.2 Prior Confidentiality Agreements
Proprietary Information disclosed by either Party to the other Party
prior to the Effective Date of this License Agreement under any previous
agreements between TCS and Sandoz Pharma Ltd and/or under the Option Agreement
shall be treated as Proprietary Information under this Article 8 notwithstanding
the expiration of the prior Confidentiality Agreements and the expiration and/or
termination of the Option Agreement. All Proprietary Information disclosed by
either Party to the other Party after the Effective Date of this License
Agreement shall be governed by this Article 8.
8.3 Public Announcement
Except as shall be necessary for governmental notification purposes or
to comply with applicable laws and regulations, and except as otherwise agreed
to by the Parties in writing, the Parties agree to keep the existence of this
License Agreement, and the transactions contemplated hereby, and any proposed
termination hereof, strictly confidential. The Parties shall agree upon the text
of an initial public announcement relating to the transactions contemplated by
this License Agreement as soon as possible after the Effective Date. Prior to
making any subsequent public announcements regarding this License Agreement or
the transactions contemplated herein, each Party agrees to provide the other
Party a reasonable opportunity to review and comment upon such proposed
subsequent announcement. Written agreement between the Parties shall be required
prior to release of any such subsequent public announcement and such agreement
shall not be unreasonably withheld.
ARTICLE IX
----------
CLEARANCE OF PUBLICATIONS
-------------------------
If either Party wishes to make any written or oral public disclosure
(e.g., speeches or publications in scientific journals or other publications)
relating to the Licensed Materials or Licensed Products in the Field, whether or
not such disclosure involves the disclosure of Proprietary Information of the
other Party, the Party seeking to make such public disclosure (the "Disclosing
Party") shall provide the other Party with details of the proposed written or
oral public disclosure and/or an advance copy of any proposed publication thirty
(30) days prior to the earlier of (i) the intended date of release or (ii) the
submission of written text or abstract of a speech for oral presentation or of
written material for publication. The other Party then shall have thirty (30)
days to make any comments or recommend any changes it reasonably believes are
necessary to preserve intellectual property rights or Proprietary Information
and the incorporation of such changes shall not be unreasonably refused by the
Disclosing Party; and if such other Party informs the Disclosing Party within
thirty (30) days of receipt of an advance notice of a written or oral public
disclosure or copy of a proposed publication (i) that such public disclosure or
publication, in its reasonable judgment, is expected to have a materially
adverse effect on its intellectual property rights or Proprietary Information,
or (ii) of some other reasonable objection, the Disclosing Party shall use its
best efforts to delay or prevent public disclosure or publication. Such delay
shall be sufficiently long as to permit the timely preparation and filing of
patent applications if the reason given by the other Party for delaying public
disclosure or publication is that it would disclose patentable inventions.
ARTICLE X
---------
PATENTS
-------
10.1 Changes to Patents
TCS shall promptly advise Novartis of any additions to, or deletions
from, the TCS Patents set forth in Appendix A including the issuance of patents
upon any patent application included therein. Novartis shall promptly advise TCS
of any patent applications and issuance of any patents falling within the
Novartis Patents.
10.2 Ownership
Know-How and any resulting inventions (whether patentable or not) which
are made, conceived, reduced to practice or generated solely by TCS' employees
or agents including TCS Patents shall belong exclusively to TCS. Know-How and
any resulting inventions (whether patentable or not) which are made, conceived,
reduced to practice or generated solely by Novartis' employees or agents
including Novartis Patents shall belong exclusively to Novartis. TCS and
Novartis shall each own a fifty percent (50%) undivided interest in any Know-How
and any resulting inventions (whether patentable or not) made, conceived,
reduced to practice or generated (i) jointly by employees, agents or other
persons acting on behalf of both Parties including Joint Patents or (ii) either
solely by TCS' employees or agents or jointly by employees, agents or other
persons acting on behalf of both Parties while carrying out activities under the
terms of Section 4.2 of this License Agreement. Subject to the terms of this
License Agreement, each joint owner may make, use and sell jointly owned
inventions, discoveries and Know-How including Joint Patents without accounting
to the other joint owner in accordance with its undivided rights hereunder.
10.3 Filing and Prosecution of Patents
TCS shall with respect to TCS inventions, and Novartis shall with
respect to Novartis inventions, use reasonable efforts to file and prosecute TCS
Patents and Novartis Patents claiming those inventions respectively. Each Party
shall give the other reasonable opportunity to review and comment on any patent
application filed and its prosecution. TCS shall have the right, but not the
obligation, with respect to Novartis Patents, and Novartis shall have the right,
subject to JHU's rights under the JHU Agreement, but not the obligation, with
respect to TCS Patents, to assume responsibility for any Novartis Patents or TCS
Patents which Novartis or TCS intends to abandon or otherwise cause or allow to
be forfeited. Subject to the rights granted by TCS to JHU pursuant to the JHU
Agreement, Novartis shall have the option, but not the obligation, to file
patent applications for any jointly developed inventions at Novartis' cost in
the joint names of TCS and Novartis. If Novartis notifies TCS that it does not
wish to file patent application(s) on any jointly developed invention, TCS shall
be free to do so at TCS' cost in the joint names of TCS and Novartis.
10.4 Enforcement of Patents
In the event that TCS or Novartis become aware of any actual or
threatened infringement of TCS Patents or Novartis Patents in the Field in the
Territory, that Party shall promptly notify the other Party in writing and the
Parties shall discuss how best to enforce the Patents. Unless otherwise agreed
to in writing between the Parties, Novartis, in the case of the Novartis Patents
and the Joint Patents, and TCS, in the case of the TCS Patents, shall have the
right to take such action, at its own expense, as it deems appropriate to abate
such infringement including patent litigation against such third party and to
use the other Party's name in connection therewith. If Novartis, in the case of
the Novartis Patents and the Joint Patents, or TCS, in the case of the TCS
Patents, without good reason, does not abate such infringement or commence a
particular infringement action within thirty (30) days after becoming aware of
the actual or threatened infringement, then, TCS, in
the case of the Novartis Patents and the Joint Patents, and Novartis, subject to
JHU's rights under the JHU Agreement, in the case of the TCS Patents, shall be
entitled to bring such action at its own expense. If either Party, without good
reason fails to take appropriate action within twenty-one (21) days after
Novartis and/or TCS have received notification of patent certification as set
forth in Article 13, the other Party, after notifying the Party which failed to
take action in writing, shall be entitled to bring such action at its own
expense. The Party bringing an action under this Section 10.4 shall have full
control over the conduct of such action, including the settlement thereof, and
shall keep the other informed of the status of such action. Notwithstanding the
foregoing, either Party shall have the right, but not the obligation, to appoint
separate counsel to represent them, at its own expense, in any action brought by
the other Party under this Section 10.4. In any event, TCS and Novartis shall
assist one another and cooperate in any such action at the other Party's request
without expense to the requesting Party. TCS and Novartis shall recover their
respective actual out-of-pocket expenses (including reasonable attorneys fees),
or equitably pro rated portions thereof, associated with any such action or
settlement thereof from any recovery made by any Party. Any excess amounts shall
be shared between the Parties with TCS receiving an amount equal to the result
obtained by multiplying the excess amount by applicable royalty rate (as
specified in Article 3) and Novartis receiving the remainder. For example, if
the applicable royalty rate is xxxxxxxxxxx, TCS shall receive xxxxxxxxxxx of the
excess amount, and Novartis shall receive xxxxxxxxxxx of the excess amount.
ARTICLE XI
----------
TRADEMARKS
----------
Novartis shall have the right to sell the Licensed Product under its
own trademark. All costs, expenses and risks of marketing, distributing and
selling the Licensed Products pursuant to this License Agreement shall be borne
by Novartis. The immediate packaging of Licensed Protein shall contain a legend
indicating that the Licensed Protein is sold "Under license from T Cell
Sciences, Inc." In the event that TCS changes its name, Novartis
agrees to revise such legend at the next scheduled printing of such packaging.
Notwithstanding the foregoing, in the event that such name change is the result
of a merger by TCS with, or an acquisition of all or substantially all of TCS'
assets by, a third party, operating in the pharmaceutical market, Novartis shall
have the option in its sole discretion to discontinue including the
above-referenced legend (or any later version thereof) on such packaging.
ARTICLE XII
-----------
DRUG PRICE COMPETITION AND PATENT TERM RESTORATION ACT USA
----------------------------------------------------------
AND PATENT TERM EXTENSIONS IN OTHER COUNTRIES
---------------------------------------------
12.1 Avoidance of Loss of Rights
The Parties agree to cooperate in an effort to avoid loss of any rights
which may otherwise be available to the Parties hereto under the provisions of
the Drug Price Competition and Patent Term Restoration Act of 1984.
12.2 TCS to Provide Patent Information
TCS shall provide relevant patent information to Novartis so that
Novartis, as NDA applicant, may inform the FDA.
12.3 Cross-Reference Rights
TCS shall grant Novartis cross-reference rights to relevant clinical or
other regulatory files.
12.4 Extension of TCS Patents
The Parties shall cooperate in determining, if applicable, which of
TCS' Patents shall be extended pursuant to 35 USC ss.156, although Novartis
shall have the final decision in this regard.
12.5 Patent Extensions
TCS agrees that applications for patent extension are to be made by
Novartis in the sixty (60) day period following NDA approval; consequently, the
Parties agree that preparation for such application shall begin upon FDA's
issuance of an "Approvable Letter".
12.6 Notice of Patent Certification
Notice to a Party of any "patent certification" filed under 21 USC
ss.355(b)(2)(A) by a third party FDA applicant which references a U.S. patent
licensed hereunder shall be immediately provided to the other Party for possible
action. TCS agrees that Novartis, on TCS' behalf, may initiate the necessary
action to prevent such third party from obtaining FDA approval to market the
Licensed Products.
12.7 No Actions or Agreements
No actions or agreements which interfere with the above activities
shall be undertaken or entered into after the Effective Date of the License
Agreement.
12.8 Patent Term Restoration - Other Countries
The Parties shall cooperate with each other in obtaining patent term
restoration or supplementary protection certificates or their equivalents in any
country worldwide where
applicable to the TCS Patents, at Novartis' cost. TCS shall provide all
reasonable assistance to Novartis, including proceeding with applications for
such in the name of TCS but at the cost of Novartis if so required.
ARTICLE XIII
------------
NOTICES
-------
13.1 Any notice or other communication required or permitted to be given or made
hereunder shall be in writing in the English language and shall be deemed to
have been duly given if sent by registered air mail (return receipt requested),
facsimile letter or delivered by hand to the Party to whom such notice or
communication is required or permitted to be given. Any such notice or other
communications, if mailed, shall be considered given or made when mailed, as
evidenced by the postmark at point of mailing. If sent by facsimile letter such
notice shall be deemed to have been given on the date that it is sent provided
that a confirmatory copy of the facsimile letter is mailed on the same day as
the facsimile letter is sent to the receiving Party. If delivered by hand, any
such notice or communication shall be considered given when delivered.
13.2 All notices to TCS or to any transferee or designee of TCS, pursuant to
this License Agreement shall be addressed as follows:
T Cell Sciences, Inc.
119 Fourth Avenue
Needham, MA 02194
USA
Facsimile: XXXXXX
Attention: XXXXXX
13.3 All notices to Novartis shall be addressed as follows:
Novartis Pharma AG
Lichstrasse 35
Post Office Box
CH-4002 Basel
Switzerland
Facsimile: XXXXXX
Attention: XXXXXX
With copy to:
Novartis Pharma AG
Lichstrasse 35
Post Office Box
CH-4002 Basel
Switzerland
Facsimile: XXXXXX
Attention: XXXXXX
13.4 Either Party may change the address to which notice and other
communications to it are to be given by notice as provided herein.
ARTICLE XIV
-----------
TERM OF LICENSE AGREEMENT
-------------------------
14.1 Term
Unless sooner terminated as provided herein, this License Agreement
shall commence on the Effective Date hereof and shall continue in full force and
effect until Novartis is no longer obligated to pay royalties hereunder.
14.2 Paid-Up License
For each country, in the Territory, upon expiration of Novartis'
obligation to pay royalties pursuant to Section 3.3, Novartis shall have a fully
paid-up, royalty-free, non-exclusive license, with the right to assign or
sub-license, under and to the TCS Patents and TCS Know-How in said country to
(i) develop, have developed, import, make or have made for use, and to use, the
Licensed Materials in the Field, (ii) develop, have developed, import, make or
have made, offer for sale, sell and otherwise distribute Licensed Protein, in,
or in connection with, Monitoring Technology in the Field and (iii) develop,
have developed, import, make, have made for use, sale, distribution and offer
for sale and to use, sell, distribute and offer to sell in the Field the
Licensed Products; provided, that, Novartis is not then in material breach of
this License Agreement with respect to such country. In the event that Novartis
is in material breach of this License Agreement at the time that its obligation
to pay royalties in such country expires, Novartis shall not have such fully
paid-up license until such time as it cures such breach, at which time Novartis
shall have a fully paid-up license, retroactive to the date on which its
obligations to pay royalties in such country expired; provided, that Novartis
cures such breach within one hundred twenty (120) days of the later of (a) the
date on which Novartis' obligation to pay royalties in such country expires or
(b) the date Novartis receives notice of such breach from TCS; provided,
further, that, in the event that Novartis is in material breach of this License
Agreement due to a dispute between Novartis, it Affiliates and/or its
sub-licensees and TCS and/or its Affiliates, the one hundred twenty (120) day
period shall be suspended until final resolution of the dispute in accordance
with Section 20.2.
For each country, upon expiration of Novartis' obligation to pay
royalties as set out above, Novartis shall grant to TCS a non-exclusive,
royalty-free license with the right to sub-license under and to the Novartis
Patents and Novartis Know-How relating to the Licensed Protein or a Licensed
Protein Product outside the Field.
14.3 Novartis' Right to Manufacture
In the event Novartis has a fully paid-up License in any country
pursuant to Section 14.2, it shall have the right to manufacture or have
manufactured the Licensed Materials or Licensed Products anywhere in the world
for use or sale in said country in the Field.
ARTICLE XV
----------
TERMINATION OF LICENSE AGREEMENT
--------------------------------
15.1 Novartis' Right to Terminate
(a) Novartis shall have the right to terminate this License Agreement,
in whole or on a country by country basis, by giving TCS sixty (60) days' prior
written notice in the event of significant and continuing regulatory, medical,
efficacy, safety or legal issues relating to, or due to lack of marketability
of, the Licensed Products.
(b) Novartis shall have the right in it sole discretion to terminate
this License Agreement for any reason other than those specified in Section
15.1(a), 15.2(a) or 15.3, or for no reason, by notifying TCS in writing of its
intention to terminate; provided, that Novartis is not in material breach of
this License Agreement at such time. TCS then shall notify Novartis in writing
within ninety (90) days after its receipt of such written notice whether it
elects to (i) have such termination move forward immediately or (ii) have
Novartis attempt to identify and enter into negotiations with a sub-licensee
acceptable to TCS.
(i) If TCS elects to have the termination move forward
immediately, TCS will send an Invoice for the amount equal to the next milestone
payment not yet paid pursuant to Section 3.2 hereof, up to a maximum amount of
XXXXXXXXXX (the "Termination Amount") to Novartis along with the written
notification of its choice. Novartis will pay to TCS the Termination Amount
within thirty (30) days after its receipt of the Invoice, but in no case earlier
than the date on which such termination becomes
effective. Any such termination will become effective one hundred and twenty
(120) days after receipt by TCS of Novartis' written notice of its intention to
terminate. Following the payment required by this Section 15.1(b)(i), Novartis
shall have no further obligations to TCS under the terms of this License
Agreement except as specified in Article 16 and Section 22.3 hereof.
(ii) If TCS elects to have Novartis attempt to identify and
enter into negotiations with a sub-licensee acceptable to TCS, Novartis shall do
the following:
(A) for a period ending one (1) year after the date it
receives written notice from TCS in accordance with Section 15.1(b)(ii), but,
except as set forth below, not later than fifteen (15) months after the receipt
by TCS of Novartis' notice of its intention to terminate, use diligent efforts
to identify, and enter into a Sub-license Agreement for the Licensed Protein in
the Major Market Countries with, a sub-licensee acceptable to TCS. In the event
that, at the end of such one (1) year period, Novartis is in the process of
negotiating a Sub-license Agreement with an acceptable sub-licensee, and the
Parties reasonably agree that there is a reasonable chance that such
negotiations will lead to the execution of a Sub-license Agreement, Novartis
agrees to continue negotiating with such potential sub-licensee for up to an
additional twelve (12) months.
(B) if Novartis has begun producing TP-10, provide to
TCS up to xxxxxxxxx of clinical grade TP-10 free of charge; and
(C) provide TCS with reasonable quantities of Licensed
Protein at Novartis' fully allocated cost (as defined in Appendix C hereto) plus
XXXXXXXXXX.
During the one (1) year period in which Novartis is attempting to
identify and negotiate with an acceptable sub-licensee, and any extension
thereto pursuant to Section 15.1(b)(ii)(A), Novartis shall have no continuing
obligations under Articles 3, 4, 5 or 6 of this License Agreement. If, at the
end of the one (1) year period, or an extension thereto, as
applicable, Novartis has not entered into a Sub-license Agreement as provided
for in Section 15(b)(ii) hereof, this License Agreement will terminate
automatically.
15.2 Termination for Breach
(a) Breach by TCS. In the event that TCS shall be in breach of any
material obligation hereunder, Novartis shall give written notice to TCS
specifying the claimed particulars of such breach, and in the event such
material breach is not cured, or effective steps to cure such material breach
have not been initiated or are not thereafter diligently pursued, within sixty
(60) days following the date of such written notification, Novartis shall have
the right thereafter to terminate this License Agreement by giving thirty (30)
days' prior written notice to TCS to such effect.
(b) Breach by Novartis. In the event that Novartis shall be in breach
of any material obligation hereunder, TCS shall give written notice to Novartis
specifying the claimed particulars of such breach. In the event such material
breach relates to a global issue in this License agreement and is not cured, or
effective steps to cure such material breach have not been initiated or are not
thereafter diligently pursued, within sixty (60) days following the date of such
written notification, TCS shall have the right thereafter to terminate this
License Agreement by giving thirty (30) days' prior written notice to Novartis
to such effect. In the event such material breach relates to one (1) country, or
a limited number of countries, and is not cured, or effective steps to cure such
material breach have not been initiated or are not thereafter diligently
pursued, within sixty (60) days following the date of such written notification,
TCS shall have the right thereafter to terminate the license granted hereunder
with respect to such country or countries by giving thirty (30) days' prior
written notice to Novartis to such effect.
15.3 Termination in Insolvency
Either Party shall have the right to terminate this License Agreement
effective upon written notice to the other Party in the event the non-notifying
Party becomes insolvent or makes an assignment for the benefit of creditors, or
has a receiver or trustee appointed for substantially all of its property, or in
the event that voluntary or involuntary bankruptcy proceedings are instituted
against the non-notifying Party or on the non-notifying Party's behalf.
15.4 Consequences of Termination
In the event of termination of this License Agreement, in any and all
countries, for whatever reason, except termination by Novartis pursuant to
Section 15.2(a) for TCS' breach (i) the license of rights to Novartis under this
License Agreement shall terminate, on a country by country basis, and all such
rights shall revert to TCS; (ii) Novartis shall immediately cease any activities
which, but for the license granted hereunder would infringe TCS' rights with
respect to the Licensed Material and/or Licensed Product, except that Novartis,
its Affiliates and its sub-licensees shall have the right for twelve (12) months
after the termination becomes effective to sell off then existing inventory of
Licensed Material and/or Licensed Product in accordance with the terms of the
License Agreement; (iii) within one hundred twenty (120) days of such
termination, Novartis shall, to the extent that Novartis has not done so already
in accordance with Section 4.7, provide to TCS, in written form, all Novartis
Know-How concerning the Licensed Protein and Licensed Protein Product as is
based on TCS Know-How provided to Novartis hereunder under an obligation of
confidentiality, and to the extent relating to the Licensed Protein inside the
Field and outside the Field (to the extent said Licensed Protein and Licensed
Protein Product is covered by a TCS Patent); and, in such event, TCS shall be
granted a royalty-free non-exclusive license with the right to sub-license in
such country or countries under the Novartis Patents and Novartis Know-How; and
(iv) except as specified to the contrary
herein, each Party shall return to the other Party all of the other Party's
Proprietary Information.
In the event of termination of this License Agreement by Novartis
pursuant to Section 15.2 (a) for TCS' breach, (i) Novartis shall have a fully
paid up license as described in Section 14.2 and (ii) TCS shall return to
Novartis all Novartis Proprietary Information.
ARTICLE XVI
-----------
SURVIVABILITY
-------------
Termination or expiry of this License Agreement in whole or in
part shall not relieve the Parties of any obligations accruing prior to the
effective date of termination or with respect to limiting disclosure and use of
Proprietary Information.
ARTICLE XVII
------------
RIGHT TO EXTEND TO AFFILIATES
-----------------------------
Either Party shall have the right to extend all or part of the rights
granted in this License Agreement to any of its Affiliates; provided, that such
Party shall not then be in default with respect to any of its obligations under
this License Agreement. All the terms and provisions of this License Agreement,
except this right to extend, shall apply to such Affiliate to which this license
has been extended to the same extent as they apply to either of Novartis or TCS,
as the case may be.
ARTICLE XVIII
-------------
ASSIGNMENT
----------
Unless consent in writing is first obtained from the other Party, such
consent not to be unreasonably withheld, this License Agreement and the rights
granted herein shall not be assignable by either Party hereto, except to a
successor to all or substantially all of its pharmaceutical or biotechnology
business. Any attempted assignment without consent shall be void.
Notwithstanding the foregoing, the Parties agree that Novartis also shall have
the right to assign this License Agreement to an Affiliate without TCS' consent.
Any permitted assigns shall assume all obligations of its assignor under this
License Agreement; provided, that the assignor shall remain primarily liable
under this License Agreement.
ARTICLE XIX
-----------
MUTUAL REPRESENTATIONS, WARRANTIES AND EXCLUSIONS
-------------------------------------------------
19.1 Representations and Warranties
Each Party hereby represents and warrants for itself as follows:
(a) It is a corporation duly organized, validly existing and is in good
standing under the laws of the jurisdiction of its incorporation with the full
power to conduct its affairs as currently conducted and contemplated in this
License Agreement.
(b) The execution, delivery and performance by it of this License
Agreement have been duly authorized by all necessary corporate action and do not
and will not (i) require any consent or approval of its stockholders; (ii)
violate any provision of any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to it or any provision of its charter or by-laws; or (iii) result
in a breach of, or constitute a default under, any material agreement, mortgage,
lease, license,
permit or other instrument or obligation to which it is a party or by which it
or its properties may be bound or affected.
(c) No authorization, consent, approval, license, exemption of, or
filing or registration with, any court or governmental authority or regulatory
body is required for the due execution, delivery or performance by it of this
License Agreement, except as provided herein.
(d) This License Agreement is a legal, valid and binding obligation of
such party, enforceable against it in accordance with its terms and conditions.
(e) It is not under any obligation to any person, contractual or
otherwise, that is conflicting or inconsistent in any respect with the terms of
the License Agreement or that would impede the diligent and complete fulfillment
of its obligations hereunder.
(f) Any clinical investigations carried out with respect to any
Licensed Material or Licensed Product shall be conducted in accordance with good
manufacturing practices and good clinical practices applicable in the
jurisdiction in which such investigation is conducted, including but not limited
to, EEC and FDA good manufacturing and good clinical practice.
19.2 Representation and Warranties of TCS.
(a) TCS warrants that it has no information as of the Effective Date of
this License Agreement to indicate that Novartis would not be free to make or
have made for use or sale in the Field, or to use and sell in the Field, in
accordance with the rights granted under Section 2.1 of this License Agreement,
in the Territory Licensed Materials and Licensed Products, without infringing
any third-party patent or any patent right of any Affiliate or parent company of
TCS.
(b) TCS represents that as of the Effective Date it owns or possesses
all right, title and interest in and to the TCS Patents and the TCS Know-How, in
the sense of being able to convey to Novartis an exclusive license thereunder in
the Field in the Territory, excluding Japan, and that it owns or possesses an
undivided right, title and interest in and to said TCS Patents and TCS Know-How,
in the sense of being able to convey to Novartis (i) an exclusive license
thereunder with respect to Licensed Materials and Licensed Products, other than
the injectable non-colloidal dose form of TP10-HD in Japan, in the Field and
(ii) a non-exclusive license thereunder with respect to the injectable
non-colloidal dose form of TP10-HD in the Field in Japan.
19.3 Exclusion of Warranties
Except as otherwise specifically set forth in this License Agreement,
neither Party makes any representation, extends any warranties of any kind,
either express or implied, and assumes any responsibilities whatever with
respect, in particular (i) to the validity or scope of the TCS Patents, the TCS
Know-How or the Novartis Know-How; or (ii) that exploitation of the TCS Patents
and the TCS Know-How or the manufacture or use of the Licensed Materials or the
manufacture, use, sale, distribution or marketing of the Licensed Products will
not infringe the patent or other intellectual property rights of third parties.
19.4 Exclusion of Consequential Loss
Notwithstanding any provisions to the contrary in this License
Agreement, in no event (including fault, negligence or strict liability of
either Party) shall either Party be liable to the other for indirect,
incidental, consequential, special, punitive or exemplary damages, loss of
profit or loss of use related to any claim, cause of action, proceeding or
judgment arising in connection with this License Agreement.
ARTICLE XX
----------
ARBITRATION AND CONSTRUCTION
----------------------------
20.1 Law
This License Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York.
20.2 Dispute Resolution
Any controversy or claim arising out of or relating to this License
Agreement, or the breach, termination or validity thereof which cannot be
settled within three (3) months of it having arisen shall be submitted to the
respective President or General Manager of each Party and if, within thirty (30)
days or such other period as may be agreed upon between the Parties following
such reference, the dispute remains unresolved, it shall be settled on
application by either Party by arbitration conducted in the English language, in
New York City, New York in accordance with the then-existing rules of the
American Arbitration Association, and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
20.3 Arbitration
In any arbitration pursuant to this Article the award shall be rendered
by a majority of three (3) arbitrators, one (1) of whom shall be appointed by
each Party and the third of whom shall be appointed by mutual agreement of the
two (2) Party-appointed arbitrators. In the event of failure of a Party to
appoint an arbitrator within sixty (60) days after commencement of the
arbitration proceeding or in the event of failure of the two (2) Party-appointed
arbitrators to agree upon the appointment of the third arbitrator within sixty
(60) days after commencement of the arbitration proceeding, such arbitrator
shall be appointed
by the American Arbitration Association in accordance with the then-existing
Rules. The arbitrators shall apply the governing law set forth in Section 20.1
and shall be required to give their conclusions in writing, with an explanation
of the facts and law on which they were based. The Parties agree that the
service of any notice in the course of such arbitration at their respective
addresses as provided for in Article 13 shall be valid and sufficient.
ARTICLE XXI
-----------
FORCE MAJEURE
-------------
Each of the Parties hereto shall be excused from the performance of its
obligations hereunder in any country or countries of the Territory in the event
such performance is prevented by force majeure, and such excuse shall continue
as long as the condition constituting such force majeure continues plus thirty
(30) days after the termination of such condition. For the purpose of this
License Agreement, force majeure is defined as follows: causes beyond the
reasonable control of Novartis or TCS (as the case may be), including, without
limitation, acts of God, acts, regulations or laws of any government, war, civil
commotion, destruction of production facilities or materials by fire, earthquake
or storm, labor disturbances (whether or not any such labor disturbance is
within the power of the affected Party to settle), epidemic, and failure of
suppliers, public utilities or common carriers. In the event of force majeure
lasting more than six (6) months, the Parties agree to meet and discuss how this
License Agreement can be justly and fairly implemented under the circumstances
prevailing in such country or countries and if the Parties are unable to agree
upon how the License Agreement can be implemented then either Party may
terminate the License Agreement in relation to such country or countries upon
thirty (30) days' written notice.
ARTICLE XXII
------------
MISCELLANEOUS
-------------
22.1 Severability
Should any part or provision of this License Agreement be held
unenforceable or in violation of or in conflict with any applicable law or
regulation of any jurisdiction, the invalid or unenforceable provision shall be
replaced with a provision which accomplishes, to the extent possible, the
original business purpose and economic benefit of such part or provision in a
valid and enforceable manner, and the balance of this License Agreement
(including any such replacement provision) shall continue in full force and
effect and be binding upon the Parties hereto. To implement the requirements of
this Section 22.1 Novartis and TCS agree to endeavor in good faith to agree upon
the wording of any replacement provision. If no agreement is reached within
ninety (90) days after written request by one Party for the replacement of any
such provision, the rewording and replacement thereof shall be subject to
arbitration in accordance with Section 20 and both Parties hereto shall be
deemed to have entered into and be bound by this License Agreement as so amended
by the arbitrators.
22.2 No Exclusion of Legal Rights
Nothing in this License Agreement is intended to nor shall it have the
effect of excluding, modifying or restricting any right or remedy available
under any relevant law which, by virtue of any such law, cannot be excluded,
modified or restricted.
22.3 Survival
Sections 3.6, 4.7 (with respect to Know-How in existence at the time of
termination only), 6, 7, 8, 9 (with respect to written or oral public
disclosures
containing information generated during the term of this License Agreement
only), 10, 14, 15, 16, 19.3, 19.4, 20 and 22.6 shall be in force during the term
of this License Agreement and any extension hereof and shall survive termination
or expiration (as the case may be) of this License Agreement and shall remain in
full force and effect. The provisions of this License Agreement which do not
survive termination or expiration hereof (as the case may be) shall nonetheless
be controlling on, and shall be used in construing and interpreting the rights
and obligations of the Parties hereto with regard to any dispute, controversy or
claim which may arise under, out of, in connection with, or relating to this
License Agreement.
22.4 Entire Agreement
This License Agreement constitutes the entire understanding between the
Parties with respect to the subject matter hereof and supersedes and replaces
all previous negotiations, understandings and representations whether written or
oral including, but not limited to, prior Confidentiality Agreement(s) between
TCS and Sandoz Pharma Ltd., and the Option Agreement and such Confidentiality
Agreement(s) shall be terminated upon the Effective Date of this License
Agreement. The Parties' obligations of confidentiality, non-disclosure and
non-use under the Confidentiality Agreements and the Option Agreement shall
continue with respect to confidential information disclosed prior to their
termination and shall be subject to the provisions of Article 8 hereof. This
License Agreement shall not be modified, altered or amended except by a written
document signed on behalf of and delivered by both Parties hereto.
22.5 No Further License
Except as specifically set forth herein, neither Party is granted any
other license by implication or otherwise.
22.6 Adverse Event Reporting
TCS and Novartis shall cooperate with respect to the exchange of
adverse event and safety information associated with the Licensed Material and
Licensed Products. The cooperation between TCS and Novartis in the exchange of
such adverse event and safety information shall be coordinated on the side of
Novartis by its central Clinical Safety and Epidemiology organization. Details
of the cooperation in the handling of adverse event and safety information
related to the Licensed Material and Licensed Products shall be the subject of
an addendum agreed upon between the designated primary liaisons of the
respective Parties (in the case of TCS, the Vice President for Development, and,
in the case of Novartis, Head, Global Clinical Safety and Epidemiology). Said
addendum shall be agreed upon no less than thirty (30) days prior to the
commencement of the first clinical investigational study of the Licensed
Material or a Licensed Product.
22.7 Waiver
Any waiver on the part of either Party hereto of any right or interest
hereunder shall be effective only if made in writing and shall not (unless
expressly so stated) constitute or imply a waiver of any other right or
interest, or a subsequent waiver.
22.8 Relationship of the Parties
Novartis and TCS shall act solely as independent contractors and
nothing in this License Agreement shall be construed to create a partnership or
joint venture or legal entity between TCS and Novartis, nor shall it give either
TCS or Novartis the power or authority to act for, bind or commit the other in
any way. Neither Party is authorized to make any statement, claims,
representations or warranties, or to act on behalf of the other, except as
specifically authorized in writing by the other Party. Accordingly, neither
Party shall have the right to use or refer to the name, tradenames, trademarks
or logo of the other or its Affiliates or agreements with the other without the
prior written consent of the other.
22.9 EC Regulations
It is the intention of the Parties hereto that this License Agreement
shall at all times qualify for the exemption from the provisions of Article
85(1) of the Treaty of Rome dated 25 March 1957, as amended, which either (a) is
available under EEC Regulation Number 240/96; or (b) may subsequently be
available under any successor regulation or regulations thereto. In the event
that any provision of this License Agreement is deemed to violate the conditions
for qualifying for the exemption, set out in whichever of those regulations may
be in effect at the relevant time, or if any such regulation is amended after
the date of this License Agreement so as to cause this License Agreement to fail
to qualify for the exemption, the Parties hereto agree that they will, as soon
as it is practicable to do so, enter into good faith negotiations to amend this
License Agreement as necessary in order to requalify for the exemption. If those
negotiations are not successfully concluded with a reasonable period of time
(not to exceed ninety (90) days or such other period as is agreed upon in
writing between the Parties), either Party may terminate this License Agreement
upon thirty (30) days' written notice to the other Party.
22.10 Language
This License Agreement is entered into in the English language. In the
event of any dispute concerning the construction or meaning of this License
Agreement, reference shall be made only to this License Agreement as written in
English and not to any translation hereof into any other language, and this
English language version shall be controlling for all purposes.
22.11 Titles. The titles used herein are for illustration purposes only and
shall not be construed as part of this License Agreement.
22.12 Amendments. No provision of the License Agreement may be amended,
modified, waived, discharged or terminated otherwise than by a written document
signed by authorized representatives of both parties.
22.13 Tradenames. This License Agreement does not confer any right to use the
name, tradename, trademark or other designation of either party.
22.14 Successors and Assigns. This License Agreement shall be binding upon and
insure to the benefit hereto and their respective successors and assigns.
IN WITNESS HEREOF, the Parties have caused this License
Agreement to be executed by their duly authorized representatives.
T CELL SCIENCES, INC. NOVARTIS PHARMA AG
By _____________________ By ____________________
Name ___________________ Name __________________
Title __________________ Title _________________
By ____________________
Name __________________
Title _________________
APPENDIX A to LICENSE AGREEMENT
-------------------------------
TCS PATENTS
-----------
T CELL SCIENCES, INC. COMPLEMENT
U.S. PATENTS
Patent No. Issue Date Title Inventors
- ---------- ---------- ----- ---------
5,472,939 12/05/95 The Human C3B/C4B Receptor Fearon et al.
(CR1) (Method of Treatment)
5,456,909 10/10/95 Glycoform Fractions Of Soluble Marsh et al.
Complement Receptor 1 (SCR1)
Having Extended Half-Lives In
Vivo
5,256,642 10/26/93 Compositions of Soluble Fearon et al.
Complement Receptor 1 (CR1) And
a Thrombolytic Agent. And The
Methods Of Use Thereof
5,252,216 10/12/93 Protein Purification Folena-Wasserman
5,212,071 05/18/93 Nucleic Acids Encoding A Human Fearon et al.
C3B/C4B Receptor (CR1)
T CELL SCIENCES, INC. COMPLEMENT
U.S. PATENT APPLICATIONS
Application No. Filing Date Subject
- --------------- ----------- -------
xxxxxxxxxx 06/05/95 CR1
xxxxxxxxxx 06/06/95 CR1
xxxxxxxxxx 06/06/95 Glycoforms
xxxxxxxxx 06/06/95 CR1 + Thrombolytics
xxxxxxxxx 07/18/95 sCR1 + Apan (Synergy)
xxxxxxxxxx 08/11/95 Aerosol sCR1
xxxxxxxxxx 04/03/96 TP10 Purification
T CELL SCIENCES, INC. COMPLEMENT
NON-U.S. PATENTS
Country Patent No. Grant Date Subject
- ------- ---------- ---------- -------
Taiwan TW N1-52379 03/12/92 CR1
Australia AU 647371 03/31/89 CR1
Spain ES 2014593 05/03/90 CR1
S. Africa ZA 89/2397 11/29/89 CR1
Australia AU 656312 09/25/90 CR1 + Thrombolytics
Greece GR 1001730 12/02/94 CR1 + Thrombolytics
New Zealand NZ 235445 01/20/93 CR1 + Thrombolytics
S. Africa ZA 90/7693 05/27/92 CR1 + Thrombolytics
Taiwan TW N1-079157 07/11/96 CR1 + Thrombolytics
Australia AU 659936 09/19/95 TP10 Purification
Mexico MX 184895 06/06/97 TP10 Purification
New Zealand NZ 251601 Allowed TP10 Purification
S. Africa ZA 93/2015 04/30/94 TP10 Purification
S. Africa ZA 94/4950 04/26/95 TP10 Purification
Australia AU 670453 11/05/96 Glycoforms
S. Africa ZA 93/5728 05/25/94 Glycoforms
New Zealand NZ 259737 09/06/97 sCR1+ Apan (Synergy)
Taiwan TW 070514 07/12/95 sCR1+ Apan (Synergy)
S. Africa ZA 94/0398 Allowed sCR1+ Apan (Synergy)
T CELL SCIENCES, INC. COMPLEMENT
NON-U.S. PATENT APPLICATIONS
Country Application No. Filing Date Subject
- ------- --------------- ----------- -------
Canada 595,389 03/31/89 CR1
China 89101990.1 04/01/89 CR1
Denmark 2348/90 03/31/89 CR1
EPO 89905249.2 03/31/89 CR1
Finland 904842 03/31/89 CR1
Israel 89790 03/29/89 CR1
Israel 119279 09/19/97 CR1
Japan 01-505000 03/31/89 CR1
S. Korea 702249/89 03/31/89 CR1
Norway P904213 03/31/89 CR1
WO PCT/US89/01358 03/31/89 CR1
Singapore 9609545-0 04/02/96 CR1
China 90108145.0 08/31/89 CR1
Canada 2,067,744 09/25/90 CR1 + Thrombolytics
China 90109580.X 11/30/90 CR1 + Thrombolytics
EPO 90917286.8 09/25/90 CR1 + Thrombolytics
Finland 921291 09/25/90 CR1 + Thrombolytics
Ireland 3447/90 09/25/90 CR1 + Thrombolytics
Israel 95806 09/26/90 CR1 + Thrombolytics
Japan 03-500358 09/25/90 CR1 + Thrombolytics
WO PCT/US90/05454 09/25/90 CR1 + Thrombolytics
Portugal 95437 09/25/90 CR1 + Thrombolytics
T CELL SCIENCES, INC. COMPLEMENT
NON-U.S. PATENT APPLICATIONS
Country Application No. Filing Date Subject
- ------- --------------- ----------- -------
Canada 2,132,533 03/24/93 TP10 Purification
EPO 93908538.7 03/24/93 TP10 Purification
Finland 944412 03/24/93 TP10 Purification
Japan 516814/1993 03/24/93 TP10 Purification
S. Korea 94703342 03/24/93 TP10 Purification
Norway 943546 03/24/93 TP10 Purification
WO PCT/US93/02732 03/24/93 TP10 Purification
Taiwan 82105986 07/27/93 TP10 Purification
Taiwan 82-108937 10/28/93 Glycoforms
Canada 2,141,842 08/06/93 Glycoforms
EPO 93918681.3 08/06/93 Glycoforms
Israel 106558 08/02/93 Glycoforms
Japan 6-505581 08/06/93 Glycoforms
Mexico 9304800 08/06/93 Glycoforms
WO PCT/US93/07406 08/06/93 Glycoforms
Australia 62372/94 02/08/94 Aerosol sCR1
Canada 2,155,933 02/08/94 Aerosol sCR1
EPO 94909571.5 02/08/94 Aerosol sCR1
Japan 6-518313 02/08/94 Aerosol sCR1
WO PCT/US94/01405 02/08/94 Aerosol sCR1
Australia 73229/94 07/06/94 TP10 Purification
Canada 2,166,805 07/06/94 TP10 Purification
China 94193182.X 07/06/94 TP10 Purification
EPO 94923333.2 07/06/94 TP10 Purification
Japan 504131/1995 07/06/94 TP10 Purification
S. Korea 700088/1996 07/06/94 TP10 Purification
Mexico 945239 07/08/94 TP10 Purification
New Zealand 269375 07/06/94 TP10 Purification
WO PCT/US94/07555 07/08/94 TP10 Purification
APPENDIX B to LICENSE AGREEMENT
-------------------------------
Sample Invoice
[COMPANY Letterhead]
[Date]
Novartis Pharma AG
xxxxxxxxxx
xxxxxxxxxx
xxxxxxxxxx
xxxxxxxxxxx
xxxxxxxxxxx
Switzerland
Dear xxxxxxxxxxx:
Re: [COMPANY] License Agreement for [PRODUCT]
This is an invoice requesting payment in connection with the above-captioned
agreement between [COMPANY] and Novartis Pharma AG.
Novartis Contract Code No.: [will be assigned by BD&L following execution]
Novartis Creditor No.: [will be assigned by BD&L following execution]
Reason for Payment: [please cite specific section or article in the agreement]
Amount and Currency: [self-explanatory]
Bank Address and Account No.: [insert the name and address of the bank to which
the payment should be sent and the account number to which it should be
credited]
Sincerely yours,
[COMPANY]
APPENDIX C
ELEMENTS OF FULLY ABSORBED MANUFACTURING COSTS
----------------------------------------------
Expenses included in fully absorbed manufacturing costs:
1. Direct Materials.
2. Salaries and wages of personnel directly engaged in manufacturing the
product.
3. Employee benefits associated with the above salaries and wages.
4. Depreciation, repairs and maintenance, and other operating costs of
production machinery.
5. Quality Control
6. Package Development
7. Import Department
8. Building operating costs assigned to production areas.
NOTE: Each building is a cost center. Operating costs such as building
depreciation (assigned on a straight line basis), property taxes, fire
insurance, light, heat, and power are charged to this building cost
center. The total building operating costs are then charged to the cost
centers occupying the building as "rent."
9. Administration costs incurred in the manufacturing process including:
a. Manufacturing Administration
b. Manufacturing Personnel Department
c. Material Management
d. Industrial Engineering (Incl. Mandated Environmental Costs)
e. Manufacturing Employee Training
f. Cost Accounting
10. Inventory losses due to regulatory revisions. Costs associated with
inventory maintenance, such as revaluation, damaged and obsolete
material, physical inventory readjustments, etc.
Expenses not included in fully absorbed manufacturing costs:
a. Inventory Carrying Costs
b. Regulatory Affairs
c. Start-up costs of new facilities
d. Other production/manufacturing costs, such as rework expenses,
unrelated to this product, returned goods and repackaging.
e. Manufacturing Technology
APPENDIX B to OPTION AGREEMENT
------------------------------
LICENSED PROTEIN
sCR1 Definition
- ---------------
The Licensed Protein, sCR1, is a soluble complement receptor type 1 polypeptide
described in international patent application PCT/US89/01358 (WO 89/09220) and
encompasses the TCS material "TP-10" defined by the amino acid sequences:
APPENDIX C to OPTION AGREEMENT
------------------------------
TCS PATENTS
-----------
T CELL SCIENCES, INC. COMPLEMENT
U.S. PATENTS
Patent No. Issue Date Title Inventors
- ---------- ---------- ----- ---------
5,472,939 12/05/95 The Human C3B/C4B Receptor Fearon et al.
(CR1) (Method of Treatment)
5,456,909 10/10/95 Glycoform Fractions Of Soluble Marsh et al.
Complement Receptor 1 (SCR1)
Having Extended Half-Lives In
Vivo
5,256,642 10/26/93 Compositions of Soluble Fearon et al.
Complement Receptor 1 (CR1) And
a Thrombolytic Agent. And The
Methods Of Use Thereof
5,252,216 10/12/93 Protein Purification Folena-Wasserman
5,212,071 05/18/93 Nucleic Acids Encoding A Human Fearon et al.
C3B/C4B Receptor (CR1)
T CELL SCIENCES, INC. COMPLEMENT
U.S. PATENT APPLICATIONS
Application No. Filing Date Subject
- --------------- ----------- -------
xxxxxxxxxx 06/05/95 CR1
xxxxxxxxxx 06/06/95 CR1
xxxxxxxxxx 06/06/95 Glycoforms
xxxxxxxxx 06/06/95 CR1 + Thrombolytics
xxxxxxxxx 07/18/95 sCR1 + Apan (Synergy)
xxxxxxxxxx 08/11/95 Aerosol sCR1
xxxxxxxxxx 04/03/96 TP10 Purification
T CELL SCIENCES, INC. COMPLEMENT
NON-U.S. PATENTS
Country Patent No. Grant Date Subject
- ------- ---------- ---------- -------
Taiwan TW N1-52379 03/12/92 CR1
Australia AU 647371 03/31/89 CR1
Spain ES 2014593 05/03/90 CR1
S. Africa ZA 89/2397 11/29/89 CR1
Australia AU 656312 09/25/90 CR1 + Thrombolytics
Greece GR 1001730 12/02/94 CR1 + Thrombolytics
New Zealand NZ 235445 01/20/93 CR1 + Thrombolytics
S. Africa ZA 90/7693 05/27/92 CR1 + Thrombolytics
Taiwan TW N1-079157 07/11/96 CR1 + Thrombolytics
Australia AU 659936 09/19/95 TP10 Purification
Mexico MX 184895 06/06/97 TP10 Purification
New Zealand NZ 251601 Allowed TP10 Purification
S. Africa ZA 93/2015 04/30/94 TP10 Purification
S. Africa ZA 94/4950 04/26/95 TP10 Purification
Australia AU 670453 11/05/96 Glycoforms
S. Africa ZA 93/5728 05/25/94 Glycoforms
New Zealand NZ 259737 09/06/97 sCR1+ Apan (Synergy)
Taiwan TW 070514 07/12/95 sCR1+ Apan (Synergy)
S. Africa ZA 94/0398 Allowed sCR1+ Apan (Synergy)
T CELL SCIENCES, INC. COMPLEMENT
NON-U.S. PATENT APPLICATIONS
Country Application No. Filing Date Subject
- ------- --------------- ----------- -------
Canada 595,389 03/31/89 CR1
China 89101990.1 04/01/89 CR1
Denmark 2348/90 03/31/89 CR1
EPO 89905249.2 03/31/89 CR1
Finland 904842 03/31/89 CR1
Israel 89790 03/29/89 CR1
Israel 119279 09/19/97 CR1
Japan 01-505000 03/31/89 CR1
S. Korea 702249/89 03/31/89 CR1
Norway P904213 03/31/89 CR1
WO PCT/US89/01358 03/31/89 CR1
Singapore 9609545-0 04/02/96 CR1
China 90108145.0 08/31/89 CR1
Canada 2,067,744 09/25/90 CR1 + Thrombolytics
China 90109580.X 11/30/90 CR1 + Thrombolytics
EPO 90917286.8 09/25/90 CR1 + Thrombolytics
Finland 921291 09/25/90 CR1 + Thrombolytics
Ireland 3447/90 09/25/90 CR1 + Thrombolytics
Israel 95806 09/26/90 CR1 + Thrombolytics
Japan 03-500358 09/25/90 CR1 + Thrombolytics
WO PCT/US90/05454 09/25/90 CR1 + Thrombolytics
Portugal 95437 09/25/90 CR1 + Thrombolytics
T CELL SCIENCES, INC. COMPLEMENT
NON-U.S. PATENT APPLICATIONS
Country Application No. Filing Date Subject
- ------- --------------- ----------- -------
Canada 2,132,533 03/24/93 TP10 Purification
EPO 93908538.7 03/24/93 TP10 Purification
Finland 944412 03/24/93 TP10 Purification
Japan 516814/1993 03/24/93 TP10 Purification
S. Korea 94703342 03/24/93 TP10 Purification
Norway 943546 03/24/93 TP10 Purification
WO PCT/US93/02732 03/24/93 TP10 Purification
Taiwan 82105986 07/27/93 TP10 Purification
Taiwan 82-108937 10/28/93 Glycoforms
Canada 2,141,842 08/06/93 Glycoforms
EPO 93918681.3 08/06/93 Glycoforms
Israel 106558 08/02/93 Glycoforms
Japan 6-505581 08/06/93 Glycoforms
Mexico 9304800 08/06/93 Glycoforms
WO PCT/US93/07406 08/06/93 Glycoforms
Australia 62372/94 02/08/94 Aerosol sCR1
Canada 2,155,933 02/08/94 Aerosol sCR1
EPO 94909571.5 02/08/94 Aerosol sCR1
Japan 6-518313 02/08/94 Aerosol sCR1
WO PCT/US94/01405 02/08/94 Aerosol sCR1
Australia 73229/94 07/06/94 TP10 Purification
Canada 2,166,805 07/06/94 TP10 Purification
China 94193182.X 07/06/94 TP10 Purification
EPO 94923333.2 07/06/94 TP10 Purification
Japan 504131/1995 07/06/94 TP10 Purification
S. Korea 700088/1996 07/06/94 TP10 Purification
Mexico 945239 07/08/94 TP10 Purification
New Zealand 269375 07/06/94 TP10 Purification
WO PCT/US94/07555 07/08/94 TP10 Purification
APPENDIX D to OPTION AGREEMENT
------------------------------
Sample Invoice
[COMPANY Letterhead]
[Date]
Novartis Pharma AG
xxxxxxxxxx
xxxxxxxxxx
xxxxxxxxxx
xxxxxxxxxxx
xxxxxxxxxxx
Switzerland
Dear xxxxxxxxxxx:
Re: [COMPANY] License Agreement for [PRODUCT]
This is an invoice requesting payment in connection with the above-captioned
agreement between [COMPANY] and Novartis Pharma AG.
Novartis Contract Code No.: [will be assigned by BD&L following execution]
Novartis Creditor No.: [will be assigned by BD&L following execution]
Reason for Payment: [please cite specific section or article in the agreement]
Amount and Currency: [self-explanatory]
Bank Address and Account No.: [insert the name and address of the bank to which
the payment should be sent and the account number to which it should be
credited]
Sincerely yours,
[COMPANY]
APPENDIX E to OPTION AGREEMENT
------------------------------
LIST OF CONTRACTING AGREEMENTS
Bulk Drug Supply Agreement with Covance
Cell Bank Testing Agreement with Genzyme, Washington
Media Supply Agreement
Fill/Finish Agreement
Performance of Characterization and Release Agreements
Consulting Agreements (for assistance in connection with the above)
APPENDIX F to OPTION AGREEMENT
------------------------------
JAPAN PATENTS
The Human C3b/C4b Receptor (CR1)
Pennie & Edwards
- ----------------
Docket Number Country Serial Number Filing
- ------------- ------- ------------- ------
Date
- ----
***** US 07/176.532 April 1, 1988
***** US 07/ April 3, 1989
***** PCT PCT/US89/01358 March 31, 1989
EP (all countries)
AU, DK, FI, JP,
KR, SU, NO
***** Canada
***** Spain
***** People's Republic of China 89101990.1 April 1, 1989
***** Republic of South Africa
***** Israel
***** Republic of China
***** US Sept. 26, 1989
APPENDIX G to OPTION AGREEMENT
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT
by and between
T CELL SCIENCES, INC.
and
NOVARTIS PHARMA AG
TABLE OF CONTENTS
-----------------
SECTION 1 SALE OF SHARES...........................................................................1
1.1 Sale of Shares...............................................................1
1.2 Per Share Price..............................................................1
1.3 Delivery of Shares...........................................................1
SECTION 2 REPRESENTATIONS AND WARRANTIES OF THE CORPORATION TO
THE INVESTOR.............................................................................1
2.1 Organization .................................................................2
2.2 Capitalization ...............................................................2
2.3 Authorization of this Agreement...............................................3
2.4 Authorization of the Shares...................................................3
2.5 Consents and Approvals........................................................4
2.6 Business of Corporation.......................................................4
2.7 Securities Laws...............................................................5
2.8 Investments in Other Entities.................................................5
2.9 Licenses and Other Rights; Compliance with Laws...............................5
2.10 Reliance; "Knowledge".........................................................5
SECTION 3 REPRESENTATION AND WARRANTIES OF THE INVESTOR TO THE
CORPORATION..............................................................................5
3.1 Authority.....................................................................6
3.2 Authority; Organization.......................................................6
3.3 No Conflict...................................................................6
3.4 Own Account...................................................................6
3.5 Legend........................................................................6
3.6 Financial Experience..........................................................6
SECTION 4 COVENANTS OF THE CORPORATION.............................................................6
4.1 Consents and Approvals.........................................................6
4.2 Inspections and Audits.........................................................7
4.3 Removal of Legend..............................................................7
4.4 Preferred Stock................................................................7
SECTION 5 COVENANTS OF THE INVESTOR................................................................7
5.1 Standstill.....................................................................7
SECTION 6 EXPENSES.................................................................................8
SECTION 7 BROKERS OR FINDERS.......................................................................9
SECTION 8 SURVIVAL OF REPRESENTATION AND WARRANTIES................................................9
SECTION 9 REGISTRATION.............................................................................9
9.1 Demand Registration...........................................................9
9.2 Piggyback Registration ......................................................10
9.3 Registration Obligations.....................................................10
9.4 Reports......................................................................12
9.5 Underwritten Offering........................................................12
9.6 Indemnification .............................................................13
9.7 Expenses.....................................................................13
9.8 Shares.......................................................................14
SECTION 10 INDEMNIFICATION ........................................................................14
SECTION 11 SUCCESSORS AND ASSIGNS..................................................................15
SECTION 12 ENTIRE AGREEMENT........................................................................15
SECTION 13 NOTICES.................................................................................15
13.1 Notice......................................................................15
13.2 Notices to Corporation......................................................15
13.3 Notice to Investor..........................................................16
13.4 Change Address..............................................................16
SECTION 14 AMENDMENTS..............................................................................16
SECTION 15 COUNTERPARTS............................................................................16
SECTION 16 HEADINGS................................................................................16
SECTION 17 NOUNS AND PRONOUNS......................................................................17
SECTION 18 SEVERABILITY............................................................................17
SECTION 19 GOVERNING LAW...........................................................................17
SCHEDULES
---------
SCHEDULE 2.2(a)........................................................................................S-1
SCHEDULE 2.2(b)........................................................................................S-2
SCHEDULE 2.6(a)........................................................................................S-3
SCHEDULE 2.6(b)........................................................................................S-4
SCHEDULE 2.6(c)........................................................................................S-5
SCHEDULE 2.8...........................................................................................S-6
STOCK PURCHASE AGREEMENT
------------------------
THIS AGREEMENT, dated as of __________________, is entered into by and
between T CELL SCIENCES, INC., a Delaware corporation (the "Corporation"), and
NOVARTIS PHARMA AG, a Switzerland corporation (the "Investor").
The Corporation and the Investor wish to provide for the issuance and
sale by the Corporation, and the purchase by the Investor of common stock, par
value $.001 per share, of the Corporation ("Common Stock"), as more specifically
set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereby agree as follows:
SECTION 1. Sale of Shares.
1.1 Sale of Shares. Subject to the terms and conditions of
this Agreement, on the date of this Agreement the Corporation shall sell and
issue to the Investor, and the Investor shall purchase and receive from the
Corporation such number of shares of Common Stock as is equal to the sum of
XXXXXXXXXX, divided by the purchase price per share described in Section 1.2
below, rounded up to the nearest share (the "Shares").
1.2 Per Share Price. The purchase of the Shares by the
Investor hereunder shall be at a price per share equal to the average of the
closing sale prices for the Common Stock on the NASDAQ National Market on the
twenty (20) trading days preceding the date on which the Investor notified the
Corporation pursuant to Section 2.4 of the Option Agreement, dated as of October
13, 1997, by and between the Investor and the Corporation (the "Option
Agreement") that it was contemplating exercising its option thereunder.
1.3 Delivery of Shares. On the date of this Agreement, (a) the
Investor shall pay the sum of XXXXXXXXXX the Corporation by certified or bank
check payable to the order of the Corporation, or by wire transfer of funds or
such other means of payment as is agreed by the parties, and (b) the Corporation
shall deliver to the Investor, stock certificates, registered in the name of the
Investor, representing the Shares.
SECTION 2. Representations and Warranties of the Corporation to the
Investor.
The Corporation hereby represents and warrants to the Investor as
follows (the Schedules referenced in this Section 2 may be referred to
collectively as the "Schedule of Exceptions" to the representations and
warranties of the Corporation):
2.1 Organization. Each of the Corporation and its wholly-owned
subsidiaries (each a "Subsidiary" and, collectively, the "Subsidiaries") is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
own and lease its properties and to carry on its business as presently
conducted. Each of the Corporation and its Subsidiaries is duly qualified to do
business as a foreign corporation in the Commonwealth of Massachusetts. Neither
the Corporation nor any Subsidiary owns or leases property or engages in any
activity in any other jurisdiction which would require its qualification in such
jurisdiction and in which the failure to be so qualified would have an adverse
effect on the financial or any other business condition of the Corporation or
the Subsidiary, as the case may be. The Corporation has furnished to the
Investor true and correct copies of the Corporation's and each Subsidiary's
Certificate of Incorporation and By-Laws in effect on the date hereof.
2.2 Capitalization.
(a) The authorized capitalization of the Corporation is as set
forth in Schedule 2.2(a) attached hereto.
(b) Except as set forth in this Section 2.2, or in Schedule
2.2 (b) attached hereto, there are: (i) no outstanding warrants, options,
agreements, convertible securities or other commitments or instruments pursuant
to which the Corporation or any Subsidiary is or may become obligated to issue,
sell, repurchase or redeem any shares of capital stock or other securities of
the Corporation or any Subsidiary; (ii) no preemptive, contractual or similar
rights to purchase or otherwise acquire shares of capital stock of the
Corporation or any Subsidiary pursuant to any provision of law, the Certificate
of Incorporation or By-Laws of the Corporation or any Subsidiary or any
agreement to which the Corporation or any Subsidiary is a party, or otherwise;
(iii) no restrictions on the transfer of capital stock of the Corporation or any
Subsidiary imposed by the Certificate of Incorporation or By-Laws of the
Corporation or any Subsidiary, any agreement to which the Corporation or any
Subsidiary is a party, any order of any court or any governmental agency to
which the Corporation or any Subsidiary is subject, or any statute other than
those imposed by relevant state and federal securities laws; (iv) no cumulative
voting rights for any of the Corporation's capital stock; (v) no registration
rights under the Securities Act of 1933, as amended (the "Act") with respect to
shares of the Corporation's capital stock; (vi) no shares of capital stock of
the Corporation reserved for issuance for any purpose; (vii) to the best of the
Corporation's knowledge and belief, no options or other rights to purchase
shares of capital stock from stockholders of the Corporation or any Subsidiary
granted by such stockholders; and (viii) no agreements, written or oral, between
the Corporation or any Subsidiary and any holder of its securities, or, to the
best of the Corporation's knowledge and belief, among holders of its securities,
relating to the acquisition, disposition or voting of the securities of the
Corporation or any Subsidiary.
(c) Prior to the date of this Agreement, the Corporation has
reserved a number of authorized but unissued shares of Common Stock sufficient
for issuance pursuant to this Agreement.
(d) All of the outstanding capital stock of each Subsidiary is
owned by the Corporation.
2.3 Authorization of this Agreement.
The execution, delivery and performance by the Corporation of this
Agreement, the Option Agreement and the License Agreement, dated as of
__________, 19__, (the Option Agreement and the aforesaid License Agreement are
referred to herein collectively as the "Related Agreements") and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all requisite corporate action on the part of the Corporation.
This Agreement and the Related Agreements have been duly executed and delivered
by the Corporation and constitute valid and binding obligations of the
Corporation, enforceable in accordance with their respective terms. The
execution, delivery and performance of this Agreement and the Related Agreements
and compliance with the provisions hereof and thereof by the Corporation, will
not:
(a) violate any provision of law, statute,
ordinance, rule or regulation of any ruling, writ, injunction, order, judgment
or decree of any court, administrative agency or other governmental body;
(b) conflict with or result in any breach of any of
the terms, conditions or provisions of, or constitute (with or without notice or
lapse of time, or both) a default (or give rise to any right of termination,
cancellation or acceleration) under (i) any agreement, document, instrument,
contract, understanding, arrangement, note, indenture, mortgage or lease to
which the Corporation or any Subsidiary is a party or under which the
Corporation or any Subsidiary or any of its assets is bound or affected, (ii)
the Corporation's (or any Subsidiary's) Certificate of Incorporation, or (iii)
the By-Laws of the Corporation or any Subsidiary; or
(c) result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets of the
Corporation or any Subsidiary.
2.4 Authorization of the Shares. The issuance, sale and
delivery of the Shares to the Investor have been duly authorized by all
requisite action of the Corporation, and the Shares are authorized, validly
issued and outstanding, fully paid and nonassessable and not subject to
preemptive or any other similar rights of the stockholders of the Corporation or
others.
2.5 Consents and Approvals. No authorization, consent,
approval or other order of, or declaration to or filing with, any governmental
agency or body (other than filings required to be made under applicable federal
and state securities laws, which have been made) or any third party is required
for (a) the valid authorization, execution, delivery and performance by the
Corporation of this Agreement and the Related Agreements, or (b) the valid
authorization, reservation, issuance, sale and delivery of the Shares by the
Corporation to the Investor.
2.6 Business of Corporation.
(a) Except as provided in Schedule 2.6(a) attached
hereto: (i) there are no actions, suits, arbitrations, claims, investigations or
legal or administrative proceedings pending or, to the best of the Corporation's
knowledge and belief, threatened, against the Corporation or any Subsidiary,
whether at law or in equity, before or by any federal, state, municipal or other
governmental department, commission, agency, instrumentality, or arbitrator,
domestic or foreign; and (ii) there are no judgments, decrees, injunctions,
orders or awards of any court, governmental department, commission, agency,
instrumentality or arbitrator entered or existing against the Corporation or any
Subsidiary or any of its assets or properties.
(b) Schedule 2.6(b) lists each registration
statement, annual, quarterly or current report, proxy or information statement,
or other document (including exhibits and all material incorporated by
reference) (collectively, the "SEC Reports") filed by the Corporation with the
Securities and Exchange Commission (the "Commission") under the Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act") since December
31, 1994. The Corporation has delivered to the Investor copies of the SEC
Reports, other than exhibits and material incorporated by reference which have
not been requested by the Investor. The SEC Reports as filed comply with the
applicable requirements of the Act or the Exchange Act, as the case may be, and
the rules and regulations thereunder, and as of the respective dates thereof did
not contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. Except
as set forth in Schedule 2.6(b), the Corporation has filed on a timely basis all
SEC Reports required to be filed by it pursuant to the Act or the Exchange Act.
(c) Except as set forth in Schedule 2.6(c) attached
hereto, since December 31, 1996, there has not been any material adverse change
in the business, operations, properties, assets, condition or prospects of the
Corporation or any Subsidiary or any event, condition or contingency that could
reasonably be expected to result in such a material adverse change.
2.7 Securities Laws. Neither the Corporation nor anyone acting
on its behalf has offered securities of the Corporation for sale to, or
solicited any offers to buy the same from, or sold securities of the Corporation
to, any person or organization, in any case so as to subject the Corporation,
its promoters, directors or officers to any liability under the Act, the
Exchange Act, or any state securities or "blue sky" law (collectively, the
"Securities Laws"). The offer, sale and issuance of the Shares to the Investor
hereunder is in compliance with the Securities Laws and is exempt from the
registration requirements of the Act.
2.8 Investments in Other Entities. Except as disclosed in
Schedule 2.8 attached hereto, (a) neither the Corporation nor any Subsidiary has
made any loan or advance to any person or entity which is outstanding on the
date hereof, nor is it committed or obligated to make any such loan or advance,
and (b) neither the Corporation nor any Subsidiary has owned or controlled and
does not currently own or
control, directly or indirectly, any subsidiaries and has never owned or
controlled and does not currently own or control any capital stock or other
ownership interest, directly or indirectly, in any corporation, association,
partnership, trust, joint venture or other entity.
2.9 Licenses and Other Rights; Compliance with Laws. The
Corporation or the Subsidiary, as the case may be, is in compliance under each
franchise, permit, license and other rights and privileges necessary to permit
them to own their respective properties and to conduct business as presently
conducted, and the transactions contemplated by this Agreement and the Related
Agreements will not cause a violation under any, of such franchises, permits,
licenses and other rights and privileges.
2.10 Reliance; "Knowledge". The Corporation understands that
the foregoing representations and warranties shall be deemed material and to
have been relied upon by the Investor. No representation or warranty by the
Corporation in this Agreement or in any of the Related Agreements, and no
written statement contained in any document, certificate or other writing
delivered by the Corporation to the Investor contains any untrue statement of
material fact or omits to state any material fact necessary to make the
statements herein or therein, in light of the circumstances under which they
were made, not misleading.
SECTION 3. Representations and Warranties of the Investor
to the Corporation.
The Investor represents and warrants to the Corporation as follows:
3.1. Authority. The execution, delivery and
performance by the Investor of this Agreement and the Related Agreements has
been duly authorized by all requisite corporate action by the Investor.
3.2 Authority; Organization. The Investor has full
power and authority to enter into and perform this Agreement and the Related
Agreements in accordance with their respective terms. It is duly organized and
validly existing under the laws of Switzerland.
3.3 No Conflict. Neither the execution and delivery
of this Agreement or the Related Agreements nor the consummation of the
transactions contemplated hereby or thereby will constitute a violation of, or a
default under, or conflict with, any term or provision of its organizational
documents, or any material contract, commitment, indenture, lease or other
agreement to which it is a party or by which it is bound.
3.4 Own Account. It is acquiring the Shares for its
own account, for investment and not with a view to the distribution thereof in
violation of the Act.
3.5 Legend. It agrees that the Corporation may
place a legend on the stock certificates delivered hereunder stating that the
Shares have not been
registered under the Act and, therefore, cannot be offered, sold or transferred
unless they are registered under the Act or an exemption from such registration
is available.
3.6. Financial Experience. It has (a) such knowledge
and experience in business and financial matters so as to enable it to
understand and evaluate the risks of the Investor's investment in the Shares and
form an investment decision with respect thereto, and (b) no need for liquidity
in its investment in the Corporation and is able to bear the risk of such
investment for an indefinite period and to afford a complete loss thereof.
SECTION 4. Covenants of the Corporation.
The Corporation covenants as follows:
4.1 Consents and Approvals. Except as necessary for
governmental notification purposes or to comply with applicable laws and
regulations, and except as otherwise agreed to by the parties in writing, the
parties agree to keep the existence of this Agreement and the Related
Agreements, and the transactions contemplated hereby and thereby, strictly
confidential. In the event that the Corporation is required by law to provide a
copy of this Agreement or any Related Agreement to any third party, the
Corporation shall ensure that such document is redacted, to the extent permitted
by law, to eliminate all confidential information. The Investor shall have the
right to review and approve each such document prior to its submission to a
third party.
4.2 Inspections and Audits. The Corporation shall
permit the Investor, at the Investor's expense, to visit and inspect the
Corporation's properties, to examine its books of account and records and to
discuss the Corporation's affairs, finances and accounts with its officers, all
at such reasonable times as may be requested by the Investor; provided, however,
that the Corporation shall not be obligated pursuant to this Section 4.2 to
provide access to any information which it reasonably considers to be a trade
secret or similar confidential information.
4.3 Removal of Legend. The legend on the stock
certificates delivered hereunder which is referenced in Section 3.5 hereof shall
be removed and the Corporation shall issue unlegended certificates to the
Investor if the Investor provides the Corporation with an opinion of counsel to
the Investor which is reasonably acceptable to the Corporation to the effect
that such legend is no longer required or if the Investor has met or complied
with the conditions for a permissible sale or transfer pursuant to Rule 144
under the Act (as such rule may be amended from time to time).
4.4 Preferred Stock. In the event that (i) the
Corporation issues any class of preferred stock (other than that certain class
of preferred stock denominated Series C-1 Junior Participating Cumulative
Preferred Stock) and (ii) such issued preferred stock is publicly traded on a
nationally recognized securities exchange, Investor shall have the right to make
its XXXXXXXXXX investment in the Corporation contemplated by Section 1.1 in such
preferred stock. This provision shall become null
and void and of no further force and effect in the event the Corporation
consummates any transaction resulting in a change of control of the Corporation.
SECTION 5. Covenants of the Investor.
The Investor covenants as follows:
5.1 Standstill. For the period beginning on the date hereof and ending
xxxxxxxxxxxxx thereafter (the "Standstill Period"), unless it has obtained the
prior written consent of the Corporation, the Investor shall not
(a) acquire, directly or indirectly, by purchase or otherwise,
of record or beneficially, any voting securities of the Corporation, or rights
or options to acquire voting securities of the Corporation, if after such
acquisition (and giving effect to the exercise of any such rights or options)
the Investor would own of record or beneficially in the aggregate more than
XXXXXX (XXXXXX) of the voting securities of the Corporation (assuming the
exercise of all outstanding rights or options to acquire voting securities) (the
xxxxxxxxxx Limit"); provided, that notwithstanding the provisions of this
Section 5.1(a), if the number of shares of outstanding voting securities of the
Corporation is reduced or if the aggregate ownership of the Investor is
increased as a result of a recapitalization of the Corporation or as a result of
any other action taken by the Corporation, the Investor will not be required to
dispose of any of its holdings of voting securities even though such action
resulted in the Investor's ownership exceeding the percentage of voting
securities which the Investor would then be permitted to own. Except as
otherwise provided above, if the Investor shall at any time during the
Standstill Period own in the aggregate in excess of the maximum percentage of
the voting securities at the time permitted by this Section 5.1(a), (i) the
Investor shall sell as promptly as practicable under the circumstances
sufficient voting securities so that after such sale the Investor shall not own
in the aggregate more than the applicable maximum permitted percentage of voting
securities, and (ii) the Investor shall refrain from voting on any matter as to
which the holders of voting securities shall have the right to vote with respect
to any voting securities held by the Investor in excess of the xxxxxxxxxxx
Limit;
(b) "solicit" proxies with respect to voting securities under
any circumstances or become a "participant" in any "election contest" relating
to the election of directors of the Corporation, as such terms are defined in
Regulation 14A under the Exchange Act; deposit any voting securities in a voting
trust or subject them to a voting agreement or other agreement of similar
effect;
(c) initiate, propose or otherwise solicit stockholders for
the approval of one or more stockholder proposals at any time, or induce or
attempt to induce any other person to initiate any stockholder proposal; or
(d) take any action individually or jointly with any
partnership, limited partnership, syndicate, or other group in taking any action
it could not take individually under the terms of this Agreement;
provided, however, that the restrictions contained in this Section 5.1 shall not
apply if (i) any third party or group makes a tender offer or exchange offer for
xxxxxxxxxx or more of the voting securities of the Corporation or acquires
xxxxxxxxxx or more of the voting securities of the Corporation or (ii) the
Corporation enters into negotiations with any third party or group concerning
acquisition of the Corporation.
SECTION 6. Expenses.
Except as specified in Section 9.7, the Investor and the Corporation
shall each pay its own expenses in connection with this Agreement, the Related
Agreements and the transactions contemplated hereby and thereby.
SECTION 7. Brokers or Finders.
The Corporation and the Investor each (a) represent and warrant to the
other that it has retained no finder or broker in connection with the
transactions contemplated by this Agreement and the Related Agreements and (b)
shall indemnify and hold the other harmless from and against any and all claims,
liabilities or obligations with respect to brokerage or finders' fees or
commissions, or consulting fees in connection with the transactions contemplated
by this Agreement and the Related Agreements asserted by any person on the basis
of any statement or representation alleged to have been made by such
Indemnifying Party (as defined below).
SECTION 8. Survival of Representations and Warranties.
Notwithstanding any investigation made by the Investor, the
representations and warranties of the Corporation shall survive the execution
and delivery of this Agreement and the purchase and sale of the Shares
hereunder.
SECTION 9. Registration.
9.1 Demand Registration. (a) From time to time, during the
period from the date the Shares are issued and ending at such time as all Shares
can be sold without restriction, including volume and manner of sale
restrictions, under Rule 144 of the Act (as such rule may be amended from time
to time), upon written demand (the "Demand") of the Investor, the Corporation
shall prepare and file a registration statement with the Commission covering the
registration, and shall use its best efforts to effect the prompt registration
under the Act, of all of the Shares which the Investor requests to be registered
in the Demand (the "Demand Registration"). In the case of an underwritten
offering, the Investor shall specify the managing underwriter, which shall be
selected by the Investor and approved by the Corporation, which approval will
not be unreasonably withheld.
In connection with any offering of Shares registered pursuant
to this Agreement, the Corporation shall (i) furnish the Investor, at the
Corporation's expense, with unlegended certificates representing ownership of
the Shares being sold in such denominations as the Investor shall request and
(ii) instruct the transfer agent and registrar of the Shares to release any stop
transfer orders with respect to the Shares being sold.
(b) The Corporation may delay in filing of a Demand
Registration for up to ninety (90) days after receipt of the Demand if it
furnishes to the Investor a certificate signed by the President of the
Corporation stating that in the good faith judgment of the Board of Directors of
the Corporation, it would be inadvisable for the Corporation and its
shareholders for such registration statement to be filed and it is therefore
essential to defer the filing of such registration statement; provided, however,
that the Corporation may not utilize this right more than once in any twelve
(12) month period.
9.2 Piggyback Registration.
(a) Request for Registration. If the Corporation
proposes at any time, during the period from the date the Shares are issued and
ending at such time as all Shares can be sold without restriction, including
volume and manner of sale restrictions, under Rule 144 of the Act (as such rule
may be amended from time to time), to register (including for this purpose a
registration effected by the Corporation for shareholders other than the
Investor) any shares of its capital stock under the Act (other than in
connection with the registration of shares of stock issuable pursuant to an
employee stock option, stock purchase or similar plan), the Corporation shall
give prompt written notice to the Investor of such proposed registration. Upon
the written request of the Investor made within fifteen (15) days after receipt
of such notice from the Corporation, the Corporation shall cause to be
registered as part of the same registration statement, all of the Shares that
the Investor has asked in such request to be registered, and the Corporation
shall cause such registration to become and remain effective as provided in
Section 9.3.
(b) Reduction in Offering. In connection with an
underwritten offering where Piggy-Back Registration has been requested as
provided in Section 9.2(a), the Corporation shall use its best efforts to cause
all shares of stock requested to be included in such Piggy-Back Registration to
be included as provided in Section 9.2(a). If the managing underwriter or
underwriters of any such underwritten offering have informed, in writing, the
Investor that it is their opinion that the total number of shares which the
Corporation, the Investor and any other persons and/or entities participating in
such registration intend to include in such offering is such as to materially
and adversely affect the success of such offering, then the number of shares to
be offered for the account of all persons and/or entities, including the
Investor, participating in such registration other than pursuant to demand
registration rights shall be reduced or limited (to zero (0) if necessary) pro
rata in proportion to the respective number of shares to be registered by such
persons and/or entities to the extent necessary to reduce the total number of
shares requested to be included in such
offering to the number of shares, if any, recommended by such managing
underwriter or underwriters.
9.3 Registration Obligations. Whenever the Corporation
includes any Shares in a registration statement or similar document pursuant to
this Agreement, the Corporation shall, as expeditiously as reasonably possible:
(a) Prepare and file with the Commission a
registration statement with respect to the Shares, as well as any necessary
amendments or supplements thereto and any prospectus forming a part thereof (all
such documents together comprising the "Registration Statement"), and use its
best efforts to cause such Registration Statement to become effective;
(b) Notify the Investor, promptly after the
Corporation receives notice thereof, of the effective date of the Registration
Statement, or if any amendment or supplement to the Registration Statement is
filed, the date of such filing;
(c) Notify the Investor promptly of any request by
the Commission for additional information or an amendment or supplement to the
Registration Statement;
(d) Advise the Investor of any order by the
Commission suspending the effectiveness of the Registration Statement and of the
initiation or threat of any proceeding for that purpose, and use its best
efforts to prevent the issuance of any stop order and to promptly obtain its
withdrawal if such stop order is issued;
(e) Prepare and file with the Commission such
amendments and supplements to the Registration Statement as may be necessary to
keep the Registration Statement effective until the earlier of (i) the sale by
the Investor of all of the Shares registered under such Registration Statement,
and (ii) two (2) years after the effective date thereof, and comply with the
provisions of the Act during such period with respect to the disposition of all
securities covered by the Registration Statement;
(f) Provide the Investor with copies of the
Registration Statement (including preliminary prospectuses) in conformity with
the requirements of the Act and such other documents as the Investor may
reasonably request in order to facilitate the disposition of the Shares;
(g) Use its best efforts to register and qualify the
Shares under the securities and blue sky laws of those jurisdictions selected by
the Investor or any underwriter, and take any other action reasonably necessary
or advisable to enable Investor to sell the Shares in such jurisdictions;
provided, however, that the Corporation shall not be required to qualify to do
business or consent to service of process in any jurisdiction in which it is not
now so qualified or has not so consented;
(h) Notify the Investor of the occurrence of any
event, the result of which is to cause the Registration Statement to contain an
untrue statement of a material fact or to omit to state any material fact
required to be reported therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and, at the request of the Investor, prepare a
supplement or amendment to the Registration Statement which shall correct such
untrue statement or eliminate such omission;
(i) Cause the registered Shares to be listed or
approved for trading on each securities exchange or through any facility on
which similar securities issued by the Corporation are then listed or traded;
(j) Provide a transfer agent and registrar for the
registered Shares not later than the effective date of the Registration
Statement;
(k) In the event of an underwritten public offering,
enter into such customary agreements (including an underwriting agreement in
customary form) and take such other actions as the Investor or the underwriters,
may reasonably request in order to expedite or facilitate the sale of the
Shares;
(l) Make available for inspection by the Investor,
any participating underwriter, attorney, accountant or other agent retained by
the Investor or such underwriter, all financial and other records and pertinent
corporate documents of the Corporation, and cause the Corporation's officers,
directors and employees to supply all information reasonably requested by the
Investor, the underwriter, attorney, accountant or agent in connection with the
Registration Statement;
(m) Use its best efforts to obtain cold comfort
letters from the Corporation's independent public accountants, in customary form
and covering such matters of the type customarily covered by cold comfort
letters, as the Investor may reasonably request; and
(n) Use its best efforts to cause counsel to the
Corporation to provide legal opinions reasonably requested by the Investor in
connection with the Registration Statement.
9.4 Reports. The Corporation shall at all times timely file
all information and reports required to be filed by it under the Act and the
Exchange Act and the rules and regulations adopted by the Commission thereunder.
Upon request, the Corporation shall deliver to the Investor a written statement
as to whether it has complied with such requirements, and the Corporation shall
take such further action as the Investor may reasonably request, to enable the
Investor to be eligible to sell restricted securities pursuant to Rule 144 under
the Act (as such rule may be amended from time to time) or any similar rule or
regulation hereafter adopted by the Commission.
9.5 Underwritten Offering. In the event of an underwritten
public offering conducted pursuant to Section 9.1 or 9.2 hereof, the Investor
shall (together with the Corporation) enter into an underwriting agreement in
customary form. If the registration of which the Corporation gives written
notice pursuant to Section 9.2 is for a registered public offering involving an
underwriting, the Corporation shall so advise
the Investor as part of such written notice, and shall include in such
underwritten offering upon the same terms (including the method of distribution)
as such underwritten offering all of the Shares that the Investor has asked to
be included in the Investor's request made pursuant to Section 9.2.
9.6 Indemnification. The Corporation shall indemnify and hold
harmless the Investor, the officers and directors of the Investor, and each
underwriter of Shares sold by the Investor pursuant to Section 9.1 and 9.2 of
this Agreement (and any person who controls the Investor or the underwriter
within the meaning of Section 15 of the Act) against all claims, losses,
damages, liabilities and expenses (including reasonable attorneys' fees) arising
out of or based on any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or in any related
prospectus, notification or similar document, or from any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading (a "Misstatement or Omission") except insofar as such
Misstatement or Omission is based on information furnished in writing to the
Corporation by the Investor expressly for use therein, and used in accordance
with such writing. The Investor, shall furnish the Corporation with such
information concerning the Investor and the intended method of disposition of
the Shares as shall be necessary to effect the registration of the Shares
pursuant to Section 9.1 or 9.2 of this Agreement. In the event that the Shares
are registered pursuant to this Agreement, the Investor shall indemnify and hold
harmless the Corporation, its officers and directors and each of its
underwriters (and any person who controls the Corporation or such underwriters
within the meaning of Section 15 of the Act) against all claims, losses,
damages, liabilities and expenses (including reasonable attorneys' fees) arising
out of or based on any Misstatement or Omission, but only insofar as such
Misstatement or Omission is based on information furnished in writing to the
Corporation by the Investor expressly for use in connection with such
registration, and used in accordance with such writing. In no event shall the
liability of the Investor under this Section 9.6 be greater in amount than the
dollar amount of the proceeds received by the Investor upon the sale of the
Shares giving rise to such indemnification obligation.
9.7 Expenses. The Corporation shall pay all of the expenses in
connection with any registration of any or all of the Shares pursuant to this
Agreement (including registrations effected pursuant to Section 9.1 and 9.2
hereof), including in each case, without limitation, all registration and filing
fees, fees and expenses required by state securities and blue sky laws, legal,
and accountant fees and disbursements, printing, messenger and delivery
expenses, and fees and expenses of any other person retained by the Corporation,
but excluding any underwriting discounts and commissions applicable to the
Shares. The Investor's attorney fees, if any, will be borne by the Investor.
9.8 Shares. As used in this Section 9, the term "Shares" shall
include any Common Stock of the Corporation purchased hereunder and any Common
Stock of the Corporation acquired as a dividend or other distribution with
respect to, or in exchange for or in replacement of, the Common Stock purchased
hereunder.
SECTION 10. Indemnification.
(a) Indemnification. The Corporation shall indemnify, defend
and hold the Investor harmless against any and all claims, losses, damages,
liabilities and expenses (including reasonable attorneys' fees) arising out of
or based on the untruth, inaccuracy or breach of any statements,
representations, warranties or covenants of the Corporation contained herein.
(b) Indemnification Procedure. Any party (the "Indemnified
Party") that may be entitled to indemnification under Section 7, 9.6 or 10(a)
shall give notice to the party obligated to indemnify ("Indemnifying Party")
reasonably promptly after the assertion by a third party of a claim against the
Indemnified Party in respect of which the Indemnified Party intends to seek
indemnification, but the delay in notifying the Indemnifying Party shall not
relieve it of any obligations hereunder except to the extent that such delay
adversely affects the ability of the Indemnifying Party to conduct the defense
of such claim. The Indemnified Party shall be entitled to participate in such
defense, but shall not be entitled to indemnification with respect to the
expenses of such defense incurred after the date the Indemnifying Party shall
have assumed the defense of the claim with counsel satisfactory to the
Indemnified Party. The Indemnifying Party may not settle any claim without the
consent of the Indemnified Party (which consent shall not be unreasonably
withheld). If notice is given to an Indemnifying Party of the assertion by a
third party of a claim against the Indemnified Party and the Indemnifying Party
does not, within ten (10) days after the Indemnified Party's notice is given,
give notice to the Indemnified Party of its election to assume the defense
thereof, the Indemnifying Party may, at the Indemnifying Party's expense, select
counsel to defend such claim, and defend such claim in such manner as it may
deem appropriate, and the Indemnifying Party shall be bound by any determination
made with respect to such claim or any compromise or settlement thereof effected
by the Indemnified Party. Notwithstanding the foregoing, if an Indemnified Party
determines in good faith that there is a reasonable probability that a claim may
adversely affect it other than as a result of monetary damages, such Indemnified
Party may, by notice to the Indemnifying Party, assume the exclusive right to
defend, compromise or settle such claim, but the Indemnifying Party shall not be
bound by any determination of a claim so defended or any compromise or
settlement thereof effected without its consent (which shall not be unreasonably
withheld).
SECTION 11. Successors and Assigns.
Unless consent in writing is first obtained from the other party, such
consent not to be unreasonably withheld, this Agreement and the rights and
obligations contained herein shall not be assignable by either party hereto,
except to a successor to all or substantially all of its
pharmaceutical/biotechnology business. Any attempted assignment in contravention
of the foregoing shall be void. Notwithstanding the foregoing, the parties agree
that the Investor shall have the right to assign this Agreement to an affiliate
without the Corporation's consent. Any permitted assigns shall assume all
obligations of its assignor under this Agreement. This Agreement shall
be binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns.
SECTION 12. Entire Agreement.
This Agreement and the Related Agreements constitute the entire
understanding between the parties with respect to the subject matter hereof and
supersede and replace all previous negotiations, understandings and
representations whether written or oral. This Agreement shall not be modified,
altered or amended except by a written document signed on behalf of both parties
hereto.
SECTION 13. Notices.
13.1 Notice. Any notice or other communication required or permitted to
be given or made hereunder shall be in writing in the English language and shall
be deemed to have been duly given if sent by registered air mail (return receipt
requested), facsimile letter or delivered by hand to the party to whom such
notice or communication is required or permitted to be given. Any such notice or
other communication, if mailed, shall be considered given or made when mailed,
as evidenced by the postmark at point of mailing. If sent by facsimile letter
such notice shall be deemed to have been given on the date that it is sent;
provided, that a confirmatory copy of the facsimile letter is mailed on the same
day as the facsimile letter is sent to the receiving party. If delivered by
hand, any such notice or communication shall be considered given when delivered.
13.2 Notices to Corporation. All notices to the Corporation shall be
addressed as follows:
T Cell Sciences, Inc.
119 Fourth Avenue
Needham, MA 02194
U.S.A.
Facsimile: XXXXXX
Attention: XXXXXX
13.3 Notice to Investor. All notices to the Investor shall be addressed
as follows:
Novartis Pharma AG
Lichstrasse 35
Post Office Box
CH-4002 Basel
Switzerland
Facsimile: XXXXXX
Attention: XXXXXX
With a copy to:
Novartis Pharma AG
Lichstrasse 35
Post Office Box
CH-4002 Basel
Switzerland
Facsimile: XXXXXX
Attention: XXXXXX
13.4 Change Address. Either party may change the address to which
notices and other communications to it are to be given by notice as provided
herein.
SECTION 14. Amendments.
No provision of this Agreement may be amended, modified or waived,
except by a writing signed by authorized representatives of both parties.
SECTION 15. Counterparts.
This Agreement may be executed in counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
SECTION 16. Headings.
The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.
SECTION 17. Nouns and Pronouns.
Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of names and pronouns shall include the plural and vice-versa.
SECTION 18. Severability.
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 19. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to the principles of conflicts
of laws thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
T CELL SCIENCES, INC.
By: _________________________
Name: _________________________
Title: _________________________
NOVARTIS PHARMA AG
By: ________________________
Name: ________________________
Title: ________________________
By: ________________________
Name: ________________________
Title: ________________________
