Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
Asterisks denote omissions.
Exhibit 10.1
LICENSE AGREEMENT
THIS LICENSE AGREEMENT dated as of September 7, 1999 (the "Agreement") is
made between Hybridon Inc., a corporation organized under the laws of the State
of Delaware ("Hybridon"), and Genzyme Corporation, a corporation organized under
the laws of the Commonwealth of Massachusetts ("Genzyme"). Hybridon and Genzyme
are sometimes referred to herein individually as a "Party" and collectively as
the "Parties."
R E C I T A L S
A. Genzyme controls certain patents and patent applications relating to
MDM2 through a license agreement (the "JHU Agreement") dated February 5, 1992
among The ▇▇▇▇▇ ▇▇▇▇▇▇▇ University ("JHU"), ▇▇▇▇▇▇▇▇-▇▇ ▇▇▇▇▇ Inc. and Genzyme
as the successor in interest through the merger of PharmaGenics, Inc. with and
into Genzyme.
B. Genzyme has the right, subject to rights retained by the U.S.
government and by JHU, to sublicense certain patents and patent applications
relating to inhibitory compounds that interfere with the expression of the MDM2
gene, to methods for treating a neoplastic cell or a cell having neoplastic
potential through the administration of such compounds, and to methods to
identify such compounds.
C. Subject to the terms and conditions of this Agreement, Genzyme is
willing to grant and Hybridon wishes to receive a non-exclusive sublicense under
such patents and patent applications to make, use and sell Licensed Products (as
herein defined) throughout the world.
NOW THEREFORE, in consideration of the premises and of the covenants
herein contained, the Parties mutually agree as follows:
ARTICLE 1. DEFINITIONS
For purposes of this Agreement, the terms defined in this Article shall
have the meanings specified below. Certain other capitalized terms are defined
elsewhere in this Agreement.
1.1. "Affiliate" shall mean any corporation or other entity which
controls, is controlled by, or is under common control with a Party. A
corporation or other entity shall be regarded as in control of another
corporation or entity if it owns or directly or indirectly controls more than
fifty percent (50%) of the voting stock or other ownership interest of the other
corporation or entity, or if it possesses, directly or indirectly, the power to
direct or cause the direction of the management
Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
Asterisks denote omissions.
and policies of the corporation or other entity or the power to elect or appoint
more than fifty percent (50%) of the members of the governing body of the
corporation or other entity.
1.2. "Antisense Technology" shall mean the selective inhibition of protein
synthesis at the RNA level. This inhibition is caused by the hybridization of an
Oligonucleotide to the complementary sequence of the selected RNA thereby
inhibiting gene expression.
1.3. "Collaborative Partner" shall mean a Third Party with which Hybridon
enters into an agreement providing for the development and/or commercialization
of a Development Candidate.
1.4. "Compound" shall mean ***
1.5. "Development Candidate" shall mean ***
1.6. "Effective Date" shall mean the date appearing on the cover page of
this Agreement.
1.7. "First Commercial Sale" shall mean the first transfer of title to a
Licensed Product by Hybridon, its Affiliates or a Collaborative Partner to a
non-Affiliate for consideration in any arm's length transaction in a country
following governmental approval for commercial sale in such country. For the
purpose of this definition a transfer of title to reasonable quantities of free
samples of Licensed Product or to clinical trial material shall not constitute a
First Commercial Sale.
1.8. "FDA" shall mean the United States Food and Drug Administration, any
successor agency, or the regulatory authority of a Major Country other than the
United States with responsibilities comparable to those of the United States
Food and Drug Administration.
1.9. "IND" shall mean the regulatory filing required to initiate human
clinical trials in the United States or any other Major Country. If human
clinical trials are initiated without a requirement for regulatory filing or
approval, an IND shall be deemed to have been filed on the initiation of human
clinical trials.
1.10. "Licensed Method" shall mean ***
1.11. "Licensed Product" shall mean ***
1.12. "Major Country" shall mean Germany, France, United Kingdom, the
United States, or Japan.
2
1.13. "NDA" shall mean a New Drug Application, as defined in the United
States Food, Drug and Cosmetic Act, or any corresponding foreign application,
registration or certification.
1.14. "Net Sales" shall mean that the gross amount invoiced on sales or
other dispositions of a Licensed Product by Hybridon and its Affiliates and
Collaborative Partners, as applicable, to independent third parties, less the
following items (provided that such items are included in the amount invoiced
and do not exceed reasonable and customary amounts in the country in which such
sale or other disposition occurred): (i) trade, cash, quantity and promotional
discounts actually allowed and taken; (ii) excises, sales taxes or other taxes
imposed upon and paid with respect to such sales (excluding national, state or
local taxes based on income); (iii) freight, insurance and other transportation
charges incurred in shipping a Licensed Product to third parties; (iv) amounts
repaid or credited by reason of rejections, defects, recalls or returns; and (v)
rebates (including pursuant to Medicaid or other governmental programs). Such
amounts shall be determined from the books and records of Hybridon and its
Affiliates and Collaborative Partners, and maintained in accordance with GAAP.
If a Licensed Product is sold, leased, used or otherwise commercially disposed
of for value (including, without limitation, disposition in connection with the
delivery of other products or services) in a transaction that is not an arm's
length sale to an independent third party, then the gross amount invoiced in
such transaction shall be deemed to be the gross amount that would have been
paid had there been such a sale at the average sale price of such Licensed
Product during the applicable royalty reporting period. Net Sales shall also
include any consideration received by Hybridon and its Affiliates and
Collaborative Partners in respect of the sale, use or other disposition of a
Licensed Product in a country prior to the receipt of all regulatory approvals
required to commence full commercial sales of such Licensed Product in such
country (e.g., sales under " treatment INDs", "named patient sales",
"compassionate use sales", or their equivalents), other than the sale, use or
other disposition of such Licensed Product in the course of any clinical trial
conducted with respect to such Licensed Product.
1.15. "Oligonucleotide" shall mean an oligomer or polymer made up of at
least six nucleosides or nucleotides. Oligonucleotide includes RNA or DNA
fragments. Oligonucleotides also include mimetics of RNA or DNA that are
composed of naturally occurring and/or non-naturally occurring bases. In
addition, an oligonucleotide may include modified and/or non-naturally occurring
sugars and/or intersugar linkages or the sugars may be partially or completely
absent. Oligonucleotides include structures where adjacent nucleosides are
linked together by phosphate groups and/or modified or non-natural
internucleoside linkages, including, without limitation, amide linkages to form
the internucleoside backbone of the oligonucleotide whether or not such linkages
retain a phosphorus atom in the linkage. A nucleotide is a nucleoside that
includes a phosphate group covalently linked to the sugar portion of the
nucleoside.
1.16. "Patent Rights" shall mean ***
3
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Securities and Exchange Commission.
Asterisks denote omissions.
1.17. "Phase II Clinical Trial" shall mean the initial clinical testing of
a Compound in humans who are patients with a medical condition for which the
Compound is being tested with the intention of gaining a preliminary assessment
of the efficacy of a Compound in treating such medical condition. If the initial
clinical testing of a Compound in humans is in patients with a medical condition
for which the Compound is being tested, such testing shall not be deemed a Phase
II Clinical Trial unless such testing is followed by a Pivotal Quality Clinical
Trial (as herein defined).
1.18. "Pivotal Quality Clinical Trial" shall mean a human clinical trial
of a Compound designed to be of a size and statistical significance to support
an NDA filing alone or in combination with other studies. If it is unclear
whether or not a study design will be sufficient to support an NDA filing (other
than by virtue of the uncertainty of efficacy data from that trial), the study
will be deemed to be a Pivotal Quality Clinical Trial on the initiation of
activities to support an NDA filing. Initiation of a Phase III clinical study
will be deemed to be initiation of a Pivotal Quality Clinical Trial.
1.19. "Third Party" shall mean any entity other than Hybridon, Genzyme,
their respective Affiliates or Collaborative Partners.
ARTICLE 2. LICENSE GRANTS
2.1. License. Subject to the terms and conditions of this Agreement,
Genzyme hereby grants to Hybridon and its Affiliates a nonexclusive, worldwide,
royalty-bearing sublicense under the Patent Rights to discover, develop, make,
have made, use, import and export, offer for sale, and sell Licensed Products
including the right to develop, make, have made and use the Licensed Methods.
Such sublicense shall not include the right to grant sublicenses except under
the circumstances set forth in Section 2.3.
2.2. Limitations. The Licenses granted under this Article 2 are subject
to:
(a) the rights retained by the United States government in
accordance with P.L. 96-517, as amended by P.L. 98-620,
(b) the retained rights of JHU to make, have made, provide and use
any method, product or composition which is covered by the Patent Rights for its
and The ▇▇▇▇▇ ▇▇▇▇▇▇▇ Health Systems' ("JHHS") non-profit purposes, and
(c) all rights of Genzyme relating to Patent Rights not specifically
licensed to Hybridon under this Agreement, as further set forth in Section 2.1.
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Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
Asterisks denote omissions.
2.3. Right to Sublicense to Collaborative Partners. *** Any Collaboration
Agreement shall be consistent with the terms and conditions of this Agreement.
Any and all Collaboration Agreement entered into by Hybridon pursuant to Section
2.3 shall expressly: (I) prohibit Collaborative Partner(s) from granting
sublicenses (except as permitted above) and (ii) require Collaborative
Partner(s) to accord confidential treatment to Confidential Information
consistent with the terms and conditions of Article 6. It is expressly agreed by
the Parties that Hybridon shall remain responsible for compliance with the terms
of this Agreement. Furthermore, it is understood and agreed that this Section
2.3 shall not give Hybridon, its Affiliates or Collaborative Partners a right to
grant sublicenses other than as provided herein.
2.4. No Other Technology Rights. Except as otherwise expressly provided in
this Agreement, under no circumstances shall a Party hereto, as a result of this
Agreement, obtain any ownership interest in or other right to the patent rights,
inventions, trade secrets, copyrights, know-how, data or other intellectual
property of the other Party, including items owned, controlled or developed by
any Third Party, or transferred by one Party to the other Party at any time
pursuant to this Agreement.
2.5. Favored Licensee. Genzyme represents and warrants that it has not
granted a license to a commercial Third Party under the Patent Rights on
financial terms and conditions which are, taken as a whole, more favorable to
such Third Party than those set forth in this Agreement. In the event that
Genzyme grants a sublicense to a commercial Third Party under the Patent Rights
relating to Oligonucleotides, pursuant to an agreement, the financial terms and
conditions of which are, taken as a whole, more favorable to such Third Party
than the terms and conditions of this Agreement, Genzyme shall offer Hybridon an
option to amend this Agreement to substitute the terms and conditions of such
more favorable agreement for the terms and conditions of this Agreement.
Hybridon shall make an election to accept the terms and conditions of such more
favorable agreement by providing written notice to Genzyme within thirty (30)
days after being notified of such more favorable agreement. For purposes of this
Section 2.5, the term "financial terms and conditions" shall include, but not be
limited to, the payment provisions set forth in Section 3.4 and the provisions
regarding infringement and damages set forth in Article 5 hereof.
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Securities and Exchange Commission.
Asterisks denote omissions.
ARTICLE 3. PAYMENTS
3.1. License Fee. ***
3.2. Milestone Payments.
3.2.1. Milestone Payments. In addition to the amounts set
forth in Sections 3.1 and 3.3, Hybridon agrees to pay to Genzyme the following
amounts upon achievement by Hybridon, its Affiliates or Collaborative Partners
of each of the following milestones with respect to a Licensed Product:
Milestone Amount
*** ***
*** ***
*** ***
*** ***
*** ***
***
3.2.2. Notice; Payments Due. Hybridon shall promptly notify Genzyme
in writing of the achievement of any milestone identifying the date in which it
occurred. All payments due to Genzyme from Hybridon pursuant to Section 3.2.1
shall be made within forty-five (45) days after the achievement of the
corresponding milestone and are not refundable under any circumstances or
creditable against any other amounts due Genzyme under this Agreement.
3.3. Royalties; Reports.
(a) ***
(b) ***
(c) Hybridon shall notify Genzyme in writing of the First
Commercial Sale within thirty (30) days after such sale.
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Securities and Exchange Commission.
Asterisks denote omissions.
(d) Hybridon agrees that beginning with the calendar quarter in
which the First Commercial Sale occurs, Genzyme shall receive, within sixty (60)
days after the end of such calendar quarter, and each of the first three
calendar quarters thereafter, and within ninety (90) days after the end of each
calendar year end thereafter: (i) payment of royalties and (ii) a written report
showing the information and basis on which the royalties have been calculated;
provided, however, that if the First Commercial Sale occurs in the fourth
calendar quarter, the first such payment and report shall be made within ninety
(90) days after the end of such calendar quarter.
(e) In the event the Licensed Product is sold as part of a
Combination Product (as defined below), the Net Sales from the Combination
Product, for the purposes of determining royalty payments, shall be determined
by multiplying the Net Sales of the Combination Product (as defined in the
standard Net Sales definition), during the applicable royalty reporting period,
by the fraction, A/A+B where A is the average sale price of the Licensed Product
when sold separately in finished form and B is the average sale price of the
other active compound(s) and/or ingredient(s) included in the Combination
Product when sold separately in finished form, in each case during the
applicable royalty reporting period or, if sales of both the Licensed Product
and the other Product (s) did not occur in such period, then in the most recent
royalty reporting period in which sales of both occurred. In the event that such
average sale price can not be determined for both the Licensed Product and all
other product (s) included in the Comination Product, Net Sales for the purposes
of determining royalty payments shall be calculated by multiplying the Net Sales
of the Combination Product by the fraction C/C+D where C is the fair market
value of the Licensed Product and D is the fair market value of all other active
compound(s) and/or ingredient(s) included in the Combination Product. As used
above, the term "Combination Product" means any pharmaceutical product which
comprises the Licensed Product and other active compound(s) and/or
ingredient(s).
(f) During any period in which a Licensed Product is under
development or is being manufactured or commercialized by Hybridon, its
Affiliates or Collaborative Partners, as applicable, Hybridon shall deliver to
Genzyme written reports within sixty (60) days of the end of each calendar year
providing a brief description of the status of research and development
activities as well as of any manufacturing and commercializing activities, if
any, conducted with respect to such Licensed Products. Such reports shall
contain sufficient information to allow Genzyme to monitor Hybridon's compliance
with this Agreement and to enable Genzyme to satisfy its reporting obligations
to JHU under Section 4.11 of the JHU Agreement, including without limitation the
accomplishment of the milestones set forth in Section 3.2. All reports and
information provided under this Section 3.3(f) shall be subject to Article 6.
3.4. Payments. All payments due under this Article 3 shall be made in
United States dollars by bank wire transfer in immediately available funds to an
account designated by Genzyme. If any payments are not made by Hybridon on or
before the specified due date, Hybridon will pay interest on the outstanding
amounts until paid in full, to the extent permitted
7
Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
Asterisks denote omissions.
by applicable law, in an amount equal to and fluctuating with the prime rate, as
reported by BankBoston, N.A., Boston, Massachusetts, from time to time until
such payment is made.
(a) The license fee, milestone payments and royalties required under
Sections 3.1., 3.2., and 3.3. shall be exclusive of any applicable withholding,
value added, sales, or other taxes and duties (which, if eligible, will be paid
by Hybridon in addition to such payments).
(b) The license fee, milestone payments and royalties payable by
Hybridon under Sections 3.1., 3.2., and 3.3. will be paid free and clear of, and
without deduction for and on account of tax, unless Hybridon is required by law
to make those payments subject to deduction or withholding of tax, in which case
the sum paid by Hybridon shall be increased to the extent necessary to ensure
that after such deduction or withholding, Genzyme receives an amount equal to
the sum which it would have received had not deduction or withholding been
required. Where Hybridon is required by law to deduct or withhold on account of
tax, it shall use commercially reasonable efforts to obtain from the relevant
revenue authorities authorization to make payment of the sums without such
deduction or withholding. The Parties undertake to provide all reasonable
assistance to each other in obtaining such authorization and, without prejudice
to the generality of the foregoing, will submit any forms or take any action as
may be reasonably necessary or reasonably requested by the other Party for that
purpose.
(c) If Hybridon is required to increase the amount of any payment
under the provisions of Section 3.4.(b) as a result of any withholding or
deduction required by law and Genzyme receives any amount by way of repayment of
the tax that is so deducted or withheld by Hybridon, Genzyme will reimburse,
without interest, to Hybridon an amount equal to such repayment.
(d) Subsections (a), (b) and (c) of this Section 3.4 will apply
equally to any royalties and other amounts payable under Section 3.3 if Genzyme
directs Hybridon to pay those royalties or other amounts directly to a Third
Party.
(e) If the Net Sales is in a currency other than U.S. Dollars (a
"Foreign Currency Amount"), then, for the purpose of determining the amount of
royalties payable hereunder, such Foreign Currency Amount shall be converted
into U.S. Dollars at the exchange rate between those two currencies quoted in
the Wall Street Journal (Eastern Edition) five (5) business days immediately
preceding the date on which such royalties become due. If no such exchange rate
is quoted in that edition, such payment shall be converted into U.S. Dollars at
the exchange rate between those two currencies most recently quoted in the Wall
Street Journal (Eastern Edition). If no such exchange rate has been quoted in
the Wall Street Journal (Eastern Edition) at any time during the twelve (12)
month period preceding the date on which royalties become due, such Foreign
Currency Amount which relates to Net Sales shall be deemed to be
8
Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
Asterisks denote omissions.
equal to the Net Sales most recently charged by the receiving party in a sale of
such Product in U.S. Dollars.
3.5. Records; Audit. Hybridon shall keep, and maintain complete and
accurate records of its sales of Licensed Products in accordance with United
States generally accepted accounting principles, consistently applied. Hybridon
shall require each of its Affiliates and Collaborative Partners to keep and
maintain complete and accurate records of any sale of Licensed Products. Such
records shall be retained for a period of four (4) years following the
applicable royalty reporting period. Hybridon shall permit, and cause each of
its Affiliates and Collaborative Partners to permit, independent accountants
retained by Genzyme to have access to its records and books for the sole purpose
of verifying Net Sales and any royalty due thereon. Such examination shall be
conducted during regular business hours and upon reasonable notice, at the
auditing Party's own expense and no more than once in each calendar year during
the term of this Agreement and once during the four (4) calendar years following
the termination hereof. Any adjustment in the amount of royalties due Genzyme on
account of overpayment or underpayment of royalties shall be made at the next
date when royalty payments are to be made to Genzyme under Section 3.4. Genzyme
shall pay the fees and expenses of the accountant engaged to perform the audit,
unless such audit reveals an underpayment of seven and one-half percent (7.5%)
or more for the period examined, in which case Hybridon shall pay all reasonable
costs and expenses incurred by Genzyme in the course of making such
determination, including the fees and expenses of the accountant (i.e., if
Hybridon pays "X" in royalties and an audit reveals it should have paid "Y" (the
difference, Y-X, being "Z"), then the underpayment percentage equals the product
obtained by multiplying (i) the quotient obtained by dividing Z and Y (Z /Y) and
(ii) 100).
ARTICLE 4. REPRESENTATIONS, WARRANTIES AND
LIMITATIONS; COMPLIANCE
4.1. Authorization. Each Party warrants and represents to the other that
it has the legal right and power to enter into this Agreement, to extend the
rights granted to the other in this Agreement, and to perform fully its
obligations hereunder, and that this Agreement is a valid and binding agreement
of such Party, enforceable in accordance with its terms.
4.2. Patent Rights Representations, Warranties and Limitations.
(a) Genzyme represents and warrants that, as of the Effective Date:
(i) it has not made nor will it make any commitments to others
in conflict with or in derogation of the rights created by this Agreement;
9
Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
Asterisks denote omissions.
(ii) to the best of its knowledge, all obligations under 37
C.F.R.ss.1.56 have been satisfied for all patents and patent applications
within the Patent Rights;
(iii) the statements set forth in the letter from JHU attached
hereto as Appendix B are true and correct; and
(iv) to the best of its knowledge, there are no pending third
party patent applications that could form a reasonable basis for a U.S.
interference proceeding with the Patent Rights.
(b) Except as otherwise provided herein, nothing herein contained
shall be construed as:
(i) a representation or warranty by Genzyme as to the validity
or scope of any sublicensed Patent Rights;
(ii) a representation or warranty that any Licensed Product
discovered, developed, made, used, imported, exported, sold or otherwise
disposed of under the sublicense granted in this Agreement is or will be
free from infringement of patents, copyrights, or trademarks of Third
Parties; or
(iii) an express or implied warranty of merchantability or
fitness for a particular purpose.
(c) In no event will Genzyme or its Affiliates be liable for
damages, whether direct, indirect, special, punitive, incidental or
consequential, or otherwise in relation to any Licensed Products manufactured or
sold by Hybridon, its Affiliates, Collaborative Partners or any distributor.
Neither Genzyme nor its Affiliates shall be obligated to defend or hold harmless
Hybridon, its Affiliates, Collaborative Partners or any other person against any
suit, damage, claim, or demand based on actual or alleged infringement of any
patent or other rights owned by a Third Party, or any unfair trade practice
resulting from the exercise or use of any right or sublicense granted under this
Agreement.
(d) Hybridon will be solely responsible for all guarantees,
warranties, conditions, and any representations provided to distributors,
customers and end-users in relation to Licensed Products.
4.3. Compliance. Hybridon shall comply, and shall require its Affiliates
and Collaborative Partners to comply, with all applicable laws and regulations
relative to the development, manufacture and marketing of Licensed Products.
10
Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
Asterisks denote omissions.
ARTICLE 5. PATENT RIGHTS MAINTENANCE AND INFRINGEMENT
5.1. Prosecution. Subject to the terms of the JHU Agreement, Genzyme shall
have the exclusive right to apply for, seek issuance of, maintain, or abandon,
any or all of the Patent Rights. In the event that Genzyme receives notice from
JHU that any of the Patent Rights will revert to JHU pursuant to Section 5.1(a)
of the JHU Agreement, Genzyme shall promptly forward such notice to Hybridon.
5.2. Infringement by Third Parties. Each Party shall promptly notify the
other of its knowledge of any potential infringement of the Patent Rights by a
Third Party.
(a) Legal Action by Genzyme. Genzyme has the right, but not the
obligation, at its sole discretion to bring legal action against a Third Party
that it has reasonably determined to have or is infringing its Patent Rights. If
Genzyme should bring an action pursuant to this Section 5.2, to recover damages
including lost profits or reasonable royalties or injunctive relief, any
recovery of monetary damages shall be applied in the following manner: (i) first
Genzyme shall recover all lost profits or reasonable royalties, whichever is
appropriate; (ii) second Genzyme shall be reimbursed for all out-of-pocket costs
and expenses associated with obtaining injunctive relief; and (iii) Genzyme
shall be reimbursed for all other out-of-pocket litigation costs or expenses
through appeal. Once (i), (ii), and (iii) above have been satisfied in full, any
remaining recoveries or reimbursements shall be applied to reimburse Hybridon
for its lost profits based on the market share of Hybridon, its Affiliates and
Collaborative Partner(s), as applicable.
(b) Legal Action by Hybridon. If within ninety (90) days following
receipt of notice from Hybridon setting forth Hybridon's basis to reasonably
conclude that Genzyme's Patent Rights are being infringed or have been
infringed, or such time as Genzyme otherwise becomes aware of an alleged
infringement and Genzyme has not either terminated such infringement or
initiated legal action against the infringer or defendant, Genzyme shall, upon
written request by Hybridon and with the consent of JHU (which Genzyme shall use
reasonable efforts to secure), grant to Hybridon the right (but not the
obligation) to bring an action against such infringer. In the event that
Hybridon brings such action against a Third Party for infringement of the Patent
Rights, pursuant to this Section 5.2, to recover damages including lost profits
or reasonable royalties or injunctive relief, any recovery of monetary damages
shall be applied in the following manner: (i) first if such action results in
Genzyme being a party in the action, Hybridon shall reimburse Genzyme for all
out-of-pocket costs and expenses incurred through appeal; (ii) second Hybridon
shall recover all out-of-pocket costs and expenses incurred through appeal; and
(iii) Hybridon shall recover all lost profits or reasonable royalties, whichever
is appropriate. Any recovery by Hybridon under (iii) above, shall be used in the
first instance to fulfill Hybridon's payment obligations under Article 3, which
obligations shall be based upon
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Asterisks denote omissions.
lost Net Sales of Licensed Products which formed the basis for awarding such
lost profits or reasonable royalties.
5.3. Infringement of Third Party Rights. Hybridon shall promptly advise
Genzyme in writing of any notice or claim of any infringement and of the
commencement of any suit or action for infringement of a Third Party patent made
or brought against Hybridon, its Affiliates or Collaborative Partners and based
upon the manufacture, use, import and export, and sale or offer to sell of
Licensed Products or the practice of Licensed Methods pursuant to the sublicense
granted under the Agreement. In such event, Hybridon shall have at all times the
right to immediately cease commercialization and/or the right either to:
(i) request that Genzyme enter into negotiations with such
Third Party to obtain rights for Hybridon under the Third Party patent;
(ii) request that Genzyme defend such claim, suit or action at
Genzyme's expense; or
(iii) terminate this Agreement.
Genzyme shall not be obligated to enter into negotiations with such Third Party
to obtain rights for Hybridon under the Third Party patent nor obligated to
defend such claim, suit or action. If Genzyme, in its sole discretion, elects to
enter into negotiations with such Third Party to obtain rights for Hybridon
under the Third Party patent or if Genzyme, in its sole discretion, elects to
undertake at its own expense the defense of any such claim, suit or action,
Hybridon shall render Genzyme all reasonable assistance that may be required by
Genzyme in the negotiations or in the defense of such claim, suit or action.
Genzyme has the primary right to control the defense of any such claim, suit or
action by counsel of its own choice, and Hybridon shall have the right, at its
own expense, to be represented in any such claim, suit or action in respect of
which Hybridon is a defendant by counsel of its own choice. The Parties agree to
cooperate reasonably in any such defense. Notwithstanding the foregoing, if
Genzyme has not within ninety (90) days (or such lesser period of time as is
necessary to avoid entry of a default judgment against Genzyme or Hybridon) from
the date of receipt of a request from Hybridon, either entered into negotiations
with such Third Party to obtain rights for Hybridon under the Third Party patent
or initiated legal action to defend such claim, suit or action, then Hybridon
shall have the right, upon written notice to Genzyme, to enter such negotiations
or defend such claim, suit or action. Hybridon shall be entitled to deduct all
reasonable out-of-pocket costs and expenses, including legal fees, incurred in
entering into such negotiations or defending such claim, suit or action from
royalties due Genzyme after commencement of such action and until such expenses
are fully recouped by Hybridon.
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Asterisks denote omissions.
5.4. Suit Relating to Patent Rights. Notwithstanding the provisions of
Sections 5.2(b) and 5.3 above, if at any time Hybridon receives notice of any
claim, suit or action by a Third Party relating to the Patent Rights (or the
validity, scope or enforceability thereof), Hybridon shall promptly notify
Genzyme in writing. Genzyme shall have the right, exercisable in its sole
discretion, to assume and control the defense of such claim, suit or action at
its own expense and using counsel of its own choice. Hybridon shall have the
right, at its own expense, to be represented in any such claim, suit or action
in respect of which Hybridon is a defendant by counsel of its own choice. The
Parties agree to cooperate reasonably in any such defense. If, however, Genzyme
has not within ninety (90) days from the date of receipt of notice from
Hybridon, either entered into negotiations with such Third Party or initiated
legal action to defend such claim, suit or action, then Hybridon shall have the
right, upon written notice to Genzyme, to enter such negotiations or defend such
claim, suit or action. Hybridon shall be entitled to deduct all reasonable
expenses, including legal fees, incurred in entering into such negotiations or
defending such claim, suit or action from royalties due Genzyme after
commencement of such action and until such expenses are fully recouped by
Hybridon. Hybridon shall not settle or compromise any such claim, suit or action
without the written consent of Genzyme, which consent shall not be unreasonably
withheld or delayed.
ARTICLE 6. CONFIDENTIALITY
6.1. Confidential Information.
(a) As used in this Agreement, the term "Confidential Information"
means any technical or business information furnished by one Party ("Disclosing
Party") to the other Party ("Receiving Party") in connection with this Agreement
and specifically designated as confidential. Such Confidential Information may
include, without limitation, the trade secrets, know-how, inventions,
formulations, compositions, technical data or specifications, testing methods,
business or financial information, research and development activities, product
and marketing plans, and customer and supplier information. Confidential
Information that is disclosed in writing shall be marked with the legend
"CONFIDENTIAL". Confidential Information that is disclosed orally or visually
shall be documented in a written notice prepared by the Disclosing Party and
delivered to the Receiving Party within thirty (30) days of the date of
disclosure. Such notice shall summarize the Confidential Information disclosed
to the Receiving Party and reference the time and place of disclosure.
(b) The Receiving Party shall and shall cause its employees engaged
in the performance of this Agreement to: (a) maintain all Confidential
Information in strict confidence, except that the Receiving Party may disclose
or permit the disclosure of any Confidential Information to its directors,
officers, employees, consultants, and advisors who are obligated to maintain the
confidential nature of such Confidential Information and who need to know such
Confidential Information to perform this Agreement; (b) use all Confidential
Information solely
13
Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
Asterisks denote omissions.
for purposes performing this Agreement; and (c) reproduce the Confidential
Information only to the extent necessary to perform this Agreement, with all
such reproductions being considered Confidential Information.
(c) The obligations of the Receiving Party under Section 6.1(b)
shall not apply to Confidential Information to the extent that the Receiving
Party can demonstrate by written documentation that such applicable Confidential
Information: (a) was in the public domain prior to the time of its disclosure
under this Agreement; (b) entered the public domain after the time of its
disclosure under this Agreement through means other than an unauthorized
disclosure resulting from an act or omission by the Receiving Party; (c) was
independently developed or discovered by the Receiving Party after the time of
its disclosure under this Agreement; (d) is or was disclosed to the Receiving
Party at any time, whether prior to or after the time of its disclosure under
this Agreement, by a Third Party having no fiduciary relationship with the
Disclosing Party and having no obligation of confidentiality with respect to
such Confidential Information; or (e) is required to be disclosed to comply with
applicable laws or regulations, or with a court or administrative order,
provided that the Disclosing Party receives, to the extent practicable, prior
written notice of such disclosure and that the Receiving Party takes all
reasonable and lawful actions to obtain confidential treatment for such
disclosure and, if possible, to minimize the extent of such disclosure.
(d) Upon the termination by either Party of this Agreement, the
Receiving Party shall return to the Disclosing Party all originals, copies, and
summaries of documents, materials, and other tangible manifestations of
Confidential Information in the possession or control of the Receiving Party,
except for one copy which may be kept in the Receiving Party's legal archives.
The obligations set forth in this Agreement shall remain in effect for a period
of five (5) years after receipt of the Confidential Information by the Receiving
Party.
(e) The Receiving Party agrees that any breach of its obligations
under this Section 6.1 may cause irreparable harm to the Disclosing Party;
therefore, the Disclosing Party shall have, in addition to any remedies
available at law, the right to seek equitable relief to enforce this Agreement.
6.2. Terms of this Agreement. The Parties agree that the public
announcement of the execution of this Agreement shall be in the form of a
mutually acceptable press release and, from and after the publication date of
such press release, each Party shall be entitled to make or publish any
statement limited to the contents of such press release. The Parties further
agree to seek confidential treatment for the filing of this Agreement with the
Securities and Exchange Commission, if such filing is required, and shall agree
upon the content of the request for confidential treatment made by each Party in
respect of such filing. Except as permitted by the foregoing provisions or as
otherwise required by law, Hybridon and Genzyme each agree not to disclose any
terms or conditions of this Agreement to any Third Party without the prior
consent
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Securities and Exchange Commission.
Asterisks denote omissions.
of the other Party; provided, however, that (i) Genzyme shall have the right to
provide a copy of this Agreement to JHU and (ii) Hybridon shall have the right
to provide a copy of this Agreement to Collaborative Partner(s) which have
agreed to treat this Agreement as Confidential Information under this Article 6.
ARTICLE 7. INDEMNIFICATION AND INSURANCE
7.1. Hybridon Indemnity Obligations. Hybridon agrees to defend, indemnify
and hold Genzyme, its Affiliates and their respective directors, officers,
employees and agents and their respective successors, heirs and assigns, and
JHU, JHHS and its subsidiary corporations, their present and former trustees,
officers, inventors of Patent Rights, agents, faculty, employees, students,
treating and consulting physicians harmless from and against any losses, costs,
claims, damages, liabilities or expenses (including reasonable attorneys' and
professional fees and other expenses of litigation) (collectively,
"Liabilities") arising, directly or indirectly, out of or in connection with
Third Party claims, suits, actions, demands or judgments, including, without
limitation, personal injury and product liability matters, suits, actions, or
demands relating to (i) any Licensed Product developed, manufactured, used, sold
or otherwise distributed by or on behalf of Hybridon, its Affiliates,
Collaborative Partners, or other designees (including without limitation,
product liability claims) or (ii) the use of the Patent Rights by or on behalf
of Hybridon, its Affiliates, Collaborative Partners or other designees, except
in each case, to the extent such Liabilities resulted from a material breach of
this Agreement by Genzyme or negligence or intentional misconduct on the part of
Genzyme.
7.2. Insurance. Hybridon, its Affiliates or Collaborative Partner(s)
shall maintain appropriate product liability insurance or self-insurance with
respect to the development, manufacture and sale of Licensed Products by
Hybridon, its Affiliates, Collaborative Partner(s) or other designees in such
amount as such entity customarily maintains with respect to the development,
manufacture and sale of its other products. Hybridon, its Affiliates or
Collaborative Partner(s) shall maintain such insurance for so long as it
continues to manufacture or sell the Licensed Products and shall name Genzyme,
JHU, and JHHS as additional insureds, and thereafter for so long as such entity
maintains insurance for itself covering such manufacture or sales.
ARTICLE 8. TERM AND TERMINATION
8.1 Term. The term of this Agreement shall commence on the Effective Date
and continue until the expiration of all royalty obligations under Section 3.3
of this Agreement.
8.2. Termination. This Agreement may be terminated in the following
circumstances:
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Securities and Exchange Commission.
Asterisks denote omissions.
8.2.1. For Convenience. Hybridon may terminate this Agreement at any
time upon ninety (90) days' written notice to Genzyme.
8.2.2. Upon Breach. Upon any material breach of this Agreement by
either Party (in such capacity, the "Breaching Party"), the other Party (in such
capacity, the "Non-Breaching Party") may terminate this Agreement by providing
sixty (60) days written notice to the Breaching Party, specifying the material
breach. The termination shall become effective at the end of the sixty (60) day
period unless: (a) the Breaching Party cures such breach during such sixty (60)
day period, (b) if such breach is not susceptible to cure within sixty (60) days
of the receipt of written notice of the breach, the Breaching Party is
diligently pursuing a cure, or (c) the Breaching Party has commenced dispute
resolution pursuant to Section 9.6 prior to the expiration of the sixty (60) day
cure period (in which event, such termination shall not be effective unless the
Arbitration Panel determines that the Party in breach has materially breached or
defaulted in the performance of any of its material obligations hereunder);
provided, however, in the case of a failure to pay any amount due hereunder,
such default may be the basis of termination thirty (30) business days following
the date that notice of such default was provided to the Breaching Party.
8.2.3. Upon Bankruptcy. Either Party may terminate this Agreement
immediately if the other Party (in such capacity, the "Bankrupt Party"): (i)
applies for or consents to the appointment of a receiver, trustee, liquidator or
custodian of itself or of all or a substantial part of its property, (ii) admits
in writing its inability to pay its debts generally as they mature, (iii) makes
a general assignment for the benefit of its creditors, (iv) is dissolved or
liquidated in full or in part, (v) commences a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or consents to any such relief or to the appointment of or
taking possession of its property by any official in an involuntary case or
other proceeding commenced against it, (vi) takes any action for the purpose of
effecting any of the foregoing, or (vii) becomes the subject of an involuntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect that is not dismissed within sixty (60)
calendar days of commencement.
8.2.4. Accrued Rights and Obligations. Termination or expiration of
this Agreement for any reason shall not release any Party hereto from any
liability which, at the time of such termination or expiration, has already
accrued to the other Party or which is attributable to a period prior to such
termination or expiration, nor preclude either Party from pursuing any rights
and remedies it may have hereunder or at law or in equity which accrued or are
based upon any event occurring prior to such termination or expiration.
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Securities and Exchange Commission.
Asterisks denote omissions.
8.2.5. Sublicenses.
(a) In the event that the sublicense granted under the JHU
Agreement to Genzyme is terminated, any granted sublicense to Hybridon and its
Affiliates under this Agreement shall remain in full force and effect, provided
that Hybridon and its Affiliates: (i) are not then in breach of this Agreement,
and (ii) agree to be bound to JHU as licensor under the terms and conditions of
this Agreement.
(b) In the event that the sublicense granted under this
Agreement to Hybridon and its Affiliates is terminated, or upon the occurrence
of any event which results in Hybridon becoming a Bankrupt Party, any granted
sublicense to Collaborative Partner(s) shall remain in full force and effect,
provided that such Collaborative Partner(s) (i) are not then in breach of their
respective Collaborative Agreement(s) and (ii) agree to be bound to Genzyme as
licensor under the terms and conditions of this Agreement.
8.2.6. Survival. The provisions of Articles 1, 6 and 7 and Sections
3.2.2 (limited solely to the obligation to make final payment of any amounts
accrued prior to expiration or termination), 3.3 (limited solely to the
obligation to submit final report), 3.4, 3.5, 8.2.4, 8.2.5, 8.2.6, 9.4, 9.5 and
9.6 shall survive the expiration or termination of this Agreement.
ARTICLE 9. MISCELLANEOUS
9.1. Force Majeure. Neither Party shall be held liable or responsible to
the other Party nor be deemed to have defaulted under or breached this Agreement
for failure or delay in fulfilling or performing any term of this Agreement when
such failure or delay is caused by or results from causes beyond the reasonable
control of the affected Party, including without limitation, fire, floods,
embargoes, war, acts of war (whether war is declared or not), insurrections,
riots, civil commotions, strikes, lockouts or other labor disturbances, acts of
God or acts, omissions or delays in acting by any governmental authority or the
other Party.
9.2. Assignment. This Agreement may not be assigned or otherwise
transferred by any Party without the consent of the other Party; provided,
however, that each Party may, without such consent, assign its rights and
obligations under this Agreement (i) in connection with a corporate
reorganization, to any member of an affiliated group, all or substantially all
of the equity interest of which is owned and controlled by such Party or its
direct or indirect parent corporation, or (ii) in connection with a merger,
consolidation or sale of substantially all of such Party's assets to an
unrelated Third Party; provided, however, that such Party's rights and
obligations under this Agreement shall be assumed by its successor in interest
in any such transaction and shall not be transferred separate from all or
substantially all of its other business assets, including those business assets
that are the subject of this Agreement. Any purported
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Securities and Exchange Commission.
Asterisks denote omissions.
assignment in violation of the preceding sentence shall be void. Any permitted
assignee shall assume all obligations of its assignor under this Agreement.
9.3. Severability. Each Party hereby agrees that it does not intend to
violate any public policy, statutory or common laws, rules, regulations, treaty
or decision of any government agency or executive body thereof of any country or
community or association of countries. Should one or more provisions of this
Agreement be or become invalid, the Parties hereto shall substitute, by mutual
consent, valid provisions for such invalid provisions which valid provisions in
their economic effect are sufficiently similar to the invalid provisions that it
can be reasonably assumed that the Parties would have entered into this
Agreement with such valid provisions. In case such valid provisions cannot be
agreed upon, the invalidity of one or several provisions of this Agreement shall
not affect the validity of this Agreement as a whole, unless the invalid
provisions are of such essential importance to this Agreement that it is to be
reasonably assumed that the Parties would not have entered into this Agreement
without the invalid provisions.
9.4. Notices. Any consent, notice or report required or permitted to be
given or made under this Agreement by one of the Parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by personal delivery or courier) or courier, postage prepaid (where
applicable), addressed to such other Party at its address indicated below, or to
such other address as the addressee shall have last furnished in writing to the
addressor and shall be effective upon receipt by the addressee.
If to
Hybridon: Hybridon Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chairman, Chief Executive Officer
and President
with a copy to: Hybridon Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President and General Counsel
If to Genzyme Corporation
Genzyme: ▇.▇. ▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President, Genzyme Molecular Oncology
with a copy to: Genzyme Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Legal Officer
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Securities and Exchange Commission.
Asterisks denote omissions.
9.5. Governing Law and Venue. The Parties hereby consent to the
jurisdiction and venue of the state and federal courts in the Commonwealth of
Massachusetts. This Agreement shall be governed by and construed under the laws
of the Commonwealth of Massachusetts, without regard to its conflicts of law
principles.
9.6. Dispute Resolution.
9.6.1. General. Any disputes arising between the Parties relating
to, arising out of or in any way connected with this Agreement or any term or
condition hereof, or the performance by any Party of its obligations hereunder,
whether before or after termination of this Agreement (a "Dispute"), which is
not settled by the Parties within thirty (30) days after notice of such Dispute
is given by one Party to the other in writing shall be referred to the Chief
Legal Officer of Genzyme and the Chief Executive Officer of Hybridon who are
authorized to settle such Disputes on behalf of their respective companies
("Senior Executives"). The Senior Executives will meet for negotiations within
thirty (30) days of the end of the 30-day negotiation period referred to above,
at a time and place mutually acceptable to both Senior Executives. If the
Dispute has not been resolved within thirty (30) days after the end of the
30-day negotiation period referred to above (which period may be extended by
mutual agreement), subject to any rights to injunctive relief and unless
otherwise specifically provided for herein, any Dispute will be finally resolved
by binding arbitration as provided in Section 9.6.2.
9.6.2. Arbitration. Any arbitration hereunder shall be conducted
under the commercial rules of the American Arbitration Association. Each such
arbitration shall be conducted in the English language by a panel of three
arbitrators (the "Arbitration Panel"). Each of Hybridon and Genzyme shall
appoint one arbitrator to the Arbitration Panel and the third arbitrator shall
be appointed by the two arbitrators appointed by Hybridon and Genzyme. The
Arbitration Panel shall be convened upon delivery of written notice by one Party
to the other following expiration of the time periods provided in Section 9.6.1
that the notifying Party intends to institute arbitration proceedings. Any such
arbitration shall be held in Boston, Massachusetts. The Arbitration Panel shall
have the authority to grant specific performance, and to allocate between the
Parties the costs of arbitration in such equitable manner as it shall determine.
Judgment upon the award so rendered may be entered in any court having
jurisdiction or application may be made to such court for judicial acceptance of
any award and an order of enforcement, as the case may be.
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Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
Asterisks denote omissions.
9.7. Entire Agreement. This Agreement contains the entire understanding of
the Parties with respect to the subject matter hereof and supersedes any prior
understanding. All express or implied agreements and understandings, either oral
or written, heretofore made are expressly merged in and made a part of this
Agreement. This Agreement may be amended, or any term hereof modified, only by a
written instrument duly executed by both Parties hereto.
9.8. Headings. The captions to the several Articles and Sections hereof
are not a part of this Agreement, but are merely guides or labels to assist in
locating and reading the several Articles and Sections hereof.
9.9. Compliance with Law. Each Party agrees to comply with all federal,
state, and local laws and regulations applicable to the sublicenses granted
under this Agreement, including without limitation the Toxic Substances Control
Act (15 U.S.C. ss. 2601 et seq.) and implementing regulations (in particular, 40
C.F.R. ss. 720.36 [Research and Development Exemption]), the Food, Drug, and
Cosmetic Act (21 U.S.C. ss. 301 et seq.) and implementing regulations, and all
United States export laws and regulations. Each Party assumes sole
responsibility for any violation of such laws or regulations by it or any of its
Affiliates.
9.10. Use of Genzyme's Trademarks. Hybridon agrees that it shall have no
right or license to use any trademark of Genzyme.
9.11. Use of The ▇▇▇▇▇ ▇▇▇▇▇▇▇ University Names. Hybridon agrees that it
shall have no right or license to use the names, likeness, or logos of The ▇▇▇▇▇
▇▇▇▇▇▇▇ University or any of its schools or divisions of The ▇▇▇▇▇ ▇▇▇▇▇▇▇
Health Systems or any of its constituent parts and affiliated hospitals and
companies, or any contraction or derivative thereof or the names of The ▇▇▇▇▇
▇▇▇▇▇▇▇ University's faculty members, employees, and students in any press
releases, general publications, advertising, marketing, promotional or sales
literature without prior written consent from an authorized official of The
▇▇▇▇▇ ▇▇▇▇▇▇▇ University.
9.12. Product Marking. Hybridon shall ▇▇▇▇ and shall require Affiliates
and Collaborative Partners to ▇▇▇▇ all packaging containing Licensed Products
and/or items relating to the practice of the Licensed Method with the number of
the applicable patents licensed hereunder in accordance with the laws of the
country in which such items are distributed.
9.13. Independent Contractors. It is expressly agreed that each of the
Parties shall be independent contractors and that the relationship between the
Parties shall not constitute a partnership, joint venture or agency. No Party
shall have the authority to make any statements, representations or commitments
of any kind, or to take any action, which shall be binding on the other, without
the prior consent of the other Party to do so.
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Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
Asterisks denote omissions.
9.14. Waiver. The waiver by either Party hereto of any right hereunder or
the failure to perform or a breach by the other Party shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by said
other Party whether of a similar nature or otherwise.
9.15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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Securities and Exchange Commission.
Asterisks denote omissions.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
HYBRIDON INC.
By: (signed)
-------------------------------------
Name: ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ III
Title: Chairman, CEO and President
GENZYME CORPORATION
By: (signed)
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President,
Chief Patent Counsel
22
Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
Asterisks denote omissions.
Appendix A - Patent Rights
***
23
Confidential materials omitted and filed separately with the
Securities and Exchange Commission.
Asterisks denote omissions.
Appendix B
***
24
