TABLE
OF CONTENTS
| |
|
Page
|
|
|
|
|
|
ARTICLE
1
|
DEFINITIONS
|
2
|
|
ARTICLE
2
|
SCOPE
OF COLLABORATION; JOINT OBLIGATIONS; DILIGENCE
|
14
|
|
2.1
|
Scope
of Collaboration
|
14
|
|
2.2
|
Conduct
of Parties
|
17
|
|
2.3
|
Assistance
|
17
|
|
ARTICLE
3
|
GRANT
OF RIGHTS
|
18
|
|
3.1
|
License
Grant to GTC
|
18
|
|
3.2
|
License
Grant to LFB Biotech
|
19
|
|
3.3
|
Exercise
of Commercialization Rights in Co-Exclusive Territory
|
20
|
|
3.4
|
Trademark
License
|
20
|
|
3.5
|
Performance
of Development and Commercialization Activities By Third
Parties
|
21
|
|
3.6
|
Reservation
of Rights
|
21
|
|
3.7
|
Competing
Products
|
21
|
|
3.8
|
Third
Party Patent Rights
|
21
|
|
3.9
|
Effect
of Bankruptcy on License Grants
|
21
|
|
ARTICLE
4
|
COLLABORATION
GOVERNANCE
|
22
|
|
4.1
|
Team
Leaders/Project Managers
|
22
|
|
4.2
|
Joint
Steering Committee; Minutes
|
22
|
|
4.3
|
Subcommittees
|
22
|
|
4.4
|
Meetings
of the JSC
|
23
|
|
4.5
|
Responsibilities
of the JSC
|
23
|
|
4.6
|
Decisions
|
23
|
|
4.7
|
Legal
Structure of the Collaboration
|
24
|
|
ARTICLE
5
|
DEVELOPMENT
PHASE
|
24
|
|
5.1
|
Development
Plan
|
24
|
|
5.2
|
Development
Activities
|
25
|
|
5.3
|
Diligence
Requirements
|
26
|
TABLE
OF CONTENTS
(continued)
| |
|
Page
|
|
|
|
|
|
5.4
|
Development
Costs
|
26
|
|
5.5
|
Right
of Reference to Data
|
26
|
|
5.6
|
Transfer
of Know-How
|
27
|
|
5.7
|
Conduct
of Clinical Trials
|
27
|
|
5.8
|
Regulatory
Filings and Approvals
|
28
|
|
5.9
|
Ownership
of Regulatory Approvals
|
29
|
|
ARTICLE
6
|
COMMERCIALIZATION
PHASE
|
29
|
|
6.1
|
Commercialization
Plan
|
29
|
|
6.2
|
Commercialization
Activities
|
29
|
|
6.3
|
Commercialization
Costs
|
31
|
|
6.4
|
Diligence
Requirements
|
31
|
|
6.5
|
Advertising
and Promotional Materials
|
31
|
|
6.6
|
Customer
Complaints and Inquiries
|
32
|
|
6.7
|
Drug
Safety
|
32
|
|
6.8
|
Product
Withdrawals and Recalls
|
32
|
|
ARTICLE
7
|
PRODUCT
SUPPLY
|
33
|
|
7.1
|
Clinical
Supply of Product
|
33
|
|
7.2
|
Forecasts
and Commercial Supply
|
33
|
|
7.3
|
Disclaimer
of Warranty
|
34
|
|
7.4
|
Second
Manufacturing Site
|
34
|
|
ARTICLE
8
|
PAYMENTS
AND ACCOUNTING
|
34
|
|
8.1
|
Equity
Purchase
|
34
|
|
8.2
|
Funding
of Costs and Sharing of Profits
|
34
|
|
8.3
|
Reports
|
38
|
|
8.4
|
Records;
Audit
|
39
|
|
8.5
|
Currency
of Account and Payment
|
40
|
|
8.6
|
Blocked
Currency
|
41
|
|
8.7
|
Taxes
|
41
|
TABLE
OF CONTENTS
(continued)
| |
|
Page
|
|
|
|
|
|
ARTICLE
9
|
PATENTS
AND INVENTIONS
|
41
|
|
9.1
|
Ownership
|
41
|
|
9.2
|
Patent
Prosecution
|
42
|
|
9.3
|
Enforcement
of Patent Rights
|
43
|
|
9.4
|
Claimed
Infringement
|
44
|
|
9.5
|
Declaratory
Actions
|
44
|
|
9.6
|
Costs
of Patent Prosecution and Enforcement
|
44
|
|
ARTICLE
10
|
TRADEMARK
USAGE AND MAINTENANCE
|
45
|
|
10.1
|
Trademarks
|
45
|
|
ARTICLE
11
|
COVENANTS,
REPRESENTATIONS, AND WARRANTIES
|
46
|
|
11.1
|
Mutual
Covenants
|
46
|
|
11.2
|
Representations
and Warranties of the Parties
|
47
|
|
11.3
|
Additional
Representations and Warranties of LFB Biotech
|
48
|
|
11.4
|
Additional
Representations and Warranties of GTC
|
48
|
|
11.5
|
Performance
by Affiliates
|
48
|
|
ARTICLE
12
|
CONFIDENTIALITY
|
49
|
|
12.1
|
Treatment
of Confidential Information
|
49
|
|
12.2
|
Exceptions
|
49
|
|
12.3
|
Authorized
Disclosures
|
49
|
|
12.4
|
Publicity
|
50
|
|
12.5
|
Publication
|
50
|
|
12.6
|
Termination
of Prior Confidentiality Agreements
|
51
|
|
ARTICLE
13
|
INDEMNIFICATION
|
51
|
|
13.1
|
Indemnification
by LFB Biotech
|
51
|
|
13.2
|
Indemnification
by GTC
|
52
|
|
13.3
|
Procedure
|
52
|
|
13.4
|
Shared
Liability Claims
|
53
|
TABLE
OF CONTENTS
(continued)
| |
|
Page
|
|
|
|
|
|
13.5
|
Effect
of Disclosures
|
53
|
|
13.6
|
Insurance
|
54
|
|
ARTICLE
14
|
TERM
AND TERMINATION
|
54
|
|
14.1
|
Term
|
54
|
|
14.2
|
Termination
Rights
|
55
|
|
14.3
|
Effects
of Termination
|
57
|
|
14.4
|
Survival;
Accrued Rights
|
62
|
|
14.5
|
Effect
of Termination on Sublicenses
|
62
|
|
ARTICLE
15
|
DISPUTE
RESOLUTION
|
62
|
|
15.1
|
Disputes
|
62
|
|
15.2
|
Arbitration
|
62
|
|
ARTICLE
16
|
MISCELLANEOUS
|
63
|
|
16.1
|
Actions
by Affiliates
|
63
|
|
16.2
|
Assignment
|
63
|
|
16.3
|
Governing
Law
|
64
|
|
16.4
|
Non-Waiver
|
64
|
|
16.5
|
Disclaimer
of Indirect Damages
|
64
|
|
16.6
|
Severability
|
64
|
|
16.7
|
Notice
|
64
|
|
16.8
|
Headings
|
65
|
|
16.9
|
Force
Majeure
|
65
|
|
16.10
|
Entire
Agreement
|
65
|
|
16.11
|
Amendments
|
66
|
|
16.12
|
Independent
Contractors and Relationship of the Parties
|
66
|
|
16.13
|
Exhibits
|
66
|
|
16.14
|
No
Strict Construction
|
66
|
|
16.15
|
Recording
|
66
|
|
16.16
|
Counterparts
|
66
|
-
iv -
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
JOINT
DEVELOPMENT AND COMMERCIALIZATION AGREEMENT
This
Joint Development and Commercialization Agreement (the “Agreement”)
is
entered into as of September 29, 2006 (the “Effective
Date”),
by
and between GTC Biotherapeutics, Inc., a Massachusetts corporation, having
offices at 175 Crossing Boulevard, Framingham, Massachusetts 01702, USA
(“GTC”),
and
LFB Biotechnologies S.A.S.U., a société par actions simplifiée unipersonnelle,
having offices at 3, avenue des Tropiques, Les Ulis, 91958 Courtaboeuf, France
(“LFB
Biotech”).
GTC
and LFB Biotech are sometimes referred to herein individually as a “Party”
and
collectively as the “Parties.”
INTRODUCTION
A. LFB
Biotech and its
Affiliates possess certain intellectual property, know-how and skills with
respect to processes and purification, expertise in clinical and regulatory
affairs, manufacturing, molecular biology and biosecurity, extensive marketing
and sales experience in therapeutic products, commercial infrastructure and
financial resources.
B. GTC
possesses
certain intellectual property with respect to the production of transgenic
proteins in milk, purification and promoters, know-how and skills in the areas
of regulatory affairs, quality systems animal husbandry, milking, biosecurity,
molecular biology, embryology, product recovery and purification.
C. LFB
Biotech and GTC
wish to collaborate to leverage and maximize the strengths of each party to
develop and commercialize, on a worldwide basis, mutually selected transgenic
animal products based on, derived from or incorporating recombinant plasma
proteins and monoclonal antibodies.
D. LFB
Biotech and GTC
have agreed that the first program to be undertaken pursuant to their
collaboration will be the development and commercialization of an rFVIIa product
in respect of which LFB Biotech and its Affiliates have developed certain
intellectual property, know how and skills.
E. Concurrently
with
the execution of this Agreement, LFB Biotech and GTC are entering into a certain
Stock and Note Purchase Agreement (as defined below), pursuant to which LFB
Biotech will make an equity investment of up to an aggregate of $25 million
in
GTC preferred and common stock and a convertible note of GTC.
F. LFB
Biotech is a
wholly-owned subsidiary of Laboratoire Francais du
Fractionnement et des Biotechnologies S.A.,
a
French société
anonyme
(“LFB
SA”).
G. As
a material
inducement for GTC to enter into this Agreement, GTC and LFB SA are
entering into a certain Keepwell Agreement concurrently with the execution
of this Agreement, pursuant to which, among other matters,
LFB SA agrees to (i) cause LFB Biotech and the Affiliates of LFB
Biotech to perform and comply with any relevant obligations under this
Agreement, (ii) be liable for any GTC damages caused by the failure of LFB
Biotech or its Affiliates to perform and comply with such obligations, and
(iii)
indemnify and hold GTC harmless for any such
failures.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
NOW
THEREFORE,
in
consideration of the foregoing and of the mutual covenants and agreements set
forth herein, the Parties hereby agree as follows:
ARTICLE
1
DEFINITIONS
1.1 “Accounting
Standards”
shall
mean (a) with respect to GTC, United States Generally Accepted Accounting
Principles, and (b) with respect to LFB Biotech, International Financial
Reporting Standards.
1.2 “Action”
means
any claim, action, cause of action or suit (whether in contract or tort or
otherwise), litigation (whether at law or in equity, whether civil or criminal),
controversy, assessment, arbitration, investigation, hearing, charge, complaint,
demand, notice or proceeding of, to, from, by or before any governmental
authority.
1.3 “Additional
Plasma Product”
means
a
Transgenic version of any therapeutic recombinant blood plasma product other
than the Initial Product.
1.4 “Affiliate”
means
any Person who directly or indirectly controls or is controlled by or is under
common control with a Party to this Agreement. For purposes of this
Section 1.4, “control”, “controls”, or “controlled by” means ownership
directly or through one or more Affiliates, of more than fifty percent (50%)
or
more of the shares of stock entitled to vote for the election of directors,
in
the case of a corporation, or more than fifty percent (50%) of the equity
interest in the case of any other type of legal entity, status as a general
partner in any partnership, or any other arrangement whereby a Party controls
or
has the right to control the Board of Directors or equivalent governing body
of
a corporation or other entity, or the ability to direct the management or
policies of a corporation or other entity.
The
Parties acknowledge that in the case of certain entities organized under the
laws of certain countries outside of the United States, the maximum percentage
ownership permitted by law for a foreign investor may be less than fifty percent
(50%), and that in such case such lower percentage shall be substituted in
the
preceding sentence, provided that such foreign investor has the power to direct
the management and policies of such entity.
1.5 “Agreement”
shall
have the meaning set forth in the preamble to this Agreement.
1.6 “Alliance
Affecting Core Business”
means,
with respect to a Party, a binding agreement between such Party or its Affiliate
and a Third Party for the development and/or commercialization of a product
which (a) if developed or commercialized by the other Party, would be within
the
Core Business of such other Party, and (b) Competes with a Core Business Product
of the other Party as listed on Exhibit
H.
1.7 “Base
Product Term”
shall
have the meaning set forth in Section 14.1(b).
1.8 “Change
of Control”
with
respect to a Party means (a) a sale of all or substantially all of such Party’s
assets or business to which this Agreement relates; (b) a merger, reorganization
or consolidation involving such Party in which the stockholders of such Party
immediately prior to such transaction cease to own collectively a majority
of
the voting equity securities of the successor entity; or (c) a Person or group
of Persons acting in concert acquires more than fifty percent (50%) of the
voting equity securities of such Party. For purposes of this Agreement, a Party
shall be deemed to have undergone a Change of Control in the event that any
of
the transactions listed in (a), (b) or (c) above take place with respect to:
(1)
an Affiliate of such Party that Controls such Party, or (2) an Affiliate of
such
Party whose performance or assets are material to such Party’s performance of
its obligations under this Agreement, including without limitation those
obligations under any Development Plan or Commercialization Plan
hereunder.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
1.9 “Co-Exclusive
Territory”
means
the rest of the world outside the European Territory and the North American
Territory.
1.10 “Collaboration Term”
means
the term of this Agreement, as set forth in Section 14.1.
1.11 “Combination
Product”
shall
have the meaning set forth in Section 1.80.
1.12 “Commercial
License”
shall
mean a commercial license agreement, substantially upon the terms set forth
in
Exhibit
G,
that is
executed by the Parties in the circumstances described in Section
8.2(c)(ii).
1.13 “Commercialization”
or
“Commercialize”
means
the promotion, detailing, sale and distribution of a Product in the Territory,
including, without limitation, all LFB Biotech Commercialization Activities
and
GTC Commercialization Activities.
1.14 “Commercialization
Activities”
means
the LFB Biotech Commercialization Activities and/or the GTC Commercialization
Activities, as the context suggests.
1.15 “Commercialization
Costs”
means,
with respect to a Product, all direct external costs and direct internal costs
properly incurred or paid by each Party with respect to such Product plus,
to
the extent permitted under Appendix II to Exhibit
D
indirect
costs properly allocated by such Party as Commercialization Costs, in each
case
during the Commercialization Phase for such Product, excluding the specific
costs required to achieve the second Major Regulatory Approval and other costs
properly allocated as Development Costs hereunder. Commercialization Costs
shall
include, without limitation, those costs described on Appendix II to Exhibit
D,
and which are related to marketing and selling of the Product, and the cost
of
producing and distributing Product for sale, sample and other uses approved
in
the Commercialization Plan. Subject to Joint Steering Committee approval, costs
incurred for phase IV studies, distribution, sales force, and any related
promotional costs are to be considered Commercialization Costs. For the
avoidance of doubt, (a) any Development Costs, including without limitation
significant costs of expanding a Product’s labeled indication or approved
territory or other costs included in the determination of Product Participation
shall not be included as Commercialization Costs in the calculation of Net
Profits, and (b) Commercialization Costs shall not be included in the
determination of the Product Participation of each Party, and shall be included
in the determination of Net Profits as per Exhibit D.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
1.16 “Commercialization
Phase”,
with
respect to a Product, shall mean the period commencing upon the first Major
Regulatory Approval of such Product and continuing throughout the remaining
Product Term with respect to such Product; provided
that,
notwithstanding commencement of the Commercialization Phase, (a) Development
Activities shall continue in other countries or regions of the Territory until
Regulatory Approval has been obtained in all countries or regions set forth
in
the applicable Development Plan and (b) certain costs incurred by the Parties
during the Commercialization Phase shall be allocated as Development Costs
as
specified herein.
1.17 “Commercialization
Plan”
shall
have the meaning set forth in Section 6.1.
1.18 “Commercially
Reasonable Efforts”
means,
with respect to each Party, commercially reasonable efforts in accordance with
such Party’s business, legal, ethical, medical and scientific judgment, and in
accordance with the efforts and resources such Party would use for a product
owned by it or to which it has rights, which is of similar market potential,
at
a similar stage in its product life, taking into account the competitiveness
of
the marketplace, the proprietary position of the product, the regulatory
structure involved, the profitability of the product and other relevant
factors.
1.1 “Compete”,
“Competes”
or
“Competing”
means,
with respect to any two therapeutic products, whether or not one of such
products is a Product, and whether or not one or both of such products is
Transgenic, that (a) one such product which is a ************.
1.20 “Competing
Product”
means
any Transgenic or non-Transgenic therapeutic product, other than a Product,
that
Competes with a Product, provided
that the
term “Competing Product” shall not include any products that ************.
1.21 “Confidential
Information”
of
a
Party means any scientific, technical, trade or business information possessed,
obtained by, developed for or given to a Party which is treated by such Party
as
confidential or proprietary, including, without limitation Research Materials
(defined below), formulations, techniques, methodology, assay systems, formulae,
protocols, SOPs, procedures, tests, equipment, data, reports, know-how, sources
of supply, patent positioning, relationships with consultants and employees,
pricing, business plans and business developments, information concerning the
existence, scope or activities of any research, development, manufacturing
or
other projects of such Party (e.g., plans, rationale, competitive strategy
or
other information related to developing or marketing products or technology
covered by such Party’s patents, patent applications or published patent
applications), and any other confidential information about or belonging to
such
Party’s suppliers, licensors, licensees, partners, Affiliates, customers,
potential customers or others and which is disclosed by such Party to the other
Party during the Collaboration Term. “Research Materials” include, without
limitation, genes, DNA sequences, plasmids, vectors, expression systems, cells,
cell lines, organisms, antibodies, biological substances, and any constituents,
progeny, mutants, derivatives or replications thereof or therefrom, together
with all reagents, chemical compounds or other materials. It is understood
and
agreed by the Parties that (a) the GTC Know-How shall be deemed to be the
Confidential Information of GTC for all purposes hereunder, (b) the LFB Biotech
Know-How shall be deemed to be the Confidential Information of LFB Biotech
for
all purposes hereunder and (c) the terms of this Agreement shall constitute
Confidential Information of each Party.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
1.22 “Control”
means,
with respect to any information or intellectual property right, possession
by a
Party or its Affiliates of the ability (whether by ownership, license, or
otherwise) to grant access, a license, or a sublicense to such information
or
intellectual property right without violating the terms of any agreement or
other arrangement with, and without the payment of additional consideration
(other than royalty payments, milestone payments and other amounts otherwise
payable under the relevant agreement) to, any Third Party as of the time such
Party would first be required hereunder to grant the other Party such access,
license, or sublicense.
1.2 “Core
Business”
means
(a) with respect to LFB Biotech and its Affiliates, the development and
commercialization of (i) protein obtained from human plasma fractionation and
their recombinant counterparts and (ii) recombinant monoclonal antibodies with
applications in oncology, auto immune diseases, infectious diseases and graft
rejection; and, (b) with respect to GTC and its Affiliates, the development
and
commercialization of (i) therapeutic Transgenic protein products and (ii)
recombinant monoclonal antibodies with applications in oncology, auto immune
diseases, infectious diseases and asthma. The applications for monoclonal
antibodies may be extended as provided in the definition of “Core Business
Product”.
1.24 “Core
Business Competitor”
means,
with respect to a Party at the relevant time, any Third Party that is developing
or commercializing one or more products that (a) if developed or commercialized
by such Party would be within the Core Business of such Party and its Affiliates
and (b) Competes with a Core Business Product of such Party and its
Affiliates.
1.25 “Core
Business Competitor Equity Acquisition”
means
with respect to a Party (a) the acquisition by a Core Business Competitor of
such Party of more than ************ of the voting equity securities of the
other Party or (b) a Core Business Competitor of such Party obtaining the right
to ************. For purposes of this Agreement, a Core Business Competitor
Equity Acquisition shall be deemed to have occurred with respect to a Party
in
the event that any of the transactions listed in (a) or (b) above take place
with respect to: (1) an Affiliate of the other Party that Controls such other
Party, or (2) an Affiliate of such other Party whose performance or assets
are
material to such other Party’s performance of its obligations under this
Agreement, including without limitation those obligations under any Development
Plan or Commercialization Plan hereunder.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
1.26 “Core
Business Product/Products”
means,
with respect to a Party and its Affiliates, a specific product within the Core
Business of such Party and its Affiliates as set forth on Exhibit
H
as the
same shall be amended in accordance with the following. Each Party shall notify
the other Party annually of any change in the Core Business Products of such
Party and its Affiliates, together with adequate supporting documentation,
and,
absent a dispute, Exhibit
H
shall be
amended to reflect such change subject to the following conditions: (i) neither
Party shall be required to delete any product which is ************; (ii) any
************ product ************ may be added to or deleted from Exhibit
H
by
either Party without restriction provided that in the case of an addition such
product is under development or being commercialized by such Party or its
Affiliates; (iii) a Party may add a ************ product to Exhibit H only
if
such product meets any one of the following criteria: (A) For products in the
stage of research or development, (1) such Party and its Affiliates have spent
in the preceding year at least ************ for research and/or development
of
such product, or (2) such Party or its Affiliates have developed a scalable
manufacturing asset for such product, either through Transgenic process or
a
cell line, or (3) such product is in a pre-clinical research program at a stage
that is reasonably expected to be within ************ of initiation of human
clinical trials or (4) such product has been licensed from an outside
institution, including a university or a company or partnership, provided that
if after ************ of the license term such licensed product does not also
satisfy either criteria, (2) or (3) above or the criteria set forth in the
following clause (B) or such Party or its Affiliates have not spent at least
************ in total during such ************ period on research and/or
development of such product (such amount not to include license fees payable
to
the relevant outside institution), then such product shall be deleted from
Exhibit H; and (B) for products in the stage of commercialization a product
which, on an annual basis accounts for more than ************ of such Party’s or
its Affiliates’ revenues, whether from sales, product milestones, royalties or
other product revenues; and (iv) a Party shall delete a recombinant monoclonal
antibody product from Exhibit
H
if for
the preceding year it has not met any of the criteria set forth in the foregoing
clauses (iii)(A) or (B). If a ************ product of a Party or its Affiliates
would be eligible for addition to Exhibit
H
but is
for an application not covered in the definition of “Core Business” of such
Party and its Affiliates, then such product may be added to Exhibit
H
and for
so long as such product remains on Exhibit
H
the
definition of “Core Business” of such Party and its Affiliates shall be deemed
amended to include such application.
1.27 “Damages”
shall
have the meaning set forth in Section 13.1.
1.28 “Development”
or
“Develop”
means
all activities performed by or on behalf of either Party pursuant to the
Development Plan with respect to a Product during the Development Phase,
including, without limitation, all activities related to preclinical testing,
DNA construct discovery and development, animal development and maintenance,
test method development and stability testing, toxicology, formulation, process
development, manufacturing scale-up, qualification and validation, quality
assurance/quality control, clinical studies (from Phase I Trials through Phase
III Trials), regulatory affairs, statistical analysis and report writing, and
all other pre-marketing activities, each to the extent performed pursuant to
the
Development Plan.
1.29 “Development
Activities”
means,
collectively or individually, as the context suggests, the LFB Biotech
Development Activities and the GTC Development Activities.
1.30 “Development
Costs”,
for
purposes of determining a Party’s Product Participation with respect to any
Product under Section 8.2(b), shall mean all direct external costs and direct
internal costs properly paid or incurred by such Party in connection with the
Development of such Product, plus, to the extent permitted under Appendix I
to
Exhibit
D,
indirect costs properly allocated by such Party to the Development of such
Product, in each case during the Development Phase or thereafter as expressly
provided herein. Development Costs shall include, without limitation, all
Pre-Marketing Costs and the cost of producing and distributing Product for
preclinical, clinical and other uses approved in the Development Plan in
addition to those other costs set forth on Appendix I to Exhibit
D,
in each
case that are incurred in the performance of Development activities under the
Development Plan.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
1.31 “Development
Phase”
shall
mean, with respect to a Product, the period commencing upon the Product Start
Date for such Product and continuing until the first Major Regulatory Approval
for such Product; provided that certain costs incurred after the Development
Phase shall be treated as Development Costs if specified herein or agreed to
in
writing in advance by the Joint Steering Committee.
1.32 “Development
Plan”
shall
have the meaning set forth in Section 5.1.
1.33 “Disclosing
Party”
shall
have the meaning set forth in Section 12.1.
1.34 “Dispute”
shall
have the meaning set forth in Section 15.1.
1.35 “ECB”
means
the European Central Bank.
1.36 “Effective
Date”
shall
have the meaning set forth in the preamble to this Agreement.
1.37 “EMEA”
means
the European Agency for the Evaluation of Medicinal Products, or any successor
organization.
1.38 “European
Territory”
means
the member states (as of the Effective Date) of the European Union, as well
as
Switzerland, Norway, Lichtenstein, Iceland, Bulgaria, Romania, Croatia, Serbia,
Montenegro, Slovenia, Bosnia, Macedonia, Albania, Turkey, Byelorussia, Ukraine
and Moldavia and each of their respective territories and
possessions.
1.39 “FDA”
means
the United States Food and Drug Administration, or any successor
organization.
1.40 “First
Commercial Sale”
means
the first commercial sale of a Product by or on behalf of a Party or its
Affiliate in a country as part of a nationwide introduction after Regulatory
Approval has been achieved for such Product in such country. Sales for test
marketing, clinical trial purposes or compassionate or similar use shall not
be
considered to constitute a First Commercial Sale.
1.41 “FTE”
shall
have the meaning set forth in Section 5.2(b).
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
1.42 “Fully
Absorbed Cost of Goods”
means,
with respect to a Product and the Party responsible for manufacturing or
supplying such Product, (a) the variable costs and fixed costs incurred by
such
Party associated with the manufacture (inclusive of finishing processes
including filling, packaging, labeling and/or other preparation), quality
assurance, quality control and other testing, storage and shipping of batches
of
such Product or (b) if such Product is not manufactured by such Party, the
amounts paid to a Third Party manufacturer for the manufacture of such Product
plus, to the extent not included in the amounts paid to such Third Party
manufacturer, the actual costs associated with the acquisition of shipments
of
Product from such Third Party manufacturer. For purposes of this definition,
“variable
costs”
means
the cost of labor, raw materials, scrap (being product losses normally recorded
in the process of manufacturing and to the exclusion of abnormal waste,
spillage, processing, handling or idle facility costs), supplies and other
resources directly consumed in the manufacture, quality assurance, quality
control and other testing, storage and shipping of batches of the applicable
Product, and “fixed
costs”
means
the cost of facilities, utilities, insurance (including any product liability
insurance or accrual for self-insurance), facility and equipment depreciation
(unless the capital cost of such facility or equipment has been directly charged
to the program), manufacturing overhead (cost accounting, personnel management,
and information technology), and other fixed costs directly related to the
manufacture, quality assurance, quality control and other testing, storage
and
shipping of batches of such Product, as well as amounts required to be paid
to
Third Parties in connection with the manufacture, use, sale, offer for sale
or
import of such Product to the extent not otherwise included as Development
Costs
or Commercialization Costs of such Party. Fixed costs shall be allocated to
such
Product based upon the proportion of such costs directly attributable to support
of the manufacturing, quality assurance, quality control and other testing,
storage and shipping processes for such Product. If a facility is used to
manufacture Products and has the capacity to manufacture products for other
programs of such Party, fixed costs shall be allocated in proportion to the
actual use of such facility for the manufacture of Products and the capacity
to
manufacture products for such other programs. For the avoidance of doubt, no
idle capacity of a manufacturing facility, or a proportionate use thereof,
shall
be included in Fully Absorbed Cost of Goods except, in the case of a facility
dedicated solely to the manufacture of Products, it shall be included to the
extent the JSC determines that such facility is appropriately sized. Fully
Absorbed Cost of Goods shall exclude all costs otherwise covered under
Development Costs or Commercialization Costs. Unless otherwise expressly
provided in this Agreement, all cost determinations made in the calculation
of
Fully Absorbed Cost of Goods shall be in accordance with the Parties’ respective
Accounting Standards, consistently applied.
1.43 “GMP”
means
the current Good Manufacturing Practices of the FDA or any similar practice
standards promulgated by applicable Regulatory Authorities with jurisdiction
over the manufacture, use, or sale of Product, as then in effect.
1.44 “Greater
Funding Party”
means,
with respect to a Product, a Party that has funded more than ************ of
the
costs of Development of such Product hereunder as of or after the date the
Product Participation percentages of the Parties are first set pursuant to
Section 8.2(b), and prior to full reimbursement to such Party of any IPV
Difference in accordance with Section 8.2(d).
1.45 “GTC
Assumed Liability”
shall
have the meaning set forth in Section 13.2.
1.46 “GTC
Commercialization Activities”
means,
with respect to a Product, the designated Commercialization activities of GTC
as
specified in the Commercialization Plan for such Product.
1.47 “GTC
Development Activities”
shall
have the meaning set forth in Section 5.2(c).
1.48 “GTC
Indemnitee”
shall
have the meaning set forth in Section 13.1.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
1.49 “GTC
Know-How”
means
all Know-How that is Controlled by GTC or its Affiliates as of the Effective
Date or during the Collaboration Term that is necessary or reasonably useful
for
the Development and/or Commercialization of Products under this
Agreement.
1.50 “GTC
Patent Rights”
means
all Patent Rights Controlled by GTC or its Affiliates as of the Effective Date
or during the Collaboration Term the practice of whose claims are necessary
or
useful to the Development and/or Commercialization of Products under this
Agreement, excluding Joint Patent Rights.
1.51 “GTC
Technology”
means,
collectively, GTC Know-How and GTC Patent Rights.
1.52 “Indemnified
Party”
shall
have the meaning set forth in Section 13.3.
1.53 “Indemnifying
Party”
shall
have the meaning set forth in Section 13.3.
1.54 “Initial
Collaboration Term”
shall
have the meaning set forth in Section 14.1(a).
1.55 “Initial
Development Plan”
shall
have the meaning set forth in Section 5.1
1.56 “Initial
Product”
means
a
Transgenic version of a therapeutic product incorporating, based on or derived
from rFVIIa.
1.57 “Insolvency
Event”
means,
with respect to a Party, (a) such Party’s filing a petition in voluntary
bankruptcy or making an assignment for the benefit of creditors or consenting
to
the appointment of a receiver of all or any substantial part of its property,
or
filing a petition to take advantage of any laws affecting debtors generally,
in
each of the foregoing cases only if it is directed to and will result in
liquidation of such Party, or (b) the commencement against such Party of any
case, proceeding or other action seeking the adjudication of such Party as
bankrupt by a court of competent jurisdiction or the appointment by such a
court
of a trustee or receiver or receivers of such Party of all or any substantial
part of the property of such Party upon the application of any creditor in
any
insolvency or bankruptcy proceeding or other creditors suit, which case,
proceeding or other action is not dismissed within sixty (60) days after its
commencement, in each of the foregoing cases only if it is directed to and
will
result in liquidation of such Party.
1.58 “Invention”
means
any invention or discovery, whether or not patentable, made as a result of
the
activities of a Party or the Parties pursuant to this Agreement, which invention
or discovery relates to a Product in any manner, including, but not limited
to,
any invention or discovery relating to the making, using or selling of a
Product.
1.59 “Investment
Present Value”
or
“IPV”
means,
with respect to a Product, the net present value of the Parties’ Development
Costs for such Product during the period commencing on the Product Start Date
for such Product and ending on the date of the first Major Regulatory Approval
for such Product, as calculated in accordance with the applicable Product
Participation Model, and subject to adjustment pursuant to Section
8.2(b)(iv).
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
1.60 “IPV
Difference”
means,
with respect to a Product, the difference between a Greater Funding Party’s IPV
and the IPV if the Development Costs of such Product were shared ************,
taking into consideration the weighting of Development Costs set forth in
Section 8.2(b)(ii).
1.61 “IPV
Payment”
has the
meaning set forth in Section 14.3(a)(iv).
1.62 “Joint
Inventions”
shall
have the meaning set forth in Section 9.1(b).
1.63 “Joint
Patent Rights”
shall
have the meaning set forth in Section 9.1(b).
1.64 “Joint
Steering Committee”
or
“JSC”
shall
have the meaning set forth in Section 4.1.
1.65 “Joint
Technology”
means
the Joint Patent Rights and any Joint Inventions.
1.66 “Keepwell
Agreement”
has
the
meaning set forth in the Preamble to this Agreement.
1.67 “Know-How”
means
any information or materials (whether or not proprietary or patentable and
whether stored or transmitted in oral, documentary, electronic or other form),
including, without limitation, ideas, concepts, formulas, methods, procedures,
designs, compositions, plans, documents, data, inventions, discoveries,
developments, works of authorship, biological materials, and any information
relating to research and development plans, experiments, results, compounds,
therapeutic leads, candidates and products, clinical and preclinical data,
toxicological data, pharmacological data, formulations, trade secrets and
manufacturing, marketing, financial, regulatory, personnel, customer sales
and
invoicing and other business information and plans, and any scientific,
clinical, regulatory, marketing, financial and commercial information or data
which relates to a Product in any manner.
1.68 “LFB
Biotech Assumed Liability”
shall
have the meaning set forth in Section 13.1.
1.69 “LFB
Biotech Commercialization Activities”
means,
with respect to a Product, the designated Commercialization activities of LFB
Biotech as specified in the Commercialization Plan for such
Product.
1.70 “LFB
Biotech Development Activities”
shall
have the meaning set forth in Section 5.2(b).
1.71 “LFB
Biotech Indemnitees”
shall
have the meaning set forth in Section 13.2.
1.72 “LFB
Biotech Know-How”
means
all Know-How that is Controlled by LFB Biotech or its Affiliates as of the
Effective Date or during the Collaboration Term that is necessary or reasonably
useful for the Development and/or Commercialization of Products under this
Agreement.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
1.73 “LFB
Biotech Patent Rights”
means
all Patent Rights Controlled by LFB Biotech or its Affiliates as of the
Effective Date or during the Collaboration Term the practice of whose claims
are
necessary or useful to the Development and/or Commercialization of Products
under this Agreement, excluding Joint Patent Rights.
1.74 “LFB
Biotech Technology”
means,
collectively, LFB Biotech Know-How and LFB Biotech Patent Rights.
1.75 “MAb
Product”
means
the Transgenic version of any therapeutic product based on, incorporating or
derived from monoclonal antibodies.
1.76 “Major
Market EU Countries”
means,
individually and collectively, France, Germany, Italy, Spain and the United
Kingdom.
1.77 “Major
Regulatory Approval”
means
a
Regulatory Approval from the FDA or the EMEA.
1.78 “Major
Regulatory Filing”
means
a
Regulatory Filing with the FDA or the EMEA.
1.79 “Net
Profits”
means,
with respect to a Product for a particular reporting period, aggregate profits
or losses resulting from the Commercialization of such Product worldwide and
shall be equal to (a) worldwide Net Sales of and any other revenues relating
to
such Product for such period, including without limitation any royalties,
sublicense income or other payments received from Third Parties, less (b)
Commercialization Costs for such Product, before income taxes. Net Profits
will
be shared based on each party’s Product Participation as described in Section
8.2.
1.80 “Net
Sales”
means,
with respect to a Product, the net sales on behalf of a Party or any Affiliate,
licensee or sublicensee of such Party, for the Product sold to Third Parties
(other than licensees or sublicensees) in bona fide, arm’s-length transactions,
as determined in accordance with applicable IFRS Accounting Standards, as
consistently applied, and which shall include the following customary deductions
from the invoiced sale price, as generally and consistently applied by a Party:
************
1.81 “North
American Territory”
means
the United States and Canada, and their respective territories and
possessions.
1.82 “Originating
Party”
means,
with respect to a Product, the Party responsible for introducing such Product
to
the collaboration under this Agreement. The Parties acknowledge and agree that
LFB Biotech is the Originating Party of the Initial Product and GTC is the
Originating Party of any rhAAT Products.
1.83 “Party”
and/or
“Parties”
shall
have the respective meanings set forth in the preamble to this
Agreement.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
1.84 “Patent
Rights”
means
any patent applications and any divisions, continuations, or
continuations-in-part thereof, and any patents issuing thereon and all
substitutions, reissues, reexaminations and extensions thereof and supplemental
protection certificates relating thereto, and all counterparts of the foregoing
in any country.
1.85 “Person”
means
any natural person, corporation, firm, business trust, joint venture,
association, organization, company, partnership, or other business entity,
or
any government, or any agency or political subdivision thereof.
1.86 “Phase
I Trial”
means
a
clinical trial as defined in 21 C.F.R 312.21(a), as may be amended from time
to
time, or any non-US equivalent thereto, in each case that is designed to
determine the metabolism and pharmacologic actions of the applicable Product
in
humans, the side effects associated with increasing doses, and, if possible,
to
gain early evidence on effectiveness.
1.87 “Phase
II Trial”
means
a
clinical trial as defined in 21 C.F.R. 312.21(b), as may be amended from time
to
time, or any non-US equivalent thereto, in each case that is designed to assess
the clinical efficacy of the applicable Product for a particular indication
or
indications and to determine the common side-effects and safety risks associated
with the use of such Product.
1.88 “Phase
III Trial”
means
a
clinical trial as defined in 21 C.F.R. 312.21(c), as may be amended from time
to
time, or any non-US equivalent thereto, in each case that is designed to gather
additional information about the efficacy, tolerability and safety of the
applicable Product that is needed to evaluate the overall benefit-risk
relationship of the Product and to provide an adequate basis for physician
labeling.
1.89 “Pivotal
Trial”
means,
with respect to a Product, a Phase III Trial or other clinical trial, the
results of which are identified by the JSC as the essential data from which
a
Regulatory Authority will determine whether to grant Regulatory Approval for
such Product.
1.90 “Pivotal
Trial Completion Date”
means,
with respect to a Product, the date of the JSC’s decision that the results of
the Pivotal Trial are adequate to support a Regulatory Filing for purposes
of
obtaining the first Major Regulatory Approval for such Product.
1.91 “Pre-Marketing
Costs”
means
all costs related to market research and development, strategic market plans,
strategic product positioning, pricing studies, inventory build and all other
pre-approval activities, each to the extent performed pursuant to the
Development Plan. As part of Development Costs, Pre-Marketing Costs should
be
approved by the Joint Steering Committee and reflected in the Development Plan.
For the avoidance of doubt, Pre-Marketing Costs approved and incurred are
included as Development Costs for the calculation of Product
Participation.
1.92 “Product”
or
“Products”
means
one or more of the following, as the context suggests: (a) the Initial Product,
(b)(i) any rhAAT Product, (ii) any Additional Plasma Products, and (iii) any
MAb
Products, and that are, with respect to (b)(i), (ii), and (iii), selected by
the
Parties for inclusion in the collaboration hereunder pursuant to Section
2.1.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
1.93 “Product
Participation”
shall
have the meaning set forth in Section 8.2(a).
1.94 “Product
Participation Model”
means,
with respect to a Product, the model agreed upon by the Parties, substantially
in the form attached as Exhibit
D
hereto,
for calculating the Parties’ respective contributions to the Development of such
Product and, based upon such contributions, determining the percentage of each
Party’s respective participation in the aggregate Net Profits that are derived
from such Product, all as more fully described in Section 8.2.
1.95 “Product
Start Date”
means,
(a) with respect to the Initial Product, the Effective Date, and (b) with
respect to any other Products, the date the relevant Product becomes subject
to
this Agreement pursuant to Section 2.1.
1.96 “Product
Trademark”
shall
have the meaning set forth in Section 10.1(a).
1.97 “Product
Term”
shall
have the meaning set forth in Section 14.1(b)(iii).
1.98 “Publishing
Party”
shall
have the meaning set forth in Section 12.5(a).
1.99 “rFVIIa”
means
recombinant human blood factor VIIa.
1.100 “rFVIIa
Rabbit”
means
a
transgenically modified rabbit that produces rFVIIa in its milk.
1.101 “Recall”
means
the removal or correction of a marketed Product that the FDA, EMEA or an
equivalent Regulatory Authority considers to be in violation of law and against
which a Regulatory Authority would otherwise initiate legal action (e.g., a
seizure).
1.102 “Receiving
Party”
shall
have the meaning set forth in Section 12.1.
1.103 “Regulatory
Approvals”
mean
any approvals, licenses, registrations or authorizations (including pricing
and
reimbursement approvals) of any Regulatory Authority, whether or not
conditional, that are necessary for the commercial sale of a Product in a
regulatory jurisdiction in the Territory.
1.104 “Regulatory
Authority”
means
any and all national, supra-national, regional, state, or local regulatory
agency, department, bureau, commission, council, or other governmental entity,
whose approval or authorization is necessary for, or to whom notice must be
given prior to, the manufacture, distribution, use, or sale of a Product in
the
Territory, including, without limitation, the FDA and the EMEA.
1.105 “Regulatory
Filings”
mean
all applications, filings, dossiers and the like submitted to a Regulatory
Authority in the Territory for the purpose of obtaining a Regulatory Approval
from such Regulatory Authority in the Territory.
1.106 “rhAAT”
means
recombinant blood protein alpha-1 antitrypsin.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
1.107 “rhAAT
Product”
means
the Transgenic version of any therapeutic product incorporating, based on or
derived from rhAAT.
1.108 “Senior
Management”
means,
for a Party, the Chief Executive Officer or a senior executive who is designated
by the Chief Executive Officer of such Party.
1.109 “Shared
Liability Claims”
shall
have the meaning set forth in Section 13.4(a).
1.110 “Specifications”
shall
have the meaning set forth in Section 7.3.
1.111 “Stock
and Note Purchase Agreement”
shall
have the meaning set forth in Section 8.1.
1.112 “Supply
Agreement”
means,
with respect to a Product, a definitive agreement executed between the Parties
to govern the terms and conditions of manufacture and supply of such Product
hereunder.
1.113 “Target
Antigen”
means
************.
1.114 “Target
Receptor”
means
************.
1.115 “Territory”
means,
individually or collectively, as the context shall suggest, the European
Territory, the North American Territory and the Co-Exclusive
Territory.
1.116 “Third
Party”
means
any person or entity (including, without limitation, any governmental authority)
other than a Party or its Affiliates.
1.117 “Third
Party Claims”
shall
have the meaning set forth in Section 13.1.
1.118 “Trademark
Owner”
shall
mean the Party owning a Product Trademark pursuant to Section 10.1.
1.119 “Trademark
User”
shall
have the meaning set forth in Section 3.4.
1.120 “Transgenic”
means,
with respect to any therapeutic product, including without limitation a Product,
that such product was produced or derived from transgenically modified
animals.
1.12 “United
States”, “US” or “USA”
shall
mean the United States of America and its territories and possessions, including
without limitation the Commonwealth of Puerto Rico and the U.S. Virgin
Islands.
1.122 “Unsettled
Shared Damages”
shall
have the meaning set forth in Section 13.4.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
ARTICLE
2
SCOPE
OF COLLABORATION; JOINT OBLIGATIONS; DILIGENCE
2.1 Scope
of Collaboration
(a) General.
LFB
Biotech and GTC wish to establish a collaborative alliance to Develop and
Commercialize Products in the Territory, all as more specifically described
herein and in the applicable Development Plan and Commercialization Plan.
Without limiting the foregoing, the
Parties agree to: (i) engage in Development of Products, with the goal of
obtaining Regulatory Approval for each Product as soon as reasonably practicable
in each market where it makes commercial sense to do so given the size of the
potential market and the safety and efficacy profile of the relevant Product;
and (ii) engage in Commercialization of Products, with the goal of optimizing
the profit available to each Party. Each Party agrees to use Commercially
Reasonable Efforts in performing its tasks and responsibilities and in
conducting all activities ascribed or assigned to it from time to time under
this Agreement, the then current Development Plan, and the then current
Commercialization Plan with respect to each Product.
(b) Initial
Product.
The
Parties shall initially collaborate to Develop and Commercialize the Initial
Product in accordance with the terms and conditions of this Agreement, the
Initial Development Plan and the Commercialization Plan for the Initial
Product.
(c) rhAAT
Product.
(i) In
the
event that GTC wishes to pursue a program for the development of an rhAAT
Product, LFB Biotech shall have a first option to include such rhAAT Product
within the collaboration hereunder and GTC shall not negotiate or enter into
an
agreement with a Third Party with respect to such rhAAT Product before first
offering a proposal to LFB Biotech in accordance with this Section 2.1(c).
(ii) GTC
shall
propose any such rhAAT Product for inclusion in the collaboration by providing
LFB Biotech with a written proposal for the Development of such rhAAT Product.
LFB Biotech shall have ************ following the receipt of such proposal
to
notify GTC in writing whether or not LFB Biotech wishes to include such rhAAT
Product as a Product under this Agreement.
(iii) If
LFB
Biotech notifies GTC within such ************ period that LFB Biotech wishes
to
include such rhAAT Product as a Product hereunder, the Parties, through the
JSC,
shall negotiate in good faith for a period not to exceed ************, or such
longer time as the Parties may mutually agree, a preliminary Development Plan
with respect to such rhAAT Product, which Development Plan shall include a
preliminary Development budget. If the Parties reach agreement on a Development
Plan for a rhAAT Product within such time period, or such longer time period
as
the Parties may mutually agree, such rhAAT Product shall become subject to
this
Agreement as a “Product” hereunder.
(iv) If
(a)
LFB Biotech (1) notifies GTC that LFB Biotech does not wish to pursue the
Development or Commercialization of such rhAAT Product hereunder or (2) does
not
notify GTC in writing within such ************ of LFB Biotech’s intention
whether or not to include such rhAAT Product hereunder, or (b) LFB Biotech
timely notifies GTC that it wishes to pursue such rhAAT Product hereunder,
but
the Parties are unable to agree in good faith upon a Development Plan for the
proposed rhAAT Product within the time frame provided in subsection (iii) above,
GTC may pursue the development and commercialization of such rhAAT Product
unilaterally or negotiate and enter into an agreement with any Third Party
for
the development and commercialization of such rhAAT Product with no further
obligation to LFB Biotech with respect thereto, subject to the provisions of
Section 3.7.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(d) Additional
Plasma Products.
(i) Either
Party may, from time to time during the Term, but is not obligated to, propose
to the other Party for inclusion in the collaboration under this Agreement
any
Additional Plasma Products that such Party believes are reasonably likely to
enhance the goals of the collaboration.
(ii) The
Originating Party may propose such Additional Plasma Product for inclusion
in
the collaboration by providing the non-Originating Party with a written proposal
for the Development of such Additional Plasma Product and the non-Originating
Party shall have ************ following the receipt of such proposal to inform
the Originating Party whether or not it wishes to include such Additional Plasma
Product as a Product under this Agreement.
(iii) If
the
non-Originating Party notifies the Originating Party in writing within such
************ period that it wishes to include such Additional Plasma Product
under this Agreement, the Parties, through the JSC, shall negotiate in good
faith for a period not to exceed ************, or such longer time as the
Parties may mutually agree, a preliminary Development Plan with respect to
such
Additional Plasma Product, which Development Plan shall include a preliminary
Development budget. If the Parties reach agreement on a Development Plan for
such Additional Plasma Product within such time period or such longer time
period as the Parties may mutually agree, such Additional Plasma Product shall
become subject to this Agreement as a “Product” hereunder.
(iv) If
(a)
the non-Originating Party (1) notifies the Originating Party that it does not
wish to pursue the Development or Commercialization of such Additional Plasma
Product hereunder, or (2) does not notify the Originating Party in writing
within such ************ period of its intention whether or not to include
such
Additional Plasma Product hereunder, or (b) the non-Originating Party timely
notifies the Originating Party that it wishes to pursue such Additional Plasma
Product hereunder, but the Parties are unable to agree in good faith upon a
Development Plan for the proposed Additional Plasma Product within the time
frame provided in subsection (iii) above, the Originating Party may pursue
the
development and commercialization of such Additional Plasma Product unilaterally
or negotiate and enter into an agreement with any Third Party for the
development and commercialization of such Additional Plasma Product with no
further obligation to the non-Originating Party with respect thereto, subject
to
the provisions of Section 3.7.
(e) MAb
Products.
(i) Either
Party may, from time to time during the Term, but is not obligated to, propose
to the other Party for inclusion in the collaboration under this Agreement
MAb
Products that
such
Party believes are reasonably likely to enhance the goals of the
collaboration.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(ii) The
Originating Party may propose a MAb Product for inclusion in the collaboration
by providing the non-Originating Party with a written proposal for the
Development of such MAb Product and the non-Originating Party shall have
************ following the receipt of such proposal to inform the Originating
Party whether or not it wishes to include such MAb Product as a Product under
this Agreement.
(iii) If
the
non-Originating Party notifies the Originating Party in writing within such
************ period that it wishes to include such MAb Product under this
Agreement, the Parties, through the JSC, shall negotiate in good faith for
a
period not to exceed ************, or such longer time as the Parties may
mutually agree, a preliminary Development Plan with respect to such MAb Product,
which Development Plan shall include a preliminary Development budget. If the
Parties reach agreement on a Development Plan for such MAb Product within such
time period or such longer time period as the Parties may mutually agree, such
MAb Product shall become subject to this Agreement as a “Product”
hereunder.
(iv) If
(a)
the non-Originating Party (1) notifies the Originating Party that it does not
wish to pursue the Development or Commercialization of such MAb Product
hereunder, or (2) does not notify the Originating Party in writing within such
************ period of its intention whether or not to include such MAb Product
hereunder, or (b) the non-Originating Party timely notifies the Originating
Party that it wishes to pursue such MAb Product hereunder, but the Parties
are
unable to agree in good faith upon a Development Plan for the proposed MAb
Product within the time frame provided in subsection (iii) above, the
Originating Party may pursue the development and commercialization of such
MAb
Product unilaterally or negotiate and enter into an agreement with any Third
Party for the development and commercialization of such MAb Product with no
further obligation to the non-Originating Party with respect thereto, subject
to
the provisions of Section 3.7.
2.2 Conduct
of Parties.
Each
Party understands and agrees that it is to its mutual benefit to maximize the
clinical and commercial potential of the Products. Each Party shall conduct
itself and its activities hereunder consistent with that understanding and
with
sound and ethical business and scientific practices, and in accordance with
the
applicable Development Plan and Commercialization Plan, provided that the
foregoing shall not limit the activities of the Parties with respect to any
product that is not a Product or a Competing Product and is not otherwise
subject to Section 3.7.
2.3 Assistance.
Each
Party agrees to provide to the other all reasonable assistance and take all
actions reasonably requested by the other Party that are necessary to enable
the
requesting Party to comply with its obligations under this Agreement or
otherwise meet the mutual objectives of the Parties set forth in
Section 2.2 above, or with any applicable law or regulation.
2.4 Product
List.
Exhibit
A attached hereto sets forth the Products under this Agreement. As the Effective
Date only the Initial Product is listed on Exhibit
A.
As
other Products become subject to this Agreement as provided above, Exhibit
A
shall be
updated by including such Products.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
ARTICLE
3
GRANT
OF RIGHTS
3.1 License
Grant to GTC
(a) Research
and Development License.
Subject
to the terms and conditions of this Agreement, LFB Biotech hereby grants to
GTC
a co-exclusive (together with LFB Biotech) right and license (with the right
to
sublicense with the JSC’s approval) during the Term in the Territory, under the
LFB Biotech Technology and LFB Biotech’s interest in any and all Joint
Technology, to:
(i) with
respect to the Initial Product, (A) create and breed one or more herds of rFVIIa
Rabbits and use such rFVIIa Rabbits to produce rFVIIa for use in making the
Initial Product, and (B) Develop, make and have made the Initial Product, all
in
accordance with applicable laws and regulations and the Initial Development
Plan; and
(ii) with
respect to subsequent Product(s), (A) create and breed one or more herds of
transgenic mammals, and use such transgenic mammals to produce material for
use
in making such Product(s), and (B) Develop, make and have made Product(s),
all
in accordance with applicable laws and regulations and the applicable
Development Plan.
(b) Commercialization
License.
Subject
to the terms and conditions of this Agreement, LFB Biotech hereby grants to
GTC
an exclusive or co-exclusive (as described below) right and license (with the
right to sublicense with the JSC’s approval) during the Term, commencing upon
the Commercialization Phase with respect to the applicable Product, under the
LFB Biotech Technology and LFB Biotech’s interest in any and all Joint
Technology, to:
(i) with
respect to the Initial Product, (A) use the rFVIIa Rabbits to manufacture
commercial quantities of rFVIIa, (B) make, have made, sell, offer for sale,
and
import the Initial Product in the North American Territory, (C) subject to
Section 3.3, in cooperation with LFB Biotech, make, have made, sell, offer
for
sale, and import the Initial Product in the Co-Exclusive Territory, and (D)
make, have made, and sell Initial Product to LFB Biotech for further
distribution and sale by LFB Biotech in the European Territory, all in
accordance with applicable laws and regulations and the applicable
Commercialization Plan; and
(ii) with
respect to subsequent Product(s), (A) use transgenic mammals created pursuant
to
the license under Section 3.1(a)(ii) to manufacture commercial quantities of
material for use in the manufacture of Product(s), (B) make, have made, sell,
offer for sale, and import Product(s) in the North American Territory, (C)
subject to Section 3.3, in cooperation with LFB Biotech, make, have made, sell,
offer for sale, and import Product(s) in the Co-Exclusive Territory, and (D)
make, have made, and sell Product(s) to LFB Biotech for further distribution
and
sale by LFB Biotech in the European Territory, all in accordance with applicable
laws and regulations and the applicable Commercialization Plan.
For
purposes of clarity, the foregoing license shall be exclusive to GTC for the
North American Territory under Sections 3.1(b)(i)(B) and 3.1(b)(ii)(B) above
and
co-exclusive (together with LFB Biotech) in the Co-Exclusive Territory under
Sections 3.1(b)(i)(C) and 3.1(b)(ii)(C) above.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
3.2 License
Grant to LFB Biotech
(a) Research
and Development License.
Subject
to the terms and conditions of this Agreement, GTC hereby grants to LFB Biotech
a co-exclusive (together with GTC) right and license (with the right to
sublicense with the JSC’s approval) during the Term in the Territory, under the
GTC Technology and GTC’s interest in any and all Joint Technology,
to:
(i) with
respect to the Initial Product, (A) create and breed one or more herds of rFVIIa
Rabbits and use such rFVIIa Rabbits to produce rFVIIa for use in making the
Initial Product, and (B) Develop, make and have made the Initial Product, all
in
accordance with applicable laws and regulations and the Initial Development
Plan; and
(ii) with
respect to subsequent Product(s), (X) create and breed one or more herds of
transgenic mammals, and use such transgenic mammals to produce material for
use
in making such Product(s), and (Y) Develop, make and have made Product(s),
all
in accordance with applicable laws and regulations and the applicable
Development Plan.
(b) Commercialization
License.
Subject
to the terms and conditions of this Agreement, GTC hereby grants to LFB Biotech
an exclusive or co-exclusive (as described below) right and license (with the
right to sublicense with the JSC’s approval ) during the Term, commencing upon
the Commercialization Phase with respect to the applicable Product, under the
GTC Technology and GTC’s interest in any and all Joint Technology,
to:
(i) with
respect to the Initial Product, (A) sell, offer for sale, and import the Initial
Product in the European Territory, and (B) subject to Section 3.3, in
cooperation with GTC, sell, offer for sale, and import the Initial Product
in
the Co-Exclusive Territory, all in accordance with applicable laws and
regulations and the applicable Commercialization Plan provided that if a
Regulatory Authority requires a second site for the production of the Initial
Product, such license shall be extended to the use of rFVIIa Rabbits to
manufacture commercial quantities of rFVIIa and to the making of the Initial
Product for distribution and sale in the Territory; and
(ii) with
respect to subsequent Product(s), (A) use transgenic mammals created pursuant
to
the license under Section 3.2 (a)(ii) to manufacture commercial quantities
of
material for use in the manufacture of Product(s), (B) make, have made, sell,
offer for sale, and import Product(s) in the European Territory, (C) subject
to
Section 3.3, in cooperation with GTC, make, have made, sell, offer for sale,
and
import Product(s) in the Co-Exclusive Territory, and (D) make, have made, and
sell Product(s) to GTC for further distribution and sale by GTC in the North
American Territory, all in accordance with applicable laws and regulations
and
the applicable Commercialization Plan; provided,
that
LFB Biotech may not exercise the license to make and have made Products granted
pursuant to the foregoing unless and until the JSC determines to establish
a
second manufacturing site, or LFB Biotech notifies GTC of its decision to
establish a second manufacturing site, in each case in accordance with the
provisions of Section 7.4.
For
the
purposes of clarity, the foregoing license shall be exclusive to LFB Biotech
with respect to the European Territory under Sections 3.2(b)(i)(A) and
3.2(b)(ii)(B) above and co-exclusive (together with GTC) in the Co-Exclusive
Territory under Sections 3.2(b)(i)(B) and 3.2(b)(ii)(C) above.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
3.3 Exercise
of Commercialization Rights in Co-Exclusive Territory.
Each
Party acknowledges and agrees that the Commercialization rights licensed to
a
Party under Sections 3.1(b)(i)(C), 3.1(b)(ii)(C), 3.2(b)(i)(B) and 3.2(b)(ii)(C)
shall only be exercisable by such Party with respect to each country or region
of the Co-Exclusive Territory that the JSC has designated to such Party as
provided in Section 6.2(c), and neither Party shall exercise such rights in
a
country or region of the Co-Exclusive Territory that the JSC has exclusively
designated to the other Party, its Affiliate or to a Third Party as provided
in
Section 6.2(c).
3.4 Trademark
License.
Subject
to the terms and conditions of this Agreement, each Trademark Owner hereby
grants to the other Party (the “Trademark User”) during the Term (a) a fully
paid up, royalty free, exclusive right and license to use the Product Trademarks
of such Trademark Owner to Commercialize Products in the Territory which is
exclusive to the Trademark User as provided in this Agreement, and (b) a fully
paid up, royalty free, co-exclusive right and license to use the Product
Trademarks to Commercialize Products in the Co-Exclusive Territory, all in
accordance with applicable laws and regulations and the applicable
Commercialization Plan, and subject to the following limitations:
(i) The
Trademark User acknowledges that the Trademark Owner is and shall remain the
owner of the Product Trademarks owned by such Trademark Owner and that all
use
of such Product Trademarks by the Trademark User shall inure to the benefit
of
the Trademark Owner.
(ii) The
Trademark User agrees that it will use such Product Trademark in connection
with
the relevant Products manufactured by or for GTC or LFB Biotech, as the case
may
be, pursuant to, or as permitted by, this Agreement and for no other purpose,
and shall agree to comply with such reasonable quality assurance provisions
of
the Trademark Owner as the Trademark Owner may reasonably specify in writing
to
ensure that the quality of any Product manufactured by or on behalf of GTC
or
LFB Biotech, as the case may be, remains, in all material respects, at least
as
high as that of Product manufactured by the Trademark Owner.
(iii) The
Trademark User agrees to use the Product Trademarks of the Trademark Owner
only
in the form and manner, and with appropriate proprietary markings, reasonably
prescribed in writing from time to time by the Trademark Owner. The Trademark
Owner will deliver such initial requirements with respect to the form and manner
of Product Trademarks use to the Trademark user prior to launch of the
applicable Product. The Trademark User agrees not to use any other trademark
in
combination with the relevant Product Trademark or in connection with the
relevant Product without prior written approval of the Trademark Owner, which
approval will not be unreasonably withheld.
(iv) The
Trademark User agrees, during the term of this Agreement and thereafter, not
to
seek to register the Product Trademarks of the Trademark Owner or any
confusingly similar trademark in any country or region.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
The
Trademark User may sublicense the rights granted under this Section 3.4 to
a
Third Party engaged by such Party to Commercialize Products with the approval
of
the JSC in accordance with Section 3.5 solely for purposes of such
Commercialization.
3.5 Performance
of Development and Commercialization Activities By Third
Parties.
Neither
Party may subcontract any significant element of its Development Activities
and/or Commercialization Activities to one or more Third Parties without the
prior approval of the JSC.
3.6 Reservation
of Rights.
Each
Party expressly reserves and retains all intellectual property rights not
expressly granted herein, and no right or license under any Patent Rights,
trademarks, Know How or other proprietary rights of either Party is granted
or
shall be granted by implication.
3.7 Competing
Products.
(a) During
the Term, each Party agrees not to, and shall cause its Affiliates not to,
alone
or together with a Third Party, (i) develop or commercialize any Competing
Product in the Territory, or (ii) acquire, directly or indirectly, any
rights or interest in or to a Competing Product which is being detailed,
promoted, marketed or sold in the Territory.
In
addition to any other remedies that may be available for a breach of the
foregoing restrictions, in the event an Affiliate of a Party takes any of the
actions described in subsections (i) or (ii) above, the other Party shall have
the right to immediately terminate this subsection 3.7(a) with respect to itself
and its Affiliates upon written notice and in the event of such termination
shall no longer be subject to the restrictions set forth in this Section
3.7(a).
(b) Each
Party further undertakes that (i) it shall not, and shall cause its Affiliates
not to, enter into any undertaking with a Third Party which would prohibit
such
Party from Developing and/or Commercializing any Product hereunder, and (ii)
at
the
time a proposal is made for the inclusion of a Product for Development and
Commercialization pursuant to this Agreement, each Party will disclose to the
other Party ************.
3.8 Third
Party Patent Rights.
In the
event that a license under any Third Party patent or other intellectual property
right is necessary for the use, Development, manufacture, sale, offer for sale
or importation of a Product, the costs of obtaining and maintaining such license
shall be ************.
3.9 Effect
of Bankruptcy on License Grants.
All
rights and licenses granted under or pursuant to this Agreement by either Party
are, and will otherwise be deemed to be, for purposes of Section 365(n) of
the U.S. Bankruptcy Code, licenses of rights to “intellectual property” as
defined under Section 101 of the U.S. Bankruptcy Code. The Parties agree
that each Party, as a licensee of such rights under this Agreement, will retain
and may fully exercise all of such Party’s rights and elections under the U.S.
Bankruptcy Code.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
ARTICLE
4
COLLABORATION
GOVERNANCE
4.1 Team
Leaders/Project Managers.
Within
************ after the Effective Date, each Party shall designate an individual
(each, a “Team
Leader”)
to
facilitate communication between the Parties and mutually manage the objectives
and activities of the Parties, as specified by the JSC, with respect to the
Development and Commercialization of Products under this Agreement and who
will
be the primary contact person within each Party’s organization for matters
pertaining to the collaboration hereunder. Each Party may change its designated
Team Leader from time to time upon notice to the other Party, it being
acknowledged by both Parties that they should endeavor to maintain continuity
to
the maximum extent practicable. In addition, with respect to each Product to
be
Developed within the collaboration as decided by the JSC, the Originating Party
shall designate an individual (each such individual a “Project
Leader”)
who
will be responsible for the management of the Development of such Product and,
if the JSC deems appropriate, for its Commercialization. The non-Originating
Party will also designate an individual (a “Project
Liaison”)
to
work closely with the Project Leader with respect to such Development and
Commercialization and who will have overall responsibility within such other
Party for oversight of such Product. The same individuals may be Team Leaders
and Project Leaders/Project Liaisons. Neither the Team Leaders nor the Project
Leaders shall have authority to make decisions with respect to the Development
or Commercialization of Products, which authority shall be within the sole
power
of the JSC.
4.2 Joint
Steering Committee; Minutes.
Within
************ after the Effective Date, LFB Biotech and GTC shall form a Joint
Steering Committee (“JSC”)
consisting of ************ representatives from each Party. Each Party may
replace its representatives at any time upon prior written notice to the other
Party, it being acknowledged by both Parties that they should endeavor to
maintain continuity of their representatives to the maximum extent practicable.
Each Party may invite a reasonable number of additional employees and/or
advisors to attend part or all of the meetings of the JSC. The chairperson
of
the JSC shall alternate between a representative selected by GTC and a
representative selected by LFB Biotech, with each chairperson to serve for
a
term of ************ following his or her designation as chairperson. GTC shall
have the right to designate the initial chairperson of the JSC. The chairperson
shall be responsible for providing an agenda for each meeting of the JSC
************ in advance of such meeting. Agenda items shall be added at the
request of either Party provided that the chairperson receives such request
no
later than ************ in advance of such meeting. The Party chairing the
JSC
shall prepare written draft minutes of all meetings in reasonable detail and
distribute such draft minutes to all members of the JSC for comment and review
within ************ after the relevant meeting. The members of the JSC shall
have ************ to provide comments. The Party preparing the minutes shall
incorporate timely received comments and distribute finalized minutes to all
members of the JSC within ************ following the relevant
meeting.
4.3 Subcommittees.
The JSC
shall have the right to establish subcommittees as determined by the JSC. Each
Party shall have the right to have ************ serve on each
subcommittee.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
4.4 Meetings
of the JSC.
During
the Term, unless otherwise decided by the JSC, the JSC shall meet at least
quarterly, with at least ************ such meetings per year to be attended
by
the members of the JSC in person and the remaining meetings to be held by audio
or video conference, as agreed by the JSC. The chairman of the JSC shall have
the right to convene any additional meetings of the JSC upon ************ prior
written notice to all members of the JSC and shall be required to convene any
such additional meeting upon request of a Party specifying the agenda items(s)
to be discussed. In-person meetings shall be held on an alternating basis
between the headquarters of each Party or otherwise as mutually agreed by the
Parties. Each Party shall be responsible for its own expenses for participating
in the JSC. Meetings of the JSC shall be effective only if ************ of
each
Party is present or participating.
4.5 Responsibilities
of the JSC.
In
addition to its other responsibilities and activities expressly described in
this Agreement, the JSC shall have the responsibility and authority to:
(a) monitor and oversee all aspects of the Development and
Commercialization of Products under this Agreement; (b) agree upon, adopt
and/or amend or modify the Development Plans, Commercialization Plans and
Product Participation Models, and all updates or amendments thereto;
(c) establish and approve budgets for the activities of the Parties under
this Agreement to be included in the Development Plans and Commercialization
Plans; (d) establish subcommittees pursuant to Section 4.3, and address
disputes or disagreements arising in any subcommittee so established;
(e) serve as the initial forum for discussion of and attempts to resolve
any disputes or disagreements between the Parties relating to this Agreement;
(e) approve the design of clinical trials for studies that form the basis of
Regulatory Filings; (f) oversee the Regulatory Approval process for all Products
and create mechanisms for interaction of the Parties with respect to submission
of Regulatory Filings; (g) coordinate efforts of the Parties to assure
proper reporting of all adverse events; (h) develop standard operating
procedures for addressing customer inquiries and complaints; (i) make decisions
in such other matters pertaining to the implementation of this Agreement as
may
be necessary; and (j) perform such other functions as the Parties may agree
in
writing.
4.6 Decisions.
The JSC
shall attempt to decide all matters by consensus, with each Party having one
collective vote. The members of the JSC shall act in good faith to cooperate
with one another and to reach agreement with respect to issues to be decided
by
the JSC. In the event that the members of the JSC cannot achieve consensus
within ************ with respect to any matter over which the JSC has authority
and responsibility, the JSC shall refer the matter to Senior Management of
GTC
and LFB Biotech, who shall in good faith attempt to resolve such dispute. If
Senior Management of GTC and LFB Biotech are unable to resolve such matter
with
************ thereafter, then, at the request of either of the Parties, the
matter shall be submitted to non-binding mediation by a mutually agreed
independent third party knowledgeable as to the matter(s) in dispute who shall
render his/her decision within ************. If both Parties do not accept
the
decision of such mediator within ************ after such decision having been
rendered, or if the Parties have not agreed on a mediator within ************
after a request for mediation, then, subject to the rights and obligations
of
the Parties under this Agreement, and, except for those matters expressly
excluded from arbitration hereunder, the matter shall be referred to arbitration
as described in Section 15.2.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
4.7 Legal
Structure of the Collaboration.
The JSC
will periodically, starting no later than one year from the Effective Date,
evaluate the legal status of the collaboration and make recommendations as
to
whether it would be in the best interests of the Parties and their collaboration
to change its structure to ************
ARTICLE
5
DEVELOPMENT
PHASE
5.1 Development
Plan
(a) All
Development with respect to any Product hereunder shall be conducted pursuant
to
a Development Plan prepared and approved by the JSC, which shall set forth
the
plan for the pre-clinical and clinical Development, and Regulatory Approval
of
such Product in each of the European Territory, the North American Territory
and
the Co-Exclusive Territories and the activities to be carried out related
thereto by LFB Biotech and GTC, together with a proposed budget for such
activities (each, a “Development
Plan”).
The
Parties will mutually agree upon a preliminary Development Plan for the Initial
Product (the “Initial
Development Plan”)
within
************ following the Effective Date, a copy of which shall be attached
hereto as Exhibit
B.
Each
Development Plan and updated Development Plan shall include a projection of
(a)
the plan of Development activities with respect to the relevant product and
timelines for performing such activities, (b) the proposed budget for such
Development activities, (c) expected Development funding by each Party, and
(d)
a non-binding forecast of clinical supply of Product to be supplied as provided
under Article 7. The Development Plan for a Product shall also specify the
jurisdictions (other than the US and EU) where Regulatory Approval will be
sought for such Product and prospective indication extension after the First
Major Regulatory Approval. Development Plans for subsequent Products shall
also
be attached to Exhibit
B
as such
Development Plans are prepared, approved and amended by the JSC. For indicative
purposes only a preliminary version of the business case prepared by the Parties
for the Initial Product is attached hereto as Exhibit B-1. Such business case
shall be reviewed and updated on a regular basis by the JSC.
(b) For
so
long as necessary to complete Development of any Product, the Parties, through
the JSC, shall update the Development Plan with respect to such Product on
an
annual basis prior to the commencement of the next calendar year, or more often
as determined by the JSC.
(c) The
JSC
will review performance against the Development Plan for each Product on a
quarterly basis, and will report any variations to the Parties in writing.
If,
in any quarter, there is a variation of ************ or greater from the budget,
the JSC will revise the Development Plan and budget for the applicable Product
************ prior to the commencement of the second quarter following the
quarter in which the variation occurred. For example, if a ************
variation is reported in quarter one, a revised Development Plan and budget
must
be prepared at least ************ prior to the commencement of quarter
three.
(d) Until
such time as a Development Plan is updated in accordance with this Section
5.1,
the preceding Development Plan (including, without limitation, all budget
projections and minimum expenditures therein) shall remain in effect. The JSC
shall not update any Development Plan in a manner that is inconsistent with
or
contradicts the terms of this Agreement.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
5.2 Development
Activities.
(a) General.
Each
Party shall be responsible for carrying out its designated activities relating
to Development of the relevant Product, as set forth in and in accordance with
this Agreement and the applicable Development Plan. Each Party will commit
those
financial and human resources specified for such Party in the Development Plan
for each Product, it being acknowledged that (i) neither Party is required
to
commit all its financial and human resources to the implementation of a
Development Plan, and (ii) those capital and human resources utilized by a
Party
to the Development of Products hereunder are not required to be exclusively
dedicated to the collaboration.
(b) LFB
Biotech Development Activities.
The
designated Development activities of LFB Biotech as specified in the applicable
Development Plan shall be referred to as the “LFB
Biotech Development Activities”.
In its
performance of the LFB Biotech Development Activities with respect to any
Product, LFB Biotech shall devote no less than the minimum levels of effort
(in
terms of full-time equivalent personnel “FTEs”)
and
financial resources as set forth in the applicable Development Plan. Without
limiting the foregoing, the LFB Biotech Development Activities with respect
to
the Initial Product shall include the following:
(i) Supply
to
GTC reasonable quantities of rFVIIa produced by ************ for use by GTC
in
the performance of its activities under this Agreement and the Initial
Development Plan.
(ii) Provide
Know-How and expertise in the areas of process development, purification and
product characterization, design and management of clinical trials, regulatory
affairs, sales and marketing, plasma proteins and monoclonal
antibodies.
(iii) Under
the
direction and supervision of the JSC, and in accordance with the Initial
Development Plan, assume primary responsibility for clinical trials in the
Territory for the Initial Product pursuant to Section 5.7(b).
(c) GTC
Development Activities.
The
designated Development activities of GTC as specified in the applicable
Development Plan shall be referred to as the “GTC
Development Activities”.
In its
performance of the GTC Development Activities with respect to any Product,
GTC
shall devote no less than the minimum levels of effort (in terms of FTEs) and
financial resources as set forth in the applicable Development Plan. Without
limiting the foregoing, the GTC Development Activities with respect to the
Initial Product shall include the following:
(i) Generate
rFVIIa Rabbits using GTC’s ************ to be used for production of rFVIIa
pursuant to this Agreement.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(ii) Provide
all necessary GTC Technology for purposes of herd development, including for
transgenic production of proteins in milk, purification technology and
promoters.
(iii) Provide
Know-How and expertise in the areas of regulatory affairs, quality systems,
molecular biology, embryology, animal husbandry and milking, process development
and product recovery and purification.
(iv) Manufacture
and supply rFVIIa material to LFB Biotech ************ in sufficient quantities
for Phase II Trials and Phase III Trials during the Development Phase, and
to
the Parties as specified below during the Commercialization Phase.
5.3 Diligence
Requirements.
(a) Development
Milestones.
The
Parties shall agree on objective time-based Development milestones with respect
to each Product for each of the European Territory, the North American Territory
and the Co-Exclusive Territory, which shall be included in the Development
Plan
for each Product. Each Party will be responsible for meeting the milestones
in
its respective exclusive Territory and in each country or region in the
Co-Exclusive Territory designated to such Party in the applicable Development
Plan.
(b) Failure
to Meet Development Milestones.
The
failure of a Party to achieve any Development milestone for a Product shall
************.
5.4 Development
Costs.
(a) Initial
Product. Unless
otherwise specified in the applicable Development Plan or this Agreement,
subject to Section 5.7(b)(ii), each Party shall bear ************ costs and
expenses incurred in connection with its respective Development Activities
with
respect to the Initial Product, as such costs are incurred. Notwithstanding
the
foregoing, LFB Biotech shall purchase from GTC quantities of the Initial Product
for the conduct of the LFB Biotech Development Activities in the European
Territory and the Co-Exclusive Territory pursuant to the applicable Development
Plans, as set forth in Article 7.
(b) Other
Products. Unless
otherwise specified in the applicable Development Plan, subject to Section
8.2(c), each Party shall bear fifty percent (50%) of the costs and expenses
incurred in connection with the Development of each Product other than the
Initial Product.
5.5 Right
of Reference to Data.
Subject
to this Section 5.5, the Party conducting any clinical trial or other
Development Activities under the relevant Development Plan shall own all data
arising or resulting therefrom; provided that ownership of Regulatory Filings
and Regulatory Approvals shall be determined in accordance with Sections 5.8
and
5.9, respectively. Each Party agrees to provide the other Party, in a timely
manner, with access to all clinical, safety and other data arising from its
respective Development Activities. The other Party shall have the right to
cross-reference all such data and information in any Regulatory Filing for
any
Product under this Agreement.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
5.6 Transfer
of Know-How.
Promptly, but in no event more than ************ after the Effective Date,
each
Party shall disclose and transfer to the other Party all Know-How Controlled
by
such Party or its Affiliates that is necessary or useful to the other Party
in
the performance of its obligations under this Agreement with respect to the
Initial Product. Within ************ of the preparation of the preliminary
Development Plan with respect to any other Product hereunder, each Party shall
disclose and transfer to the other Party all Know-How Controlled by such Party
and its Affiliates not previously disclosed hereunder that is necessary or
useful to the other Party in the performance of its obligations under this
Agreement with respect to such Product. Throughout the Product Term with respect
to each Product, each Party will disclose and supply to the other Party from
time to time any
material modifications or updates to
the
Know-How Controlled by such Party or its Affiliates that are necessary or useful
to the other Party in the performance of its obligations under this Agreement
with respect to such Product. The transfer of Know-How pursuant to this Section
5.6 may occur by means of written documentation, personal consulting or other
communications between the Parties, or by demonstration (show-how). All Know-How
transferred hereunder shall be used by the Party receiving the same solely
in
accordance with this Agreement and shall be the Confidential Information of
the
Party providing the same.
5.7 Conduct
of Clinical Trials.
(a) General.
The
clinical Development and Regulatory Approval program with respect to each
Product, and the respective activities and responsibilities of each Party with
respect thereto, shall be included in the Development Plan for such Product.
It
is the intention of the Parties that all clinical studies for Products shall
be
conducted in a manner such that the results will be acceptable to Regulatory
Authorities in the European Territory and the North American Territory, as
well
as the Co-Exclusive Territory to the extent reasonably possible. Unless
otherwise specified in the applicable Development Plan, subject to Section
8.2(c), each Party shall bear fifty percent (50%) of the costs and expenses
incurred in connection with the clinical studies of each Product other than
the
Initial Product.
(b) Initial
Product.
(i) Conduct
of Phase II Trials and Phase III Trials by LFB Biotech.
Under
the direction and supervision of the JSC, LFB Biotech shall have primary
responsibility for the conduct of Phase II Trials and Phase III Trials for
the
Initial Product in the entire Territory in accordance with this Agreement and
the applicable Development Plan. ************ data from such Phase II Trials
and
Phase III Trials shall be fully shared with GTC, and such data may be used
by
both Parties in applications for Regulatory Approval pursuant to Section
5.8.
(ii) Funding
of Clinical Development.
LFB
Biotech will bear all costs of clinical trials with respect to the Initial
Product in the entire Territory, subject to GTC’s option to co-fund as provided
below. GTC shall have the option, but not the obligation, to fund up to
************ of the costs of clinical trials with respect to the Initial Product
in the Territory. GTC may exercise such option by providing LFB Biotech with
written notice of its election to co-fund at any time prior to ************
with
respect to the Initial Product together with payment of the amount of funding
GTC is willing to contribute. If GTC elects not to participate, or not to fully
participate, in the funding of clinical trials with respect to the Initial
Product, the Product Participation with respect to the Initial Product shall
be
adjusted in accordance with the Product Participation Model on Exhibit
D
to
reflect LFB Biotech’s greater participation in the funding of clinical trials,
subject to readjustment pursuant to Section 8.2(b)(iv). Notwithstanding the
foregoing, provided that GTC’s participation in the funding of the Development
of the Initial Product is at least ************ of the total IPV, GTC’s Product
Participation with respect to the Initial Product shall be no less than
************.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
5.8 Regulatory
Filings and Approvals.
(a) Preparation
of Proposed Regulatory Filings.
The
Parties agree to seek Regulatory Approvals from the FDA, the EMEA, and the
applicable Regulatory Authorities in each of the other countries listed in
the
applicable Development Plan, as may be amended by the Parties from time to
time.
LFB Biotech shall prepare all Regulatory Filings for Products in the European
Territory. GTC shall prepare all Regulatory Filings for Products in the North
American Territory. The JSC shall determine, on a country-by-country basis,
which Party shall be responsible for preparing Regulatory Filings and Regulatory
Approvals in the Co-Exclusive Territory. All such Regulatory Filings shall
be
prepared in accordance with the applicable Development Plan and all applicable
laws and regulations. Each Party shall submit to the other Party each proposed
Regulatory Filing for the other Party’s review and comment. The reviewing Party
shall notify the Party responsible for such Regulatory Filing in writing of
any
proposed modifications to such Regulatory Filing as soon as reasonably
practicable after receipt of such filing, and the Party preparing such
Regulatory Filing shall consider, in good faith, whether to implement such
proposed modifications; provided
that the
Party responsible for making such Regulatory Filing shall have the right to
make
the final determination, in its sole discretion, as to the form and substance
of
such Regulatory Filing.
(b) Submission
to Regulatory Authorities.
Each
Party agrees to use Commercially Reasonable Efforts to file promptly, in its
own
name, all Regulatory Filings finalized in accordance with
Section 5.8(a) with the proper Regulatory Authority.
(c) Copies
of Regulatory Filings.
Each
Party shall provide to the other Party copies of all Regulatory Filings for
Products submitted to Regulatory Authorities in the Territory within a
reasonable time following the filing thereof. In addition, the Parties shall
share all correspondence and communications, other than Regulatory Filings,
with
Regulatory Authorities relating to a Product in the Territory.
(d) Interactions
with Regulatory Authorities.
The
Party responsible for making a Regulatory Filing pursuant to this Section 5.8
shall also be responsible for and control all interactions with Regulatory
Authorities with respect to such Regulatory Filing. To the extent practicable,
each Party shall provide to the other Party reasonable advance written notice
of
meetings and conference telephone calls with any Regulatory Authority related
to
the Product in the Territory, and shall use Commercially Reasonable Efforts
to
invite one senior executive or regulatory counsel of the other Party to attend
meetings with such Regulatory Authorities as a silent observer, if and to the
extent permitted by the relevant Regulatory Authority.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
5.9 Ownership
of Regulatory Approvals.
Subject
to Section 5.5, as between the Parties, (a) LFB Biotech shall own and maintain
all Regulatory Filings and all Regulatory Approvals that relate to the Product
in the European Territory, (b) GTC shall own and maintain all Regulatory
Filings
and all Regulatory Approvals that relate to the Product in the North American
Territory, and (c) ownership and maintenance of Regulatory Filings and
Regulatory Approvals in the Co-Exclusive Territory shall be determined by
the
JSC on a country-by-country basis.
ARTICLE
6
COMMERCIALIZATION
PHASE
6.1 Commercialization
Plan.
All
Commercialization with respect to a Product under this Agreement shall be
conducted pursuant to a Commercialization Plan, which shall set forth the plan
for the Commercialization of such Product and the activities to be carried
out
with respect thereto, together with a proposed budget for such activities (each,
a “Commercialization
Plan”).
The
Parties, through the JSC, shall agree upon a preliminary Commercialization
Plan
for each Product at least ************ prior to anticipated Regulatory Approval
for such Product. A copy of each Commercialization Plan shall be attached hereto
as part of Exhibit C.
During
the Commercialization Phase with respect to each Product, the Parties, through
the JSC, shall update the Commercialization Plan with respect to such Product
on
an annual basis prior to the commencement of the next calendar year, or more
often as determined by the JSC. Each updated Commercialization Plan shall
include, for the subsequent ************, the projection of the plan for
Commercialization Activities for the Product in each Territory and timelines
for
performing such activities, the projected Net Sales and other revenues from
the
sale of the Product, together with an updated Commercialization budget. The
Commercialization Plan shall contain an estimation of the resources that each
Party intends to employ in connection with the Commercialization of the relevant
Product. In addition, the JSC will review performance against the
Commercialization Plan for each Product on a quarterly basis, and will report
any variations to the Parties in writing. If, in any quarter, there is a
variation of ************ or greater from the budget or from projected Net
Sales
and other revenues, the JSC will revise the Commercialization Plan and budget
for the applicable Product ************ prior to the commencement of the second
quarter following the quarter in which the variation occurred. For example,
if a
************ variation is reported in quarter one of a calendar year, a revised
Commercialization Plan and budget must be prepared at least ************ prior
to the commencement of quarter three of such calendar year. Until such time
as
an updated Commercialization Plan is approved in accordance with this Section
6.1, the preceding Commercialization Plan (including, without limitation, all
budget projections therein) shall remain in effect. The JSC shall not approve
any Commercialization Plan that is inconsistent with or contradicts the terms
of
this Agreement.
6.2 Commercialization
Activities.
(a) European
Territory.
Subject
to the terms and conditions of this Agreement, LFB Biotech shall have exclusive
rights to Commercialize Products in the European Territory. LFB Biotech shall
use Commercially Reasonable Efforts to maximize profits with respect to each
Product in each country of the European Territory where Regulatory Approval
has
been obtained, including the performance of those activities with respect to
the
European Territory specified in the applicable Commercialization
Plan.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(b) North
American Territory.
Subject
to the terms and conditions of this Agreement, GTC shall have exclusive rights
to Commercialize Products in the North American Territory. GTC shall use
Commercially Reasonable Efforts to maximize profits with respect to each Product
in each country of the North American Territory where Regulatory Approval has
been obtained, including the performance of those activities with respect to
the
North American Territory specified in the applicable Commercialization
Plan.
(c) Co-Exclusive
Territory.
Subject
to the terms and conditions of this Agreement, each Party shall have the
exclusive right to Commercialize Products in each country or region of the
Co-Exclusive Territory designated to such Party by the JSC in the applicable
Commercialization Plan, and neither Party shall grant Commercialization rights
to a Third Party in the Co-Exclusive Territory except as expressly set forth
herein. The JSC will decide the appropriate party, whether one of the Parties
and/or its Affiliate or a Third Party, to exclusively Commercialize Products
in
a given national or regional territory within the Co-Exclusive Territory on
the
basis of criteria determined by the JSC; provided that where one of the Parties
has an Affiliate within such national or regional territory and the other Party
does not, then such Affiliate shall have a first right to negotiate with the
JSC
for the distribution of such Product. If such Affiliate agrees in writing to
meet the undertakings as to minimum sales commitments set by the JSC (which
shall have first obtained such information as it may require in order to
determine what minimum sales commitments would be reasonable in the
circumstances) and demonstrates to the satisfaction of the JSC that it has
the
capability of performing such undertakings, such Affiliate shall be given the
right to Commercialize the relevant Product, even if such Affiliate may be
of
lesser standing than a Third Party in terms of the criteria determined by the
JSC. Where both Parties have an Affiliate in a given national or regional
territory within the Co-Exclusive Territory, the JSC will determine the
appropriate entity to Commercialize the relevant Product, which entity may
be a
Third Party, based on the criteria it has previously determined, but with a
view
to maximizing the profits for the collaboration while allowing each Party the
opportunity to build its marketing and sales presence in the Co-Exclusive
Territory taken as a whole and, on an overall basis, to share equally in
Commercialization activities in the Co-Exclusive Territory taken as a whole.
In
any event, each Party or its Affiliate shall use Commercially Reasonable Efforts
to maximize profits with respect to each Product in each country of the
Co-Exclusive Territory where Regulatory Approval has been obtained, including
the performance of those activities with respect to the Co-Exclusive Territory
designated to such Party or its Affiliate specified in the applicable
Commercialization Plan. Each Party shall be responsible for the performance
of
the Commercialization activities of its Affiliate hereunder.
(d) No
Parallel Trade.
Due to
the territorial nature of Regulatory Approvals, each Party will undertake
Commercially Reasonable Efforts within applicable legal constraints to limit
trade of Products between and among the North American Territory, the European
Territory, and the specific countries or regions within the Co-Exclusive
Territory exclusively designated to a Party under the applicable
Commercialization Plan.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
6.3 Commercialization
Costs.
Unless
otherwise specified in the applicable Commercialization Plan, each Party shall
bear all costs and expenses incurred in connection with its respective
Commercialization Activities with respect to each Product. Notwithstanding
the
foregoing, except as otherwise determined by the JSC, LFB Biotech shall purchase
from GTC its commercial supply of Initial Products in the European Territory
and
Co-Exclusive Territory pursuant to the initial Commercialization Plan, as set
forth in Article 8.
6.4 Diligence
Requirements.
(a) Commercialization
Milestones.
The
Parties shall agree on objective time-based Commercialization milestones with
respect to each Product for each Party’s respective exclusive Territory and each
country or region in the Co-Exclusive Territory, which shall be included in
the
Commercialization Plan for the relevant Product. Each Party will be responsible
for meeting the milestones in its respective exclusive Territory and in each
country or region in the Co-Exclusive Territory designated to such Party in
the
applicable Commercialization Plan.
(b) Failure
to Meet Commercialization Milestones.
The
failure of a Party to timely achieve any Commercialization milestone designated
to such Party in the Commercialization Plan for a Product shall have the
consequences set forth below with respect to the applicable country or region
in
the Territory; provided
that
such failure ************, unless such failure occurs within the ************
period following a Change of Control of the Party failing to achieve such
milestone as provided in subsection (ii) below.
(i) If
such
Party fails to achieve one or more applicable Commercialization milestones
for a
Product in either of the first two full calendar years following the First
Commercial Sale of such Product, ************.
(ii) Commencing
upon the beginning of third full calendar year following the First Commercial
Sale of a Product, if such Party fails to achieve one or more applicable
Commercialization milestones during any full calendar year during the
Commercialization Phase for the Product, starting in the next full calendar
year
************.
6.5 Advertising
and Promotional Materials.
(a) Promotional
Materials.
The
Parties, through the JSC, shall collaborate to develop all advertising and
promotional materials related to the Products (collectively, “Promotional
Materials”)
in the
Territory utilizing the Product Trademarks, in accordance with style and
branding guidelines to be mutually agreed upon and with applicable laws and
regulations. Neither Party shall use in the conduct of its respective
Commercialization Activities any Promotional Materials that have not been
finally approved by the JSC. Ownership of Promotional Materials shall be
determined consistently with ownership of Regulatory Approvals under Section
5.9.
(b) Filing
of Promotional Materials with Regulatory Authorities.
Each
Party shall be responsible for filing with the relevant Regulatory Authority,
in
accordance with all applicable laws and regulations and industry standards,
Promotional Materials with respect to use of the Product in the respective
Territory, consistent with Section 5.8.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
6.6 Customer
Complaints and Inquiries.
LFB
Biotech shall be responsible for receiving and addressing all customer
complaints and inquiries regarding Products in the European Territory. GTC
shall
be responsible for receiving and addressing all customer complaints and
inquiries regarding Products in the North American Territory. The JSC shall
determine, on a country-by-country or region-by-region basis, which Party shall
be responsible for receiving and addressing customer complaints and inquiries
regarding Products in the Co-Exclusive Territory. Following receipt of any
customer complaint or inquiry, the responsible Party shall log the complaint
or
inquiry and determine the appropriate response, in accordance with applicable
laws and regulations and the procedures established by the JSC and set forth
in
the applicable Commercialization Plan; provided,
that
the Party responsible for addressing any complaint or inquiry shall promptly
notify the other Party after receiving any material complaint or inquiry and
shall consult with the other Party prior to taking any action in response
thereto that would materially affect the other Party’s rights or obligations
under this Agreement.
6.7 Drug
Safety.
(a) New
Information.
Each
Party shall promptly inform the other Party of any adverse safety information
or
data affecting any Product in the Territory or either Party’s obligations with
respect to the safety of Products under this Agreement.
(b) Adverse
Event Reporting; Safety Database.
Each
Party shall be responsible for reporting, at its expense, to appropriate
authorities, in accordance with local requirements, all adverse events related
to use of a Product in its respective Territory (or its respective designated
country or region in the Co-Exclusive Territory); provided,
that
each Party shall consult with the other Party before making any such report.
The
non-reporting Party shall provide to the reporting Party, upon the reporting
Party’s request, reasonable assistance in connection with the reporting of all
of adverse events, responding to safety queries and assessing safety issues,
in
each case, to the extent related to a Product in the Territory. Adverse events
related to the use of a Product in the Territory shall be recorded in a single,
centralized database for such Product. Such database shall be held, owned and
maintained by the Originating Party of such Product at the Originating Party’s
expense, which shall be a Development Cost of the Originating Party hereunder.
Direct access to the safety database for each Product will be granted to both
Parties. Details of safety reporting activities relating to the Product in
the
Territory will be addressed in a pharmacovigilance agreement, which the Parties
shall enter into within ************ following the first Regulatory Approval
of
such Product.
6.8 Product
Withdrawals and Recalls.
In the
event that, within a Party’s Territory (or its designated country or region in
the Co-Exclusive Territory), (a) a Party determines that an event, incident,
or
circumstance that may result in the need for a Recall or other removal of a
Product or any lot or lots thereof from the market; (b) the applicable
Regulatory Authority threatens to remove a Product from the market; or
(c) the applicable Regulatory Authority requires distribution of a “Dear
Doctor” letter or its equivalent regarding the use of a Product, the Party
making such determination or receiving notice of such threat or requirement
shall promptly advise the other Party in writing with respect thereto, and
shall
provide the other Party with copies of all relevant correspondence, notices
and
the like. The Parties shall reasonably cooperate through the JSC to determine
what action is warranted and to take such action with respect to the conduct
of
any such Recall, market withdrawal or other corrective action with respect
to a
Product in the Territory.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
ARTICLE
7
PRODUCT
SUPPLY
7.1 Clinical
Supply of Product.
(a) Initial
Product.
(i) Requirements.
Subject
to the terms set forth in this Article 7, GTC shall supply to LFB Biotech its
requirements for the Initial Product for the conduct of the LFB Biotech
Development Activities and for Phase II Trials and Phase III Trials at a
transfer price ************.
(ii) Ordering
Process.
The
Parties shall agree upon and set forth in the Supply Agreement for the Initial
Product: (A) the amount of Initial Product to be supplied by GTC to LFB
Biotech during the Development Phase for such Product (subject to maximums
to be
agreed upon), and (B) the procedures for LFB Biotech to submit its
requirements and GTC to supply such requirements. Such procedures shall include,
without limitation, (1) forecasting procedures, including annual
non-binding forecasts of LFB Biotech’s requirements, (2) firm purchase
commitments no less than ************ prior to the time the order must be
delivered to LFB Biotech by GTC, (iii) procedures for return and replacement
of
Initial Product that is in breach of the product warranty set forth in the
relevant Supply Agreement, and (iv) payment terms. Any purchase orders, purchase
order releases, confirmations, acceptances, invoices, and similar documents
submitted by either Party shall be for administrative purposes only and shall
not add to or modify the terms of this Agreement or the relevant Supply
Agreement, except for the specification of quantities or requested delivery
dates.
(b) Other
Products.
The
Parties shall mutually agree in writing upon the availability and timing of
delivery of clinical supplies of Products other than the Initial Product, which
shall be set forth in the applicable Development Plan. All such Products shall
be supplied at ************.
7.2 Forecasts
and Commercial Supply.
(a) Initial
Product.
(i) Exclusive
Supply; Forecasts.
Subject
to Section 7.4(c), and unless otherwise specified in the applicable
Commercialization Plan, GTC or its designated Third Party subcontractor shall
be
the exclusive manufacturer and supplier of commercial quantities of the Initial
Product throughout the Territory. The Supply Agreement for the Initial Product
shall set forth the forecasting requirements of the Parties for the Initial
Product in the Territory.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(ii) Commercial
Supply.
Unless
otherwise specified in the applicable Commercialization Plan, GTC shall use
Commercially Reasonable Efforts to supply to LFB Biotech its commercial
requirements for the Initial Product in the European Territory, and the
commercial requirements of the collaboration for the Initial Product in the
Co-Exclusive Territory, at a transfer price equal ************. GTC shall supply
Initial Product to LFB Biotech and, if applicable, to any Third Party selected
by the JSC to Commercialize or distribute the Initial Product in a country
or
region in the Co-Exclusive Territory, on a non-discriminatory basis. The Supply
Agreement for the Initial Product shall set forth the other relevant terms
and
conditions of the manufacture and supply of Initial Product in the
Territory.
(b) Other
Products.
The
Parties shall mutually agree in writing upon the terms and conditions with
respect to the manufacture and supply of commercial quantities of Product(s)
other than the Initial Product, which shall be set forth in the relevant Supply
Agreement. All such Products shall be supplied at ************.
7.3 Disclaimer
of Warranty.
EXCEPT
TO THE EXTENT EXPRESSLY PROVIDED IN THE APPLICABLE SUPPLY AGREEMENT,
EACH
PARTY EXPRESSLY DISCLAIMS
ANY
WARRANTY WITH RESPECT TO THE PRODUCT(S) SUPPLIED HEREUNDER, WHETHER EXPRESS
OR
IMPLIED, WRITTEN OR ORAL (INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE).
7.4 Second
Manufacturing Site.
************
(a) ************
(b) ************
(c) ************
(d) ************
(e) ************
ARTICLE
8
PAYMENTS
AND ACCOUNTING
8.1 Equity
Purchase.
In
conjunction with the establishment of the collaboration hereunder between LFB
Biotech and GTC, LFB Biotech shall make an equity and debt investment in GTC
of
up to an aggregate of $25 million pursuant to a definitive purchase agreement,
substantially in the form of Exhibit
E
hereto,
to be executed by and between the Parties on or about the Effective Date (the
“Stock
and Note Purchase Agreement”).
8.2 Funding
of Costs and Sharing of Profits.
(a) General.
Subject
to the terms and conditions of this Agreement, on a Product-by-Product basis,
it
is the Parties’ intention that each Party will share equally in the costs of
Development and Commercialization and that in such case each Party will be
entitled to fifty percent (50%) of the Net Profits of the collaboration with
respect to such Product, as adjusted in accordance with the profit participation
percentage for such Party under the applicable Product Participation Model
as
described below (the “Product
Participation”).
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(b) Product
Participation Calculation.
(i) The
Parties shall agree upon the final (subject to adjustment by the JSC as provided
herein) Product Participation Model for each Product no later than ************
following ************ for such Product, and shall attach a copy of such Product
Participation Model as part of Exhibit
D
to this
Agreement and such Product Participation Model shall be incorporated herein
be
reference. Product Participation calculations will be included upon their
approval. A standard form of Product Participation Model is attached as part
of
Exhibit D to this Agreement.
(ii) The
Product Participation of a Party with respect to a Product shall be based upon
the IPV of such Party with respect to such Product in accordance with the
applicable Product Participation Model. All Development Costs of a Party shall
be included in the IPV calculation under the Product Participation Model. IPV
will be calculated using a discount rate of ************. Development Costs
of
each Party will be factored into the Product Participation Model by calendar
year based on the official statutory accounts of each Party, or properly
allocated Development Costs reconciled to the relevant Party’s statutory
accounts and approved by the JSC, in each case as reflected in the reports
delivered pursuant to Sections 8.3(a) and (b). Any significant differences
between the Parties’ statutory bases of accounting will be identified by the JSC
during the annual budgeting process. A common basis will be selected or
approximated, subject to approval of the JSC. Depreciation or amortization
of
expenditures will be excluded from the IPV calculation to the extent such costs
have previously been incorporated elsewhere in the Product Participation Model.
The Joint Steering Committee will evaluate ************ after the Effective
Date
the impacts of the discrepancies in such accounting methods and decide on
relevant rules to be applied to account for and reconcile such discrepancies
in
the calculation of the respective Product Participations.
For
purposes of calculating each Party’s IPV, to reflect the increased risk
associated with earlier investment, Development Costs paid or incurred by a
Party in earlier stages of a Product’s Development program will be weighted more
highly than later-stage Development Costs, in accordance with the following
schedule:
|
Timing
of Expenditure
|
Weight
Accorded
|
|
From
Product Start Date through last day of month ending before decision
of JSC
to commence Phase III Trials
|
************
of Development Cost
|
|
From
the month when decision is made by JSC to commence Phase III Trials
through Pivotal Trial Completion Date
|
************
of Development Cost
|
|
Pivotal
Trial Completion Date to date of receipt of written confirmation
of Major
Regulatory Approval
|
************
of Development Cost
|
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(iii) Notwithstanding
the foregoing, after the first Major Regulatory Approval is obtained for a
Product, only those Development Costs specifically allocable to obtaining the
other Major Regulatory Approval as per the Development Plan previously approved
by the JSC (including, without limitation, the costs of additional clinical
trials, if any, required for purposes of obtaining such other Major Regulatory
Approval) shall be subject to weighting in accordance with the above schedule,
and all other Development Costs properly incurred or allocated by the Parties
shall be weighted ************ of cost. Any costs with respect to a Product
incurred by a Party prior to the decision by the JSC to proceed with the
Development of such Product shall not be included as Development Costs. Subject
to adjustment from time to time pursuant to Section 8.2(b)(iv), each Party’s
relative IPV will also represent such Party’s Product Participation percentage
for such Product; provided,
that
the Product Participation of the Parties shall be rounded to the closest full
percentage point with no decimals. Notwithstanding any of the foregoing, if
GTC’s relative participation in funding the Development of the Initial Product
is ************, the minimum Product Participation of GTC with respect to the
Initial Product shall be no ************.
(iv) The
Product Participation of each Party with respect to a Product shall be fixed
as
of ************, and shall remain fixed for the remainder of the Product Term,
subject to adjustment on ************ basis as follows:
(A) After
the
first Major Regulatory Approval is obtained for such Product, the Product
Participation Model for such Product shall be adjusted by the JSC in accordance
with Section 8.2(b)(iii) to account for Development Costs of the Parties
specifically allocable to obtaining the other Major Regulatory Approval,
provided they are previously approved by the Joint Steering Committee within
the
framework of the Development Plan.
(B) The
Product Participation Model with respect to each Product shall be reviewed
and
adjusted by the JSC to reflect any additional significant costs properly
allocated as Development Costs (such as capital costs and additional costs
incurred by a Party to expand the indication or territory of the Product),
approved by the JSC and incurred by the Parties in the previous year with
respect to such Product, and the Parties’ respective Product Participation
percentages shall be adjusted to reflect such additional Development Costs.
Within ************ after the Effective Date, the Parties will agree upon a
methodology for determining which costs shall be deemed “significant” for
purposes of this Section 8.2(b) and costs not satisfying the agreed upon
criteria shall be treated as Commercialization Costs and will be subject to
reimbursement pursuant to Section 8.2(d).
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(C) If
a
Party’s Product Participation for a Product is ************ but is ************,
then once the Greater Funding Party has been fully reimbursed for any IPV
Difference out of any distributed Net Profits in accordance with Section 8.2(d),
the Product Participation of each Party with respect to the relevant Product
shall be set at ************ for the remainder of the relevant Product Term,
in
each case (i) and (ii), subject to further adjustment in accordance with
subsections (A) and (B) above. If a Party’s Product Participation for a Product
(other than the Initial Product with respect to GTC) is ************ then the
provisions of Section 8.2(c)(ii) shall apply.
(c) Funding
of Development and Commercialization.
(i) Funding
Obligations and Rights of the Parties.
Subject
to Sections 5.7(b) and 8.2(c)(ii), and except as set forth in the applicable
Development Plan or Commercialization Plan, each Party will be responsible
for
paying those costs and expenses it incurs in the performance of its Development
Activities and Commercialization Activities with respect to each Product, in
each case as such costs are incurred.
(ii) Minimum
Funding Commitment for Certain Products.
Subject
to the applicable Development Plan, it is the Parties’ present intention that
each Party will ultimately ************ of the costs of Development for each
Product other than the Initial Product. Notwithstanding the foregoing, if a
Party is unable or unwilling to fund ************ of the Development Costs
with
respect to a Product other than the Initial Product, it shall notify the JSC
in
writing, within ************ prior to the completion of the annual budget under
the applicable Development Plan, the amount of Development Costs such Party
is
able to fund during the relevant upcoming calendar year. Upon receipt of such
notice, the JSC shall adjust the budget accordingly and such Party shall be
obligated to fund that portion of Development Costs specified in the budget
during the applicable calendar year. Subject to further adjustment in accordance
with Section 8.2(b)(iv), the Profit Participation Model shall be revised to
reflect such lesser participation. Notwithstanding the foregoing, in order
to
maintain its Profit Participation with respect to any Product other than the
Initial Product, each Party must have funded ************ of the Development
Costs (as weighted in accordance with the Product Development Model) of such
Product in the aggregate during the period commencing on the relevant Product
Start Date and ending on ************ for such Product. If a Party fails to
fund
************ of such Development Costs of such Product during such period,
then
such Product shall cease to be subject to this Agreement, the licenses hereunder
with respect to such Product shall terminate, and, without further action by
the
Parties, the rights and obligations of the Parties with respect to such Product
after the time of such termination shall be governed by the terms of a
definitive Commercial License to be executed between the Parties at such time,
the material terms of which are set forth on Exhibit
G.
The
Parties shall mutually agree upon the definitive terms of the Commercial License
within ************ following the Product Start Date of each Product hereunder
(other than the Initial Product).
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(d) Reimbursement
of Commercialization Costs.
Each
Party will be reimbursed for its Commercialization Costs with respect to a
Product out of net revenues on Net Sales and other revenues derived from such
Product prior to the distribution of Net Profits to the Parties in accordance
with Section 8.3(c). After reimbursement of such costs, Net Profits shall be
allocated between the Parties in accordance with their respective Product
Participation and distributed in accordance with Section 8.3(c). In addition,
if
one Party’s Product Participation for a Product is ************ but is
************, the IPV Difference of the Greater Funding Party with respect
to
such Product shall be reimbursed to such Greater Funding Party out of its
greater portion of Net Profits until such time as the IPV Difference is
reimbursed in full, at which time the Product Participations of each Party
shall
be adjusted in accordance with Section 8.2(b)(iv)(C). If the aggregate
Commercialization Costs of the Parties exceed the aggregate Net Sales and other
revenues of the collaboration as a whole with respect to such Product in a
calendar year, the amount of the net loss shall be treated as follows, depending
on the calculated Product Participation for each Party:
(i) If
each
Party’s Product Participation for the relevant Product is ************, the
amount of the loss incurred by each Party will be counted at ************
of cost
value in the IPV reimbursement calculation in the Product Participation Model
in
the calendar year in which the loss is recorded and will result in an adjustment
to the amount of the IPV Difference that must be reimbursed to the Greater
Funding Party pursuant to this Section 8.2(d).
(ii) If
a
Party’s Product Participation for a Product is ************
but is
************,
net
losses incurred will be considered the responsibility of each Party in
accordance with its Product Participation percentage. For example, if a Party
has a Product Participation ************,
such
Party will be responsible for ************
of the
net losses with respect to such Product in the applicable calendar year. If
at
the end of any calendar year, a Party has funded less than its allocated
percentage of aggregate net losses, such Party shall reimburse the other Party
to the extent of such under funding. Such payment will be made in accordance
with Section 8.3(c).
(iii) If
a
Party’s Product Participation for a Product is ************ net
losses incurred will be considered the responsibility of each Party in
accordance with its Product Participation percentage until such time as the
Product is no longer subject to this Agreement. When such Party ************
as
described in Section 8.2(c)(ii), the foregoing provisions, including
reimbursement on an annual basis, will apply to the extent applicable with
respect to net losses incurred ************.
Any
reimbursement payment will be made in accordance with Section
8.3(c).
8.3 Reports.
(a) Quarterly
Development and Commercialization Reports.
Within
************ following the close of each calendar quarter during the Term,
each
Party will submit to the JSC a written report setting forth in reasonable
detail, on a Product-by-Product basis, such Party’s Development Activities and
Commercialization Activities for such Product and its actual costs (including
Development Costs and Commercialization Costs) incurred in connection with
the
Development and/or Commercialization of Product(s) for such quarter, together
with the aggregate amounts as at the end of such quarter past due and unpaid
to
Third Parties in respect of goods or services furnished by such Third Parties
to
the reporting Party in connection with its activities under this Agreement.
The
reports specified in this Section 8.3(a) shall be used in monitoring the
Parties’ compliance with their respective Development and Commercialization
obligations under this Agreement and by the JSC in updating the Development
and
Commercialization Plans in accordance with Sections 5.1 and 6.1 and the Product
Participation Models in accordance with Section 8.2.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(b) Quarterly
Net Profits Reports.
During
the Term following First Commercial Sale with respect to a Product, each Party
shall, within ************ following the end of each calendar quarter, furnish
to the JSC a written quarterly report showing, in reasonable detail and on
a
Product-by-Product basis: (i) the gross sales of Product sold by such Party,
its
Affiliates, sublicensees and/or subcontractors; (ii) any other revenues relating
to the Products, including without limitation royalties and any other payments
from sublicensees or subcontractors; (iii) a calculation of Net Sales of the
Party for such quarter; (iv) the Development Costs of such Party for such
quarter, and (v) the Commercialization Costs of such Party for such
quarter.
(c) Annual
Reconciliation of Net Profit.
On an
annual basis during the Term, and upon the expiration or termination of this
Agreement, the JSC (or a subcommittee thereof) shall submit to both Parties
within ************ of the end of the applicable calendar year, or of the
effective date of termination, as the case may be, a summary report setting
forth, on a Product-by-Product basis for the previous calendar year (or portion
thereof) and for the cumulative program to date for each Product from the
Product Start Date through the period of the report: (i) the gross sales of
Product sold by each Party, its Affiliates, sublicensees and/or subcontractors;
(ii) any other revenues of each Party relating to the Products, including
without limitation royalties and any other payments from sublicensees or
subcontractors; (iii) a calculation of Net Sales of each Party; (iv) the
Development Costs of each Party, and (v) the Commercialization Costs of each
Party. Such report shall account for any differences between the Parties’
accounting methodologies in a manner to be reasonably agreed by the Parties.
The
report shall also indicate, on a Product-by-Product basis, the Product
Participation of each Part and the amount of IPV (if prior to the First
Commercial Sale) or of Net Profits due each Party (if after the First Commercial
Sale) for the applicable reporting period based on the Product Participation
Model, and shall reconcile such amount with the net profits and loss statements
of such Party for the applicable reporting period. If the report indicates
that
the Net Profits received by a Party with respect to a Product in the reporting
period exceed the amount due such Party for such reporting period, such Party
shall pay the other Party the amount of the difference within ************
following receipt of the report (each such payment, a “Profit
Payment”).
If
the report indicates that there is an aggregate net loss, the provisions of
Section 8.2 shall determine the treatment of the Parties’ respective losses and
any reimbursement due from one Party to the other shall be made within
************ following receipt of the report.
8.4 Records;
Audit.
(a) Records.
The
Parties shall keep, and shall cause their respective Affiliates and
subcontractors to keep, complete, true and accurate books and records with
respect to all data related to sales of and costs incurred in connection with
the Products, and specifically regarding sales figures, in accordance with
the
defined Accounting Standards and in sufficient detail to reflect all gross
sales, Net Sales, Development Costs and Commercialization Costs, and to enable
the amount of Net Profits due each Party hereunder to be determined. The Parties
will keep, and shall cause their respective Affiliates and subcontractors to
keep, such books and records for at least ************ following the end of
the
calendar quarter to which they pertain. Such books and records shall be kept
by
each Party, or the applicable Affiliate or subcontractor, at its principal
place
of business.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(b) Audit
of Records.
(i) During
the Term and for ************ thereafter, each Party shall have the right,
at
its own expense, through an independent certified public accounting firm of
nationally or internationally recognized standing (or such other independent
Third Party on which the Parties may agree) acceptable to the other Party,
to
review financial and related records in the location(s) where such records
are
maintained by the other Party or such other Party’s Affiliates or
subcontractors, upon reasonable notice, during regular business hours and under
obligations of confidence, for the sole purpose of verifying such other Party’s
compliance with its obligations under this Agreement; provided
that
such examination shall not take place more than once per calendar year and
shall
not cover records for more than the preceding ************; and provided
further
that
such accounting firm or other Third Party auditor shall first have entered
into
a confidentiality agreement mutually agreeable to the Parties. The results
of
such review shall be made available to both Parties.
(ii) If
the
review reflects any significant misreporting of expenses or performance by
the
Party subject to the review, i.e. the amount of such misreporting is equal
to or
************ of the expense or performance amount that should have properly
been
reported during the applicable reporting period or is in excess of ************,
the Party subject to the review shall pay all of the costs of such
review
and, in
the event of any underpayment shall pay any additional sum, including interest
charges (at a rate ************
percentage points above LIBOR), shown to be due to the other Party.
(iii) In
the
event that either Party in good faith disputes the results of the review, or
any
specific aspect thereof, then such Party shall inform the other Party by written
notice within ************ after receiving the result of the review, specifying
in detail the reasons for disputing the results thereof. The Parties shall
promptly thereafter meet and negotiate in good faith a resolution to such
dispute. In the event that the Parties are unable to resolve such dispute within
************ after such dispute notice is received, the matter shall be resolved
in a manner consistent with the procedures set forth in Article 15.
8.5 Currency
of Account and Payment.
For
purposes of Sections 8.2, 8.3 and 8.4, all amounts will be calculated in United
States Dollars and all Profit Payments hereunder shall be calculated and paid
in
United States Dollars. Conversion into United States Dollars from other
currencies for purposes of calculating Net Profits and of setting and adjusting
the Product Participation Models shall be calculated using average rates
published by the ECB for the calendar month in which the sale of the Product
occurred or the relevant Development Cost or Commercialization Cost was
incurred, as the case may be. Any rates not listed by the ECB, will be derived
using the average Exchange Rates published in the Wall Street Journal for the
applicable calendar month. All amounts invoiced by GTC for goods or services
will be invoiced and paid in United States Dollars and all amounts invoiced
by
LFB Biotech for goods or services shall be invoiced and paid in Euros, in each
case except as otherwise may be agreed.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
8.6 Blocked
Currency.
If by
reason of exchange controls or other laws in a particular jurisdiction a Party
is unable to convert to United States Dollars or Euros, as the case may be,
in
accordance with Section 8.5, and transfer any portion of the amount payable
by
such Party under this Agreement, then such Party shall promptly notify the
other
Party in writing and shall pay such amounts through such means or methods as
are
lawful in such jurisdiction as the other Party may reasonably designate. Failing
the designation by the other Party of such lawful means or methods within
************ after such notice is given to such other Party, the Party
responsible for making such payment shall deposit such payment in local currency
to the credit of the other Party in a recognized banking institution designated
by the Party entitled to such payment, or if none is designated within the
************ period described above, in a local banking institution selected
by
the Party responsible for making such payment and identified in a written notice
to the Party entitled to such payment, and such deposit shall fulfill all
obligations of the Party responsible for making such payment with respect
thereto.
8.7 Taxes.
(a) Cooperation
and Coordination.
The
Parties acknowledge and agree that it is their mutual objective and intent
to
minimize, to the extent permitted under applicable laws and regulations, taxes
payable with respect to their collaboration efforts under this Agreement and
that they shall use their best efforts to cooperate and coordinate with each
other to achieve such objective.
(b) Payment
of Tax.
A Party
receiving a payment pursuant to this Article 8, or otherwise deemed to receive
a
payment under this Agreement, shall pay any and all taxes levied on such payment
or deemed payment. If applicable laws or regulations require that taxes be
deducted and withheld from a payment made pursuant to this Article 8, the
remitting Party shall (i) deduct those taxes from the payment;
(ii) pay the taxes to the proper taxing authority; and (iii) send
evidence of the obligation together with proof of payment to the other Party
within ************ following that payment.
(c) Tax
Residence Certificate.
A Party
receiving a payment pursuant to this Article 8 shall provide the remitting
Party
a certification from the revenue authorities of any jurisdiction that it is
a
tax resident of that jurisdiction if such receiving Party wishes to claim the
benefits of an income tax treaty to which that jurisdiction is a party. Upon
the
receipt thereof, any deduction and withholding of taxes shall be made at the
appropriate treaty tax rate.
(d) Assessment.
Either
Party may, at its own expense, protest any assessment, proposed assessment,
or
other claim by any governmental authority for any additional amount of taxes,
interest or penalties or seek a refund of such amounts paid if permitted to
do
so by law. The Parties shall cooperate with each other in any protest by
providing records and such additional information as may reasonably be necessary
for a Party to pursue such protest.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
ARTICLE
9
PATENTS
AND INVENTIONS
9.1 Ownership.
(a) Sole
Inventions.
Except
as otherwise expressly provided in this Agreement, as between GTC and LFB
Biotech, and subject to the express license grants under Articles 3, 7.4 and
14
hereof, each Party shall exclusively own all and retain all right, title and
interest in and to all Inventions and Know-How made solely by the employees,
contractors, consultants or agents of such Party, its Affiliates or
sublicensees, as applicable (“Sole
Inventions”).
(b) Joint
Inventions.
LFB
Biotech and GTC shall ************ any Invention invented jointly by the
employees or agents of LFB Biotech and GTC or their respective Affiliates,
with
or without Third Parties (the “Joint
Inventions”),
and
any Patent Rights that claim such Joint Inventions (the “Joint
Patent Rights”).
Neither LFB Biotech nor GTC, ************.
(c) Inventorship.
Solely
for the purpose of determining ownership of Inventions with respect to any
US
Patent Rights under this Section 9.1, inventorship shall be determined in
accordance with United States patent laws.
9.2 Patent
Prosecution.
(a) LFB
Biotech Patent Rights and Joint Patent Rights in LFB Biotech’s
Territory.
(i) LFB
Biotech shall retain sole and exclusive ownership of all LFB Biotech Patent
Rights and, subject to Section 9.2(a)(ii), shall retain control over, and bear
all expenses associated with, the filing, prosecution, and maintenance of any
LFB Biotech Patent Rights in the entire Territory and any Joint Patent Rights
in
the European Territory and any country or region of the Co-Exclusive Territory
as the JSC may designate. LFB Biotech shall confer in good faith with GTC
regarding LFB Biotech’s patent strategy with respect to any LFB Biotech Patent
Rights licensed to GTC hereunder and any Joint Patent Rights in LFB Biotech’s
respective Territory or region and GTC shall have the right to comment upon
LFB
Biotech’s strategy.
(ii) In
the
event LFB Biotech decides, at its sole discretion, not to file, nationalize
or
validate a patent application covering an LFB Biotech Sole Invention or Joint
Invention or LFB Biotech Know-How in any country in the Territory or LFB Biotech
decides not to continue to prosecute or maintain a patent or patent application
included in the LFB Biotech Patent Rights licensed to GTC hereunder, LFB Biotech
shall promptly notify GTC of such decision and GTC shall have the right to
file,
prosecute, and maintain such patent or patent application at its sole expense
and discretion. If GTC elects to file, prosecute, or maintain such patent or
patent application (as applicable) at its own expense, LFB Biotech shall
reasonably cooperate with GTC in connection with such filing, prosecution and/or
maintenance.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(b) GTC
Patent Rights and Joint Patent Rights in GTC’s Territory.
(i) GTC
shall
retain sole and exclusive ownership of all GTC Patent Rights and, subject to
Section 9.2(b)(ii), shall retain control over, and bear all expenses associated
with, the filing, prosecution, and maintenance of any GTC Patent Rights in
the
entire Territory and any Joint Patent Rights in the North American Territory
and
any country or region of the Co-Exclusive Territory as the JSC may designate.
GTC shall confer in good faith with LFB Biotech regarding GTC’s patent strategy
with respect to any GTC Patent Rights licensed to LFB Biotech hereunder and
any
Joint Patent Rights in GTC’s respective Territory or region and LFB Biotech
shall have the right to comment upon GTC’s strategy.
(ii) In
the
event GTC decides, at its sole discretion, not to file, nationalize or validate
a patent application covering a GTC Sole Invention or Joint Invention or GTC
Know-How in any country in the Territory or GTC decides not to continue to
prosecute or maintain a patent or patent application included in the GTC Patent
Rights licensed to LFB Biotech hereunder, GTC shall promptly notify LFB Biotech
of such decision and LFB Biotech shall have the right to file, prosecute, and
maintain such patent or patent application at its sole expense and discretion.
If LFB Biotech elects to file, prosecute, or maintain such patent or patent
application (as applicable) at its own expense, GTC shall reasonably cooperate
with LFB Biotech in connection with such filing, prosecution and/or
maintenance.
9.3 Enforcement
of Patent Rights.
(a) Notice.
Each
Party shall give prompt written notice to the other Party promptly after gaining
knowledge of any Third Party activity that infringes any GTC Patent Right,
LFB
Biotech Patent Right, or Joint Patent Right, or if any declaratory judgment
action is filed by a Third Party against such Party alleging noninfringement
or
invalidity of any GTC Patent Right, LFB Biotech Patent Right or Joint Patent
Right.
(b) Enforcement
Rights.
(i) LFB
Biotech Patent Rights.
LFB
Biotech shall have the primary right, but not the obligation, to institute,
prosecute and control any action or proceeding with respect to any unauthorized
Third Party activity under the LFB Biotech Patent Rights, including any LFB
Biotech Patent Rights licensed to GTC hereunder. If LFB Biotech fails to bring
an infringement action under such LFB Biotech Patent Rights or to notify GTC
whether or not LFB Biotech intends to bring such action, in each case within
a
period of ************ after delivery of the notice set forth in
Section 9.3(a), then GTC shall have the right, but not the obligation, to
bring and control an action with respect to such Third Party activity, by
counsel of its own choice.
(ii) GTC
Patent Rights.
GTC
shall have the primary right, but not the obligation, to institute, prosecute
and control any action or proceeding with respect to any unauthorized Third
Party activity under the GTC Patent Rights, including any GTC Patent Rights
licensed to LFB Biotech hereunder. If GTC fails to bring an infringement action
under such GTC Patent Rights or to notify LFB Biotech whether or not it intends
to bring such action, in each case within a period of ************ after
delivery of the notice set forth in Section 9.3(a), then LFB Biotech shall
have the right, but not the obligation, to bring and control an action with
respect to such Third Party activity, by counsel of its own choice.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(iii) Joint
Patent Rights.
LFB
Biotech shall have the primary right, but not the obligation, to institute,
prosecute and control any action or proceeding with respect to any unauthorized
Third Party activity under the Joint Patent Rights in the European Territory.
GTC shall have the primary right, but not the obligation, to institute,
prosecute and control any action or proceeding with respect to any unauthorized
Third Party activity under the Joint Patent Rights in the North American
Territory. The Parties shall mutually agree upon which Party shall have the
primary right, but not the obligation, to institute, prosecute and control
any
action or proceeding with respect to any unauthorized Third Party activity
under
the Joint Patent Rights in the Co-Exclusive Territory. If the Party having
the
primary right to institute, prosecute and control any action or proceeding
pursuant to this Section 9.3(b)(iii) fails to bring an infringement action
under
the Joint Patent Rights or to notify the other Party whether or not it intends
to bring such action, in each case within a period of ************ after
delivery of the notice set forth in Section 9.3(a), then the other Party
shall have the right, but not the obligation, to bring and control an action
with respect to such Third Party activity, by counsel of its own
choice.
(iv) Notification;
Cooperation.
If a
Party intends to initiate an infringement action under this Section 9.3(b),
or
decides not to initiate such action, it shall promptly provide written
notice
to the
other Party of such intent. The Party controlling any action under this Section
9.3(b) shall notify the other Party promptly upon commencement of such action
and shall keep the other Party reasonably informed of the status of such action.
In
connection
with any
action under this Section 9.3(b), the Parties will cooperate fully and will
provide each other with any information or assistance that the other may
reasonably request, at the expense of the Party initially bringing the action.
Notwithstanding a Party’s right to control an action under this Section 9.3(b),
neither Party shall settle or compromise any claim or proceeding that would
adversely affect the scope, validity or enforceability of any
Patent
Right
granted
by one Party to another hereunder or otherwise adversely affect the rights
and
licenses granted hereunder unless agreed to in writing by both Parties, which
consent shall not be unreasonably withheld or delayed.
(c) Allocation
of Recovery.
Any
damages or monetary awards recovered by the Party enforcing an action hereunder
shall (i)(A) first be applied to reimburse such Party in an amount equal to
the
costs and expenses of such Party in connection with such litigation, and (B)
then be applied to reimburse the non-enforcing Party in an amount equal to
the
costs and expenses of such Party in connection with such litigation, and
(ii) any remaining balance shall be ************.
9.4 Claimed
Infringement.
In the
event that a Party becomes aware of any Third Party claim that the manufacture,
use, sale, offer for sale, and/or importation of any Product in the Territory
infringes the Patent Rights of any such Third Party, the terms and conditions
of
Article 13 shall apply.
9.5 Declaratory
Actions.
The
rights of the Parties to defend any declaratory judgment action alleging
noninfringement or invalidity of any GTC Patent Right, LFB Biotech Patent Right
or Joint Patent Right shall be consistent with the rights of the Parties to
prosecute and control an action against a Third Party pursuant to Section
9.3(b).
9.6 Costs
of Patent Prosecution and Enforcement.
All
costs incurred or paid by a Party in prosecuting and enforcing any Patent Rights
in accordance with this Article 9, to the extent not otherwise reimbursed to
or
recovered by such Party, shall be treated as Development Costs of such Party
to
the extent incurred during the Development Phase, and as Commercialization
Costs
of such Party to the extent incurred during the Commercialization
Phase.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
ARTICLE
10
TRADEMARK
USAGE AND MAINTENANCE
10.1 Trademarks.
(a) Selection
of Product Marks.
Promptly after the Effective Date, LFB Biotech and GTC agree to undertake a
program to identify suitable trademarks for use with the Initial Product in
the
Territory under this Agreement, it being agreed that the Originating Party
shall
make a presentation to the other Party as to the trademarks it considers
appropriate. The objective of the Parties is to develop a single trademark
suitable for use throughout the Territory but the Parties recognize that it
may
be necessary or desirable to use additional or alternative trademarks in certain
Territories or certain countries within the Territories. As additional Products
are added to the Agreement pursuant to Section 2.1, the Parties shall undertake
a similar program with respect to each Product to identify suitable trademarks
for use in connection such Products hereunder, with the Originating Party making
a presentation to the other Party as to the trademarks it considers appropriate.
All trademarks which the Parties decide should be used for a Product (with
respect to such Product the “Product
Trademark”
or
the
“Product
Trademarks”)
will
be owned by the Originating Party of such Product (the “Trademark
Owner”).
Similarly, the Parties will cooperate in the selection and approval (i.e.,
through USAN and WIPO) of a generic name for each Product and a domain name
with
respect to each Product, with the objective the each Product shall have the
same
approved generic name and the same domain name throughout the entire Territory.
The provisions of this Agreement as to the ownership and licensing of Product
Trademarks shall apply mutatis
mutandis
to the
ownership and licensing of generic names and domain names.
(b) Product
Trademark Prosecution.
The
Trademark Owner shall be responsible for filing and prosecuting applications
to
register its Product Trademarks in the entire Territory, and for maintenance
of
such registrations thereafter, and shall initially bear all costs associated
therewith, provided that the Trademark User shall reimburse the Trademark Owner
for all costs associated with filing, prosecuting and maintaining its Product
Trademark in the Trademark User’s exclusive Territory and in each country or
region in the Co-Exclusive Territory designated to such Trademark User in the
Commercialization Plan for such Product. GTC shall consult with LFB Biotech
with
respect to the countries or regions (e.g. a Community Trade Mark) in which
registration of Product Trademarks owned by GTC will be sought in the European
Territory, and will register the Product Trademarks in all such countries or
regions as reasonably requested by LFB Biotech in the European Territory. LFB
Biotech will register Product Trademarks owned by LFB Biotech in the United
States and Canada. The Trademark Owner will consult with the Trademark User
with
respect to the countries or regions within the Co-Exclusive Territory in which
the Product Trademarks owned by the Trademark Owner will be registered and
will
register the Product Trademarks in all such countries or regions as reasonably
requested by the Trademark User.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(c) Product
Trademark Enforcement.
LFB
Biotech shall be responsible for enforcing the Product Trademarks in the
European Territory and shall bear all costs associated therewith and GTC shall
be responsible for enforcing the Product Trademarks in the North American
Territory and shall bear all costs associated therewith. The Parties shall
mutually determine, through the JSC, on a Product- by- Product and
country-by-country basis, which Party shall be responsible for enforcing the
Product Trademarks in respect of the relevant Product in the Co-Exclusive
Territory. Each Party shall promptly inform the other Party in writing of any
alleged or threatened infringements of the Product Trademarks in the Territory,
or of any challenge to the validity of the Product Trademarks of which they
become aware, and the JSC shall consider the action to be taken. In the event
that the Parties, through the JSC, elect to prosecute or defend the matter,
they
will determine which Party will do so using counsel approved by both Parties,
and no settlement, consent judgment or other voluntary disposition of the matter
may be entered into by either Party without the consent of the other
Party.
(d) No
Implied Licenses.
Except
for the license granted in Section 3.1(e), nothing herein shall create any
rights of either Party in and to any Product Trademarks owned by the other
Party
as provided in this Agreement.
(e) Costs
of Trademark Prosecution and Enforcement.
All
costs incurred or paid by a Party in prosecuting and enforcing Product
Trademarks for a Product in accordance with this Article 10, to the extent
not
otherwise reimbursed to or recovered by such Party, shall be treated as
Development Costs of such Party to the extent incurred during the Development
Phase, and as Commercialization Costs of such Party to the extent incurred
during the Commercialization Phase.
ARTICLE
11
COVENANTS,
REPRESENTATIONS, AND WARRANTIES
11.1 Mutual
Covenants.
Each
Party covenants the following:
(a) That
it
shall comply, and cause its Affiliates, employees, agents, sublicensees and
subcontractors to comply, with all federal, state, provincial, territorial,
governmental, and local laws, rules, and regulations applicable to the
Development, manufacture, and Commercialization of Products in the Territory
by
such Party pursuant to the Development Plan, the Commercialization Plan, and
this Agreement, including without limitation, with respect to the United States,
the Prescription Drug Marketing Act, the Federal Food, Drug and Cosmetics Act
of
1938, as amended, the Health Insurance Portability and Accountability Act,
the
Federal Anti-Kickback Statute, and any applicable FDA regulations relating
to
sampling practices.
(b) That
it
shall disclose promptly, without delay, to the other Party all information
in
its Control, and as to which it becomes aware, concerning side effects, injury,
toxicity, or sensitivity reaction and incidents or severity thereof with respect
to the Products.
(c) That
it
shall not, and shall cause its Affiliates not to, during the Term, grant,
assign,
transfer, convey or otherwise encumber its right, title and interest in its
respective Patent Rights and Know-How in a manner that conflicts or is
inconsistent with the rights and licenses granted to the other Party under
this
Agreement.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(d) To
the
extent that any of its obligations under this Agreement require performance
or
observance by one or more of its Affiliates, it has made, or shall have made
prior to the time such performance or observance is required, arrangements
with
the relevant Affiliate(s) to cause such obligations to be performed or observed
in accordance with the terms and conditions of this Agreement.
(e) At
no
time during the Term shall its past due and unpaid obligations to Third Parties
in respect of goods or services furnished by such Third Parties to such Party
in
connection with its activities under this Agreement exceed ************ in
the
aggregate.
11.2 Representations
and Warranties of the Parties.
(a) GTC
and
LFB Biotech each represents and warrants to the other that, as of the Effective
Date:
(i) it
is
duly organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation;
(ii) it
has
the authority and right to enter into this Agreement and to perform its
obligations hereunder;
(iii) this
Agreement is a legal and valid obligation binding upon it and is enforceable
in
accordance with its terms, subject to applicable limitations on such enforcement
based on bankruptcy laws and other debtors’ rights;
(iv) its
execution, delivery and performance of this Agreement will not conflict in
any
material fashion with the terms of any other agreement or instrument to which
it
is or becomes a party or by which it is or becomes bound, subject to the terms
of any disclosure that either Party shall have made to the other Party on the
date hereof nor violate any law or regulation of any court, governmental body
or
administrative or other agency having authority over it;
(v) to
its
knowledge, all necessary consents, approvals and authorizations of all
government authorities and other persons required to be obtained as of the
Effective Date in connection with the execution, delivery and performance of
this Agreement have been obtained; and
(vi) neither
its name nor the name of any of its Affiliates or their respective employees
or
consultants who will be undertaking any activities related to this Agreement
or
the Product are listed on the debarment list maintained by the FDA pursuant
to
21 U.S.C. § 335(a) and § 335(b) and published on the internet at the
following address (or any successor address):
http://www.fda.gov/ora/compliance_ref/debar/default.htm.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
11.3 Additional
Representations and Warranties of LFB Biotech.
LFB
Biotech hereby represents and warrants to GTC that, as of the Effective
Date:
(a) There
are
no claims or, to LFB Biotech’s knowledge, written threats of interference,
nullity or similar invalidity proceedings (or the equivalent in countries
outside the United States) pending with respect to the LFB Biotech Patent
Rights;
(b) Neither
LFB Biotech nor any of its Affiliates has previously
granted, assigned, transferred, conveyed or otherwise encumbered its right,
title and interest in the LFB Biotech Technology in a manner that conflicts
or
is inconsistent with the rights and licenses granted to GTC under this
Agreement;
(c) To
the
best of LFB Biotech’s knowledge, LFB Biotech or its Affiliates Controls all
right, title and interest in and to the LFB Biotech Technology, including any
data, materials and animals provided to GTC hereunder, and LFB Biotech has
the
right to grant the rights and licenses granted to GTC hereunder;
and
(d) There
is
no action, claim, demand, suit, proceeding, arbitration, grievance, citation,
summons, subpoena, inquiry or investigation pending or relating to or, to LFB
Biotech’s knowledge, threatened that the LFB Biotech Technology infringes upon
the patent rights or other intellectual property rights of any Third
Party.
11.4 Additional
Representations and Warranties of GTC.
GTC
hereby represents and warrants to LFB Biotech that, as of the Effective
Date:
(a) There
are
no claims or, to GTC’s knowledge, written threats of interference, nullity or
similar invalidity proceedings (or the equivalent in countries outside the
United States) pending with respect to the GTC Patent Rights;
(b) Neither
GTC nor any of its Affiliates has previously
granted, assigned, transferred, conveyed or otherwise encumbered its right,
title and interest in the GTC Technology
in a
manner that conflicts or is inconsistent with the rights and licenses granted
to
LFB Biotech under this Agreement;
(c) To
the
best of GTC’s knowledge, GTC or its Affiliates Controls all right, title and
interest in and to the GTC Technology, including any materials provided to
LFB
Biotech hereunder, and GTC has the right to grant the rights and licenses
granted to LFB Biotech hereunder; and
(d) There
is
no action, claim, demand, suit, proceeding, arbitration, grievance, citation,
summons, subpoena, inquiry or investigation pending or relating to or, to GTC’s
knowledge, threatened that the GTC Technology infringes upon the patent rights
or other intellectual property rights of any Third Party.
11.5 Performance
by Affiliates.
Either
Party may perform some or all of its obligations under this Agreement through
one or more of its Affiliates or sublicensees or subcontractors, provided,
however,
that
such Party shall remain responsible for, and be guarantor of, the performance
by
its Affiliates, sublicensees and subcontractors.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
ARTICLE
12
CONFIDENTIALITY
12.1 Treatment
of Confidential Information.
Except
as provided below, the Parties agree that during the Term, and for a period
of
************ thereafter, each Party (the “Receiving
Party”)
shall
(a) maintain in confidence Confidential Information of the other Party (the
“Disclosing
Party”)
to at
least the same extent and with the same degree of care as the Receiving Party
maintains its own proprietary information of similar kind and value (but at
a
minimum each Party shall use Commercially Reasonable Efforts), including,
without limitation, using Commercially Reasonable Efforts to protect the
integrity and confidentiality of the Disclosing Party’s Confidential
Information, (b) not disclose such Confidential Information to any Third
Party without prior written consent of the Disclosing Party, except for
disclosures made in confidence to any Third Party that are explicitly permitted
by the Development Plan or Commercialization Plan or approved by the JSC, and
(c) not use such Confidential Information for any purpose except those
permitted by this Agreement.
12.2 Exceptions.
Notwithstanding the foregoing, the Receiving Party shall have no such
confidentiality and non-use obligations with respect to any portion of the
Confidential Information of the Disclosing Party that:
(a) at
the
time of disclosure by the Disclosing Party to the Receiving Party, was generally
available to the public, or after such disclosure, becomes generally available
to the public through no fault attributable to the Receiving Party;
or
(b) was
known
to the Receiving Party, without obligation to keep it confidential, prior to
when it was received from the Disclosing Party, as evidenced by the Receiving
Party’s written records in existence at the time of disclosure; or
(c) is
subsequently disclosed to the Receiving Party, without obligation to keep it
confidential, by a Third Party lawfully in possession thereof and having the
right to so disclose; or
(d) as
demonstrated by the Receiving Party by competent written proof, has been
independently developed by employees of the Receiving Party who do not have
access to or knowledge of such Confidential Information.
12.3 Authorized
Disclosures.
Nothing
in this Agreement shall prohibit the Receiving Party from disclosing
Confidential Information of the other Party, as well as the terms and conditions
of this Agreement:
(a) to
the
Receiving Party’s Affiliates, employees, agents, consultants, sublicensees,
clinical investigators, and contract manufacturers, if any, but only on a
need-to-know basis for purposes provided for in this Agreement, provided
that
such disclosure occurs pursuant to a written confidentiality agreement
containing provisions at least as protective as those of this Article
12;
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(b) to
the
Receiving Party’s professional advisors or investors who are bound by a duty of
confidentiality with obligations at least as protective as the provisions of
this Article 12;
(c) to
the
extent required by court order, law, or regulation, provided
that the
Receiving Party provides the other Party prior written notice of the required
disclosure and takes reasonable steps to limit such disclosure to the minimum
required amount and to obtain, or cooperate with the other Party in obtaining,
a
protective order or other similar order requiring that such Confidential
Information be used only for the purposes required by such court order, law,
or
regulation.
12.4 Publicity.
All
publicity, press releases, and other public announcements relating to this
Agreement or the performance hereunder other than publications described in
Section 12.5 shall be reviewed in advance by, and shall be subject to the
written approval of, both Parties (which approval shall not be unreasonably
withheld). Notwithstanding the foregoing, any disclosure which is required
by
law or any listing or securities trading agreement concerning a Party’s publicly
traded securities, based upon advice of the disclosing Party’s counsel, may be
made without the prior consent of the other Party, provided
that
(a) the other Party shall be given prompt notice of any such legally
required disclosure and to the extent practicable the disclosing Party shall
provide the other Party an opportunity to comment on the proposed disclosure
and
in the case of the legally required disclosure of the text of this Agreement,
to
request the redaction of such parts hereof as may be appropriate, which request
shall be transmitted by the disclosing Party to the authority requiring such
disclosure, and (b) such disclosure is limited only to the information that
is required to be disclosed by the applicable foregoing exception. The Parties
will agree upon a press release to announce the execution of this Agreement.
The
press release will be in the form set out in Exhibit
F.
Thereafter, GTC and LFB Biotech may each disclose to Third Parties the
information contained in such press release without the need for further
approval by the other Party. Notwithstanding any of the foregoing, the Parties
acknowledge that GTC shall disclose on a Current Report on Form 8-K the
existence of this Agreement and its material terms within ************ Business
Days after the Effective Date provided such Form 8-K shall contain only the
information set forth in the press release set out in Exhibit F unless LFB
Biotech otherwise agrees in writing, such agreement not to be unreasonably
withheld or delayed.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
12.5 Publication.
(a) Each
Party agrees that it shall not, and shall cause its Affiliates not to, publish
or present to the public the results of non-clinical studies or clinical trials
or other information related to any Product in the Territory without the
opportunity for prior review by the other Party. If a Party (the “Publishing
Party”)
wishes
to publish or to present to the public such results, then it shall provide
the
other Party (the “Non-Publishing
Party”)
the
opportunity to review any of the Publishing Party’s proposed abstracts,
manuscripts or presentations (including verbal presentations) which relate
to
the Product at least ************ prior to its intended submission for
publication and agrees, upon request, not to submit any such abstract or
manuscript for publication until the other Party is given a reasonable period
of
time to secure patent protection for any material in such publication which
it
believes to be patentable. Both Parties understand that a reasonable commercial
strategy may require delay of publication of information or filing of patent
applications. The Parties agree to review and consider delay of publication
and
filing of patent applications under certain circumstances. Neither Party or
its
Affiliates shall have the right to publish or present to the public Confidential
Information of the other Party, except as permitted under Sections 12.2 or
12.3. Nothing contained in this Section 12.5 shall prohibit the inclusion
of information necessary for a patent application, provided that the
non-Publishing Party is given a reasonable opportunity to review the information
to be included prior to submission of such patent application. Notwithstanding
anything to the contrary herein, either Party may disclose information about
the
clinical trials performed or to be performed on Products hereunder, without
the
need to obtain the other Party’s approval (provided,
however,
that
the Publishing Party will use reasonable efforts to inform the other Party
and
to allow the other Party to comment on the disclosure), to the extent that
such
disclosure is reasonably necessary to comply with applicable laws, regulations
and guidelines of Regulatory Authorities.
(b) It
is
understood that a detail of the Product in the Territory shall not be considered
to be publication or presentation to the public and shall therefore not be
subject to the requirements of Section 12.5(a).
12.6 Termination
of Prior Confidentiality Agreements.
This
Agreement supersedes all nondisclosure agreements entered into by the Parties
prior to the Effective Date. All information exchanged between the Parties
that
qualified as confidential or proprietary under such nondisclosure agreements
prior to the Effective Date shall be deemed Confidential Information hereunder
and shall be subject to the terms of this Article 12.
ARTICLE
13
INDEMNIFICATION
13.1 Indemnification
by LFB Biotech.
Unless
otherwise provided herein, LFB Biotech agrees to indemnify, hold harmless and
defend GTC, its Affiliates, and its and their respective directors, officers,
employees and agents (the “GTC
Indemnitees”)
from
any and all liabilities, costs, damages, fines, penalties, amounts paid in
settlement, fees and expenses (including reasonable fees and expenses of legal
counsel) (“Damages”)
arising from an Action by a Third Party (collectively, “Third
Party Claims”)
resulting or alleged to result from, directly or indirectly, any of the
following (each, an “LFB
Biotech Assumed Liability”):
(a) a
breach
by LFB Biotech of a representation, warranty, or covenant made under this
Agreement;
(b) any
negligence or willful misconduct of the LFB Biotech Indemnitees in connection
with their performance of LFB Biotech’s obligations under this
Agreement;
(c) the
practice of the LFB Biotech Technology to manufacture, use, sale, offer for
sale, and/or import Products under this Agreement infringing the Patent Rights
of any Third Party;
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(d) the
infringement of any Third Party Patent Rights by LFB Biotech or its Affiliates
or subcontractors in the manufacture, use, sale, offer for sale, and/or
importation of Products under this Agreement; or
(e) the
manufacture, use, sale, offer for sale and/or importation of the Products by
LFB
Biotech or its Affiliates or subcontractors causing, directly or indirectly,
any
Third Party personal injury or death, possibility of injury or death or economic
loss.
Such
indemnity shall not apply to the extent it is shown that such Third Party Claim
was the result of any GTC Assumed Liability (as defined below) or constitutes
a
Shared Liability Claim.
13.2 Indemnification
by GTC.
Unless
otherwise provided herein, GTC shall indemnify, hold harmless and defend LFB
Biotech, its Affiliates, and its and their respective directors, officers,
employees and agents (the “LFB
Biotech Indemnitees”)
from
any and all Damages arising from any Third Party Claims resulting or alleged
to
result from, directly or indirectly, any of the following (each, a “GTC
Assumed Liability”):
(a) a
breach
by GTC of a representation, warranty, or covenant made under this Agreement;
or
(b) any
negligence or willful misconduct of the GTC Indemnitees in connection with
their
performance of GTC’s obligations under this Agreement;
(c) the
practice of the GTC Technology to manufacture, use, sale, offer for sale, and/or
import Products under this Agreement infringing the Patent Rights of any Third
Party;
(d) the
infringement of any Third Party Patent Rights by GTC or its Affiliates or
subcontractors in the manufacture, use, sale, offer for sale, and/or importation
of Products under this Agreement; or
(e) the
manufacture, use, sale, offer for sale and/or importation of the Products by
GTC
or its Affiliates or subcontractors causing, directly or indirectly, any Third
Party personal injury or death, possibility of injury or death or economic
loss.
Such
indemnity shall not apply to the extent it is shown that such Third Party Claim
was the result of any LFB Biotech Assumed Liability or constitutes a Shared
Liability Claim.
13.3 Procedure.
In the
event of a Third Party Claim against a Party entitled to indemnification under
Section 13.1 or 13.2 hereof (“Indemnified
Party”),
the
Indemnified Party shall promptly notify the other Party (“Indemnifying
Party”)
in
writing of the Third Party Claim and the Indemnifying Party shall undertake
and
solely manage and control, at its sole expense, the defense of the Third Party
Claim and its settlement; provided
that the
omission of such notice shall not relieve either Party from its obligations
under this Section 13.3, except to the extent the other Party can establish
actual prejudice and direct damages as a result thereof. The Indemnified Party
shall cooperate with the Indemnifying Party, including, as requested by the
Indemnifying Party and at the Indemnifying Party’s cost, entering into a joint
defense agreement. The Indemnified Party may, at its option and expense, be
represented in any such action or proceeding by counsel of its choice. The
Indemnifying Party shall not be liable for any litigation costs or expenses
incurred by the Indemnified Party without the Indemnifying Party’s written
consent. The Indemnifying Party shall not settle any such Third Party Claim
unless such settlement fully and unconditionally releases the Indemnified Party
from all liability relating thereto, unless the Indemnified Party otherwise
agrees in writing.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
13.4 Shared
Liability Claims.
(a) Allocation.
If any
Third Party Claim is made that (A) the manufacture, use, sale, offer for sale,
and/or importation of Products under this Agreement infringes the Patent Rights
of any Third Party, or (B) the use of the Products has caused, directly or
indirectly, any Third Party personal injury or death, possibility of injury
or
death or economic loss and such Third Party Claim does not constitute an LFB
Biotech Assumed Liability or a GTC Assumed Liability, then such Third Party
Claim shall be considered a “Shared
Liability Claim”.
GTC
and LFB Biotech shall each be liable for ************ of all Damages incurred
by
the Parties or their respective Affiliates or any of them arising from any
Shared Liability Claim. All such claims, actions, suits, proceedings, hearings,
investigations and demands shall be governed exclusively by this Section 13.4
and, except as expressly set forth in this Section 13.4, neither Party shall
seek from the other Party any indemnity or other recovery on account of any
such
claims.
(b) Procedure.
Each
Party shall give the other Party prompt written notice of any Shared Liability
Claim, but the omission of such notice shall not relieve either Party from
its
obligations under this Section 13.4, except to the extent the other Party
can establish actual prejudice and direct damages as a result thereof. The
Parties shall collaborate in good faith to defend any Shared Liability Claim
in
accordance with this Section 13.4 and no settlement shall be entered into
without the approval of both Parties, such approval not to be unreasonably
withheld or delayed. Any costs incurred by a Party in defense of a Shared
Liability Claim shall be treated as the Development Costs of such
Party.
(c) Reconciliation.
Within
************ following the end of each calendar quarter during which any Shared
Liability Claim has been pending, each Party shall provide to the JSC a written
statement of all Damages incurred by such Party or its Affiliates in connection
with such claim (“Unsettled
Shared Damages”).
************ of any Unsettled Shared Damages shall be allocated to each Party
as
the Development Costs of such Party.
(d) Exception.
For
purposes of clarity, the obligations of each Party to indemnify the other Party
under a Commercial License executed in accordance with Section 8.2(c)(ii) shall
be governed by the terms of the Commercial License and shall not be governed
by
this Article 13 unless otherwise specifically agreed.
13.5 Effect
of Disclosures.
Notwithstanding any disclosure, whether in oral, written, electronic or other
form, made by either Party under the representation and warranty in Section
11.2(a)(iv) hereof, such Party’s indemnity obligations under this Agreement and
the other Party’s remedies shall remain in full force and effect as if such
representation and warranty were unqualified in any way.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
13.6 Insurance.
Each
Party shall procure and maintain insurance, including product liability
insurance, naming the other Party as an additional insured, adequate to cover
its obligations hereunder and which is consistent with normal business practices
of prudent corporations similarly situated at all times during which the Product
is being clinically tested with human subjects or commercially distributed
or
sold. The Parties acknowledge and agree that such insurance shall not be
construed to create a limit of either Party’s liability with respect to its
indemnification obligations under this Article 13. Each Party shall provide
the
other with written evidence of such insurance upon request. Each Party shall
provide the other with written notice at least ************ prior to the
cancellation, non-renewal or material change in such insurance.
ARTICLE
14
TERM
AND TERMINATION
14.1 Term.
(a Collaboration
Term.
Unless
earlier terminated in accordance with the terms of this Article 14, the term
of
this Agreement shall commence on the Effective Date and expire on the fifteenth
(15th)
anniversary thereof (the “Initial
Collaboration Term”).
At
least ************ prior to the expiration of the Initial Collaboration Term,
the Parties shall mutually determine whether to (i) extend the collaboration
to
continue adding new Products in accordance with Section 2.1, or (ii) if no
Product Term is then in effect, allow the Agreement to expire by its terms.
In
any event, the collaboration under this Agreement shall be continued with
respect to those Products, if any, for which the Product Term thereof is still
in effect and shall continue for such purposes until the last to expire of
such
Product Terms. The Initial Collaboration Term, together with any extension
or
continuation thereof as provided in this Section 14.1, is referred to herein
as
the “Collaboration
Term”.
(b) Product
Term.
(i) Unless
earlier terminated in accordance with this Agreement, the initial term of this
Agreement with respect to each Product shall commence on the applicable Product
Start Date and end on the later of (a) the ************ anniversary of the
Effective Date, and (b) the date that is ************ years following the date
of the last Regulatory Approval for such Product in any country in the
Territory. The initial Product term for any Product as set forth in this Section
14.1(b) is referred to herein as the “Base
Product Term”.
(ii) The
Parties shall begin discussing in good faith an extension of the Base Product
Term for each Product on or about the date that is ************ prior to the
end
of such Base Product Term. Any extension of the Base Product Term must be agreed
upon by the date that is ************ prior to the date upon which the Base
Product Term of such Product shall expire, or this Agreement shall terminate
with respect to such Product on such date. The Base Product Term with respect
to
any Product, together with any extension agreed by the Parties in accordance
with this Section 14.1(b)(ii), is referred to herein as the “Product
Term”.
(c) Upon
expiration of the Product Term with respect to any Product, all rights and
licenses granted hereunder with respect to such Product shall terminate and
neither Party shall have any obligations to the other Party with respect to
such
Product, except to the extent such obligations were incurred prior to such
expiration; provided,
however,
that in
the case of a Product then in use for the treatment of human patients, the
Parties shall, under the guidance of the JSC, which shall continue to exist
for
such purposes following such expiration, use Commercially Reasonable Efforts
to
continue to exercise such responsibilities as shall ensure the continued
availability of the Product to patients, including continued licensing and
supply arrangements, subject to commercially reasonable compensation as the
JSC
shall determine.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
14.2 Termination
Rights.
(a) Termination
of a Product Term Without Fault.
The
Product Term with respect to a Product may be terminated without fault under
the
following circumstances:
(i) at
any
time by the mutual consent of the Parties;
(ii) with
no
further action required on the part of either Party if the JSC determines that
it is not commercially viable to proceed with Development or Commercialization
of such Product;
(iii) by
either
Party upon ************ written notice to the other Party if, after commencing
Development of a Product, the JSC fails to agree on a subsequent Development
Plan or Commercialization Plan for such Product in accordance with Section
5.1
or 6.1 after such matter has been submitted to Senior Management and to
mediation for resolution in accordance with Section 4.6 (for the avoidance
of
doubt, such matters shall not be subject to arbitration pursuant to Section
15.2); provided,
that if
any such failure to agree occurs within a ************ period following a Change
of Control of a Party and is not resolved through mediation in accordance with
Section 4.6 such failure to agree shall be deemed a material breach permitting
the other Party to terminate the relevant Product Term immediately on written
notice to the Party subject to the Change of Control unless the Party subject
to
the Change of Control can demonstrate that the failure to agree was caused
by
the other Party’s having negotiated in bad faith (for the avoidance of doubt,
the Party subject to the Change of Control may submit the question of whether
the other Party acted in bad faith to arbitration in accordance with Section
15.2 and in such event such termination shall not be effective unless and until
a final decision is rendered in the other Party’s favor in such arbitration
proceeding); and
(iv) In
the
event of a Force Majeure event as provided in Section 16.9.
(b) Termination
of a Product Term for Material Breach.
Either
Party may terminate the Product Term with respect to a Product upon ************
written notice for (i) the other Party’s material breach of any material
obligation under this Agreement with respect to such Product, including without
limitation, (A) any disclosure requirements with respect to Competing Products
or with respect to an Alliance Affecting Core Business, (B) the failure to
achieve any express Development and Commercialization milestone set forth in
the
applicable Development Plan and Commercialization Plan, which failure is
************, and (C) the obligation to make any undisputed Profit Payment
required under Section 8.3, or (ii) a deemed material breach by the other Party
following a Change of Control of such other Party pursuant to Section
6.4(b)(ii), in each case (i) and (ii) which breach is not cured during such
************.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(c) Termination
of Agreement Without Fault.
This
Agreement may be terminated in its entirety without the fault of either Party
under the following circumstances:
(i) at
any
time by the mutual consent of the Parties; or
(ii) by
either
Party upon ************ written notice to the other Party at any time after
the
************ of the Effective Date if at the time of delivery of such notice
no
Products (including the Initial Product) are then being Developed or
Commercialized by the Parties under this Agreement and no Products are listed
on
the Product List attached as Exhibit
A
for
Development or Commercialization hereunder.
(d) Termination
of Agreement for Insolvency Event.
A Party
may terminate this Agreement in its entirety on ************ notice to the
other
Party upon the occurrence of an Insolvency Event with respect to such other
Party.
(e) Termination
of Agreement in case of Alliance Affecting Core Business, Change of Control
or
Core Business Competitor Equity Acquisition.
(i) If
one
Party or its Affiliate proposes to enter into an Alliance Affecting Core
Business, it shall disclose such Alliance Affecting Core Business to the other
Party and if the disclosing Party or its Affiliate does enter into such an
Alliance Affecting Core Business the other Party shall have the rights to (A)
terminate this Agreement upon ************ prior written notice to the Party
which itself or whose Affiliate is entering into such Alliance Affecting Core
Business, or (B) if the disclosing Party’s Affiliate enters into the Alliance
Affecting Core Business, in lieu of terminating this Agreement, to immediately
terminate this subsection 14.2(e)(i) with respect to itself and its Affiliates
upon written notice and in the event of such termination shall no longer be
subject to the restrictions set forth in this Section 14.2(e)(i);
provided
that the
foregoing termination rights shall not apply if (A) such Party, before it or
its
Affiliate enters into such Alliance Affecting Core Business, shall have
************. The Party proposing to enter into an Alliance Affecting Core
Business shall not be required to disclose to the other Party (x) the identity
of the Third Party with whom it or its Affiliate proposes to enter into such
Alliance Affecting Core Business or (y) the product(s) proposed to be developed
or commercialized in such Alliance Affecting Core Business, other than in
general terms sufficient to demonstrate that such product(s) are within the
description of the other Party’s Core Business and Compete with the other
Party’s Core Business Product(s).
(ii) If
a
Change of Control occurs with respect to a Party or the relevant Affiliate
and
the Third Party obtaining control of such Party or the relevant Affiliate is
not
a Core Business Competitor of the other Party, and if after the Change of
Control such Party does not propose any products for Development or
Commercialization under this Agreement during the ************ period
immediately following the effective date of such Change of Control, then the
other Party shall have the right to terminate this Agreement in its entirety
upon ************ prior written notice.
(iii) If
a
Change of Control occurs with respect to a Party or the relevant Affiliate
and
the Third Party obtaining control is a Core Business Competitor of the other
Party or if a Core Business Competitor Equity Acquisition occurs with respect
to
a Party or the relevant Affiliate, then the other Party shall have the right
to
terminate this Agreement in its entirety upon ************ prior written
notice.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(f) Termination
of Agreement if Two Products Subject to Termination for Material
Breach.
If a
Party has the right to terminate two or more Products for the other Party’s
material breach pursuant to Section 14.2(b), then whether or not such Party
has
exercised such right (unless such Party has expressly waived in writing such
right with respect to one or more Products), such Party shall have the right
to
terminate this Agreement in its entirety upon ************ prior written notice
to the other Party, unless within such ************ period all material breaches
which gave rise to the right of termination of such Products are
cured.
(g) Termination
of Agreement if LFB Biotech in Default of Stock and Note Purchase Agreement
Obligations.
GTC
shall have the right to terminate this Agreement in its entirety upon
************ prior written notice upon any failure by LFB Biotech to meet any
of
its funding obligations under the Stock and Note Purchase
Agreement.
(h) Termination
for Default of Covenant Under Section 11.1(e).
If a
Party fails to perform its undertaking set forth in Section 11.1(e) (as reported
pursuant to Section 8.3(a)) for ************, then the other Party shall have
the right to terminate this Agreement in its entirety upon ************ prior
written notice to the Party in default, unless within such ************ period
such Party has reduced the amounts past due and unpaid referred to in Section
11.1(e) to no more than ************; provided, that if the other Party does
not
provide written notice of such termination within ************ after receipt
of
the applicable report under Section 8.3(a), it shall be deemed to have
irrevocably waived its termination right with respect to that particular failure
but not with respect to any subsequent failure to perform under Section
11.1(e).
14.3 Effects
of Termination.
(a) Termination
of Product Term without Fault.
If a
Product Term is terminated pursuant to Section 14.2(a)(i) (mutual
agreement),
Section 14.2(a)(ii) (JSC
decision),
Section 14.2(a)(iii) (JSC
unable to agree on Development Plan or Commercialization Plan)
(but
excluding a termination for any deemed material breach under the proviso
thereof, the effect of which shall be determined in accordance with Section
14.3(c)) or Section 14.2(a)(iv) (Force
Majeure),
such
termination shall have the following effects:
(i) Such
Product shall be removed from the Product List attached as Exhibit
A
and
shall no longer be subject to this Agreement.
(ii) If
the
Product is in the Commercialization Phase:
(A) all
licenses
granted to GTC hereunder with respect to such Product will become exclusive,
irrevocable, perpetual licenses with respect to the North American Territory
and
such part of the Co-Exclusive Territory as to which GTC or any Affiliate of
GTC
had previously been granted an exclusive or co-exclusive license in respect
of
such Product, bearing an aggregate royalty as set forth in 14.3(a)(v) below;
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(B) all
licenses
granted to LFB Biotech hereunder with respect to such Product will become will
become exclusive, irrevocable, perpetual licenses with respect to the European
Territory and such part of the Co-Exclusive Territory as to which LFB Biotech
or
any Affiliate of LFB Biotech had previously been granted an exclusive or
co-exclusive license in respect of such Product, bearing an aggregate royalty
as
set forth in 14.3(a)(v) below;
(C) with
respect to
such remaining part of the Co-Exclusive Territory as shall not be subject to
an
exclusive license in favor of GTC or LFB Biotech, the Originating Party of
such
Product shall be granted an exclusive license in respect of such remaining
part
of the Co-Exclusive Territory, bearing an aggregate royalty as set forth in
14.3(a)(v) below, such license to be of the same scope as the exclusive licenses
described in subsections (A) or (B) above, as applicable and
(D) if
a Party was
manufacturing and supplying or was required to manufacture and supply such
Product to the other Party as of the date of termination, it shall continue
to
do so at ************ until the earlier of (x) ************ years following
termination and (y) such time as the Continuing Party has established a
satisfactory alternative supply of such Product.
(iii) If
the
Product is in the Development Phase and Phase II Trials have commenced with
respect to such Product, then:
(A) the
Originating Party shall be deemed the “Continuing
Party”
with
respect to such Product, provided
that the
Originating Party shall promptly notify the non-Originating Party in writing
in
the event that the Originating Party decides not to continue to pursue the
development or commercialization of such Product. The non-Originating Party
shall have the right, to be exercised within ************ after receiving such
notice, to notify the Originating Party in writing whether the non-Originating
Party wishes to pursue the development and commercialization of such Product.
If
the non-Originating Party timely notifies the Originating Party that the
non-Originating Party desires to develop and commercialize the Product, the
non-Originating Party shall become the Continuing Party with respect to such
Product. If the non-Originating Party notifies the Originating Party that the
non-Originating Party does not wish to develop and commercialize the Product,
or
does not timely provide notice, the Originating Party shall remain the
Continuing Party with respect to such Product;
(B) all
licenses from the Continuing Party to the non-Continuing Party with respect
to
such Product shall terminate;
(C) all
licenses from the non-Continuing Party to the Continuing Party with respect
to
such Product shall continue in effect but shall become perpetual exclusive
licenses (subject to subsection (A) above) with respect to the entire Territory,
bearing an aggregate royalty as set forth in Section 14.3(a)(v) below;
(D) until
the
earlier of (x) ************ following termination and (y) such time as the
Continuing Party has established an alternative supply of such Product, if
the
non-Continuing Party was manufacturing and supplying or was contemplated to
manufacture and supply such Product, it shall continue to manufacture and supply
such Product to the Continuing Party at ************;
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(E) the
non-Continuing Party shall grant the Continuing Party a perpetual (subject
to
subsection (A) above), non-exclusive, royalty-bearing license (such royalty
to
be included in the royalty set forth in Section 14.3(a)(v) below) under the
non-Continuing Party’s technology and Know-How to the extent reasonably
necessary to manufacture such Product, with the right to sublicense to Third
Parties engaged by the Continuing Party to manufacture such Product for the
Continuing Party; and
(F) the
non-Continuing Party shall return to the Continuing Party all Know-How and
Confidential Information of the Continuing Party then in the non-Continuing
Party’s possession that is solely related to the terminated
Product.
(iv) If
the
Product is in the Development Phase but Phase II Trials have not commenced
with
respect to such Product, then the non-Originating Party in respect of such
Product shall have the right to elect in writing within either to (x) be treated
in accordance with Section 14.3(a)(iii) above or (y) receive from the
Originating Party a payment in cash (the “IPV
Payment”)
equal
to ************ of such non-Originating Party’s IPV with respect to such Product
as of the date of termination as calculated in accordance with the Product
Participation Model. If the non-Originating Party elects to receive the IPV
Payment:
(A) the
Originating Party shall pay the non-Originating Party the IPV Payment within
************ of receipt of the non-Originating Party’s written notice of such
election;
(B) all
licenses from the non-Continuing Party to the Continuing Party with respect
to
such Product shall continue in effect but shall become perpetual exclusive
licenses with respect to the entire Territory, bearing a commercially reasonable
royalty to be determined by the Parties through good faith negotiations within
************ after such termination; provided,
that if
the Parties are unable to agree upon such royalties within such ************,
then the matter shall be resolved through dispute resolution in accordance
with
Section 14.3(d);
(C) the
non-Continuing Party shall grant the Continuing Party a perpetual,
non-exclusive, royalty-bearing license (such royalty to be included in the
royalty calculation under subsection (iv)(B) above) under the non-Continuing
Party’s technology and Know-How to the extent reasonably necessary to
manufacture such Product, with the right to sublicense to Third Parties engaged
by the Continuing Party to manufacture such Product for the Continuing Party;
and
(D) the
provisions of Sections 14.3(a)(iii)(B), (D), and (F) shall apply with respect
to
such terminated Product.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(v) The
royalty to be paid to a Party in respect of the licenses granted to such Party
under Sections 14.3(a)(ii)(A),(B) and (C) or 14.3(a)(iii)(C) above shall be
an
************ for all such licenses in respect of the relevant Product and shall
be determined by the Parties through good faith negotiations within ************
after such termination in such manner as the amount received by each Party
through the payment of such royalties will be ************, it being agreed
by
the Parties that the then most recent Development and/or Commercialization
Plans
with respect to such Product shall be accepted as a reference in determining
such royalty. If GTC and LFB Biotech are unable to agree on such royalties
within such ************ period, then the matter shall be resolved through
dispute resolution in accordance with Section 14.3(d).
(b) Termination
of Agreement Without Fault or Insolvency Event.
(i) If
this
Agreement is terminated in its entirety pursuant to Section 14.2(c)(i)
(mutual
agreement),
Section 14.2(d) (Termination
of Agreement for Insolvency Event)
or
Section 14.2(e) (Termination
of Agreement in case of Change of Control, Alliance Affecting Core Business
or
Core Business Competitor Equity Acquisition),
then
the provisions of Section 14.3(a) shall be applicable with respect to each
of
the Products then under Development or Commercialization.
(ii) If
this
Agreement is terminated in its entirety pursuant to Section 14.2(c)(ii)
(no
Products in Development or Commercialization after three years)
then
all licenses granted hereunder by either Party shall immediately terminate
and
each Party shall promptly return to the other Party all Know-How and
Confidential Information of the other Party then in such Party’s
possession.
(c) Termination
for Fault.
If the
Product Term with respect to a Product is terminated under Section 14.2(b)
(material
breach)
(including for the avoidance of doubt a deemed material breach in accordance
with subsection (ii) thereof or in accordance with Section 14.2(a)(iii)), or
this Agreement is terminated in its entirety under Section 14.2(f)
(Termination of the Agreement if two Products subject to Termination for
Breach),
14.2(g)
(Failure
of LFB Biotech to Meet Funding Obligations under Stock and Note Purchase
Agreement)
or
14.2(h) (Default
of Covenant under Section 11.1(e))
then:
(i) all
rights and licenses granted by the terminating Party to the terminated Party
hereunder, or with respect to the terminated Product, as the case may be, shall
terminate (provided
that,
subject to the terms and conditions of this Agreement, the terminated Party
may
continue to sell off its existing inventory of Products on hand as of the
effective date of termination, and may fill any orders for Products accepted
prior to the effective date of termination, provided that such orders are filled
within ************ after the effective date of termination);
(ii) all
rights and licenses granted by the terminated Party to the terminating Party
hereunder with respect to any Products then being Developed or Commercialized,
or with respect to the terminated Product, as the case may be, shall remain
in
effect, but shall convert to exclusive (in the terminating Party’s exclusive
Territory hereunder, including those countries or regions of the Co-Exclusive
Territory that are exclusively designated to such Party or its Affiliates by
the
JSC) and non-exclusive (in the rest of the Territory), worldwide, irrevocable,
perpetual and royalty-free licenses;
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(iii) the
terminated Party shall return to the terminating Party all Know-How and
Confidential Information of the terminating Party then in the terminated Party’s
possession that is solely related to the terminated Product(s);
(iv) to
the
extent legally permissible, the terminated Party shall transfer to the
terminating Party ownership, possession and control of all Regulatory Filings
prepared by and Regulatory Approvals held by the terminated Party or its
Affiliates that solely relate to the terminated Product(s), together with copies
of all correspondence and conversation logs with Regulatory Authorities relating
thereto, and copies of all data, reports, records and materials in the
terminated Party’s or its Affiliates’ possession that solely relate to the use,
sale, offer for sale or importation of the terminated Product(s), including
all
non-clinical, pre-clinical and clinical data relating thereto;
(v) the
terminated Party shall grant the terminating Party a fully paid, non-exclusive,
royalty-free, worldwide, irrevocable, perpetual license to use in the
manufacture of the terminated Product(s) any technology or Know-How Controlled
by the terminated Party or its Affiliates that is reasonably necessary for
the
manufacture of such Product(s);
(vi) if
the
terminated Party is a Trademark Owner then the terminated Party shall assign
the
relevant Product Trademark(s) of which it is the Trademark Owner, together
with
all goodwill associated therewith, to the terminating Party;
(vii) to
the
extent the terminated Party was manufacturing and supplying the terminated
Product(s) to the terminating Party, the terminated Party shall continue to
manufacture and supply such Product(s) to the terminating Party at ************
until the earlier of (x) ************ following termination and (y) such time
as
the Continuing Party has established a satisfactory alternative supply of such
Product; provided,
that
the terminating Party shall use good faith reasonable efforts to establish
a
manufacturing site for such Product as soon as reasonably practicable following
the date of termination;
(viii) the
terminated Party agrees to use best efforts (subject to any legal and regulatory
constraints) to transfer the manufacture of the terminated Product(s) (including
any transgenic mammals it owns or controls and that are used in the production
of the terminated Product(s)) to the terminating Party or a Third Party
designated by the terminating Party as soon as possible following such
termination; and
(ix) the
terminated Party shall provide at cost to the terminating Party reasonable
technical support with respect to the manufacture of the terminated Product(s)
as reasonably requested by the terminating Party for a period not to exceed
************ from the effective date of termination.
(d) Disputes
Regarding the Calculation of Royalties.
If GTC
and LFB Biotech are unable to agree on the royalties to be paid under
subsections (a)(iv)(B), (a)(v) or (c)(ii) of this Section 14.3 within the
negotiation period provided therein, then, at the request of either of the
Parties, the matter shall be submitted to non-binding mediation by a mutually
agreed independent third party knowledgeable as to the matter(s) in dispute
who
shall render his/her decision within ************. If both Parties do not accept
the decision of such mediator within ************ after such decision having
been rendered, or if the Parties have not agreed on a mediator within
************ after a request for mediation, then, subject to the rights and
obligations of the Parties under this Agreement, the matter shall be referred
to
arbitration as described in Section 15.2.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
14.4 Survival;
Accrued Rights.
The
rights and obligations of the Parties under the following provisions of this
Agreement shall survive any expiration or any termination of this Agreement
in
its entirety or with respect to any Product: Sections 1, 7.3, 7.4(e), 8.3(c)
(with respect to final reports and Profit Payments), 8.4, 8.5, 8.6 and 8.7
(in
each case 8.5, 8.6 and 8.7, with respect to post-expiration or post-termination
payment and accounting obligations), 12.1, 12.2, 12.3, 12.5, 13.1, 13.2, 13.3,
13.4, 13.5, 14.3, 14.4, 14.5, 15.2, 16.3, 16.4, 16.5, 16.6, 16.7, 16.8, 16.10,
16.11, 16.12, 16.13 and 16.14. In any event, expiration or termination of this
Agreement shall not relieve the Parties of any liability which accrued hereunder
prior to the effective date of such expiration or termination nor preclude
either Party from pursuing all rights and remedies it may have hereunder or
at
law or in equity with respect to any breach of this Agreement.
14.5 Effect
of Termination on Sublicenses.
If this
Agreement is terminated in the entirety or with respect to a particular Product,
as the case may be, and a given sublicense granted by the terminated Party
is in
force and effect on the date of such termination, then any Patent Rights and/or
Know-How of the terminating Party sublicensed by the terminated Party to the
sublicensee shall automatically become directly licensed from the terminating
Party to such sublicensee under the terms and conditions of this Agreement
with
respect to the applicable Product(s), which license shall be of the same scope
licensed to the sublicensee, provided
that the
sublicensee (a) agrees in writing to be bound to the terminating Party under
the
terms and conditions of this Agreement, (b) is not in breach of the relevant
sublicense and (c) agrees to thereafter make all reports and payments due under
this Agreement with respect to the applicable Product(s) directly to the
terminating Party or its designee; provided,
that
the terminating Party will not be required to assume any obligations broader
in
scope than it has under this Agreement.
ARTICLE
15
DISPUTE
RESOLUTION
15.1 Disputes.
Except
as otherwise set forth in this Agreement, in the event of any dispute,
controversy or claim arising out of or relating to this Agreement, or the
breach, termination or invalidity thereof (a “Dispute”),
either Party may promptly, upon written notice to the other Party, refer such
Dispute to the respective Senior Management, and such Senior Management shall
attempt in good faith to resolve such Dispute. If the Parties are unable to
resolve a given Dispute pursuant to this Section 15.1 within ************ after
referring such Dispute to the Senior Management, either Party may elect to
resolve such Dispute in accordance with Section 15.2, to the exclusion of other
remedies.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
15.2 Arbitration.
(a) Subject
to Section 15.1 and except as otherwise expressly provided in this Agreement,
any dispute, claim or controversy relating to, arising out of, or in connection
with this Agreement, including any question regarding its formation, existence,
validity, enforceability, performance, interpretation, breach, or termination,
shall be finally resolved under the rules of the London Court of International
Arbitration by a panel of three arbitrators appointed in accordance with such
rules and having relevant legal or business experience. Each Party shall
nominate one such arbitrator, and the two arbitrators so nominated shall
nominate the third. The place of arbitration shall be London, England. The
language of the arbitration shall be English. The arbitrators shall be empowered
to order production of all documents reasonably calculated to lead to
information or other documents relevant to such proceeding. Each Party shall
bear the fees and expenses of its legal representation in the arbitration.
Judgment upon the arbitrators’ award may be entered in any court of competent
jurisdiction. The award of the arbitrators may include compensatory damages
but
under no circumstances will the arbitrators be authorized to, nor shall they,
award punitive damages or multiple damages against either Party, except to
the
extent consistent with Section 16.5, and the Parties expressly waive the right
to assert claims for punitive damages or multiple damages.
(b) Nothing
in this Article shall prevent any Party, whether before or during the pendancy
of an arbitration under this Article, from seeking conservatory and interim
measures, including, but not limited to temporary restraining orders or
preliminary injunctions, or their equivalent, from any court of competent
jurisdiction. Further, notwithstanding anything to the contrary in this Article
15, without resort to arbitration in the first instance, either Party shall
have
the right to bring suit in a court of competent jurisdiction against the other
Party for (i) any breach of such other Party’s duties of confidentiality
pursuant to Article 12 of this Agreement, or (ii) any infringement of its own
Patent Rights or other proprietary rights by such other Party.
ARTICLE
16
MISCELLANEOUS
16.1 Actions
by Affiliates.
In the
event an Affiliate of a Party fails to perform any obligation or comply with
any
provision hereunder that requires performance or compliance by such Affiliate
and such failure to perform or comply would constitute or be deemed a breach
of
the relevant obligation or provision of this Agreement if such Affiliate were
the relevant Party, such failure to perform or comply shall be deemed a breach
of such obligation or provision by the relevant Party. In the event of any
failure of an Affiliate of a Party to perform or comply with an applicable
obligation hereunder, the other Party shall provide notice of such failure
to
the Party whose Affiliate failed to perform, in accordance with Section
16.7.
16.2 Assignment.
Neither
Party may assign this Agreement or any rights or obligations hereunder without
the prior written consent of the other Party, such consent not to be
unreasonably withheld, and any attempted assignment without such consent shall
be null and void. Notwithstanding the foregoing, either Party may assign this
Agreement or all of its rights and obligations hereunder in connection with
(a)
a merger or acquisition or a sale of substantially all of such Party’s assets to
which this Agreement relates, or (b) to an Affiliate that Controls such Party
in
connection with a transfer to such Controlling Affiliate of substantially all
of
such Party’s assets to which this Agreement relates. This Agreement shall be
binding upon and, subject to the other terms of this Section 16.2, inure to
the
benefit of the Parties’ successors and permitted assigns and each Party shall
cause any successor or permitted assign to agree in writing to be bound by
the
terms and conditions hereof.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
16.3 Governing
Law.
This
Agreement shall be construed and interpreted in accordance with the laws of
the
State of New York, USA, without regard to any conflicts of law principles that
would provide for the application of the laws of another jurisdiction and
excluding (a) the United Nations Convention on Contracts for the International
Sale of Goods, (b) the 1974 Convention on the Limitation Period in the
International Sale of Goods; and (c) the Protocol amending the 1974 Convention,
done at Vienna April 11, 1980. The foregoing notwithstanding, the Parties
acknowledge and agree that any arbitration proceeding pursuant to Article 15
shall be subject to the procedural laws of England and Wales.
16.4 Non-Waiver.
The
waiver by either of the Parties of any breach of any provision hereof by the
other Party shall not be construed to be a waiver of any succeeding breach
of
such provision or a waiver of the provision itself.
16.5 Disclaimer
of Indirect Damages.
NEITHER
PARTY WILL BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY
(PUNITIVE), MULTIPLE DAMAGES OR OTHER INDIRECT DAMAGES (INCLUDING, WITHOUT
LIMITATION, LOST PROFITS) ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY
BREACH HEREOF, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES. NOTWITHSTANDING THE
FOREGOING, NOTHING IN THIS SECTION 16.5 IS INTENDED TO LIMIT OR RESTRICT
(a) ANY RIGHTS OR REMEDIES OF EITHER PARTY WITH RESPECT TO A BREACH OF
ARTICLE 12 BY THE OTHER PARTY, OR (b) THE INDEMNIFICATION RIGHTS OR
OBLIGATIONS OF EITHER PARTY WITH RESPECT TO THIRD PARTY CLAIMS UNDER SECTIONS
14.1, 14.2 AND 14.3.
16.6 Severability.
If and
to the extent that any court or tribunal of competent jurisdiction holds any
of
the terms or provisions of this Agreement, or the application thereof to any
circumstances, to be invalid or unenforceable in a final nonappealable order,
the Parties shall use their best efforts to reform the portions of this
Agreement declared invalid to realize the intent of the Parties as fully as
practical, and the remainder of this Agreement and the application of such
invalid term or provision to circumstances other than those as to which it
is
held invalid or unenforceable shall not be affected thereby, and each of the
remaining terms and provisions of this Agreement shall remain valid and
enforceable to the fullest extent of the law.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
16.7 Notice.
Any
notice or other communication required or permitted hereunder shall be in
writing and shall be deemed given (a) when delivered personally, (b) on the
next
business day after timely delivery to an overnight courier (postage prepaid),
or
(c) on the third business day after deposit in the United States mail (certified
or registered mail return receipt requested, postage prepaid), as
follows:
|
To
LFB Biotech:
|
To
GTC:
|
| |
|
|
LFB-Biotechnologies
|
GTC
Biotherapeutics, Inc.
|
|
3,
avenue des Tropiques
|
175
Crossing Boulevard
|
|
91958
Courtaboeuf Cedex - France
|
Framingham,
MA 01702
|
| |
|
|
Attention:
Président
|
Attention:
CEO and General Counsel
|
|
Facsimile:
+33 (0) 1 69 82 72 67
|
Facsimile:
1 (508) 370-3797
|
| |
|
|
with
a copy to:
|
|
| |
|
|
Laboratoire
Francais du Fractionnement
|
|
|
et
des Biotechnologies
|
|
|
3,
avenue des Tropiques
|
|
|
91958
Courtaboeuf Cedex - France
|
|
| |
|
|
Attention:
Président Directeur Général
|
|
|
Facsimile:
+33 (0) 1 69 82 72 67
|
|
or
to
such other address as to which the Party has given written notice thereof.
For
the avoidance of doubt, GTC shall send a copy of any notice with respect to
a
default by LFB Biotech of its obligations hereunder (including without
limitation any failure of an Affiliate of LFB to perform or comply with an
applicable obligation hereunder) to LFB SA at the time such notice is sent
to
LFB Biotech; provided,
that
the failure of GTC to send such copy to LFB SA shall not relieve LFB Biotech
from its obligations and liabilities hereunder or LFB SA from its obligations
and liabilities under the Keepwell Agreement or diminish in any way the remedies
available to GTC under this Agreement, the Keepwell Agreement or otherwise,
with
respect to the applicable default.
16.8 Headings.
The
headings appearing herein have been inserted solely for the convenience of
the
Parties and shall not affect the construction, meaning or interpretation of
this
Agreement or any of its terms and conditions.
16.9 Force
Majeure.
No
failure or omission by the Parties in the performance of any obligation of
this
Agreement shall be deemed a breach of this Agreement nor shall it create any
liability if the same shall arise from any cause or causes beyond the reasonable
control of the affected Party, including, but not limited to, the following,
which for purposes of this Agreement shall be regarded as beyond the control
of
the Party in question: acts of nature; acts or omissions of any government;
any
rules, regulations, or orders issued by any governmental authority or by any
officer, department, agency or instrumentality thereof; fire; storm; flood;
earthquake; accident; war; rebellion; insurrection; riot; invasion; terrorism;
strikes; and lockouts or the like; provided
that the
Party so affected shall use its best efforts to avoid or remove such causes
of
nonperformance and shall continue performance hereunder with the utmost dispatch
whenever such causes are removed. The
obligations of each Party hereunder shall be deemed to be suspended until the
effects of the Force Majeure are relieved.
If
however, such cause or causes are not removed or discontinued within
************
of the
commencement thereof, and
the
failure to remove them affects the performance of a material obligation of
a
Party hereunder with respect to a Product, the other Party
may
terminate the Product Term with
respect to the applicable Product upon written notice to the affected
Party.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
16.10 Entire
Agreement.
This
Agreement, including the Exhibits hereto, constitutes the entire
understanding between the Parties with respect to the subject matter contained
herein and supersedes any and all prior agreements, understandings and
arrangements whether oral or written between the Parties relating to the subject
matter hereof. This Agreement will control in the event of any conflict between
this Agreement and any Development Plan or between this Agreement and any
Commercialization Plan.
16.11 Amendments.
No
amendment, change, modification or alteration of the terms and conditions of
this Agreement shall be binding upon either Party unless in writing and signed
by the Party to be charged.
16.12 Independent
Contractors and Relationship of the Parties.
It is
understood that both Parties are independent contractors and engage in the
operation of their own respective businesses, and neither Party is to be
considered the agent or partner of the other Party for any purpose whatsoever,
except as otherwise expressly provided in this Agreement. Neither Party has
any
authority to enter into any contracts or assume any obligations for the other
Party or make any warranties or representations on behalf of the other Party.
Without limiting the generality of the foregoing, neither Party shall be liable
for any obligations of the other Party to such other Party’s subcontractors,
sublicensees or other third parties with whom such other Party has contracted
in
connection with the performance of its obligations hereunder. Furthermore,
nothing in this Agreement or the transactions contemplated hereby shall be
construed as creating a partnership among the Parties, including without
limitation for tax purposes.
16.1 Exhibits.
All
Exhibits to this Agreement are part of this Agreement.
16.14 No
Strict Construction.
This
Agreement has been prepared jointly and shall not be strictly construed against
either Party.
16.15 Recording.
Each
Party shall have the right, at any time, to record, register or otherwise notify
this Agreement in appropriate governmental or regulatory offices anywhere in
the
Territory, and GTC or LFB Biotech, as the case may be, shall provide reasonable
assistance to the other in effecting such recordal, registration or
notification.
16.16 Counterparts.
This
Agreement may be executed in counterparts, each of which shall be deemed an
original and both of which together shall constitute one and the same
instrument.
[Signature
page follows.]
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
IN
WITNESS WHEREOF,
the
parties hereto have caused this Joint Development and Commercialization
Agreement to be executed by their duly authorized officers as of the date first
above written.
| |
GTC
BIOTHERAPEUTICS, INC.
|
| |
|
| |
|
|
By:
|
/s/
Geoffrey F. Cox
|
| |
Geoffrey
F. Cox
|
| |
Chairman,
Chief Executive Officer and
President
|
| |
LFB-BIOTECHNOLOGIES
S.A.S.U.
|
| |
|
| |
|
|
By:
|
/s/
Christian Bechon
|
| |
Christian
Bechon
|
| |
President
|
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
LIST
OF EXHIBITS AND ANNEXES
|
EXHIBIT
A:
|
PRODUCT
LIST
|
| |
|
|
EXHIBIT
B:
|
DEVELOPMENT
PLAN
|
| |
|
|
EXHIBIT
B-1
|
PRELIMINARY
BUSINESS PLAN FOR INITIAL PRODUCT
|
| |
|
|
EXHIBIT
C:
|
COMMERCIALIZATION
PLAN
|
| |
|
|
EXHIBIT
D:
|
PRODUCT
PARTICIPATION MODEL
|
| |
|
| |
APPENDIX
I TO EXHIBIT D:
DEVELOPMENT COSTS
|
| |
|
| |
APPENDIX
II TO EXHIBIT D:
COMMERCIALIZATION COSTS
|
| |
|
|
EXHIBIT
E:
|
STOCK
AND NOTE PURCHASE AGREEMENT
|
| |
|
|
EXHIBIT
F:
|
FORM
OF PRESS RELEASE
|
| |
|
|
EXHIBIT
G:
|
TERMS
OF COMMERCIAL LICENSE
|
| |
|
|
EXHIBIT
H:
|
CORE
BUSINESS PRODUCTS
|
| |
|
| |
|
|
ANNEX
1:
|
LIST
OF CURRENT PRODUCTS EXCLUDED FROM “COMPETING PRODUCTS”
DEFINITION
|
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
EXHIBIT
A
Product
List
|
¡
|
Transgenic
version of rFVIIa (Initial Product)
|
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
EXHIBIT
B
Development
Plan
[Initial
Development Plan to be completed by GTC/LFB Biotech within 180 days of Effective
Date.]
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
EXHIBIT
B-1
Preliminary
Business Plan for Initial Product
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
EXHIBIT
C
Commercialization
Plan
[Preliminary
Commercialization Plan for each Product to be agreed
upon
at
least one year prior to anticipated Regulatory Approval for such
Product.]
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
EXHIBIT
D
Product
Participation Model
************
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
Appendix
I to Exhibit D
Development
Costs
Development
Costs of a Party with respect to a Product may include the following costs
to
the extent they are paid or incurred during the Development Phase for such
Product, as approved in advance by the JSC or, to the extent expressly provided
in the Agreement, thereafter, and are ordinary and necessary for the Development
of such Product:
| |
—
|
Direct
salary and wages.
|
| |
—
|
Payroll
taxes and fringe benefitsrelated to direct salary and
wages.
|
| |
—
|
Travel,
training, staff licenses and
certifications.
|
| |
—
|
Direct
materials and direct supplies, including specialized
software.
|
| |
—
|
Direct
costs for production of such Product including, but not limited to,
construct discovery and development, animal development, animal
maintenance, process development, validation, pre-clinical, clinical
work
and regulatory filings.
|
| |
—
|
Direct
external costs for consultants, temporary help and special
studies.
|
| |
—
|
Direct
costs for research and development and pre-commercialization sales
and
marketing efforts, including without limitation the development and
documentation of process methods and procedures for the manufacture
and
the Fully Absorbed Cost of Goods for batches manufactured and supplied
for
use in preclinical and clinical trial and pre-Commercialization
activities.
|
| |
—
|
Direct
costs for outside services contracted with Third Parties related
to
performance of clinical trials, process development, pre-clinical
studies,
or other activities, including without
limitation:
|
| |
o
|
direct,
out-of-pocket external costs, including clinical grants, clinical
laboratory fees, positive controls and the cost of studies conducted
and
services provided by contract research organizations and individuals,
consultants, toxicology contractors, and manufacturers necessary
or useful
for the purpose of obtaining Regulatory
Approvals;
|
| |
o
|
costs
related to data management, statistical designs and studies, document
preparation and other expenses associated with the clinical testing
program; and
|
| |
o
|
costs
for preparing, submitting, reviewing or developing data or information
for
the purpose of submission of applications to obtain Regulatory
Approvals
(including user fees).
|
| |
—
|
Direct
costs for license fees and other amounts paid to a Third Party in
connection with the Development of such
Product.
|
| |
—
|
Direct
costs relating to the investigation, filing, prosecution and maintenance
of Patent Rights that cover the development, manufacture, use or
sale of
such Product. that are incurred during the Development
Phase.
|
| |
—
|
Direct
costs of filing and maintaining Product Trademark registrations that
are
incurred during the Development
Phase.
|
| |
—
|
Other
direct Development Costs to the extent mutually agreed by the Parties
through the JSC.
|
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
| |
—
|
Costs
of building inventory necessary for Product launch to the extent
incurred
during the Development Phase. The JSC shall agree on an inventory
plan for
build-up of commercial supplies of Product in advance of launch on
a
country by country basis. The cash impact of this build up will be
included in the Product Participation calculation to the extent incurred
during the Development Phase.
|
| |
—
|
Indirect
Costs should be allocated considering a reasonable and appropriate
share
of
|
| |
-
|
Indirect
materials and supplies for the Development Activities of the relevant
Party, properly allocated.
|
| |
-
|
Indirect
equipment rental, maintenance, and calibration, properly
allocated.
|
| |
-
|
administration,
facilities costs, information resources, cost accounting and forecasting,
human resources, insurance, and incentive compensation performance
bonus
(whether paid in cash or stock), but excluding non-cash expense resulting
from Accounting Standard SFAS123R or any equivalent accounting standard,
share-based compensation accounting for stock options, stock appreciation
rights and the like.
|
| |
—
|
Cash
costs for direct capital expenditures, or other significant investments,
licenses, or assets used for the Development of such Product, in
each case
to be reviewed and approved by the JSC. If the asset is used for
more than
one program, its costs will be attributed to each program based on
the
program’s use of the asset’s available
capacity.
|
| |
o
|
Prior
investments used in a program will be included based on their depreciation
in accordance with the relevant Accounting
Standard.
|
Depreciation
or amortization resulting from investments that have been allowed on a cash
basis will be excluded.
| |
—
|
For
clarity, the costs of issuing or repaying debt or equity financing,
including interest or dividends shall not be included as Development
Costs
of a Party.
|
Development
Costs will include only overhead costs that are ordinary and necessary for
the
Development of the Products. Overhead costs will be allocated by each Party
to
Development Costs based on allowable cost items and an allocation method to
be
approved by the JSC.
The
Parties will use their respective best efforts to specify within ************
of
the Effective Date the project accounting allocation methods of each Party
which
will be used to attribute Development Costs to the Development program for
each
Product.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
Appendix
II to Exhibit D
Commercialization
Costs
Commercialization
Costs of a Party with respect to a Product may include the following costs
to
the extent they are paid or incurred during the Commercialization Phase for
such
Product, except to the extent such costs are properly allocated as Development
Costs under the Agreement, and are ordinary and necessary for the Development
of
such Product:
| |
—
|
Direct
salary and wages.
|
| |
—
|
Payroll
taxes and fringe benefits related to direct salary and
wages
|
| |
—
|
Ttravel,
training, staff licenses and
certifications.
|
| |
—
|
Direct
materials and direct supplies, including specialized
software.
|
| |
—
|
Direct
costs for production of such Product, including Fully Absorbed Cost
of
Goods for the manufacture and supply of
Product.
|
| |
—
|
Direct
external costs for consultants, temporary help and special
studies.
|
| |
—
|
Costs
of sales and marketing efforts, including without
limitation:
|
| |
o
|
Finished
Product distribution expense, including all distribution expenses
such as
transportation, customs duties, insurance, fees paid to warehouses,
packaging and labeling expenses;
|
| |
o
|
Field
selling expenses, meaning the actual costs of staff, expenses,
and
external costs, incurred in the active detail or selling of a Product.
In
the event that more than one Product is being actively detailed
or
marketed, these costs will be allocated to each Product based on
a
reasonable method considering time incurred, details performed,
etc. The
method will be approved by the JSC during the annual budget
process;
|
| |
o
|
Direct
promotion expense, including all Product-specific promotion expenses
incurred in the promotion of the Product including, but not limited
to,
journal or direct to consumer advertising, agency fees, samples,
speaker
programs and other costs incurred in the promoting and marketing
of
Products.
|
| |
o
|
Marketing
overhead, will include only overhead costs that are ordinary and
necessary
for the marketing of the Products. Overhead costs will be allocated
by
each Party to marketing costs based on allowable cost items and
an
allocation method to be approved by the JSC.
|
| |
—
|
Direct
costs for outside services contracted with Third Parties related
to
performance of post-registration studies, including payments for
contract
research, clinical grant costs, bulk drug, contract manufacturing
costs,
user fees, etc.
|
| |
—
|
Direct
costs for license fees and other amounts paid to a Third Party in
connection with the making, use or selling of such Product.
|
| |
—
|
Direct
costs relating to the investigation, filing, prosecution and maintenance
of Patent Rights that cover the Development, manufacture, use or
sale of
such Product that are incurred during the Commercialization
Phase.
|
| |
—
|
Costs
of filing and maintaining Product Trademark registration that are
incurred
during the Commercialization Phase.
|
| |
—
|
The
direct cost of all the external and internal regulatory support necessary
to maintain the worldwide product registration for the Product including
stability testing, preparation of annual reports, answering questions
of
Regulatory Authorities, preparing expert reports as required by Regulatory
Authorities, etc.
|
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
| |
—
|
Costs
of building inventory necessary for Product launch to the extent
incurred
during the Commercialization Phase. The JSC shall agree on an inventory
plan for build-up of commercial supplies of Product in advance of
launch
on a country by country basis. Costs incurred during Commercialization
will be reimbursed from net Sales.
|
| |
—
|
Cash
impact of Direct Working Capital changes, for example significant
increases in accounts receivable from
customers.
|
| |
—
|
Direct
costs of support necessary for adverse experience documentation and
reporting, response to health professional and consumer inquiries
about
the Product including the preparation and maintenance of the Product
database, administration of Phase IV study grants and supplies, the
monitoring and review of medical literature concerning the Product,
evaluation of the need for labeling changes, coordination with marketing
to manage promotional material review, and medical review and oversight
of
such activities.
|
| |
—
|
Cash
costs for direct capital expenditures, or other significant investments,
licenses, or assets used in the Development or Commercialization
of such
Product. If the asset is used for more than one program, its costs
will be
attributed to each program based on the program’s use of the asset’s
available capacity.
|
| |
o
|
Prior
investments used in a program will be included based on their depreciation
in accordance with the relevant Accounting
Standard.
|
| |
o
|
Depreciation
or amortization resulting from investments that have been allowed
on a
cash basis will be excluded.
|
| |
—
|
Indirect
costs should be allocated considering a reasonable and appropriate
share
of:
|
| |
o
|
Indirect
materials and supplies for the Commercialization Activities of
the
relevant Party, properly allocated.
|
| |
o
|
indirect
equipment rental, maintenance, and calibration, properly
allocated.
|
| |
o
|
To
the extent specifically allocable to Commercialization of the Product,
an
appropriate share of administration, facilities costs, information
resources, cost accounting and forecasting, human resources, insurance,
and incentive compensation performance bonus (whether paid in cash
or
stock), but excluding non-cash expense resulting from Accounting
Standard
SFAS123R or any equivalent accounting standard, share-based compensation
accounting for stock options, stock appreciation rights and the
like.
|
| |
—
|
For
clarity, the costs of issuing or repaying debt or equity financing,
including interest or dividends shall not be included as Commercialization
Costs of a Party.
|
Commercialization
Costs will include only overhead costs that are ordinary and necessary for
the
Commercialization of Products. Overhead costs will be allocated by each Party
to
Commercialization Costs based on allowable cost items and an allocation method
to be approved by the JSC.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
EXHIBIT
E
Stock
and Note Purchase Agreement
[To
be attached at signing.]
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
EXHIBIT
F
Form
of Press Release
[To
be attached at signing.]
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
EXHIBIT
G
HEADS
OF AGREEMENT
COMMERCIAL
PRODUCT LICENSE
by
and between
GTC
BIOTHERAPEUTICS, INC. (“GTC”)
And
LFB-BIOTECHNOLOGIES
S.A.S.U. (“LFB”)
RECITALS
A. GTC
and
LFB are parties to that certain Joint Development and Commercialization
Agreement dated September 29, 2006 (hereinafter, the “Collaboration
Agreement”)
(capitalized terms used herein and not defined shall have the meaning ascribed
to them in the Collaboration Agreement);
B. Pursuant
to Section 8.2(c)(ii) of the Collaboration Agreement, if a Party fails to fund
************ of the Development Costs of a Product (other than the Initial
Product) (hereinafter, an “Affected
Product”)
during
the period commencing on the relevant Product Start Date and ending on
************ for such Product (hereinafter, the “Funding
Commitment Period”),
then
such Affected Product shall no longer be included within the Collaboration
Agreement and the rights and obligations of the Parties with respect to such
Affected Product after the expiration of such period shall be governed by the
terms of a definitive commercial license agreement (hereinafter, the
“Commercial
License”)
to be
executed between the Parties at such time; and
C. This
Heads of Agreement sets forth the basic material terms of the Commercial License
and the Parties shall negotiate in good faith a definitive agreement based
on
such terms within ************ from the Product Start Date with respect to
any
Product other than the Initial Product.
1.1 “Commercial
Party”
means,
for purposes hereof, the Party that has failed to fund ************ of the
Development Costs of a Product during the Funding Commitment
Period.
1.2 “Continuing
Party”
means,
for purposes hereof, the Party other than the Commercial Party.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
1.3 “Exclusive
Collaboration Territory”
means,
for purposes hereof, the European Territory with respect to LFB, and the North
American Territory with respect to GTC. For purposes hereof, a Party’s Exclusive
Collaboration Territory shall not include any portion of the Co-Exclusive
Territory that was designated to such Party or its Affiliates or its Third
Party
subcontractors by the JSC under the Collaboration Agreement.
1.4 “ROW”
or
“Rest
of World”
means,
for purposes hereof, the rest of the Territory outside the Commercial Party’s
Exclusive Collaboration Territory.
|
2.
|
RIGHTS
OF THE PARTIES WITH RESPECT TO AFFECTED
PRODUCTS
|
2.1 Termination
of Product from Collaboration Agreement. The
Affected Product shall be excluded from the Collaboration Agreement and except
to the extent described herein, the terms and conditions of the Collaboration
Agreement shall no longer apply to such Affected Product.
| |
2.2
|
License
to Continuing Party.
|
(a) The
Commercial Party shall grant the Continuing Party an exclusive license under
the
Commercial Party’s Patent Rights and Know How to develop and commercialize the
Affected Product in ROW, which license shall otherwise be of the same scope
as
its license from the Commercial Party under the Collaboration Agreement with
respect to the Affected Product.
(b) Such
license shall bear an aggregate ************ royalty on Net Sales of the
Affected Product in ROW (the “Product
Royalty”).
The
precise Product Royalty will be negotiated in good faith by the Parties on
an
Affected Product-by-Affected Product basis, taking into consideration the IPV
of
the Commercial Party at the end of the Funding Commitment Period. Any dispute
regarding the amount of the Product Royalty to be paid with respect to Net
Sales
of an Affected Product shall be subject to dispute resolution in accordance
with
the terms set forth in Article 15 of the Collaboration Agreement.
| |
2.3
|
License
to Commercial Party.
|
(a) The
Commercial Party shall have no rights to develop and commercialize the Affected
Product in ROW and all rights and licensed granted by the Continuing Party
to
the Commercial Party with respect to the Affected Product in ROW shall
terminate.
(b) The
Commercial Party shall retain exclusive rights under the Continuing Party’s
Patent Rights and Know-How to develop and commercialize the Affected Product
in
the Commercial Party’s Exclusive Collaboration Territory.
(c) Subject
to Section 2.4 below, the relevant terms and conditions of the Collaboration
Agreement, including without limitation all performance obligations of the
Commercial Party thereunder, shall be incorporated into the Commercial License
and shall continue to apply to the Affected Product solely with respect to
the
Commercial Party’s Exclusive Collaboration Territory.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
| |
2.4
|
Further
Economic Terms.
|
(a) The
Continuing Party shall retain ************ all profits on Net Sales of the
Affected Product in ROW, subject to its obligation to pay to the Commercial
Party the Product Royalty and, if applicable, a reasonable transfer price in
connection with the manufacture and supply of the Affected Product for ROW
as
set forth in 2.5 below.
(b) The
Product Participation Model for the Affected Product and profit-sharing
mechanism under the Collaboration Agreement shall be incorporated into the
Commercial License and shall apply solely to Net Sales of Affected Products
in
the Commercial Party’s Exclusive Collaboration Territory. Thus, for example, if
at the end of the Funding Commitment Period the Continuing Party’s Product
Participation percentage is ************ and the Commercial Party’s Product
participation percentage is ************, the Continuing Party shall be entitled
to ************ of Net Profits in the Commercial Party’s Exclusive Collaboration
Territory and the Commercial Party shall be entitled to ************ of such
Net
Profits, subject to subsequent adjustment under the same terms provided in
the
Collaboration Agreement.
(c) The
Commercial Party shall continue to bear Development Costs and Commercialization
Costs in its Exclusive Collaboration Territory and such costs shall be factored
into the Product Participation Model under the same terms provided in the
Collaboration Agreement to adjust the Parties’ relative IPV solely with respect
to the Commercial Party’s Exclusive Collaboration Territory. Thus, the
Commercial Party may increase its Product Participation percentage solely in
its
Exclusive Collaboration Territory by contributing a larger share of Development
Costs in its Exclusive Collaboration Territory; provided
that the
Commercial Party shall not regain any rights in ROW by reason of such additional
funding.
| |
2.5
|
Manufacture
and Supply of Product.
|
(a) If
the
Commercial Party was supplying the Affected Product to the Continuing Party
or a
Third Party Commercialization partner under a Supply Agreement, it shall
continue to do so and the terms of the relevant Supply Agreement, other than
its
economic terms, shall remain in effect. The Commercial Party shall continue
to
supply the Affected Product for those territories in ROW which it was previously
supplying at a transfer price equal to ************.
(b) If
the
Continuing Party desires the Commercial Party to supply Affected Product to
the
Continuing Party for additional regions of ROW, and the Commercial Party is
willing and has the capacity to supply Affected Product for such additional
regions, it shall supply such Affected Product at a transfer price equal to
************ under the terms of a definitive Supply Agreement to be negotiated
for such purposes.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
(c) If
the
Commercial Party is unable to supply, through itself or third parties, all
or
part of the Continuing Party’s requirements for the Affected Product, it shall
grant the Continuing Party a perpetual, non-exclusive, royalty bearing (such
royalty to be included in the Product Royalty described above) license under
the
Commercial Party’s Patent Rights and Know-How to the extent reasonably necessary
to enable the Continuing Party to manufacture the Affected Product, with the
right to sublicense to Third Parties engaged by the Continuing Party to
manufacture such Product, under the terms of the Commercial
License.
(d) If
the
Continuing Party was supplying the Affected Product to the Commercial Party
under a Supply Agreement, it shall continue to do so with respect to the
Commercial Party’s Exclusive Collaboration Territory at a transfer price equal
to ************.
2.6 Other
Material Terms and Conditions.
The
Parties shall negotiate in good faith the other terms and conditions of the
Commercial License, which shall be commercially reasonable and shall include,
without limitation, customary representations, warranties, covenants and
indemnities, reasonable performance obligations and appropriate remedies for
default thereof, provisions regarding intellectual property rights,
confidentiality, payments and reporting and other customary provisions for
a
commercial product license of this type.
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
EXHIBIT
H
Core
Business Products
|
|
¡
|
GTC
Core Business Products:
|
************
LFB
Biotech Core Business Products
MARKETED
PRODUCTS
************
R
& D PRODUCTS
************
Confidential
material omitted and filed separately with the Securities and Exchange
Commission. Asterisks denote such
omissions.
ANNEX
1
Products
Excluded from Competing Product Definition
GTC
Excluded Products as of the Effective Date:
************
|
|
¡
|
Transgenic
Products developed by GTC as part of pre-existing contracts or agreements
with external partners:
|
************
LFB
Biotech Excluded Products as of the Effective Date:
MARKETED
PRODUCTS
************