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ASSIGNMENT AGREEMENT

IP Intellectual Property License Assignment Agreement

ASSIGNMENT AGREEMENT

 | Document Parties: Avigen, Inc. | Genzyme Corporation You are currently viewing:
This IP Intellectual Property License Assignment Agreement involves

Avigen, Inc. | Genzyme Corporation

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Title: ASSIGNMENT AGREEMENT
Governing Law: California     Date: 3/16/2006
Industry: Biotechnology and Drugs     Law Firm: Latham Watkins    

ASSIGNMENT AGREEMENT

, Parties: avigen  inc. , genzyme corporation
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EXHIBIT 10.58

ASSIGNMENT AGREEMENT

This ASSIGNMENT AGREEMENT is made and entered into on December 19, 2005 (the “Effective Date”) by and between Avigen, Inc., a Delaware corporation having its principal place of business at 1301 Harbor Bay Parkway, Alameda, California 94502 (“Avigen”), and Genzyme Corporation, a Massachusetts corporation having its principal place of business at 500 Kendall Street, Cambridge, Massachusetts 02142 (“Genzyme”) (hereinafter, each of Avigen and Genzyme a “Party” and, collectively, the “Parties”).

W I T N E S S E T H:

WHEREAS , Avigen has developed, licensed and/or controls certain intellectual property relating to gene therapy, including without limitation products based on adeno-associated virus vector (“AAV”, as more particularly defined below) that may be used for the treatment of inherited diseases, and methods of making and using such products;

WHEREAS , Avigen has in the past conducted or has ongoing several research and development programs regarding certain such products (including one for Parkinson’s disease that is currently the subject of an ongoing phase I/II clinical trial, one for a Factor IX product to treat hemophilia B that has previously been in two phase I/II clinical trials, one for a Factor VIII product to treat hemophilia A that has been studied preclinically, and other earlier-stage research programs), and has developed or obtained certain clinical data, know-how and regulatory filings regarding such products;

WHEREAS , Genzyme is a leading biotechnology company with expertise in developing and commercializing biopharmaceutical products; and

WHEREAS , Genzyme wishes to acquire Avigen’s gene therapy intellectual property and current gene therapy research and development programs (other than its IL-10 Patent Rights and IL-10 Product, each as defined herein), all for the purpose of pursuing the further pre-clinical and clinical development and commercialization of these and other potential therapeutic gene therapy products;

NOW THEREFORE , in consideration of the above stated premises and of the mutual covenants and agreements set forth below, and intending to be legally bound by the provisions of this Agreement, the Parties hereby agree as follows:

ARTICLE 1

 

DEFINITIONS

As used in this Agreement, the following initially capitalized terms shall have the meanings indicated (with derivative forms being interpreted accordingly):

 

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

 

1.1         “AAV” shall mean any adeno-associated virus vector, including without limitation all [*] .

1.2         “ Affiliate ” shall mean any business entity which directly or indirectly controls, is controlled by, or is under common control with either Party to this Agreement. A business entity shall be deemed to “control” another business entity if (i) it owns, directly or indirectly, at least fifty percent (50%) of the issued and outstanding voting securities, capital stock, or other comparable equity or ownership interest of such business entity, or (ii) it otherwise has the right or de facto ability to control or direct the management of such business entity (through voting agreement or otherwise). If the laws of the jurisdiction in which such entity operates prohibit ownership by a Party of fifty percent (50%) or more, “control” shall be deemed to exist at the maximum level of ownership allowed by such jurisdiction.

1.3

Agreement ” shall mean this Assignment Agreement.

1.4         “ Ancillary Agreements ” shall mean those agreements and instruments the Parties are required to execute pursuant to Section 2.4.

1.5

Assumed Liabilities ” shall have the meaning set forth in Section 2.2.

1.6         “ Avigen Indemnitee ” shall mean Avigen, its Affiliates, successors and assigns, and each of their respective directors, officers, employees, and agents.

1.7         “ Avigen Related Know-How ” shall mean all Know-How that is as of the Effective Date owned or controlled by or licensed to (with the right to grant sublicenses of the scope and content set forth herein) Avigen that is not Gene Therapy Listed Know-How but [*] including without limitation data relating to [*].

1.8         “ Avigen Trademark ” shall mean all trademarks owned or controlled by Avigen related to the Products as of the Effective Date, including without limitation the trademark “COAGULIN-B” for the use of which in connection with the Product Avigen has filed and owns an intent to use application. The Avigen Trademark excludes all Avigen housemarks (i.e., the name “Avigen” and other names and marks associated with Avigen as a company).

1.9         “ BLA ” means a Biologics License Application to be filed with the FDA (or any successor or other filing with the FDA or such successor serving an equivalent purpose) and/or any other application required to be filed with an appropriate Regulatory Agency in a country or group of countries other than the United States (including, without limitation, a Product License Application or Marketing Authorization in the European Union) in order to manufacture, market, sell or use the Product in such country or group of countries.

1.10       “ Business Day ” means Monday, Tuesday, Wednesday, Thursday or Friday of any week, other than such a day on which a United States federal government holiday falls or on which banks in either California or Massachusetts are closed.

1.11       “ Claim ” shall mean a claim of [*] which has not been held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent

 

2.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise.

1.12       “ Commercial Launch ” shall mean, with respect to a country where Regulatory Approval has been obtained and, if applicable, Pricing Approval has been obtained, for a Product, the first sale of such Product in such country for consideration from a Third Party that occurs after such Regulatory Approval has been obtained and, if applicable, Pricing Approval has been obtained, for such Product in such country. To avoid any doubt, Pricing Approval is not applicable with respect to the United States as of the Effective Date.

1.13       “ Commercially Reasonable and Diligent Efforts ” shall mean the level of effort which, consistent with [*] would be applied by a company in the biotechnology industry for a product owned by it or to which it has rights which [*] taking into account issues of safety and efficacy, product profile, the competitiveness of the marketplace, the proprietary position of the product, the regulatory structure involved, the cost of scaling up a manufacturing process (including facility costs), the profitability of the applicable products, and other relevant factors.

1.14       “ Confidential Information ” shall mean, with respect to a Party, all confidential and all proprietary information and Know-How it discloses to the other Party in connection with this Agreement, including but not limited to, the terms of this Agreement. All proprietary information and Know-How that is included in the Gene Therapy Assets assigned from Avigen to Genzyme hereunder shall be deemed Genzyme’s Confidential Information, in accordance with Section 7.1 hereof.

1.15

Consent ” shall have the meaning given in Section 2.7.

1.16       “ Cover ” shall mean, with respect to a particular product and a particular patent, that such patent claims or covers, [*] or any of [*] or an [*] in the [*] of [*] (for example (but without limitation) with respect to [*] ; and as another example (without limitation) with respect to [*] ).

1.17       “ Current Factor IX Product ” shall mean that certain Factor IX Product delivered by Gene Therapy that was the subject of clinical trials under and is described in IND # 9398 and IND # 8033.

1.18       “ Current Parkinson’s Product ” shall mean that certain Product that contains the AADC gene and that is the subject of the Ongoing Parkinson’s Trial as of the Effective Date and is described in IND # 11366.

1.19       “ Current Regulatory Filings ” shall mean the INDs and other Regulatory Filings set forth in Schedule 1.19 hereto.

1.20       “ Damages ” shall mean damages, losses, liabilities, costs and expenses, including (without limitation) reasonable attorneys’ fees and expenses.

1.21

Dollar ” shall mean the United States dollar.

 

 

3.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

 

1.22       “ Effective Date ” shall have the meaning set forth in the first paragraph of this Agreement.

1.23       “ EMEA ” shall mean the European Medicines Agency or any successor agency thereto with responsibilities similar to those of the European Medicines Agency.

1.24

Excluded Assets ” shall have the meaning given in Section 2.3.

 

1.25

Excluded Liabilities ” shall have the meaning given in Section 2.3.

1.26       “ Facility ” shall mean Avigen’s facility located at 1201 Harbor Bay Parkway in Alameda, California.

1.27       “ Factor IX Product ” shall mean a Product that is (a) the Current Factor IX Product or (b) any Product containing a Factor IX gene or a derivative of such a gene and which is delivered by Gene Therapy.

1.28       “ Factor VIII Product ” shall mean any Product containing a Factor VIII gene or a derivative of such a gene and which is delivered by Gene Therapy.

1.29       “ FDA ” shall mean the United States Food and Drug Administration or any successor agency thereto with responsibilities similar to those of the United States Food and Drug Administration.

1.30

FDA Decision ” shall have the meaning given in Section 4.4(b)(ii).

 

1.31

Force Majeure ” shall have the meaning set forth in Section 11.11.

1.32        “GAAP” shall mean the then-current United States generally accepted accounting principles, consistently applied.

1.33        “Gene Therapy” shall mean the treatment or prevention of a disease, or remedying of a gene deficiency, of humans or animals, by genetic modification of [*].

1.34

Gene Therapy Assets ” shall have the meaning given in Section 2.1.

1.35       “ Gene Therapy Know-How ” shall mean Gene Therapy Listed Know-How, the Avigen Related Know-How and all other Know-How to which Avigen derives rights through any Upstream License and/or Selected Other Gene Therapy Contract.

1.36       “ Gene Therapy Patents ” shall mean the Gene Therapy Listed Patents, the Gene Therapy Upstream License Patents, and the Gene Therapy Other Contract Patents.

1.37       “ Gene Therapy Listed Know-How ” shall mean Know-How that is listed on Schedule 1.37 and that (i) is owned by Avigen and (ii) relates to, arises from or is useful for any Product and/or its manufacture or pharmaceutical utility, including without limitation data relating to formulation, analytical methods, pre-clinical and clinical trials, pharmacology, toxicology, regulatory information, and data relating to the manufacture and use of such

 

4.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

Products, but excluding any Know-How that is commonly available from another source (other than Avigen and its Affiliates) or is necessary for the research, development, manufacture or sale of IL-10 Products.

1.38        “ Gene Therapy Listed Patents ” shall mean [*] those patent applications listed on Schedule 1.38; all divisionals, continuations, continuations-in-part and substitutions thereof; all patents issuing on any of the foregoing; those patents listed on Schedule 1.38; all re-examinations, re-issues, extensions and renewals of any of the foregoing patents; [*] all counterparts in other countries to any of the foregoing; and [*].

1.39       “ Gene Therapy Other Contract Patents ” shall mean all patent applications and patents to which Avigen derives rights through any Selected Other Gene Therapy Contract (including without limitation the following types of patent applications and patents, to the full extent of Avigen’s rights under the Selected Other Gene Therapy Contracts: all divisionals, continuations, continuations-in-part and substitutions, re-examinations, re-issues, extensions and renewals and foreign counterparts thereof). To avoid any doubt, this includes (without limitation) patent applications and patents to which Avigen derives rights through any contract that becomes a Selected Other Gene Therapy Contract through Section 8.5.

1.40       “Gene Therapy Upstream License Patents” shall mean all patent applications and patents to which Avigen derives rights through any Upstream License (including without limitation the following types of patent applications and patents, to the full extent of Avigen’s rights under the Upstream Licenses: all divisionals, continuations, continuations-in-part and substitutions, re-examinations, re-issues, extensions and renewals and foreign counterparts thereof).

1.41       “ Genzyme Indemnitee ” shall mean Genzyme, its Affiliates, successors, assigns and Licensees, and each of their respective directors, officers, employees, and agents.

1.42        “Genzyme Retained Product” shall mean any Product that [*] with respect to a [*] together with all [*] as that of [*] or a [*] or [*] with respect to which [*] together with all [*] or a [*] such gene. For purposes of this Section 1.42, [*] shall mean [*] to be [*] for such [*] that [*] the [*] with respect to all [*] Genzyme. [*] this is the [*] of the [*] The Parkinson’s Product and the Factor IX Product shall [*] on the [*] of [*] of [*] as of the Effective Date ( [*] ). If Genzyme [*] then the Parkinson’s Product shall not [*] Product.

1.43       “ HSR Act ” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (15 U.S.C. 18a), and the rules and regulations promulgated thereunder.

1.44        “ IL-10 ” shall mean interleukin 10 and all other anti-inflammatory cytokines disclosed in the IL-10 Patent Rights [*]

1.45       “ IL-10 Patent Rights ” shall mean the patents and patent applications identified in Schedule 2.3 hereto.

1.46

IL-10 Product ” shall mean any product [*] .

 

 

5.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

 

1.47       “ IND ” shall mean an investigational new drug application filed with the FDA and/or any other similar application filed with an appropriate Regulatory Agency in a country or group of countries other than the United States.

1.48

Indemnify ” shall have the meaning given in Section 6.1.

1.49

IRB ” shall mean an Institutional Review Board.

 

1.50        “ Know-How ” shall mean all technical information, data (including, without limitation, regulatory data), patentable and unpatentable inventions, developments, discoveries, methods and processes that are, in each case, not disclosed in a published patent application or patent or otherwise publicly available.

1.51        “ Legal Requirements ” means any applicable present and future national, state, local, foreign or similar laws (whether under statute, rule, regulation or otherwise); applicable requirements under permits, orders, decrees, judgments or directives, and requirements of applicable Regulatory Agencies (including, without limitation, current Good Manufacturing Practices as specified in 21 CFR Parts 210 and 211, and 21 CFR Part 312); and applicable regulations pertaining to Investigational New Drug Applications (as amended or revised from time to time). To avoid any doubt, Legal Requirements do not include contractual obligations to non-governmental Persons.

1.52       “ Licensee ” shall mean any Third Party to which Genzyme or its Affiliate grants on or after the Effective Date under any Gene Therapy Patent or Gene Therapy Know-How a license, sublicense, option, covenant not to sue, non-suit, assignment (other than an assignment together with this Agreement as a whole pursuant to Section 11.13), right to use or reference or other right to practice free from claims of infringement or misappropriation of any Gene Therapy Patent or Gene Therapy Know-How (each of the foregoing, a “License”). [*] To avoid any doubt, if the rights Genzyme obtains to the Gene Therapy Patents and Gene Therapy Know-How pursuant to this Agreement [*] that Third Party shall be deemed to be Licensee; provided, however , that [*] Licensee also means any Genzyme Affiliate described in the last paragraph of Section 3.4. References in this Agreement to any given Licensee shall be deemed to include such Person’s affiliates (with such term having a perfectly analogous meaning with respect to such Person as the definition of “Affiliate” set forth in this Agreement has with respect to each Party) if and to the extent such affiliates are also covered by the license granted by Genzyme or its Affiliate to such Licensee.

1.53

Licensing Revenue ” shall have the meaning given in Section 3.4.

 

1.54

Licensing Transaction ” shall have the meaning given in Section 3.4.

1.55       “ Lysosomal Storage Disorder Product ” shall mean any Product that is intended to be developed or is developed to treat any lysosomal storage disorder to be delivered by Gene Therapy.

1.56

Major Market Country ” shall mean any of the following: [*] and [*] .

 

 

6.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

 

1.57       “ Net Sales ” with respect to any Product shall mean the invoiced sales prices of all such Product to Third Parties by Genzyme, its Affiliates or its Licensees, less the following items [*] customary under industry practices and are actually allowed and taken in accordance with standard allocation procedures, allowance methodologies and accounting methods consistently applied, which methods are in accordance with GAAP: (a) credits or allowances granted upon returns, rejections or recalls, retroactive price reductions, billing corrections or allowances for bad debt; (b) freight, shipping and insurance costs; (c) quantity and other trade discounts, credits or allowances; (d) customs duties, taxes and surcharges and other governmental charges imposed on the production, sale, transportation, delivery, use, exportation or importation of Products; (e) government mandated rebates and discounts; (f) Third Party rebates and charge backs, hospital buying group/group purchasing organization administration fees or managed care organization rebates; and (g) distribution fees and sales commissions paid to Third Parties. The transfer of any Product by Genzyme or one of its Affiliates or Licensees to another Affiliate of Genzyme or to Genzyme or a Licensee shall not be considered a sale; in such cases, Net Sales shall be determined based on the invoiced sales price by Genzyme, the Affiliate or Licensee, as the case may be, to its Third Party customer, less the deductions allowed under this Section. “Net Sales” excludes transfers of Product for the purposes described in Section 3.5.

If Genzyme or any of its Affiliates or Licensees [*] or sells a [*] or [*] for [*] where [*] and such Product is Commercially Launched anywhere in the world, then the [*] shall equal [*] the [*] of the [*] Product sold, as determined in accordance with Section 3.16. Similarly, if Genzyme or any of its Affiliates or Licensees chooses to sell any Product in combination with another product of Genzyme or a Genzyme Affiliate, [*] (i.e. [*] or [*] in part on the [*] ), then Net Sales will be based on the [*] Product as determined in accordance with [*] For the avoidance of doubt, the Parties acknowledge and agree that [*] not be [*] or any other [*] under this Agreement [*] sold in combination with such Product [*] and the determination in [*] with respect to such Products is intended to [*] based on the [*] not the [*] with [*] or not [*].

Any determination of [*] pursuant to [*] shall apply only to determine Net Sales for purposes of payments to Avigen hereunder. It shall not be deemed to give Avigen input or control over the price set by Genzyme, its Affiliate or Licensee for Products or any other product. Genzyme shall be bound by such determination of [*] for purposes of making payments to Avigen hereunder only, and not for purposes of determining the price at which Products or other products are sold to customers.

1.58       “ Notice ” shall have the meaning set forth in Section 11.6 of this Agreement.

1.59       “ Ongoing Parkinson’s Trial ” shall mean that certain Phase I/II Trial (IND # 11366) that Avigen is conducting as of the Effective Date entitled “A Phase 1 Open-label Safety Study of Intrastriatal Infusion of Adeno-Associated Virus Encoding Human Aromatic L-Amino Acid Decarboxylase (AAV-hAADC-2) in Subjects with Advanced Parkinson’s Disease {AAV-hAADC-2-003}” and identified as AAV-hAADC-2-003.

1.60       “ Other Gene Therapy Contracts ” shall mean the contracts, purchase orders and other commitments listed on Schedule 1.60.

 

 

7.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

 

1.61       “ Parkinson’s Product ” shall mean a Product that is (a) the Current Parkinson’s Product or (b) any other Product that contains the same gene to be delivered by Gene Therapy as that of the Current Parkinson’s Product, or a derivative of such gene.

1.62        “Patent Rights” shall mean any patents and/or patent applications including (without limitation) all of the following types: all divisionals, continuations, continuations-in-part, substitutions, re-examinations, reissues, extensions and renewals, and all counterparts in other countries to any of the foregoing).

1.63       “ Person ” shall mean any individual, partnership, corporation, limited liability company, unincorporated organization or association, any trust or any other legal entity.

1.64       “ Phase   I Clinical Trial ” shall mean a clinical trial in humans that is in the portion of a clinical development program that involves controlled trials of the Product in a pilot study on a group of patients for the primary purposes of evaluating safety, dose escalation and pharmacokinetic studies, as more specifically defined in 21 C.F.R. §312.21(a).

1.65       “ Phase   II Clinical Trial ” shall mean a clinical trial in humans that is designed to establish the safety and biological activity of the product for its intended use, and to define the dosage range to be tested in further clinical trials, as more specifically defined in 21 C.F.R. §312.21(b).

1.66       “ Phase   III Clinical Trial ” shall mean a clinical trial in humans that is designed to serve the same purpose as a Phase II Clinical Trial, and in addition is designed to obtain data to support a filing to request Regulatory Approval for the Product, as more specifically defined in 21 C.F.R. §312.21(c).

1.67       “ Pivotal Trial ” shall mean any human clinical trial the results of which are used, or that is designed so that the results of it may be used, in a filing to request Regulatory Approval for the product candidate being studied (without the need for additional later trials in a phase of development prior to Regulatory Approval of that product candidate to treat that indication). Pivotal Trials for purposes of the milestones set forth in Schedule 3.2 includes any trial designed or intended to serve the foregoing purpose, regardless of whether it is or is denominated to be a Phase II Clinical Trial, Phase II/III Clinical Trial or Phase III Clinical Trial, or is otherwise denominated.

1.68       “ Price Approval ” shall mean, with respect to any country in which the price at which Genzyme or its Affiliate or Licensee sells Product must be approved by a governmental or regulatory authority for reimbursement or payment purposes, the receipt of approval by the applicable authority with respect to such price.

1.69       “ Product ” shall mean any product [*] Covered by at least one (1) Claim of the Gene Therapy Patents [*] All such pharmaceutical products that are based on or incorporate a particular gene sequence (or sequences) shall be deemed to be a single Product. The Products include (without limitation) the Parkinson’s Product, the Factor IX Product, the Factor VIII Product and Lysosomal Storage Disorder Products. The Products specifically exclude all IL-10 Products. To avoid any confusion, [*] for purposes of this definition [*] is determined as if [*] in [*] regardless of the [*]

 

 

8.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

 

1.70       “ RAC ” shall have the meaning given in Section 4.4(a)(iii).

1.71       “ Regulatory Agency ” means, with respect to the United States, the FDA, and, in the case of a country other than the United States, such other appropriate regulatory agency with similar responsibilities, including, without limitation, the EMEA.

1.72       “ Regulatory Approval ” shall mean, with respect to a particular country and Product, the receipt of all regulatory approvals (including, without limitation, through mutual recognition of Regulatory Approval by another country), other than any Price Approval, necessary for sale of the Product in that country.

1.73       “ Regulatory Filing ” shall mean any filing with any Regulatory Agency with respect to the manufacture, use in clinical trials or marketing of a pharmaceutical or biologic product (including without limitation INDs, BLAs, NDAs, DMFs and CMCs filed with the FDA).

1.74       “ Royalty Term ” shall mean, with respect to a particular Product, the period from Commercial Launch of such Product until [*]  the expiration of the last Claim of a Gene Therapy Patent that Covers such Product [*] or [*] if the [*] (regardless of whether or not [*] until the [*] of the [*] of the [*] of the [*] Royalty Terms shall be determined on a Product-by-Product basis.

1.75        “Selected Other Gene Therapy Contracts” shall mean those Other Gene Therapy Contracts that are listed in Schedule 1.75, and all other Other Gene Therapy Contracts that Genzyme by timely written notice under Section 2.12 elects to include among the Selected Other Gene Therapy Contracts.

1.76

“SOP(s)” shall mean standard operating procedure(s).

 

1.77

Term ” shall have the meaning given in Section 9.1.

 

1.78

Third Party ” shall mean any Person who is not a Party or a Party’s Affiliate.

 

 

 

 

1.79       “ Upstream Licenses ” shall mean those agreements that are listed in Schedule 1.79.

 

ARTICLE 2

 

ACQUISITION AND ACTIONS TO TRANSFER

2.1          Assets Acquired . Upon the terms and subject to the terms and conditions set forth in this Agreement, on the Effective Date, Avigen shall convey, sell, transfer, and assign to Genzyme and Genzyme shall purchase from Avigen, free and clear of any encumbrances, all of the following:

(a)         All of Avigen’s right, title and interest as of the Effective Date in and to the Gene Therapy Listed Patents, including but not limited to all rights to obtain patent term

 

9.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

extensions, renewals, continuations, divisions or other extensions of legal protections pertaining thereto;

(b)         All of Avigen’s rights as of the Effective Date in and to claims, causes of action, actions or suits and all rights to sue at law or equity for any past or future infringement or other impairment of any Gene Therapy Patent, including the right to receive all proceeds and damages therefrom;

(c)         All of Avigen’s right, title and interest as of the Effective Date in and to the Gene Therapy Listed Know-How;

(d)         All of Avigen’s rights as of the Effective Date under the Upstream License Agreements, except as provided in Section 2.7;

(e)         All of Avigen’s rights as of the Effective Date under the Selected Other Gene Therapy Contracts, except as provided in Section 2.7;

(f)          All of Avigen’s rights as of the Effective Date in and to finished product inventories, work-in-process inventories, product-in-transit inventories and other inventories of the Current Parkinson’s Product and Current Factor IX Product, and all AAV or active pharmaceutical ingredient inventories [*] either such Product that are owned by Avigen, including in any event those items listed on Schedule 2.1(f), but excluding [*] and all SOPs, batch records, release data, stability data and other data related to the production of such Products;

(g)         All laboratory supplies, cell lines, raw materials, reagents and related research materials owned by Avigen as of the Effective Date that [*] Gene Therapy Assets [*] and are listed on Schedule 2.1(g) hereto (subject only to any applicable contractual use restrictions and Legal Requirements), including without limitation all standards, internally produced reagents and controls for performing the quality control tests on the Products and all stability samples currently in inventory and all materials (cell lines, SOPs, media, etc.) for producing any non-commercially available reagents [*] with the Products and all SOPs related to performing release and stability assays ( but excluding items specifically [*] IL-10 Products);

(h)         Those books, documents and records of Avigen (existing and owned by Avigen as of the Effective Date) that contain preclinical and clinical data with respect to Product, or that otherwise relate exclusively to AAV (but not IL-10 Products) and/or Products, except that Avigen is entitled to provide redacted versions (or copies) of any such books, documents and records that relate to Products or AAV as well as to the IL-10 Product or products that are not deemed Products (which shall be redacted to only the extent necessary to remove information that specifically relates to the IL-10 Product or such other non-Products) (collectively, “Transferred Records”); provided however , that, subject to Avigen’s obligations of confidentiality and non-use set forth in ARTICLE 7, Avigen may retain an archival copy of all Transferred Records in the confidential files of its legal counsel);

(i)          All of Avigen’s rights as of the Effective Date in all licenses, permits, consents, authorizations and approvals of any federal, state or local regulatory, administrative or

 

10.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

other governmental agency or body relating to Gene Therapy and/or the Products, including without limitation the Current Regulatory Filings;

(j)          All of Avigen’s right, title and interest as of the Effective Date in and to the Avigen Trademark;

(k)         To the extent permitted under the applicable agreement, the right to enforce any agreement that requires the counterparty or counterparties to maintain the confidentiality of any information Avigen is required to maintain confidential pursuant to ARTICLE 7, to the extent required for Genzyme to enjoin, restrain, recover damages from or obtain specific performance against such counterparty or counterparties for any breach, suspected breach or anticipatory breach of such confidentiality requirement (with the mechanics of cooperation from Avigen to provide copies of the executed version of any such agreement that has been breached with respect to such information protected by ARTICLE 7 being as set forth in Section 7.4);

(l)          All claims of Avigen against Third Parties relating to the Gene Therapy Assets (as defined below), whether choate or inchoate, known or unknown, contingent or noncontingent; and

(m)        All of Avigen’s right, title and interest in the assets listed on Schedule 2.1(m), whether or not such assets are listed in 2.1(a) through 2.1(l) and notwithstanding anything in Section 2.3 to the contrary.

The assets referred to in (a) through (m) are, together with the license set forth in the next paragraph, collectively, the “Gene Therapy Assets.” If after the Effective Date, Avigen discovers any item of Know-How that was owned by Avigen as of the Effective Date, and [*] any Product and/or its manufacture or pharmaceutical utility (including without limitation any such items of Know-How that are data relating to formulation, analytical methods, pre-clinical and clinical trials, pharmacology, toxicology, regulatory information, and data [*] ; but excluding any Know-How that falls into any of the following categories: (x) Know-How that is commonly available from another source (other than Avigen and its Affiliates), (y) Know-How that is subject to any existing (as of the Effective Date) written agreement with the University of Colorado in connection with IL-10 Products or necessary for the research, development, manufacture or sale of IL-10 Products, and (z) Know-How that is an Excluded Asset (the Know-How described in this sentence that does not fall into any of (x), (y) or (z), the “Later-Identified Know-How”), then Avigen will promptly provide Notice to Genzyme of such item of Later-Identified Know-How and such item of Later-Identified Know-How will, effective upon such notice, automatically be deemed included in the Gene Therapy Listed Know-How and retroactively assigned to Genzyme in accordance with the assignment of Gene Therapy Listed Know-How provided for in this Section 2.1.

Effective as of the Effective Date, Avigen hereby grants Genzyme an exclusive (even as to Avigen) license under the Avigen Related Know-How, to make, have made, use, sell, offer for sale and import Products throughout the world. Such license shall be fully and freely sublicenseable one (1) or more times through one (1) or more tiers of sublicensees without

 

11.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

Avigen’s consent, provided, however, that this license and the definition of Avigen Related Know-How do not obligate Avigen to disclose any Avigen Related Know-How to Genzyme.

2.2          Liabilities Assumed . Upon the terms and subject to the conditions set forth in this Agreement, on the Effective Date, Genzyme shall assume from Avigen and agree to satisfy and/or perform when due: (a) those liabilities and obligations of Avigen identified on Schedule 2.2 hereto; (b) all of the duties, obligations and liabilities of Avigen arising after the Effective Date under all Upstream Licenses that are assigned to Genzyme under this Agreement; (c) all of the liabilities of Avigen [*] ; and (d) all of the duties, obligations and liabilities of Avigen under all Selected Other Gene Therapy Contracts [*]. The foregoing obligations described in this Section 2.2 are hereinafter collectively referred to as the “Assumed Liabilities.”

2.3          Excluded Assets and Excluded Liabilities . Other than the assets specifically referred to in Section 2.1 and the liabilities specifically referred to in Section 2.2, Avigen shall not be required to transfer to Genzyme, and Genzyme shall not be required to acquire or assume, any other assets or liabilities of Avigen or its Affiliates. Without limiting the foregoing sentence, notwithstanding the provisions of Sections 2.1 and 2.2 -- except as they operate to include those assets listed in Schedule 2.1(m) among the Gene Therapy Assets or those liabilities listed in Schedule 2.2 among the Assumed Liabilities -- neither the Gene Therapy Assets nor the Assumed Liabilities shall include, and Avigen shall not be required to transfer to Genzyme and Genzyme shall not be required to acquire or assume:

(i)          Any cash, cash equivalents or accounts receivable;

(ii)         The Facility and any equipment, fixtures, and furniture located therein;

(iii)        In accordance with Section 2.7, any Selected Other Gene Therapy Contract for which a Consent (as defined in Section 2.7) is required to be obtained from any Person in order to permit the assignment to Genzyme of Avigen’s rights under such Contract which Consent shall not have been obtained on or prior to the Effective Date;

(iv)        All materials that Avigen must retain in order to comply with Legal Requirements (including without limitation samples of plasmids and cell lines);

(v)        The other assets listed on Schedule 2.3 (Certain Excluded Assets);

(vi)        Avigen’s equity or debt interests in any subsidiaries or other Affiliates of Avigen;

(vii)       Any contractual obligations of Avigen to Third Parties other than pursuant to the Upstream Licenses or Selected Other Gene Therapy Contracts or as described in Section 2.2 (i.e. as included among the Assumed Liabilities under Section 2.2 without reference to this Section 2.3);

(viii)      Any debts (in the form of indebtedness or a loan), [*] or outstanding amounts (pursuant to a payment obligation) owed by Avigen related to any Gene Therapy Asset on or prior to the Effective Date and any payments due by Avigen pursuant to the

 

12.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

Selected Other Gene Therapy Contracts or the Upstream Licenses on or prior to the Effective Date;

(ix)        Any liabilities with respect to the Facility or any equipment, fixtures or furniture located therein;

(x)         Any liability of Avigen incurred in connection with entering into this Agreement or any Ancillary Agreement, including (but limited to) brokerage, accounting and counsel fees, transfer and other taxes and fees due Third Parties with respect to the execution of this Agreement or any Ancillary Agreement, and expenses of Avigen arising from performance by Avigen of its obligations hereunder or thereunder (except to the extent required to be reimbursed by Genzyme as explicitly provided elsewhere in this Agreement);

(xi)        Any obligations to Avigen’s current or former employees, including without limitation, any salaries, wages, bonuses, benefits, severance payments, or pension, retirement, or profit-sharing plan or trust payments or benefits;

(xii)       Any litigation, proceeding or claim by any person or entity against Avigen or other obligation of Avigen related to the business or operations of Avigen or otherwise relating to the Gene Therapy Assets prior to the Effective Date, [*] and except to the extent such litigation, proceeding or claim constitutes an Assumed Liability (with Assumed Liabilities being determined without reference to any exclusion provided under this Section 2.3, and Assumed Liabilities therefore, to avoid any doubt, including without limitation those liabilities referred to in Schedule 2.2);

(xiii)      Any tax obligations or benefits of Avigen or its Affiliates, whether relating to periods before or after the Effective Date;

(xiv)      Any obligations or liabilities (for violations or otherwise) of Avigen under any Legal Requirements (including without limitation pertaining to antitrust, civil rights, labor, employment, discrimination and environmental laws) or arising from or related to the gross negligence or intentional misconduct of Avigen or its Affiliates or their respective current or former officers, directors, employees, consultants or agents (other than any such obligation or liability that constitutes an Assumed Liability (with Assumed Liabilities, to avoid any doubt, including without limitation those liabilities referred to in Schedule 2.2)); or

(xv)       Any expenses or liabilities resulting from the closure of AAV production at the Facility or any other facilities and/or the termination of any employees of Avigen;

Subject to the introductory paragraph to this Section 2.3, the assets referred to in (i) through (vi) and the tax benefits referred to in (xiii) are, collectively, but excluding any asset referred to in Schedule 2.1(m), the “Excluded Assets” and the liabilities referred to in (vii) through (xv) are, collectively, but excluding any liability referred to in Schedule 2.2, the “Excluded Liabilities.” To avoid any shadow of a doubt, nothing in this Section 2.3 is intended to remove those assets referred to in Schedule 2.1(m) from the Gene Therapy Assets or those liabilities referred to in Schedule 2.2 from the Assumed Liabilities.

 

 

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* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

 

In addition, Genzyme hereby grants Avigen an exclusive (even as to Genzyme) license under the Gene Therapy Patents and Gene Therapy Listed Know-How, to make, have made, use, sell, offer for sale and import IL-10 Products throughout the world, subject to the terms and conditions of the Upstream Licenses and Selected Other Gene Therapy Contracts including without limitation any royalty obligations contained therein. Such license shall be fully and freely sublicenseable one (1) or more times through one (1) or more tiers of sublicensees without Genzyme’s consent, subject to the terms and conditions of the Upstream Licenses and Selected Other Gene Therapy Contracts. If Genzyme has a prospective sublicensee within the scope of this license to Avigen for Avigen to consider, and wishes to discuss the possibility of a sublicense with Avigen, Genzyme will Notify Avigen. Avigen agrees to discuss and consider in good faith the possibility of granting such a sublicense on appropriate terms, but retains discretion over whether or not to grant such sublicense.

2.4          Ancillary Agreements . On the Effective Date, the Parties shall enter into the following additional agreements and deliver the following instruments (collectively, the “Ancillary Agreements”):

(a)

A bill of sale substantially in the form of Exhibit A;

 

(b)

An assignment and assumption agreement in the form of Exhibit B;

 

(c)

A general technology assignment instrument in the form of Exhibit C; and

 

 

 

 

(d)            A trademark assignment instrument in the form of Exhibit D; provided that such trademark assignment instrument, though signed, notarized and effective as of the Effective Date, may be delivered within one business day thereafter.

2.5          Transition Assistance . For a period of six (6) months after the Effective Date (or such longer period as may be mutually agreed upon by the Parties), at Genzyme’s request and upon reasonable advance notice and at reasonable (in view of the relevant personnel’s other responsibilities) times, Avigen shall make the Avigen personnel set forth in Schedule 2.5 hereto available to Genzyme for transition services related to the Gene Therapy Assets on a consulting basis ( provided that such personnel continue to be employed by Avigen or an Affiliate of Avigen and only for so long as such personnel continue to be so employed). Avigen shall provide (as requested by Genzyme) up to the applicable number of hours of such transition services per month set forth in Schedule 2.5 in exchange for Genzyme paying to Avigen for the time of each person at an hourly rate equal to [*] as calculated above. Promptly following a request from Genzyme delivered no earlier than January 3, 2006, Avigen will provide Genzyme with a true and correct list of the [*]. Avigen shall not be required to provide access to each Avigen person’s time beyond the maximum number of hours for such person stated in Schedule 2.5, and Genzyme shall pay Avigen for the number of hours actually spent providing such services within forty-five (45) days after receipt of a reasonably detailed invoice therefor from Avigen.

2.6          Regulatory Filings . Within thirty (30) days after the Effective Date, Avigen shall deliver to Genzyme executed original letters and other documentation necessary or desirable to be delivered to each Regulatory Agency to assign and officially transfer authority and responsibility for each of the Current Regulatory Filings to Genzyme. Genzyme and Avigen

 

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shall mutually agree on the form and content of each such letter or other documentation, but in any event Genzyme shall not unreasonably withhold its consent to letters and other documentation provided by Avigen that are consistent with this Agreement and legally effective to transfer such authority and responsibility in accordance with the relevant Regulatory Agency’s practices. Genzyme shall file such letters or other documents with the relevant Regulatory Agencies within three (3) Business Days after provided by Avigen. If Genzyme does not timely do so, then Avigen shall be entitled to file these letters on Genzyme’s behalf.

2.7          Non-Assignment of Certain Contracts . Notwithstanding anything to the contrary in this Agreement, to the extent that the assignment hereunder of any contracts included in the Gene Therapy Assets shall require the consent of any Third Party (each, a “Consent”) that has not been obtained by Avigen on or prior to the Effective Date, neither this Agreement nor any action taken pursuant to it shall constitute an assignment or an agreement to assign if such assignment or attempted assignment would constitute a breach of the relevant contract and/or result in the loss or diminution of any Gene Therapy Asset; provided, however , that in each such case, Avigen shall, [*] use its reasonable efforts to obtain the Consent of such other party to an assignment to Genzyme equivalent to that otherwise provided for herein as soon as practicable after the Effective Date and, promptly upon such receipt, execute and deliver to Genzyme such documentation as the Parties mutually agree is reasonably necessary or appropriate to effect the assignment of such contract (with it being acknowledged that documentation in the form of Exhibit C (Form of Assignment and Assumption Agreement) shall suffice); provided further that Avigen shall not be required to [*] . Nothing herein shall be deemed a waiver by Genzyme of its right to receive on a timetable that is consistent with this Agreement an effective assignment of or sublicense under each Upstream License that is included in the Gene Therapy Assets.

2.8

Other Closing-Related Deliveries of the Parties .

(a)          Inventory . Avigen shall physically transfer to Genzyme all materials required to be transferred to Genzyme under Sections 2.1(f)-2.1(g), except that Avigen may retain a sufficient amount of such materials (other than any such materials described on Schedule 2.1(m)) to the full extent required by Legal Requirements. The transfer of these materials shall be at [*] expense and [*] costs incurred in connection with such transfer.

(b)          Files . Avigen shall deliver to Genzyme, an original (or, if Avigen is required under Legal Requirements to retain the original, a copy) of all files possessed and maintained by Avigen related to: the Upstream License and the, Selected Other Gene Therapy Contracts (and activities thereunder), Gene Therapy Listed Patents and Gene Therapy Listed Know-How and the other Gene Therapy Assets (other in each case than those files that fall within the categories of Sections 2.1(h) and (i)); those items assigned to Genzyme in Sections 2.1(h) and (i); and the Current Regulatory Filings, including without limitation all correspondence and minutes of meetings and teleconferences with Regulatory Agencies relating thereto (other in each case than those files that fall within the categories of Sections 2.1(h) and (i)). Avigen shall be entitled to retain a copy of each such item for archival purposes in the confidential files of its legal counsel or, with respect to regulatory matters, in the confidential files of its regulatory department.

 

 

15.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

 

(c)          Recordation . Promptly following receipt from Genzyme of a patent assignment acknowledgement substantially in the form of Exhibit E with respect to a Gene Therapy Listed Patent on file as of the Effective Date, Avigen will execute and deliver such patent assignment acknowledgement to Genzyme in a form suitable for recordation with the applicable governmental entity. Genzyme shall properly record at its own expense all Gene

Therapy Listed Patent assignment acknowledgement documents provided by Avigen pursuant to this Section 2.8(c) as and when reasonably determined by Genzyme in a manner consistent with its patent practices, policies and procedures.

(d)          Opinion of Counsel . Avigen shall provide to Genzyme an opinion from Avigen’s outside counsel in the form of Exhibit F, dated the Effective Date.

(e)          Inventor Signatures . Avigen shall (i) seek to contact the inventors of the patents and/or patent applications listed on Schedule 8 [*] its [*] to obtain signatures from such inventors on the applicable patent assignment recordation documents and [*] information and declarations required to make the proper filings with the U.S. Patent and Trademark Office to proceed with respect to the patents and/or patent applications listed on Schedule 8 [*] including without limitation providing Genzyme with copies of the employment agreements of such inventors and documenting Avigen's efforts to contact such inventors if requested by Genzyme.

The mechanics and timing of the transfer and deliveries called for in this Section 2.8 shall be as set forth in Schedule 2.8. In accordance with such Schedule, certain aspects of this transfer shall be accomplished by Genzyme’s personnel visiting Avigen’s facility. Accordingly, Avigen’s responsibility to “physically transfer” these items to Genzyme is limited to making these items available to Genzyme at Avigen’s facility as per the procedures provided in such Schedule. With respect to the clinical trial material inventories covered by Section 2.8(a), at Genzyme’s expense, Avigen shall (x) continue to store such materials in accordance with all of its internal standard operating procedures and representations made to the FDA in connection with the production and maintenance of clinical trial material for IND # 11366 (for the Current Parkinson’s Product inventory) and IND # 9398 or 8033 (for the Current Factor IX Product inventory), (y) until [*] continue to perform such testing and assays as are required in such internal standard operating procedures and such representations made to the FDA, and (z) until the inventories of the Current Parkinson’s Product have been transferred to Genzyme, ship quantities of the inventories of the Current Parkinson’s Product to clinical sites of the Ongoing Parkinson’s Trial in accordance with Genzyme’s written requests. As regards (z), Genzyme must provide reasonable notice prior to any requested shipment.

2.9          Sales and Transfer Taxes . Except as otherwise provided herein, each Party shall bear and be solely responsible for any sales taxes, use taxes, transfer taxes, documentary charges, recording fees, filing fees and similar taxes, charges, fees and expenses that may become payable by such Party in connection with the transactions contemplated by this Agreement.

2.10        Clinical Trial Insurance Coverage . At Genzyme’s request, Avigen shall (a) purchase an extended reporting period for its insurance policies with respect to liabilities incurred prior to the Effective Date that arise out of the clinical trials conducted pursuant to IND # 9398 and IND # 8033 and (b) cause Genzyme to be added to such policies as an additional

 

16.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

named insured. The length of the extended reporting period and the liability limits of such policies shall be those requested by Genzyme, and Genzyme shall reimburse Avigen for the premium payments required to purchase such coverage and to add Genzyme as an additional insured within 45 days of receipt of Notice from Avigen that such premium payment has been made. It is understood and agreed that Avigen is not required to make any claim under an insurance policy other than those policies described in this Section 2.10 to discharge, satisfy or mitigate (in whole or in part) any Assumed Liability.

2.11        Non-Compete . Except as otherwise expressly provided herein, prior to the expiration of the Royalty Term applicable to each Product, neither Avigen nor any of its Affiliates shall directly by the actions of any of them or indirectly by acting with or through a Third Party (including, without limitation, by granting a Third Party a license under intellectual property rights), conduct research or development activities regarding, or engage in the manufacture, marketing, sale or distribution of Products; provided, however, that if Genzyme [*] then this non-compete shall not apply to [*] effective upon receipt by Avigen of the Notice delivered by Genzyme pursuant to [*] . In the event that this Agreement is terminated in its entirety pursuant to Section 9.2, then the non-compete under this Section 2.11 shall expire effective on the effective date of such termination.

2.12        Selection of Additional Other Gene Therapy Contracts . Avigen will, beginning January 5 2006, make available to Genzyme at Avigen’s facility all Other Gene Therapy Contracts not listed on Schedule 1.75. On or before February 20, 2006, Genzyme shall Notify Avigen which of the Other Gene Therapy Contract not listed on Schedule 1.75 Genzyme wishes to include among the Selected Other Gene Therapy Contracts, and they shall be so included, provided that no Other Gene Therapy Contracts that become Selected Other Gene Therapy Contracts after the Effective Date will be Represented Contracts for the purpose of Section 8.1(j), and [*] .

2.13        Maintenance of Essential Materials . Genzyme shall maintain those quantities of materials included among the Gene Therapy Assets that are listed in Schedule 2.13, under the storage conditions set forth in that Schedule. The purpose of this (in addition to being part of Genzyme risk management and operational practices with like materials) is [*] . Avigen acknowledges and agrees that the quantities of such materials set forth in Schedule 2.13 will be sufficient to serve this purpose, and in no circumstances shall Genzyme’s obligation to maintain tangible Gene Therapy Assets be deemed to extend beyond the materials listed in Schedule 2.13.

2.14        Lists of In-Licensed and Contracted-For Patents . On the Effective Date, Avigen shall deliver to Genzyme (a) a list prepared in good faith by Avigen of those Gene Therapy Upstream License Patents of which Avigen is aware, and (b) a list prepared in good faith by Avigen of those Gene Therapy Other Contract Patents of which Avigen is aware.

ARTICLE 3

 

FINANCIAL CONSIDERATION; PAYMENT TERMS

As partial consideration for the sale of the Gene Therapy Assets, Genzyme shall make the following payments to Avigen on the following terms and conditions:

 

 

17.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

 

3.1          Initial Consideration . Genzyme shall pay to Avigen Twelve million Dollars ($12,000,000) in cash by wire transfer (the “Upfront Payment”) within two (2) Business Days after the Effective Date. The Upfront Payment shall be non-refundable, shall not be creditable against any other amount due hereunder and shall not be subject to offset or reduction of any kind except, if applicable, as provided in Section 3.8. Without limiting the requirements of Section 3.8, Genzyme shall make the Upfront Payment from a U.S. entity to Avigen (itself a U.S. entity).

3.2          Milestone Payments . Subject to Section 9.6 (to the extent it applies) and the additional terms and conditions set forth in Schedule 3.2, Genzyme shall pay to Avigen each of the amounts in Dollars set forth in the tables set forth in Schedule 3.2 within [*] days after the first achievement of the corresponding milestone event by or on behalf of Genzyme, its Affiliate or any Licensee with respect to each Product. Each such amount shall be non-refundable, shall not be creditable against any other amount due hereunder and shall not be subject to offset or reduction of any kind, except as explicitly set forth in the first paragraph after Part F of Schedule 3.2 and except as provided in Section 3.8 (if applicable) and Section 6.8. The milestones in Part A, Part B and Part C of Schedule 3.2 shall be [*] . The milestones in Part D, Part E and Part F of Schedule 3.2 shall be [*] .

3.3

Royalty Payments; One Royalty; Offsets for Third Party Royalties .

(a)         Genzyme shall pay to Avigen a royalty on worldwide Net Sales of each Product during the Royalty Term for such Product as follows based on cumulative (not annual) Net Sales of such Product worldwide during said Royalty Term:

(i)          For all Net Sales of such Product up to or equal to [*] , [*] percent [*] of such Net Sales;

(ii)         For all Net Sales of such Product above [*] and less than [*] , [*] percent [*] of such Net Sales; and

(iii)        For all Net Sales of such Product equal to and above [*] , [*] percent [*] of such Net Sales;

provided, however , that if a royalty is payable with respect to [*] solely because [*] then the royalties payable with respect to [*] shall be at [*] Royalties payable pursuant to this Section 3.3 shall not be subject to offset, deduction or reduction of any kind except as provided in Section 3.8 (if applicable) and Section 6.8. Such royalties shall be payable quarterly within sixty (60) days after the end of the calendar quarter in which the Net Sales on which the royalty is due were made.

(b)         Only one earned royalty will accrue and be paid on a given Product regardless of the number of Claims of Gene Therapy Patent or number of countries having Claims of Gene Therapy Patent, even if the manufacture of such Product in one country is Covered by the Claims of the Gene Therapy Patents and the use, sale or importation in another country is Covered by the Claims of the Gene Therapy Patents. This Section 3.3(b) shall not be read to modify the way “Coverage” is determined for purposes of the “Product” definition and the “Royalty Term” definition, rather this Section 3.3(b)) relates to clarifying that the royalty

 

18.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

rates of Section 3.3(a) are the rates that apply, and they are not doubled nor applied multiple times to the same Net Sales under the circumstances described above in this Section 3.3(b).

3.4          Licensing Revenues . Genzyme shall pay to Avigen the cash equivalent of [*] percent [*] of any and all payments (whether received by Genzyme in cash, equity, loan forgiveness or other form) that Genzyme or any of its Affiliates receives from any Licensee through, in connection with or pursuant to any transaction (or series of transactions) in which the Licensee obtained any right that qualifies it as a Licensee in accordance with the definition of such term (“Licensing Transaction”), but excluding any payment that is calculated as a percentage of net sales or profits or similar metric (all such payments that Genzyme is required to pay a share of to Avigen, “Licensing Revenues”). Licensing Revenues include (without limitation) Licensing Transaction initial payments, upfront payments, milestone payments and annual maintenance fees. Licensing Revenues exclude payments that are in explicit consideration of funding for research, development, manufacturing, commercialization or other actual costs, or reimbursement on a pass-through basis of such actual costs [*] .

If there are multiple connected or otherwise related transactions any one (1) of which alone would be a Licensing Transaction (but including at least one (1) other transaction that would not alone be a Licensing Transaction), then the value of Licensing Revenues for that overall Licensing Transaction will be proportionally reduced based on the relative fair market values of the Gene Therapy Assets included therein, and of the other consideration provided by Genzyme, as determined in accordance with Section 3.16.

Licensing Revenues shall be proportionally reduced if a Licensing Transaction includes a grant of a license or other right under intellectual property other than those included within the Gene Therapy Patents and Gene Therapy Know How transferred hereunder, based on the relative fair market values of the Gene Therapy Patents and Gene Therapy Know How and such other intellectual property, as determined in accordance with Section 3.16.

Genzyme shall pay Avigen its share of each payment (in whatever form) of Licensing Revenue received by Genzyme or its Affiliate within sixty (60) days after the later of (i) Genzyme’s receipt thereof or (ii), if applicable, the fair market value of the Licensing Revenues is finally determined pursuant to Section 3.16.

If [*] and [*] shall be deemed a Licensee for all purposes hereunder, provided , however , that [*] Licensing Revenue.

3.5          Samples, Compassionate Use, Expanded Access, Charitable Donations and Investigator-Sponsored Studies . The Parties hereby agree that Genzyme may make Product available (i) for use as samples in the ordinary course of business, (ii) to patients under expanded access compassionate use programs prior to receipt of the necessary Regulatory Approvals for market such Product in the relevant country, (iii) through charitable donations or (iv) for preclinical studies, clinical trials and investigator-sponsored studies, in each case (i) through (iv) without including the value of the Product transferred for such purposes in Net Sales (and thus without paying any royalty hereunder on such the quantities of Product). However, if Genzyme sells a [*] , then the levels of the corresponding Product disposed of or transferred under Section 3.5(i), (ii) or (iii) shall be subject to the procedures contained in Section 3.16 including

 

19.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

Industry Expert determination if applicable, applied to determine the fair market value on which a royalty shall be paid to Avigen pursuant to Section 3.16, such fair market value as determined under Section 3.16 to be equal to the imputed Net Sales value of any Product disposed of under this Section 3.5 that are in excess of customary levels of charitable or compassionate use of pharmaceutical products relative to actual sales of such products (determined on product-by-product basis).

3.6          Wire Transfer . Genzyme shall make payments by wire transfer of Dollars to the account specified by Avigen in writing prior to the Effective Date (as such address may be changed or updated by Avigen by providing Notice reasonably in advance of any payment becoming due or payable), or by such other payment method as the Parties may agree in writing upon from time to time.

3.7          Foreign Currency . Payments made under this Agreement shall be payable in Dollars. Net Sales calculated under this Agreement shall be computed for each quarter with foreign Net Sales converted into Dollars in accordance with GAAP, using the average of the relevant exchange rates for each month of such quarter (based on the rates published in The Wall Street Journal, East Coast Edition for such month).

3.8          Withholding . Any income or other taxes which Genzyme is required by Legal Requirements to pay or withhold on behalf of Avigen with respect to monies payable to Avigen under this Agreement shall be deducted from the amount of such payments and paid to the relevant competent taxing authority. If Genzyme is required to make any such withholding, Genzyme shall indicate the details of the withholding in its report to Avigen accompanying the payment from which withholding has been made. Upon written request from Avigen, Genzyme shall promptly provide Avigen with a certificate or other documentary evidence to enable Avigen to support a claim for a refund or a foreign tax credit with respect to any such tax so withheld or deducted by Genzyme. Genzyme and Avigen will reasonably cooperate in completing and filing documents required under the provisions of any applicable tax treaty or under any other applicable law, in order to enable Genzyme to make such payments to Avigen without any deduction or withholding, if possible. Genzyme is a U.S. entity and, except as provided in Section 3.12 below, shall make all [*] required of it hereunder from a U.S. entity or from a non-U.S. entity in a circumstance where tax or other withholding of any portion of such payment is not required, provided, that in a circumstance where withholding is required: (a) at the reasonable request of Genzyme, Avigen will execute and deliver such administrative or ministerial certificates that will enable such a payment to be made without withholding and in a circumstance where withholding is required and (b) Genzyme may make the payment from such entity if Genzyme also makes a gross-up payment to Avigen that makes Avigen whole for the amount withheld.

3.9          Reports . With each payment that Genzyme is required to make to Avigen under ARTICLE 3, Genzyme shall provide a written report, showing the calculation of Net Sales together with the calculation of the royalty thereon that is required to be paid. The calculation of Net Sales in the report shall include a statement of gross sales and in aggregate form within each category the amount of each deduction provided for in the definition of Net Sales. With each milestone or Licensing Revenue payment that Genzyme is required to make to Avigen under ARTICLE 3, Genzyme shall provide a written report stating the amount and calculation of the

 

20.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

payment, the milestone or other event triggering such payment and the Product and/or Licensing Transaction, as applicable, for which such payment is being made.

3.10        Records . Genzyme shall, and shall cause its Affiliates and Licensees to, keep and maintain for [*] after the relevant calendar quarter complete and accurate books and records in sufficient detail so that Net Sales and payments made hereunder can be properly calculated.

3.11        Interest on Late Payments . Interest shall accrue on late payments by Genzyme at the rate announced from time to time by Bank of America in Boston, Massachusetts U.S.A. (or its successors or assigns) as its prime rate, calculated on the number of days payment is delinquent, or the maximum amount permitted by law, whichever is less; provided , that if such payment has been delayed because it is related to a dispute raised by a Party in good faith that is undergoing the dispute resolution procedures set forth in ARTICLE 10 hereof, interest shall be calculated on the number of days payment is delinquent starting on the day after such dispute is finally resolved.

3.12        Exchange Controls . Notwithstanding any other provision of this Agreement, if at any time legal restrictions prevent the prompt remittance of part or all of the royalties with respect to Net Sales in any country, payment shall be made through such lawful means or methods as Genzyme may determine after reasonable consultation with Avigen. When in any country the law or regulations prohibit both the transmittal and deposit of royalties on sales in such a country, royalty payments may be suspended for as long as such prohibition is in effect (and such suspended payments shall not accrue interest), and promptly after such prohibition ceases to be in effect, all royalties that Genzyme would have been obligated to transmit or deposit, but for the prohibition, shall be deposited or transmitted, as the case may be, to the extent allowable (with any interest earned on such suspended royalties which were placed in an interest-bearing bank account in that country, less any transactional costs).

3.13        Audit . No more frequently than once during each calendar year during the Term and once during the [*] period thereafter, Genzyme shall permit Avigen’s independent auditors, to whom Genzyme has no reasonable objection and with reasonable advance notice at any time during normal business hours, accompanied at all times, to inspect, audit and copy reasonable amounts of relevant accounts and records of Genzyme, its Affiliates and reports submitted to Genzyme and its Affiliates by Licensees, for the sole purpose of verifying the accuracy of the calculation of payments to Avigen pursuant to ARTICLE 3 and the reports which accompanied them. The accounts, records and reports related to any particular period of time may only be audited one time under this Section 3.13. Avigen will cause its independent auditors not to provide Avigen with any copies of such accounts, records or reports and not to disclose to Avigen any information other than information relating solely to the accuracy of the accounting and payments made by Genzyme pursuant to ARTICLE 3. Avigen shall cause its independent auditors to promptly provide a copy of their report to Genzyme. If such audit determines that payments are due to Avigen, Genzyme shall pay to Avigen any such additional amounts within thirty (30) days after the date on which such auditor’s written report is delivered to Genzyme and Avigen, unless such audit report is disputed by Genzyme, in which case the dispute shall be resolved in accordance with ARTICLE 10. If such audit determines that Genzyme has overpaid any amounts to Avigen, Avigen shall refund any such overpaid amounts to Genzyme within thirty (30) days after the date on which such auditor’s written report is delivered to Genzyme and

 

21.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

Avigen. Any such inspection of records shall be at Avigen’s expense unless such audit discloses a deficiency in the payments made by Genzyme (whether for itself or on behalf of its Affiliates and Licensees) of more than [*] of the aggregate amount payable for the relevant period, in which case Genzyme shall bear the cost of such audit. Each of the Parties agree that all information subject to review under this Section 3.13 is Genzyme’s Confidential Information that is subject to Avigen’s confidentiality and non-use obligations under ARTICLE 7, and Avigen agrees that it shall cause its accounting firm to also retain all such information subject to the confidentiality and non-use restrictions of ARTICLE 7 or similar (but no less stringent) obligations of confidentiality and non-use customary in the accounting industry.

3.14        Fair Market Value of Gene Therapy Assets . The Parties acknowledge that the purchase price represents the fair market value for the Gene Therapy Assets and was determined by arm’s length negotiations. The Parties agree that no consideration is or will be paid for the value of any referrals to or from either Party to the other, or their respective Affiliates that violates any Legal Requirements.

3.15        Allocation of Consideration . Within sixty (60) days after the Effective Date, Genzyme shall allocate the consideration among the Gene Therapy Assets. Such allocation shall be made in accordance with the provisions of Section 1060 of the Internal Revenue Code of 1986, as amended (the “Code”), and shall be binding upon both Parties for tax purposes. The Parties also each agree to file tax returns consistently with the foregoing and in accordance with Section 1060 of the Code.

3.16        Fair Market Value Determination for Products or Licensing Transactions

(a)         If Genzyme or an Affiliate or Licensee [*] as described in the second sentence of Section 3.5, Genzyme will notify Avigen of the per-unit Net Sales value Genzyme proposes with respect to the relevant Product, reflecting the fair market value of the Product. [*] in excess of the limitations contained in Section 3.5, as described in the last sentence of Section 3.5.)

(b)         If there are multiple connected or otherwise related transactions any one (1) of which alone would be a Licensing Transaction (but at least one (1) of which would not alone be a Licensing Transaction), as soon as practicable after Genzyme consummates such transaction, Genzyme will notify Avigen of the value Genzyme proposes to allocate to Licensing Revenue for the overall Licensing Transaction, based on the fair market value of the rights to Gene Therapy Assets that are granted as part of the Licensing Transaction relative to the fair market value of the other consideration provided by Genzyme under the Licensing Transaction (excluding consideration provided to Genzyme which is already excluded from Licensing Revenue based on the definition of such term set forth in Section 3.4).

(c)         If there is a Licensing Transaction that involves the grant of a right under Gene Therapy Patents and Gene Therapy Know-How as well as the grant of the right under other intellectual property, as soon as practicable after Genzyme consummates such transaction, Genzyme will notify Avigen of the value Genzyme proposes to allocate to Licensing Revenue based on such Licensing Transaction, based on the fair market value of the rights to Gene Therapy Patents and Gene Therapy Know-How that are granted as part of the Licensing

 

22.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

Transaction relative to the fair market value of the rights to the other intellectual property provided by Genzyme under the Licensing Transaction (excluding consideration provided to Genzyme which is already excluded from Licensing Revenue based on the definition of such term set forth in Section 3.4).

(d)         If Avigen and Genzyme fail to agree on the relevant fair market value(s) within [*] days after Avigen receives Genzyme’s proposal, the Parties shall attempt to resolve the dispute amicably and promptly by negotiations between senior executives (at the level of Vice President or above) who have authority to settle the dispute. Within [*] Business Days after the dispute is submitted to such senior executives, they shall meet at a mutually acceptable time and place, or by means of telephone or video conference, and thereafter as often as they reasonably deem necessary, to attempt to resolve the dispute. Each Party’s such senior executives shall be reasonably available during a [*] day period for such discussions. If the matter is not resolved within such [*] days, either Party may proceed under clause (e) below.

(e)         If the Parties fail to resolve the dispute on the relevant fair market value(s) pursuant to clause (d) above, then the Parties shall refer the determination of fair market value(s) to an industry expert with no less than [*] of experience valuing biopharmaceutical assets (such as [*] ) who has not been affiliated with either of the Parties or their Affiliates (an “Industry Expert”) to determine the fair market value(s). If the Parties cannot agree on a single Industry Expert within such [*] days, each shall choose one (1) Industry Expert by the end of the [*] days and such two (2) experts shall choose a third Industry Expert within an additional [*] . In this case, the Parties would engage the third Industry Expert to resolve the dispute, and the third Industry Expert is the person who shall make the determination as to fair market value. Within thirty (30) days after engaging the expert, each Party shall submit no more than ten (10) pages of analysis demonstrating its view of the fair market value of the relevant Product (the ten-page limit is on a per-country basis in cases where per-unit Product fair market values for sales in different countries are being determined). Within [*] days after these written analyses are due, the Industry Expert shall hold a proceeding in which each Party is entitled to make a presentation of no more than [*] . Neither Party shall engage in any ex parte communications with the Industry Expert. Within [*] days after the in-person proceeding, the Industry Expert shall deliver in writing his or her decision as to all fair market values referred for determination simultaneously to both Parties. This decision must be for a value that is [*] , as to each fair market value. The Industry Expert is instructed (i) to make this determination based on valuation techniques that are customary and usual in the biopharmaceutical industry, including without limitation for [*] and all other relevant factors typically taken into account, including without limitation issues of safety and efficacy, product profile, the competitiveness of the marketplace, the proprietary position of the product, the regulatory structure involved, the cost of scaling up a manufacturing process (including facility costs), and the profitability of the applicable products; and (ii) that the purpose of the procedures under this Section 3.16 is to ensure that [*] in accordance with the terms and conditions of this Agreement based on Net Sales and Licensing Revenue values that fairly reflect the fair market values of Products, Gene Therapy Patents and Gene Therapy Know How or Gene Therapy Assets, as applicable. The Industry Expert’s decision shall not result in any payments being made to Avigen based on [*] rather Avigen must be compensated in accordance with the terms and conditions of this Agreement based on the fair market value of Products, Gene Therapy Patents and Gene Therapy Know How or Gene Therapy

 

23.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

Assets, as applicable. The Industry Expert’s decisions shall be final and binding on the Parties absent fraud.

(f)           [*] to an [*] under subsection (b) one time only, provided that [*] shall [*] based on [*] in the [*] for Finished Goods published by the [*] the [*] and [*] of the [*] as the [*] for [*] .

(g)         The Parties shall bear equally the costs of engaging the Industry Expert under this Section 3.16, including without limitation the Industry Expert’s fees and expenses and any other costs incurred to conduct the proceedings contemplated hereunder.

3.17        Recognition of Potential Reversion in Licensing Transactions . If, after the Effective Date, Genzyme licenses Gene Therapy Assets to a Third Party for the research and development of the Parkinson’s Product, Genzyme will cause the terms and conditions of such license to recognize and permit the potential reversion of Gene Therapy Assets and grant of other rights with respect to the Parkinson’s Product set forth in Section ARTICLE 9, for no consideration to Genzyme’s counterparty to the applicable transaction. This Section is not intended to limit Avigen’s rights under ARTICLE 9.

ARTICLE 4

 

DEVELOPMENT; COMMERCIALIZATION

4.1          General Diligence Obligation . Genzyme (either itself or through its Affiliates, Licensees or any Third Party selected by Genzyme) shall be responsible [*] for: (i) the research, development, manufacturing, commercialization and distribution of Products selected by Genzyme and the related regulatory, reimbursement and marketing activities; (ii) the identification and selection of any Third Party to be utilized in connection with any clinical trials or research project related to, or the manufacture, distribution or marketing of, the Products and the negotiation of the arrangements with such Third Party and (iii) preparing, submitting and obtaining (in the name of Genzyme or its Affiliates or Licensees) all Regulatory Approvals and orphan drug designations (and similar designations outside of the United States) for Products. In addition to complying with the more specific diligence obligations set forth in Section 4.4 below, Genzyme shall use its Commercially Reasonable and Diligent Efforts to research, develop (including without limitation preclinically, clinically and with respect to manufacturing processes), manufacture and seek Regulatory Approval [*] . This [*] but if [*] to [*] the [*] to the [*] then this shall be [*] . Genzyme may satisfy its diligence obligations under Sections 4.1 and 4.4 through its own efforts, and through those of its Affiliates, Licensees and subcontractors.

4.2          Development Reports . By January 31st and July 31st of each year until the Commercial Launch of the first Product, Genzyme shall submit a written report setting forth in reasonable detail: (a) Genzyme’s (and its Affiliates’ and Licensees’) efforts to research and develop Products since the date of the last report delivered to Avigen under this Section and (b) Genzyme’s plan for such activities in the next year (including without limitation any milestone events described in Schedule 3.2 that are anticipated to occur during the covered year. The first such report shall be due on March 31, 2006 and shall be in lieu of the report that would otherwise be required on January 31, 2006. Genzyme’s obligations under this Section 4.2 shall

 

24.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

be subject to (i) Genzyme’s confidentiality obligations to Third Parties, (ii) any restrictions under Legal Requirements and (iii) [*] All reports delivered by Genzyme pursuant to this Section 4.2 shall be deemed Genzyme’s Confidential Information and shall be subject to Avigen’s confidentiality and non-use obligations under ARTICLE 7.

4.3          Ongoing Parkinson’s Trial . From the Effective Date until such time as the IND for the Ongoing Parkinson Trial has been effectively transferred to Genzyme as required pursuant to Section 2.6, Avigen shall not take action to suspend or terminate the Ongoing Parkinson’s Trial unless there arises a safety issue or request from the FDA or IRB of a clinical site.

4.4          Parkinson’s Disease Product

(a)         Once the IND for the Ongoing Parkinson’s Trial is transferred to Genzyme, Genzyme shall:

(i)          conduct the Ongoing Parkinson’s Trial to completion in accordance with its current protocol (subject to any amendments or updates that may be required by the FDA or the IRB of any of the clinical sites for the trial or that Genzyme in its prudent scientific or business judgment deems necessary or advisable),

(ii)         obtain FDA review (a Type C or other similar meeting) of a protocol for a subsequent Clinical Trial for a Current Parkinson’s Product [*] .

(iii)        if Genzyme determines to submit a protocol for a subsequent Clinical Trial for a Current Parkinson’s Product to the Recombinant DNA Advisory Committee (“RAC”) for review, submit such protocol to the RAC [*] , and

(iv)        if the RAC requests that Genzyme attend a meeting of the RAC to discuss the protocol, obtain RAC review of the protocol [*] provided that if [*] Genzyme shall [*] as an [*] and [*] to [*] this meeting to be [*] at the earliest possible date [*] .

(b)

(i)          Within [*] after the [*] Genzyme shall [*] in [*] either [*] Avigen [*] or [*] the [*] with respect to [*] to [*] to Avigen [*] . Also, if Genzyme treats a patient in [*] of a [*] (meaning [*] )) without a [*] then the [*] .

(ii)         The term “FDA Decision” means, [*] if Genzyme does not submit a protocol to the RAC as described in Section 4.4(a)(iii), the date of the FDA Type C or other similar meeting with Genzyme to discuss the Ongoing Parkinson’s Trial results and a proposed protocol for a subsequent Clinical Trial for a Current Parkinson’s Product, [*] and the [*] the date the RAC has held the meeting with Genzyme to discuss the protocol.

(c)         In the case where the FDA (or the RAC, if Genzyme elects to submit a protocol to the RAC as contemplated by Section 4.4(a)(iii) and does so in a timely manner) [*] however, to be clear, anything [*] provided that Genzyme has devoted Commercially Reasonable and Diligent Efforts [*] feedback as required by Section 4.4(a) and devotes Commercially

 

25.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

Reasonable and Diligent Efforts to [*] in order for them to provide such feedback, the FDA Decision will be the date of [*] If the FDA or RAC (if Genzyme elects to submit a protocol to the RAC as contemplated by Section 4.4(a)(iii) and does so in a timely manner) provides Genzyme with a notice that [*] the FDA Decision will be the date of such notice.

(d)         If the FDA or RAC [*] based on the information and data produced by the Ongoing Parkinson’s trial, Genzyme may:

(i)

[*] to [*] to [*] pursuant to [*] of the Agreement, or

(ii)         Perform further work, which may include an additional clinical trial, which in Genzyme’s best scientific or business judgment, will provide information and data that the FDA will deem sufficient to approve a clinical protocol for a subsequent clinical trial of a Current Parkinson’s Product following a Type C or similar meeting (or a meeting with the RAC, if Genzyme elects to submit a protocol to the RAC as contemplated by Section 4.4(a)(iii) and does so in a timely manner), exercising Genzyme’s judgment in making such decisions in accordance with the Commercially Reasonable and Diligent Efforts standard and devoting Commercially Reasonable and Diligent Efforts to such activities. In such case, the FDA Decision will be the date of a subsequent Type C or other similar meeting (or meeting with the RAC if Genzyme elects to submit a protocol to the RAC as contemplated by Section 4.4(a)(iii) and does so in a timely manner, whichever is later) that is scheduled as soon as possible after the further work is performed by Genzyme.

4.5          Commercialization . Genzyme shall use its Commercially Reasonable and Diligent Efforts to promote (including without limitation reasonable pre-marketing, advertising, education and detailing), market, distribute, sell, and provide product support for, each Product for which Genzyme obtains Regulatory Approval and, if applicable, Pricing Approval. Genzyme may satisfy its diligence obligations hereunder through its own efforts, and through those of its Affiliates, Licensees, distributors and subcontractors.

4.6          Regulatory Reporting . Beginning on the date that the authority and responsibilities for the Current Regulatory Filings are transferred by Avigen to Genzyme, as between the Parties, Genzyme shall have sole responsibility for and control of such transferred Regulatory Filings and all future Regulatory Filings for the Products and all regulatory reporting that is required in relation thereto with respect to periods beginning on such date.

ARTICLE 5

 

PROTECTION OF INTELLECTUAL PROPERTY

5.1          Filing, Prosecution and Maintenance of Patent Rights

(a)          Patent Rights . Except as provided in subsection (b), as between the Parties, Genzyme shall have sole responsibility for and control over the filing, prosecution (including without limitation conducting interferences and oppositions), and maintenance, all at its sole expense, the Gene Therapy Patents. Except as provided in any Upstream License or Other Gene Therapy Agreement, Genzyme shall file, prosecute and maintain the Gene Therapy Patents in a manner consistent with its general patent practices and policies as in effect from time

 

26.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

to time. Avigen agrees to (i) promptly execute such documents (or require its current employees or consultants to execute such documents, and encourage its former employees or consultants to execute such documents, as applicable) and perform such acts as Genzyme may reasonably require to enable Genzyme’s filing, prosecution and maintenance of any and all Gene Therapy Patents and [*] . In response to any reasonable requests from Avigen, Genzyme shall keep Avigen reasonably informed of [*] related to the filing [*] prosecution and maintenance of the Gene Therapy Patents.

It is understood and agreed that with respect to any Gene Therapy Patents to which rights are derived through an Upstream License or Other Gene Therapy Agreement, Genzyme’s rights and obligations to file, prosecute and maintain such Gene Therapy Rights under this ARTICLE 5 are subject to any applicable terms and conditions of the relevant Upstream License or Other Gene Therapy Agreement.

(b)          Maintenance of Certain Patents . Genzyme may elect to [*] in a manner consistent with [*] as in effect from time to time [*] subject to [*] with respect to any Products [*] by such [*] to the full extent required under [*]

5.2

Infringement of Patent Rights .

(a)          Action Against Infringement . Genzyme shall promptly deliver Notice to Avigen of any alleged or threatened infringement of the Gene Therapy Patents of which it becomes aware. Genzyme shall have the right to prosecute any such infringement at its own and sole expense. If Genzyme recovers any damages, by way of settlement or otherwise, such recovery shall be used first to reimburse Genzyme for its litigation expenses (including internal and expenses of Avigen that are required to be reimbursed by Genzyme as described below). Any remaining amounts from such recovery shall (i) to the extent [*] , (ii) to the extent [*] and (iii) the rest to be retained by Genzyme without any obligations to Avigen with respect thereto. In the event Genzyme brings an infringement action, Avigen shall cooperate fully in response to Genzyme’s reasonable requests for assistance but at Genzyme’s sole expense for all of Avigen’s reasonable invoiced out-of-pocket expenses (including both internal and external expenses), including, if required to bring such action, the furnishing of a power of attorney.

(b)          Indispensable Party . If Genzyme reasonably determines that Avigen (and/or its Affiliate) is an indispensable party to any action brought by Genzyme pursuant to this Section 5.2, Avigen hereby consents to be joined and agrees to use its reasonable efforts to cause its Affiliate, as the case may be, to consent to be joined. Avigen (or its Affiliate, as the case may be) shall bear its own costs if it elects to be represented by separate counsel, but Genzyme shall bear all other litigation costs, including without limitation all of Avigen’s reasonable invoiced out-of-pocket expenses, whether internal or external (other than such costs of Avigen’s separate counsel).

(c)          Reimbursement of Internal Avigen Costs . Internal costs of Avigen reimbursable pursuant to Section 5.2(a) or 5.2(b) are limited to the [*] Time spent by an Avigen employee shall not be eligible for reimbursement pursuant to Section 5.2(a) or 5.2(b) until Avigen has provided Genzyme with Notice of the annual salary of the Avigen employee (the “Annual Salary”). The amount Genzyme is required to reimburse Avigen with respect to the

 

27.

 

* = confidential treatment requested; certain confidential information, in the places marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 


 

time spent by any Avigen employee with respect to such infringement action will be calculated by [*] .

5.3

Third Party Intellectual Property .

(a)          Notice . If the development, manufacture, use, import, export, offer for sale or sale of any Product by or on behalf of Genzyme, any of its Affiliates and Licensees results in a claim for patent infringement or other violation of intellectual property rights of any Thir


 
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