LICENSE AGREEMENT

 

LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT (this “ Agreement ”) is made and entered into as of March 27, 2006 (the “ Effective Date ”), by and between Bristol-Myers Squibb Company , a Delaware corporation headquartered at 345 Park Avenue, New York, New York 10154 (“ BMS ”), and Pharmacopeia Drug Discovery Inc. , a Delaware corporation, having its principal office at 3000 Eastpark Boulevard, Cranbury, New Jersey 08512 (“ Pharmacopeia ”).  BMS and Pharmacopeia are sometimes referred to herein individually as a “ Party ” and collectively as the “ Parties .”

RECITALS

 

WHEREAS, BMS Controls (as defined below) certain patent rights and know-how rights with respect to the Licensed Compounds (as defined below); and

 

WHEREAS, Pharmacopeia desires to obtain from BMS the licenses set forth herein, and BMS desires to grant such licenses to Pharmacopeia, all on the terms and conditions set forth in this Agreement;

 

NOW, THEREFORE in consideration of the foregoing and the mutual agreements set forth below, the Parties agree as follows.

 

ARTICLE 1

DEFINITIONS

 

The terms in this Agreement with initial letters capitalized, whether used in the singular or the plural, shall have the meaning set forth below or, if not listed below, the meaning designated in places throughout this Agreement.

 

1.1            “ AAA ” has the meaning set forth in Section 14.2.

 

1.2            “ Act ” means the United States Food, Drug and Cosmetic Act, as amended.

 

1.3            “ Active Compound ” has the meaning set forth in Appendix 2 hereto.

 

1.4            “ Affiliate ” of a Person means any other Person which (directly or indirectly) is controlled by, controls or is under common control with such Person.  For the purposes of this definition, the term “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) as used with respect to a Person means (i) in the case of a corporate entity, direct or indirect ownership of voting securities entitled to cast at least fifty percent (50%) of the votes in the election of directors or (ii) in the case of a non-corporate entity, direct or indirect ownership of at least fifty percent (50%) of the voting securities with the power to direct the management and policies of such entity.

 

 

1.5            “ Agreement ” means this Agreement, together with all Appendices attached hereto, as the same may be amended or supplemented from time to time.

 

1.6            “ Approval ” means, with respect to any Licensed Product in any regulatory jurisdiction, approval from the applicable Regulatory Authority sufficient for the manufacture, distribution, use and sale of the Licensed Product in such jurisdiction in accordance with applicable Laws.

 

1.7            “ BMS Core Patent Rights ” means the patents and patent applications that are listed in Appendix 1 hereto, and (a) **that ** listed in Appendix 1 hereto (**), and ** thereof (but in each case, only with respect to ** listed in Appendix 1 hereto), and (b) all ** on any of the foregoing **, together with all ** thereof, and ** thereof (but in each case, only with respect to ** listed in Appendix 1 hereto).

 

1.8            “ BMS Know-How ” means **.  BMS Know-How shall also include the **.  BMS Know-How shall not include **.

 

1.9            “ BMS Other Patent Rights ” means (i) ** (a) ** or (b) ** and (ii) **.

 

1.10          “ BMS Patent Rights ” means the BMS Core Patent Rights and the BMS Other Patent Rights.

 

1.11          “ Board ” means Pharmacopeia’s then-current Board of Directors.

 

1.12          “ Business Day ” or “ business day ” means a day other than Saturday, Sunday or any day on which commercial banks located in New York, New York are authorized or obligated by applicable Laws to close.

 

1.13          “ Calendar Quarter ” means the respective periods of three consecutive calendar months ending on March 31, June 30, September 30 and December 31.

 

1.14          “ Calendar Year ” means each successive period of 12 months commencing on January 1 and ending on December 31.

 

1.15          “ Combination Product ” means a **.

 

1.16          “ Commercialization ” or “ Commercialize ” means activities directed to commercially manufacturing, obtaining pricing and reimbursement approvals, carrying out Phase 4 Trials for, marketing, promoting, distributing, importing or selling a pharmaceutical product.

 

1.17          “ Commercially Reasonable Efforts ” means, with respect to Licensed Compounds and Licensed Products, the carrying out of Development or Commercialization activities in a **.  Without limiting the foregoing, Commercially Reasonable Efforts requires that a Party: (i) **, (ii) **, (iii) **, (iv) **, and (v) **.

 

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1.18          “ Competitive Compound ” means any ** that is not a **, unless BMS has **.  BMS shall not **.

 

1.19          “ Compound Library Services ” means the services to be performed by Pharmacopeia for BMS as set forth in Appendix 5 and Appendix 6 hereto, for the design, synthesis and delivery to BMS of the Libraries.

 

1.20          “ Confidential Information ” means all trade secrets, processes, formulae, data, know-how, improvements, inventions, chemical or biological materials, assays, techniques, marketing plans, strategies, customer lists, or other information that has been created, discovered, or developed by a Party, or has otherwise become known to a Party, or to which rights have been assigned to a Party, as well as any other information and materials that are deemed confidential or proprietary to or by a Party (including, without limitation, all information and materials of a Party’s customers and any other Third Party and their consultants), in each case that are disclosed by such Party to the other Party, regardless of whether any of the foregoing are marked “confidential” or “proprietary” or communicated to the other by the disclosing Party in oral, written, graphic, or electronic form.

 

1.21          “ Controlled ” or “ Controls ”, when used in reference to intellectual property, means the legal authority or right of a Party hereto (or any of its Affiliates) to grant a license or sublicense of intellectual property rights to another Party, or to otherwise disclose proprietary or trade secret information to such other Party, without breaching the terms of any agreement with a Third Party, or misappropriating the proprietary or trade secret information of a Third Party.

 

1.22          “ Cover ,” “ Covered ” or “ Covering ” means, with respect to patent rights, that the making, using, importation, offer for sale or sale of an invention claimed in such patent rights or the conducting of an activity that, in the absence of a license under such patent rights, would infringe at least one Valid Claim of such patent rights whether present in an issued patent or in a patent application if it issued as a patent containing such claim.

 

1.23          “ DARA ” means dual acting antagonists of the angiotensin-II receptor (AT1 receptor) and the endothelin-1 (ETA) receptor.

 

1.24          “ Development ” means non-clinical and clinical drug development activities reasonably related to the development and submission of information to a Regulatory Authority, including, without limitation, toxicology, pharmacology and other discovery and pre-clinical efforts, test method development and stability testing, manufacturing process development, formulation development, delivery system development, quality assurance and quality control development, statistical analysis, clinical studies (including, without limitation, pre- and post-approval studies and specifically excluding regulatory activities directed to obtaining pricing and reimbursement approvals).  When used as a verb, “Develop” means to engage in Development.

 

1.25          “ Development Plan ” means, with respect to any Licensed Product, a comprehensive, multi-year plan specifying the anticipated timing and technical details of Development activities for such Licensed Product, including without limitation the indications to

 

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be targeted, line of therapy, timelines for completing key activities, phasing of development, primary endpoints, criteria for continuing activities, study size, comparator drugs, combination drugs, timelines for data preparation and filing of regulatory submissions, toxicology and pharmacology studies and manufacturing process development and scale up.  An outline of the initial Development Plan as of the Effective Date is attached hereto as Appendix 3 .

 

1.26          “ Dollar ” or “ $ ” means the lawful currency of the United States.

 

1.27          “ Effective Date ” means the date specified in the initial paragraph of this Agreement.

 

1.28          “ EMEA ” means the European Agency for the Evaluation of Medicinal Products, or any successor agency thereto.

 

1.29          “ EU ” means the European Union, as its membership may be altered from time to time, and any successor thereto, and which, as of the Effective Date, consists of Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and the United Kingdom, and that certain portion of Cyprus included in such organization.

 

1.30          “ Europe ” means the countries comprising the European Union as it may be constituted from time to time, together with those additional countries included in the European Economic Area as it may be constituted from time to time (which as of the Effective Date includes Iceland, Liechtenstein and Norway), Albania, Andorra, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Holy See (Vatican), Macedonia, Moldova, Monaco, Poland, Romania, Russian Federation, San Marino, Serbia and Montenegro, Switzerland, Turkey, Ukraine, other central and eastern European markets including former Soviet block and USSR countries, and any successors to, or new countries created from, any of the foregoing.

 

1.31          “ FDA ” means the U.S. Food and Drug Administration, or any successor agency thereto.

 

1.32          “ Field ” means the diagnosis, prevention, treatment or control of any human or animal disease, disorder or condition.

 

1.33          “ First Commercial Sale ” means, with respect to any Licensed Product, the first sale for use or consumption by the general public of such Licensed Product in any country in the Territory after Approval of such Licensed Product has been granted, or such marketing and sale is otherwise permitted, by the Regulatory Authority of such country.

 

1.34          “ GAAP ” means generally accepted accounting principles in the United States.

 

1.35          “ IND ” means an Investigational New Drug Application, as defined in the Act, filed with the FDA or its foreign counterparts.

 

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1.36          “ Indemnification Claim ” has the meaning set forth in Section 12.3.

 

1.37          “ Indemnitee ” has the meaning set forth in Section 12.3.

 

1.38          “ Indemnitor ” has the meaning set forth in Section 12.3.

 

1.39          “ Independent Evaluator ” means an independent certified public accounting firm, a consulting firm in the biotechnology and/or pharmaceutical sectors or investment bank, in each case of recognized standing within such sectors, which is not at the time of the evaluation contemplated in Section 3.1 providing auditing or consulting services to either Party, and which is selected by Pharmacopeia.

 

1.40          “ JNDA ” means a New Drug Application filed with the Koseisho required for marketing approval for the applicable Licensed Product in Japan.

 

1.41          “ JNDA Approval ” means the approval of a JNDA by the Koseisho for the applicable Licensed Product in Japan.

 

1.42          “ JNDA Filing ” means the acceptance by the Koseisho of the filing of a JNDA for the applicable Licensed Product in Japan.

 

1.43          “ Koseisho ” means the Japanese Ministry of Health and Welfare, or any successor agency thereto.

 

1.44          “ Laws ” means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of any federal, national, multinational, state, provincial, county, city or other political subdivision, agency or other body, domestic or foreign.

 

1.45          “ Library ” and “ Libraries ” have the meaning set forth in Appendix 5 .

 

1.46          “ License ” means any agreement transferring rights with respect to any Licensed Compound or any Licensed Product by Pharmacopeia (or an Affiliate of Pharmacopeia) to any Third Party licensee, including without limitation any license, sublicense, co-development, co-promotion, distribution, joint venture, development and commercialization collaboration or similar transaction involving a transfer of rights with respect to a Licensed Compound or Licensed Product.  “ License ” shall also include any further transfer of such rights by a Third Party licensee to any other Third Party.  “ License ” also refers to the corresponding arrangement for the grant by Pharmacopeia of rights back to BMS with respect to one or more Licensed Compound(s) and Licensed Product(s) pursuant to Section 3.1.

 

1.47          “ Licensed Compounds ” means:

 

(a)            the **;

 

(b)            any **;

 

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(c)            any **; and

 

(d)            any **.

 

1.48          “ Licensed Product ” means any pharmaceutical product containing a Licensed Compound (alone or with other active ingredients), in all forms, presentations, formulations and dosage forms.

 

1.49          “ List A Countries ” means **.

 

1.50          “ Listed Compounds ” means those compounds identified in Appendix 4 .

 

1.51          “ Losses and Claims ” has the meaning set forth in Section 12.1.

 

1.52          “ MAA Approval ” means approval by the EMEA of a marketing authorization application (“MAA”) filed with the EMEA for the applicable Licensed Product under the centralized European procedure.  If the centralized EMEA filing procedure is not used, MAA Approval shall be achieved upon the first Approval for the applicable Licensed Product in any two of the following countries:  France, Germany, Italy, Spain or the United Kingdom.

 

1.53          “ MAA Filing ” means filing with the EMEA of a marketing authorization application (“MAA”) for the applicable Licensed Product under the centralized European procedure.  If the centralized EMEA filing procedure is not used, MAA Filing shall be achieved upon the first filing of a marketing authorization application for the applicable Licensed Product in any two of the following countries:  France, Germany, Italy, Spain or the United Kingdom.

 

1.54          “ Major Market Countries ” means the **.  “ Major Market Country ” means one of these countries.

 

1.55          “**” has the meaning set forth in **.

 

1.56          “ NDA ” means a New Drug Application filed with the FDA required for marketing approval for the applicable Licensed Product in the U.S.

 

1.57          “ NDA Approval ” means the approval of an NDA by the FDA for the applicable Licensed Product in the U.S.

 

1.58          “ NDA Filing ” means the acceptance by the FDA of the filing of an NDA for the applicable Licensed Product.

 

1.59          “ Negotiation Period ” has the meaning set forth in Article 3.

 

1.60          “ Net Sales ” means, with respect to any **:

 

(a)            **; provided, however , that where any such **;

 

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(b)            **;

 

(c)            **; and

 

(d)            **.

 

Net Sales shall be determined **.  In the case of any Combination Product sold in the Territory, Net Sales for such Combination Product shall be calculated by **.

 

Net Sales shall not include any **.

 

1.61          “ Notice ” has the meaning set forth in Section 3.1.1(a).

 

1.62          “ Person ” means any individual, firm, corporation, partnership, limited liability company, trust, business trust, joint venture company, governmental authority, association or other entity.

 

1.63          “ Phase 1 Trial ” means a human clinical trial of a Licensed Product, the principal purpose of which is a preliminary determination of safety in healthy individuals or patients, as described in 21 C.F.R. 312.21(a), or a similar clinical study prescribed by the Regulatory Authorities in a foreign country.

 

1.64          “ Phase 1b Study ” means a Phase 1 Trial based upon and conducted subsequent to filing an IND in the U.S. for the Licensed Product and **.  The plan for such clinical trial for a Licensed Compound (including the clinical end points for the trial) shall be described in the then-applicable Development Plan.  As used herein, “completion of a Phase 1b Study” shall mean completion of the applicable clinical trial and the submission to the FDA (or equivalent Regulatory Authority in the country in which the Phase 1b Study is carried out) of the preliminary clinical studies report plus the clinical data and tables in anticipation of post-trial meeting with the relevant Regulatory Authority for such clinical trial.  If the Phase 1b Study described above is not approved by the relevant Regulatory Authority, then “Phase 1b Study” shall mean that study that is carried out that most closely approximates the study described above.

 

1.65          “ Phase 2 Trial ” means a human clinical trial of a Licensed Product, the principal purpose of which is a determination of safety and efficacy in the target patient population, as described in 21 C.F.R. 312.21(b), or a similar clinical study prescribed by the Regulatory Authorities in a foreign country.

 

1.66          “ Phase 2b Trial ” means a means a Phase 2 Trial of a Licensed Product, the principal purpose of which is a further determination of efficacy and safety, in the target population, at the intended clinical dose or doses or range of doses, on a sufficient number of subjects and for a sufficient period of time to confirm the optimal manner of use of the Product (dose and dose regimen) to support the initiation, without any further Phase 2 Trial, of a pivotal Phase 3 Trial (such Phase 3 Trial may be a continuation/extension of such Phase 2 Trial).

 

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1.67          “ Phase 3 Trial ” means a human clinical trial of a Licensed Product on a sufficient number of subjects that is designed to establish that a pharmaceutical product is safe and efficacious for its intended use, and to determine warnings, precautions, and adverse reactions that are associated with such pharmaceutical product in the dosage range to be prescribed, which trial is intended to support Approval of a Licensed Product, as described in 21 C.F.R. 312.21(c), or a similar clinical study prescribed by the Regulatory Authorities in a foreign country.  For purposes of this Agreement, “start of Phase 3 Trial” for a Licensed Product means the first dosing of such Licensed Product in a human patient in a Phase 3 Trial.

 

1.68          “ Phase 4 Trial ” means a human clinical trial for a Licensed Product commenced after receipt of Approval in the country for which such trial is being conducted and that is conducted within the parameters of the Approval for the Licensed Product.  Phase 4 Trials may include, without limitation, epidemiological studies, modeling and pharmacoeconomic studies, investigator sponsored clinical trials of the Licensed Product and post-marketing surveillance studies.

 

1.69          “ Proprietary Compound of BMS ” means any compound or other agent being developed or sold, as of the Effective Date or at any time thereafter, by BMS or its Affiliates or their contractors or collaborators.

 

1.70          Regulatory Authority ” means any national or supranational governmental authority, including, without limitation, the FDA, EMEA or Koseisho (i.e., the Japanese Ministry of Health and Welfare, or any successor agency thereto), that has responsibility in countries in the Territory over the Development and/or Commercialization of Licensed Compounds and Licensed Products.

 

1.71          “ Sublicensee ” means any Third Party to whom rights are transferred with respect to any Licensed Compound or Licensed Product, including through any license, sublicense, co-development, co discovery, co-promotion, distribution, joint venture, Development and Commercialization collaboration or similar transaction between a Party (or an Affiliate of a Party) and a Third Party.  “ Sublicensee ” shall also include any Third Party to whom such rights are transferred through further sublicense by a Sublicensee.  “ Sublicensee ” shall include any Third Party that is a party to a License agreement.

 

1.72          “ Territory ” means any country in the world.

 

1.73          “ Third Party ” means any Person other than Pharmacopeia, BMS and their respective Affiliates.

 

1.74          “ Third Party Term Sheet ” has the meaning set forth in Section 3.1.2(b).

 

1.75          “ Title 11 ” has the meaning set forth in Section 13.8.

 

1.76          “ United States ” or “ U.S. ” means the United States of America and its territories and possessions (including, without limitation, Puerto Rico).

 

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1.77          “ Valid Claim ” means a claim of (i) an issued and unexpired patent or a supplementary protection certificate, which claim has not been held invalid or unenforceable by a court or other government agency of competent jurisdiction from which no appeal can be or has been taken and has not been held or admitted to be invalid or unenforceable through re-examination or disclaimer, opposition procedure, nullity suit or otherwise, or (ii) a pending patent application; provided, however , that if a claim of a pending patent application shall not have issued within five (5) years (or in Japan, seven (7) years) after the earliest filing date from which such claim takes priority, such claim shall not constitute a Valid Claim for the purposes of this Agreement unless and until a patent issues with such claim.

 

ARTICLE 2

LICENSE GRANTS

 

2.1            BMS Patent Rights and BMS Know-How.

 

2.1.1.              BMS Core Patent Rights and BMS Know-How .  Subject to the terms and conditions set forth in this Agreement (including, without limitation, the reservation of rights in Section 2.5), BMS hereby grants to Pharmacopeia a non-transferable (except in accordance with Section 15.4), exclusive license, with the right to sublicense in accordance with Section 2.2, under the BMS Core Patent Rights and BMS Know-How to the extent reasonably necessary to, make, use (including in activities directed at the research and Development of Licensed Compounds), have made, sell, have sold, offer to sell, export, import and otherwise exploit or Commercialize Licensed Compounds and Licensed Products in the Field in the Territory.

 

2.1.2.              BMS Other Patent Rights .  Subject to the terms and conditions set forth in this Agreement (including, without limitation, the reservation of rights in Section 2.5), BMS hereby grants to Pharmacopeia a non-transferable (except in accordance with Section 15.4), non-exclusive (subject to conversion to exclusivity pursuant to Section 2.6 below) license, with the right to sublicense in accordance with Section 2.2, under the BMS Other Patent Rights solely to the extent reasonably necessary or useful to make, use (including in activities directed at the research and Development of Licensed Compounds), have made, sell, offer to sell, export and import and otherwise exploit or Commercialize Licensed Compounds and Licensed Products in the Field in the Territory, provided, however , that no rights are granted under this Section 2.1.2 (or otherwise under this Agreement) with respect to any Proprietary Compound of BMS.  For clarification, no rights are granted under this Section 2.1.2 (or otherwise under this Agreement) to co-formulate or use in combination a Licensed Compound with any Proprietary Compound of BMS.  The rights granted by BMS to Pharmacopeia under this Section 2.1.2 include the right to make, have made, use (including in activities directed at the research and Development of Licensed Compounds), export and import intermediates and starting materials reasonably necessary for the manufacture of Licensed Compounds, and to practice methods reasonably necessary for the manufacture of Licensed Compounds, and to practice methods reasonably necessary for manufacturing such intermediates and starting materials, but only for the purposes of manufacturing, using, importing or exporting Licensed Compounds in the Field in the

 

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Territory.  For clarification, no rights are granted to sell or offer to sell any such intermediates or starting materials, or use such intermediates or starting materials for any purpose other than for the purposes of manufacturing Licensed Compounds.

 

2.2            Sublicenses .  Pharmacopeia shall have the right to grant sublicenses with respect to the rights licensed to Pharmacopeia under Sections 2.1.1 and 2.1.2 to any Affiliate of Pharmacopeia for so long as such Affiliate remains an Affiliate of Pharmacopeia, provided that (i) such Affiliate shall agree in writing to be bound by and subject to the terms and conditions of this Agreement in the same manner and to the same extent as Pharmacopeia, and (ii) Pharmacopeia shall remain responsible for the performance of this Agreement and shall cause such Affiliate to comply with the terms and conditions of this Agreement.  In addition, Pharmacopeia shall have the right to grant sublicenses with respect to the rights licensed to Pharmacopeia under Sections 2.1.1 and 2.1.2 to Third Parties.

 

(a)            Other than a permitted assignment of this Agreement in accordance with Section 15.4.1, ** then only in accordance with this Section 2.2 and Article 3.  The foregoing ** shall not limit Pharmacopeia’s ability to engage Third Party contractors in the Development, manufacture and/or shipping/warehousing of any Licensed Compound or any Licensed Product, provided that such engagement is essentially a fee-for-service or similar purchase arrangement and does not grant the Third Party contractor the right to sell or promote such Licensed Compound or Licensed Product.

 

(b)            ** , Pharmacopeia shall have the right to enter into a License agreement with a Third Party, provided that, to the extent any such License agreement grants rights with respect to any Licensed Compound:

 

(i)             such License agreement shall be consistent with the terms and conditions of this Agreement, and shall not limit (A) Pharmacopeia’s ability to perform its obligations under this Agreement or (B) BMS’ rights under this Agreement;

 

(ii)            in such License agreement, the Sublicensee shall agree in writing to be bound to Pharmacopeia by terms and conditions that are substantially similar to, or less favorable to the Sublicensee than, or otherwise allow Pharmacopeia to fully perform the corresponding terms and conditions of this Agreement, provided that Section 3.1.2 of Section 3.1 shall not apply to a Sublicensee;

 

(iii)           promptly after the execution of such License agreement, Pharmacopeia shall provide a copy of such License agreement to BMS, with financial and other confidential or proprietary commercial terms redacted consistent with the public filing of such license agreement with the Securities and Exchange Commission (“SEC”), or, if not filed with the SEC, then with financial and other confidential or proprietary commercial terms redacted (to the extent that such other commercial terms are not reasonably necessary for BMS to determine Pharmacopeia’s compliance with this Agreement);

 

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(iv)           Pharmacopeia shall remain responsible for the performance of this Agreement (including, without limitation, its obligations under Sections 5.1(a) and 6.1), the payment of all payments due, and making reports and keeping books and records, and shall use commercially reasonable efforts to monitor such Sublicensee’s compliance with the terms of such License;

 

(v)            any sublicense rights granted by Pharmacopeia in a License (to the extent such sublicensed rights are granted to Pharmacopeia in this Agreement) shall terminate on a country-by-country and Licensed Product-by-Licensed Product basis effective upon the termination under Section 13.2 of the license from BMS to Pharmacopeia with respect to such sublicensed rights, provided that such sublicensed rights shall not terminate if, as of the effective date of such termination by BMS under Section 13.2, the Sublicensee is not in material breach of its obligations to Pharmacopeia under its License agreement, and within sixty (60) days of such termination the Sublicensee agrees in writing to be bound directly to BMS under a license agreement substantially similar to this Agreement with respect to the rights sublicensed hereunder, substituting such Sublicensee (a “Surviving Sublicensee ”) for Pharmacopeia; and

 

(vii)          such Sublicensees shall have the right to grant further sublicenses with respect to the Development or Commercialization of Licensed Products, provided that such further sublicenses shall be in accordance with and subject to all of the terms and conditions of this Section 2.2.

 

For purposes of clarification, the preceding provisions of this Section 2.2(b) shall not apply to Licensed Compounds with respect to which Pharmacopeia grants BMS a License.

 

(c)            In accordance with the foregoing, unless BMS agrees otherwise in writing, any License shall **.

 

(d)            For clarity, where provisions of this Agreement provide that Pharmacopeia shall be “solely” responsible or the like with respect to a matter (for example, Sections 5.4, 5.5, or 7.1), it is understood that such responsibilities may be carried out or borne on Pharmacopeia’s behalf by a Pharmacopeia Affiliate, permitted Sublicensee or contractor of Pharmacopeia.

 

(e)            It shall be a **.

 

2.3            No Trademark License .  No right or license, express or implied, is granted to Pharmacopeia to use any trademark, trade name, trade dress or service mark owned or Controlled by BMS or any of its Affiliates.  Pharmacopeia, at its sole cost and expense, shall be responsible for the selection, registration and maintenance of all trademarks which it employs in connection with its activities conducted pursuant to this Agreement, if any, and shall own and control such trademarks.

 

2.4            No Implied Licenses .  No license or other right is or shall be created or granted hereunder by implication, estoppel or otherwise.  All such licenses and rights are or shall be granted only as expressly provided in this Agreement.

 

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2.5            Retained Rights .

 

2.5.1.              All rights not expressly granted under Section 2.1 are reserved by BMS and may be used by BMS for any purpose.  Without limiting the foregoing, BMS retains any and all rights under the BMS Patent Rights and BMS Know-How to make, have made, use, sell, have sold, export or import any compounds, provided that such compounds are not Licensed Compounds or products containing any Licensed Compounds.  For clarification, BMS retains the exclusive right under the BMS Patent Rights to develop and commercialize compounds within the BMS Patent Rights which are not Licensed Compounds.  BMS also expressly reserves and retains the right (i) to make, have made and use Licensed Compounds for any internal research purposes (including but not limited to for purposes of screening in support of BMS’ internal research programs), (ii) to support the filing and prosecution of patent applications, and (iii) to make, have made and use any Licensed Compound solely for use as an intermediate or starting material in the manufacture of any compound which is not a Licensed Compound.

 

2.5.2.              Subject to the exclusive rights granted to Pharmacopeia under this Article 2 and subject to the restrictions on use of Pharmacopeia’s Confidential Information under Article 11, **.  For clarification, the foregoing restriction on BMS shall not apply to any Active Compound that is acquired from or through a Third Party after the Effective Date, for example, through in-license, acquisition or merger.  For purposes of clarity, nothing in the foregoing shall be construed to reserve to BMS the right to engage in the discovery, Development and/or Commercialization of Active Compounds Covered by the BMS Core Patent Rights exclusively licensed to Pharmacopeia hereunder.

 

2.6            Conversion to Exclusive License .  BMS shall have the right at its sole discretion to convert the license granted to Pharmacopeia under Section 2.1.2 to be an exclusive license upon notice to Pharmacopeia specifying the patents to be so converted.  The BMS patent rights so exclusively licensed to Pharmacopeia pursuant to this Section 2.6 shall thereafter be deemed to be BMS Core Patent Rights.

 

ARTICLE 3

BMS RIGHT OF FIRST NEGOTIATION

 

3.1            BMS Right of First Negotiation.

 

3.1.1.              BMS shall have a limited right of first negotiation with respect to Licensed Compounds as follows (the “ Right of First Negotiation ”).

 

(a)            In the event that Pharmacopeia desires to enter into a License arrangement with respect to any Licensed Compound, before entering into negotiations with any Third Party with respect to such License, Pharmacopeia will notify BMS of its desire and provide BMS with information in Pharmacopeia’s possession and control that is reasonably necessary for BMS to perform its due diligence with respect to such Licensed Compound (including but not limited to information from or relating to clinical studies, correspondence with FDA, information regarding

 

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Third Party patents, and information regarding the manufacture, sourcing and cost of goods for the Licensed Compound) (the “ Notice ”).  Pharmacopeia shall provide to BMS a proposal of terms and conditions with respect to such a License at the time of such Notice.  If BMS notifies Pharmacopeia in writing of its election to pursue a License for such Licensed Compound within ** (**) days after BMS’ receipt of such Notice, Pharmacopeia shall enter into good faith negotiations with BMS with respect to such License for a period of ** (**) days (the “ Negotiation Period ”) following receipt of such election from BMS.  **.

 

(b)            During the Negotiation Period, Pharmacopeia will provide BMS with an opportunity to make a written proposal of terms and conditions with respect to such a License and Pharmacopeia will either accept the proposal or provide a counter offer to BMS (i.e., in addition to the proposal provided to BMS at the time of the Notice).  If BMS has not provided Pharmacopeia with such a written proposal regarding all principal financial terms of such a License within the first ** (**) days of the Negotiation Period, the Negotiation Period will terminate.  If Pharmacopeia and BMS are able to conclude an agreement in principle within the Negotiation Period as set forth in a mutually satisfactory term sheet with respect to such License (being demonstrated by BMS obtaining internal BMS Executive Committee, and Pharmacopeia obtaining Board approval, to proceed with completing a definitive agreement based on such term sheet), the Parties shall negotiate a definitive agreement in good faith with the goal of executing such agreement within ** (**) days thereafter.

 

(c)            If BMS does not elect through the written notification described above to pursue a License with respect to such Licensed Compounds within the ** (**) day period set forth above, Pharmacopeia will then be free to enter into negotiations with any Third Party regarding a License for such Licensed Compounds and free to enter into any such License, but only subject to the provisions set forth in this Article 3 below.

 

(d)            Following Notice, if BMS does so elect to pursue a License with respect to the Licensed Compounds within the ** (**) day period set forth above, but Pharmacopeia and BMS do not conclude an agreement in principle (being demonstrated by BMS obtaining internal BMS Executive Committee, and Pharmacopeia obtaining Board approval, to proceed with completing a definitive agreement based on such term sheet) with respect to such License within the Negotiation Period as described above, Pharmacopeia will then be free to enter into negotiations with any Third Party regarding a License for such Licensed Compounds, and free to enter into any such License, subject to the provisions set forth in Article 3 below.

 

3.1.2.              Pharmacopeia shall not enter into an agreement with any Third Party with respect to such License for a Licensed Compound except in accordance with the provisions of this Article 3, including the provisions set forth below.

 

(a)            In the event that Pharmacopeia intends to enter into a License agreement with a Third Party (based on bona fide arm’s-length negotiations with an unaffiliated Third Party) after following the procedure set forth in this Article 3, **.

 

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(b)            **.  For this purpose, ** at that time.  Such determination by the **.  ** will consider **.  Such determination by the Board shall be **.

 

(c)            If the **.

 

(d)            If the **.  In the event that Pharmacopeia makes **.  If Pharmacopeia offers **.  **.

 

3.1.3.              **.

 

3.1.4.              Upon the initiation of any such Negotiation Period, Pharmacopeia shall **.

 

3.1.5.              Any License agreement entered into by Pharmacopeia with a Third Party in accordance with the foregoing procedure shall be consistent with the terms and conditions of this Agreement and shall fully enable Pharmacopeia to fully perform all of its obligations under the Agreement which will continue in effect.  As set forth in Section 2.2, any Sublicensee shall be bound by the terms and conditions of this Agreement in the same manner as Pharmacopeia, provided that Section 3.1.2 of Section 3.1 shall not apply to a Sublicensee.

 

3.1.6.              Certain Definitions .  For the purposes of this Article 3, the following capitalized terms shall have the following meanings:

 

(a)            “ ** ” means, with respect to a **, compared to a ** under the terms and conditions set forth in the **, that the **, based on the **, including without limitation, **.

 

(b)            “ ** ” means any **.

 

ARTICLE 4

TRANSFER OF KNOW-HOW

 

4.1            Documentation .  Prior to the Effective Date BMS shall provide to Pharmacopeia one (1) electronic or paper copy of all documents, data or other information Controlled by BMS as of the Effective Date to the extent that such documents, data and information are (i) reasonably necessary for the manufacture, Development or Commercialization of the Listed Compounds (including SAR information) and subject to the BMS Know-How license under Section 2.1, and (ii) are reasonably available to BMS without undue searching; provided however , that subject to the last sentence of this Section 4.1, the foregoing shall in no event require BMS to provide copies of manufacturing run records or laboratory notebook records.  Such documentation is Confidential Information of BMS (subject to Article 11) and shall not be used by Pharmacopeia for any purpose other than Development, manufacture or Commercialization of Licensed Compounds and Licensed Products in accordance with this Agreement.  Pharmacopeia acknowledges that it has received from BMS such documents, data and information prior to the Effective Date.  BMS shall be responsible for the cost of providing

 

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one (1) set of copies only.  BMS shall have no obligation to reformat or otherwise alter or modify any such materials, or to create materials in electronic form, in order to provide them to Pharmacopeia.  Any and all such materials delivered to Pharmacopeia pursuant to this Section 4.1 are and shall remain the sole property of BMS.  Notwithstanding the foregoing, if at any time during the term of this Agreement Pharmacopeia identifies particular documents, data or information (including laboratory notebook records) that are within the BMS Know-How, but were not previously delivered to Pharmacopeia, and that are reasonably necessary for the continued manufacture, Development or Commercialization of a Licensed Compound or Licensed Product (including without limitation materials requested in connection with an audit or other inquiry by a Regulatory Authority), or are reasonably necessary to support the filing and/or prosecution of patent rights Covering the Licensed Compounds or Licensed Products, BMS shall promptly provide such material to Pharmacopeia upon request to the extent that such items are in BMS’ possession and are available without undue searching.

 

4.2            Technical Assistance .  During the ** (**) day period following the Effective Date, BMS shall provide Pharmacopeia with reasonable access by teleconference or in-person at BMS’ facilities (subject to BMS’ customary rules and restrictions with respect to site visits by non-BMS personnel) to BMS personnel reasonably knowledgeable in the research and development of the Licensed Compounds and Licensed Products for up to ** hours of consulting advice with respect to the Licensed Compounds and Licensed Products, provided that (i) such access shall be requested and coordinated through a single BMS contact person reasonably knowledgeable with respect to the BMS DARA program, with such person to be designated by BMS, (ii) BMS makes no warranty, express or implied, that Pharmacopeia shall be able to successfully implement and use the BMS Know-How, (iii) BMS shall not be obligated to provide more than ** (**) hours of consulting advice in such period, and (iv) BMS will use reasonable efforts to provide such consulting advice promptly.  If Pharmacopeia requests further consulting advice related to Licensed Compounds and Licensed Products in excess of the ** (**) hour amount referenced above, BMS may at its sole discretion provide such consulting advice and, if BMS elects to provide such consulting advice, Pharmacopeia shall reimburse BMS for its time incurred in connection therewith at a rate of $** per hour, plus any reasonable out-of-pocket expenses incurred by BMS in providing such consulting advice requested by Pharmacopeia.  Such reimbursement shall be made to BMS within thirty (30) days after receipt by Pharmacopeia of a BMS invoice reasonably detailing BMS’ time expended, together with documentation substantiating any out-of-pocket expenses incurred.

 

4.3            Materials .  BMS shall have no obligation to provide Pharmacopeia with samples of any compounds or other materials (other than the information provided under Section 4.1) under this Agreement, provided that upon written request by Pharmacopeia, BMS will authorize in writing the transfer to Pharmacopeia of the compound ** for BMS.  Pharmacopeia shall be responsible for any and all fees charged by **.  Any such compounds or other materials (including **) that may be provided by or for BMS to Pharmacopeia pursuant to this Agreement (the “ Transferred Materials ”) are provided “AS IS”.  Pharmacopeia shall be fully responsible for its and its Affiliates’, Sublicensees’ and contractors’ use, storage, handling and disposition of the Transferred Materials.  Under no circumstances shall BMS be liable or responsible for

 

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Pharmacopeia’s or its Affiliates’, Sublicensees’ and contractors’ use, storage, handling or disposition of the Transferred Materials, and Pharmacopeia assumes sole responsibility for any claims, liabilities, damages and losses that might arise as a result of Pharmacopeia’s and its Affiliates’, Sublicensees’ and contractors’ use, storage, handling or disposition of any Transferred Material. Pharmacopeia shall indemnify, defend and hold harmless BMS and its Affiliates, and their respective officers, directors, employees, agents, licensors, and their respective successors, heirs and assigns and representatives, from and against any and all damages, liabilities, losses, costs and expenses (including, without limitation, reasonable legal expenses, costs of litigation and reasonable attorney’s fees) arising in connection with any claims, suits, proceedings, whether for money damages or equitable relief, of any kind, arising out of or relating, directly or indirectly, to Pharmacopeia’s, or any of its Affiliates’, Sublicensees’ or contractors’ use, storage, handling or disposition of any Transferred Material.  Transferred Materials may only be provided to Pharmacopeia, its Affiliates, Sublicensees and contractors.  The Transferred Materials shall be used by Pharmacopeia solely for purposes of supporting the Development of the Licensed Compounds and Licensed Products.

 

ARTICLE 5

DEVELOPMENT

 

5.1            Development and Development Plan.

 

(a)            Commercially Reasonable Efforts .  Pharmacopeia (or its Sublicensees, as applicable) shall use sustained Commercially Reasonable Efforts to Develop at least one Licensed Compound and Licensed Product, including but not limited to using Commercially Reasonable Efforts to expeditiously carry out the pre-clinical and clinical development for the Licensed Compounds and Licensed Products (including expeditiously pursuing regulatory filings and Approvals and marketing authorizations for at least one Licensed Compound and Licensed Product) in accordance with the Development Plan.

 

(b)            Development Plan .  An outline of the initial Development Plan is attached hereto as Appendix 3 to the Agreement.  The complete initial Development Plan through Phase I Trials will be provided to BMS by Pharmacopeia within ** (**) days after the Effective Date.

 

5.2            Development Reports .  Pharmacopeia will provide BMS with ** written development reports within thirty (30) days following ** presenting a summary of the Development activities accomplished by Pharmacopeia during the just ended ** (**) months, including as applicable updates to the Development Plan, and significant results, information and data generated with respect to Licensed Compounds and Licensed Products.  Upon reasonable request by BMS, Pharmacopeia shall also meet in-person with BMS to review Pharmacopeia’s Development activities for the Licensed Compounds and Licensed Products.  In addition, prior to Pharmacopeia entering into a License agreement with a Third Party, upon reasonable request by BMS, but no more than once per Calendar Year, Pharmacopeia shall present to BMS, at Pharmacopeia’s facilities, summaries of (and, at the request of BMS, with copies of) clinical protocols, investigator brochures, regulatory submissions and correspondence from regulatory

 

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agencies with respect to Licensed Compound and Licensed Product that have been prepared or received by Pharmacopeia as of the date of such request by BMS.

 

5.3            Records .  Pharmacopeia shall maintain complete and accurate records of all work conducted in furtherance of the Development and Commercialization of the Licensed Compounds and Licensed Products and all material results, data and developments made in conducting such activities.  Such records shall be maintained sufficient detail and in good scientific manner appropriate for patent and regulatory purposes.  If BMS believes in good faith that Pharmacopeia may not be complying with its obligations under this Section 5.3, BMS shall provide written notice thereof to Pharmacopeia identifying the basis for BMS’ good faith belief, and Pharmacopeia shall allow an independent Third Party as to which Pharmacopeia has no reasonable objection to review such records on behalf of BMS to verify that Pharmacopeia is complying with this Section 5.3.  Such review shall be conducted no more frequently than once per year, at BMS’ cost, and upon reasonable advance notice at mutually agreed upon times during normal business hours.

 

5.4            Development Responsibilities and Costs .  Pharmacopeia shall have sole responsibility for, and shall bear the cost of conducting, all Development with respect to the Licensed Compounds and Licensed Products.

 

5.5            Regulatory Responsibilities and Costs .  Pharmacopeia shall have sole responsibility for, and shall bear the cost of preparing, all regulatory filings and related submissions with respect to the Licensed Compounds and Licensed Products.  Pharmacopeia shall be responsible for meeting the requirements of all pre-approval inspections required by any Regulatory Authorities.  Except as set forth in Section 13.4, Pharmacopeia or its Affiliate or Sublicensee shall own all INDs, NDAs, Approvals and submissions in connection therewith and all Approvals shall be obtained by and in the name of Pharmacopeia or its Affiliate or Sublicensee.

 

5.6            Subcontracting .  Subject to and without limiting Section 2.2, Pharmacopeia may perform any activities in support of its Development or Commercialization of Licensed Compounds and Licensed Products through subcontracting to a Third Party contractor or contract service organization, provided that: (a) Pharmacopeia shall enter into an appropriate written agreement with any such Third Party subcontractor such that the subcontractor shall be bound by all applicable provisions of this Agreement to the same extent as Pharmacopeia and such that BMS’ rights under this Agreement are not adversely effected; (b) any such Third Party subcontractor to whom Pharmacopeia discloses Confidential Information of BMS shall enter into an appropriate written agreement obligating such Third Party to be bound by obligations of confidentiality and restrictions on use of such BMS Confidential Information that are no less restrictive than the obligations in this Agreement; (c) Pharmacopeia will obligate such Third Party to agree in writing to assign or license (with the right to grant sublicenses) to Pharmacopeia any inventions (and any patent rights covering such inventions) made by such Third Party in performing such services for Pharmacopeia; and (d) Pharmacopeia shall at all times be responsible for the performance of such subcontractor.

 

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ARTICLE 6

COMMERCIALIZATION

 

6.1            Pharmacopeia Obligations .  Pharmacopeia (or its Sublicensees, as applicable) shall use sustained Commercially Reasonable Efforts to Commercialize at least one (1) Licensed Product in the Territory, including but not limited to the Major Market Countries.  Without limiting the foregoing, Pharmacopeia shall use Commercially Reasonable Efforts to obtain Approvals in such countries with respect to at least one (1) Licensed Product and to effect the First Commercial Sale thereof in such countries as soon as reasonably practicable after receipt of such Approvals.

 

6.2            Continued Availability .  Following the First Commercial Sale of a Licensed Product in a Major Market Country in the Territory and until the expiration or termination of this Agreement, Pharmacopeia shall use Commercially Reasonable Efforts to supply and keep such Licensed Product reasonably available to the public in such country.

 

6.3            Marking .  Each Licensed Product Commercialized by Pharmacopeia under this Agreement shall be marked (to the extent not prohibited by applicable Laws): (i) with a notice that such Licensed Product is sold under a license from BMS and (ii) with applicable patent and other intellectual property notices relating to the BMS Core Patent Rights in such a manner as may be required by applicable Law.

 

6.4            Reports .  Pharmacopeia shall provide BMS with ** written reports within ** (**) days following the end of ** summarizing significant commercial activities and events with respect to Licensed Products during the just ended ** period.

 

ARTICLE 7

MANUFACTURE AND SUPPLY

 

7.1            Manufacture and Supply .  Pharmacopeia shall be solely responsible at its expense for making or having made all of its requirements of the Licensed Compounds and Licensed Products.

 

ARTICLE 8

FINANCIAL TERMS

 

8.1            In partial consideration of the rights granted by BMS to Pharmacopeia pursuant to this Agreement, Pharmacopeia shall make the payments to BMS as provided for in this Article 8.

 

8.2            Development Milestone Payments.

 

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8.2.1.              Development Milestone Payments .  Pharmacopeia shall make milestone payments to BMS upon achievement of each of the milestones events in the amounts as set forth below in Table 1.  Subject to Section 8.2.2, the milestone payments set forth below will be payable by Pharmacopeia to BMS within ten (10) days of the achievement of the specified milestone event with respect to each Licensed Compound.  Such milestone payment shall not be refundable or returnable in any event, nor shall it be creditable against royalties or other payments.

Table 1

 

Milestone Event		Milestone Payment
**		$	**
**		$	**
**		$	**
**		$	**
**		$	**
**		$	**
**		$	**
**		$	**
**		$	**

 

In the event that a milestone event is achieved that triggers a development milestone payment as set forth above, if the **.  For example, **.

 

8.2.2.              Milestone Payments for Follow-on Compounds .  Only **.  Each such milestone payment shall be **.

 

8.3            Royalty Payments .

 

8.3.1.              Pharmacopeia shall pay to BMS in cash the following royalty payments on the total aggregate annual Net Sales in the Territory of all Licensed Products in a particular Calendar Year by Pharmacopeia, its Affiliates, and Sublicensees in the Territory:

 

Aggregate Annual Worldwide Net Sales of All Licensed Products in a Calendar Year		Royalty Rate
**		**	%
**		**	%

 

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By way of example, in a given Calendar Year, if the aggregate annual worldwide Net Sales for all Licensed Products is $**, the following royalty payment would be payable under this Section 8.3.1: **.

 

8.3.2.              Royalty Term .  Royalties shall be payable on a **of (i) ** or (ii)  the** or (iii) thef**.

 

8.3.3.              ** .  If Pharmacopeia or its Sublicensee, **.  Prior to Pharmacopeia or its Sublicensee exercising its ** under this Section 8.3.3, Pharmacopeia shall provide BMS with **.  The Parties shall discuss the best course of action to resolve such potential **, provided that such discussions shall not limit or delay Pharmacopeia’s or its Sublicensee’s right to **.

 

Except as set forth above,**.

 

8.3.4.              Royalty Conditions .  The royalties under Section 8.3.1 shall be subject to the following conditions:

 

(a)            that only one royalty shall be due with respect to the same unit of Licensed Product;

 

(b)            that no royalties shall be due upon the sale or other transfer among Pharmacopeia, its Affiliates, or Sublicensees, but in such cases the royalty shall be due and calculated upon Pharmacopeia’s or its Affiliate’s or Sublicensee’s Net Sales of Licensed Product to the first independent Third Party; and

 

(c)            no royalties shall accrue on the disposition of Licensed Product in reasonable quantities by Pharmacopeia, its Affiliates or Sublicensees as part of an expanded access program, as bona fide samples, as part of Phase 4 Trials or as donations to non-profit institutions or government agencies for non-commercial purposes, provided , in each case, that neither Pharmacopeia, its Affiliate or Sublicensees receives any payment for such Licensed Product.

 

8.4            Manner of Payment .  All payments to be made by Pharmacopeia hereunder shall be made in Dollars by wire transfer of immediately available funds to such United States bank account as shall be designated by BMS.  Late payments shall bear interest at the rate provided in Section 8.9.

 

8.5            Sales Reports and Royalty Payments .  After the First Commercial Sale of a Licensed Product and during the term of this Agreement, Pharmacopeia shall furnish to BMS a written report, within ** (**) days after the end of each ** (or portion thereof, if this Agreement terminates during a **), showing the amount of royalty due for such ** (or portion thereof).  Royalty payments for each ** shall be due at the same time as such written report for the **.  With each ** payment, Pharmacopeia shall deliver to BMS a full and accurate accounting to include at least the following information:

 

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(a)            the quantity of each Licensed Product sold (by country) by Pharmacopeia, its Affiliates, and Sublicensees;

 

(b)            the calculation of Net Sales from such gross sales (by country);

 

(c)            the royalties payable in Dollars which shall have accrued hereunder in respect of such Net Sales;

 

(d)            withholding taxes, if any, required by applicable Law to be deducted in respect of such royalties; and

 

(e)            the dates of the First Commercial Sales of Licensed Products in any country during the reporting period.

 

If no royalty or payment is due for any royalty period hereunder, Pharmacopeia shall so report.

 

8.6            Sales Record Audit .  Pharmacopeia shall keep, and shall cause each of its Affiliates, and Sublicensees, if any, to keep, full and accurate books of accounting in accordance with GAAP as may be reasonably necessary for the purpose of calculating the royalties payable to BMS.  Such books of accounting (including, without limitation, those of Pharmacopeia’s Affiliates, and Sublicensees, if any) shall be kept at their principal place of business and, with all necessary supporting data, shall during all reasonable times for the ** (**) years next following the end of the Calendar Year to which each shall pertain, be open for inspection at reasonable times upon written notice by BMS and at BMS’ sole cost, no more than once per year, by an independent certified accountant selected by BMS as to which Pharmacopeia has no reasonable objection, for the purpose of verifying royalty statements for compliance with this Agreement.  Such accountant must have agreed in writing to maintain all information learned in confidence, except as necessary to disclose to BMS such compliance or noncompliance by Pharmacopeia.  The results of each inspection, if any, shall be**.  BMS shall pay for such inspections, except that in the event there is**.  Any underpayments shall be paid by Pharmacopeia within ten (10) Business Days of notification of the results of such inspection.  Any overpayments shall be fully creditable against amounts payable in subsequent payment periods or, if no such amounts become payable within ninety (90) days after notification of such results, shall be refunded.

 

8.7            Currency Exchange . With respect to Net Sales invoiced in Dollars, the Net Sales and the amounts due to BMS hereunder shall be expressed in Dollars.  With respect to Net Sales invoiced in a currency other than Dollars, the Net Sales shall be expressed in the domestic currency of the entity making the sale, together with the Dollar equivalent, calculated using the arithmetic average of the spot rates on the close of business on the last Business Day of each month of the Calendar Quarter in which the Net Sales were made.  The “closing mid-point rates” found in the “dollar spot forward against the dollar” table published by The Financial Times or any other publication as agreed to by the Parties shall be used as the source of spot rates to calculate the average as defined in the preceding sentence.  All payments shall be made in Dollars.

 

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8.8            Tax Withholding .  In the event that any withholding taxes or similar charges are levied or assessed by any taxing authority in the Territory with respect to payments made by Pharmacopeia to BMS under this Agreement, Pharmacopeia shall pay such taxes or similar charges to the proper taxing authority.  Pharmacopeia may deduct the amount of such taxes or similar charges paid by Pharmacopeia to such taxing authority from the applicable royalties or other payment otherwise payable to BMS, subject to the following.  Pharmacopeia shall promptly provide BMS with evidence of such tax payment obligation together with an original receipt for such tax payments (or a certified copy, if the original is not available) and other documentation as BMS reasonably determines is required for the purpose of BMS’ tax returns.  Pharmacopeia, its Affiliates and Sublicensees shall cooperate with BMS to enable the claiming of a reduction or exemption from withholding taxes on payments under any applicable convention on the avoidance of double taxation or similar agreement in force and shall provide to BMS proper evidence of payments of withholding tax and assist BMS by obtaining or providing in as far as possible the required documentation for the purpose of BMS’ tax returns.  Pharmacopeia’s obligation vis-à-vis the tax authorities shall remain unaffected by the provisions of this Section.

 

8.9            Interest Due .  Without limiting any other rights or remedies available to BMS, Pharmacopeia shall pay BMS interest on any payments that are not paid on or before the date thirty (30) days after the date such payments are due under this Agreement at a rate of one and one-half percent (1.5%) per month or the maximum applicable legal rate, if less, calculated on the total number of days payment is delinquent.

 

8.10          ** .  In addition to the above milestone and royalty payments, Pharmacopeia shall pay to BMS the following **:

 

(a)            **; or

 

(b)            **.

 

Such**.  Such ** to BMS shall be due within thirty (30) days following **.

 

For purposes of this Section 8.10, “**” means **, but does not include (i) **, (ii)**, or (iii) **.

 

ARTICLE 9

REPRESENTATIONS AND WARRANTIES; DISCLAIMER;
LIMITATION OF LIABILITY

 

9.1            Mutual Representations and Warranties .  Each Party represents and warrants to the other Party that (i) it has all requisite corporate power and authority to enter into this Agreement and to perform its obligations under this Agreement, (ii) execution of this Agreement and the performance by such Party of its obligations hereunder have been duly authorized, (iii) this Agreement is legally binding and enforceable on such Party in accordance with its terms,

 

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and (iv) the performance of this Agreement by it does not create a material breach or material default under any other agreement to which it is a Party.

 

9.2            Representations and Warranties of BMS.

 

9.2.1.              BMS represents and warrants to Pharmacopeia that as of the Effective Date, to the actual knowledge of BMS: (i) there is no pending litigation which alleges, or any written communication alleging, that BMS’ activities with respect to the BMS Core Patent Rights or the Licensed Compounds have infringed or misappropriated any of the intellectual property rights of any Third Party, and (ii) all fees (including legal fees) required to be paid by BMS in order to maintain the BMS Core Patent Rights have been paid to date.

 

9.2.2.              BMS represents and warrants that it has not previously assigned, transferred, conveyed or licensed (or granted an option to assign, transfer, convey or license) its right, title and interest in the BMS Core Patent Rights or the BMS Know-How.

 

9.2.3.                        BMS represents and warrants to Pharmacopeia that as of the Effective Date, it has discontinued its internal drug discovery and development programs for DARA compounds and that it has no active internal programs for the discovery or development of DARA compounds as of the Effective Date.

 

9.2.4.              BMS represents and warrants to Pharmacopeia that as of the Effective Date, to the actual knowledge of its in-house patent counsel, other than the BMS Core Patent Rights, BMS does not Control any patent(s) or patent application(s) that is reasonably necessary for the Development or Commercialization of any Listed