Certain
information in this document, marked by brackets, has been omitted
and filed separately with the Securities and Exchange Commission.
Confidential treatment has been requested with respect to the
omitted portions.
Technology Transfer
Agreement
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ARTICLE 1 DEFINITIONS AND
CONSTRUCTION
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1
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1
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1
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1.3 Acquired Books and Records
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1
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1.4 Acquired Intellectual Property
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1
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2
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2
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2
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1.8 Alternative Compound Fee
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2
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2
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1.10 Assigned Third Party Agreements
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2
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1.11 Assignment and Assumption
Agreements
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2
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2
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2
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2
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2
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1.16 Bayer Confidential Information
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3
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1.17 Bayer Indemnified Parties
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3
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1.18 Bayer’s Licensed-Back Confidential
Information
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3
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1.19 Bayer’s Licensed Confidential
Information
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3
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1.20 Bayer Material Adverse Effect
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3
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1.21 Bayer’s Other Confidential
Information
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3
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3
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3
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3
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3
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3
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3
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4
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4
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4
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4
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1.32 Confidential Information
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4
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5
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1.34 Disclosure Schedules
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5
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5
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5
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5
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5
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5
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5
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5
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5
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5
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1.44 Excluded Books and Records
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6
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6
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6
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6
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6
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6
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6
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6
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6
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1.53 GMP or Good Manufacturing
Practices
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6
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1.54 Governmental Approval
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1.55 Governmental Authority
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6
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7
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7
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7
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1.59 Initial Enrollment Period
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7
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1.60 Intellectual Property
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7
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1.61 Intellectual Property Cross
License
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7
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7
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7
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-ii-
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8
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1.65 Laboratory Notebooks
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8
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8
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8
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8
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8
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9
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1.71 Maxygen’s Confidential
Information
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9
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1.72 Maxygen Indemnified Parties
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1.73 Maxygen’s Licensed Confidential
Information
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1.74 Maxygen Material Adverse Effect
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1.75 Maxygen’s Other Confidential
Information
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9
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1.76 Maxygen’s Principal Business
Location
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9
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1.77 Maxygen’s Retained Confidential
Information
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9
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9
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1.79 Milestone Expiration Date
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9
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10
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10
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1.82 Non-Assignable Assets
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10
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1.83 Ordinary Course of Business
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1.84 Other Confidential Information
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1.85 Outside Delivery Date
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10
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10
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10
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10
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10
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1.91 Post-Payment Estimate Statement
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11
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1.92 Post-Payment Statement
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1.93 Pre-Payment Statement
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11
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11
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1.95 Qualified Corporate Transaction
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1.96 Qualified Counterparty
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-iii-
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1.97 Qualified Bayer Assignment
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11
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1.98 Qualified Maxygen Assignment
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11
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11
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12
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1.101 Regulatory Information
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12
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1.102 Reimbursable Post-Payment
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12
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1.103 Reimbursable Pre-Payment
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12
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1.104 Restricted Books and Records
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12
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12
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1.106 Retained Books and Records
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1.107 Retained Intellectual Property
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1.108 Retained Liabilities
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1.109 Scheduled Inventory
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1.110 Site Preparation Period
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13
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13
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1.112 Subject Completion Period
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1.113 Sublicensed Third Party
Agreements
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13
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13
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13
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14
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14
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1.118 Third Party Agreements
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14
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1.120 Transition Services
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1.121 Transition Services Period
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1.122 Transition Services Statement
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14
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1.124 Construction of Certain Terms
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14
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15
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15
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16
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17
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17
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-iv-
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2.5 Reimbursement of Certain Payments
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17
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2.6 Consideration to Maxygen and
Holdings
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18
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25
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25
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25
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ARTICLE 3 PROTECTION OF ACQUIRED
ASSETS
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26
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26
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26
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26
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ARTICLE 4 REPRESENTATIONS AND WARRANTIES;
COVENANTS
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26
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4.1 Maxygen and Holdings Representations and
Warranties
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26
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4.2 Bayer Representations and
Warranties
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33
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4.3 Disclaimer of Warranties
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35
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35
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ARTICLE 5 INDEMNIFICATION; SURVIVAL
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40
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40
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41
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41
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42
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5.5 Survival of Representations and
Warranties
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42
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5.6 Effect of Due Diligence
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42
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ARTICLE 6 INTELLECTUAL PROPERTY
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42
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6.1 Acquired Intellectual Property
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42
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6.2 Assigned Third Party Agreements
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42
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43
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ARTICLE 7 TRANSITION SERVICES
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43
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7.1 Maxygen and Holdings
Responsibilities
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43
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7.2 Bayer Responsibilities
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44
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45
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7.4 Independent Contractor Status
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45
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45
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8.1 Control in Acquired Assets except the Third
Party Agreements
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45
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8.2 Control in Assigned Third Party
Agreements
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45
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-v-
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ARTICLE 9 CLOSING DELIVERABLES
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46
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9.1 Maxygen and Holdings Closing
Deliverables
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46
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9.2 Bayer Closing Deliverables
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46
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46
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ARTICLE 11 GOVERNMENTAL COMPLIANCE
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46
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11.1 Compliance with Applicable Law
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46
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11.2 Responsibility for Compliance
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46
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47
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47
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11.5 Prohibited Communications
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47
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ARTICLE 12 DISPUTE RESOLUTION
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47
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47
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48
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48
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48
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48
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14.1 Third Party Beneficiaries
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48
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49
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51
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51
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51
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52
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52
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52
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-vi-
TECHNOLOGY TRANSFER
AGREEMENT
This Technology
Transfer Agreement (this “Agreement”) is made and
entered into on this 1st day of July 2008 (the
“Execution Date”), by and between Maxygen, Inc.
(“Maxygen”), a Delaware corporation, Maxygen Holdings
Ltd. (“Holdings”), a wholly owned subsidiary of Maxygen
and a company organized under the laws of the Cayman Islands,
Maxygen ApS, a wholly owned subsidiary of Holdings and a company
organized under the laws of the Kingdom of Denmark
(“ApS”), and Bayer HealthCare LLC
(“Bayer”), a Delaware limited liability
company.
Whereas, Maxygen
and Holdings are the owners of all right, title and interest in the
Acquired Assets and the Intellectual Property licensed under the
License Agreement;
Whereas, Maxygen
and Holdings desire to assign and license to Bayer, and Bayer
desires to obtain, all right, title and interest in the Acquired
Assets and a license to certain Intellectual Property;
Now, therefore, in
consideration of the mutual promises and obligations hereinafter
set forth and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Parties hereto stipulate and agree as follows:
ARTICLE 1
DEFINITIONS AND CONSTRUCTION
As used in this
Agreement, the following capitalized terms shall have the following
meanings:
1.1
“AAA” shall have the meaning set forth in
Section 12.2.
1.2
“Acquired Assets” shall have the meaning set
forth in Section 2.1.
1.3
“Acquired Books and Records” shall mean Books
and Records (i) that are primarily useful for, or held for use
primarily for, the research, development, manufacture or
commercialization of Compounds or (ii) that are expressly
identified as Acquired Books and Records in Section 4.4(d).
Acquired Books and Records do not include any Books and Records
that otherwise expressly meet the definition of Restricted Books
and Records or Excluded Books and Records, unless such Books and
Records are expressly identified as Acquired Books and
Records.
1.4
“Acquired Intellectual Property” means the
Intellectual Property, including the Patent Rights, Know-How,
Compounds and Assigned Third Party Agreements that is
(i) owned by Maxygen, Holdings and/or their Affiliates or to
which Maxygen, Holdings and/or their Affiliates otherwise have
rights through the Assigned Third Party Agreements, and
(ii) primarily useful for, or held for use primarily for, the
research, development, manufacture or commercialization of
Compounds. Acquired Intellectual Property does not include the
Sublicensed Third Party Agreements or rights or licenses
thereunder.
1.5
“Affiliate” shall mean, with respect to any
Person, any other Person (other than individuals in their
individual capacities) that, directly or indirectly, through one or
more intermediaries controls, is controlled by, or is under common
control with, such Person. For purposes of this definition,
“control” means the possession, direct or indirect, of
the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting
securities or general partnership or managing member interests, by
contract or otherwise. Without limiting the generality of the
foregoing, a Person shall be deemed to control any other Person in
which it owns, directly or indirectly, a majority of the ownership
interests. In no event, however, shall GlaxoSmithKline plc, Conus
Partners, Inc. or Codexis, Inc., or any of their respective
affiliates, or any of their successors or assigns, be deemed as a
result of their current equity ownership in Maxygen or
Maxygen’s current equity ownership in them, as the case may
be, a direct or indirect Affiliate of Maxygen or
Holdings.
1.6
“Agreement” shall have the meaning set forth in
the first paragraph hereof.
1.7
“Alternative Compound” shall have the meaning
set forth in Section 2.6(d)(1)(iii).
1.8
“Alternative Compound Fee” shall have the
meaning set forth in Section 2.6(d)(2).
1.9
“Applicable Law” shall mean any statute, law,
regulation, ordinance, rule, judgment, court order, decree, permit,
approval, concession, grant, franchise, license, agreement (other
than commercial agreements) or requirement of any Governmental
Authority having jurisdiction over the matter or matters in
question.
1.10
“Assigned Third Party Agreements” shall mean
those Third Party Agreements that are listed on
Schedule 1.10 as of the Execution Date.
1.11
“Assignment and Assumption Agreements” shall
mean the Assignment and Assumption Agreements for the Acquired
Assets substantially in the form attached hereto as Exhibit
1.11 .
1.12
“Assumed Liabilities” shall have the meaning set
forth in Section 2.3.
1.13
“Backup Compound Fee” shall have the meaning set
forth in Section 2.6(c).
1.14
“Backup Compounds” shall mean the Compounds
identified in Schedule 1.14 as [****] or
[****] , as applicable, and any other Compounds having the
[****] as [****] or [****] , respectively;
provided further, Backup Compounds shall not include any Compound
which has a [****] from [****] or [****] ,
respectively.
1.15 “
Bayer Facility ” shall mean Bayer’s or its
Affiliates’ facilities located in Berkeley, California or
Richmond, California.
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1.16 “
Bayer’s Confidential Information ” shall have
the meaning set forth in Section 1.32.
1.17
“Bayer Indemnified Parties” shall have the
meaning set forth in Section 5.2.
1.18 “
Bayer’s Licensed-Back Confidential Information ”
shall have the meaning set forth in Section 1.32.
1.19 “
Bayer’s Licensed Confidential Information ”
shall have the meaning set forth in Section 1.32.
1.20
“Bayer Material Adverse Effect” means any
material adverse change, event or circumstance with respect to, or
any material adverse effect on, the ability of Bayer to consummate
the transactions contemplated by this Agreement on a timely
basis.
1.21 “
Bayer’s Other Confidential Information ” shall
have the meaning set forth in Section 1.32.
1.22
“Bills of Sale” shall mean the Bills of Sale for
the Acquired Assets substantially in the form attached hereto as
Exhibit 1.22 .
1.23
“Books and Records” shall mean all records and
portions thereof of Maxygen, Holdings and/or their Affiliates in
written or electronic form, including (i) all business
records, files, specifications, drawings and correspondence;
(ii) engineering, manufacturing, maintenance, operating and
production records; (iii) laboratory or research notebooks and
log books; (iv) marketing or other studies; (v) adverse event
and clinical trial reports; (vi) research and development
records; (vii) periodic internal management and technical
reports; (viii) regulatory compliance reports;
(ix) communications and filings with Governmental Authorities;
(x) all Emails; and (xi) all other books and
records.
1.24
“Business Day” means a day that is not a
Saturday, a Sunday or a statutory or civic holiday in the United
States or the State of California or any other day on which banking
institutions are not required to be open in the United States or
the State of California.
1.25
“Challenge” shall mean that a Governmental
Authority or a Third Party has requested in writing, or filed an
action before, any Governmental Authority having jurisdiction to
determine validity, enforceability or patentability of Patent
Rights to hold a Valid Claim invalid, unenforceable, or
unpatentable.
1.26
“Clinical Trials” shall mean the clinical trials
conducted pursuant to the following [****] in the United
Kingdom, [****] .
1.27
“Closing” shall mean the closing of the
transactions contemplated by this Agreement.
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1.28
“Closing Date” shall have the meaning set forth
in Section 2.9.
1.29
“Commencement” shall mean, with respect to any
Phase II study, the earlier of (i) the date upon which a
protocol for such Phase II study is approved by, or notice of
permission to proceed is received from, the FDA or the EMEA (or the
applicable Regulatory Agency for a country within the European
Union) or (ii) if formal approval by, or the permission of,
the FDA or EMEA (or the applicable Regulatory Agency for a country
within the European Union) with respect to such protocol is not
required before performing the Phase II study, the first date
following submission of such a protocol on which the sponsor is
permitted to proceed with such Phase II study in the United States
or in any country within the European Union without such formal
approval or permission from the FDA or EMEA (or the applicable
Regulatory Agency for a country within the European
Union).
1.30
“Compound” shall mean any and all chemical or
biological molecules, whether naturally or synthetically created,
(including small molecules, nucleic acids, polypeptides, proteins,
antibodies and carbohydrates) and any analogs, derivatives,
conjugations, modifications, variants, progeny, including any
pharmaceutically acceptable salt, hydrate, solvate or mixture
thereof, in each case that are, or which comprise, Factor VII,
Factor VIII and/or Factor IX (and/or any variant of Factor VII,
Factor VIII or Factor IX). A reference to a Factor in this
Agreement, e.g., Factor VII shall include the factor and any active
form of the factor, e.g., Factor VIIa.
1.31 “
Compound Fee” shall mean individually the Lead
Compound Fee, Alternative Compound Fee, or Backup Compound
Fee.
1.32
“Confidential Information” shall mean any
information, technical data, or Know-How of one Party that is
disclosed to another Party (including, but not limited to, that
which relates to research, product or service plans, business
practices, agreement terms, products, services, employees,
suppliers, customers, technology or other strategic partners,
investors, stockholders or members, markets, software,
developments, inventions, processes, designs, drawings,
engineering, hardware configuration information, marketing,
finances, notes, analyses or studies) and all tangible and
intangible embodiments thereof of any kind whatsoever, whether
conveyed in writing or orally by or on its behalf, that should
reasonably be understood by the receiving Party, because of
markings, legends, the circumstances of disclosure or the nature of
the information itself, is confidential or proprietary.
Notwithstanding that Maxygen disclosed Confidential Information
included within the Acquired Assets to Bayer before the Closing
Date, from and after the Closing Date all (a) Confidential
Information included within Licensed-Back Acquired IP as defined in
the Intellectual Property Cross License (“Bayer’s
Licensed-Back Confidential Information”), (b) Confidential
Information as defined in the License Agreement within Bayer Other
Improvements as defined in the License Agreement
(“Bayer’s Licensed Confidential Information”) and
(c) Confidential Information within the Acquired Intellectual
Property other than the Licensed-Back Acquired IP
(“Bayer’s Other Confidential Information”;
collectively with Bayer’s Licensed-Back Confidential
Information and Bayer’s Licensed Confidential Information,
“Bayer’s Confidential Information”) shall be
considered the Confidential Information of Bayer, and all
(a) Confidential Information included within the Retained
Intellectual Property (“Maxygen’s Retained Confidential
Information”), (b) Confidential Information as defined
in the License Agreement within Licensed Technology and
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Maxygen Other
Improvements as defined in the License Agreement
(“Maxygen’s Licensed Confidential Information”)
and (c) Confidential Information within Intellectual Property
of Maxygen, Holdings and their Affiliates other than Retained
Intellectual Property, Licensed Technology and Maxygen Other
Improvements as defined in the License Agreement, or Acquired
Intellectual Property (“Maxygen’s Other Confidential
Information;” collectively with Maxygen’s Retained
Confidential Information and Maxygen’s Licensed Confidential
Information, “Maxygen’s Confidential
Information”) shall be considered the Confidential
Information of Maxygen, Holdings and/or their Affiliates.
Confidential Information excludes any information that: (i) at
the time of disclosure, is, or, after disclosure, becomes generally
known or available to the public other than as a consequence of
receiving Party’s breach of this Agreement; (ii) was
known or otherwise available to receiving Party prior to the
disclosure by disclosing Party; (iii) was disclosed by a Third
Party to receiving Party after the disclosure by disclosing Party
if such Third Party’s disclosure neither violates any
obligation of the Third Party to disclosing Party nor is a
consequence of receiving Party’s breach of this Agreement;
(iv) was independently developed by the receiving Party
without use of or reference to the disclosing Party’s
Confidential Information; or (v) the disclosing Party
authorizes, in writing, for release without obligation of
confidentiality.
1.33
“CTA” shall mean a Clinical Trial Application as
defined in the EMEA’s rules and regulations, including all
subsequent filings in support of the initial filing(s).
1.34
“Disclosure Schedules” shall have the meaning
set forth in Section 4.1.
1.35
“Dispute” shall have the meaning set forth in
Section 12.1.
1.36
“Dollars” or “$” shall mean U.S.
dollars.
1.37
“DMC” shall mean a Data Monitoring Committee
established pursuant to ICH Guidance for Industry E6 Good Clinical
Practice: Consolidated Guidance. For the avoidance of doubt, any
member appointed by Maxygen or Holdings or any of their Affiliates
prior to the Closing Date will be deemed to be appointed in
accordance with such ICH Guidance.
1.38
“Emails” shall mean electronic mail
messages.
1.39
“EMEA” means the European Medicines Agency and
any successor Regulatory Agency.
1.40
“EPO” means the European Patent
Office.
1.41 “
Europe ” shall mean collectively the countries of
France, Italy, Germany, Spain and the United Kingdom.
1.42 “
European Union ” shall mean the organization
consisting of Belgium, France, Italy, Luxembourg, Netherlands,
Germany, Denmark, Greece, Ireland, United Kingdom, Spain, Portugal,
Austria, Finland, Sweden, Cyprus, Czech Republic, Estonia, Hungary,
Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia, Bulgaria and
Romania.
1.43
“Excluded Activities ” shall have the meaning
set forth in Section 3.1.
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1.44
“Excluded Books and Records” shall mean Books
and Records (i) unrelated to Compounds, (ii) that are
transaction documents prepared in connection with or related to the
negotiation of the transactions contemplated by this Agreement or
similar negotiations with any Third Party, (iii) that are Tax
returns, Tax records, accounting records or financial records,
(iv) that are minutes of proceedings of stockholders or boards
of directors or (v) are expressly identified as Excluded Books
and Records in Section 4.4(d) hereof.
1.45
“Exclusivity Field” shall mean all uses in the
Field of any of the coagulation factors, that are, or which
comprise, Factor VII, Factor VIII and/or Factor IX (and/or any
variant of Factor VII, Factor VIII or Factor IX).
1.46
“Exclusivity Period” shall have the meaning set
forth in Section 3.1.
1.47
“Execution Date” shall mean the date set forth
in the first paragraph of this Agreement.
1.48
“Factor VII Compound” shall have the meaning set
forth in Section 2.6(e).
1.49
“FDA” shall mean the U.S. Food and Drug
Administration and any successor Regulatory Agency.
1.50
“Field” shall have the meaning set forth in
Schedule 1.50 .
1.51
“FTE” shall mean a full-time equivalent person
year, based upon a total of [****] ( [****] ) hours
per year of work, on or directly related to performing activities
under the Transition Plan.
1.52
“GLP” shall mean good laboratory practices, as
set forth in 21 C.F.R. Part 58 and comparable regulations and
standards of any Governmental Authority.
1.53
“GMP” or “Good Manufacturing
Practices” shall mean current good manufacturing
practices, as set forth in 21 C.F.R. Parts 210, 211 and 606 and
comparable regulations and standards of any Governmental
Authority.
1.54
“Governmental Approval” shall mean any permit,
license, franchise, approval, consent, waiver, certification,
qualification, registration or other authorization issued, granted,
given or otherwise made available or the expiration or termination
of any applicable waiting period by or under the authority of any
Governmental Authority or pursuant to any Applicable
Law.
1.55
“Governmental Authority” shall mean any
government or any agency, bureau, board, commission, court,
department, political subdivision, tribunal, or other
instrumentality of any government (including any regulatory or
administrative agency), whether federal, state or local, domestic
or foreign.
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1.56
“IND” shall mean an Investigational New Drug
application, as defined in the U.S. Food, Drug and Cosmetic Act and
the regulations promulgated thereunder, including all subsequent
filings, if any, in support of initial IND filing(s), and any
corresponding foreign applications, registrations or certificates,
in each case related to clinical development of a
Compound.
1.57
“Indemnified Party” shall have the meaning set
forth in Section 5.3.
1.58
“Indemnifying Party” shall have the meaning set
forth in Section 5.3.
1.59
“Initial Enrollment Period” shall have the
meaning set forth in Section 2.6(f).
1.60
“Intellectual Property” means patents (including
utility, design, plant, utility model, reissues, re-examination,
and patents of addition), patent applications (filed, unfiled or
being prepared), records of invention, invention disclosures,
trademarks (registered or unregistered), trademark applications
(filed, unfiled or being prepared), trade names, copyrights
(registered or unregistered), copyright applications (filed,
unfiled or being prepared), mask works, service marks (registered
or unregistered), service mark applications (filed, unfiled or
being prepared), and database rights (registered or unregistered),
all together with any extension, modification or renewal of any of
the foregoing registrations and applications and together with all
goodwill associated with the foregoing; trade secrets, shop and
royalty rights, technology, inventions, Know-How, discoveries,
processes, confidential and proprietary information, including any
being developed (including but not limited to designs,
manufacturing data, design data, test data, operational data, and
formulae), whether or not recorded in tangible form through
drawings, software, reports, manuals or other tangible expressions,
whether or not subject to statutory registration, anywhere; and all
rights to any of the foregoing.
1.61
“Intellectual Property Cross License” shall mean
that certain Intellectual Property Cross License Agreement,
substantially in the form attached hereto as
Exhibit 1.61 .
1.62
“Inventory” shall mean any and all master cell
banks for GMP production of Compounds, bulk Compounds produced in
accordance with GMP and GMP final drug product containing Compounds
(including work-in-process, fill-to-pack, packed/not released
products, finished goods, packaging, goods in transit, goods off
premises (including materials subject to process and goods held in
storage), all materials related to such GMP bulk Compounds and/or
GMP final drug product containing Compounds), non-GMP biological
and other materials primarily relating to Compounds, including
Compounds, products containing Compounds, genetic materials
encoding Compounds, cell lines expressing Compounds (and genetic
elements and genetic materials incorporated therein), plasmids,
test materials and raw materials, in each case that exist and are
the property of Maxygen, Holdings or their Affiliates, including
the Scheduled Inventory. Inventory does not include the materials
listed on Schedule 1.62 .
1.63
“Know-How” shall include data, invention
disclosures, information, and other know-how that exists and is
owned by Maxygen, Holdings or their Affiliates or licensed to
Maxygen, Holdings or their Affiliates, including any Regulatory
Information, data, know-how, instrumentation, services,
methodologies, processes, assays, formulae, and sources, devices,
systems, notes, records, protocols, standards, patterns,
compilations, programs, preparations,
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methods,
techniques, usage information, procedures, regulatory information,
biological, chemical, biochemical, toxicological, pharmacological,
metabolic, formulation, manufacturing, clinical, analytical and
stability information and data, diagnostic information,
prophylactic information, treatment and/or palliation of human
diseases, manufacturing information, proprietary and secret ideas,
technical information, trade secrets, commercial information,
techniques, or other information, whether in written or verbal
form.
1.64
“Knowledge” shall mean, with respect to an
entity, the knowledge of the executive officers of the entity and,
in the case of Maxygen and Holdings, those individuals occupying
the positions listed on Schedule 1.64 .
1.65 “
Laboratory Notebooks ” shall have the meaning set
forth in Section 4.4(d)(ii).
1.66
“Lead Compound” shall mean the Compound
identified in Schedule 1.66 as [****] and any
other Compounds having the [****] as [****] as it
existed on the Closing Date; provided further, Lead Compound shall
not include any Compound which has a [****] from
[****] .
1.67
“Lead Compound Fee” shall have the meaning set
forth in Section 2.6(b).
1.68
“License Agreement” shall mean that certain
License Agreement between Maxygen and Bayer dated as of the Closing
Date.
1.69
“Lien” shall mean, with respect to any property
or other asset of any Person (or any revenues, income or profits of
that Person therefrom) (in each case whether the same is consensual
or nonconsensual or arises by contract, operation of law, legal
process or otherwise), (i) any mortgage, lien, security
interest, pledge, assignment, hypothecation, title retention,
preferential right, counterclaim, attachment, seizure, embargo,
levy or other charge or encumbrance of any kind thereupon or in
respect thereof or (ii) any other arrangement under which the
same is transferred, sequestered or otherwise identified with the
intention of subjecting the same to, or making the same available
for, the payment or performance of any liability in priority to the
payment of the ordinary, unsecured creditors of that Person, in
each case other than (A) any liens securing the payment of
taxes and filing fees not yet due and payable, (B) pledges or
deposits under workmen’s compensation, unemployment
insurance, social security and other similar laws, (C) liens
imposed by law, such as mechanics’, materialmen’s,
landlords’, warehousemen’s, carriers’ and other
similar liens, securing obligations in the Ordinary Course of
Business, (D) applicable payment and other obligations set
forth in the Assigned Third Party Agreements required to be
performed by Bayer after Closing and (E) liens that, in the
aggregate, do not and would not impair in any material respect the
value or the continued use and operation of the assets to which
they relate. For purposes of this Agreement, a Person will be
deemed to own subject to a Lien any asset that it has acquired or
holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease, synthetic lease or other
title retention agreement relating to that asset.
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1.70
“Loss” shall mean any loss, cost, liability or
expense, Tax, settlement, damage of any kind, judgment, obligation,
charge, fee, fine, penalty, interest, court cost and/or
administrative and reasonable attorneys’ fees, reasonable
expert fees, reasonable consulting fees, and reasonable
disbursements (at all levels, including appellate), but excluding
all indirect corporate and administrative overhead costs. Losses
shall be net of: (x) any Tax benefit actually recognized by
the Indemnified Parties or their Affiliates as a result of the
indemnified Loss and (y) any insurance proceeds actually
received by the Indemnified Parties or their Affiliates in respect
of the indemnified Loss.
1.71
“Maxygen’s Confidential Information ”
shall have the meaning set forth in Section 1.32.
1.72
“Maxygen Indemnified Parties” shall have the
meaning set forth in Section 5.1.
1.73 “
Maxygen’s Licensed Confidential Information ”
shall have the meaning set forth in Section 1.32.
1.74
“Maxygen Material Adverse Effect” means any
change, effect or circumstance that had, or would have, a material
adverse effect on (1) the Acquired Assets or the Assumed
Liabilities or (2) the ability of Maxygen or Holdings to consummate
the transactions set forth herein on a timely basis, provided that
in no event shall any of the following be taken into account in
determining whether there has been or will be a Maxygen Material
Adverse Effect: (i) any change, effect or circumstance that is
the result of factors similarly affecting the economy as a whole or
the industry or specific markets in which Maxygen or Holdings
competes, provided that any such change, effect or circumstance
does not disproportionately affect Maxygen or Holdings,
(ii) any change, effect or circumstance that is the result of
an outbreak or escalation of hostilities involving the United
States or any member state of the European Union, the declaration
by the United States or any member state of the European Union of a
national emergency or war, or the occurrence of any acts of
terrorism, (iii) any change, effect or circumstance that is
the result of any change in Applicable Law or (iv) any change,
effect or circumstance arising out of or resulting from actions
contemplated by the Parties in connection with this Agreement or
that is attributable to the announcement or performance of this
Agreement or the transactions contemplated by this Agreement
(including a loss of customers or employees).
1.75
“Maxygen’s Other Confidential Information
” shall have the meaning set forth in Section
1.32.
1.76
“Maxygen’s Principal Business Location”
shall mean 515 Galveston Drive, Redwood City, California
94063.
1.77 “
Maxygen’s Retained Confidential Information ”
shall have the meaning set forth in Section 1.32.
1.78 “
Milestone Event ” shall have the meaning set forth in
Section 2.6(e).
1.79
“Milestone Expiration Date” shall have the
meaning set forth in Section 2.6(f).
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1.80 “
Mixed-Use Notebooks ” shall have the meaning set forth
in Section 4.4(d)(iii).
1.81
“Modification” shall have the meaning set forth
in Section 2.6(d)(1)(i).
1.82
“Non-Assignable Assets” means any certificate,
approval, authorization or other right of a Governmental Authority,
which by its terms or by law is nonassignable without the consent
of a Governmental Authority and such consent has not been received
after Maxygen, Holdings or their respective Affiliates, as
applicable, has taken commercially reasonable efforts to obtain
such consent or waiver.
1.83
“Ordinary Course of Business” shall mean the
ordinary course of the business as currently conducted by Maxygen,
Holdings or their Affiliates, consistent with past practice,
including activities of Maxygen, Holdings or their Affiliates as
reasonably necessary or useful with respect to entering into
service agreements, site agreements, investigator agreements,
shipment of clinical trial supplies, and other activities and
arrangements to prepare for and/or conduct the Clinical
Trials.
1.84 “
Other Confidential Information ” shall have the
meaning set forth in Section 4.4(c)(i).
1.85
“Outside Delivery Date” shall have the meaning
set forth in Section 4.4(d)(ii).
1.86
“Party” or “Parties” shall mean
Bayer, Maxygen, Holdings and/or ApS as appropriate.
1.87
“Patent Rights” shall mean any and all existing
U.S., Patent Cooperation Treaty and foreign patents and patent
applications licensed to or owned by Maxygen, Holdings or their
Affiliates, and any and all future patents and patent applications
which claim priority from any such patent or application including
all divisional, reissue, re-examination, continuations, and
continuations-in-part, extensions (including governmental
equivalents thereto) and renewal applications and patents thereof
and any and all other counterpart applications in any countries and
patents and inventors’ certificates, utility models and the
like issuing therefrom.
1.88
“Person” shall mean an individual, corporation,
limited liability corporation, joint stock company, partnership,
joint venture, trust, unincorporated organization, university,
college, Governmental Authority or other entity.
1.89
“Phase I” shall mean the first phase of human
clinical trials using a limited number of human subjects, with no
more than [****] patients in a study, to gain evidence of
the safety and tolerability of a product in a new patient
population and to determine one or more of the following:
[****] for such product.
1.90
“Phase II” shall mean the second phase of human
clinical trials of a product in human subjects to evaluate and/or
further assess the efficacy in one or more indications and to
gather expanded information regarding the safety of such product,
as well as an indication of the
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dosage regimen
required. For avoidance of doubt, no human clinical trial that
meets the definition of Phase I shall be considered a Phase II
clinical trial. For purposes of this Agreement, it is also
understood and agreed that a Phase II/III (or later stage) clinical
trial shall be considered a Phase II study.
1.91
“Post-Payment Estimate Statement” shall have the
meaning set forth in Section 2.5(c).
1.92
“Post-Payment Statement” shall have the meaning
set forth in Section 2.5(c).
1.93
“Pre-Payment Statement” shall have the meaning
set forth in Section 2.5(b).
1.94
“Purchase Price” shall have the meaning set
forth in Section 2.6(a).
1.95
“Qualified Corporate Transaction” means any of
the following transactions:
(1) any
merger or consolidation between (A) Maxygen and any
counterparty, if the counterparty is the surviving entity, or
(B) any Qualified Counterparty and Maxygen, if Maxygen is the
surviving entity;
(2) any
sale or exchange of all or substantially all assets (including any
sale of one or more subsidiaries) between (A) Maxygen and any
counterparty, if Maxygen is the seller of such assets, or
(B) any Qualified Counterparty and Maxygen, if the Qualified
Counterparty is the seller of such assets; or
(3) any
other transactions or series of transactions pursuant to, or as a
result of which, there is a change in the identity of the holders
of a majority of the voting power, between (A) Maxygen and any
counterparty, if it is Maxygen or Maxygen’s stockholders that
are subject to such change, or (B) any Qualified Counterparty
and Maxygen, if it is the Qualified Counterparty or the Qualified
Counterparty’s stockholders that are subject to such
change.
1.96 “
Qualified Counterparty ” means any Person, the
outstanding equity securities of which have, as of immediately
prior to the completion of, or as valued in, the applicable
Qualified Corporate Transaction, an aggregate fair market value
equal to or greater than [****] US Dollars (US $
[****] ).
1.97
“Qualified Bayer Assignment” shall have the
meaning set forth in Section 14.2(c).
1.98
“Qualified Maxygen Assignment” shall have the
meaning set forth in Section 14.2(d).
1.99
“Regulatory Agency” means, with respect to any
particular country or, where applicable, a multinational
jurisdiction, the Governmental Authority (e.g., the EMEA
with
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respect to the
European Union), with the primary responsibility for the approval
of pharmaceutical products before a Compound or a product
containing, in part, a Compound can be tested, marketed, promoted,
distributed or sold in such country or multinational jurisdiction,
including such governmental bodies, if any, that have jurisdiction
over the pricing of such pharmaceutical product. The term
“Regulatory Agency” includes the FDA and the
EMEA.
1.100
“Regulatory Filing ” means any filing with a
Regulatory Agency relating to a Compound or a product containing,
in part, a Compound and/or its use or potential use in humans,
including any documents submitted to any Regulatory Agency and all
supporting data (e.g., pharmacology, toxicology, etc.). Regulatory
Filings include any IND or CTA.
1.101
“Regulatory Information” shall mean (1) any
protocol (including information about applicable assays, test
materials and standards contained therein), Regulatory Filings and
approvals by Regulatory Agencies, each of the foregoing with regard
to any Compound, and the related dossiers and marketing
authorizations (including FDA studies (Phase I or Phase II), IND or
foreign equivalent studies (including, but not limited to CTA),
including [****] in the United Kingdom, [****] in
each case as the same may be modified or amended in accordance with
this Agreement, and (2) substantive communications with
respect to clinical development of the Compounds between Maxygen or
its Affiliates, on the one hand, and the FDA, EMEA or other
Governmental Authorities of similar jurisdiction, or institutional
review boards, on the other hand.
1.102
“Reimbursable Post-Payment” shall have the
meaning set forth in Section 2.5(a).
1.103
“Reimbursable Pre-Payment” shall have the
meaning set forth in Section 2.5(a).
1.104
“Restricted Books and Records” shall mean Books
and Records that relate to Compounds and that (i) are the
subject of binding confidentiality agreements with non-Affiliates
of Maxygen restricting their conveyance or disclosure to Bayer, or
(ii) are subject to attorney-client or other legal privilege
(other than those opinion letters of legal counsel listed on
Schedule 1.104 , which shall constitute Acquired Books and
Records).
1.105
“Retained Assets” shall have the meaning set
forth in Section 2.2.
1.106
“Retained Books and Records” shall mean
(i) Books and Records that relate to Compounds but that do not
constitute Acquired Books and Records or (ii) Books and
Records that are expressly identified as Retained Books and Records
in Section 4.4(d). Retained Books and Records do not include
any Books and Records that otherwise meet the definition of
Excluded Books and Records, unless such Books and Records are
expressly identified as Retained Books and Records.
1.107
“Retained Intellectual Property” means the
Intellectual Property, including applicable Patent Rights, Know-How
and Third Party agreements (other than consulting agreements,
confidentiality agreements or materials transfer agreements), that
(i) is owned by
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Maxygen,
Holdings or their Affiliates or to which Maxygen, Holdings or their
Affiliates otherwise have rights and (ii) is not primarily
useful for, or held for use primarily for, the research,
development, manufacture or commercialization of Compounds, and
which (A) in the case of Know-How, has been used or is used by
Maxygen, Holdings or their Affiliates, as of the Closing Date, in
connection with Compounds, and (B) in the case of Patent
Rights, claims (x) the manufacture of any Compound in the
Field as manufactured and formulated by or on behalf of Maxygen,
Holdings or their Affiliates prior to the Effective Date or the
Closing Date or (y) the sale or use of any Compound in the
Field. For the avoidance of doubt, neither Retained Intellectual
Property nor Acquired Intellectual Property shall include any
Intellectual Property licensed under the License
Agreement.
1.108
“Retained Liabilities” shall have the meaning
set forth in Section 2.4.
1.109
“Scheduled Inventory” shall mean the Inventory
listed on Schedule 1.109.
1.110 “
Site Preparation Period ” shall have the meaning set
forth in Section 2.6(f).
1.111 “
Solvent ” means, with respect to any Person as on any
date of determination, that as of such date, (i) the value of
the assets of such Person is greater than the total amount of
liabilities (including contingent and unliquidated liabilities) of
such Person, (ii) such Person is able to pay all liabilities
of such Person as such liabilities mature and (iii) such
Person does not have unreasonably small capital. In computing the
amount of contingent or unliquidated liabilities at any time, such
liabilities shall be computed at the amount that, in light of all
the facts and circumstances existing at such time, represent the
amount that can reasonably be expected to become an actual or
matured liability. In computing the value of the assets of a
Person, the value shall be determined in the context of current
facts and circumstances affecting such Person.
1.112
“Subject Completion Period” shall have the
meaning set forth in Section 2.6(f).
1.113
“Sublicensed Third Party Agreements” shall mean
those Third Party Agreements (whether or not constituting Retained
Intellectual Property) listed on Schedule 1.113 as of
the Execution Date, as amended for additions (or otherwise updated
to reflect the change of any Third Party Agreement from a
Sublicensed Third Party Agreement to an Assigned Third Party
Agreement) as of the Closing Date.
1.114
“System” shall have the meaning set forth in
Section 4.4(d)(ii).
1.115
“Taxes” means all taxes, including income, gross
receipts, ad valorem, value added, excise, real property, personal
property, sales, use, transfer, withholding, employment,
unemployment, insurance, social security, business license,
business organization, environmental, workers compensation,
profits, license, lease, service, service use, severance, stamp,
occupation, windfall profits, customs, duties, franchise and other
taxes imposed by any Governmental Authority, and any interest,
penalties, assessments or additions to tax resulting from,
attributable to or incurred in connection with any tax or any
contest or dispute thereof, and including any liability for the
Taxes of another Person.
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1.116
“Termination” shall mean the date after a
Challenge has ended by withdrawal from, dismissal by, or decision
of a Governmental Authority of competent jurisdiction, and such
action is unappealable or unappealed within the time allowed for
appeal.
1.117
“Third Party” shall mean any Person other than
Maxygen, Bayer, Holdings, ApS or their Affiliates.
1.118
“Third Party Agreements” shall mean all licenses
or agreements and amendments thereto between Maxygen, Holdings or
any of their Affiliates and a Third Party, which Maxygen, Holdings
or any of their Affiliates is entitled, with or without permission,
to sublicense or assign to Bayer, and that are primarily useful
for, or held for use primarily for, the research, development,
manufacture, commercial exploitation or use of, or for use with, a
Compound, other than consulting agreements, confidentiality
agreements or materials transfer agreements.
1.119
“Transition Plan” shall have the meaning set
forth in Section 7.1(a).
1.120
“Transition Services” shall have the meaning set
forth in Section 7.1(b).
1.121
“Transition Services Period” shall have the
meaning set forth in Section 7.1(b).
1.122
“Transition Services Statement” shall have the
meaning set forth in Section 7.3.
1.123 “
Valid Claim ” shall mean a claim in a patent within
the Patent Rights, wherein said claim is a composition of matter
claim covering all or any portion of the applicable Compound or
covering DNA sequences encoding the entirety of the applicable
Compound, and:
(a) in
the United States, which claim (i) is in an issued, unexpired
patent, (ii) has not been held unenforceable, unpatentable, or
invalid by a decision of a Governmental Authority of competent
jurisdiction, unappealable, or unappealed within the time allowed
for appeal, and (iii) has not been admitted to be invalid or
unenforceable through abandonment, reissue, disclaimer or
otherwise; or
(b) in
Europe, which claim (i) is included in an unexpired patent
that has been allowed by the EPO, (ii) has not been held
unenforceable or unpatentable or invalid by decision of a
Governmental Authority of competent jurisdiction, unappealable or
unappealed within the time allowed for appeal, and (iii) has
not been admitted to be invalid or unenforceable through
abandonment, reissue, disclaimer or otherwise.
1.124
Construction of Certain Terms .
(a) The
Parties acknowledge that, where reference is made in this Agreement
to Maxygen owning, transferring or licensing, or taking similar
action with respect to, an Acquired Asset or Assumed Liability, or
to Maxygen retaining, or taking similar action with respect to, any
Retained Asset or Retained Liability, if such asset or liability is
owned or held by Holdings or an Affiliate of Maxygen, such
reference shall be understood to mean that Holdings or an Affiliate
of Maxygen, as the case may be, owns, transfers, licenses, retains
or takes similar action with respect to, such asset or liability.
Without limitation to the forgoing, to the extent
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that ApS owns
any assets or is subject to any liability that, if held by or
applicable to Maxygen or Holdings would be subject to this
Agreement, ApS and such assets and liabilities shall be subject to
this Agreement in accordance with this
Section 1.124(a).
(b) Except
where the context requires otherwise, the following rules of
construction shall apply with respect to this Agreement and its
schedules and exhibits:
(i) The
word “including” shall be deemed to be followed by the
words “without limitation” regardless of whether they
are included or not;
(ii) The
word “will” shall be construed to have the same meaning
and effect as the word “shall”;
(iii) Definitions
shall be deemed to include both the singular or plural usages of
such terms, as applicable;
(iv) Masculine
pronouns shall be deemed to include references to feminine or
genderless terms, as applicable;
(v) The
words “herein,” “hereof” and
“hereunder,” and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any
particular provision hereof;
(vi) All
references herein to Articles, Sections, Exhibits or Schedules
shall be construed to refer to Articles, Sections, Exhibits and
Schedules of this Agreement, and references to this Agreement
include all Exhibits and Schedules hereto; and
(vii) References
to any specific law, rule or regulation, or article, section or
other division thereof, shall be deemed to include the then-current
amendments thereto or any replacement or successor law, rule or
regulation thereof.
2.1 Acquired
Assets . At Closing, upon the terms and subject to the
conditions of this Agreement and in exchange for the consideration
set forth herein and the assumption of the Assumed Liabilities by
Bayer, Maxygen and Holdings shall, and shall cause their Affiliates
to assign, transfer, convey and deliver (provided that such
delivery shall be subject to Sections 4.4(c)(iii) and 4.4(d))
to Bayer, free and clear of all Liens, and Bayer shall acquire and
receive, subject to the terms and conditions of this Agreement,
from Maxygen, Holdings and each of their Affiliates, all of
Maxygen’s, Holdings’ and each of their
Affiliates’ right, title and interest in and to the following
assets (the “Acquired Assets”):
(a) the
Acquired Intellectual Property;
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(c) to
the extent transferable, all Governmental Approvals and all pending
applications for Governmental Approvals for the use of the
Compounds;
(d) all
rights, claims, credits or rights of set-off with respect to
Acquired Assets arising at any time, whether liquidated or
unliquidated, fixed or contingent, including rights of
indemnification, hold harmless agreements, covenants not to
prosecute and other agreements;
(e) the
Regulatory Information; and
(f) the
Acquired Books and Records.
Schedule 2.1 lists (i) the applicable entity
(Maxygen, Holdings or otherwise) that will, subject to the terms
and conditions of this Agreement, transfer certain specific
Acquired Assets or license the Intellectual Property under the
License Agreement, and (ii) the amount of the Purchase Price
to be allocated to each such Acquired Asset and such Intellectual
Property.
2.2 Retained
Assets . Notwithstanding Section 2.1, the following assets
are not included among the Acquired Assets and are excluded from
the assignment, transfer, conveyance and, subject to
Section 4.4(d), delivery provided for in Section 2.1 (the
“Retained Assets”):
(a) the
Retained Intellectual Property;
(b) any
and all of Maxygen’s, Holdings’ and their
Affiliates’ cash and cash equivalents, bank deposits, bank
accounts and similar cash items;
(c) all
rights under insurance policies of Maxygen, Holdings and their
Affiliates, including rights to proceeds thereunder;
(d) any
and all of Maxygen’s, Holdings’ and their Affiliates
Tax research and development credits, net operating losses,
refunds, rebates, abatements or other recoveries for Taxes
attributable to the business associated with the Acquired Assets,
together with any interest due thereon or penalty rebate arising
therefrom, the basis of which arises or accrues prior to the
Closing;
(e) any
document retention software and other software of Maxygen, Holdings
and their Affiliates;
(f) rights
to and under the Non-Assignable Assets;
(g) any
assets of any employee benefit plan of Maxygen, Holdings or their
Affiliates, including any 401(k) plan or health insurance
plan;
(h) any
real property owned or leased by Maxygen, Holdings or their
Affiliates;
(i) the
Retained Books and Records, the Restricted Books and Records and
the Excluded Books and Records; and
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(j) any
and all assets of any kind of Maxygen, Holdings and their
Affiliates that are not Acquired Assets.
2.3 Assumed
Liabilities . At Closing, Bayer shall assume the following
liabilities (the “Assumed Liabilities”):
(a) all
liabilities that relate to any Acquired Asset and that arise from
acts, events or omissions occurring after the Closing Date (it
being understood that the specified commercial payment obligations,
commercial deliverables and/or other commercial obligations under
agreements, contracts and other legal arrangements shall be deemed
to be Assumed Liabilities to the extent that they accrue after the
Closing Date), other than those specifically addressed in
Section 2.5(b) or Article 5; and
(b) all
liabilities for Taxes relating to, arising from or with respect to
the Acquired Assets which are attributable to Tax periods or
portions thereof commencing after the Closing Date, other than
those for Taxes specifically addressed in
Section 2.8(b).
2.4 Retained
Liabilities . Maxygen, Holdings and their Affiliates shall
retain the following liabilities (the “Retained
Liabilities”):
(a) all
liabilities that relate to any Acquired Asset and that arise from
acts, events or omissions occurring on or prior to the Closing Date
(it being understood that the specified commercial payment
obligations, commercial deliverables and/or other commercial
obligations under agreements, contracts and other legal
arrangements shall be deemed to be Retained Liabilities to the
extent that they accrue prior to the Closing Date), other than
those specifically addressed in Section 2.5(c) or
Article 5;
(b) all
liabilities for Taxes relating to, arising from or with respect to
the Acquired Assets which are attributable to Tax periods or
portions thereof ending on or prior to the Closing Date, other than
those for Taxes specifically addressed in
Section 2.8(a);
(c) all
liabilities to or with respect to officers or employees of Maxygen,
Holdings and their Affiliates;
(d) all
indebtedness of Maxygen, Holdings and their Affiliates;
and
(e) any
and all liabilities and obligations of any kind of Maxygen,
Holdings and their Affiliates that are not Assumed
Liabilities.
2.5
Reimbursement of Certain Payments .
(a) Neither
party shall be entitled to any credit or refund of any payments
made under the Assigned Third Party Agreements; provided that,
notwithstanding the foregoing, Maxygen, Holdings or their
Affiliates shall be entitled to a full and prompt refund of any
payments made by Maxygen, Holdings or their Affiliates, as
applicable, prior to the Closing Date for services or benefits to
be received by Bayer or its Affiliates following the Closing Date
under the Assigned Third Party Agreements (the “Reimbursable
Pre-Payments”) and Bayer shall be entitled to a full and
prompt refund of any payments made by Bayer after the Closing Date
for
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services or
benefits received by Maxygen, Holdings or their Affiliates prior to
the Closing Date under Assigned Third Party Agreements (the
“Reimbursable Post-Payments”).
(b) As
promptly as practicable, but no later than sixty (60) days
after the Closing Date, Maxygen will cause to be prepared and
delivered to Bayer, at Maxygen’s expense, a
“Pre-Payment Statement,” which will set forth in
reasonable detail the Reimbursable Pre-Payments and the calculation
thereof. The Pre-Payment Statement shall be final and binding on
each of the Parties unless Bayer objects and delivers notice of
disagreement to Maxygen within thirty (30) days after the
delivery of the Pre-Payment Statement, which shall specify the item
or items in dispute and state the amount, if any, of adjustment
that Bayer believes should be made to the Reimbursable Pre-Payments
set forth therein. In the event of a disagreement over the
Pre-Payment Statement, the Parties shall attempt in good faith to
resolve such dispute by negotiation between representatives who
have the power to settle the disagreement, but if a final
resolution thereof is not obtained within thirty (30) days of
delivery of Bayer’s notice of disagreement, the Parties shall
resolve such dispute by binding arbitration pursuant to
Section 12.2. All undisputed fees shall be paid by Bayer to
Maxygen, Holdings or their Affiliates, as applicable, within thirty
(30) days after delivery of the Pre-Payment Statement in which
such fees are described; all disputed fees shall be paid by Bayer
to Maxygen, Holdings or their Affiliates, as applicable, within
five (5) days of resolution of the underlying
dispute.
(c) As
promptly as practicable, but no later than sixty (60) days
after the Closing Date, Bayer will cause to be prepared and
delivered to Maxygen, at Bayer’s expense, a
“Post-Payment Estimate Statement,” which will set forth
in reasonable detail the estimated Reimbursable Post-Payments and
the calculation thereof. No later than one hundred eighty
(180) days after the Closing Date, Bayer will cause to be
prepared and delivered to Maxygen, at Bayer’s expense a
“Post-Payment Statement.” The Post-Payment Statement
shall be final and binding on each of the Parties unless Maxygen
objects and delivers notice of disagreement to Bayer within thirty
(30) days after the delivery of the Post-Payment Statement,
which shall specify the item or items in dispute and state the
amount, if any, of adjustment that Maxygen believes should be made
to the Reimbursable Post-Payments set forth therein. In the event
of a disagreement over the Post-Payment Statement, the Parties
shall attempt in good faith to resolve such dispute by negotiation
between representatives who have the power to settle the
disagreement, but if a final resolution thereof is not obtained
within thirty (30) days of delivery of Maxygen’s notice
of disagreement, the Parties shall resolve such dispute by binding
arbitration pursuant to Section 12.2. All undisputed fees
shall be paid by Maxygen to Bayer within thirty (30) days
after delivery of the Post-Payment Statement in which such fees are
described; all disputed fees shall be paid by Maxygen to Bayer
within five (5) days of resolution of the underlying
dispute.
2.6
Consideration to Maxygen and Holdings . Upon the terms and
subject to the conditions of this Agreement and in consideration of
the assignment and transfer of the Acquired Assets to Bayer, the
Intellectual Property Cross License, the execution and delivery of
the License Agreement, and the assumption of the Assumed
Liabilities, Bayer will pay to Maxygen and Holdings the following
amounts (accounts of Maxygen and Holdings designated by Maxygen and
Holdings, as appropriate, and to be allocated between Maxygen and
Holdings as set forth on Schedule 2.1 ):
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(a) A
one-time fee of Ninety Million US Dollars US $90,000,000) at
Closing (the “Purchase Price”); and
(b) A
one-time Compound Fee (which may be payable in one or more
installments in accordance with Section 2.6(g)) upon first
occurrence of the Milestone Event with respect to any Lead
Compound, except where the Alternative Compound Fee is payable with
respect to the Alternative Compound pursuant to
Section 2.6(d). Bayer shall notify Maxygen of the first
occurrence of any such Milestone Event within [****] days,
and within [****] days of such notice it shall deliver to
Maxygen the applicable payment (the “Lead Compound
Fee”) of the amount set forth in Section 2.6(h), subject
to the conditions set forth in Section 2.6(g).
For clarification
purposes, if Bayer institutes a Phase I study for the Lead Compound
(other than an Alternative Compound), the treatment of patients
with one or more of the Alternative Compound and/or any Backup
Compound shall not count as part of the [****] patients for
purposes of determining whether a Milestone Event has occurred for
such Lead Compound (other than an Alternative Compound) pursuant to
item (ii) in Section 2.6(e); provided, however, that
treatment of patients with any Lead Compound (other than an
Alternative Compound) shall count as part of the [****]
patients (for purposes of determining whether a Milestone Event has
occurred for such Lead Compound (other than an Alternative
Compound) pursuant to item (ii) in Section 2.6(e)) with
respect to any other Lead Compounds (other than an Alternative
Compound), unless (A) the Lead Compound fails under
Sections 2.6(c)(iii) or (iv); (B) Bayer modifies such
Lead Compound and such modification does not meet the definition of
an Alternative Lead Compound; (C) the modification requires a
[****] and a [****] ; and (D) Bayer does not use
the data from the previous Phase I study in support of clinical
trials for the modified Lead Compound or in support of approval of
the modified Lead Compound, then previous patients treated in a
Phase I study with a Lead Compound shall not count as part of the
[****] patients. For clarity, if Bayer does use the data
from the previous Phase I study in support of clinical trials for
the modified Lead Compound or in support of approval of the
modified Lead Compound, then previous patients treated in a Phase I
study with a Lead Compound shall count as part of the [****]
patients.
(c) A
one-time Compound Fee (which may be payable in one or more
installments in accordance with Section 2.6(g)) upon
occurrence of the Milestone Event with respect to either of the
Backup Compounds; provided that such amount shall only be payable
one (1) time, regardless of whether the Milestone Event occurs
with respect to both Backup Compounds, and further provided that no
such Compound Fee shall be payable if one of the following occurs
with respect to [****] (and development of [****] is,
in fact, discontinued as a result) prior to first occurrence of the
Milestone Event with respect to a Backup Compound:
(i) the
DMC overseeing Phase I clinical trials of [****] recommends
discontinuation of clinical studies with respect to [****] ,
for safety issues, prior to completion of the protocol for the
[****] human subject to receive [****] in clinical
studies;
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(ii)
[****] does not demonstrate [****] , and does not
have [****] , measured for the [****] dose
administered in the Phase I study, when calculated using data
generated using the [****] ;
(iii) a
non-affiliate Third Party asserts that the composition, manufacture
or use of [****] itself infringes (and would, after
projected commercial launch, continue to infringe) a valid, issued
claim of a United States patent, a patent issued by the EPO
validated and registered in each country in Europe, or a German
National Patent (but only to the extent the manufacture of
[****] infringes such German National Patent), in each case
other than any patent that was licensed or sublicensed to Bayer
under the Assigned Third Party Agreements or the Intellectual
Property Cross License, and Bayer reasonably concludes that it
would incur more than de minimis liability for such infringement
and provided that the composition, manufacture or use of
[****] or [****] would not so infringe;
and/or
(iv) if
Bayer (or any applicable third party manufacturer) determines that,
despite all reasonable efforts, the cost of goods sold (determined
in accordance with Schedule 2.6(c) ) for manufacture of
[****] at quantities and quality reasonably necessary for
commercial supply exceeds [****] per mg.
Bayer shall notify
Maxygen of the first occurrence of the Milestone Event with respect
to any Backup Compound within [****] days, and, unless the
Compound Fee is not payable (x) for reasons set forth in the
preceding Section 2.6(c)(i) through (iv) or
(y) because such Milestone Event is first achieved after the
Milestone Expiration Date, Bayer shall deliver to Maxygen the
applicable payment (the “Backup Compound Fee”) of the
amount set forth in Section 2.6(h), subject to the conditions
set forth in Section 2.6(g).
For clarification
purposes, if Bayer institutes a Phase I study for a Backup
Compound, the treatment of patients with one or more of the Lead
Compound, Alternative Compound and/or the other Backup Compound
shall not count as part of the [****] patients for purposes
of determining whether a Milestone Event has occurred for such
Backup Compound pursuant to item (ii) in
Section 2.6(e).
(d)
(1) If either of the circumstances described in
Section 2.6(c)(i) or 2.6(c)(ii) occurs with respect to
[****] and:
(i) Bayer
makes any alteration, modification or change (other than
[****] ) (the “Modification”) to [****]
;
(ii) the
Modification is designed to overcome the applicable circumstance
described in Section 2.6(c)(i) or 2.6(c)(ii); and
(iii) such
Modification requires that: (x) Bayer [****] on
[****] with such Modification, (y) Bayer [****] with
such Modification and (z) Bayer [****] with such
Modification ( [****] with a Modification as described in
Section 2.6(d)(1)(i), (ii) and (iii) shall be
referred to herein as the “Alternative Compound”);
and
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(2) then,
if Bayer proceeds with development of the Alternative Compound,
and, provided that:
(i) the
[****] for the Alternative Compound referred to in
Section 2.6(d)(1)(iii) is [****] ; and
(ii) all
IND(s) and/or CTA(s) for the Lead Compound (other than for the
Alternative Compound) are not pending when the first IND and/or CTA
on the Alternative Compound are filed;
then Bayer shall
notify Maxygen of the first occurrence of the Milestone Event with
respect to the Alternative Compound within [****] days, and,
unless the Alternative Compound Fee is not payable because such
Milestone Event is first achieved after the Milestone Expiration
Date, Bayer shall deliver to Maxygen the applicable payment (the
“Alternative Compound Fee”) of the amount set forth in
Section 2.6(h), subject to the conditions set forth in
Section 2.6(g).
For clarification
purposes, if Bayer institutes a Phase I study for the Alternative
Compound, the treatment of patients with one or more other versions
of the Lead Compound which are not the same Alternative Compound
and/or with any Backup Compound shall not count as part of the
[****] patients for purposes of determining whether a
Milestone Event has occurred for the Alternative Compound pursuant
to paragraph (ii) in Section 2.6(e).
(e) As
used herein, “Milestone Event” with respect to a Lead
Compound, Alternative Compound or Backup Compound (a “Factor
VII Compound”) means the earliest to occur of
(i) Commencement of [****] by or under authority of
Bayer, any of its Affiliates, and/or any of their licensees, for
such Factor VII Compound, or (ii) dosing of the [****]
human subject in any country with the same Factor VII Compound by
or under authority of Bayer, any of its Affiliates, and any of
their licensees (“under authority of” shall include
dosing of a human subject under a physician IND under which Bayer,
its Affiliate or a licensee provides, or permits any Third Party to
provide, the applicable Factor VII Compound or any related
biological materials, including any cell line, vector or genetic
materials used to produce Factor VII Compound with Bayer’s
consent), regardless of whether the applicable human subject is
dosed in a clinical trial designated as a [****] or
otherwise, and regardless of whether any or all of the previous
[****] human subjects were dosed in the same or different
clinical studies as the [****] human subject (and provided
that a subject who completes the protocol and subsequently enrolls
or re-enrolls in the same or another clinical trial shall be
counted again, upon each such enrollment or re-enrollment, as a
separate human subject for purposes of this Section 2.6). It
is understood and agreed that a “Milestone Event” shall
be deemed to have occurred with respect to any Factor VII Compound
upon the first, if any, occurrence of the events described in this
Section 2.6(e)(i) or (ii) by, or under authority of, any
purchaser of assets consisting of one or more such Factor VII
Compounds in one or a series of related transactions, or any
affiliate or licensee of such purchaser, regardless of whether
Bayer and its Affiliates has disposed of all or substantially all
of the Factor VII Compounds. Bayer shall not have any diligence
obligation to initiate a [****] of any Factor VII Compounds,
dose any human subjects with a Factor VII
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information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has
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Compound, or
consummate a disposition of assets consisting of one or more of the
Factor VII Compounds, and Bayer may abandon any further research
and development of any Factor VII Compound in its sole
discretion.
(f) As
used herein, the “Milestone Expiration Date” shall be
that date [****] calendar months after the date of
[****] to the [****] human subject plus Site
Preparation Period plus two (2) times Initial Enrollment Period
plus Subject Completion Period. “Site Preparation
Period” means the duration of time from having full site
approval of the first site until [****] subject is dosed in
[****] . “Initial Enrollment Period” means the
duration of time from dosing of [****] subject until the
[****] subject is dosed in [****] ; and, in the event
clinical trials of [****] are discontinued before
[****] subjects are dosed, the Initial Enrollment Period
shall be [****] months. “Subject Completion
Period” means the time required for completion of the
protocol for [****] , as specified in the protocol in effect
upon the completion of dosing of the [****] , starting with
[****] and ending upon the completion of [****] ,
and, in the event that no subject completes the protocol, the
Subject Completion Period shall be [****] months.
For
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