EXHIBIT 10.1 CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO THE CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED AS *. A COMPLETE, UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO THE CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED AS *. A COMPLETE, UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

 

 i

 ii

 DEFINITIONS

"Act" shall mean, as applicable, the United States Federal Food, Drug and Cosmetic Act, 21 U.S.C.  301 et seq., and/or the Public Health Service Act, 42. U.S.C.  262 et seq., as such may be amended from time to time.

 1.2

“Adeno/DNA Product” shall mean a Product comprising an Adenoviral Vaccine and/or a DNA Vaccine.

   1.3

“Adenoviral Vaccine” shall mean a vaccine containing an adenoviral vector, which adenoviral vector encodes a Telomerase Antigen.

“Affiliate” means any individual, corporation, association or other business entity which directly or indirectly controls, is controlled by or is under common control with the Party in question. As used in this definition of “Affiliate,” the term “control” means the direct or indirect ownership of fifty percent (50%) or more of the stock having the right to vote for directors thereof or the ability to otherwise control the management of the corporation or other business entity whether through the ownership of voting securities, by contract, resolution, regulation or otherwise; provided, however, that the term “Affiliate” shall not include subsidiaries or other entities in which a Party or its Affiliates owns a majority of the ordinary voting power necessary to elect a majority of the board of directors or other governing body, but is restricted from electing such majority by contract or otherwise until the time such restrictions are no longer in effect.

“DC Technology” shall mean technology specifically relating to Dendritic Cells, and the use and methods of manufacture thereof. For avoidance of doubt, DC Technology does not include technology related to DC/Non-DC Therapies and/or DC/Adeno/DNA Therapies.

 1.16

“DC Product” shall mean a Product that comprises a Dendritic Cell.

 1.17

“DC/Adeno/DNA Therapy” shall mean a treatment regimen comprising the administration to a patient of both a DC Product and an Adeno/DNA Product.

 1.18

“DC/Non-DC Therapy” shall mean a treatment regimen comprising the administration to a patient of both a DC Product as a Prime and a Non-DC Product as a Boost, provided that the Non-DC Product is not an Adeno/DNA Product.

 1.19

“Directed” shall mean, with respect to a Telomerase Antigen, that such Telomerase Antigen elicits a detectable humoral and/or cellular immune response against Telomerase.

 1.20

“DNA Vaccine” means a vaccine comprising a DNA plasmid vector. For the avoidance of doubt, a vaccine that comprises a Dendritic Cell containing a DNA plasmid vector is not a DNA Vaccine.

 1.21

“Effective Date” shall mean the date first set forth in the first paragraph of this Agreement.

 1.22

“EMEA” shall mean the European Medicines Agency.

 1.23

“European Union” shall mean the countries that are members of the European Union as of the Effective Date of this Agreement.

 1.24

“Field" shall mean the treatment, modulation and/or prophylaxis of cancer, and/or other diseases mediated by hyperproliferation of cells, in humans.

 1.25

“Filing” of an NDA shall mean the acceptance by a Regulatory Authority of an NDA for filing.

 1.26

“First Commercial Sale” shall mean, with respect to any Product, the first sale for end use or consumption of such Product in a country, excluding, however, any sale or other distribution for use in a Clinical Trial.

 1.27

“Fusion Protein” shall mean a conjugate which, (i) is Directed to Telomerase; (ii) comprises a heterologous protein conjugated with a Telomerase Antigen, which conjugate is not specifically covered by a Valid Patent Claim at the time such conjugate is Invented; and (iii) provides benefit as a vaccine component due to its capacity to induce an immune response cross-reactive against Telomerase which response is superior in quality to that induced by the corresponding wild-type epitope, as assessed by (x) *; (y) *; or (z) * and (b) any nucleic acid sequence which encodes the conjugate set forth in (a).

 1.35

“Initiates” or “Initiation” shall mean, with respect to a Clinical Trial, the administration of the first dose to a patient in such Clinical Trial.

 1.36

“Invention” shall mean any process, method, composition of matter, article of manufacture, discovery or finding that is conceived and/or reduced to practice during and as a result of the Research Program or the Clinical Development Program, and “Invent” shall mean the act of conception and/or reduction to practice of such Invention.

 1.37

“JDC”shall mean the joint development committee, as more fully described in Section 2.4.

 1.38

“Joint Program Patent Rights” shall mean Program Patent Rights jointly owned by the Parties under 2.6.4(c).

 1.39

“JRC” shall mean the joint research committee, as more fully described in Section 2.3.

 1.40

“Licensed Program Patent Rights” shall mean: (1) Geron Program Patent Rights (2) Merck Telomerase Program Patent Rights and (3) Joint Program Patent Rights.

 1.41

“Licensed Subject Matter” shall mean, (i) with respect to the licenses granted by Geron to Merck hereunder, Geron Patent Rights, Geron Know-How, Geron Program Patent Rights, Geron’s interest in Joint Program Patent Rights and Geron’s interest in Program Know-How; and (ii) with respect to the licenses granted by Merck to Geron hereunder, Merck Telomerase Program Patent Rights, and Merck’s interest in Program Know-How relating to Telomerase Antigen.

 1.42

“Major Market” shall mean any one of the following countries: *.

 1.43

“Marketing Authorization” shall mean all approvals from the relevant Regulatory Authority necessary to market and sell a Product in any country (including without limitation, all applicable pricing and governmental reimbursement approvals even if not legally required to sell Product in a country).

 1.44

“Materials”shall mean such materials that are indicated in Schedule 2.1 as being provided by Geron to Merck.

 1.45

“Merck Know-How” shall mean any information and materials, including, but not limited to, discoveries, improvements, processes, methods, protocols, formulas, data, inventions, know-how and trade secrets, patentable or otherwise, which during the term of this Agreement, (i) are Controlled by Merck, (ii) are not generally known and (iii) are mutually agreed by the Parties to be necessary or useful to Geron in the performance of its obligations under the Research Program, excluding, however, any Program Patent Rights and Program Know-How.

 1.46

“Merck Program Patent Rights” shall mean Program Patent Rights which are owned by Merck pursuant to Sections 2.6.1 or 2.6.4(b).

 1.47

“Merck Telomerase Program Patent Rights” shall mean Merck’s interest in Program Patent Rights claiming or covering Synthetic Epitopes and/or Fusion Proteins.

 1.50

“Non-DC Product” shall mean any Product that is not a DC Product, DC/Non-DC Therapy or a DC/Adeno/DNA Therapy, regardless of whether such Product employs any delivery enhancement technology (e.g. with or without electroporation). Non-DC Products shall include, but not be limited to, Adeno/DNA Products.

 1.51

“Non-DC Technologies” shall mean antigen-delivery technology, adjuvants, electroporation technology, adenoviral vectors and/or DNA plasmid vectors, viral vectors, virus like particles, which technologies comprise Program Patent Rights and Program Know-How. For avoidance of doubt, Non-DC Technologies does not include DC Technologies or any therapy that includes Dendritic Cells.

 1.52

“Party” shall mean Merck and Geron, individually, and “Parties” shall mean Merck and Geron, collectively.

 2.

 2.1

 2.1.1

Geron and Merck shall engage in the Research Program upon the terms and conditions set forth in this Agreement. In the initial Research Program, as set forth in Schedule 2.1 as of the Effective Date (the “Initial Research Program”), the Parties shall investigate *. The Initial Research Program may be amended only by mutual written agreement of the Parties. When used herein, any reference to “Research Program” shall include the Initial Research Program as amended by the Parties.

 2.2

 2.2.1

Performance. Geron and Merck each shall proceed diligently with the work set out in the Research Program by using their respective good faith efforts to allocate sufficient time, effort, equipment and facilities to the Research Program and to use personnel with sufficient skills and experience as are required to accomplish the Research Program in accordance with the terms of this Agreement and Schedule 2.1.

 2.2.6

Research Program Term. Except as otherwise provided herein, the term of the Research Program shall commence on the Effective Date and continue for a period of * (*) years after the Effective Date (“Research Program Term”). The Initial Research Program described in Schedule 2.1 is expected to be completed within * to * months after the Effective Date (“Initial Research Program Term”). Additional Research Program activities after the Initial Research Program, and the funding obligations of the Parties with respect thereto, shall be agreed upon between Geron and Merck at the conclusion of the Initial Research Program Term, including those activities provided in Section 2.3.4. The Parties may extend the Initial Research Program Term only by mutual written agreement of the authorized representative of the Parties, and shall, in such case, amend Schedule 2.1 as applicable.

 2.3

 Joint Research Committee

 2.3.1

The Parties hereby establish a joint research committee (the “JRC”) as a scientific forum for discussion of the work and technical review of activities and results of the Research Program, and to facilitate the execution of the Research Program. Unless otherwise agreed between the Parties, the JRC shall remain in effect from the Effective Date of this Agreement up to and including the date three (3) months after commencement by Merck of IND-enabling GLP toxicology studies for a Non-DC Product, at which point a JDC will be formed in accordance with Section 2.4.1.

 2.3.2

Composition of the Joint Research Committee. The Research Program shall be conducted under the direction of the JRC, comprised of * (*) representatives of Merck and * (*) representatives of Geron. Each Party may change its representatives to the JRC from time to time, in its sole discretion, effective upon prior written notice to the other Party of such change. These representatives shall have appropriate technical credentials, experience and knowledge, and ongoing familiarity with the Research Program. Additional representatives or consultants may from time to time, by mutual consent of the Parties, be invited to attend JRC meetings, subject to such representative’s or consultant’s written agreement to comply with the requirements of Section 4. The JRC shall be chaired by a representative of Merck. Decisions of the JRC shall be made unanimously by the representatives. In the event that the JRC cannot or does not, after good faith efforts, reach agreement on an issue related to the Research Program, the resolution and/or course of conduct shall be determined by Merck, in its sole discretion, provided that Geron shall have the right to raise issues of substance to the appropriate Executive Vice President of Merck Research Laboratories if not in agreement with a Merck decision. Each Party shall bear its own expenses related to the attendance of such meetings by its representatives.

 2.3.3

JRC Meetings. During the Research Program Term and until the formation of the JDC, the JRC shall meet in accordance with a schedule established by mutual written agreement of the Parties, but no less frequently than once per Calendar Quarter, with the location for such meetings alternating between Geron and Merck facilities (or such other location as may be determined by the JRC). Alternatively, the JRC may meet by means of teleconference, videoconference or other similar communications equipment. The JRC shall confer regarding the status of the Research Program, review relevant data, and consider and advise on any technical issues that arise under the Research Program. Prior to the JRC meetings, the Parties shall exchange written summaries of the matters to be presented to the Committee. At JRC meetings, the Parties, through the JRC, will share Information arising from the performance of the Research Program, and any Information exchanged at JRC meetings shall be appropriately documented.

 2.7.4

For purposes of this Section 2.7.1, the term “adverse experience” means any unfavorable and unintended change in the structure (signs), function (symptoms), or chemistry (laboratory data) of the body temporally associated with any use of a Product, whether or not considered related to the use of such Product. Changes resulting from normal growth and development which do not vary significantly in frequency or severity from expected levels are not to be considered adverse experiences. Examples of this may include, but are not limited to, teething, typical crying in infants and children, and onset of menses or menopause occurring at a physiologically appropriate time.  

(a)  Adverse experiences may occur in the course of the use of a Product in Clinical Trials or within the follow-up period specified in the protocol of such Clinical Trial, or prescribed in clinical practice, from overdose (whether accidental or intentional), from abuse, and from withdrawal.

(b)  Adverse experiences may also occur in screened patients during any preallocation baseline period as a result of a protocol-specified intervention including washout or discontinuation of usual therapy, diet, placebo treatment, or a procedure.

(c)  The term “adverse experience” does not pertain to events that are a result of investigator-initiated changes to the patient’s usual care during any preallocation baseline period. The term “adverse experience” does not pertain to nonprotocol specified intervention events or to preexisting conditions which occur in screened/nonrandomized patients unless the event causes the patient to be excluded from the study.

(d)  For a marketed Product, (clinical practice and post-marketing study) any significant failure of expected pharmacologic, immunologic, or therapeutic effect also constitutes an adverse experience.

(e)  While the reason for a procedure, e.g., chest pain necessitating cardiac catheterization, may be an adverse experience, a procedure in and of itself is not an adverse experience.

 2.7.5

For purposes of this Section 2.7.1, “serious” means any untoward medical occurrence that at any dose is fatal or immediately life-threatening, results in persistent or significant disability/incapacity, or requires in-patient hospitalization or prolongation of an existing hospitalization, or is a congenital anomaly, cancer, or overdose. Other important medical events that may jeopardize the patient or may require intervention to prevent one of the outcomes listed previously, should also be considered “serious”.

Information provided by one Party to the other Party under this Section 2.7 shall be maintained in confidence by the receiving Party, except as expressly permitted by Article 4 of this Agreement.

 3.

 3.1

 3.1.1

Exclusive Non-DC Products License. Subject to the terms and conditions of this Agreement, including Section 3.1.2, Geron hereby grants to Merck an exclusive license (even as to Geron) in the Territory under Geron Patent Rights, Geron Program Patent Rights, Geron’s interest in Joint Program Patent Rights, Geron Know-How, and Geron’s interest in Program Know-How to make, have made, use, offer to sell, sell and/or import Non-DC Product(s) (including use for research and development of such Non-DC Product(s)) for any and all uses in the Field.

 3.6

 3.6.1

Geron Right to Co-Promote. Subject to the obligations of Merck existing as of the Effective Date, Merck hereby grants Geron an option to co-promote any Product developed hereunder in the U.S. only (the “Co-promotion Option”) by Detailing (as such term is defined in Schedule 3.6) the Non-DC Product to physicians other than primary care providers who are designated by Merck as candidates for Detailing the Product (“Target Prescribers”) Geron’s right to co-promote any Product hereunder is subject to the provisions of this Section 3.6, and is conditioned on Geron’s exercise of the Co-Promotion Option set forth in Section 3.6.3, Geron’s demonstrated ability to perform such mutually agreed co-promotion obligations as are set forth in a Co-Promotion Agreement mutually acceptable to the Parties and containing terms and conditions substantially consistent with Schedule 3.6. Any rights to co-promote Non-DC Products shall only be granted to Geron or a wholly-owned subsidiary of Geron, and shall not be assignable or transferable except as may be otherwise agreed in the Co-Promotion Agreement.

 3.6.2

Procedure. (a) Merck shall determine the projected Launch Date (as such term is defined in Schedule 3.6) of the Product, and shall keep Geron apprised at quarterly JDC meetings of any changes in the projected Launch Date for the Non-DC Product, so that Geron has reasonable notice thereof. Merck will notify Geron in writing of the projected Launch Date for each Product hereunder at least * (*) months in advance of such projected Launch Date. Subject to notice by Merck as set forth in the preceding sentence, Geron will notify Merck in writing of its intent to exercise the Co-Promotion Option at any time but no later than * (*) months prior to the projected Launch Date as communicated by Merck(the “Exercise Date”). If Geron chooses to exercise the Co-Promotion Option, Merck and Geron will enter into a definitive Co-Promotion Agreement consistent with the terms and conditions set forth in Schedule 3.6 *. 

(b)      Notwithstanding Section 3.6.2(a), if Merck determines that an accelerated time schedule for the Exercise Date and execution of a Co-Promotion Agreement is necessary to optimally plan and execute the launch of the Product, Merck will inform Geron and the Parties will agree on the revised schedule for exercise of the Co-Promotion Option and execution of a definitive Co Promotion Agreement *.

 3.6.3

Co-Promotion Obligations. If Geron exercises the Co-Promotion Option, Geron shall be required to commence Detailing the Product on the Launch Date, and shall be required to deploy a sufficient number * of Specialty Sales Representatives (as such term is defined in Schedule 3.6), based on the reach and frequency of Detailing that Merck determines is desirable to the Target Prescribers. Merck shall inform Geron at least * (*) days before the Exercise Date of the total number of Specialty Sales Representatives required for the Detailing of the Product on the Launch Date. Merck and Geron will mutually agree on the number of Specialty Sales Representatives Geron will deploy as outlined in Schedule 3.6. Compensation in any event shall be as described in Schedule 3.6.

 3.6.4

Lapse of Co-Promotion Option. Geron’s right to co-promote a Product hereunder shall lapse if, with respect to such Product:

(a)  Geron does not notify Merck in writing of its intent to exercise the Co-Promotion Option by the Exercise Date (subject to reinstatement of the Co-Promotion Option as provided in Section 3.6.2); or

(b)  Geron cannot provide the number of Specialty Sales Representatives set forth in Schedule 3.6; or

(c)       For the reasons set forth in Schedule 3.6; or

(d)  Geron is involved in a Major Pharma Change of Control as set forth in Section 9.2; or

(e)  The Agreement is terminated pursuant to Article 9.

 3.7

  3.7.1

All licenses granted under or pursuant to this Agreement by Geron to Merck are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the Code, licenses of rights to “intellectual property” as defined under Section 101(35A) of the Code. The Parties agree that Merck, as a licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Code, and that upon commencement of a bankruptcy proceeding by or against Geron under the Code, Merck shall be entitled, to the extent necessary for Merck to continue to preserve its license rights under this Agreement, to a complete duplicate of any such intellectual property and all embodiments of such intellectual property. Such intellectual property and all embodiments thereof shall be promptly delivered to Merck (i) upon any such commencement of a bankruptcy proceeding upon written request therefor by Merck, unless Geron elects to continue to perform all of its obligations under this Agreement or (ii) if not delivered under (i) above, upon the rejection of this Agreement by or on behalf of Geron upon written request therefor by Merck. The foregoing provisions of this Section 3.7 are without prejudice to any rights Merck may have arising under the Code or other applicable law.

 4.

 4.1

 4.1.1

All Information disclosed by one Party to the other Party hereunder shall be maintained in confidence by the receiving Party and shall not be disclosed to any Third Party or Related Party, or used for any purpose except as set forth herein without the prior written consent of the disclosing Party, except to the extent that such Information:

(a)  is known by the receiving Party at the time of its receipt, and not through a prior disclosure by the disclosing Party, as documented by the receiving Party’s business records;

(b)  is in the public domain by use and/or publication before its receipt from the disclosing Party, or thereafter enters the public domain through no fault of the receiving Party;

 

 (c)     is subsequently disclosed to the receiving Party by a Third Party who may lawfully do so and is not under an obligation of confidentiality to the disclosing Party;

(d)  is developed by the receiving Party independently of Information received from the disclosing Party, as documented by the receiving Party’s business records;

(e)  is disclosed to governmental or other regulatory agencies in order to obtain patents or to gain or maintain approval to conduct clinical trials or to market Product, but such disclosure may be only to the extent reasonably necessary to obtain patents or authorizations;

(f)  is (i) Licensed Subject Matter licensed to Merck hereunder and is deemed necessary by Merck to be disclosed to Related Parties, agents, consultants, and/or other Third Parties for any and all purposes Merck and its Affiliates deem necessary or advisable for the research and development, manufacturing and/or marketing of the Non-DC Product (or for such entities to determine their interest in performing such activities) or (ii) Licensed Subject Matter licensed to Geron hereunder and is deemed necessary by Geron to be disclosed to Affiliates, agents, consultants, permitted sublicensees and/or other Third Parties for any and all purposes Geron and its Affiliates deem necessary and advisable for the research and development, manufacturing or marketing of any DC-Product or DC/Non-DC Therapy (or for such entities to determine their interest in performing such activities), provided that such activities by either Party shall be in accordance with this Agreement on the condition that such Third Parties agree in writing to be bound by the confidentiality and non-use obligations contained in this Agreement; and further provided that the term of confidentiality for such Third Parties shall be no less than ten (10) years; or

(g)  is deemed necessary by counsel to the receiving Party to be disclosed to such Party’s attorneys, independent accountants or financial advisors for the sole purpose of enabling such attorneys, independent accountants or financial advisors to provide advice to the receiving Party.

Any combination of features or disclosures shall not be deemed to fall within the foregoing exclusions merely because individual features are published or available to the general public or in the rightful possession of the receiving Party unless the combination itself and principle of operation are published or available to the general public or in the rightful possession of the receiving Party.

 4.1.2

If a Party is required by judicial or administrative process to disclose Information that is subject to the non-disclosure provisions of this Section 4.1 or Section 4.2, such Party shall promptly inform the other Party of the disclosure that is being sought in order to provide the other Party an opportunity to challenge or limit the disclosure obligations. Information that is disclosed by judicial or administrative process shall remain otherwise subject to the confidentiality and non-use provisions of this Section 4.1 and Section 4.2, and the Party disclosing Information pursuant to law or court order shall take all steps reasonably necessary, including without limitation obtaining an order of confidentiality, to ensure the continued confidential treatment of such Information. Each Party agrees that it shall cooperate fully and in a timely manner with the other with respect to all disclosures to the Securities and Exchange Commission and any other governmental or regulatory agencies, including requests for confidential treatment of Information of either party included in any such disclosure.

 4.2

 4.2.1

Geron agrees to use Commercially Reasonable Efforts to keep all Geron Know-How and Geron’s interest in Program Know-How that is exclusively licensed to Merck pursuant to Section 3.1 confidential, subject to exception (b) in Section 4.1 above.

 4.3

 4.3.1

Merck and Geron each acknowledge the other Party’s interest in publishing the results of its research in order to obtain recognition within the scientific community and to advance the state of scientific knowledge. However, any publication of Information arising from the Research Program shall be solely by agreement of the Parties. Each Party also recognizes the mutual interest in obtaining valid patent protection and in protecting business interests and trade secret information. Consequently, except for disclosures permitted pursuant to Section 4.1, either Party, its employees or consultants wishing to make a publication containing Program Know-How or confidential Information of the other Party shall deliver to the other Party a copy of the proposed written publication or an outline of an oral disclosure at least * (*) days prior to submission for publication or presentation. The reviewing Party shall have the right (a) to propose modifications to the publication or presentation for patent reasons, trade secret reasons or business reasons or (b) to request a reasonable delay in publication or presentation in order to protect patentable information. If the reviewing Party requests a delay, the publishing Party shall delay submission or presentation for a period of * (*) days to enable patent applications protecting each Party’s rights in such information to be filed in accordance with Article 8 below. Upon expiration of such * (*) days, the publishing Party shall be free to proceed with the publication or presentation. If the reviewing Party requests modifications to the publication or presentation, the publishing Party shall edit such publication to prevent disclosure of trade secret or proprietary business information of the reviewing Party prior to submission of the publication or presentation. Notwithstanding anything in this Section 4.3.1 (i) Merck may publish its clinical or manufacturing Information relating to Non-DC Products with advance written notice to Geron and (ii) Geron may publish its clinical or manufacturing Information relating to DC Products, provided, however, that for any such publication relating to any DC Product covered by a license granted to Geron by Merck under this Agreement, Geron shall provide advance written notice to Merck.

 4.4

 4.4.1

Both Parties hereby agree that, on or after the Effective Date, Geron may issue the press release set forth in Schedule 4.4.1.

 4.4.2

No disclosure of the terms of this Agreement beyond those otherwise described in the press release in Schedule 4.4.1, or otherwise previously publicly disclosed as required by law, may be made by either Party. Neither Party shall use the name, trademark, trade name or logo of the other Party, its Affiliates or their respective employees in any publicity, promotion, news release or disclosure relating to this Agreement or its subject matter, without the prior express written permission of the other Party, except as may be required by law. Each Party hereby consents to the use of its name by the other Party in making reference to the existence of the Agreement only to the extent permitted in this Section 4.4.2.

 4.4.3

Notwithstanding the above, either Party may disclose the terms of this Agreement to accredited investors, investment bankers, or potential acquirors or merger candidates in the context of due diligence investigations of such Party, provided that the party to which such information is disclosed is subject to a nondisclosure obligation no less stringent that that specified in Section 4.1.

$ U.S.  *

 

$ U.S.  *

 

$ U.S.  *

 

$ U.S.  *

 

$ U.S.  *

 

$ U.S.  *

 

Merck shall notify Geron in writing within thirty (30) days following the achievement of each milestone set forth in Sections 5.3.2, 5.3.3, or 5.3.4, and shall make the appropriate milestone payment within thirty (30) days after the achievement of such milestone.

Royalty tiers pursuant to 5.4.1(a) and 5.4.1(b) shall be calculated based on worldwide Net Sales of each Product , provided that the determination of whether the royalty shall be calculated under 5.4.1(a) or 5.4.1(b) shall be determined on a country-by-country basis. Royalties on each Product at the rates set forth above shall continue on a country-by-country basis until the later of: (i) the end of the royalty obligation under Section 5.4.1(a); or (ii) for a period of * (*) years after First Commercial Sale of such Product in such country (the “Royalty Period”). All royalties are subject to the following conditions:

Compulsory Licenses. *

Retroactive Lump-Sum Payment of Royalties. *.

Non-cash Compensation. The Parties acknowledge that it may be impracticable to anticipate all possible ways for Merck and its Related Parties to commercialize and exploit the licenses granted to them hereunder or which are later sublicensed to them, as the case may be, with respect to Non-DC Products, or for Merck and/or its Affiliates to receive compensation therefor directly or indirectly from Third Parties, but that Geron is properly entitled to compensation therefor. Except as permitted pursuant to Section 5.4.2, if any of Merck or its Related Parties transfers to a Third Party any Non-DC Products, and does not receive compensation for such transfer equivalent to commercial sale of Non-DC Products, (including if Merck or any of its Related Parties receive Net Sales in the form of non-cash consideration for any Non-DC Product sold or otherwise transferred to a Third Party) Merck shall be obligated to promptly report such transfer to Geron. In such event, Merck and Geron shall discuss in good faith and agree upon new ways of compensating Geron to the extent currently contemplated under Section 5.4.1 and 5.4.2; provided that this provision shall not apply to services received by Merck or its Related Parties from Third Parties in the ordinary course of business.

During the term of this Agreement following the First Commercial Sale of a Product, Merck shall furnish to Geron a quarterly written report for the Calendar Quarter showing the Net Sales of all Products subject to royalty payments sold by Merck and its Related Parties in the Territory during the reporting period and the royalties payable under this Agreement. Reports shall be due on the * (*) day following the close of each Calendar Quarter. Royalties shown to have accrued by each 

royalty report shall be due and payable on the date such royalty report is due. Merck shall keep complete and accurate records in sufficient detail to enable the royalties payable hereunder to be determined.

Upon the written request of Geron and not more than once in each Calendar Year, Merck shall permit an independent certified public accounting firm of nationally recognized standing selected by Geron and reasonably acceptable to Merck, at Geron’s expense, to have access during normal business hours to such of the records of Merck as may be reasonably necessary to verify the accuracy of the royalty reports within twenty-four (24) months after receipt by Geron of such royalty reports. The accounting firm shall disclose to Geron only whether the royalty reports are correct or incorrect and the amount of any discrepancy. No other information shall be provided to Geron.

If such accounting firm identifies a discrepancy made during such period, the appropriate Party shall pay the other Party the amount of the discrepancy within thirty (30) days of the date Geron delivers to Merck such accounting firm’s written report so concluding, or as otherwise agreed upon by the Parties. The fees charged by such accounting firm shall be paid by Geron, provided, however, that if such audit uncovers an underpayment of royalties by Merck that exceeds * of the total royalties owed, then the fees of such accounting firm shall be paid by Merck.

Merck shall include in each sublicense granted by it pursuant to this Agreement a provision requiring the sublicensee to make reports to Merck, to keep and maintain records of sales made pursuant to such sublicense and to grant access to such records by Geron’s independent accountant to the same extent required of Merck under this Agreement.

Upon the expiration of * (*) months following the end of any Calendar Year, the calculation of royalties payable with respect to such year shall be binding and conclusive upon Geron, and Merck and its Related Parties shall be released from any liability or accountability with respect to royalties for such year.

Geron shall treat all financial information subject to review under Section 5.6.1 or under any sublicense agreement in accordance with the confidentiality and non-use provisions of this Agreement, and shall cause its accounting firm to enter into an acceptable confidentiality agreement with Merck and/or its Related Parties obligating it to retain such information in confidence pursuant to such confidentiality agreement.

All payments to be made by Merck to Geron under this Agreement shall be made in United States dollars and may be paid by bank wire transfer in immediately available funds to such bank account in the United States as may be designated in writing by Geron from time to time. In the case of sales outside the United States, the rate of exchange to be used in computing the monthly amount of currency equivalent in United States dollars due Geron shall be made at the monthly rate of exchange utilized by Merck in its worldwide accounting system, prevailing on the third to the last business day of the month preceding the month in which such sales are recorded by Merck.

If laws, rules or regulations require withholding of income taxes or other taxes imposed upon payments set forth in this Article 5, Merck shall make such withholding payments as may be required and shall subtract such withholding payments from the payments set forth in this Article 5. Merck shall deliver to Geron a proof of payment within a reasonable period of time after making such withholding payment.

Geron Representations and Warranties. Geron represents and warrants to Merck that, except as indicated in Schedule 6.1.1, as of the Effective Date of this Agreement:

Merck Representations and Warranties. Merck represents and warrants to Geron that, except as indicated in Schedule 6.1.2, as of the Effective Date:

Limitation of Liability.

Any recovery obtained by either Geron or jointly by Merck and Geron in connection with or as a result of any action contemplated by this Section 8.1, whether by settlement or otherwise, shall be shared in order as follows:

Any recovery obtained by either or both Merck and Geron in connection with or as a result of any action contemplated by this Section, whether by settlement or otherwise, shall be shared in order as follows:

Each Party shall inform the other of any certification regarding any Licensed Program Patent Rights it has received pursuant to either 21 U.S.C. §§355(b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) or its successor provisions, or any similar provisions relating to biologicals in a country in the Territory , and shall provide the other Party with a copy of such certification within five (5) days of receipt. Geron’s and Merck’s rights with respect to the initiation and prosecution of any legal action as a result of such certification or any recovery obtained as a result of such legal action shall be as defined in Section 8.2.3 hereof. Regardless of which Party has the right to initiate and prosecute such action, both Parties shall, as soon as practicable after receiving notice of such certification, convene and consult with each other regarding the appropriate course of conduct for such action. The non-initiating Party shall have the right to be kept fully informed and participate in decisions regarding the appropriate course of conduct for such action, and the right to join and participate in such action.

The Parties hereto shall cooperate with each other, including without limitation to provide necessary information and assistance as the other Party may reasonably request, in obtaining patent term restoration or supplemental protection certificates or their equivalents in any country in the Territory where applicable to any Patent Rights subject to this Agreement.

This Agreement shall be effective as of the Effective Date and unless terminated earlier pursuant to Sections 9.2 or 9.3 below, this Agreement shall continue in effect until expiration of all royalty obligations hereunder. Upon natural expiration of this Agreement, Merck’s licenses pursuant to Section 3.1 shall become fully paid-up, perpetual licenses.

Notwithstanding anything contained herein to the contrary, Merck shall have the right to terminate this Agreement at any time after the second anniversary of the Effective Date in its sole discretion by giving ninety (90) days’ advance written notice to Geron. No later than thirty (30) days after the effective date of such termination, each Party shall return or cause to be returned to the other Party all Information in tangible form received from the other Party and all copies thereof; provided, however, that each Party may retain any Information reasonably necessary for such Party’s continued practice under any license(s) which do not terminate pursuant to this Section, and may keep one copy of Information received from the other Party in its confidential files for record purposes. In the event of termination under this Section 9.2.1 each Party shall pay any amounts then due and owing to the other Party as of the termination date; (ii) except for the surviving provisions set forth in Section 9.5 hereof and Section 3.3, the rights and obligations of the Parties hereunder shall terminate as of the date of such termination, provided, however, that Merck shall have a fully paid up non-exclusive license to use Geron’s interest in Joint Program Patent Rights and Joint Program Know-How for research purposes only; and (iii) in the event that Merck has obtained an exclusive license right from a Third Party to the use of Telomerase Antigen with such Third Party’s intellectual property, Merck shall promptly terminate Merck’s exclusive rights under such license with such Third Party specifically related to Telomerase Antigen and shall promptly notify Geron of the date of such termination. In the event of termination under this Section 9.2, in addition to other provisions of the Agreement that are specified to survive termination in Section 9.4.2, Article 5 of the Agreement (other than any and all aspects of patent royalties payable under 5.4.1(a)) shall also survive termination.

Notice and Cure. In the event that a first Party views that the second Party is in material breach of its obligations hereunder as a result of causes and reasons within the control of the second Party then the first Party shall provide written notice to the second Party providing a detailed explanation of the asserted material breach. The second Party shall then either (1) cure such asserted material breach within ninety (90) days after actual receipt of such written notice (or such longer period as may be agreed by the Parties) or, if the second Party disagrees that it is in material breach, (2) initiate dispute resolution pursuant to Section 10.6, whereupon the ninety (90) day cure period shall be tolled until the dispute is resolved.

Material Breach. Either Party may terminate this Agreement upon written notice for material breach but only after (1) the non-breaching Party has provided the breaching Party with notice and an opportunity to cure as specified in 9.3.1 and has failed to cure the breach; and (2) any dispute resolution invoked under Section 10.6 pertaining to the existence of a material breach has been resolved.

Financial Insolvency. Either Party may terminate this Agreement upon written notice upon the filing or institution of bankruptcy, reorganization, liquidation or receivership proceedings, or upon an assignment of a substantial portion of the assets for the benefit of creditors by the other Party; provided, however, that in the case of any involuntary bankruptcy proceeding such right to terminate shall only become effective if the Party consents to the involuntary bankruptcy or such proceeding is not dismissed within ninety (90) days after the filing thereof.

Effect of Termination for Cause on Licenses. If Merck terminates this Agreement under Section 9.4 on the basis of material breach for which Merck cannot otherwise be made whole by Geron, Merck’s licenses pursuant to Section 3.1 shall continue and shall remain fully subject to all financial obligations set forth in Section 5, except that, with respect to the royalty obligations set forth in Section 5.4.1, Merck shall only be obligated to pay a royalty pursuant to Section 5.4.1(a) for the duration of any Valid Patent Claim pursuant to Section 5.4.1(b)(1), and Merck shall not be obligated to pay a know-how royalty pursuant to Section 5.4.1(c). Upon such termination by Merck, Geron shall, within thirty (30) days after the effective date of such termination, return or cause to be returned to Merck all Information in tangible form, and all substances or compositions delivered or provided by Merck, as well as any other material provided by Merck in any medium. If Geron terminates this Agreement under Section 9.4, Merck’s licenses pursuant to Section 3.1 shall terminate as of such termination date and Merck shall, within thirty (30) days after the effective date of such termination, return or cause to be returned to Geron all Information in tangible form and substances or compositions delivered or provided by Geron, as well as any other material provided by Geron in any medium.

If, after termination of this Agreement by Merck pursuant to Section 9.2 or by Geron pursuant to Section 9.4, should Geron thereafter undertake development of a Product, then at Merck’s sole discretion, Geron and Merck shall meet to negotiate a license to Geron under any Merck Know-How that was conveyed to Geron during the course of the Agreement. For the avoidance of doubt, Merck shall not be obligated to provide such a license to Geron.

Expiration or termination of this Agreement shall not relieve the Parties of any obligation accruing prior to such expiration or termination. Any expiration or termination of this Agreement shall be without prejudice to the rights of either Party against the other accrued or accruing under this Agreement prior to expiration or termination, including without limitation the obligation to pay royalties for Product(s) sold prior to such expiration or termination. The provisions of Article 4 shall survive the expiration or termination of this Agreement and shall continue in effect for ten (10) years. In addition, the provisions of Articles 1, 6, 7, 8, and 9 (other than Section 9.2) shall survive any expiration or termination of this Agreement.

Neither Party shall be held liable to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in performing any obligation under this Agreement to the extent that such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party, potentially including, but not limited to, embargoes, war, acts of war (whether war be declared or not), insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, fire, floods, or other acts of God, or acts, omissions or delays in acting by any governmental authority or the other Party. The affected Party shall notify the other Party of such force majeure circumstances as soon as reasonably practical, and shall promptly undertake all reasonable efforts necessary to cure such force majeure circumstances.

Except as provided in this Section 10.2, this Agreement may not be assigned or otherwise transferred, nor may any right or obligation hereunder be assigned or transferred, by either Party without the consent of the other Party. Merck may, without Geron’s consent, assign this Agreement and its rights and obligations hereunder in whole or in part to a Merck Affiliate or in connection with a Change of Control (as defined below). Geron may, without Merck’s consent, assign this Agreement and its rights and obligations hereunder (except as specified below) in connection with a Change of Control; provided, however, that Geron must notify Merck at least thirty (30) days prior to completion of any Major Pharma Change of Control, and Merck shall have the right, at any time after receipt of such notice, to notify Geron of the termination of the Research Program.

Notwithstanding the foregoing, the rights and obligations of Geron in Section 3.6 may not be assigned in the event of a Major Pharma Change of Control under any circumstances without Merck’s prior written consent.

For purposes of this Section 10.2, a “Change of Control” of a Party shall be deemed to occur if such Party is involved in a merger, reorganization or consolidation, or if there is a sale of all or substantially all of such Party’s assets or business relating to this Agreement or if a person or group other than the current controlling person or group shall effectively acquire control of the management and policies of such Party, and a “Major Pharma Change of Control” shall mean a Change of Control in which the acquiring or merging or entity either (i) has any cancer vaccine product in clinical development or approved in any country, or (ii) had worldwide pharmaceutical sales in excess of * during the Calendar Year preceding such merger or acquisition.

Any permitted assignee shall assume all assigned obligations of its assignor under this Agreement. Any attempted assignment not in accordance with this Section 10.2 shall be void.

If any one or more of the provisions contained in this Agreement is held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, unless the absence of the invalidated provision(s) adversely affects the substantive rights of the Parties. The Parties shall in such an instance use their best efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, implement the purposes of this Agreement.

All notices which are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier), sent by nationally-recognized overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

If to Geron, to:

Geron Corporation

230 Constitution Drive,

Menlo Park, CA  94025

Attention: Corporate Development

Facsimile No.: (650) 473-7750

and:

Latham & Watkins LLP

135 Commonwealth Dr.

Menlo Park, CA 94025

Facsimile No.: (650) 463-2600

If to Merck, to:

Merck & Co., Inc.

One Merck Drive

P.O. Box 100, WS3A-65

Whitehouse Station, NJ ###-###-####

Attention: Office of Secretary

Facsimile No.: *

and:

Merck & Co., Inc.

One Merck Drive

Attention: Chief Licensing Officer

P.O. Box 100, WS2A-30

Whitehouse Station, NJ ###-###-####

Facsimile: *

This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware and the patent laws of the United States, without reference to any rules of conflict of laws.

The Parties shall negotiate in good faith and use reasonable efforts to settle any dispute, controversy or claim arising from or related to this Agreement or the breach thereof. If the Parties do not fully settle, and a Party wishes to pursue the matter, each such dispute, controversy or claim that is not an “Excluded Claim” shall be finally resolved by binding arbitration in accordance with the Commercial Arbitration Rules and Supplementary Procedures for Large Complex Disputes of the American Arbitration Association (“AAA”), and judgment on the arbitration award may be entered in any court having jurisdiction thereof.

The arbitration shall be conducted by a panel of three persons experienced in the pharmaceutical business: within thirty (30) days after initiation of arbitration, each Party shall select one person to act as arbitrator; and the two Party-selected arbitrators shall select a third arbitrator within thirty (30) days of their appointment. If the arbitrators selected by the Parties are unable or fail to agree upon the third arbitrator, the third arbitrator shall be appointed by the AAA. The place of arbitration shall be New York, New York, and all proceedings and communications shall be in English.

Either Party may apply to the arbitrators for interim injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved. Either Party also may, without waiving any remedy under this Agreement, seek from any court having jurisdiction any injunctive or provisional relief necessary to protect the rights or property of that Party pending the arbitration award. The arbitrators shall have no authority to award punitive or any other type of damages not measured by a Party’s compensatory damages. Each Party shall bear its own costs and expenses and attorneys’ fees and an equal share of the arbitrators’ fees and any administrative fees of arbitration.

Except to the extent necessary to confirm an award or as may be required by law, neither a Party nor an arbitrator may disclose the existence, content, or results of an arbitration without the prior written consent of both Parties. In no event shall an arbitration be initiated after the date when commencement of a legal or equitable proceeding based on the dispute, controversy or claim would be barred by the applicable Delaware statute of limitations.

The Parties agree that, in the event of a dispute over the nature or quality of performance under this Agreement, neither Party may terminate this Agreement until final resolution of the dispute through arbitration or other judicial determination. The Parties further agree that any payments made pursuant to this Agreement pending resolution of the dispute shall be refunded if an arbitrator or court determines that such payments are not due.

As used in this Section, the term “Excluded Claim” shall mean a dispute, controversy or claim that concerns (a) the validity or infringement of a patent, trademark or copyright; or (b) any antitrust, anti-monopoly or competition law or regulation, whether or not statutory. Notwithstanding this Section 10.6.6, the Parties agree that any dispute as to ownership arising under Sections 1.65 (Synthetic Epitope) and 1.27 (Fusion Protein) shall be subject to the dispute resolution provisions of this Section 10.6 and shall not be considered an Excluded Claim.

This Agreement contains the entire understanding of the Parties with respect to the Research Program and the licenses granted hereunder. Any other express or implied agreements and understandings, either oral or written, with regard to the Research Program or the licenses granted hereunder are superseded by the terms of this Agreement. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by authorized representatives of both Parties hereto.

The captions to the several Articles and Sections hereof are not a part of this Agreement, but are merely for convenience to assist in locating and reading the several Articles and Sections hereof.

It is expressly agreed that Geron and Merck shall be independent contractors and that the relationship between the Parties shall not constitute a partnership, joint venture or agency. Neither Geron nor Merck shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior written consent of the other Party.

The waiver by either Party hereto of any right hereunder, or of any failure of the other Party to perform, or of any breach by the other Party, shall not be deemed a waiver of any other right hereunder or of any other breach by or failure of such other Party, whether of a similar nature or otherwise.

No remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.

Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply.

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

RICHARD T. CLARK

THOMAS B. OKARMA

TITLE: CHIEF EXECUTIVE OFFICER AND PRESIDENT

DATE: July 14, 2005

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Geron Docket

 

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Geron Docket

 

Ownership

 

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