Exhibit 10.68

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

LICENSING AGREEMENT

 

This LICENSING AGREEMENT (“Agreement”), effective as of March 31, 2000 (the
“Effective Date”), by and among GILEAD SCIENCES, INC., a Delaware corporation
with its principal office located at 333 Lakeside Drive, Foster City, CA 94404
(“Gilead Sciences”), and its wholly-owned subsidiary, NEXSTAR PHARMACEUTICALS,
INC., a Delaware corporation (collectively with Gilead Sciences, “Gilead”), and
EYETECH PHARMACEUTICALS, INC., a Delaware corporation with its principal offices
located at 300 East 42nd Street, Third Floor, New York, New York 10017
(“EyeTech”).  Unless otherwise defined in this Agreement, all capitalized terms
shall have the meanings given to them in Section 1.1 of this Agreement.

 

RECITALS

 

1.                                       WHEREAS, Gilead owns certain patents
and patent applications and related know-how for NX1838, and has made certain
filings for regulatory approvals with respect to NX1838; and

 

2.                                       WHEREAS, Gilead and EyeTech desire to
enter into this Agreement and certain other agreements, including an agreement
providing for the fill-and-finish manufacture of quantities of Product
sufficient for the completion of Phase Ib clinical trials; and

 

3.                                       WHEREAS, subject to the terms and
conditions set forth in this Agreement, Gilead wishes to license to EyeTech and
EyeTech wishes to license from Gilead all of Gilead’s rights under patents,
patent applications and know-how related to NX1838, and have access to all
regulatory approvals with respect to NX1838; and

 

4.                                       WHEREAS, subject to the terms and
conditions set forth in this Agreement, Gilead also wishes to sell to EyeTech
and EyeTech wishes to purchase from Gilead its inventory of NX1838.

 

NOW, THEREFORE, the Parties hereto, intending to be legally bound, hereby agree
as follows:

 

SECTION 1
DEFINITIONS

 

1.1                                
Definitions.                                  For purposes of this Agreement,
the following terms shall have the meanings set forth below:

 

“Affiliate” shall mean any Person that, directly or indirectly, through one or
more intermediaries, Owns, is Owned by or is under common Ownership with, a
Party, where “Own” or “Ownership” means (a) direct or indirect possession of at
least fifty percent (50%) of the outstanding voting securities of a corporation
or a comparable ownership in any other type of Person, provided, however, that
if the law of the jurisdiction in which such entity operates does not allow
fifty percent (50%) or greater ownership by a Party, such ownership interest
shall be at

 

1

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least forty percent (40%) or (b) that a Person or group of Persons otherwise has
the unilateral ability to control and direct the management of the entity,
whether by contract or otherwise.

 

“Business Day” shall mean any day other than a Saturday, Sunday or banking
holiday in New York City or San Francisco, California.

 

“Calendar Quarter” shall mean a calendar quarter (i.e., period of three (3)
consecutive months) ending on March 31, June 30, September 30 or December 31.

 

“Calendar Year” shall mean any period of twelve (12) consecutive months ending
on December 31.

 

“Competitive Product” shall mean a product competitive with a Product.

 

“Compulsory License” means a compulsory license under the Licensed Patents
obtained by a Third Party through the order, decree, or grant of a governmental
authority of competent jurisdiction, authorizing such Third Party to
manufacture, use, sell, offer for sale or import a Competitive Product in one or
more countries within the Territory.

 

“Control”, “Controls”, and “Controlled” shall mean, with respect to a particular
item of information or intellectual property right, that the applicable Party
owns or has a license to such item or right and has the ability to grant to the
other Party access to and a license or sublicense (as applicable) under such
item or rights as provided for in this Agreement without violating the terms of
any agreement or other arrangement with any Third Party.

 

“Damages” shall mean any and all costs, losses, claims, liabilities, fines,
penalties, damages and expenses, court costs, and reasonable fees and
disbursements of counsel, consultants and expert witnesses incurred by a Party
hereto (including any interest payments which may be imposed in connection
therewith).

 

“Delivery Date” shall mean the date that is ten (10) days after the Effective
Date.

 

“Effective Date” shall have the meaning given such term in the first sentence of
this Agreement.

 

“EU” shall mean Austria, Belgium, Denmark, Finland, France, Germany, Greece,
Ireland, Italy, Luxembourg, The Netherlands, Portugal, Spain, Sweden and the
United Kingdom, and future members of the European Union (or its successor),
upon their admission for full membership (with commercial rights and privileges
substantially comparable to those of the foregoing countries).

 

“EyeTech Rights” shall mean any invention or inventions, patentable or not,
know-how, information and/or data relating to the Product, including, without
limitation, pre-clinical studies and clinical trial information, manufacturing
processes, formulations, modes of delivery and/or data necessary for the
manufacture, use or sale of the Product, which are Controlled by EyeTech during
the term of this Agreement, and all Patents covering any of the foregoing which
are Controlled by EyeTech during the term of this Agreement.

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

2

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“FDA” shall mean the United States Food and Drug Administration, or any
successor thereto.

 

“Field” shall mean the prevention and treatment of all human and other animal
diseases and conditions, and expressly excluding in vivo and in vitro diagnostic
applications.

 

“First Commercial Sale” shall mean, with respect to any particular country, the
first sale of a Product in such country by EyeTech, or any of its Affiliates or
sublicensees, after Regulatory Approvals in such country have been granted from
the relevant Regulatory Authority in such country for such Product.

 

“GAAP” shall mean United States generally accepted accounting principles,
consistently applied.

 

“Indemnified Party” shall have the meaning given in Section 7.2 hereof.

 

“Indemnifying Party” shall have the meaning given in Section 7.2 hereof.

 

“Know-How” shall mean all ideas, materials, inventions (whether patentable or
not), trade secrets, data, instructions, processes, formulas, expert opinion and
information, including, without limitation, the Manufacturing Information and
biological, chemical, pharmacological, toxicological, physical and analytical,
safety, manufacturing and quality control data and information, in each case
within the Field, that, as of the Effective Date are (i) existing, and (ii)
Controlled by Gilead as of the Effective Date, in each case which is necessary
or useful for the development, manufacture, use, sale or commercialization of
the Product in the Field.  Excluded from Know-How are any Patents, the Licensed
Patents and the Transferred Assets.

 

“License” shall mean the license granted by Gilead to EyeTech pursuant to
Section 2.1.

 

“Licensed Patents” shall mean any Patents listed in Exhibit D (as updated from
time to time pursuant to Section 5.6) which claim the manufacture, use, import,
offer for sale or sale of Products in accordance with this Agreement and which
now or at any time during the term of this Agreement are Controlled by Gilead or
any Affiliate of Gilead.

 

“Major Countries” shall mean Canada, France, Germany, Italy, Japan, Spain,
United Kingdom and the United States.

 

“Manufacturing Information” shall mean copies of all existing information in
written and electronic form in Gilead’s possession or control as of the
Effective Date, with respect to any Product existing as of the Effective Date,
that relates to, in the Field:  (1) processes for the production of NX1838, and
intermediates in the preparation of a Product; (2) the in-process analytical
controls for production of each of:  (a) NX1838; and (b) a Product; (3) the
process, formulation and development reports generated for the preparation of a
Product; (4) the analytical methods and validation for the quality control
release of each of:  (a) NX1838; and (b) a Product; and (5) the stability
protocols, stability indicating methods and stability data for each of:  (a)
NX1838; and (b) a Product.

 

3

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“NDA” shall mean a New Drug Application filed with the FDA requesting market
approval for a new drug product.

 

“Net Sales” shall mean, with respect to the Product, the gross amount billed or
invoiced by EyeTech, its Affiliates or sublicensees, to unrelated Third Parties
for the Products in finished product form, less the following deductions:

 

(a)                                  trade, quantity and cash discounts allowed,
but expressly excluding discounts or allowances offered as part of a package of
products that includes a Product sold by EyeTech, its Affiliates or
sublicensees;

 

(b)                                 refunds, chargebacks and any other
allowances which effectively reduce the net selling price;

 

(c)                                  actual product returns, credits and
allowances;

 

(d)                                 rebates actually paid or credited to any
governmental agency (or branch thereof) or to any Third Party payor,
administrator or contractee;

 

(e)                                  discounts mandated by, or granted to meet
the requirements of, applicable state, provincial or federal law, wholesaler,
including required chargebacks and retroactive price reductions;

 

(f)                                    transportation, freight, postage charges
and other charges such as insurance, relating thereto, in each case included as
a specific line item on an invoice to such Third Parties; and

 

(g)                                 taxes, excises or other governmental charges
upon or measured by the production, sale, transportation, delivery or use of
goods, in each case included as a specific line item on an invoice to such Third
Parties.

 

Notwithstanding the foregoing, amounts received by EyeTech, or its Affiliates or
sublicensees, for the sale of Products among EyeTech and its Affiliates or
sublicensees for resale shall not be included in the computation of Net Sales
hereunder.  Net Sales shall be determined from books and records maintained in
accordance with GAAP.  In the event the Product is sold as part of a combination
product, or as part of bundled products or as part of a delivery system, the Net
Sales from the combination product, bundled product or delivery system, for the
purposes of determining royalty payments, shall be determined by multiplying the
Net Sales (as defined without regard to this paragraph) of the combination
product by the fraction, A/(A+B) where A is the average sale price of the
Product when sold separately in finished form and B is the average sale price of
the other product(s) or system sold separately in finished form, or, only if the
value of B cannot be determined, where A+B is the average sales price of the
product(s) and the delivery system together.  If the value of B can be
determined, in no event will the sales price of any combination product, bundled
product or delivery system product be less than the sum of A and B.  In the
event that such average sale price cannot be determined for both the Product and
such other product(s) or system in combination, the following calculation shall
be substituted for the calculation recited in (ii) of the preceding sentence:
the Net Sales (as defined without regard

 

4

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to this paragraph) of the combination products shall be multiplied by the
fraction C/(C+D) where C is EyeTech’s cost of goods of the Product and D is
EyeTech’s cost of goods for the other product(s) or system, determined in
accordance with the method of accounting normally employed by EyeTech in
computing cost of goods, provided, however, that the minimum value of such
fraction as used in the calculation of Net Sales shall be 0.9.

 

“NX1838” shall mean Gilead’s proprietary compound known as NX1838, as described
in Exhibit A.

 

“Party” shall mean either Gilead or EyeTech, and “Parties” shall mean both of
Gilead and EyeTech.

 

“Patents” shall mean patents and patent applications, both foreign and domestic,
including without limitation, all extensions, reissues, renewals,
reexaminations, patents of addition, supplementary protection certificates and
inventors’ certificates thereof, substitutions, provisionals, divisionals,
continuations and continuations-in-part.

 

“Person” shall mean a natural person, a corporation, a partnership, a trust, a
joint venture, a limited liability company, any governmental authority or any
other entity or organization.

 

“Pivotal Clinical Trial” shall mean either (a) a trial on sufficient numbers of
patients that is designed to establish that a pharmaceutical product is safe and
efficacious for its intended use, and to define warnings, precautions and
adverse reactions that are associated with the pharmaceutical product in the
dosage range to be prescribed, and to support Regulatory Approval of such
pharmaceutical product or label expansion of such pharmaceutical product, or (b)
a clinical trial that began as a trial on sufficient numbers of patients that is
designed to establish the safety and biological activity of a pharmaceutical
product for its intended use, and to define warnings, precautions and adverse
reactions that are associated with the pharmaceutical product in the dosage
range to be prescribed, after such date as the U.S. Food and Drug Administration
or its successor (or equivalent regulatory authority) has indicated that the
applicable Party may reasonably continue such trials with the intention to
establish that a pharmaceutical product is safe and efficacious for its intended
use, and to define warnings, precautions and adverse reactions that are
associated with the pharmaceutical product in the dosage range to be prescribed,
and to support Regulatory Approval of such pharmaceutical product or label
expansion of such pharmaceutical product.

 

“Product” shall mean any pharmaceutical composition containing NX1838 in any
formulation, dosage concentration or volume, together with all label expansions,
line extensions and improvements thereon, which may be included in any
supplement, modification or addition to the filings for Regulatory Approval of
the foregoing compound.

 

“Product Data Package” shall include the following information and data related
to the Product in the possession or control of Gilead as of the Effective Date: 
(a) the Regulatory Documents; (b) pre-clinical and clinical development
protocols, data, and reports; (c) manufacturing development technical reports;
(d) toxicology reports; and (e) such other information and data specifically
identified in Exhibit B attached hereto.

 

5

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“Product Inventory” shall mean the NX1838 and Product inventory, in bulk or
finished form, which Gilead Controls as of the Effective Date, as identified in
Exhibit C attached hereto.

 

“Reasonable Diligence” shall mean commercially reasonable efforts to develop,
obtain Regulatory Approval, and/or commercialize, as applicable, a Product in a
country in the Territory, consistent with accepted business practices and legal
requirements, and comparable to efforts in the pharmaceutical industry
applicable to development, obtaining of Regulatory Approval for, or
commercialization of human pharmaceutical products at an equivalent stage of
development and similar market potential, profit potential and strategic value
in view of conditions then prevailing.

 

 “Regulatory Approval” shall mean (a) in the United States, approval by the FDA
of an NDA, or equivalent application, for marketing approval and satisfaction of
any related applicable FDA registration and notification requirements (if any)
and (b) in any country other than the United States, all approvals (including
any required marketing, pricing and reimbursement approvals) by the Regulatory
Authority in such country of a single application or set of applications
comparable to an NDA, enabling legal sale of a product in such country.

 

“Regulatory Authority” shall mean the FDA in the United States or the equivalent
governmental agency having jurisdiction in any other country in the Territory.

 

“Regulatory Documents” shall mean the (a) United States investigational new drug
application (the “IND”) #56503 (dated July 12, 1998), and all amendments and
annual reports to same;  (b) any pediatric data package or other exclusivity
extensions relating to Products; and (c) any other regulatory filings with
Regulatory Authorities relating to the Product.

 

“Royalty Term” shall mean, with respect to each country in which Product is
sold, the period of time equal to the longer of (i) [*] years from the date of
First Commercial Sale of the Product in such country, or (ii) the expiration of
the last-to-expire Licensed Patent in such country that claims the manufacture,
use, and or sale of such Product as such activities are carried out pursuant to
this Agreement.

 

“Territory” shall mean the world, unless the License terminates with respect to
a country pursuant to Section 6.7, in which case the Territory shall exclude any
country in which the License has so terminated.

 

“Third Party” shall mean a Person other than EyeTech, Gilead or their
Affiliates.

 

“Transferred Assets” shall mean the Product Inventory and the Product Data
Package.

 

6

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SECTION 2
GRANT OF LICENSES AND TRANSFER AND DELIVERY OF TRANSFERRED
ASSETS AND MANUFACTURING INFORMATION

 

2.1                                 Grant of License. Subject to the terms and
conditions of this Agreement, during the term of this Agreement, Gilead hereby
grants to EyeTech an exclusive license under the Licensed Patents and Know How
to make, have made, use, sell, offer to sell, import and export the Product
within the Field throughout the Territory, with a right to sublicense to its
Affiliates or (subject to Section 2.4) to any other Person.

 

2.2                                 Transferred Assets.  As of the Effective
Date, Gilead hereby assigns, transfers and conveys to EyeTech all of Gilead’s
right, title and interest in and to the Transferred Assets (subject to Section
4.5(c)), and EyeTech hereby accepts such assignment, transfer and conveyance.
 On or before the Delivery Date, Gilead shall have delivered to EyeTech all of
the Transferred Assets and the Manufacturing Information.  EyeTech shall have up
to ten (10) days after such delivery to inventory the delivered Transferred
Assets and Manufacturing Information and to give notice to Gilead of any
Transferred Assets and Manufacturing Information that were not so delivered.  If
Gilead receives notice or otherwise learns after the Delivery Date that it has
failed to deliver any Transferred Assets or Manufacturing Information to
EyeTech, Gilead shall provide to EyeTech any such Transferred Assets or
Manufacturing Information no later than five (5) Business Days after receipt of
such notice or knowledge (or within such longer time as is mutually agreed by
EyeTech and Gilead).  The clinical data portion of the Product Data Package
shall be provided to EyeTech in computer-readable format, where available, and
otherwise in printed format.  Gilead shall be under no obligation to convert to
electronic format any portion of the Product Data Package that currently is
available only in printed format.  In the event that EyeTech is unwilling or
unable to assume physical possession of the Transferred Assets and Manufacturing
Information by the Effective Date, Gilead shall be entitled to charge EyeTech a
reasonable fee for storage of the Transferred Assets and Manufacturing
Information beyond the Effective Date.  Gilead shall ship the Transferred Assets
to EyeTech F.O.B. to EyeTech’s designated facilities.  For a period of 90 days
following the receipt by EyeTech of the Transferred Assets and Manufacturing
Information, Gilead personnel shall be reasonably available during Gilead’s
normal business hours to respond to technical inquiries of EyeTech regarding
Products as is reasonably requested by EyeTech.  EyeTech acknowledges that
Gilead makes no representations or warranties with respect to the Transferred
Assets or Manufacturing Information (other than as expressly set forth in
Section 5 below) and that it accepts such Transferred Assets and Manufacturing
Information “as is.”

 

2.3                                 Negative Covenant of EyeTech.  EyeTech shall
not use or practice Licensed Patents or Know-How outside the Field or outside
the Territory or for any other purpose except activities that it conducts in
compliance with this Agreement.

 

2.4                                 Sublicenses.  EyeTech shall have the right
to sublicense the licenses granted to it by Gilead under this Agreement without
the consent of Gilead; provided that (i) prompt notice and a copy of such
sublicense shall be given by EyeTech to Gilead pursuant to Section 8.2 of this
Agreement; (ii) EyeTech shall remain obligated at all times under this Agreement
without regard to whether it has sublicensed its rights or whether EyeTech’s
sublicensee has performed; (iii) such sublicense shall name Gilead as a third
party beneficiary of such sublicense; and (iv) any such sublicenses granted by
EyeTech shall contain provisions providing for its termination or assignment to
Gilead, at the option of Gilead, of EyeTech’s interest therein upon termination
of this Agreement, and shall further contain provisions which obligate such
sublicensee to comply

 

7

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with such terms, conditions, agreements and obligations that are consistent with
the terms, conditions, agreements and obligations to which EyeTech is subject
under this Agreement.

 

2.5                                 Gilead Right of First Negotiation. Except as
otherwise provided in this Section 2.5, Gilead shall have a right of first
negotiation with respect obtaining all rights with respect to any Product which
is, or which can reasonably be expected to be, [*] (a “Reversion Product”) as
follows:  Eyetech shall notify Gilead in writing if Eyetech intends to seek,
negotiate, or solicit offers to license a Third Party to commercialize the
Reversion Product for the treatment or prevention [*] (the “Reversion Field”)
and a specific territory (the “Reversion Territory”), prior to contacting any
such potential Third Party licensees.  Such written notice shall include
sufficient detailed technical information concerning the Reversion Product as
Gilead may reasonably require to evaluate its interest in such Reversion
Product. Within thirty (30) days after receiving Eyetech’s notice as to the
Reversion Product, Gilead shall notify Eyetech whether it is interested in
negotiating with Eyetech the terms under which Gilead shall obtain a license
from Eyetech to research, develop and commercialize Reversion Products as
described herein. If Gilead provides such notice, the Parties shall negotiate
exclusively and in good faith for a period of up to ninety (90) days after
Eyetech receives Gilead’s notice of interest (the “Negotiation Period”) the
terms of an agreement pursuant to which Eyetech will grant to Gilead and its
Affiliates an exclusive, royalty-bearing, sublicensable license, under all
Eyetech Know-How and Eyetech Patents relating to such Reversion Product, to
research, develop, make, have made, use, import, offer for sale, sell and
otherwise commercialize such Reversion Product within the Reversion Field within
the Reversion Territory, and which agreement shall include commercially
reasonable provisions for transfer of or access to relevant regulatory filings
and technology to Gilead. Neither Gilead nor Eyetech shall have any obligation
to actually enter into a license agreement with respect to such Reversion
Product. If either Gilead does not respond to Eyetech’s notice of intent to
license the Reversion Product within thirty (30) days after Gilead’s receipt
thereof, or Gilead and Eyetech fail to agree upon the terms of a license under
rights to the Reversion Product during the Negotiation Period, Eyetech shall be
free to commercialize such Reversion Product by itself or through its Affiliates
or Third Parties without further obligation to Gilead.

 

SECTION 3
PAYMENTS AND DELIVERIES

 

In consideration of the exclusive license granted herein and the transfer of
ownership of the Transferred Assets, EyeTech shall pay the following amounts to
Gilead:

 

3.1                                 Initial Payments and Deliveries.

 

(a)                                  On or before Tuesday, April 4, 2000,
EyeTech shall pay to Gilead the sum of [*] United States Dollars (US$[*]) by
Federal Reserve electronic wire transfer in immediately available funds to an
account designated by Gilead.  Such amount shall be non-refundable and
non-creditable, and shall not be subject to any counterclaim or set-off.

 

(b)                                 On or before the Effective Date, EyeTech and
Gilead Sciences shall enter into a Warrant Agreement (the “Warrant Agreement”)
mutually satisfactory to both Parties

 

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pursuant to which EyeTech shall issue to Gilead Sciences a warrant to purchase
EyeTech Series B Preferred Stock.

 

(c)                                  On or before the Delivery Date, Gilead
shall deliver to EyeTech (i) all of the Transferred Assets pursuant to Section
2.2 of this Agreement; (ii) all of the Manufacturing Information pursuant to
Section 2.2 of this Agreement; and (iii) a schedule (“Schedule of Transferred
Assets and Manufacturing Information”) setting forth each of the Transferred
Assets and Manufacturing Information being delivered to EyeTech at such time.

 

(d)                                 Within ten (10) days of delivery of the
Transferred Assets and the Manufacturing Information and of the Schedule of
Transferred Assets and Manufacturing Information pursuant to Section 3.1(c)
above, EyeTech shall inventory the delivered Transferred Assets and
Manufacturing Information pursuant to Section 2.2 and shall either (i) deliver
to Gilead a receipt acknowledging the receipt of each of the Transferred Assets
and the Manufacturing Information set forth on the Schedule of Transferred
Assets and Manufacturing Information or (ii) notify Gilead of any Transferred
Assets or Manufacturing Information that Gilead did not deliver. If Gilead
receives notice or otherwise learns after the Delivery Date that it has failed
to deliver any Transferred Assets or Manufacturing Information to EyeTech,
Gilead shall provide to EyeTech any such Transferred Assets or Manufacturing
Information no later than five (5) Business Days after receipt of such notice or
knowledge (or within such longer time as is mutually agreed by EyeTech and
Gilead).  Within ten (10) days of Gilead delivering such missing items to
EyeTech following notice given by EyeTech pursuant to clause (ii) of this
Section 3.1(d), EyeTech shall deliver the receipt described in clause (i) of
this Section 3.1(d).

 

3.2                                 Milestone Payments.  Within five (5)
Business Days of EyeTech and/or its Affiliates or sublicensees achieving the
first occurrence of each of the milestone events listed below with respect to
any Product, EyeTech shall notify Gilead of such achievement and the date
thereof, and within thirty (30) days of the date of such achievement, pay the
one-time non-refundable fees specified below to Gilead by Federal Reserve
electronic wire transfer in immediately available funds to an account designated
by Gilead; provided, however, that in no event shall the following fees be
payable more than once with respect to Products for any particular geographical
area or Milestone:

 

Milestone

 

Fee

 

 

 

 

 

First [*] with respect to a Product

 

$

[*]

 

 

 

 

 

First [*] with respect to a Product

 

$

[*]

 

 

 

 

 

First [*] with respect to a Product

 

$

[*]

 

 

 

 

 

First [*] with respect to a Product

 

$

[*]

 

 

 

 

 

First [*] with respect to a Product

 

$

[*]

 

 

 

 

 

First [*] with respect to a Product

 

$

[*]

 

 

9

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3.3                                 Royalties.

 

(a)                                  Royalty on Products.  EyeTech shall pay
Gilead a royalty payment on Net Sales of Products that are made or sold during
the Royalty Term and that are sold by EyeTech, its Affiliates or sublicensees
(the “Royalty”) according to the following rates, as adjusted in accordance with
Sections 3.3(b) below:

 

(i)                                     [*] percent ([*]%) of Net Sales in the
United States for the first [*] dollars ($[*]) in Net Sales in the United States
in a given Calendar Year;

 

(ii)                                  [*] percent ([*]%) of Net Sales in the
United States for the next [*] dollars ($[*]), up to and including, [*] dollars
($[*]) in Net Sales during the same Calendar Year;

 

(iii)                               [*] percent ([*]%) of Net Sales in the
United States in excess of [*] dollars ($[*]) during the same Calendar Year; and

 

(iv)                              [*] percent ([*]%) of Net Sales outside the
United States in the same Calendar Year.

 

By way of example, if, in the year 2005, EyeTech Net Sales in the United States
were equal to [*] dollars ($[*]), and [*] dollars ($[*]) outside the United
States, then the Royalty payable to Gilead hereunder would equal [*] dollars
($[*]), calculated in the following manner:

 

Amount of Net Sales

 

Royalty Rate

 

Royalty

 

First $[*] (United States)

 

[*]

%

$

[*]

 

Next $[*] (United States)

 

[*]

%

$

[*]

 

Next $[*] (United States)

 

[*]

%

$

[*]

 

$[*] (outside United States)

 

[*]

%

$

[*]

 

Total Royalty

 

 

 

$

[*]

 

 

 

                By way of further example, if, through the second Calendar
Quarter in the year 2005, EyeTech Net Sales in the United States were equal to
[*] dollars ($[*]), and [*] dollars ($[*]) outside the United States, then the
Royalty payable to Gilead hereunder after such Calendar Quarter would equal [*]
dollars ($[*]), calculated in the following manner:

 

 

Amount of Net Sales

 

Royalty Rate

 

Royalty

 

First $[*] (United States)

 

[*]

%

$

[*]

 

Next $[*] (United States)

 

[*]

%

$

[*]

 

$[*] (outside United States)

 

[*]

%

$

[*]

 

Total Royalty

 

 

 

$

[*]

 

 

(b)                                 Offset.  Notwithstanding the forgoing, on a
country by country and Product by Product basis, EyeTech may credit against Net
Sales [*] percent ([*]%) of any royalties it must pay to any Third Party on any
Product:  (1) pursuant to any licenses necessary to practice the License; or (2)
resulting from any litigation (including settlement thereof) under

 

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Section 6.16; provided, however, for purposes of this Section 3.3(b) that the
applicable royalty rates used for calculation of Royalties payable to Gilead
shall not be reduced to less than [*] percent ([*]%) of the royalty rates(s)
otherwise applicable pursuant to Section 3.3(a).

 

3.4                                 Payment; Report.  All Royalties payable to
Gilead under this Agreement shall be paid in U.S. dollars within sixty (60) days
of the end of each Calendar Quarter or as otherwise specifically provided herein
by Federal Reserve electronic wire transfer in immediately available funds to an
account designated by Gilead.  At the time of payment of Royalties, EyeTech
shall send to Gilead a statement with respect to the applicable Calendar
Quarter, country by country and Product by Product, for EyeTech, its Affiliates
and sublicensees, of the amount of aggregate worldwide gross sales and Net
Sales, the amount of gross sales during such Calendar Quarter, an itemized
calculation of Net Sales showing deductions provided for in the definition of
Net Sales and in Section 3.3(b), and, on a cumulative basis for the current
Calendar Year, the amount of Royalties or other payments due on such sales.

 

3.5                                 Exchange Rate; Manner and Place of Payment.

 

(a)                                  All payments due hereunder from time to
time shall be paid in U.S. Dollars.  For purposes of computing such payments,
the Net Sales of Product in countries other than the United States shall be
converted into U.S. Dollars as computed using the average monthly rate of
exchange at the time for such currencies as the rate applicable to the transfer
of funds arising from payments as published in the Wall Street Journal (New York
edition). The currency conversion system used by EyeTech shall be subject to
audit by Gilead as described in Section 3.6 and, if not determined to be a
system reflecting the fair market value of the currencies in question, shall be
modified as necessary to effect currency conversion at fair market value.

 

(b)                                 Notwithstanding the provisions of Section
3.5(a), if by reason of any restrictive exchange laws or regulations, EyeTech
shall be unable to convert to U.S. Dollars the amount, determined as above,
equivalent to the amount due by EyeTech hereunder, then EyeTech shall so notify
Gilead promptly and provide an explanation of the circumstances.  In such event,
EyeTech shall make all such payments or the balance thereof due hereunder and
which is not paid in foreign currency as provided below, in U.S. Dollars as soon
as reasonably possible after and to the extent that such restrictive exchange
laws or regulations are lifted so as to permit EyeTech to pay amounts due under
this Section 3.5 in U.S. Dollars.  EyeTech shall promptly notify Gilead if such
restrictions are so lifted.  At its option Gilead shall meanwhile have the right
to request the payment (to it or to its nominee), and, upon request, EyeTech
shall pay or cause to be paid amounts due (or such portions thereof as are
specified by Gilead) in the currency of any other country designated by Gilead
and legally available to EyeTech under the then-existing laws of regulations. 
Any payments shall be payable to Gilead by wire transfer at such bank in the
United States as Gilead Sciences shall specify from time to time.  Not less than
one (1) Business Day prior to such wire transfer, the remitting party shall
telefax the receiving party advising it of the amount and of the payment to be
made.

 

3.6                                 Audits.  EyeTech and its Affiliates and
sublicensees shall keep full and accurate books and records relating to the
financial performance of the Product.  During the term of this

 

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Agreement plus four (4) years after termination or expiration of this Agreement,
Gilead shall have the right, during regular business hours and upon reasonable
advance notice, to have such books and records audited by an independent
certified accountant so as to verify the accuracy of the information previously
reported to Gilead.  Such information shall be deemed to be Proprietary
Information of EyeTech and, as such, subject to confidentiality obligations
pursuant to Section 6.3.  The independent certified account shall keep
confidential any Proprietary Information obtained during such audit and shall
report to Gilead only the amounts of Royalties due and payable.  The cost of
such audit shall be borne by Gilead; however, in the event such audit reveals
that the Royalties to Gilead constitute an underpayment of five percent (5%) or
more from that revealed by the audit to be actually owed, the cost of the audit
shall be borne by EyeTech.  EyeTech shall include in all sublicenses granted as
permitted under Section 2.4 an audit provision substantially similar to the
foregoing requiring the sublicensee to keep full and accurate books and records
relating to the Product and granting Gilead the right to audit the accuracy of
the information reported by the sublicensee in connection therewith on the same
terms as apply to an audit of EyeTech’s records hereunder.  The terms of this
Section 3.6 shall survive any termination or expiration or termination of this
Agreement for a period of four (4) years.

 

3.7                                 Withholding Taxes.  Any and all taxes levied
on account of royalty payments paid or owed from a country in which provision is
made in the law or by regulation for withholding will be deducted from royalty
payments paid Gilead hereunder.  EyeTech shall cooperate with Gilead to claim
exemption from such deductions or withholdings under any double taxation or
similar agreement in force from time to time.

 

3.8                                 Sublicensee Obligations.  In the event
EyeTech sublicenses its right to sell a Product, such sublicense shall include
an obligation for the sublicensee to account for and report its Net Sales of
Products and provide that Gilead shall have audit rights therefor pursuant to
this Section 3 on the same basis as if such sales were Net Sales of Products by
EyeTech, and EyeTech shall pay royalty payments to Gilead as if the Net Sales of
the sublicensee were Net Sales of EyeTech.

 

3.9                                 Late Payments.  Any amounts not paid by
EyeTech when due under this Agreement shall be subject to interest from and
including the date payment is due through and including the date upon which
Gilead has collected immediately available funds in an account designated by
Gilead at a rate equal to the sum of two percent (2%) plus the prime rate of
interest quoted in the Money Rates section of The Wall Street Journal,
calculated daily on the basis of a 360-day year, or similar reputable data
source.  No special notice by Gilead to EyeTech of such interest due shall be
required.

 

3.10                           Compulsory License. If either Party learns that a
Third Party has obtained a Compulsory License in any country in the Territory,
such Party shall promptly notify the other Party of such occurrence.  If the
royalty rate payable by the grantee of the Compulsory License is less than the
royalty rates applicable in such country set forth in Section 3.3 of this
Agreement, then the applicable royalty rates set forth in Section 3.3 of this
Agreement shall be reduced to the lower royalty rates applicable in such country
pursuant to such Compulsory License for so long

 

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as sales of a Competitive Product are made by any Third Party pursuant to the
Compulsory License.

 

SECTION 4
TERM OF AGREEMENT; TERMINATION

 

4.1                                 Term.  The term of this Agreement shall
commence upon the Effective Date and, unless sooner terminated as provided in
this Section 4, expire on the expiration of all Royalty Terms for all Products.

 

4.2                                 Licenses upon Expiration.  In the event that
the Agreement expires as set forth in Section 4.1 above without early
termination, the License shall automatically become, at EyeTech’s election made
at least 90 days prior to such expiration, either (i) an exclusive, irrevocable,
royalty-bearing license, subject to the surviving provisions of the Agreement,
to use and/or sublicense the use of Know How to make, have made, use, import,
have imported, offer for sale, sell, and have sold Product(s) in the Field in
the Territory as it exists at the time of such expiration, subject to payment by
EyeTech to Gilead of a royalty equal to [*] percent ([*]%) of Net Sales of
Products made pursuant to the license under this Section 4.2(i) after the
expiration of this Agreement, or (ii) a non-exclusive, irrevocable,
royalty-free, paid-up license, subject to the surviving provisions of this
Agreement, to use and/or sublicense the use of Know How to make, have made, use,
import, have imported, offer for sale, sell, and have sold Product(s) in the
Field in the Territory as it exists at the time of such expiration.

 

4.3                                 Termination for Breach.  Each Party shall
have the right to terminate this Agreement and its obligations hereunder for
material breach by the other Party, which breach remains uncured for sixty (60)
days after written notice is provided to the breaching Party, or in the case of
an obligation to pay royalty payments or other amounts owing under this
Agreement, which breach remains uncured for thirty (30) days after written
notice to the breaching Party; provided, however, that non-payment of any
royalty amounts or other payments owing under this Agreement, for which the
non-paying Party reasonably disputes the obligation or amounts not paid, shall
not be deemed a breach of an obligation to pay royalty payments or other amounts
owing under this Agreement, provided that the non-paying Party has paid all such
amounts not in reasonable dispute.

 

4.4                                 Termination in Event of Patent Challenge.
Gilead shall have the right to terminate this Agreement if EyeTech challenges
the validity of the Licensed Patents within any country in the Territory,
effective thirty (30) days after EyeTech’s receipt of written notice of such
termination by Gilead.

 

4.5                                 Reversion of Product Rights.

 

(a)                                  Termination of Agreement. In the event that
this Agreement is terminated pursuant to Sections 4.3 or 4.4 above, other than
for Gilead’s material breach of this Agreement, the License shall terminate
immediately upon such termination.

 

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(b)                                 Loss of License Rights in Country.  In the
event that EyeTech permanently loses its right to use and sell Products in any
country other than by reason of any action or failure to act on the part of
Gilead or any party acting on behalf of Gilead, the License shall terminate with
respect to such country.

 

(c)                                  Transfer of Rights.  With respect to any
and all countries in which EyeTech’s license rights are terminated pursuant to
Sections 4.5(a), 4.5(b), or 6.7(b): (i) such country(ies) shall automatically be
removed from the Territory; (ii) EyeTech hereby grants to Gilead an exclusive,
freely sublicensable license under the EyeTech Rights, which license shall be
royalty-free and paid-up, subject to Section 4.5(d), to make, have made, use,
import, offer for sale, sell and otherwise research, develop and commercialize
formulations of the NX1838 in such countries, and Gilead covenants not to
practice such license until the actual termination of EyeTech’s license rights
as to such countries pursuant to Sections 4.5(a) or (b); (iii) EyeTech shall
assign all of its right, title and interest in and to, and shall cooperate in
the transfer of all of, the following related to Products to the extent that
EyeTech Controlled such during the term of this Agreement: (A) INDs and
Regulatory Approvals, (B) all pre-clinical and clinical development protocols,
data, and reports and other information and data (with any clinical data to be
in computer-readable format, where available, and otherwise in printed format,
with no obligation of EyeTech to convert to electronic format any portion of
such clinical data that currently is available only in printed format), (C)
manufacturing development technical reports, (D) toxicology reports, and (E)
such other information and data specifically identified in Exhibit B or of such
type (the preceding (A), (B), (C), (D) and (E) constituting the “Updated Product
Data Package”), (iv) EyeTech shall deliver to Gilead copies of all information,
records and data that it Controls that are reasonably necessary for the
research, development and commercialization of Products, including without
limitation all clinical data relating to Products, forward to Gilead samples of
all chemical and biological materials acquired, made, cloned, synthesized, first
discovered or collected as a result of research development or commercialization
of Products and reasonable necessary to continue the research, development and
commercialization of Products, and take such other actions and execute such
other instruments, assignments and documents as may be necessary to effect the
transfer of rights and materials hereunder to Gilead; and (v) EyeTech shall
provide assistance reasonably requested by Gilead for a period of ninety (90)
days following the date of notice of termination to facilitate the exercise of
the license granted to Gilead in Section 4.5(c)(ii).

 

(d)                                 Royalties. Any license granted to Gilead
pursuant to Section 4.5(c) shall be subject to payment of a royalty to EyeTech
on a country-by-country basis at a rate equal to: (i) if such license is granted
after initiation of Pivotal Clinical Trials for a Product applicable to such
country, [*] percent ([*]%) of Gilead’s net sales of Products in such country,
or (ii) if such license is granted on or after the first Regulatory Approval of
Product in such country, [*] percent ([*]%) of Gilead’s net sales of Products in
such country.

 

4.6                                 Accrued Rights and Obligations; Survival. 
Termination or expiration of this Agreement for any reason shall be without
prejudice to any rights which shall have accrued to the benefit of either Party
prior to such termination or expiration, including damages arising from any
breach hereunder.  The following provisions of this Agreement shall survive the
expiration or termination of this Agreement:  Sections 2.3, 4.2, 4.6, 5, 6.3,
6.4, 6.5, 6.9, 6.11(a), 6.12, 6.18,

 

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7, 8.  The following provisions of this Agreement shall survive the expiration
of this Agreement to the extent that the license granted to EyeTech pursuant to
Section 4.2 is in effect: Sections 3.4  through 3.9, 4.3, 4.5, 6.2,  6.7(d),
6.7(f), 6.8, 6.11(b), 6.11(c), 6.11(d), 6.13, 6.16 and 6.17(a).

 

SECTION 5
REPRESENTATIONS AND WARRANTIES

 

5.1                                 Corporate Existence and Power. As of the
Effective Date, each Party represents and warrants to the other that it (a) is a
corporation duly organized, validly existing and in good standing under the laws
of the state in which it is incorporated, and (b) has full corporate power and
authority and the legal right to own and operate its property and assets and to
carry on its business as it is now being conducted and as contemplated in this
Agreement, including, without limitation, the right to grant the licenses
granted hereunder.

 

5.2                                 Authority and Binding Agreement. As of the
Effective Date, each Party represents and warrants to the other that it (a) has
the corporate power and authority and the legal right to enter into this
Agreement and perform its obligations hereunder, (b) has taken all necessary
corporate action on its part required to authorize the execution and delivery of
the Agreement and the performance of its obligations hereunder, and (c) the
Agreement has been duly executed and delivered on behalf of such Party, and
constitutes a legal, valid and binding obligation of such Party and is
enforceable against it in accordance with its terms.

 

5.3                                 Title. As of the Effective Date, each Party
represents and warrants to the other that it has sufficient legal and/or
beneficial title under its intellectual property rights necessary to perform
activities contemplated under this Agreement and to grant the licenses contained
in this Agreement and other ownership rights conveyed pursuant to this Agreement

 

5.4                                 No Conflict. Each Party represents and
warrants to the other that it has not entered, and will not enter, into any
agreement with any Third Party which is in conflict with the rights granted to
the other Party under this Agreement, and has not taken and will not take any
action that would in any way prevent it from granting the rights granted to the
other Party under this Agreement, or that would otherwise materially conflict
with or adversely affect the rights granted to the other Party under this
Agreement.

 

5.5                                 No Approvals or Consents Required.  Each
Party represents and warrants to the other that all necessary consents,
approvals and authorizations of all governmental authorities and other persons
or entities required to be obtained by such Party in order to enter into this
Agreement have been obtained.

 

5.6                                 Patents. Gilead represents and warrants to
EyeTech that in Exhibit D, Gilead has in good faith supplied a complete list of
all Patents it Controls as of the Effective Date, that, but for the grant of the
License, would be infringed by the manufacture, use or sale of Products in the
Field.  If EyeTech reasonably determines that any Patent Controlled by Gilead or
any Affiliate of Gilead as of the Effective Date should be added to Exhibit D
because EyeTech’s manufacture, use or sale of Products would infringe such
Patent, then there shall be no deemed breach of Gilead’s representations and
warranties in this Section 5.6 until after the parties negotiate in

 

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good faith regarding the addition of any such Patent to Exhibit D without any
additional financial obligation and are unable to reach agreement on such
addition of such Patent.

 

5.7                                 No Conflict.  Each Party represents and
warrants to the other that the execution and delivery of the Agreement by such
Party and the performance of such Party’s obligations hereunder (a) do not
conflict with or violate any requirement of applicable law or regulation or any
provision of articles of incorporation or bylaws of such Party in any material
way, and (b) do not conflict with, violate or breach or constitute a default or
require any consent under, any contractual obligation or court or administrative
order by which such Party is bound.

 

5.8                                 Regulatory Documents.  Gilead represents and
warrants to EyeTech that:

 

(a)                                  Gilead has furnished EyeTech with access to
a complete copy of the United States Regulatory Documents for the Product,
including all material amendments and supplements thereto;

 

(b)                                 the Regulatory Documents have been accepted
by, and Gilead has received no notice that the Regulatory Documents are not in
good standing with, the relevant Regulatory Authorities;

 

(c)                                  to its knowledge, Gilead has filed with the
relevant Regulatory Authorities all required notices, supplemental applications
and annual or other reports, including adverse experience reports, with respect
to the Regulatory Documents which are material;

 

(d)                                 Gilead has received no written notice of any
regulatory action by the relevant Regulatory Authorities which may reasonably be
expected to have a material adverse effect on the ability of a Party to obtain
Regulatory Approval for Products based upon the Regulatory Documents.

 

5.9                                 Manufacturing Information.  Gilead
represents and warrants that, it has delivered or shall by the Delivery Date
deliver to EyeTech all of the Transferred Assets and the Manufacturing
Information.

 

5.10                           Product Quality.  Gilead hereby represents and
warrants that all Product Inventory that is provided to EyeTech pursuant to the
terms of this Agreement has been manufactured in compliance with all laws, rules
and regulations (including without limitation, all applicable IND applications)
applicable to the conduct of Gilead’s Phase I clinical trial for a Product.

 

5.11                           Implied Warranties.  EXCEPT AS EXPRESSLY PROVIDED
IN THIS SECTION 5, GILEAD MAKES NO REPRESENTATION OR WARRANTY AS TO THE PATENTS,
LICENSED PATENTS, KNOW-HOW, THE TRANSFERRED ASSETS, PRODUCTS, ITS INVENTORY OF
PRODUCTS OR NX1838, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW,
BY STATUTE OR OTHERWISE, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT OF THIRD
PARTY RIGHTS, OR OTHERWISE, AND GILEAD SPECIFICALLY DISCLAIMS ANY AND ALL
IMPLIED OR STATUTORY WARRANTIES.

 

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Without limiting the foregoing, EyeTech acknowledges that it has not and is not
relying upon any implied warranty, including without limitation implied
warranties of merchantability, fitness for a particular purpose,
non-infringement of third party rights, or upon any representation or warranty
whatsoever as to the prospects (financial, regulatory or otherwise), or the
validity or likelihood of success, of any Product after the Effective Date.

 

SECTION 6
ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES

 

6.1                                 Governmental Filings.  Gilead and EyeTech
each agree to prepare and file whatever filings, requests or applications are
required to be filed with any governmental authority in connection with this
Agreement and to cooperate with one another as reasonably necessary to
accomplish the foregoing.  Without limiting the generality of the foregoing,
prior to, or within five (5) Business Days following, the assignment, transfer
and conveyance by Gilead to EyeTech of the Transferred Assets pursuant to
Section 2.2, Gilead shall have submitted to the relevant Regulatory Authorities
the information required of a former owner of regulatory filings with respect to
the Product, and EyeTech shall submit to the relevant Regulatory Authorities the
information required of a new owner of regulatory filings with respect to the
Product.

 

6.2                                 Compliance with Law.  EyeTech shall comply
with all supranational, national, federal, state, provincial and other local
laws and regulations applicable to EyeTech’s manufacture, use, development,
marketing and sale of the Product.  Without limiting the generality of the
foregoing sentence, EyeTech shall not promote the Product in any manner in
conflict with any applicable laws or regulations.

 

6.3                                 Proprietary Information; Exceptions.  Each
Party will maintain all Proprietary Information received by it under this
Agreement in trust and confidence and will not disclose any such Proprietary
Information to any Third Party or use any such Proprietary Information for any
purposes other than those necessary or permitted for performance under this
Agreement.  In particular, EyeTech shall not use any Know How for the
manufacture or sale of any product other than a Product in the Field.  Each
Party may use such Proprietary Information only to the extent required to
accomplish the purposes of this Agreement.  Proprietary Information shall not be
used for any purpose or in any manner that would constitute a violation of any
laws or regulations, including without limitation the export control laws of the
United States.  Proprietary Information shall not be reproduced in any form
except as required to accomplish the intent of this Agreement.  No Proprietary
Information shall be disclosed to any employee, agent, consultant, Affiliate, or
sublicensee who does not have a need for such information.  To the extent that
disclosure is authorized by this Agreement, the disclosing Party will obtain
prior agreement, from its employees, directors, agents, consultants, Affiliates,
sublicensees or clinical investigators to whom disclosure is permitted to be
made, to obligations to hold in confidence and not make use of such information
for any purpose other than those permitted by this Agreement, that are at least
as restrictive as those of this Section 6.3.  Each Party will use at least the
same standard of care as it uses to protect its own Proprietary Information of a
similar nature to ensure that such employees, agents, consultants and clinical
investigators do not disclose or make any unauthorized use of such Proprietary
Information, but no less than reasonable care.

 

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Each Party will notify the other within two (2) Business Days upon discovery of
any unauthorized use or disclosure of the Proprietary Information.

 

Proprietary Information shall not include any information which, as shown by
competent proof:

 

(a)                                  is now, or hereafter becomes, through no
act or failure to act on the part of the receiving Party, its employees or
contractors in breach hereof, generally known or available;

 

(b)                                 is known by the receiving Party at the time
of receiving such information, as evidenced by its contemporaneous written
records;

 

(c)                                  is hereafter furnished to the receiving
Party by a Third Party, as a matter of right and without restriction on
disclosure;

 

(d)                                 is independently developed by the receiving
Party without any breach of this Agreement, as shown by independent,
contemporaneous, written records; or

 

(e)                                  is the subject of a prior, express, written
permission to disclose provided by the disclosing Party.

 

Notwithstanding any other provision of this Section 6.3, (i) the Parties agree
that they shall issue a press release promptly after close of NASDAQ trading on
Monday, April 3, 2000, which shall include key financial terms for this
Licensing Agreement and the Warrant Agreement, including the initial payment
under Section 3.1(a), the aggregate milestone payments under Section 3.2, the
number and class of shares issuable upon exercise of the warrant pursuant to the
Warrant Agreement and the price per share of such shares, but excluding the
royalty rates in Section 3.3 and elsewhere in this Agreement, and (ii) either
Party may disclose such terms to bona fide potential corporate partners, to the
extent required or contemplated by this Agreement, and to financial underwriters
and other Third Parties with a need to know such information, provided that all
such disclosures shall be made only to such Third Parties under an obligation of
confidentiality and appropriately limited use.

 

6.4                                 Authorized Disclosure.  Notwithstanding any
other provision of this Agreement, each Party may disclose Proprietary
Information if such disclosure:

 

(a)                                  is in response to a valid order of a court
or other governmental body of the United States or a foreign country, or any
political subdivision thereof; provided, however, that the receiving Party shall
first have given notice to the other Party hereto and shall have made a
reasonable effort to obtain a protective order requiring that the Proprietary
Information so disclosed be used only for the purposes for which the order was
issued;

 

(b)                                 is otherwise required by governmental law,
rule or regulation, including without limitation rules or regulations of the
U.S. Securities and Exchange Commission, or by rules of the National Association
of Securities Dealers; or

 

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(c)                                  is otherwise necessary to file or prosecute
patent applications, prosecute or defend litigation or comply with applicable
governmental regulations or otherwise establish rights or enforce obligations
under this Agreement, but only to the extent that any such disclosure is
necessary.  Under no circumstances will EyeTech disclose publicly proprietary
features of Gilead manufacturing technology for NX1838; provided, however, that
Gilead shall cooperate with EyeTech to disclose such information to the extent
required to provide EyeTech with reasonable protection from liability by reason
of this prohibition on disclosure.

 

6.5                                 Return of Proprietary Information.  In the
event that the License terminates or expires, EyeTech shall promptly return all
Proprietary Information received by it from Gilead.

 

6.6                                 Expenses.  Gilead and EyeTech shall each
bear their own direct and indirect expenses incurred in connection with the
negotiation and preparation of this Agreement and, except as set forth in this
Agreement, the performance of the obligations contemplated hereby.

 

6.7                                 Efforts.

 

(a)                                  EyeTech shall use Reasonable Diligence to
develop, obtain Regulatory Approval for, and commercialize Product(s) in the
Territory and shall be solely responsible for all related development,
regulatory and commercialization efforts and costs; provided, however, with
respect to countries in the Territory that are not Major Countries (such
countries, “Non-Major Countries”), EyeTech shall have the right to determine, on
a country by country basis using its reasonable discretion not to pursue
Regulatory Approval in such Non-Major Country because commercialization of the
Product is not economically feasible for EyeTech. EyeTech shall provide Gilead
with written notice of all decisions by EyeTech to not pursue development,
Regulatory Approval or commercialization in a country in the Territory for a
Product in the Field for any reason within thirty (30) days of such decision.

 

(b)                                 In the event EyeTech or its sublicensees
fail to undertake Reasonable Diligence in developing, obtaining Regulatory
Approval of, and/or commercializing Products in one or more Major Countries in
the Territory, such failure shall (i) automatically cause the License to
terminate with respect to such Major Country(ies) and have the consequences set
forth in Section 4.5(c) with respect to any such Major Country(ies); and (ii)
shall entitle Gilead to terminate this Agreement for material breach under
Section 4.3 if there have been such failures of diligence applying to four (4)
or more Major Countries, with the consequences set forth in Section 4.5(c);
provided in each case that EyeTech (or its sublicensee) does not cure such
failure within ninety (90) days of written notice from Gilead specifying its
belief that such failure has occurred and the reasons therefor.  Gilead shall
not be entitled to exercise the foregoing termination rights if EyeTech
reasonably disputes Gilead’s contention that EyeTech has failed in such
Reasonable Diligence until after the Parties have first completed dispute
resolution procedures pursuant to Section 8.9.

 

(c)                                  EyeTech’s Responsibilities.  EyeTech shall
be responsible, at its sole expense, for all development of, regulatory
activities relating to, and commercialization of Products in the Territory
beginning on the Effective Date, including performing clinical development of
Products within the Territory using standard pharmaceutical industry practices,

 

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and making all regulatory filings necessary to obtain Regulatory Approvals of
Products in the Territory.  Within thirty (30) days of the Effective Date,
EyeTech shall provide to Gilead a formal clinical development plan for Products
in the Field in the Territory (the “Development Plan”), pursuant to which
EyeTech will carry out development of Products under this Agreement, which shall
be reasonably satisfactory to Gilead.  The Development Plan shall be subject to
amendment by EyeTech from time to time, with notice and copy of such amended
Development Plan to Gilead; provided, however, (i) Gilead shall have the right
to review such proposed amendment prior to its adoption; (ii) EyeTech shall in
good faith consider any reasonable comments and considerations raised by Gilead
within five (5) Business Days of Gilead’s receipt of such proposed amendment;
and (iii) such proposed amendment is consistent with EyeTech’s obligations of
Reasonable Diligence pursuant to Sections 6.7(a) and (b).

 

(d)                                 Regulatory Filings and Matters.  EyeTech
will file such regulatory filings as may be necessary to obtain Regulatory
Approvals of Products within the Territory.  EyeTech will be responsible for all
communications with all supranational, regional, federal, state, provincial or
other local regulatory agencies, department, bureaus and other governmental
authorities with jurisdiction over Regulatory Approvals in connection with such
filings.  EyeTech will keep Gilead informed of the status of such filings in
each country, and will provide Gilead with at least sixty (60) days advance
notice of the final submission of an application for Regulatory Approval in any
country of the Territory.  EyeTech will promptly advise Gilead each time that it
obtains Regulatory Approval of Products in a country of the Territory. EyeTech
shall be responsible for the reporting of adverse events related to the use of
Products marketed by EyeTech, its Affiliates or sublicensees in the Territory.

 

(e)                                  Reporting; Meetings.  Prior to February 1,
May 1, August 1 and November 1 of each Calendar Year, EyeTech will submit to
Gilead, written reports summarizing the status and progress of the clinical
development, marketing and commercialization efforts for each Product in
sufficient detail so as to allow Gilead to monitor EyeTech’s compliance with
Section 6.7(a).  During March and September of each Calendar Year, senior
executive and scientific personnel of EyeTech will meet with Gilead
representatives to report on the status of development and commercialization of
Products and to consult as to modifications in the development plan referenced
in Section 6.7(c).

 

6.8                                 Pricing.  EyeTech shall determine, in its
sole discretion, the pricing, discounting policy and other commercial terms
relating solely to Products.  EyeTech agrees that EyeTech, its Affiliates and
its sublicensees shall not subject the selling price of Products to abnormal
discounts taken against Products in order to achieve sales of other products.

 

6.9                                 Export Control.  This Agreement is made
subject to any restrictions concerning the export of products or technical
information from the United States of America or other countries which may be
imposed upon or related to Gilead or EyeTech from time to time.  Each Party
agrees that it will not export, directly or indirectly, any technical
information acquired from the other Party under this Agreement or any products
using such technical information to a location or in a manner that at the time
of export requires an export license or other governmental approval, without
first obtaining the written consent to do so from the appropriate agency or
other governmental entity.

 

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6.10                           Inability to Develop or Commercialize. EyeTech
represents that it has, and covenants that it will maintain adequate resources
and expertise to fulfill its obligations under this Agreement.  During the term
of this Agreement, EyeTech shall provide such information that Gilead may
request that is reasonably necessary for Gilead to verify that EyeTech has
adequate resources and expertise to fulfill its obligations under this Section
6.10.

 

6.11                           Compliance with Laws; Cooperation; Maintenance of
Original Documents.

 

(a)                                  Each Party shall carry out its activities
pursuant to this Agreement in compliance with all applicable supranational,
national, state, provincial and local laws, rules, regulations and guidances.

 

(b)                                 Gilead and EyeTech each agree to use all
commercially reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary or proper to make effective the
transactions contemplated by this Agreement, including such actions as may be
reasonably necessary to obtain approvals and consents of governmental Persons
and other Persons (including, without limitation, all applicable drug listing
and notifications to the relevant Regulatory Authority identifying EyeTech as
the licensee of the Product), in each case as reasonably necessary to allow
EyeTech to develop, obtain Regulatory Approvals for, and commercialize Products
as provided in this Agreement; provided that no Party shall be required in
connection with such activities to (1) make any payment (other than as expressly
required pursuant to this Agreement), or (2) assume any other material
obligation not otherwise required to be assumed by this Agreement.

 

(c)                                  For so long as EyeTech, its Affiliates or
sublicensees is making, using or selling Products, Gilead shall store and
maintain all original Manufacturing Information in a secure location in
accordance with practices customary for Gilead and the pharmaceutical industry
for regulatory documents and in compliance with applicable laws and regulations,
and, upon proper notice from a Regulatory Authority of competent jurisdiction
over Products, shall make such Manufacturing Information reasonably available to
such Regulatory Authority.

 

(d)                                 EyeTech shall store and maintain all
original Updated Product Data Package in a secure location in accordance with
practices customary for EyeTech and the pharmaceutical industry for regulatory
documents and in compliance with applicable laws and regulations.

 

6.12                           Cooperation.  If either Party shall become
engaged in or participate in any investigation, claim, litigation or other
proceeding with any Third Party, including any proceeding before a Regulatory
Authority, relating in any way to the Product or any of the Licensed Patents the
other Party shall cooperate in all reasonable respects with such Party in
connection therewith, including, without limitation, using its reasonable
efforts to make available to the other Party such Party’s employees who may be
helpful with respect to such investigation, claim, litigation or other
proceeding, provided that, for purposes of this provision, reasonable efforts to
make available any employee shall be deemed to mean providing a Party with
reasonable access to any such employee at no cost for a period of time not to
exceed 24 hours (e.g., three 8-hour Business Days).  Thereafter, any such
employee shall be made available for

 

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such time and upon such terms and conditions (including, but not limited to,
compensation) as the Parties may mutually agree.

 

6.13                           Exclusive Rights.  The licenses granted under
this Agreement to EyeTech are exclusive, and no Person, including without
limitation Gilead, shall have any right with respect to such licenses during the
term of this Agreement, except as otherwise permitted under this Agreement. 
Except as otherwise permitted by this Agreement, Gilead shall refrain from
granting any right to any Third Party relating to NX1838, the Licensed Patents
or the Transferred Assets that would, in any manner, violate the terms of or
conflict with the rights granted to EyeTech pursuant to this Agreement.

 

6.14                           Patent Prosecution and Maintenance.

 

(a)                                  Prosecution of Patents.  Licensed Patents
shall be prosecuted and maintained in the Territory by Gilead using diligent
efforts, at Gilead’s expense, except as otherwise provided in this Section
6.14(a).  If Gilead reasonably determines that it has no material or
commercially useful application for a Licensed Patent, then EyeTech shall have
the right to have Gilead prosecute and maintain such Licensed Patents or file
for such patent term extension therefor at EyeTech’s sole expense.  EyeTech
shall bear all reasonable costs of any inter partes patent proceeding, including
without limitation oppositions, interferences or contested re-examinations,
which proceeding shall be conducted under the control of Gilead.

 

(b)                                 EyeTech shall assist Gilead in obtaining
patent extensions and supplementary protection certificates, and provide such
other assistance as reasonably requested by Gilead in connection with the
prosecution and maintenance of the Licensed Patents in any part of the Territory
at EyeTech’s sole expense.

 

6.15                           Infringement of Licensed Patents.

 

(a)                                  Notice.  Each Party shall promptly notify
the other in writing of any alleged infringement by Third Parties of any
Licensed Patent within the Territory and provide any information available to
that Party relating to such alleged infringement or misappropriation.  EyeTech
shall have no rights with respect to any infringement of Licensed Patents that
occurs outside of the Field and/or outside the Territory except the right to
receive notice pursuant to this Section 6.15(a).

 

(b)                                 Enforcement of Licensed Patents against
Competitive Products.  If any Licensed Patent is infringed by a Third Party in
connection with the manufacture, use, sale, offer for sale or import of a
Competitive Product within the Field and within the Territory (“Competitive
Product Infringement”), EyeTech shall have the primary right, but not the
obligation, to initiate, prosecute and control any action with respect to such
infringement in the Territory, by counsel of its own choice, to secure the
cessation of the infringement or to enter suit against the infringer.  Gilead
shall have the right to participate in any such action with respect to the
Licensed Patents and to be represented by counsel of its own choice. If EyeTech
fails to bring an action or proceeding to enforce a Licensed Patent within a
period of one hundred twenty (120) days after having knowledge of infringement
of such Licensed Patent, then Gilead

 

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shall have the right to bring and control any such action by counsel of its own
choice, and EyeTech shall have the right to participate in such action and be
represented by counsel of its own choice.  If a Party brings any such action or
proceeding under this Section 6.15(b), the other Party agrees to be joined as a
party plaintiff and to give the first Party reasonable assistance and authority
to control, file and prosecute the suit as necessary.  The costs and expenses of
the Party bringing suit under this Section 6.15(b) (including the internal costs
and expenses specifically attributable to such suit) shall be reimbursed first
out of any damages or other monetary awards recovered in favor of the Parties,
and any remaining damages shall be treated as Net Sales of EyeTech in its
Territory if EyeTech controlled the action or allocated between the parties in
accordance with their economic interest in the profitability of Products if
Gilead controlled the action. No settlement or consent judgment or other
voluntary final disposition of a suit under this Section 6.15(b) relating to a
Licensed Patent may be entered into without the consent of Gilead, not to be
unreasonably withheld.

 

(c)                                  Enforcement of Licensed Patents against
Non-Competitive Products.  With respect to any infringement of Licensed Patents
within the Field and within the Territory that is not a Competitive Product
Infringement, Gilead shall have the primary right, but not the obligation, to
initiate, prosecute and control any action with respect to such infringement, by
counsel of its own choice, to secure the cessation of the infringement or to
enter suit against the infringer and shall be the “Lead Party” and EyeTech shall
be the “Secondary Party”.  The Secondary Party shall have the right to
participate in any such action with respect to its Patents and to be represented
by counsel of its own choice. If the Lead Party fails to bring an action or
proceeding to enforce a Licensed Patent within a period of one hundred twenty
(120) days after having knowledge of infringement of such Licensed Patent, then
the Secondary Party shall have the right to bring and control any such action by
counsel of its own choice, and the Lead Party shall have the right to
participate in such action and be represented by counsel of its own choice.  If
a Party brings any such action or proceeding hereunder, the other Party agrees
to be joined as a party plaintiff and to give the first Party reasonable
assistance and authority to control, file and prosecute the suit as necessary. 
The costs and expenses of the Party bringing suit under this Section 6.15(c)
(including the internal costs and expenses specifically attributable to such
suit) shall be reimbursed first out of any damages or other monetary awards
recovered in favor of the Parties, and any remaining damages shall be paid to
Gilead if Gilead controlled the action, or paid to each Party in proportion to
their expenditures in such action, if EyeTech controlled the action. No
settlement or consent judgment or other voluntary final disposition of a suit
under this Section 6.15(c) relating to a Licensed Patent may be entered into
without the consent of Gilead, not to be unreasonably withheld.

 

6.16                           Infringement of Third Party’s Rights.

 

(a)                                  If the practice of the Licensed Patents
through the manufacture, use or sale of Products by EyeTech, its Affiliates or
sublicensees results in a claim for patent infringement against EyeTech, its
Affiliates or sublicensees, the Party to this Agreement first having notice of
that claim shall promptly notify the other Party in writing. The notice shall
set forth the facts of the claim in reasonable detail.

 

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(b)                                 If a Third Party asserts that a patent or
other right owned by or licensed to it is infringed by the practice of the
Licensed Patents through the manufacture, use or sale of Products by EyeTech,
its Affiliates or sublicensees pursuant to the License, EyeTech may attempt to
resolve the problem raised by the asserted infringement.  The matter shall be
deemed resolved if EyeTech obtains:  (a) a license permitting EyeTech to
manufacture, use and sell Products in that country on a royalty-free or
royalty-bearing basis; (b) a statement or representation from the Third Party
that:  (1) no action will be taken against EyeTech, its Affiliates or its
sublicensees, or (2) that the patent or other right is not infringed by the
manufacture, use or sale of Products by EyeTech, its Affiliates or its
sublicensees; or (c) a final judgment by a court of competent jurisdiction from
which no appeal has or can be taken that the Third Party’s patent(s) alleged to
be infringed is invalid, or the Third Party’s patent(s) or other right(s) are
unenforceable or not infringed by the manufacture, use or sale of Products by
EyeTech, its Affiliates or sublicensees. EyeTech shall have the primary right to
defend any such claim.  Gilead shall have the right, but not the obligation, to
participate in any such suit at its sole option and at its own expense.  Each
Party shall reasonably cooperate with the Party conducting the defense of the
claim.  Neither Party shall enter into any settlement that affects the other
Party’s rights or interests without such other Party’s prior written consent,
not to be unreasonably withheld.  If EyeTech makes a payment to any Third Party
in the course of defending or settling any claim brought by a Third Party
pursuant to this Section 6.16, EyeTech shall be entitled to offset a percentage
of all such amounts against royalties due to Gilead hereunder as provided in
Section 3.3(b).

 

6.17                           Manufacturing.

 

(a)                                  EyeTech shall be solely responsible for the
manufacture of Product following the Effective Date, including without
limitation for clinical trials and commercialization.

 

(b)                                 The Parties shall enter into an agreement
dated as of the Effective Date (the “Manufacturing Agreement”) obligating the
Parties to enter into a clinical supply agreement providing for the fill and
finish of sufficient quantities of Product Inventory to complete a Phase Ib
trial investigating the use of NX1838 for the treatment of age-related macular
degeneration.

 

6.18                           Use of Names, Logos or Symbols.  No Party hereto
shall use the name, trademarks, logos, physical likeness, employee names or
owner symbol of the other Party hereto for any purpose, including, without
limitation, in connection with any private or public securities placements,
without the prior written consent of the affected Party, such consent not to be
unreasonably withheld or delayed so long as such use of name is limited to
objective statements of fact, rather than for endorsement purposes.  Nothing
contained herein shall be construed as granting either Party any rights or
license to use any of the other Party’s trademarks or trade names without
separate, express written permission of the owner of such trademark or trade
name.

 

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SECTION 7
INDEMNIFICATION

 

7.1                                 Indemnification.

 

(a)                                  Gilead shall indemnify, defend and hold
EyeTech (and its directors, officers, employees, consultants, Affiliates and
sublicensees) (each, an “EyeTech Indemnitee”) harmless from and against any and
all Damages incurred or suffered by an EyeTech Indemnitee as a result of Third
Party claims, actions or proceedings (collectively, “EyeTech Claims”) to the
extent such EyeTech Claims are a consequence of:

 

(1)                                  the breach or alleged breach of any
representation or warranty by Gilead hereunder, or

 

(2)                                  the negligence or misconduct of Gilead in
connection with its activities under this Agreement;

 

except to the extent such EyeTech Claims are a consequence any of the items in
Sections 7.1(b)(1), (2) or (3).

 

(b)                                 EyeTech shall indemnify, defend and hold
Gilead (and its directors, officers, employees, consultants and Affiliates)
(each, a “Gilead Indemnitee”) harmless from and against any and all Damages
incurred or suffered by a Gilead Indemnitee as a result of Third Party claims,
actions or proceedings (collectively, “Gilead Claims”) to the extent such Gilead
Claims are a consequence of:

 

(1)                                  the breach or alleged breach of any
representation or warranty by EyeTech hereunder;

 

(2)                                  the negligence or willful misconduct of
EyeTech in connection with its activities under this Agreement;

 

(3)                                  the possession, research, development,
manufacture, use, offer for sale, sale, administration, storage or transport of
NX1838 or Products by EyeTech or its Affiliates or sublicensees;

 

except to the extent such Gilead Claims are a consequence any of the items in
Sections 7.1(a)(1) or (2).

 

7.2                                 Mechanics.  If a Party or its Affiliate has
a right to be indemnified under this Section 7 (the “Indemnified Party”), such
Party or Affiliate (i) shall give prompt notice of such EyeTech Claim or Gilead
Claim, as the case may be (as applicable, a “Claim”), to the other Party (the
“Indemnifying Party”) and (ii) subject to Sections 6.15 and 6.16 of this
Agreement, will have the first right to defend any Claims for which it is
entitled to indemnification from the other Party under Section 7.1, with the
cooperation and at the expense of such other Party, provided that it will not
settle any such Claim without the prior written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld.  If the Indemnified
Party is defending a

 

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Claim, the Indemnifying Party shall have the right to be present in person or
through counsel at substantive legal proceedings.  In the event that the Parties
cannot agree as to the application of Section 7.1 to any Damages or Claim, the
Parties may conduct separate defenses of such claim.  Each Party further
reserves the right to claim indemnity from the other in accordance with Section
7.1 upon resolution of the underlying claim.

 

7.3                                 Insurance Coverage.  Each Party represents
and warrants that it is covered and will continue to be covered by a
comprehensive general liability insurance program which covers all of each
Party’s activities and obligations hereunder in accordance with reasonable
pharmaceutical industry standards. Each Party will provide the other Party with
written notice at least fifteen (15) days prior to any cancellation or material
change in such insurance program.  Each Party will maintain such insurance
program, or other program with comparable coverage, beyond the expiration or
termination of this Agreement during the period in which any Product is being
commercially distributed or sold, and for a commercially reasonable period
thereafter.

 

7.4                                 Indemnification Payment Adjustments.  The
amount of any Damages for which indemnification is provided under this Section 7
shall be reduced to take account of any net tax benefit and shall be increased
to take account of any net tax detriment arising from the incurrence or payment
of any such Damages or from the receipt of any such indemnification payment and
shall be reduced by the insurance proceeds received and any other amount
recovered, if any, by the Indemnified Party with respect to any Damages;
provided, however, that an Indemnified Party shall not be subject to an
obligation to pursue an insurance claim relating to any Damages for which
indemnification is sought hereunder.  If any Indemnified Party shall have
received any payment pursuant to this Section 7 with respect to any Damages and
shall subsequently have received insurance proceeds or other amounts with
respect to such Damages, then such Indemnified Party shall pay to the
Indemnifying Party an amount equal to the difference (if any) between (1) the
sum of the amount of those insurance proceeds or other amounts received and the
amount of the payment by such Indemnifying Party pursuant to this Section 7 with
respect to such Damages and (2) the amount necessary to fully and completely
indemnify and hold harmless such Indemnified Party from and against such
Damages; provided, however, in no event will such Indemnified Party have any
obligation pursuant to this sentence to pay to such Indemnifying Party an amount
greater than the amount of the payment by such Indemnifying Party pursuant to
this Section 7 with respect to such Damages.

 

7.5                                 Indemnification Payment.  Upon the final
determination of liability and the amount of the indemnification payment under
this Section 7, the appropriate Party shall pay to the other in immediately
available funds, within thirty (30) Business Days after such determination, the
amount of any claim for indemnification made hereunder.

 

7.6                                 Survival.  The provisions of this Section 7
shall survive any termination of this Agreement with respect to actions of the
Parties during the term of the Agreement or the term of any license to EyeTech,
whichever occurs later.  Each Indemnified Party’s rights under this Section 7
shall not be deemed to have been waived or otherwise affected by such
Indemnified Party’s waiver of the breach of any representation, warranty,
agreement or covenant contained in or made pursuant to this Agreement, unless
such waiver expressly and in writing also waives any or all of the Indemnified
Party’s right under Section 7.

 

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SECTION 8
MISCELLANEOUS

 

8.1                                 Successors and Assigns.  This Agreement
shall be binding upon and shall inure to the benefit of the Parties hereto and
their respective successors and assigns; provided, however, that neither Gilead
nor EyeTech may assign any of its rights, duties or obligations hereunder
without the prior written consent of the other, which consent may be withheld in
the other’s sole discretion, except that no prior written consent shall be
required in the event that a Third Party acquires substantially all of the
assets or outstanding shares of, or merges with, EyeTech or Gilead, as the case
may be.  No assignment of this Agreement or of any rights hereunder shall
relieve the assigning Party of any of its obligations or liability hereunder. 
Any attempted assignment not in compliance with this Section 8.1 shall be of no
force or effect.

 

8.2                                 Notices.  All notices or other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given if delivered by hand, prepaid telex,
cable, telegram or facsimile and confirmed in writing, or mailed first class,
postage prepaid, by registered or certified mail, return receipt requested
(mailed notices and notices sent by telex, cable or telegram shall be deemed to
have been given on the date received) as follows:

 

If to Gilead, as follows:

 

Gilead Sciences, Inc.

333 Lakeside Drive,

Foster City, CA 94404

Facsimile: (650) 522-5488

Attn:  Chief Executive Officer

 

With a copy to:

 

Gilead Sciences, Inc.

333 Lakeside Drive,

Foster City, CA 94404

Facsimile: (650) 522-5537

Attn:  General Counsel

 

If to EyeTech, as follows:

 

EyeTech Pharmaceuticals, Inc.

300 East 42nd Street

Third Floor

New York, N.Y. 10017

Facsimile:  (212) 883-8883

Attn:  Chief Executive Officer

 

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With a copy to:

 

Duval & Stachenfeld LLP

300 East 42nd Street

Third Floor

New York, N.Y. 10017

Facsimile:  (212) 883-8883

Attn:  Harsha Murthy

 

or in any case to such other address or addresses as hereafter shall be
furnished as provided in this Section 8.2 by any Party hereto to the other
Party.

 

8.3                                 Waiver; Remedies.  Any term or provision of
this Agreement may be waived at any time by the Party entitled to the benefit
thereof by a written instrument executed by such Party.  No delay on the part of
Gilead or EyeTech in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any waiver on the part of either Gilead
or EyeTech of any right, power or privilege hereunder operate as a waiver of any
other right, power or privilege hereunder nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder.

 

8.4                                 Survival of Representations.  Each of the
representations and warranties made in this Agreement shall survive the
expiration or termination of this Agreement only with respect to activities
conducted or events occurring prior to the expiration or termination of the
Agreement.

 

8.5                                 Entire Agreement.  This Agreement, together
with all exhibits hereto and the Warrant Agreement and the Manufacturing
Agreement, constitute the entire agreement between the Parties with respect to
the subject matter hereof and supersedes all prior agreements or understandings
of the Parties relating thereto.

 

8.6                                 Amendment.  This Agreement may be modified
or amended only by written agreement of the Parties hereto.

 

8.7                                 Counterparts.  This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original but all of which together shall constitute a single instrument.

 

8.8                                 Governing Law.  This Agreement shall be
governed and construed in accordance with the laws of the State of California,
excluding its choice of law rules, except for the application of the Federal
Arbitration Act pursuant to Section 8.9(c)(ii).

 

8.9                                 Dispute Resolution.

 

(a)                                  The Parties recognize that disputes as to
certain matters may from time to time arise during the term of this Agreement
which relate to either party’s rights and/or obligations hereunder or
thereunder.  It is the objective of the Parties to establish procedures to
facilitate the resolution of disputes arising under this Agreement in an
expedient manner by

 

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mutual cooperation and without resort to litigation.  To accomplish this
objective, the Parties agree to follow the procedures set forth in this Section
8.9 if and when a dispute arises under this Agreement.  In the event of disputes
between the Parties, a Party seeking to resolve such dispute will, by written
notice to the other Party, have such dispute referred to their respective
executive officers designated below or their successors, for attempted
resolution by good faith negotiations within fourteen (14) days after such
notice is received.  Said designated officers are as follows:

 

For EyeTech:

 

Chief Executive Officer

For Gilead:

 

Chief Executive Officer

 

In the event the designated executive officers are not able to resolve such
dispute, either party may at any time after the 14 day period invoke the
provisions of Section 8.9(b) hereinafter.

 

(b)                                 Following settlement efforts pursuant to
Section 8.9(a), any dispute, controversy or claim arising out of or relating to
the validity, construction, enforceability or performance of this Agreement,
including disputes relating to alleged breach or to termination of this
Agreement under Section 4, other than disputes which are expressly prohibited
herein from being resolved by this mechanism, shall be settled by binding
Alternative Dispute Resolution (“ADR”) in the manner described below:

 

(i)                                     If a party intends to begin an ADR to
resolve a dispute, such party shall provide written notice (the “ADR Request”)
to counsel for the other party informing such other party of such intention and
the issues to be resolved.  From the date of the ADR Request and until such time
as any matter has been finally settled by ADR, the running of the time periods
contained in Section 4.3 as to which party must cure a breach of this Agreement
shall be suspended as to the subject matter of the dispute.

 

(ii)                                  Within ten (10) business days after the
receipt of the ADR Request, the other party may, by written notice to the
counsel for the party initiating ADR, add additional issues to be resolved.

 

(iii)                               Disputes regarding the scope, validity and
enforceability of Patents shall not be subject to this Section 8.9, except for
Section 8.9(a), and shall be submitted to a court of competent jurisdiction.

 

(c)                                  The ADR shall be conducted pursuant to
Comprehensive Rules for Commercial, Real Estate and Construction Disputes then
in effect, except that notwithstanding those rules, the following provisions
shall apply to the ADR hereunder:

 

(i)                                     The arbitration shall be conducted by a
panel of three arbitrators (the “Panel”).  The Panel shall be selected from a
pool of retired independent federal judges to be presented to the Parties by
JAMS.

 

(ii)                                  The time periods set forth in the JAMS
rules shall be followed, unless a party can demonstrate to the Panel that the
complexity of the issues or other reasons

 

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warrant the extension of one or more of the time tables.  In such case, the
Panel may extend such time tables, but in no event shall the time tables being
extended so that the ADR proceeding extends more than 18 months from its
beginning to the Award.  In regard to such time tables, the Parties (i)
acknowledge that the issues that may arise in any dispute involving this
Agreement may involve a number of complex matters and (ii) confirm their
intention that each party will have the opportunity to conduct complete
discovery with respect to all material issues involved in a dispute within the
framework provided above.  Within such time frames, each party shall have the
right to conduct discovery in accordance with the Federal Rules of Civil
Procedure.  The Panel shall not award punitive damages to either party and the
Parties shall be deemed to have waived any right to such damages.  The Panel
shall, in rendering its decision, apply the substantive law of the State of
California, without regard to its conflict of laws provisions, except that the
interpretation of and enforcement of this Section 8.9(c)(ii) shall be governed
by the Federal Arbitration Act.  The Panel shall apply the Federal Rules of
Evidence to the hearing.  The proceeding shall take place in San Francisco, San
Mateo or Santa Clara Counties, California.  The fees of the Panels and JAMS
shall be paid by the losing Party which shall be designated by the Panel.  If
the Panel is unable to designate a losing party, it shall so state and the fees
shall be split equally between the Parties.

 

(iii)                               The Panel is empowered to award any remedy
allowed by law, including money damages, multiple damages, prejudgment interest
and attorneys’ fee, and to grant final, complete, interim, or interlocutory
relief, including injunctive relief but excluding punitive damages.

 

(iv)                              Except as set forth in Section 8.9(c)(ii),
above, each party shall bear its own legal fees.  The Panel shall assess its
costs, fees and expenses against the party losing the ADR unless it believes
that neither party is the clear loser, in which case the Panel shall divide such
fees, costs and expenses according to the Panel’s sole discretion.

 

(v)                                 The ADR proceeding shall be confidential and
the Panel shall issue appropriate protective orders to safeguard each party’s
Proprietary Information.  Except as required by law, no party shall make (or
instruct the Panel to make) any public announcement with respect to the
proceedings or decision of the Panel without prior written consent of each other
party.  The existence of any dispute submitted to ADR, and the award, shall be
kept in confidence by the Parties and the Panel, except as required in
connection with the enforcement of such award or as otherwise required by
applicable law.

 

(d)                                 The Parties agree that judgment on any
arbitral award issued pursuant to this Section 8.9 shall be entered in the
United States District Court for the Northern District of California or, in the
event such court does not have subject matter jurisdiction over the dispute in
question, such judgment shall be entered in the Superior Court of the State of
California, in the County of San Mateo, and each Party agrees to the
co-exclusive personal jurisdiction of such courts for the purpose of entry of
such a judgment.

 

8.10                           Captions.  All section titles or captions
contained in this Agreement, in any Exhibit referred to herein and the table of
contents, if any, to this Agreement are for convenience

 

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only, shall not be deemed a part of this Agreement and shall not affect the
meaning or interpretation of this Agreement.

 

8.11                           No Third Party Rights or Obligations.  Except as
expressly provided in Section 7, no provision of this Agreement shall be deemed
or construed in any way to result in the creation of any rights or obligation in
any Person not a Party to this Agreement.

 

8.12                           Severability.  If any provision of this Agreement
is found or declared to be invalid or unenforceable by any court or other
competent authority having jurisdiction, such finding or declaration shall not
invalidate any other provision hereof, and this Agreement shall thereafter
continue in full force and effect.  In the event any such provision is so
declared invalid or unenforceable, the Parties shall negotiate an alternative
provision that closely approximates the Parties’ intent, to the extent allowable
under law.

 

8.13                           Attachments.  All Exhibits and other attachments
to this Agreement are by this reference incorporated herein and made a part of
this Agreement.

 

8.14                           Disclaimer of Agency.  This Agreement shall not
constitute any Party the legal representative or agent of another, nor shall any
Party have the right or authority to assume, create, or incur any Third Party
liability or obligation of any kind, express or implied, against or in the name
of or on behalf of another except as expressly set forth in this Agreement.

 

8.15                           Interpretation. This Agreement has been jointly
prepared by the Parties and their respective legal counsel and shall not be
strictly construed against either Party.

 

8.16                           Force Majeure.  Each of the Parties hereto shall
be excused from the performance of its obligations hereunder (except the payment
of money) in the event such performance is prevented by force majeure, provided
that the non-performing Party promptly provides notice of the prevention to the
other Party. Such excuse shall be continued so long as the condition
constituting force majeure continues and the non-performing Party makes and
continues to make reasonable efforts to remove or overcome the condition.  For
the purposes of this Agreement, force majeure shall mean any act of God, fire,
casualty, flood, war, earthquake, strike, failure of public utilities, any act,
exercise, assertion or requirement of governmental authority, accident,
epidemic, destruction of facilities, or such other similar occurrences beyond
the control of the Party whose performance is affected.

 

8.17                           Limitation of Liability. IN NO EVENT SHALL EITHER
PARTY OR ITS RESPECTIVE AFFILIATES AND PERMITTED SUBLICENSEES BE LIABLE FOR
SPECIAL, EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES, WHETHER IN CONTRACT,
WARRANTY, TORT, STRICT LIABILITY OR OTHERWISE, EXCEPT TO THE EXTENT SUCH PARTY
MAY BE REQUIRED TO INDEMNIFY THE OTHER PARTY FROM SUCH DAMAGES CLAIMED BY THIRD
PARTIES UNDER SECTION 7.

 

8.18                           No Assumption of Obligations.  Except as
expressly provided in this Agreement:  (i) neither Party is assuming any of the
other Party’s responsibilities, duties (including, without limitation,
compliance with all applicable laws and regulations), obligations (including
payment obligations), claims, Damages, liabilities, burdens and problems of any
nature whatsoever

 

31

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(collectively, “Obligations”), whether by operation of law or otherwise, and
(ii) without limiting the foregoing, EyeTech is not assuming any of Gilead’s
Obligations with respect to Transferred Assets.

 

32

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
and delivered as of the day and year first above written.

 

GILEAD SCIENCES, INC.

EYETECH PHARMACEUTICALS, INC.

 

 

 

 

By:

/s/ Mark L. Perry

 

By:

/s/ David Guyer

 

 

Mark L. Perry

 

David Guyer

 

Senior Vice President, Operations

 

Chief Executive Officer

 

 

 

 

NEXSTAR PHARMACEUTICALS, INC.

 

 

 

 

 

By:

/s/ Mark L. Perry

 

 

 

Mark L. Perry

 

 

Chief Financial Officer

 

 

33

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EXHIBIT A

 

NX1838

 

The compound NX1838, is [*]

 

A-1

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EXHIBIT B

 

PRODUCT DATA PACKAGE INFORMATION AND DATA

 

 

Regulatory

IND

Pre-IND submissions

IND correspondence

IND supplements

 

Clinical

Case Report Forms by site

1838 Project Files

Investigator Files by Site

 

Manufacturing (API)

Synthesis Batch Records

Accompanying Analytical Data

Records of Failed Lots

 

Manufacturing (DP)

Master Production Records

Bills of Materials

Assay methods

Finished Product Specifications

 

B-1

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EXHIBIT C

 

PRODUCT INVENTORY

 

DESCRIPTION

 

PART NUMBER

 

LOT
NUMBER

 

QUANTITY

 

UNITS OF
MEASUREMENT

 

[*]

 

 

 

 

 

 

 

 

 

[*]

 

 

 

[*]

 

[*]

 

[*]

 

[*]

 

 

 

[*]

 

[*]

 

[*]

 

[*]

 

 

 

[*]

 

[*]

 

[*]

 

 

 

 

 

 

 

 

 

 

 

[*]

 

 

 

 

 

 

 

 

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

[*]

 

 

 

 

 

 

 

 

 

 

 

[*]

 

 

 

 

 

 

 

 

 

[*]

 

 

 

[*]

 

[*]

 

[*]

 

[*]

 

 

 

[*]

 

[*]

 

[*]

 

[*]

 

 

 

[*]

 

[*]

 

[*]

 

[*]

 

 

 

[*]

 

[*]

 

[*]

 

[*]

 

 

 

[*]

 

[*]

 

[*]

 

[*]

 

 

 

[*]

 

[*]

 

[*]

 

 

C-1

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EXHIBIT D

 

LICENSED PATENTS

 

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

 

D-1

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