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

















 


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

















 


“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

















 


“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

















 


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

















 


“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

















 


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

















 


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


 


8

















 


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

















 


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


 


10

















 


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


 


11

















 


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


 


12

















 


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.


 


13

















 


(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,


 


14

















 


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


 


15

















 


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.


 


16

















 


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.


 


17

















 


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


 


18

















 


(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,


 


19

















 


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.


 


20

















 


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


 


21

















 


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


 


22

















 


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.


 


23

















 


(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.


 


24

















 


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


 


25

















 


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.


 


26

















 


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


 


27

















 


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


 


28

















 


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


 


29

















 


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


 


30

















 


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

















 


(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

















 


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

















 


EXHIBIT
A


 


NX1838


 


The compound NX1838, is [*]


 


A-1

















 


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

















 


EXHIBIT
C


 


PRODUCT
INVENTORY


 


	
  DESCRIPTION

  	
   

  	
  PART NUMBER

  	
   

  	
  LOT

  NUMBER

  	
   

  	
  QUANTITY

  	
   

  	
  UNITS OF

  MEASUREMENT

  	
   

  
	
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C-1

















 


EXHIBIT
D


 


LICENSED
PATENTS


 


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[*]


 


D-1