GPCB » Topics » 6.1 General.

This excerpt taken from the GPCB 20-F filed Apr 3, 2006.

6.1 General.

6.1.1 Responsibility for Collaboration Costs. The Parties shall share all Collaboration Costs in the following proportions: GPC Biotech shall bear sixty-five percent



(65%) of all Collaboration Costs and Licensee shall bear thirty-five percent (35%) of all Collaboration Costs.

6.1.2 Initial Collaboration Costs. On or before January 3, 2006, Licensee shall make a payment to GPC Biotech in the amount of Nineteen Million One Hundred Thousand U.S. Dollars ($19,100,000), representing its thirty-five percent (35%) share of (a) the Collaboration Costs incurred by GPC Biotech after October 1, 2005 and prior to the Effective Date and (b) those payments on Collaboration Costs identified in Section 6.1.6(a).

6.1.3 FTE Costs. Each Party shall record and account for its FTE Costs and its out-of-pocket costs for the Development of the Licensed Product and the Joint Commercialization Activities and shall report such costs to the JDC on a quarterly basis, in each case in a manner that allocates costs to the extent possible to a specific activity in the Development Plan and Budget or Commercialization Plan and Budget. FTEs allocable to the Development Plan shall be charged to Collaboration Costs. Out-of-pocket costs allocable to Collaboration Costs, but otherwise included within FTE Costs, shall not be charged separately as Collaboration Costs.

6.1.4 Adjustment of FTE Costs. The FTE Costs shall be adjusted annually, with each annual adjustment effective as of January 1 of each Calendar Year, the first such annual adjustment to be made as of January 1, 2007, based on the percentage change in the U.S. Department of Labor Consumer Price Index for All Urban Consumers for the prior Calendar Year or as otherwise mutually agreed upon by the Parties.

6.1.5 Reports. Each Party shall report to the other Party within forty five (45) days after the end of each Calendar Quarter the Collaboration Costs incurred by such Party during such Calendar Quarter for the Licensed Product. Such report shall specify in reasonable detail all amounts included in such Collaboration Costs with respect to the Licensed Product during such Calendar Quarter (broken down by activity) and shall be accompanied by invoices or other appropriate supporting documentation for any payments made by such Party to Third Parties that individually exceed Fifty Thousand U.S. Dollars ($50,000) or Fifty Thousand Euros (€50,000), as applicable, or as may be determined by the JEC. Each such report shall enable the receiving Party to compare the reported costs against the Development Plan and Budget and Commercialization Plan and Budget, on both a quarterly basis and a cumulative basis for each activity. The Parties shall seek to resolve any questions related to such accounting statements within thirty (30) days following receipt by each Party of the other Party’s report hereunder.

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