EXHIBIT 10.1
TO
NeoRx Corporation's
Report on Form 8-K
Dated
October 7, 1997
"[ * ]" = omitted, confidential material, which material has been
separately filed with the Securities and Exchange Commission pursuant to a
request for confidential treatment.
AGREEMENT
between
Xxxxxxx Pharmaceutica, N.V.
and
NeoRx Corporation
CONTENTS
AGREEMENT ........................................................................................... 1
RECITALS ............................................................................................ 1
I. DEFINITIONS ................................................................................ 1
II. DEVELOPMENT ................................................................................ 11
2.1 Xxxxxxx'x Responsibilities ........................................................ 11
2.2 NeoRx's Responsibilities .......................................................... 11
2.3 Development Committee ............................................................. 12
2.4 Additional Products ............................................................... 13
2.5 FDA ............................................................................... 13
2.6 IND Transfer ...................................................................... 13
2.7 Research Audit .................................................................... 14
2.8 Capital Expenditures .............................................................. 14
III. LICENSE GRANTS ............................................................................. 14
3.1 License for Pre-Targeting Products ................................................ 14
3.2 Sublicense Rights ................................................................. 15
3.3 Distribution ...................................................................... 15
3.4 Nonexclusive Know-How License to NeoRx ............................................ 15
3.5 Nonexclusive Know-How License to Xxxxxxx .......................................... 15
3.6 Third-Party Agreements ............................................................ 15
3.7 No Other Rights ................................................................... 16
3.8 Prohibition ....................................................................... 16
IV. PAYMENTS ................................................................................... 16
4.1 Upfront Payments .................................................................. 16
4.2 Milestone Payments for the First Pre-Targeting Product ............................ 16
4.3 Milestones for a Second Type of Pre-Targeting Product ............................. 17
4.4 Earned Royalties for Primary Pre-Targeting Products ............................... 18
4.5 Royalty Adjustment in U.S. for Primary Pre-Targeting Products ..................... 18
4.6 Earned Royalties for Additional Products .......................................... 20
4.7 Royalty Adjustment in U.S. for Additional Products ................................ 20
4.8 Duration of Royalty Payments ...................................................... 20
4.9 Reduction in Royalty Rate in Response to Generic Competition ...................... 21
4.10 Reduction in Royalty Rate in Response to Substitute Product Competition ........... 21
4.11 Reduction in Royalty Rate for Jointly Owned Patents ............................... 22
4.12 Foreign Exchange .................................................................. 22
4.13 [Intentionally Left Blank] ........................................................ 22
4.14 Taxes ............................................................................. 22
4.15 Records, Reports and Payment ...................................................... 23
4.16 Accounting ........................................................................ 23
4.17 Third Party Patents ............................................................... 24
4.18 Compulsory License ................................................................ 25
4.19 No Multiple Royalties; Third Party Royalties ...................................... 25
4.20 Value of Collaboration in NeoRx Know-How .......................................... 26
4.21 No Multiple Reductions ............................................................ 26
4.22 Allocation of Annual Net Sales [ * ] .......................................... 26
X. XXXXXXX'X OPTION TO EXPAND FIELD AND INDEPENDENT DEVELOPMENT ............................... 27
5.1 Xxxxxxx'x Option to Expand the Field .............................................. 27
5.2 Exercise of Xxxxxxx'x Option ...................................................... 27
5.3 Limitation on NeoRx Right to Assign or License Prior to Exercise by
Xxxxxxx of Its Option ............................................................. 27
5.4 NeoRx Right to Independently Develop Pre-Targeting Products Within the
Field ............................................................................. 28
5.5 NeoRx Obligation to Re-Offer ...................................................... 28
5.6 Limitations on NeoRx Rights During Re-Offer Period ................................ 29
5.7 Xxxxxxx'x Right of First Negotiation to Expand the Field Further .................. 30
VI. CO-PROMOTION ............................................................................... 30
6.1 Co-Promotion Option of NeoRx ...................................................... 30
6.2 Co-Promotion Limitation of Scope .................................................. 31
6.3 NeoRx Is Not a Distributor ........................................................ 33
6.4 Joint Marketing and Sales Committee ............................................... 33
6.5 Co-Promotion Obligations .......................................................... 33
6.6 Costs Associated With Co-Promotion ................................................ 34
6.7 Co-Promotion Compliance ........................................................... 34
6.8 Co-Promotion Audit of Performance ................................................. 34
6.9 Co-Promotion Termination for Cause ................................................ 35
6.10 Co-Promotion Is Through Independent Organizations ................................. 36
6.11 Co-Promotion Does Not Affect Certain Responsibilities ............................. 36
6.12 NeoRx Right to Terminate .......................................................... 37
6.13 Trademarks ........................................................................ 37
6.14 Indemnification for Products ..................................................... 38
[ * ] Confidential Treatment Requested
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6.15 Marketing Liaison ................................................................. 38
6.16 Dispute Resolution ................................................................ 39
6.17 Transferability of Co-Promotion Right ............................................. 39
VII. MANUFACTURE ................................................................................ 40
7.1 Xxxxxxx'x Responsibility .......................................................... 40
7.2 Xxxxxxx'x Obligation .............................................................. 40
VIII. PATENTS .................................................................................... 40
8.1 Maintenance of NeoRx Patents ...................................................... 40
8.2 Failure by NeoRx to Prosecute and/or Maintain ..................................... 41
8.3 Ownership of Patents .............................................................. 41
8.4 Disclosure of Patentable Inventions ............................................... 41
8.5 Jointly Owned Patent Filings ...................................................... 42
8.6 Parties' Cooperation in Obtaining Patent Extensions ............................... 42
IX. INFRINGEMENT ............................................................................... 42
9.1 Infringement of Third Party Patents ............................................... 42
9.2 Infringement by Third Parties of NeoRx Patents .................................... 43
9.3 Infringement by Third Parties of Jointly Owned Patents ............................ 43
X. XXXXXXXXXX AND CORPORATE NAME .............................................................. 44
XI. CONFIDENTIALITY ............................................................................ 44
11.1 Confidentiality; Exceptions ....................................................... 44
11.2 Authorized Disclosure ............................................................. 45
11.3 Survival ......................................................................... 45
XII. REPRESENTATIONS AND WARRANTIES; PERFORMANCE................................................. 45
12.1 Representations and Warranties .................................................... 45
12.2 Disclaimer ........................................................................ 46
12.3 Performance by Affiliates ......................................................... 46
XIII. TERM AND TERMINATION ....................................................................... 46
13.1 Term .............................................................................. 46
13.2 Termination for Breach ............................................................ 46
13.3 Termination for Bankruptcy ........................................................ 47
13.4 Xxxxxxx'x Termination Without Cause ............................................... 47
13.5 Rights and Obligations Upon Termination Under Paragraph 13.2 or 13.3 by
NeoRx or Under Paragraph 13.4 by Xxxxxxx .......................................... 47
13.6 Survival .......................................................................... 48
13.7 Accrued Rights, Surviving Obligations ............................................. 48
13.8 Termination Not Sole Remedy ....................................................... 48
XIV. INDEMNIFICATION ............................................................................ 48
14.1 Research and Development Indemnification .......................................... 48
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14.2 Xxxxxxx Indemnification ........................................................... 49
14.3 Notification ...................................................................... 49
V. DISPUTE RESOLUTION .......................................................................... 49
15.1 Alternative Dispute Resolution .................................................... 49
15.2 Arbitration Procedure ............................................................. 49
(a) Arbitrator ............................................................... 50
(b) Proceedings .............................................................. 50
(c) Award .................................................................... 52
(d) Costs .................................................................... 52
(e) Confidentiality .......................................................... 52
15.3 Survivability ..................................................................... 52
15.4 Jurisdiction ...................................................................... 52
XVI. LICENSOR BANKRUPTCY ........................................................................ 53
XVII. NOTICES .................................................................................... 53
XVIII. PUBLICITY .................................................................................. 54
18.1 Publicity ......................................................................... 54
18.2 Scientific Publications ........................................................... 55
XIX. FORCE MAJEURE .............................................................................. 55
XX. INTEGRATION ................................................................................ 56
XXI. MISCELLANEOUS .............................................................................. 56
21.1 Amendments ....................................................................... 56
21.2 Laws .............................................................................. 56
21.3 Severability ...................................................................... 56
21.4 Headings .......................................................................... 57
21.5 Waiver ............................................................................ 57
21.6 Representations ................................................................... 57
21.7 Compliance With Laws .............................................................. 57
21.8 Relationship of Parties ........................................................... 57
21.9 Interest .......................................................................... 58
21.10 Counterparts ...................................................................... 58
EXHIBIT A COST OF GOODS SOLD ....................................................................... 1
EXHIBIT B NEORX PATENTS ............................................................................ 1
EXHIBIT C NEORX COST CATEGORIES .................................................................... 1
EXHIBIT D 12/4/96 Letter from X. Xxxxxxxx .......................................................... 1
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AGREEMENT
This Agreement is entered into as of this 1st day of July, 1997 by and
between Xxxxxxx Pharmaceutica, N.V., having its principal place of business at
Xxxxxxxxxxxxx 00, 0000 Xxxxxx, Xxxxxxx ("Xxxxxxx"), and NeoRx Corporation,
having its principal place of business at 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxx 00000-0000 ("NeoRx"). Xxxxxxx and NeoRx are sometimes referred to
herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, NeoRx has begun Development (hereinafter defined) of NeoRx
Pre-Targeting Technology (hereinafter defined) for the delivery of a [ * ]
Effector Molecule (hereinafter defined) localized at a tumor, which may be
particularly useful in cancer therapy.
WHEREAS, this NeoRx Pre-Targeting Technology has resulted in a product
called Avicidin(R) (hereinafter defined) now in Development by NeoRx for small
cell lung cancer.
WHEREAS, Xxxxxxx is a pharmaceutical company with a worldwide
development and marketing organization.
WHEREAS, Xxxxxxx desires to develop Pre-Targeting Product(s)
(hereinafter defined) employing NeoRx Pre-Targeting Technology, including, but
not limited to, Avicidin, with NeoRx and to receive license rights to develop,
manufacture and market the Pre-Targeting Product(s) that result therefrom.
NOW, THEREFORE, the Parties agree as follows:
I. DEFINITIONS
The following terms shall have the following meanings as used in this
Agreement:
1.1......"Actual Cost of Goods Percentage" or "Al" shall have the mean-
ing recited in Paragraph 4.5(a).
1.2 ....."Additional Product" means a Pre-Targeting Product that is not
a Primary Pre-Targeting Product, [ * ]. Additional Products are developed
pursuant to Paragraph 2.4.
[ * ] Confidential Treatment Requested
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1.3......"Affiliate" means an entity that, directly or indirectly,
through one or more intermediaries, controls, is controlled by or is under
common control with Xxxxxxx or NeoRx. As used in this definition, "control"
shall be presumed if there is ownership, directly or indirectly, of thirty
percent (30%) or more (or, if less, the maximum permitted by applicable law) of
the voting stock, equity or income interest of an entity.
1.4......"Anti-Ligand" means a composition of matter that demonstrates
high affinity, and, preferably, multivalent binding, of the complementary
Ligand. Avidin is an example of an Anti-Ligand.
1.5......"Avicidin" means a product designed for administration to a
patient as three separate components comprising a first component comprising
NR-LU-10 bound to Avidin, a second component comprising a Clearing Agent and a
third component comprising yttrium-90 bound to biotin or its functional analog.
1.6......"Avidin" means avidin, streptavidin and derivatives and
analogs thereof that are capable of high affinity, multivalent or univalent
binding to biotin or its functional analogs.
1.7......"Bind(s)" means, solely with respect to Paragraph 1.25(b) and
the binding to a cell line, that an antibody demonstrates a greater than or
equal to [ * ] increase in medium channel fluorescence intensity over a negative
control in a flow cytometry system using directly labeled antibody when tested
on that cell line in the presence of human IgG. [ * ].
1.8......"BLA" means a Product License Application filed with the FDA,
as more fully defined in 21 C.F.R. Part 600 et seq., or any replacement
application for Regulatory Approval in the United States.
1.9......"Clearing Agent" means a composition of matter capable of
binding, complexing or otherwise associating with an administered moiety (e.g.,
Targeting Agent-Ligand, Targeting Agent-Anti-Ligand or Anti-Ligand alone)
present in the recipient's circulation, thereby facilitating circulating moiety
clearance from the recipient's body, removal from blood circulation or
inactivation thereof in circulation.
1.10....."Control" means possession of the ability to grant a license
or sublicense as provided for herein without violating the terms of an agreement
or other arrangement.
[ * ] Confidential Treatment Requested
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1.11....."Co-Promote" or "Co-Promotion" means to promote jointly
Avicidin or another Pre-Targeting Product hereunder through Xxxxxxx'x and
NeoRx's respective sales forces under a single trademark in the United States.
1.12....."Cost of Goods Sold" means the cost of Pre-Targeting Product
(excluding the Ligand/Effector Molecule conjugate) inventory sold and other
manufacturing-related costs with respect to the Pre-Targeting Product. These
costs shall be defined as the sum of the applicable expenditures incurred
directly in bringing goods acquired and/or manufactured to their existing
condition or location. Cost of Goods Sold shall be calculated in the manner set
forth in Exhibit A attached hereto.
1.13....."Crossover Field" means the field described in Paragraph
1.25(c).
1.14....."Date of First Sale" means the day on which Xxxxxxx, its
Affiliate or its sublicensee first sells a Pre-Targeting Product to a Third
Party (excluding sublicensees) in a commercial arm's-length transaction after
Regulatory Approval.
1.15....."Details" shall mean face-to-face presentations made to
physicians, nurses, P&T committee members and other individuals who provide
direct health care services to patients, in their capacity as such. Details
shall not include calls on managed care organizations in an attempt to secure a
contract with such organization. Details shall also not include calls on
administrators or other such individuals in charge of deciding what is placed on
a formulary in hospitals or teaching institutions. Once, however, the
Pre-Targeting Product is on a formulary of such hospital or teaching
institution, Details shall include calls to health care professionals in the
hospital or teaching institution. Details may also include, if agreed in advance
by Xxxxxxx and NeoRx, calls on P&T committee members of such hospitals and
teaching institutions in an attempt to get the Pre-Targeting Product on a
formulary.
1.16....."Development" means all activities relating to obtaining
Regulatory Approval of a Pre-Targeting Product, line extensions, alternate
delivery systems and new indications therefor and all activities relating to
developing the ability to manufacture the same. This includes, but is not
limited to, preclinical testing, toxicology, formulation, bulk production
fill/finish, manufacturing process development, manufacturing and quality
assurance technical support, clinical studies and regulatory affairs. In
addition, Development also includes those research activities necessary to
develop certain new or different components of the Pre-Targeting Product such as
the Clearing Agent or fusion protein.
1.17 ...."Development Committee" means that committee described in
Paragraph 2.3.
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1.18 ...."Development Costs" means the costs, including allocable
overhead, incurred by a Party or for its account, specifically identifiable to
the Development of a Pre-Targeting Product or an Independent Product that is
aimed at achieving Regulatory Approval of such Product, including, but not
limited to, [ * ].
1.19....."Development Plan" means the plan for Development of a Primary
Pre-Targeting Product agreed to by the Parties and attached to a separate letter
exchanged between the Parties concurrently herewith, as amended and revised in
accordance with this Agreement, and plans for Development of other Pre-Targeting
Products.
1.20....."Drug Approval Application" means an application for
Regulatory Approval required before commercial sale or use of a Pre-Targeting
Product as a drug in a regulatory jurisdiction.
1.21....."Effective Date" means the date first written above.
1.22....."Effector Molecule" means a therapeutic agent, including, but
not limited to, [ * ].
1.23....."Expansion Field" means the therapeutic applications in
oncology of NeoRx Pre-Targeting Technology outside of the Field where the
specific antibody and the Effector Molecule are owned or Controlled by (or are
covered by an option to acquire or license, with right to sublicense, held by)
NeoRx or its Subsidiaries. Xxxxxxx has a right of first negotiation to the
Expansion Field pursuant to Paragraph 5.7.
1.24....."FDA" means the United States Food and Drug Administration or
any successor agency.
1.25....."Field" means:
[ * ] Confidential Treatment Requested
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(a)......All therapeutic applications in oncology of NeoRx
Pre-Targeting Technology that use NR-LU-10 or any antibody that binds to the
NR-LU-10 antigen and any Effector Molecule.
(b)......All therapeutic applications in oncology of NeoRx Pre-Target-
ing Technology that use [ * ].
(c)......Notwithstanding the limitation to oncology therapy in either
(a) or (b) above, (i) if a Pre-Targeting Product comprising NR-LU-10, or any
antibody that binds to the NR-LU-10 antigen, and any Effector Molecule has
reached the stage in Development wherein [ * ].
The Field may be expanded in accordance with, and subject to the terms
of, Paragraphs 5.1 and 5.7.
1.26....."FTE" means a full-time scientific person dedicated to
Development or, in the case of less than a full-time dedicated scientific
person, a full-time, equivalent scientific person year based upon a total of
forty-six (46) weeks or one thousand eight hundred forty (1,840) hours per year
of scientific work, on or directly related to Development, carried out by an
employee. No FTE shall be a postdoctoral trainee of NeoRx. Scientific work on or
directly related to Development to be performed by employees can include, but is
not limited to, experimental laboratory or clinical work, recording and writing
up results, reviewing literature and references, holding scientific discussions,
attending appropriate seminars and symposia, managing and leading scientific
staff, and carrying out management duties related to Development. Excluded are
administrative facilities support, laboratory administrative support,
information and computer support, and other internal or external support
personnel involved in Development.
1.27....."Generic Product" means a product sold in a particular country
(a) after the expiration in such country of [ * ] or its corresponding foreign
equivalent that (i) was not made or sold by Xxxxxxx, its Affiliate or its
sublicensee and (ii) has the same components and configuration as a
Pre-Targeting Product sold in the country or (b) that (i) is competitive with a
Pre-Targeting Product sold in the country, (ii) employs the technology described
in [ * ] or its corresponding foreign equivalent in such country, (iii) is sold
under the license rights granted under the [ * ], and (iv) is sold in any
quantity in the country.
[ * ] Confidential Treatment Requested
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1.28....."IND" means an investigational new drug application filed with
the FDA as more fully defined in 21 C.F.R. ss. 312.3.
1.29....."Independent Product" means any product in the Field
(excluding the Crossover Field) for pharmaceutical use in humans employing NeoRx
Pre-Targeting Technology that is developed by NeoRx in accordance with
Paragraphs 5.4, 5.5 and 5.6. An Independent Product may become a Pre-Targeting
Product at the election of Xxxxxxx in accordance with Paragraph 5.4 or 5.5.
1.30....."Information" means (a) information generally not known to the
public relating to the Field (excluding the Crossover Field), including, but not
limited to, techniques and data, including, but not limited to, inventions,
practices, methods, knowledge, know-how, skill, experience, test data including
pharmacological, toxicological and clinical test data, analytical and quality
control data, marketing, pricing, distribution, costs, sales, manufacturing, and
patent and legal data or descriptions, and (b) reasonable research quantities of
compounds, assays, Clearing Agents, Ligand/Anti-Ligand Pairs and biological
materials generally not known to the public relating to the Field (excluding the
Crossover Field); provided, however, that "Information" does not include
information, compounds, assays, Clearing Agents, Ligand/Anti-Ligand Pairs or
biological materials relating to Targeting Agents (other than NR-LU-10) or [ * ]
Effector Molecules and not relating to NR-LU-10 or [ * ] Effector Molecules.
1.31....."Xxxxxxx Know-How" means Information that (a) Xxxxxxx
discloses to NeoRx under this Agreement and (b) is now or hereafter within the
Control of Xxxxxxx; provided, however, "Xxxxxxx Know-How" does not include
rights under any patents or patent applications.
1.32....."Joint Marketing and Sales Committee" means a committee
consisting of members from the marketing and/or sales functions of Xxxxxxx and
NeoRx.
1.33....."Ligand" means a small, soluble molecule that exhibits rapid
serum, blood and/or whole body clearance when administered intravenously in an
animal. Biotin is an example of a Ligand.
1.34....."Ligand/Anti-Ligand Pair"means a complementary/anti-complemen-
tary set of molecules that demonstrates specific binding, generally of
relatively high affinity. Biotin/streptavidin is an example of a Ligand/Anti
-Ligand Pair.
[ * ] Confidential Treatment Requested
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1.35....."Major European Market Country" means France, Germany, Great
Britain or Italy.
1.36....."Marketing Approval" means all allowances and approvals,
including, but not limited to, Regulatory Approval and pricing and reimbursement
approvals granted by the appropriate federal, state and local regulatory
agencies, departments, bureaus or other governmental entities within a country
necessary to market and sell a product.
1.37....."NeoRx Know-How" means Information that (a) NeoRx discloses to
Xxxxxxx under this Agreement and (b) is now or hereafter (subject to Xxxxxxx'x
election under Paragraph 4.19) within the Control of NeoRx; provided, however,
"NeoRx Know-How" does not include rights under any patents or patent
applications.
1.38....."NeoRx Patents" means all the patents and patent applications
now or hereafter (subject to Xxxxxxx'x election under Paragraph 4.19) owned or
Controlled by NeoRx including its interest in any jointly owned patents
hereunder relating to NeoRx Pre-Targeting Technology at any time, prior to or
during the term of this Agreement, a partial listing of which is identified in
Exhibit B, attached hereto, and which shall be updated by NeoRx from time to
time, any foreign counterparts thereof, as well as all continuations,
continuations-in-part, divisions, provisional applications and renewals thereof,
all patents that may be granted thereon, and all reissues, re-examinations,
extensions, patents of addition and patents of importation thereof; provided,
however, that "NeoRx Patents" does not include patents or patent applications
relating to Targeting Agents (other than NR-LU-10) or [ * ] Effector Molecules.
1.39....."NeoRx Pre-Targeting Technology" means the technology now or
hereafter (subject to Xxxxxxx'x election under Paragraph 4.19) owned or
Controlled by NeoRx that involves: (a) target site localization in the patient
by administering a Targeting Agent that is conjugated with one member of a
Ligand/Anti-Ligand Pair (a first component) and allowing a time period
sufficient for optimal target accumulation of this Targeting Agent conjugate;
and preferably after removing the nontarget bound Targeting Agent conjugate from
the patient with a Clearing Agent (a second component); and (b) administering to
the patient an Effector Molecule conjugated to the opposite member of the
Ligand/Anti-Ligand Pair (a third component) that binds (directly or indirectly)
to the Targeting Agent conjugate at the target site.
[ * ] Confidential Treatment Requested
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1.40....."Net Sales" means the gross sales price billed by a Party or
an Affiliate thereof or a sublicensee thereof for sales of Pre-Targeting
Products (including all components thereof) to a Third Party, less (in each case
as may be applicable thereto and consistent with such Party's then existing
standard business practices): (a) standard trade discounts, including cash
discounts or rebates actually allowed or granted from the billed amount; (b)
credits or allowances actually granted upon claims, rejections or returns of
Pre-Targeting Products, including recalls, regardless of the Party requesting
such recall; (c) charges included as part of the gross sales price for freight,
postage, shipping and insurance charges, to the extent billed, and separately
stated on the invoice; (d) taxes, duties or other governmental charges levied on
or measured by the billing amount when included in billing, as adjusted for
rebates and refunds, and separately stated on the invoice; and (e) accounts that
are uncollectible and written off such Party's books as uncollectible; provided,
however, that any uncollectible accounts excluded pursuant to this clause (e)
that are subsequently collected by such Party shall be included in Net Sales for
the royalty period in which such amounts are collected. Each reference to a
Party set forth above in this Paragraph 1.40 shall be deemed to include and
apply to such Party's Affiliates and sublicensees, as applicable. Any
Pre-Targeting Product sold or otherwise disposed of in other than an
arm's-length transaction or for other property (e.g., barter) shall be deemed
billed at its fair market value in the country of sale or disposition. In the
event a Party is receiving royalties under this Agreement from any Product sold
in the form of a combination Product containing or together with one or more
active ingredients or devices in addition to a Pre-Targeting Product (including
all its components), Net Sales for such combination Product will be calculated
by multiplying Net Sales of such combination Product by the fraction A/(A+B),
where A is the invoice price of the applicable Pre-Targeting Product, if sold
separately, and B is the total invoice price of the active ingredients or
active, nonconsumable devices (such as, for example, implantable pumps or
electronic stimulators; however, items such as disposable transdermal patches or
prefilled syringes shall constitute consumable devices) in the combination, if
sold separately. If, on a country-by country basis, the other active component
or components in the combination are not sold separately in said country, Net
Sales for the purpose of determining royalties of the combination Product shall
be calculated by multiplying Net Sales of such combination Product by the
fraction A/C, where A is the invoice price of the applicable Pre-Targeting
Product, if sold separately, and C is the invoice price of the combination
Product. If, on a country-by-country basis, neither the combination Product nor
the other active component or components of the combination Product are sold
separately in said country, Net Sales for the purposes of determining royalties
of the combination Product shall be determined by the Parties in good faith.
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1.41....."NR-LU-10" means the antibody whose binding sequences have
been provided in writing to Xxxxxxx by NeoRx in a letter of even date and any
functional analog of such antibody that binds to the same tumor-specific antigen
(including, but not limited to, F(ab)'2, Fab, single chain fv and human
antibodies).
1.42....."Phase II" means that portion of the clinical development
program that provides for the initial trials of a product on a limited number of
patients for the purposes of determining dose and evaluating safety and efficacy
in the proposed therapeutic indication as more fully defined in 21 C.F.R.
ss. 312.21(c) or foreign equivalent.
1.43....."Pivotal Phase II/III" means that portion of the clinical
development program that provides for a clinical trial(s) of a product on a
sufficient number of patients to establish the safety and efficacy of a product
and generate pharmacoeconomic data necessary to support Regulatory Approval in
the proposed therapeutic indication(s) in the United States or a Major European
Market Country, it being recognized and agreed that, with respect to the United
States, [ * ].
1.44....."Pre-Targeting Product" means any product in the Field for
pharmaceutical use in humans employing NeoRx Pre-Targeting Technology that is
developed with NeoRx as provided herein. Pre-Targeting Products are either
Primary Pre-Targeting Products or Additional Products, but are not Independent
Products.
1.45....."Primary Pre-Targeting Product" means a Pre-Targeting Product
that comprises a [ * ] Effector Molecule used with NR-LU-10 or any other
Targeting Agent that binds to the NR-LU-10 antigen.
1.46....."[ * ] Effector Molecule" means an Effector Molecule that
is a [ * ].
[ * ] Confidential Treatment Requested
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1.47....."Regulatory Approval" means any approvals (including, but not
limited to, pricing and reimbursement approvals, product and/or establishment
licenses, registrations or authorizations of any federal, state or local
regulatory agency, department, bureau or other governmental entity) necessary
for the manufacture, use, storage, import, export, transport or sale of a
Pre-Targeting Product in a regulatory jurisdiction.
1.48....."Standard Cost of Goods Reference Percentage" or "S1" shall
have the meaning recited in Paragraph 4.5.
1.49....."Subsidiary" means an entity that, directly or indirectly, is
controlled by Xxxxxxx or NeoRx. As used in this definition, "control" shall be
presumed under the same conditions as Paragraph 1.3.
1.50....."Substitute Product" means a product sold in a particular
country after the expiration in such country of the equivalent of [ * ] that (a)
was not made or sold by Xxxxxxx, its Affiliate or its sublicensee, (b) can be
substituted for, and is competitive with, a Pre-Targeting Product sold in the
country, (c) has the same [ * ], and (e) does not infringe a Valid Claim of a
NeoRx Patent in the country because of the change described in clause (d).
1.51....."Targeting Agent" means a composition of matter, including,
but not limited to, an antibody, that binds to a cell or defined population of
cells. A Targeting Agent may bind to a receptor, an oligonucleotide, an
enzymatic substrate, an antigenic determinant or other binding site present or
in the target cell population.
1.52....."Third Party" means any entity other than Xxxxxxx or NeoRx,
and their respective Affiliates.
1.53....."Third Party Patents" means those patents and patent
applications (including foreign counterparts) identified by NeoRx prior to the
Effective Date in writing to Xxxxxxx.
1.54....."Third Party Royalties" means those royalties and other
amounts that are or may be payable to those Third Parties previously identified
by NeoRx in writing to Xxxxxxx as a result of the use of NeoRx Pre-Targeting
Technology or the manufacture, use or sale of a Pre-Targeting Product hereunder.
1.55....."Third Party Royalty Rates" are those royalty rates associated
with the Third Party Royalties.
1.56....."U.S. Marketing Plan" means a marketing plan or plans,
including, but not limited to, premarketing plans for specified periods of time,
that shall set forth promotion, detailing and marketing strategies related to
each Pre-Targeting Product to be sold in the United States, including proposed
pricing and detailing.
1.57....."Valid Claim" means a claim of a pending patent application
being pursued in good faith or an issued, unexpired patent that has not been (a)
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held invalid or unenforceable by a final decision of a court or governmental
agency of competent jurisdiction, which decision is unappealable or was not
appealed within the time allowed therefor, or (b) admitted in writing to be
invalid or unenforceable by the holder(s) by reissue, disclaimer or otherwise.
II. DEVELOPMENT
2.1 Xxxxxxx'x Responsibilities
As of the Effective Date, Xxxxxxx shall use reasonable efforts
consistent with its normal business practices to develop and commercialize at
least one Pre-Targeting Product (Avicidin is the initial Pre-Targeting Product
to be developed by Xxxxxxx) and, with support from NeoRx described in Paragraphs
2.2 and 2.4, shall be solely responsible for the Development of Pre-Targeting
Product(s), including, but not limited to, preparing and filing Drug Approval
Applications in its own name and seeking Regulatory Approvals for Pre-Targeting
Product(s). All costs associated with its Development and manufacturing
activities shall be borne solely by Xxxxxxx, except to the extent described in
Paragraph 2.2. Xxxxxxx shall keep NeoRx informed of its Information related to
Development of Pre-Targeting Products.
2.2 NeoRx's Responsibilities
Promptly following the Effective Date, NeoRx shall disclose to Xxxxxxx
Information within NeoRx's Control relating to NeoRx Pre-Targeting Technology,
including, but not limited to, Avicidin, and from time to time, as Information
becomes available, is generated or is learned, update such disclosure with
additional Information that it obtains throughout the term of this Agreement.
Upon request, NeoRx will provide reasonable quantities of physical materials
(e.g. compounds) for evaluation. In order to assure a smooth transfer of the
responsibilities for Development from NeoRx to Xxxxxxx for the Primary
Pre-Targeting Product, NeoRx will commit up to [ * ] FTEs/year as assigned by
the Development Committee until December 31, 1998. Such FTEs shall carry out the
activities that are reasonably assigned to them as described in the Development
Plan and that are within their capabilities (i.e., NeoRx is not obligated to
hire additional scientists, but is obligated to provide, as needed, up to [ * ]
FTEs having the general background and skills of NeoRx's current scientific
staff and having a mix of Ph.D. to non-Ph.D. degrees comparable to NeoRx's
current staff working on Avicidin). It is expected that such FTEs shall, subject
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to Development Committee approval, [ * ], the maximum level of FTE support at
NeoRx shall be reduced to [ * ] FTEs for the Primary Pre-Targeting Product. All
internal, nonproject-related costs associated with employing FTEs, including,
but not limited to, [ * ], shall be to the account of NeoRx with the costs
associated with any capital investments being treated as set forth in Paragraph
2.8. All costs associated with the Development conducted or coordinated by
NeoRx, such as having material produced by a Third Party, which work is
preapproved by Xxxxxxx, and any other costs specifically budgeted in the
Development Plan as Xxxxxxx expenses, shall be to the account of Xxxxxxx.
Xxxxxxx has approved and will reimburse NeoRx within twenty (20) days of the
date hereof for [ * ] of costs previously incurred by NeoRx. In carrying out the
activities assigned to it pursuant to the Development Plan, NeoRx shall use
reasonable efforts consistent with its normal business practices and the budget
set forth in the Development Plan. NeoRx shall have no obligation to incur costs
or perform work not in the Development Plan budget. Any additional cost or cost
overruns of NeoRx not provided for in the quarterly Development Plan budget
shall be to the account of NeoRx, unless approved in writing in advance. NeoRx
shall invoice Xxxxxxx each calendar quarter for the Development expenses
incurred by it that are within the budget recited in the Development Plan or
that have been otherwise approved in advance, together with a detailed statement
describing the costs and expenses billed. Xxxxxxx shall make payment of the
amount invoiced within thirty (30) days of receipt of the invoice. It is
recognized and agreed that budgeting will be done on a monthly basis; however,
invoicing and calculation of cost overruns will be done on a calendar quarter
basis. The initial budget against which NeoRx may commence incurring expenses is
included in the Development Plan. After the first Marketing Approval in the
United States, NeoRx shall have no obligation to provide FTEs or perform other
activities with respect to Development of a Primary Pre-Targeting Product,
unless the Parties mutually agree to a compensation arrangement for NeoRx for
such services.
2.3 Development Committee
In order to coordinate activities between Xxxxxxx and NeoRx, a
Development Committee shall be promptly established after the Effective Date.
The Development Committee shall be comprised of representatives from each Party
with the size of the Development Committee to be agreed upon by the Parties from
time to time. The purpose of the Development Committee shall be to monitor the
Development of each Pre-Targeting Product, facilitate the flow of Information
with respect to Development being conducted for each Pre-Targeting Product,
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oversee the preparation of any revised Development Plans, including Development
timelines, and submit Development Plans to the Xxxxxxx Research Management Board
for review and budget approval. Any disputes that arise at the Development
Committee shall be discussed by the president of the Xxxxxxx Research Foundation
or its successor organization and the president of NeoRx. If the two individuals
cannot resolve the dispute after good faith discussions, the president of the
Xxxxxxx Research Foundation or its successor organization shall make the final
decision. It is recognized and agreed that the Development Committee cannot
change the rights or obligations of the parties under this Article II with
respect to research and Development.
2.4 Additional Products
Both Xxxxxxx and NeoRx shall be involved in the research and
Development of Additional Products based on the then-current expertise and
resources of both Parties. In case Xxxxxxx decides to develop an Additional
Product, both Parties shall discuss how they can best capitalize on their joint
expertise in the Field and determine resources. To the extent of its
participation, NeoRx shall receive full reimbursement of its Development Costs
(including FTEs) from Xxxxxxx, such participation being similar to the extent it
has participated to date and is expected to participate in the future in the
research and Development of the Primary Pre-Targeting Product. Xxxxxxx shall be
responsible for all regulatory filings in connection with such Additional
Products. In developing Additional Products, Xxxxxxx shall use reasonable
efforts consistent with its normal business practices. In carrying out its
activities, NeoRx shall use reasonable efforts consistent with its normal
business practices.
2.5 FDA
NeoRx shall have right to participate as an observer in any planned
meetings (whether by phone, video conferencing, face-to-face or otherwise)
between Xxxxxxx (or its Affiliates or sublicensees) and the FDA with respect to
regulatory matters pertaining to Pre-Targeting Products. Xxxxxxx shall give
sufficient advance notice to NeoRx, to the extent possible, to allow it to
observe such meetings. It is recognized that there are some circumstances where
it may be impractical to include NeoRx as an observer (e.g., acute toxicity
reports and encounter at conferences), but the intention is, whenever possible,
to allow NeoRx to participate as an observer. At its discretion, Xxxxxxx may
allow NeoRx to participate actively in such meetings. NeoRx shall have an
opportunity to review all documents and filings with the FDA, and communications
from the FDA.
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2.6 IND Transfer
NeoRx agrees to promptly transfer and assign any IND or equivalent
foreign regulatory filing relating to a Pre-Targeting Product that it has filed
prior to the Effective Date upon written request from Xxxxxxx.
2.7 Research Audit
NeoRx will maintain complete and accurate records relevant to its
expenditure of Development funding provided to it by Xxxxxxx pursuant to
Paragraphs 2.2 and 2.4. Such records shall be open during reasonable business
hours for a period of three (3) years from creation of the individual records
for examination, at Xxxxxxx'x expense and not more often than once each year, by
an independent certified public accountant appointed by Xxxxxxx and reasonably
acceptable to NeoRx for the purpose of verifying for Xxxxxxx the use of the
funding. Such accountant may retain or utilize independent consultants with
expertise necessary to assist such accountant in examining such records and
making such determination.
2.8 Capital Expenditures
NeoRx shall not be required to purchase any item of a capital nature
reasonably required by NeoRx to conduct Development unless it is covered by the
budget or otherwise approved by Xxxxxxx, in which event NeoRx shall be
reimbursed by Xxxxxxx. For the purpose of this Paragraph 2.8, the term "item"
refers to a complete operational unit or a related group of cell lines. For
example, if the instrument being purchased requires the purchase of a computer
(including the acquisition, by license or otherwise, of computer software) to
run the instrument, the operational unit is the combination of the two.
All purchases or acquisitions of capital items that cost [ * ] or more
shall be to the account of Xxxxxxx; provided, however, that Xxxxxxx approves in
advance each such purchase or acquisition. The determination of whether Xxxxxxx
purchases or acquires an item exceeding [ * ] or NeoRx purchases or acquires
such item and is reimbursed by Xxxxxxx shall be made by the Parties prior to the
purchase. Any items purchased or otherwise acquired and charged one hundred
percent (100%) to Xxxxxxx'x account shall be solely owned by Xxxxxxx, maintained
and insured at Xxxxxxx'x expense and, if not consumed during the development,
transferred to Xxxxxxx, at its expense, by NeoRx upon termination or expiration
of this Agreement.
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III. LICENSE GRANTS
3.1 License for Pre-Targeting Products
Subject to the terms of this Agreement, NeoRx hereby grants to Xxxxxxx
an exclusive, worldwide right and license under NeoRx Patents and NeoRx Know-How
to develop, make, have made, use, sell, have sold and distribute any
Pre-Targeting Products in the Field. NeoRx shall not knowingly do anything that
would jeopardize Xxxxxxx'x ability to obtain exclusive rights to a specific
Pre-Targeting Product in the Crossover Field prior to [ * ].
3.2 Sublicense Rights
The right and license granted under Paragraph 3.1 with respect to each
Pre-Targeting Product shall be sublicensable by Xxxxxxx to a Third Party in any
country; provided, however, that Xxxxxxx shall not have the right to sublicense
the Development of the entire Pre-Targeting Product to any one Third Party, but
nevertheless shall have the right to sublicense for development individual
components of the Pre-Targeting Product to Third Parties with no one Third Party
having a license to develop all of the components.
3.3 Distribution
Xxxxxxx may sell or distribute Pre-Targeting Products through its
Affiliates or distributors in any country.
3.4 Nonexclusive Know-How License to NeoRx
Xxxxxxx hereby grants to NeoRx a paid-up, nonexclusive, worldwide
license to use Xxxxxxx Know-How (except compounds, assays and biological
materials), with the right to sublicense, and to disclose such Xxxxxxx Know-How
subject to a binder of confidentiality so long as the provisions of Article XI
remain in effect.
3.5 Nonexclusive Know-How License to Xxxxxxx
NeoRx hereby grants to Xxxxxxx a paid-up, nonexclusive, worldwide
license to use NeoRx Know-How (except compounds, assays, Clearing Agents,
Ligand/Anti-Ligand Pairs and biological materials, including NR-LU-10), with the
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right to sublicense, and to disclose such NeoRx Know-How subject to the binder
of confidentiality so long as the provisions of Article XI remain in effect.
3.6 Third-Party Agreements
Xxxxxxx shall comply with and perform in accordance with all agreements
under which NeoRx has Control of NeoRx Pre-Targeting Technology. If Xxxxxxx
intends to have another party manufacture any Pre-Targeting Product, Xxxxxxx
shall first negotiate in good faith with [ * ]. In the event that Xxxxxxx or
NeoRx takes a direct license to any Third Party Patents, it shall use its
reasonable and diligent efforts to provide in such license that (a) the other
Party shall be granted a sublicense with the same scope and (b) upon early
termination of such license, the other Party shall have a right to take over the
license as a direct license upon the same terms, provided the other Party agrees
to comply with the terms and to pay the licensor any past due milestone or
royalty payments that the licensor has identified as unpaid.
3.7 No Other Rights
All rights and licenses not specifically granted to Xxxxxxx under this
Agreement by NeoRx are hereby reserved and retained by NeoRx.
3.8 Prohibition
Except as licensed hereunder, Xxxxxxx shall not use, and shall not
allow its Affiliates and sublicensees to use, the NeoRx Patents and NeoRx
Know-How for any other purpose.
IV. PAYMENTS
4.1 Upfront Payments
Xxxxxxx shall pay or cause to be paid to NeoRx Ten Million Dollars
($10,000,000) as follows:
(a)......Five Million Dollars ($5,000,000) within ten (10) days of
receiving an invoice (which invoice may be dated and delivered as of the
Effective Date) and
(b)......Five Million Dollars ($5,000,000) as an equity investment in
[Convertible Preferred Stock or Common Stock] of NeoRx pursuant to the terms and
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conditions of a Stock Purchase Agreement between Xxxxxxx & Xxxxxxx Development
Corporation and NeoRx dated as of the Effective Date.
4.2 Milestone Payments for the First Pre-Targeting Product
Xxxxxxx shall pay NeoRx the following amounts for the first achievement
of each of the following milestones by any Pre-Targeting Product:
[ * ]
All milestone payments recited in this Paragraph 4.2 shall be payable
only once. Once a particular milestone has been paid it will not be due again
for a replacement or follow-up product, so that the total milestones payable
under this Paragraph 4.2 shall not exceed [ * ].
No credits from or against any royalties hereunder shall be available
on any of the milestones recited in this Paragraph 4.2.
Xxxxxxx shall promptly notify NeoRx of the occurrence of each milestone
event. Each milestone payment shall be due and payable after such notification
and shall be paid no later than thirty (30) days after receipt of an invoice
from NeoRx.
4.3 Milestones for a Second Type of Pre-Targeting Product
In addition to the milestone payments recited in Paragraph 4.2, Xxxxxxx
shall pay NeoRx the following amounts for the second Pre-Targeting Product that
achieves the following milestones and that is of a different type than that
Pre-Targeting Product that achieved the same milestone in Paragraph 4.2 (a
"type" of Pre-Targeting Product being either a Primary Pre-Targeting Product or
an Additional Product):
[ * ]
For example, if the milestones set forth in Paragraphs 4.2(a) and (b)
were first achieved by a Primary Pre-Targeting Product and the milestone set
forth in Paragraph 4.2(c) was first achieved by an Additional Product, the
milestones set forth in Paragraphs 4.3(a) and (b) would not be triggered unless
achieved by an Additional Product and a Primary Pre-Targeting Product,
respectively.
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All milestone payments recited in this Paragraph 4.3 shall be payable
only once. Once a particular milestone has been paid it will not be due again
for a replacement or follow-up product, so that the total milestones payable
under this Paragraph 4.3 shall not exceed [ * ].
No credits from or against any royalties hereunder shall be available
on any milestones recited in this Paragraph 4.3.
Xxxxxxx shall promptly notify NeoRx of the occurrence of each
milestone. Each milestone payment shall be due and payable after such
notification and shall be paid no later than thirty (30) days after receipt of
an invoice from NeoRx.
4.4 Earned Royalties for Primary Pre-Targeting Products
Xxxxxxx shall pay NeoRx a royalty based on Net Sales in connection with
the annual Net Sales of each Primary Pre-Targeting Product by Xxxxxxx, its
Affiliates and sublicensees as follows:
Royalty Rate Worldwide Net Sales (annual)
[ * ] [ * ]
[ * ] [ * ]
For example, if during a year of sales, Xxxxxxx has Net Sales of [ * ]
of a Primary Pre-Targeting Product, Xxxxxxx is obligated to pay royalties as
follows: [ * ] and [ * ].
4.5 Royalty Adjustment in U.S. for Primary Pre-Targeting Products
In the United States only, NeoRx will share in the gross profit
increase/decrease resulting from changes in the Cost of Goods Sold structure of
the Targeting Agent and Clearing Agent components of the Primary Pre-Targeting
Product being sold as recited hereinafter. An annual adjustment only to the [ *
] royalty rate shall be made by calculating the percentage change to the [ * ]
royalty rate (the [ * ] royalty rate shall not likewise be so adjusted) based on
Actual Cost of Goods Percentage changes (excluding Third Party Royalties) and
Third Party Royalty Rate changes according to the following formula:
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[ * ]
wherein AR is the adjusted royalty rate; provided, however, that AR can never be
greater than [ * ] or less than [ * ] and AR1 and AR2 are calculated as set
forth in clauses (a) and (b) below.
(a)......Royalty Rate Adjustment for Actual Cost of Goods Percentage
Changes (Excluding Third Party Royalty Rates).
If the Actual Cost of Goods Percentage ("A1") for any calendar year is
greater than or less than the Standard Cost of Goods Reference Percentage
("S1"), then AR1 shall be calculated according to the following formula:
[ * ]
wherein A1 is calculated by dividing the average Cost of Goods Sold (excluding
Third Party Royalty Rates) per dose by an amount (the "Per Dose Price") that is
the greater of (i) [ * ] and (ii) the average Net Sales per dose in the United
States for the calendar year, and S1 is calculated by dividing [ * ] by the Per
Dose Price; provided, however, that in the event the average dose does not
contain [ * ] of chemical conjugate, fusion protein or other Targeting Agent
bound to Avidin, the [ * ] shall be adjusted using the calculational approach
set forth in the December 4, 1996 letter from Xxxxxxx Xxxxxxxx to Xxxx Xxxxxx
attached hereto as Exhibit D.
(b)......Royalty Rate Adjustment Based on Changes to Third Party
Royalty Rates.
If the actual cumulative Third Party Royalty Rate ("A2") is greater
than or less than the Standard Cumulative Third Party Royalty Rate ("S2"), which
equals [ * ], then AR2 shall be calculated according to the following formula:
[ * ]
wherein A2 is the actual cumulative Third Party Royalty Rate paid to such Third
Parties during the calendar year with respect to the sale of Primary
Pre-Targeting Products in the United States and S2 equals [ * ].
For example, if the average Cost of Goods Sold for a calendar year is
[ * ] per dose [ * ] and the average Net Sales per dose for the same calendar
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year are [ * ] per dose, A1 equals [ * ]. If the Actual Cumulative Third Party
Royalty Rate is [ * ], then using the formulas shown above:
[ * ]
Should the adjusted royalty rate calculation result in monies being
owed to NeoRx as in the above example, Xxxxxxx shall report to NeoRx the amount
of monies owed and, upon receipt of an invoice from NeoRx, shall pay NeoRx
within thirty (30) days after receipt of invoice. Should the adjusted royalty
rate calculation result in monies being owed to Xxxxxxx, Xxxxxxx shall take
those monies as a credit on the next scheduled royalty payment to NeoRx.
4.6 Earned Royalties for Additional Products
Xxxxxxx shall pay NeoRx a royalty based on Net Sales in connection with
the annual Net Sales of each Additional Product by Xxxxxxx, its Affiliates and
sublicensees as follows:
Royalty Rate Worldwide Net Sales (annual)
[ * ] [ * ]
[ * ] [ * ]
4.7 Royalty Adjustment in U.S. for Additional Products
The royalty rates recited in Paragraph 4.6 are based on an Actual Cost
of Goods Percentate plus the Third Party Royalty Rate being [ * ] or less for
the United States. If on an annual basis the Actual Cost of Goods Percentage
plus the Third Party Royalty is greater than [ * ] for the United States, the
royalty rates for the United States shall be as follows:
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Royalty Rate Worldwide Net Sales (annual)
[ * ] [ * ]
[ * ] [ * ]
4.8 Duration of Royalty Payments
The royalties recited in Paragraphs 4.4 and 4.6 shall accrue and be
payable on a country-by-country and product-by-product basis with respect to Net
Sales occurring prior to the later of (a) the last to expire of any NeoRx Patent
with a Valid Claim covering the Pre-Targeting Product or its use or (b) ten (10)
years from the Date of First Sale of the Pre-Targeting Product in the country,
except that the Date of First Sale for any country in the European Union shall
be deemed to be, if earlier, the first Date of First Sale of the Pre-Targeting
Product in a Major European Market Country. Thereafter, no further royalties
shall accrue and the license under Paragraph 3.1 shall become fully paid-up
(except for payments to Third Parties) and non-exclusive with respect to the
Pre-Targeting Product and country.
4.9 Reduction in Royalty Rate in Response to Generic Competition
Except as provided in Paragraph 4.21, the royalty rates recited in
Paragraphs 4.4 and 4.6 shall be reduced (on a country-by-country and
product-by-product basis) by [ * ] in connection with the sale of a
Pre-Targeting Product by Xxxxxxx, its Affiliates or sublicensees in those
countries where (a) the royalty period described in Paragraph 4.8(b) has not
expired and the royalty period described in Paragraph 4.8(a) has either (i)
expired or (ii) is still running only as a result of a Valid Claim in a NeoRx
Patent covering only a method of manufacturing the Pre-Targeting Product, (b) a
Generic Product to the Pre-Targeting Product is being manufactured and sold in
the country without infringing such Valid Claim, and (c) the total sales of the
Generic Product in the country are cumulatively [ * ] of the total sales of the
Pre-Targeting Product being sold hereunder expressed in equivalent units in said
country for a [ * ]. Once it has been determined that competition exists in a
particular country pursuant to clause (c) of this paragraph and clauses (a) and
(b) of this paragraph apply, the royalty rates shall be reduced pursuant to this
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Paragraph 4.9 for the next succeeding [ * ], and the determination of whether
competition continues to exist shall be reviewed [ * ] thereafter. If for such [
* ] competition exists, then the royalty rates for the next succeeding [ * ]
shall continue to be as set forth in this Paragraph 4.9. If it is determined
that competition exists for [ * ], the royalty for such country and
Pre-Targeting Product shall be as set forth in this Paragraph 4.9, unless it can
be demonstrated that no competition pursuant to clause (c) of this paragraph
exists for [ * ].
4.10 Reduction in Royalty Rate in Response to Substitute Product Competition
Except as provided in Paragraph 4.21, the royalty rates recited in
Paragraphs 4.4 and 4.6 shall be reduced (on a country-by-country and
product-by-product basis) by [ * ] in connection with the sale of a
Pre-Targeting Product by Xxxxxxx, its Affiliates or sublicensees in those
countries where (a) a Substitute Product to the Pre-Targeting Product is being
sold and (b) the total sales of the Substitute Product in the country is
cumulatively at least [ * ] of the total sales of the Pre-Targeting Product
being sold hereunder expressed in equivalent units in said country [ * ]. Once
it has been determined that competition exists in a particular country pursuant
to clause (b) of this paragraph and clause (a) of this paragraph applies, the
royalty rates shall be reduced pursuant to this Paragraph 4.10 for the next
succeeding [ * ], and the determination of whether competition continues to
exist shall be reviewed [ * ] thereafter. If for such [ * ] competition exists,
then the royalty rates for the next succeeding [ * ] shall continue to be as set
forth in this Paragraph 4.10. If it is determined that competition exists for [
* ], the royalty for such country and Pre-Targeting Product shall be as set
forth in this Paragraph 4.10, unless it can be demonstrated that no competition
pursuant to clause (b) of this paragraph exists for [ * ].
4.11 Reduction in Royalty Rate for Jointly Owned Patents
After the expiration of the royalty period described in Paragraph
4.8(b) and except as provided in Paragraph 4.21, the royalty rates recited in
Paragraphs 4.4 and 4.6 shall be reduced (on a country-by-country and
product-by-product basis) [ * ] in connection with the sale of a Pre-Targeting
Product by Xxxxxxx, its Affiliates or sublicensees in those countries where the
only Valid Claim(s) covering the Pre-Targeting Product are in jointly owned
patents described in Paragraph 8.3 that were filed in good faith more than [ * ]
after the Effective Date.
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4.12 Foreign Exchange
The remittance of royalties payable on Net Sales will be payable in
U.S. dollars to NeoRx at a bank and to an account designated by NeoRx using a
rate of exchange of the currency of the country from which the royalties are
payable in accordance with the rate of exchange published in The Wall Street
Journal as of the last business day of the month immediately preceding the month
during which payment of such royalties is required to be made to NeoRx
hereunder. All references to "Dollars" hereunder are references to U.S.
Dollars.
4.13 [Intentionally Left Blank]
4.14 Taxes
All payments under this Agreement will be made without any deduction or
withholding for or on account of any tax unless such deduction or withholding is
required by any applicable law. If Xxxxxxx is so required to deduct or withhold,
Xxxxxxx will:
(a)......promptly notify NeoRx of such requirement;
(b)......pay to the relevant authorities the full amount required to be
deducted or withheld promptly upon the earlier of determining that such
deduction or withholding is required or receiving notice that such amount has
been assessed against NeoRx; and
(c)......promptly forward to NeoRx an official receipt (or certified
copy), or other documentation reasonably acceptable to NeoRx, evidencing such
payment to such authorities.
In case such deduction or withholding is required, the Parties may
propose changes to the then current arrangement with respect to the flow of
monies under this Agreement in order to reduce or eliminate the extra cost for
NeoRx.
All payments pursuant to Paragraphs 4.1, 4.2, 4.3, 4.4, 4.6 and 4.19 to
NeoRx shall be made by Xxxxxxx from either Belgium or the United States so that,
under current law, there should be no tax withholding.
4.15 Records, Reports and Payment
Xxxxxxx shall keep complete and accurate records of the sale of
Pre-Targeting Products, with respect to which a royalty is payable according to
this Agreement. Within thirty (30) days following each quarterly period of a
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calendar year, Xxxxxxx shall render to NeoRx a written report setting forth the
Net Sales (in local currency and U.S. Dollars, with applicable exchange rates
pursuant to Paragraph 4.12 noted) and quantity of such products sold and the
royalty due and payable on a product-by-product and country-by-country basis
(including all deductions taken from the gross sales price in determining Net
Sales and any royalty reduction or credit). NeoRx shall then remit to Xxxxxxx an
invoice for the royalty payment due and Xxxxxxx shall, within ten (10) days of
receipt of such invoice, remit to NeoRx the amount of royalty shown thereby to
be due.
4.16 Accounting
Each Party shall have the right, at its own expense, to appoint an
independent certified public accountant reasonably acceptable to and approved by
the other Party, said approval not to be unreasonably withheld or delayed, who
shall have access to the other Party's records during reasonable business hours
for the purpose of verifying Net Sales, the Cost of Goods Sold, the Actual Cost
of Goods Percentage, Third-Party Royalty Rates, manufacturing costs and
supplier's charges (Paragraphs 5.6 and 7.2) and the calculation of royalties
payable for any period within the preceding three (3) years or, in the case of
Xxxxxxx, for verifying whether NeoRx dedicated the number of FTEs for which it
received funding at the rate agreed to pursuant to Article II. This right may
not be exercised more than once in any calendar year, and said accountant shall
disclose to the Party requesting the audit only information relating solely to
the accuracy of the royalty report, the royalty payments or research
expenditures according to this Agreement. If any audit or examination shall
reveal a deficiency of any royalty payment due, the Party owing the royalty
shall make payment to the other Party of such deficiency plus interest for the
period of such deficiency. If any audit or examination shall reveal that NeoRx
has not properly spent the research funding pursuant to the terms of this
Agreement and therefore misused such funding, NeoRx shall refund any monies not
so properly spent to Xxxxxxx. Payment of such deficiencies or misused research
funding shall be made within five (5) days following written notification of the
auditing Party to the Party being audited of the monies owed. In the event that
such an audit or examination shall reveal a deficiency of any royalty payment
due in an amount equaling or exceeding five percent (5%) of the royalties or
expenditures, the Party shall reimburse the other Party for the reasonable costs
of such audit within ten (10) business days after written demand therefor.
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4.17 Third Party Patents
If a patent or patents of a Third Party, other than Third Party Patents
or patents [ * ], should exist in any country during the term of this Agreement
covering the use or sale of any Primary Pre-Targeting Product comprised of a [ *
], and if it should prove in Xxxxxxx'x reasonable judgment impractical or
impossible for Xxxxxxx or any Affiliate or sublicensee to continue the activity
or activities licensed hereunder without obtaining a royalty-bearing license
from such Third Party under such patent or patents in said country, then, except
as provided in Paragraph 4.21, Xxxxxxx shall be entitled to a credit for the
royalty paid to such Third Party under such license for the use or sale of the
Primary Pre-Targeting Product in said country ("Royalty"), such credit being
applied against only the royalty payments due under this Agreement with respect
to the Primary Pre-Targeting Product for said country and in an amount equal to
[ * ] of the Royalty paid to such Third Party; provided, however, that the
earned royalties payable to NeoRx under this Agreement shall not be reduced to
less than [ * ] of Net Sales of such Primary Pre-Targeting Product in said
country by reason of the credit described in this Paragraph 4.17 and the
reduction provided by this Paragraph 4.17 with respect to the United States
shall not exceed [ * ] of the amount by which [ * ] the Royalty exceeds [ * ]
for the United States. For example, with respect to such a Primary Pre-Targeting
Product in the United States, if A1 equals [ * ], A2 equals [ * ] and the
Royalty equals [ * ], then the maximum amount of the Royalty that may be
deducted pursuant to this Paragraph 4.17 from the earned royalties otherwise
payable on Net Sales in the United States for such Primary Pre-Targeting Product
shall not exceed [ * ] and shall not be applied to reduce the earned royalties
payable to NeoRx to less than [ * ] of Net Sales in the United States for such
Primary Pre-Targeting Product. (Note that by operation of Paragraph 4.5, without
the application of this Paragraph 4.17, the earned royalty rate may be reduced
to [ * ].)
4.18 Compulsory License
If at any time and from time to time a Third Party in any country
shall, under the right of a compulsory license granted or ordered to be granted
by a competent governmental authority, sell any Pre-Targeting Product, with
respect to which royalties would be payable pursuant to Paragraphs 4.4 and 4.6,
then except as provided in Paragraph 4.21, Xxxxxxx may reduce the royalty on
sales in such country of such Pre-Targeting Product, to an amount no greater
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than the amount payable by said Third Party as consideration for the compulsory
license; provided, however, that the royalty rate payable by Xxxxxxx after any
reduction thereof pursuant to this Paragraph 4.18 shall not be less than [ * ]
of Net Sales of such Pre-Targeting Product in such country.
4.19 No Multiple Royalties; Third Party Royalties
If a Pre-Targeting Product is covered by more than one license granted
hereunder, Xxxxxxx shall be responsible for payment of only one royalty based on
the Net Sales thereof, such royalty to be equal to the highest applicable
royalty rate on a product-by-product and country-by-country basis; provided,
however, that Xxxxxxx shall remain responsible for paying all Third Party
Royalties and any other royalties or amounts that NeoRx owes or has paid a Third
Party for NeoRx Pre-Targeting Technology that it hereafter acquires Control of
and that Xxxxxxx elects to have included in the license granted in Paragraph 3.1
and added to the definition(s) of NeoRx Patents and/or NeoRx Know-How. Xxxxxxx
shall pay such Third Party Royalties and other royalties or amounts to NeoRx or,
at NeoRx's request, directly to the appropriate Third Party.
4.20 Value of Collaboration in NeoRx Know-How
Xxxxxxx acknowledges that NeoRx's participation and work in Development
may be of substantial value and that the NeoRx Know-How and/or NeoRx's rights to
NR-LU-10 may constitute valuable and substantial trade secrets of NeoRx. The
parties acknowledge and agree that, for their mutual convenience and after
considering other alternatives, including reimbursement of NeoRx's costs under
Paragraph 2.2 and larger or other upfront and milestone payments, the payments
to NeoRx set forth in this Agreement, including the structure and term of
royalty payments, are an appropriate and mutually convenient way of compensating
NeoRx.
4.21 No Multiple Reductions
Notwithstanding the provisions of Paragraphs 4.9, 4.10, 4.11, 4.17 and
4.18 (each a "Royalty Reduction Paragraph"), only one Royalty Reduction
Paragraph may be applied to reduce the royalty obligations payable under
Paragraphs 4.4 (as adjusted by Paragraph 4.5) and 4.6 (as adjusted by Paragraph
4.7) and the reductions provided by the other Royalty Reduction Paragraphs shall
not be accumulated and shall be lost. With each quarterly report due under
Paragraph 4.15, Xxxxxxx shall identify which, if any, Royalty Reduction
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Paragraph it elects to apply to the royalties due on the Net Sales for the
quarter.
4.22 Allocation of Annual Net Sales [ * ]
In the event annual worldwide Net Sales [ * ] (the "Breakpoint") and it
is necessary to treat Net Sales for certain Pre-Targeting Products and/or
countries differently (e.g., under Paragraphs 4.5, 4.7, 4.9, 4.10, 4.11, 4.17 or
4.18), then the amount of Net Sales for such Pre-Targeting Product and/or
country that are deemed to be above the Breakpoint (i.e., to which a higher
royalty rate is applied under this Agreement) shall be equal to the worldwide
annual Net Sales in [ * ] multiplied by the ratio of the Net Sales for such
Pre-Targeting Product and/or country to the worldwide annual Net Sales; the
balance of such Net Sales being deemed to be below the Breakpoint (i.e., to
which a lower royalty rate is applied). Any credits to royalties provided under
Paragraph 4.17 for a particular Pre-Targeting Product and/or country shall be
attributed prorata to the royalties for Net Sales deemed to be above and below
the Breakpoint, i.e., if one-third of the Net Sales for a particular
Pre-Targeting Product and/or country is deemed to be above the Breakpoint, then
one-third of the credit for such Pre-Targeting Product and/or country shall be
deemed attributable to the higher royalty rate and two-thirds of the credit
shall be deemed attributable to the lower royalty rate.
For example, if worldwide Net Sales of a Primary Pre-Targeting Product
are [ * ] in one year, of which [ * ] are in the United States and [ * ] are in
the rest of the world, and if the adjusted royalty rate on the first [ * ] Net
Sales in the United States is [ * ] pursuant to Paragraph 4.5, then the
aggregate royalties payable to NeoRx pursuant to Paragraphs 4.4 and 4.5 for the
year on such Net Sales would be [ * ], calculated as follows: with respect to
the United States, [ * ]; and, with respect to the rest of the world, [ * ].
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X. XXXXXXX'X OPTION TO EXPAND FIELD AND INDEPENDENT DEVELOPMENT
5.1 Xxxxxxx'x Option to Expand the Field
Until [ * ] after the Effective Date, Xxxxxxx shall have the exclusive
right and option to expand the Field to [ * ]; provided, however, that the
Parties agree on financial terms and conditions during such [ * ]. If either (a)
the Parties fail to reach agreement by the end of such [ * ] or (b) Xxxxxxx
notifies NeoRx during such [ * ] that it elects not to exercise its right and
option, the right and option shall be terminated.
5.2 Exercise of Xxxxxxx'x Option
Xxxxxxx shall be deemed to have exercised its right and option to
expand the Field pursuant to Paragraph 5.1 upon written agreement by the Parties
to the financial terms and conditions.
5.3 Limitation on NeoRx Right to Assign or License Prior to Exercise by
Xxxxxxx of Its Option
NeoRx agrees not to assign or license any rights in the expanded Field
as defined in Paragraph 5.1 (or begin discussions with any Third Party to do
such) until the first to occur of:
(a)......Xxxxxxx exercises its option to expand the Field pursuant to
Paragraph 5.2;
(b)......Xxxxxxx elects not to exercise its option; or
(c)......The option period expires without Xxxxxxx exercising its
option.
5.4 NeoRx Right to Independently Develop Pre-Targeting Products Within the
Field
At any time following [ * ], but not more than once every [ * ] and
with not more than [ * ] such recommendations in the aggregate, NeoRx may
propose a Pre-Targeting Product, other than Avicidin or other Pre-Targeting
Product in Development or on sale hereunder, as a Pre-Targeting Product to enter
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into development by written notice to Xxxxxxx after NeoRx has completed [ * ].
Together with its notice, NeoRx will submit a detailed proposed development plan
and a proposed development budget for the proposed Pre-Targeting Product.
Xxxxxxx shall have one hundred twenty (120) days from the date of receipt of the
notice, together with the proposed development plan and budget, to accept or
reject NeoRx's recommendation to commence development. If Xxxxxxx accepts
NeoRx's recommendation to develop the proposed Pre-Targeting Product, it shall
so notify NeoRx within the one hundred twenty (120) day period and shall assume
responsibility for development pursuant to Article II. If Xxxxxxx either fails
to notify NeoRx of its decision to either accept or reject NeoRx's
recommendation within the one hundred twenty (120) day period or rejects NeoRx's
recommendation within the one hundred twenty (120) day period, NeoRx may
independently develop the proposed Pre-Targeting Product, subject to the right
to re-offer it to Xxxxxxx under Paragraph 5.5; provided, however, that the
proposed Pre-Targeting Product is not being developed for the same indication
for which a Pre-Targeting Product is being developed or marketed hereunder. The
proposed Pre-Targeting Product shall be an Independent Product until and unless
Xxxxxxx elects, pursuant to Paragraph 5.4 or 5.5, to have it developed pursuant
to Article II, in which event it shall become a Pre-Targeting Product for which
milestone payments may be payable pursuant to Paragraph 4.2 or 4.3.
5.5 NeoRx Obligation to Re-Offer
In the event that NeoRx continues to independently develop the
Independent Product, XxxXx agrees that it will disclose a summary of all
development plans, results and data every six (6) months during independent
development to Xxxxxxx through the Development Committee and re-offer in writing
the Independent Product to Xxxxxxx at least [ * ] prior to the estimated date of
[ * ]. The Development Committee shall be involved in the development of such
Independent Product to the extent necessary to assure that its development does
not interfere with or disrupt the Development of any Pre-Targeting Product in
Development. The re-offer of the Independent Product to Xxxxxxx shall include at
the time of re-offer a complete information package on development results,
plans and data, details of monies expended, and a comprehensive development plan
and budget, all of which shall be kept updated during the re-offer period.
Upon a re-offer, Xxxxxxx may elect that such Independent Product be
returned to it for development under this Agreement by notifying NeoRx (a) at
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any time prior to the [ * ] or (b) [ * ] following the re-offer, whichever is
the later. At the time such Independent Product is returned to Xxxxxxx for
Development, Xxxxxxx shall pay NeoRx [ * ] of the Development Costs that were
incurred independently by NeoRx for the Independent Product up to that point,
plus accrued simple interest at the prime rate plus [ * ] adjusted quarterly
during the period of independent development.
If Xxxxxxx elects to cause an Independent Product to be returned to it
for Development, it shall cease being an Independent Product and become a
Pre-Targeting Product for which milestone payments may be payable pursuant to
Paragraph 4.2 or 4.3.
If Xxxxxxx does not elect to cause such Independent Product to be
returned to it within the time period specified in this Paragraph 5.5, it shall
continue being an Independent Product and Xxxxxxx shall have no rights therein.
5.6 Limitations on NeoRx Rights During Re-Offer Period
NeoRx shall not license or sublicense its rights under any NeoRx
Patents or NeoRx Know-How with respect to any Independent Product that is
subject to a re-offer right under Paragraph 5.5; provided, however, that NeoRx
shall have the right to license or sublicense rights to manufacture such
Independent Product. In this regard, NeoRx shall be obligated to first offer to
Xxxxxxx the right to manufacture. Xxxxxxx shall have the absolute right to
manufacture any components of such Independent Product that are the same or
substantially the same as the components of a Pre-Targeting Product that is
being developed by Xxxxxxx hereunder. With respect to components that are not
the same or substantially the same, Xxxxxxx shall have the right to manufacture
such components if it can manufacture and supply to NeoRx the components at an
acceptable quality and at a price equal to or less than the price of a
qualified, quality manufacturer, i.e., a manufacturer that manufactures with
comparable quality as Xxxxxxx and is in compliance with cGMPs and other
applicable regulatory regulations and requirements. Xxxxxxx shall exercise its
right to manufacture by giving its commitment in writing to NeoRx within [ * ]
of notice. If Xxxxxxx manufactures components for NeoRx and does not decide to
return the Independent Product to Development (i.e., decides not to exercise its
right of re-offer), Xxxxxxx shall continue to manufacture NeoRx's requirements
for such components for [ * ]. The price for components that are the same or
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substantially the same as components that Xxxxxxx is developing for
Pre-Targeting Products shall be Xxxxxxx'x Cost of Goods Sold F.O.B. Xxxxxxx'x
facility during the re-offer period and for [ * ] thereafter. Thereafter, the
price of such components shall be Xxxxxxx'x Cost of Goods Sold plus [ * ] for
the [ * ], and each year thereafter Xxxxxxx may increase the [ * ] number in
increments of [ * ], so that in [ * ] the profit margin may be [ * ] and in
[ * ], etc., subject to NeoRx's right to terminate such supply arrangements.
5.7 Xxxxxxx'x Right of First Negotiation to Expand the Field Further
In the event the Field has not been expanded pursuant to Paragraph 5.1,
in whole or in part, Xxxxxxx shall have the first right of negotiation with
respect to the use of specific antibodies in the Expansion Field prior to NeoRx
negotiating or entering into an agreement with a Third Party with respect to the
Expansion Field as follows: [ * ].
VI. CO-PROMOTION
6.1 Co-Promotion Option of NeoRx
In connection with Pre-Targeting Products marketed and sold by or under
authority of Xxxxxxx hereunder, NeoRx has the right to Co-Promote in the United
States during the term of this Agreement from the Date of First Sale of each
Pre-Targeting Product sold in the United States according to the terms and
conditions recited in Paragraphs 6.2 - 6.17. NeoRx's rights under this Article
VI shall only be transferable pursuant to Paragraph 6.17. NeoRx must indicate
its intention to Co-Promote by providing Xxxxxxx with notice within [ * ] of the
filing of a BLA for each Pre-Targeting Product; provided, however, that Xxxxxxx
(or the Joint Marketing and Sales Committee for Pre-Targeting Products (other
than the first one to be marketed)) provided to NeoRx, at least [ * ] prior to
the date by which NeoRx must indicate its intention, the proposed total Details
to be conducted for such Pre-Targeting Product in the United States, together
with a complete copy of the then-current U.S. Marketing Plan for such
Pre-Targeting Product (to the extent one then exists). Should NeoRx not have
been provided with such Information on or before the BLA filing, it shall have [
* ] from receipt of all such Information to indicate its intention. The
notification must include a declaration by NeoRx of what it commits to be its
effort for detailing to be used in refining the U.S. Marketing Plan. Failure of
Xxxxxxx (or the Joint Marketing and Sales Committee) to provide the proposed
total Details along with a U.S. Marketing Plan will toll the time in which NeoRx
must decide to Co-Promote the Pre-Targeting Product. Should NeoRx elect to
Co-Promote hereunder and should NeoRx not already have in place a sales force
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suitable for Co-Promoting, Xxxxxxx may instruct NeoRx to begin to hire sales
professionals to Co-Promote as early as [ * ] prior to the anticipated Date of
First Sale for the Pre-Targeting Product. NeoRx may only Co-Promote if within [
* ] after Xxxxxxx receives a letter from the FDA approving its Drug Approval
Application, it has in place in the United States an infrastructure, including,
but not limited to, reasonable insurance protection and a sales force of
sufficient size to carry out the Details to which NeoRx has committed. Promptly
following NeoRx's exercise of its right to Co-Promote each Pre-Targeting Product
hereunder, the Parties shall negotiate a more detailed Co-Promotion Agreement on
reasonable and customary terms and conditions, consistent with this Article VI.
6.2 Co-Promotion Limitation of Scope
The scope of Co-Promotion for NeoRx will be limited specifically to its
representation on the Joint Marketing and Sales Committee and to carry out
Details to a target audience, which shall be determined by the Joint Marketing
and Sales Committee. The U.S. Marketing Plan shall set the Details for the [ * ]
of sale of each Pre-Targeting Product, taking into account NeoRx's commitment of
its detailing support. If NeoRx elects to Co-Promote a Pre-Targeting Product
under this Article VI, NeoRx shall have the right to conduct that percentage of
Details as equal up to [ * ], but not less than [ * ], of the total Details to
be conducted for each Pre-Targeting Product during the period of Co-Promotion.
When making its commitment under Paragraph 6.1, NeoRx must commit to a specific
percentage of total Details [ * ] range, agreeing to carry out that percentage
of the total Details during each year of Co-Promotion, except to the extent
specified below. After making its commitment to a specific percentage of total
Details, should the total number of Details be changed by the Joint Marketing
and Sales Committee for any future period during the Co-Promotion, then the
actual number of Details assigned to NeoRx shall be changed as follows:
(a)......If the percentage change of total Details varies within a
range of [ * ] of the initial number of total Details established by the Joint
Marketing and Sales Committee, the total Details assigned to NeoRx shall not
change unless the Parties otherwise mutually agree; rather, the Xxxxxxx sales
force shall be responsible for either making more or less Details, whatever the
case may be.
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(b)......If the percentage increase in total Details is greater than [
* ] of the initial number of total Details established by the Joint Marketing
and Sales Committee, NeoRx, at its option, may increase its total Details by a
percentage equal to its initial commitment percentage times the percentage
increase over the initial number of total Details established by the Joint
Marketing and Sales Committee. For example, if NeoRx initially committed to [ *
] of the total Details and the total Details established by the Joint Marketing
and Sales Committee for [ * ] of the Co-Promotion amounted to a [ * ] increase
as compared to the initial number of total Details, then NeoRx may elect to
increase its total Details by the percentage equal to [ * ], which is [ * ].
NeoRx must exercise its option to increase its total Details by giving Xxxxxxx
notice within [ * ] of being notified of the percentage increase in total
Details or the option will terminate.
(c)......If the percentage decrease of total Details is greater than [
* ] of the initial number of total Details established by the Joint Marketing
and Sales Committee, then NeoRx's total Details shall be decreased so that its
percentage of total Details remains at its initial commitment percentage.
After NeoRx makes its commitment to a specific number of Details, the
Joint Marketing and Sales Committee shall establish a target audience for NeoRx
to call on and a different target audience for Xxxxxxx to call on. Depending on
marketing strategy, one or more target audiences to be called on by both Xxxxxxx
and NeoRx may also be established.
6.3 NeoRx Is Not a Distributor
It is recognized by the Parties that NeoRx, under its option to
Co-Promote, may receive orders from Third Parties. NeoRx shall promptly transmit
said orders to Xxxxxxx and Xxxxxxx shall book all sales resulting from such
orders.
6.4 Joint Marketing and Sales Committee
The Joint Marketing and Sales Committee shall meet in the United States
at least four (4) times a year, generally on a quarterly basis, at Xxxxxxx'x
facility or a Xxxxxxx-designated site, at mutually agreeable times, to discuss
and coordinate the Co-Promotion of Pre-Targeting Products that are being
Co-Promoted by Xxxxxxx and NeoRx in accordance with this Agreement and the
strategies and programs that should be developed to optimally grow each such
Pre-Targeting Product, including, but not limited to, the assignment of Details,
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designating the target audience and developing a U.S. Marketing Plan. Subject to
NeoRx's prior review and opportunity to comment, Xxxxxxx will have the sole
responsibility, with the cooperation and assistance of NeoRx, for marketing,
pricing and promotion strategies and all other elements of the U.S. Marketing
Plan with respect to each Pre-Targeting Product and budgets therefor. Allocation
of target audiences and detailing efforts between the Parties by the Joint
Marketing and Sales Committee will be done in a fair and reasonable manner. All
disputes relating to designating the target audiences shall be resolved in
accordance with the procedures set forth in Paragraph 6.16.
6.5 Co-Promotion Obligations
NeoRx and Xxxxxxx shall use all reasonable efforts consistent with
Xxxxxxx'x and NeoRx's normal business practices and legal requirements to deploy
a professional and trained sales force to Co-Promote those Pre-Targeting
Products selected by NeoRx for Co-Promotion in the United States. NeoRx and
Xxxxxxx agree that their sales force employed in Co-Promoting each Pre-Targeting
Product, shall be comprised of individuals at least [ * ] of whom have at least
[ * ] prior pharmaceutical sales experience (or is otherwise acceptable to the
other Party), and such sales forces shall meet standards of competence and
professionalism as is common in the pharmaceutical industry. NeoRx and Xxxxxxx
shall compensate their sales force consistent with industry standards,
including, but not limited to, incentivizing their sales representatives. In all
events, the joint promotion and detailing shall be conducted in accordance with
the then current U.S. Marketing Plan. Xxxxxxx shall provide to NeoRx's sales
personnel, at Xxxxxxx'x expense, such product training and promotional materials
(including samples) that are reasonably necessary to effectively promote the
particular product consistent with the U.S. Marketing Plan and that are provided
to the Xxxxxxx sales force.
6.6 Costs Associated With Co-Promotion
Except to the extent specifically described in this Paragraph 6.6, each
Party shall be solely responsible for all expenses (direct and indirect)
associated with its Co-Promotion activities, including, but not limited to,
compensation for its sales force. Notwithstanding the foregoing, NeoRx's sales
representatives shall receive sufficient advanced notice of and may attend
Xxxxxxx-organized and-supported scientific and educational symposiums or
meetings, including, but not limited to, sales meetings, sales training
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sessions, symposiums, conventions, displays, clinical presentations and
seminars, and speaker presentations to the extent such involve a Pre-Targeting
Product. While NeoRx shall remain responsible for the compensation of its sales
representatives attending any such educational or scientific symposium or
meeting; Xxxxxxx shall compensate NeoRx for all reasonable and necessary
out-of-pocket expenses incurred by such sale representatives attending such
symposium or meeting, provided, however, that the travel and room and board
expenses of NeoRx sales representatives are pre-approved by Xxxxxxx.
6.7 Co-Promotion Compliance
Within thirty (30) days after the end of each calendar quarter during
the term of Co-Promotion, the Parties shall submit to each other a reasonably
detailed description of their promotional, detailing and marketing efforts
pursuant to this Agreement. Such description shall be based on its then current
call reporting system and shall contain a full disclosure of any changes to such
system from that previously disclosed to the other and of any noncompliance with
its promotional, detailing and marketing obligations under this Agreement.
6.8 Co-Promotion Audit of Performance
Each Party shall have the right to review and audit the other Party's
call reporting records during regular business hours to confirm satisfaction of
the obligations set out in this Article VI where for any two (2) consecutive
quarters there is a substantial difference between the Party's call reporting
records and the records of the IMS auditing service or other pharmaceutical
industry call reporting service utilized by the Party hereunder. For this
purpose, each Party shall, at its expense, subscribe to the IMS auditing service
or other pharmaceutical industry-recognized auditing service recommended by
Xxxxxxx. Further, each Party shall provide to the other Party its reporting
records on a quarterly basis. If, after such review, the Parties are unable to
agree as to the results of the audit, a Party may demand a verification of any
certification by audit of the other Party's call reporting system to be
conducted by a mutually agreed upon auditor.
6.9 Co-Promotion Termination for Cause
In order to monitor the performance of NeoRx's sale representatives,
the Parties shall compare the number of prescriptions for each Pre-Targeting
Product per doctor for those doctors in the target audience called on by NeoRx's
sales representatives ("NeoRx Prescriptions") against the number of
prescriptions for each Pre-Targeting Product per doctor for the aggregate of the
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doctors called on by both NeoRx and Xxxxxxx sales representatives ("Total
Prescriptions"). Such comparison shall be done on a monthly basis using data
obtained from the IMS Exponent Database based on prescriptions written per zip
code and the number of target physicians in that zip code. The IMS data will be
obtained by Xxxxxxx on a monthly basis and shared with NeoRx so that Xxxxxxx and
NeoRx can monitor the performance of NeoRx's sales force against the Total
Prescriptions. On an annual basis (calendar year) NeoRx's performance will be
evaluated and actions taken as follows:
NeoRx Rxs Per Doctor/
Total Rxs Per Doctor % Consequence
[ * ] Acceptable performance.
[ * ] Performance sub par--NeoRx
......... has [ * ] to improve
......... performance to acceptable level. If
......... NeoRx fails, Xxxxxxx has the right to
......... terminate upon [ * ]
......... notice.
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NeoRx Rxs Per Doctor/
Total Rxs Per Doctor % Consequence
[ * ] Xxxxxxx has the right to terminate
......... upon [ * ] notice given
......... within [ * ] after the end
......... of the calendar year.
More specifically, if NeoRx falls within the [ * ] range during any
calendar year it shall have the next year to improve its performance to [ * ].
If during that next calendar year NeoRx fails to so improve, Xxxxxxx shall have
the right to terminate NeoRx's right to Co-Promote that Pre-Targeting Product.
In order to avoid the possibility of NeoRx falling into an unacceptable
performance category of [ * ], Xxxxxxx shall report the comparative numbers to
NeoRx on a monthly basis to the extent the numbers are available from IMS. In
addition, upon written request from XxxXx, Xxxxxxx will make suggestions to
NeoRx on how to improve its performance.
Except for the remedies provided by Paragraph 6.14, Xxxxxxx'x sole
remedy for any material nonperformance of NeoRx under this Article VI shall be
termination of NeoRx's right to Co-Promote the Pre-Targeting Product.
6.10 Co-Promotion Is Through Independent Organizations
In implementing the obligations of Co-Promotion hereunder, each Party
shall have sole discretion as to the manner (which shall not be inconsistent
with the U.S. Marketing Plan) in which it promotes and Details (including any
expenditure of funds in connection therewith) the Pre-Targeting Product. Except
as otherwise expressly provided in this Article VI, each Party shall contribute
facilities, supplies, personnel (including management and sales representatives)
and other resources to the other as each Party, in its absolute discretion not
inconsistent with the express terms of this Agreement, believes necessary for
the proper performance of the terms of this Agreement, and each Party shall bear
its own costs, except as payment is provided to NeoRx in Paragraph 6.6, incurred
in the performance of any obligations hereunder.
6.11 Co-Promotion Does Not Affect Certain Responsibilities
Except as expressly otherwise provided in this Agreement, Xxxxxxx shall
have the sole right and responsibility, and shall bear all costs related
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thereto, to take such actions with respect to each Pre-Targeting Product that is
Co-Promoted hereunder as would normally be taken in accordance with accepted
business practices and legal requirements to manufacture or arrange for the
manufacture of each Pre-Targeting Product and obtain and maintain the
authorization and/or ability to market and commercialize each Pre-Targeting
Product in the United States, including, without limitation, the following:
(a)......Any activity relating to the manufacture of each Pre-Targeting
Product, including, without limitation, determination of the content of labeling
and the style, design and type of packaging;
(b)......Responding to medical complaints and inquiries relating to
each Pre-Targeting Product;
(c)......Handling all returns of each Pre-Targeting Product; and
(d)......Communicating and dealing with any governmental agencies and
satisfying their requirements regarding the authorization and/or continued
authorization to market each Pre-Targeting Product in commercial quantities;
provided, however, that NeoRx shall be able to communicate with such agencies
regarding each Pre-Targeting Product if (i) in the reasonable opinion of NeoRx's
counsel, such communication is necessary to comply with the requirements of any
applicable law, order or governmental regulation and (ii) NeoRx, if practical,
made a request of such agency to communicate with Xxxxxxx instead, and such
agency refused such request; but in any such event, unless in the reasonable
opinion of NeoRx's counsel there is a legal prohibition against doing so,
Xxxxxxx shall be immediately notified of such agency's request and/or NeoRx's
intention to make such communication and Xxxxxxx shall be permitted to accompany
NeoRx to any meeting with such agency, take part in any such communication and
receive copies of all such communications.
6.12 NeoRx Right to Terminate
NeoRx shall have the right to terminate its Co-Promotion of each
Pre-Targeting Product hereunder, and its obligations under this Article VI with
respect to each such Pre-Targeting Product, upon six (6) months' prior notice to
Xxxxxxx.
6.13 Trademarks
The Joint Marketing and Sales Committee shall select new trademarks or
the "Avicidin(R)" mark under which the Parties will market each Pre-Targeting
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Product, and no right or license is granted to NeoRx hereunder with respect to
such trademarks. All such trademarks shall be solely owned by Xxxxxxx.
6.14 Indemnification for Products
With respect to Pre-Targeting Products covered by this Agreement:
(a)......Xxxxxxx shall save, defend and hold NeoRx and its agents,
directors and employees harmless from and against any and all suits, claims,
actions, demands, liabilities, expenses and/or losses, including reasonable
legal expense and attorneys' fees, related to Third Party claims ("Losses")
resulting directly from the manufacture, use, handling, storage, sale or other
disposition of chemical agents or Pre-Targeting Products by Xxxxxxx, its
Affiliates, agents or sublicensees, except to the extent such Losses result
directly from the negligence of NeoRx.
(b)......In the event that NeoRx is seeking indemnification under
Paragraph 6.14(a), it shall inform Xxxxxxx of a claim as soon as reasonably
practicable after it receives notice of the claim, shall permit Xxxxxxx to
assume direction and control of the defense of the claim (including the right to
settle the claim solely for monetary consideration) and shall cooperate as
requested (at the expense of Xxxxxxx) in the defense of the claim.
(c)......NeoRx shall save, defend and hold Xxxxxxx and its agents,
directors and employees harmless from and against any and all Losses resulting
directly from the manufacture, use, handling, storage, sale or other disposition
of chemical agents or Pre-Targeting Products by NeoRx, its Affiliates, agents or
sublicensees, except to the extent such Losses result directly from the
negligence of Xxxxxxx.
(d)......In the event that Xxxxxxx is seeking indemnification under
Paragraph 6.14(c), it shall inform NeoRx of a claim as soon as reasonably
practicable after it receives notice of the claim, shall permit NeoRx to assume
direction and control of the defense of the claim (including the right to settle
the claim solely for monetary consideration), and shall cooperate as requested
(at the expense of NeoRx) in the defense of the claim.
6.15 Marketing Liaison
NeoRx shall appoint a "Marketing Liaison" who will take part in all
Pre-Targeting Product marketing discussions and receive all relevant
correspondence, memos and reports. The Marketing Liaison will be responsible for
coordinating NeoRx marketing and sales efforts with those of Xxxxxxx for the
39
Pre-Targeting Products. The Marketing Liaison will have the right to review all
details of the U.S. Marketing Plans for Pre-Targeting Products and shall have
the opportunity to submit to Xxxxxxx written and oral comments on such plans. In
order to perform his/her work effectively, the Marketing Liaison is expected to
spend a reasonable amount of his/her working time at the premises of Xxxxxxx.
Xxxxxxx will make available to the Marketing Liaison an office and secretarial
services at the relevant site and will provide reasonable access to Xxxxxxx'x
marketing personnel assigned to work on the Pre-Targeting Product.
6.16 Dispute Resolution
Should the Joint Marketing and Sales Committee disagree on any
substantive issue relating to designating the target audiences for a
Pre-Targeting Product (a "Dispute"), the following procedures shall be employed
to resolve such Dispute:
(a)......Within three (3) business days of determining the existence of
a Dispute, each Party shall prepare a written memo summarizing the Dispute and
stating the Party's position and reasons therefor.
(b)......Copies of each party's memos shall be forwarded to the respec-
tive heads of Xxxxxxx U.S. and NeoRx.
(c)......A meeting shall be convened within five (5) business' days of
the receipt of the memos or as soon thereafter as mutually agreed.
(d)......The heads of Xxxxxxx and NeoRx shall meet and discuss the
issues relating to the Dispute and use reasonable efforts to resolve the
Dispute. The standard of negotiation shall be one of good faith and fair
dealing.
(e)......If the heads of Xxxxxxx and NeoRx cannot resolve the dispute,
Xxxxxxx'x head shall have the right to make the final determination of the
Dispute.
6.17 Transferability of Co-Promotion Right
Upon a Change in Control (hereinafter defined) involving NeoRx, the
rights and duties set forth in this Article VI are transferable and/or
assignable under the following conditions:
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(a)......NeoRx shall not require the consent of Xxxxxxx where the
acquiring party has annual U.S. prescription sales of [ * ]; or
(b)......If the acquiring party has annual U.S. prescription sales [ *
], then Xxxxxxx shall have the right to consent to the transfer and/or
assignment of the subject rights. Once Xxxxxxx grants such consent in writing,
it cannot be revoked. If Xxxxxxx does not consent, the transfer of such rights
to the acquiring party shall not take place upon a Change in Control, but rather
the acquiring party shall not have any Co-Promotion rights.
As used herein, a "Change in Control" means any transaction or series
of related transactions in which a Third Party acquires or becomes the
beneficial owner of (i) [ * ] of the outstanding voting securities of NeoRx or
the surviving entity, whether by merger, consolidation, reorganization, tender
offer or other similar means, or (ii) all or substantially all of the assets of
NeoRx.
VII. MANUFACTURE
7.1 Xxxxxxx'x Responsibility
Xxxxxxx shall be solely responsible for making or having made
Pre-Targeting Products to be sold by Xxxxxxx or Co-Promoted by Xxxxxxx and NeoRx
under this Agreement.
7.2 Xxxxxxx'x Obligation
If Xxxxxxx terminates this Agreement pursuant to Paragraph 13.4 [ * ],
Xxxxxxx shall provide, or make arrangements for its supplier to provide, to
NeoRx its requirements for the next [ * ] of Avicidin. The price for such
material shall be Xxxxxxx'x Cost of Goods Sold [ * ] for the [ * ], [ * ] for
the [ * ] and [ * ] for the [ * ] or the supplier's charges under its contract
with Xxxxxxx, without markup by Xxxxxxx.
[ * ] Confidential Treatment Requested
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VIII. PATENTS
8.1 Maintenance of NeoRx Patents
Except as provided in Paragraph 8.5 for patents jointly owned by the
Parties, NeoRx shall continue, at its sole expense, to prosecute all patent
applications for NeoRx Patents listed in Exhibit B and to file and prosecute
NeoRx Patents covering commercially relevant, patentable inventions relating to
NeoRx Pre-Targeting Technology in at least the countries of Canada, Japan, the
EPO and the United States and, with reimbursement from Xxxxxxx for all
reasonable costs, to file, prosecute and maintain NeoRx Patents in all other
countries requested by Xxxxxxx. Notwithstanding the foregoing, Xxxxxxx shall pay
all taxes, maintenance fees and annuities on all NeoRx Patents. If so requested
by Xxxxxxx, NeoRx shall promptly provide Xxxxxxx with copies of all patent
applications listed in Exhibit B, all future filed NeoRx Patents and all
correspondence with the patent offices in any countries relating thereto on an
on-going basis.
8.2 Failure by NeoRx to Prosecute and/or Maintain
If NeoRx chooses not to prosecute and/or maintain any NeoRx Patents
under Paragraph 8.1, NeoRx shall promptly and timely so notify Xxxxxxx, and
Xxxxxxx shall, in its sole discretion, decide whether to assume the
responsibility and expenses therefor on a country-by-country basis for each such
NeoRx Patent. In the event Xxxxxxx decides to assume such responsibility: (a)
the NeoRx Patent shall be assigned to Xxxxxxx (subject to the rights previously
granted therein to Third Parties for other than Pre-Targeting Products); (b) all
royalty obligations with respect to the NeoRx Patent under this Agreement shall
cease; and (c) NeoRx shall have a fully paid-up, royalty-free, worldwide
nonexclusive license to the NeoRx Patent, with the right to sublicense, for
other than Pre-Targeting Products.
8.3 Ownership of Patents
Title to all patents claiming inventions made solely by an employee of
a Party in the course of performing Development shall be owned by such Party.
Title to all other patents claiming inventions made jointly by employees of
Xxxxxxx and NeoRx shall be jointly owned by Xxxxxxx and NeoRx. The laws of the
United States with respect to joint ownership of inventions shall apply in all
jurisdictions; accordingly, except as expressly provided in this Agreement,
neither Party shall have any obligation to account to the other for profits, or
to obtain any approval of the other party to license or exploit a jointly owned
patent, by reason of joint ownership thereof.
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8.4 Disclosure of Patentable Inventions
Each Party shall provide to the other any invention disclosure
submitted to it in the normal course and disclosing a patentable invention,
which is at a stage reasonably suitable to begin the preparation of a patent
application thereto, arising in the course of the Development. Such invention
disclosures shall be provided to the other Party promptly after submission, or,
in the case where no invention disclosure is made, any patent application shall
be provided promptly after it is initially drafted.
8.5 Jointly Owned Patent Filings
The filing and prosecution of jointly owned patents shall be only as
mutually agreed by Xxxxxxx and XxxXx. In such connection, the Parties agree to
cooperate in good faith to obtain broad patent protection.
Xxxxxxx shall be responsible at the expense of Xxxxxxx for drafting,
filing, prosecuting, maintaining and defending any jointly owned patents
relating primarily to the Pre-Targeting Product. Xxxxxxx shall keep NeoRx
apprised of the status of each such jointly owned patent. If, during the term of
this Agreement, Xxxxxxx intends to allow any jointly owned patent to lapse or
become abandoned without having first filed a substitute, Xxxxxxx shall promptly
notify NeoRx of such intention, and, if practical, at least sixty (60) days
prior to the date upon which such patent shall lapse or become abandoned, and
NeoRx shall thereupon have the right, but not the obligation, to assume
responsibility for the prosecution, maintenance and defense thereof in its sole
name and at its own expense. In the event NeoRx assumes such responsibility, the
patent or patent application shall be assigned to NeoRx and excluded from the
definition of NeoRx Patents.
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8.6 Parties' Cooperation in Obtaining Patent Extensions
The Parties shall cooperate in order to avoid loss of any rights that
may otherwise be available to the Parties under the U.S. Drug Price Competition
and Patent Term Restoration Act of 1984, the Supplementary Certificate of
Protection of the Member States of the European Union and other similar measures
in any other country. Without limiting the foregoing, Xxxxxxx shall notify NeoRx
promptly upon receipt of a BLA approval to market licensed Pre-Targeting
Products in the United States and timely supply NeoRx with all information
necessary to file an application for patent term extension in connection with
any relevant NeoRx Patent within the sixty (60) day period following BLA
approval. The same cooperation and obligations shall apply with respect to
patent term extensions in any other country.
IX. INFRINGEMENT
9.1 Infringement of Third Party Patents
If, as a result of the manufacture, use or sale of a Pre-Targeting
Product in any country, Xxxxxxx and/or its Affiliate is sued for patent
infringement or threatened with such a lawsuit or other action by a Third Party
(other than with respect to Third Party Patents), Xxxxxxx shall be solely
responsible for defending against any such assertions at its cost and expense.
9.2 Infringement by Third Parties of NeoRx Patents
Except as provided in Paragraph 9.3 for patents jointly owned by the
Parties, in the event that there is an infringement of a NeoRx Patent on a
commercial scale by a Third Party involving a Pre-Targeting Product, Xxxxxxx or
its Affiliates shall notify NeoRx in writing to that effect, including with said
written notice evidence establishing a case of infringement by such Third Party.
NeoRx shall have the first right to bring an infringement suit against the Third
Party and shall bear all the expenses of any suit brought by it. Xxxxxxx and/or
its Affiliates will cooperate with NeoRx in any such suit and shall have the
right to consult with NeoRx and be represented by its own counsel at its own
expense. If, after the expiration of one hundred twenty (120) days from the date
of receipt of notice of infringement from Xxxxxxx or its Affiliate, NeoRx has
not overcome the case of infringement, obtained a discontinuance of such
infringement or brought suit against the Third Party infringer, then Xxxxxxx
shall have the right, in its sole discretion, but not the obligation, to bring
such suit at its own expense and in its own name, if possible, for such
infringement. If necessary, NeoRx will permit the suit to be brought in its
name. Xxxxxxx shall bear all the expenses of any suit brought by it. NeoRx will
44
cooperate with Xxxxxxx in any such suit and shall have the right to consult with
Xxxxxxx and be represented by its own counsel at its own expense. All monies
recovered by either Party from a final judgment or settlement of any
infringement suit shall, after reimbursement of the expenses of the Party
bringing such suit, be shared as follows: [ * ] to Xxxxxxx and [ * ] to NeoRx.
9.3 Infringement by Third Parties of Jointly Owned Patents
In the event there is infringement of a jointly owned patent on a
commercial scale by a Third Party in the Field, Xxxxxxx or its Affiliates shall
notify NeoRx of such infringement and shall have the first right, but not the
obligation, to bring an infringement suit against such Third Party. If an
infringement suit is not brought within one hundred twenty (120) days, NeoRx
shall have the right, but not the obligation, to bring such an infringement
suit. The Parties will cooperate in any such suit and shall have the right to
consult with the other party and be represented by its own counsel at its own
expense. If necessary, the other party will permit the suit to be brought in its
name. All monies recovered by a Party in a final judgment or settlement of such
infringement suit shall, after reimbursement of the expenses of Xxxxxxx in
bringing such suit, be shared as follows: [ * ] to the Party bringing the suit
and [ * ] to the other Party.
X. TRADEMARKS AND CORPORATE NAME
All trademarks (except the "NeoRx" mark) to be utilized by Xxxxxxx
and/or its Affiliates on Pre-Targeting Products under this Agreement shall be
owned by Xxxxxxx and/or its Affiliates. Except to the extent prohibited by
applicable law, Pre-Targeting Products covered by this Agreement shall bear
NeoRx's corporate name in a reasonable location on outer packaging labels and on
any package inserts. Xxxxxxx shall mention, in certain appropriate forms of its
advertising and promotional literature, NeoRx's contribution to the development
of each Pre-Targeting Product to the extent permitted by applicable law. The
first use of any such reference shall require NeoRx's approval, which shall not
be unreasonably withheld.
[ * ] Confidential Treatment Requested
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XI. CONFIDENTIALITY
11.1 Confidentiality; Exceptions
Except to the extent expressly authorized by this Agreement or
otherwise agreed in writing, the Parties agree that, for the term of this
Agreement and for five (5) years thereafter, the receiving Party shall keep
confidential and shall not publish or otherwise disclose or use for any purpose
other than as provided for in this Agreement any Information, and other
confidential and proprietary information and materials, disclosed or otherwise
furnished to it by the other Party pursuant to this Agreement (collectively,
"Confidential Information"), except to the extent that it can be established by
the receiving Party that such Confidential Information:
(a)......was in the lawful knowledge and possession of, or was
independently developed by, the receiving Party prior to the time it was
disclosed to, or learned by, the receiving Party as evidenced by written records
kept in the ordinary course of business or other documentary proof of actual use
by the receiving Party;
(b)......was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving Party;
(c)......became generally available to the public or otherwise part of
the public domain after its disclosure and other than through any act or
omission of the receiving Party in breach of this Agreement; or
(d)......was disclosed to the receiving Party, other than under an
obligation of confidentiality, by a Third Party who had no obligation not to
disclose such Confidential Information to others.
11.2 Authorized Disclosure
Each Party may disclose Confidential Information of the other Party as
follows: (a) to Third Parties under appropriate terms and conditions including
confidentiality provisions substantially equivalent to those in this Agreement
for consulting, manufacturing, development, external testing and marketing
trials with respect to the products covered by this Agreement or (b) to the
extent such disclosure is reasonably necessary in filing or prosecuting patent,
copyright and trademark applications, prosecuting or defending litigation,
complying with applicable governmental regulations, obtaining Regulatory
Approvals, conducting preclinical or clinical trials, or marketing products;
provided, however, that if a Party is required by law or regulation to make any
such disclosure of the other Party's Confidential Information it will, except
46
where impracticable for necessary disclosures (for example, in the event of
medical emergency), give reasonable advance notice to the other Party of such
disclosure requirement and will, except to the extent inappropriate in the case
of patent applications, use its reasonable efforts to secure confidential
treatment of such Confidential Information required to be disclosed. Nothing in
this Article XI shall restrict any Party from using for any purpose any
Information developed by it during the course of this Agreement.
11.3 Survival
This Article XI shall survive the termination or expiration of this
Agreement for a period of five (5) years.
XII. REPRESENTATIONS AND WARRANTIES; PERFORMANCE
12.1 Representations and Warranties
Each Party hereby represents and warrants and covenants as follows:
(a)......This Agreement is a legal and valid obligation binding upon
such Party and enforceable in accordance with its terms. The execution, delivery
and performance of this Agreement by such Party do not conflict with any
agreement, instrument or understanding, oral or written, to which it is a Party
or by which it is bound, or violate any law or regulation of any court,
governmental body or administrative or other agency having jurisdiction over it.
(b)......Each party has not granted, and during the term of this
Agreement will not grant, any right to any Third Party relating to its
respective technology in the Field (excluding the Crossover Field with respect
to NeoRx) that would conflict with the rights granted to the other Party
hereunder, except, in the case of NeoRx, the rights granted under the contract
described in Paragraph 1.27(b).
(c)......Each Party owns or Controls its respective know-how.
12.2 Disclaimer
EXCEPT AS SET FORTH IN THIS AGREEMENT, NEORX MAKES NO OTHER
REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE NEORX PRE-TARGETING
TECHNOLOGY, NEORX PATENTS AND NEORX KNOW-HOW, EXPRESS OR IMPLIED, INCLUDING
WARRANTIES, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, PATENTABILITY AND
NONINFRINGEMENT.
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12.3 Performance by Affiliates
The Parties recognize that each may perform some or all of its
obligations under this Agreement through Affiliates; provided, however, that
each Party shall remain responsible and be guarantor of the performance by its
Affiliates and shall cause its Affiliates to comply with the provisions of this
Agreement in connection with such performance.
XIII. TERM AND TERMINATION
13.1 Term
This Agreement shall commence as of the Effective Date and, unless
sooner terminated as provided herein, shall continue in effect until the date on
which NeoRx is no longer entitled to receive a royalty on any Pre-Targeting
Product under this Agreement. After expiration (but not termination), Xxxxxxx
and its Affiliates shall have a fully paid-up (except for payments to Third
Parties), irrevocable, nonexclusive license to sell, have sold, distribute, use,
make and have made Pre-Targeting Products licensed hereunder.
13.2 Termination for Breach
In the event that (a) either Party shall commit a material breach at
any time and (b) such defaulting Party shall fail to remedy such material breach
within sixty (60) days after the date of notice thereof by the nondefaulting
Party to the defaulting Party (or, if such material breach cannot be remedied
within sixty (60) days, such longer period of time as may be reasonably
necessary; provided, however, that the defaulting Party commences to remedy such
material breach within such sixty (60) day period and thereafter proceeds
promptly and diligently to complete such remedy), then the nondefaulting Party
may at any time thereafter terminate this Agreement.
13.3 Termination for Bankruptcy
Either Party hereto shall have the right to terminate this Agreement
forthwith by written notice to the other Party (a) if the other Party is
declared insolvent or bankrupt by a court of competent jurisdiction, (b) if a
voluntary or involuntary petition in bankruptcy is filed in any court of
competent jurisdiction against the other Party and such petition remains
undismissed, undischarged or unbonded for a period of ninety (90) days after the
filing thereof, or (c) if the other Party shall make or execute an assignment
for the benefit of creditors generally.
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13.4 Xxxxxxx'x Termination Without Cause
Xxxxxxx may not terminate this Agreement, other than pursuant to
Paragraph 13.2 or 13.3, during the period beginning on the Effective Date and
ending twelve (12) months thereafter, except in the following situations:
(a)......There is a Change in Control as described in Paragraph 6.17 or
(b)......A patent of a Third Party (other than a Third Party Patent) is
uncovered containing a Valid Claim that would be infringed if the Pre-Targeting
Product in Development is sold.
Notice of termination under either clause (a) or (b) shall be given at
least one (1) month in advance. At any time after the twelve (12) month period,
however, Xxxxxxx may terminate this Agreement upon ninety (90) days' prior
notice for any reason.
13.5 Rights and Obligations Upon Termination Under Paragraph 13.2 or 13.3 by
NeoRx or Under Paragraph 13.4 by Xxxxxxx
In the event this Agreement is terminated by Xxxxxxx pursuant to
Paragraph 13.4 or by NeoRx pursuant to Paragraph 13.2 or 13.3, Xxxxxxx agrees:
(a)......To return to NeoRx any NeoRx Know-How in its possession;
(b)......Not to use the NeoRx Know-How as long as it has to be kept
confidential pursuant to Article XI;
(c)......That its licenses and rights under the NeoRx Patents are
terminated;
(d)......To transfer, at NeoRx's written request, all Xxxxxxx
Information useful for or related to Pre-Targeting Products that were being
Developed hereunder and all Drug Approval Applications and Regulatory Approvals
for use by NeoRx or its designee; and
(e)......To the extent requested by NeoRx, transfer to NeoRx
responsibility for ongoing Development, including contracts with Third Parties
for such work with costs for such on-going (but not past) Development assumed by
NeoRx as of the effective date of termination.
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13.6 Survival
Any accrued obligations and the provisions of Articles XIV, XV and XVII
and Paragraphs 3.6 (with respect to NeoRx's sublicense and right to take over as
a direct license in the last sentence), 4.15, 4.16, 6.14, 7.2, 8.2(c), 13.5 and
21.9 shall survive expiration or termination of this Agreement.
13.7 Accrued Rights, Surviving Obligations
Termination, relinquishment or expiration of this Agreement for any
reason shall be without prejudice to any rights that shall have accrued to the
benefit of either Party prior to such termination, relinquishment or expiration,
including, but not limited to, the payment obligations under Paragraphs 4.1-4.4
and 4.6 and any and all damages arising from any breach hereunder.
13.8 Termination Not Sole Remedy
Termination is not the sole remedy under this Agreement and, whether or
not termination is effected, all other remedies will remain available except as
agreed to otherwise herein.
XIV. INDEMNIFICATION
14.1 Research and Development Indemnification
Each Party (the "Indemnifying Party") shall indemnify, defend and hold
the other Party (the "Indemnified Party") harmless from and against any and all
liabilities, claims, damages, costs, expenses or money judgments incurred by or
rendered against the Indemnified Party and its Affiliates and sublicensees
incurred in the defense or settlement of a Third Party lawsuit or in a
satisfaction of a Third Party judgment arising out of any injuries to persons
and/or damage to property resulting from negligent acts of the Indemnifying
Party performed in carrying out the development program hereunder, including
failure by the Indemnifying Party to provide the Indemnified Party with any
Information of the Indemnifying Party that, if timely received, would have
avoided injury, death or damage; provided, however, that such failure to provide
such Information is due to negligence on the part of the Indemnifying Party.
14.2 Xxxxxxx Indemnification
In addition to its obligations in Paragraph 14.1, Xxxxxxx shall
indemnify and hold NeoRx harmless from and against any and all liabilities,
50
claims, damages, costs, expenses or money judgments that result from the
Development, manufacture, promotion, sale or use of any and all Pre-Targeting
Products under this Agreement.
14.3 Notification
The Indemnified Party shall promptly notify the Indemnifying Party in
writing of any such liability, claim, damage, costs, expenses or money
judgments, and the Indemnifying Party, upon written request by the Indemnified
Party, shall promptly defend or settle such at the Indemnifying Party's expense.
XV. DISPUTE RESOLUTION
15.1 Alternative Dispute Resolution
Any dispute, controversy or claim arising out of or relating to the
validity, construction, enforceability or performance of this Agreement,
including disputes relating to the alleged breach or to termination of this
Agreement, shall be settled by binding Alternative Dispute Resolution ("ADR") in
the manner described below:
(a)......If a Party intends to begin an ADR to resolve a dispute, such
Party shall provide written notice (the "ADR Request") to the other Party
informing such other Party of such intention and the issues to be resolved.
(b)......Within fourteen (14) days after the receipt of the ADR
Request, the other Party may, by written notice to the Party initiating ADR, add
additional issues to be resolved.
15.2 Arbitration Procedure
The ADR shall be conducted pursuant to the International Arbitration
Rules of the American Arbitration Association then in effect. Notwithstanding
those rules, the following provisions shall apply to the ADR hereunder.
(a) Arbitrator
The ADR shall be conducted by a panel of three (3) arbitrators (the
"Panel"). Each Party shall have the right to appoint one member of the Panel,
with the third member to be mutually agreed upon by the two (2) Panel members
appointed by the Parties or appointed in accordance with the rules of the
American Arbitration Association. All Panel members shall be selected from the
CPR Panel of Distinguished Neutrals of the CPR Institute of Distinguished
Neutrals. Each Party shall make its appointment within twenty (20) days of
receipt of the ADR Request and the Third Panel member shall be selected by the
two (2) Panel members within ten (10) days of the selection of the first two (2)
Panel members.
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(b) Proceedings
The Parties will cooperate in good faith in the voluntary, prompt and
informal exchange of documents and other information relevant to the ADR. The
Parties and the Panel will make every effort to conclude the information
exchange process within ninety (90) days after the Panel is selected. Within
seven (7) days after selection of the Panel, each Party may serve on any other
Party up to ten (10) interrogatories, without subparts, for the purpose of
identifying documents and witnesses. These interrogatories will be answered
within seven (7) days.
At any time after the selection of the Panel, but no later than thirty
(30) days before the ADR hearing, each Party may take up to three (3)
depositions of an opposing Party as a matter of right. The Parties will attempt
to agree to time, location and duration of the deposition, and, if the Parties
do not agree, these will be determined by the Panel.
Any Party may conduct depositions of its own witnesses that may be
introduced as evidence at the ADR hearing if the other Party was given fair
opportunity to attend the deposition and cross-examine. Upon the request of any
Party, the Panel will conduct a conference for the purpose of determining
additional information to be exchanged. Parties may request additional
depositions, interrogatories or document production. If the Panel determines
that the requesting Party has a reasonable need for the requested information
and that the request is not overly burdensome on the opposing Party, the Panel
may order the additional information exchange.
As they become aware of new documents or information, including experts
who may be called upon to testify, all Parties remain under a continuing
obligation to provide documents upon which they rely, to supplement their
responses and to honor any informal agreements or understandings between the
Parties regarding documents or information to be exchanged. Documents that have
not been previously exchanged will not be considered by the Panel at the
hearing, unless agreed by the Parties.
The Parties will promptly notify the Panel when an unresolved dispute
exists regarding discovery issues. The Panel will discuss the matter with the
Parties to determine the nature of the dispute and will attempt to resolve that
dispute. If the Panel does not resolve the dispute, the Panel will arrange a
conference concerning the dispute before the Panel by telephone, or in person,
and the Panel will decide the dispute.
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The Panel will determine the location, date and time of the ADR hearing
and other proceedings after consultation with the Parties and will provide
reasonable notice of the hearing date and time. The Panel will make every effort
to schedule the ADR hearing within one hundred twenty (120) days of the
commencement of ADR, absent unusual circumstances.
The Parties may agree on or the Panel for good cause may order a
rescheduling of the hearing date.
The Panel will ordinarily conduct the ADR hearing in the manner set
forth herein. The Panel may vary these procedures if the Panel determines it is
reasonable and appropriate to do so. The Panel may impose reasonable time limits
on each phase of the proceeding and may limit testimony to exclude evidence that
would be immaterial or unduly repetitive; provided, however, that all Parties
are afforded the opportunity to present material and relevant evidence.
The Panel will require witnesses to testify under oath if requested by
any Party.
The Panel will determine the order of proof, which will generally be
similar to that of a court trial, including opening and closing statements.
When the Panel determines that all relevant and material evidence and
arguments have been presented, the Panel will declare the hearing closed. The
Panel may defer the closing of the hearing for up to twenty (20) days to permit
the Parties to submit post-hearing briefs and/or to make closing arguments, as
the Panel deems appropriate, before rendering an award.
The Panel will render the award within ten (10) days after the date of
the closing of the hearing or, if an ADR hearing has been waived, within ten
(10) days after the date of the Panel's receiving all materials specified by the
parties. The decision and award of a majority of the Panel will constitute the
ADR award and will be binding on the Parties.
The Panel shall, in rendering its decision, apply the substantive law
of the State of Illinois U.S.A., without regard to its conflict of laws
provisions, except that the interpretation and enforcement of this Article XV
shall be governed by the Federal Arbitration Act. The proceeding shall take
place in the City of Chicago, Illinois, U.S.A., or such other place as may be
mutually agreed upon by the Parties. The fees of the Panel shall be paid by the
53
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.
(c) Award
The Panel is empowered to award any remedy allowed by law, including
money damages, prejudgment interest and attorneys' fees and expenses, and to
grant final, complete, interim or interlocutory relief, including injunctive
relief. Notwithstanding the foregoing, punitive damages may not be awarded.
(d) Costs
Except as set forth in Paragraph 15.2(b), each Party shall bear its own
legal fees.
(e) Confidentiality
The ADR proceeding shall be confidential and the Panel shall issue
appropriate protective orders to safeguard each Party's Confidential
Information. Except as required by law, no Party shall make (or instruct the
Panel to make) any public announcement with respect to the ADR proceedings or
the decision of the Panel without the prior written consent of the 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.
15.3 Survivability
Any duty to arbitrate under this Agreement shall remain in effect and
enforceable after termination of this Agreement for any reason.
15.4 Jurisdiction
For the purposes of this Article XV, the Parties acknowledge their
diversity (NeoRx having its principal place of business in Seattle, Washington,
U.S.A., and Xxxxxxx Pharmaceutica, N.V. having its principal place of business
in Beerse, Belgium) and agree to accept the exclusive jurisdiction of the
Federal District Court in Chicago, Illinois, U.S.A., and any courts of appeal
therefrom for the purposes of enforcing awards entered pursuant to this Article
XV and for enforcing the agreements reflected in this Article XV.
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XVI. LICENSOR BANKRUPTCY
All rights and licenses granted under or pursuant to this Agreement by
NeoRx to Xxxxxxx are, and shall otherwise be deemed to be, for purposes of
Section 365(n) of Title 11, U.S. Code (the "Bankruptcy Code"), licenses of
rights to "intellectual property" as defined under Section 101(60) of the
Bankruptcy Code. The Parties agree that Xxxxxxx, as a licensee of such rights
under this Agreement, shall retain and may fully exercise all of its rights and
elections under the Bankruptcy Code. NeoRx agrees during the term of this
Agreement to create and maintain current copies or, if not amenable to copying,
detailed descriptions or other appropriate embodiments of all such intellectual
property licensed hereunder. The Parties further agree that, in the event of the
commencement of a bankruptcy proceeding by or against NeoRx under the Bankruptcy
Code, Xxxxxxx shall be entitled to a complete duplicate of (or complete access
to, as appropriate) any such intellectual property and all embodiments of such
intellectual property, and the same, if not already in its possession, shall be
promptly delivered to Xxxxxxx, upon written request therefor by Xxxxxxx, (a)
upon any such commencement of a bankruptcy proceeding, unless NeoRx elects to
continue to perform all of its obligations under this Agreement, or (b) if not
delivered under clause (a) above, upon the rejection of this Agreement by or on
behalf of NeoRx.
XVII. NOTICES
Any payment, notice or other communication required or permitted to be
made or given to either Party hereto pursuant to this Agreement shall be in
writing in case of a notice or communication and shall be deemed given if
delivered by hand or by facsimile transmission (receipt verified), telexed,
received by registered or certified mail (return receipt requested), postage
prepaid, or sent by overnight or express courier service, to the Parties at the
following addresses (or at such other address for a Party as shall be specified
by like notice; provided, however, that notices of a change of address shall be
effective only upon receipt thereof):
In the case of NeoRx:
NeoRx Corporation
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-4004, U.S.A.
Attention: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
55
With a copy to:
Xxxxxxx Coie
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000-0000, X.X.X.
Attention: Xxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
In case of Xxxxxxx:
Xxxxxxx Pharmaceutica, X.X.
Xxxxxxxxxxxxx 00
0000 Xxxxxx, Xxxxxxx
Attention: President, Xxxxxxx Research Foundation
Telephone: 00 00 00 0000
Telecopy: 32 14 60 2111
With a copy to:
Office of General Counsel
Johnson and Xxxxxxx
One Xxxxxxx and Xxxxxxx Plaza
New Brunswick, New Jersey 08933, U.S.A.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
XVIII. PUBLICITY
18.1 Publicity
In the absence of specific agreement between the Parties, neither Party
shall, without the prior written consent of the other Party (which consent shall
not be unreasonably withheld or delayed), originate any publicity, news release
or public announcement, written or oral, whether to the public or press,
relating to this Agreement, including its existence, the subject matter to which
it relates, performance under it or any of its terms or to any amendment hereto,
except only such announcement as in the opinion of counsel for the Party making
such announcement is required by law to be made. Any such announcements shall be
factual. If a Party decides to make an announcement required by law, it will
give the other Party five (5) business days' advance written notice, where
56
possible, of the text of the announcement so that the other Party will have an
opportunity to comment on the announcement. To the extent that the receiving
Party requests that any information in the materials proposed to be disclosed be
deleted, the disclosing Party shall request confidential treatment of such
information pursuant to any applicable rules or regulations (including those of
the Securities and Exchange Commission) relating to the confidential treatment
of such information so that there is omitted from the materials that are
proposed to be disclosed any information that the receiving Party reasonably
requests to be deleted. The Parties shall mutually agree upon a press release to
be made on or promptly after the Effective Date.
18.2 Scientific Publications
Except for materials submitted prior to the Effective Date by NeoRx for
publication or scientific meetings scheduled prior to the Effective Date, each
Party shall submit any other proposed publication containing Confidential
Information to the other Party at least thirty (30) days in advance to allow
that Party to review such planned public disclosure. The reviewing party will
promptly review such proposed publication and make any objections that it may
have to the publication of the Confidential Information contained therein.
Should the reviewing Party make an objection to the publication of the
Confidential Information, then the Parties shall discuss the advantages and
disadvantages of publishing such Confidential Information. If the Parties are
unable to agree on whether to publish the same, the Vice President, Drug
Discovery of Xxxxxxx Research Foundation, and NeoRx's Vice President of Research
shall discuss the advantages and disadvantages of publishing such, with the Vice
President, Drug Discovery of Xxxxxxx Research Foundation having the final say.
XIX. FORCE MAJEURE
Neither Party hereto shall be liable to the other Party for any losses
or damages attributable to a material breach or other default in or breach of
this Agreement that is the result of war (whether declared or undeclared), acts
of God, revolution, strike, fire, earthquake, flood, pestilence, riot, enactment
or change of laws and regulations, accident(s), labor trouble, or shortage of or
inability to obtain material, equipment or transport or any other cause beyond
the reasonable control of the Party, and the performance of obligations
hereunder shall be suspended during, but no longer than, the existence of such
cause.
57
XX. INTEGRATION
It is the mutual desire and intent of the Parties to provide certainty
as to their future rights and remedies against each other by defining the extent
of their mutual undertakings as provided herein. The Parties have in this
Agreement incorporated all representations, warranties, covenants, commitments,
and understandings on which they have relied in entering into this Agreement,
and, except as provided for herein, neither Party has made any covenant,
agreement or other commitment to them concerning its future action. Accordingly,
this Agreement, all Exhibits attached hereto and all documents delivered
concurrently herewith or referenced herein (a) constitute the entire agreement
and understanding between the Parties with respect to the matters contained
herein, and there are no promises, representations, warranties, conditions,
provisions or terms related thereto other than those set forth in this
Agreement, and (b) supersede all previous understandings, agreements,
representations and warranties by or between the Parties, written or oral,
relating to the subject matter hereof.
XXI. MISCELLANEOUS
21.1 Amendments
This Agreement will not be binding upon the Parties until it has been
signed herein below by or on behalf of each Party, in which event it shall be
effective as of the Effective Date. No amendment or modification hereof shall be
valid or binding upon the Parties unless made in writing and duly executed by or
on behalf of all Parties hereto.
21.2 Laws
All matters affecting the interpretation, validity and performance of
this Agreement shall be governed by the internal laws of the State of Illinois,
U.S.A. without regard to its conflict of law principles, except as otherwise
expressly provided herein.
21.3 Severability
Any provision hereof that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
58
21.4 Headings
The headings of the several sections are inserted for convenience of
reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
21.5 Waiver
No failure or delay by any Party to insist on the strict performance of
any term, condition, covenant or agreement of this Agreement, or to exercise any
right, power or remedy hereunder or consequent upon a breach hereof, shall
constitute a waiver of any such term, condition, covenant, agreement, right,
power or remedy of any such breach or preclude such Party from exercising any
such right, power or remedy at any later time or times.
21.6 Representations
Each of the Parties hereto acknowledges and agrees that (a) no
representation or promise not expressly contained in this Agreement has been
made by the other Party hereto or by any of its agents, employees,
representatives or attorneys, (b) this Agreement is not being entered into on
the basis of, or in reliance on, any promise or representation, express or
implied, covering the subject matter hereof, other than those that are set forth
expressly in this Agreement, and (c) each Party has had the opportunity to be
represented by counsel of its own choice in this matter, including the
negotiations that preceded the execution of this Agreement.
21.7 Compliance With Laws
The Parties shall comply with all applicable laws, rules, regulations
and orders of the United States and all jurisdictions and any agency or court
thereof in connection with this Agreement and the transactions contemplated
thereby.
21.8 Relationship of Parties
Nothing herein shall be construed to create any relationship of
employer and employee, agent and principal, partnership or joint venture between
the Parties. Each Party is an independent contractor. Neither Party shall
assume, either directly or indirectly, any liability of or for the other Party.
Neither Party shall have the authority to bind or obligate the other Party and
neither Party shall represent that it has such authority.
59
21.9 Interest
Any past due payments under this Agreement shall accrue and be payable
with interest at the "prime rate" of interest quoted by The Wall Street Journal
(or if not published, another appropriate publication) for the last business day
of each month plus [ * ] or the maximum rate permitted by applicable law,
whichever is less.
21.10 Counterparts
This Agreement may be executed in counterparts, any one of which need
not contain the signatures of more than one Party, but all of which, taken
together, shall constitute one and the same agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement in
duplicate originals by their proper officers as of the date and year first above
written.
XXXXXXX PHARMACEUTICA, N.V.
By /s/ Staf VanReet
-----------------------------------
Title: Managing Officer
Date: August 8, 1997
By
-----------------------------------
Title:
-----------------------------------
NEORX CORPORATION
By /s/ Xxxx X. Xxxxxx
-----------------------------------
Title: President and CEO
[ * ] Confidential Treatment Requested
60
EXHIBIT A
COST OF GOODS SOLD
[ * ]
A-1
[ * ] Confidential Treatment Requested
EXHIBIT B
NEORX PATENTS
[ * ]
B-1
[ * ] Confidential Treatment Requested
EXHIBIT C
NEORX COST CATEGORIES
[ * ]
[ * ] Confidential Treatment Requested
C-1
EXHIBIT D
12/4/96 Letter from X. Xxxxxxxx
[ * ]
[ * ] Confidential Treatment Requested
D-1
