EXHIBIT 10.12
COLLABORATION AND LICENSE AGREEMENT
This COLLABORATION AND LICENSE AGREEMENT (the "Agreement"), effective as of
April 25, 1996 (the "Effective Date"), is made by and between Focal, Inc., a
Delaware corporation having offices at 0 Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxx
00000 ("Focal"), Ciba-Geigy Corporation, a New York corporation having offices
at 000 Xxxxxx Xxx., Xxxxxx, Xxx Xxxxxx 00000 ("Ciba"), and Chiron Corporation, a
Delaware corporation having offices at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxxxx 00000 ("Chiron"). Chiron and Ciba are sometimes hereinafter referred
to collectively as "Ciba/Chiron."
BACKGROUND
A. Focal is developing its FocalGell-TM- polymer and associated catheter
delivery system for use in the prophylaxis, treatment and/or inhibition of
diseases in humans.
B. The parties wish to enter into a research collaboration to conduct
preclinical research with respect to certain products utilizing Hydrogel
Polymers for the prophylaxis, treatment and/or inhibition of vascular restenosis
and/or stenosis, all as further described herein in humans.
C. Focal is willing to grant to Chiron and Ciba, and Chiron and Ciba wish
to obtain licenses under Focal's patents and proprietary technology with respect
to commercialization of such products, subject to Focal's right and commitment
to manufacture and supply such products to Chiron and Ciba, all on the terms and
conditions set forth below.
NOW THEREFORE, for and in consideration of the covenants, conditions, and
undertakings hereinafter set forth, it is agreed by and between the parties as
follows:
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DEFINITIONS
1.1 "Affiliate" shall mean any entity which controls, is controlled by or
is under common control with a party hereto. An entity shall be regarded as in
control of another entity for purposes of this definition if it owns or controls
more than fifty percent (50%) of the shares of the subject entity entitled to
vote in the election of directors (or, in the case of an entity that is not a
corporation, for the election of the corresponding managing authority). A
"Controlled Affiliate" shall mean an entity that is controlled (as defined
above) by a party to this Agreement. Notwithstanding the foregoing, Ciba and
its Affiliates shall not be deemed Affiliates of Chiron and its Affiliates for
the purposes of this Agreement unless and until such time as Ciba is authorized
to control the management and affairs of Chiron pursuant to that certain
Governance Agreement between Ciba and Chiron dated as of November 20, 1994 as
amended or otherwise modified from time to time.
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1.2 "Angioplasty" shall mean any percutaneous transluminal procedure
within a blood vessel (including, for all purposes of this Agreement, an artery
or a vein, whether natural, grafted or prosthetic) which is performed to remove
or reduce an obstruction within such blood vessel for the purpose of improving
the flow of blood within such blood vessel. For purposes of this Agreement,
"Angioplasty" shall include without limitation percutaneous transluminal
coronary angioplasty (PTCA) or balloon angioplasty, atherectomy (rotational,
excisional, or laser) and stenting.
1.3 "Ciba/Chiron Compound" shall mean a compound that is a drug
(including, without limitation, a biologic, antisense molecule, ribozyme or
genetic sequence) or potential drug candidate, which in each case is or was
discovered, developed or acquired by Ciba or Chiron, including, in each case,
all modifications and derivatives of such a compound. Notwithstanding the
foregoing, it is understood and agreed that "Ciba/Chiron Compound" shall not
include the Combination Product defined in Section 12.1.1 below or subject
matter owned by Focal under Section 12.1.3 below.
1.4 "Product Development" shall mean for purposes of this Agreement all
toxicology, pharmacology, safety, animal efficacy and preclinical studies (other
than those preclinical studies included under the Research), clinical trials,
regulatory affairs and all other activities reasonably required to obtain all
governmental approvals required to market a Product within the Field in the
Major Countries.
1.5 "Control" shall mean possession of the ability to grant the rights
provided for herein without violating the terms of any agreement or other
arrangements with a third party.
1.6 "Delivery Systems" shall mean Energy Sources, catheters and other
components, which in each case were, or are developed by or for Focal, for use
in the local delivery of Products within the Field. As used herein, "Energy
Source" shall mean the instrument that generates light or other energy sources
to polymerize Hydrogel Polymer, together with any fiber optic cables or other
components for the delivery of the light or other energy sources to the
catheter.
1.7 "Developing Party" shall mean, as to each Product, Chiron or Ciba or
Chiron and Ciba jointly. As to Products which contain a Ciba/Chiron Compound
provided by only one party, such party shall be the Developing Party. As to all
other Products, Chiron and Ciba shall determine and shall notify Focal in
writing prior to the commencement of any Research with respect to such Product
of the identity of the Developing Party for such Product. Unless Focal is
otherwise notified in writing, the Developing Party of the First Generation
Products shall be Chiron and Ciba jointly.
1.8 "FDA" shall mean the U.S. Food and Drug Administration.
1.9 "Field" shall mean the percutaneous in vivo intraluminal deposition
within blood vessels (as defined in Section 1.2) of Hydrogel Polymer with or
without therapeutically active agents, for the prophylaxis, treatment or
inhibition of (i) restenosis in connection with Angioplasty; [*]. It is
* Confidential treatment has been requested for marked portion
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understood and agreed that the Field shall not include without limitation the
application of any such Hydrogel Polymer [*] to stents or other items that
are inserted within blood vessels.
1.10 "First Generation Product" shall mean a First Generation FocalGel
Product and/or a First Generation Radiopharmaceutical Product, together with all
applicable Delivery Systems, for use within the Field.
1.11 "First Generation FocalGel Product" shall mean a formulation comprised
of Hydrogel Polymer alone (but that does not include a Ciba/Chiron Compound or a
Radiopharmaceutical), together with all applicable Delivery Systems, for use
within the Field.
1.12 "First Generation Radiopharmaceutical Product" shall mean a
formulation comprised of Hydrogel Polymer in combination with one or more
Radiopharmaceuticals (but that does not include a Ciba/Chiron Compound),
together with all applicable Delivery Systems, for use within the Field.
1.13 "Focal Technology" shall mean Focal Know-How and Focal Patents.
1.14 "Focal Know-How" shall mean confidential information (as defined in
Article 14), tangible and intangible, and materials, including, but not limited
to: pharmaceutical, chemical, physical, mechanical, biological and biochemical
products; technical and nontechnical data and information, and/or the results of
tests, assays, methods and processes; and drawings, sketches, plans, diagrams,
specifications and/or other documents containing said information and data; in
each case that is Controlled by Focal or its Controlled Affiliates during the
term of this Agreement and which (i) pertains to the development, manufacture,
use or sale of Hydrogel Polymer or any New Polymer licensed to Ciba/Chiron
pursuant to Section 2.4.3 or any Delivery Systems, or the application of
Hydrogel Polymer, New Polymer or Delivery Systems to the development,
manufacture, use or sale of Products; or (ii) is developed by Focal in the
course of performing the Research or in performing its obligations under this
Agreement.
1.15 "Focal Patents" shall mean all patents and all reissues, renewals,
re-examinations and extensions thereof, and patent applications therefor, and
any divisions or continuations, in whole or in part, or foreign counterparts
thereof, which claim or would be infringed by the manufacture, sale or use of
Hydrogel Polymer, any Delivery System or any Product, or which claim Focal
Know-How, and that are Controlled by Focal or its Controlled Affiliates during
the term of this Agreement. Focal Patents include, without limitation, the
patents and patent applications listed in [*].
1.16 "Fragmentation and Embolization Study" shall have the meaning set
forth in Section 3.3.1 below.
1.17 "Hydrogel Polymer" shall mean (i) [*]; or (ii) any other polymer
Controlled by Focal as of the Effective Date; or discovered or developed as a
result of the Research Program conducted under this Agreement.
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1.18 "IND" shall mean an Investigational New Drug Application or an
Investigational Device Exemption for a Product, each as defined in the U.S.
Food, Drug and Cosmetic Act and the regulations promulgated thereunder, or their
foreign equivalents in any country.
1.19 "Major Country" shall mean the United States, Japan, the United
Kingdom, Germany, France or Italy.
1.20 "Manufacturing Committee" shall have the meaning set forth in
Section 3.1.1.
1.21 "NDA" shall mean a New Drug Application, Premarket Approval
Application and/or Product License Application, as required under the U.S. Food,
Drug and Cosmetics Act and the regulations promulgated hereunder, or its foreign
equivalent in a Major Country.
1.22 "Net Sales" shall mean the gross amount billed by Ciba, Chiron, or
their respective Affiliates or Subdistributors, to third parties worldwide for
sales of Products, less (i) allowances for all discounts (including, but not
limited to, cash discounts, pharmacy incentive programs, and all other
substantially similar incentive programs), and rebates (including but not
limited to all governmental and managed healthcare rebates and hospital
performance incentive program chargebacks) actually taken, granted or accrued,
(ii) credits, refunds and returns (including but not limited to wholesaler and
retailer returns), and (iii) in each case if paid or accrued in accordance with
generally accepted accounting practice, by Ciba, Chiron or their respective
Affiliates or Subdistributors: transportation, insurance and postage charges, in
each case, with respect to the shipment of the Product to the purchaser, and
(iv) sales, use and other taxes similarly incurred, duties and other similar
governmental charges, in each case paid with respect to the sale to the
customer. For the removal of doubt, Net Sales shall not include sales by Ciba
or Chiron to Affiliates or Subdistributors for resale. A "sale" shall include a
transfer or other disposition for consideration other than cash, in which case
such consideration shall be valued at the fair market value thereof.
1.23 "Platelet Antagonist" shall mean any drug or substance whose primary
biological activity and intended purpose is the inhibition of the role of
platelets in vascular wound healing, including, but not limited to those
compounds identified in [*]. Notwithstanding the foregoing, the
determination of whether a drug or substance is a "Platelet Antagonist" shall
only be made based upon the known biological activity and intended purpose at
the time the drug or substance is first selected for inclusion as a Second
Generation Product or, in the case of Section 2.2.2, at the time the same is
first selected by Focal or its licensee (whichever is earlier) for research
or commercialization.
1.24 "Production Costs" with respect to units of a Product shall mean the
direct and indirect costs (but excluding general and administrative expenses)
associated with the manufacture and/or preparation of such Product, calculated
in accordance with generally accepted accounting principles in the United
States. With respect to units or portions acquired from a non-Affiliate vendor,
Production Costs shall mean the amounts paid to the vendor plus costs associated
with acquisition from such vendor, in each case including without limitation
freight, insurance, shipping, packaging and other
* Confidential treatment has been requested for marked portion
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similar costs associated with acquiring such portions or units for delivery
F.O.B. to the Developing Party's destination point. Prior to the time at which
Ciba and/or Chiron become obligated to reimburse Focal for any Production Costs,
the parties shall mutually agree upon the method of calculating such Production
Costs.
1.25 "Products" shall mean, collectively and individually, the First
Generation Products and Second Generation Products. It is understood that in no
case shall "Product" be deemed to include any product or formulation that
includes either a [*] or, except as provided under Section 2.2 below,
a Platelet Antagonist.
1.26 "Radiopharmaceutical" shall mean any radionuclide as incorporated into
Hydrogel Polymer, including without limitation the covalent binding of a
radionuclide (e.g., 1(125)), noncovalent immobilization of a radionuclide, or
incorporation of a radioactive form of a therapeutic agent on a carrier molecule
(e.g., 1(125) albumin, polymeric microspheres, etc.). It is understood that a
Radiopharmaceutical shall not be deemed a Ciba/Chiron Compound hereunder.
1.27 "Research Committee" shall have the meaning set forth in
Section 3.1.1.
1.28 "Research" shall mean all activities relating to fragmentation and
embolization studies of the type described in Section 3.3.1 below, and with
respect to each Product, (i) formulation and release studies, (ii) animal
screening activities (for formulation and release, not designed to establish
animal efficacy), (iii) Hydrogel Polymer or New Polymer (as defined in
Section 2.4.3) design, (iv) development of Energy Sources, catheters and other
device components intended for use in the local delivery of Products, and
(v) other activities conducted by Focal as mutually agreed.
1.29 "Research Period" shall mean, for each Product, the period upon
commencement of the Research Program and continuing until completion or
termination of the Research for such Product.
1.30 "Research Plan and Budget" shall mean, for each Product, the plan
and budget for the Research to be conducted by Focal with respect to such
Product [*], as modified from time to time in accordance with Section 3.2
below.
1.31 "Research Program" shall mean all Research and other activities
conducted by a party hereto pursuant to a Research Plan and Budget then in
effect.
[*]
[*]
* Confidential treatment has been requested for marked portion
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1.34 "Second Generation Product" shall mean a formulation comprising
Hydrogel Polymer in combination with a Ciba/Chiron Compound selected pursuant to
Article 3 (whether or not also including a Radiopharmaceutical), together with
all applicable Delivery Systems, in each case for use within the Field.
Notwithstanding the foregoing, except as provided under Section 2.2 below,
Second Generation Products shall not include any such formulation incorporating
[*] or Ciba/Chiron Compound that is a Platelet Antagonist.
1.35 "Committee" shall have the meaning set forth in Section 3.1 below.
1.36 "Subdistributor" shall mean, with respect to a particular Product, a
third party who has obtained through the Developing Party directly or indirectly
the right to distribute, promote and/or market such Product.
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LICENSE
2.1 Grant. Subject to the terms and conditions of this Agreement, Focal
hereby grants to Chiron and Ciba and their respective Affiliates an exclusive,
worldwide license under the Focal Technology, including Focal Technology which
is licensed from third parties, with right to sublicense, to develop, make, have
made, use, sell and have sold Products for use within the Field and as provided
in Section 2.4.2(b), except that Focal retains the exclusive right to make and
have made all Products in accordance with Article 8 hereof. It is understood
that, as between Ciba and Chiron, the foregoing license to Ciba and its
Affiliates shall be limited to Products for which Ciba is the Developing Party
hereunder, and the license to Chiron and its Affiliates shall be limited to
those Products for which Chiron is the Developing Party hereunder.
Notwithstanding the foregoing, Ciba/Chiron acknowledges that Focal may
obtain Energy Sources included within the Products from third party suppliers,
and the rights granted under this Article 2 with respect to such Energy Sources,
shall be nonexclusive. Such licenses set forth in this Article 2 shall be
subject to such further limitations as are applicable to the rights to Focal
which limitations have been disclosed to Ciba and Chiron in writing prior to
execution of this Agreement.
[*]
* Confidential treatment has been requested for marked portion
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[*]
* Confidential treatment has been requested for marked portion
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2.3 Radiopharmaceuticals. Focal shall identify to Ciba and Chiron the
Radiopharmaceutical(s) which Focal proposes to use in the First Generation
Radiopharmaceutical Product. Focal will endeavor to supply
Radiopharmaceutical(s) incorporated into a First Generation Product to Ciba and
Chiron under Article 8; it is understood, however, that Focal has no rights to
any Radiopharmaceutical as of the Effective Date and makes no representation or
warranty that Focal will obtain rights to supply such Radiopharmaceutical.
2.4 Exclusivity of Efforts.
2.4.1 (a) For a period of three (3) years after the Effective
Date, neither Ciba, Chiron nor their Affiliates shall develop, manufacture,
market, sell or otherwise distribute any product, other than Products, which
product is specifically intended by Ciba, Chiron or such Affiliate for use
within the Field at the time of Ciba or Chiron's development, manufacture,
marketing, sale or distribution. Subject to Section 3.3.4, nothing herein shall
preclude preclinical research by Ciba, Chiron or their respective Affiliates
within the Field.
(b) Neither Ciba, Chiron nor their respective Affiliates shall
seek regulatory approval to market or promote any Product for use outside the
Field, and Ciba, Chiron and their respective Affiliates shall market, promote
and distribute the Products only in accordance with applicable laws and
regulations, and only as a combination including the Delivery System. Subject
to the foregoing provisions of this Section 2.4.1(b), the Developing Party shall
not be deemed to have exceeded the scope of the licenses set forth in
Section 2.1 above by reason of off label use of Products outside the Field.
2.4.2 By reason of the license granted in Section 2.1, during the
term of this Agreement, Focal shall not conduct research, develop, manufacture,
market, sell or distribute, or grant to a third party a right or license to
conduct research, develop, manufacture, market, sell or distribute, any product
incorporating any Hydrogel Polymer which product is specifically intended by
Focal or such third party for use within the Field, except as may be approved by
Ciba or Chiron, or as provided below. It is understood that Focal may conduct
research, development, manufacture, marketing, sale or distribution of products
incorporating Hydrogel Polymers for use outside the Field; provided that Focal,
its Controlled Affiliates and licensees with respect to such products shall not
seek regulatory approval to market or promote any such product for use within
the Field, and Focal, its Controlled Affiliates and licensees shall market,
promote and distribute such products only in accordance with applicable laws and
regulations. Focal shall not be deemed to have granted a license within the
Field by reason of off label use of any such product. It is understood that the
foregoing restrictions on licensees apply only to products subject to the
license from Focal.
Notwithstanding the foregoing provisions of this Section 2.4.2:
[*]
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(b) This Section 2.4.2 is subject to Section 2.2 and
Section 2.4.3.
2.4.3 Subject to Section 2.2 above, during the term of this
Agreement, Focal hereby grants to each of Ciba and Chiron the right of first
refusal to expand the Field to include within the licenses granted under
Section 2.1 any New Polymer. "New Polymer" shall mean any polymer other than a
Hydrogel Polymer which is discovered, developed, acquired or otherwise
Controlled by Focal or its Controlled Affiliates after the Effective Date and
during the term of this Agreement.
(a) Prior to proceeding, alone or with any third party, or
granting any right or license to a third party, to develop or commercialize any
New Polymer, or product incorporating a New Polymer, specifically intended for
use in the Field, Focal shall notify Ciba and Chiron in writing. The notice
shall include a description of the New Polymer. Upon written request by Ciba or
Chiron within thirty (30) days after receipt of such a notice, the parties shall
commence negotiations in good faith with respect to commercially reasonable
terms under which the licenses in Section 2.1 shall be expanded to include the
New Polymer.
(b) If (i) neither Ciba nor Chiron requests within such thirty
(30) day period to commence such negotiations, or both Ciba and Chiron notify
Focal that they are not interested in including the New Polymer within the
licenses granted hereunder; or (ii) the parties do not enter into a letter of
intent with respect to the New Polymer within ninety (90) days after the date of
Focal's notice; or (iii) the parties do not enter into a definitive written
agreement within ninety (90) days after the parties enter into a letter of
intent pursuant to (ii) above (in each case, the "Negotiation Period"), the New
Polymer shall not be included within the Field, and Focal may proceed to
commercialize such New Polymer itself or grant rights or licenses to third
parties with respect to the New Polymer, on terms not more favorable to the
third party than those terms last offered to Ciba and/or Chiron hereunder.
2.5 No Rights Outside Field. Except as expressly provided in this
Agreement, including without limitation in Sections 2.4.1(b) and 2.4.3, nothing
in this Agreement shall be deemed to grant Ciba or Chiron any rights or licenses
to exploit any Hydrogel Polymer, New Polymer or Focal Technology outside the
Field, and Focal expressly reserves the right to grant exclusive licenses under
the Focal Technology to commercialize any and all products and components
outside the Field. It is understood, without limitation, that if a third party
has independent intellectual property or other rights to commercialize the same
or similar compound as a Ciba/Chiron Compound (other than Hirudin or Tissue
Factor Pathway Inhibitor or derivatives or modifications thereof) outside the
Field, Focal reserves the right to grant exclusive licenses under Focal
Technology to such party for use of such compound outside the Field, subject to
the restrictions set forth in this Agreement on the use of data and information
arising from this Agreement. Subject to Article 8, it is further understood
that neither Ciba nor Chiron grant to Focal any actual or implied rights or
licenses under any Ciba or Chiron patents or intellectual property to
commercialize Ciba/Chiron Compounds.
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3
RESEARCH
3.1 Committees Generally.
3.1.1 As to each Product, the Developing Party and Focal shall
establish the following Committees: a research committee to approve the
Research Plan and Budget and to oversee, review and coordinate the Research
Program with respect to such Product ("Research Committee"); an advisory
development committee to monitor and review the Developing Party's Product
Development with respect to such Product ("Development Committee"); an
advisory manufacturing committee to monitor and review Focal's development of
manufacturing capacity with respect to such Product under the Manufacturing
Plan ("Manufacturing Committee"); and an advisory marketing committee to
monitor and review the Developing Party's activities with respect to the
marketing, promotion and distribution of such Product ("Marketing
Committee"). The Development Committee, Manufacturing Committee and
Marketing Committee are referred to herein collectively and individually as
"Advisory Committees." The Advisory Committees and the Research Committee
are referred to collectively and individually herein as "Committees."
3.1.2 Each Committee shall be comprised of an equal number of
representatives from the Developing Party and Focal, selected by such party,
it being understood that when Ciba and Chiron are jointly the Developing
Party, Ciba and Chiron together shall have a combined number of
representatives on the Committee equal to the number of Focal
representatives. The Developing Party and Focal each may replace its
Committee representatives at any time, with prior written notice to the
other. The Developing Party and Focal each shall bear its own personnel and
travel costs and expenses relating to Committee meetings. With the consent of
the Developing Party and Focal, other representatives of Focal or the
Developing Party may attend Committee meetings as nonvoting observers.
3.1.3 Research Committee.
(a) The Research Committee shall meet quarterly, or as
otherwise agreed by the parties, alternating between the location of Focal
and of the Developing Party, or at such locations as the parties agree. At
its meetings, the Research Committee will (i) monitor the progress of the
Research Program toward its objectives, and (ii) review and approve the
Research Plan and Budget, pursuant to this Article 3. The host party's lead
representative shall chair meetings of the Research Committee and shall be
responsible for preparing the meeting agendas and minutes.
(b) Wherever possible, the decisions of the Research Committee
shall be made by unanimous consent of the Developing Party and Focal.
However, in the event that unanimous decisions cannot be reached, decisions
of the Research Committee as described in Section 3.1.3 shall be by majority
vote (based upon votes being cast by an equal number of representatives of
Focal and the
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Developing Party). There shall be no tie-breaker; and in the event of
deadlock the matter in question shall be referred to selected executive
officers of Focal and the Developing Party for final resolution.
(c) The Research Committee for a Product shall terminate upon
completion or termination of all activities within the Research Program for
such Product, provided that if after termination of the Research Committee
for a Product the Developing Party and Focal desire that additional Research
be performed with respect to such Product, the Developing Party and Focal
shall reconstitute the Research Committee for such Product.
(d) Prior to the earlier of (i) termination of the Research
Committee for a Product, and (ii) commencement of any study which may result
in the achievement of any of the milestones set forth in Section 4.2.1 or
milestones 1 or 2 set forth in Section 4.2.2, the Research Committee for the
Product shall establish the criteria to be used in determining whether the
First Generation Product milestones set forth in Section 4.2.1 below or
milestones 1 and 2 of the Second Generation Product milestones set forth in
Section 4.2.2 below shall have occurred with respect to such Product
("Committee Criteria").
3.1.4 Advisory Committees. After commencement of Product
Development for a particular Product (and in the case of the Marketing
Committee, after the filing of an NDA for such Product), Advisory Committees
for such Product shall meet semi-annually, or as otherwise agreed by Focal
and the Developing Party, alternating between the location of Focal and of
the Developing Party, or at such locations as Focal and the Developing Party
may agree. Focal's participation in the Development Committee and Marketing
Committee shall be advisory only, and the Developing Party shall control
decision-making within the Development Committee and Marketing Committee.
The role of the Development Committee and Marketing Committee shall be to
review development and marketing plans and to provide advisory input with
respect to thereto, but not to make operational or strategic decisions.
Except as otherwise provided under Article 8 below, Developing Party's
participation in the Manufacturing Committee shall be advisory only, and
Focal shall control decision-making within the Manufacturing Committee. When
Focal or the Developing Party's participation is advisory only, the other
party's lead representative shall chair meetings of the Advisory Committee
and shall be responsible for preparing the meeting agendas and minutes.
3.2 Plans and Budgets. The Research Program will be carried out in
accordance with the Research Plan and Budget then in effect. By October 1 of
each calendar year, Focal and/or the Developing Party shall propose to the
Research Committee appropriate modifications, if any, of the Research Plan
and Budget for the next succeeding year, and upon approval of such
modifications of the Research Plan and Budget by the Research Committee, such
modified plans and budgets shall be reflected in the Research Plan and Budget
for purposes of this Agreement. In addition, the Research Committee shall
review the Research Plan and Budget on an ongoing basis and may modify the
Research Plan and Budget as the Research Committee shall approve from time to
time.
3.3 Research Program. Focal shall be primarily responsible for
conducting the Research for each Product, with assistance from Ciba/Chiron.
In each case, such Research shall be conducted solely
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pursuant to a Research Program, as further described in the Research Plans
and Budgets, and Focal shall use its reasonable efforts to diligently perform
the Research Program in accordance with the Research Plan and Budget then in
effect.
3.3.1 Initial Feasibility of First Generation Products and First
Generation Radiopharmaceutical Products.
(a) Within ninety (90) days after the Effective Date, Focal,
Ciba and Chiron shall define and initiate, themselves or by a third party
approved by Focal, Chiron and Ciba, a fragmentation and embolization study
for Hydrogel Polymer ("Fragmentation and Embolization Study"). Upon
completion of the Fragmentation and Embolization Study, the parties shall
meet promptly (in person or by telephone), but in no event more than fifteen
(15) days after such completion, to determine whether the results of the
Fragmentation and Embolization Study meet the study criteria as are mutually
agreed upon in writing by the parties ("Study Criteria"). Subject to Section
3.3.3(b), if the results of the Fragmentation and Embolization Study as
reasonably determined by both Ciba and Chiron meet the Study Criteria, the
parties shall continue with the Research Program with respect to the First
Generation FocalGel Product in accordance with the Research Plan and Budget.
(b) If both Ciba and Chiron determine that the results of the
Fragmentation and Embolization Study meet the Study Criteria, the parties
shall also proceed with a Research Program in accordance with the Research
Plan and Budget to evaluate the First Generation Radiopharmaceutical Product,
which shall include evaluation of use of the Hydrogel Polymer for the
interstitial radiation through local delivery or immobilization of
Radiopharmaceuticals to inhibit cell proliferation, and the Developing Party
shall conduct a commercial assessment of the First Generation
Radiopharmaceutical Product.
(c) If, in the reasonable judgment of both Ciba and Chiron,
the results of the Fragmentation and Embolization Study do not meet the Study
Criteria, Ciba and Chiron shall have the right to terminate this Agreement
pursuant to Section 16.3 promptly after completion of the Fragmentation and
Embolization Study, effective upon thirty (30) days written notice to Focal,
and in such event all rights and licenses granted to Ciba and Chiron
hereunder shall terminate and all such rights and licenses shall revert to
Focal.
3.3.2 Commencement of Research for First Generation Product.
Subject to Section 3.3.3(b), the Research Program with respect to First
Generation FocalGel Product shall be initiated promptly after the Effective
Date in accordance with the Research Plan and Budget. Regardless of whether
or not the First Generation FocalGel Product or the First Generation
Radiopharmaceutical Product are successful or are pursued by Chiron and/or
Ciba, Chiron and Ciba shall retain the exclusive license under Section 2.1 in
the Field unless and until this Agreement is terminated in accordance with
Article 16.
3.3.3 Selection of Second Generation Products.
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(a) At any time and from time to time during the term of this
Agreement, Chiron and/or Ciba may select Ciba/Chiron Compounds to be
incorporated into Second Generation Products. Prior to commencement of
Research or Product Development with respect to a Ciba/Chiron Compound that
the Developing Party intends to include in a Product, the Developing Party
shall notify Focal in writing of the Ciba/Chiron Compound to be included
within such Research or Product Development, together with the biological and
physical characteristics of the Ciba/Chiron Compound, including without
limitation the known chemical structure and mechanisms of action of such
Ciba/Chiron Compound ("Compound Notice"). Within thirty (30) days after
Focal's receipt of the Compound Notice, Focal shall notify the Developing
Party if the Ciba/Chiron Compound described in the Compound Notice is within
the definition of [*]. If Focal does not so notify the Developing Party,
Research shall be initiated promptly with respect to such Ciba/Chiron
Compound.
(b) Ciba and Chiron agree to proceed with, and to engage Focal
to perform Research on, at least [*] Second Generation Products;
provided, however, if, in the judgment of Chiron and Ciba, the First
Generation FocalGel Product or the First Generation Radiopharmaceutical
Product is effective, based on the pig efficacy model, and Ciba and Chiron
are diligently proceeding with Product Development of the First Generation
FocalGel Product or the First Generation Radiopharmaceutical Product under
this Agreement, at such time Chiron and/or Ciba may but shall not be
obligated to, continue with evaluation and development of Second Generation
Products. If Chiron and/or Ciba are diligently proceeding with Research or
Product Development of Second Generation Products in accordance with this
Section 3.3.3, Chiron and/or Ciba may, but shall not be obligated to,
continue with Research and Product Development of First Generation Products.
(c) Except as provided in Section 3.3.3(b), the [*] Ciba/Chiron
Compounds to be included within Second Generation Products shall be
determined as follows. Ciba shall select the [*] Ciba/Chiron Compound to be
included in a Second Generation Product, and Ciba shall be the Developing
Party with respect to such Second Generation Product. Such [*] Ciba/Chiron
Compound [*] and shall be delivered to Focal as soon as reasonably
practicable but not later than within thirty (30) days after the Effective
Date. The Research Program on such [*] Second Generation Product shall be
initiated promptly after delivery of the [*] Ciba/Chiron Compound to Focal.
A [*] Ciba/Chiron Compound shall be selected for inclusion in a Second
Generation Product within six (6) months after the Effective Date, and a [*]
Ciba/Chiron Compound shall be selected for inclusion in a Second Generation
Product within twelve (12) months after the Effective Date; provided that if
Ciba or Chiron have not determined by the end of such periods that the
results of the Fragmentation and Embolization Study meet the Study Criteria,
the foregoing periods shall be extended until ninety (90) days after it is
determined that the results of the Fragmentation and Embolization Study meet
the Study Criteria (such six (6) or twelve (12) month period, as applicable
and as so extended, being referred to below as the "Selection Period"); and
provided further that in the event Ciba or Chiron selects for use in a Second
Generation Product a Ciba/Chiron Compound that is within the definition of [*],
as described in Section 3.3.3(a), the Selection Period for such Second
Generation Product, as the case may be, shall be reasonably extended. The
Research with respect to each Second Generation Product shall be initiated
promptly upon selection of such Second Generation Product for inclusion in
the Research Program in accordance with the Research Plan and Budget.
14
* Confidential treatment has been requested for marked portion
(d) Upon selection of each Second Generation Product in
accordance with the foregoing, and subject to Focal's right to decline to
participate in the Research and to transfer technology in accordance with
Section 3.3.4, Focal and the Developing Party shall promptly agree upon a
Research Plan and Budget to include a full, active and expedient Research
Program for such selected Second Generation Product.
3.3.4 Focal Right to Perform Research. Notwithstanding Section
2.1 above, or any other provision of this Agreement, Focal shall have the
exclusive right at its election to conduct any and all Research relating to
First Generation Products and Second Generation Products, and Ciba and Chiron
agree not to conduct or have conducted any such Research except to have such
Research performed by Focal hereunder or as otherwise provided in this
Section 3.3.4. If at any time a Developing Party desires that additional
Research be conducted with respect to a Second Generation Product, the
Developing Party shall so notify Focal and provide Focal with a description
of the Research proposed to be performed. If Focal elects to perform such
Research, Focal and the Developing Party shall establish a reasonable
Research Plan and Budget for such Research Program, and Focal shall proceed
with such Research Program in accordance with this Agreement. In the event
that Focal elects not to conduct such Research, the Developing Party may
conduct such Research on its own, and subject to the last sentence of Section
1.25, the product that is the subject of such Research within the Field shall
become one of the "Products" selected by Ciba and Chiron. If the Developing
Party elects to conduct such Research on its own, Focal shall disclose to the
Developing Party Focal Know-How necessary for the Developing Party to perform
the Research Focal declined to perform as provided in this Section 3.3.4
above, and such assistance to the Developing Party as is reasonably necessary
to enable the Developing Party to perform such Research.
3.4 Product Development.
3.4.1 Selection of Products. Subject to Section 3.3.3(b), with
respect to the First Generation FocalGel Product or the First Generation
Radiopharmaceutical Product or any of the first three Second Generation
Products, if in the judgment of the Developing Party such product
demonstrates efficacy, including without limitation demonstration of efficacy
in a pig or other mutually agreed upon large animal model, the Developing
Party shall use reasonable commercial efforts to conduct Product Development
of the Product in question, at the Developing Party's sole expense. Focal
shall be informed with respect to such Product Development. Focal agrees to
provide reasonable mutually agreed technical support as reasonably necessary
pursuant to the Research Plan and Budget; however, except as otherwise
expressly agreed in writing, Focal shall have no obligation to perform
pre-clinical studies other than those contained in the Research Plan and
Budget or clinical studies or other portions of Product Development. It is
understood during the term of this Agreement, the Developing Party may select
a Product for Product Development at any time.
3.4.2 Regulatory Filings. With respect to each Product, the
Developing Party shall determine the most effective regulatory pathway for
obtaining approval to manufacture, market and sell the Product. Unless
otherwise agreed, all regulatory filings shall be prepared, filed and owned
by the Developing Party in the Developing Party's name at the Developing
Party's expense, except for such
15
regulatory registrations as Focal is required to hold as manufacturer of the
Product, which shall be prepared, filed and owned by Focal at Focal's
expense. The Developing Party and Focal shall each provide to the other such
reference rights, in each case as may reasonably be required for the
preparation and filing of all such regulatory documents with respect to the
Products, and as otherwise provided in Article 6.
3.5 Diligence. It is understood that nothing contained in the Article 3
shall be deemed to limit Focal's rights under Article 11 or 16 below.
4
DEVELOPMENT PROGRAM FUNDING
4.1 Funding of Research and Development.
4.1.1 Provision of Ciba/Chiron Compounds. As required under the
Research Plans and Budgets with respect to Second Generation Products, the
Developing Party shall supply to Focal free of charge such quantities of
Ciba/Chiron Compounds as are reasonably required for Focal to perform its
obligations under the Research Program.
4.1.2 Research Initiation Payment for First Second Generation
Product. In consideration for the scientific benchmark of initiating the
Research Program with respect to the first Second Generation Product, in
addition to the amounts to be paid under Section 4.1.3 below, within thirty
(30) days following first delivery of a Ciba/Chiron Compound to Focal, Ciba
shall make a nonrefundable initial payment to Focal in the amount of [*]
("Research Initiation Fee") creditable as provided in Section 4.2.2(a).
4.1.3 Ongoing Research Funding. The Developing Party shall pay
to Focal for each Focal full time equivalent conducting the Research in
accordance with the Research Plans and Budgets a full-time equivalent
personnel charge, which incorporates all of Focal's direct and indirect
expenses for such personnel ("FTE Rate"), together with such other costs as
are specifically set forth in the Research Plans and Budgets or approved by
the Research Committee. The parties agree that the FTE Rate for the period
commencing on the Effective Date and expiring on December 31, 1997 shall be
[*] per full-time equivalent person per year. Each subsequent calendar
year after 1997, the FTE Rate shall increase by the percentage change
specified during the most recent calendar year in the Consumer Price Index,
for All Urban Consumers for Boston, Massachusetts, as published by the U.S.
Department of Labor, Bureau of Labor Statistics; provided that for the
adjustment to be made for calendar year 1998, the adjustment shall equal the
increase in the Consumer Price Index over the 1997 calendar year. As used
herein, a "full-time equivalent" (or "FTE") shall mean a full-time person
dedicated to the Research Program, or in the case of less than a full-time
dedicated person, a full-time, equivalent person year, based upon a total of
one thousand eight hundred eighty (1,880) hours per year of work related to
the Research Program, to the extent such full-time equivalent personnel are
included as headcounts in the Research Plan and Budget. The FTEs working on
each Research Program shall be
* Confidential treatment has been requested for marked portion
16
an appropriate mix of Ph.D. and other scientists and personnel, qualified to
perform the work in question as approved by the Research Committee. The
foregoing amounts to be reimbursed by the Developing Party are referred to
below as the "Research Costs".
4.1.4 Payment. Within thirty (30) days after the Effective
Date, and on or before the first day of each subsequent calendar quarter
during the Research Period, the Developing Party shall pay to Focal the
Research Costs budgeted for the quarter in the Research Plan and Budget then
in effect. Within sixty (60) days following the end of each calendar year
during the Research Period, Focal shall provide to the Developing Party a
summary of the Research Costs actually incurred by Focal during such year.
If the actual Research Cost amounts incurred by Focal in accordance with the
approved Research Plan and Budget for a calendar year were less than the
budgeted amounts paid by the Developing Party to Focal in advance for such
calendar year, the excess shall be recouped by way of a reduction from the
next payments due to Focal under this Section 4.1.4 provided that at the end
of the Research Program any such excess not then recouped shall be repaid by
Focal to the Developing Party within thirty (30) days after the end of the
Research Period.
4.1.5 Reimbursement for Past Research Expenditure. As
reimbursement of past research expenditures incurred by Focal with respect to
research relating to potential Products within the Field, Ciba/Chiron shall
pay to Focal a nonrefundable and noncreditable payment to Focal in the amount
of [*] within ten (10) days following the Effective Date.
4.2 Milestone Payments.
4.2.1 First Generation Product Milestones. Subject to Section
4.2.3(b) below, Ciba/Chiron agree to make the following payments to Focal
upon the first occurrence of each milestone specified below for each of the
First Generation Products:
FIRST GENERATION PRODUCT MILESTONES PAYMENT
----------------------------------- -------
1. Filing of the first IND by Chiron or Ciba
(regardless of where the IND is filed) [*]
2. Demonstration of efficacy at the end of
[*], as determined by the applicable
Committee Criteria. [*]
4.2.2 Second Generation Product Milestones. Ciba/Chiron agree
to make the following payments to Focal with respect to Second Generation
Products upon the occurrence of each milestone specified below:
* Confidential treatment has been requested for marked portion
17
SECOND GENERATION PRODUCT MILESTONES PAYMENT
------------------------------------ -------
1. Initial demonstration of formulation and [*]
release of the Second Generation Product
in an animal model, as determined by the
applicable Committee Criteria, for up to a
maximum of [*]:
2. The first demonstration of efficacy of any [*]
Second Generation Product in a pig coronary
model, as determined by the applicable
Committee Criteria:
3. Filing of the first IND, by the Developing [*]
Party (in a major country) or initiation of
human clinical trials in any country, for each
Second Generation Product, up to a maximum of
[*]:
4. Acceptance for filing by the FDA or foreign [*]
equivalent in a Major Country, whichever
occurs first, of an NDA by the Developing
Party for each Second Generation Product, up
to a maximum of [*]:
5. First commercial sale of each Second [*]
Generation Product in the first Major Country,
up to a maximum of [*]:
For any additional Second Generation Products
beyond [*] there will be [*] milestone
payments.
(a) It is understood that milestone 1, 3, 4, and 5 of this
Section 4.2.2 above shall be paid with respect to each Second Generation
Product to meet such milestone, up to a maximum of [*], and milestone 2 of
this Section 4.2.2 above shall be due only with respect to the [*] Second
Generation Product to meet such milestone. In addition, the Research
Initiation Fee paid pursuant to Section 4.1.2 above shall be applied as a
credit to the payment upon the occurrence of milestone 1 of this Section
4.2.2 above for such [*] Second Generation Product (i.e., [*]).
(b) After an aggregate of [*] has been paid by
Ciba/Chiron to Focal with respect to milestone 1 of Section 4.2.2, if a
Second Generation Product for which Ciba/Chiron has paid the fee for
milestone 1 under this Section 4.2.2 does not meet milestone 2 above and all
further research and development of such Second Generation Product is
discontinued, then [*] of the fee paid
* Confidential treatment has been requested for marked portion
18
with respect to such Second Generation Product for such milestone 1 shall be
credited against the fee payable for milestone 1 with respect to the next
Second Generation Product to meet such milestone 1; provided, that if
Ciba/Chiron receives such a credit, the amount taken by Ciba/Chiron as such a
credit shall be carried forward and the payments due upon milestone 1 under
4.2.2 above shall be made for Second Generation Products beyond [*] until a
maximum of [*] has been paid hereunder upon the satisfaction of such
milestone with respect to Second Generation Products.
4.2.3 Other.
(a) Focal and the Developing Party agree to promptly notify
the other in writing of its achievement of any milestone. Except as
otherwise provided under paragraph (b) below, if at the time a particular
milestone is achieved under Sections 4.2.1 or 4.2.2, above, any prior
milestones under the same Section 4.2.1 or 4.2.2 have not been achieved with
respect to the same Product, or if the Committee Criteria are not met for a
particular milestone but Ciba or Chiron nonetheless proceeds with Product
Development for the same Product toward the next milestone (or in the case of
milestone 2 under 4.2.1 above, toward [*], the payments for such prior
milestones shall then be due. The payments set forth in Section 4.2.1 and
4.2.2 shall each be due and payable within sixty (60) days after written
notice of the milestone event is delivered to the other party, subject in the
case of a milestone achieved by Focal, to the Developing Party's verification
thereof during such sixty (60) day period.
(b) If, in the course of performing Product Development with
respect to a Second Generation Product or First Generation
Radiopharmaceutical Product, Ciba or Chiron performs a control study using a
First Generation FocalGel Product as a control, and thereby achieves a First
Generation FocalGel Product milestone, but neither Ciba nor Chiron proceeds
with Research or Product Development with respect to such First Generation
FocalGel Product, Ciba and Chiron shall not be obligated to make the
milestone payment that would otherwise be due under Section 4.2.1 for such
First Generation FocalGel Product. However, if in such event Ciba/Chiron
proceed with Research or Product Development of such First Generation
FocalGel Product, milestone 1 for such First Generation FocalGel Product
shall then be due and no further milestones shall be due under Section 4.2.1
for such First Generation FocalGel Product.
5
RECORDKEEPING; PUBLICATION
5.1 Reports and Records.
5.1.1 Records. Each party shall maintain records of work
performed by such party under the Research Program (or cause such records to
be maintained) in sufficient detail and in good scientific manner as will
properly reflect all work done and results achieved in the performance of the
* Confidential treatment has been requested for marked portion
19
Research Program (including all data in the form required under any
applicable governmental regulations).
5.1.2 Reports. During the Research Period, Focal shall provide
the Research Committee with a semi-annual written report summarizing the
progress of the Research Program. The Developing Party agrees to provide
Focal with semi-annual written progress reports with respect to the Product
Development performed by such party with respect to each Product during the
preceding semi-annual period. Such reports shall be Confidential Information
of the Developing Party under Article 14.
5.2 Publication. Except as required by law, none of the parties hereto
shall publish or publicly disclose any results, information or data arising
from any Research or Product Development for a First Generation Product or
Second Generation Product without the prior written consent of Focal and the
Developing Party, which consent shall not be unreasonably withheld.
6
USE OF PRECLINICAL AND CLINICAL DATA
6.1 Access by Developing Party. Focal shall allow Developing Party to
have prompt access to all records and data generated in the course of
performing the Research Program on behalf of such Developing Party with
respect to each Product at reasonable times and in a reasonable manner.
Focal shall further provide to the Developing Party access to all data and
records arising from process development and manufacturing activities
conducted by Focal pursuant to Article 8 with respect to each Product at
reasonable times and in a reasonable manner.
6.2 Access by Focal.
(a) The Developing Party shall provide to Focal such preclinical
and clinical data with respect to Products as is necessary for Focal to
conduct its process development, manufacturing and regulatory filing
responsibilities with respect to the Products. All such data shall be deemed
Confidential Information of the Developing Party, subject to Article 14, and
shall be used solely for the purpose for performing Focal's obligations
hereunder with respect to the Products.
(b) The parties recognize that in connection with development of
products which incorporate the same or similar Hydrogel Polymer or New
Polymer as is incorporated into the Products, Focal may be required by the
FDA or other regulatory agencies to provide access to safety information
generated through preclinical and clinical studies by the Developing Party
using such Hydrogel Polymer or New Polymer. The Developing Party agrees to
provide Focal with a copy of each adverse event report filed with the FDA
with respect to a Product containing a Hydrogel Polymer or New Polymer,
except to the extent it can be determined that the adverse event arises from
a Ciba/Chiron Compound; and the Developing Party agrees to permit Focal to
reference its FDA filings with respect to the safety of the Hydrogel Polymer
or the Now Polymer. Nothing herein shall allow Focal direct access to
20
preclinical or clinical data with respect to any Product, except for use
solely in connection with Product development and manufacture pursuant to
Section 6.1(a). All information provided to Focal pursuant to this Section
6.2(b) shall be Confidential Information of the Developing Party; may be used
only as provided in this Section 6.2(b); and may be disclosed to third
parties only as necessary for the purposes of this Section 6.2(b), subject to
confidentiality obligations no less restrictive than those set forth in
Article 14.
7
MARKETING ASSISTANCE; OTHER
7.1 Marketing Assistance. On request of the Developing Party, for
twelve (12) months after receipt of government approval to market and
distribute the first Product, Focal will provide reasonable assistance during
Focal's normal business hours, not to exceed three full-time equivalents (as
defined in Section 4.1.3), in training Ciba/Chiron's sales and marketing
personnel in the use of the Products at times and locations to be agreed upon
in writing by the parties. Ciba/Chiron personnel trained by Focal in the use
of the Products shall be responsible for training the remainder of
Ciba/Chiron's sales and marketing force. In addition, Focal will provide
in-service training of interventional cardiologists, and participate in such
customer evaluations and cardiology medical convention exhibitions of
Products, as are agreed upon from time to time during the term of this
Agreement by the parties. Ciba/Chiron shall reimburse Focal for all
reasonable travel, lodging and per diem expenses incurred by Focal in
connection with providing the services set forth in this Section 7.1 within
thirty (30) days after date of invoice.
7.2 Regulatory Reporting. Pursuant to applicable regulations of the FDA
and foreign equivalent agencies, whether with respect to drugs, biologics or
medical devices, each party may be required to report to the FDA or foreign
equivalent agency information that reasonably suggests that a Product may
have caused or contributed to the death or serious injury or has
malfunctioned and that the Product would be likely to cause or contribute to
a death or serious injury if the malfunction were to recur. Focal shall
provide to the Developing Party prompt notice of all adverse events with
respect to Products, whether or not serious as defined in applicable
regulations of the FDA or foreign equivalent, together with sufficient
information about such events to enable the Developing Party to comply with
its regulatory reporting obligations. The Developing Party agrees to provide
Focal with prompt notice of all adverse events with respect to Products,
whether or not serious as defined in applicable regulations of the FDA or
foreign equivalent, together with sufficient information about such events to
enable Focal to comply with its regulatory reporting obligations. The
reports of information on adverse events referred to in this Section 7.2
shall be no more extensive or frequent than is required by the FDA or foreign
equivalent.
8
MANUFACTURING RIGHTS
8.1 Manufacturing. Subject to this Article 8 and the Developing Party's
supply of Ciba/Chiron Compounds as set forth in this Section 8.1 below, Focal
shall manufacture, or have
21
manufactured by a third party and supply to the Developing Party, and the
Developing Party shall purchase from Focal, reasonable requirements of
Product, in a form ready for final packaging, for (i) the Developing Party to
perform Product Development of such Product, and (ii) supply of Products for
commercial sale. The Developing Party shall supply without charge to Focal,
in sterile, stable, bulk form, such quantities of Ciba/Chiron Compounds as
are reasonably required for Focal to manufacture Products in accordance with
this Article 8. In the event that Focal elects to utilize a third party to
manufacture a Product for supply to the Developing Party, the Developing
Party shall have the right to approve such third party supplier, which
approval shall not be withheld unreasonably. It is understood that the
expectation of the parties is that Focal shall have the right to utilize
third party manufacturers, and that the Developing Party's consent shall only
be withheld to the extent reasonably necessary to maintain quality, ensure
the availability of sufficient capacity to supply the necessary quantity in a
timely manner in accordance with the Manufacturing Plan as described below,
ensure reasonable protection of the Developing Party's Confidential
Information against disclosure to competitors, and for similar reasonable
concerns.
8.2 Transfer Prices.
8.2.1 Product Development Transfer Price.
(a) The parties agree that Focal's use of Products in the
course of the Research Program will ordinarily be included within the FTE
Rate payable pursuant to Section 4.1.3. In the event that extraordinary
requirements for Products arise pursuant to the Research Program, the cost of
such extraordinary supply shall be a Research Cost subject to approval of
both parties pursuant to the approval of the Research Plan and Budget for the
Product in question.
(b) Focal shall provide to the Developing Party Products for
use in Product Development at a transfer price equal to Focal's Production
Cost thereof, provided that the Production Cost for the Disposable Components
of each Product supplied for use in human clinical trials shall not exceed [*].
For purposes of this Section 8.2.1. "Disposable Components" shall mean only
Hydrogel Polymer and catheter components of Products.
8.2.2 Commercial Transfer Prices. Focal shall provide Products
to Ciba/Chiron for commercial sale at a price equal to [*] Net Sales by
Ciba/Chiron and its Affiliates and Subdistributors set forth in this Section
8.2.2 below:
(i) With respect to First Generation FocalGel Products, [*].
(ii) With respect to First Generation Radiopharmaceutical
Products, [*].
(iii) With respect to Second Generation Products, [*].
* Confidential treatment has been requested for marked portion
22
In the event that the Supply Agreement continues after expiration of all
patents governing the Product in a given jurisdiction, the parties shall
negotiate in good faith a reasonable reduction in the transfer price to
reflect the lack of patent coverage in such country.
8.2.3 Energy Source. Notwithstanding the foregoing provisions
of Section 8.2, Energy Sources shall be provided at [*]. In the event that
Focal does not manufacture the Energy Source, but rather obtains it from a
third party, the Developing Party shall have the right to purchase the Energy
Source directly from such third party as mutually agreed by the Developing
Party and such third party.
8.2.4 Promotional Samples. With respect to any Products that
are supplied to Ciba or Chiron for use as samples, or otherwise to be used or
distributed in other than full commercial sales (other than as part of a
Research Program or for use in Product Development), the transfer price for
such Products or other materials shall equal [*] to be mutually agreed upon
by the parties in the Supply Agreement.
8.2.5 Undue Hardship. The parties will review and monitor
Production Costs through the Manufacturing Committee on an ongoing basis with
the goal of maintaining Production Costs at the lowest reasonable level,
including consideration of use of third party suppliers. As of the Effective
Date, both parties believe that the financial terms reflected in this Section
8.2 reflect the agreed balance of interests and burdens between the parties,
and the parties expect to preserve such terms. However, in the event that
the total of actual and reasonably anticipated Net Sales over a period of at
least one (1) year create an unreasonable burden as to the profitability of
this manufacturing arrangement to one party, in relation to the burden to the
profitability to the other, the parties agree to equitably adjust the terms
hereof to remedy such unreasonable burden. In making such adjustments, the
parties shall reasonably consider such factors as the respective
contributions made and risks borne by the parties in connection with the
discovery, research, development and commercialization of the Product in
question, the reasonable expectation of the parties as to profitability of
such Products and the like.
8.3 Supply Agreement. Within one hundred eighty (180) days following
commencement of [*] with respect to each Product, Focal and the Developing
Party shall enter into a mutually agreed upon Supply Agreement for [*]
commercial supply of such Product on commercially reasonable terms, including
without limitation those set forth in this Article 8. The Supply Agreement
shall include reasonable and customary terms for ordering, forecasting,
provisional payment and reconciliation and the like.
8.4 Manufacturing Rights.
8.4.1 Focal shall at all times supply in accordance with the
Supply Agreement quantities of Products ordered by the Developing Party, its
Affiliates and Subdistributors, manufactured in compliance with all agreed
upon specifications and all applicable legal and regulatory requirements and
all warranties of Focal as set forth in the Supply Agreement; provided,
however, that if Focal fails to supply to the Developing Party reasonable
quantities of a Product, or fails to comply with the
* Confidential treatment has been requested for marked portion
23
Manufacturing Plan (as defined below), in accordance with the Supply
Agreement, or Focal elects not to supply a Product or component thereof, the
Developing Party shall have the right to manufacture, or have manufactured
for it by a third party, such Product or component. However, the Developing
Party's right to manufacture or have manufactured such Product or component
shall be subject to its payment of a commercially reasonable royalty to
Focal, to be negotiated by the parties in good faith in lieu of the transfer
prices set forth in Section 8.2 for such Product or component; and in the
event the Developing Party has such Product or component manufactured by a
third party, such right shall be further subject to having in place
reasonable protections to ensure against unauthorized use and disclosure of
Focal confidential information. It is further understood that
notwithstanding the provisions of Section 2.1 and 2.2, the Developing Party
shall not have the right to sublicense to a third party the right to both
manufacture and sell Products, without Focal's consent which shall not be
unreasonably withheld.
8.4.2 The Supply Agreement shall include provisions to implement
the right of the Developing Party to manufacture or have manufactured
Products under Section 8.4. 1, including without limitation provisions for
the transfer of all Focal Know-how necessary for the manufacture of Products,
and requirements on the part of Focal to provide all necessary assistance to
the Developing Party reasonably necessary to enable it to assume the
manufacture of Products.
8.4.3 Manufacturing Plans.
(a) Focal represents and warrants that it currently has
sufficient capacity to supply all requirements of Ciba and/or Chiron for
Products for [*].
(b) As soon as reasonably practicable following commencement
of [*], Focal shall prepare a reasonable manufacturing plan for development
by Focal of the necessary capacity to supply the reasonable requirements of
the Developing Party for the [*].
(c) As soon as is reasonably practicable following
commencement of [*], Focal shall present for review and comment in the
Manufacturing Committee and approval by the Developing Party, which approval
shall not be unreasonably withheld, a process and manufacturing development
plan pursuant to which Focal will (i) supply all of the Developing Party's
reasonable requirements of such Product for [*]; (ii)
conduct or have conducted commercial manufacture of Products; and (iii)
create and qualify a second site or source of supply for commercial sale of
such Product ("Manufacturing Plan"). Each Manufacturing Plan provided
pursuant to this Section 8.4.3 shall include milestones and timelines and
shall be incorporated within the Supply Agreement for such Product.
Ciba/Chiron shall reimburse Focal for all direct and indirect costs and
expenses (excluding general and administrative expense); calculated in
accordance with generally accepted accounting principles in the United
States, which are incurred by Focal in accordance with a budget reasonably
agreed upon by the parties and the Manufacturing Committee for process
development, manufacturing scale-up, obtaining regulatory approvals and other
activities, in each case to the extent specific for the manufacture of
Products within the Field and reasonably
* Confidential treatment has been requested for marked portion
24
necessary to manufacture or have manufactured and supply Products hereunder,
and obtain required regulatory approvals thereof, in accordance with
applicable laws.
(d) Focal shall provide quarterly reports to the
Developing Party through the Manufacturing Committee of the status of its
activities pursuant to this Section 8.4.3. The Developing Party shall have
the right to inspect the manufacturing facilities of Focal or any third party
supplier of a Product or component, during reasonable business hours, to
assess compliance with this Article 8 and the Supply Agreement.
9
THIRD PARTY ROYALTIES AND IMPROVEMENTS
9.1 Without limiting Section 13.2(a), Focal shall be responsible for the
payment of any royalties, license fees, or milestone payments due, and for
the performance of all other obligations, to third parties under those
licenses and/or agreements listed on [*] with respect to the marketing, sale
or distribution of Products by Ciba, Chiron or the Affiliates or
Subdistributors of Ciba or Chiron.
9.2 Without limiting Section 2.4.3, if during the term of this
Agreement, Focal acquires from a third party any additional Focal Technology,
other than the Focal Technology existing as of the Effective Date, which is
known to be useful in connection with the manufacture, use or sale of
Hydrogel Polymers, New Polymers or Products in the Field, Focal will make
available such additional technology for use within the Field under this
Agreement on mutually agreed upon terms and conditions intended to cause Ciba
and/or Chiron to bear a fair share of the acquisition cost of such additional
technology in relation to Focal and other third party licensees of Focal with
respect to such technology.
10
PAYMENTS; BOOKS AND RECORDS
10.1 Reports and Payments. The Supply Agreements to be entered into
under Section 8.3 above shall include provisions for quarterly written
reports to be made by the Developing Party to Focal within sixty (60) days
after the end of each calendar quarter, stating in each such report the
invoiced price and quantity of all Product sold, and the aggregate Net Sales
of such Product sold during such calendar quarter.
10.2 Payment Method. All payments to Focal under this Agreement shall be
made by check or bank wire transfer in immediately available funds to an
account designated by Focal. All payments hereunder shall be made in U.S.
dollars. Any payments due hereunder which are not paid on the date such
payments are due under this Agreement shall bear interest at the lesser of
one and one-half percent (1%) per month or the maximum rate permitted by law,
calculated on the number of days such payment is delinquent. This Section
10.2 shall in no way limit any other remedies available to Focal.
* Confidential treatment has been requested for marked portion
25
10.3 Currency Conversion. If Net Sales are made in currency other than
U.S. dollars, for the purpose of calculating payments hereunder such Net
Sales shall be converted to U.S. dollars using the standard exchange rate
into U.S. dollars used by the Developing Party for financial reporting
purposes.
10.4 Withholding Taxes.
10.4.1 (a) If any withholding taxes become payable solely by
reason of an assignment under this Agreement by Ciba or Chiron to a foreign
Affiliate, the transfer prices and payments due hereunder shall be net of and
shall not include any amounts due with respect to such withholding taxes.
Accordingly, payments shall be made without deduction for any such
withholding taxes and the Developing Party shall be responsible for the
payment of all such taxes. If laws or regulations require that taxes be
withheld on payments to Focal under Article 4, 8 or 9, the paying party, will
(i) timely pay the taxes to the proper taxing authority, and (ii) send proof
of payment to Focal within sixty (60) days following payment. If Focal uses
a foreign tax credit received by Focal as a result of the payment of
withholding taxes by Ciba or Chiron and thereby reduces the amount of U.S.
income tax that Focal otherwise would have paid, Focal shall refund to Ciba
or Chiron, as applicable, the amount of such reduction with respect to such
foreign tax credit.
(b) If withholding taxes are payable with respect to payments
to Focal for any reason other than that set forth in Section 10.4.1 (a), the
Developing Party shall pay such withholding taxes and deduct the amount
thereof from the amounts otherwise due to Focal hereunder. The Developing
Party shall provide Focal with a written statement of any such taxes paid
with respect to Focal's tax liability.
10.5 Records; Inspection. Ciba, Chiron and Affiliates of Ciba and Chiron
shall keep complete, true and accurate books of account and records for the
purpose of determining the amounts payable under Articles 8, 9 and 10 and
Focal shall keep complete, true and accurate records of Research performed by
Focal hereunder, the Research Costs thereof, the activities of Focal pursuant
to Article 8 and the costs thereof, and the Production Costs of all Products
and components. Such books and records shall be kept at the principal place
of business of Ciba, Chiron or Focal or the Affiliate of Ciba, Chiron, or
Focal as the case may be, for at least three (3) years following the end of
the calendar quarter to which they pertain. Such records will be open for
inspection, during such three (3) year period by an independent certified
public accountant selected by Focal for inspections conducted by Focal, or a
representative selected by Ciba or Chiron with respect to inspections
conducted by Ciba or Chiron, and reasonably acceptable to the audited party,
such acceptance not be unreasonably withheld for the purpose of verifying the
amounts payable by Ciba/Chiron pursuant to Articles 8, 9 and 1 0, the amounts
of reimbursement payable under this Agreement with respect to Research Costs,
under Article 8 or the amounts of Production Costs, or other matters
reasonably necessary in connection with Research, process development or
manufacturing records maintained by Focal, as applicable. Such inspections
may be made no more than once each calendar year, during normal business
hours, as mutually agreed by Focal and Ciba or Chiron. The inspecting
accountant will be under confidentiality obligations to the audited party to
report to Focal only the amounts payable to Focal hereunder with respect to
Net Sales during the period in question, in the case of an audit by Focal,
and such matters as are the subject of the
26
audit, including, but not limited to, FTE calculation Research Costs and
Production Costs in the case of an audit by Ciba or Chiron. Inspections
conducted under this Section 10.5 shall be at the expense of the auditing
party, unless a variation or error producing an underpayment in amounts
payable exceeding five percent (5%) of the amount paid for any period covered
by the inspection is established in the course of any such inspection,
whereupon all costs relating to the inspection for such period and any unpaid
amounts that are discovered will be paid by the audited party, together with
interest on such unpaid amounts at the rate specified in Section 10.2 above.
11
DUE DILIGENCE
The Developing Party shall use its reasonable commercial efforts to (i)
conduct expeditiously all Product Development for Products following
successful completion of the Research Program and other required preclinical
research to the extent required in the Major Countries; (ii) upon successful
completion of Product Development, apply for NDA approval in the Major
Countries; and (iii) upon receipt of NDA and other requisite marketing
approvals, subject to availability of Product supply, maximize Net Sales of
such Products in all Major Countries and other countries of the world in
which it is commercially reasonable to market the Products, all in a manner
consistent with the marketing of other products by the Developing Party.
12
INTELLECTUAL PROPERTY
12.1 Ownership of Inventions. Focal and the Developing Party shall each
promptly disclose to the other parties all Inventions as defined below.
Rights to such Inventions shall be as follows:
12.1.1 Definitions. For the purposes of this Section 12.1:
(a) "Patent Rights" shall mean patent applications, including
continuations (in whole or in part), divisionals, reissues, reexaminations
and foreign counterparts thereof, and issued patents on such applications, to
the extent the same claim and disclose Inventions;
(b) "Combination Product" shall mean a novel and possibly
patentably distinct composition of matter arising within a Research Program
or Product Development that comprises (i) a Ciba/Chiron Compound that is
supplied by Ciba or Chiron to Focal as a potential component of a Second
Generation Product, and (ii) a Focal Hydrogel Polymer as defined in Section
12.1.1(d) below;
(c) "Inventions" shall mean inventions or discoveries that are
first conceived, or first conceived and reduced to practice, (i) within a
Research Program or Product Development, or (ii) in the case of inventions or
discoveries by Ciba or Chiron, that are made using a Focal Hydrogel Polymer.
As used herein, references to Inventions shall include all Patent Rights and
other non-patent intellectual property rights to such Inventions necessary to
exploit such Patent Rights;
27
(d) "Focal Hydrogel Polymer" shall mean a Hydrogel Polymer or
a Hydrogel Polymer formulation (i) supplied by Focal to Ciba or Chiron,
whether during the Research, Product Development, under the terms of Article
8, or otherwise, or (ii) disclosed in writing by Focal as a potential
component of a Product (in each case other than a Combination Product).
12.1.2 The Developing Party retains, and Focal hereby assigns to
the Developing Party, Focal's entire right, title and interest in and to
Inventions that are first conceived, or first conceived and reduced to
practice, by Focal alone or jointly with any other party hereto, to the
extent such Inventions consist of (a) chemical modifications of a Ciba/Chiron
Compound (i) which is supplied by Ciba or Chiron to Focal or (ii) which is
disclosed in writing by Ciba or Chiron to Focal as a potential component of a
Second Generation Product (in each case other than a Combination Product), or
(b) methods of manufacture or use of such a Ciba/Chiron Compound.
12.1.3 Focal retains, and each of Ciba and Chiron hereby assigns
to Focal, all right, title and interest, subject to Ciba's and Chiron's
rights in the Field under this Agreement, in and to Inventions that are first
conceived, or first conceived and reduced to practice, by Ciba or Chiron,
alone or jointly with any other party hereto, to the extent such Inventions
consist of (a) chemical modifications to a Focal Hydrogel Polymer (other than
a Combination Product) or (b) methods of manufacture or use of such a Focal
Hydrogel Polymer.
12.1.4 Except as may be otherwise mutually agreed to in writing
and subject to the rights and obligations of Article 2 and Article 8, the
Developing Party and Focal shall jointly own, but agree not to commercialize,
Patent Rights to any Invention to the extent such Invention consists of a
Combination Product or to the use of a Combination Product. Such restriction
on commercialization of Patent Rights under this Section 12.1.4 shall survive
any termination of this Agreement with respect to a Combination Product
during the term of any patents claiming the Combination Product or the use of
a Combination Product. It is understood that to the extent components of a
Combination Product may be exploited for purposes other than the combination
of a Ciba/Chiron Compound described in 12.1.1(b)(i) and a Focal Hydrogel
Polymer, described in Section 12.1.1.(b)(ii), such components and
exploitation shall not be covered by this Section 12.1.4, but shall instead
be covered by Sections 12.1.2, 12.1.3 and 12.1.5.
12.1.5 To the extent that ownership of an Invention is not
provided for under Sections 12.1.1, 12.1.2, 12.1.3 and 12.1.4 above, rights
to such Inventions shall be as follows:
(i) If the Invention is first conceived or first conceived and
reduced to practice by Focal alone, such Invention will be considered part of
the Focal Technology and will be solely owned by Focal subject to Ciba's and
Chiron's rights within the Field under this Agreement.
Focal hereby grants to Ciba and Chiron a royalty free,
fully paid, non-exclusive, worldwide, irrevocable license, with the right to
grant and authorize sublicenses, under the Inventions described in this
paragraph (i) to make, have made, use and sell products for [*].
* Confidential treatment has been requested for marked portion
28
(ii) If the Invention is first conceived or first conceived and
reduced to practice by the Developing Party alone, such Invention will be
solely owned by the Developing Party.
The Developing Party hereby grants to Focal a royalty
free, fully paid, nonexclusive, worldwide, irrevocable license, with the
right to grant and authorize sublicenses (subject to the following sentence),
under the Inventions described in this paragraph (ii) to make, have made, use
and sell products, processes and or services involving a Hydrogel Polymer,
outside of the Field. Notwithstanding the foregoing, no Invention described
in this paragraph (ii) shall be sublicensed or otherwise made available to
[*].
(iii) If the Invention is first conceived or first
conceived and reduced to practice by the Developing Party jointly with Focal,
such Invention will be jointly owned by the inventing parties. The
Developing Party shall have the exclusive rights set forth in Article 2.
Except as provided in Article 2,
(a) Focal shall have the exclusive right under the
Inventions described in this paragraph (iii), with the right to grant and
authorize licenses and sublicenses (subject to paragraph (c) below), to make,
use, and sell products, processes and/or services, involving the use of Focal
Hydrogel Polymer, outside the Field.
(b) Each party will have a royalty-free right to make,
have made, use and sell the Invention, with the right to grant and authorize
licenses and sublicenses (subject to paragraphs (c) and (d) below) for all
other purposes.
(c) Notwithstanding the foregoing, no Invention described
in this Section 12.1.5(iii) shall be sublicensed or otherwise made available
[*].
(d) Prior to granting any license to Inventions governed
by this Section 12.1.5(iii) to a third party to develop a product for local
delivery, Ciba and/or Chiron, as the case may be, agree to offer Focal a
right of first refusal to develop such product for local delivery, under the
following terms. This paragraph (d) shall not apply to any license to such
an Invention by Ciba or Chiron to a third party for the manufacture, use or
sale of a product, including a product for local delivery, which is developed
by Ciba or Chiron, as the case may be.
Prior to granting any sublicense governed by this paragraph (d) to a
third party, Ciba or Chiron, as the case may be, shall notify Focal in
writing, describing the proposed sublicense and development project. Upon
written request by Focal within thirty (30) days after receipt of such a
notice, if Focal has the capability of performing the development project in
question, the parties shall commence negotiations in good faith with respect
to commercially reasonable terms under which the proposed license would be
granted to Focal rather than a third party.
* Confidential treatment has been requested for marked portion
29
If (i) Focal does not request within such thirty (30) day period to
commence such negotiations, or Focal notifies Ciba or Chiron, as the case may
be, that Focal is not interested in obtaining the license in question; or
(ii) the parties do not enter into a letter of intent with respect to license
in question within ninety (90) days after the date of the notice from Ciba or
Chiron, as the case may be; or (iii) the parties do not enter into a
definitive written agreement within ninety (90) days after the parties enter
into a letter of intent pursuant to (ii) above, then Ciba or Chiron, as the
case may be, shall be free to proceed with the license in question to a third
party, on terms not more favorable to the third party than those terms last
offered to Focal hereunder.
12.1.6 Resolution of Ownership Disputes
(i) Any dispute regarding ownership of a particular Invention
shall be referred to the Research Committee or Advisory Committee, as
appropriate, for resolution. The Research Committee or Advisory Committee,
as the case may be, shall use all reasonable efforts to resolve such disputes
within sixty (60) days after such referral, including referral of questions
to outside independent experts where the Research Committee or Advisory
Committee, as the case may be, deems appropriate.
(ii) In the event the dispute cannot be resolved pursuant to
12.1.6 (i) hereinabove, the dispute shall be referred to the Chief Executive
Officer (CEO) of Focal and a senior executive of Ciba or Chiron, as
appropriate.
(iii) In the event the dispute cannot be resolved pursuant
to 12.1.6 (ii) hereinabove, the parties shall enter into non-binding
mediation. The mediation shall be conducted by an independent mediator
acceptable to the parties. Either party may serve upon the other party a
written demand for mediation and such mediation shall commence within thirty
(30) days of the other party's receipt of such demand, unless otherwise
authorized by the parties. Each party shall make available to the mediation
an authorized representative with the capacity to bind such party, and the
mediation shall be conducted as deemed appropriate by the mediator.
(iv) In the event the dispute cannot be resolved pursuant to
12.1.6 (iii) hereinabove, the dispute shall be referred to arbitration in
accordance with the rules then prevailing of the Center for Public Resources
("CPR"), 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, unless otherwise mutually
agreed. Unless otherwise agreed by the parties, the arbitration panel shall
consist of one neutral arbitrator selected in accordance with the CPR rules.
The results of the arbitration shall be binding upon the parties.
12.1.7 Rights and Obligations. Focal's interest in Patent Rights
to all Inventions shall be subject to the exclusive licenses granted to Ciba
and Chiron in the Field under Article 2. Except as expressly provided in
Article 2, this Article 12, or otherwise in this Agreement, it is understood
that no party shall have any obligation to account to any other party for
profits, or to obtain any approval of any other party to license or exploit
an Invention by reason of joint ownership of any Invention.
30
12.1.8 Each party retains all right, title and interest to
inventions or discoveries, other than Inventions as defined in Section 12.1.1
(c), which are conceived or reduced to practice by it, whether solely or
jointly with third parties, except as specifically provided in this Agreement.
12.2 Patent Prosecution.
12.2.1 Focal Sole Inventions. Focal shall have the right, at its
expense, to control the preparing, filing, prosecuting and maintenance
worldwide of the patent applications and patents owned solely by Focal
pursuant to Section 12.1.3 or 12.1.5(i) above, in such countries as it deems
appropriate, and the conduct of any interferences, reexaminations, reissues,
oppositions or requests for patent term extensions using counsel of its
choice all at its expense. Focal agrees to make such additional foreign
filings as may be requested by Ciba and/or Chiron, to the extent it is able
to do so under applicable law, and subject to reimbursement by Ciba and/or
Chiron of costs with respect to such additional foreign filings; and provided
further that in the event a patent or application within the Focal Technology
applicable to Products within the Field is the subject of an interference,
request for reexamination, opposition or similar proceeding, Ciba and/or
Chiron shall reimburse Focal [*] of Focal's out-of-pocket costs of such
proceeding; provided, however, if Focal enters into an agreement granting
exclusive rights to a third party to sell products covered by the patent or
application that is the subject of such proceeding, Ciba and/or Chiron's
reimbursement shall be reduced [*] (e.g., Ciba and/or Chiron's percentage
would be reduced to [*], or [*].
12.2.2 Joint Inventions. The parties shall jointly pursue Patent
Rights for Inventions that are owned jointly by Ciba and/or Chiron, and Focal
under Sections 12.1.4 and 12.1.5 (iii) above by counsel mutually agreed to by
the joint owners, and the joint owners agree to take all reasonable action to
cooperate fully with each other in this regard. The joint owners [*]
the out-of-pocket expenses in connection with such activities as they are
incurred. If one joint owner elects [*] of expenses, the remaining joint
owner(s) shall have the right to file, prosecute and maintain such Patent
Rights in the name of such remaining joint owner(s).
12.2.3 Ciba and/or Chiron Sole Invention. Each of Ciba and
Chiron shall have the right, at Ciba and Chiron's expense, to control the
preparing, filing, prosecuting and maintenance worldwide of the patent
applications and patents owned solely by Ciba or Chiron, respectively,
pursuant to Section 12.1.2 or 12.1.5(ii) above, in such countries as Ciba or
Chiron deems appropriate, and the conduct of any interferences,
reexaminations, reissues, oppositions or requests for patent term extensions
for the Inventions owned by Ciba and Chiron pursuant to Section 12.1.2 or
12.1.5 above using counsel of its choice.
12.2.4 Cooperation.
(a) Focal shall keep Ciba and Chiron reasonably informed in a
timely manner as to the status of patent matters pertaining to the Focal
Patents, including Inventions made in the course of performing a Research
Program, including providing Ciba and Chiron copies of any significant
* Confidential treatment has been requested for marked portion
31
documents that Focal receives from or sends to patent offices, such as
amendments and responses to official actions, notices of interferences,
reexaminations, oppositions or requests for patent term extensions, all as
reasonably requested by any other party hereto. Focal shall provide each of
Ciba and Chiron with copies of the complete patent prosecution files of the
Focal Patents and patent applications within sixty (60) days of the Effective
Date of this Agreement. Each of Ciba and Chiron shall have the right, but
not the obligation, to advise Focal on the prosecution and maintenance of the
Focal Patents and applications. It is understood, however, the Developing
Party's period of review shall not delay filings or submissions to meet
deadlines to preserve Focal's patent rights.
(b) Ciba and/or Chiron shall advise Focal in a timely manner
as to the status of all patent matters to which Focal has rights under
12.1.5(ii). Upon Focal's request, Ciba and Chiron promptly shall provide
Focal with copies of the complete patent prosecution files of patents and
patent applications for Inventions described in Sections 12.1.5(ii). Focal
shall have the right, but not the obligation, to advise Ciba and Chiron on
the prosecution and maintenance of patents and patent applications for
Inventions described in Sections 12.1.5(ii). It is understood, however,
Focal's period of review shall not delay filings or submissions to meet
deadlines to preserve Ciba and Chiron's patent rights.
12.3 Defense of Third Party Infringement Claims. If the manufacture,
preparation, sale or use of any Product pursuant to this Agreement results in
a claim, suit or proceeding (collectively, "Actions") alleging patent
infringement of a third party patent against Focal, Ciba or Chiron (or their
respective Affiliates or Subdistributors), such party shall promptly notify
the other parties hereto in writing. Except as otherwise provided in Article
15, the party subject to such Action shall have the exclusive right to defend
and control the defense of any such Action using counsel of its own choice,
at such party's own expense; provided, however, that the other parties may
participate in the defense and/or settlement thereof at its own expense with
counsel of its choice. The party defending the Action shall have the right,
but not the obligation, to defend the Action in the name of itself and the
other parties as may reasonably be required by law. The party subject to the
Action agrees to keep the other parties hereto reasonably informed of all
material developments in connection with any such Action, and shall not
compromise or settle such Action in a manner which would adversely impact the
other party or parties hereto without the prior written consent of such
party, which consent shall not be unreasonably withheld.
12.4 Enforcement. Subject to the provisions of this Section 12.4, in
the event that Focal, or Ciba and/or Chiron reasonably believes that any
Focal Technology necessary for the manufacture, use or sale of a Product is
infringed or misappropriated by a third party or is subject to a declaratory
judgement action arising from such infringement in such country, in each case
with respect to the manufacture, sale or use of a product within the Field,
such party shall promptly notify the other parties hereto, and thereafter the
parties shall consult with one another and keep the others reasonably
informed to the extent such infringement significantly affects the commercial
exploitation of Products. Focal will use commercially reasonable efforts
generally to enforce the Focal Technology with respect to substantial
continuing infringements of the Focal Technology, by initiating legal action,
licensing the infringing activities or otherwise as appropriate after
consultation with Ciba and Chiron. It is understood, however, that such
obligation shall not be deemed to require Focal to take such actions with
32
respect to each such infringement, and Focal may take into account strategic
and other considerations in determining which infringers to take action
against, as well as when and whether to do so. Notwithstanding the foregoing
provisions of this Section 12.4 and the provisions set forth in Sections
12.4.1, 12.4.2, or 12.4.3 below, unless and until Ciba and/or Chiron
exercises the Option pursuant to Section 2.2 above, the provisions of this
Section 12.4 shall not apply to infringement of Focal Technology by a third
party with respect to Platelet Antagonists or [*].
12.4.1 In the event of a commercially significant infringement of
Focal Technology by a third party within the Field, Focal may, at the request
of Chiron and/or Ciba or at its own election, initiate an enforcement action
against such third party. Ciba and/or Chiron shall have the right to
participate in such action, which shall be conducted by counsel selected by
Focal and approved by Ciba and/or Chiron (which approval shall not be
withheld unreasonably), and Focal shall be responsible for the direction of
said counsel. Focal and Ciba and/or Chiron each shall pay [*] of the
reasonable out-of-pocket costs and expenses (including attorneys' and
professional fees) of actions initiated pursuant to this Section 12.4.1. Any
recoveries in an action initiated pursuant to this Section 12.4.1 shall be
applied first to reimburse the parties for all expenses of such action, and
any remaining recoveries from such Action applicable to the Field shall be
split between Focal and Ciba and/or Chiron with Ciba and/or Chiron retaining
[*] of the remaining recoveries applicable to the Field and Focal retaining
[*] of the remaining recoveries applicable to the Field; and Focal retaining
all of the remaining recoveries not applicable to the Field.
12.4.2 In the event that Focal elects not to initiate an action
to enforce the Focal Technology against a commercially significant
infringement by a third party in a country, which infringement consists of
the manufacture, sale or use of a product within the Field, within one
hundred eighty (180) days of a request by Ciba and/or Chiron to initiate such
action, Ciba and/or Chiron may initiate the requested action against such
infringement at its own expense with Focal's prior written approval, which
approval shall not be unreasonably withheld. Focal shall cooperate in such
action, and Ciba and/or Chiron shall keep Focal reasonably informed of the
progress of any such enforcement action. Ciba and/or Chiron shall reimburse
Focal's reasonable out-of-pocket costs and expenses necessary for such
cooperation. Focal shall have the right to participate in any such action
with counsel of its own choice at its own expense. Any recoveries with
respect to such action shall be retained by Ciba and/or Chiron, as
appropriate.
12.4.3 In the case of any third party infringement of Focal
Technology not governed by this Article 12, Focal shall have the right, but
not the obligation, to bring an action against such third party at Focal's
sole expense, and to retain any recoveries arising from such action.
12.5 Third Party Rights. The provisions of Sections 12.2.1 and 12.4
shall be subject to and limited by any agreements pursuant to which Focal
acquired any particular Focal Technology. As of the date of this Agreement,
all such agreements are identified in [*]. Notwithstanding the foregoing,
Focal shall use reasonable commercial efforts to preserve for Ciba and Chiron
the rights granted under this Article 12 with respect to Focal Technology
owned by third party licensors, and shall keep Ciba and Chiron reasonably
informed of, and cooperate with Ciba and Chiron in connection with,
* Confidential treatment has been requested for marked portion
33
the filing, prosecution, maintenance and enforcement of Focal Patents owned
by such third party licensors.
13
REPRESENTATIONS AND WARRANTIES AND COVENANTS
13.1 Focal Warranties. Focal warrants and represents to Ciba and Chiron
that (i) it has the full right and authority to enter into this Agreement and
grant the rights granted herein; (ii) it has not previously granted and will
not grant any rights in conflict with the rights granted herein; (iii) to its
knowledge and belief, there are no existing or threatened actions, suits or
claims pending against it with respect to its right to enter into and perform
its obligations under this Agreement; (iv) it has not previously granted, and
will not grant during the term of this Agreement, any right, license or
interest in or to the Focal Technology, or any portion thereof, to
manufacture, sell or use a product in the Field, except to the extent
expressly authorized under this Agreement; (v) the agreements listed in [*]
constitute a complete and accurate list of all agreements between Focal and
third parties pertaining to the Field that are in existence as of the
Effective Date.
Focal further represents and warrants as follows:
(a) Subject to the agreements listed in [*], Focal Controls all
patent rights set forth in [*].
(b) All of the license agreements in [*] are in full force and
effect and as of the Effective Date, Focal has not received notice of any
asserted breach under any such license agreement, and Focal is not in breach
of its obligations under any such license agreement.
(c) As of the Effective Date, Focal has no Affiliates.
(d) As of the Effective Date, except as previously disclosed to Ciba and
Chiron, Focal does not know of any patent or trade secret rights which would
be infringed by the manufacture, use or sale of Hydrogel Polymer for use in
the Field, except for intellectual property licensed under the Agreements
listed in [*]. As used herein, "to know" means specific knowledge of a
particular patent or trade secret.
13.2 Focal Covenants. Focal hereby agrees that during the term of this
Agreement,
(a) Focal shall, at Focal's sole expense, comply with all of its
obligations as licensee under all third party license agreements in [*]; and
(b) Focal shall not terminate any such license agreement in [*]
without the prior written consent of Ciba/Chiron; and
* Confidential treatment has been requested for marked portion
34
(c) Focal shall provide to Chiron and Ciba, promptly upon receipt
by Focal, any notices of default or termination received from the licensor
under any such third party license agreement in [*].
Focal acknowledges and agrees that any material breach by Focal under, or any
termination (without the consent of Ciba/Chiron) of, any third party license
agreement identified in [*] shall be deemed a breach of Focal's
obligations under this Agreement.
13.3 Ciba/Chiron Warranties. Ciba and Chiron warrant and represent to
Focal that (i) each has the full right and authority to enter into this
Agreement and grant the rights granted herein; (ii) each has not previously
granted and will not grant any rights in conflict with the rights granted
herein; and (iii) to each of Ciba's and Chiron's knowledge and belief, there
are no existing or threatened actions, suits or claims pending against it
with respect to its right to enter into and perform its obligations under
this Agreement.
13.4 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS
ARTICLE 13, FOCAL, CIBA AND CHIRON EXPRESSLY DISCLAIM ANY WARRANTIES,
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE RESEARCH,
PRODUCT DEVELOPMENT, AND THE FOCAL AND CIBA AND/OR CHIRON INTELLECTUAL
PROPERTY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, OR
FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF FOCAL TECHNOLOGY, PATENTED OR
UNPATENTED, AND NON-INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES.
14
CONFIDENTIALITY
14.1 Confidential Information. Except as expressly provided herein, the
parties agree that, for the term of this Agreement and for the longer of five
(5) years after the termination of this Agreement or ten (10) years after the
Effective Date, the receiving party, including Affiliates and Consultants,
shall not publish or otherwise disclose and shall not use for any purpose any
confidential information furnished to it by any other party hereto pursuant
to this Agreement (including confidential information provided prior to the
Effective Date) which if disclosed in tangible form is marked "Confidential"
or with other similar designation to indicate its confidential or proprietary
nature, or if disclosed orally is orally confirmed as confidential or
proprietary by the party disclosing such information at the time of such
disclosure ("Confidential Information"). As used herein, Confidential
Information shall include all confidential or proprietary biological,
chemical or other materials provided to any other party hereunder.
Notwithstanding the foregoing, Confidential Information shall not include
information that, in each case as demonstrated by written documentation:
(a) was already known to the receiving party, other than under
an obligation of confidentiality to the disclosing party, at the time of
disclosure;
* Confidential treatment has been requested for marked portion
35
(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 subsequently lawfully disclosed to the receiving party
by a person other than a party hereto or developed by the receiving party
without reference to any information or materials disclosed by the disclosing
party.
14.2 Permitted Disclosures. Notwithstanding the provisions of Section
14.1 above, the receiving party may disclose Confidential Information of the
disclosing party to its consultants, Affiliates, Subdistributors and
permitted sublicensees and subcontractors, provided that such disclosures are
under confidentiality restrictions no less stringent than those contained
herein. The receiving party may disclose Confidential Information of the
disclosing party to the extent such disclosure is required by applicable law,
regulation or court order, including without limitation filing and
prosecution of patents, prosecuting or defending litigation, submitting
information to tax or other governmental authorities, and/or manufacturing,
marketing and/or selling Products, or as reasonably necessary to exercise
other rights provided under this Agreement, (including rights under Article
12) provided that to the extent it may legally do so, the receiving party
will give reasonable advance written notice to the disclosing party of such
disclosure and, save to the extent inappropriate in the case of patent
applications, will use its reasonable efforts to secure confidential
treatment of such Confidential Information prior to its disclosure (whether
through protective orders or otherwise). The parties further shall have the
right to disclose Confidential Information of other parties hereto to the
extent reasonably necessary to carry out performance of this Agreement,
provided that the disclosing party uses at least the degree of care that it
uses with respect to its own Confidential Information, but in no event less
than reasonable care.
14.3 Confidentiality as to Ciba and Chiron. Since Chiron and Ciba are
jointly the Developing Party of the First Generation Products, Chiron, Ciba
and Focal all intend that information relating to the First Generations
Products will be disclosed to and used by all three parties in connection
with their activities under this Agreement. Similarly, all three parties
shall have access to, and the right to use, in accordance with this
Agreement, all information related to Second Generation Products as to which
Chiron and Ciba are jointly the Developing Party. With regard to Ciba/Chiron
Compounds owned by Chiron or Ciba individually, and with respect to Second
Generation Products as to which Chiron or Ciba is individually the Developing
Party, the party (Chiron or Ciba) which does not own the Ciba/Chiron Compound
or is not the Developing Party is referred to as the "Non Developing Party".
Focal agrees not to disclose to the non-Developing Party any Confidential
Information of the Developing Party, and Focal agrees not to use Confidential
Information of the Developing Party in connection with Second Generation
Products of the non-Developing Party, except to the extent authorized under
Section 6.2.
36
15
INDEMNIFICATION
15.1 Indemnification of Focal. The Developing Party with respect to a
Product shall indemnify each of Focal and its Affiliates and the directors,
officers, and employees of Focal and such Affiliates and the licensors,
successors and assigns of any of the foregoing (the "Focal Indemnities"), and
hold each Focal Indemnitee harmless from and against any and all liabilities,
damages, settlements, claims, actions, suits, penalties, fines, costs or
expenses (including, without limitation, reasonable attorneys' fees and other
expenses of litigation) (any of the foregoing, a "Claim") incurred by any Focal
Indemnitee, arising from or occurring as a result of (a) the development,
marketing, sale or use of any Product, or the manufacture by the Developing
Party, its Affiliates, contractors or licensees of any Product, except to the
extent such claim is subject to indemnification by Focal pursuant to
Section 15.2; or (b) the negligence or willful misconduct of the Developing
Party.
15.2 Indemnification of Ciba/Chiron. Focal shall indemnify each of Ciba,
Chiron and their respective Affiliates and the directors, officers, and
employees of Ciba, Chiron and such Affiliates and the successors and assigns of
any of the foregoing (the "Ciba/Chiron Indemnities"), and hold each Ciba/Chiron
Indemnitee harmless from and against any and all liabilities, damages,
settlements, claims, actions, suits, penalties, fines, costs or expenses
(including, without limitation, reasonable attorneys' fees and other expenses of
litigation) (any of the foregoing, a "Claim") incurred by any Ciba/Chiron
Indemnitee, arising from or occurring as a result of or relating to (a) the
failure by Focal, its Affiliates or contractors to manufacture Products supplied
by Focal hereunder in accordance with the warranties set forth in the Supply
Agreement or with applicable law of the Major Countries; or (b) the negligence
or willful misconduct of Focal.
15.3 Procedure. A party (the "Indemnitee") that intends to claim
indemnification under this Article shall promptly notify the indemnifying party
(the "Indemnitor") in writing of any loss, claim, damage, liability or action in
respect of which the Indemnitee or any of its Affiliates, sublicensees or their
directors, officers, employees or agents intend to claim such indemnification,
and the Indemnitor shall have control of the defense and/or settlement thereof,
subject to the limitations set forth herein; provided that the Indemnitee shall
have the right to participate in the defense through its own counsel at the
Indemnitee's expense. The indemnity agreement in this Article 15 shall not
apply to amounts paid in settlement of any loss, claim, damage, liability or
action if such settlement is effected without the consent of the Indemnitor,
which consent shall not be withheld unreasonably. The failure to deliver
written notice to the Indemnitor within a reasonable time after the commencement
of any such action, if prejudicial to its ability to defend such action, shall
relieve such Indemnitor of any liability to the Indemnitee under this Article 15
but the omission so to deliver written notice to the Indemnitor shall not
relieve the Indemnitor of any liability that it may have to any Indemnitee
otherwise than under this Article 15. The Indemnitor shall not settle or
compromise any indemnified claim in a manner which would adversely impact the
Indemnitee without the Indemnitee's prior written consent, which shall not be
unreasonably withheld. The Indemnitee under this Article 15, its employees and
agents, shall cooperate fully with the Indemnitor and its legal representatives
at the Indemnitor's expense in the investigation of any action, claim or
liability covered by this indemnification.
37
16
TERM AND TERMINATION
16.1 Term. This Agreement shall become effective as of the Effective Date
and, unless earlier terminated pursuant to the other provisions of this
Article 16, shall continue in full force and effect, until the last to expire or
be abandoned of the patents and patent applications within the Focal Technology,
or the date payments are no longer due under Articles 8 and 9 for such products
in such country, whichever is later. Upon expiration, but not earlier
termination of this Agreement, the licenses granted to Ciba and Chiron hereunder
shall become fully paid up, perpetual and nonexclusive. The Supply Agreement
entered into pursuant to Article 8 shall have a mutually agreed upon term and
mutually agreed upon renewal rights.
16.2 Termination for Cause. Either Focal or Ciba/Chiron may terminate this
Agreement in the event the other shall have materially breached or defaulted in
the performance of any of its material obligations hereunder, and such default
shall have continued for sixty (60) days after written notice thereof was
provided to the breaching party by the nonbreaching party. Any termination
shall become effective at the end of such sixty (60) day period unless the
breaching party (or any other party on its behalf) has cured any such breach or
default prior to the expiration of the sixty (60) day period.
16.3 Termination Upon Notice.
16.3.1 Ciba/Chiron may terminate this Agreement in its entirety
upon ninety (90) days prior written notice; provided, however, that such notice
of termination may not be given prior to three (3) months after the Effective
Date. Notwithstanding the foregoing, if the Fragmentation and Embolization
Study fails to meet the Study Criteria, as set forth in Section 3.3.1,
Ciba/Chiron shall have the right to terminate this Agreement upon thirty (30)
days prior written notice as set forth in Section 3.3.1(c).
16.3.2 Subject to the provisions of Article 11, Chiron and/or Ciba,
as Developing Party, shall have the right, at any time in its sole discretion to
discontinue development of any Product, and such discontinuation shall not be
deemed a termination of this Agreement or the licenses granted hereunder.
Ciba/Chiron shall promptly notify Focal of any such decision.
16.3.3 If at any time no First Generation Product or Second
Generation Product is included and being actively pursued within either the
Research or Product Development, and at such time neither a First Generation
Product nor Second Generation Product is being actively marketed and promoted
commercially by Ciba or Chiron, or their respective Affiliates or
Subdistributors under this Agreement, Focal shall have the right to terminate
this Agreement effective upon ninety (90) days written notice to Ciba and
Chiron. For purposes of this Section 16.3.3, "actively pursuing" a Product
shall mean devoting such resources to the Research and Product Development of
such Product as is reasonably required to complete such Product Development and
to obtain regulatory approvals to market the Product in Major Countries in an
expeditious manner in accordance with a reasonable plan for
38
obtaining regulatory approvals (recognizing that approval in some Major
Countries may be sought after approval has been obtained and marketing commenced
in others); and "actively marketing and promoting" a Product shall mean devoting
such resources as are required to promote the Product in accordance with a
reasonable marketing plan in the Major Countries and other countries of the
world in which it is commercially reasonable to market the Products.
16.4 Effect of Termination or Expiration.
16.4.1 Accrued Obligations. Termination of this Agreement for any
reason shall not release any party hereto from any liability which, at the time
of such termination, has already accrued to the other party or which is
attributable to a period prior to such termination, nor preclude either party
from pursuing all rights and remedies it may have hereunder or at law or in
equity with respect to any breach of this Agreement. Subject to any liability
for damages by reason of a breach of this Agreement by Focal, Focal may retain
any amounts paid to it prior to the effective date of any termination of this
Agreement.
16.4.2 Return of Materials and Information. Upon any termination
or expiration of this Agreement, upon request of the disclosing party, each
receiving party shall return to the disclosing party or destroy all Confidential
Information owned by the other party, except to the extent the returning party
retains the right to use such Confidential Information under the surviving
provisions of this Agreement. Notwithstanding the foregoing, the receiving
party shall have the right to retain one copy of the Confidential Information
for archival purposes.
16.4.3 Survival. Articles 1, 14, 15, 16 and 17 and Sections 6.2,
7.2, 10.4, 10.5, 12.1 (excluding the first sentence of 12.1.7); first sentence
of 12.2.1, 12.2.2, and the first sentence of 12.5 shall survive expiration or
termination of this Agreement for any reason. Upon the expiration, but not an
earlier termination of this Agreement, Section 6.1, Article 8, first sentence of
12.1.7 and the Supply Agreement shall survive for the period specified in the
Supply Agreement, and the Supply Agreement shall provide for the transfer to the
Developing Party upon expiration thereof of any Focal Know-how necessary to
manufacture or have manufactured the Products then being supplied thereunder.
Upon the termination by any party hereto pursuant to Section 16.3 or by Focal
pursuant to Section 16.2, Section 5.2 shall survive only as Section 5.2 applies
to Ciba and Chiron's activities thereunder. Except as otherwise set forth in
the second sentence of Section 16.1 or Section 16.4.4 below, all other rights
including without limitation all licenses and obligations shall terminate upon
the expiration or earlier termination of this Agreement.
16.4.4 Other.
Without limiting the foregoing provisions of Section 16.4.3 above or
this Section 16.4.4 below, upon termination of this Agreement by Focal
pursuant to Section 16.3.3 or by Ciba and Chiron pursuant to Section 1 6.3.1,
(i) rights to First Generation Products shall revert to Focal; and (ii) Ciba
and Chiron shall transfer to Focal, all regulatory filings, regulatory,
approvals, other correspondence with regulatory authorities and other
preclinical or clinical data and information that relates to First
39
Generation Products obtained or
generated in the course of performing Research or Product Development, subject
to payment by Focal of mutually agreed upon compensation to Ciba and Chiron for
value created by them with respect to such First Generation Products. Focal may
use and disclose any data, information and other information and other items
described in this Section 16.4.3 for any purpose. Under no circumstances will
Ciba or Chiron be obligated to provide to Focal any data or information on
Second Generation Products except as provided in Section 6.2(b) and Section 7.2.
17
MISCELLANEOUS
17.1 Bankruptcy. All licenses granted under this Agreement are deemed to
be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of
right to "intellectual property" as defined in Section 101 of such Code. The
parties agree that the licensee may fully exercise all of its rights and
elections under the Bankruptcy Code. The parties further agree that, in the
event a licensee elects to retain its rights as a licensee under such Code, the
licensee shall be entitled to complete access to all Focal Know-How, and copies
of any Focal Know-how in tangible form, all as necessary for the manufacture of
Products licensed to it hereunder. Such copies of Focal Know-how shall be
delivered to the licensee not later than (a) the commencement of bankruptcy
proceedings against the licensor, upon written request, unless the licensor
elects to perform its obligations under this Agreement, or (b) if not delivered
under (a) above, upon the rejection of this Agreement by or on behalf of the
licensor, upon written request.
17.2 Governing Law. This Agreement and any dispute arising from the
performance or breach hereof shall be governed by and construed and enforced in
accordance with, the laws of the State of New York, without reference to
conflicts of laws principles.
17.3 Force Majeure. Nonperformance of any party (except for payment
obligations) shall be excused to the extent that performance is rendered
impossible by strike, fire, earthquake, flood, governmental acts or orders or
restrictions, delay or failure of suppliers, or any other reason where failure
to perform is beyond the reasonable control and not caused by the negligence or
willful misconduct of the nonperforming party (each a "Force Majeure Event").
The party whose performance is prevented by a Force Majeure Event such event
shall promptly inform the other parties of its occurrence, and shall keep the
other parties informed of its progress in resolving the Force Majeure Event. In
the event that any Force Majeure Event prevents performance for more than sixty
(60) days, the parties shall reasonably negotiate alternative methods of
enabling the performance of this Agreement to continue, including authorizing
another party hereto to perform the obligations in question or obtaining such
performance from a third party, all on reasonable commercial terms.
17.4 Joint and Several Liability. Where obligations under this Agreement
are obligations of "Ciba/Chiron" or are obligations of the "Developing Party"
where the Developing Party is Ciba and Chiron jointly, each of Ciba and Chiron
shall be jointly and severally liable to Focal with respect to the performance
and any breach of such obligations. It is further understood and agreed that
40
notwithstanding that an obligation of Focal hereunder is expressly stated as
being to "Ciba/Chiron" or the "Developing Party" where the Developing Party is
Ciba and Chiron jointly, the satisfaction or performance by Focal of any such
obligations to Ciba or Chiron shall be deemed to satisfy all obligations of
Focal to both Ciba and Chiron and the Developing Party.
17.5 No Implied Waivers; Rights Cumulative. No failure on the part of any
party to exercise and no delay in exercising any right under this Agreement, or
provided by statute or at law or in equity or otherwise, shall impair, prejudice
or constitute a waiver of any such right, nor shall any partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right.
17.6 Independent Contractors. Nothing contained in this Agreement is
intended implicitly, or is to be construed, to constitute Focal and Ciba and/or
Chiron as partners in the legal sense. No party hereto shall have any express
or implied right or authority to assume or create any obligations on behalf of
or in the name of any other party or to bind any other party to any contract,
agreement or undertaking with any third party.
17.7 Notices. All notices, requests and other communications hereunder
shall be in writing and shall be personally delivered or sent by registered or
certified mail, return receipt requested, postage prepaid, in each case to the
respective address specified below, or such other address as may be specified in
writing to the other parties hereto:
Ciba: Ciba-Geigy Corporation
000 Xxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attn: Office of the President
with a copy to: General Counsel
Chiron: Chiron Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: President, Chiron Technologies
with a copy to: General Counsel
Focal: Focal, Inc.
0 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxx Xxxx
with a copy to: Wilson, Sonsini, Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
00
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
17.8 Affiliates; Assignment; Change of Control.
17.8.1 This Agreement shall not be assignable by any party to any
third party hereto without the written consent of the other parties hereto;
except that any party hereto may assign this Agreement without any other party's
consent (i) to an Affiliate of the assigning party or (ii) subject to
Section 17.8.2, to an entity that acquires substantially all of the business or
assets of the assigning party relating to the Products, in each case whether by
merger, acquisition, or otherwise. Any assignment not permitted hereunder shall
be deemed null and void. In the event a party hereto assigns this Agreement to
an Affiliate, or its Affiliate exercises any rights granted to such Affiliate
hereunder, the party shall guarantee the performance of such Affiliate, and any
action or inaction of the Affiliate shall be deemed an action or inaction of
such party.
17.8.2 Focal agrees to notify Ciba and Chiron prior to the closing
of any sale, merger, reorganization or other transaction which would result in
(i) a transfer of all or substantially all of the assets of Focal relating to
the subject matter of this Agreement; or (ii) a change in the ownership or
control of more than 50% of the equity interests or voting interests in Focal
being held by a third party (each a "Change of Control"). Unless Ciba and
Chiron consent to the Change of Control of Focal within thirty (30) days after
receipt of notice thereof from Focal, which consent shall not be unreasonably
withheld, if Focal is so acquired by a third party that is developing or
commercializing a product specifically intended for use within the Field, Focal
shall, at its election, either (i) have the Second Generation Products
manufactured by a third party manufacturer reasonably acceptable to Ciba/Chiron
as set forth in Section 8.1, or (ii) terminate Focal's manufacturing rights
under Article 8 with respect to Second Generation Products, subject to payment
of a royalty to Focal, and subject to the Developing Party's right to
manufacture or have manufactured such Product or component, all as provided in
Section 8.4.1.
17.8.3 Subject to the foregoing, this Agreement shall be binding on
and inure to the benefit of the permitted successors and assigns of the parties.
17.9 Modification. No amendment or modification of any provision of this
Agreement shall be effective unless in writing signed by the party to be
charged.
17.10 Severability. If any provision hereof should be held invalid,
illegal or unenforceable in any jurisdiction, all other provisions hereof shall
remain in full force and effect in such jurisdiction, to the extent such
remaining provisions are consistent with the intentions of the parties as
evidenced by this Agreement as a whole, and such remaining provisions shall be
liberally construed in order to carry out the intentions of the parties hereto.
Such invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of such provision in any other jurisdiction. The
parties will negotiate in good faith a valid, substitute provision that most
nearly reflects the original intent of the parties.
42
17.11 Publicity. Each of the parties hereto agrees not to disclose to
any third party the financial terms of this Agreement without the prior written
consent of the other parties hereto, except to advisors, investors and others on
a need-to-know basis under circumstances that reasonably ensure the
confidentiality thereof, or to the extent required by law. Notwithstanding the
foregoing, if the parties agree upon and issue a press release to announce the
execution of this Agreement, together with a corresponding Question & Answer
outline for use in responding to inquiries about the Agreement, Ciba, Chiron and
Focal may each thereafter disclose to third parties the information contained in
such press release and Question & Answer outline without the need for further
approval by the other.
17.12 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together, shall constitute one and the same instrument.
17.13 Headings. Headings used herein are for convenience only and shall
not in any way affect the construction of or be taken into consideration in
interpreting this Agreement.
17.14 Patent Marking. Focal and Ciba and Chiron agree to xxxx and have
their Affiliates and sublicensees xxxx all patented Products they sell or
distribute pursuant to this Agreement in accordance with the applicable patent
statutes or regulations in the country or countries of manufacture and sale
thereof.
17.15 Export Laws. Notwithstanding anything to the contrary contained
herein, all obligations of Focal and Ciba/Chiron are subject to prior compliance
with United States export regulations and such other United States laws and
regulations as may be applicable, and to obtaining all necessary approvals
required by the applicable agencies of the government of the United States.
Focal and Ciba/Chiron shall cooperate with each other and shall provide
assistance to the other as reasonably necessary to obtain any required
approvals.
17.16 No Implied Licenses. Except as expressly provided herein, no
party hereto grants to any other party hereto any rights or licenses under such
party's patent rights, trade secrets or other intellectual property rights.
17.17 Entire Agreement. This Agreement, [*], and the Joint Defense
Agreement between the parties effective as of January 15, 1996, constitute
the entire agreement, both written or oral, with respect to the subject
matter hereof, and supersede all prior or contemporaneous understandings or
agreements, whether written or oral, among the parties hereto with respect to
such subject matter.
* Confidential treatment has been requested for marked portion
43
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in duplicate originals as of the date first above
written.
FOCAL INC. CIBA-GEIGY CORPORATION
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------- -------------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxxx
------------------------------ -----------------------------------
Title: President & CEO Focal, Inc. Title: President, Ciba Pharmaceuticals
----------------------------- ----------------------------------
CHIRON CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx, M.D., Ph.D.
-----------------------------------
Title: President, Chiron Technologies
----------------------------------
44