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CONFIDENTIAL TREATMENT REQUESTED
FOR PORTIONS OF THIS DOCUMENT
EXHIBIT 10.8
EXCLUSIVE LICENSE AGREEMENT
THIS AGREEMENT effective as of this 3rd day of December, 1996, between LUNG
RX, Inc., a corporation organized and existing under the laws of the State of
Delaware, with its principal place of business at 000 Xxxxxx Xxxxx, Xxxxx 000,
Xxxxxx Xxxx, Xxxxx Xxxxxxxx 00000 (hereinafter referred to as "LUNG RX") and
Pharmacia & Upjohn Company, a corporation organized and existing under the laws
of the State of Delaware, with its principal office at 0000 Xxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxx 00000 (hereinafter referred to as "P&U").
WHEREAS, P&U holds valuable patent rights pertaining to
9-deoxy-13,14-dihydra-2',
a-methano-3-oxa-4,5,6-trinor-3,7-(1',3"-interphenylene)-PGF, and the
pharmaceutically acceptable salts and esters thereof (hereinafter referred to as
"Compound");
WHEREAS, P&U is willing to license Compound to a party wishing to develop
it; WHEREAS, LUNG RX has the capability and know-how to develop Compound and is
desirous of licensing it from P&U;
WHEREAS, P&U (formerly Upjohn) and Glaxo Wellcome (formerly Wellcome
Foundation Limited), entered into a Basic Agreement dated December 14, 1976
(hereinafter referred to as the "Basic Agreement") relating to Compound;
WHEREAS, P&U and Glaxo Wellcome entered an agreement on 10 February 1993
for the further development of Compound (hereinafter referred to as "Development
Agreement"); and
WHEREAS, Development Agreement has now terminated and LUNG RX wishes to
develop Compound, using data and know-how generated under the Development
Agreement.
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NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
ARTICLE 1. DEFINITIONS
As used in this Agreement, the following terms, whether used in the
singular or the plural, shall have the following meanings:
1.1 "Affiliate" means any corporation or non-corporate business entity
which controls, is controlled by, or is under common control with a party to
this Agreement. A corporation or non-corporate business entity shall be regarded
as in control of another corporation if it owns or directly or indirectly
controls at least forty percent (40%) of the voting stock of the other
corporation, or (a) in the absence of the ownership of at least forty percent
(40%) of the voting stock of a corporation, or (b) in the case of a
non-corporate business entity, if it possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of the
corporation or non-corporate business entity, as applicable.
1.2 "Agreement" means this exclusive license agreement.
1.3 "Compound" means (a)9-deoxy-13,14-dihydra-2,9a-methano-3-oxa-4,
56-trinor-3,7-(1',3"-interphenylene)-PGF, formerly referred to by the parties as
X/X 000 xx X-00000, and (b) the pharmaceutically acceptable salts and esters
thereof.
1.4 "Dollars" or "$" means United States dollars.
1.5 "Effective Date" means the date set forth at the beginning of this
Agreement.
1.6 "Europe" means all countries which are Member States, from time to time
of the European Community.
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1.7 "FDA" means the United States Food and Drug Administration.
1.8 "IND" means an Investigational New Drug Application or its equivalent.
1.9 "Know-How" means all data, information, know-how, methods, procedures,
and processes and materials, including samples, whether or not patentable, which
are possessed by P&U as of the Effective Date of this Agreement and which
relates to the manufacture, use or sale of a Compound or a Product, including
but not limited to, biological, chemical, biochemical, toxicological,
pharmacological, metabolic, formulation, clinical, analytical and stability
information and data.
1.10 "Milestone Country" means any one of the following countries: the
United States, the United Kingdom, Japan, France, Italy, Spain, Germany or
Canada.
1.11 "NDA" means a New Drug Application or its equivalent.
1.12 "Net Sales" with respect to any Product containing a Compound as the
sole active ingredient, means the gross sales (i.e., gross invoice prices) of
such Product billed by LUNG RX and its sublicensees to Third Party customers,
less
(i) actual credited allowances to such Third Party customers for
spoiled, damaged, outdated and returned Product and for retroactive price
reductions,
(ii) the amounts of trade and cash discounts not already credited to
such Third Party customers at the time of invoice,
(iii) all transportation and handling charges, sales taxes, excise
taxes, use taxes and import/export duties actually paid, and
(iv) all other allowances and adjustments actually credited to
customers (including, but not limited to rebates paid to Third Party payors),
whether during a specific royalty period or not.
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1.13 "Net Sales" with respect to any Product containing one or more active
ingredient(s) in addition to a Compound means gross sales of such Product billed
by LUNG RX and its sublicensees to Third Party customers, less the allowances,
adjustments, reductions, discounts, taxes, duties, rebates, and other charges
referred to in Section 1.12 above credited against sales of such Product
multiplied by a fraction the numerator of which shall be the manufacturing or
acquisition cost of all the active therapeutic ingredients in such Product,
including the Compound, such costs to be determined by LUNG RX, or its
sublicensees in accordance with such party's customary accounting procedures.
1.14 "Orphan Indication" means an indication to treat a disease or
condition that meets the definition stated in the Orphan Drug Act of 1983, to
include primary pulmonary hypertension.
1.15 "Non-Orphan Indication" means any indication to treat a disease or
condition which does not meet the definition stated in the Orphan Drug Act of
1983, to perhaps include secondary pulmonary hypertension, peripheral vascular
disease, congestive heart failure and chronic obstructive pulmonary disease.
1.16 "Patent Rights" means all United States and foreign patents and patent
applications listed in Appendix A attached hereto and made a part hereof and any
and all patents that may issue from said patent applications and all other
patent applications now or hereafter owned by P&U, alone or jointly with LUNG RX
which are filed or are entitled to priority or benefit of an application filed
prior to the Effective Date and, which claim inventions relating to the
Compound, a Product, the preparation of either, or relating to the Know-How,
together with any and all patents that have issued or in the future issue
therefrom; including any and all reissues, extensions, substitutions,
confirmations, registrations, revalidations, renewals,
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supplementary protection certificates, additions, continuations,
continuations-in-part or divisions of or to any of the aforesaid patent
applications and patents.
1.17 "Phase III Pivotal Trial" means a clinical study of a Product carried
out by or under the control of LUNG RX as a Phase III clinical trial which is
designed to demonstrate the efficacy of the chronic administration of such
Product as a treatment for any disease or condition.
1.18 "Conclusion of Pivotal Phase III Trial" means sixty (60) days after
completion of the treatment of one hundred percent (100%) of the specified
number of patients described in the protocol for such study and the analysis of
the data collected during the study.
1.19 "Product" means any Compound or any pharmaceutical product containing
a Compound as the sole therapeutically active ingredient, or containing, in
addition to a Compound, one or more other therapeutically active ingredients.
1.20 "Registration" in relation to any Product means such approvals by
government authorities in a country of or community or association of countries
included in the Territory (including, where applicable, price approvals) as may
be legally required before such Product may be commercialized in such country.
1.21 "Territory" means the entire world.
1.22 "Third Party" means any party other than P&U or LUNG RX, or LUNG RX's
Affiliates or sublicensees.
1.23 "Valid Claim" means a claim of an issued and unexpired patent included
within the Patent Rights which has not been held unenforceable, unpatentable or
invalid by a decision of a court or other governmental agency of competent
jurisdiction, unappealable or unappealed with in the time allowed for appeal,
and which has not been admitted to be invalid or unenforceable through reissue
or disclaimer or otherwise.
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ARTICLE 2. REPRESENTATIONS AND WARRANTIES
Each party warrants and represents to the other that it has the full right
to enter into this Agreement, and that, to the best of its knowledge, there are
no agreements, commitments or obstacles, technical or legal, including patent
rights of others which could prevent it from carrying out all of its obligations
hereunder, including, in the case of P&U, its grant to LUNG RX of the license
described in Section 3.1. P&U warrants to LUNG RX that, to the best of its
knowledge, the use of the Know-How and Patent Rights by or for LUNG RX, its
Affiliates and sublicensees under the terms and conditions contemplated by this
Agreement will not infringe upon any Third Party's know-how, patent or other
intellectual property rights in the Territory or constitute misuse of
confidential information by LUNG RX, it Affiliates or sublicensees, or Third
Parties acting on their behalf. P&U further warrants that Appendix A is a
complete list as of the Effective Date of all patents and patent applications
included in the Patent Rights.
ARTICLE 3. GRANT
3.1 Grant. P&U hereby grants LUNG RX an exclusive license, with a right to
sublicense, under the Patent Rights and Know-How to make, have made, use and
sell Products in the Territory.
3.2 Covenant Not to Xxx. P&U agrees that during the term of this Agreement,
it will not assert nor cause to be asserted against LUNG RX or its sublicensees
any patent not included in the Patent Rights that is or might be infringed by
reason of LUNG RX or its sublicensees' exercise of rights under the license
granted to LUNG RX hereunder.
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ARTICLE 4. SALE OF INTERMEDIATES
In conducting research on the Compound LUNG RX shall obtain certain
intermediates of the Compound and other materials related to the Compound
(collectively, the "Intermediates") from Glaxo Wellcome under terms and
conditions worked out between them.
ARTICLE 5. LICENSE FEE: MILESTONE PAYMENTS
5.1 License Fee. In partial consideration of the rights granted to LUNG
RX by P&U under Article 3 hereof, LUNG RX will pay P&U a nonrefundable license
fee of [ ] within thirty (30) days after execution of this Agreement by both
parties.
5.2 Milestone Payments.
(a) LUNG RX will pay P&U a milestone payment ("Milestone Payment")
during development of the first Orphan Indication in the amount specified below
no later than thirty (30) days after the occurrence of the corresponding event
designated below unless LUNG RX shall have given P&U notice of the termination
of this Agreement on or before expiration of such thirty (30) days:
Milestone Event Milestone Payment
First Orphan Indication Millions of Dollars
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The date the first NDA is filed in a Milestone
Country by LUNG RX or its sublicensees for the
first Product. [ ]
Approval of the first NDA in a Milestone Country. [ ]
One year from marketing commencement in a Milestone
Country. [ ]
Total Milestone Payments _______________
$0.325
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(b) LUNG RX will pay P&U a milestone payment ("Milestone Payment")
during development of the first Non-Orphan Indication in the amount specified
below no later than thirty (30) days after the occurrence of the corresponding
event designated below unless LUNG RX shall have given P&U notice of the
termination of this Agreement on or before expiration of such thirty (30) days:
Milestone Event Milestone Payment
First Non-Orphan Indication Millions of Dollars
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The date the first IND is filed in a Milestone
Country. [ ]
The conclusion of a pivotal Phase III clinical trial
in a Milestone Country. [ ]
The date the first NDA is filed in a Milestone
Country by LUNG RX or its sublicensees for the
first Product. [ ]
Approval of the first NDA in a Milestone Country. [ ]
Total Milestone Payments _______________
$3.55
(c) All Milestone Payments payable pursuant to clauses (a) and (b) of
Section 5.2 shall be nonrefundable and only the Milestone Payment for a
Non-Orphan Indication due upon the first NDA approval in a Milestone Country
(i.e., the [ ] Milestone Payment) shall be fully creditable against earned
royalties payable hereunder pursuant to Article 6.
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ARTICLE 6. ROYALTIES
6.1 In consideration of the license granted to LUNG RX hereunder, LUNG RX
shall pay or cause to be paid to P&U royalty equal to (a)
(i) [ ] for Net Sales of the Product in the Territory, less than [ ],
and
(ii) [ ] of the Net Sales of a Product in a country of the Territory,
so long as the manufacture, sale or use of such Product in such country would,
but for the license granted herein, infringe a Valid Claim; or (b) [ ] of the
Net Sales of Product in a country of the Territory for sales or uses of such
Product other than those described in clause (a)(i) or (a)(ii) of this Section
6.1 for a period of ten (10) years commencing on the date of first commercial
sale of the first Product sold in a Milestone Country. Notwithstanding the
foregoing, with respect to Europe only, LUNG RX's obligation to pay royalties
payable on Net Sales of a given Product by virtue of clause (b) of Section 6.1
shall cease as of the date on which the Know-How embodied in such Product
becomes published or generally known to the public through no fault on the part
of LUNG RX or its Affiliates or sublicensees.
6.2 Accrual of Royalties. No royalty shall be payable on a Product made,
sold, or used for tests or development purposes or distributed as samples. No
royalties shall be payable on sales among LUNG RX and its sublicensees, but
royalties shall be payable on subsequent sales by LUNG RX or its sublicensees to
a Third Party. No multiple royalty shall be payable because the manufacture, use
or sale of a Product is covered by more than one Valid Claim or is subject to
both Know-How and a Valid Claim.
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6.3 Third-Party Royalties. If LUNG RX or its sublicensees determine, at
LUNG RX's or its sublicensees' discretion, that it is necessary to pay royalties
or other fees to any Third Party in order to market or develop a Product in a
given country of the Territory, LUNG RX may deduct such royalties from royalties
thereafter due P&U with respect to Net Sales of such Product in such country,
but in no event shall the royalties due P&U on such Net Sales of such Product in
such country on account of any reduction pursuant to this Section 6.3 be thereby
reduced to less than [ ] of Net Sales of Product for which royalties are payable
pursuant to clause (a) of Section 6.1 hereof or [ ] of Net Sales of Product for
which royalties are payable pursuant to clause (b) of Section 6.1 hereof.
6.4 Compulsory Licenses. Should a compulsory license be granted to a Third
Party under the applicable laws of any country in the Territory under the Patent
Rights licensed hereunder to LUNG RX, the royalty rate payable hereunder for
sales of Products in such country shall be adjusted to match any lower royalty
rate granted to such Third Party for such country.
6.5 Commercial Hardship. If in any country of the Territory LUNG RX can
demonstrate that for any reason beyond its or its sublicensees' control the
royalty payable hereunder by LUNG RX causes or may cause LUNG RX a significant
reduction in its or their sales of Product in that country, or otherwise causes
or may cause hardship in the promotion or sale of Product in a country, the
parties shall meet and in good faith endeavor to agree on a reduction in the
royalty rate payable in that country. The negotiated royalty rate will be one
which places LUNG RX or its sublicensees in a position to market competitively
the Product in such country.
6.6 Reduction in Royalty Due to Invalid Claim. In the event that all
applicable claims of a patent included within the Patent Rights under which LUNG
RX is selling or actively
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developing a Product shall be held invalid or not infringed by a court of
competent jurisdiction in a given country of the Territory, whether or not there
is a conflicting decision by another court of competent jurisdiction in such
country, LUNG RX may cease payment of royalties which would have otherwise been
due hereunder on Net Sales of Product covered by such claims in such country
until such judgment shall be finally reversed by an unappealed or unappealable
decree of a court of competent jurisdiction of higher dignity in such country;
provided, however, that if such judgment is finally reversed by an unappealed or
unappealable decree of a court of competent jurisdiction, the former royalty
payments shall be resumed and the royalty payments not therefore made shall
become due and payable.
6.7 Most Favored Licensee. Should LUNG RX's exclusive license hereunder
become nonexclusive in any country of the Territory due to LUNG RX's failure to
perform the obligations set forth in Article 9 or for any reason whatsoever and
should P&U thereafter grant to a Third Party a license for the Products in such
country containing more favorable terms than those granted to LUNG RX, then in
such event, P&U promptly shall notify LUNG RX and LUNG RX shall have the benefit
of such more favorable terms.
ARTICLE 7. ROYALTY REPORTS AND ACCOUNTING
7.1 Royalty Reports; Records. During the term of this Agreement, LUNG RX
shall furnish or cause to be furnished to P&U on a semiannual basis a written
report or reports covering LUNG RX's fiscal half year (currently ending on or
about the last day of February and August; each such fiscal half year being
sometimes referred to herein as a royalty period) showing (a) the Net Sales of
all Products in the Territory during the reporting period; (b) the royalties,
payable in Dollars, which shall have accrued hereunder in respect of such sales
with a
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summary computation of such royalties; (c) withholding taxes, if any, required
by law to be deducted in respect of such sales; and (d) the exchange rates used
in determining the amount of Dollars. With respect to sales of Products invoiced
in Dollars, the Net Sales and royalty payable shall be expressed in Dollars.
With respect to sales of Products invoiced in a currency other than Dollars, the
Net Sales and royalty payable shall be expressed in the domestic currency of the
party making the sale together with the Dollar equivalent of the royalty
payable, calculated using the simple average of the exchange rates published in
the Midwest Edition of The Wall Street Journal. If any sublicensee makes any
sales invoiced in a currency other than its domestic currency, the Net Sales
shall be converted to its domestic currency in accordance with the sublicense's
normal accounting principles. LUNG RX's shall have the option of making any
royalty payment directly to P&U. LUNG RX sublicensees or its sublicensee making
any royalty payment shall furnish to the other party appropriate evidence of
payment of any tax or other amount deducted from any royalty payment. Reports
shall be due on the ninetieth (90th) day following the close of each respective
fiscal half year. In case no royalty is due for any royalty period hereunder,
LUNG RX shall so report. LUNG RX shall keep accurate records in sufficient
detail to enable the royalties payable hereunder to be determined.
7.2 Right to Audit. Upon written request of P&U, at P&U's expense and not
more than once in each fiscal year nor more than once in respect of any LUNG RX
fiscal year, LUNG RX shall permit an independent public accountant, selected by
P&U but not regularly employed by P&U and acceptable to LUNG RX, which
acceptance shall not be unreasonably refused, to have access during normal
business hours to those records of LUNG RX as may be reasonably necessary to
verify the accuracy of the royalty reports hereunder in respect of any fiscal
year ending not more than twenty-four (24) months prior to the date of such
request. LUNG RX shall
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include in each sublicense granted by it pursuant to this Agreement a provision
requiring the sublicensee to keep and maintain records of sales made pursuant to
such sublicense and to grant access to such records by P&U's independent
accountant. Upon the expiration of twenty-four (24) months following the end of
any fiscal year, the calculation of royalties payable with respect to such year
shall be binding and conclusive upon P&U, unless (a) an audit requested by P&U
prior to expiration of such twenty-four (24) month period has not yet been
completed, or (b) P&U has notified LUNG RX that such audit has revealed a
discrepancy regarding such calculation prior to the expiration of such
twenty-four (24) month period; and LUNG RX and its sublicensees shall be
released from any liability or accountability with respect to royalties for such
fiscal year. The report prepared by such independent accountants, a copy of
which promptly shall be provided to LUNG RX, shall disclose only the amount of
any underpayment or overpayment of royalties, if any, without disclosure of or
reference to supporting documentation. If such independent public accountant's
report shows any underpayment of royalties, LUNG RX shall remit or shall cause
its sublicensees to remit to LUNG RX the amount of such underpayment within
thirty (30) days after P&U's receipt of such report. Any overpayment of
royalties shall be creditable against future royalties payable in subsequent
royalty periods. In the event this Agreement is terminated or expires before
such overpayment is fully credited, P&U shall pay LUNG RX the portion of such
overpayment not credited within thirty (30) days after termination or expiration
hereof.
7.3 Confidentiality of Records. P&U agrees that all information subject to
review under this Article 6 or under any sublicense agreement is confidential
and that P&U and its accountant shall retain all such information in confidence.
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ARTICLE 8. ROYALTY AND OTHER PAYMENTS
Royalties shown to have accrued by each royalty report provided for under
Article 7 of this Agreement shall be due and payable on the date such royalty
report is due. Payment of royalties in whole or in part may be made in advance
of such due date.
ARTICLE 9. DEVELOPMENT AND MARKETING PROGRAM
9.1 Diligence Obligations. Subject to the provisions of Section 9.2 below
and in complete fulfillment of its development and marketing obligations
hereunder and any such obligations implied by law, LUNG RX will undertake the
activities set forth in this Article 9.
9.2 Development Program. LUNG RX shall, at its expense, use its best
efforts (a) to conduct a research and development program in the United States
relating to the use of a Product for treatment of at least one indication (the
"Development Program"); and (b) if, in LUNG RX's opinion, the results of the
Development Program so justify, to seek Registration for such Product in the
United States. For purposes of this Agreement, "best efforts" shall mean that
LUNG RX shall use reasonable efforts consistent with those used by it in its
research and development projects with its own products deemed to have
comparable commercial potential. The Development Program shall include such
product development work as LUNG RX may, in its sole discretion, consider
necessary for such Registration.
9.3 Business Judgment. LUNG RX's obligation to conduct a Development
Program specified in Section 9.2 above and its obligation to market a Product in
a country of the Territory upon obtaining Registration are expressly conditioned
on the continuing absence of any event or condition (such as, but not limited
to, a regulatory action affecting the Product or the existence of
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an issue relating to the safety or efficacy of the Product, the introduction of
a therapy which has superior safety and/or efficacy, or the existence of any
circumstances, economic or otherwise, which make the development or marketing of
the Product, in LUNG RX's judgment, commercially unrewarding) that would suggest
to LUNG RX, in exercising prudent and reasonable business judgment, that
development or marketing of the Product should be suspended or stopped
altogether, and LUNG RX's obligation to develop or market the Product shall be
suspended so long as any such condition or event exists.
9.4 Fulfillment; Conversion. Subject to the provisions of Section 9.3
above, LUNG RX's best efforts obligation set forth in this Article 8 and implied
by law shall be deemed to have been fulfilled if LUNG RX (a) files an NDA for
registration of a Product in the United States within [ ] after the
Effective Date, and (b) commences marketing such Product in the United States
within [ ] following approval of an NDA by the FDA. The time periods specified
in clause (a) and (b) shall each be subject to up to four (4) six (6) month
extensions at LUNG RX's election, by payment to P&U of [ ] for each such
extension, in such payments to be made within the first thirty (30) days of each
such extension and to be creditable against the payment of royalties by LUNG RX
pursuant to Section 6.1 hereof. In the event LUNG RX fails to meet either
deadline specified in clause (a) or (b) above, P&U may, upon at least sixty (60)
days' prior written notice, convert the exclusive license granted to LUNG RX
hereunder to a nonexclusive license, unless within such sixty (60) day period,
LUNG RX meets such deadline. The foregoing conversion remedy shall be P&U's sole
and exclusive remedy for LUNG RX's failure to meet such deadline.
9.5 Non-United States Development. No later than receipt of approval in the
United States of an NDA for a Product or prior thereto in its discretion, LUNG
RX shall use reasonable
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efforts (a) to obtain Registration, itself or through a sublicensee, for such
Product in such other countries of the Territory as LUNG RX deems appropriate,
and (b) upon obtaining Registration for the Product in a particular country, to
proceed in due course with the commercial introduction and marketing of such
Product in such country.
9.6 Progress Reports. So long as LUNG RX is conducting one or more
Development Programs hereunder, LUNG RX will provide annual reports to P&U
summarizing in reasonable detail LUNG RX's activities related to the development
of a Product and securing of the requisite marketing approvals during the annual
period covered by such report.
9.7 Severability of Obligations. The parties agree that LUNG RX's
obligations pursuant to this Article 9 shall be severable with regard to
obligations within the United States and to obligations in other countries in
the Territory. Any remedies available to P&U for LUNG RX's lack of diligence
with regard to its obligations within the United States shall be limited to
affecting LUNG RX's rights within the United States; any remedies available to
P&U for LUNG RX's lack of diligence with regard to obligations in countries
other than the United States shall be limited to affecting LUNG RX's rights
outside of the United States.
ARTICLE 10. PATENT RIGHTS
10.1 Patent Prosecution and Maintenance. P&U shall use its best efforts to
prosecute any patent applications within the Patent Rights, to obtain patents
thereon and to maintain such patents; provided, however, that P&U shall have the
right to discontinue the prosecution of such patent application or to abandon
any such patent. If P&U decides to abandon or allow to lapse any patent
application or patent within the Patent Rights in any country of the Territory,
P&U shall inform LUNG RX at least thirty (30) days prior to such abandonment or
lapse and LUNG
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RX shall be given the opportunity to prosecute such patent application and/or
maintain such patent at its expense, and shall be entitled to deduct from
royalties or any other payments due P&U hereunder, LUNG RX's or its
sublicensees' out-of-pocket expenses in prosecuting or maintaining patent
protection in such country.
10.2 Status of Patent Rights. Within thirty (30) days after the Effective
Date and each anniversary thereof, P&U shall advise LUNG RX as to the current
status of any patent applications and patents included within the Patent Rights
and, to the extent it has not previously done so, shall provide LUNG RX with
relevant documentation relating to such patent applications and patents
including, but not limited to, copies thereof.
ARTICLE 11. INFRINGEMENT
11.1 Applicability. Except as otherwise provided in Article 17, the
provisions of this Article 11 shall govern the parties' rights and obligations,
as between themselves, with respect to actions against Third Parties for
infringement of patents licensed under this Agreement.
11.2 Third Party Infringement. In the event that any person other than LUNG
RX or any of its sublicensees, shall sell a Product and thereby infringe or
induce infringement of a Valid Claim with respect to a Product licensed to LUNG
RX hereunder and P&U shall fail, within sixty (60) days after P&U otherwise
learns of such infringement or after receipt of notice from LUNG RX advising P&U
of the infringement of such patent, either (a) to terminate such infringement,
or (b) to institute an action to prevent continuation thereof, and thereafter,
to prosecute such action diligently, then LUNG RX or an Affiliate or sublicensee
of LUNG RX shall have the right to do so at its own expense. P&U will cooperate
with LUNG RX or its Affiliates or sublicensees in their respective efforts,
including being joined as a party to such
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action, if necessary. Any damages or costs recovered by P&U in connection with
any action filed by it hereunder, after first reimbursing P&U for its
out-of-pocket costs and expenses of litigation, shall be equally divided by P&U
and LUNG RX. Any damages or costs recovered in connection with any action filed
by LUNG RX, its Affiliate or sublicensees hereunder shall be retained by LUNG RX
or its Affiliates or sublicensees.
11.3 Reduction in Payments Due to Infringement. Notwithstanding the
provisions of Article 5, in the event of any such infringement by a Third Party
and notice by LUNG RX pursuant to Section 11.2, if P&U shall fail within sixty
(60) days either to terminate such infringement or to institute an action to
prevent continuation thereof and thereafter to prosecute such action diligently,
LUNG RX's royalty obligations hereunder with respect to such country or
countries shall be reduced by [ ] until the termination of such infringement in
such country or countries. If neither LUNG RX nor any LUNG RX sublicensee is
selling any Product in such country or countries, LUNG RX may deduct [ ] of the
expenses incurred in instituting and prosecuting such action from other payments
due to P&U hereunder. Upon termination of such infringement, LUNG RX's
obligations to pay royalties shall resume, but no back royalties shall be
payable.
ARTICLE 12. CONFIDENTIALITY
12.1 Treatment of Confidential Information. Except as otherwise provided in
this Article 12, during the term of this Agreement and for a period of five (5)
years thereafter,
(a) P&U will retain in confidence and use only for purposes of this
Agreement any information, data, and materials supplied by P&U or on behalf of
P&U to LUNG RX under this Agreement; and
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(b) LUNG RX will retain in confidence and use only for purposes of this
Agreement any information, data, and materials supplied by LUNG RX or on behalf
of LUNG RX to P&U under this Agreement.
For purposes of this Article 12, all such information and data which a
party is obligated to retain in confidence shall be called "Information". All
information disclosed in written form will be marked "Confidential" or with a
similar designation.
12.2 Right to Disclose. To the extent it is reasonably necessary or
appropriate to fulfill its obligations or exercise its rights under this
Agreement or any rights which survive termination or expiration hereof, LUNG RX
may disclose Information to its Affiliates, sublicensees, consultants, outside
contractors, clinical investigators or other Third Parties on condition that
such entities or persons agree (a) to keep the information confidential for the
same time periods and to the same extent as LUNG RX is required to keep the
Information confidential, and (b) to use the Information only for such purposes
as LUNG RX is entitled to use the Information. Each party or its Affiliates or
sublicensees may disclose such Information to government or other regulatory
authorities to the extent that such disclosure (i) is reasonably necessary to
obtain patents or authorizations to conduct clinical trials with and to market
commercially the Products provided such party is otherwise entitled to engage in
such activities under this Agreement; or (ii) is otherwise legally required.
12.3 Release From Restrictions. The foregoing obligations in respect of
disclosure and use of Information shall not apply to any part of such
Information that (a) is or becomes patented, published or otherwise part of the
public domain other than by acts of the party obligated not to disclose such
Information (for purposes of this Article 12, the "receiving party") or its
Affiliates or sublicensees in contravention of this Agreement; or (b) is
disclosed to the receiving party or its
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Affiliates or sublicensees by a Third Party, provided such Information was not
obtained by such Third Party directly or indirectly from the other party under
this Agreement; or (c) prior to disclosure under this Agreement, was already in
the possession of the receiving party or its Affiliates or sublicensees,
provided such Information was not obtained, directly or indirectly, from the
other party under this Agreement; or (d) results from research and development
by the receiving party or its Affiliates or sublicensees independent of
disclosures from the other party under this Agreement.
12.4 Confidentiality of Agreement. Except as otherwise required by law or
the terms of this Agreement or mutually agreed upon by the parties hereto, each
party shall treat as confidential the terms, conditions and existence of this
Agreement, except that LUNG RX may disclose such terms and conditions and the
existence of this Agreement to its Affiliates and sublicensees.
ARTICLE 13. TERM; TERMINATION
13.1 Term; Termination. Unless terminated sooner pursuant to Sections 13.2
or 13.3 below, this Agreement shall become effective as of the Effective Date
and shall continue in full force and effect until the expiration of LUNG RX's
obligation to pay royalties hereunder. Upon expiration or termination of this
Agreement, the rights and obligations of the parties shall cease, except as
follows:
(a) Upon expiration or termination for any reason, the obligations of
confidentiality and use of Information under Article 12 shall survive for the
period provided therein;
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(b) Upon expiration or termination for any reason, the right of LUNG RX
to continue to use the Know-How (subject to the fulfillment, in the case of
termination, of all of its royalty and other related obligations hereunder) to
which it is licensed under this Agreement shall survive.
(c) Upon termination by LUNG RX pursuant to Section 13.3, all license
rights of LUNG RX pursuant to Section 13.3, all license rights of LUNG RX shall
survive, subject to the fulfillment of all of its royalty obligations hereunder,
if any; and
(d) Expiration or termination of this Agreement shall not relieve the
parties of any obligation accruing prior to such termination.
13.2 LUNG RX's Right to Terminate. LUNG RX may terminate this Agreement at
any time upon at least sixty (60) days' prior written notice to P&U. Such
termination may be made with respect to one or more countries of the Territory
without affecting the rest of this Agreement or the licenses granted hereunder
in any other country of the Territory.
13.3 Bankruptcy; Uncured Breach. Either party may terminate this Agreement
upon the occurrence of any of the following:
(a) Upon or after the bankruptcy, insolvency, dissolution or wind up of
the other party (other than dissolution or winding up for the purposes of
reconstruction or amalgamation); or
(b) Upon or after the breach of any material provision of this
Agreement by the other party if the breach is not cured within ninety (90) days
after written notice thereof to the party in default.
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ARTICLE 14. TRANSFER OF KNOW-HOW
Within sixty (60) days following the Effective Date and as far as it has
not already done so, P&U will supply LUNG RX with all available Know-How it
possesses. In addition, P&U agrees to provide such technical assistance as LUNG
RX may reasonably request to enable it to utilize the Know-How; provided,
however, that it is understood that LUNG RX will obtain the majority of the
Know-How from Glaxo Wellcome which Glaxo Wellcome obtained or generated under
the 1993 Development Agreement. P&U will also grant LUNG RX a right of reference
under its Drug Master File No. 6804 at the U.S. FDA for Compound.
ARTICLE 15. ASSIGNMENT
This Agreement may not be assigned or otherwise transferred by LUNG RX
without the written consent of P&U; provided, however, that LUNG RX may, without
such consent, assign this Agreement in connection with the transfer or sale of
all or substantially all of its business to which this Agreement pertains or in
the event of its merger or consolidation with another company. Any purported
assignment in violation of the preceding sentence shall be void. Any permitted
assignee shall assume all obligations of its assignor under this Agreement. No
assignment shall relieve either party of responsibility for the performance of
any accrued obligation which such party then has hereunder.
ARTICLE 16. NOTIFICATION AND AUTHORIZATION UNDER DRUG
COMPETTION AND PATENT TERM RESTORATION ACT
16.1 Notices Relating to the Act. P&U shall notify LUNG RX of (a) the
issuance of each U.S. patent included within the Patent Rights, giving the date
of issue and patent number for
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each such patent, and (b) each notice pertaining to any patent included within
the Patent Rights which P&U receives as patent owner pursuant to the Drug Price
Competition and Patent Term Restoration Act of 1984 (hereinafter called the
"Act"), including, but not necessarily limited to, notices pursuant to xx.xx.
101 and 103 of the Act from persons who have filed an abbreviated NDA ("ANDA")
or a "paper" NDA. Such notices shall be given promptly, but in any event within
ten (10) days of each such patent's date of issue or receipt of each such notice
pursuant to the Act, whichever is applicable.
16.2 Authorizations Relating to Patent Term Extension. P&U hereby
authorized LUNG RX (a) to include in any NDA for a Product, as LUNG RX may deem
appropriate under the Act, a list of patents included within the Patent Rights
that relate to such Product and such other information as LUNG RX in its
reasonable discretion believe is appropriate to be filed pursuant to the Act;
(b) notwithstanding the provisions of Article 10, to commence suit for any
infringement of the Patent Rights under ss. 271(e)(2) of Title 35 of the United
States Code occasioned by the submission by a Third Party of an Abbreviated New
Drug Application ("ANDA") or a paper NDA for a Product pursuant to xx.xx. 101 or
103 of the Act; and (c) in consultation with P&U, to exercise any rights that
may be exercisable by P&U as patent owner under the Act to apply for an
extension of the term of any patent included within the Patent Rights, as LUNG
RX in its discretion deems appropriate. In the event that applicable law in any
other country of or community or associations of countries in the Territory
hereafter provides for the extension of the term of any patent included in the
Patent Rights in such country; upon request by LUNG RX, P&U shall obtain such
extension or, in lieu thereof, authorize LUNG RX, or if requested by LUNG RX,
its sublicensees to apply for such extension, in consultation with P&U. P&U
agrees to cooperate with LUNG RX or its sublicensees, as applicable, in the
exercise
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of the authorization granted herein or which may be granted pursuant to this
Section 16.2 and will execute such documents and take such additional action as
LUNG RX may reasonably request in connection therewith, including, if necessary,
permitting itself to be joined as a proper party in any suit for infringement
brought by LUNG RX under clause (b) above. Counsel shall be selected by LUNG RX.
In the event, LUNG RX decides not to commence suit for infringement under clause
(b) above, LUNG RX will notify P&U of its decision within thirty (30) days so
that P&U may institute such litigation itself, if it wishes, at its own cost and
expense.
ARTICLE 17. REGISTRATION OF LICENSE
LUNG RX may, at its expense, register the license granted under this
Agreement in any country of, or community or association of countries in, the
Territory where the use, sale or manufacture of a Product in such country would
be covered by a Valid Claim. Upon request by LUNG RX, P&U agrees promptly to
execute any "short form" licenses in a form submitted to it by LUNG RX from time
to time in order to effect the foregoing registration in such country.
ARTICLE 18. FORCE MAJEURE
Neither party shall be held liable or responsible to the other party nor be
deemed to have defaulted under or breached this Agreement for failure or delay
in fulfilling or performing any term of this Agreement when such failure or
delay is caused by or results from fire, floods, embargoes, government
regulations, prohibitions or interventions, war, acts of war (whether war be
declared or not), insurrections, riots, civil commotions, strikes, lockouts,
acts of God or any other cause beyond the reasonable control of the affected
party.
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ARTICLE 19. SEVERABILITY
Both parties hereby expressly agree and contract that it is the intention
of neither party to violate any public policy, statutory or common laws, rules,
regulations, treaty or decision of any government agency or executive body
thereof of any country or community or association of countries, that if any
word, sentence, paragraph, clause or combination thereof in this Agreement is
found by a court or executive body with judicial powers having jurisdiction over
this Agreement or any of the parties hereto in a final unappealed order, to be
in violation of any such provisions in any country or community or association
of countries, such words, sentences, paragraphs, clauses or combination shall be
inoperative in such country or community or association of countries and the
remainder of this Agreement shall remain binding upon the parties hereto.
ARTICLE 20. NOTICES
Any notice required or permitted to be given hereunder shall be in writing
and shall be deemed to have been properly given if delivered in person, or if
mailed by registered or certified mail (return receipt requested), postage
prepaid, or by telex or facsimile (and promptly confirmed by such registered or
certified mail), to the addresses given below or such other addresses as may be
designated in writing by the parties from time to time during the term of this
Agreement. Any notice sent by registered or certified mail as aforesaid shall be
deemed to have been given when mailed.
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In the case of P&U:
Pharmacia & P&U Company
0000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Business Development
Facsimile No.: (000) 000-0000
In the case of LUNG RX:
Lung RX
000 Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxx, Xxxxx Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxx, C.E.O.
Facsimile No.: (000) 000-0000
ARTICLE 21. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the State of Michigan, exclusive of its choice-of-law rules.
ARTICLE 22. ENTIRE AGREEMENT; MODIFICATION
This Agreement contains the entire understanding of the parties with
respect to the subject matter hereof. All express or implied agreements and
understandings, either oral or written, heretofore made are expressly merged in
and made a part of this Agreement. The parties hereto may alter any of the
provisions of this Agreement, but only by a written instrument duly executed by
both parties hereto.
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ARTICLE 23. WAIVER
The failure of a party to enforce at any time for any period any of the
provisions hereof shall not be construed as a waiver of such provisions or of
the rights of such party thereafter to enforce each such provisions.
ARTICLE 24. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same document.
ARTICLE 25. CAPTIONS
The captions to the several Articles and Sections hereof are not a part of
this Agreement, but are merely guides or labels to assist in locating and
reading the several Articles and Sections hereof.
IN WITNESS HEREOF, the parties have executed this Agreement as of the
Effective Date.
PHARMACIA & UPJON COMPANY LUNG RX, INC.
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxx X. Xxxx
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Xxxxxxx X. Xxxxxx Xxxxx X. Xxxx
11/25/96 3 December `96
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Vice President, Research President and C.E.O.
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