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AMENDED AND RESTATED
LICENSE AGREEMENT
THIS AMENDED AND RESTATED LICENSE AGREEMENT made effective as of the 11th
day of March, 1998.
BETWEEN:
PARTEQ RESEARCH AND DEVELOPMENT INNOVATIONS, a
non-profit corporation without share capital
incorporated under the laws of the Province of
Ontario and having a principal office and place
of business at Queen's University at Kingston,
Xxxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0 (hereinafter
referred to as "PARTEQ")
-and-
DUSA Pharmaceuticals, Inc., a corporation
incorporated under the laws of the State of New
Jersey and having its registered office at 000
Xxxxx 00 Xxxx, Xxxxx 000, P.O. Box 5369,
Somerville, New Jersey, United States of
America, 08876 (hereinafter referred to as
"DUSA")
WHEREAS, the Invention (as hereinafter defined) was made in the course of
research at Queen's University at Kingston ("Queen's") and Royal Military
College ("RMC"); and
WHEREAS, all right, title and interest in and to the Invention have been
assigned to Queen's, and PARTEQ, as the technology transfer arm of Queen's, has
the exclusive worldwide rights to the Invention and has all right and authority
to enter into this Agreement; and
WHEREAS, Queen's, RMC, PARTEQ, and DUSA are desirous of amending and
restating the License Agreement dated as of August 27, 1991, among them (the
"Original License") to better reflect the current development opportunities for
the Invention pursuant to the terms and conditions set forth below; and
WHEREAS, PARTEQ is desirous of releasing Draxis Health, Inc. (formerly
Deprenyl Research Limited, Inc.) as Guarantor of the obligations of DUSA under
the Original License;
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NOW, THEREFORE, for and in consideration of the covenants, conditions and
undertakings hereinafter set forth, it is agreed by and between the parties (as
hereinafter defined) that the Original License is amended and restated as
follows:
1. DEFINITIONS
1.1 "Affiliate", as used herein, shall mean any person, corporation, firm,
partnership or other entity in which DUSA owns or controls more than fifty
percent (50%) of the equity (e.g., a subsidiary); or which owns or controls DUSA
to the extent of more than fifty percent (50%) of its equity (e.g., a parent);
or which is owned or controlled to the extent of more than fifty percent (50%)
by the same corporation, firm, partnership or other entity also owning or
controlling more than fifty percent (50%) of the equity in DUSA (e.g., a sister
corporation); or a person, corporation, firm, partnership or other entity in
which the sister corporation owns or controls more than fifty percent (50%) of
the equity hereof (e.g., a subsidiary of the sister corporation).
1.2 "Cost of Goods", as used herein shall mean all costs to manufacture
Products, including, but not limited to, the cost of raw material supplies,
devices and components, labor and services and manufacturing overhead related to
the Product determined by United States generally accepted accounting
principles, consistently applied by DUSA's independent certified public
accountants.
1.3 "...covered by...", as used herein, shall mean any Products or Method
that when made, used, practiced or sold would, in the context of Queen's Patent
Rights, fall within the scope of any claim of Queen's Patent Rights or, in the
context of Improvements, fall within the scope of any Improvement.
1.4 "Drug Products", as used herein, means pharmaceutical formulations
containing, as active ingredient, one or more precursors to protoporphyrin IX,
including 5-amino levulinic acid,
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whose use is covered by Queen's Patent Rights or Improvements, which are
manufactured, packaged and ready for resale or distribution to the end-user.
1.5 "Execution Date", as used herein, means the date first above written.
1.6 "Improvements", as used herein, shall mean any and all inventions,
developments or discoveries, including trade secrets, not disclosed as of the
Execution Date in the Queen's Patent Rights, whether or not patented or
patentable, relating to the Invention and the development and commercialization
of same, discovered, developed or acquired by or for PARTEQ, Queen's or RMC
prior to or during the term of this Agreement and in respect of which PARTEQ has
the right to grant a license hereunder.
1.7 "Invention" as used herein, means a method for detecting and/or
treating primary or secondary malignant and non-malignant tissue abnormalities
and lesions of the skin; conjunctiva; respiratory, digestive and vaginal mucosa;
endometrium and urothelium in which a precursor to protoporphyrin IX, including
5-amino levulinic acid (ALA), is administered in an amount sufficient to induce
synthesis of protoporphyrin IX in the abnormality or lesion, followed by
exposure of the thus treated tissue to a photoactivating light, as described and
claimed in the applications for patent set forth in Exhibit A hereto.
1.8 "Method", as used herein, means any method, procedure, process or
other subject matter whose manufacture, use, or sale is covered by Queen's
Patent Rights or Improvements.
1.9 "Net Selling Price", as used herein, means gross invoice price less
the sum of the following deductions where applicable: cash discounts, trade or
quantity discounts, government mandated discounts such as Medicaid or Veterans
Administration rebates, sales, use tariff, import/export duties or other excise
taxes imposed upon particular sales; transportation charges and allowances or
credits to customers because of rejections or returns.
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1.10 "Non-drug Products", as used herein, means any product or component
other than pharmaceuticals whose manufacture, use or sale is covered by Queen's
Patent Rights or Improvements, and other than Drug Products (i.e., devices).
1.11 "Party" or "parties", as used herein, means PARTEQ and/or DUSA, as
the context requires, but shall not include Queen's or RMC.
1.12 "Products", as used herein, means Drug Products and Non-drug
Products.
1.13 "Queen's Patent Rights", as used herein, means the issued patents and
pending patent applications recited in Exhibit A, any continuing or divisional
applications thereof and any patents issuing on said applications or continuing
or divisional applications including reissues thereof.
1.14 "Tangible Research Materials", as used herein, shall mean all notes,
progress reports, computer files, laboratory notebooks, and test results capable
of being reduced to any permanent form, excluding the name of any patient who
has not waived confidentiality.
2. GRANT
2.1 Subject to the terms and conditions herein set out, PARTEQ hereby
grants to DUSA an exclusive, worldwide license under Queen's Patent Rights and
Improvements to make, have made, use and sell Products and Method.
2.2 PARTEQ hereby grants to DUSA the right to sublicense to any third
party or Affiliate any portion or all of the license rights granted by PARTEQ to
DUSA hereunder. In the event DUSA terminates this Agreement, all sublicenses to
Affiliates will automatically terminate and all sublicenses other than those to
Affiliates will revert directly to PARTEQ. DUSA agrees to be responsible for the
performance under any sublicense by its sublicensees and to promptly report to
PARTEQ the granting of any sublicenses.
2.3 PARTEQ expressly reserves:
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2.3.1 the non-exclusive right to permit Queen's the personal,
non-transferable and non-exclusive right to use the Invention
for educational and research purposes; the rights reserved
under this subsection 2.3.1 expressly exclude any rights for
commercial use of the Invention or to commercialize, including
by license or sale, the results of any such education and
research; and
2.3.2 the non-exclusive right to grant to Her Majesty, the Queen, in
right of Canada, as represented by the Minister of National
Defense (hereinafter referred to as "DND") an irrevocable,
royalty-free, non-exclusive license to use the Invention and
Improvements solely for defense purposes within DND, its
educational institutions and other establishments in Canada
and overseas, without the right to sublicense for any
commercial use; for the purpose of this subsection 2.3.2,
"defense purposes" does not include sales to any third party,
but does include DND procurement.
3. IMPROVEMENTS
3.1 PARTEQ shall promptly disclose to DUSA any patent applications,
Improvements and Tangible Research Materials related thereto which PARTEQ,
Queen's or RMC has discovered, developed or acquired or has had discovered,
developed or acquired on its behalf prior to the Execution Date which has not
been previously disclosed to DUSA. PARTEQ shall promptly disclose to DUSA any
Improvements and Tangible Research Materials related thereto which PARTEQ,
Queen's or RMC may discover, develop or acquire or may have discovered,
developed or acquired on its behalf from time to time during the term of this
Agreement. Improvements shall be included in the license hereunder for no
additional consideration.
3.2 Without limitation to any other provision of this Agreement, PARTEQ
agrees to use
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its best efforts to obtain and maintain the right to grant a license under any
invention, development or discovery, including any trade secret, relating to the
Invention and the development and commercialization of same discovered,
developed or acquired by or for Queen's or RMC.
4. COMPENSATION AND ROYALTIES
4.1 During the continuance, and in further consideration, of the rights
and licenses granted hereunder, DUSA agrees to pay to PARTEQ a fee of fifty
thousand Canadian dollars (CA$50,000.00), (or one hundred thousand Canadian
dollars (CA $100,000) if by the payment due date hereof DUSA has entered into a
sublicense agreement as defined in Section 4.5.2 below) within thirty (30) days
of the receipt by DUSA or sublicensee hereunder of approval from the United
States Food and Drug Administration to market Products in the United States of
America.
4.2 PARTEQ acknowledges that it has received from DUSA CA$150,000.00 and
that pursuant to Section 4.4 of the Original License, such fees shall be
deducted from any royalties payable pursuant to Sections 4.3 and 4.12 hereof;
provided, however, that the credit shall not exceed CA$75,000 in any year, and
further provided that the credit shall be taken only to the extent that
royalties payable under Section 4.3 exceed the minimum royalties specified in
Section 4.12 (e.g., to obtain a credit of CA$75,000 in year 1, royalties under
Section 4.3 would have to equal or exceed CA$125,000).
4.3 During the continuance, and in further consideration of the rights and
licenses granted hereunder, DUSA shall pay to PARTEQ royalties as follows:
4.3.1 In countries where Queen's Patent Rights are issued,
(a) six percent (6%) of sixty-six percent (66%) of the Net
Selling Price of DUSA or its Affiliates of Products when
first sold to non-Affiliates, other than Products sold
to sublicensees and other than Non-drug Products sold at
or below cost; and
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(b) six percent (6%) of the Net Selling Price less Cost of
Goods Sold charged by DUSA for Products sold to
sublicensees, other than Non-drug Products sold at or
below cost.
4.3.2 In countries where Queen's Patent Rights have not issued,
(a) four percent (4%) of sixty-six percent (66%) of the Net
Selling Price of DUSA or its Affiliates of Products
first sold to non-Affiliates, other than Products sold
to sublicensees and other than Non-drug Products sold at
or below cost; and
(b) four percent (4%) of the Net Selling Price less Cost of
Goods Sold charged by DUSA for Products sold to
sublicensees other than Non-drug Products sold at or
below cost.
4.3.3 Six percent (6%) of royalty payments received by DUSA from
sublicensees based upon such sublicensees (or their
Affiliates) sales of Drug Products.
4.4 Royalties under Section 4.3 hereof shall accrue, subject to Section
4.14 hereof, until no United States patent or United States patent application
included in Queen's Patent Rights subsists, whether by virtue of expiry,
invalidation or rejection, at which time the rights and licenses granted by
virtue of this Agreement shall become perpetual and royalty-free.
4.5 In the event DUSA grants a sublicense to an unrelated third-party of
the rights and licenses granted to DUSA hereunder, DUSA shall pay to PARTEQ:
4.5.1 five percent (5%) of lump sum sublicense fees paid for the
grant of any such sublicense (i.e., license fees) or right to
market Products; provided, however, no royalties shall be paid
to PARTEQ hereunder with respect to any consideration received
by DUSA which may be designated in the sublicense
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for future research and development efforts.
4.5.2 The amounts stated in 4.5.1 above shall become due to PARTEQ
as and when lump sum fees are received by DUSA; provided,
however, if the sublicense is granted to an unrelated
third-party for the field of use encompassing substantially
all dermatological indications for Products and for the
territory including both the United States and Europe on or
before Xxxxx 00, 0000, XXXX shall pay to PARTEQ CA$200,000 on
that date, and if such sublicense agreement is executed on or
before the first anniversary of this Amended and Restated
License Agreement, DUSA shall pay to PARTEQ CA$500,000, in the
aggregate (e.g. an additional CA$300,000 if CA$200,000 has
been paid previously) on such first anniversary date. Further
provided, that if any such sublicense agreement(s) under this
Section 4.5.2 is (are) executed during the term of this
Amended and Restated License Agreement, then DUSA shall pay to
PARTEQ a minimum royalty equal to the difference between all
amounts paid under Section 4.5.1 and this Section 4.5.2, and
CA$1,100,000 (if any). Such minimum royalty shall be due and
payable, if at all, when DUSA has received all lump sum fees
to which it is entitled under any such sublicense agreement(s)
remaining in full force and effect which fees did not equal or
exceed CA$22,000,000 in the aggregate from any and all such
sublicense agreements.
4.6 If DUSA has not entered into a sublicense agreement as described in
Section 4.5.2 above on or before Xxxxx 00, 0000, XXXX shall pay to PARTEQ a
minimum royalty of Canadian One Hundred Thousand Dollars (CA$100,000).
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4.7 If DUSA has not entered into a sublicense agreement as described in
Section 4.5.2 by the first anniversary date of this Amended and Restated License
Agreement, and if DUSA's balance sheet for the month ended prior to the first
anniversary date of this Amended and Restated License Agreement states that
"Cash and U.S. Government Securities" plus "Marketable Securities", if any,
exceed U.S. $15,000,000, then DUSA shall pay to PARTEQ an additional minimum
royalty payment of Canadian Two Hundred Thousand Dollars (CA$200,000) on such
first anniversary date.
4.8 All minimum royalties payable under Sections 4.6 and 4.7 shall be
credited in full against royalties payable under Section 4.5.2 above, which in
turn shall be credited in full against royalties payable under Section 4.5.1
above. In addition, if DUSA pays to PARTEQ CA$100,000 under Section 4.1 above,
then CA$50,000 of such CA$100,000 will be credited against royalties due under
Section 4.5.1 above, if and to the extent such royalties exceed CA$1,100,000
(i.e., the CA$50,000 will be credited in full if PARTEQ receives royalties of at
least CA$1,150,000 under Section 4.5.1) during the term of this Amended and
Restated License Agreement.
4.9 As further consideration for this Amended and Restated License
Agreement and subject to its execution hereof, DUSA confirms that it has granted
to PARTEQ options to purchase up to 85,000 shares of Common Stock of DUSA. Such
options shall have an exercise price of $10.875 per share. Options shall vest
over a period of four (4) years and shall have a term of ten (10) years from the
date of grant. Other terms and conditions, consistent with options previously
granted by DUSA shall apply.
4.10 DUSA shall be entitled to deduct from any fees and royalties payable
under this Article 4 any amounts required to be withheld from such fees and
royalties and remitted to any governmental or other taxing authority. Upon
request, DUSA shall provide to PARTEQ evidence of such withholding and remittal.
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4.11 Royalties under Sections 4.3.1 (a) and 4.3.2(a) hereof shall be paid
to PARTEQ within forty-five (45) days following the end of the calendar quarter
in which the Products were sold. Royalties under Sections 4.3.1(b), 4.3.2(b),
4.3.3, and 4.5.1 hereof shall be paid to PARTEQ within forty-five (45) days
following the end of the calendar quarter in which the royalties or sublicensing
fees were received by DUSA or its Affiliates.
4.12 DUSA shall pay to PARTEQ minimum annual royalties calculated under
Section 4.3 as follows, such minimums to commence when DUSA or an Affiliate or
sublicensee receives approval from the United States Food and Drug
Administration to market Products in the United States of America:
4.12.1 in the first calendar year during which such approval is
received, fifty thousand Canadian dollars (CA$50,000.00)
where such approval is received on January 1 or in the case
of a partial calendar year, that sum obtained by
multiplying the number of days contained in the partial
calendar year by fifty thousand Canadian dollars
(CA$50,000.00) and dividing by three hundred and sixty-five
(365); and
4.12.2 in succeeding calendar years, one hundred thousand Canadian
dollars (CA$100,000.00) or in the case of a partial
succeeding calendar year, that sum obtained by multiplying
the number of days contained in the partial calendar year
by one hundred thousand Canadian dollars (CA$100,000.00)
and dividing by three hundred and sixty-five (365).
In the event that royalties payable pursuant to Section 4.3 hereof for any given
calendar year or partial calendar year total less than the minimum royalties
specified in this Section 4.12 for such year, DUSA shall pay the difference
within forty-five (45) days following the end of such year or
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partial year.
4.13 Fees and royalties due PARTEQ hereunder shall be paid in Canadian
funds collectible at par in Xxxxxxx, Xxxxxxx, Xxxxxx. For sales made and
royalties or sublicensing fees received by DUSA or an Affiliate in a currency
other than Canadian dollars, royalties on such sales and royalties on such
royalties or sublicensing fees shall be calculated in the currency of sale or
payment and converted into Canadian funds at the rate published by the Bank of
Canada on the last business day of the calendar quarter in which the sale is
made or the royalties or sublicensing fees are received. Any royalties or
sublicensing fees in kind received by DUSA or an Affiliate from sublicensees
shall be valued at fair market value.
4.14 Subject to Section 4.4 hereof, in the event that any patent or patent
application or any claim of either included within Queen's Patent Rights shall
be held invalid or rejected in a decision of a tribunal of competent
jurisdiction (including a patent examiner) and from which no appeal can be
taken, or if such appeal can be taken, no appeal has been taken, all obligations
to pay royalties pursuant to Section 4.3.1 hereof based on such patent or patent
application or claim or any claim patentably indistinct therefrom shall cease as
of the date specified in such decision. Furthermore, if any such patent action
occurs, or if a product which competes directly with a DUSA Product is
introduced into the marketplace, and such new product captures at least five
percent (5%) of the marketplace in the territory, then the parties agree to
renegotiate the royalties under Sections 4.3.2 and 4.3.3 hereof.
4.15 All payments to PARTEQ relating to goods and services subject to tax
under the Excise Tax Act (Canada) shall be increased by the amount of tax
payable. PARTEQ shall be responsible for remitting that tax to the Canadian
Government, and shall provide DUSA with receipts in a form suitable for DUSA to
claim an input tax credit under the Excise Tax Act (Canada).
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5. DUE DILIGENCE
5.1 Subject always to the exercise of prudent and justifiable business and
medical judgment, DUSA, upon execution of this Agreement, shall diligently
proceed with the development of Products in order to achieve a first commercial
sale of such Products.
5.2 DUSA agrees to keep PARTEQ informed as to its progress in the
development and testing of all Products and preparing, filing, and obtaining of
the approvals necessary for marketing. Beginning January 1, 1998 and
semi-annually thereafter, DUSA shall submit to PARTEQ a progress report covering
DUSA's activities related to the development of Products and the securing of the
requisite approvals. These reports shall be made until the market introduction
of the first Product.
5.3 During the term of this Agreement, representatives of DUSA and PARTEQ
will meet at times and places mutually agreed upon not less than annually to
discuss progress and results and each party shall bear the expense of its own
representatives attending such meetings. Should DUSA request the attendance of
any representative of Queen's or RMC at any such meeting, DUSA shall reimburse
such representative for reasonable travel and lodging expenses.
5.4 At the request of either party, any controversy or claim arising out
of or relating to the diligence provisions of this Agreement shall be subject to
arbitration conducted in accordance with the then current Arbitration Act of
Ontario. Judgment upon the award rendered by the arbitrator(s) shall be binding
on the parties and may be entered by either party in the court or forum,
provincial or federal, having jurisdiction.
6. MAINTENANCE OF PROPERTY, TRADE SECRET AND KNOW-HOW RIGHTS
6.1 Each of PARTEQ and, except as is necessary for the commercialization
of Products, DUSA (the "receiving party") agrees to maintain as confidential all
information (including Tangible Research Materials) of the other party (the
"disclosing party") received by the receiving party from
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the disclosing party. Except to DUSA, PARTEQ shall not disclose or permit to be
disclosed by Queen's or RMC any information relating to the Invention or
Improvements, except that which is disclosed in patents or published patent
applications and except that which is made the subject of the prior written
consent of DUSA, not to be unreasonably withheld after DUSA having been accorded
a ninety (90) day review period.
6.2 A receiving party shall not be prevented from disclosing to third
parties any information of a disclosing party:
6.2.1 which the receiving party can demonstrate by written records
was previously known to it;
6.2.2 which is now, or becomes in the future, publicly available
other than through acts or omissions of the receiving party;
or
6.2.3 which is lawfully obtained by the receiving party from sources
independent of the disclosing party.
6.3 PARTEQ agrees that it shall use its best efforts to procure and
maintain the prior agreement of each individual at Queen's and RMC who shall be
conducting or otherwise involved in research and development relating to
Improvements in the form attached as Exhibit B, mutatis mutandis.
Notwithstanding the immediately foregoing, PARTEQ shall procure and maintain the
prior agreement of each individual at Queen's and RMC who shall be conducting or
otherwise involved in research and development relating to Improvements funded
by DUSA-sourced funds in the form attached as Exhibit B, mutatis mutandis, and
shall cause Queen's and PARTEQ to preclude the conduct of or involvement in any
such research and development by or of any individual who declines to enter into
such agreement.
7. QUARTERLY REPORTS
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7.1 After the first commercial sale of Products, DUSA shall provide PARTEQ
with written reports made no later than forty-five (45) days following the end
of each calendar quarter showing all sales of Products by DUSA and its
Affiliates and royalties or sublicensing fees received from sublicensees,
hereunder other than Affiliates during such preceding calendar quarter. If no
sales of Products have been made or royalties received during such calendar
quarter, a statement to this effect shall be required.
7.2 DUSA agrees to report to PARTEQ the date of first commercial sale of
Products in each country within thirty (30) days of its occurrence.
8. BOOKS AND RECORDS
8.1 DUSA shall keep books and records accurately showing all Products sold
under the terms of this Agreement by DUSA and its Affiliates and all royalties
received from sublicensees hereunder other than Affiliates. Such books and
records shall be open to inspection by representatives or agents of PARTEQ at
reasonable times for the purpose of verifying the accuracy of the quarterly
reports and the royalties due.
8.2 The fees and expenses of the representatives performing such an
examination shall be borne by PARTEQ, unless such examination reveals an error
of more than fifteen thousand Canadian dollars (CA$15,000.00) in the computation
of royalties due. In such case, the cost of such examination shall be borne by
DUSA.
8.3 The books and records required by paragraph 8.1 herein shall be
preserved for at least five (5) years from the date of the royalty payment to
which they pertain.
9. TERM AND TERMINATION
9.1 Subject to any termination pursuant to the terms hereof, this
Agreement shall remain in full force and effect until expiration of the last to
expire of the United States patents listed in
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Exhibit A.
9.2 DUSA has the right to terminate this Agreement with or without cause
at any time upon ninety (90) days' notice to PARTEQ.
9.3 If either party (the "defaulting party") should commit any breach of
this Agreement, the other party (the "non-defaulting party") shall be entitled
to terminate this Agreement upon ninety (90) days' notice to the defaulting
party particularizing the breach; provided however that, if the defaulting party
cures such breach within the ninety (90) day notice period, this Agreement shall
continue in full force and effect as if the notice from the non-defaulting party
had never been given.
9.4 No termination of this Agreement shall relieve either party of any
obligation or liability of such party accrued hereunder prior to such
termination nor affect the rights of either party arising under this Agreement
prior to such termination.
10. PATENT PROSECUTION AND MAINTENANCE
10.1 PARTEQ shall diligently prosecute and maintain Queen's Patent Rights
and shall diligently make, prosecute and maintain such patent applications and
patents in such jurisdictions for such Improvements as are agreed upon by DUSA
and PARTEQ using counsel of PARTEQ's choice and after due consultation with
DUSA. PARTEQ shall provide DUSA with copies of all relevant documentation so
that DUSA may be informed and apprised of and meaningfully consulted as to the
continuing prosecution. In the event that DUSA does not agree that any given
patent application or patent should be made, prosecuted or maintained
(hereinafter referred to as a "PARTEQ patent"), PARTEQ shall have the right
unilaterally to make, prosecute and maintain such PARTEQ patent, and same shall
be deemed licensed hereunder for no additional consideration.
10.2 PARTEQ shall use its best efforts to amend any patent application to
include claims
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reasonably requested by DUSA and required to protect the Products contemplated
to be sold under this Agreement.
10.3 PARTEQ agrees to advance all costs and legal fees incurred for the
prosecution, maintenance and taxes for all patent applications referred to in
Section 10.1 and patents issuing therefrom. Subject to the said counsel of
PARTEQ's choice giving reasonably accurate advance quotes of out-of-pocket
expenses for prosecution, maintenance and taxes for all patent applications
referred to in Section 10.1 and patents issuing therefrom, all reasonable
out-of-pocket expenses incurred after the Execution Date for such prosecution,
maintenance and taxes shall be promptly reimbursed to PARTEQ by DUSA, except for
those expenses relating to PARTEQ patents, which shall be borne by PARTEQ.
11. USE OF NAMES, TRADE NAMES, AND TRADEMARKS
11.1 Except as required by law, no party shall have any right to use in
advertising, publicity, or other promotional activities any name, trade name,
trademark, or other designation of the other party (including any contraction,
abbreviation or simulation of any of the foregoing), without the prior written
consent of such other party.
12. WARRANTY BY PARTEQ
12.1 PARTEQ hereby warrants:
12.1.1 that it has the right to grant the rights and licenses
granted hereunder;
12.1.2 that each of Xxxxx X. Xxxxxxx and Xxxxxx X. Xxxx have, on
or prior to the Execution Date, executed agreements to
assign all Improvements to PARTEQ in the form attached as
Exhibits B and C hereto and that such agreements will be
maintained for as long as each of Xxxxx X. Xxxxxxx and
Xxxxxx X. Xxxx are conducting or
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otherwise involved in research and development relating to
Improvements and remain on the faculty of Queen's.
12.1.3 that it is not aware of any present challenge to the
validity of the Queen's Patent Rights in any governmental
proceeding or in any pending or threatened lawsuit.
Further, PARTEQ has no knowledge or reason to know of any
inquiry, claim or threat of infringement or unfair trade
practices of any third party patents, which threaten the
validity of any rights granted to DUSA under this
Agreement.
13. INDEMNITY
13.1 DUSA covenants and agrees to indemnify and save PARTEQ, Queen's and
RMC harmless from and against all actions, claims, damages, lawsuits, losses,
costs or expenses which any of same may sustain, incur, or be liable for by
reason of DUSA's omission, negligence, or wrongful act in the use of the
Invention or any Improvement or in the development, exploitation, or marketing
of the Products or Method.
13.2 Subject to Section 13.3, PARTEQ covenants and agrees to indemnify and
save DUSA harmless from and against all actions, claims, damages, lawsuits,
losses, costs or expenses (other than any action, claim, damage, lawsuit, loss,
cost or expense referred to in Section 13.1 hereof) which DUSA may sustain,
incur or be liable for by reason of DUSA's use of the Invention or any
Improvement or DUSA's development, exploitation or marketing of the Products or
Process and by reason of any breach of representation or warranty made hereunder
by PARTEQ.
13.3 In the event that DUSA, acting reasonably, decides to acquire third
party rights which otherwise constitute a potential infringement threat, or is
required to defend against any assertion by any third party of infringement,
DUSA shall be entitled to deduct fifty percent (50%) of all costs
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and expenses of such acquisition or defense from royalties payable pursuant to
Sections 4.3, 4.5 and 4.12 hereof as follows:
13.3.1 in respect of any such costs and expenses arising prior to
the commencement of royalty payments under Section 4.3 in
respect of sales following health regulatory approval in
the United States, such fifty percent (50%) of costs and
expenses shall be deducted from all royalties payable
pursuant to Sections 4.3, 4.5 and 4.12 hereof; and
13.3.2 in respect of any such costs and expenses arising after the
commencement of royalty payments under Section 4.3 in
respect of sales following health regulatory approval in
the United States, such fifty percent (50%) of costs and
expenses shall be deducted from fifty percent (50%) of
royalties payable pursuant to Sections 4.3, 4.5 and 4.12
hereof.
13.4 Notwithstanding Section 13.3 hereof, in the event that DUSA makes an
acquisition pursuant to Section 13.3 hereof having a total cost in excess of one
hundred thousand Canadian dollars (CA$100,000.00), DUSA shall be entitled to
deduct from royalties payable only the sum of fifty thousand Canadian dollars
(CA$50,000.00) in respect of acquisition.
14. INFRINGEMENT
14.1 DUSA shall consult with PARTEQ in respect of, but shall have ultimate
and sole control over, all litigation or threatened or anticipated litigation
(including any settlement thereof) arising out of DUSA's performance under this
Agreement including that relating to infringement of third party rights and
infringement by third parties. PARTEQ agrees to cooperate with DUSA in the
prosecution of any such litigation or threatened or anticipated litigation
including any preparations
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therefor and settlement negotiations in respect thereof.
14.2 In the event that PARTEQ learns of the infringement of Queen's Patent
Rights or of any patent rights relating to Improvements or of any confidential
information referred to in Section 6 hereof (hereinafter referred to as
"intellectual property infringement by a third party"), PARTEQ shall immediately
notify DUSA and shall provide DUSA with any evidence of intellectual property
infringement by a third party which PARTEQ may have.
14.3 PARTEQ shall not commence any action or enter into any settlement
negotiation in respect of intellectual property infringement by a third party.
At the request of DUSA, PARTEQ agrees to be joined as a party plaintiff in any
litigation relating to intellectual property infringement by a third party and
PARTEQ shall be represented by counsel of DUSA's choosing.
14.4 The expenses of any litigation or settlement negotiations in respect
of intellectual property infringement by a third party shall be borne by DUSA
and all recovery pursuant thereto shall be for the account of DUSA.
15. WAIVER
15.1 It is agreed that no waiver by either party hereto of any breach or
default of any of the covenants or agreements herein set forth shall be deemed a
waiver as to any subsequent and/or similar breach or default.
16. ASSIGNABILITY
16.1 This Agreement is binding upon and shall inure to the benefit of both
parties and their successors and assigns. DUSA may assign this Agreement to any
Affiliate or, with the written consent of PARTEQ, to any third party, which
consent shall not be unreasonably withheld.
17. FORCE MAJEURE
17.1 In the event of acts of God, action of the elements, war, invasions,
civil commotion, insurrection, labor disturbance, fire, flood, restrictions in
availability of materials or government
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restriction, which render performance under this Agreement impossible, failure
on that account during each period shall be excused; and any minimum royalty
called for shall not be required during each period or periods of inability to
perform.
18. LATE PAYMENTS
18.1 In the event royalty payments or fees are not paid by DUSA when due,
DUSA shall pay to PARTEQ interest charges at the rate of two percent (2%) over
the Bank of Canada rate as set on the day the fees are due per annum on the
unpaid royalties or fees due for the reporting period.
19. NOTICES
19.1 Any payment, notice or other communication required or permitted to
be given to either party hereto, other than routine quarterly reports and
payments, shall be given in writing and shall be effective on the date of
delivery if delivered in person or by registered mail, return receipt requested,
to the respective addresses given below, or to such other address as shall be
designated by notice hereunder:
In the case of DUSA: DUSA Pharmaceuticals, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
XXXXXX
with a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
LANE and XXXXXXX
000 Xxxxx 00 Xxxx, Xxxxx 000
P.O. Box 8539
Xxxxxxxxxx, XX 00000 XXX
In the case of PARTEQ: Office of Patents & Licensing
PARTEQ Innovations
Queen's University
Xxxxxxxx, Xxxxxxx
X0X 0X0
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20. FOREIGN LICENSE REGISTRATION
20.1 DUSA agrees to register this Agreement when required by local
national law, to pay all costs and legal fees connected therewith, and to
otherwise insure that the local national laws, regulations and/or ordinances
affecting this Agreement are fully satisfied.
21. GOVERNING LAWS
21.1 This Agreement shall be interpreted and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein.
22. MISCELLANEOUS
22.1 The headings of sections herein are inserted for convenience of
reference only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
22.2 This Agreement will not be binding upon the parties until it has been
signed hereinbelow by or on behalf of each party, in which event, it shall be
effective as of and from the Execution Date.
22.3 No amendment or modification hereof shall be valid or binding upon
the parties unless made in writing and signed as aforesaid.
22.4 This Agreement embodies the entire understanding of the parties and
shall supersede all previous communications, representations or understandings,
either oral or written, between the parties relating to the subject matter
hereof including the Original License.
22.5 In case any one or more of the provisions contained in this Agreement
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision hereof, but this Agreement shall be construed as if such invalid
or illegal or unenforceable provisions had never been contained herein.
23. PUBLICITY
23.1 Except as required by law, neither party shall make public the
details or existence of
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this Agreement without the prior consent of the other party.
24. RELEASE OF GUARANTEE
24.1 PARTEQ hereby releases and discharges Draxis Health, Inc. from
Draxis' obligation under the Original License to unconditionally and irrevocably
guarantee the obligations of DUSA pursuant to the Original License. PARTEQ and
DUSA agree to notify Draxis of the release stated herein. Furthermore, they
agree to enter a revised ALA Assignment Agreement with Draxis so that the
assignment of rights previously granted to Draxis under the Original License
will be made consistent with the terms of this Amended and Restated License
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement, in
triplicate originals, by their respective officers duly authorized.
PARTEQ RESEARCH AND
DEVELOPMENT INNOVATIONS
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Xxxx X. Xxxxxx
Executive Director
DUSA PHARMACEUTICALS, INC.
By: /s/ D. Xxxxxxxx Xxxxxxx
----------------------------------------
D. Xxxxxxxx Xxxxxxx, MD, FRCPC
President and Chief Executive Officer
PARTEQ
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------------
Xxxxxxx Xxxxxxx
Chair of the Board of Directors
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EXHIBIT A
Queen's University Patents and Patent Applications
Methods of Diagnosis and/or Treatment Using Photodynamic Therapy Compositions
for Detection or Treatment.
Issued Patents
Country Patent No. Filing Date Issue Date
U.S.A. 5,079,262 07/28/89 01/07/92
U.S.A. 5,211,938 10/28/91 05/18/93
U.S.A. 5,234,940 04/08/92 08/10/93
U.S.A. 5,422,093 06/28/93 06/06/95
Australia 624985 07/25/90 10/19/92
Australia 674310 04/02/93 04/09/97
New Zealand 251284 04/02/93 11/10/97
Pending Applications
[c.i.]
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EXHIBIT B
UNDERTAKING
I, Xxxxx X. Xxxxxxx of 000 Xxxx Xxxxx Xxxxxxx, Xxxxxxxx, Xxxxxxx X0X 0X0, being
a named inventor in Applications for Letters Patent of the United States of
America Serial Numbers _________ and ______________ and assigned to Queen's
University at Kingston, for good and valuable consideration the receipt and
sufficiency whereof is hereby acknowledged, do hereby undertake to assign all
and any improvements, continuations, continuations-in-part, divisions and
reissues pertaining thereto for all countries of the world to Queen's University
at Kingston, and to sign all such documents as may be reasonably required by
Queen's University to perfect its title thereto, at any time while I am a member
of faculty at Queen's University, or thereafter, provided that any such
improvement shall have been made while I am a member of the faculty of Queen's
University.
Signed this ____ day of __________, 1998, at Kingston, Ontario.
_______________________________
Xxxxx X. Xxxxxxx
In the presence of _______________, whose post office address is _______________
___________________.
Witness
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EXHIBIT C
UNDERTAKING
I, Xxxxxx X. Xxxx of 0 Xxxxxxx Xxxxx, X.X. #0, Xxxxxxxx, Xxxxxxx X0X 0X0, being
a named inventor in Application for Letters Patent of the United States of
America Serial Number _____________ and assigned to Queen's University at
Kingston, for good and valuable consideration the receipt and sufficiency
whereof is hereby acknowledged, do hereby undertake to assign all and any
improvements, continuations, continuations-in-part, divisions and reissues
pertaining thereto for all countries of the world to Queen's University at
Kingston, and to sign all such documents as may be reasonably required by
Queen's University to perfect its title thereto, at any time while I am a member
of faculty at Queen's University, or thereafter, provided that any such
improvement shall have been made while I am a member of the faculty of Queen's
University.
Signed this ___day of _________, 1998, at Kingston, Ontario.
_________________________
Xxxxxx X. Xxxx
In the presence of ___________________, whose post office address is ___________
___________________.
__________________________
Witness
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EXHIBIT D
UNDERTAKING
I, ______________, of ______________________________________, being a named
inventor in Applications for Letters Patent of the United States of America
Serial Numbers _____________ and _________________ and assigned to Queen's
University at Kingston, for good and valuable consideration the receipt and
sufficiency whereof is hereby acknowledged, do hereby undertake to assign all
and any improvements, continuations, continuations-in-part, divisions and
reissues pertaining thereto for all countries of the world to Queen's University
at Kingston, and to sign all such documents as may be reasonably required by
Queen's University to perfect its title thereto, at any time while I am a member
of faculty at Queen's University, or thereafter, provided that any such
improvement shall have been made while I am a member of the faculty of Queen's
University.
Signed this ____ day of __________, 1998, at Kingston, Ontario.
_______________________________
In the presence of _______________, whose post office address is _______________
___________________.
__________________________
Witness
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