EXHIBIT 10.15
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTION.
LICENSE AND DEVELOPMENT ALLIANCE AGREEMENT
TAKEDA PHARMACEUTICAL COMPANY LIMITED
AND
BIONUMERIK PHARMACEUTICALS, INC.
OCTOBER 5, 2004
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LICENSE AND DEVELOPMENT ALLIANCE AGREEMENT
This License and Development Alliance Agreement ("Agreement") is
executed as of October 5, 2004 between Takeda Pharmaceutical Company Limited, a
Japanese corporation located at 0-0-0 Xxxxxxxxxx, Xxxx-xx, Xxxxx 000-0000, Xxxxx
(hereinafter "Takeda"), and BioNumerik Pharmaceuticals, Inc., a Texas
corporation located at 0000 Xxxxxxxxx Xxxxx, Xxxxx 0000, Xxx Xxxxxxx, XX 00000,
Xxxxxx Xxxxxx of America (hereinafter "BioNumerik"). Takeda and BioNumerik may
be referred to herein individually as a "Party" or collectively as the
"Parties."
WHEREAS BioNumerik has developed the Product that Takeda desires to
distribute in the Territory, and whereas BioNumerik owns the Licensed Patents
and Licensed Information directed to compositions of the Product, to
formulations containing the Product, to methods of making the Product, and to
methods of using the Product, and whereas BioNumerik owns, or has the right to
license to Takeda on the terms described herein, the Licensed Patents, the
Licensed Information, the Licensed Trademarks, and BioNumerik's Licensees'
Patents and Information, and whereas BioNumerik desires to grant an exclusive
license to Takeda to the Licensed Patents, the Licensed Information, and the
Licensed Trademarks in the Field in the Territory, and a license to use
BioNumerik's Licensees' Patents and Information in the Field in the Territory,
all on the terms described herein, and whereas BioNumerik desires to develop and
prepare the Product in order to seek regulatory approval in the Territory;
WHEREAS Takeda desires to help BioNumerik develop and prepare the
Product in order to seek regulatory approval in the Territory and to help
BioNumerik manufacture the Product for sale in the Territory and Takeda desires
to sell, offer for sale, promote, distribute and market the Product in the
Territory and to obtain an exclusive license to the Licensed Patents, Licensed
Information, and the Licensed Trademarks in the Field in the Territory, and a
license to use BioNumerik's Licensees' Patents and Information in the Field in
the Territory all on the terms described herein;
NOW THEREFORE, for the consideration described herein and upon the
terms listed below, the Parties hereby agree as follows:
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ARTICLE I
DEFINITIONS
When used in this Agreement, each of the following defined terms will
have the meanings set forth in this Article. There are other terms defined in
this Agreement parenthetically, and such terms will have the meanings apparent
from the context in which such terms are parenthetically defined.
1.1 "Affiliate" means, with respect to any Party, any corporation,
entity, or person that directly or indirectly controls, or is controlled by or
is under common control with, such Party, but only for so long as such control
exists. For purposes of this Section 1.1, "control" means (a) in the case of
corporate entities, direct or indirect ownership of fifty percent (50%) or more
of the stock or shares entitled to vote for the election of directors; and (b)
in the case of non-corporate entities, direct or indirect ownership of fifty
percent (50%) or more of the equity interest with the power to direct the
management and policies of such non-corporate entities.
1.2 "BioNumerik Developments and Improvements" means, any and all
inventions, developments, discoveries and improvements useful in the
development, manufacture or sale of the Product (including, without limitation,
formulae, compounds, specifications, designs, chemical and physical data,
clinical data, information concerning synthesis, processes, formulations,
applications, toxicity, operations, regulatory affairs and marketing) that are
created by, generated by, or owned exclusively by BioNumerik subsequent to the
date of this Agreement and during the term of this Agreement.
1.3 "BioNumerik's Licensees' Patents and Information" means (a) with
respect to Xxxxxx Oncology GmbH ("Baxter"), any and all inventions (including
patents and patent applications), developments, discoveries, and improvements
useful in the development, manufacture or sale of the Product, including,
without limitation, formulae, compounds, specifications, designs, chemical and
physical data, clinical data, information concerning synthesis, processes,
formulations, applications, toxicity, operations, regulatory affairs and
marketing that were or are developed by or for Baxter or its alliance
predecessor, ASTA Medica Aktiengesellschaft ("ASTA Medica") during the term of
the Strategic Alliance Agreement (the "Xxxxxx Alliance Agreement") between
BioNumerik and Baxter, subject in all cases to any
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restrictions that existed or may exist on the ability of Baxter or ASTA Medica
to license such inventions, developments, discoveries or improvements to
BioNumerik in accordance with the Xxxxxx Alliance Agreement, (b) with respect to
Grelan Pharmaceutical Co., Ltd. ("Grelan"), any and all inventions (including
patents and patent applications), developments, discoveries, and improvements
directly relating to the Product, including, without limitation, formulae,
specifications, designs, chemical and physical data, clinical data, and
information concerning synthesis, processes, formulations, applications,
toxicity, operations, regulatory affairs and marketing, that were or are
developed by or for Grelan during the term of the Joint Venture Agreement dated
August 30, 2000, as amended September 22, 2000 to add KI Pharmaceuticals, L.L.C.
as a party (the "KI Pharma Joint Venture Agreement") among BioNumerik, Grelan
and KI Pharmaceuticals, L.L.C., subject in all cases to any restrictions that
existed or may exist on the ability of Grelan to license such inventions,
developments, discoveries or improvements to BioNumerik in accordance with the
KI Pharma Joint Venture Agreement, (c) with respect to third parties other than
Baxter and Grelan, any and all inventions (including patents and patent
applications), developments, discoveries, and improvements, and data and
information, useful in the development, manufacture or sale of the Product,
including, without limitation, formulae, compounds, specifications, designs,
chemical and physical data, non-clinical and clinical data, information
concerning synthesis, processes, formulations, applications, toxicity,
operations, regulatory affairs and marketing invented by, obtained by, or at the
direction of, BioNumerik's direct and indirect licensees and/or collaborators,
such as the National Cancer Institute, in any country, before the Effective Date
of this Agreement and subsequently during the course of this Agreement,
including any divisions, renewals, continuations, continuation-in-parts,
substitutions, additions, registrations, confirmations, re-issues,
re-examinations, extensions, supplementary protection certificates, and patent
term extensions of the patents identified above, and any patent or patent
application derived from the these patents or their original patent
applications, provided that any such patent or patent application covers or
relates to the Product as defined herein, (d) with respect to Baxter, all data
and results obtained by Baxter (or its alliance predecessor, ASTA Medica) from
the non-clinical studies, clinical studies and related testing conducted by
Baxter (or its alliance predecessor, ASTA Medica) on the Product pursuant to the
Xxxxxx Alliance Agreement, (e) with respect to Grelan, all data and developments
which arise from research and development (including nonclinical studies and
clinical studies) carried out on the Product by
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Grelan pursuant to the KI Pharma Joint Venture Agreement, and (f) with respect
to parties other than Baxter and Grelan, any and all non-clinical, clinical, and
other data, experiments, results, conclusions, know-how, and the like, relating
to the Product obtained or generated by, or at the direction of, BioNumerik's
direct and indirect licensees in any country before the Effective Date of this
Agreement and subsequently during the course of this Agreement, provided that,
with respect to clauses (c) and (f) above, the intellectual property and
information described are only included to the extent BioNumerik actually has
and is authorized to sublicense such intellectual property and information.
1.4 "Commercial Milestone Payments" means the payments required to be
made by Takeda to BioNumerik pursuant to Section 8.3.
1.5 "Commercially Diligent Efforts" means, with respect to the
manufacture, supply, delivery, marketing and promotion of the Product or the
conduct of other activities referred to herein as requiring Commercially
Diligent Efforts, such efforts and resources commonly used by a similarly
situated company in the research-based pharmaceutical industry for a product
owned or licensed by it of similar commercial potential at a similar stage in
its lifecycle, taking into consideration various factors such as its safety and
efficacy, product profile, cost to develop, the time required to complete
development, the competitiveness of alternative products, its proprietary
position, the likelihood of regulatory approval, its profitability, sharing of
revenues, its labeling, the regulatory environment, competitive market
conditions and all other relevant factors, all as measured by the facts and
circumstances at the time such efforts are due. In addition to and
notwithstanding the foregoing, with respect to the obligation of Takeda and its
Affiliates and sublicensees to satisfy the requirement to use Commercially
Diligent Efforts as provided in Section 6.1 hereof, from [**] until [**], the
marketing, promotion and selling of the Product will need to be and remain one
of the two top priority products of the oncology business operations of Takeda
in the Territory for [**], one of the three top priority products of the
oncology business operations of Takeda in the Territory for [**], and thereafter
will receive for the term of the Agreement at least [**] of the resources of the
oncology business operations of Takeda in the Territory, ranked in terms of
priority, resource allocation, efforts, product positioning and relative order
of
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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importance. Upon request from BioNumerik, Takeda agrees to provide BioNumerik
with an explanation and documentation sufficient to demonstrate it is meeting
the requirements described in the previous sentence.
1.6 "Confidential Information" means any and all non-public and
proprietary information that is disclosed by a Party to another Party in
connection with this Agreement. Notwithstanding the foregoing, Confidential
Information will not include any part of such information that:
i. Was already known to the receiving Party as evidenced
by the receiving Party's written records, other than
any portion of such information that was under an
obligation of confidentiality, at the time of
disclosure;
ii. Was generally available to the public or was
otherwise part of the public domain at the time of
disclosure of such information to the receiving
Party;
iii. Became generally available to the public or otherwise
becomes part of the public domain after disclosure of
such information and other than through any act or
omission of the receiving Party in breach of this
Agreement;
iv. Was subsequently lawfully disclosed to the receiving
Party by a third party other than in contravention of
a confidentiality obligation of such third party to
the disclosing Party; or
v. Was developed or discovered by employees of the
receiving Party or Affiliates of the receiving Party
who had no access to the Confidential Information of
or enabling disclosure originating from the
disclosing Party and did not make use of the
Confidential Information of the disclosing Party as
evidenced by the written records or communications of
either Party.
1.7 "Delivery Costs" means, with respect to the delivery of the Product
as specified by either Party in the Territory the sum of:
6
(a) Any reasonable and customary warehouse or storage
costs;
(b) Any reasonable and customary transportation or
shipping costs;
(c) Import, export and customs fees and/or duties
attributable to delivery of the Product as specified
by either Party in the Territory; and
(d) Reasonable overhead (fixed and variable) allocated to
the delivery of the Product as specified by either
Party in the Territory, calculated in accordance with
normal accounting practices applied on a basis
consistent with such Party's past practices and
industry standards.
Costs included in Delivery Costs will not be counted twice in any other
calculation described herein.
1.8 "Development Plan" means the mutually agreed development plan for
the Product in the Territory described in Section 4.1.
1.9 "Distribution, Marketing and Promotion Expenses" means the actual
recorded expenses that are in accordance with Sections 9.2(d) and 9.2(e) or the
Marketing Plan or are otherwise approved by prior mutual consent of the Parties,
for the distribution, marketing, selling and promotion of the Product conducted
in accordance with the Marketing Plan, including, but not limited to, costs for
inspection and testing at the time of delivery, cost of sales representatives
and medical liaisons, including, but not limited to salaries, customary
incentives, costs for travel and meetings and fleet cars, and training of sales
representatives, promotional materials, publication costs, speaker programs,
insurance premiums relating to the distribution, marketing and promotion of the
Product (but not insurance costs described in Article XX or Section 20.4),
Takeda's or BioNumerik's reasonable overhead costs, management and support costs
associated with distribution, marketing and promotion (excluding G&A Costs
allocated to the distribution, marketing and promotion of the Product), costs
for returned goods, costs for recalls of the Product and other customary costs
for distribution, marketing and promotion. For clarity, the Distribution,
Marketing and Promotion Expenses include, but are not limited to, expenses
incurred by either Party for preparation of the launch of the Product in the
Field in the Territory. The same cost or expense will not be counted twice in
the calculation of the Distribution,
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Marketing and Promotion Expenses and the Net Sales or Net Profits. Delivery
Costs are not included in the Distribution, Marketing and Promotion Expenses.
The Distribution, Marketing and Promotion Expenses will be within the budgets
set forth in the Marketing Plan for each Fiscal Year and such budgets may be
changed by mutual agreement by both Parties.
1.10 "Effective Date" means, except for Articles XVIII and XXII of this
Agreement, the next business day after which the following have both occurred:
(1) either (a) the expiration or earlier termination of any notice and waiting
period under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder (the "HSR Act") or
(b) the approval of the transactions contemplated herein under the HSR Act,
unless an HSR Act filing is deemed unnecessary by Takeda at its sole discretion,
and (2) BioNumerik's obtaining any necessary approvals by BioNumerik's
shareholders of (x) the issuance of the Preferred Stock and the Common Shares,
and (y) the execution of the Registration Rights Agreement with respect to the
Preferred Stock and the Common Shares, although BioNumerik has represented, in
accordance with Section 21.2(q), that each member of its Board of Directors will
recommend approval of and support approval of and each of BioNumerik's
shareholders owning five percent (5%) or more of the capital stock of BioNumerik
will vote in favor of all aspects of this Agreement with Takeda that require
such shareholder approval, including the issuance of Preferred Stock and Common
Shares as described in this Agreement. BioNumerik will use diligent efforts to
notify and obtain any necessary approvals from BioNumerik's shareholders
referenced in clause 2 of the first sentence of this definition within
twenty-one (21) days following the execution of this Agreement. If BioNumerik
has not obtained such approvals within twenty-eight (28) days following the
execution of this Agreement, then Takeda has the option to terminate this
Agreement at any time before the necessary approvals by BioNumerik's
shareholders are obtained. Further, BioNumerik will inform Takeda in writing
when such necessary approvals by BioNumerik's shareholders have been obtained.
BioNumerik agrees that following execution of this Agreement until thirty (30)
days following execution of this Agreement, BioNumerik will not seek to enter
into another alliance transaction directly concerning the Product in the
Territory and also BioNumerik will not, during such thirty (30) day period
referred to in this sentence, participate in any discussions with a third party
concerning any tender or exchange offer, merger, acquisition or other business
combination involving BioNumerik or any of its subsidiaries. With
8
respect to the immediately preceding sentence and Sections 8.4(j) and 21.2(q),
the Parties' rights and obligations will begin immediately upon delivery to each
Party of fully executed counterparts of this Agreement. If an HSR Act filing is
deemed unnecessary by Takeda at its sole discretion, then the Effective Date is
the next business day after the BioNumerik shareholder approvals referenced in
clause 2 of the first sentence of this definition have been obtained.
1.11 "Field" means any and all indications for a human pharmaceutical
product.
1.12 "Fiscal Year" means the period from April 1st through March 31st
of the following year of the term hereof, or portion of a Fiscal Year if less
than the entire Fiscal Year applies at the beginning or end of the term hereof.
1.13 "Generic Entry Date" means the first date that a third party who
is not an Affiliate or sublicensee of Takeda or BioNumerik is legally
distributing a generic version of the Product in the Territory, or just in the
United States, and is not being sued by either BioNumerik or Takeda regarding
the Product.
1.14 "G&A Costs" means allocated costs associated with administrative,
accounting, legal (including patent counsel), human resources and information
systems. These costs would be allocated to the extent of the amount of support
they provide to the Product.
1.15 "Incurred Costs" means the costs not otherwise deducted from Net
Sales that are actually incurred by either Takeda or BioNumerik relating to the
manufacture, distribution, marketing, promotion, and Third Party Payments in the
Territory. Incurred Costs do not include costs associated with research and
development of the Product, unless expressly stated. Incurred Costs include, but
are not limited to, the following costs:
(a) Manufacturing Costs of BioNumerik;
(b) Delivery Costs of both Parties;
(c) PMS Costs of both Parties;
(d) Distribution, Marketing and Promotion Expenses of both Parties;
9
(e) G&A Costs of both Parties;
(f) Third Party Payments of both Parties; and
(g) Tax of both Parties.
However, in the event that BioNumerik licenses any Product
manufacturing rights to Takeda in the future, and Takeda manufactures some or
all of the Product, then Takeda's Manufacturing Costs for the portion of the
Product that it manufactures will be included in the Incurred Costs. Costs for
damaged Product and for recall of the Product will be included in the Incurred
Costs unless such damage or recall arises out of the negligence or willful
misconduct by one Party or by the breach of representations or warranties
contained in this Agreement by one Party or is otherwise allocable to either
Party pursuant to other provisions of this Agreement, including without
limitation Article XVI. Costs included in Incurred Costs will not be counted
twice in any other calculation described herein.
1.16 "Licensed Information" means any and all non-clinical, clinical,
and other data, experiments, results, conclusions, know-how, and the like,
created by, generated by, or owned exclusively by, BioNumerik before the
Effective Date and subsequently during the course of this Agreement by testing,
studying, using, making, selling, offering for sale, and/or marketing the
Product.
1.17 "Licensed Patents" means any and all patents, or patent
applications, including utility models and designs and certificates of
inventions, issued or filed in the Territory and owned by or exclusively
licensed to BioNumerik that claim or directly concern the Product, a formulation
containing the Product, a method of making the Product, and/or a method of using
the Product, regardless of when filed or obtained, including, but not limited
to, the following patents and patents derived from the following applications:
[**]. The Licensed Patents also include any divisions,
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
10
renewals, continuations, continuation-in-parts, substitutions, additions,
registrations, confirmations, reissues, re-examinations, extensions,
supplementary protection certificates, and patent term extensions of the patents
identified above, and any patent or patent application derived from these
patents or their original patent applications, provided that any such patent or
patent application claims or directly concerns the Product as defined herein.
Any other patents issued or filed in the Territory that BioNumerik may have any
control over, and that claims or directly concerns the Product are included in
the definition of Licensed Patents, to the extent that BioNumerik has a right to
exclusively license any such patent to Takeda in the Territory, so as to allow
Takeda the ability to fulfill the purposes of this Agreement.
1.18 "Licensed Trademarks" means (a) "TAVOCEPT", including any
registrations and any applications therefor issued or filed in the Territory and
owned by BioNumerik, and (b) any back-up trademarks for the Product to which
BioNumerik has or may obtain rights during the term of this Agreement, to the
extent of BioNumerik's rights, including any registrations and any applications
therefor that relate to the Product.
1.19 "Manufacturing Costs" means the fully allocated cost of
manufacturing the Product in a final packaged form (calculated in accordance
with Generally Accepted Accounting Principles ("GAAP")), including the direct
and indirect cost of any raw materials, packaging materials and labor (including
benefits) utilized in such manufacturing (including formulating, filling,
finishing, labeling and packaging, regulatory reporting fees, as applicable),
transportation, import, export and customs fees and/or duties attributable to
manufacture of the Product, plus overhead (fixed and variable costs associated
with management and support of the manufacturing process) allocated to the
Product in accordance with normal accounting practices applied on a basis
consistent with the manufacturing Party's past practices and industry standards
for all products manufactured in a fully utilized facility or normal capacity.
The Manufacturing Costs will not include any profit for BioNumerik or, to the
extent it is at any time authorized to manufacture the Product, Takeda, or their
respective Affiliates or sublicensees (excluding third party
contract-manufacturers). Costs included in Manufacturing Costs will not be
counted twice in any other calculation described herein.
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1.20 "Marketing Plan" means the mutually agreed marketing plan for the
commercialization of the Product in the Territory created by Article XIII,
Section 13.3 and further described in Article VI, Section 6.2.
1.21 "Material Data" means any and all data, information, or
documentation, that Takeda, or a similarly situated company, would have
reasonably considered important when deciding material conditions of this
Agreement including, but not limited to, its Exhibits and attachments or whether
to purchase a license to certain rights to the Product, to take a license to the
Licensed Patents, Licensed Information, BioNumerik's Licensees' Patents and
Information, or Licensed Trademarks, or to enter into an alliance agreement with
BioNumerik similar in nature to this Agreement, including, but not limited to,
all data, information, and documentation regarding non-clinical, and clinical
studies of the Product, potential efficacy of the Product, recognized and
possible side effects, injuries, toxicities, and sensitivities associated with
the Product, manufacturing of the Product, quality of the Product, compliance
with applicable laws and regulations, communications with Regulatory Agencies,
conflict with third parties' intellectual property rights, and ownership,
validity, and enforceability of the Licensed Patents and Licensed Trademarks,
except in each case where such data, information or documentation would not
reasonably be considered important when deciding material conditions of this
Agreement including, but not limited to, its Exhibits and attachments or whether
to invest in the Product, to take a license to the Licensed Patents, Licensed
Information, BioNumerik's Licensees' Patents and Information, or Licensed
Trademarks, or to enter into an alliance agreement with BioNumerik similar in
nature to this Agreement.
1.22 "Material Adverse Effect" means an effect that would be materially
adverse to the business, financial condition, and results of operations of the
Party with respect to which such effect is being evaluated.
1.23 "Milestone Payments" means the payments required to be made by
Takeda to BioNumerik pursuant to Section 8.2.
1.24 "Net Sales" means the recorded Gross Sales of the Product by
Takeda, its Affiliates, or its sublicensees in the Territory to third parties in
accordance with United States GAAP less the following deductions as determined
in accordance with Takeda's current and
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future commercial and accounting policies and practices that are consistently
applied in a manner consistent with GAAP and the Marketing Plan:
(a) sales and excise taxes, duties, and any other
governmental charges imposed upon the use or sale of
the Product;
(b) trade, quantity and cash discounts allowed on a Product
to wholesalers or other third parties to whom the
Product is sold and shipped directly;
(c) provisions for actual credits to customers on account
of rejection or return of a Product or on account of
price reductions affecting a Product;
(d) Product rebates and Product charge-backs and other
price reduction programs granted to managed care
entities and pharmaceutical benefit management service
entities; and
(e) provisions for actual write-offs of uncollectible
customer accounts for previously recorded sales.
Deductions used to calculate Net Sales will not be counted twice in any
other calculation described herein. Sales of Product resulting from co-promotion
by BioNumerik, which will be recorded by Takeda, will be included in Net Sales.
"Gross Sales" means recorded post launch gross sales of the Product in
the Territory by Takeda or its Affiliates or sublicensees to third parties.
Sales between Takeda and its Affiliates and sublicensees are not considered to
be sales to third parties, unless the Affiliate or sublicensee is the end-user
of the Product.
1.25 "Patent Expiration Date" means the date first following the last
to expire Licensed Patent in the Territory that claims or directly concerns the
Product.
1.26 "Phase III Studies" means adequate and well-controlled human
clinical studies in any country the results of which could be used to establish
safety and efficacy of the Product, as a basis for any type of New Drug
Application ("NDA") filed with the U.S. Food and Drug
13
Administration or a similar application for the marketing approval of the
Product filed in the Territory, to be conducted before or after the approval of
BioNumerik's NDA for the Product.
1.27 "Phase IV Costs" means the costs associated with Phase IV Studies,
or Phase III studies that are concluded following receipt of NDA approval for
the Product in the Territory.
1.28 "Phase IV Studies" means additional clinical studies for the
Product commenced after the receipt of regulatory approval of the Regulatory
Agency for the Product in all or part of the Territory, which studies are
conducted within the parameters of the regulatory approval and other than those
required or requested by the Regulatory Agency as a condition of or in
connection with obtaining full regulatory approval. Phase IV Studies also
include, but are not limited to, studies to gather additional information
regarding the drug's potential risks, medical or pharmacoeconomic benefits,
justifications and descriptions for other indications or comparative data to be
included in United States compendial listings, and optimal use, dose, route, and
schedule of administration, epidemiological studies, modeling and
pharmacoeconomic studies, and investigator sponsored clinical trials, but
specifically excludes PMS (as defined in Section 1.30 below).
1.29 "PMS Costs" means the costs associated with PMS and related
activities, including, but not limited to, costs for a database of adverse
events relating to the Product in the Territory as well as costs for receiving,
assembling, and reporting to a Regulatory Agency in the Territory of PMS data
from outside of the Territory.
1.30 "PMS" means post-marketing safety surveillance with respect to the
Product in the Territory which is required by the Regulatory Agency in the
Territory and worldwide by other regulatory agencies where the Product is
undergoing development or is approved.
1.31 "Product" means any and all formulations, salts and dosage forms,
in the Field, containing BNP7787 with the chemical structure listed below (also
known as "disodium 2,2'dithio-bis-ethane sulfonate", "BNP7787", "Dimesna," and
"TAVOCEPT"), including any salt forms thereof and with or without any
pharmaceutically acceptable carriers, excipients, preservatives, bacteriostatic
components, and adjuvants, and including, but not limited to, any improvements
to which BioNumerik has rights that are made to the Product after the execution
14
of this Agreement, and any combination products or therapies where BNP7787 is
administered with one or more active ingredients alone or in combination with
other medicaments, regardless of the respective timing and mode of
administration of each active ingredient.
The Chemical Structure of BNP7787 is set forth below:
[CHEMICAL STRUCTURE OF BNP7787]
1.32 "Profit Share" means the division of profit and loss between the
Parties in accordance with Article IX.
1.33 "Provisional Margin" means the amount above BioNumerik's
Manufacturing Costs and Delivery Costs that Takeda agrees to pay as part of the
Provisional Price. The maximum Provisional Margin is [**] of the sum of
BioNumerik's Manufacturing Costs and BioNumerik's Delivery Costs.
1.34 "Provisional Price" means the unit price at which BioNumerik will
sell the final, packaged form of the Product to Takeda. The Provisional Price is
the sum of:
(a) BioNumerik's Manufacturing Costs;
(b) BioNumerik's Delivery Costs; and
(c) the Provisional Margin.
Under no circumstance will the Provisional Price that Takeda will pay
BioNumerik be less than the actual Manufacturing Costs and Delivery
Costs for the Product.
1.35 "Regulatory Agency" means the United States Food and Drug
Administration ("FDA") and the Canadian Health Authority, and/or such other
similar and appropriate
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
15
government regulatory authority or agency outside the United States, the
approval of which is required to develop, market or distribute the Product in a
portion of the Territory.
1.36 "Research and Development Payments" means the payments required to
be made by Takeda to BioNumerik pursuant to Section 8.4.
1.37 "Supply Conditions" means specifications and testing methods of
the Product which are set forth in Exhibit A attached hereto.
1.38 "Takeda Developments and Improvements" means any and all
inventions, developments, discoveries and improvements useful in the
development, manufacture or sale of the Product (including, without limitation,
formulae, compounds, specifications, designs, chemical and physical data,
clinical data, information concerning synthesis, processes, formulations,
applications, toxicity, operations, regulatory affairs and marketing) that are
developed by or for Takeda subsequent to the date of this Agreement and during
the term of this Agreement.
1.39 "Tax" means any and all consumption or value-added taxes and
import or export duties incurred by either Party for sales, manufacture,
importation or distribution of the Product for the Territory, including, but not
limited to, those incurred for any transaction between BioNumerik and Takeda.
Any and all income taxes attributable to the Parties will not be included in the
Tax. Costs included in Tax will not be counted twice in any other calculation
described herein.
1.40 "Territory" means (a) the United States of America, its
territories and possessions (including Puerto Rico), and (b) Canada.
1.41 "Third Party Payment" means (i) royalty and other payments to a
third party for alleged or adjudged infringement of such third party's patent
rights relating to manufacturing, distribution, promotion, sales, use, offers
for sale or importation of the Product in the Territory; and (ii) damages and
other payments to a third party for alleged or adjudged product liability claims
other than those allocated to either Party pursuant to other provisions of this
Agreement, including without limitation Article XVI. Royalty, damages or other
payments which
16
BioNumerik or its licensees pay to a third party relating to the Product not
marketed by Takeda or its Affiliates or sublicensees will not be included in the
Third Party Payment.
1.42 "BioNumerik IPO" means the public offering by BioNumerik of its
Common Shares pursuant to the first effective registration statement under the
U.S. Securities Act of 1933, as amended, (the "Securities Act") of a firmly
underwritten offering of Common Shares.
1.43 "IPO Price" means the offering price to the public established for
the BioNumerik IPO.
1.44 "Pre-Transaction Valuation" means the indicated aggregate
valuation for BioNumerik established by multiplying (i) the IPO Price by (ii)
the aggregate number of Common Shares outstanding or issuable upon the
conversion or exercise of convertible preferred stock, options or warrants of
BioNumerik outstanding as of the date of execution of this Agreement.
ARTICLE II
LICENSE GRANT
2.1 Exclusive License. Subject to Section 2.4, Section 5.1(a), and
Section 6.3, BioNumerik hereby grants Takeda and its Affiliates: (i) an
exclusive license, with the right to sublicense, under the Licensed Patents and
Licensed Information; and (ii) a non-exclusive license, with the right to
sublicense through BioNumerik as directed by Takeda, under BioNumerik's
Licensees' Patents and Information, such license in the case of each of clauses
(i) and (ii) being to make, have made, use, sell, offer for sale, import and
market the Product in the Territory in the Field. Takeda will be responsible for
the performance of its obligations hereunder by its Affiliates and sublicensees.
The license grant hereunder as it relates to BioNumerik's Licensees' Patents and
Information obtained from Xxxxxx or Grelan are granted for the purpose of
supporting non-clinical studies, clinical trials, regulatory approval for the
Product in the Territory, and development, marketing and sale of the Product in
the Territory and are subject to any retained rights of Xxxxxx or Grelan to
practice such BioNumerik's Licensees' Patents and Information other than in
connection with the Product. BioNumerik agrees not to make, have made, use,
sell, offer for sale, import or market the Product in the Territory, except
17
as specifically allowed in this Agreement. Under this Section, it is understood
that BioNumerik will license to Takeda all the intellectual property rights
regarding the use of the Product in the Field in the Territory that BioNumerik
itself has.
2.2 BioNumerik's Licensees. Simultaneously with the execution of this
Agreement, BioNumerik will provide Takeda with a written acknowledgement from
each of Xxxxxx and Grelan that BioNumerik has the right to xxxxx Xxxxxx
according to the terms of this Agreement a license to such party's portion of
BioNumerik's Licensees' Patents and Information in the Territory. Such license
includes, but is not limited to, a license to data and results obtained in (a)
the Phase III non-small cell lung cancer clinical trial conducted by Xxxxxx
and/or ASTA Medica for the Product, and (b) the Phase I advanced ovarian cancer
clinical trial conducted by Xxxxxx and/or ASTA Medica for the Product.
2.3 Sublicenses. Takeda will have the right to sublicense (or to
require BioNumerik to sublicense) the rights granted under Section 2.1 to third
parties in the Field in the Territory subject to the prior written consent of
BioNumerik, which BioNumerik may withhold in its sole discretion after
exercising good faith. Takeda's use of contract sales organizations or other
sales agents in accordance with the Marketing Plan will not be deemed a
sublicense.
2.4 Retention of Rights. BioNumerik will retain the right for itself
and its Affiliates, sublicensees and contract-manufacturers to use the Licensed
Patents, Licensed Information and BioNumerik's Licensees' Patents and
Information in the Territory without cost as necessary to carry out the
manufacturing and development of the Product described in this Agreement as
being conducted by BioNumerik, to file the NDA and obtain regulatory approval
for the Product in the Territory, and to perform regulatory operations to
maintain such regulatory approval or additional regulatory approvals for the
Product in the Territory or elsewhere, for internal research purposes, and for
purposes of co-developing and co-promoting the Product in the Territory as
described herein or elsewhere, for purposes of manufacturing the Product in the
Territory in accordance with this Agreement, for purposes of manufacturing the
Product in the Territory for use outside the Territory, and for purposes that do
not relate to the Product or to the Product's use within the Territory. In
addition, BioNumerik, its Affiliates, and other parties previously or hereafter
authorized by BioNumerik will retain the right to conduct and have conducted
research
18
and development (including studies and clinical trials) of the Product
throughout the world for the purpose of obtaining regulatory approvals and label
expansions or other medical indications for the Product outside the Territory.
In addition, BioNumerik may conduct or sponsor non-clinical research and
clinical research regarding the Product through or in collaboration with
academic parties or research institutions ("Academic/Cooperative Studies"),
provided that (a) within six (6) months after the Effective Date, BioNumerik and
Takeda will adopt mutually agreed to Standard Operating Procedures ("SOP's") for
such Academic/Cooperative Studies that are not described in the Development
Plan, and (b) pending adoption of such SOP's, BioNumerik will regularly inform
and consult with Takeda regarding such Academic/Cooperative Studies. In
addition, subject to Section 6.7, nothing contained herein is intended to limit
the right of Takeda or BioNumerik to discover, develop, market, or sell other
therapeutic products or technologies beside the Product throughout the world.
2.5 Disclosure of Information. BioNumerik will promptly disclose to
Takeda after the Effective Date of this Agreement both Licensed Information and
BioNumerik's Licensee's Patents and Information that it is aware of; BioNumerik
will first collect both Licensed Information and BioNumerik's Licensee's Patents
and Information and then will provide copies to Takeda. During the term of this
Agreement, BioNumerik will promptly inform Takeda of any new Licensed
Information and of any new BioNumerik's Licensee's Patents and Information that
it is aware of and Takeda will promptly inform BioNumerik of any new Takeda
Developments and Improvements.
ARTICLE III
TRADEMARK LICENSE GRANT
3.1 BioNumerik hereby grants Takeda and its Affiliates an exclusive
license, with the right to sublicense, subject to reasonable quality control
conditions determined by BioNumerik, to use the Licensed Trademarks in
connection with the Product in the Territory in the Field as long as Takeda is
selling the Product in accordance with the terms of this Agreement, including
Article XV as applicable. Any sublicense of the Licensed Trademarks by Takeda
will be granted only together with a sublicense of the rights granted under
Article II, Section 2.1. BioNumerik agrees not to use, or to grant a license to
any third party to use the Licensed Trademarks in the Territory, whether inside
or outside of the Field, provided, however, that
19
BioNumerik retains the right to describe TAVOCEPT (or any of the other Licensed
Trademarks) in its own documents and publications, and in the manufacture of the
Product, the Product label or Product container or marketing or promotional
materials, for reporting to regulatory agencies, or for making public disclosure
regarding the Product, including reporting to shareholders or the United States
Securities and Exchange Commission ("SEC"), and to use the Licensed Trademarks
as necessary for other territories and the manufacture of the Product in the
Territory for shipment to other territories.
3.2 BioNumerik will retain any and all goodwill associated with the
Licensed Trademarks and BioNumerik will also retain the benefit of any goodwill
associated with the Licensed Trademarks. BioNumerik will perform periodic
quality control assessments of any Product bearing one or more of the Licensed
Trademarks, whether the Product originated from Takeda or from a Takeda
sublicensee. Quality control assessments will take place at least once per
calendar year, up to as many as two (2) times per calendar year. Procedures and
policies concerning quality control assessments of the Product bearing one or
more of the Licensed Trademarks are subject to reasonable quality control
conditions determined by BioNumerik and will be reasonably set forth and
communicated to Takeda and any of Takeda's Affiliates or sublicensees.
ARTICLE IV
DEVELOPMENT OF THE PRODUCT AND SUBMISSION TO REGULATORY
AGENCY
4.1 Development Plan.
(a) The Parties will collaborate and use diligent efforts to
develop the Product with the intent of obtaining regulatory approval for
interstate transport, distribution, sale, promotion, labeling and marketing the
Product in the Territory as soon as reasonably practicable. Each Party will
assure that its Product development responsibilities hereunder are carried out
adhering to ethical and safety standards and in compliance with material
provisions of all applicable laws, regulations, standards, and guidelines in
force in the Territory. BioNumerik and Takeda hereby agree that the development
of the Product will be initially focused on the field of oncology.
20
(b) The development of the Product will be conducted pursuant
to a mutually agreed development plan for non-clinical and clinical studies,
including Phase III and IV Studies, which will specify in detail all planned
development activities and priorities, time frames for completion of activities,
which Party or third party is to be responsible for each activity, and any other
items reasonably required by the Parties (the "Development Plan"). The
Development Plan must be approved by both Parties prior to the commencement of
the non-clinical and clinical studies and may be modified at any time by mutual
written agreement of the Parties through the Joint Steering Committee described
in Article XIII, Section 13.1. An outline of the Development Plan is attached to
this Agreement in Exhibit B and includes a summary synopsis, a timeline, and an
annual budget estimate. BioNumerik will prepare and submit a draft of the
Development Plan to Takeda for consultation and approval within two (2) months
after the Effective Date and the draft of the Development Plan will be
substantially the same as set forth in Exhibit B.
(c) A Party will have the obligation to promptly inform the
other Party, as soon as the notifying Party becomes aware, of an expected excess
of development costs over the annual budget in the Development Plan by greater
than [**] of such annual budget or of such otherwise agreed upon plan by the
Parties. The Parties will consult with each other regarding the reasons for and
the handling of such expected excess. It is understood, however, that BioNumerik
will use Commercially Diligent Efforts in conducting the activities under the
Development Plan, including monitoring the costs thereof to stay within the
annual budget. Any Party that is responsible for creating an excess or monetary
loss caused by its negligent conduct for a particular project will be
responsible for correcting the loss at its own expense to the extent such cost
was caused by its negligent conduct. Notwithstanding the foregoing, the Parties
are encouraged to regularly consider and discuss activities that would result in
new indications or expand the market opportunity for the Product and to propose
such matters for consideration by the Joint Steering Committee.
(d) Unless otherwise agreed upon by the Parties, the
Development Plan will include the following studies, all of which will be
included in the budget set forth in the Development Plan:
(i) A [**] study of [**] TAVOCEPT versus [**] in
patients with [**]. This study will have clearly defined
safety and efficacy endpoints, and will involve intrapatient
controls and crossover design involving the comparative
analysis of [**] TAVOCEPT. The initiation and priority of this
study will be dependent upon near term FDA responses to
BioNumerik's discussions regarding the [**];
(ii) A [**] study of TAVOCEPT in patients with [**] who
will be treated with [**] TAVOCEPT or [**] in combination with
[**]. This trial will be designed to have adequate statistical
power [**] for the primary safety endpoint that will be
either: (1)[**]; or (2)[**], and for the primary safety
endpoint, which will evaluate [**]. With regard to the safety
endpoint, the analysis methodology that will be applied is
[**] that will be discussed and agreed to by the Regulatory
Authority and BioNumerik. The initiation of this study will be
a priority for BioNumerik to design and implement within the
first [**] months after the Effective Date; and,
(iii) Both Parties will closely collaborate regarding
obtaining any necessary information regarding potentially [**]
in the Final Drug Report as defined in 21 CFR 312 with the
objective of addressing potentially important specification
matters regarding the Final Drug Report and its impurity
profile. In the event that Takeda and/or BioNumerik believe it
is important to complete the following steps, they will
collaborate together on the following:
1. Takeda will synthesize and purify or procure
adequate quantities of test articles, which may
include [**].
2. BioNumerik, in consultation with Takeda and
subject to prior FDA discussion and agreement, will
design and complete Good Laboratory Practices safety
evaluation of the test articles in one or two species of
animals (e.g., rat and dog) with the objective of
evaluating the [**] of such test articles in a [**]
study in animals, as well as conducting [**] of such
test articles, as well as a [**] study.
3. The results of such studies will be discussed
by BioNumerik and Takeda.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
21
4. The initiation of these studies will be a
priority for both Parties to design and implement within
the first [**] months after the Effective Date.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
22
4.2 Development. Without regard to Section 4.1 above, BioNumerik will
continue to conduct clinical and non-clinical studies of the Product necessary
to submit an NDA to the FDA and otherwise necessary for distribution, sale,
promotion, and marketing the Product in the United States in accordance with the
Development Plan.
BioNumerik will provide Takeda with monthly status reports on such
studies. The content and format of such reports will be determined by a
Development Committee created by Article XIII, Section 13.2, but will, at a
minimum, include such data and information and a description of discoveries,
inventions and patents and other intellectual property rights as have been
acquired by BioNumerik as a result of the studies. BioNumerik will also respond
to such reasonable inquiries as Takeda may from time to time make with respect
to such studies.
4.3 Phase III Studies and Phase IV Studies. In accordance with the
Development Plan and as otherwise requested by a Regulatory Agency, BioNumerik
will conduct Phase III Studies and Phase IV Studies of the Product, including
studies for expansion of the approved indications and for indications different
from those currently undergoing, or planned to undergo, Phase III Studies in the
Territory.
23
4.4 Studies, Papers, and Presentations. Unless otherwise provided
herein or in an agreement between BioNumerik and Takeda, BioNumerik will be
responsible for conducting any non-clinical and clinical study, the publishing
of scientific papers, and organizing and making presentations at medical or
scientific congresses or other academic meetings under the auspices of the
Development Committee. Subject to the decisions of the Development Committee,
BioNumerik will send Takeda relevant documents (protocols, drafts of initial
scientific papers to be published, drafts of initial manuscripts of
presentations to be made at congresses or other meetings) for Takeda's review
and consent fourteen (14) business days in advance of filing, presentation or
publication. The costs associated with such activities will also be considered
to be part of the Distribution, Marketing, and Promotion Expenses after the
Product is approved.
4.5 Filing and Maintenance of a NDA. BioNumerik will use Commercially
Diligent Efforts to prepare and file a NDA for the Product in the United States,
and subsequently in Canada, in the Field in accordance with the Development Plan
and in consultation with Takeda, and will use Commercially Diligent Efforts to
obtain and maintain NDA approval for the Product in the United States, and
subsequently in Canada, in the Field. Takeda will provide BioNumerik reasonable
assistance in the preparation of application documents for NDA of the Product in
the Territory. BioNumerik will provide Takeda with draft application documents
for the NDA no later than twenty (20) business days before the anticipated
filing thereof for Takeda's review and comment, and BioNumerik will incorporate
Takeda's reasonable comments in the application documents. BioNumerik will
promptly notify Takeda in writing of any communication with the FDA regarding
the Product in the United States and consult with Takeda about such
communication. Takeda may participate in any meeting and other communication
with the FDA, if such participation is permitted by the FDA, or if requested by
BioNumerik.
4.6 Orange Book Listing. Based on BioNumerik's judgment and
determination, and in consultation with Takeda, BioNumerik will file appropriate
information with the FDA listing any Licensed Patent, patents in the
BioNumerik's Licensees' Patents and Information and patents referred to in
Article XII in the FDA's "Orange Book" as a patent related to the Product.
BioNumerik will use Commercially Diligent Efforts to maintain the listing in the
Orange Book until the expiration, disclamation, withdrawal, cancellation,
surrender, invalidation or holding of unenforceability of all of the Licensed
Patents. If Takeda identifies a Licensed Patent that should
24
be listed in the Orange Book and which BioNumerik has not listed, Takeda will
notify BioNumerik, in writing, of the Licensed Patent and the reasons it
believes that such Licensed Patent should be listed. Within ten (10) business
days, BioNumerik will respond, in writing, that it will file appropriate papers
with the FDA to list the Licensed Patent in the Orange Book, or BioNumerik will
give reasons why it does not believe that the Patent should or can be listed.
Any dispute will follow the procedures laid out in Article XIX. BioNumerik will
notify in writing Takeda of a Notice of Allowance of the Licensed Patents and
patents in the BioNumerik's Licensees' Patents and Information within ten (10)
business days after its receipt of the Notice of Allowance regarding each
patent. Takeda will notify in writing BioNumerik of a Notice of Allowance of
patents relating to Takeda Developments and Improvements and patents relating to
Jointly Developed Intellectual Property within ten (10) business days after its
receipt of the Notice of Allowance regarding each patent. This provision will
also apply to any Canadian patent regarding Canadian listing similar to the
Orange Book.
4.7 Other Listings. BioNumerik will use Commercially Diligent Efforts
to register the Product in specified United States compendial listings with
prior consultation from Takeda.
4.8 New Formulation and Manufacturing Process. Both Parties will
cooperate with each other in developing a new formulation of the Product and/or
improving the manufacturing process for the Product if both Parties agree that
such activities are necessary. The result, regarding the Product, of such
activities will be included in the scope of this Agreement and the cost for the
activities will be shared equally by both Parties unless otherwise agreed.
ARTICLE V
MANUFACTURE OF THE PRODUCT
5.1 Manufacturing Responsibility.
(a) BioNumerik will be responsible for all manufacturing
activities of the Product, including the use of existing or mutually agreed upon
contractor-manufacturers for the manufacture and supply of the Product to
Takeda, and Takeda agrees to purchase from BioNumerik, Takeda's entire
requirement of the Product in the Territory under the conditions set forth
herein. BioNumerik agrees to hire only contract-manufacturers that Takeda
approves in
25
writing before manufacturing by the contract-manufacturer begins, provided that
Takeda will not unreasonably withhold approval of a prospective qualified
contract-manufacturer. A list of potential contract-manufacturers that have
already been approved by Takeda is set forth on Exhibit G hereto.
(b) BioNumerik hereby grants Takeda the right to audit
manufacturing related operations for the Product, including but not limited to
audits of the following: sources, procurement and utilization of raw materials,
API production, Final Drug Product production, FDA inspections and reporting,
operations involving importation or exportation of raw materials, API or Final
Drug Product; label production, carton production, final packaged form of
Product production, transportation, quality assurance, and shipping, and inspect
the facilities of BioNumerik and its contract-manufacturers that manufacture the
Product for the Territory for the foregoing purposes, all subject to Takeda
reasonably cooperating with BioNumerik and its contract-manufacturers regarding
the timing and scope of any such audits. BioNumerik agrees to substantially
comply and to use Commercially Diligent Efforts to cause its
contract-manufacturers to substantially comply with (i) Takeda's reasonable
advice on quality assurance and (ii) all applicable laws, regulations,
guidelines and standards governing manufacture of the Product. Both Parties
agree to cooperate with each other in reducing the costs for the manufacture of
the Product and in keeping a high standard of quality and regulatory compliance
regarding the manufacturing process.
(c) BioNumerik will, at its cost, assure that appropriate
back-up suppliers are available in the event that BioNumerik or its
contract-manufacturers are unable to supply or are materially delayed in
supplying the Product to Takeda.
5.2 Supply Conditions. BioNumerik agrees to supply Takeda the Product
in a final packaged form suitable for distribution to wholesalers, distributors,
cooperative purchasing groups, pharmacies or hospitals at the Provisional Price
to Takeda. The conditions for the supply from BioNumerik to Takeda are
prescribed in Exhibit A to this Agreement.
5.3 Takeda's Manufacture. Upon Takeda's request at any time, BioNumerik
and Takeda will in good faith negotiate regarding the possible manufacture by
Takeda (including Takeda's right to use contract manufacturers) of a part or all
of the entire requirement of the
26
Product or bulk Active Pharmaceutical Ingredient of the Product for distribution
and sale in the Territory, provided that any such manufacturing would be subject
to BioNumerik's then existing arrangements with contract-manufacturers and other
third parties relating to manufacture of the Product and the decision of whether
or not to allow Takeda to manufacture any of the Product would be in the sole
discretion of BioNumerik. BioNumerik will not enter into future arrangements
with contract manufacturers and other third parties directly concerning
manufacture of the Product for sale (and not routine testing and analysis) in
the Territory without Takeda's prior written consent, which will not be
unreasonably withheld by Takeda.
5.4 Manufacturing Costs. BioNumerik will use Commercially Diligent
Efforts to attempt to keep the Manufacturing Costs per unit at or below [**] of
Gross Sales per unit; provided that this maximum Manufacturing Costs is
determined based on the assumption that such Gross Sales per unit is more than
[**] in the United States.
ARTICLE VI
MARKETING AND PROMOTION OF THE PRODUCT
6.1 Marketing. Takeda and its Affiliate or its sublicensees will use
their Commercially Diligent Efforts to promote and market the Product in the
Territory in accordance with the Marketing Plan created by Article XIII, Section
13.3. Takeda will be responsible for assuring that its Affiliates and any
sublicensees meet the standards required in this Section.
6.2 Marketing Plan. Takeda and BioNumerik agree to jointly develop the
Marketing Plan. The Marketing Plan will be developed by the Promotion Committee
as discussed in Article XIII, Section 13.3. The Marketing Plan may be changed by
the Joint Steering Committee referred to in Article XIII, Section 13.1. The
Marketing Plan will include, but is not limited to, the following items:
(a) the strategy and expected outcomes for
cost-effectively marketing and promoting the Product
in the Territory, including, but not limited to, the
number and location of sales representatives and
selling and promotional coordination plans;
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
27
(b) the strategy and expected outcomes for
cost-effectively distributing the Product in the
Territory;
(c) the strategy and expected outcomes for
cost-effectively training medical personnel about the
Product in the Territory, including, but not limited
to, the number of medical liaisons and their
responsibilities;
(d) the strategy and expected outcomes for
cost-effectively marketing and promoting the Product
in the Territory specifically to potentially larger
sales accounts and to persons identified by at least
one of the Parties as "opinion leaders" in oncology,
including but not limited to the schedule of such
visits and the identification of persons who would
participate in such visits;
(e) the projected annual budgets for the Distribution,
Marketing and Promotion Expenses; the projected
annual budgets will be inclusive of three (3) years
with the caps set forth in Sections 9.2(d) and
9.2(e); and,
(f) the projected budget for preparation of the launch of
the Product in the Territory, including caps to be
recommended by the Promotion Committee as approved by
the Joint Steering Committee.
6.3 Co-Promotion. BioNumerik has the right to co-promote the Product
with Takeda in the United States in accordance with this Agreement.
6.4 Preparation of Promotional Materials. Both Parties will have the
responsibility to prepare, in close collaboration with each other through the
Promotion Committee and as approved by the Joint Steering Committee, promotional
materials for their use in the Territory consistent with the Marketing Plan.
Takeda will indicate BioNumerik's corporate name and/or logo on labels,
packages, package inserts, or promotional materials, etc. for the Products in
such reasonable shape, color and size so as to render the indication plainly
discernible, to the extent permitted by applicable law, regulations and
guidelines in the Territory, with prior review and approval by BioNumerik.
28
6.5 Preparation of Training Materials. Both Parties will have the
responsibility to prepare, in consultation with each other, training materials
for their use in the Territory consistent with the Marketing Plan.
6.6 Recall. Voluntary recall of the Product in each country of the
Territory will be determined by mutual agreement of both Parties; provided,
however, Takeda as a distributor and seller of the Product may start procedures
for the recall of the Product in the case of emergency event by Takeda's own
good faith determination, keeping BioNumerik informed of the progress of such
procedures. All costs and liabilities for the recall arising out of negligence
or willful misconduct by one Party or the breach of representations or
warranties by one Party will be borne by such Party to the extent caused by such
Party, and such Party will indemnify the other Party in accordance with Article
XVI.
6.7 Non-Compete. Neither BioNumerik nor Takeda will market or promote [**]
in competition with the Product in the Territory during the term of this
Agreement, except with prior written consent or agreement by the other Party.
BioNumerik will not cause or encourage third parties to import the Product into
the Territory for sale in the Territory and BioNumerik will use Commercially
Diligent Efforts to oppose the importation by third parties of the Product into
the Territory for marketing and distribution in the Territory. Except as
expressly provided in this Agreement or by a separate written agreement between
the Parties, BioNumerik will not directly or indirectly distribute or sell
Product in the Territory. Except as expressly provided in this Agreement or by a
separate written agreement between the Parties, Takeda will not directly or
indirectly manufacture Product to be sold in the Territory or manufacture,
market, distribute or sell Product outside the Territory.
ARTICLE VII
CANADA
7.1 Development. Article IV will apply, mutatis mutandis, to
development of the Product in Canada; provided, however, that both Parties agree
that each will conduct its
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
29
obligations regarding the development of the Product in Canada after
consultation with the other Party.
7.2 Marketing and Promotion. Notwithstanding Section 6.1, in
consultation with BioNumerik, Takeda will have an option not to start promotion
or marketing of the Product in Canada until the later of (a) two (2) years after
the commercial launch of the Product in the United States, and (b) sixty (60)
days after marketing approval of the Product by the Regulatory Agency in Canada,
provided that if Takeda does not start promotion or marketing of the Product in
Canada by such time, then all rights granted under Section 2.1 regarding Canada
would revert back to BioNumerik. In addition, at any time after commercial
launch of the Product in Canada. Takeda, upon six (6) months written notice to
BioNumerik, may suspend, discontinue, or terminate promotion or marketing of the
Product in Canada, in which event, all rights granted under Section 2.1
regarding Canada would revert back to BioNumerik. In addition, in the event of
reversion to BioNumerik of rights concerning Canada pursuant to this Section
7.2, Takeda will transfer to BioNumerik, with the right to sublicense, all
necessary data and information possessed by Takeda for BioNumerik to develop and
commercialize the Product in Canada. Before or after the time of any such
reversion of Canada rights to BioNumerik, commercial launch and marketing of the
Product in Canada will be subject to Joint Steering Committee approval, which
will not be unreasonably withheld by either Party. Also, if BioNumerik alleges a
breach of the Agreement by Takeda under Section 15.4(a) and the basis for
Takeda's breach is solely a breach of its obligation to use Commercially
Diligent Efforts to promote and market the Product in Canada, then BioNumerik's
remedy will be the reversion of all rights granted under Section 2.1 regarding
Canada to BioNumerik, as well as the transfer by Takeda to BioNumerik of all
necessary data and information possessed by Takeda for BioNumerik to develop and
commercialize the Product in Canada. If Takeda's Canadian license reverts back
to BioNumerik, then BioNumerik, and its sublicensees, may develop and market the
Product in Canada.
ARTICLE VIII
PAYMENTS, COSTS, STOCK TRANSFER, AND REPORTS
8.1 Initial Payment. The Parties agree that Takeda will acquire from
BioNumerik, and BioNumerik will issue to Takeda, shares of (a) Series I
Convertible Preferred Stock, par
30
value $0.01 per share (the "Series I Preferred Stock"), and (b) Series J
Convertible Preferred Stock, par value $0.01 per share (the "Series J Preferred
Stock" and together with the Series I Preferred Stock, the "Preferred Stock"),
in the respective amounts provided herein, for aggregate cash consideration of
fifty-two million US dollars (US$52,000,000) (the "Aggregate Preferred Stock
Purchase Price"), in accordance with the terms and subject to the conditions of
that Convertible Preferred Stock Purchase Agreement, a copy of which is attached
hereto as Exhibit C and which will be executed by the Parties on the Effective
Date of this Agreement (the "Preferred Stock Purchase Agreement").
The number of shares of Series I Preferred Stock initially will be
1,123,417 shares at an initial purchase price of US$34.7929 per share (the
aggregate initial Series I Preferred Stock value, i.e., the initial purchase
price per share multiplied by the initial number of shares, the "Initial Series
I Value"), provided that in the event of a BioNumerik IPO within one year after
the Effective Date, the purchase price and number of shares of Series I
Preferred Stock will be adjusted, immediately following the exercise or
expiration of any underwriters' over-allotment option granted in connection with
the BioNumerik IPO (the aggregate adjusted Series I Preferred Stock value, i.e.,
the adjusted purchase price per share multiplied by the adjusted number of
shares, the "Adjusted Series I Value"), so that the adjusted purchase price will
equal the IPO Price and the number of adjusted shares of Series I Preferred
Stock will equal the lesser of (i) that number of shares of Series I Preferred
stock that on an as-converted basis would represent 9.99% of BioNumerik's then
outstanding common stock, par value $ 0.01 (the "Common Shares") and Preferred
Stock (calculated on an as converted basis) (taking such offering into account)
but exclusive of any Common Shares issuable pursuant to options granted but
unexercised pursuant to BioNumerik's stock option or stock purchase plans or
warrants issued but unexercised in connection with certain other preferred stock
issuances or (ii) that number of shares of Series I Preferred Stock determined
by dividing the Aggregate Preferred Stock Purchase Price by the IPO Price;
provided that if the Pre-Transaction Valuation is less than US$400.00 million,
the adjusted number of shares of Series I Preferred Stock will be 1,362,930. The
number of shares of Series J Preferred Stock initially will be 265,101 shares at
a purchase price of US$48.7100 per share, provided that in the event of a
BioNumerik IPO, if completed within one year after the Effective Date, the
purchase price and number of shares of Series J Preferred Stock will be adjusted
so that the adjusted purchase price per share will equal the
31
product of 1.40 multiplied by the IPO Price (the "Adjusted Series J Price Per
Share") and the adjusted number of shares will be a number equal to (i) the
difference of the Aggregate Preferred Stock Purchase Price less the Adjusted
Series I Value divided by (ii) the Adjusted Series J Price Per Share; provided
that if such difference is zero (0) or negative, then no Series J Preferred
Stock shall remain outstanding.
The terms and provisions of the Preferred Stock will be substantially
in the form set forth in Exhibit 1 to the Convertible Preferred Stock Purchase
Agreement. Contemporaneous with the execution of the Convertible Preferred Stock
Purchase Agreement, Takeda and BioNumerik will execute a Registration Rights
Agreement substantially in the form set forth in Exhibit 2 to the Convertible
Preferred Stock Purchase Agreement (the "Registration Rights Agreement").
Immediately following the determination of the Adjusted Series I Value
and related adjustments to the purchase price and number of shares of Series I
Preferred Stock in the event of a BioNumerik IPO, if completed within one year
following the Effective Date, the Series I Preferred Stock will automatically
convert into Common Shares (the Series I Preferred Stock, in accordance with its
terms, will also automatically convert into common stock in the event of a
BioNumerik IPO at any time following the one year anniversary of the Effective
Date). The Series I Preferred Stock will also be convertible, at the election of
Takeda, at any time upon a "Corporate Reorganization" (as defined in Series I
Preferred Stock designation) or after the first anniversary of the Effective
Date.
The Series J Preferred Stock will be convertible, at the election of
Takeda, at any time upon a "Corporate Reorganization" (as defined in Series J
Preferred Stock designation) or after the first anniversary of the Effective
Date, will not be automatically convertible upon a BioNumerik IPO, and will be
mandatorily convertible at BioNumerik's election and upon written notice to
Takeda at any time following the one year anniversary of the Effective Date
provided that the closing price or last sale price of the Common Shares on each
of the ten (10) business days preceding BioNumerik's delivery of such notice of
conversion shall have equaled or exceeded the then applicable conversion price
of the Series J Preferred Stock. Furthermore, to the extent then outstanding and
provided that a BioNumerik IPO has occurred, shares of Series J
32
Preferred Stock will automatically convert into Common Shares at the then
applicable conversion price upon the sixth anniversary of the Effective Date.
Although the Series I Preferred Stock and Series J Preferred Stock will
vote on an as converted basis together with other classes and series of
BioNumerik capital stock on matters submitted to a vote of shareholders, Takeda
hereby agrees with BioNumerik, as set forth in the separately-executed Voting
Agreement Form attached hereto as Exhibit J, to vote all shares of BioNumerik
capital stock held by Takeda or its Affiliates at any time until the earlier of
three years after launch of the Product in the Territory or five years after the
date of execution of this Agreement in accordance, at Takeda's election, with
either (i) the recommendation of the BioNumerik Board of Directors to
shareholders with respect to such matter, or (ii) in a proportionate manner that
allocates Takeda's votes with respect to any such matter in the same relative
percentages as are recorded by BioNumerik with respect to the properly submitted
votes of other shareholders of BioNumerik as to such matter; provided, however,
that in accordance with the terms of the Preferred Stock the holders of Series I
Preferred Stock and Series J Preferred Stock will have separate class voting
rights with respect to any proposed amendments to the terms of such series of
Preferred Stock and the foregoing voting arrangement between Takeda and
BioNumerik will not apply to Takeda's voting on any such proposed amendment to
the terms of such series of Preferred Stock.
8.2 Milestone Payments. Within [**] after the NDA for the Product has
been filed by BioNumerik and such NDA filing has been accepted by the FDA in the
United States, Takeda will pay to BioNumerik the sum of sixty million US dollars
(US $60,000,000). Takeda will further pay to BioNumerik, within [**] after the
launch of the Product in the United States, the sum of sixty million US dollars
(US $60,000,000). The term "launch" used in this section means the first receipt
of the Product by commercial entities such as wholesalers, distributors,
pharmacies and hospitals in the United States, after the NDA approval of the
Product and not for the purpose of non-clinical or clinical studies.
8.3 Commercial Milestone Payments. For the first Fiscal Year during
which sales of the Product in the Territory reach each of the following
indicated annual Net Sales levels,
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
33
Takeda will pay Commercial Milestone Payments to BioNumerik in the amounts and
at the times described below:
ANNUAL NET SALES IN THE TERRITORY PAYMENT
IN A FISCAL YEAR TO BIONUMERIK
--------------------------------- ---------------------------------
Two hundred million US dollars Twenty million US dollars (US
(US $200,000,000) $20,000,000)
Four hundred million US dollars Twenty million US dollars (US
(US $400,000,000) $20,000,000)
Six hundred million US dollars Thirty million US dollars (US
(US $600,000,000) $30,000,000)
Eight hundred million US dollars Forty-five million US dollars (US
(US $800,000,000) $45,000,000)
In other words, in the first Fiscal Year that annual Net Sales in the
Territory reach US$200,000,000, Takeda will pay BioNumerik US$20,000,000. If, in
the next Fiscal Year, annual Net Sales reach only US$300,000,000, then no
payment is made, and if, in the following Fiscal Year, annual Net Sales reach
US$500,000,000, Takeda will pay BioNumerik an additional US$20,000,000.
The following example is intended to help clarify the arrangement and
is for clarification purposes only. In the event the actual annual Net Sales for
the Product are US$100,000,000 in 2008, US$300,000,000 in 2009, US$700,000,000
in 2010, US$900,000,000 in 2011 and US$1,100,000,000 in 2012, then each
Commercial Milestone Payment would be as follows: no payment in 2008;
US$20,000,000 in 2009; US$50,000,000 in 2010 (US$20,000,000 for US$400,000,000
sales plus US$30,000,000 for US$600,000,000 sales); US$45,000,000 in 2011; and
no payment in 2012 and thereafter. Thus, each Commercial Milestone Payment
occurs only once during the life of this Agreement and only when the annual Net
Sales reach the particular
34
amount shown in a given Fiscal Year. At the same time as the accounting is
reported after the end of a quarter, Takeda will pay to BioNumerik the annual
Commercial Milestone Payment if the annual Net Sales reach the particular amount
shown in a given Fiscal Year to date required to achieve such Commercial
Milestone Payment during that preceding quarter.
8.4 Research and Development Payments.
(a) Subject to the terms and conditions set forth in this
Section 8.4, Takeda agrees to pay BioNumerik up to the following maximum annual
Research and Development Payments in the following calendar years to develop the
Product for the Territory:
2005 2006 2007 2008 2009 Total
----------------- ------------------- ----------- -------------- -------------- ------------------
Thirty million US Thirty-five million Thirty-five Thirty million Eight million One hundred
dollars (US US dollars million US US dollars (US US dollars (US thirty-eight
$30,000,000) (US$35,000,000) dollars (US $30,000,000) $8,000,000) million US dollars
$35,000,000) (US $138,000,000)
(b) Within [**] after April 1st of each year,
beginning with calendar 2005 and ending with calendar 2009, Takeda will pay
BioNumerik in cash the first one-half of the annual Research and Development
Payments for such year. For clarity and example, Takeda will pay BioNumerik
fifteen million US dollars within [**] after April 1, 2005.
(c) Takeda will satisfy its obligation to pay the remaining
one-half of annual Research and Development Payments not otherwise paid pursuant
to subsection (b) above by purchasing for cash, during each such year, Common
Shares as follows:
(i) Takeda will have the right in connection
with any public or private offering of
securities during such year by BioNumerik
primarily for capital-raising purposes (but
excluding, without limitation, shares
issuable pursuant to an acquisition, another
strategic alliance or
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
35
licensing arrangement and shares issued
pursuant to employee, director or consultant
benefit plans) to acquire the lesser of (i)
20% of the number of Common Shares to be
issued in each such offering; or (ii) the
maximum number of Common Shares which, when
aggregated with Takeda's existing holdings
of Common Shares and Preferred Stock at the
time, will result in Takeda's holdings not
exceeding 9.99% of BioNumerik's outstanding
Common Shares and Preferred Stock
(calculated on an as converted basis)
(taking such offering into account)
exclusive of any Common Shares issuable
pursuant to options or warrants granted but
unexercised pursuant to BioNumerik's stock
option or stock purchase plans or warrants
issued but unexercised in connection with
preferred stock issuances, at a price per
share and otherwise on terms and conditions
made available to other bona fide purchasers
in any such offering, with such purchase by
Takeda to be made concurrently with the
closing of such other offering, and
(ii) at any time during such calendar year as
BioNumerik will elect upon at least one
hundred twenty (120) days advance written
notice to Takeda, (x) Takeda and BioNumerik
will complete a separate sale or sales of
Common Shares to Takeda at a price equal to
the fair market value of such Common Shares
based upon the average closing price or last
sale price over the 10-business day period
immediately preceding the sale, if
BioNumerik is then a reporting company under
the U.S. Securities Exchange Act of 1934, as
amended (the "Exchange Act")), or, (y) if
BioNumerik is not then a reporting company
under the Exchange Act, Takeda and
BioNumerik may agree upon a separate sale or
sales of Common Shares to Takeda at such
fair market value price as may be mutually
agreed by BioNumerik and Takeda. If, within
sixty (60) days after commencement of
efforts by BioNumerik and Takeda to agree
upon a fair market value price for Common
Shares in accordance with the
36
immediately preceding sentence, the Parties
have been unable to so agree, then either
Party, upon notice to the other Party, may
elect to have the fair market value price
determined as follows:
(A) For a period of twenty (20) days
after receipt of such notice, the
Parties will attempt to agree upon
an investment banking firm to
determine the fair market value
price for Common Shares and, if the
Parties cannot agree upon an
investment banking firm to make such
determination within such period,
then, with forty (40) days after
receipt of the notice referenced
above, each Party, by notice to the
other Party, will name one
internationally recognized
investment banking firm not
otherwise associated or doing
business with such Party and such
two investment banking firms will
mutually select a third
internationally recognized
investment banking firm, which will
then determine the fair market value
price for Common Shares; and
(B) Each Party may provide the
investment banking firm selected to
determine the fair market price
value for Common Shares such
materials and other written
information, with copies to the
other Party, as such Party believes
relevant to such determination
within ten (10) business days after
such firm's selection. The
investment banking firm will
determine a fair market value price
for Common Shares within sixty (60)
days after its selection. Once the
fair market value price for Common
Shares has been determined by the
investment banking firm, as provided
above, the investment banking firm
will notify both Parties of such
value in writing, and the
corresponding
37
purchase of Common Shares pursuant
to this Section 8.4 will be closed
within thirty (30) days of such
notification. The decision of the
investment banking firm will be
final and binding on the Parties.
All costs and fees incurred by the
investment banking firm(s) in
connection with the procedures
described above will be borne
equally by the Parties.
In addition, with respect to purchases of the Common Shares in
private offerings only, as a condition to each such purchase, Takeda and
BioNumerik will execute and deliver, and the purchase and sale of the Common
Shares will be made in accordance with, a Common Stock Purchase Agreement
substantially in the form of attached Exhibit D. All Common Shares purchased by
Takeda under this subsection (c) will be subject to the Registration Rights
Agreement.
(d) BioNumerik will have the right, in its sole discretion, in
any particular calendar year, not to sell some or all of the Common Shares
relating to such year to Takeda pursuant to clause (ii) of subsection (c);
provided, however, that BioNumerik will have no such right to the extent that it
initiates the procedures to select an investment banking firm to determine the
fair market value price in accordance with Section 8.4(c) above with respect to
the Common Shares subject to such valuation procedures. If, for any reason,
BioNumerik is unable or unwilling to sell Common Shares to Takeda or Takeda is
otherwise limited under this Section 8.4 from acquiring Common Shares, in either
case in an amount sufficient for Takeda to satisfy its entire Research and
Development funding obligation hereunder for any calendar year, then upon
written notice to Takeda prior to the end of such calendar year, BioNumerik may
elect to carry over such Takeda purchase commitment (to the extent of the
Research and Development Payment amount for such calendar year that is not paid
during such year pursuant to Section 8.4(c), being referred to as the "Carryover
Amount", expressed in U.S. dollars) to the immediately following calendar year
(together with Takeda's other Common Share purchase commitments for such
following year), but if, in such following calendar year, BioNumerik is unable
or unwilling to sell Common Shares to Takeda or if Takeda is otherwise limited
under this Section 8.4 from acquiring Common Shares, in either case in such
following year in an
38
amount sufficient to satisfy such Carryover Amount (and all shares sold by
BioNumerik to Takeda in such following year will be first allocated to satisfy
the Carryover Amount) then Takeda's obligation to purchase any additional Common
Shares pursuant to subsection (c) for the immediately preceding calendar year to
which such Carryover Amount relates will terminate. BioNumerik, in its
discretion, may sell Common Shares to Takeda to allow the satisfaction of some,
but not all, of Takeda's funding commitment amount, in which event any remaining
unsatisfied commitment amount would be carried over subject to the limitations
described above. Similarly, to the extent a delay in the sale of Common Shares
is agreed to by the Parties pursuant to Section 8.4(f) to enable Takeda to avoid
a potential liability under Section 16(b) of the Exchange Act, the amount of any
such deferred Research and Development Payment will be treated as a Carryover
Amount to such following calendar year. To the extent any unpurchased amount of
Common Shares in any calendar year does not become a Carryover Amount for the
following year in accordance with the terms of the immediately preceding
sentences, then Takeda's obligation to purchase such amount shall terminate. If,
for any reason, BioNumerik is unable or unwilling to sell Common Shares to
Takeda or Takeda is otherwise limited under this Section 8.4 from acquiring
Common Shares, then in either case the costs for the clinical and non-clinical
development of the Product in the Field for the Territory in accordance with the
Development Plan exceeding Takeda's payment of half of the maximum annual
Research and Development Payment pursuant to Section 8.4(b) will be borne solely
by BioNumerik, but subject to the provisions of Section 8.4(h).
(e) Anything else in this Agreement to the contrary
notwithstanding, except as otherwise agreed by BioNumerik, Takeda will not
purchase Common Shares pursuant to this Section 8.4 to the extent that Takeda's
ownership of BioNumerik Common Shares and Preferred Stock then actually
outstanding exceeds, or as a result of such purchase would exceed, 9.99% of
BioNumerik's then outstanding Common Shares and Preferred Stock (calculated on
an as converted basis) exclusive of any Common Shares issuable pursuant to
options or warrants granted but unexercised pursuant to BioNumerik's stock
option or stock purchase plans or warrants issued but unexercised in connection
with certain other previous preferred stock issuances; provided however, that
BioNumerik and Takeda will use reasonable efforts to cooperate with one another,
pursuant to the provisions of the Registration Rights Agreement and otherwise,
so that Takeda will be afforded the opportunity not less often than once every
two
39
years through the calendar year 2010 to effectuate in an orderly fashion sales
of Common Shares held by Takeda in the principal U.S. securities markets, if
any, in which BioNumerik's Common Shares are then traded (including, without
limitation, in an underwritten public offering, which may involve, at Takeda's
election, selling efforts by BioNumerik's management team; in negotiated block
trades arranged by BioNumerik's or Takeda's principal investment banking firms;
or in sales pursuant to Rule 144 of the Securities Act), and in the amount of up
to 50% of Takeda's then-current holdings of Common Shares and Preferred Stock
(calculated on an as converted basis); provided, however, if the Parties
successfully arrange any such sale opportunity and any Common Shares (including
Common Shares issuable upon conversion of any Preferred Stock that can be
converted) can then be sold by Takeda at a price per share in excess of the
acquisition price for such Common Shares (or the acquisition price for the
underlying Preferred Stock), Takeda will at that time sell all of such Common
Shares to the extent that the number of Common Shares to be sold is equal to the
greater of (i) 25% of Takeda's holdings of Common Shares and Preferred Stock
(calculated on an as converted basis) (provided that 18 months or more will have
elapsed since Takeda was last required to sell or dispose of Common Shares based
upon such 25% standard); and (ii) the minimum number of Common Shares which,
when aggregated with reasonably foreseeable Common Share purchase obligations
under Section 8.4(c) for such calendar year, will result in Takeda's holdings
not exceeding 9.99% of BioNumerik's then outstanding Common Shares and Preferred
Stock (calculated on an as converted basis) exclusive of any Common Shares
issuable pursuant to options or warrants granted but unexercised pursuant to
BioNumerik's stock option or stock purchase plans or warrants issued but
unexercised in connection with certain other previous preferred stock issuances.
Takeda, in its discretion, may also sell additional Common Shares in such
transaction up to the 50% limitation described in the prior sentence of this
Section 8.4(e). Anything in this Section 8.4(e) to the contrary notwithstanding,
Takeda will have no restrictions on sale of Common Shares hereunder in the event
of (i) any sale of all or substantially all of the assets of BioNumerik, or any
sale or related series of sales of shares of BioNumerik's capital stock by any
holders thereof or any merger, consolidation or combination to which BioNumerik
is a party and which results in the beneficial owners of BioNumerik's Common
Shares as of the date immediately preceding such transaction or related series
of transactions no longer beneficially owing the capital stock of BioNumerik (or
any new or surviving corporation with which
40
BioNumerik merges, consolidates or combines) possessing the voting power (under
ordinary circumstances) to elect a majority of the board of directors, (ii) any
sale or other disposition by Xx. Xxxx Xxxxxxxx, in one or a series of related
transactions, of 50% or more of the Common Shares beneficially owned by Xx. Xxxx
Xxxxxxxx over any two-year period, or (iii) the termination of this Agreement.
However, Takeda hereby agrees that Takeda will not sell or otherwise dispose of
any shares of the Preferred Stock (though Takeda may convert the Preferred Stock
and sell the underlying Common Shares in accordance with the provisions hereof)
except (i) upon or following the occurrence of any of the events specified in
clauses (i), (ii) or (iii) of the preceding sentence and (ii) for transfers to
Affiliates of Takeda or to a successor to substantially all of the business or
assets of Takeda in a transfer permitted under Section 11.1 (which in either
case undertakes in connection with such transfer to be similarly bound to comply
with this undertaking).
(f) Anything in this Section 8.4 to the contrary
notwithstanding, Takeda will have no obligation to purchase or sell the Common
Shares or otherwise take any other action to the extent that any such purchase,
sale, or other action would violate the Securities Act, the Exchange Act, or any
other applicable federal or state securities law, or result in any liability to
Takeda under the Securities Act, the Exchange Act, or any other applicable
federal or state securities law. To the extent that Takeda is at any time deemed
a holder of 10% or more of the shares of BioNumerik's outstanding common stock
or is otherwise a person subject to the reporting and short-swing profit
provisions of Section 16 of the Exchange Act, both Parties will cooperate, to
the extent reasonably necessary as identified by Takeda, to arrange the timing
of Takeda sales activity pursuant to Section 8.4(e) and Takeda purchases from
BioNumerik pursuant to Sections 8.4(c) and 8.4(d) so as accomplish the
objectives of not creating liability for Takeda under Section 16(b) of the
Exchange Act and positioning Takeda to make purchases contemplated by Section
8.4(c) to fund Research and Development Payments.
(g) Research and Development Payments made by Takeda pursuant
to Section 8.4(b) will be allocated solely for the clinical and non-clinical
development of the Product in the Field for the Territory in accordance with the
Development Plan. Any portion of a Research and Development Payment received for
a particular calendar year that is not spent in that particular calendar year
may be deferred, as reasonably determined by BioNumerik, to be used in the
41
following calendar year. BioNumerik will provide to Takeda a quarterly
accounting regarding the costs for such development within thirty (30) days
following the end of each calendar quarter of the Fiscal Year. BioNumerik will
send Takeda a written report setting forth the reasonable costs that it incurred
for the clinical and non-clinical development. Each cost will be described and
the date on which the cost was paid will be included.
(h) Subject to the limitations of this Section 8.4, the total
amount of the Research and Development Payments made solely by Takeda between
the calendar years 2005 and 2009 will be one hundred and thirty eight million US
dollars (US$138,000,000). All additional required clinical and non-clinical
investment in any particular calendar year that is in excess of the Research and
Development Payments made by Takeda as set forth in Section 8.4(a) above will be
borne equally by BioNumerik and Takeda, provided that the Parties mutually agree
to the additional work to be done. Further, all subsequent required clinical and
non-clinical investment over US$138,000,000 for the Product in the Field in the
Territory will be borne equally by BioNumerik and Takeda for the Product, if the
costs are agreed to in writing by both Parties in the Development Plan. Costs
for clinical and non-clinical studies will include actual payments to service
providers such as contract research organizations ("CROs"), consultants,
clinical and non-clinical drug supply and materials, as well as actual payments
and indirect costs for regulatory filing fees, regulatory document preparation
and copying costs, and each Party's internal direct and indirect costs
reasonably allocated to such studies and materials for such studies and
regulatory filings, regarding the Product in the Field for the Territory.
(i) BioNumerik agrees that, for the Applicable Period (as
defined below), it will pay to Takeda within thirty (30) days after each
calendar quarter, one-half of all Manufacturing Net Profits (as defined below)
earned by BioNumerik during the preceding calendar quarter with respect to
BioNumerik's manufacturing rights for Venture Products BN (as defined in the KI
Pharma Joint Venture Agreement a copy of which definition is attached hereto as
Exhibit I). For purposes hereof, "Manufacturing Net Profits" means, for any
relevant period, aggregate sales of the Venture Products BN by BioNumerik, as
manufacturer, to the KI Pharma Joint Venture less (i) fully allocated cost of
manufacturing the Venture Products BN in a final packaged form, and (ii)
overhead (fixed and variable costs associated with management and support of the
manufacturing process) allocated to the Venture Products BN, all calculated in
42
accordance with normal accounting practices applied on a basis consistent with
BioNumerik's past practices and industry standards for all products manufactured
in a fully utilized facility or normal capacity. "Applicable Period" means the
period commencing upon the first receipt of the Venture Products BN by
commercial entities such as wholesalers, distributors, pharmacies and hospitals
in Japan, after receipt of required regulatory approvals in connection therewith
and not for the purpose of non-clinical or clinical studies and ending after a
period thereafter equal to the number of days from the Effective Date to the
date the BioNumerik IPO occurs, provided that if the BioNumerik IPO occurs
within 365 days after the Effective Date the applicable period will be zero (0)
days.
(j) From the date of execution of this Agreement until the
Effective Date, BioNumerik agrees that it will not issue or grant any shares of
Common Shares or Preferred Stock (other than in connection with the BioNumerik
IPO and in connection with the exercise of previously granted stock options or
warrants in the ordinary course) or any options or warrants to acquire any such
shares or any other securities or instruments convertible into such shares.
(k) BioNumerik covenants and agrees that it will not cause the
BioNumerik IPO to occur until the earlier of (i) BioNumerik's obtaining of all
necessary approvals by BioNumerik's shareholders of the issuance of the
Preferred Stock and the Common Shares and the execution of the Registration
Rights Agreement, as provided in this Agreement, or (ii) BioNumerik's failure,
after full discharge of its obligations under this Agreement to attempt to
obtain shareholder approvals, to obtain all such approvals.
ARTICLE IX
PROVISIONAL PRICE AND PROFIT SHARE
9.1 Provisional Price. Takeda agrees to pay BioNumerik a Provisional
Price for each unit of Product that BioNumerik supplies to Takeda.
9.2 Profit Share. Net Profits will be determined by the following
equation:
Net Profits = Net Sales minus Incurred Costs
Net Profits will be shared equally between BioNumerik and
Takeda as follows:
43
(a) If Net Profits are positive, then each Party will receive
fifty percent (50%) of Net Profits; however, the Provisional Margin paid by
Takeda to BioNumerik as part of the Provisional Price will be deducted from
BioNumerik's share of the Net Profits.
(b) If Net Profits are negative, then each Party will bear
fifty percent (50%) of the loss of Net Profits. Specifically, in the event that
Net Profits are negative, BioNumerik will give back to Takeda all or part of the
Provisional Margin plus any additional amount necessary to equal fifty percent
(50%) of the loss of Net Profits.
(c) All costs for developing and obtaining approval for a new
indication beyond oncology will be borne equally by the Parties. However, in the
case that one Party does not want to make or cannot afford to bear the costs for
the new indication, the other Party has the option to take the responsibility to
bear the necessary costs itself. In such event the other Party will cooperate
with the Party seeking such new indication with the other Party being reasonably
reimbursed for related costs of the cooperation. In the event that (i) the new
indication for the Product is successful, the other Party will have the option
to reimburse the paying Party [**] of the actual costs incurred for the Product
development and approval with respect to the new indication, in which case the
other Party will then receive [**] of the Net Profits as described in this
Section 9.2 (including, without limitation, [**] of the Net Profits for the new
indication), or in the event that (ii) the other Party does not want to pay for
such [**] share of the costs for the new indication, then the non-paying Party
will receive only [**] of the Net Profits from sales of the Product for the new
indication and the paying Party will receive [**] of the Net Profits from sales
of the Product for the new indication.
(d) The amount of Takeda's costs included in the calculation
of the Net Profits will not exceed for each of the first three years from the
anniversary date of the "launch" of the Product as defined in Section 8.2 the
amounts in the Table 9.2(d) immediately following this section. When the
Promotion Committee is discussing the budget to be applied for the fourth year
following the launch and thereafter, if the Parties can not agree to the amount
of the maximum expenses for these four categories in each of these later years,
the Parties understand that, until the Parties have reached agreement on such
applicable amount, the default amount of
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
44
the maximum expenses in the fourth year will be [**] of the actual amount spent
in the third year, and the default amount in any year thereafter will be [**] of
the actual amount spent in the prior year. Both Parties agree that the division
of these four categories are not strict and Takeda may reasonably allocate its
expenses in one category of them to another category within the total annual
maximum amount for each year.
Table 9.2(d)
Cap on Certain Takeda's Commercialization Costs (in $US Millions)
[**]
(e) The amount of BioNumerik's costs included in the calculation of the
Net Profits will not exceed for each of the first three years from the
anniversary date of the "launch" of the Product as defined in Section 8.2 the
amounts in the Table 9.2(e) immediately following this section. When the
Promotion Committee is discussing the budget to be applied for the fourth year
following the launch and thereafter, if the Parties can not agree to the amount
of the maximum expenses for these four categories in each of these later years,
the Parties understand that, until the Parties have reached agreement on such
applicable amount, the default amount of the maximum expenses for these four
categories in the fourth year will be 105% of the actual amount spent in the
third year, and the default amount in any year thereafter will be 105% of the
actual amount spent in the prior year. Both Parties agree that the division of
these four categories are not strict and BioNumerik may reasonably allocate its
expenses in one category of them to another category within the total annual
maximum amount for each year.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
45
Table 9.2(e)
Cap on Certain BioNumerik's Commercialization Costs (in $US Millions)
1-12 13-24 25-36
MONTHS MONTHS MONTHS
-------------- --------------- ------------
Sales Force $10 $10 $10
Marketing & Promotion $ 0 $ 0 $ 0
G&A Costs $ 4 $ 4 $ 4
Medical Liaisons $ 5 $ 5 $ 5
Total annual maximum $19 $19 $19
9.3 Accounting. Calculation and payment/reimbursement of the Profit
Share will be made quarterly, with an adjustment at the end of the Fiscal Year,
with the calculation of the Net Profits to begin after the first full quarter
following the Effective Date. A statement will be provided by BioNumerik to
Takeda of BioNumerik's Incurred Costs within ten (10) business days following
the end of each calendar quarter of the Fiscal Year. BioNumerik will send a
written report to Takeda detailing its Incurred Costs. Within ten (10) business
days of receiving BioNumerik's report, Takeda will send to BioNumerik, a written
report setting forth the calculation of the Profit Share payment. Such report
will be sent to BioNumerik even when no Product was sold during the calendar
quarter. Within thirty (30) days of the date of such Takeda's report, the
balance will be paid by a Party to the other Party so that the Net Profits will
be equally shared between the parties. For illustration, an example calculation
is set forth in Exhibit H hereto.
After the Product is launched in the Territory, a monthly accounting
will be made by Takeda to BioNumerik within fifteen (15) days following the end
of each month of the Fiscal Year. Specifically, Takeda will send to BioNumerik,
a written report setting forth the amount and a description of the Product sold
during the preceding month and the associated aggregate Net Sales invoiced
during the month. A report will be sent to BioNumerik even if no Product is sold
during the previous month.
46
Such reports by each Party for the last calendar quarter in a Fiscal
Year will include year-end adjustment in accordance with ascertained Net Sales
and Incurred Costs if necessary.
ARTICLE X
WITHHOLDING TAX, AUDIT AND CURRENCY CONVERSION.
10.1 Withholding Tax. In the event that any payment by a Party to the
other Party under this Agreement is subject to withholding tax required by
applicable laws to be paid to the taxing authority of any country, the amount of
such tax may be withheld from the applicable payment. Such Party will promptly
pay such tax on behalf of the other Party, and will furnish the other Party with
a certificate of withholding tax so deducted or its equivalent for the other
Party's avoidance of duplicate taxation. Each Party will cooperate with and
provide reasonable assistance to the other Party to enable them to obtain
necessary documentation and other information necessary to establish any
exemptions from or refund of withholding or other payments under applicable tax
treaties or other tax laws of applicable countries.
10.2 Maintenance and Auditing of Records.
(a) The Parties will keep and will require that their
Affiliates and sublicensees keep true and accurate records and books of account
containing all data necessary for the calculation of costs for non-clinical and
clinical studies undertaken by BioNumerik hereunder, the Commercial Milestone
Payments and the Net Profit, including, but not limited to, the Incurred Costs,
and Net Sales, profit sharing pursuant to Section 8.4(i), and for preparation of
the written reports due hereunder. Those records and books of account will be
kept for three (3) years following the end of each Fiscal Year to which they
relate.
(b) Upon twenty (20) business days notice, each Party may have
an independent registered public accounting firm audit the other Party's or
Affiliate's or sublicensee's records and books of account to verify that every
charge and payment is correctly made in accordance with this Agreement. Such
inspections will be no more frequent than once each calendar year during the
term of this Agreement, and once within six (6) months after termination of this
Agreement. Prior to audit implementation, each Party will submit an audit plan,
including audit scope and name(s) of proposed public accounting firm, to the
other Party
47
for approval, which approval will not be unreasonably withheld. The independent
registered public accounting firm will keep confidential any information
obtained during such inspection and will only report to the requesting Party the
result on whether the item(s) being reviewed is accurate or not and the amount
of any inaccuracy or discrepancy.
(c) The cost of the accounting firm will be the responsibility
of the auditing Party unless the certification shows the audited Party to have
underpaid or overcharged the auditing Party by more than five percent (5%) in
which case the cost of the accounting firm will be the responsibility of the
audited Party. If an audit reveals an over or underpayment or over or
undercharge, the Parties will take such steps as necessary to rectify the error.
(d) Within ten (10) business days following any such
certification any monies which such certification shows as being due and owing
by one Party to the other (whether because of an underpayment or overpayment)
will be paid by the owing Party.
(e) In the conduct of their respective reporting activities
under this Agreement, each Party, its Affiliates, or its sublicensees will
prepare all accounting information in accordance with United States GAAP or as
otherwise directed by the Joint Steering Committee.
10.3 Payments To BioNumerik. All payments made under this Agreement by
Takeda to BioNumerik will be made in US dollars and will be wired to the
following institution:
[**]
10.4 Payments To Takeda. All payments made under this Agreement by
BioNumerik to Takeda will be made in US dollars and will be wired to the
following institution:
[**]
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
48
10.5 Conversion. The exchange rate to be used for converting foreign
currencies into US dollars will be as published in the Wall Street Journal,
Eastern U.S. Edition for the purchase of US dollars on the last business day of
the calendar quarter for which the Net Sales and other items are calculated
under this Agreement.
ARTICLE XI
SUBLICENSE AND TRANSFERABILITY OF RIGHTS AND OBLIGATIONS
11.1 Except as otherwise provided herein, there is no right to
sublicense and this Agreement may not be assigned by either Party without the
prior written consent of the other Party. Each Party may, at its discretion,
assign this Agreement in whole or in part to one or more of its Affiliates as
well as to a party acquiring all or substantially all of the assigning Party's
business or assets, if the assigning Party (if such assigning Party is a
surviving entity) remains liable and responsible for and the assignee will be
liable and responsible for the performance and observation of all of the
Affiliate's obligations hereunder.
ARTICLE XII
MAINTENANCE OF LICENSED PATENTS AND TRADEMARKS AND OWNERSHIP
OF JOINTLY DEVELOPED INTELLECTUAL PROPERTY, RESULTING
INTELLECTUAL PROPERTY, AND IMPROVEMENTS
12.1 Maintenance of Licensed Patents and Trademarks. BioNumerik hereby
agrees (a) to use Commercially Diligent Efforts to file, prosecute and maintain
the Licensed Patents and Licensed Trademarks and (b) to proceed to initiate
interference, re-examinations, reissues and oppositions with respect thereto, at
its costs and pay all necessary fees to assure that the Licensed Patents and
Licensed Trademarks do not terminate prematurely. Each calendar quarter,
BioNumerik will provide Takeda with reports in writing with detailed information
on the status of the Licensed Patents and patents and patent applications
constituting BioNumerik's Licensees' Patents and Information.
Takeda will have a right to request and, promptly after any such
request, receive from BioNumerik reasonable additional information with respect
to any patent application and/or patent in the Licensed Patents and patents and
patent applications in the BioNumerik's
49
Licensees' Patents and Information. BioNumerik will provide Takeda with a
reasonable opportunity to review and provide substantive input to material
decisions relating to the prosecution and maintenance of the Licensed Patents.
BioNumerik will furnish to Takeda copies of documents relevant to any such
prosecution and maintenance reasonably in advance of the expiration of a
response or application deadline in order to provide Takeda a meaningful
opportunity to comment thereon and to participate in all material decision
making regarding such prosecution and maintenance. For purposes of
clarification, BioNumerik will consider all substantive input and comments
provided by Takeda regarding the prosecution of such patent applications and the
maintenance of such patents. BioNumerik may continue to take ministerial and
non-material procedural matters regarding the Licensed Patents without obtaining
prior input from Takeda.
BioNumerik agrees not to finally abandon any claims of the Licensed
Patents without providing Takeda written notice of BioNumerik's decision not
less than thirty (30) days prior to any deadline or date imposed by an office
with authority and jurisdiction in any country in the Territory where such
patent application is being prosecuted or such patent is being maintained. Upon
receipt of such notice, Takeda may, in its sole discretion, initiate and/or
continue prosecution activities with respect to such patent application and/or
maintenance activities with respect to such patent, and BioNumerik, upon such
Takeda's decision to initiate and/or continue such activities, will assign,
deliver, transfer and set over to Takeda all interest of BioNumerik in, to and
under such patent application and patent. BioNumerik will provide Takeda
reasonable cooperation, and will make available to Takeda, at reasonable times
and under appropriate conditions, access to all relevant personnel, records,
papers, information, samples, specimens, and the like in its possession
necessary to prosecute such patent application and/or maintain such patent
assigned to Takeda.
The Parties also agree to consult with each other from time to time, at
one Party's request, on patent policies to be implemented with respect to the
Product in the Territory.
12.2 BioNumerik Developments and Improvements. All BioNumerik
Developments and Improvements made by BioNumerik on the Product will be included
in the scope of the Licensed Information and Licensed Patents to which
BioNumerik grants Takeda an exclusive
50
license on the terms described herein and subject to Sections 2.4, 5.1(a), 6.3
and 6.7 hereof. However, nothing in this section should be construed to entitle
BioNumerik to additional consideration besides that expressly contained herein.
BioNumerik will be solely responsible for the prosecution of any patents
relating to the BioNumerik Developments and Improvements made to the Product,
without any right of reimbursement from Takeda for the cost of the prosecution.
12.3 Takeda Developments and Improvements. Takeda grants a
non-exclusive, perpetual, worldwide except the Territory, royalty-free paid-up
license to BioNumerik (and its designated Affiliates and sublicensees) to: (a)
all Takeda Developments and Improvements to make, have made, use, sell, offer
for sale, market and license the Product incorporating such Takeda Developments
and Improvements throughout the world in areas outside the Territory and, (b)
all data and results obtained by Takeda from the non-clinical studies, clinical
trials and related testing conducted by Takeda for the purpose of supporting
non-clinical studies, clinical trials, regulatory approval for the Product
outside of the Territory, and development, marketing and sale of the Product
outside the Territory, and are subject to any retained rights of Takeda to
practice such Takeda Developments and Improvements other than in connection with
the Product.
12.4 Jointly Developed Intellectual Property. Information,
developments, improvements, and intellectual property that are jointly developed
by the Parties directly concerning the Product ("Jointly Developed Intellectual
Property") will be jointly owned by the Parties. Takeda and its Affiliates will
have the exclusive right (with the right to sublicense) to use all Jointly
Developed Intellectual Property in the Territory and BioNumerik is hereby
granted a non-exclusive, perpetual, worldwide except the Territory, royalty-free
paid-up license to all Jointly Developed Intellectual Property, and BioNumerik
(and its designated Affiliates and sublicensees) may make, have made, use, sell
and license products and technology incorporating such Jointly Developed
Intellectual Property throughout the world in areas outside the Territory. In
addition, BioNumerik may use the Jointly Developed Intellectual Property to
conduct the activities described in Section 2.4. Takeda will be solely
responsible for (a) filing, prosecution and maintaining of any patents relating
to Jointly Developed Intellectual Property and (b) to proceed to initiate
interference, re-examinations, reissues and oppositions with respect thereto,
51
but each Party agrees to share the cost of the patent prosecution equally for
Jointly Developed Intellectual Property.
Each party will promptly notify the other Party as to the creation of,
the conception or reduction to practice of any Jointly Developed Intellectual
Property. Takeda will promptly notify BioNumerik as to whether any patent
applications will be prepared. Takeda will have a right to request and, promptly
after any such request, receive from BioNumerik reasonable additional
information with respect to Jointly Developed Intellectual Property. Takeda will
provide BioNumerik with a reasonable opportunity to review and provide
substantive input to material decisions relating to the prosecution and
maintenance of patents for the Jointly Developed Intellectual Property. Takeda
will furnish to BioNumerik copies of documents relevant to any such prosecution
and maintenance reasonably in advance of expiration of response or application
deadline in order to provide BioNumerik a meaningful opportunity to comment
thereon and to participate in all material decision making regarding such
prosecution and maintenance. For purposes of clarification, Takeda will consider
all substantive input and comments provided by BioNumerik regarding the
prosecution of such patent applications and the maintenance of such patents.
Takeda may continue to take ministerial and non-material procedural matters
regarding the Jointly Developed Intellectual Property without obtaining prior
input from BioNumerik.
Takeda agrees not to finally abandon any claims of the Jointly
Developed Intellectual Property without providing BioNumerik written notice of
Takeda's decision not less than thirty (30) days prior to any deadline or date
imposed by an office with authority and jurisdiction in any country where such
patent application is being prosecuted or such patent is being maintained. Upon
receipt of such notice, BioNumerik may, in its sole discretion, initiate and/or
continue prosecution activities with respect to such patent application and/or
maintenance activities with respect to such patent, and Takeda, upon
BioNumerik's decision to initiate and/or continue such activities, will assign,
deliver, transfer and set over to BioNumerik all interest of Takeda in, to and
under such patent application and patent. Takeda will provide BioNumerik
reasonable cooperation, and will make available to BioNumerik, at reasonable
times and under appropriate conditions, access to all relevant personnel,
records, papers, information, samples, specimens, and the like in its possession
necessary to prosecute such patent application and/or
52
maintain such patent assigned to BioNumerik. If Takeda determines not to file a
patent application relating to any Jointly Developed Intellectual Property,
BioNumerik can, in its discretion, file and prosecute and will then obtain sole
ownership rights with respect to such Jointly Developed Intellectual Property
and Takeda will provide necessary assistance to allow BioNumerik to file,
including providing data and other reasonably requested inventorship
documentation and assistance.
Except as otherwise set forth in this Agreement, inventorship of the
Jointly Developed Intellectual Property will be determined in accordance with
the U.S. Patent Law. In the case of disagreements regarding inventorship, such
issue will be determined through the dispute resolution process under Article
XIX.
12.5 Patent Term Extension. BioNumerik and Takeda will consult with
each other about Patent Term Extension in the Territory and make a joint
decision thereon. A Party that owns the patent which claims or relates to the
Product will promptly file all applications for any extension of patent term for
which it is eligible in accordance with such joint decision, and take all
reasonable actions necessary to obtain patent extension. Each Party will assist
with all reasonable requests made by the other Party in support of any
application for Patent Term Extensions of, or supplementary protection
certificates relating to, the Licensed Patents, and patents on Takeda
Developments and Improvements and Jointly Developed Intellectual Property.
ARTICLE XIII
GOVERNANCE
13.1 Joint Steering Committee. A Joint Steering Committee will be
created along with at least two sub-committees as described in Sections 13.2 and
13.3 below. The Joint Steering Committee will have an equal number of members
who are qualified by education, training and experience in oncology product
development, distribution, marketing and/or sales, and who are line managers
from each Party or its Affiliates. The Joint Steering Committee will be
accountable for the following: (i) allocation of sufficient qualified personnel
to specific Product operations; (ii) meeting specific objectives for
development, manufacturing needs, marketing, sales, promotion and/or
distribution of the Product for each quarter and for each Fiscal Year; and,
(iii) meeting specified timelines and approved budgets set by the Joint Steering
Committee. The
53
Joint Steering Committee will regularly review the actual performance of the
meeting of specific objectives concerning the development, marketing, promotion
and manufacturing needs for the Product, and may modify any of the foregoing
should performance targets not be met, as well as review proposed plans
regarding the Product in the Territory. Decisions by the Joint Steering
Committee will be made by unanimous votes by representatives of both Parties.
Should there be an unresolved disagreement on an issue at the Joint Steering
Committee, such issue will be resolved according to Article XIX. The Joint
Steering Committee will be responsible for the following tasks:
(a) Allocate and assign accountability of designated personnel
who are qualified by education, training and experience in the development,
distribution, marketing, promotion and/or manufacturing of the Product to all
specific Product operations and objectives in the Territory;
(b) Set the direction, objectives and accountabilities which
will be specifically assigned for the designated personnel who are engaged in
the Development Plan, the Marketing Plan and other plans. The Joint Steering
Committee is accountable for assuring that the proper personnel and resources
are assigned to such plans. The Joint Steering Committee has the final authority
to approve and modify the Development Plan or Marketing Plan or other plans, and
any allocated resources or personnel as identified in Article IV;
(c) Has the final authority to decide and engage the
appropriate countermeasure(s) in the event that some failure or lack of progress
by each Party or both Parties in meeting specific objectives for Development or
Marketing Plans or other plans that have been previously implemented, or with
regard to specific tasks or accountabilities of either Party in this Agreement
has occurred;
(d) Has the final authority to make decisions regarding the
termination of the Agreement;
(e) Has the final authority to approve and disapprove
BioNumerik's contract-manufacturers in Section 5.1;
54
(f) Has the final authority to coordinate auditing and
inspecting reviews of the manufacturing facilities of BioNumerik and its
contract-manufacturers;
(g) Is accountable for implementing a coordinated quality and
compliance program that assures both Parties are in compliance and achieving
proper quality targets in accordance with all applicable laws, statutes,
regulations, and ordinances applicable to performing its obligations under this
Agreement;
(h) Reviewing all communications, notices and reports which
are sent between the Parties and that all such communications, notices and
reports are provided in a timely manner; and,
(i) Is accountable for reviewing and approving potential
measures regarding infringement of intellectual property rights by a third party
or of a third party in the Territory.
Any Joint Steering Committee member can request of BioNumerik
and Takeda operating reports, data and analyses on the Product as reasonably
necessary, with reasonable time allocation for preparation of such information,
for the Joint Steering Committee to perform its functions.
13.2 Development Committee. The Development Committee will have an
equal number of qualified members (as specified in Section 13.1 above) from each
Party and will be responsible for preparing and executing the Development Plan
identified in Article IV and for submitting the Development Plan to the Joint
Steering Committee for approval. In addition, the Development Committee will be
responsible for assuring that the Development Plan is implemented by both
Parties, in terms of the allocation of qualified personnel who will have
specific accountabilities to meet Development Plan objectives, and to assure
that each Party performs its obligations under the Development Plan and under
Article IV. The Development Committee will review and approve all clinical and
non-clinical study protocols of all contemplated studies that are conducted for
the Territory pursuant to the Development Plan. Further, the Development
Committee will review BioNumerik's reports on the clinical and non-clinical
studies produced according to Article IV and will review the materials under
Article IV, Section 4.4. Any disagreements or anticipated or actual failures to
meet specific objectives by
55
the Development Committee should be brought to the prompt attention of the Joint
Steering Committee. Further, the Development Committee will be accountable for
recommending to the Joint Steering Committee any proposed changes to the
Development Plan. In the event that the Parties cannot agree on which additional
clinical or non-clinical studies to conduct, besides those included in the
Development Plan, either Party may conduct such studies at its own expense,
notwithstanding the provisions of Sections 4.1(b) and 8.4(h), provided that such
studies are not intended to result in an improved label, patent position, or
method of use, or expanded indication that is beneficial to the Product
promotion, marketing or sales. The Development Committee will provide regular
progress and status reports to the Joint Steering Committee.
13.3 Promotion Committee. The Promotion Committee will have an equal
number of qualified members (as specified in Section 13.1) from each Party and
will be accountable for meeting specific objectives as previously agreed to by
the Joint Steering Committee, performing market research on a regular basis as
approved by the Joint Steering Committee, and recommending potential
modifications to the Marketing Plan identified in Article VI, and for submitting
the Marketing Plan to the Joint Steering Committee for approval. In addition,
the Promotion Committee will be accountable for assuring that the Marketing Plan
is properly implemented by both Parties, in terms of the allocation of qualified
personnel who will have specific accountabilities to meet the Marketing Plan
objectives, and assuring that each Party performs its obligations under the
Marketing Plan and under Article VI. Any disagreements or anticipated or actual
failures by the Promotion Committee should be brought to the prompt attention of
the Joint Steering Committee. Further, the Promotion Committee will be
accountable for recommending to the Joint Steering Committee any proposed
changes to the Marketing Plan. The Promotion Committee will provide regular
progress and status reports to the Joint Steering Committee.
ARTICLE XIV
ADVERSE EVENT REPORT AND PMS
14.1 Within six (6) months of the Effective Date, the Parties will
develop a procedure for the reporting of adverse events between the Parties and
to the Regulatory Agency (substantially in the form of the reporting procedure
attached herewith as Exhibit F), which may
56
be amended from time to time to reflect applicable laws and regulations and the
Parties' pharmacovigilance practices. As part of this procedure, a PMS database
will be shared by the Parties. The plan for the PMS database and the PMS
reporting responsibilities and operations will be established by the Joint
Steering Committee within six (6) months of the Effective Date.
14.2 BioNumerik will be responsible for preparing and submitting
regulatory reports or inquiries or responses concerning the Product to the FDA
or other Regulatory Agency as well as any other regulatory communication to the
FDA or other Regulatory Agency concerning the Product as well as making such
communications available to Takeda or any Regulatory Agency as required by
applicable laws, regulations, standards and guidelines or in accordance with
then-current ICH guidelines.
14.3 Each Party will conduct PMS in the Territory in a coordinated
manner with the other Party. Each Party will regularly report PMS results from
the Territory to the other Party. BioNumerik will summarize and analyze such PMS
data for the purpose of reporting to the FDA and other regulatory agencies as
required by law and in accordance with ICH guidelines. BioNumerik will regularly
report PMS results from other territories to Takeda. BioNumerik will be
responsible for reporting the results of the PMS and any adverse events of the
Product to the Regulatory Agency as well as in other territories where the
Product is in development or approved. Takeda and BioNumerik will have direct
access to PMS data at all times, and BioNumerik will have the responsibility and
the right to report such data to all regulatory authorities in accordance with
all applicable laws and contractual obligations for such safety reporting.
14.4 Each Party will fully cooperate with the other in all respects
necessary to enable each to fulfill its reporting obligations under applicable
laws and regulations.
ARTICLE XV
TERM AND TERMINATION
15.1 Term. The term of this Agreement will begin on the Effective Date
and will remain in effect until and unless this Agreement is terminated pursuant
to a provision of this Agreement.
57
15.2 Termination on Patent Expiration or Generic Entry Date. (a) Takeda
may terminate this Agreement effective as of the Patent Expiration Date in the
Territory or just in the United States or at any time after the Patent
Expiration Date in the Territory or just in the United States, provided that
Takeda has provided BioNumerik with 6 months (180 days) prior written notice, or
Takeda may opt to continue the Agreement until the Agreement is otherwise
terminated. If Takeda terminates this Agreement pursuant to this Section
15.2(a), then (1) the licenses granted to Takeda under this Agreement except for
the Licensed Trademarks will become royalty-free, paid-up and perpetual as to
the terminated portion of the Territory, provided that BioNumerik can promote,
market and sell the Product in the terminated portion of the Territory without
any further obligation to Takeda and (2) the licenses granted to Takeda pursuant
to this Agreement except for the Licensed Trademarks will be extended to
encompass the right of Takeda to make and have made the Product in such
terminated portion of the Territory. Further, in the event of such termination,
BioNumerik (and its designated Affiliates and sublicensees) will be granted a
non-exclusive, perpetual, royalty-free paid-up license under Takeda Developments
and Improvements and Jointly Developed Intellectual Property, to make, have
made, use, and sell the Product in such terminated portion of the Territory.
(b) Takeda may terminate this Agreement on the Generic Entry Date in
the Territory or just in the United States or at any time after the Generic
Entry Date in the Territory or just in the United States with 6 months (180
days) prior written notice to BioNumerik, or Takeda may opt to continue the
Agreement until the Agreement is otherwise terminated. If Takeda terminates this
Agreement pursuant to this Section 15.2(b), then (1) the licenses granted to
Takeda under this Agreement except for the Licensed Trademarks will become
royalty-free, paid-up and perpetual as to the terminated portion of the
Territory, provided that BioNumerik can promote, market and sell the Product in
the terminated portion of the Territory without any further obligation to Takeda
and (2) the licenses granted to Takeda pursuant to this Agreement will be
extended to encompass the right of Takeda to make and have made the Product in
such terminated portion of the Territory. Further, in the event of such
termination, BioNumerik (and its designated Affiliates and sublicensees) will be
granted a non-exclusive, perpetual, royalty-free paid-up license under Takeda
Developments and Improvements and Jointly Developed Intellectual Property, to
make, have made, use, and sell the Product in such terminated portion of the
Territory.
58
(c) If Takeda desires to retain exclusive rights to use of the Licensed
Trademarks for the Product in the terminated portion of the Territory following
termination pursuant to Section 15.2 (a) or Section 15.2(b), Takeda will make an
offer to BioNumerik of a payment amount to retain such rights to the Licensed
Trademarks, within thirty (30) days after Takeda has provided the written notice
of termination. Within thirty (30) days after Takeda makes its offer, BioNumerik
will have the option to either: (i) accept such payment amount and allow Takeda
to retain such rights to the Licensed Trademarks; or (ii) pay Takeda the payment
amount and retain the rights to the Licensed Trademarks for exclusive use by
BioNumerik and its Affiliates and sublicensees in such terminated portion of the
Territory. If BioNumerik accepts such payment amount, the license granted to
Takeda to the Licensed Trademarks will become royalty-free, paid-up and
perpetual as to the terminated portion of the Territory.
15.3 Termination for Lack of Viability or Profitability. If the Product
is not commercially viable or profitable in either country of the Territory as
measured by the standards described in this Section 15.3 below, as reasonably
applied by Takeda in its sole discretion but after consultation with BioNumerik
for one hundred fifty (150) days, Takeda may eliminate a country from the
Territory or terminate this Agreement by informing BioNumerik of such
elimination or termination in writing thirty (30) days in advance. The Product
is not commercially viable or profitable if (i) the Net Profits are negative for
any three (3) out of four (4) calendar quarters in a Fiscal Year during the
second year after the commercial launch of the Product or any two (2) calendar
quarters in any Fiscal Year after the first two-year period following the
commercial launch of the Product; (ii) Takeda determines in good faith that any
event of the subsection 15.3(i) above is more likely than not to occur; or (iii)
Takeda determines in good faith that the NDA filing or NDA approval of the
Product in the United States is more likely than not to be delayed for more than
one (1) year compared with the initial Development Plan attached hereto. In the
event of such a termination, all rights granted to Takeda under this Agreement
will revert to BioNumerik, and BioNumerik will have no obligation to return any
amounts paid to BioNumerik by Takeda prior to such termination. Further, in the
event of such termination, BioNumerik (and its designated Affiliates and
sublicensees) will be granted a non-exclusive, perpetual, royalty-free paid-up
license under Takeda Developments and Improvements and Jointly Developed
Intellectual Property, to make, have made, use, and sell the Product in the
Territory.
59
15.4 Termination for Cause. This Agreement may be terminated as
provided for below if any of the following occur:
(a) Material Breach of the Agreement. In the event of a
material breach of this Agreement, the nonbreaching Party may terminate this
Agreement by providing written notice to the breaching Party of the breach and
intent to terminate this Agreement; provided, that this Agreement will terminate
sixty (60) days following receipt of the notice of breach unless the breaching
Party corrects the breach within such sixty (60) day period, and notifies the
nonbreaching Party of the correction.
However, if the breaching Party does not correct the breach within such
sixty (60) day period, then the nonbreaching Party may provide written notice to
the breaching Party that the termination will be delayed to allow the
nonbreaching Party the opportunity to take any actions necessary to try to
correct the breach itself and to seek fair and reasonable damages from the
breaching Party to reimburse any loss caused by the breach, either (a) through
negotiations; (b) through the dispute resolution procedures in Article XIX; or
(c) acceptance of the breach by the nonbreaching Party, provided that if the
nonbreaching Party has not chosen option (b) within six (6) months of the notice
of delay, the nonbreaching Party will be deemed to have chosen option (c) and
have accepted the breach. Further, the nonbreaching Party will not be considered
to have waived any of its other remedies available to it under the law or equity
for any such breach, including but not limited to damages from the breaching
Party to reimburse the nonbreaching Party for any loss caused by the breach.
If either Party terminates this Agreement pursuant to this Section
15.4(a), then the Parties will resort to the dispute resolution procedure in
Article XIX for resolution. Pending the outcome of such dispute resolution
procedure, (1) the licenses granted to each Party under this Agreement will
continue; (2) the licenses granted to Takeda pursuant to this Agreement will be
extended to encompass the right of Takeda to make and have made the Product in
the Territory; and, (3) the licenses granted to BioNumerik (and its designated
Affiliates and sublicensees) will be extended to encompass the right to Takeda
Developments and Improvements and Jointly Developed Intellectual Property to
make, have made, use, and sell the Product in the Territory. The Parties expect
that the arbitration decision after the outcome of such dispute resolution
60
procedure will determine issues such as the merits of the alleged breach, how
the Parties' relationship may continue following the dispute resolution
procedure, what rights each Party will have under the other Party's intellectual
property following the outcome of the dispute resolution procedure, how the
Product will continue to be marketed in the Territory, and what monetary
damages, if any, will be provided to the Parties as compensation.
Pending the outcome of such dispute resolution procedure, the amount
and timing of any payments (including payments by Takeda to BioNumerik pursuant
to Articles VIII and IX of this Agreement) that would otherwise be made by
Takeda to BioNumerik will be referred to the International Chamber of Commerce
for determination by Arbitrator(s) ("the Payment Arbitrator(s)") different than
the Arbitrators selected when the dispute resolution procedure of Article XIX is
invoked. The Parties will mutually select a single Payment Arbitrator. If the
Parties are unable to mutually agree on the selection of a single Payment
Arbitrator, then one arbitrator will be appointed by BioNumerik, one arbitrator
will be appointed by Takeda, and the third arbitrator will be appointed by the
two arbitrators. The selection of the Payment Arbitrator(s) will take place
within thirty (30) days after the filing of the Request for Arbitration. The
Payment Arbitrator(s) will be requested to decide the amount and timing of such
payments on an interim and expedited basis with their decision to be rendered no
later than thirty (30) days after the selection of Payment Arbitrator(s); in
addition to the foregoing, both Parties will use best efforts and will
accordingly perform their respective activities necessary to resolve this
payment issue within sixty (60) days after the filing of the Request for
Arbitration. The Payment Arbitrator(s) decision regarding such payments will
govern such payment matters pending the outcome of the arbitration. Before the
Payment Arbitrator(s)'s decision, payments by Takeda to BioNumerik pursuant to
Articles VIII and IX of this Agreement will continue, provided that if Takeda is
the nonbreaching Party, such payments will continue for no longer than sixty
(60) days after the filing of the Request, even if the Payment Arbitrator(s)
takes longer to decide the payments issue than the requested thirty (30) day
period provided further, that if Takeda is still requesting BioNumerik to supply
it with manufactured Product, Takeda will continue to pay to BioNumerik the
Provisional Price per unit of Product supplied by BioNumerik to Takeda.
(b) Bankruptcy. Either Party may terminate this Agreement by a
registered letter to the other Party with termination to take immediate effect
upon the sending of such letter
61
if the other Party becomes insolvent or a petition in bankruptcy or corporate
reorganization or any similar relief is filed by or against the other Party, or
a receiver is appointed with respect to any substantial portion of the assets of
the other Party, or a liquidation proceeding is commenced against the other
Party. In the case that Takeda terminates this Agreement pursuant to this
Section, subject to Takeda continuing all payment obligations to BioNumerik as
described in this Agreement, BioNumerik will transfer to Takeda any existing NDA
approvals, applications and/or filings and similar approvals for the Product in
the Territory upon request of Takeda and Takeda will have, with the right to
sublicense, (i) an exclusive and perpetual license under the Licensed Patents
and Licensed Information existing at the time of such termination and (ii) a
non-exclusive and perpetual license under the BioNumerik's Licensees' Patents
and Information existing at the time of such termination (subject to the
restrictions and limitations contained in Section 2.1 with respect to the
license of such BioNumerik's Licensees' Patents and Information), such licenses
in the case of each of clauses (i) and (ii) being to develop, market, promote,
sell, distribute, make, have made, use, sell, offer to sell and import the
Product in the Territory, provided that Takeda will indemnify, defend and hold
BioNumerik and each of BioNumerik's Affiliates, agents, employees, officers and
directors harmless from any and all liabilities, damages, loss, costs, or
expense (including reasonable attorney's fees and product liability claims
directly concerning the Product) arising out of activities conducted by Takeda
after the date of Takeda's termination under this Section 15.4(b), and provided
further that BioNumerik will retain the right for itself and its Affiliates,
sublicensees and contract manufacturers to use any of the Licensed Patents,
Licensed Information and BioNumerik's Licensees' Patents and Information without
any payment obligation to Takeda for purposes of manufacturing the Product in
the Territory for use outside the Territory, for internal research, and for
purposes that do not relate to the Product. BioNumerik will, subject to Takeda
continuing all payment obligations to BioNumerik as described in this Agreement,
also xxxxx Xxxxxx an exclusive and perpetual license to use the Licensed
Trademarks for the Product in the Territory, provided that Takeda can provide
reasonably sufficient explanation to BioNumerik that the goodwill associated
with the Licensed Trademarks will not be substantially damaged by the continued
use by Takeda and its Affiliates and sublicensees of such Licensed Trademarks in
the Territory. In the case that BioNumerik terminates this Agreement pursuant to
this Section 15.4(b), BioNumerik (and its designated Affiliates and
sublicensees) will be granted a non-exclusive,
62
perpetual, royalty-free paid-up license under Takeda Developments and
Improvements and Jointly Developed Intellectual Property, to make, have made,
use, and sell the Product in the Territory. All rights and licenses granted
under or pursuant to this Agreement by each Party as a licensor or sublicensor
are, and will otherwise be deemed to be, for purposes of Section 365(n) of Title
XI, United States Code (the "Bankruptcy Code"), licenses (or, if applicable,
sublicenses) of rights to "intellectual property" as defined under Section
101(35A) of the Bankruptcy Code. Each Party agrees that each licensee (or, if
applicable, sublicensee) of such rights under this Agreement will retain and may
fully exercise all rights and elections it would have in the case of a licensor
(or sublicensor) bankruptcy under the Bankruptcy Code. Each Party agrees during
the term of this Agreement to create or maintain current copies, or if not
amenable to copying, detailed descriptions or other appropriate embodiments, of
all such intellectual property licensed or sublicensed to the other Party.
15.5 Termination for Failure to Maintain Safety and Quality in Product
Manufacturing Standards. Takeda may terminate this Agreement at any time if it
determines that BioNumerik or any one of its contract-manufacturers fail to
maintain the applicable safety and quality standards when manufacturing the
Product for Takeda, provided that this provision will only apply with respect to
a failure to maintain appropriate safety and quality standards when
manufacturing the Product for Takeda that would have a Material Adverse Effect
on Takeda. In addition, Takeda will, prior to any such termination, provide
BioNumerik with notice and a sixty (60) day opportunity to correct or remedy
such failure, unless allowing for such notice period would have a Material
Adverse Effect on Takeda due to such failure. In the case that Takeda decides to
continue to market the Product in the Territory following such termination,
BioNumerik will transfer to Takeda any existing NDA approvals, applications
and/or filings and similar approvals for the Product in the Territory upon
request of Takeda and Takeda will have, with the right to sublicense, (i) an
exclusive and perpetual license under the Licensed Patents and Licensed
Information existing at the time of such termination and (ii) a non-exclusive
and perpetual license under the BioNumerik's Licensees' Patents and Information
existing at the time of such termination (subject to the restrictions and
limitations contained in Section 2.1 with respect to the license of such
BioNumerik's Licensees' Patents and Information), such licenses in the case of
each of clauses (i) and (ii) being to develop, market, promote, sell,
distribute, make, have made, use, sell, offer to sell and import the Product in
the Territory, provided that Takeda
63
will indemnify, defend and hold BioNumerik and each of BioNumerik's Affiliates,
agents, employees, officers and directors harmless from any and all liabilities,
damages, loss, costs, or expense (including reasonable attorney's fees and
product liability claims directly concerning the Product) arising out of
activities conducted by Takeda after the date of Takeda's termination under this
Section, and provided further that BioNumerik will retain the right for itself
and its Affiliates, sublicensees and contract manufacturers to use any of the
Licensed Patents, Licensed Information and BioNumerik's Licensees' Patents and
Information without any payment obligation to Takeda for purposes of
manufacturing the Product in the Territory for use outside the Territory, for
internal research, and for purposes that do not relate to the Product.
BioNumerik will also xxxxx Xxxxxx and its Affiliates and sublicensees an
exclusive and perpetual license to use the Licensed Trademarks for the Product
in the Territory, provided that Takeda can provide reasonably sufficient
explanation to BioNumerik that the goodwill associated with the Licensed
Trademarks will not be substantially damaged by the continued use by Takeda of
such Licensed Trademarks in the Territory. Further, Takeda will continue to pay
all payment obligations to BioNumerik as described in this Agreement. In the
case that Takeda decides not to continue to market the Product in the Territory
following such termination, all rights granted to Takeda under this Agreement
will revert to BioNumerik, and BioNumerik (and its designated Affiliates and
sublicensees) will be granted a non-exclusive, perpetual, royalty-free paid-up
license under Takeda Developments and Improvements and Jointly Developed
Intellectual Property, to make, have made, use, and sell the Product in the
Territory.
15.6 Suspension or Termination Due to Serious Adverse Event. Either
Party may suspend development, marketing, and sales activities or immediately
terminate this Agreement at its choice at any time upon notice to the other
Party if such Party becomes aware of a "serious adverse drug experience" as
defined in 21 CFR 312 that is associated with the administration of the Product,
provided that this provision will only apply with respect to a serious adverse
drug experience that would have a material adverse effect on the ability to
obtain and/or maintain regulatory approvals in the Territory or only in the
United States and/or to continue to profitably market the Product in the
Territory or only in the United States or would be materially adverse to the
terminating Party's reputation, and provided further that any such suspension
will continue for no more than ninety (90) days (unless otherwise agreed upon by
the Parties). If BioNumerik terminates this Agreement pursuant to this section
and Takeda desires to continue to develop and
64
commercialize the Product, BioNumerik will transfer to Takeda any existing NDA
approvals, applications and/or filings and similar approvals for the Product in
the Territory upon request of Takeda and Takeda will have, with the right to
sublicense, (i) an exclusive royalty-free, paid-up and perpetual license under
the Licensed Patents and Licensed Information existing at the time of such
termination and (ii) a non-exclusive royalty-free, paid-up and perpetual license
under the BioNumerik's Licensees' Patents and Information existing at the time
of such termination (subject to the restrictions and limitations contained in
Section 2.1 with respect to the license of such BioNumerik's Licensees' Patents
and Information), such licenses in the case of each of clauses (i) and (ii)
being to develop, market, promote, sell, distribute, make, have made, use, sell,
offer to sell and import the Product in the Territory, provided that Takeda will
indemnify, defend and hold BioNumerik and each of BioNumerik's Affiliates,
agents, employees, officers and directors harmless from any and all liabilities,
damages, loss, costs, or expense (including reasonable attorney's fees and
product liability claims directly concerning the Product) arising out of
activities conducted by Takeda after the date of BioNumerik's termination under
this Section, and provided further that BioNumerik will retain the right for
itself and its Affiliates, sublicensees and contract manufacturers to use any of
the Licensed Patents, Licensed Information and BioNumerik's Licensees' Patents
and Information without any payment obligation to Takeda for purposes of
manufacturing the Product in the Territory for use outside the Territory, for
internal research, and for purposes that do not relate to the Product.
BioNumerik will also xxxxx Xxxxxx and its Affiliates and sublicensees an
exclusive royalty-free, paid-up and perpetual license to use the Licensed
Trademarks for the Product in the Territory, provided that Takeda can provide
reasonably sufficient explanation to BioNumerik that the goodwill associated
with the Licensed Trademarks will not be substantially damaged by the continued
use by Takeda of such Licensed Trademarks in the Territory. If Takeda terminates
this Agreement pursuant to this section and BioNumerik desires to continue to
develop and commercialize the Product, BioNumerik (and its designated Affiliates
and sublicensees) will be granted a non-exclusive, perpetual, royalty-free
paid-up license under Takeda Developments and Improvements and Jointly Developed
Intellectual Property, to make, have made, use, and sell the Product in the
Territory.
65
15.7 Termination by Mutual Agreement. The Parties may terminate this
Agreement at any time upon mutual agreement expressed in a writing signed by
authorized representatives of both Parties.
15.8 Suspension or Termination for Impossibility. In the event that any
act, regulation, or law of government in the Territory, including departments,
agencies, and courts, make impossible or prohibit, modify, or limit any act or
obligation of the Parties, either Party may suspend or terminate the Agreement
or make modifications as necessary and reasonably agreed to by the Parties,
provided that this provision will only apply with respect to a situation that
would permanently prohibit or permanently halt the development or marketing of
the Product in the Territory. In addition, the terminating Party will, prior to
any such termination, provide the non-terminating party with notice and a sixty
(60) day opportunity to correct or remedy such situation. If BioNumerik
terminates this Agreement pursuant to this section and Takeda desires to
continue to develop and commercialize the Product, BioNumerik will transfer to
Takeda any existing NDA approvals, applications and/or filings and similar
approvals for the Product in the Territory upon request of Takeda and Takeda
will have, with the right to sublicense, (i) an exclusive royalty-free, paid-up
and perpetual license under the Licensed Patents and Licensed Information
existing at the time of such termination and (ii) a non-exclusive royalty-free,
paid-up and perpetual license under the BioNumerik's Licensees' Patents and
Information existing at the time of such termination (subject to the
restrictions and limitations contained in Section 2.1 with respect to the
license of such BioNumerik's Licensees' Patents and Information), such licenses
in the case of each of clauses (i) and (ii) being to develop, market, promote,
sell, distribute, make, have made, use, sell, offer to sell and import the
Product in the Territory, provided that Takeda will indemnify, defend and hold
BioNumerik and each of BioNumerik's Affiliates, agents, employees, officers and
directors harmless from any and all liabilities, damages, loss, costs, or
expense (including reasonable attorney's fees and product liability claims
directly concerning the Product) arising out of activities conducted by Takeda
after the date of BioNumerik's termination under this Section, and provided
further that BioNumerik will retain the right for itself and its Affiliates,
sublicensees and contract manufacturers to use any of the Licensed Patents,
Licensed Information and BioNumerik's Licensees' Patents and Information without
any payment obligation to Takeda for purposes of manufacturing the Product in
the Territory for use outside the Territory, for internal research, and for
purposes that do not relate to the Product.
66
BioNumerik will also xxxxx Xxxxxx an exclusive royalty-free, paid-up and
perpetual license to use the Licensed Trademarks for the Product in the
Territory, provided that Takeda can provide reasonably sufficient explanation to
BioNumerik that the goodwill associated with the Licensed Trademarks will not be
substantially damaged by the continued use by Takeda of such Licensed Trademarks
in the Territory. If Takeda terminates this Agreement pursuant to this section
and BioNumerik desires to continue to develop and/or market the Product,
BioNumerik (and its designated Affiliates and sublicensees) will be granted a
non-exclusive, perpetual, royalty-free paid-up license under Takeda Developments
and Improvements and Jointly Developed Intellectual Property, to make, have
made, use, and sell the Product in the Territory.
15.9 Right to Complete Contracted Sales. In the event of termination of
this Agreement, Takeda will have the right to complete all contracts for the
sale of the Product under which Takeda is obligated on the date of termination,
provided Takeda pays all Commercial Milestone Payments and Profit Share on such
sales as required herein and provided all such sales are completed within three
(3) months after the date of termination.
15.10 Obligations to Make Milestone Payments, Commercial Milestone
Payments and Profit Share. In the event of termination of this Agreement, Takeda
will pay BioNumerik and BioNumerik will pay Takeda all outstanding obligations,
due and payable as of the date of such termination, which will include Milestone
Payments and also include Commercial Milestone Payments and Profit Share
payments for sales of the Product since the last quarter for which Commercial
Milestone Payments and Profit Share have been made, including the sales of the
Product after termination permitted in Section 15.9 herein. The final Commercial
Milestone Payment and Profit Share payment is due ninety (90) days after the
date of termination, or ninety (90) days after the last sale made pursuant to
Section 15.9. For clarity, after the termination of this Agreement, Takeda will
be relieved from payment of the Milestone Payments, Commercial Milestone
Payments and Research and Development Payments, other than as provided in this
Section 15.10, which were not otherwise due at the time of the termination of
this Agreement. In the event of termination of this Agreement, BioNumerik will
have no obligation to return to Takeda any amounts previously paid by Takeda to
BioNumerik.
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15.11 Termination Report. In the event of termination of this
Agreement, BioNumerik will send to Takeda a termination report identifying the
research and development costs, and the Incurred Costs that it incurred since
the last quarterly report through termination. The termination report will be
transmitted to Takeda within ninety (90) days following termination. Takeda will
send to BioNumerik a termination report identifying the Net Sales of the Product
since the last quarterly report through termination, and the anticipated Net
Sales of the Product for which the deliveries will take place after termination
as provided for in Section 15.9. Takeda's termination report will be transmitted
to BioNumerik within ninety (90) days following termination. The monthly reports
under Section 9.3 will continue until the termination report is sent.
15.12 Surviving Provisions. The rights and obligations of the Parties
specified in Articles XV, XVI, XVIII, XIX, XX and XXII, and Section 10.2,
Section 12.3, Section 12.4 and Section 21.1(h) (on the terms described in such
Section 21.1(h)) of this Agreement will survive termination of this Agreement
and remain enforceable.
ARTICLE XVI
INDEMNIFICATION
16.1 Liability. In accordance with Article XX, liability arising from
infringement of a third party's intellectual property rights relating to the
Product being sold in the Territory or from product liabilities relating to the
Product being sold in the Territory will be shared equally by the Parties even
if such liabilities are caused by performance by only one Party; provided,
however, that any liability arising out of the negligence or willful misconduct
of one Party or the breach of representations or warranties by one Party will
not be shared by the other Party.
16.2 Indemnification by BioNumerik. BioNumerik will indemnify, defend
and hold Takeda and its Affiliates, agents, employees, officers and directors
(the "Takeda Indemnitees") harmless from and against any and all liability,
damage, loss, cost or expense (including reasonable attorneys' fees) arising out
of or relating to claims or suits by third parties arising from: (i)
BioNumerik's failure to perform its obligations under this Agreement or
BioNumerik's negligence or willful misconduct, including, but not limited to,
negligence or willful misconduct of a contract-manufacturer of the Product; or
(ii) breach by BioNumerik of its representations
68
and warranties under this Agreement; provided, however, that BioNumerik's
obligations pursuant to this Section 16.2 will not apply to the extent such
claims or suits result from the negligence or willful misconduct of any of the
Takeda Indemnitees.
16.3 Indemnification by Takeda. Takeda will indemnify, defend and hold
BioNumerik and its Affiliates, agents, employees, officers and directors (the
"BioNumerik Indemnitees") harmless from and against any and all liability,
damage, loss, cost or expense (including reasonable attorneys' fees) arising out
of or relating to claims or suits by third parties arising from: (i) Takeda's
failure to perform its obligations under this Agreement or Takeda's negligence
or willful misconduct; or (ii) breach by Takeda of its representations and
warranties under this Agreement; provided, however, that Takeda's obligations
pursuant to this Section 16.3 will not apply to the extent such claims or suits
result from the negligence or willful misconduct of any of the BioNumerik
Indemnitees.
16.4 Notification of Claim; Conditions to Indemnification Obligations.
As a condition to a Party's right to receive indemnification under this Article
XVI, it will: (i) promptly provide written notice (a "Claim Notice") to the
other Party as soon as it becomes aware of a claim or suit for which
indemnification may be sought pursuant hereto (provided that the failure to give
a Claim Notice promptly will not prejudice the rights of an indemnified Party
except to the extent that the failure to give such prompt notice materially
adversely affects the ability of the indemnifying Party to defend the claim or
suit); (ii) cooperate with the indemnifying Party in the defense of such claim
or suit, at the expense of the indemnifying Party; and (iii) if the indemnifying
Party confirms in writing to the indemnified Party its intention to defend such
claim or suit within ten (10) days of receipt of the Claim Notice, permit the
indemnifying Party to control the defense of such claim or suit, including
without limitation the right to select defense counsel; provided that if the
indemnifying Party fails to (x) provide such confirmation in writing within the
ten (10) day period; or (y) diligently and reasonably defend such suit or claim
at any time, its right to defend the claim or suit will terminate immediately in
the case of (x) and otherwise upon twenty (20) days' written notice to the
indemnifying Party and the indemnified Party may assume the defense of such
claim or suit at the sole expense of the indemnifying Party and may settle or
compromise such claim or suit without the consent of the indemnifying Party. The
indemnifying Party will pay the costs of separate counsel for the indemnified
parties if there
69
is a conflict of interest involving the counsel selected by the indemnifying
Party. In no event, however, may any indemnifying Party compromise or settle any
claim or suit in a manner which admits fault or negligence on the part of any
indemnified party or that otherwise materially affects any such indemnified
party's rights under this Agreement or requires any payment by an indemnified
party without the prior written consent of each such indemnified party. Except
as expressly provided above, the indemnifying Party will have no liability under
this Article XVI with respect to claims or suits settled or compromised by an
indemnified party without the indemnifying Party's prior written consent.
ARTICLE XVII
ENFORCEMENT OF PATENTS
17.1 Reporting. Each Party will promptly report in writing to the other
Party during the term of this Agreement any known infringement or suspected
infringement of any of the Licensed Patents, patents in the BioNumerik's
Licensees' Patents and Information, patents relating to Takeda Developments and
Improvements described in Section 12.3, and patents relating to Jointly
Developed Intellectual Property described in Section 12.4, or the Licensed
Trademarks by a third party or on account of the manufacture, use, offer for
sale, importation, or sale by a third party of the Product of which it becomes
aware, and will provide the other Party with all available evidence supporting
said infringement or suspected infringement.
17.2 Filing Suit. BioNumerik will be solely responsible for enforcing
the Licensed Patents or the Licensed Trademarks by filing suit against suspected
infringers of which it becomes aware or whom Takeda brings to its attention and
will have discretion in determining to file suit. BioNumerik will keep Takeda
promptly informed and will from time to time consult with Takeda regarding the
status of any such suit and will provide Takeda with copies of all documents
filed in, and all written communications relating to, such suit. Payments by
Takeda to BioNumerik pursuant to Articles VIII and IX will continue during any
patent litigation unless and until this Agreement is otherwise terminated in
accordance with the terms of this Agreement.
17.3 BioNumerik Suit.
70
(a) BioNumerik will have the right to select counsel,
witnesses and experts for any suit referred to in Section 17.2 above after
consultation with Takeda and will, except as provided below, pay all expenses of
the suit, including without limitation attorneys' fees and court costs. Takeda
will join as a party to the suit if requested by BioNumerik but otherwise will
be under no obligation to participate except to the extent that such
participation is required or requested by BioNumerik. Takeda will join in any
such suit if required by law and will offer reasonable assistance to BioNumerik
therewith at no charge to BioNumerik. Takeda will have the right to participate
and be represented in any such suit by its own counsel at its own expense. In
the event there are any damages, royalties, settlement fees or other
consideration as a result of such litigation solely conducted by BioNumerik, any
and all of these forms of such consideration will be solely received by
BioNumerik.
(b) Takeda, in its sole discretion, may elect, within sixty
(60) days after the commencement of such litigation, to contribute to the costs
incurred by BioNumerik in connection with such litigation, and, if it so elects,
any damages, royalties, settlement fees or other consideration received by
BioNumerik as a result of such litigation will be shared by Takeda and
BioNumerik [**] based on [**] the costs of such litigation provided that such
[**] share will not exceed [**] unless BioNumerik has consented to a higher
share in writing.
17.4 Takeda Suit.
(a) In the event that BioNumerik elects not to initiate an
infringement or other appropriate suit pursuant to Section 17.2 above,
BioNumerik will promptly advise Takeda of its intent not to initiate such a
suit. Takeda will have the right, at the sole expense of Takeda, to initiate an
infringement or other appropriate suit against the party or parties. In
exercising its rights pursuant to this section, Takeda have the sole and
exclusive right to select counsel and will, except as provided below, pay all
expenses of the suit including without limitation attorneys' fees and court
costs. If necessary, BioNumerik will join as a party to the suit but will be
under no obligation to participate except to the extent that such participation
is required as a result of being named a party to the suit. Further, BioNumerik
will join as a party to the suit if requested by Takeda but otherwise will be
under no obligation to participate except to the extent
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
71
that such participation is required or requested by Takeda. At Takeda's request,
BioNumerik will offer reasonable assistance to Takeda in connection therewith at
no charge to Takeda. Takeda and its litigation counsel will attempt to run the
litigation as effectively as possible to minimize the impact on BioNumerik's
senior management's participation. BioNumerik will have the right to participate
and be represented in any such suit by its own counsel at its own expense. In
the event there are any damages, royalties, settlement fees or other
consideration as a result of such litigation solely conducted by Takeda, any and
all of these forms of such consideration will be solely received by Takeda.
(b) BioNumerik, in its sole discretion, may elect, within
sixty (60) days after the commencement of such litigation, to contribute to the
costs incurred by Takeda in connection with such litigation, and, if it so
elects, any damages, royalties, settlement fees or other consideration received
by Takeda as a result of such litigation will be shared by BioNumerik and Takeda
[**] based on [**] the costs of such litigation provided that such [**] share
will not exceed [**] unless Takeda has consented to a higher share in writing.
17.5 Settlement. Neither Party will settle any such suit under this
Article XVII on terms which grant any license to any other party in derogation
of the rights granted to or retained by either Party hereunder without obtaining
the prior written consent of the other Party, which consent will not be
unreasonably withheld.
ARTICLE XVIII
CONFIDENTIALITY AND PUBLICITY
18.1 Confidentiality. Each Party (including its Affiliates) will keep
the Confidential Information of the other Party in strict confidence and will
not disclose such Confidential Information to any third party nor use such
Confidential Information for any purpose other than pursuant to this Agreement
without the prior written consent of the disclosing Party, each for [**] from
the disclosure of such Confidential Information by the disclosing Party to the
other Party; provided, however, that each Party may disclose and use the
Confidential Information to the extent necessary for its performance of the
obligations hereunder. The terms and conditions of this Agreement will also be
kept confidential by Takeda and BioNumerik. The
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
72
Parties agree that they may acknowledge and disclose the existence of this
Agreement without disclosing any terms or conditions of this Agreement. Further,
the Parties will mutually agree to the wording of any press release or other
public disclosure concerning either this Agreement or the relationship between
the Parties, such proposed disclosure to be provided to the nondisclosing Party
no later than seven (7) days before the intended disclosure. Additionally,
promptly after the signing of this Agreement, the Parties will develop a
mutually agreed to SOP's and policy to provide intended disclosure to the
nondisclosing Party much quicker than seven (7) days before the intended
disclosure and to receive a response from the nondisclosing Party to the
disclosing Party, including expedited disclosures that must be done almost
immediately. However, any Party may disclose the terms of this Agreement to the
extent required, in the reasonable opinion of such Party's legal counsel, to
comply with applicable laws, including without limitation the rules and
regulations promulgated by the SEC or by the stock exchange on which a Party's
stock is listed or by any stock exchange or similar body on which BioNumerik's
stock may be listed in the future. Notwithstanding the foregoing, before
disclosing this Agreement or any of the terms hereof pursuant to this section,
the Parties will consult with each other on the terms of this Agreement to be
redacted before making any such disclosure.
18.2 Publicity. Without limitation, the prohibition under Section 18.1
will apply to press releases, governmental filings, and discussions with
lenders, investment bankers, public officials and the media. However, the
prohibition does not apply to any disclosures required by an applicable law
(including Xxxxxxxx-Xxxxx requirements), disclosures to legal, investment
banking, accounting, financial and tax advisors, shareholders, and including
requests for a copy of related information by tax authorities in the case of an
audit or by any stock exchange on which a Party's stock is listed, provided,
however, that if any copy of this Agreement or any Confidential Information is
to be filed with or to be disclosed to the SEC and such filing or disclosure is
required by an applicable law, the Party intending to make such filing or
disclosure will first consult with the other Party regarding the extent of
disclosure required and use its best efforts to request confidential treatment
of such information, and provided, further that if any Party is required by an
applicable law to disclose any of the Confidential Information, that Party will
notify the other Party as soon as practicable and give as much detail as
possible in relation to
73
the disclosure required. The Parties will then cooperate with respect to
obtaining an appropriate protective order and/or to determining what information
should actually be released.
ARTICLE XIX
DISPUTE RESOLUTION
19.1 Disputes. Any disputes arising between the Parties relating to,
arising out of or in any way connected with this Agreement or any term or
condition hereof, or the performance by any Party of its obligations hereunder,
whether before or after termination of this Agreement (a "Dispute"), which is
not settled by the Parties within thirty (30) days after notice of such Dispute
is given by one Party to the other in writing will be referred to a senior
executive designated by BioNumerik and a senior executive designated by Takeda
who are authorized to settle such disputes on behalf of their respective
companies ("Senior Executives"). The Senior Executives will meet for
negotiations within thirty (30) days of the end of the initial 30-day
negotiation period referred to above, at a time and place mutually acceptable to
both Senior Executives. If the Dispute has not been resolved within thirty (30)
days after the end of the initial 30-day negotiation period referred to above
(which period may be extended by mutual agreement), the Dispute will be
forwarded to a neutral consultant agreed upon by both Parties. The neutral
consultant will, within twenty (20) days, issue a non-binding comment with
suggestions for resolving the dispute. If the Parties cannot reach agreement on
the Dispute within thirty (30) days of receiving the non-binding comment, the
Dispute will be finally resolved by resorting to arbitration according to
Section 19.2.
19.2 Arbitration. If a Dispute is not resolved, the Parties hereby
agree to resolve such Dispute by final and binding arbitration administered
under the most recent rules of arbitration of the International Chamber of
Commerce ("ICC"). The arbitration will be conducted in English by one arbitrator
appointed in accordance with the ICC Rules, provided that upon request of either
Party, three arbitrators will be appointed. Although the arbitration will be
conducted in English, the only documents that would need to be translated from a
foreign language by the
74
Party producing such documents will be those documents that the Party intends to
rely on at the arbitration hearing. If the Parties are unable to mutually select
the arbitrators, one arbitrator will be appointed by BioNumerik, one arbitrator
will be appointed by Takeda, and the third arbitrator will be appointed by the
two arbitrators.
In any such arbitration, the arbitrator(s) will not have the right to
modify the terms and conditions of this Agreement. As a result, the rights and
obligations of the Parties will be determined in accordance with the terms and
conditions of this Agreement and any decision or award will be only in
accordance with the terms and conditions of this Agreement. The Parties will
exert reasonable efforts to have the decision and award rendered within six (6)
months after the first to occur of (i) notice of breach of this Agreement or
disagreement regarding a term of the Agreement, a right of a Party to the
Agreement, or an obligation of a Party to the Agreement, which breach or
disagreement is a subject of the arbitration, and (ii) a notice invoking this
arbitration provision.
Judgment upon the award may be entered in any court having jurisdiction
thereof. Any arbitration pursuant to this section will be held in [**], or such
other place as may be mutually agreed upon in writing by the Parties.
Notwithstanding the provisions of this Section 19.2, either Party will
have the right to seek temporary or permanent injunctive relief in any court of
competent jurisdiction as may be available to such Party under the laws and
rules applicable in such jurisdiction.
ARTICLE XX
THIRD PARTY LIABILITY
20.1 Reporting. Each Party will promptly report in writing to the other
Party during the term of this Agreement any cease and desist letters, lawsuits
that are filed against the Party, and any agency actions instituted against the
Party relating to the Product, the Licensed Patents, the Licensed Trademarks,
the Licensed Information and BioNumerik's Licensees' Patents and Information. At
each Party's request, the other Party will offer reasonable assistance in
connection therewith.
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
75
20.2 Settlement. In the event referred to in Section 20.1, each Party
will consult with the other Party about selection of counsels, defense plan and
settlement. Neither Party will settle any such suit on terms which adversely
affect the rights granted to the other Party hereunder without obtaining the
prior written consent of the other Party, which consent will not be unreasonably
withheld.
20.3 Shared Liability. Liability arising from infringement of a third
party's patent rights relating to the Product being sold in the Territory or
from product liabilities relating to the Product being sold in the Territory
will be shared equally by the Parties as the Third Party Payment even if such
liabilities are caused by performance of only one Party; provided, however, that
any liability arising out of the negligence or willful misconduct of one Party
or the breach of representations or warranties by one Party will not be shared
by the other Party, in which case the responsible Party is liable for bearing
the damages and other payments.
20.4 Insurance.
(a) During the term of this Agreement and continuing for a period of [**]
after the termination of this Agreement, each Party agrees to obtain and
maintain, at its sole cost and expense, product liability insurance in the
Territory, in amounts which are reasonable and customary in the pharmaceutical
industry in the United States and Canada for companies of comparable size and
activities at its place of business. Subject to reasonable insurance policy
limitation and exclusions, such product liability insurance will insure against
all liability, including personal injury, physical injury, or property damage
arising out of the manufacture, sale, offer for sale, use, distribution,
marketing and promotion of the Product in the Territory and will include the
other Party as an additional insured.
(b) During the term of this Agreement, each Party will carry
insurance in amounts not less than the following for each type specified or as
otherwise might be required by applicable law or regulation:
(i) commercial general liability insurance,
including coverage for bodily injury and
property damage, with limits of not less
than [**] per occurrence and [**] in
the aggregate;
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
76
(ii) automobile liability insurance with coverage
of not less than [**] per occurrence; and
(iii) worker's compensation with limits in
accordance with statutory requirements,
including employer's liability coverage of
not less than [**].
(c) Each Party will provide written proof of the existence of
such insurance to the other Party upon request.
ARTICLE XXI
REPRESENTATIONS AND WARRANTIES
21.1 Takeda's Representations and Warranties. Takeda represents and
warrants to BioNumerik as follows as of the date of execution of this Agreement:
(a) Corporate Organization. (i) It is a duly organized and
validly existing corporation under the laws of Japan; (ii) it has full corporate
power and authority to enter into and perform this Agreement; and (iii) it has
taken, or will take prior to the Effective Date, all action necessary or
required for the lawful execution, delivery, and performance of this Agreement.
This Agreement is a legal, valid, and binding obligation, enforceable in
accordance with the terms and conditions hereof.
(b) Non-contravention. The execution and delivery of this
Agreement, the performance of this Agreement, the purchase of the Preferred
Stock and Common Shares by Takeda under this Agreement, and the consummation of
the purchase of the Preferred Stock and Common Shares according to this
Agreement do not violate, conflict with, or constitute a default under (i) any
material bond, debenture, note or other evidence of indebtedness, any material
lease, contract, indenture, mortgage, deed of trust, loan agreement, or joint
venture, or any other agreement or instrument to which Takeda is a party or by
which it or its property is bound, where such conflict, violation or default is
likely to result in a Material Adverse Effect to Takeda, (ii) its charter or
similar documents, its by-laws, or other organizational documents of Takeda, or
(iii) any law, administrative regulation, ordinance or order of any court or
governmental agency,
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
77
arbitration panel or authority binding upon Takeda or its property, where such
conflict, violation or default is likely to result in a Material Adverse Effect
to Takeda.
(c) Governmental Consent. No consent from any governmental
entity is required for the execution and delivery of this Agreement or the
consummation by Takeda of the equity investment, except for the consent, if any,
relating to the HSR Act and any securities filings required to be made under
federal, state or foreign securities laws, which filings, if any, will be made
and approved prior to the Effective Date.
(d) Court Order. It is not subject to any order, decree or
injunction by a court of competent jurisdiction which prevents or delays the
consummation of the transactions contemplated by this Agreement.
(e) Encumbrances. It has no outstanding encumbrances or
agreements, either written, oral or implied which will prevent the grant of
rights by Takeda herein.
(f) Conflicting Agreements. Neither Takeda nor any of its
Affiliates is a party to, or are otherwise bound by, any oral or written
contract that will result in any person or entity obtaining any interest in, or
that would give to any third party any right to assert any claim in or with
respect to, any of BioNumerik's or Takeda's rights under this Agreement nor will
it undertake any such obligation during the term of this Agreement.
(g) No Debarment. Takeda has never, to its knowledge, employed
and will not, to its knowledge, employ, or use, a person or entity debarred
under Section 306(a) or (b) of the Federal Food, Drug, and Cosmetic Act.
Further, Takeda, to its knowledge, has not employed and, to its knowledge, has
not used a contractor or consultant that has employed, any individual or entity
debarred by the FDA, or, to the knowledge of Takeda, any individual who or
entity which is the subject of an FDA debarment investigation or proceeding.
(h) Standstill Agreement. Takeda agrees that, until the
earlier of three (3) years after launch of the Product in the Territory or five
(5) years after the date of execution of this Agreement, unless otherwise
approved by BioNumerik, neither Takeda nor any of its "Affiliates" (as such term
is defined under the Securities Exchange Act) or representatives will (1)
directly participate in or assist any third party to affect or participate in
any tender or
78
exchange offer, merger or other business combination involving BioNumerik or any
of its subsidiaries, or (2) acquire BioNumerik's securities through purchases on
the open market that, when added to all other BioNumerik securities owned by
Takeda and its Affiliates would exceed 9.99% of BioNumerik's outstanding capital
stock. This Section 21.1(h) will survive termination of this Agreement unless
this Agreement is terminated by Takeda pursuant to Section 15.4(a) or Section
15.4(b).
21.2 BioNumerik's Representations and Warranties. BioNumerik represents
and warrants to Takeda as follows as of the date of execution of this Agreement:
(a) Corporate Organization. (i) It is a duly organized and
validly existing corporation under the laws of the State of Texas; (ii) it has
full corporate power and authority to enter into and perform this Agreement; and
(iii) it has taken, or will take prior to the Effective Date, all action
necessary or required for the lawful execution, delivery, and performance of
this Agreement. Upon the Effective Date, this Agreement will be a legal, valid,
and binding obligation, enforceable in accordance with the terms and conditions
hereof.
(b) Non-contravention. The execution and delivery of this
Agreement, the performance of this Agreement, the transfer of the Preferred
Stock and Common Shares by BioNumerik under this Agreement, and the consummation
of the purchase of the Preferred Stock and Common Shares according to this
Agreement do not violate, conflict with, or constitute a default under (i) any
material bond, debenture, note or other evidence of indebtedness, any material
lease, contract, indenture, mortgage, deed of trust, loan agreement, or joint
venture, or any other agreement or instrument to which BioNumerik is a party or
by which it or its property is bound, where such conflict, violation or default
is likely to result in a Material Adverse Effect to BioNumerik, (ii) its charter
or similar documents, its by-laws, or other organizational documents of
BioNumerik, or (iii) any law, administrative regulation, ordinance or order of
any court or governmental agency, arbitration panel or authority binding upon
BioNumerik or its property, where such conflict, violation or default is likely
to result in a Material Adverse Effect to BioNumerik.
(c) Governmental Consent. No consent from any governmental
entity is required for the execution and delivery of this Agreement or the
consummation by BioNumerik
79
of the equity investment, except for the consent, if any, relating to the HSR
Act and any securities filings required to be made under federal, state or
foreign securities laws, which filings, if any, will be made and approved prior
to the Effective Date.
(d) Court Order. BioNumerik is not subject to any order,
decree or injunction by a court of competent jurisdiction which prevents or
delays the consummation of the transactions contemplated by this Agreement.
(e) Encumbrances. Except for such shareholder approvals or
waivers as will be obtained prior to the Effective Date, BioNumerik has no
outstanding encumbrances or agreements, either written, oral or implied which
will prevent the grant of rights by BioNumerik herein.
(f) Conflicting Agreements. Neither BioNumerik nor any of its
Affiliates is a party to, or are otherwise bound by, any oral or written
contract that will result in any person or entity obtaining any interest in, or
that would give to any third party any right to assert any claim in or with
respect to, any of BioNumerik's or Takeda's rights under this Agreement nor will
BioNumerik undertake any such obligation during the term of this Agreement.
(g) Ownership, Validity, and Enforceability. BioNumerik is the
sole, legal, and true owner or exclusive licensee of the Licensed Patents, the
Licensed Trademarks, and its rights in the Licensed Information and it has full
right and authority to xxxxx Xxxxxx and its licensees the licenses and rights
under this Agreement. No third party has any right, title or interest in the
Territory with respect to the Licensed Patents and Licensed Trademarks and
BioNumerik's rights in the Licensed Information. BioNumerik further represents
and warrants that Exhibit E accurately and completely identifies all patents and
patent applications that as of the date of execution of this Agreement are
within the Licensed Patents and BioNumerik's Licensees' Patents and Information
in the Territory. To its knowledge, as of the date of execution of this
Agreement, BioNumerik represents and warrants that there are no disputes or
controversies regarding ownership, validity, or enforceability of the Licensed
Patents, related patent applications, or Licensed Trademarks.
80
(h) BioNumerik's Licensees' Patents and Information.
BioNumerik has the full right and authority to xxxxx Xxxxxx and its licensees
the right to use all clinical, non-clinical, and other data in the Territory as
provided in this Agreement, which BioNumerik's licensees, including Xxxxxx and
Grelan, have and will have, including BioNumerik's Licensees' Patents and
Information.
(i) Infringement. To BioNumerik's knowledge, by researching,
developing, making, using, selling, offering to sell, and/or importing the
Product into the Territory, Takeda and its Affiliates and sublicensees and
BioNumerik will not infringe any patents, known patent applications, or
trademarks of any third parties, and there is no pending or threatened
litigation relating to such infringement.
(j) Transferred Rights. BioNumerik has not previously
assigned, transferred, conveyed or otherwise encumbered its right, title and
interest in the Licensed Patents as related to the Product in the Territory, in
the Licensed Trademarks or in the Licensed Information, except that:
(i) BioNumerik has granted Xxxxxx an exclusive
license in order to pursue the clinical
development and registration of the Product
in territories outside the United States,
Canada and Japan, where Xxxxxx has exclusive
marketing and sales rights to the Product in
those territories in accordance with the
alliance agreement between BioNumerik and
Xxxxxx; and BioNumerik previously granted to
Xxxxxx a Canada Right of First Offer that
has previously expired; and
(ii) As part of the KI Pharma Joint Venture
Agreement, BioNumerik has granted Grelan and
the KI Pharma Joint Venture an exclusive
license in order to pursue the clinical
development and registration of the Product
in Japan, where Grelan and the KI Pharma
Joint Venture have exclusive marketing and
sales rights to the Product in Japan in
accordance with the KI Pharma Joint Venture
Agreement.
81
(k) Claim Assignment. BioNumerik has not made any assignments,
nor will it make any assignments, of any claim, right of action or any right of
any kind whatsoever, embodied in or arising out of the Licensed Patents or
Licensed Trademarks as related to the Product in the Territory.
(l) Lawsuits. No one has filed a lawsuit against BioNumerik,
including a declaratory judgment lawsuit, nor threatened to file a lawsuit
against BioNumerik, including sending a cease and desist letter, relating to the
Product, the Licensed Patents, the Licensed Trademarks or the Licensed
Information in the Territory.
(m) Full Disclosure. As of the date of execution of this
Agreement, BioNumerik has provided Takeda and/or Takeda's legal, accounting,
financial, or other advisors with the opportunity to review all Material Data in
BioNumerik's possession, and has not concealed from Takeda any Material Data.
Notwithstanding the foregoing, BioNumerik has provided Takeda and/or Takeda's
advisors with the opportunity to review all human subject safety data
(Life-threatening adverse drug experience, Serious adverse drug experience,
Unexpected adverse drug experience, Adverse Event, Serious Adverse Event,
Adverse Drug Reaction, Expectedness of Adverse Drug Reaction, as defined in 21
CFR 312 and/or ICH Guideline E2A) regarding the Product and all non-clinical
safety data that is in its possession as of the date of execution of this
Agreement regarding the Product.
(n) Regulations. BioNumerik is not aware of any safety,
efficacy, or regulatory issues, other than the information that has previously
been made available to Takeda, that would preclude Takeda or BioNumerik, their
licensees and contract service organizations, from researching, developing,
manufacturing, marketing, using, selling, offering for sale, and importing the
Product in the Territory in compliance with the laws and regulations of the
Territory.
(o) Research, Development, and Manufacturing. BioNumerik, its
contractors, and its consultants have conducted, and will continue to conduct,
all research and development, including non-clinical studies and clinical
studies of the Product, and all manufacturing of the Product or components
thereof in accordance with (i) all material provisions of applicable laws,
regulations, guidelines, or standards of the Territory, and other countries in
which such activities
82
are conducted, (ii) the known or published standards of the applicable
Regulatory Agency in the Territory and such other countries, and (iii) the
scientific standards applicable to the conduct of such studies and activities in
the Territory and such other countries. BioNumerik believes it has conducted
appropriate audits of its contract-manufacturers and appropriate diligence
regarding Xxxxxx, Grelan and their contract research organizations (CROs)
relating to compliance with applicable laws and regulations, and has found no
circumstances that BioNumerik believes would be likely to have a Material
Adverse Effect on the development and marketing of the Product in the Territory
as contemplated by this Agreement. Neither BioNumerik, nor, to BioNumerik's
knowledge, any officer, employee or agent of BioNumerik, has made an untrue
statement of a material fact to any Regulatory Agency with respect to the
Product (whether in any submission to such Regulatory Agency or otherwise), or
knowingly failed to disclose a material fact required to be disclosed to any
Regulatory Agency with respect to the Product.
(p) No Debarment. BioNumerik has never, to its knowledge,
employed and will not, to its knowledge, employ, or use, a person or entity
debarred under Section 306(a) or (b) of the Federal Food, Drug, and Cosmetic
Act. Further, BioNumerik, to its knowledge, has not employed and, to its
knowledge, has not used a contractor or consultant that has employed, any
individual or entity debarred by the FDA, or, to the knowledge of BioNumerik,
any individual who or entity which is the subject of an FDA debarment
investigation or proceeding.
(q) Each member of BioNumerik's Board of Directors will
recommend approval of and support approval of and each of BioNumerik's
shareholders owning five percent (5%) or more of the capital stock of BioNumerik
will vote for all aspects of this Agreement with Takeda that require such
shareholder approval, including the issuance of Preferred Stock and Common
Shares as described in this Agreement. BioNumerik agrees that following
execution of this Agreement until thirty (30) days following execution of this
Agreement, BioNumerik will not seek to enter into another alliance transaction
directly concerning the Product in the Territory and also BioNumerik will not,
during such thirty (30) day period referred to in this sentence, participate in
any discussions with a third party concerning any tender or exchange offer,
merger, acquisition or other business combination involving BioNumerik or any of
its subsidiaries. If BioNumerik breaches this warranty by BioNumerik seeking to
enter into another alliance transaction directly concerning the Product in the
Territory or by BioNumerik participating in
83
any discussions with a third party concerning any tender or exchange offer,
merger, acquisition or other business combination involving BioNumerik or any of
its subsidiaries, then Takeda has the right to terminate this Agreement.
21.3 Disclaimer of Consequential and Punitive Damages. UNDER NO
CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR CONSEQUENTIAL
OR PUNITIVE DAMAGES ARISING FROM THE USE OF OR INABILITY TO USE THE PRODUCT OR
FROM ANY OTHER PROVISION OF THIS AGREEMENT, SUCH AS, BUT NOT LIMITED TO, LOST
PROFITS, LOST BUSINESS OR OPPORTUNITIES, BUSINESS INTERRUPTION, OR LOSS OF
BUSINESS REPUTATION. THESE DAMAGES ARE HEREBY DISCLAIMED BY BOTH PARTIES.
21.4 EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT AND ITS
EXHIBITS AND ATTACHMENTS, NEITHER PARTY MAKES OR HAS MADE ANY OTHER
REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED.
ARTICLE XXII
HSR ACT REPORTS
22.1 Within thirty (30) days of the date of execution of this
Agreement, if deemed legally necessary by Takeda in consultation with BioNumerik
but at Takeda's sole discretion, Takeda will file with the Federal Trade
Commission ("FTC") and the Antitrust Division of the United Stated Department of
Justice ("Antitrust Division") the notification and report form (the "Report")
required under the HSR Act, with respect to the transactions contemplated herein
and BioNumerik will reasonably cooperate with Takeda to the extent necessary to
assist Takeda in the preparation of its Report and to proceed to obtain
necessary approvals under the HSR Act, including, but not limited to, the
expiration or earlier termination of any and all applicable waiting periods
required by the HSR Act. Takeda will, within ten (10) days of the date of
execution of this Agreement, determine whether filing of the Report is legally
necessary. In addition, Takeda will make the determination regarding the filing
of the Report as soon as reasonably possible after the execution date of this
Agreement and, if Takeda determines that such filing is legally required, Takeda
will endeavor to file such Report as soon as reasonably possible after the
execution date of this Agreement. If Takeda determines that such filing is not
84
legally necessary, it will so notify BioNumerik within the above-referenced
thirty (30) day period and the Effective Date will occur upon such notification,
subject to obtaining the BioNumerik shareholder approvals described in the
definition of the Effective Date. Unless Takeda determines that a filing is not
legally necessary, Takeda and BioNumerik will equally split any fees required to
be paid to any governmental agency in connection with making such filings. Each
Party will bear its own expenses, including, without limitation, legal fees and
attorneys' fees, incurred in connection with preparing such filings.
BioNumerik and Takeda will use respectively their good faith efforts to
eliminate any concern on the part of any court or government authority regarding
the legality of the proposed transaction, including, if required by federal or
state antitrust authorities, promptly taking all steps to secure government
antitrust clearance, including, without limitation, cooperating in good faith
with any government investigation including the prompt production of documents
and information required by a second request for documents and of witnesses if
requested.
BioNumerik and Takeda will cooperate and use respectively all
reasonable efforts to make all other registrations, filings and applications, to
give all notices and to obtain as soon as practicable all governmental or other
consents, transfers, approvals, orders, qualification authorizations, permits
and waivers, if any, and to do all other things necessary or desirable for the
consummation of the transactions as contemplated hereby. Neither Party will be
required, however, to divest products or assets or to change its business if
doing so is a condition of obtaining approval under the HSR Act or other
governmental approvals of the transactions contemplated by this Agreement. In
addition, neither Party will be required to agree to any limit on the
contemplated agreement.
In the event that (i) within thirty (30) days of the date of execution
of this Agreement, Takeda fails to file a notification under the HSR Act or (ii)
notification of this Agreement is filed under the HSR Act and the expiration or
earlier termination of any notice and waiting period under the HSR Act has not
occurred within ninety (90) days, then either Party will have the right (but
will not be obligated) to terminate this Agreement by providing the other Party
with written notice to such effect. Upon receipt of such written notice, this
Agreement will be null, void and of no effect and neither Party will have any
further rights or obligations hereunder.
85
22.2 Before Takeda acquires a holding of US$50,000,000 or more in
Common Shares (or other voting securities) of BioNumerik, Takeda and BioNumerik
will file with the FTC and the Antitrust Division the Notification Report
required under the HSR Act with respect to the stock acquisitions contemplated
by the Parties. Takeda will also receive HSR approval prior to making any
acquisition that would result in Takeda holding US$50,000,000 or more Common
Shares (or other voting securities) in BioNumerik. All acquisitions of Common
Shares in BioNumerik by Takeda are subject to, and contingent upon, HSR approval
at the time of acquisition, if such approval is required under the HSR Act.
Takeda and BioNumerik agree to cooperate as necessary to prepare and file their
respective HSR Notification Forms and otherwise obtain any required HSR
approvals. Takeda will bear all expenses and fees related to any required HSR
approvals pursuant to this section.
ARTICLE XXIII
MISCELLANEOUS
23.1 Addresses. All notices, reports, and audit requests with respect
to this Agreement will be made in writing and will be given by certified mail,
return receipt requested, by recognized international courier service, or by
personal delivery, properly addressed to the Party for whom it is intended as
follows:
If to Takeda:
[**]
with a copy to:
[**]
If to BioNumerik:
[**]
86
[**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
All notices are deemed effective on the date of receipt or, if delivery
is not accepted, five (5) days after placement with a post office for delivery
by certified mail, return receipt requested as described above and five (5) days
after placement with a recognized international courier service for delivery as
described above.
23.2 Compliance. Each of BioNumerik and Takeda will conduct its
respective obligations and activities under this Agreement, including, but not
limited to, research, development, manufacture, distribution, sale and promotion
of the Product, in compliance with material provisions of all applicable laws,
regulations, guidelines, or standards of the Territory, and other countries in
which such obligations or activities are conducted.
23.3 Execution. This Agreement will be executed in two (2)
counterparts, each of which will be deemed as original.
23.4 Choice of Law. This Agreement and the performance of the Parties
hereunder will be construed in accordance with and governed by the laws of the
State of
New York, United States of America, without reference to choice of law.
23.5 Severability. In the event that any term, provision, or covenant
of this Agreement is determined by a court of competent jurisdiction to be
invalid, illegal or unenforceable, that term will be curtailed, limited or
deleted, but only to the extent necessary to remove such invalidity, illegality
or unenforceability, and the remaining terms, provisions and covenants will not
in any way be affected or impaired thereby.
23.6 Waiver. No waiver by either Party of any breach of this Agreement,
no matter how long continuing or how often repeated, will be deemed a waiver of
any subsequent breach thereof, nor will any delay or omission on the part of
either Party to exercise any right, power, or privilege hereunder be deemed a
waiver of such right, power or privilege, except as stated herein.
23.7 No Agency Relationship. The relationship between the Parties is
that of independent contractor and contractee. Neither Party will be deemed to
be an agent of the other
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in connection with the exercise of any rights hereunder, and neither will have
any right or authority to assume or create any obligation or responsibility on
behalf of the other.
23.8 Article Headings. The Article and Section headings herein are for
purposes of convenient reference only and will not be used to construe or modify
the terms written in the text of this Agreement.
23.9 Force Majeure. Neither Party hereto will be deemed to be in
default of any provision of this Agreement, or for any failure in performance,
resulting from acts or events beyond the reasonable control of such Party, such
as Acts of God, acts of civil or military authority, civil disturbance, war,
strikes, fires, power failures, natural catastrophes or other "force majeure"
events.
23.10 No Solicitation. Neither BioNumerik nor Takeda will directly
solicit any current or future employees of the other Party during the term of
this Agreement to leave the other Party's employment for any reason.
23.11 Final Agreement. This Agreement and its Exhibits and attachments
contain the entire agreement and understanding of the Parties with respect to
the matters contained herein, superceding all prior understandings, whether
written or oral, concerning the subject matter hereof. The Parties may, from
time to time during the continuance of this Agreement, modify, vary or alter any
of the provisions of this Agreement, but only by a written instrument duly
executed by authorized officials of both Parties hereto.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed and delivered by their duly authorized representatives as of the date
first written above. The undersigned represent that they are authorized to sign
this Agreement on behalf of the Parties hereto.
Takeda Pharmaceutical Company Limited
BioNumerik Pharmaceuticals, Inc.
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxxxxxx X. Xxxxxxxx
--------------------------------- --------------------------------
Printed Name: Xxxxxx Xxxxxxxx Printed Name: Xxxxxxxxx X. Xxxxxxxx,
M.D.
Title: Corporate Officer Title: Chairman, CEO & President
General Manager, Division of Americas
Date: October 4, 2004 Date: October 5, 2004
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