AMENDED AND RESTATED SUBLICENSE AGREEMENT
THIS AGREEMENT is made this the first day of January, 1997 by and
between Research Triangle Pharmaceuticals Ltd., a North Carolina corporation
which has its principal place of business at 0000 X. Xxxxxx Xxxxxx, Xxxxxx,
Xxxxx Xxxxxxxx 00000 ("RTP"), and Sparta Pharmaceuticals, Inc., a Delaware
corporation, which has its principal place of business at 000 Xxxx Xxxx,
Xxxxxxx, Xxxxxxxxxxxx 00000-0000 ("Sparta")
Recitals
1. RTP entered into a Technology License Agreement dated March 11, 1991
among Cato Holding Company, Research Triangle Pharmaceuticals Ltd.,
Xxxxxx-Xxxxxxxxxxx Pharma-Logic, Inc. (now "Pharma-Logic, Inc."), Xxxxxx Xxxxxx,
and Xxxxxxx Xxxxxxxxxxx ("Technology License Agreement"), pursuant to which
Research Triangle Pharmaceuticals Ltd. licensed rights to certain drug delivery
technologies from Pharma -Logic, Inc. more particularly described therein but
which have been generally referred to by the parties thereto as the
Microdroplet, Microcrystal and Novel Liposome Technology.
2. On July 13, 1992, RTP and SPARTA entered into a Sublicense Agreement
(the "Sublicense Agreement") with respect the Microdroplet, Microcrystal and
Novel Liposome Technology in the field of anti- cancer applications. This
Sublicense agreement was subsequently amended by the parties on October 27,
1992, March 19, 1993, August 18, 1993, and July 22, 1994 (all of which are
referred to as the "Sublicense Amendments").
3. On or about October 25, 1996 RTP entered into a Technology Purchase
Agreement with Pharma Logic, Inc. pursuant to which RTP acquired rights to
technology formerly licensed under the Technology License Agreement. On the same
date, RTP entered into a License Agreement with RTP Pharma, Inc. ("RTP Pharma")
pursuant to which rights of RTP in the Microdroplet, Microcrystal and Novel
Liposome Technology other than that licensed to SPARTA were licensed to RTP
Pharma, Inc.
4. SPARTA and RTP desire to make technical changes in the Sublicense
Agreement to reflect RTP's status as an owner, rather than a licensee of the
technology, to narrow the scope of the field of use, to change certain financial
terms, and to make other technical amendments as are necessary and appropriate.
NOW, THEREFORE, in consideration of the covenants and premises herein
recited and of other good and valuable consideration, the receipt of which is
hereby acknowledged, RTP AND SPARTA AGREE AS FOLLOWS:
1. Definitions.
The following terms, when initially capitalized, shall have the following
respective meanings:
Affiliate. "Affiliate" shall mean any entity in which SPARTA or any of
its officers, agents, employees, or spouses thereof have a direct or indirect
ownership interest of fifty (50) percent or more, or any
1
person or entity which directly or indirectly, or through one or more
intermediaries, controls, is controlled by, or is under common control with
SPARTA or any of its officers, agents, employees, or the spouses thereof. For
purposes of this paragraph, "control" shall mean the power to direct or cause
the direction of the management and policies of such entity, whether through the
ownership of voting securities, by contract or otherwise.
Agreement. "Agreement" shall mean and refer to this Amended and
Restated License Agreement.
Application. "Application" shall mean and refer to a finished
pharmaceutical formulation within the Field suitable for delivering drugs whose
manufacture, use or sale is covered by Licensed Rights.
Anti-Cancer Agent. "Anti-Cancer Agent" shall mean and refer to an agent
that it is intended to be used alone or in combination with other agents or
modalities such as surgery, radiation, or other non- pharmaceutical procedures
for the prevention, cure or treatment of neoplasia or dysplasia, whether or not
malignant, including but not limited to the primary and meta static lesions of
any such neoplasia or dysplasia.
Best Efforts. "Best Efforts" shall mean and refer to that reasonable
level of efforts undertaken in good faith which the performing party shall exert
which, in the performing party's sole judgment, shall be best suited to
commercialize the licenses granted under this Agreement and to carry out the
intent of this Agreement, taking into account such factors as time and expense
encountered in patent prosecution, regulatory considerations, capital formation,
cost factors derived at the completion of the development, competitive and other
market conditions. "Best Efforts" shall not imply any warranty or guaranty that
the intended result can or will be accomplished.
Continuing License Fees. "Continuing License Fees" shall mean and refer
to any royalty, or license fee, or the equivalent thereof even if not called the
same, other than Up-Front License Fees, received by SPARTA or its Affiliates,
including but not limited to periodic, running or continuing royalties or
license fees, which are compensation to SPARTA or its Affiliates for rights
granted by SPARTA or its Affiliates to utilize the Licensed Rights, to make,
have made, use and sell Applications. Notwithstanding the foregoing, "Continuing
License Fees" shall not include any revenue received by SPARTA or its Affiliates
which reimburses SPARTA for its reasonably allocated costs related to the
development of an Application, nor shall "Continuing License Fees" include any
equity investment made in SPARTA or its Affiliates by a Third Party, or
contribution to a joint venture, or the equivalent thereof, provided that, in
the case of a joint venture, said joint venture uses and practices Applications
and the joint venture becomes a Sublicensee. In the event SPARTA manufactures
and supplies Applications to a Sublicensee or a Sublicensee Affiliate,
Continuing License Fees shall also include any amounts received by SPARTA from
said Sublicensee or Sublicensee Affiliate with regard to the supply of such
Applications by SPARTA to the Sublicensee or Sublicensee Affiliate in excess of
twice SPARTA's reasonably allocated cost of goods for such Application.
CRL. "CRL" shall mean and refer to Cato Research Ltd., a North Carolina
corporation with its headquarters and principal place of business located at
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxx Xxxxxxxx, and that is an affiliate of
RTP.
Default. "Default" shall mean and refer to a material breach of any
material term of this
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Agreement by a party to this Agreement, an Affiliate or a Sublicensee.
FDA. "FDA" shall mean the United States Food and Drug Administration
and its successors.
Field of Use. "Field of Use" or "Field" shall mean and refer to any use
in humans of (1) of busulfan; (2) Aphidicolin and its water soluble ester
derivatives, including glycine ester, and the lipophilic derivatives of
aphidicolin; (3)[*], (4) one Anti-Cancer Agent Application determined pursuant
to Section 2.2, and, (5) any additional therapeutic indication received on the
drugs listed in (1)-(4) preceding following receipt of regulatory approval as a
primary indication as an Anti-Cancer Agent.
First Commercial Sale. "First Commercial Sale" of an Application shall
mean any arm's length transaction which transfers to a purchaser physical
possession and title to an Application. Transfer of possession and title to an
Affiliate or Sublicensee shall not constitute a First Commercial Sale. Sales or
transfers which are made in the drug development process prior to receipt of
approval of a New Drug Application by the FDA for use in humans shall not be
considered a First Commercial Sale.
Fraction. "Fraction" shall mean and refer to a fraction the numerator
of which is one (1) and the denominator of which is ten (10).
Licensed Rights. "Licensed Rights" shall mean and refer to all of the
rights RTP has throughout the Territory with respect to Patent Rights and Other
Proprietary Rights.
Net Selling Price. "Net Selling Price" shall mean and refer to [
Information omitted and filed separately with the Commission under
Rule 24b-2.
]
Notwithstanding the foregoing, no deductions shall be made for [ *
]. Also, no deduction shall be made for[ * ].
Applications or kits including Applications shall be considered sold when billed
out or invoiced. Unless otherwise agreed among the parties, when the Application
is sold as a part of a kit in which multiple products are sold: (a) if there is
only a single pharmaceutical formulation in the kit, the entire price of the kit
shall be considered within the Net Selling Price; (b) if there are multiple
pharmaceutical formulations containing active ingredients in the kit and not all
of such formulations are Applications, for the purpose of determining how to
allocate the purchase price of the kit to Net Selling Price with respect to an
Application included within a kit,
[*Information omitted and filed separately with the Commission under Rule
24b-2.]
3
the Net Selling Price shall include that portion of the selling price of the kit
which is represented by a fraction, the numerator of which is the number of
Applications included in the kit, and the denominator of which is the total
number of pharmaceutical formulations containing active ingredients included in
the kit.
Other Proprietary Rights. "Other Proprietary Rights" shall mean and
refer to any know-how, technical data, techniques, methods, or skills that are:
(1) directly related to the Patent Rights, (ii) are trade secrets owned by RTP,
and (iii) are necessary to practice or useful in practicing the above Patent
Rights. "Proprietary Rights" shall not include any formulation or invention
which is (1) disclosed in the published literature, including a published patent
application or issued patent, (2) generally available to the recipient without
breach of this Agreement, (3) obtained from a Third Party without binder of
secrecy, (4) or known by SPARTA prior to the date hereof and not otherwise
protected by a confidentiality agreement with RTP or not obtained from RTP by
SPARTA by misappropriation or other breach of the common law.
Patent Rights. "Patent Rights" shall mean, with respect to the patents
and patent applications identified in Schedule 1 attached hereto, all rights of
RTP to practice patent applications, issued patents, issued patents arising
therefrom and all additions, renewals, extensions, continuations, continuations
in part, and divisions arising therefrom.
A patent application will cease to be a Patent Right for purposes of
computing royalty obligations hereunder when it has been abandoned or it
(including any parent patent application) has been pending for more than five
(5) years, whichever first occurs, but will be reinstated as a Patent Right for
the purposes of computing royalty obligation on the date a patent issues
thereon. A patent will cease to be a Patent Right in the event of any of the
following:
(1) the patent expires;
(2) the patent is no longer maintained;
(3) all pertinent claims in the patent have been held to be invalid
by an unappealed or unappealable decision of a court of competent
jurisdiction.
Pharma-Logic. Inc. "Pharma-Logic, Inc." shall mean an Illinois
Corporation, formerly Xxxxxx- Xxxxxxxxxxx Pharma-Logic, Inc., which is owned by
Xxxxxx Xxxxxx and Xxxxxxx Xxxxxxxxxxx, and which assigned the Patent Rights and
some of the Other Proprietary Rights to RTP.
PTO. "PTO" shall mean and refer to the United States Patent and
Trademark Office.
Requirements. "Requirements" shall mean and refer to the requirements
of SPARTA or its Sublicensees for a formulated and finished product constituting
an Application, including but not limited to the size and configuration of the
tablet, capsule or formulation, density, volume, stability, other manufacturing
specifications, the quantities of the product needed and when the product is
needed.
RTP. "RTP" shall mean and refer to Research Triangle Pharmaceuticals
Ltd., a North Carolina corporation with its headquarters and principal place of
business at 0000 X. Xxxxxx Xxxxxx, Xxxxxx, Xxxxx Xxxxxxxx 00000.
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RTP Pharma. Inc., a body politic and corporate, duly incorporated
according to the Canadian Business Corporations Act, having its head office and
principal place of business at 0000 Xxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxx, Xxxxxx,
X0X 0X0, in the City of Montreal, Province of Quebec, Canada, which is an
affiliate of RTP.
Sales Year. "Sales Year" shall mean and refer to the period from
January 1 through December 31 of each calendar year unless otherwise agreed by
the parties hereto.
SPARTA. "SPARTA" shall mean and refer to SPARTA Pharmaceuticals, Inc.,
a Delaware corporation, with its headquarters and principal place of business at
000 Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxx 00000-0000.
Sublicense. "Sublicense" shall mean and refer to any agreement in which
SPARTA, or an Affiliate, conveys to a Third Party any or all of SPARTA's rights
to use and practice Licensed Rights within the Field.
Sublicensee. "Sublicensee" shall mean and refer to any Third Party to
whom SPARTA conveys pursuant to a Sublicense any rights of SPARTA to use and
practice Licensed Rights pursuant to this Agreement.
Sublicensee Affiliate. "Sublicensee Affiliate" shall mean any entity in
which a Sublicensee or any of its officers, agents, employees, or spouses
thereof has a direct or indirect ownership interest of fifty (50) percent or
more, or any person or entity which directly or indirectly, or through one or
more intermediaries, controls, is controlled by, or is under common control with
the Sublicensees or any of its officers, agents, employees, or the spouses
thereof. For purposes of this paragraph, "control" shall mean the power to
direct or cause the direction of the management and policies of such entity,
whether through the ownership of voting securities, by contract or otherwise.
Technology License Agreement. "Technology License Agreement" shall mean
and refer to the Technology License Agreement dated March 11, 1991 among Cato
Holding Company, Research Triangle Pharmaceuticals Ltd., Xxxxxx-Xxxxxxxxxxx
Pharma-Logic, Inc. (now "Pharma-Logic, Inc."), Xxxxxx Xxxxxx, and Xxxxxxx
Xxxxxxxxxxx.
Term. "Term" shall mean the duration of this Sublicense Agreement more
particularly set forth in Section 9.1.
Territory. "Territory" shall mean and refer to the entire world.
Third Party. "Third Party" shall mean any entity or person other than
RTP, SPARTA or an Affiliate.
Up-Front License Fees. "Up-Front License Fees" shall mean and refer to
any prepaid or up-front
5
royalty payments, license fees or other equivalent lump sum payments made to
SPARTA or its Affiliates, by a Sublicensee or other Third Party, for the purpose
of obtaining the right to make, have made, use or sell Applications using the
Licensed Rights.
2. RTP Obligations.
2.1. Grant of License. In consideration of the obligations of SPARTA to
RTP set forth in this License Agreement, RTP hereby grants to SPARTA and its
Affiliates and SPARTA hereby accepts, for itself and on behalf of its
Affiliates, upon the terms and conditions set forth in this Agreement, subject
to the determination of an Anti-Cancer Agent set forth in Section 2.2. of this
Agreement, the exclusive right, throughout the Territory, to:
2.1.1. to use and practice the Licensed Rights to make, have
made, use and sell Applications within the Field; and,
2.1.2. to sublicense the right to use and practice the
Licensed Rights to make, have made, use and sell Applications within
the Field provided that:
(a) Each Sublicense will be subject to the terms of this
Agreement, and no term in any Sublicense may be inconsistent with this
Agreement;
(b) The rights granted to each Sublicensee shall be no broader
than the fights granted to SPARTA in this Agreement;
(c) SPARTA shall be responsible for the performance of its
Sublicensees and Sublicensee Affiliates;
(d) If SPARTA cancels this Sublicense Agreement in its
entirety, any rights SPARTA may have under a Sub license shall revert
directly to RTP;
(e) Every Sublicense shall contain a statement setting forth
the conditions under which SPARTA's rights, privileges and license
hereunder shall terminate;
(f) Each Sublicense shall provide language substantially to
the effect that, to the extent applicable given the field of use,
territory and scope of license granted within the Sublicense: (i) the
obligations of SPARTA to RTP set forth in Subsections 4.1., 4.2.,
4.5.2., (to the extent not directly paid by SPARTA on behalf of each
respective Sublicensee), 4.5.4., 4.5.5., 4.5.6., 4.5.7., 4.7., 4.8.,
5.1., 5.2., 5.3., 9.1., 9.2., 9.4. (including all subsections), 9.5.
(including all subsections), and 10 (including all subsections thereof)
of this Agreement, as well as all applicable Definitions, shall be
binding upon Sublicensees and Sublicensee Affiliates in their
respective capacities just as they are binding upon SPARTA; (ii) if
this Agreement is terminated for any reason, RTP shall be exclusively
entitled to the benefits of such Sublicenses, and (iii) in no event
shall RTP be liable for or otherwise responsible for any breach by
SPARTA of the terms of any Sublicense or for any other obligation of
SPARTA arising out of any such Sublicense, regardless of whether such
liability or obligation arises from nonfeasance, misfeasance or
malfeasance or other action on the part of SPARTA, even if RTP should
assume the ongoing obligations of SPARTA as set forth in (g) below;
(g) Each Sublicense shall provide language substantially to
the effect that (i) RTP shall receive from each Sublicensee notice of
any breach of the Sublicense by SPARTA, (ii) in the event of
6
the breach of the Sublicense by SPARTA, and SPARTA does not
cure the breach as set forth in the Sublicense Agreement, subject to
the limitation of Subsection 2.1 .2.(f)(iii) immediately above, RTP at
its option may elect to assume the ongoing duties and responsibilities
of SPARTA pursuant to said Sublicense or to terminate such Sublicense;
(h) In order that RTP can determine compliance with this
Agreement and related agreements, and so that RTP can provide copies of
Sublicenses to Pharma-Logic, Inc., SPARTA agrees to forward to RTP a
copy of any and all proposed Sublicenses at least twenty (20) days
prior to their final approval and execution;
(i) SPARTA shall forward to RTP annually a copy of such
reports received by SPARTA from its Sublicensees and Sublicensee
Affiliates during the preceding twelve-month period as shall be
pertinent to a royalty accounting under said sublicense agreements;
(j) Each Sublicense shall include language which provides
that: (i) the Sublicensee under such Sublicense shall procure product
liability insurance naming Xxxxxx Xxxxxx, Xxxxxxx Xxxxxxxxxxx, RTP
(including its officers and directors), RTP Pharma, Inc. and its
officers and directors, Cato Holding Company (and its officers and
directors)(for so long as RTP is controlled by Cato Holding Company),
Pharma-Logic, Inc., and the University of Miami as named insureds, and
shall be in an amount not less than One Million Dollars ($1,000,000)
per occurrence, and Five Million Dollars ($5,000,000) in the annual
aggregate, subject to reasonable deductibles which are based upon the
Sublicensee's or Sublicensee Affiliate's ability to self-insure with
respect to the amount of the deductible and excluding from such
insurance liability which arises by reason of the negligence, bad faith
or illegal act of any of the foregoing persons or entities; (ii) in
lieu of (i) above, each Sublicensee or Sublicensee Affiliate may
self-insure if it can present to RTP an audited balance sheet as of the
end of the last fiscal year and an unaudited balance sheet less than
forty-five (45) days old which shows that the Sublicensee has
unencumbered liquid assets in excess of $5,000,000; (iii) said
Sublicensee or Sublicensee Affiliate shall indemnify and hold harmless
Xxxxxx Xxxxxx, Xxxxxxx Xxxxxxxxxxx, Pharma-Logic, Inc., the University
of Miami, Cato Holding Company, RTP Pharma, Inc. and RTP from and
against any costs, damages, expenses, or charges, including reasonable
attorneys' fees, arising from any claim that any Application as
marketed or sold contains latent or non-latent defects or is inherently
unsafe or dangerous, except where such claim arises from the
negligence, bad faith or illegal act of any of the foregoing persons or
entities;
(k) Each Sublicense shall have provisions obligating the
Sublicensee pursuant to the Sublicense: either (i) to pay minimum
royalties from and after [*] years after the execution of the
Sublicense, in addition to any development costs or research costs
reimbursed under the Sublicense; or (ii) to pay substantially all of
the development costs for each Application which is the subject of the
Sublicense within reasonable milestones established for said
development;
(1) Each Sublicense shall provide language substantially to
the effect that: (i) upon the failure of the Sublicensee under said
Sublicense to meet the minimum use requirements established as set
forth in Subsection 2.1 .2.(k) above, the Sublicense shall terminate
immediately;
(m) No Sublicensee or Sublicensee Affiliate shall have any
right to sublicense any of the Licensed Rights; and,
(n) Each Sublicensee shall at all times during the term of
this Agreement and thereafter, indemnify, defend and hold harmless RTP,
its directors, officers, employees, affiliates, RTP Pharma, Inc. and
its officers and directors, Cato Holding Company, its trustees,
directors, officers, employees, and affiliates, Xxxxxx Xxxxxx, Xxxxxxx
Xxxxxxxxxxx, Pharma-Logic, Inc., and the University of Miami
[*Information omitted and filed separately with the Commission under Rule
24b-2.]
7
against all claims and expenses, including legal expenses and
reasonable attorneys' fees, arising out of the death or injury to any
person or persons or out of any damage to property and against any
other claim, proceeding, demand, expense and liability of any kind
whatsoever resulting from the production, manufacture, sales, use,
consumption or advertisement of the Application arising from any
obligation of SPARTA or Sublicensee or arising out of or pursuant to
the Sublicense Agreement between SPARTA and the Sublicensee, except
where such death, injury, or damage occurs to RTP or its employees or
agents, or to subjects being tested by RTP directly or indirectly,
through no substantial fault of SPARTA or said Sublicensee, or where
such death, injury, damage, claim, proceeding, demand, expense or
liability results substantially from the negligence, illegal act or bad
faith of RTP, its employees or agents; and,
(o) Each Sublicensee shall be responsible for paying for all
of the development costs with respect to each Application licensed
pursuant to the Sublicense.
2.2. Anti-Cancer Agent. If SPARTA should decide it wishes to
commercialize one Anti- Cancer Agent Application, it shall notify RTP
of its desire to do so and shall provide RTP with sufficient
information to describe the nature of the intended Anti-Cancer Agent
Application. RTP shall, in response, notify SPARTA as to whether:
(a) RTP or RTP Pharma has a pre-existing bona fide plan to
begin development of that Application within a one year period, as
evidenced by a business plan that has been approved by the RTP Board of
Directors or that of RTP Pharma, Inc.,
(b) The proposed Anti-Cancer Agent Application is comprised of
all or a part of a category of Anti-Cancer Agents that has been the
subject of another license agreement entered into by RTP or RTP Pharma,
(c) The proposed Anti-Cancer Agent Application has been the
subject of active licensing negotiations by RTP or RTP Pharma within
the past year, as evidenced by: (i) written documentation showing
interest by a Third Party in securing a license for such Application,
(ii) , if there have been real and material negotiations, letters of
intent have been negotiated, or proposed license- arrangements have
been exchanged and discussed, or RTP or RTP Pharma has expended more
than negligible resources to attempt to effect such a license, or
(iii). RTP or RTP Pharma has engaged in other reasonable activities
leading to the development qr marketing of the Anti-Cancer Application
and such negotiations have not been terminated or have not lapsed by
default or inactivity, or,
(d) the proposed Anti-Cancer Agent Applications is being the
subject of substantial and material development activity by RTP or RTP
Pharma (such as chemical synthesis (but not by itself), pharmacology,
kinetics, metabolism, assay development, formulation development,
manufacturing feasibility, efficacy, safety, toxicology, or other
similar studies) to prepare or leading to the preparation of an
Investigational New Drug Application (IND) with respect to an
Application before the United States Food and Drug Administration or to
prepare similar regulatory documents for similar regulatory authorities
in other jurisdictions, and if any of (a) through (d) above apply,
SPARTA may not undertake the development of that Anti-Cancer Agent. If
RTP responds that none of (i) through (iv) apply, SPARTA may include
one such Anti-Cancer Agent within the Field of Use and Subsection 2.1.
and, upon doing so, SPARTA may not include within the Field of Use any
other Anti-Cancer Agent pursuant to this Subsection 2.2.
2.3. Taxol. SPARTA and RTP agree to work in good faith to establish a
50:50 joint venture to evaluate and develop Taxol and related derivatives
utilizing the Patent Rights, it being understood that no such joint venture
shall be established until the terms and conditions of such joint venture have
been documented in
8
a joint venture agreement that has been executed by the parties thereto. RTP
agrees that it will withhold the licensing of Taxol to any party other than
SPARTA or said joint venture for a period of one year following the date of this
Agreement after which time, if no joint venture has been consummated, RTP shall
be free to license the Patent Rights associated with Taxol Applications to other
parties.
3. Additional RTP Obligations.
3.1. Delivery of Proprietary Data and Information Concerning Patent
Rights. RTP shall, as reasonably requested by SPARTA, except where such
undertaking would cause a breach of RTP's obligation to Third Parties or
cause an undue burden on RTP, furnish to SPARTA copies of and provide
access to written material that is owned by RTP and that is within the
possession of RTP with respect to the Licensed Rights as is reasonably
necessary, without creating an undue burden on RTP, to commercialize the
Licensed Rights within the Field and to carry out the purposes of this
Agreement. Except where such undertaking would cause a breach of RTP's
obligation to Third Parties, SPARTA shall have the reasonable opportunity
to discuss the technical aspects of manufacturing with appropriate RTP
technical personnel. All such material furnished to SPARTA shall be billed
to and paid for by SPARTA at RTP's reasonable cost of reproduction thereof
Subject to the terms of Third Party confidentiality rights, RTP shall
exercise good faith efforts to inform SPARTA of any material adverse
safety information of which RTP becomes aware concerning the safety of
Applications within the Field.
3.2. Clinical Research. Drug Development and Manufacturing . Recognizing
that SPARTA and RTP are both young companies with a need to cooperate in
order to maximize economies of scale and to avoid duplicate efforts
related to drug development and manufacturing of applications utilizing
same drug delivery technologies, SPARTA and RTP agree that:
3.2.1. Clinical Research. Except as otherwise provided in the
agreement effective November 27, 1991 by and between
SPARTA and CRL, to the extent requested by SPARTA and to
the extent available by RTP and its affiliates, Cato
Research Ltd. ("CRL") and Cato Pharma Canada, Ltd., RTP
will make available its staff or that of said affiliates,
to conduct ongoing clinical research activities related to
the Applications being developed by SPARTA as requested by
SPARTA and at SPARTA's expense, as mutually agreed by the
applicable parties.
3.2.2. Process and Product Development. SPARTA agrees to contract
with RTP or its affiliates (which may include but not be limited
to RTP Pharma, and a planned joint venture between Societe
General de Financement du Quebec and Patheon, Inc.) to conduct,
at SPARTA's expense as mutually agreed by the applicable parties,
all process and product development work other than animal and
clinical studies, and other than such work as is conducted by
SPARTA itself; provided that RTP and its affiliates,
respectively, have the resources to provide such services and can
provide such services on cost-competitive basis and in a timely
fashion.
3.2.3. Product Manufacturing. RTP and its affiliates (which may
include but not be limited to RTP Pharma, and a planned joint
venture between Societe General de Financement du Quebec and
Patheon, Inc.), shall have a right of first refusal to provide,
at SPARTA's expense, all of SPARTA's manufacturing Requirements
with respect to Applications, provided that RTP and its
affiliates, respectively, have the resources to provide such
services and can provide such services on cost- competitive basis
and in a timely fashion. The foregoing right of first refusal
shall not apply to manufacturing of Applications by a Sublicensee
or Sub licensee Affiliate.
9
3.3. Regulatory Information. Except where such undertakings would cause a
breach of RTP's obligations to Third Parties, RTP will execute such
instruments, including but not limited to authorizing references to RTP's
regulatory filings, including its master file, and take such other action
as SPARTA may reasonably request in order to obtain regulatory approvals
of Applications.
3.4. Royalty on Manufacturing Data. If SPARTA provides data and know-how
to RTP pursuant to Section 4.2., and such manufacturing data and know-how
is licensed by RTP to a Third Party, RTP shall pay to SPARTA a royalty in
the amount of [*] of the manufacturing royalty received by RTP from said
Third Party. Said royalty shall be paid by RTP to SPARTA in the same
manner as that provided in Sections 4.5.4., 4.5.5., 4.5.6. and 4.5.7. with
respect to royalties paid by SPARTA to RTP and shall be subject to the
same rights by SPARTA as those provided for RTP in Sections 4.5.4.4.5.5.,
4.5.6. and 4.5.7.
4. SPARTA Obligations.
4.1. Patent Prosecution. Except for those costs accrued or paid by RTP
prior to the effective date of this Agreement (which costs shall be the
sole liability and responsibility of RTP), SPARTA shall pay its Fraction
of all reasonable U.S. and foreign patent attorney, patent registration,
issuance, or filing fees, search fees, legal fees, and patent translation
and patent maintenance expenses with respect to the Patent Rights or Other
Proprietary Rights; provided, however, that if said expense relates solely
to a use within the Field, then SPARTA shall pay and be responsible for
one hundred percent (100%) of said costs.
4.2. Provision of Manufacturing Data. In recognition that the technology
comprising the Licensed Rights has application outside of the field, and
in recognition that information related to the manufacture of one
Application may potentially be utilized for other Applications, except
where such undertaking would cause a breach of SPARTA's obligation to
Third Parties, upon request of RTP, and at RTP's expense for procurement
of copies thereof and the time of the individuals involved, SPARTA and its
Affiliates shall provide RTP with access to all manufacturing feasibility
studies, all data on manufacturing processes, all FDA submissions related
to manufacturing of Applications, all manufacturing specifications, and
all information on manufacturing scale- up for production of Applications
which may be utilized or produced during the process of producing
Applications within the Field, whether such manufacture is performed by
SPARTA, its Affiliates or its Sublicensees, or by Third Party
manufacturers under contract with SPARTA, its Affiliates or its
Sublicensees. In addition, SPARTA shall make arrangements necessary so
that RTP shall have the right to inspect and observe the operation of all
facilities in which Applications are produced during such times in which
Applications are being produced, and RTP shall have the reasonable
opportunity to discuss the technical aspects of manufacturing with
appropriate technical personnel in each such manufacturing facility. In
addition, RTP will have the right to assay samples of Applications to
perform tests on samples from any production run of Applications.
4.3. Product Development and Manufacturing. SPARTA agrees to conduct its
clinical research, product development and manufacturing as provided in
Subsection 3.2.
4.4. Sale and Promotion of Licensed Products. SPARTA agrees to use its
Best Efforts to sell Applications within the Territory, to promote the
sale of Applications within the Territory, and to enter into Sublicenses
to effect the sale and promotion of Applications within the Territory.
4.5. Royalties. SPARTA shall pay to RTP a Royalty as follows:
4.5.1. Royalty on Applications Distributed by SPARTA. In the event SPARTA
or its Affiliates directly
[*Information omitted and filed separately with the Commission under Rule
24b-2.]
10
or indirectly distribute, use or sell Applications within the Field
pursuant to Subsection 2.1.1., SPARTA shall pay to RTP a royalty in the
amount of [*] of the Net Selling Price with respect to all other
Applications, provided the Application sold is covered by a valid and
unexpired claim of a patent included within Patent Rights, or a patent
application for the period provided for in the Patent Rights. Furthermore,
in the event Applications are sold in a country where there are no issued
patents applicable to such sale, and SPARTA, its Affiliates, or
Sublicensees are not the exclusive manufacturer or distributor of the
subject Applications in such country, the royalty rate provided herein
shall be reduced by [*], and shall continue at such rate for the five-year
period referred to in the definition of Patent Rights or until such a
patent issues or such exclusivity is gained.
Only a single royalty shall be payable with respect to the sale or use of
an Application, irrespective of the number of claims of licensed Rights
used in the sale or use thereof.
4.5.2. License Fees on Sublicenses. In the event SPARTA shall sublicense
all or a portion of the Licensed Rights within the Field to a Sublicensee
pursuant to Subsection 2.1.2., SPARTA shall pay to RTP an amount equal to
(i) [*]of Continuing License Fees received by SPARTA with respect to such
Sublicensee or its Sublicensee Affiliate, plus [*]with respect to all
other Applications, of the Up-front License Fees received by SPARTA with.
respect to such Sublicensee or its Sublicensee Affiliate. Furthermore, in
the event Applications are sold in a country where there are no issued
patents applicable to such sale, and SPARTA, its Affiliates, or
Sublicensees are not the exclusive manufacturer or distributor of the
subject Applications in such country, the royalty rate provided herein
shall be reduced by [*] and shall continue at such rate for the five-year
period referred to in the definition of Patent Rights or until such a
patent issues or such exclusivity is gained.
4.5.3. Minimum Royalty. The parties acknowledge that prior to the
effective date of this Agreement SPARTA has paid to RTP Minimum Royalties
in the amount of [*] pursuant to the Sublicense Agreement and the
Amendments. From the effective date of the Agreement forward, a Minimum
Royalty shall be paid by SPARTA in the following amounts on or before the
last day of each calendar year following execution of this agreement as
indicated below:
Calendar Year End Minimum Royalty Due
----------------- -------------------
1997 $[ * ]
1998 $[ * ]
1999 $[ * ]
2000 $[ * ]
Each calendar year
thereafter until 2007
or until the amounts
paid as minimum royalties
are $[ * ] in addition to
amounts previously paid by
SPARTA under the Sublicense
Agreement and the Sublicense
Amendments $[ * ]
Any Minimum Royalty payments made pursuant to this Subsection 4.5.3. shall
be credited against SPARTA's obligation to make royalty payments pursuant
to Subsections 4.5.1., 4.5.2. and 4.5.4.
4.5.4. Payment of Royalties. After crediting any Minimum Royalty payments
paid pursuant to Subsection 4.5.3. above, royalties payable pursuant to
Subsections 4.5.1., and 4.5.2. above, shall be paid within ninety (90)
days following the termination of each quarter during the Sales Year.
Royalty payments shall be accompanied
[*Information omitted and filed separately with the Commission under Rule
24b-2.]
11
by a schedule showing the number and type of products sold by SPARTA, its
Affiliates, Sublicensees or Sublicensee Affiliates during the calendar
quarter, and a computation of the royalties due.
Royalty payments that are not paid for whatever reason within ninety (90)
days of the end of the calendar quarter are delinquent on the next day (or
the 91st day) and are the subject to the addition of interest at the
annual rate of Citibank prime plus 3%, calculated from the date of
delinquency (91 days after the end of the calendar quarter) to the date a
negotiable payment check is received by RTP.
Except as provided below, royalty payments shall be paid in United States
dollars at RTP's headquarters, or to such other place as RTP may
reasonably designate, consistent with the laws and regulations controlling
in any foreign country. If any currency conversion shall be required in
connection with the payment of royalties hereunder, such conversion shall
be made by using the exchange rate prevailing at a first-class foreign
exchange on the last business day of the calendar quarter reporting period
to which such royalty payments relate.
Only a single Up-Front License Fee and/or Continuing Royalty shall be
payable with respect to an Application, irrespective of the number of
claims of Licensed Rights used in the manufacture, use or sale thereof.
4.5.5. Books and Records. SPARTA and its Affiliates shall keep such
accurate records, books of account, and product catalogues as will show in
detail the number and type of Applications on which royalty is payable
hereunder manufactured and sold and the selling prices therefor, and such
records and books of account, as well as other records relating to
materials procurement, manufacturing, inventory, sales, and licenses as
will permit verification thereof SPARTA and its Affiliates shall permit
RTP's representatives to take excerpts from and make copies of any entries
or details of such records.
SPARTA and its Affiliates shall keep true and accurate accounts of the
sales of any pharmaceutical products and kits covered by this Agreement
and of the royalties payable to RTP hereunder, and SPARTA and its
Affiliates shall deliver to RTP written reports to accompany each of the
payments specified in this Subsection 4.8., setting forth, in reasonable
detail, the computation of the royalties then payable (if none, so
stating) and the underlying facts.
SPARTA and its Affiliates shall furnish such other reports as may be
reasonably required by RTP and reasonably available to SPARTA and its
Affiliates as to sales and prospective sales under this Agreement.
SPARTA shall deliver to RTP copies of all Sublicense agreements, insurance
certificates and such other evidence as RTP may reasonably request to
determine compliance with this Agreement.
4.5.6. Foreign Taxes. Any and all foreign taxes levied on account of
royalties accruing under this Agreement remittable from a country in which
provision is made in the law or by regulation for withholding shall be
deducted from such royalty, shall be paid by SPARTA and its Affiliates to
the proper taxing authority, and proof of payment will be secured and sent
to RTP as evidence of such payment. Notwithstanding the foregoing, in the
event that the revenues received by SPARTA or an Affiliate cannot be
converted into U.S. Dollars and/or cannot be repatriated from a foreign
country, such royalty payments shall be made for the benefit of RTP, as
directed by RTP, subject to applicable law.
4.5.7. Audit. RTP shall have the right, at its own expense, during the
term of this Agreement and for a period of one (1) year following any
termination of this Agreement, to have an independent public accountant
examine the relevant books and records of SPARTA or its Affiliates during
reasonable business hours, to determine whether appropriate accountings
and payments have been made by SPARTA or its Affiliates; provided,
however, that SPARTA and its Affiliates shall not be obligated to keep
records for more than three years after the period has occurred to which
the audit relates; provided, further, that such accountant shall report
12
to RTP only as to the accuracy of the royalty statements and payments
required to be made hereunder.
SPARTA shall make prompt adjustment and payment to RTP to compensate for
any errors and/or omissions disclosed by the review or audit performed in
accordance with this Agreement, and shall be liable for that amount plus
interest as set forth in Subsection 4.8.4 above, from the time said
payment should have been made. It after conducting an audit as set forth
above, it is determined that there has been an underpayment in the amount
of four percent (4%) or more of the amount due to RTP, the cost of such
audit shall be paid by SPARTA.
4.6. Annual Maintenance Fee. The parties acknowledge that prior to the
effective date of this agreement, SPARTA has paid to RTP [ * ] in annual
maintenance fees pursuant to the Sublicense Agreement and the Sublicense
Amendments. From the effective date of this Agreement forward, SPARTA
shall pay to RTP an Annual Maintenance Fee in the amount of [ * ] by
December 30, 1997, [ * ] by December 30, 1998, [ * ] by December 30,
1999, and [ * ] by December 30 of each year thereafter until the
termination of the agreement for annual maintenance fees in addition to
amounts previously paid for annual maintenance fees by SPARTA under the
Sublicense Agreement and the Sublicense Amendments.
4.7 Information Sharing. So long as this requirement is not unreasonably
burdensome, and except where such undertaking would cause a breach of
SPARTA's obligations to Third Parties, SPARTA and its Affiliates shall
provide to RTP on a royalty-free basis, and without any additional
consideration of any kind except RTP's performance pursuant to this
Agreement, upon reasonable request by RTP, all information, compilations,
analyses, reports, studies, data, copies of regulatory filings and
proceedings which SPARTA and its Affiliates have developed or acquired
which is related to the Licensed Rights or any Application within the
Field and which concerns or relates to preclinical and clinical research,
safety, use, pharmacokinetics and efficacy. SPARTA and its Affiliates
shall automatically provide, without request by RTP, copies of their
findings or reports which are required by the FDA or similar regulatory
agencies. SPARTA and its Affiliates shall make good faith efforts to
notify RTP of any finding of theirs with respect to any material adverse
safety information of which they become aware concerning an Application
being developed or marketed by them. All such material furnished to RTP
shall be billed to and paid for by RTP at SPARTA's reasonable cost of
reproduction thereof.
4.8. Regulatory Information. Except where such undertakings would cause a
breach of SPARTA's obligations to Third Parties, SPARTA and its Affiliates
will execute such instruments, including but not limited to authorizing
references to SPARTA's or its Affiliates' regulatory filings, including
their master file, and take such other action as RTP may reasonably
request in order to obtain regulatory approvals of finished pharmaceutical
formulations utilizing the Licensed Rights outside the Field.
4.9. Use of Confidential Information. With respect to the disclosures
required to be made pursuant to Subsections 4.2., 4.7., and 4.8., the
parties acknowledge and recognize that such disclosures are made subject
to the confidentiality provisions hereof and that the only purposes
consistent with this Agreement for which such proprietary information may
be used by the receiving party (or in the case of SPARTA its Affiliates,
Sublicensees or Sublicensee Affiliates, or in the case of RTP, parties who
would be Affiliates but for the fact that their relationship arises
through RTP rather than SPARTA, sublicensees of the Licensed Rights from
RTP, or Third Party manufacturers under contract with any of the foregoing
entities) are for the development and manufacture of Technology
Applications (as defined in Subsection 4.6.) to which such receiving party
has rights under the Licensed Rights, and not for the purpose of impairing
the rights granted or reserved to either party pursuant to the terms of
this Agreement.
5. Protection of Patent Rights and Other Proprietary Data.
[*Information omitted and filed separately with the Commission under Rule
24b-2.]
13
The following actions shall be taken to protect the Patent Rights and
Other Proprietary Rights:
5.1. Filing and Maintenance of Patents. RTP shall initially select those
countries or patent offices where it wishes to have patents filed or
maintained to perfect or protect the Patent Rights. At the request of
SPARTA, RTP shall undertake filings in those countries or patent offices
where SPARTA wishes to have patents filed or maintained to perfect or
protect the Patent Rights which were not initially selected by RTP. RTP
shall take steps which are necessary to file, obtain (if possible) and
maintain such patent protection and RTP shall have the right to select
patent counsel to carry out the filings, but it shall consult with and
keep SPARTA fully informed regarding the status of such filings and the
selection of counsel. SPARTA shall pay to RTP SPARTA's Fraction of said
patent filing and maintenance expenses; provided, however that if said
patent filing or other related patent protection or maintenance activity
solely relates to the Patent Rights within the Field, or if SPARTA has
requested a filing in a country were RTP had previously elected not to
file, SPARTA shall be responsible for payment of One Hundred Percent
(100%) of such costs. SPARTA shall have the right, at its own cost and
expense to file for any patents encompassing all or a part of the Licensed
Rights in any country which RTP fails to file hereunder, provided that the
patent counsel who shall undertake such filings must be approved by RTP,
which approval shall not be unreasonably withheld.
Upon request by SPARTA, and at SPARTA's expense, RTP shall prepare and
execute such documents and take such other actions as are reasonably
necessary and appropriate to seek extension of the term of any patents
included within the Patent Rights pursuant to the terms of the Patent Term
Restoration Act of 1984. RTP shall have the authority to select counsel
and control the content of such filings, but it shall consult with and
keep SPARTA fully informed regarding the status of such filings and the
selection of counsel.
5.2. Defense of the Patent Rights. Upon receipt of notice of any
threatened or pending claim, suit, or cause of action whatsoever, alleging
that the practice or use of the Licensed Rights infringe upon any other
valid patent or is otherwise invalid, the party hereto receiving said
notice shall so inform the other party. RTP shall have the first right and
the duty to investigate and defend the claim, provided, if at any time, it
no longer wishes to act on its own, and it is requested to do so by
SPARTA, it shall continue such investigation at SPARTA's expense. RTP
shall consult with and keep SPARTA fully informed regarding the status of
such investigation and defense and the selection of counsel. In the event
that RTP, at any time, fails to undertake the defense of said claim,
SPARTA shall have the right to defend the claim, provided that no
settlement shall occur except with the consent of RTP, which consent shall
not be unreasonably withheld. All costs of such defense incurred by either
party, shall first be set off (in proportion to the relative expenditures
by each party) against any recovery from said suit, and then the balance,
if any, of such costs shall be credited against the royalty and other
payments due to RTP pursuant to Subsections 4.5.1., 4.5.2.,and 4.5.3. Any
excess recovery shall be treated as Net Selling Price as set forth herein
and royalties shall be paid to RTP accordingly. RTP and SPARTA,
respectively, shall provide each other with all necessary support and
assistance reasonably required in investigating and defending the Licensed
Rights.
If the settlement or the outcome of the litigation requires that SPARTA
pay royalties to a Third Party because it is determined or agreed that the
Patent Rights, when practiced with respect to a given Application,
infringe the rights of the Third Party to whom the royalties are paid, the
amount of such royalty payments shall be deducted from the royalty and
other payments due to RTP pursuant to Subsections 4.5.1., 4.5.2.,and
4.5.3. with respect to such Application, but in no event shall RTP be
responsible for payment to SPARTA for any royalty payments previously paid
by SPARTA to RTP, and in no event shall RTP have to pay to SPARTA any
deficiency between the level of royalties paid to RTP by SPARTA and the
level of royalties paid by SPARTA to said Third Party. If during the term
of this Agreement, after consultation and review by an independent patent
attorney mutually selected by RTP and SPARTA, it is determined that it is
advisable to seek a license from any Third Party under any patent in order
to avoid infringement of said patent by exercise of the Licensed Rights
within the Field, then RTP and SPARTA shall in good faith negotiate a
license with said Third Party, and any
14
payments which must be made by SPARTA pursuant to said license shall be
deducted from royalty and other payments due to RTP pursuant to
Subsections 4.5.1., 4.5.2.,and 4.5.3.
No right of SPARTA pursuant to this Subsection 5.2. may be assigned to a
Sublicensee, in whole or in part. SPARTA may, however, at its option,
delegate its rights under this Section to an individual who may coordinate
and undertake such decisions and activities on behalf of SPARTA, its
Affiliates, its Sublicensees and Sublicensee Affiliates, so long as RTP
only has to deal with one party or person.
5.3. Protection Against Infringement. Upon receipt of any information
supporting a claim that any Third Party whatsoever is infringing on the
Patent Rights, the party hereto receiving said notice shall so inform the
other party. RTP shall have the first right and the duty to take any
necessary or appropriate actions to prevent the infringement of the Patent
Rights provided, if at any time, it no longer wishes to act on its own,
and it is requested to do so by SPARTA, it shall continue such action at
SPARTA's expense. RTP shall consult with and keep SPARTA fully informed
regarding the status of such action and the selection of counsel. In the
event that RTP, at any time, fails to undertake or continue the
prosecution of said claim, SPARTA shall have the right to prosecute the
claim, within its discretion. All costs of such action shall first be set
off (in proportion to the relative expenditures by each party) against any
recovery from said suit, if any, and any excess of costs over recoveries
shall be credited toward SPARTA's obligations to make payments to RTP as
set forth in Subsections 4.5.1., 4.5.2.,and 4.5.3. of this Agreement. All
recoveries in excess of the costs of said action, if any, shall be then be
treated as Net Selling Price received by SPARTA pursuant to Subsection
4.8.1. and royalties shall be paid according to that Section. In the event
RTP or SPARTA wishes to settle with the alleged infringer, said party
shall first procure the consent of the other which consent will not be
unreasonably withheld, and RTP will take reasonable steps to attempt to
procure the consent required from Pharma-Logic, Inc. under the Technology
Purchase Agreement. Each party shall provide the other party with all
necessary support and assistance reasonably required by the requesting
party in investigating and prosecuting infringement of the Patent Rights.
Upon request by SPARTA, at SPARTA's expense, RTP shall prepare and execute
such documents, and to take such other actions, as are reasonably
necessary and appropriate to take all appropriate action under the
provision of U.S. Public Law 98-417, to bring a patent infringement action
if SPARTA is notified that a Third Party has filed an application for a
similar product under Subsections 5.05(b) and 5.05(j) of the U.S. Food,
Drug and Cosmetic Act. SPARTA and RTP shall consult with and keep each
other fully advised of all their activities under this paragraph. Like
coordination and support from each party to the other shall be imputed in
foreign countries where similar statutory or regulatory structures exist.
RTP shall have the authority to select counsel and control the content of
such filings provided that such content must be reasonably acceptable to
SPARTA. Costs of SPARTA pursuant to this paragraph shall be treated in the
same way as costs of SPARTA as set forth in the first paragraph of this
Subsection.
5.4. Assistance of RTP. RTP shall provide all necessary assistance in the
protection or defense of any claim with respect to the Licensed Rights at
no compensation but with reimbursement for RTP's expenses out of the
proceeds or recoveries resulting from the litigation.
5.5. Jointly Developed Inventions. Any discoveries or inventions made
jointly by employees or agents of SPARTA and RTP while undertaking joint
development efforts shall be jointly owned by RTP and SPARTA, and,
accordingly, said inventions may be practiced by either or both of the
joint owners.
6. Representations and Warranties of SPARTA.
6.1. Due Incorporation, Existence. SPARTA is a corporation duly organized
and validly existing under the laws of the State of Delaware, with all
requisite power necessary to enter into this Agreement.
15
6.2. Authority Relative to this Agreement. The execution, delivery and
performance of this Agreement by SPARTA and consummation of the
transactions contemplated hereby have been duly and effectively authorized
by all necessary corporate action, and, to the best of SPARTA's knowledge,
will not violate any provision of law applicable to SPARTA. To the best of
SPARTA's knowledge, the execution, delivery and performance of this
Agreement by SPARTA and the consummation of the transactions contemplated
hereby do not require the consent or approval of any person or public
authority not already obtained.
6.3. No Brokers. SPARTA has not entered into any contract, arrangement, or
understanding with, and is not aware of any claims or basis for any claims
by, any person or firm which may result in the obligation of RTP to pay
any finder's fee, brokerage or agent's commission or other like payment in
connection with the negotiations leading to this Agreement or the
consummation of this Agreement.
7. Representations and Warranties of RTP.
7.1. Due Incorporation. Existence. RTP is a corporation duly organized and
validly existing under the laws of the State of North Carolina, with all
requisite power necessary to enter into this Agreement.
7.2. Authority Relative to this Agreement. The execution, delivery and
performance of this Agreement by RTP and consummation of the transactions
contemplated hereby have been duly and effectively authorized by all
necessary corporate action. To the best of RTP's knowledge, the execution,
delivery and performance of this Agreement by RTP and the consummation of
the transactions contemplated hereby do not require the consent or
approval of any person or public authority, and, to the best of RTP's
knowledge and understanding, do not conflict with the terms of the
Technology Purchase Agreement.
7.3. Encumbrance. RTP covenants that at no time during the term of this
Agreement (nor at any time thereafter so long as SPARTA shall enjoy a
right originating under this Agreement to practice any of the Licensed
Rights) shall RTP assign, transfer, encumber, hypothecate or grant rights
in or with respect to the rights granted to SPARTA herein.
7.4. Non-Interference. RTP represents and warrants that SPARTA's entering
into this Agreement and performing under it shall not constitute any
interference with the advantageous contractual relations of any Third
Party.
7.5. Non-Infringement. RTP represents and warrants that it is unaware of
any claim by any Third Party that SPARTA's practice of the Patent Rights
will infringe any valid U.S. patent.
7.6. Ownership. RTP represents and warrants that it has the rights to
grant to SPARTA the rights to Licensed Rights as set forth herein, and
that such rights are not the subject of any encumbrance, lien or claim of
ownership by any Third Party, except as set forth in the Technology
Purchase Agreement. RTP has granted no other license within the Field
respecting the Licensed Rights or any part thereof for use in
Applications.
7.7. Litigation. Except as set forth in the European opposition to the
filing with the European Patent Office with respect to the microcrystal
technology, RTP has not received any notice of any claim from any person
asserting that any of the Licensed Rights infringe or may infringe any
patent or other proprietary rights of any person. Except as set forth in
the aforesaid opposition, RTP is not aware of any infringement by others
of its patents or Other Proprietary Rights in any of the Patent Rights, or
any violation of the confidentiality of any of its proprietary
information. To the best of its knowledge, RTP is not making unauthorized
use of any confidential information or trade secrets of any person,
including without limitation, any former employer of
16
any past or present employee of RTP. Except as set forth in the European
opposition to the filing with the European Patent Office with respect to
the microcrystal technology, to the best of its knowledge, there are not
any actions, suits or proceedings pending or, to the knowledge of RTP,
threatened, against RTP before a court, arbiter, or any other governmental
or non-governmental department, commission, board, bureau, agency or
instrumentality which could affect the Licensed Rights or RTP's interest
therein.
7.8. No Brokers. RTP has not entered into any contract, arrangement or
understanding with, and is not aware of any claim or basis for any claim,
by any person or firm, which may result in the obligation of SPARTA to pay
any finder's fee, brokerage or agent's commission or other like payment in
connection with the negotiations leading to this Agreement or the
consummation of this Agreement.
7.9. Disclosure. To the best of its knowledge, no representation or
warranty by RTP in this Agreement, nor any statement made or documents
provided to SPARTA by or on the behalf of RTP in the course of SPARTA's
investigation process of deciding to enter this Agreement, contains any
untrue statement of material fact, or omits or will omit to state a
material fact necessary to make the statements not misleading. RTP does
not know or any fact that has not been disclosed to SPARTA that materially
or adversely affects or, so far as RTP can reasonably foresee, may
materially or adversely affect the Licensed Rights.
7.10. Confidentiality Agreements. RTP has entered into no confidentiality
agreements with, nor has it made any other undertakings to, Third Parties
of the type referred to in the exceptions to its disclosure obligations in
Subsection 3.1. which would cause a breach of any such undertakings to
Third Parties or otherwise prevent the disclosure of information as set
forth in Subsection 3.1. absent such exceptions. RTP and SPARTA agree that
the disclosures of information which RTP is required to make to SPARTA
pursuant to this Agreement are necessary and appropriate to License the
Licensed Rights to SPARTA and for SPARTA to develop Applications pursuant
to such license.
8. Indemnification.
8.1. Indemnification. SPARTA and its Affiliates shall at all times during
the term of this Agreement and thereafter, indemnify, defend and hold
harmless RTP, its trustees, directors, officers, employees, and
affiliates, RTP Pharma, Inc., its trustees, directors, officers, employees
and affiliates, Cato Holdings, Inc., its trustees, directors, officers,
employees, and affiliates, Xxxxxx Xxxxxx, Xxxxxxx Xxxxxxxxxxx and
Pharma-Logic, Inc., against all claims and expenses, including legal
expenses and reasonable attorneys fees, arising out of the death of or
injury to any person or persons or out of any damage to property and
against any other claim, proceeding, demand, expense and liability of any
kind whatsoever resulting from the production, manufacture, sale, use,
consumption or advertisement of the Application arising from any
obligation of SPARTA hereunder, except where such death, injury, or damage
occurs to RTP or its employees or agents, or to subjects being tested by
RTP directly or indirectly, through no substantial fault of SPARTA, or
where such death, injury, damage, claim, proceeding, demand, expense or
liability results from the negligence, bad faith or illegal act of RTP,
its employees or agents.
8.2. Insurance. In addition to the duty of SPARTA and its Affiliates to
indemnify RTP as set forth above, and not in lieu thereof, SPARTA and its
Affiliates shall procure and maintain for any Applications sold
incorporating or utilizing Licensed Rights, product liability insurance
naming Xxxxxx Xxxxxx, Xxxxxxx Xxxxxxxxxxx, RTP, its directors, officers,
employees, and affiliates, RTP Pharma, Inc., its trustees, directors,
officers, employees and affiliates, Cato Holding Company, its directors,
officers, employees, and affiliates, Pharma-Logic, Inc. and the University
of Miami as named insureds, and such insurance shall be in an amount, with
respect to claims arising in the United States, not less than One Million
Dollars ($1,000,000) per occurrence and Five Million Dollars ($5,000,000)
in the annual aggregate, subject to reasonable deductibles which are based
upon the ability of SPARTA and its Affiliates to self-insure with respect
to the amount of the
17
deductible and, in addition, with respect to claims arising outside the
United States, not less than One Million Dollars ($1,000,000) per
occurrence and Five Million Dollars ($5,000,000) in the annual aggregate,
subject to reasonable deductibles which are based upon the Sublicensee's
ability to self-insure with respect to the amount of the deductible and
excluding from such insurance both in and outside of the United States
liability which arises by reason of the negligence, bad faith or illegal
act of any of the foregoing persons or entities.
9. Term. Termination and Default.
9.1. Term. This Agreement will become effective upon the date hereinabove
written and, unless sooner terminated in accordance with any of the
provisions herein, will remain in lull force and effect for the life of
the last to expire of the patents included in the Patent Rights or a
patent application for the period provided in the definition of Patent
Rights. Expiration of this Agreement under this provision shall not
preclude SPARTA, its Affiliates, Sublicensees and Sublicensee Affiliates
from continuing to develop and market Applications and to use Licensed
Rights on a royalty-free basis, provided SPARTA shall have paid all sums
accrued under the Agreement which are due upon such expiration.
9.2. Default. In the event that either party defaults or breaches any of
the provisions of this Agreement, the other party will have the right to
terminate this Agreement by giving written notice to the defaulting party;
provided, however, that if the defaulting party cures the default or
breach within sixty (60) days after the notice is given, this Agreement
will continue in lull force and effect; provided, further, that any
default which is a monetary default such as, but not limited to, any
monetary obligations set forth in Subsection 4.5 (and all subsections
thereof), 4.6 and 5.2., must be corrected or cured within thirty (30)
days. The failure on the part of either of the parties hereto to exercise
or enforce any right conferred upon it hereunder will not be deemed to be
a waiver of any right, nor operate to bar the exercise or enforcement
thereof at any time or times thereafter. Any right to terminate this
Agreement pursuant to this Subsection, shall be in addition to, and shall
not be exclusive of, or prejudicial to, any other rights or remedies the
non-defaulting party may have on account of the default of the other
party, notwithstanding any other provision of Subsection 9.4. or 9.5.
9.3. Insolvency of SPARTA. It during the term of this Agreement, SPARTA
becomes bankrupt or insolvent or if the business of SPARTA is placed in
the hands of a receiver or trustee, whether by the voluntary act of SPARTA
or otherwise, RTP shall have the right to terminate this Agreement by
giving written notice of termination to SPARTA.
9.4. Effect of Termination.
9.4.1. Termination by RTP Pursuant to Subsection 9.2. or 9.3. In the
event of termination by RTP pursuant to Subsection 9.2. or 9.3.:
(a) SPARTA shall retain its rights under Subsection 2.1. with respect
to any Application for which SPARTA is not in Default, subject to the
provisions of Subsections 4.2, 4.4, 4.5 and 5.2 and all other
applicable provisions of this Agreement with respect to such
Application and for which (i) SPARTA has filed a Phase I
Investigational New Drug Application (IND) (or a similar regulatory
filing in Canada, Great Britain, the European Common Market countries,
or Japan) in good faith conformity with FDA (or a similar regulatory
agency in Canada, Great Britain, the European Common Market countries,
or Japan) requirements and which is in due course approved or (ii)
which SPARTA is developing; all other rights of SPARTA pursuant to this
Agreement shall lapse, provided that for a period of one year after
such termination, SPARTA shall continue to be able to sell, subject to
the payment provisions of Subsection 4.8., other Applications which
SPARTA has in its possession at the time of termination;
18
(b) The provisions of Subsections 5.3. (last sentence), 5.4. (first and
last sentence), 8.1., 8.2., 10. (except 10.9) shall continue in full
force and effect; and,
(c) The provisions of Subsections 4.5 and 5.2. shall continue for as
long as monies due to RTP by SPARTA as of the date of termination have
not been paid, and the provisions of Subsection 4.5. shall continue for
as long as any revenues with respect to any Application are received by
SPARTA, its Affiliates, its Sublicensees or their Sublicensee
Affiliates.
(d) RTP shall assume all rights of SPARTA pursuant to any Sublicense
with respect to Applications for which SPARTA has not retained rights
pursuant to (a) above;
9.4.2. Sales after Termination. Upon the termination of this Agreement,
SPARTA shall notify RTP of the amount of goods or products constituting
Applications SPARTA or one of its Sublicensees has on hand as of the
time of such termination and SPARTA shall have a license to sell those
goods or products, but no more, provided that SPARTA pays the royalty
thereon at the rate and at the time provided for herein.
9.5. Partial termination.
9.5.1. Partial Termination by SPARTA. SPARTA can terminate this
Agreement in its entirety or on a patent application-by-patent
application, patent-by-patent, or country-by- country basis by giving
RTP written notice at least three (3) months prior to termination, and
thereupon terminate the use or sale by SPARTA, its Affiliates, its
Sublicensees, and Sublicensee Affiliates of Applications in that
country.
9.5.2. Patent Costs. In the event SPARTA does not pay for patent costs
pursuant to Subsection 4.1. or 5.2. associated with any jurisdiction,
and RTP does not terminate this Agreement pursuant to Subsection 9.3.,
SPARTA's rights pursuant to Subsection 2.1. in such jurisdiction shall
lapse and revert to RTP, and such jurisdiction shall no longer be
within the Territory. In such event, the patent shall be excluded from
this Agreement for that country and all rights to use and sell
Applications within that country as well as all rights to receive
revenues and profits from the commercialization and exploitation of the
Licensed Rights in that country shall belong to RTP.
9.5.3. Default on Payment of Annual Maintenance Fee. If SPARTA shall
default with respect to any payment due pursuant to Subsection 4.6.,
all rights of SPARTA pursuant to this Agreement shall lapse.
10. Miscellaneous.
10.1. Governing Law. This Agreement shall be governed and construed in
accordance with the law of North Carolina.
10.2. No Agency or Partnership. It is understood that in giving effect
to this Agreement, SPARTA shall not be an agent or partner of RTP for
any purpose and that its relationship to RTP shall be that of an
independent contractor. SPARTA shall not have the right to enter into
contracts or to incur expenses or liabilities on behalf of RTP.
Similarly, it is understood that in giving effect to this Agreement,
RTP shall not be an agent or partner of SPARTA for any purpose and that
its relationship to SPARTA shall be that of an independent contractor.
RTP shall not have the right to enter into contracts, nor incur
expenses or liabilities, on behalf of SPARTA.
19
10.3. Assignment. This Agreement will be binding upon and inure to the
benefit of the successors in interest of the parties hereto. However,
SPARTA cannot assign its rights in this Agreement or any interest
therein without consent by RTP, which consent will not be unreasonably
withheld, provided that SPARTA may assign its rights in this Agreement
or Licensed Rights owned by it to any Affiliate or to any corporation
with which it may merge or consolidate or to any corporation with which
it may transfer all or substantially all of its assets to which this
Agreement relates, without obtaining the consent of RTP, if the entity
to which the assets or Licensed Rights are transferred would have a net
worth, immediately after such merger, consolidation or transfer equal
to or in excess of that of SPARTA immediately prior to the transfer and
such entity assumes all of the obligations and liabilities of the
assigning party pursuant to this Agreement. Upon any such assignment or
transfer, except in the case of an assignment to an Affiliate, the
assigning party shall be relieved of liability hereunder, and the terms
of this Agreement referring to SPARTA hereunder shall include any such
assignee or transferee. An attempted assignment by SPARTA except as
provided herein shall be void.
10.4. Severance. In the event any term or provision of this Agreement
shall for any reason be held to be invalid, illegal, or unenforceable
in any respect, then, unless such term or provision goes to the root of
the Agreement and subject as otherwise agreed, this Agreement shall
continue in full force and effect save that the term or provision shall
be deemed to be excised therefrom and shall be interpreted and
construed as if such term or provision, to the extent the same shall
have been held to be invalid, illegal, or unenforceable, had never been
contained herein.
10.5. Confidentiality.
10.5.1. Use of Confidential Information. During the term of this
Agreement and for a period of five years thereafter, and, with
respect to manufacturing and regulatory information and
documentation, for a period of twenty-five years after the date
hereof both parties shall hold in confidence and not use for any
purpose inconsistent with the Agreement the other party's
proprietary or confidential information, including but not limited
to information concerning trade secrets and Other Proprietary
Rights disclosed by either party to the other pursuant to this
Agreement. Neither SPARTA nor RTP shall have any obligations with
respect to confidentiality or use if said information:
(a) was known to the recipient prior to the date of the disclosure
thereof unless covered by a prior confidentiality agreement; or,
(b) was known to the public or generally available to the public prior
to the date of the disclosure to the recipient; or,
(c) becomes available to the public or generally available to the
public subsequent to the date it was received through no act or failure
on the part of the recipient; or,
(d) materially corresponds in substance to information disclosed or
made available to the recipient any time by a Third Party having a bona
fide right to disclose or make available the same; or,
(e) is required to be disclosed to a governmental agency for the
purpose of securing essential or desirable authorizations, privileges
or rights from governmental agencies or otherwise provided that the
agency is itself not required to maintain the information as
confidential by contract or operation of law; or,
(f) is subsequently and independently developed by employees of the
receiving party or Affiliates who had no access to the confidential
information and who had no knowledge of the confidential information
disclosed; or,
20
(g) is required to be disclosed for the purpose of filing or
prosecuting patent applications, or carrying out any litigation
concerning Licensed Rights, but this information shall not be
considered a waiver of confidentiality with respect to any information
which is subject to the attorney-client privilege; or
(h) is required to be disclosed for purposes of investigating,
manufacturing or marketing Applications, subject to the consent of the
party who provided said information, which consent shall not be
unreasonably withheld.
10.5.2. Publications. Except as otherwise provided in the exceptions
set forth in Subsection 10.5.1. above, neither party shall submit for
written or oral publication any manuscript, abstract or the like which
includes data or any other information generated and provided by the
other without first obtaining the prior written consent of the other
party, which consent shall not be unreasonably withheld, provided,
however, that valid commercial reasons may exist for withholding such
consent. Nothing contained herein shall be construed as precluding
either party from making, in its discretion, any disclosures of
information of any type which (a) relate to the safety, efficacy,
toxicology and pharmacokinetic characteristics of the microdroplet,
microcrystal, or liposome technology incorporated within the Licensed
Rights to the extent that either party may be required by law to make
disclosures of such information.
10.6. Compliance with Law. The rights and obligations set forth in this
Agreement shall be subject to all laws, both present and future, of any
government having jurisdiction over either of the parties hereto or the subject
matter hereof, and to orders, regulations, directions or the like of such
government or any
10.7. Arbitration.
10.7.1. General Rules. Except as to issues relating to the validity,
construction or effect of any patent licensed hereunder, any and all
claims, disputes or controversies arising under, out of, or in
connection with this Agreement, which have not been resolved by good
faith negotiations between the parties, shall be resolved by final and
binding arbitration in Durham or Wake County, North Carolina under the
rules of the American Arbitration Association then obtaining, provided
that any request for arbitration is filed within 180 days from the date
that the party seeking relief knew or through the exercise of due
diligence should have known of the facts giving rise to the dispute.
The arbitrators shall have no power to add to, subtract from or modify
any of tile terms or conditions of this Agreement. Any award rendered
in such arbitration may be enforced by either party in any court of
competent jurisdiction.
10.7.2. Patents. Claims, disputes or controversies concerning the
validity, construction or effect of any patent licensed hereunder shall
be resolved in any court having jurisdiction thereof.
10.7.3. Validity of Patents. In the event that, in any arbitration
proceeding, any issue shall arise concerning the validity, construction
or effect of any patent licensed hereunder, the arbitrators shall
assume the validity of all claims as set forth in such patent; in any
event the arbitrators shall not delay the arbitration proceeding for
the purpose of obtaining or permitting either party to obtain judicial
resolution of such issue, unless an order stating such arbitration
proceeding shall be entered by a court of competent jurisdiction.
Neither party shall raise any issue concerning the validity,
construction or effect of any patent licensed hereunder in any
proceeding to enforce any arbitration award hereunder or in any
proceeding otherwise arising out of any such arbitration award.
10.8. Laws. This Agreement shall be construed in accordance with the laws of the
State of North Carolina but the scope and validity of any patent comprised
within the Patent Rights shall be governed by the applicable laws of the country
granting such patent. In the event that any dispute hereunder is not otherwise
resolved, the parties hereto acknowledge and accept jurisdiction over any such
dispute in the United States District Court for the Middle District of North
Carolina.
21
10.9. Force Majeure. No failure or omission by a party hereto in the performance
of any obligation of this Agreement, other than a failure to make any monetary
payment when due, shall be considered a breach if caused by reasons beyond the
reasonable control of such party, including but not limited to: acts of God; act
or omissions of any government; any rule, regulation or order issued by any
governmental authority or by any officer, department, agency or instrumentality
thereof; fire; storm; flood; earthquakes; accident; war; rebellion;
insurrection; riot; invasion; strikes; and lockouts; provided, however, that the
affected party shall use its Best Efforts to avoid or remove such causes or
non-performance and shall continue performance with the utmost dispatch whenever
such causes are removed. When such circumstances arise, the parties shall
discuss what, if any, modification of the terms of this Agreement may be
required to arrive at an equitable solution.
10.10. Notice. Notice hereunder shall be in writing and shall be duly dispatched
in the U.S. Mails by registered mail, by Federal Express courier, duly
addressed:
if to SPARTA to: J. Hook, President & CEO
SPARTA Pharmaceuticals, Inc.
000 Xxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000-0000
or if to RTP to: Xxxx X. Xxxx, President & CEO
Research Triangle Pharmaceuticals Ltd.
0000 X. Xxxxxx Xxxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
with a copy to: Xxxxxx X. Xxxxxxx
Xxxxxxx & Xxxxxxx, P.A.
0000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx Xxxxxxxx 00000
or in either case, to such other address as the recipient party shall previously
have designated for the purpose by written communication to and actually
received by the giving party.
10.11. Waiver. The failure of either party to assert a right hereunder or to
insist upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term of condition by the other party.
10.12. Non-Use of Names. Except as required by law, rule, or regulation, and
except as provided in the third paragraph of this Subsection 10.12., no
statement concerning the signing of this Agreement shall be made or released to
any medium or public communication by either party, except with the prior
written approval of the other.
Except as set forth in the third paragraph of this Subsection 10.12., SPARTA
shall not use RTP's name or the names of any inventor in connection with any
product or process or for any promotional purposes, without the prior written
consent of RTP.
Notwithstanding the provisions immediately above, it is understood that SPARTA
shall be free to release to prospective investors, investment bankers,
regulatory authorities and other appropriate parties, the existence of and such
information concerning the terms and conditions of this Agreement, and SPARTA's
operations under it, which SPARTA may deem reasonably necessary in connection
therewith, or that may be required by applicable law regulating disclosure of
information with respect to potential investment.
22
10.13. Trademarks of SPARTA. SPARTA and its Sublicensees, at its and their
expense, shall be responsible for the selection, registration and maintenance of
all trademarks which it or they may employ in connection with Applications and
shalt own and control such trademarks.
10.14. Captions. The captions used in this Agreement are for convenience only
and shall not be construed as being part of this Agreement.
10.15. Entire Understanding; Merger; Amendment. This Agreement represents the
entire understanding between the parties, and supersedes all other agreements,
express or implied, between the parties concerning Applications, Licensed Rights
or any other subject matter of this Agreement. This agreement shall not be
amended except pursuant to a writing executed by both parties. Notwithstanding
the foregoing, any approvals previously given by RTP with respect to Sublicenses
granted by SPARTA under the Sublicense Agreement and the Sublicense Amendments
shall remain in full force and effect.
IN WITNESSETH HEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date hereof first set
forth.
Research Triangle Pharmaceuticals Ltd.
By /s/ Xxxx X. Xxxx
-----------------------------
SPARTA Pharmaceuticals, Inc.
By /s/ Xxxxx X. Xxxx
-----------------------------
23
Schedule 1
Patents and patent applications being licensed by RTP to Sparta
pursuant to the amended and restated license agreement
- Phospholipid-coated microcrystals: injectable formulations of water-insoluble
drugs Purchased from Pharma-Logic, Inc.
United States Patent #5,091,187 issued 2/25/92
- Phospholipid-coated microcrystals: injectable formulations of water-insoluble
drugs Purchased from Pharma-Logic, Inc.
United States Patent #5,091,188 issued 2/25/92
- Sustained release of water-soluble bio-molecules and drugs using
phospholipid-coated microcrystals, microdroplets, and high concentration
liposomes Purchased from Pharma-Logic, Inc.
United States Patent #5,246,707 issued 9/21/93
US reissue Patent #Re. 35,338 issued 9/24/96
application #08/304,225
- Sustained release of water-soluble bio-molecules and drugs using
phospholipid-coated microcrystals, microdroplets, and high concentration
liposomes Purchased from Pharma-Logic, Inc.
United States application #08/663,867 filed 9/6/94
- Phospholipid-coated microcrystals: injectable formulations of water-insoluble
drugs Purchased rom Pharma-Logic, Inc.
Canada application #2078990 filed 4/23/91
Europe application #91908933.4 filed 4/23/91
India Patent #173,056 issued 4/22/91
Japan application #3-508854 filed 4/23/91
Korea application #702656/92 filed 4/23/91
Mexico Patent #178176 issued 5/29/95
Russia application #92016352 filed 4/23/91
Taiwan Patent #61654 issued 7/31/93
South Africa Patent #91/3122 issued 4/29/92
- Method of inducing local anesthesia using microdroplets of a general
anesthetic Purchased from Pharma-Logic, Inc.
United States Patent #4,622,219 issued 11/11/86
- Microdroplets of water soluble drugs and injectable formulations containing
same Purchased from Pharma-Logic, Inc.
United States Patent #4,725,442 issued 2/16/88
- Method of inducing local anesthesia using microdroplets of a general
anesthetic Purchased from Pharma-Logic, Inc.
Austria Patent #153,926 issued 2/6/91
Belgium Patent #153,926 issued 2/6/91
Canada Patent #1,242,645 issued 10/4/88
Switzerland Patent #153,926 issued 2/6/91
Germany Patent #P348104 issued 2/6/91
Europe Patent #153,926 issued 2/6/91
France Patent #153,926 issued 2/6/91
Great Britain Patent #153,926 issued 2/6/91
Japan Patent #2,518,605 issued 5/17/96
Luxembourg Patent #153,926 issued 2/6/91
Netherlands Patent #153,926 issued 2/6/91
Sweden Patent #153,926 issued 2/6/91
- Compressed fluid technology for insoluble drug delivery
Owned by Research Triangle Pharmaceuticals Ltd.*
United States provisional patent #60/005,340 issued 10/17/95
- Composition and method of preparing water-insoluble substances Owned by
Research Triangle Pharmaceuticals Ltd.
United States application #08/701,483 filed 8/22/96
* the patent application will be co-owned with the University of Texas
