FIRST AMENDED AND RESTATED ROYALTY STREAM PURCHASE AGREEMENT
Exhibit 10.15
FIRST AMENDED AND RESTATED ROYALTY STREAM PURCHASE AGREEMENT
This FIRST AMENDED AND RESTATED ROYALTY STREAM PURCHASE AGREEMENT (the “Agreement”) is entered into and effective as of the 11th day of August, 2005 (the “Effective Date”), by and between Accentia Biopharmaceuticals, Inc., a Florida corporation (“Accentia”), and Pharmaceutical Product Development, Inc., a North Carolina corporation (“PPD”).
WHEREAS, Accentia and Mayo Foundation For Medical Education and Research (“Mayo”), a Minnesota charitable corporation, have entered into that certain Mayo Foundation For Medical Education and Research License Agreement with an effective date of February 10, 2004 (the “Mayo License Agreement”); and
WHEREAS, Accentia and BioDelivery Sciences International, Inc. (“BDSI”), have entered into that certain License Agreement between BioDelivery Sciences International, Inc. and Accentia, dated April 12, 2004 (the “BDSI License Agreement”); and
WHEREAS, Accentia is currently sublicensing pharmacy(s) with regard to selling certain Products and intends to develop and sell certain FDA Products (each, as defined below) pursuant to rights obtained from the Mayo License Agreement and the BDSI License Agreement; and
WHEREAS, the parties entered into that certain Royalty Stream Purchase Agreement, dated September 7, 2004 (the “Original Agreement”), pursuant to which PPD purchased a stream of royalty payments based on sales of the Products; and
WHEREAS, Accentia now desires that PPD provide certain clinical trial services to Accentia in exchange for an increase in certain royalty payments due under the Original Agreement; and
WHEREAS, Section 9(k) of the Original Agreement provides that it may be amended by mutual written agreement of the parties; and
WHEREAS, the parties now desire to amend and restate the Original Agreement in order to (i) increase certain payments to PPD under the Original Agreement, and (ii) set forth certain terms and conditions pursuant to which PPD shall provide certain clinical trial services to Accentia;
NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements herein contained, the parties hereto agree as follows.
1. DEFINITIONS. In addition to capitalized terms defined elsewhere in this Agreement, the following capitalized terms shall have the meanings set forth below:
(a) “Affiliate” means with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with such other Person. For purposes of this definition, a Person shall be deemed to control another entity if it owns or controls, directly or
indirectly, at least fifty percent (50%) of the voting securities of another entity (or other comparable ownership interest for an entity other than a corporation) or if it has management control of the other entity.
(b) “Compounded Product” shall mean a Product that contains or comprises an antifungal prepared by a pharmacy that provides prescription fulfillment by extemporaneous compound preparation.
(c) “Enabling Agreements” means the Mayo License Agreement and the BDSI License Agreement.
(d) “FDA Product” means a Product that is approved by the FDA or any other Regulatory Authorities, including without limitation the SinuNase Formulation.
(e) “IND” means an Investigational New Drug Application filed with the FDA necessary to commence human clinical trials in conformance with applicable laws and regulations.
(f) “License Quarter” means each quarter that begins on the first day of each January, April, July and October during the Term; provided, however, that the first License Quarter will commence on the Effective Date and end on the day preceding the first day of the next License Quarter.
(g) “Lien” means, with respect to any agreement or other asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset.
(h) “Net Sales” means the amount invoiced by Accentia, or its Affiliates and sublicensees, or any of them, on all sales of Products, less: (i) sales, excise or use taxes shown on the face of the invoice; (ii) credits for defective or returned Products; (iii) regular trade and discount allowances and any amount actually excluded or disallowed by Medicare, Medicaid, third party payer or insurance company. Sales of Products by Accentia or an Affiliate or sublicensee of Accentia to any Affiliate or sublicensee that is a reseller thereof shall be excluded, and only the subsequent sale of such Products by Affiliates or sublicensees of Accentia to unrelated parties shall be deemed Net Sales hereunder. Net Sales shall also include all settlement amounts, payments and damages received by Accentia or its Affiliates and sublicensees, or any of them, which result from litigation or disputes related to or arising from the sale of the Products, including amounts received from enforcement of the Enabling Agreements as described in Paragraph 6(f).
(i) “Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, but not including a government or political subdivision or any agency or instrumentality of such government or political subdivision.
(j) “Product” means a therapeutic product that (i) is in suitable form for commercial sale and (ii) contains or comprises an antifungal, including but not limited to amphotericin-B, itraconazole or voriconanzole (“Antifungal”), together with any formulation ingredients,
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regardless of the formulation or mode of administration of such Product, for use in the treatment of chronic sinusitis. For the sake of clarity, the term Product shall include an FDA Product.
(k) “Regulatory Authorities” means any governmental authority in any country responsible for regulatory approvals and post-marketing surveillance of any FDA Product. Regulatory approvals refer to any approvals required for clinical experimentation or commercialization of any FDA Product. Regulatory approvals shall also include receipt of a pricing or reimbursement approval.
(l) “Royalty Stream” means: (i) six percent (6%) of Net Sales for all Products that are not FDA Products; (ii) seven percent (7%) of Net Sales for all FDA Products, excluding the SinuNase Formulation; and (iii) fourteen percent (14%) of Net Sales for the SinuNase Formulation. Payments of the Royalty Stream shall be made on a quarterly basis in accordance with Section 6. By way of illustration and example, if an Accentia sublicensee invoices a customer $220 for the sale of a non-FDA Product (i.e., the sublicensee’s Net Sales is $220), then the Royalty Stream on the transaction, which is payable by Accentia to PPD, would be 6% of $220 or $13.20 regardless of any royalty due Accentia from the sublicensee.
(m) “SinuNase Formulation” means any aqueous suspension that includes amphotericin B and inactive excipients used to put the amphotericin B in suspension. For sake of clarity, a SinusNase Formulation includes the formulation set forth in the Investigator Brochure included in Section 5 of IND No. 69,611, as amended, and any successor formulation, but does not include a formulation that includes amphotericin B embedded in a cochleate delivery vehicle. For further clarity, a formulation that includes amphotericin B embedded in a cochleate delivery vehicle would be subject to a seven percent (7%) Royalty Stream pursuant to Section 1(l)(ii), but not a fourteen percent (14%) Royalty Stream pursuant to Section 1(l)(iii).
| 2. | PURCHASE AND SALE OF ROYALTY STREAM |
(a) Purchase and Sale. Upon the terms and subject to the conditions of this Agreement: (a) PPD agrees to purchase from Accentia, and Accentia agrees to sell and pay to PPD, upon execution of this Agreement the Royalty Stream for a one-time payment of $2,500,000 in cash (the “Purchase Price”).
(b) Payment. The Purchase Price shall be due and payable not later than thirty (30) days following September 7, 2004. Accentia hereby acknowledges the timely receipt of the Purchase Price from PPD.
(c) No Assumed Obligations. Notwithstanding any provision in this Agreement or any other writing to the contrary, PPD is acquiring only the Royalty Stream and is not assuming any liability or obligation of Accentia of whatever nature, whether presently in existence or arising or asserted hereafter, whether under any of the Enabling Agreements or otherwise. All such liabilities and obligations shall be retained by and remain obligations and liabilities of Accentia.
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| 3. | REPRESENTATIONS AND WARRANTIES OF ACCENTIA |
Accentia hereby represents and warrants to PPD as follows.
(a) Corporate Existence and Power. Accentia is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all corporate powers and all licenses, authorizations, consents and approvals required to carry on its business as now conducted.
(b) Corporate Authorization. The execution, delivery and performance by Accentia of this Agreement, and the consummation by Accentia of the transactions contemplated hereby are within Accentia’s corporate powers and have been duly authorized by all necessary corporate action on the part of Accentia. This Agreement has been duly executed and delivered and constitutes a valid and binding agreement of Accentia.
(c) Governmental Authorization. The execution, delivery and performance by Accentia of this Agreement does not require any notice to, action or consent by or in respect of, or filing with, any governmental authority, Mayo or BDSI.
(d) Non-Contravention. The execution, delivery and performance by Accentia of this Agreement does not and will not: (i) contravene or conflict with the corporate charter or bylaws of Accentia; (ii) contravene or conflict with or constitute a violation of any provision of any law or regulation binding upon or applicable to Accentia, which contravention, conflict or violation could reasonably be expected to have an adverse effect on Accentia or the Royalty Stream; (iii) contravene or conflict with or constitute a violation of any judgment, injunction, order or decree binding upon or applicable to Accentia, which contravention, conflict or violation could reasonably be expected to have an adverse effect on Accentia or the Royalty Stream; (iv) constitute a default under any agreement or give rise to any right of termination, cancellation or acceleration of any right or obligation of Accentia or to a loss of any benefit relating to the Royalty Stream; or (v) result in the creation or imposition of any Lien on the Royalty Stream or other assets of Accentia (except for any Lien in favor of PPD).
(e) [This paragraph is intentionally omitted.]
(f) No Undisclosed Material Liabilities. There are no material liabilities related to the Royalty Stream of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, and there is no existing condition, situation or set of circumstances that could reasonably be expected to result in such a liability.
(g) Litigation. There is no action, suit, investigation or proceeding (or any basis therefor), of which Accentia has received notice, pending or, to the knowledge of Accentia, threatened, before any governmental authority or arbitrator, which has or could materially affect the Royalty Stream or the business of Accentia. There have been no claims made by any Person with respect to, and no actions, suits or other proceedings relating to Accentia or the conduct of its business, which could reasonably be expected to have an adverse effect thereon.
(h) Compliance with Laws. Accentia is not in violation of, has not violated, and to the
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knowledge of Accentia, is not under investigation with respect to and has not been threatened to be charged with or given notice of any violation of, any law, rule, ordinance or regulation, or judgment, order or decree entered by any governmental authority, which could reasonably be expected to have a material adverse effect thereon.
(i) Intellectual Property. Exhibit B of the Mayo License Agreement and Exhibit B of the BDSI License Agreement include all intellectual property of Mayo and BDSI, respectively, that directly or indirectly relate to Products. To the best of Accentia’s knowledge, the Products and methods of making or using them do not infringe or misappropriate the intellectual property rights of any third party, and no royalties are owed to any third party with respect to such Products. Neither Accentia, Mayo nor BDSI has received any notice or other communication alleging that a Product infringes or misappropriates the intellectual property rights of a third party.
(j) Enabling Agreements. The Enabling Agreements are in full force and effect and Accentia has all rights under the Enabling Agreements to develop and commercialize the Products and generate the Royalty Stream as contemplated by the Agreement. The copies of the Enabling Agreements as provided by Accentia to PPD are true and correct copies. There have been no amendments or modifications to any of the Enabling Agreements. The Royalty Stream is not subject to any claim of off-set for any other liability or obligation of PPD. Accentia is in compliance with each of the Enabling Agreements and is not in breach of its obligations with respect thereto. Mayo and BDSI are, to the knowledge of Accentia, in compliance with, respectively, the Mayo License Agreement and the BDSI License Agreement, and Accentia has no reason to believe that either Mayo or BDSI does not intend to comply with its obligations pursuant to the Mayo License Agreement and the BDSI License Agreement, respectively. Accentia has not granted any licenses or other rights and has no obligations to grant licenses or other rights with respect to the Products, and, except for the Enabling Agreements, there are no other contracts, arrangements, or understandings relating to the Royalty Stream.
(k) No Brokers. There is no investment banker, broker, finder or other intermediary which has been retained by or is authorized to act on behalf of Accentia who might be entitled to any fee or commission from PPD or any of its Affiliates upon consummation of the transactions contemplated by this Agreement.
(l) Other Information. This Agreement does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained herein not misleading.
(m) A Compounded Product is being sold by Accentia’s sublicensee as of the Effective Date.
(n) Accentia has disclosed to PPD all material adverse data relating to the Products and their safety in animals and humans and the development and regulatory status known to Accentia as of the Effective Date of this Agreement.
(o) Accentia has disclosed to PPD all material documents concerning the
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development of SinuNase Formulation including, but not limited to, a complete copy of IND 69,611, the SinuNase development plan, FDA pre-meeting minutes from the December, 2004 meeting, Item 8 data relevant to SinuNase Formulation and a list of any material FDA issues of which Accentia is aware.
| 4. | REPRESENTATIONS AND WARRANTIES OF BUYER |
PPD hereby represents and warrants to Accentia the following.
(a) Organization and Existence. PPD is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and has all applicable powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted.
(b) Corporate Authorization. The execution, delivery and performance by PPD of this Agreement and the consummation by PPD of the transactions contemplated hereby are within the powers of PPD and have been duly authorized by all necessary action on the part of PPD. This Agreement constitutes a valid and binding agreement of PPD.
(c) Governmental Authorization. The execution, delivery and performance by PPD of this Agreement do not require any action by or in respect of, or filing with, any governmental authority.
(d) Finders’ Fees. There is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of PPD who might be entitled to any fee or commission from Accentia or any of its Affiliates upon consummation of the transactions contemplated by this Agreement.
| 5. | COVENANTS |
PPD and Accentia agree as follows.
(a) Maintenance of Enabling Agreements. Accentia shall exercise fully all of its rights, and comply fully with all of its obligations, under the Enabling Agreements and shall not, without PPD’s prior written approval (not to be unreasonably withheld), permit any amendment or take any other action (or omit to take any action) with respect thereto, which could reasonably be expected to impair the Royalty Stream. For purposes of this Paragraph 5(a), it shall be reasonable for PPD to withhold its approval with respect to any amendment, action or omission if, in the reasonable opinion of PPD, such amendment, action or omission could, in the sole discretion of PPD, have the effect of reducing the Royalty Stream.
(b) No Transfers. Without PPD’s prior written approval (not to be unreasonably withheld), Accentia shall not sell, transfer, assign, license, sublicense or otherwise dispose of, or grant any Lien on, all or any part of the Enabling Agreements, the rights provided thereunder or any receivable therefrom.
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(c) Confidential Treatment. PPD and Accentia will hold, and will use reasonable commercial efforts to cause their officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence, unless compelled to disclose by judicial or administrative process or unless required by law or the rules and regulations of the Securities and Exchange Commission or any securities exchange or trading system, all confidential documents and information concerning PPD, Accentia, this Agreement and the Royalty Stream.
(d) Public Announcement. Except as required by law or the rules and regulations of the Securities and Exchange Commission or any securities exchange or trading system, the parties agree to consult with each other before issuing any press release or making any public statement with respect to PPD’s acquisition of the Royalty Stream. Such press release or public statement shall, to the extent possible, be a joint release.
(e) FDA Product IND. Accentia filed an IND with the FDA for an FDA Product on or before the applicable deadline set forth in Exhibit A of the Mayo License Agreement.
(f) Encochleated FDA Product. Accentia will seek approval of the FDA and other Regulatory Authorities for an encochleated form of FDA Product using the cochleate technology licensed by Accentia under the BDSI License Agreement. Accentia shall follow the development timeline set forth in Exhibit A of the Mayo License Agreement (“Development Plan”) unless the timeline is shortened because it is determined by the FDA that a Phase I and/or Phase II study is not needed, in which case Accentia shall follow the revised, shortened timeline.
(g) Product Sales. Accentia will use its best efforts to maximize the sale of Products and FDA Products, if any, in each country in which Accentia has the right to sell any such Products or FDA Products, as the case may be.
(h) Marketing Effort. Accentia will provide the marketing services for the FDA Products as set forth in Schedule 1 attached hereto (the “Marketing Services”). Any breach by Accentia of its obligations to provide the Marketing Services shall be deemed a material breach of this Agreement and cause for PPD to exercise the provisions of Paragraph 8(c). At PPD’s request, Accentia shall make available to PPD Accentia’s management personnel with direct responsibility for Product development, commercialization and marketing, for meetings and teleconferences. Such meetings and teleconferences will be during business hours and PPD shall provide reasonable advance notice of its request for such meetings and teleconferences. The sole purpose of the meetings and teleconferences will be to provide PPD with information relating to Accentia’s performance of its obligations under this Agreement.
| 6. | PAYMENT OF ROYALTY, REPORTS, AUDIT RIGHTS |
(a) Royalty Stream Payment and Reports. During the term of this Agreement, Accentia will deliver to PPD on or before the following dates of each year: 1 February, 1 May, 1 August, and 1 November, a written report stating Net Sales of Products and FDA Products on which the Royalty Stream is based for the preceding License Quarter, and summarizing the status of the development of Products and FDA Products that are not then being sold (in sufficient detail as PPD may from time to time request) and of preparations to market Products
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and FDA Products if marketing has not yet begun. Each such report will be accompanied by the Royalty Stream payment due for such License Quarter either by check or wire transfer pursuant to instructions received from PPD. Any Royalty Stream payment that is not paid when due shall bear interest at the interest rate of one and one-half percent (1.5%) per month.
(b) Minimum Royalty Stream Payments. Accentia agrees to make minimum cumulative royalty stream payments to PPD under this Agreement in the amount of $2,500,000 prior to the end of calendar year 2009. Failure to make minimum payments of $2,500,000 will be deemed a material breach of this Agreement and cause for PPD to exercise the termination provisions of Paragraph 8(c); provided, however, that if cumulative Royalty Stream payments are not $2,500,000, then Accentia may make up the shortfall in which case a material breach will not have occurred.
By way of illustration and example, if cumulative royalty payments made to PPD under Paragraph 6(a) are $2,000,000 by the end of calendar year 2009, Accentia may make an additional payment to PPD of $500,000. In the event such a payment is not made, PPD may exercise its rights to terminate this Agreement under Paragraph 8(c).
(c) Mayo Reports. Accentia shall provide to PPD all Reports (as defined in the Mayo License Agreement) that Accentia is required to provide to Mayo pursuant to the Mayo License Agreement. Such Reports shall be provided to PPD simultaneously with the provision of the Reports to Mayo.
(d) Notice of Certain Events. Accentia shall immediately report to PPD in writing the occurrence of any of the events that could reasonably be expected to give rise to a right of Accentia to terminate this Agreement under Section 8 hereof.
(e) Audit and Inspection Rights. Accentia shall maintain, during the term of this Agreement and for at least three (3) years thereafter, records sufficient to demonstrate Accentia’s compliance with its (i) Royalty Stream reporting and payment obligations and (ii) Product development, commercialization and marketing obligations under this Agreement. Accentia shall make such records available for inspection and copying by PPD or its representatives, during normal business hours upon reasonable advance notice, for the purpose of confirming Accentia’s compliance with its obligations under this Agreement. PPD may at its election engage an independent public accounting firm to conduct an audit of amounts due PPD under this Agreement. If in the written opinion of such auditors there has been an under-reporting by Accentia of more than three percent (3%) of the total amounts due during any License Quarter, Accentia shall pay the costs of such audit in addition to all unpaid amounts then owing. In the event Accentia sublicenses all or any part of its rights under the Mayo License Agreement or the BDSI License Agreement, Accentia agrees that the applicable sublicense agreement shall contain audit rights substantially similar to those set forth herein in favor of PPD or its designee.
(f) Breach of Enabling Agreements. Upon any occurrence of a breach by Mayo or BDSI under the Mayo License Agreement or the BDSI License Agreement, respectively, which is not cured as provided in the applicable agreement and which affects the Royalty Stream, Accentia shall use its best efforts to enforce its rights under the applicable agreement, including
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without limitation, initiating litigation with the breaching party. Accentia shall provide PPD written notice of any such breach not later than ten (10) days after Accentia becomes aware of such breach, and any settlement related to the breach is subject to the prior approval of PPD. Accentia shall keep PPD informed, on a current basis, with respect all actions it takes to enforce its rights under the Enabling Agreements, including providing PPD with copies of all material correspondence with the breaching party and/or its counsel and allowing PPD to participate, at its election, in all litigation strategy meetings. All recoveries and damages obtained by Accentia pursuant to its enforcement of its rights under the Enabling Agreements shall be deemed to be Net Sales as defined herein. Accentia’s failure to use its best efforts to enforce its rights under an Enabling Agreement shall be deemed a material breach of this Agreement.
| 7. | INDEMNIFICATION |
(a) Indemnification. Accentia hereby indemnifies PPD and its Affiliates against and agrees to hold each of them harmless from any and all damage, loss, liability and expense (including, without limitation, reasonable expenses of investigation and reasonable attorneys’ fees and expenses in connection with any action, suit or proceeding) (collectively, “Loss”) incurred or suffered by PPD or any of its Affiliates arising out of: (i) any misrepresentation or breach of warranty, covenant or agreement made or to be performed by Accentia pursuant to this Agreement; or (ii) any act of gross negligence or willful misconduct by Accentia. PPD agrees to give prompt notice to Accentia of the assertion of any claim, or the commencement of any suit, action or proceeding in respect of which indemnity may be sought under such Section 7; provided that the failure to give such notice shall not affect PPD’s rights hereunder except to the extent Accentia is materially prejudiced by such failure. Accentia may, and at the request of PPD shall, participate in and control the defense of any such third party suit, action or proceeding at its own expense. Accentia shall not be liable under this Section 7 for any settlement effected without its prior consent of any claim, litigation or proceeding in respect of which indemnity may be sought hereunder; provided that such consent may not be unreasonably withheld. No investigation by PPD of the Enabling Agreements or otherwise shall limit PPD’s rights to indemnification hereunder. Nothing in this Agreement shall limit any remedies available to PPD at law or in equity for any claims under this Agreement.
(b) Survival. The representations, warranties, covenants and agreements, including without limitation the agreements set forth in (a) above, contained herein shall survive the expiration or termination of this Agreement. The expiration or termination of this Agreement shall not excuse any party hereto from its liability in respect of any breach hereof prior to such expiration or termination.
| 8. | TERM |
(a) Term. The term of this Agreement shall commence on the Effective Date and shall continue, unless sooner terminated as provided herein, until the parties mutually agree to terminate this Agreement.
(b) Termination of Enabling Agreements. If either of the Enabling Agreements is terminated, then PPD may terminate this Agreement at any time thereafter by sending Accentia
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written notice of termination. The notice of termination shall specify the effective date of the termination.
(c) Termination for breach. If Accentia commits a material breach of this Agreement, PPD may notify Accentia in writing of such breach and Accentia will have thirty (30) days after receipt of such notice to cure such breach to PPD’s satisfaction. If Accentia fails to cure such breach, PPD may, at its option, terminate this Agreement at any time thereafter by sending Accentia written notice of termination. The notice of termination shall specify the effective date of the termination.
(d) Termination for failure to Maintain Market Exclusivity Rights. As an inducement for PPD to enter into this Agreement, Accentia agrees to use its best efforts to maintain exclusive license rights under the Mayo License Agreement and prosecute, perfect and maintain the Market Exclusivity Rights (as defined in the Mayo License Agreement) for a Product. In the event that Accentia fails to fulfill its obligations under Section 8.01 of the Mayo License Agreement, PPD may terminate this Agreement at any time thereafter by sending Accentia written notice of termination. The notice of termination shall specify the effective date of the termination.
(e) Termination due to conversion to nonexclusivity. In the event that any of the rights granted to Accentia under Section 3.01(a), (b) or (c) of the Mayo License Agreement shall become nonexclusive for any reason, PPD may terminate this Agreement at any time thereafter by sending Accentia written notice of termination. The notice of termination shall specify the effective date of the termination.
(f) Termination for failure to enforce Mayo Patent Rights. As an inducement for PPD to enter into this Agreement, Accentia agrees to exercise reasonable efforts to ensure that the Patent Rights (as defined in the Mayo License Agreement) are enforced against any known or suspected infringer of such rights. In the event that the Patent Rights are not enforced by Accentia or Mayo against any known or suspected infringer of such rights, PPD may terminate this Agreement at any time thereafter by sending Accentia written notice of termination. The notice of termination shall specify the effective date of the termination.
(g) Termination for failure to amend Mayo License Agreement. In the event that Accentia fails to amend Section 4.03 of the Mayo License Agreement to remove the requirement of the diligence payment of $30 million to the satisfaction of PPD prior to December 31, 2004, PPD may terminate this Agreement at any time thereafter by sending Accentia written notice of termination. The notice of termination shall specify the effective date of the termination.
(h) Effect of Termination by PPD. In the event that PPD has the right to terminate this Agreement pursuant to any of Sections 8(b) through 8(g), PPD may, in its sole discretion, exercise such termination right at any time by providing written notice to Accentia. No delay by PPD in exercising such right shall cause PPD to lose such termination right by laches, estoppel or any other legal theory. In the event that PPD exercises its termination rights, Accentia shall: (i) refund the Purchase Price less the aggregate Royalty Stream amount paid to PPD hereunder prior to the date of termination; and (ii) pay to PPD the fully-burdened costs incurred by it, PPD
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Development and their Affiliates in the performance of the Services (as defined in Section 1.1 of Schedule 2) prior to the date of termination. Such refund shall be paid to PPD not later than five (5) business days after the effective date of termination; provided that with respect to the fully-burdened costs related to the Services, such costs shall be reimbursed by Accentia within ten (10) days after an invoice therefore is provided to Accentia by PPD. In the event that the aggregate Royalty Stream payments to PPD hereunder exceed $2,500,000 as of the date of termination, then Accentia shall not have an obligation to refund any portion of the Purchase Price. In no event will PPD have an obligation to refund any Royalty Stream payments to Accentia or to pay any additional amounts to Accentia, which are in excess of the Purchase Price.
(i) Effect of Termination by Accentia. In the event that Accentia effectuates a termination of this Agreement, whether by equitable remedy ordered by a court of competent jurisdiction or otherwise: (i) this Agreement shall be terminated; (ii) the Original Agreement shall be automatically reinstated and effective as if never terminated and superseded by this Agreement; and (iii) Accentia shall pay to PPD the fully-burdened costs incurred by it, PPD Development and their Affiliates in the performance of the Services (as defined in Section 1.1 of Schedule 2) prior to the date of termination. Accentia shall reimburse the fully-burdened costs to PPD related to the Services within ten (10) days after an invoice for such Services is provided to Accentia by PPD. In no event will PPD have an obligation to refund any Royalty Stream payments to Accentia or to pay any additional amounts to Accentia, which are in excess of the Purchase Price.
(j) Survival. In the event of termination by PPD and in addition to the rights otherwise set forth herein, all payment obligations accrued prior to the date of termination and Sections 1, 3, 4, 7, 8 and 10, and Paragraphs 2(c) and 6(c) shall survive such termination of this Agreement. In the event of termination by Accentia, this Agreement shall continue as set forth in Section 8(i) subject to the rights and remedies set forth Section 8(i).
| 9. | CLINICAL SERVICES TO BE PROVIDED BY PPD |
(a) Services. PPD will cause PPD Development, LP (“PPD Development”) and other Affiliates to provide certain limited Services (as defined in Schedule 2 attached hereto and made a part hereof) to Accentia with respect to two Phase III clinical trials for the SinuNase Formulation for the treatment of chronic sinusitis. Notwithstanding anything herein to the contrary, the respective rights and obligations of each party with respect to the Services are as set forth in Schedule 2. With respect to the performance of the Services, in the event of any conflict between a term or condition set forth in Schedule 2 and a term or condition set forth elsewhere in this Agreement, the term or condition in Schedule 2 shall control.
(b) Study Data. The parties agree that PPD Development shall own the Study Data (as defined in Section 4.2 of Schedule 2). PPD Development hereby grants to Accentia during the term of this Agreement an unrestricted worldwide, royalty-free license to use the Study Data for all commercial purposes. Such license shall extend for the term of this Agreement. Upon either: (i) termination or expiration of this Agreement for any reason; or (ii) Accentia’s filing for relief under 11 U.S.C. §101 et seq., such license shall terminate and Accentia shall promptly return all Study Data and copies thereof in its possession to PPD Development and immediately cease any further use of or reference to all or any part of the Study Data.
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(c) Joint Development Committee. The parties shall form a Joint Development Committee (“JDC”) for the purposes of making all decisions related to the development and approval of Products and FDA Products, including without limitation: (i) preparation of proposed development plans and development budgets, and modifications thereto as needed; (ii) oversight of implementation of development plans and development budgets, (iii) oversight of outsourced work; (iv) management of the flow of information with respect to clinical trials; and (v) preparation of the applicable New Drug Application(s).
(i) Membership. The JDC shall be composed of six members, three members appointed by each of PPD and Accentia. Each party shall designate its initial JDC representatives within thirty (30) days after the Effective Date. Each party may replace its JDC representatives at any time upon written notice to the other party. PPD will designate one of its initial JDC representatives as the initial Chairperson of the JDC. The Chairperson shall alternate between the parties every twelve (12) months. The Chairperson shall be responsible for scheduling meetings, preparing and circulating an agenda in advance of each meeting, and preparing and issuing minutes of each meeting within 30 days thereafter.
(ii) Responsibilities and Decision Making. During the term of this Agreement, the JDC shall meet on a quarterly basis and at such other times as the parties shall mutually agree. Each party shall have the right to call a meeting of the JDC upon at least two business days’ notice. If the other party is unable to attend such meeting, the meeting shall be rescheduled to a date not to exceed five business days of the initial notice of the meeting. The JDC will make its decisions by majority vote, with each party’s representatives collectively having one vote. In the event that any vote is deadlocked, the respective CEO’s of each party will meet to resolve the issue. If the CEO’s are unable to resolve the issue, the issue will be resolved by binding arbitration in accordance with Paragraph 9(c)(iii) below.
(iii) Arbitration. In the event that the CEOs of each party are unable to break any deadlocked vote of the JDC, the unresolved issue shall be resolved by binding arbitration in accordance with the terms of this Agreement by American Arbitration Association (“AAA”) rules. The arbitration will be conducted in a geographically neutral site within the United States that is mutually agreed by the parties or, in the absence of such agreement, chosen by the arbitrator. The arbitration will be conducted under the rules then in effect for AAA, except as provided herein, and the parties consent to the personal jurisdiction of the United States federal courts, for any cause arising out of or otherwise related to this arbitration, its conduct and its enforcement. The arbitrator shall be one (1) neutral, independent and impartial arbitrator selected from a pool of retired federal judges to be presented to the parties by AAA. Failing the agreement of the parties as to the selection of an arbitrator within fifteen (15) days of the failure of the CEOs to resolve the dispute, there shall be three (3) arbitrators rather than one (1). Each party shall select one (1) arbitrator from the pool of retired federal judges presented to the parties by AAA and within fifteen (15) days thereafter those two (2) arbitrators shall select the third (3rd) neutral, independent and impartial arbitrator from such pool. The parties shall share equally all costs of arbitration. For purposes of clarity, this Paragraph 9(c)(iii) shall apply solely to those deadlocked votes of the JDC that are not resolved by the CEOs of each party.
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(d) Commercialization. Accentia shall actively consult with PPD regarding the commercialization of Products and FDA Products. PPD shall have the right to offer input into commercialization decisions; provided, however that Accentia shall have control over decisions that are solely related to the commercialization of Products and FDA Products, subject to using good faith and commercially reasonable efforts to take PPD’s input into account in making such decisions.
| 10. | MISCELLANEOUS |
(a) Assignment and Subcontract. Accentia is strictly prohibited from assigning its obligations or rights under this Agreement without PPD’s prior express written consent, which consent shall not be unreasonably withheld. Any other attempted assignment or subcontract is void.
(b) Waiver. The failure of either party to complain of any default by the other party or to enforce any of such party’s rights, no matter how long such failure may continue, will not constitute a waiver of the party’s rights under this Agreement. The waiver by either party of any breach of any provision of this Agreement shall not be construed as a waiver of any subsequent breach of the same or any other provision. No part of this Agreement may be waived except by the further written agreement of the parties.
(c) Governing Law and Jurisdiction. This Agreement is made and performed in North Carolina. It is governed by North Carolina law. This is not an Agreement for the sale of goods. In addition, no North Carolina conflicts-of-law or choice-of-laws provisions apply to this Agreement. The exclusive forums for actions between the parties in connection with this Agreement are the State District Court sitting in either New Hanover or Wake County, North Carolina, or the United States Court for the Eastern District of North Carolina. Accentia agrees unconditionally that it is personally subject to the jurisdiction of such courts.
(d) Headings. The headings of paragraphs and sections used in this Agreement are for convenience of reference only, and shall not affect the meaning or interpretation of this Agreement unless the context requires otherwise.
(e) Notices. All notices and other business communications between the parties related to this Agreement shall be in writing, sent by certified mail or facsimile, addressed as follows:
| If to PPD: |
Pharmaceutical Product Development, Inc. | |
| 0000 X. 00xx Xxxxxx | ||
| Xxxxxxxxxx, XX 00000 | ||
| Attn: Xxxx X. Xxxxxxxx, CEO | ||
| Fax: (000) 000-0000 | ||
| If to Accentia: |
Accentia, Inc. | |
| 0000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000 | ||
| Xxxxx, XX 00000 | ||
| Attn: Xxxxx X. X’Xxxxxxx, Xx., Chairman and CEO | ||
| Fax: (000) 000-0000 | ||
| Attn : Xxxxx XxXxxxx, | ||
| Fax : (000) 000-0000 | ||
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Notices sent by certified mail shall be deemed given and received on the third day following the date of mailing. Notices sent by facsimile shall be deemed given and received on the date transmitted as evidenced by the transmission report generated by the sender’s facsimile machine. Either party may change its address or facsimile number by giving written notice in compliance with this paragraph.
(f) Relationship. Neither party is the agent, employee, or servant of the other. Except as specifically set forth herein, neither party shall have nor exercise any control or direction over the methods by which the other party performs work or obligations under this Agreement. Further, nothing in this Agreement is intended to create any partnership, joint venture, lease, or equity relationship, expressly or by implication, between the parties with the respect to the subject matter herein.
(g) Entire Agreement. This Agreement constitutes the final, complete and exclusive agreement between the parties with respect to its subject matter and supersedes all past and contemporaneous agreements, promises, and understandings, whether oral or written, between the parties
(h) Unenforceable Provision. The unenforceability of any part of this Agreement will not affect any other part. This Agreement will be construed as if the unenforceable parts had been omitted.
(i) Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties, their heirs, legal representatives, successors and assigns.
(j) Severability. In the event any provision of this Agreement is held to be invalid or unenforceable, the remainder of this Agreement shall remain in full force and effect as if the invalid or unenforceable provision had never been a part of the Agreement.
(k) Amendments. This Agreement may not be amended or modified except by a writing signed by both parties and identified as an amendment to this Agreement.
(l) Nondisclosure. Neither party will disclose any of the financial terms of this Agreement without the express, prior, written consent of the other party, or unless required by law.
(m) Expenses. Except as otherwise provided herein, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense.
(n) Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto.
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IN WITNESS WHEREOF, the parties have executed this Royalty Stream Purchase Agreement as of the Effective Date.
| PPD: | ||
| PHARMACEUTICAL PRODUCT DEVELOPMENT, INC. | ||
| By: | /s/ Xxxx X. Xxxxxxxx | |
| (signature) | ||
| Name: | Xxxx X. Xxxxxxxx | |
| (print name) | ||
| Title: | Chief Executive Officer | |
| ACCENTIA: | ||
| ACCENTIA BIOPHARMCEUTICALS, INC. | ||
| By: | /s/ Xxxxx X. O’Donnnell, Jr. | |
| (signature) | ||
| Name: | Xxxxx X. X’Xxxxxxx, Xx., M.D. | |
| (print name) | ||
| Title: | Chairman, CEO | |
PPD Development, LP executes and delivers this Agreement for the sole and limited purpose of agreeing to be bound by the provisions of Section 9(b) and Schedule 2 hereof.
| PPD DEVELOPMENT, LP | ||
| By PPD GP, LLC, its general partner | ||
| By: | /s/ Xxxx X. Xxxxxxxx | |
| (signature) | ||
| Name: | Xxxx X. Xxxxxxxx | |
| (print name) | ||
| Title: | Chief Executive Officer | |
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Schedule 1
Marketing Services
During the term of this Agreement, Accentia agrees to perform the following Marketing Services.
1. Accentia shall promote the Products to customers during at least 4 medical conferences per year, which shall be attended by Accentia marketing and sales representatives.
2. Accentia shall employ or engage a sufficient number of full-time persons or independent contractors for the sole purposes of promoting Products and achieving the objectives of the Marketing Plan (as defined below).
3. Prior to the beginning of each calendar year during the term of this Agreement, Accentia shall provide PPD with a reasonably detailed marketing plan for Products for the upcoming calendar year (the “Marketing Plan”). Such Marketing Plan shall include, among other things, performance goals and milestones to be achieved by Accentia during the relevant year. Accentia shall provide said plan to PPD at least thirty (30) days before each calendar year end.
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Schedule 2
Clinical Trial and NDA Services
1. Services.
1.1 Services to be Provided by PPD. PPD shall cause PPD Development, LP (“PPD Development”) and other Affiliates, as appropriate, to provide the CRO services set forth below with respect to two pivotal Phase III trials (“Clinical Trials”) for chronic sinusitis pursuant to the terms and conditions set forth in this Schedule 2 (“Services”). The Services to be provided by PPD Development shall be limited to providing direct labor support for the following:
| (a) | Identification of up to 31 clinical trial sites and/or investigators to participate in the Clinical Trials. |
| (b) | Assistance in signing up a maximum of 31 clinical trial sites (see Section 2 below). |
| (c) | Seeking Institutional Review Board (IRB) approval. |
| (d) | Data capture and patient randomization. |
| (e) | Monitoring of up to a maximum of 31 clinical trial sites. |
| (f) | Collection of safety data and safety reporting to the FDA. |
| (g) | Production of individual Phase III study reports. |
| (h) | Production of Integrated Safety Summary (ISS). |
| (i) | Production of New Drug Application. |
The Services shall exclude any services with respect to the Clinical Trials not listed above. Without limiting the generality of the foregoing, the Services shall not include any of the following:
| (j) | Any Services related to clinical trial material (CTM) including, but not limited to, chemistry, manufacturing and controls (CMC), regulatory services, stability and release of CTM, and depoting and distribution of CTM to sites. |
| (k) | Bioanalytical analysis of biological samples. |
| (l) | Laboratory analysis of endoscopy samples. |
| (m) | Measurement of fungal load in biological samples. |
| (n) | Analysis of CT scans. |
| (o) | Validation of the Rhinoqol Questionnaire. |
| (p) | Performance of clinical studies using a pump spray. |
| (q) | Any services related to bioavailability, pharmacokinetics, or safety related studies such as animal toxicity and carcinogenicity. |
In addition to and not in lieu of the foregoing limitations, the Clinical Trials, and the Services to be provided by PPD Development, shall be limited to a maximum of 31 clinical trial sites with up to a maximum of 400 patients, with a treatment duration of up to a maximum of four months. Any increase in the number of clinical trial sites or patients, or the treatment duration, shall require the consent of PPD, which consent shall not be unreasonably withheld. PPD shall have the right, in determining whether to grant such consent, to take into account, among other things,
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the additional costs associated with increasing the number of clinical trial sites or patients or the treatment duration. PPD Development’s obligation to provide Services shall automatically terminate if a first patient is not dosed in a Clinical Trial by December 31, 2005. Upon such termination, PPD Development shall have no obligation to continue to provide Services. PPD Development shall provide Services in compliance with this Schedule 2, PPD Development’s Standard Operating Procedures (“SOPs”), and all applicable laws, rules, and regulations. SOPs are subject to revision by PPD Development in which case PPD Development shall notify Accentia of such revision. The current SOPs for conducting and monitoring clinical trials are available for review upon request by Accentia.
1.2 Protocol Disclaimer. Notwithstanding anything herein to the contrary, the parties hereby agree and acknowledge that Accentia shall be solely responsible for review, approval and adoption of any applicable study protocol that may apply to the Services (the “Protocol”) and that Accentia shall assume all liability for such Protocol.
1.3 MedDRA. In the event PPD Development is requested to perform services that require PPD Development to use the MedDRA medical dictionary, Accentia shall be solely responsible for obtaining and maintaining all required MedDRA licenses for all parties to whom Accentia instructs PPD Development to distribute MedDRA terminology, and all costs and expenses associated therewith.
1.4 Out of Scope. In the event that PPD Development is requested or required to perform services beyond that which are specifically set forth in this Schedule 2, any such additional services and a compensation schedule therefor must be mutually agreed upon by the parties in writing prior to the provision of said services. Said mutually agreed upon writing shall be an addendum to this Schedule 2.
1.5 Use of Copyrighted Material. In the event that Accentia requests PPD Development to make and/or distribute copies of copyrighted materials such as journal articles or excerpts from publications, Accentia agrees to pay the cost of any copyright fees incurred by PPD Development that are necessary for PPD Development to produce such copies, unless Accentia provides a written representation and warranty that: (a) Accentia has paid any and all fees and costs associated with said copying and/or distribution of the material to be copied and or distributed; or (b) PPD is not required to pay a copyright fee to make copies or distribute the subject material. Accentia hereby expressly agrees to indemnify PPD for any and all damages, losses, and costs PPD may suffer as a result of making and/or distributing copyrighted material pursuant to Accentia’s request.
2. Reimbursement of Expenses. Accentia shall reimburse PPD for all out-of-pocket expenses incurred in connection with the performance of Services, including, without limitation, investigator grants, travel expenses, printing fees and other “pass through” expenses reasonably expected to be incurred in connection with performing the Services (collectively, the “Pass Through Costs”). PPD shall submit to Accentia a monthly invoice describing the Pass Through Costs paid by PPD. Accentia shall pay each monthly invoice within thirty (30) days of receipt of said invoice. In the event any invoice is not paid when due, PPD may immediately cease performing the Services.
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Payments to PPD shall be made to:
| PPD Development, LP | ||||
| 00000 Xxxxxxxxxxx Xxxxx | ||||
| Xxxxxxx, Xxxxxxxx 00000 | ||||
| or if wired: |
Bank of America | |||
| ABA#: 000000000 | ||||
| Acct#: 000696217456 | ||||
| Acct Name: PPD Development, LP | ||||
| Tax ID #: 00-0000000 | ||||
Accentia shall be responsible for entering into agreements with all clinical trial sites and/or investigators, laboratories and other third parties that provide services with respect to the Phase III studies. PPD will assist Accentia in preparing and negotiating agreements with investigators, laboratories and other third parties, but all such agreements will be between Accentia and the third party. Notwithstanding anything to the contrary herein, PPD shall not be a party to any such agreements or have any liability for payment for services rendered by such parties, and Accentia shall indemnify PPD therefor in accordance with Section 6.
3. Confidentiality.
3.1 Accentia Information. PPD Development shall treat all confidential and proprietary information of Accentia (“Accentia Confidential Information”) disclosed under this Schedule 2 as the confidential and exclusive property of Accentia.
3.2 PPD Confidential Information. Accentia shall treat all confidential and proprietary information of PPD Development and its Affiliates, including without limitation, PPD Development bids or proposals, personnel information, standard operating procedures and all PPD Property (as hereinafter defined) ( “PPD Confidential Information”) as the confidential and exclusive property of PPD Development and its Affiliates, as applicable.
3.3 Use of Accentia and PPD Confidential Information. Each party shall use the other party’s Confidential Information solely for the purposes contemplated by this Schedule 2 and for no other purpose without the prior written consent of other. Neither party shall disclose Confidential Information of the other party to any third party without first obtaining the written consent of other party. Each party shall take reasonable steps to ensure that the other’s Confidential Information shall not be used by its directors, officers, employees, agents, representatives and advisors (collectively, “Agents”), except on like terms of confidentiality as aforesaid.
3.4 Exceptions to Confidential Information. The above provisions of confidentiality shall not apply to that part of the disclosing party’s Confidential Information which the receiving party is able to demonstrate by documentary evidence:
(i) was in the receiving party’s possession prior to receipt from the disclosing party or is independently developed by the receiving party;
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(ii) was in the public domain at the time of receipt from the disclosing party;
(iii) becomes part of the public domain through no fault of the receiving party or its Agents; or
(iv) is lawfully received by the receiving party from a third party having a right of further disclosure.
Either party may disclose the other’s confidential information when required by law, provided that such disclosure is subject to all applicable governmental or judicial protection available for like material, reasonable advance notice is given to the non-disclosing party and the disclosing party shall take reasonable steps to limit the scope of such disclosure.
3.5 Return of Information. Upon completion of the Services or at the disclosing party’s request, the receiving party shall return, and shall cause its Agents to return, all Confidential Information provided by the disclosing party in documentary form, or, at the disclosing party’s request, destroy all or such parts of the disclosing party’s Confidential Information as the disclosing party shall direct, including any copies thereof made by the receiving party or its Agents. Notwithstanding the foregoing, the receiving party may retain copies of such of the disclosing party’s Confidential Information as is reasonably necessary solely for regulatory purposes and for no other reason, subject to the ongoing obligation to maintain the confidentiality of such information.
3.6 Remedy. Each party acknowledges that disclosure or distribution of the other’s Confidential Information or use of the information contrary to the terms of this Schedule 2 will cause irreparable harm for which damages at law will not be an adequate remedy. Accordingly, the disclosing party hereunder may seek to enforce the provisions of this Section 3 prohibiting disclosure or distribution of its Confidential Information or use thereof contrary to the provisions hereof in a court of competent jurisdiction, in addition to any and all other remedies available at law or in equity.
3.7 Privacy. All information of each party containing personal data shall be handled in accordance with all applicable privacy laws, rules and regulations, including, without limitation, the Health Insurance Portability and Accountability Act (HIPAA) and the European Data Protection Directive [EC/95/46], as the same may hereafter be amended, modified or changed.
4. Intellectual Property.
4.1 PPD Development Property. Accentia acknowledges that PPD Development and its Affiliates possesses certain inventions, processes, technology, know-how, trade secrets, improvements, other intellectual property and other assets, including, without limitation, those
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related to composition of matter, data collection, data management processes, laboratory analyses, analytical methods, procedures and techniques, computer technical expertise and software (including codes) which have been independently developed without the benefit of any information provided by Accentia (collectively, the “PPD Property”). All PPD Property and improvements thereto are the sole and exclusive property of PPD Development and its Affiliates, as appropriate, and Accentia shall have no right, title or interest therein.
4.2 Ownership of Reports and Data. All data, reports and information generated or derived by PPD Development or its Affiliates in connection with PPD Development’s performance of the Services (the “Study Data”) shall be and remain the exclusive property of PPD Development and its Affiliates. Accentia hereby assigns to PPD Development all right, title and interest Accentia may have in and to the Study Data (subject to the license granted in Section 9.2 of the Agreement), and Accentia shall assist PPD, at PPD’s expense, in obtaining or extending protection therefor. Accentia represents and warrants that it has and shall continue to have agreements with its employees and agents to affect the terms of this Section 4.2 and shall enforce such agreements as necessary to provide PPD Development with the benefits granted under this Section.
5. Publication. During the term of the Agreement, PPD Development will not publish any articles or make any presentations relating to the Services or referring to data, information or materials generated as part of the audit, in whole or in part.
6. Indemnification and Limitation of Liability.
6.1 Accentia Indemnity. Accentia shall indemnify, defend and hold PPD Development, its Affiliates and their respective Agents (collectively, the PPD Indemnitees”) harmless from and against any and all damages, liabilities, losses, fines, penalties, settlement amounts, costs and expenses of any kind or nature whatsoever, including, without limitation, reasonable attorney’s fees, expert witnesses and court costs, incurred in connection with any claim, demand, action, proceeding, investigation or hearing (collectively, a “Claim”), directly or indirectly arising from or relating to (i) an indemnity obligation imposed or sought to be imposed on any of the PPD Indemnitees (other than a claim by Accentia or its Agents pursuant to Section 6.2 below); (ii) the Services provided by PPD Indemnitees hereunder and (iii) Accentia’s failure to pay a clinical trial site and/or investigator, laboratory or other third party with respect to services provided for the Clinical Trials; provided however, that Accentia shall have no obligation of indemnity hereunder with respect to any Claim to the extent determined by a court of competent jurisdiction to have arisen from the gross negligence or intentional misconduct on the part of a PPD Indemnity or resulting from PPD Development’s material breach of any of its material obligations under this Schedule 2.
6.2 PPD Indemnity. PPD Development shall indemnify, defend and hold Accentia and its Agents harmless from and against any and all damages, liabilities, losses, fines, penalties, settlement amounts, cost and expenses of any kind or nature whatsoever, including, without limitation, reasonable attorney’s fees, expert witnesses and court costs, incurred in connection with any Claim to the extent determined by a court of competent jurisdiction to have arisen from the negligence or intentional misconduct of PPD Development or its Agents or resulting from
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PPD Development’s breach of any of its obligations under this Schedule 2.
6.3 Claim Defense. Any party obligated to provide indemnification hereunder with respect to a Claim shall be entitled to control the defense and settlement of the Claim, provided the indemnifying party shall act reasonably and in good faith with respect to all matters relating to the settlement or disposition of the Claim. The indemnified party shall reasonably cooperate in the investigation, defense and settlement of a Claim for which indemnification is sought hereunder and shall provide prompt notice of the Claim to the indemnifying party. The indemnified party shall have the right to retain separate legal counsel at its own expense.
6.4 LIMITATION OF LIABILITY. NEITHER PPD DEVELOPMENT NOR ITS AFFILIATES SHALL BE LIABLE FOR ANY SPECIAL, CONSEQUENTIAL, PUNITIVE, INCIDENTAL OR INDIRECT DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE PERFORMANCE OF THE SERVICES, INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS OR ANTICIPATED SALES. TO THE FULLEST EXTENT PERMITTED BY LAW, AND NOTWITHSTANDING ANY OTHER PROVISION OF THIS SCHEDULE 2, THE TOTAL LIABILITY, IN THE AGGREGATE, OF PPD DEVELOPMENT AND ITS AFFILIATES, AND ANY OF THEM, TO ACCENTIA AND ANYONE CLAIMING BY OR THROUGH ACCENTIA, FOR ANY AND ALL CLAIMS, LOSSES, COSTS OR DAMAGES, INCLUDING WITHOUT LIMITATION, ATTORNEYS’ FEES AND COSTS, EXPERT-WITNESS FEES AND COSTS OF ANY NATURE WHATSOEVER OR CLAIMS OR EXPENSES RESULTING FROM OR IN ANY WAY RELATED TO THIS SCHEDULE 2 FROM ANY CAUSE OR CAUSES SHALL NOT EXCEED $500,000. IT IS INTENDED THAT THIS LIMITATION APPLY TO ANY AND ALL LIABILITY OR CAUSE OF ACTION HOWEVER ALLEGED OR ARISING, INCLUDING WITHOUT LIMITATION, NEGLIGENCE, PROFESSIONAL ERRORS AND OMISSIONS, VICARIOUS LIABILITY AND BREACH OF CONTRACT, UNLESS OTHERWISE PROHIBITED BY LAW.
7. Record Storage.
7.1 Record Maintenance During Study. PPD Development shall maintain all Study Data, including all computerized records and files. PPD Development shall cooperate with any reasonable internal review or audit by Accentia and make available to Accentia for examination and duplication, during normal business hours and at mutually agreeable times, all documentation, data and information relating to the Services.
7.2 Record Maintenance After Termination. Upon termination of the Agreement other than for PPD’s termination pursuant to Section 8, all materials and all other data and information obtained or generated by PPD Development in the course of providing the Services hereunder (the “Records”) shall, at Accentia’s option, be (i) delivered to Accentia at its expense and risk to its offices identified herein in such form as is then currently in the possession of PPD Development, (ii) retained by PPD Development for Accentia for a period of three (3) years, or (iii) disposed of at Accentia’s expense, as directed by written request of Accentia, unless the Records are otherwise required to be stored or maintained by PPD Development under
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applicable law. If PPD Development is required or requested to maintain and/or store the Records for a period beyond three (3) years after the termination of the Agreement, Accentia shall reimburse PPD Development for its maintenance and storage costs. In no event shall PPD Development dispose of Records without first giving Accentia sixty (60) days prior written notice of its intent to dispose of the Records. PPD Development shall be entitled at its expense to retain copies of the Records reasonably necessary for regulatory purposes or to demonstrate the satisfaction of its obligations hereunder, all subject to the confidentiality obligations set forth in Section 4 above.
8. Debarment.
PPD Development hereby certifies that it has not been debarred, and has not been convicted of a crime which could lead to debarment, under the Generic Drug Enforcement Act of 1992. If PPD Development, its Affiliates or any of their Agents who perform Services for this Study is debarred or receives notice of an action or threat of action of debarment, PPD Development shall immediately notify Accentia of same. The debarment of PPD Development, its Affiliate or any of their Agents (which are providing services to Accentia on this Study under this Schedule 2) that remains in place for a period of at least thirty (30) days shall be deemed to be a material breach of this Schedule 2, unless, with respect to the debarment of an Agent which is providing services to Accentia hereunder, PPD Development is able to replace the Agent within such 30-day period, in which case the debarment of the replaced Agent shall not be a material breach of this Schedule 2.
9. Use of Affiliates. PPD shall have the right to provide all or any part of the Services for this Study through an Affiliate of PPD.
10. Defined Terms in Schedule 2. Capitalized terms used by not defined in this Schedule 2 shall have the meaning given to them in the attached Agreement.
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