CONFIDENTIAL
Execution Copy
SUBLICENSE AGREEMENT
BY AND BETWEEN
SUNPHARM CORPORATION
A Delaware Corporation
AND
SCHEIN PHARMACEUTICAL, INC.
A Delaware Corporation
TABLE OF CONTENTS
PAGE
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ARTICLE I. DEFINITIONS....................................................2
ARTICLE II. GRANT..........................................................6
ARTICLE III. ROYALTY AND LUMP SUM PAYMENTS..................................7
ARTICLE IV. RECORDS AND PAYMENTS..........................................10
ARTICLE V. DEVELOPMENT AND MARKETING.....................................11
ARTICLE VI. PATENT PROSECUTION AND INFRINGEMENT...........................14
ARTICLE VII. OBLIGATION OF CONFIDENTIALITY.................................16
ARTICLE VIII. REPRESENTATIONS AND WARRANTIES................................18
ARTICLE IX. COVENANTS.....................................................19
ARTICLE X. TERM OF AGREEMENT.............................................19
ARTICLE XI. MISCELLANEOUS.................................................23
SUBLICENSE AGREEMENT
THIS AGREEMENT is made as of the 4th day of October, 1999 by and
between SUNPHARM CORPORATION, a corporation organized and existing under the
laws of the State of Delaware and having its principal place of business at The
Veranda, Xxxxx 000, 000 Xxxxxxx X0X, Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
(hereinafter referred to as "Licensor"), and SCHEIN PHARMACEUTICAL, INC., a
corporation organized and existing under the laws of the State of Delaware and
having its principal place of business at 000 Xxxxxx Xxxxx, Xxxxxxx Xxxx, Xxx
Xxxxxx 00000 (hereinafter referred to as "Licensee").
W I T N E S S E T H:
WHEREAS, the University of Florida Research Foundation, Inc.,
a not-for-profit corporation duly organized and existing under the laws of the
State of Florida, and having its principal office at 0 Xxxxxxxx Xxxxxxxxx,
Xxxxxxx, Xxxxxxx 00000 ("UFRFI"), is the owner of the Licensed Patents (which
are hereinafter defined; such Licensed Patents having been referred to as the
"Patent Rights" under the UFRFI License Agreement described and defined below)
by assignment from the University of Florida and has the right to grant licenses
under the Licensed Patents, subject only to a royalty-free, nonexclusive license
previously granted to the United States Government, and has developed and is the
owner of the Know-How (as hereinafter defined); and
WHEREAS, UFRFI has granted an exclusive license to Licensor to
make, have made, use, have used, lease and sell and have sold Licensed Products
(as hereinafter defined), and to practice Licensed Processes (as hereinafter
defined), and Improvements (as hereinafter defined) in the Territory (as
hereinafter defined) pursuant to the Patent License Agreement with Research
Component entered into between UFRFI and Licensor at December 9, 1991, as
amended and as may be further amended, supplemented or otherwise modified from
time to time (the "UFRFI License Agreement"); and
WHEREAS, Licensee wishes to obtain an exclusive sublicense of
Licensor's rights under the Licensed Patents and an exclusive sublicense to use
the Know-How for the Field of Use (as hereinafter defined) throughout the
Territory (as hereinafter defined), and Licensor is willing to grant such
sublicenses to Licensee, subject to the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in view of the foregoing premises which are
hereby incorporated as part of this Agreement and in consideration of the mutual
covenants herein contained, Licensor and Licensee agree as follows:
ARTICLE I.
DEFINITIONS
The following terms as used in this Agreement shall have the
meanings set forth in this Article:
1. AFFILIATE. "Affiliate" means any corporation or entity
controlling, controlled by or under common control with the party in question.
As used herein the term control means possession of the power to direct, or
cause the direction of, the management and policies of a corporation or entity
by reason of any ownership interest therein.
2. AGREEMENT COMPOUND. "Agreement Compounds" means the [ **
].
3. BULK SUBSTANCE. "Bulk Substance" shall mean the bulk
active drug substance for the manufacture of the Licensed Products.
4. DMF. "DMF" means a Drug Master File as that term is used
by the FDA, and any comparable corresponding documentation required by
applicable regulatory authorities to authorize the manufacture, marketing and/or
sale of the Bulk Substance in the Territory.
5. FDA. "FDA" means the United States Food and Drug
Administration but shall also include, where appropriate, such foreign
governmental agencies having a similar regulatory function.
6. FIELD OF USE. "Field of Use" means iron overload
conditions, including, but not limited to, Thalassemia, sickle-cell anemia, and
myelodysplasia (but excluding neuro- degenerative disorders), but shall exclude
uses of Agreement Compounds by a route of delivery other than subcutaneous or IM
injection or IV infusion or transdermal.
7. IMPROVEMENTS. "Improvements" means any change or
modification to an Agreement Compound or Licensed Product or compounds used in
the production thereof, or Licensed Process or to any Licensed Patent or
Know-How licensed hereunder, together with any patent applications and patents
that may issue from such changes or modifications which are conceived,
discovered or reduced to practice, in whole or in part, hereunder or pursuant to
the Research Agreement, PROVIDED, that any additional University Inventions, as
defined in the Research Agreement, other than University Inventions related to
the Agreement Compounds, shall be excluded from this definition.
8. IND. "IND" means an IND as defined in 21 CFR 312.3(b) (as
hereinafter modified or amended) for any Agreement Compound, such term to
specifically include the Investigator's IND's filed with the FDA in support of a
Phase I clinical trial.
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9. JOINT COMMITTEE. "Joint Committee" shall have the meaning
given to such term in Section 5.03 hereof.
10. KNOW-HOW. "Know-How" means any and all data, information,
trade secrets, expertise or knowledge which relate to Agreement Compounds or
Licensed Products or compounds used in the production thereof, the Improvements
or the Licensed Processes or that can be utilized, directly or indirectly, for
the development, manufacture, marketing, registration, packaging, purity,
quality, potency, safety and efficacy, use, promotion, distribution or sale of
Agreement Compounds or Licensed Products or compounds used in the production
thereof, or Licensed Processes or Improvements, and that is owned, licensed,
acquired and/or controlled by Licensor and its Affiliates during the term of
this Agreement, including, but not limited to, any IND filed with the FDA in
support of a Phase I clinical trial of the Agreement Compounds, and the
information contained therein, and all other clinical data and test results,
whether or not covered by any patent, design, trademark, trade secret or other
industrial or intellectual property rights. The term "controlled" as used in
this definition shall mean a sufficient interest through ownership, contract
right or otherwise, to grant a license to Licensee and/or its Affiliates
hereunder.
11. LICENSED PATENTS. "Licensed Patents" means all of the
following intellectual property, granted to Licensor pursuant to the UFRFI
License Agreement identified herein as Agreement Compounds for the described
Field of Use and as further described below:
(a) the United States and foreign patents and/or patent
applications listed in Exhibit A;
(b) United States and foreign patents issued from the
applications listed in Exhibit A and from divisionals and continuations of these
applications;
(c) claims of United States and foreign continuation-in-part
applications, and of the resulting patents, which are directed to subject matter
either specifically described in, or subject matter of, a claim of the United
States patent application as originally filed and foreign applications listed in
Exhibit A;
(d) claims of all foreign patent applications, and of the
resulting patents, which are directed to subject matter either specifically
described in, or subject matter of, a claim of the United States patents as
originally filed and/or patent applications described in (a), (b) or (c) above;
and/or
(e) any reissues, extensions, substitutions, confirmations,
registrations, revalidations, additions, continuations or divisions of United
States and foreign patents described in (a), (b), (c) or (d) above;
as well as any and all other patents in the Territory necessary or useful for
the manufacture, use or sale of Licensed Products, Licensed Processes, Agreement
Compounds or compounds used in the
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production thereof, now or subsequently owned, acquired and/or controlled or
licensed by, or granted to, Licensor or under which Licensor is or shall become
empowered to grant licenses, and any and all reissues, extensions,
substitutions, confirmations, registrations, revalidations, additions,
continuations, divisionals, continuations-in-part, re-examinations,
supplementary protection certificates, inventor's certificates and foreign
counterparts of or to any of the aforesaid patents and patent applications and
any patents issuing thereon and extensions of any patents licensed hereunder.
For the avoidance of doubt, the Parties acknowledge and agree that for purposes
of Sections 1.11(c) and 1.11(d) hereof, claims that cover subject matters
contained within the parent United States application or foreign applications
listed in Exhibit A are within the license granted by Licensor to Licensee
hereunder to the extent of such coverage, whether described specifically or only
generically in the applications and patents listed in Exhibit A. Should a claim
of a continuation-in-part application or patent cover in whole or in part such
subject matter, that portion of the subsequent claim which falls within the
scope of the applications and patents listed in Exhibit A are specifically
licensed to Licensee in this Agreement.
12. LICENSED PROCESSES. "Licensed Processes" means any process
which is:
(a) covered in whole or in part by an issued, unexpired claim
or a pending claim contained in Licensed Patents;
(b) derived from Licensed Patents, Know-How and/or trade
secrets related to or described in Licensed Patents;
(c) sold or used in any country under this Agreement; and/or
(d) practiced or otherwise used in connection with, and
necessary for the synthesis of, Agreement Compounds hereunder.
13. LICENSED PRODUCTS. "Licensed Products" means any product
or part thereof which:
(a) is covered in whole or in part by an issued, unexpired
claim or a pending claim contained in the Licensed Patents in the country in
which any Licensed Products are made, used or sold;
(b) is manufactured by using a process which is covered in
whole or in part by an issued, unexpired claim or a pending claim contained in
the Licensed Patents in the country in which any Licensed Process is used or in
which such product or part thereof is used or sold;
(c) is derived from Licensed Patents, Know-How and/or trade
secrets related to or described in the Licensed Patents;
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(d) is sold, manufactured or used in any country under this
Agreement; and/or
(e) contains Agreement Compounds in final packaged form
suitable for distribution to non-affiliated customers and bears Licensee's or
Licensee's Affiliates typical trade dress.
14. NDA. "NDA" means the initial Application, as defined in 21
CFR 314.2(b) (as hereafter modified or amended), seeking approval from the FDA
to use any Agreement Compound for any human indication or treatment in the
United States in the Field of Use.
15. NET SALES. "Net Sales" means the actual gross amount
invoiced by Licensee and its Affiliates to non-affiliated customers for the sale
of Licensed Products in the Territory less trade, cash and quantity discounts
and unaffiliated broker's or agent's commissions, if any, actually allowed or
paid; credits and allowances related to price adjustments, billing errors and
the rejection or return of goods; rebates, chargeback rebates, fees,
reimbursements or similar payments granted or given to wholesalers and other
distributors, buying groups, etc. in respect of the purchase price; freight
insurance and other transportation costs and all other taxes (except income
taxes), tariffs, duties and other similar governmental charges paid by Licensee
and its Affiliates.
16. PARTY AND PARTIES. "Party" shall mean Licensor or
Licensee, and "Parties" means Licensor and Licensee.
17. PHASE 1. "Phase 1" means the first clinical investigation
of the type described in 21 CFR 312.21(a) (as hereinafter modified or amended)
with respect to any Agreement Compound as reasonably determined by Licensee.
18. POPULATION ADJUSTED. "Population Adjusted" means adjusting
an amount stated by multiplying such amount due by a fraction, the numerator of
which shall be the population of the relevant country or countries and the
denominator of which shall be the population of all countries in the Territory,
in each case as determined by the most recent governmental census, rounded to
the nearest million in population.
19. PROJECT. "Project" shall have the meaning set forth in
Section 5.01 hereto.
20. RESEARCH AGREEMENT. "Research Agreement" means the
Corporate Research Agreement entered into by and between Licensor and UFRFI, and
acknowledged and consented to by the University of Florida, dated March 26,
1993, as amended, providing for the provision of research assistance by UFRFI
and the University of Florida to Licensor relating to the Agreement Compounds
and the Field of Use.
21. RESEARCH AND DEVELOPMENT EXPENSES. "Research and
Development Expenses" means the costs and expenses incurred by Licensor in the
course of its pre-clinical studies
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in connection with its filing of an IND and conduct and development of Phase 1
of the Project, net of any funding received from the United States Government or
any subdivision thereof.
22. TERRITORY. "Territory" means the countries of the European
Community, the United States, Canada, Cyprus, Turkey, Australia, and New
Zealand.
23. VALID CLAIM. "Valid Claim" means a claim which, but for
the license granted hereunder, would be infringed by Licensee's manufacture, use
or sale of a Licensed Product, and which is in an unexpired issued patent
included within the Licensed Patents which has not been held invalid or
unenforceable by a decision of a court of competent jurisdiction, unappealable
or unappealed within the time allowed for appeal, and which has not been
admitted to be invalid by the owner through reissue or disclaimer. If there
should be two or more decisions which are conflicting with respect to the
invalidity of the same claim, the decision of the higher or highest tribunal
shall thereafter control; however, should the tribunals be of equal dignity,
then the decision or decisions holding the claim valid shall prevail where the
conflicting decisions are equal in number, and the majority of decisions shall
prevail where the conflicting decisions are unequal in number.
ARTICLE II.
GRANT
1. GRANT OF LICENSE. Licensor hereby grants to Licensee an
exclusive sublicense under the Licensed Patents in the Field of Use to make and
have made, manufacture and have manufactured Agreement Compounds and Licensed
Products from Agreement Compounds for sale in the Territory and to use and have
used and lease, sell and have sold Licensed Products, and to practice the
Licensed Processes, and Improvements, with the right to grant sublicenses (with
the prior written consent of Licensor, which consent shall not be unreasonably
withheld), in the Territory and Licensor further grants to Licensee an exclusive
sublicense to use the Know-How to make and have made, manufacture and have
manufactured Agreement Compounds and Licensed Products from Agreement Compounds
for sale in the Territory and to use the Know-How to use and have used and
lease, sell and have sold Licensed Products, and to practice the Licensed
Processes, and Improvements, with the right to grant sublicenses (with the prior
written consent of Licensor, which consent shall not be unreasonably withheld),
in the Territory. For the avoidance of doubt, the Parties acknowledge and agree
that the license granted by Licensor to Licensee hereunder includes the right of
Licensee to practice the Licensed Processes and Improvements, with the right to
grant sublicenses (with the prior written consent of Licensor, which consent
shall not be unreasonably withheld) outside of the Territory for the sole
purpose of importing the Licensed Products into the Territory.
2. KNOW-HOW. To the extent Licensor has not already done so,
promptly after the date of this Agreement, Licensor shall make available to
Licensee any Know-How not previously furnished to Licensee. Licensor shall
disclose to Licensee, during the term of this Agreement, all additional
Know-How, including all Improvements, and Licensee shall have the right, at its
option, to include said Know-How, whether patentable or not, within the scope of
the license herein granted.
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ARTICLE III.
ROYALTY AND LUMP SUM PAYMENTS
1. LUMP SUM PAYMENTS. In consideration of the licenses
granted hereunder, Licensee shall pay Licensor, except as hereinafter provided,
an ongoing royalty during the term of this Agreement as set forth in Section
3.02 hereof and lump sum payments, as set forth in this Section 3.01. Lump sum
payments shall be paid only once and only upon the completion of the following
events during the term of this Agreement, as follows:
(a) A payment of six hundred twenty-five thousand dollars
($625,000) shall be made in immediately available funds on execution and
delivery of this Agreement by the Parties as consideration of this Agreement;
and
(b) A payment of [ ** ] shall be made in immediately available
funds within ten (10) days of the filing of an IND with the United States FDA
with respect to the Agreement Compounds or Licensed Products in the Field of
Use; and
(c) A payment of [ ** ] shall be made within ten (10) days of
the completion of the NaHBED synthesis and delivery to Licensee of adequate
amounts of DMF grade active pharmaceutical ingredient to continue product
development activities, accompanied by a fileable DMF for the United States; and
(d) A payment of [ ** ] shall be made within ten (10) days of
the satisfactory completion of the ninety (90) day toxicity studies indicating
that the Agreement Compounds can be administered safely long-term to humans for
a pivotal study; and
(e) A payment of [ ** ] shall be made within ten (10) days of
the later of (i) satisfactory completion of a Phase I iron balance study
indicating that product development can be continued into Phase II studies and
(ii) the grant of a US patent with a Valid Claim which would prohibit a third
party, not licensed by the Parties, from using the Agreement Compound for
Thalassemia and sickle-cell anemia; and
(f) A payment of [ ** ] shall be made within ten (10) days of
the later of (i) the start of Phase III studies for Thalassemia and (ii) the
grant of a US patent with a Valid Claim which would prohibit a third party, not
licensed by the Parties, from using the Agreement Compound for Thalassemia; and
(g) A payment of [ ** ] shall be made within ten (10) days of
the later of (i) the start of Phase III studies for sickle-cell anemia and (ii)
the grant of a US patent with a Valid Claim which would prohibit a third party,
not licensed by the Parties, from using the Agreement Compound for sickle-cell
anemia; and
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(h) A payment of [ ** ] shall be made within ten (10) days of
the later of (i) successful completion of Phase III studies allowing the
submission by Licensor of an NDA to the FDA for Thalassemia and (ii) the grant
of a US patent with a Valid Claim which would prohibit a third party, not
licensed by the Parties, from using the Agreement Compound for Thalassemia and
sickle-cell anemia; and
(i) A payment of [ ** ] shall be made within ten (10) days of
the later of (i) successful completion of Phase III studies allowing the
submission by Licensor for regulatory approval in the European Community for
Thalassemia and (ii) the grant of a European patent with a Valid Claim which
would prohibit a third party, not licensed by the Parties, from using the
Agreement Compound for Thalassemia; and
(j) A payment of [ ** ] shall be made within ten (10) days of
the later of (i) successful completion of Phase III studies allowing the
submission by Licensor of an NDA to the FDA for sickle-cell anemia and (ii) the
grant of a US patent with a Valid Claim which would prohibit a third party, not
licensed by the Parties, from using the Agreement Compound for sickle- cell
anemia; and
(k) A payment of [ ** ] shall be made within ten (10) days of
the later of (i) successful completion of Phase III studies allowing the
submission by Licensor for regulatory approval in the European Community for
sickle-cell anemia and (ii) the grant of a European patent with a Valid Claim
which would prohibit a third party, not licensed by the Parties, from using the
Agreement Compound sickle-cell anemia; and
(l) A payment of [ ** ] shall be made within ten (10) days of
the later of (i) the receipt of FDA approval of the NDA pertaining to the
Licensed Product for Thalassemia, and (ii) the grant of a US patent with a Valid
Claim which would prohibit a third party, not licensed by the Parties, from
using the Agreement Compound for Thalassemia; and
(m) A payment of [ ** ] shall be made within ten (10) days of
the later of (i) the receipt of regulatory approval of the marketing and sale in
the European Community of the Licensed Product for Thalassemia, and (ii) the
grant of a European patent with a Valid Claim which would prohibit a third
party, not licensed by the Parties from using the Agreement Compound for
Thalassemia; and
(n) A payment of [ ** ] shall be made within ten (10) days of
(i) the receipt of FDA approval of the NDA pertaining to the Licensed Product
for sickle-cell anemia and (ii) the grant of a US patent with a Valid Claim
which would prohibit a third party, not licensed by the Parties, from using the
Agreement Compound for sickle-cell anemia; and
(o) A payment of [ ** ] shall be made within ten (10) days of
the later of (i) the receipt of regulatory approval of the marketing and sale of
the Licensed Product for sickle-cell
8
anemia, and (ii) the grant of a European patent with a Valid Claim which would
prohibit a third party, not licensed by the Parties, from using the Agreement
Compound for sickle-cell anemia.
2. ONGOING ROYALTY. In consideration of the licenses granted
hereunder, Licensee shall pay to Licensor during the term of this Agreement
(except as hereinafter provided) a royalty on all Licensed Products sold by
Licensee at the rate of [ ** ] of Net Sales;
PROVIDED; HOWEVER, that to the extent Net Sales exceed in a
calendar year the sum of [ ** ], but are less than [ ** ] then
Licensee shall pay to Licensor a royalty of [ ** ] on the
amount of Net Sales which are above [ ** ] and are less than [
** ];
PROVIDED FURTHER, that to the extent Net Sales are equal to or
greater than [ ** ] in a calendar year, but are less than [ **
], then Licensee shall pay to Licensor a royalty of [ ** ] on
the amount of Net Sales which are above [ ** ] but less than [
** ]; and
PROVIDED FURTHER, that if Net Sales are equal to or greater
than [ ** ] in a calendar year, then Licensee shall pay to
Licensor a royalty of [ ** ] on the amount of Net Sales which
are above [ ** ].
3. DEVELOPMENT EXPENSES. In addition to the payments required
in Sections 3.01 and 3.02, Licensee shall either reimburse Licensor for, or pay
directly, the expenses associated with the pre-clinical and clinical development
of the Agreement Compounds for the Field of Use, as agreed in the Project
described in more detail in Section 6.01, to the extent such expenses are not
paid for by government institution grants; provided such expenses have been
previously approved in writing by Licensee.
4. CURRENCY OF PAYMENT. All payments to be made by Licensee
to Licensor hereunder shall be made in United States Dollars in the United
States to the following bank account designated by Licensor:
SunTrust Bank, North Florida, N.A.
Routing number: 000000000
Beneficiary: SunPharm Corp., Inc.
Account Number: 0070003765431
or at such other place as Licensor may reasonably designate consistent with the
laws and regulations controlling in any foreign country. Royalties earned shall
be first determined in the currency of the country in which they are earned and
then converted to its equivalent in United States currency. The buying rates of
exchange for the currencies involved into the currency of the United States
quoted by Citibank N.A. (or its successor in interest) in New York, New York at
the close of business on
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the last business day of the quarterly period in which the royalties were earned
shall be used to determine any such conversion.
5. TAXES WITHHELD. Any income or other tax that Licensee or
its Affiliates is required to withhold and pay on behalf of Licensor with
respect to the royalties payable to Licensor under this Agreement shall be
deducted from said royalties prior to remittance to Licensor; PROVIDED, HOWEVER,
that in regard to any tax so deducted, Licensee shall give or cause to be given
to Licensor such assistance as may reasonably be necessary to enable Licensor to
claim exemption therefrom or credit therefor, and in each case shall furnish
Licensor proper evidence of the taxes paid on its behalf.
6. REDUCTION IN ROYALTIES. In the event that any third party
begins unlicensed sales of Licensed Products in any country in the Territory in
which Licensee or its Affiliates are selling Licensed Products under the
Licensed Patents and Licensor is unable to force the discontinuance of such
sales within six (6) months after having received written notice thereof, the
royalty thereafter due pursuant to Section 3.02 with respect to such country
shall be reduced by fifty percent (50%) and shall continue for the duration of
such sales by an unlicensed third party. Licensee shall promptly notify Licensor
in writing of any unlicensed sales of Licensed Products which may come to
Licensee's attention.
7. COMPUTATION OF ROYALTIES. All sales of Licensed Products
between Licensee and any of its Affiliates and/or sub-licensees shall be
disregarded for purposes of computing royalties under this Article III, but in
such instances royalties shall be payable only upon sales to unlicensed
independent third parties. Nothing herein contained shall obligate Licensee to
pay Licensor more than one royalty on any unit of a Licensed Product or any
Licensed Process.
8. LICENSES TO AFFILIATES. Licensor shall, at the request of
Licensee, sign license agreements directly with Licensee's Affiliates in those
countries where such licenses will be advantageous to Licensee and will not have
a material adverse effect on Licensor. Such license agreements shall contain the
same language as contained herein with appropriate changes in parties and
territory. It shall be Licensee's responsibility to register such agreements
with the appropriate authorities. Royalties received by Licensor directly from
Licensee's Affiliates shall be credited towards Licensee's royalty obligation
under Section 3.02 hereof.
9. STATUTORY LIMIT. If applicable royalty rates hereunder
exceed the maximum permissible rate established in a given country by a
governmental agency, the royalty payable by Licensee hereunder shall not exceed
such maximum permissible rate.
ARTICLE IV.
RECORDS AND PAYMENTS
1. QUARTERLY REPORTS AND PAYMENTS. Within ninety (90) days
after the close of Licensee's current fiscal quarter during the term of this
Agreement following the first commercial
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launch of a Licensed Product in a country in the Territory, Licensee shall
deliver or cause to be delivered to Licensor a written report showing all sales
of Licensed Products by Licensee and its Affiliates during the preceding
quarterly period and showing the calculation of Net Sales and the amount payable
as royalties pursuant to Article 3 hereof. Concurrently with the submission of
each such written report, Licensee shall pay Licensor or cause to be paid the
amount of royalties shown to be due thereon, subject to the other provisions of
this Agreement. If no royalties shall be due, Licensee shall so report.
2. RECORDS. Licensee shall keep or cause to be kept accurate
records in sufficient detail to enable the royalties payable hereunder to be
determined. Said records shall be kept at Licensee's principal place of business
of the appropriate division of Licensee to which this Agreement relates. Within
180 days following the close of each fiscal year during the term of this
Agreement, upon the request of Licensor, Licensee shall grant access to
Licensor's independent certified public accounting firm (reasonably acceptable
to Licensee), during regular business hours and upon reasonable prior notice,
and subject to the confidentiality undertakings contained in this Agreement, to
Licensee's books and records relating to Net Sales solely for purposes of
verifying the accuracy of the calculations hereunder for the fiscal year then
ended. If any such verification shows any underpayment or overpayment then,
unless either Party disagrees in any respect with the results of such
verification, a correcting payment or a refund, together with interest at the
current prime lending rate established by leading New York banks as published in
THE WALL STREET JOURNAL, shall be made within thirty (30) days of completion of
such verification and submission of the results thereof, with details of the
calculations included therein.
If either party disagrees in any respect with the results of
such verification, then Licensor and Licensee shall meet to attempt to resolve
the disagreement. If they are unable within thirty (30) days to reach a
resolution, Licensor and Licensee shall jointly retain an independent auditor to
review calculations under Section 4.01 and the verification conducted under the
preceding paragraph. The decision of such independent auditor with respect to
the payments if any, to be made pursuant to this Section shall be final and
binding on the Parties. The costs of such independent auditor shall be borne
equally by the Parties.
ARTICLE V.
DEVELOPMENT AND MARKETING
1. DEVELOPMENT OF LICENSED PRODUCTS. Subject to the terms and
conditions of this Agreement, including without limitation, Sections 5.01, 5.02
and 5.03 hereof, Licensor and Licensee shall coordinate activities with respect
to the Project through the Joint Committee. The IND for the Agreement Compounds
shall be filed in the name of Licensor or Licensor's designee. Upon completion
of Phase 1 and provided that Licensee has elected to continue development of the
Project, (a) Licensor shall promptly transfer or cause to be transferred the IND
to Licensee and execute or cause to be executed any documentation required in
connection therewith, and (b) Licensee shall control and complete the
development and improvement of the Agreement Compounds, Licensed Products and
Licensed Processes in accordance with the development plans
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set forth in Exhibit B attached hereto and shall pay all costs arising from or
related to such development plans. (The development activities relating to the
Agreement Compounds, Licensed Products and Licensed Processes are hereinafter
referred to as the "Project").
2. PROGRESS REPORTS.
(a) DURING PHASE 1. Xxxxxx Xxxxx 0 of the Project, Licensor,
through the Joint Committee, shall coordinate activities relating to the Project
and shall keep Licensee informed of the progress of the work being performed by
Licensor pursuant to the development plans and the budget set forth in Exhibit
B. Without prejudice to the generality of the foregoing, Licensor shall submit
to Licensee other written progress reports at intervals of not more than six
months summarizing activities during each reporting period and the planned
activities of the succeeding period. Licensor shall provide Licensee with
Investigator's Brochures, IND Annual Reports, Serious Adverse Event Reports,
clinical trial protocols, and Sponsor's Study Reports within 30 days of final
draft. Licensor shall provide Licensee with such access to relevant records and
facilities as to permit a reasonable review of the progress, from time to time,
of the activities being performed by Licensor during Phase 1 of the Project
pursuant to the development plans and the budget set forth in Exhibit B.
(b) AFTER COMPLETION OF PHASE 1. Following completion of Phase
1 of the Project, Licensee through the Joint Committee, shall keep Licensor
informed of the progress of the work being performed by Licensee pursuant to the
development plans set forth in Exhibit B; provided, however, that Licensee shall
have responsibility and sole control for product development and clinical design
decisions in support of the plans set forth on Exhibit B and for completion of
the clinical designs and the execution of such plans set forth on Exhibit B.
Without prejudice to the generality of the foregoing, Licensee shall submit to
Licensor other written progress reports at intervals of not more than six months
summarizing activities during each reporting period and the planned activities
of the succeeding period. Licensee shall provide Licensor with Investigator's
Brochures, IND Annual Reports, Serious Adverse Event Reports, clinical trial
protocols, and Sponsor's Study Reports within 30 days of final draft. Licensee
shall provide Licensor with such access to relevant records and facilities as to
permit a reasonable review of the progress, from time to time, of the activities
being performed by Licensee pursuant to the development plans set forth in
Exhibit B.
3. JOINT RESEARCH AND DEVELOPMENT COMMITTEE AND MEETINGS.
(a) Licensee and Licensor shall establish a committee (the
"Joint Committee") to provide each party with timely information regarding
development and management of the Project in accordance with the development
plans set forth in Exhibit B hereto and the terms of Sections 5.01 and 5.02
above. Promptly following the execution of this Agreement, each of Licensee and
Licensor shall (i) appoint one of its employees to serve as its Research
Development Program Leader, who shall serve on the Joint Committee and shall
have overall responsibility for conducting and directing the efforts of his or
her respective party in accordance with the determinations of the Joint
Committee and (ii) appoint two additional representatives to the Joint
Committee; and the Joint
12
Committee shall have an initial meeting as soon as practicable following the
appointment of the members thereof.
(b) Following the initial meeting of the Joint Committee
provided in paragraph 5.03(a), the Joint Committee shall meet at intervals of
not less than three and not more than six months in order to carry out
appraisals of the Project and the results thereof. At such meetings the parties
shall consider whether the direction of the Project should be modified in light
of the parties' experience, PROVIDED, that no recommendations of the Joint
Committee which would extend the scope or alter the terms of this Agreement
shall be effective until an amendment to this Agreement shall have been prepared
and signed by the legal representatives of the Parties, in accordance with the
terms of Section 11.05 hereof.
(c) Actions of the Joint Committee shall be by consensus;
PROVIDED, HOWEVER, that notwithstanding anything contained in this Agreement to
the contrary, in the event of a deadlock, issues shall be resolved (i) by
negotiations between the management of Licensee and Licensor and (ii) in the
event that the management of Licensee and Licensor are unable to reach an
agreement, then (1) if such issue arises during Phase 1, the issue shall be
resolved by an independent third party expert selected by, and mutually
agreeable to, the Parties, whose determinations will be final and binding upon
the Parties and (2) if such issue arises after completion of Phase 1, Licensee's
decision, determined in Licensee's sole discretion, shall control and be final
and binding upon the Parties.
4. GOVERNMENTAL APPROVALS. With respect to each country in
the Territory, Licensee shall be responsible for (either alone or with one or
more third parties deemed necessary or desirable in Licensee's sole discretion),
and pay the costs, expenses and fees associated therewith, the submission of
information with respect to each Licensed Product, Licensed Process and
Agreement Compound to the appropriate governmental agency in such country from
which approval must be obtained in order to market such Licensed Product,
Licensed Process and/or Agreement Compound. Licensor shall assist and cooperate,
and shall cause UFRFI to assist and cooperate, with Licensee as reasonably
requested in any such submission.
5. MARKETING. Licensee shall have sole control and
responsibility (either alone or with one or more third parties deemed necessary
or desirable in Licensee's sole discretion) for the marketing of Agreement
Compounds or Licensed Products in the Territory; provided that Licensee shall at
all times comply with the terms of Section 5.07.
6. PHARMACOVIGILANCE AND ADVERSE REACTION INFORMATION.
Licensee shall maintain an adverse event and vigilance reporting system that is
in compliance with FDA requirements or any foreign counterpart thereof in the
Territory. Such system shall track, investigate and report to the appropriate
regulatory authorities in the Territory adverse events for the Agreement
Compounds or Licensed Products. Licensee shall promptly notify Licensor of any
serious adverse reaction investigation with respect to Agreement Compounds,
Licensed Products or Licensed Processes occurring within the Territory. For FDA
reportable adverse events occurring within the Territory, notification of
Licensor by Licensee shall be concurrent with FDA notification. Licensor
13
shall promptly notify Licensee of any serious adverse reaction investigation
with respect to Agreement Compounds, Licensed Products or Licensed Processes
occurring outside the Territory. For FDA reportable adverse events occurring
outside the Territory, notification of Licensee by Licensor shall be concurrent
with FDA notification.
7. DUE DILIGENCE.
(a) Licensee shall use commercially reasonable efforts to
bring one or more Licensed Products or Licensed Processes to market such efforts
to be consistent with the efforts employed by Licensee for its own products.
(b) Licensee shall exercise commercially reasonable efforts in
developing the Project in an expeditious manner, in accordance with the
development plan set forth in Exhibit B hereto and this Article V.
(c) Licensee, or a sublicensee of Licensee, will promote,
market and sell a Licensed Product, including the specific launch of commercial
sales in each country within the Territory, within one hundred eighty (180) days
of governmental market and pricing approval of the Licensed Product, except
where and to the extent that such promotion, marketing and/or sale may be
prohibited or restricted by law; provided, however, that in the event that
Licensee fails to launch the commercial sale of such Licensed Product in a
country within the Territory within such one hundred eighty (180) day period due
to Force Majeure, or the inability of Licensee to secure DMF grade Bulk
Substance from an FDA approved source after a good faith effort, such one
hundred eighty (180) day period shall be extended by the period of delay
resulting from any of such occurrences. In the event Licensee decides not to
launch a given Licensed Product in any given country, Licensee shall notify
Licensor in writing of such decision promptly after governmental market and
pricing approval of such Licensed Product. In such event, all rights of Licensee
under this Agreement with respect to such Licensed Product in such country in
the Territory shall terminate.
ARTICLE VI.
PATENT PROSECUTION AND INFRINGEMENT
1. PROSECUTION. Licensor shall, subject to the rights of
UFRFI under the UFRFI License Agreement, prepare, file, prosecute and maintain,
all patent applications and issued patents related to the Know-How, the
Agreement Compounds, the Licensed Products, Licensed Processes and Improvements
in the Territory. Licensor shall keep Licensee currently advised of all steps
taken or to be taken by Licensor in the prosecution, filing and maintenance of
all applications for patents relating to Agreement Compounds, Licensed
Processes, Licensed Products and Improvements and shall furnish Licensee with
copies of all such patent applications promptly after filing. Licensee shall
have the right to advise and cooperate with Licensor in any such prosecution,
filing or maintenance of such patent applications, and such advice shall not be
rejected unreasonably. All costs and expenses incurred after the execution and
delivery of this Agreement by the Parties,
14
including reasonable attorneys fees, with respect to the preparation, filing,
prosecution and maintenance of all patent applications and issued patents
related to the Know-How, the Agreement Compounds, the Licensed Products,
Licensed Processes and Improvements in the Territory shall be shared equally by
the Parties.
2. OWNERSHIP OF INVENTIONS. Inventions made by one Party
shall remain the property of, and shall be owned by, such Party; and inventions
made jointly by the Parties shall be the property of, and shall be owned jointly
by, the Parties; provided, however, that all such inventions referred to in this
Section 6.02 that are owned jointly or otherwise by Licensor shall be included
in the grant of the license by Licensor to Licensee under Section 2.01 above. In
the event the License is terminated by Licensor with respect to a country in the
Territory and Licensee has transferred to Licensor Know-How pursuant to Section
10.04 below, Licensee shall also grant to Licensor an exclusive license for use
in the Field of Use solely within the country in the Territory in which the
License hereunder has been terminated, on terms and conditions similar to those
contained herein, including the royalty terms set forth in Section 3.01 hereof
on a Population Adjusted basis, but excluding the Lump Sum Payments provided in
Section 3.02 hereof, to all Licensee inventions which may be utilized in
connection with the Products.
3. ENFORCEMENT ACTIONS AGAINST THIRD PARTY INFRINGEMENTS.
(a) Licensor and Licensee shall promptly notify each other of
any infringement of the Licensed Patents and/or unauthorized use of the Know-How
which may come to their attention. Subject to Section 6.03(b), Licensor shall
(i) promptly notify Licensee if UFRFI elects to join Licensor as a plaintiff or
subsequently bring its own action against an infringer or the rights or
unauthorized use of Licensed Products or Agreement Compounds, and (ii) promptly
undertake commercially reasonable efforts to obtain a discontinuance of the
aforesaid infringement or unauthorized use and, if not successful, Licensor
shall bring suit against such infringer or unauthorized user. Subject to the
rights of UFRFI under the UFRFI License Agreement, Licensee may elect to join
Licensor and/or UFRFI as a party plaintiff in any such suit, at the expense of
Licensee.
(b) Notwithstanding anything to the contrary set forth in
Section 6.03(a), in the event Licensee desires to be designated as lead
plaintiff and select counsel for such an action, Licensee shall provide prompt
written notice to Licensor of such intent and shall, subject to the rights of
UFRFI under the UFRFI License Agreement, thereafter assume direction of the
litigation. Any suit by Licensee shall be either in the name of Licensee, or in
the name of Licensor or UFRFI, or jointly by Licensee, Licensor and UFRFI, or
any combination thereof, as may be required by the law of the forum. For such
purpose Licensor shall execute, and where necessary shall cause UFRFI to
execute, such legal papers necessary for prosecution of such suit as may be
reasonably requested by Licensee.
15
4. DEFENSE AGAINST CLAIMS OF INFRINGEMENTS BY THIRD PARTIES.
(a) Subject to the rights of the UFRFI under the UFRFI License
Agreement and 6.04(b) below, Licensor shall have the right, but not the
obligation to defend any and all charges of infringement of intellectual
property rights concerning the manufacture, use, sale, offer for sale, or
importation of the Licensed Products whether such charge is made against UFRFI,
Licensor, Licensee, an Affiliate or sub-licensee of Licensee, or any combination
thereof. In all such cases, Licensor shall have the right, but not the
obligation, to control such litigation or threatened litigation, including the
right to choose counsel, the right to direct the conduct of the litigation, the
right to settle or compromise the case or position, and to take any other action
as Licensor may, in its own discretion deem appropriate, provided, however, that
Licensor shall obtain Licensee's consent, not to be unreasonably withheld, to
any settlement or compromise which would have an adverse effect on Licensee, an
Affiliate of Licensee or sub-licensee of Licensee, or of such party's respective
rights hereunder.
(b) Notwithstanding anything to the contrary set forth in
Section 6.04(a), in the event Licensee desires to be designated as lead
plaintiff and select counsel for such an action, Licensee shall provide prompt
written notice to Licensor of such intent and shall thereafter, subject to the
rights of UFRFI under the UFRFI License Agreement, assume direction of the
litigation. Any suit by Licensee shall be either in the name of Licensee, or in
the name of Licensor or UFRFI, or jointly by Licensee, Licensor and UFRFI, or
any combination thereof, as may be required by the law of the forum. For such
purpose Licensor shall execute, and where necessary shall cause UFRFI to
execute, such legal papers necessary for prosecution of such suit as may be
reasonably requested by Licensee.
5. COOPERATION OF PARTIES. With respect to any suit for
infringement of the Licensed Patents or unauthorized use of the Know-How, or
defense of the Licensed Patents, the party that did not institute suit or that
does not control the defense of the suit, as the case may be, shall render
reasonable assistance to the party that did institute suit or is defending the
action, including, but not limited to executing all documents as may be
reasonably requested by the party that did institute suit, having its employees
testify when requested and making available relevant records, papers,
information, samples, specimens and the like.
6. LEGAL FEES AND RECOVERIES. The costs and expenses,
including reasonable attorneys fees, of any action brought by or defended by
Licensor or Licensee pursuant to Sections 6.03 or 6.04 hereof, shall be shared
equally by the Parties. Any recovery of damages by Licensee for any such suit
shall be applied first in satisfaction of any unreimbursed expenses and legal
fees of the parties and thereafter shall be divided equally between Licensee and
Licensor. In the event a cash settlement is received as a result of an action
against an infringer or a "product settlement" is received (as defined below),
Licensor and Licensee shall, after deduction for costs of litigation, each
receive 50% of the net settlement amount. In the event the Licensor and Licensee
agree that a license is required to be obtained from a third party in connection
with any action or
16
settlement, the parties shall each bear fifty percent (50%) of the costs and
royalties associated therewith.
ARTICLE VII.
OBLIGATION OF CONFIDENTIALITY
1. CONFIDENTIALITY OBLIGATION. During the term of this
Agreement and thereafter, the Parties hereto shall hold in confidence all
confidential and proprietary information ("Information") of the other party
hereto except for and to the extent to which:
(a) Information which must be disclosed to government agencies
for the process of registering Licensed Products or Licensed Processes;
(b) Information which is or becomes part of the public domain
through no fault of the parties or their respective Affiliates;
(c) Information which was known by either of the parties or
such party's Affiliates as shown by the written records of such party at the
time of its disclosure by the other party;
(d) Information which is disclosed with the prior written
approval of the other party;
(e) Information which must be disclosed to those persons who
have a need to know in order to effectuate the development of Licensed Products
or Licensed Processes, provided that each such person signs an agreement
obligating that person to hold the Information in confidence to the same extent
as the parties are obligated hereunder;
(f) Information which must be disclosed to a company which is
appointed as a supply source of Agreement Compounds, provided that such company
signs an agreement obligating it to hold the Information in confidence to the
same extent as the parties are obligated hereunder;
(g) Information which becomes known to Licensee from a source
other than Licensor or UFRFI without breach of this Agreement by Licensee
provided that such other source has the right to disclose such Information; or
(h) Information which is disclosed pursuant to an order or
requirement of a court, administrative agency, or other government body.
2. STANDARD OF CARE. Each party shall take all such
precautions as it normally takes with its own confidential information to
prevent any improper disclosure of the Information; provided, however, that
Information may be disclosed within the limits required to obtain any
17
authorization from the FDA or any other United States or foreign regulatory
agency or, with the prior written consent of the other party.
3. NON-USE OF NAMES. Neither of the parties hereto shall use
the names of the other party hereto, the University of Florida or UFRFI or any
of either party's or institution's employees, nor any adaptation thereof, in any
advertising, promotional or sales literature without the prior written consent
of the other party or UFRFI in each case, except that the parties may state that
it is licensed and/or sublicensed by UFRFI under one or more of the patents
and/or applications comprising the Licensed Patents.
4. SURVIVAL. The obligations of confidentiality shall survive
expiration or termination of this Agreement.
ARTICLE VIII.
REPRESENTATIONS AND WARRANTIES
1. REPRESENTATIONS AND WARRANTIES OF LICENSOR. Licensor
hereby represents and warrants the following:
(a) Except for the royalty-free, nonexclusive license granted
by UFRFI to the United States Government described in the UFRFI License
Agreement, to Licensor's knowledge, Licensor is the sole licensee of the entire
right, title and interest in and to Licensed Patents; Licensor is the sole
licensee of the Know-How to be provided under the terms of this Agreement and
the UFRFI License Agreement; and Licensor is the sole licensee of the right,
title and interest in and to the Agreement Compounds, the Licensed Products and
Licensed Processes.
(b) Licensor is free to enter into this Agreement and to
sublicense its rights under the UFRFI License Agreement to Licensor pursuant to
this Agreement.
(c) As of the date of this Agreement, there are no actions,
suits or claims pending against Licensor or any of its Affiliates or, to the
best of Licensor's knowledge, UFRFI in any court or by or before any
governmental body or agency with respect to Licensed Patents, Agreement
Compounds, Licensed Products, Licensed Processes and/or Know-How, and to the
best of Licensor's knowledge, no such actions, suits or claims have been
threatened against Licensor or any of its Affiliates or UFRFI and Licensor is
unaware of any facts which would form a reasonable basis for such a claim.
(d) No other person or organization presently has been granted
by Licensor any effective option or license with respect to the manufacture, use
or sale of Agreement Compounds, Licensed Products or Licensed Processes in the
Field of Use in the Territory, or is presently authorized to use Know-How in or
for the Field of Use in the Territory.
18
(e) As of the date of this Agreement, to the best of
Licensor's knowledge, none of the Agreement Compounds, Licensed Patents,
Licensed Processes or Know-How infringe upon the patent or other intellectual
property rights of any third party.
(f) To the best of Licensor's knowledge, there is no patent or
patent application of another, which contains claims that dominate or may
dominate any Know-How, or any of the Licensed Patents, Licensed Processes or
Licensed Products.
(g) Nothing has come to the attention of Licensor which it
believes would indicate that the Licensed Products are not patentable or
marketable or would be unable upon completion of the development program to
receive FDA approval.
2. REPRESENTATION AND WARRANTIES OF LICENSEE. Licensee hereby
represents and warrants the following:
(a) Licensee is free to enter into this Agreement and perform
all of the obligations required by Licensee hereunder. When executed by
Licensee, this Agreement shall be valid and enforceable against Licensee, in
accordance with its terms.
(b) There are no actions, suits or claims pending against
Licensee or any of its Affiliates, in any court or by or before any governmental
body or agency preventing Licensee from entering into this Agreement or
performing its obligations hereunder.
ARTICLE IX.
COVENANTS
1. COVENANTS OF LICENSOR. Licensor hereby covenants to
Licensee as follows:
(a) it shall not terminate the UFRFI License Agreement for any
reason without the prior written consent of Licensee;
(b) it shall not amend the UFRFI License Agreement without the
prior written consent of Licensee if such amendment would adversely affect or
diminish any of Licensee's or Licensee's Affiliates or sublicensees' rights or
privileges hereunder; and
(c) it shall meet all of its obligations to UFRFI under the
UFRFI License Agreement.
2. COVENANTS OF LICENSEE. Licensee hereby covenants to
Licensor that Licensor's obligations to UFRFI under the UFRFI License Agreement,
to the extent they relate directly to the Agreement Compounds, the Licensed
Patents, the Licensed Processes and Know-How (other than financial commitment
and payment obligations), shall be binding upon Licensee as if Licensee were a
party thereto, except as otherwise provided in this Agreement.
19
ARTICLE X.
TERM OF AGREEMENT
1. TERM. Unless sooner terminated as provided in Section
10.02, this Agreement shall commence as of the date first above written and
shall continue on a product by product and country by country basis with respect
to each Licensed Product in each country in the Territory until (i) with respect
to a Licensed Product in a country in the Territory in which a patent is granted
prior to regulatory approval of such Licensed Product for such country in the
Territory, the expiration date of the last to expire granted Licensed Patent for
such Licensed Product containing a Valid Claim in that country; or (ii) with
respect to a Licensed Product in a country in the Territory in which a patent is
not granted prior to regulatory approval of such Licensed Product for such
country in the Territory, five (5) years from the date of regulatory approval of
such Licensed Product for such country in the Territory; provided, however, that
in the event a patent for such Licensed Product is subsequently granted during
such five year period for such country in the Territory, then expiration of the
term of this Agreement for such Licensed Product for such country in the
Territory shall be the last to expire granted Licensed Patent for such Licensed
Product containing a Valid Claim in that country. Upon expiration of the term of
this Agreement with respect to any Licensed Product in any country in the
Territory or earlier termination with respect to Licensed Products whose
underlying Licensed Patents have been determined to lack a Valid Claim in a
country in the Territory, Licensee shall retain all rights to any trademarks
utilized in connection with the sale and marketing of any such Licensed
Products, and nothing herein shall be deemed to restrict Licensee's ability to
manufacture, sell, distribute, market and promote the Licensed Products in any
country in the Territory with respect to which the Licensed Patents have expired
or lack a Valid Claim.
2. TERMINATION. This Agreement may be terminated:
(a) By either party hereto upon the breach of this Agreement
by the other party, on sixty (60) days' prior written notice to the breaching
party, the notice to become effective at the end of the sixty (60) day period
unless the breach is sooner cured by the breaching party, PROVIDED, that (i)
upon the breach by Licensee of any obligation to make payments to Licensor
hereunder, Licensor may terminate this Agreement on thirty (30) days' prior
written notice to Licensee unless the breach is cured by Licensee within such
thirty (30) day period; and (ii) upon breach by Licensor of any obligation
hereunder, the Licensee shall be entitled to a fifty percent (50%) reduction in
royalties payable hereunder until such breach is cured; or
(b) By a party, if the other party hereto seeks relief under
any bankruptcy, insolvency, or other laws affecting creditors' rights generally
or seeks to place its business in the hands of a receiver or any such petition
or action is filed or sought against such party which is not dismissed within
sixty (60) days of the commencement thereof; or
(c) By Licensee upon the termination of the UFRFI License
Agreement relating to the Licensed Patents (it being understood that in such
event Licensee shall be entitled, without any
20
obligation to Licensor, to enter into a license agreement with the UFRFI with
respect to the Agreement Compounds, Licensed Products or Licensed Processes); or
(d) By Licensee on a product by product and country by country
basis, if an NDA or its non-US equivalent is not approved within thirty-six (36)
months of submission; or
(e) By Licensee with respect to the United States and without
further obligation for royalty payments hereunder with respect to Net Sales in
the United States, in the event the United States government exercises its
residual rights arising from its National Institute of Health grants to fund
research on Agreement Compounds (except if the United States Government requires
sales to it by Schein at no less than the then current market price); or
(f) By Licensee on a product-by-product and country by country
basis with respect to Licensed Products whose underlying patents lack a Valid
Claim in a country in the Territory, in which event Licensee shall be free to
manufacture, sell, transfer, commercialize and market such Licensed Product in
such country in the Territory without obligation to Licensor other than those
set forth in Sections 10.03 and 10.04 below; or
(g) By Licensee, on six (6) months' notice, if Licensee is
unable to secure DMF grade Bulk Substance from an FDA approved source after a
good faith effort; or
(h) By Licensee, on a product by product and country by
country basis, if a temporary restraining order, preliminary injunction or other
order is granted by a court or authority enjoining or restricting the
manufacture or distribution of a Licensed Product in a country in the Territory,
as contemplated hereby; or
(i) By Licensee, on a product by product and country by
country basis, if it determines in good faith that a Licensed Product is not
commercially feasible in a country in the Territory; or
(j) By Licensee, on a product by product and country by
country basis, if the Licensed Patents or the Licensed Products infringe upon
third party patents or other third party rights in a country in the Territory
and Licensee is unable to effect an arrangement that is satisfactory to Licensee
to avoid infringement after a good faith effort to do so; or
(k) By Licensee, if the results of clinical studies in humans
with respect to the Licensed Products or the Agreement Compounds are
inconclusive and do not permit a filing for an NDA, or if additional studies
need to be performed or redone which additional studies would extend the
timetable for the Project by eighteen (18) or more months; or
(l) By Licensee, after completion of Phase 1, upon 180 days'
prior written notice to Licensor, for any other reason, including, without
limitation, a change of Licensee's strategic plans; or
21
(m) By Licensor, during the period from the date of the
transfer of the IND to the Licensee until date of submission of the NDA, if the
Licensee does not use commercially reasonable efforts to pursue development of
the Agreement Compound for a period of nine months.
3. CONTINUING RIGHTS. Termination of this Agreement for any
reason shall be without prejudice to:
(a) Licensor's right to receive all royalties accrued and
unpaid on the effective date of such termination;
(b) the rights and obligations provided in Section 7.03
hereof; and
(c) any other remedies which either party may then or
thereafter have hereunder or otherwise.
Upon termination of this Agreement for any reason other than
the expiration of this Agreement under Section 10.01, Licensee may notify
Licensor of the amount of Licensed Products that Licensee and its Affiliates and
sublicensees then have on hand, in which case Licensee and its Affiliates and
sublicensees shall have the right to sell that amount of Licensed Products,
provided that Licensee shall pay or cause to be paid royalties thereon at the
rates and at the times herein provided and render reports thereon in the manner
herein provided. Notwithstanding the foregoing, upon the occurrence of any of
the events set forth in Sections 10.02(e) or (j), above, Licensee shall have the
right to elect to (i) terminate the term of this Agreement with respect to the
applicable Licensed Product or Products in a country in the Territory, or (ii)
continue the Agreement on the same terms and conditions except that Licensee
shall have the right to continue selling the affected Licensed Product or
Products the applicable country or countries in the Territory at fifty (50%) of
the royalty rate set forth in Section 3.02 above.
4. RETURN OF KNOW-HOW. Upon early termination of this
Agreement by (1) Licensor following breach of this Agreement by Licensee, or (2)
by Licensee pursuant to Sections 10.02(d), (e), (f), (h), (i), (j), (k) or (l),
Licensee, its successors and legal representatives shall collect and return to
Licensor all Know-How and information obtained by Licensee pursuant to this
Agreement in whatever form it may exist and shall do its utmost to prevent the
further use of any and all such Know-How or information without Licensor's
express written consent. Upon the early termination of this Agreement as set
forth in the first sentence of this Section 10.04, Licensee shall immediately
transfer to Licensor or to a third party designated by Licensor the marketing
registrations, data base and registration dossier information relating to
Licensed Products or Licensed Processes in Licensee's possession.
Notwithstanding the foregoing, in the event of such termination of this
Agreement as to less than all of the countries in the Territory, the obligations
set forth in this Section 10.04 shall apply only with respect to such countries
and Licensee shall be permitted to retain Know-How and other information
obtained pursuant to this Agreement and utilize such Know- How and information
in such countries in the Territory with respect to which this Agreement has not
been terminated. In the event Licensee terminates this Agreement pursuant to
Sections 10.02(d),
22
(e), (h), (j), or (k), Licensor shall, at such time as Licensor or any
sub-licenseee of Licensor shall commence the first commercial launch of a
product based upon the Agreement Compound, reimburse Licensee for the Population
Adjusted fifty percent (50%) cost of cumulative clinical expenses incurred by
Licensee on such Agreement Compound, such amounts to be paid from royalty,
milestone and profits derived from the license, development and sale of Licensed
Products at the same rate as provided herein for payment of royalties on sales
of the Agreement Compound. In the event this Agreement is terminated by Licensee
pursuant to Subsection 10.02(l), Licensee agrees that, for a period of five (5)
years following such termination, it will not undertake to develop an ANDA for
the Agreement Compound.
5. WAIVER. Failure to terminate this Agreement following
breach or failure to comply with this Agreement shall not be deemed a waiver of
the non-breaching party's defenses, rights or causes of action arising from such
or any future breach or noncompliance.
ARTICLE XI.
MISCELLANEOUS
1. FORCE MAJEURE. If for reasons of Force Majeure, as
hereinafter defined, either party fails to comply with its obligations hereunder
other than the payment of money, such failure shall not constitute breach of
contract. For the purpose of this Article, Force Majeure shall means acts of
God; acts, regulations or laws of any government; war; civil commotion;
destruction of production facilities or materials; fire; earthquake or storm;
labor disturbances; failure of public utilities or common carriers and any other
causes beyond this reasonable control of either party.
2. ASSIGNMENT. Either party hereto may assign this Agreement
in whole or in part to any Affiliate or Affiliates who shall be substituted
directly in whole or in part for it hereunder, provided, however, that the
assignor shall guarantee the performance of its Affiliate assignee hereunder.
This Agreement shall not otherwise be assignable by either party without the
prior written consent of the other party, except by a party to the successor or
assignee of all or substantially all of its business related to Licensed
Products.
3. NOTICES. Any notice or report required or permitted to be
given or made under this Agreement by one of the parties hereto to the other
shall be in writing and sent to the other party at its address indicated below
or to such other address as the addressee shall have theretofore furnished in
writing to the addressor:
23
If to Licensor:
SunPharm Corporation
The Veranda, Xxxxx 000
000 Xxxxxxx X0X
Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxx
President and CEO
If to Licensee:
Schein Pharmaceutical, Inc.
000 Xxxxxx Xxxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: General Counsel
4. GOVERNING LAW. This Agreement shall be construed and the
respective rights of the parties hereto determined according to the substantive
laws of Delaware, other than those provisions governing conflict of laws. The
Parties agree that the venue of any action in connection with this Agreement
shall be the Federal District Court sitting in Wilmington, Delaware and hereby
waive any and all defenses of improper venue or that the forum is inconvenient.
5. ENTIRE AGREEMENT. The terms and provisions contained in
this Agreement constitute the entire Agreement between the parties and shall
supersede all previous communications, representations, agreements or
understandings, either oral or written, between the parties hereto with respect
to the subject matter hereof and no agreement or understanding varying or
extending this Agreement shall be binding upon either party hereto, unless in
writing which specifically amended thereby shall remain in full force and
effect.
6. NON-WAIVER. Any waiver must be explicitly in writing. The
waiver by either of the parties to this Agreement of any breach of any provision
hereof by the other party shall not be construed to be a waiver of any
succeeding breach of such provision or a waiver of the provision itself.
7. SEVERABILITY. If and to the extent that any court or
tribunal of competent jurisdiction holds any of the terms, provisions or
conditions or parts thereof of this Agreement, or the application hereof to any
circumstances, to be invalid or to be unenforceable in a final, unappealable
order, the remainder of this Agreement and the application of such terms,
provision or condition or part thereof to circumstances other than those as to
which it is held invalid or unenforceable shall not be affected thereby, and
each of the other terms, provisions and conditions of this Agreement shall be
valid and enforceable to the fullest extent of the law.
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8. AGENCY. The relationship of the parties under this
Agreement is that of independent contractors. Neither party shall be deemed to
be the agent of the other, and neither is authorized to take any action binding
upon the other.
9. COUNTERPARTS, HEADINGS, ETC. This Agreement may be
executed in counterparts, each of which shall be deemed to be an original and
both together shall be deemed to be one and the same Agreement. All headings,
the cover page and the index in this Agreement are inserted for convenience of
reference only and shall not affect its meaning or interpretation. When
necessary or applicable, the use of the singular includes the plural and vice
versa, and the masculine includes the feminine and vice versa.
IN WITNESS WHEREOF, Licensor and Licensee have executed this
Agreement in duplicate as of the day and year first above written.
SUNPHARM CORPORATION
By: /s/ XXXXXX XXXX
------------------------------------------------
Name: XXXXXX XXXX
Title: PRESIDENT AND CHIEF EXECUTIVE OFFICER
SCHEIN PHARMACEUTICAL, INC.
By: /s/ XXXX X. XXXXXXXXX
------------------------------------------------
Name: XXXX X. XXXXXXXXX
Title: SENIOR VICE-PRESIDENT, STRATEGIC DEVELOPMENT
25
EXHIBIT A
LICENSED PATENTS
[ ** ]
26
EXHIBIT B
DEVELOPMENT PLANS
All of the attached Exhibit B has been deleted.
27
