1
Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
Exhibit 10.7
DEVELOPMENT AND LICENSE AGREEMENT
THIS DEVELOPMENT AND LICENSE AGREEMENT (the "Agreement") is made and entered
into as of the date of last signature of the parties below (the "Effective
Date"), by and between RECORDATI S.A. CHEMICAL AND PHARMACEUTICAL COMPANY, a
Swiss corporation, with its principal offices located at Xxxxx Xxx Xxxxxxxx 00,
0000 Xxxxxxx, Xxxxxxxxxxx ("Recordati"), and ASCENT PEDIATRICS, INC., a Delaware
corporation, with its principal offices located at 0 Xxxxxxx Xxxxxx, Xxxxxxxxx,
XX 00000, X.X.X. ("Ascent").
RECITALS
A) Recordati has developed and owns the Recordati Technology (as defined
herein);
B) Ascent is interested in developing a CRSS-formulation for the delivery
of the non-proprietary drug Albuterol ("Drug");
C) Recordati and Ascent on May 24, 1994 entered into an agreement
("Feasibility Agreement") under which Recordati, with input from Ascent, has
prepared prototype CRSS formulations containing the Drug and
D) Recordati and Ascent desire to set forth the terms and conditions under
which Recordati will develop the Product (as defined herein), scale-up the
production from laboratory scale to industrial scale and grant to Ascent a
license to clinically test, register, distribute, market, use and sell the
Finished Product (as defined herein); and Ascent will clinically test, obtain
Regulatory Approval (as defined herein), register, distribute, market, use and
sell the Finished Product.
In consideration of the foregoing recitals and the mutual promises,
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
I. CERTAIN DEFINITIONS
As used in this Agreement, the capitalized terms below have the following
meaning:
1.1 "Affiliate/s" means any person or entity controlling, controlled by,
or under common control with, Recordati or Ascent. For the purpose of
this Agreement, the term "control" means the direct or indirect
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Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
ownership of fifty percent (50%) or more of any entity's voting stock,
equity or income interest or such other relationship as in fact
constitutes actual control, but in each case only for so long as such
ownership or control shall continue.
1.2 "Clinical Testing" means all biological, toxicological,
pharmacokinetic, pre-clinical and clinical studies or tests, and all
other studies or tests, necessary or useful for Regulatory Approval.
1.3 "Costs" means Recordati's actual ***************** costs and expenses
(including, without limitation, payments made to ********************
*************)related to the fulfillment of its obligations under the
Development Program.
1.4 "CRSS" means the proprietary technology, including, without
limitation, the Patents, owned by Recordati for a controlled release
suspension system for drug delivery.
1.5 "Development Committee" means the committee, to be composed of an
equal number of two or more representatives of each party, with
responsibility for all coordination, monitoring, modifications and
reporting related to the Development Program.
1.6 "Development Program" means the program, Estimated Costs,
specifications and respective responsibilities of the parties hereto,
for the ************************************************************
********************************************************************
********************************************************************
****, which is described in Exhibit A hereto, together with such
further modifications as shall be agreed upon by the Development
Committee.
1.7 "Estimated Costs" means the part of the Development Program describing
the estimated Costs expected to be incurred by Recordati and
reimbursed by Ascent in connection with the fulfillment of Recordati's
obligations under the Development Program. The Estimated Costs will be
determined on the basis of, and be part of the Development Program and
the parties shall agree to the Estimated Costs prior to initiating
each stage of the Development Program. The Estimated Costs are set
forth in Exhibit A. Recordati shall bear the cost of transferring the
CRSS technology to its Nominee or the Second Source. Ascent shall bear
the cost of the manufacturing scale-up of the Finished Product.
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Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
1.8 "Finished Product" means the Product together with all excipients (the
"Vehicle Granulate") reflecting the specifications set forth in the
Regulatory Approval in its finished package form ready for sale to
consumers, including packaging materials as approved for marketing by
Regulatory Authorities in the Territory.
1.9 "FDA" means the United States Food and Drug Administration, or any
successor governmental agency performing similar functions.
1.10 "IND" means an Investigational New Drug Application filed with the FDA
or the equivalent application filed with a foreign Regulatory
Authority.
1.11 "Know-How" means scientific and technical data or information,
including, without limitation, the Product, its formulations,
improvements, manufacturing data, process descriptions, skills,
methods of formulation, pharmacokinetics, preclinical and clinical
data plus tests with respect to the Product or Finished Product that
either party now possesses, develops or becomes contractually entitled
to receive from a third party during the term of this Agreement.
1.12 "Major Countries" means those countries with major markets for
pharmaceutical products as set forth in Exhibit B, including any
subsequent amendments.
1.13 "Net Sales" means the ************************ of Finished Product in
the Territory by Ascent, its Affiliates and its sublicensees, as the
case may be, (or by Recordati and its Affiliates, if Recordati is
obligated to pay royalties to Ascent under this Agreement) to
unaffiliated third parties
**********************************************************************
**********************************************************************
**********************************************************************
provided that*********************************************************
*******of Ascent's, its Affiliates and its sublicensees' published
list price; ************ ***************** provided that the
******************************************* shall be
****************************of such gross invoices in any Major
Country and to ********** of such gross invoices in all other
countries of the Territory during each calendar year. Sales between
Ascent and its Affiliates or sublicensees shall be excluded from the
computation of Net Sales, except where such Affiliates or sublicensees
are end-users, but
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Net Sales shall include the subsequent final sales to third parties by
such Affiliates or sublicensees.
1.14 "Patents" means the patents and patent applications set forth in
Exhibit C, together with any continuation, continuation in part,
extension, division, substitution, or addition thereto, as well as
patents issuing thereon and reissues, re-examinations, revalidation,
and registrations based thereon.
1.15 "PLA" or "Product License Application" means any application seeking
Regulatory Approval of the Finished Product filed with a Regulatory
Authority by Ascent, Recordati, their Affiliates or their
subcontractors or sublicensees anywhere in the Territory. For the
purposes of this Agreement a PLA includes an NDA or New Drug
Application.
1.16 "Product" means any specific CRSS formulation for Albuterol in the
form of CRSS coated granulates to be developed by Recordati pursuant
to the Development Program attached hereto as Exhibit A, and selected
by Ascent for use with the Vehicle Granulate in the manufacture of the
Finished Product for clinical testing and sale.
1.17 "Finished Product Data" means all documents, reports information and
expertise, except for Recordati Technology, developed, acquired or
possessed by Ascent, its affiliates, or its sublicensees, relating to
the Finished Product or any improvements, including, without
limitation, all Know-How, Clinical Testing data, formulations and
packaging, useful or required for the acquisition of Regulatory
Approval, registration and/or commercialization of the Finished
Product.
1.18 "Recordati Technology" means the proprietary or confidential
information relating to CRSS, the Product, the Finished Product and/or
improvements (except combination products, i.e., CRSS products using
one or more active ingredients in addition to Albuterol) thereto,
owned or otherwise licensable by Recordati or its Affiliates prior to
the Effective Date or developed or acquired by Recordati or its
Affiliates or jointly by Recordati and Ascent during the term of this
Agreement, which is necessary or useful for the manufacture, Clinical
Testing, registration, marketing, distribution, use and sale of the
Product or Finished Product. Proprietary information includes, but is
not limited to, information, data and designs of any kind and any
embodiment thereof, Know-How, intellectual property rights, trade
secrets, patents and patent applications anywhere in the world,
including, without limitation the Patents. Recordati Technology shall
not include any
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5
trademarks, tradedress, logos and designs owned or used by Recordati,
except for the trademark(s) pertaining to CRSS.
1.19 "Recordati Territory" means Italy and Spain.
1.20 "Regulatory Approval" means all the authorizations required by the
Regulatory Authorities in any country of the Territory necessary for
the manufacturing, importation, use, marketing and/or sale of the
Finished Product in such country.
1.21 "Regulatory Authority" means the FDA or other governmental authority
whose authorization is necessary for the lawful manufacture,
importation, use, marketing and/or sale of the Product or Finished
Product in the Territory.
1.22 "Supply Agreement" means the Manufacturing and Supply Agreement for
the Finished Product attached hereto as Exhibit D.
1.23 "Territory" means all of the countries of the world (including the
Recordati Territory, unless otherwise agreed upon in writing by the
parties.
II. REPRESENTATIONS AND WARRANTIES
2.1 Recordati Representations - Recordati hereby represents and
warrants to Ascent as follows:
2.1.1 Power and Authority - Recordati has the corporate power
and authority to execute and deliver this Agreement and
perform its obligations hereunder, and the execution,
delivery and performance of this Agreement has been duly
and validly authorized by Recordati, and upon mutual
execution and delivery, this Agreement, will constitute a
valid and binding agreement of Recordati. Execution,
delivery and performance of this Agreement will not result
in the breach of, or give rise to, the termination of any
agreement to which Recordati is a party.
2.1.2 Ownership, Validity and Enforceability of Patents -
Recordati is the owner of the Patents, and, except for
such Patents, there are no other patents issued in any
country in the Territory and no other patent applications
filed in any country therein, in each case owned or filed
by or specifically licensed to Recordati or any of its
Affiliates relating to the Product or Finished Product.
Recordati has no knowledge of any fact which casts
substantial
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doubt on the validity or enforceability of any of the
Patents which have been issued as of this date that is not
referred to in the file wrappers thereof or that has not
been otherwise disclosed to Ascent in writing.
2.1.3 Non-Infringement - To the best of Recordati's knowledge,
information and belief, the manufacture and the permitted
testing, registration, use, marketing and sale of the
Product and Finished Product will not infringe the rights
of any third party.
2.1.4 Material Information Concerning Product - Recordati has no
knowledge as of the date of this Agreement of any material
information, not heretofore disclosed to Ascent, relating
to the potential safety or efficacy of the Product or
Finished Product.
2.1.5 Good Practices - Recordati represents and warrants that
the activities conducted by or for it during the
Development Program have been and will be conducted under
conditions that meet or exceed, in all material respects,
the standards for good laboratory practices, current good
manufacturing practices and good clinical practices as set
by the applicable authorities and in compliance of all
other laws and regulations governing the conduct of such
activities.
2.1.6 No Other Representations or Warranties - Recordati is not
making any other representation or warranty, express or
implied.
2.2 Ascent Representations - Ascent hereby represents and warrants to
Recordati as follows:
2.2.1 Power and Authority - Ascent has the corporate power and
authority to execute and deliver this Agreement and
perform its obligations hereunder, and the execution,
delivery and performance of this Agreement has been duly
and validly authorized by Ascent, and upon mutual
execution and delivery, this Agreement, will constitute a
valid and binding agreement of Ascent.
2.2.2 Material Information Concerning Product - Ascent has no
knowledge as of the date of this Agreement of any material
information, not heretofore disclosed to Recordati,
relating to the potential safety or efficacy of the
Product or Finished Product.
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7
2.2.3 No Third Party Approvals. Neither the execution and
delivery of this Agreement, the Supply Agreement or the
License Agreement, nor consummation of the transactions
contemplated hereunder or thereunder, requires Ascent to
obtain any permits, authorizations or consents from any
governmental body (except for Regulatory Approvals as
contemplated herein) or from any other person, firm or
corporation, and such execution, delivery and performance
will not result in the breach of or give rise to any
termination of any agreement or contract to which Ascent
may be a party.
2.2.4 Good Practices - Ascent represents and warrants that the
activities conducted by or for it during the Development
Program have been and will be conducted under conditions
that meet or exceed, in all material respects, the
standards for good laboratory practices, current good
manufacturing practices and good clinical practices as set
by the applicable authorities and in compliance of all
other laws and regulations governing the conduct of such
activities.
2.2.5 No Other Representations or Warranties - Ascent is not
making any other representation or warranty, express or
implied.
2.3 Disclaimer - The parties acknowledge that the Development Program
is a research program, that the results of such a program are
unpredictable and that neither party guarantees any particular
results of the research.
III. DEVELOPMENT PROGRAM
3.1 General - The Development Program will be conducted on a
country-by-country basis. The Development Program in a specific
country will be commenced upon timely election by Ascent pursuant
to Section 3.2 and will be completed upon receipt of Regulatory
Approval for the Finished Product in that country. The Development
Program will be continued until its lapses or is completed or
terminated in all countries in the Territory or until terminated in
accordance with this Agreement. Upon execution of this Agreement,
Ascent will be deemed to have elected to commence the Development
Program in the United
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Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
States as of the Effective Date; provided, however, that Ascent
acknowledges and understands that Recordati has been performing
obligations under the Development Program since October 1, 1995, an
that simultaneously herewith Ascent shall pay Recordari the sum of
US ********** in reimbursement of the Costs incurred by Recordati
through to May 31, 1996.
3.1.1 Worklist - The parties have agreed on a work list,
milestones and estimated timetables for the activities to
be carried out by each party under the Development Program
in the United States, each of which are set forth in
Exhibit A.
3.1.2 Estimated Costs - The parties have agreed on the Estimated
Costs for the work to be carried out by Recordati under
the Development Program in the United States set forth in
Exhibit A.
3.1.3 Special Equipment - The cost of special equipment is not
included in the Estimated Costs. In the event that
procurement of special equipment becomes necessary
specifically and exclusively as a result of the
performance of this Agreement, the sharing of the costs of
such equipment will be the subject of good faith
deliberation of the Development Committee.
3.2 Election to Commence Development Program in Specific Countries
Ascent may elect, at any time during the Commencement Period (as
hereinafter defined), to commence the Development Program in any
country in the Territory.
3.2.1 Commencement Period - The Commencement Period means the
period beginning on the Effective Date and ending
twenty-four (24) months from filing for Regulatory
Approval in the United States. The Development Program in
respect of any country will lapse if Ascent does not elect
to commence the Development Program for such country
during the Commencement Period.
3.2.2 Notice of Election - In respect of each country, Ascent
shall exercise its right by giving Recordati written
notice of its election to commence the Development Program
in such country.
3.2.3 Negotiation of Terms - Upon receipt of Ascent's election,
the parties will negotiate in good faith the worklist,
specifications, timing and Estimated Costs for further
activities, if any, required to complete the Development
Program in each country of the Territory where Ascent
timely elects to commence the
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Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
Development Program, including, without limitation,
reformulation and/or compliance with regulatory countries
of the Territory, provided that such terms and
requirements in other conditions are substantially similar
to the terms and conditions contained herein in the event
that the costs of the Development Program in any such
country are likely to exceed the costs incurred for the
Development Program in the United States the parties shall
promptly meet and in good faith discuss the Development
Program and the costs thereof.
3.2.4 Commencement - The Development Program in a specific
country of the Territory shall commence upon the final
negotiation of and agreement to the terms described in
Section 3.2.3 above.
3.3 Pre-clinical Development - The parties will use commercially
reasonable efforts to perform their respective obligations for the
pre-clinical development of the Product.
3.3.1 Billing and Payment - Recordati will invoice Ascent
quarterly for its Costs incurred through the end of the
preceding quarter. Ascent will pay such invoices within
thirty (30) days of invoice date in U.S. dollars by wire
transfer or other payment method acceptable to Recordati;
provided, however, that, unless agreed upon by the
Development Committee in accordance with Section 3.6,
Ascent will not be obligated to reimburse Recordati for
Costs which exceed Estimated Costs by more than
**********.
3.3.2 Completion - The Pre-clinical development of the Product
will be complete upon the formulation of a Product meeting
the specifications set forth in the Development Program.
3.4 Manufacturing Scale-Up - The parties will use commercially
reasonable efforts to perform their respective obligations for the
clinical and industrial manufacturing scale-up of the Product as
set forth in theDevelopment Program. Ascent will supply to
Recordati or its Nominee ************** required for the
manufacturing scale-up.
3.4.1 Billing and Payment - Recordati will invoice Ascent
quarterly for its Costs incurred through the end of the
quarter. Ascent will pay such invoices within thirty (30)
days of invoice date in U.S. dollars
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Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
by wire transfer or other payment method acceptable to
Recordati; provided, however, that, unless agreed upon by
the Development Committee in accordance with Section 3.6,
Ascent will not be obligated to reimburse Recordati for
Costs which exceed Estimated Costs by more than *********.
3.4.2 Completion of Clinical Manufacturing Scale-Up - The
clinical manufacturing scale-up of the Product will be
complete upon the delivery for Clinical Testing of the
first lot of the Product meeting the specifications set
forth in the Development Program.
3.4.3 Completion of Industrial Manufacturing Scale-Up - The
industrial manufacturing scale-up of the Product will be
complete upon the validation of the process by manufacture
of an industrial scale lot meeting the specifications set
forth in the Development Program and provision to Ascent
of the documentation related to the manufacturing of the
Product necessary for Regulatory Approval.
3.5 Clinical Testing - The parties will use commercially reasonable
efforts to perform their respective obligations set forth in the
Development Program for the Clinical Testing of the Product and
obtaining of Regulatory Approval for the Finished Product.
3.5.1 Right to Gain Regulatory Approval - With the exception of
the Recordati Territory, Ascent or its sublicensee(s) will
have the right, at its sole option, to first obtain
Regulatory Approval(s) for the Finished Product(s) in the
country of the Territory where Ascent has timely elected
to make the Development Program effective and the
Development Program has not been terminated. In such case,
the IND and PLA filed with respect to the Finished Product
will be filed by, and in the name of, Ascent, or its
sublicensee, and Ascent, or its sublicensee, will be
designated as the party with whom the Regulatory Authority
shall communicate regarding such submissions.
3.5.2 Responsibilities for Clinical Testing - Recordati will be
responsible for conducting the clinical studies and other
tests required for Regulatory Approval in the Recordati
Territory. In all other countries of the Territory, Ascent
will conduct at its own expense the Clinical Testing
required for the Regulatory Approvals for the Finished
Product. If Ascent acquires a Regulatory Approval which is
effective in the Recordati Territory an Recordati elects
to acquire such Regulatory Approval in the Recordati
Territory in lieu of obtaining its own Regulatory Approval
under this section, then
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Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
Recordati and Ascent shall negotiate in good faith and
agree upon the proportion of the cost of the PLA in
respect of such Regulatory Approval to be borne by
Recordati and upon agreement and payment of the agreed
upon price, Ascent shall assign to Recordati the
Regulatory Approval for the Finished Product in the
Recordati Territory.
3.5.3 Supply of Clinical Samples - Recordati will supply
**************** to Ascent the quantities of Product
required by Ascent for Clinical Testing in accordance with
the Development Program and Ascent shall supply all
quantities of Albuterol required therefor **************
to Recordati. To the extent that Recordati is unable to
supply sufficient quantities of the Product for Clinical
Testing of the Product by both Ascent and Recordati,
Recordati will first allocate clinical supplies of the
Product to Ascent, and then to Recordati until such time
as the Development Program has lapsed or been completed in
each Major Country or has been terminated. 3.5.4
Completion of Clinical Testing - The clinical testing of
the Product will be completed upon the receipt by Ascent
or its sublicensee (or Recordati in the Recordati
Territory, of Regulatory Approval for the Finished
Product.
3.6 Development Committee - The Development Committee will consist of
two (2) representatives from each of Ascent and Recordati. Either
party is free to change its representatives by written notice to
the other party.
3.6.1 Coordination - The Development Program will be coordinated
by the Development Committee. The Development Committee
will confer by telephone from time to time as necessary
but in no event, unless agreed by both parties, less than
once per week. Unless otherwise decided, the Development
Committee will meet in person not less than once per
quarter. Decisions of the Development Committee will be
made by majority vote of its members.
3.6.2 Revisions and Modifications - The parties recognize that
the Development Program, including the Estimated Costs,
may require revisions from time to time. The Development
Committee will be responsible for all revisions or
modifications to
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Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
the Development Program. If either party should reasonably
request revision or modification to the Development
Program, the Development Committee will consider the
request at its next scheduled meeting. Requests for
significant revision or modification will be subject to a
formal vote at the meeting at which such requests are
considered. If the requested revision to the Development
Program does not receive a majority in favor or in
opposition, the Development Committee will use its best
efforts to arrive at a compromise proposal for revision or
modification of the Development Program taking into
account the reasons for the requested revision or
modification, the other party's reasons for objection
thereto, the best interests of the long-term relationship
between the parties and the purposes and objectives of the
Development Program. If, despite its best efforts, the
Development Committee is unable to approve a requested
revision or modification or arrive at an acceptable
compromise proposal, then such revision or modification
will be addressed by one executive from each party, each
having a title or rank higher than the highest title or
rank of any of the members of the Development Committee.
The executives will meet, either face to face or by
telephone, and will use their best efforts to arrive at a
negotiated resolution. If the executives are unable to
resolve the issues related to the requested revision or
modification in a mutually agreeable manner, then the
requested revision or modification, will be considered
rejected. If the executives are able to arrive at a
mutually agreeable proposal, then that proposal will be
reduced to by writing signed by the executives and will be
deemed approved by the Development Committee.
3.7 Reporting - All reports will be provided to the members of the
Development Committee.
3.7.1 Progress Reports - Within thirty (30) days after the end
of each calendar quarter, Recordati and Ascent will
provide progress reports on the work performed and actions
taken in such quarter with respect to the Development
Program, including, without imitation, updates on
*********************************************************
******************************. Recordati and Ascent will
also provide, as soon as is reasonably practical after the
end of each month (except March, June, September and
December), an outline of the work performed and actions
taken with respect to the Development Program.
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3.7.2 Material Events - Recordati and Ascent will closely
cooperate and promptly inform the Development Committee as
soon as either becomes aware of any event which is likely
to cause a variation in the specifications or to
materially impair the continuation of the Development
Program. Ascent will promptly advise the Development
Committee of any event which comes to its attention in the
course of its human and animal studies, so that Recordati
may make revisions as needed. All material events will
also be included in the quarterly reports exchanged
between the parties in accordance with Section 3.7.1.
3.7.3 Adverse Effects - Ascent will advise Recordati regarding
any adverse effect, relating to the Finished Product
during the clinical trials of the Finished Product,
including the incidence or severity thereof, associated
with clinical uses, studies, investigations or tests,
whether or not determined to be attributable to a Finished
Product. Such reports will be made in accordance with the
Adverse Event Procedures to be established under Section
5.5. All adverse effects or events will also be included
in the quarterly reports exchanged between the parties in
accordance with Section 3.7.1.
3.7.4 Obligations After Completion of Development Program -
During the term of this Agreement, each party will
continue to report to the Development Committee the
information set forth in Section 3.7.3 relevant to each
country in which the Development Program is complete.
3.8 Access - Recordati will provide Ascent with reasonable access to
Recordati personnel as required under the Development Plan.
3.9 Term and Termination of the Development Program
3.9.1 Term - Unless earlier terminated in accordance with this
Agreement, the Development Program will continue until
completed in each country in respect of which Ascent has
made timely election pursuant to Section 3.2.
3.9.2 Termination with respect to Specific Countries in the
Territory The Development Program shall be terminated with
respect to one or more countries in the Territory in the
event that the Development Committee determines that the
commercial development of the Product in such countries is
not technically feasible. The Development Program in a
specific country shall
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also terminate upon termination of the licenses granted
pursuant to Sections 5.1 and 5.2 in that country. In
either case, the Development Program will continue until
completed or terminated in other countries of the
Territory, without regard to the termination of the
Development Program in a specific country.
3.9.3 Termination of the Entire Development Program - The
Development Program will terminate upon termination of
this Agreement. Termination of this Agreement terminates
the Development Program with respect to each and every
country in the Territory. In the event of termination of
this Agreement, Ascent will promptly pay all substantiated
reasonable Costs incurred by Recordati or which prior to
the effective date of termination Recordati has obligated
itself to pay and which cannot be canceled, with respect
to each country in the Territory in which the Development
Program has commenced but has not been completed;
provided, however, that in the event this Agreement is
terminated due to a breach by Recordati, Ascent shall not
be obligated to reimburse any Costs incurred by Recordati.
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IV. INTELLECTUAL PROPERTY
4.1 Recordati Technology - Recordati is and shall be the exclusive
owner of the Recordati Technology. Recordati will retain all
rights, title and interest in the Recordati Technology developed
during the term of this Agreement even if the same is included in
the Development Program information exchanged between the parties,
or any submission to the Regulatory Authorities.
4.2 Finished Product Data - Ascent and/or its sublicensee(s) are and
shall be the exclusive owner(s) of all the Finished Product Data
developed by Ascent and/or its sublicensee(s), or acquired by
Ascent from third parties other than Recordati and its affiliates,
and the Regulatory Approvals applied for and obtained by Ascent
and/or its sublicensee(s). Recordati is and shall be the owner of
the Finished Product Data developed or obtained by Recordati and
the Regulatory Approvals applied for or obtained by Recordati.
4.3 Patent Protection - Recordati will use diligent efforts at its
expense to file those patents claiming inventions specific to the
Product or Finished Product in the United States, Japan and all
other PCT countries, as well as any other country in which Ascent
applies for Regulatory Approval. In the event that Recordati files
a patent application, Recordati will give Ascent reasonable
opportunity to review and comment on the patent application during
its preparation and during the prosecution process.
4.4 Infringement Actions - In the event that Ascent becomes aware of
actual infringement by a third party in the Territory of a patent
included within the Recordati Technology, Ascent will notify
Recordati within fifteen days in writing. Recordati will take such
reasonable action as it deems appropriate to xxxxx such
infringement, including patent litigation, prosecution and all
other remedies at law and equity. Ascent will render to Recordati
all reasonable assistance.
4.4.1 Joint Litigation - Upon written notice to Recordati given
not later than five days after Recordati's notice to
Ascent of litigation brought by Recordati to halt
infringing activity, Ascent may elect to join in any
litigation commenced against the alleged infringer ("Joint
Litigation"). Recordati will have control over the Joint
Litigation; provided that it will make no settlement of
the Joint Litigation without Ascent's consent, not to be
unreasonably withheld. The parties will each bear 50% all
out of pocket expenses of Joint Litigation (including all
costs and fees), and will
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each be entitled to 50% of the net proceeds from any
settlement or award.
4.4.2 Individual Litigation - Notwithstanding the foregoing,
either party will have thirty days from receipt of notice
of the alleged infringing activity to withdraw, in
writing, its consent to participate in the Joint
Litigation. In that event, the party which has not
withdrawn its consent may institute litigation in its own
name and on its own behalf; the party which has withdrawn
its consent will provide all reasonable assistance to the
party litigating individually; and the party litigating
individually will control the litigation and settlement of
the action, bear all expenses of litigation and will be
entitled to retain the proceeds from any settlement or
award, provided that the party litigating individually
first recover its own expense and then reimburse any
documented, out-of-pocket expenses of the other party
incurred in assisting with the litigation.
X. XXXXX OF LICENSE
5.1 Grant of Rights to the Product and Finished Product
5.1.1 License - Recordati grants to Ascent an exclusive license
under the Recordati Technology for the Clinical Testing,
registration, marketing, distribution and sale of the
Finished Product in all countries of the Territory, except
the Recordati Territory. In the Recordati Territory,
Recordati grants to Ascent a nonexclusive license under
the Recordati Technology for the Clinical Testing,
registration, marketing, distribution, and sale of the
Finished Product. Recordati otherwise retains all rights
to the Recordati Technology to itself. Such licenses are
granted for the term of this Agreement unless earlier
terminated in accordance with this Article.
5.1.2 Sublicenses - (a) Ascent may grant one or more sublicenses
of its rights under Section 5.1.1, in the Territory,
provided that Ascent furnishes to Recordati, in form and
substance acceptable to Recordati, a written assurance
from each sublicensee that it agrees to be bound by and
comply with the terms and conditions of this Agreement.
Ascent shall not grant a sublicense to a Competitor of
Recordati for any Major Country without Recordati's
approval of the sublicensee. A "Competitor" is any person
who makes, uses, or sells any oral liquid controlled
release technology or with whom Recordati is in litigation
or
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17
Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
preparing for litigation in connection with CRSS or the
Patents. In the Recordati Territory, Ascent may directly
market or grant one non-divisible and non-assignable
sublicense, provided that Ascent shall not grant a
sublicense in the Recordati Territory without Recordati's
prior written approval.
(b)Recordati shall not grant any sublicenses to the
Recordati Technology for the Product or the Finished
Product in the Recordati Territory, except to an
Affiliate of Recordati.
5.1.3 No License to Manufacture - Nothing in this Agreement will
be construed as a license to Ascent, its Affiliates, or
its sublicensees to manufacture the Product or Finished
Product, directly or through third parties. Subject to the
provisions of Section 8.3.3, all rights to manufacture the
Product and Finished Product are owned and retained solely
and exclusively by Recordati.
5.1.4 Improvements - Recordati grants Ascent a right of first
refusal to take a license under Section 5.1.1 for any line
extension or new formulation of the Finished Product.
Ascent shall have sixty (60) days from receipt of written
notice from Recordati identifying such line extension, or
new formulation of the Finished Product to exercise its
right of first refusal and takes such license aforesaid.
If Ascent exercises such right to take a license then the
parties shall promptly meet and negotiate the terms and
conditions of such license on the basis of the terms of
this Agreement.
5.2 Grant of Rights to Recordati by Ascent - Ascent hereby grants to
Recordati a non-exclusive license to use the Finished Product Data
owned by Ascent or its sublicensee(s), provided that Ascent has rights
to its sublicensee's data and has used its diligent efforts to obtain
such rights, in any country in the Recordati Territory as useful or
necessary to manufacture, have manufactured, register, obtain
Regulatory Approval, market, distribute, use and sell the Finished
Product in the Recordati Territory. If Recordati elects to use the
Finished Product Data owned by Ascent or its sublicensees, Recordati
will pay Ascent a royalty of ******************************* of Net
Sales in the country of the Recordati Territory in respect of which
such Finished Product Data was so used.
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18
5.3 Commercialization Obligations - Ascent has the following
commercialization obligations:
5.3.1 Diligent Efforts - Upon completion of the Development
Program in a specific country of the Territory, consistent
with Ascent's legal obligations in connection with the
sale of its other products, Ascent will use diligent
efforts to sell the Finished Product in such country of
the Territory provided that Recordati supplies Ascent's
requirements for the Product. Ascent will be deemed to
have failed to use its diligent efforts if:
(a) In a Major Country:
(i) In the United States, if Ascent or its sublicensee
fails to commercially launch the Finished Product
within six (6) months of obtaining the Regulatory
Approval; or
(ii) In Major Countries other than the United States or
Europe, if Ascent fails to apply for Regulatory
Approval for the Finished Product in such country
within 24 months of receipt of Regulatory Approval in
the United States; or
(iii) with respect to all of the Major Countries in
Europe, if Ascent fails to file for Regulatory
Approval in at least one country in the European
Union within 12 months of filing for Regulatory
Approval in the United States.
(b) In any country (including any Major Country):
(i) if Ascent does not begin making continuous and
regular commercial shipments of the Finished Product,
or otherwise fails to begin marketing the Finished
Product, within six (6) months of receiving
Regulatory Approval for the Finished Product in that
country; or
(ii) if Ascent ceases marketing, or does not make a
commercial shipment of the Finished Product, in such
country for any three-month period during the two
year period following the first three months after
the launch of the Finished Product; or
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19
(iii) if Ascent fails either (x) to begin Clinical Testing
within six months after receiving clinical supplies
from Recordati or (y) apply for Regulatory Approval
within six months after receiving the Finished
Product Data for such country and satisfactory
reports which are required for such application.
5.3.2 No Commercialization of Competing Products - Ascent agrees
not to develop, market, distribute, use or sell any
Competing Products for the Term of this Agreement. A
"Competing Product" for purposes of this Section means any
oral liquid controlled release formulation of Albuterol.
Ascent agrees not to develop, market, distribute, use or
sell another oral liquid controlled release formulation of
a Beta-2 agonist unless Ascent shall have given Recordati
a right of first refusal in connection therewith.
Recordati shall have three (3) months from the date of
such notification to notify Ascent if it is interested in
entering into an agreement in this regard.
5.3.3 Marketing, Packaging and Promotion - Ascent will supply
Recordati with written instructions for the packaging and
labeling of the Finished Product during manufacturing
scale-up phase of the Development Program. Ascent agrees
that it will be Ascent's sole responsibility to insure,
and that it will insure, that the packaging and labeling
of the Finished Product, as described in its written
instructions, complies with all laws and regulations of
the country of the Territory in which the Finished Product
is marketed. In addition, Ascent will cause the CRSS
trademark to appear on all labels, packaging material,
instruction sheets and promotional material. Ascent will
also include on all labels and packaging for the Finished
Product the statement "Sold under License from Recordati
S.A." and shall include the relevant Patent number of the
patent licensed by Recordati to Ascent, the claims of
which cover the Finished Product. The Finished Product
will otherwise not include any Recordati markings or
labels thereon, except to the extent required by the laws
of the
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20
country in which the Finished Products are distributed
or as the parties may agree upon and which is legally
permissible.
5.4 Documentation - Recordati agrees to provide Ascent promptly with such
documentation and other materials reasonably requested by Ascent in
order to enable Ascent to use the Recordati Technology in accordance
with the licenses granted in this Article V. The parties agree that
such documentation and materials are deemed "Confidential" and are
subject to the confidentiality provisions of Article VI. To the extent
Recordati is granted rights to the Finished Product Data pursuant to
Section 5.2, Ascent agrees to provide Recordati promptly with such
documentation and other materials reasonably requested by Recordati in
order to enable Recordati to use the Finished Product Data for the
purpose of gaining Regulatory Approvals in the Recordati Territory.
The parties agree that such documentation and materials are deemed
"Confidential" and are subject to the confidentiality provisions of
Article VI.
5.5 Adverse Event Reporting - Each party will communicate the name of the
appropriate person within the organization for the coordination of a
system of Adverse Event Reporting to satisfy compliance with
international requirements, and relevant correspondence. Adverse Event
Reporting to the Regulatory Authorities will be the sole
responsibility of the party which has obtained Regulatory Approval.
Ascent and Recordati will maintain databases of information concerning
Adverse Events. Each party will have reasonable access to the database
of the other. The parties will exchange information as necessary or
useful to allow the other to comply with national and international
reporting guidelines, rules and laws.
5.6 Termination of License(s) -
(a) The License granted pursuant to this Article may be terminated by
Recordati with respect to any country in the Territory in which
Ascent fails to fulfill its commercialization obligations or in
which the Development Program has lapsed or been terminated.
(b) In the event that Recordati terminates a license pursuant to this
section with respect to a particular country, Ascent will have no
further rights to the Product or Finished
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21
Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
Product in the country of the Territory in respect of which the
license is terminated. Ascent, its Affiliates, and their
sublicensees will immediately grant an exclusive license to
Recordati for all Finished Product Data, PLAs and Regulatory
Approvals necessary or useful for Recordati to register, test,
manufacture, market, distribute, use and sell the Finished
Product in the Territory. For a period of **** ********** from
the date of such exclusive license, Recordati will pay Ascent
**** ************* of Net Sales from the Finished Product in the
specific county where termination is effected, if at the time of
termination Ascent had received Regulatory Approval in such
country.
(c) If, at the time of termination of a license pursuant to this
section, Ascent had not received Regulatory Approval in the
relevant country and Recordati elects to utilize the Ascent
Finished Product Data and PLAs in respect of such country, then
Recordati will pay Ascent **************** ******* of Net sales
from such country for a period of ***** **** years from the date
of termination.
(d) In the event that Ascent breaches its commercialization
obligations in a specific country prior to completion of the
Development Program in that country, Recordati may, in addition
to terminating the license in that country, also terminate the
Development Program in that country. In that event, Ascent will
promptly pay all substantiated reasonable Costs incurred by
Recordati or which prior to the date of termination Recordati has
obligated itself to pay and which cannot be canceled, with
respect to the Development Program in that Country.
(e) All licenses granted under this Article shall terminate upon
termination of this Agreement.
5.7 Failure to Commercialize due to Breach by Recordati - In no event will
Ascent be deemed to have breached its commercialization obligations
under Section 5.3, if such failure is the result of Recordati failing
to fulfill its obligations to supply Ascent with the Finished Product
under the Supply Agreement.
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22
VI. CONFIDENTIALITY
6.1 Confidential Information. During the term of this Agreement, all
information, in whatever form, disclosed to one party by the other
under this Agreement, the Supply Agreement and the Feasibility
Agreement, including, without limitation, information relating to
inventions, technology, disclosures, processes, systems, methods,
formulae, Recordati Technology, Finished Product Data, Clinical
Testing, PLAs, Regulatory Approval, Know-How, patent applications,
machinery, materials, research activities and plans, costs of
production, contract forms, prices, volume of sales, promotional
methods, and lists of names or classes of customers and the terms of
this Agreement are deemed "Confidential Information" provided, however
that such information will not be considered Confidential Information
if the receiving party can demonstrate by clear and convincing
evidence that the information:
(i) was known by the receiving party prior to its disclosure
by the disclosing party; or
(ii) is or becomes public knowledge other than through any act
or default of the receiving party; or
(iii) is obtained or derived by the receiving party from a third
party which, to the best knowledge of the receiving party
after appropriate inquiry, is lawfully in possession of
such information and has the right to disclose the
information to the receiving party on a non-confidential
basis; or
(iv) is developed or derived by the receiving party, prior or
subsequent to its disclosure by the disclosing party,
independently and without reference to the information
which was disclosed by the disclosing party, and the
receiving party can demonstrate such independent
development with contemporaneous documentation; or
(v) has, at the time of disclosure, no material competitive
value to the disclosing party.
6.2 Obligation of Confidentiality. Neither party will, either during the
Term of this Agreement or within ten (10) years of termination of this
Agreement, divulge, disclose or communicate to any other person, or
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23
authorize anyone to use, any Confidential Information disclosed to it
by the other party during the Term of this Agreement, and will keep
the same confidential, except as provided by Section 6.3. Nor will
either party use such Confidential Information except as permitted in
Section 6.4. Recordati and Ascent will use their best efforts to
prevent the unauthorized use or disclosure of Confidential Information
by any persons to whom they disclose Confidential Information, and
will be responsible therefor.
6.3 Permitted disclosures.
Confidential Information may be disclosed to:
(i) An subcontractor or sublicensee, authorized under this Agreement,
and entrusted by the receiving party with the evaluation,
development, registration, manufacture, use or sale of the
Product or Finished Product;
(ii) Any directors or employees of the party in question; and
(iii) The Regulatory Authorities;
to such extent only as is necessary for the purposes contemplated
or permitted by this Agreement or as required by law, and subject
in the cases of clauses (i) and (ii) above to the party in
question first obtaining a written undertaking from the person to
whom the disclosure is made, as nearly as practicable to the
terms of this Section, to keep it confidential and to use it only
for the purposes for which the disclosure is made. The receiving
party will be responsible for any breaches of the obligations of
this Agreement by such sub-contractors, sublicensees, directors
or employees.
6.3.1 Confidential Information may also be disclosed to the
extent required to be disclosed by the receiving party
pursuant to applicable law, or under a government or court
order; provided, however, that (a) in the event that the
receiving arty is requested in any judicial or
administrative proceeding to disclose any of the
information of the disclosing party, then the receiving
party will promptly notify the disclosing party of such
request so that the disclosing party may resist such
disclosure or seek an appropriate protective order or
other remedy; (b) the obligations will continue to the
fullest extent not in conflict with such law or order; and
(c) if and when a party is required to disclose such
information pursuant to any such law or order, such party
will use its best
- 23 -
24
efforts to take such actions as will prevent or limit,
to the fullest extent possible, public access to, or
disclosure of, such information.
6.3.2 Under no other circumstances can Confidential Information
be disclosed.
6.4 Use of Confidential Information - Each party agrees that the use of
the Confidential Information received from the other party is
restricted to purposes consistent with the implementation of this
Agreement.
6.5 Ownership of Confidential Information - Both parties acknowledge
that they have no ownership rights in the Confidential Information
of the other, that the right to use such information is strictly
limited to that which is expressly permitted by this Agreement, and
that unless otherwise expressly provided herein, the right to use
such information will terminate upon termination of this Agreement.
6.6 Publications - The following restrictions shall apply to the
disclosure in scientific journals or publications by either party
relating to the Development Program, whether or not such
disclosures involve the disclosure of the Confidential Information
of the other party:
6.6.1 A party seeking to publish (the "Publishing Party") shall
provide the other party with an advance copy of any
proposed publication of information relating to the
Development Program, and the other party shall have a
reasonable opportunity to recommend any changes it
reasonably believes are necessary to preserve intellectual
property rights or Confidential Information and the
incorporation of such changes shall not be unreasonably
refused by the Publishing Party; and
6.6.2 if such other party informs the Publishing Party within 30
days of receipt of an advance copy of a proposed
publication, that such publication, in its reasonable
judgment is expected to have a material adverse effect on
intellectual property rights or Confidential Information,
the publishing Party shall use its best efforts to delay
or prevent such publication. Such delay shall be
sufficiently long to permit the timely preparation and
filing of patent applications if the reason given by the
other party for requesting delay is that the proposed
publication would disclose patentable inventions.
VII. LIABILITY AND INDEMNIFICATION
- 24 -
25
7.1 Indemnification by Recordati - Subject to Sections 7.3 and 7.4,
Recordati agrees to indemnify, defend and hold Ascent harmless
against any claims, losses, expenses, costs and fees (including the
reasonable fees of attorneys and other professionals) of any third
party arising in connection with:
(i) negligent, reckless or intentional wrongful acts or omissions
of Recordati;
(ii) the breach by Recordati of its obligations under this
Agreement, unless such breach arises out of the negligent,
reckless or intentional wrongful acts or omissions of
Ascent, or a prior breach of the Agreement by Ascent;
(iii) the breach by Recordati of any representation or warranty
under this Agreement; and
(iv) the infringement of any patent, the infringement of a
trademark by the required use of the CRSS trademark, or
the misappropriation of any trade secret by Recordati
or its agents, resulting from the permitted marketing,
Clinical Testing, use or sale of the Finished Product.
7.2 Indemnification by Ascent - Subject to Sections 7.3 and 7.4, Ascent
agrees to indemnify, defend and hold Recordati harmless against any
claims, losses, expenses, costs and fees (including the reasonable
fees of attorneys and other professionals) of any third party
arising in connection with:
(i) negligent, reckless or intentional wrongful acts or
omissions of Ascent;
(ii) the breach by Ascent of its obligations under this
Agreement, unless such breach arises out of the negligent,
reckless or intentional wrongful acts or omissions
of Recordati, or a prior breach of the Agreement
by Recordati;
(iii) the breach by Ascent of any representation or warranty
under this Agreement;
(iv) the clinical testing of the Finished Product;
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26
(v) the marketing, distribution, sale, possession, or use
of the Finished Product following Ascent's acceptance
of the Product hereunder; and
(vi) the packaging or labeling of the Finished Product other
than packaging or labeling required by Recordati
(including, by way of example, the infringement of any
trademark other than by the required use of the CRSS
trademark), or the misappropriation of any trade secret
by Ascent or its agents.
7.3 Indemnification Procedure - In the event any third party asserts
any claim with respect to any matter as to which the indemnities in
this Agreement relate, the party against whom the claim is asserted
(the "Indemnified Party") will promptly notify the other party (the
"Indemnifying Party"). The Indemnifying Part will have the right to
assume sole control over the defense and settlement of the third
party claim, at its own expense, by giving prompt notice to the
Indemnified Party. If the Indemnifying Party does not give such
notice and does not proceed diligently so to defend the third party
claim within 30 days after receipt of the notice of the third party
claim, the Indemnifying Party will be bound by any defense or
settlement that the Indemnified Party may make as to those claims
and will reimburse the Indemnified Party for its losses and
expenses related to the defense or settlement of the third party
claim. The parties will cooperate in defending against any asserted
third party claims. The party defending the claim will keep the
other party continuously informed of its activities with respect to
the defense of any such claim. The Indemnified Party will render
the Indemnifying Party all reasonable assistance in the defense of
any such claim at no cost to the Indemnifying Party other than the
out of pocket expense of such Indemnified Party. The right to
indemnification is conditioned upon provision by the Indemnified
Party of prompt notice to, and an opportunity to control over the
defense of the action by, the Indemnifying Party.
7.4 Limitation on Liability - Except as provided in Sections 7.1 and
7.2 neither party will be liable to indemnify the other party for
indirect, incidental, consequential, special or exemplary damages,
other than to the extent necessary to reimburse such other party
for damages actually paid to a third party.
VIII. TERM, TERMINATION AND SUSPENSION
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27
8.1 Term - The term of this Agreement commences upon execution thereof.
Unless terminated in accordance with this Article, this Agreement
will continue in full force and effect for a term of fifteen (15)
years following receipt of Regulatory Approval in the United
States. Thereafter, Ascent shall have the right to renew this
Agreement for an additional five (5) years by giving Recordati
written notice of its intent to renew at least one-hundred and
twenty (120) days prior to the expiration of such fifteen year
term.
8.2 Termination - This Agreement may be terminated:
8.2.1 By Ascent - Ascent may terminate this Agreement on 120
days written notice to Recordati. In such case, Ascent
will promptly pay all substantiated reasonable Costs
incurred by Recordati or which prior to the effective date
of termination Recordati has obligated itself to pay and
which cannot be canceled, in all countries in the
Territory in which the Development Program has been
commenced.
8.2.2 By Either Party - Either party may terminate this
Agreement immediately by written notice to the other party
in the event that:
(i) The other party becomes insolvent, or an order for
relief is entered against the other party under any
bankruptcy or insolvency laws or laws of similar
import; or
(ii) The other party makes an assignment for the benefit of
its creditors, or a receiver or custodian is appointed
for it, or its business is placed under attachment,
garnishment or other process involving a significant
portion of its business, and the other party cannot
prove to the reasonable satisfaction of the party to
which it has given notice that it is solvent; or
(iii) The other party's material breach of this Agreement
which is not cured or excused within ninety (90) days
of written notice of such breach, except for the
breach of an obligation to pay money, which must be
cured within thirty (30) days of written notice. A
material breach of this Agreement will be excused
for so long it has occurred and is continuing by
virtue of Force as Majeure or technical hindrances
which cannot be surmounted with diligent efforts: or
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28
Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
(iv) The termination of the Supply Agreement due to the
other party's material breach thereof.
8.3 Rights and Obligations Following Termination -
8.3.1 Termination by Expiration - Upon expiration of the term of
this Agreement, the licenses granted to Ascent and to
Recordati shall become non-exclusive fully paid-up
licenses.
8.3.2 Termination by Recordati - In the event that this
Agreement is terminated by Recordati pursuant to Sections
8.2.2 or 9.3(c), Ascent will have no further rights to the
Product or Finished Product. Ascent and/or its
sublicensee(s) will immediately assign to Recordati all
Finished Product Data, PLAs and Regulatory Approvals
necessary or useful for Recordati to register, test,
manufacture, market, distribute, use and sell the Finished
Product in the Territory.
8.3.3 Termination by Ascent - In the event of termination of
this Agreement by Ascent:
(a) Pursuant to Sections 8.2.1 or 9.3(c) - Ascent will
have no further rights to the Product or Finished
Product. Ascent and/or its sublicensee(s) will
immediately Recordati all Finished Product Data, PLAs
and Regulatory assign to Approvals necessary or
useful for Recordati to register, test, manufacture,
market, distribute, use and sell the Finished Product
in the Territory.
(b) Pursuant to Section 8.2.2 - Ascent will have the
right to elect from among the following remedies:
(i) Ascent, its Affiliates, and their sublicensees
may immediately assign to Recordati all Finished
Product Data, PLAs and Regulatory Approvals
necessary or useful for Recordati to register,
test, manufacture, market, distribute, use and
sell the Finished Product in the Territory, and
upon such assignment they shall cease to have
any further rights to the Product or Finished
Products. As liquidated damages, Recordati for a
period of ******* from the date of
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29
Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
termination, Recordati will pay Ascent
*************** of Net Receipts of the Finished
Product in countries of the Territory where
Ascent had received Regulatory Approval and
**************** of Net Receipts in countries of
the Territory in which Regulatory Approval had
not, at the time of termination, been obtained
by Ascent; or
(ii) To maintain its rights set forth in Sections 5.1
and 5.2 and continue to purchase its
requirements under the Supply Agreement for a
term of years equal to the number of years
remaining in the Term at the time of
termination; provided, however, that if this
Agreement is terminated pursuant to Section
8.2.2 (iv), then at Ascent's request, Recordati
will also grant to Ascent a license for a term
of years equal to the number of years remaining
in the Term at the time of termination, to use
the Recordati Technology, with right of
sublicense, to the extent necessary for Ascent
to qualify two sources of supply for the
Finished Product, and for such sources to
manufacture the Finished Product. Recordati
shall have the right to approve such Ascent
manufacturing sublicensees, such approval not to
be unreasonably withheld. For the purposes of
this section, it shall be reasonable for
Recordati to withhold approval to any person who
is a Competitor. Recordati shall also have the
right to impose reasonable conditions upon
access to its technology, including, by way of
example, satisfactory confidentiality
provisions.
8.3.4 In exchange for the licenses granted above in Section
8.3.3(b)(ii), Ascent will pay to Recordati a royalty of
***** on Net Receipts. Ascent will provide to Recordati
within thirty (30) days of the end of each quarter, a
report (the "Sales Report") reflecting the sales, in units
and in value, of the Finished Product by Ascent and its
sublicensee(s) or other distributors or agents in the
Territory.
8.3.5 Ascent agrees to keep complete and accurate records in
connection with sales of the Finished Product by Ascent,
its Affiliates, and their sublicensees, and of payments
provided for under this Agreement. Recordati will have the
right, not more
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30
Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
than once per calendar year, to appoint an independent
public accountant to inspect and copy Ascent's books and
related to the sales and revenues for the Finished
records Product. The cost of such audit will be borne by
Recordati unless an error of magnitude greater than *% is
discovered in the course of the audit, in which case the
cost will be borne by Ascent.
8.4 Non-Disclosure of Termination - In the event either party
terminates this Agreement, Ascent and Recordati agree to not
disclose the circumstances of such termination, except as may
otherwise be required by law, reasonable ethical standards or to
enforce rights arising out of this Agreement.
8.5 Suspension of Obligations - Recordati may suspend its obligations
under this Agreement on thirty days' notice if in its reasonable
judgment based upon the advice of its counsel it determines that
the Recordati Technology or the Finished Product infringes upon the
patent rights of any third party as such relate to patent
applications filed or patents issued after the Effective Date. In
the event of such suspension, Ascent shall have the right to
manufacture the Finished Products or have a second source
manufacture the Finished Products as provided for in Section
8.3.3(b)(ii) provided that Recordati may lift such suspension by
giving to Ascent not less than ***** (**) months' written notice
thereof.
IX. GENERAL PROVISIONS
9.1 Independent Parties - The parties agree that they are independent
contractors and that nothing in this Agreement creates a joint
venture, partnership, principal-agent, or other fiduciary
relationship. Neither party has the authority to act as agent for,
or partner of, the other party or to make any commitments or create
any obligations of the other party without the prior written
agreement of the other party. Nothing in this Agreement will be
construed to prevent, prohibit, restrict, limit or hinder in any
way Recordati's right to use, license or transfer the CRSS
technology or Recordati Technology alone or in combination with
active ingredients other than Albuterol.
9.2 Compliance with Law - Each party will comply with, and will not be
in violation of, any valid applicable international, national,
state or local statutes, laws, ordinances, rules, regulations, or
other governmental orders (which affect the research, purchase
sale, shipment, distribution or storage of the Product) of any
country in which the Product is either manufactured or sold.
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31
9.3 Force Majeure
(a) Neither Recordati nor Ascent will be liable or will be
considered as having failed in meeting its respective
obligations under this Agreement because of a failure to
perform all or any part of them in the event such default
is due to an occurrence of "Force Majeure." As used
herein, the term Force Majeure includes, but is not
limited to, the following events to the extent the same
cannot be overcome with due diligence and reasonable
expense by the party claiming Force Majeure: War,
invasion, rebellion, mutiny, revolution, insurrection,
riots, civil disturbances or civil war; Acts of government
in its sovereign capacity; Earthquakes, fires, hurricanes,
floods, sinking, drought, tidal waves, lightning or any
operation of the forces of nature: Strikes, lock-outs or
other industrial disturbances; Impossibility to obtain
equipment, supplies, fuel, or other required materials;
and Other events beyond the reasonable control of the
party claiming Force Majeure, such that reasonable
foresight and ability on the part of the affected party
could not reasonably provide against.
(b) A party claiming Force Majeure will promptly notify the
other part of its inability to perform and the event which
excuses performance. If said notice is given, the
performance of the party giving notification will be
excused for so long as performance may be prevented by
such event of Force Majeure. Except for payment of funds
that are due and payable, neither party will be require to
make up any performance that was prevented by Force
Majeure.
(c) Notwithstanding the foregoing, if such Force Majeure
continues for a period in excess of one hundred and eighty
(180) days, then the other party may declare this
Agreement terminated.
9.4 Assignment - The rights and obligations under this Agreement may be
assigned by either party hereto to any Affiliate, provided that no
such assignment shall relieve the assignor of its obligations.
Assignment of this Agreement or any part thereof other than to
Affiliates is subject to the written consent of the other party,
such consent not to be unreasonably withheld. For
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the purposes of this section, it shall be reasonable for
Recordati to withhold approval to a Competitor. Any assignment of
any rights under such agreement without the written consent of
the other party will be null and void.
9.4.1 Sublicensing - The parties have the right to sublicense
rights under this Agreement only as specifically set forth
in the Agreement. Any sublicense of rights under this
Agreement, other than specifically permitted herein is and
will be null and void.
9.4.2 Subcontracting - The parties have the right to wholly or
partly subcontract the activities to be performed by them
under this Agreement, provided however that the
subcontracting party will (i) inform the other party in
writing of its intention to utilize a subcontractor which
subcontractor shall be FDA approved; (ii) furnish the
other party with reasonably detailed information regarding
the extent of such subcontractor's services; (iii) consult
with the other party regarding the proposed
subcontractor's selection and its ability to perform; and
(iv) give due consideration to the other's party concerns,
if any, regarding such proposed contractor to the extent
such concerns are based upon requirements regarding
Regulatory Approvals. The final selection of a
subcontractor will be the responsibility of the party for
which the subcontractor shall perform its services. Ascent
will in no event have direct contact, written or oral,
with any Recordati subcontractor hereunder without prior
written approval by Recordati, such approval not to be
unreasonably withheld. All expenses associated with a
subcontractor will be the liability of the party engaging
such contractor; provided, however, that once paid the
expenses of engaging such contractor will become Costs,
payable in accordance with this Agreement.
9.5 Waiver - A party's failure to insist upon the strict performance of
any provision of this Agreement will not be deemed to be a waiver
by it of any rights or remedies it may have for breaches of a like
or different nature. No waiver will be effective unless
specifically made in writing and signed by a duly authorized
representative of the party granting such waiver.
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Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
9.6 Notices - All notices hereunder will be in writing and will be
personally delivered or by telefax or telecopy or, dispatched,
postage pre-paid, by internationally recognized courier duly
addressed:
if to Recordati, to:
Recordati S.A. Chemical and Pharmaceutical Company
Xxxxx Xxx Xxxxxxxx 00
0000 Xxxxxxx
Xxxxxxxxxxx
Attention: President
Facsimile: 0041 41 9144 6009
Copy to:
Recordati Industria Chimica e Farmaceutica S.p.A.
Xxx Xxxxxxxx, 0
00000 Xxxxxx Xxxxx
Attention: V.P. and Director Corporate Development
Facsimile: 0039 2 48705223
if to Ascent, to:
Ascent Pediatrics, Inc.
0 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000 - X.X.X.
Attention: President
Facsimile: 001 508 667 5322
or in either case to such other address as the recipient party
has previously designated for such purpose by written
communication to and actually received by the giving party.
Notices will be effective upon receipt, or, if delivery is not
accomplished through fault of the addressee, upon tender.
9.7 Liability Insurance - Each party will obtain and maintain at all
times and at its own expense Product Liability insurance covering
losses related to its activities with respect to the Product and
Finished Product for risks to humans. The limit of liability on
such coverage shall be no less than *********** in total in respect
of Recordati and ********** per occurrence and ********** in the
aggregate in respect of Ascent.
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9.8 Survival - Upon termination of this Agreement, the rights and
obligation of the parties hereunder will terminate, except that the
rights and obligations under Articles VI, VII, VIII and X and
Sections 3.9, 4.1, 4.2 and 5.6 will survive any such termination.
9.9 Entire Agreements; Amendments - This Agreement and the
Manufacturing and Supply Agreement embody all of the understandings
and obligations between the parties and supersede all other prior
agreements or understandings, whether written or oral, including
the Feasibility Agreement. Any amendments and supplements to this
Agreement will not be valid unless executed in writing by duly
authorized officers of both parties.
9.10 Interpretation - References to any gender include the other gender
and to the singular number the plural number and vice versa. All
headings throughout this Agreement have been inserted for the
purpose of ease of reference only and do not define, limit or
affect the meaning or interpretation of this Agreement or of any
instrument created pursuant hereto or in accordance herewith. All
Exhibits to this Agreement are an integral part of this Agreement
and will be construed and have the same force and effect as if set
out in the body of this Agreement.
9.11 Further assurances - Recordati and Ascent agree to execute such
further documents and instruments, and will provide such additional
assurances, requested by either party as may be necessary or
reasonably desirable to consummate the matters contemplated by this
Agreement.
X. GOVERNING LAW AND DISPUTE RESOLUTION
10.1 Governing law - This Agreement is to be governed by and construed
in all respects in accordance with the internal laws of the state
of New York.
10.2 Resolution of disputes - Any dispute arising out of or relating to
this Agreement not resolved within ninety (90) days of such dispute
having arisen will be resolved by mandatory, binding arbitration on
the application of either party. The arbitration will take place in
New York, New York, at the offices of the American Arbitration
Association ("AAA"), pursuant to the AAA International Commercial
Rules. The dispute will be resolved by
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the majority decision of three arbitrators of whom one will be
nominated by Recordati and one by Ascent, and a third nominated
by the two party-appointed arbitrators, unless Recordati and
Ascent agree in any given dispute to have it settled by a single
arbitrator acceptable to both Recordati and Ascent. If a party
fails to nominate its arbitrator to a three-arbitrator panel
within 30 days after the other party has appointed its arbitrator
and served written notice of such appointment on the other party,
or if within 30 days after both party-appointed arbitrators are
appointed, the party-appointed arbitrators have not agreed upon
the appointment of a third arbitrator, then the missing
arbitrator will be appointed by the appointing authority in
accordance with the AAA's governing rules.
The arbitration shall be conducted in English. The decision of the
arbitrators, or of the single arbitrator, as the case may be, will be final
and binding on the parties and enforceable in accordance with the New York
Convention on the Enforcement of Arbitral Awards.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives on the date first stated below.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
RECORDATI S.A. CHEMICAL AND ASCENT PEDIATRICS, INC.
PHARMACEUTICAL COMPANY
By: /s/ Luciano Bocasso By: /s/ Xxxxxx Xxxxxxxx
------------------- ---------------------
Name: Luciano Bocasso Name: Xxxxxx Xxxxxxxx
Title: President Title: Chairman
Date: October 8, 1996 Date: October 1, 1996
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Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
Exhibit A
Development Program
1) Pre-clinical Development
Work List Milestones Estimated Timetable
******** **********
******** ***** **********
******** **********
******** **********
2) Manufacturing Scale-up
Work List Milestones Estimated Timetable
******** ***** **********
******** **********
******** **********
******** **********
******** **********
******** **********
3) Clinical Testing
Work List Milestones Estimated Timetable
******** ***********
******** ***********
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Exhibit B
Major Countries
Australia
Canada
France
Germany
Italy
Japan
The Netherlands
Poland
Spain
United Kingdom
United States of America
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38
Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
EXHIBIT C
Patents
Country Application No. Patent No.
------- --------------- ----------
Australia *******
Canada *******
China *******
Denmark *******
Europe *******
(AT, BE, CH, DE, ES,
FR, XX, XX, XX, XX,
XX, XX and SE)
Finland *******
Israel *******
Japan *******
Singapore *******
S. Korea *******
Mexico *******
Norway *******
Taiwan *******
USA *******
USA *******
USA *******
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EXHIBIT D
Omitted and Filed Separately as Exhibit 10.8
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