EXHIBIT 4.12
EXECUTION COPY
[*] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
AMENDED AND RESTATED
LICENSE AGREEMENT
BETWEEN
CONTROL DELIVERY SYSTEMS, INC.
AND
BAUSCH & LOMB INCORPORATED
THIS AGREEMENT IS CONFIDENTIAL AND SHALL NOT BE DISCLOSED TO ANY THIRD PARTY
EXCEPT IN ACCORDANCE WITH THE PROCEDURES SPECIFIED IN ARTICLE 32 HEREOF.
Dated as of December 9th, 2003
TABLE OF CONTENTS
Page
----
Article 1. Definitions:.................................................................................. 1
1.1 Active Commercialization or Actively Commercializing..................................... 1
1.2 Affiliate................................................................................ 1
1.3 Amendment Date........................................................................... 2
1.4 ANDA..................................................................................... 2
1.5 ARMD..................................................................................... 2
1.6 Base Royalty............................................................................. 2
1.7 Clinical IP.............................................................................. 2
1.8 Commercialize, Commercializing or Commercialization...................................... 2
1.8A Co-Owned Patents......................................................................... 2
1.9 Confidential Information................................................................. 2
1.10 Develop, Developing or Development....................................................... 2
1.11 DME...................................................................................... 2
1.12 DR....................................................................................... 2
1.13 Eligible Licensed Product................................................................ 3
1.14 First Generation Exclusive Licensed Product.............................................. 3
1.15 FDA...................................................................................... 3
1.16 Generic Product.......................................................................... 3
1.17 Improvement.............................................................................. 3
1.18 IND...................................................................................... 3
1.19 Invention................................................................................ 3
1.20 Issued Patent Claim...................................................................... 3
1.21 Know-how................................................................................. 3
1.22 Licensed Field........................................................................... 3
1.23 Licensed Patents......................................................................... 3
1.24 Licensed Product......................................................................... 4
1.25 Licensed Territory....................................................................... 4
1.26 Licensee Improvement..................................................................... 4
1.27 Licensee Improvement Application......................................................... 4
1.28 Licensee Improvement Patent.............................................................. 4
1.29 Licensor Improvement Product............................................................. 4
1.29A Licensor Improvement..................................................................... 4
1.29B Licensor Improvement Patents............................................................. 5
1.30 Milestone Payment........................................................................ 5
1.31 NDA...................................................................................... 5
1.32 Net Sales................................................................................ 5
1.33 Non-Exclusive Licensed Product........................................................... 5
1.34 Original Effective Date.................................................................. 6
1.35 Other Technology......................................................................... 6
1.36 Patent Rights............................................................................ 6
1.37 Person................................................................................... 6
1.38 Regulatory Approval...................................................................... 6
1.39 Right of Access to Clinical IP........................................................... 6
1.40 Sublicense............................................................................... 6
1.41 Sublicensee.............................................................................. 6
1.42 Target Market............................................................................ 6
1.43 Term of this Agreement................................................................... 6
1.44 Third Party Licensed Product............................................................. 7
1.45 Total Relevant Sales..................................................................... 7
1.46 UKRF..................................................................................... 7
1.47 UKRF Licenses............................................................................ 7
1.48 Uveitis Base Royalty Product............................................................. 7
1.49 Uveitis Product.......................................................................... 7
1.50 Valid Claim.............................................................................. 7
1.51 Vitrasert Licensed Product............................................................... 7
Article 2. Granting Clause:.............................................................................. 8
2.1 License Grant............................................................................ 8
2.2 Sublicensing............................................................................. 8
2.3 Non-suit................................................................................. 9
2.4 Non-assert of Know-how................................................................... 10
2.5 Non-Compete.............................................................................. 10
(a) Non-Compete for Uveitis Product.......................................................... 10
(b) Non-Compete for First Generation Exclusive License Product............................... 101
2.6 Licensor Disclosure of Inventions........................................................ 12
2.7 Licensee Disclosure of Inventions........................................................ 12
2.8 Co-Owned Patents......................................................................... 13
2.9 Licensee Non-suit........................................................................ 13
2.10 Licensee Covenant Not to File............................................................ 13
2.11 Frustration Regarding Vitrasert Product.................................................. 13
Article 3. Royalties and Repayment Obligations........................................................... 13
3.1 Running Royalties........................................................................ 13
3.2 Royalty Step-Down for Generic Competition................................................ 15
3.3 Royalties Payable Only Once.............................................................. 16
3.4 Timing of Royalty Payments............................................................... 16
3.5 Withholding Taxes........................................................................ 16
3.6 Intentionally Omitted.................................................................... 16
3.7 Repayment of Advanced Amount............................................................. 16
3.8 Royalty Calculation...................................................................... 18
Article 4. License and Maintenance Fees.................................................................. 18
4.1 License and Maintenance Fees............................................................. 18
Article 5. Development of Licensed Products.............................................................. 18
5.1 Joint Diligence Obligation............................................................... 18
5.2 Licensee's General Diligence Obligations................................................. 18
5.3 (a) Licensee's Specific Diligence Obligations - Uveitis.................................. 18
5.3 (b) Licensee's Specific Diligence Obligations - Other First Generation
Exclusive Licensed Product............................................................... 18
5.4 Licensee's Specific Diligence Obligations - Non-Exclusive Licensed Products.............. 19
5.5 Failure to Comply with Diligence Obligations............................................. 19
Article 6. Marketing Obligations......................................................................... 19
Article 7. Reporting and Accounting Provisions:.......................................................... 20
7.1 Royalty Report........................................................................... 20
7.2 Record Keeping by Licensee............................................................... 20
7.3 Termination Report....................................................................... 20
Article 8. Ownership:.................................................................................... 21
8.1 Ownership................................................................................ 21
8.2 Inventorship............................................................................. 21
8.3 Licensee Improvements.................................................................... 21
Article 9. Filing and Maintenance of Patents:............................................................ 23
Article 10. Enforcement of Intellectual Property Rights:................................................. 24
10.1 Notice to Licensor....................................................................... 24
10.2 Right to Bring Suit - Licensor; Settlement............................................... 24
10.3 Right to Bring Suit - Licensee........................................................... 24
10.4 UKRF..................................................................................... 25
10.5 Expense.................................................................................. 25
Article 11. Term; Termination:........................................................................... 27
11.1 Expiration of Royalty Obligations........................................................ 27
11.2 Term..................................................................................... 27
11.3 Termination by Licensor.................................................................. 27
11.4 Termination by Licensee.................................................................. 28
11.5 Bankruptcy............................................................................... 29
11.6 Effect of Termination.................................................................... 29
11.7 Grant Back............................................................................... 29
Article 12. Ownership of Clinical IP:.................................................................... 30
12.1 Clinical IP Outside Licensees License Rights............................................. 30
12.2 Clinical IP-Cooperation.................................................................. 30
Article 13. University of Kentucky Research Foundation Licenses:......................................... 30
Article 14. Indemnification:............................................................................. 31
14.1 Indemnification of Licensee.............................................................. 31
14.2 Indemnification of Licensor.............................................................. 31
14.3 Limitation of Liability.................................................................. 32
14.4 Procedure for Indemnification............................................................ 32
14.5 Insurance................................................................................ 32
Article 15. Trademarks:.................................................................................. 32
Article 16. Representations and Warranties:.............................................................. 33
16.1 Representations and Warranties of Both Parties........................................... 33
16.2 Representations and Warranties of Licensor............................................... 33
Article 17. Warranty Disclaimer:......................................................................... 34
Article 18. Operations in Compliance with Law:........................................................... 35
Article 19. Infringement of Third Party's Patents:....................................................... 35
Article 20. Force Majeure:............................................................................... 37
Article 21. Choice of Law/Forum:......................................................................... 37
Article 22. Dispute Resolution:.......................................................................... 37
Article 23. Notices:..................................................................................... 38
Article 24. Merger Clause:............................................................................... 39
Article 25. Integration Clause:.......................................................................... 39
Article 26. Severability Clause:......................................................................... 39
Article 27. No Waiver:................................................................................... 40
Article 28. Transferability of Rights and Obligations:................................................... 40
Article 29. Patent Marking:.............................................................................. 40
Article 30. Publicity:................................................................................... 40
Article 31. Independent Contractors:..................................................................... 40
Article 32. Confidentiality:............................................................................. 40
32.1 Confidentiality.......................................................................... 40
32.2 External Disclosure...................................................................... 41
Article 33. Relinquishment:.............................................................................. 42
33.1 UKRF Letter Agreement.................................................................... 42
33.2 Covenant Not to Compete.................................................................. 42
Article 34. No Limit to Remedies:........................................................................ 42
Article 35. Counterparts:................................................................................ 42
Article 36. Transition Obligations:...................................................................... 42
36.1 Clinical/Trial Agreements................................................................ 42
36.2 Clinical Activities Data................................................................. 43
36.3 Transition Space......................................................................... 43
36.4 Insurance................................................................................ 43
EXHIBITS
--------
Exhibit 1.14 - First Generation Exclusive Licensed Product
Specifications/Drawings
Exhibit 1.23(a) - Licensed Patents, Patent Applications and IDFs
Exhibit 1.23(b) - Excluded Patents, Patent Applications and IDFs
Exhibit 1.33 - Non-Exclusive Licensed Product
Exhibit 1.47 - UKRF Licenses
Exhibit 2.3 - Non-Suit Excluded Patents, Patent Applications and
IDFs
Exhibit 2.8 - Licensee Patents
Exhibit 2.9 - Licensee Non-suit
Exhibit 2.10 - Licensee IDFs; Covenant Not to File
Exhibit 3.7.3 - Form of Option
Exhibit 3.7.4 - Form of Promissory Note
Exhibit 4.1 - Milestone Payments
Exhibit 5.3 - Due Diligence Obligations for First Generation
Exclusive Licensed Products (Non-Uveitis Indications)
Exhibit 5.4 - Due Diligence Obligations for Non-Exclusive Licensed
Products
Exhibit 16.1(vi) - Litigation, Proceedings, Governmental Investigations
Exhibit 16.2(iii) - Exceptions to Ownership of Licensed Patents
Exhibit 16.2(v) - Licensor Disclosees
Exhibit 36.1A - Clinical Agreements
Exhibit 36.1B - Trial Agreements
AMENDED AND RESTATED LICENSE AGREEMENT
THIS AMENDED AND RESTATED LICENSE AGREEMENT ("Agreement"), effective as of the
9th day of December, 2003 (the "Amendment Date"), is made between Control
Delivery Systems, Inc., a corporation organized and existing under the laws of
the State of Delaware and having its principal place of business at 000 Xxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000 ("Licensor") and Bausch & Lomb
Incorporated, a corporation organized and existing under the laws of the State
of New York and having its principal place of business at Xxx Xxxxxx & Xxxx
Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("Licensee"). Collectively, Licensor and
Licensee are "Parties" and, individually, a "Party."
RECITALS
WHEREAS, the Parties have entered into, and performed in part under, the License
Agreement between Licensor and Licensee, dated June 9, 1999, as amended January
1, 2001, December 31, 2001, and April 14, 2003 (the "1999 Agreement"), and the
License and Development Agreement dated December 31, 1992, between Licensor and
Licensee, as the assignee of ChironVision Corporation (formerly Chiron
IntraOptics, Inc.) ("Chiron"), as amended August 16, 1993, March 30, 1995, June
23, 1995, and December 31, 1997 (the "Vitrasert Agreement"); and
WHEREAS, the Parties have determined to change, in part, the nature of their
relationship with respect to the development, manufacturing and licensing of
products under the 1999 Agreement and with respect to intellectual property
rights and other matters reflected in this Agreement; and
WHEREAS, the Parties wish to amend and restate their intentions into a single
agreement, all to effect the foregoing changes.
NOW THEREFORE, in consideration of the mutual promises set forth below, the
Parties agree as follows:
ARTICLE 1. DEFINITIONS:
In addition to the terms defined elsewhere in this Agreement, the following
terms shall have their associated meanings.
1.1 Active Commercialization or Actively Commercializing. "Active
Commercialization" and "Actively Commercializing" means: (a) Licensee
diligently conducting clinical trials for Uveitis Base Royalty Product; or
(b) with respect to a Uveitis Base Royalty Product for which clinical trials
are complete, Licensee diligently obtaining Regulatory Approval; or (c) with
respect to a Uveitis Base Royalty Product that has received Regulatory
Approval in one or more markets, Licensee diligently Commercializing such
product in such markets; all in active furtherance of Licensee's diligence
obligations pursuant to Articles 5 and 6 of this Agreement.
1.2 Affiliate. "Affiliate" of any Party means any Person that is controlled
by, controls, or is under common control with such Party, for so long as such
control relationship continues to exist. "Control" as used in this definition
means the possession, directly or indirectly, of the
power to direct or cause the direction of the management of a Person, whether
through ownership of voting securities, by contract, or otherwise.
1.3 Amendment Date. "Amendment Date" shall mean December 9th, 2003.
1.4 ANDA. "ANDA" means an Abbreviated New Drug Application and all associated
documents and components thereof, required to be filed with the FDA in order
to obtain approval to market a particular product in the United States.
1.5 ARMD. "ARMD" means age-related macular degeneration.
1.6 Base Royalty. "Base Royalty" means a running royalty rate of [*] of Net
Sales, provided that, as set forth in Section 3.8, the amount of royalties
due and owing pursuant to Section 3 shall be subject to Licensee's right of
recoupment as follows: if the Advanced Amount has not been fully repaid by
Licensor to Licensee as required hereunder, the amount of any royalties that
might otherwise be due and owing from Licensee to Licensor under this
Agreement shall in all instances be the amount determined in accordance with
Article 3, less the Unpaid Advanced Amount at the time of such determination.
1.7 Clinical IP. "Clinical IP" means (i) all pre-clinical and clinical
protocols, studies, data and results and study-related forms, materials and
reports (e.g., investigator brochures, informed consent forms, data safety
monitoring board related documents, patient recruitment related materials,
biocompatibility studies, animal studies, safety studies, and chemistry,
manufacturing and control data) used in or resulting from any pre-clinical or
clinical study or trial and any audits of any pre-clinical or clinical study
or trial of any First Generation Exclusive Licensed Product or the Vitrasert
Licensed Product in the Licensed Field, and (ii) all INDs, NDAs, any unfiled
applications, components or materials normally associated with an IND or NDA,
regulatory filings or applications comparable to INDs or NDAs in any foreign
jurisdictions, and other regulatory applications and approvals regarding any
First Generation Exclusive Licensed Product or the Vitrasert Licensed Product
in the Licensed Field.
1.8 Commercialize, Commercializing or Commercialization. "Commercialize",
"Commercializing" or "Commercialization" means the sale, offering for sale,
distribution, or marketing, of a product.
1.8A Co-Owned Patents. "Co-Owned Patents" is defined in Section 2.8 of this
Agreement.
1.9 Confidential Information. "Confidential Information" is defined in
Article 32 of this Agreement.
1.10 Develop, Developing or Development. "Develop", "Developing" or
"Development" means performance of human clinical trials for a product.
1.11 DME. "DME" means diabetic macular edema.
1.12 DR. "DR" means diabetic retinopathy.
[*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH
THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND
EXCHANGE ACT OF 1934, AS AMENDED.
-2-
1.13 Eligible Licensed Product. "Eligible Licensed Product" is defined in
Section 3.2 of this Agreement.
1.14 First Generation Exclusive Licensed Product. "First Generation Exclusive
Licensed Product" shall mean a product, other than the Vitrasert Licensed
Product, that is an implant that is required to be surgically inserted
through an incision of at least 2 mm (and which cannot be inserted through an
incision of less than 2 mm) in the scelera into the vitreous, is secured in
the posterior of the eye, cannot be injected, and uses a reservoir design
that generally conforms to the drawings and specifications (and any prior
iterations thereof in whole or in part) shown in Exhibit 1.14. An example of
such a design is that which is currently used in clinical trial #005 and #002
for DME and clinical trial #001 for Uveitis.
1.15 FDA. "FDA" means the United States Food and Drug Administration.
1.16 Generic Product. "Generic Product" is defined in Section 3.2 of this
Agreement.
1.17 Improvement. "Improvement" means any Invention which is a development,
enhancement, improvement, invention, modification, derivative or new use of a
Licensed Product, [*].
1.18 IND. "IND" means an Investigational New Drug Application and associated
documents, components thereof, or corresponding applications and associated
documents for devices or combination products, required to be filed with the
FDA in order to obtain approval to commence human clinical trials of product
in the United States.
1.19 Invention. "Invention" shall mean any invention or discovery.
1.20 Issued Patent Claim. "Issued Patent Claim" is defined in Section 1.50 of
this Agreement.
1.21 Know-how. "Know-how" means unpatented information, whether or not
patentable, including, without limitation, technical information, processes,
formulae, trade secrets, materials, designs, drawings and data.
1.22 Licensed Field. "Licensed Field" means with respect to: (a) the First
Generation Exclusive Licensed Products, any and all use for the treatment,
prevention and/or diagnosis of any disease, disorder and/or condition of the
human eye; (b) Non-Exclusive Licensed Products, any and all use for the
treatment, prevention and/or diagnosis in humans of [*] (c) Vitrasert
Licensed Product, any and all use for the prevention and treatment of
cytomegalovirus retinitis in humans; and (d) all Licensed Products, any and
all research in non-human eyes.
1.23 Licensed Patents. "Licensed Patents" shall mean all: (1) patents issued
to or licensed by Licensor on or before June 18, 2003, as set forth in
Exhibit 1.23(a), other than those specific patents listed on Exhibit 1.23(b);
(2) patent applications filed by Licensor on or before June 18,
[*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH
THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND
EXCHANGE ACT OF 1934, AS AMENDED.
-3-
2003, as set forth in Exhibit 1.23(a), other than those specific patent
applications listed on Exhibit 1.23(b); (3) patent applications filed by
Licensor after June 18, 2003, to the extent directed to the specific
inventions made before June 18, 2003, and disclosed in the invention
disclosure forms set forth in Exhibit 1.23(a), other than those specific
invention disclosure forms listed on Exhibit 1.23(b); and (4) all patents and
patent applications claiming priority to the patents or patent applications
set forth in (1) - (3) above, including (i) any continuation,
continuation-in-part (to the extent the claims are specifically directed to
the subject matter in the patent or patent application to which it claims
priority), divisional, reissue, reexamination, or renewal with respect to any
of the foregoing, and (ii) any corresponding patent, utility model, inventor
certificate, registration or the like in any country of the world with
respect to the foregoing; provided, however, that notwithstanding anything to
the contrary in this Section 1.23 or elsewhere in this Agreement, Licensed
Patents shall not include any patent or patent application, or any claim
thereof, that is directed to inventions made by Licensor after June 18, 2003.
Exhibit 1.23(a) shall be updated from time to time by Licensor to incorporate
the patent application serial numbers for the patent applications referenced
in subsection (3) above. For the purposes of this Section 1.23, patents,
patent applications, Patent Rights and Inventions shall only mean patents,
patent applications, Patent Rights and Inventions of Control Delivery
Systems, Inc., and shall not include patents, patent applications, Patent
Rights and Inventions of a third party acquiree or transferor, or a third
party merger or consolidation partner, of or with Control Delivery Systems,
Inc., or a third party acquiror or transferee of substantially all of the
assets or stock of Control Delivery Systems, Inc.'s opthalmics business.
1.24 Licensed Product. "Licensed Product" means First Generation Exclusive
Licensed Product, Vitrasert Licensed Product, and Non-Exclusive Licensed
Product.
1.25 Licensed Territory. "Licensed Territory" means the world.
1.26 Licensee Improvement. "Licensee Improvement" is defined in Section
8.3(a) of this Agreement.
1.27 Licensee Improvement Application. "Licensee Improvement Application" is
defined in Section 8.3(a) of this Agreement.
1.28 Licensee Improvement Patent. "Licensee Improvement Patent" is defined in
Section 8.3(b) of this Agreement.
1.29 Licensor Improvement Product. "Licensee Improvement Product" is defined
in Section 8.3(b) of this Agreement.
1.29A Licensor Improvement. "Licensor Improvement" means any Improvement
created, invented or discovered by Licensor, after June 18, 2003 and before
[*], provided, however, that in the event of (i) any transfer by
Licensee of substantially all of the assets or stock of Licensee's proprietary
(branded and/or generic) ophthalmic pharmaceutical business; or (ii) any
transfer by Licensor of substantially all of the assets or stock of Licensor's
ophthalmics business, "Licensor Improvement" shall only include Improvements
created, invented or discovered by Licensor after June 18, 2003 and before the
earlier of (x) the effective date of such transfer or (y) [*]. For
the purposes of this Section 1.29A,
[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-4-
Improvements shall only mean Improvements of Control Delivery Systems, Inc., and
shall not include Improvements of a third party acquiree or transferor, or a
third party merger or consolidation partner, of or with Control Delivery
Systems, Inc., or a third party acquiror or transferee of substantially all of
the assets or stock of Control Delivery Systems, Inc.'s opthalmics business.
1.29B Licensor Improvement Patents. Any patent application filed by Licensor to
the extent it claims a Licensor Improvement, and any issued patents or patent
applications to the extent they claim priority thereto.
1.30 Milestone Payment. "Milestone Payment" is defined in Article 4 of this
Agreement.
1.31 NDA. "NDA" means a New Drug Application and all associated documents,
components thereof, or corresponding applications and associated documents
for devices or combination products, required to be filed with the FDA in
order to obtain approval to market a particular product in the United States.
1.32 Net Sales. "Net Sales" means, in any case where a Licensed Product is
sold or commercially disposed of for value by Licensee or any Sublicensee in
an arm's length transaction with a third party (other than an Affiliate of,
respectively, Licensee or Sublicensee), the gross invoice price for such
Licensed Product, less the following: (i) discounts, chargebacks, Medicare or
other government rebates, and rebates to purchasers actually taken or
allowed; (ii) credits or allowances given or made for rejections or return of
any previously sold Products actually taken or allowed; (iii) to the extent
included in such gross invoice price any tax or government charge imposed on
the production, import, export, sale, delivery or use of such Products,
including, without limitation, any value added or similar tax or government
charge, but not including any tax levied with respect to income; and (iv) to
the extent included in such gross invoice price any reasonable and documented
packaging and distribution charges. Net Sales shall also include and be
deemed to have been made with respect to (a) any Licensed Product not sold or
otherwise transferred to any third party but rather used by Licensee or any
Sublicensee to provide a commercial service and (b) any other transfer of a
Licensed Product for less than arm's length value other than intercompany
transfers where the transferee is not the end user. The amount of any Net
Sale as defined in the preceding sentence shall be imputed using the price or
prices at which the Licensed Product at issue is then being sold in
transactions covered by the first sentence of this Section or, if no such
transactions have occurred, on a reasonable basis to be determined at the
time by the Parties. Notwithstanding any other provision of this Section, Net
Sales shall not include the transfer without consideration of any Licensed
Product by Licensee or any Sublicensee (x) for use in any clinical trial or
in any preclinical or other research, (y) as detailing samples or other use
to promote additional Net Sales in amounts consistent with the normal
business practices of Licensee or any Sublicensee, or (z) for compassionate
use.
1.33 Non-Exclusive Licensed Product. "Non-Exclusive Licensed Product" means a
product (a) that meets the following criteria: (i) uses as its active
ingredient only one or more of the active ingredients set forth in column A
of Exhibit 1.33, and no others, and (ii) uses one of the delivery systems in
column B of Exhibit 1.33, and (iii) uses one of the methods of delivery set
forth in column C of Exhibit 1.33; and (iv) uses one of the anchoring methods
set forth in
-5-
column D of Exhibit 1.33; and (v) is applied in one of the locations set
forth in column E of Exhibit 1.33; and (vi) is approved, or is designed to be
approved, for the treatment of one or more of the indications set forth in
Column F of Exhibit 1.33, and no others; and (b) the manufacture, use, sale,
offering for sale or importing of which, absent the license granted by
Licensor to Licensee herein, would infringe any Valid Claim included in any
Licensed Patent or Licensor Improvement Patent. Notwithstanding the
foregoing, Non-Exclusive Licensed Product shall exclude First Generation
Exclusive Licensed Product.
1.34 Original Effective Date. "Original Effective Date" means December 31,
1992, for rights and obligations hereunder related to Vitrasert Licensed
Product and June 9, 1999, for all other rights and obligations hereunder.
1.35 Other Technology. "Other Technology" means Patent Rights owned or
controlled by Licensor and not included as a Licensed Patent or Licensor
Improvement Patent.
1.36 Patent Rights. "Patent Rights" means any and all forms of patents issued
or granted anywhere in the world, including, without limitation, utility,
model and design patents, patents of addition, patents of importation or
innovation, improvement patents, reissued and reexamined patents, all
renewals and extensions thereof, and all applications for such patents
(including original, divisional, continuation and continuation-in-part
applications) pending before any national Patent Office and which have not
been abandoned or expired.
1.37 Person. "Person" means any individual, partnership, association,
corporation, trust, or other legal person or entity.
1.38 Regulatory Approval. "Regulatory Approval" means (a) approval by the FDA
of an NDA and satisfaction of any related applicable FDA requirements (if
any) or (b) in any country other than the United States, approval by
regulatory authorities having jurisdiction over such country of a single
application or set of applications comparable to an IND, NDA, and
satisfaction of any related applicable regulatory and notification
requirements, if any, together with any other approvals necessary to make and
sell pharmaceuticals or delivery systems in such country.
1.39 Right of Access to Clinical IP. "Right of Access to Clinical IP" means
the right to reference, cross-reference, review, have access to, incorporate
and use Clinical IP in any regulatory, applications or filings or for any
research or development purpose.
1.40 Sublicense. "Sublicense" means any sublicense of, or other agreement
permitting the commercial exploitation of, some or all of the rights granted
to Licensee under this Agreement.
1.41 Sublicensee. "Sublicensee" means any Person to whom Licensee grants a
Sublicense.
1.42 Target Market. "Target Market" means each of the [*].
1.43 Term of this Agreement. "Term of this Agreement", "term of this
Agreement", or "Term" shall mean the period beginning on the Original
Effective Date and continuing only for so long as (a) Licensee has any right
to exercise any of its rights with respect to any Licensed Patent or Licensor
Improvement Patent in the Licensed Territory, or (b) royalty payments are
[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-6-
due under this Agreement, unless earlier terminated by Licensor or Licensee
as provided herein.
1.44 Third Party Licensed Product. "Third Party Licensed Product" means a
First Generation Exclusive Licensed Product or a Non-Exclusive Licensed
Product, the therapeutic effect of which is derived in part from any
proprietary product, compound, method or process in-licensed or acquired by
Licensee from an unaffiliated third party on an arm's length basis; provided
that such First Generation Exclusive Licensed Product or Non-Exclusive
Licensed Product is subject to a running royalty equal to the Base Royalty.
1.44A Third Party Licensor Improvement Product. "Third Party Licensor
Improvement Product" is defined in Section 8.3(d) of this Agreement.
1.45 Total Relevant Sales. "Total Relevant Sales" is defined in Section 3.2
of this Agreement.
1.46 UKRF. "UKRF" means University of Kentucky Research Foundation.
1.47 UKRF Licenses. "UKRF Licenses" mean the licenses set forth in Exhibit
1.47.
1.48 Uveitis Base Royalty Product. "Uveitis Base Royalty Product" means a
Uveitis Product the Net Sales of which bear, or for a product that has not
yet received Regulatory Approval, will bear, the Base Royalty payable to
Licensor that is not subject to any royalty reduction or offset under this
Agreement.
1.49 Uveitis Product. "Uveitis Product" means any product which has received
or is designed to receive Regulatory Approval to treat Uveitis.
1.50 Valid Claim. "Valid Claim" means (i) a claim of an issued and unexpired
patent which has not been held permanently revoked, unenforceable or invalid
by a decision of a court or other governmental agency of competent
jurisdiction, unappealed or unappealable within the time allowed for appeal,
and which has not been admitted to be invalid or unenforceable through
reissue or disclaimer or otherwise (an "Issued Patent Claim"), and/or (ii) a
pending claim of any pending patent application which has been filed and
continues to be prosecuted in good faith and is not abandoned or finally
disallowed without the possibility of appeal or refiling (a "Pending Claim");
provided, however, that, with respect to any Licensed Product or Licensor
Improvement Product, no Pending Claim which has not become an Issued Patent
Claim shall continue to constitute a Valid Claim for more than five years
following the first approved commercial sale of the first Licensed Product or
Licensor Improvement Product which qualifies as a Licensed Product or
Licensor Improvement Product solely as a result of such Pending Claim.
1.51 Vitrasert Licensed Product. "Vitrasert Licensed Product" means the
product that has received FDA regulatory approval pursuant to application
#20-569 as approved on March 4, 1996, and the manufacture, use, sale, or
importation of which would, absent the license granted by Licensor to
Licensee herein, infringe any Valid Claim included in the Licensed Patents.
-7-
ARTICLE 2. GRANTING CLAUSE:
2.1 License Grant.
2.1.1 License to First Generation Exclusive Licensed Product and Vitrasert
Licensed Product. Licensor grants to Licensee, and Licensee accepts, an
exclusive, royalty-bearing, worldwide right and license, with exclusive
right to sublicense, under Licensor's interest (i.e., subject to the UKRF
Licenses) in the Licensed Patents and Licensor Improvement Patents, solely
to make, have made, use, sell, offer to sell, and import First Generation
Exclusive Licensed Products and Vitrasert Licensed Product in the Licensed
Field.
2.1.2 License to Non-Exclusive Licensed Product. Licensor grants to Licensee,
and Licensee accepts a non-exclusive, royalty-bearing, worldwide right and
license, without the right to sublicense, under Licensor's interest (i.e.,
subject to the UKRF Licenses) in the Licensed Patents and Licensor
Improvement Patents solely to make, have made (including by
manufacturers), use, sell, offer to sell, have sold (including by
distributors), and import Non-Exclusive Licensed Products in the Licensed
Field.
2.1.3 Intentionally Omitted.
2.1.4 No License. Nothing in this Agreement shall be construed as granting a
license, whether express, implied or by operation of law, to Licensee
under any Patent Rights, Know-how, or other proprietary rights owned,
acquired or controlled by Licensor other than the rights expressly granted
by Licensor to Licensee in this Agreement, including, without limitation,
Sections 2.3 and 2.8. Licensee shall have no rights in any Other
Technology or in any inventions disclosed in any patents, patent
applications or invention disclosure forms listed in Exhibit 1.23(b),
regardless of whether such Other Technology or such inventions disclosed
in Exhibit 1.23(b) incorporate, or are infringed by the use of, Licensor
Know-how. This Agreement does not create, and shall under no circumstances
be construed or interpreted as creating, an obligation on the part of
Licensor to grant any license to Licensee other than as expressly set
forth herein. Any further contract or license agreement between the
Parties shall be in writing.
2.1.5 Reserved Rights. All rights not expressly granted to Licensee in this
Agreement are reserved to Licensor for itself, its partners and Affiliates
(other than Licensee) and other licensees and sublicensees.
Notwithstanding the licenses granted in Article 2, Licensor hereby retains
and reserves a royalty-free right and license to use and permit others to
use the Licensed Patents and Licensor Improvement Patents for research,
but not for making, using, selling, or importing any commercial products
or processes for First Generation Exclusive Licensed Products and the
Vitrasert Licensed Product, and for development purposes, subject in all
cases to Section 2.5.
2.2 Sublicensing. Licensee shall have the right to grant Sublicenses under
the license granted pursuant to Section 2.1.1, provided, however, that any such
Sublicense shall not be inconsistent with the terms and conditions of this
Agreement and that Licensee shall be responsible for the operations of any
Sublicensee relative to this Agreement as if such operations were carried out by
Licensee itself, including (without limitation) the payment of any royalties
provided for
-8-
hereunder, regardless of whether the terms of any Sublicense provide for such
amount to be paid by the Sublicensee directly to Licensor, but Sublicensees
shall not be required to pay Milestones Payments pursuant to Article 4.
2.3 Non-suit. While the licenses granted hereby only include rights to
Licensed Patents and Licensor Improvement Patents as expressly stated in this
Agreement, and do not include rights to Other Technology, Licensor shall not
bring (and shall not authorize or assist a third party to bring) any action
under Other Technology owned by Licensor or controlled and able to be
licensed by Licensor to block Licensee or any Sublicensee from:
(a) exercising its rights with respect to a Uveitis Base Royalty Product
that is an implant that is required to be surgically inserted through an
incision of at least 2 mm (and which cannot be inserted through an incision of
less than 2 mm) in the scelera into the vitreous, is secured by a suture
attaching a tab to the scelera in the posterior of the eye, uses the
reservoir/suture tab design currently used in clinical trial #001 for Uveitis,
uses fluocinolone acetonide as an active ingredient with no other active
ingredients, and generally conforms with the drawings and meets the
specifications shown in Exhibit 1.14 of this Agreement and any prior iterations
thereof, with only such modifications to the design that do not modify the
parameters set forth above and that are required to obtain Regulatory Approval
for the implant in the above clinical trials as a result of the current
stability issue or another safety issue that may arise during the course of such
clinical trials; and
(b) exercising those rights (but only those rights) granted by Licensor to
Licensee pursuant to Section 2.1.1, provided that:
(i) the Other Technology is filed on or before or claims priority to
an application filed on or before December 31, 2004 (provided the non-suit
only applies to the extent of claims directed to the subject matter in the
application to which such Other Technology claims priority); and
(ii) the Other Technology claims an invention for which Licensee,
prior to any public disclosure of the Invention by the Licensor, has
recorded an invention disclosure form including one or more claims to the
same Invention, provided that such invention disclosure form has described
such Invention with enough particularity to demonstrate that Licensee was
in possession of the Invention at the time such invention disclosure form
was recorded.
For the purposes of this Section 2.3, Other Technology shall not include those
patents, patent applications and invention disclosure forms set forth in Exhibit
2.3 (i.e., Licensor shall not be precluded from bringing an action based on
those patents, patent applications and invention disclosure forms set forth in
Exhibit 2.3). Also, for the purposes of this Section 2.3, the non-suit granted
herein shall not preclude Licensor from enforcing any of its rights in Other
Technology that are directed to the composition of active ingredients,
formulations, indications or novel polymers that are not limited in use or
application to First Generation Exclusive Licensed Products. For the purposes of
this Section 2.3, patents, patent applications, Patent Rights, Inventions and
Other Technology shall only mean patents, patent applications, Patent Rights,
Inventions and Other Technology of Control Delivery Systems, Inc., and shall not
include
-9-
patents, patent applications, Patent Rights, Inventions and other technology of
a third party acquiree or transferor, or a third party merger or consolidation
partner, of or with Control Delivery Systems, Inc., or a third party acquiror or
transferee of substantially all of the assets or stock of Control Delivery
Systems, Inc.'s opthalmics business. The provisions of this Section 2.3 shall in
no way limit Licensee's rights under Licensor Improvement Patents as set forth
in this Agreement.
2.4 Non-assert of Know-how. Licensor shall not bring (and shall not authorize
or assist a third party to bring) any action against Licensee or a
Sublicensee alleging misappropriation of Licensor's Know-how. Licensee shall
not bring (and shall not authorize or assist a third party to bring) any
action against Licensor or a sublicensee of Licensor alleging
misappropriation of Licensee's Know-how. For the purposes of this Section,
Licensor's Know-how shall be limited to Know-how known by Licensor as of June
18, 2003, and Licensee's Know-how shall be limited to Know-how known by
Licensee as of June 18, 2003. The prohibitions of this Section shall not
apply to any action which the aggrieved Party may bring if such action is
limited to the intentional and willful theft or misappropriation of the
Know-how based on misappropriation actions occurring by the other Party
solely after the Amendment Date. For the purposes of this Section 2.4,
Know-how shall only mean Know-how of Control Delivery Systems, Inc., and
shall not include Know-how of a third party acquiree or transferor, or a
third party merger or consolidation partner, of or with Control Delivery
Systems, Inc., or a third party acquiror or transferee of substantially all
of the assets or stock of Control Delivery Systems, Inc.'s opthalmics
business.
2.5 Non-Compete.
(a) Non-Compete for Uveitis Product. Licensor shall not Develop, or license a
third party to Develop, a Uveitis Product, but only for so long as (1)
Licensee is Actively Commercializing a Uveitis Base Royalty Product; and (2)
Licensee is not Developing or Commercializing a Uveitis Product that is not a
Uveitis Base Royalty Product. Licensor further agrees not to Commercialize,
or license a third party to Commercialize, a Uveitis Product but only for so
long as (3) Licensee is Actively Commercializing a Uveitis Base Royalty
Product; and (4) Licensee is not Commercializing a Uveitis Product that is
not a Uveitis Base Royalty Product. Notwithstanding the foregoing, the
prohibitions under this Section 2.5(a) shall not apply to the Development and
Commercialization activities of a third party acquiree or transferor, or a
third party merger or consolidation partner, of or with Licensor, or a third
party acquiror or transferee of substantially all of the assets or stock of
Licensor's opthalmics business, provided that such acquiror, acquiree,
transferor, transferee, or a merger or consolidation partner does not use in
such Development or Commercialization activities for a Uveitis Product any
(i) Licensed Patent or (ii) Know-how owned or controlled by Licensor as of
the date of such acquisition, transfer, merger or consolidation. For the
purposes of this Section 2.5(a), patents, patent applications, Patent Rights,
Inventions and Know-how shall only mean patents, patent applications, Patent
Rights, Inventions and Know-how of Control Delivery Systems, Inc., and shall
not include patents, patent applications, Patent Rights, Inventions and
Know-how of a third party acquiree or transferor, or a third party merger or
consolidation partner, of or with Control Delivery Systems, Inc., or a third
party acquiror or transferee of substantially all of the assets or stock of
Control Delivery Systems, Inc.'s opthalmics business. In addition, the
Parties
-10-
agree that whenever Licensee realizes revenue from Commercializing a
Uveitis Product, Licensee will receive a royalty on such revenue.
Licensee shall provide written notice to Licensor within ninety (90) days
after: (x) Licensee's filing of an IND for a Uveitis Product that is not a
Uveitis Base Royalty Product; (y) Licensee's ceasing to Actively
Commercialize a Uveitis Base Royalty Product; and (z) Licensee's
Commercialization of a Uveitis Product that is not a Uveitis Base Royalty
Product. Such written notice shall set forth in reasonable detail the basis
for Licensee's determination of whether a Uveitis Product is or is not a
Uveitis Base Royalty Product.
If Licensee no longer satisfies the requirements of Sections 2.5(a)(1), (2),
(3) or (4) and Licensor has commenced animal pre-clinical trials, the
restrictions of this Section 2.5 shall no longer be applicable to Licensor
and shall thereafter terminate, regardless of whether Sections 2.5(a)(1),
(2), (3) or (4) are subsequently satisfied by Licensee. Notwithstanding the
foregoing, Licensor shall not be prohibited under this Section from
Developing or Commercializing a product designed and approved for an
indication other than Uveitis, regardless of whether such product is or could
be subject to off-label or other unapproved sales or uses for the prevention,
treatment or diagnosis of Uveitis.
(b) Non-Compete for First Generation Exclusive Licensed Product. Licensor
agrees that during the Term of this Agreement, Licensor shall not Develop or
Commercialize a First Generation Exclusive Licensed Product so long as
Licensee has exclusive rights to such First Generation Exclusive Licensed
Product under this Agreement. Notwithstanding the foregoing, the prohibitions
under this Section 2.5(b) shall not apply to the Development or
Commercialization activities of a third party acquiree or transferor, or a
third party merger or consolidation partner, of or with Licensor, or a third
party acquiror or transferee of substantially all of the assets or stock of
Licensor's opthalmics business, provided that such acquiror, acquiree,
transferor, transferee, or a merger or consolidation partner does not use in
such Development or Commercialization activities for a First Generation
Exclusive Licensed Product any (i) Licensed Patent or (ii) Know-how owned or
controlled by Licensor as of the date of such acquisition, transfer, merger
or consolidation. In consideration of the non-compete as set forth in this
Section 2.5(b), as well as all other rights granted and information provided
by Licensor to Licensee under this Agreement with respect to First Generation
Exclusive Licensed Products, including without limitation the rights granted
pursuant to Sections 2.1.1, 2.2, 2.3, 2.4, 2.5 and 2.6 herein, the Parties
agree that the royalty rate set forth in Section 3.1.1 reflects the value of
all such rights granted and information provided and shall be paid whether or
not such First Generation Exclusive Licensed Product is covered by a Valid
Claim in the Licensed Patents or Licensor Improvement Patents, and whether or
not such royalty payments under Section 3.1.1 extend beyond the term of any
Licensed Patent or Licensor Improvement Patent containing Valid Claims
covering such First Generation Exclusive Licensed Product. For the purposes
of this Section 2.5(b), patents, patent applications, Patent Rights,
Inventions and Know-how shall only mean patents, patent applications, Patent
Rights, Inventions and Know-how of Control Delivery Systems, Inc., and shall
not include patents, patent applications, Patent Rights, Inventions and
Know-how of a third party acquiree or transferor, or a third party merger or
consolidation partner, of or with Control Delivery Systems, Inc., or a third
party acquiror or transferee of substantially all of the assets or stock of
Control Delivery Systems, Inc.'s opthalmics business.
-11-
2.6 Licensor Disclosure of Inventions. Licensor represents that the patents,
patent applications and invention disclosure forms listed on Exhibits 1.23(a)
and (b) disclose all Inventions conceived or made by or on behalf of Licensor
prior to June 18, 2003. Licensor agrees that any Invention conceived or made
by or on behalf of Licensor prior to June 18, 2003, which is not listed on
Exhibits 1.23(a) or (b) shall be deemed a Licensed Patent and added to
Exhibit 1.23(a). For the purposes of this Section 2.6, patents, patent
applications, Patent Rights and Inventions shall only mean patents, patent
applications, Patent Rights and Inventions of Control Delivery Systems, Inc.,
and shall not include patents, patent applications, Patent Rights and
Inventions of a third party acquiree or transferor, or a third party merger
or consolidation partner, of or with Control Delivery Systems, Inc., or a
third party acquiror or transferee of substantially all of the assets or
stock of Control Delivery Systems, Inc.'s opthalmics business.
2.7 Licensee Disclosure of Inventions. Licensee represents that all
Inventions conceived or made by or on behalf of Licensee after June 9, 1999,
and before June 18, 2003, that: (a) directly relate to (i) treatment by (A)
intraocular local delivery of an active ingredient into the eye, (B) local
delivery of an active ingredient into the eye by injection into the scelera
(provided that the foregoing in subparts (A) and (B) shall not include
technology developed for the cataract, refractive surgical and contact lens
businesses of Licensee), (ii) non-topical sustained ophthalmic release of an
active ingredient (provided that the foregoing in this subsection (ii) shall
not include technology developed for the cataract, refractive surgical and
contact lens businesses of Licensee), (iii) co-drug modifications for
altering the bioavailability or rate of release of a drug, where "co-drug" is
defined as two or more pharmaceutically active ingredients that are linked by
a covalent or ionic bond with each other, which bond dissolves in vivo, and
where "co-drug" specifically excludes any natural extracts; or (iv) pro-drug
modifications for altering the bioavailability or rate of release of a drug
for non-topical applications; or (b) would interfere with the subject matter
of, or dominate the practice of any invention disclosed in, Licensed Patents
or invention disclosure forms disclosed in Exhibits 1.23(a) or (b) (all such
inventions in subparts (a) and (b) of this Section 2.7 are referred to
collectively as "Licensee Relevant Inventions") are disclosed in the
invention disclosure forms and unpublished patent applications that have been
disclosed to Licensor's counsel by Licensee. In addition to any other
remedies available to Licensor, Licensee shall grant and hereby grants
Licensor a world-wide perpetual, non-exclusive royalty-free license, with the
right to sublicense, to use any Licensee Relevant Invention made by Licensee
after June 9, 1999, and before June 18, 2003, that was not disclosed to
Licensor's counsel by Licensee; provided, however, that such right and
license shall be subject to Licensee's other rights hereunder, e.g., the
exclusive rights granted under Section 2.1.1 and Section 2.5.
-12-
2.8 Co-Owned Patents. With respect to the patents and patent applications
listed in Exhibit 2.8 and any inventions disclosed in the invention
disclosure forms listed in Exhibit 2.8, including all Patent Rights in the
foregoing (the "Co-Owned Patents"), Licensee shall assign and hereby assigns
to Licensor a one-half interest in the Co-Owned Patents, and to the extent of
Licensor's interest in the Co-Owned Patents, such Co-Owned Patents shall be
deemed to be Licensed Patents, provided that Licensor's interest in the
Co-Owned Patents shall be exclusively licensed to Licensee solely to make,
have made, use, sell, offer to sell, and import Licensed Products in the
field of ophthalmology, and further provided that such license shall (a)
become non-exclusive in the event Licensee's rights to First Generation
Exclusive Licensed Product become non-exclusive; and (b) terminate in the
event this Agreement terminates. Licensee shall fully cooperate with
Licensor, at Licensor's expense, with any activities necessary to perfect the
rights assigned to Licensor, including the execution of assignments of any
patents or patent applications or the filing of any patent applications.
2.9 Licensee Non-suit. Licensee shall not bring (and shall not authorize or
assist a third party to bring) any action under any patents or patent
applications listed in Exhibit 2.9 or any Inventions disclosed in the
invention disclosure forms listed in Exhibit 2.9, including all Patent Rights
or other intellectual property rights in the foregoing, against Licensor or
any sublicensee of Licensor.
2.10 Licensee Covenant Not to File. Licensee shall not file (and shall not
authorize or assist an Affiliate or other third party to file) an application
for Patent Rights, either in the United States or in any other foreign
jurisdiction, containing claims covering any inventions disclosed in the
invention disclosure forms listed in Exhibit 2.10.
2.11 Frustration Regarding Vitrasert Product. Subject to the last sentence of
Section 14.1 of this Agreement, if any third party brings any cause of
action, claim, or other challenge which has the result of frustrating in a
material way the licensing of the intellectual property applicable to
Licensee's rights with respect to the Vitrasert Licensed Product (a
"Frustration Claim"), Licensor shall cooperate with Licensee in any
reasonable arrangement designed to give Licensee as nearly as possible the
same economic benefits with respect to a Vitrasert Licensed Product and to
have Licensee assume the same obligations and expenses as if such Frustration
Claim with respect to a Vitrasert Licensed Product had not occurred.
ARTICLE 3. ROYALTIES AND REPAYMENT OBLIGATIONS
3.1 Running Royalties. Licensee shall pay running royalties to Licensor as
follows:
3.1.1 Net Sales of First Generation Exclusive Licensed Products. Subject to
Sections 3.2 and 3.3, on all Net Sales of First Generation Exclusive
Licensed Products, Licensee shall pay to Licensor a running royalty rate
equal to the Base Royalty.
3.1.2 Net Sales of Third Party Licensed Products. Subject to Section 3.3, on all
Net Sales of any Third Party Licensed Product Licensee shall pay to
Licensor a running royalty equal to the Base Royalty reduced by [*] of the
amount of any running royalty payable or "deemed paid or payable" by
Licensee with respect to such Net Sales to any third party licensor of
proprietary technology or other proprietary property included in such
Third
[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-13-
Party Licensed Product, provided, however, that the total running royalty
due to Licensor with respect to such Net Sales shall in no event be less
than [*] of the Base Royalty. Where Licensee acquires rights to a Third
Party Licensed Product but doesn't pay a royalty based on net sales, units
sold, etc., royalties "deemed paid or payable" shall be the imputed
royalty paid by Licensee in connection with the payment of the purchase
price or other consideration to acquire those rights needed to use the
applicable proprietary product, compound, method, or process in such Third
Party Licensed Product. Where Licensee acquires rights to such proprietary
product, compound, method or process which permit Licensee to use such
product, compound, method or process for purposes other than use in
connection with such Third Party Licensed Product or where Licensee
acquires the applicable proprietary product, compound, method or process
in connection with the acquisition of any other rights or assets, a
reasonably allocable share of such purchase price or other consideration
shall be allocated to the right to use such product, compound, method or
process in connection with such Third Party Licensed Product. The
allocated portion of the purchase price or other consideration shall then
be converted into an imputed royalty, taking into account all relevant
factors, including, without limitation, the length of time over which
Licensee may exercise the rights involved, the likely sales of such Third
Party Licensed Product over such period of time, and/or other factors
considered relevant at the time. In no event shall the deemed royalty so
derived exceed the royalty that would have been paid for the rights
involved in an arms-length transaction with such third party had Licensee
licensed such rights for use in connection with such Third Party Licensed
Product on a purely royalty-bearing basis. If Licensor and Licensee cannot
agree on the amount of any deemed royalty, the issue shall be resolved by
the dispute resolution provisions of this Agreement.
3.1.3 Net Sales of Vitrasert Licensed Products. Subject to Section 3.3, on all
Net Sales of Vitrasert Licensed Product, Licensee shall pay to Licensor a
running royalty equal to [*] of Net Sales. In addition to
payment of the royalty under this Section 3.1.3, Licensee shall also pay
to Licensor all amounts due to UKRF under the UKRF Licenses for Net Sales
of Vitrasert Licensed Product.
3.1.4 Net Sales of Non-Exclusive Licensed Products. For Non-Exclusive Licensed
Products, other than Third Party Licensed Products, Licensee shall pay to
Licensor a running royalty rate equal to: (a) the Base Royalty on all Net
Sales of Non-Exclusive Licensed Product employing a delivery system, which
delivery system would, absent the license granted by Licensor to Licensee
herein, infringe any Valid Claim included in a Licensed Patent or Licensor
Improvement Patent; (b) [*] of Net Sales of Non-Exclusive Licensed Product
that employs an anchoring method, which anchoring method would, absent the
license granted by Licensor to Licensee herein, infringe only a Valid
Claim of a Licensed Patent or Licensor Improvement Patent related to the
anchoring method, and that is not subject to payment of a running royalty
pursuant to Section 3.1.4(a); and (c) a royalty rate to be determined by
arbitration through the American Arbitration Association ("AAA") for any
Non-Exclusive Licensed Product that is not subject to payment of a running
royalty pursuant to Sections 3.1.4(a) or 3.1.4(b) and which would, absent
the license granted by Licensor to Licensee herein, infringe any Valid
Claim included in a Licensed Patent or Licensor Improvement Patent,
provided that such rate shall be not less than [*] of Net Sales and not
greater than
[*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED
WITH THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED.
-14-
[*] of Net Sales. For the purposes of the AAA arbitration, all Valid
Claims included in any Licensed Patent or Licensor Improvement Patent
shall be deemed valid and enforceable.
3.2 Royalty Step-Down for Generic Competition.
(a) Notwithstanding anything in this Agreement to the contrary, in each
country where (i) the making, using, selling, offering to sell or importing of a
particular Uveitis Base Royalty Product or a particular First Generation
Exclusive Licensed Product does not infringe a Valid Claim of a Licensed Patent
or a Licensor Improvement Patent; and (ii) such Uveitis Base Royalty Product or
First Generation Exclusive Licensed Product is no longer covered under
Xxxxx-Xxxxxx, Orphan Drug, Pediatric, or other non-patent exclusivity, including
applicable similar standards outside the United States; and (iii) with respect
to First Generation Exclusive Licensed Product, such product is subject to a
running royalty equal to the Base Royalty, and is not subject to a royalty
reduction or offset, including without limitation an offset under Section 3.1.2
of this Agreement, then with respect to each such Uveitis Base Royalty Product
or First Generation Exclusive Licensed Product (each an "Eligible Licensed
Product") in such country, Licensee shall be entitled to a royalty adjustment
for each such Eligible Licensed Product as follows:
If sales of Generic Product (as defined in subsection (b) below) in a
particular fiscal quarter are greater than [*] of Total Relevant Sales
(as defined in subsection (b) below) for a particular Eligible Licensed
Product, then the running royalty on Net Sales of such Eligible
Licensed Product in such fiscal quarter shall be [*].
(b) For the purposes of this Section 3.2, "Generic Product" shall mean a
product or products sold by a third party without a license from Licensor that
has been approved under an ANDA pursuant to 21 U.S.C. Section 355(j) (or a
substantially similar application or filing in jurisdictions outside the United
States) that references safety and efficacy data of an Eligible Licensed
Product. For the purposes of this Section 3.2, "Total Relevant Sales" shall
mean, in a fiscal quarter, the total combined sales by all Persons, including
Licensee or Sublicensees, of (i) all Generic Product (with respect to a
particular Eligible Licensed Product); and (ii) the relevant Eligible Licensed
Product.
(c) In the event of any adjustments to the running royalty pursuant to
this Section 3.2, Licensee shall provide to Licensor written notice of such
adjustment, along with reasonably detailed documentation (including market
reports and other data) supporting Licensee's determination of the Total
Relevant Sales. Such written notice and documentation shall be supplied to
Licensor with any Royalty Reports due to Licensor pursuant to Section 7.1, and
shall be subject to the record keeping and audit rights as set forth in Section
7.2. In addition, in the event Licensee has made an adjustment to the running
royalty of a Uveitis Base Royalty Product pursuant to this Section 3.2 such that
the running royalty for such Uveitis Base Royalty Product in a country is less
than the Base Royalty for two consecutive fiscal quarters, then Licensor shall
have the right, at its sole discretion, to Develop and Commercialize a Uveitis
Product in such country, notwithstanding the provisions of Section 2.5(a).
Licensor shall retain such right to Develop and Commercialize a Uveitis Product
in such country, even if the running royalty for
[*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED
WITH THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED.
-15-
such Uveitis Base Royalty Product in such country is equal to the Base Royalty
in subsequent fiscal quarters.
3.3 Royalties Payable Only Once. Licensee's obligation to pay royalties under
this Article 3 shall be imposed only once at the highest applicable royalty
rate, with respect to any Net Sale of any Licensed Product. Only a single
royalty shall be due and payable by Licensee under this Agreement with
respect to a Licensed Product regardless of whether the Licensed Product is
covered by more than one claim of a Licensed Patent or Licensor Improvement
Patent and in no event will such royalty exceed [*].
3.4 Timing of Royalty Payments. Within thirty (30) days after the end of each
fiscal quarter of Licensee, Licensee shall pay to Licensor the royalty
payment due for each such quarter in U.S. dollars, provided, however, that
solely with respect to any royalty payment due with respect to Net Sales made
pursuant to Sections 1.32(a) or (b) herein, such thirty (30) day period may
be extended to such longer period as Licensee may reasonably require, not to
exceed ninety (90) days, to determine the amount of such Net Sales for such
fiscal quarter. If a Sublicensee adjusts any of its Net Sales for any
applicable quarter on account of misreported or late-reported Net Sales,
Licensee shall promptly pay (or cause the Sublicensee to pay) any royalties
due within 30 days after such adjustment. If Net Sales are in a currency
other than U.S. Dollars, the sales shall be converted from the currency of
the country in which the sales were made into U.S. Dollars at the month-end
exchange rate for such currency for such sales made during such month as
determined by Licensee in accordance with its standard accounting policies
and procedures consistently applied during each of Licensee's fiscal
quarters. If any royalty or other amount due Licensor is in a non-U.S. Dollar
currency, and Licensee or any Sublicensee is prohibited from exporting that
currency from that jurisdiction, Licensee or such Sublicensee shall pay an
amount equal to the royalty or other amount due in such blocked currency into
a bank account of Licensor's choice in such jurisdiction, and such deposit
shall be deemed to be full satisfaction of Licensee and Sublicensee's
obligation to make the applicable payment to Licensor.
3.5 Withholding Taxes. Licensee and Licensor shall use all commercially
reasonable and legal efforts to reduce tax withholding on any payments to be
made to Licensor hereunder. If Licensee concludes that, notwithstanding such
efforts, tax withholding under the laws of any country is required with
respect to any royalty payment to be made to Licensor under this Agreement,
Licensee shall pay or cause its Sublicensee to pay any applicable withholding
taxes imposed by any such political jurisdiction on such royalty payments,
and the amount of any such payments shall be credited against Licensee's
royalty obligation under this Agreement. Licensee shall promptly provide
Licensor with, or promptly cause Licensor to be provided with, original
receipts or other evidence sufficient to allow Licensor to obtain the
benefits of any such tax withholding.
3.6 Intentionally Omitted.
3.7 Repayment of Advanced Amount. The Parties acknowledge that Licensee has
made advances to Licensor (collectively, "Advanced Amount") totaling Ten
Million Forty-Four Thousand Seven Hundred Nineteen Dollars ($10,044,719),
which are still outstanding under the 1999 Agreement immediately preceding
the Amendment Date. The Parties stipulate that
[*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH
THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND
EXCHANGE ACT OF 1934, AS AMENDED.
-16-
the Advanced Amount constitutes all known financial liabilities of the
Parties under all prior agreements between the Parties, including without
limitation the 1999 Agreement, and no other amounts are due to Licensee by
Licensor except as set forth in this Agreement. The Parties also acknowledge
that the Advanced Amount is liquidated and that Licensee's right to payment
of the Advanced Amount will not be subject to invocation of the dispute
resolution procedure under Article 22. The Advanced Amount will be repaid and
reduced as described in this Section 3.7. Any remaining amounts due after
such repayment and reduction shall be the "Unpaid Advanced Amount." In
addition, the Parties acknowledge that Licensor has provided services to
Licensee between June 18, 2003, and the Amendment Date, for which Licensee
will reimburse Licensor $250,000. The reimbursement of the $250,000 will be
accomplished by reducing the Advanced Amount by $250,000 such that the Unpaid
Advanced Amount hereby is reduced to $9,794,719. Licensor will repay, and, in
addition to any other rights provided at law or equity, Licensee may recoup,
such Unpaid Advanced Amount as follows:
3.7.1 Cash Payment. Licensor will pay Three Million Dollars ($3,000,000) to
Licensee in cash promptly upon the execution of this Agreement. Licensor
will wire transfer such amount to Licensee pursuant to Licensee's
instructions, and this Agreement will not be effective until Licensee has
actually received such payment. This payment shall reduce the Unpaid
Advanced Amount.
3.7.2 Milestone/Royalty Recoupment. After the reduction described in the first
paragraph of Section 3.7 and the payment described in Section 3.7.1, the
Unpaid Advanced Amount will be reduced to $6,794,719. Licensee may further
recoup the Unpaid Advanced Amount from (i) any Milestone Payments (as
defined in Section 4.1), and (ii) royalty payments otherwise due Licensor
hereunder in each case until the entire remaining Unpaid Advanced Amount
has been fully repaid.
3.7.3 Equity Option. Licensor may make an optional payment of $1,000,000 (One
Million Dollars) to Licensee by December 27, 2003, which payment, if made,
shall reduce the Unpaid Advanced Amount. Effective upon such payment,
Licensee shall grant to Licensor an option to acquire all of Licensee's
holdings of Licensor's common stock (600,000 shares, collectively the
"Stock") at an exercise price of $5.00 per share. This option must be in
the form of Exhibit 3.7.3, and Licensee shall deliver the option
certificate evidencing the option within 5 days of the payment that
reduces the Unpaid Advanced Amount. Payments to Licensee as a result of
exercising the option will not reduce the remaining Unpaid Advanced
Amount, if any. The foregoing per share option price is not intended by
the Parties to in any way represent the fair market value of such shares,
and shall in no way be used by either Party to support a valuation of
Licensor.
3.7.4 July 1, 2007. Irrespective of any other circumstances whatsoever, the
Unpaid Advanced Amount, if any, shall be absolutely due and payable by
Licensor to Licensee on July 1, 2007, and Licensor shall make immediate
payment of such amount to Licensee without Licensee having to make any
further demand or provide any further notice. Licensor will be liable for
and shall pay a late charge equal to one and one-half (1.5) times the
prime rate in effect as announced by Chase Manhattan Bank, N.A. from time
to time on any outstanding balance of the Unpaid Advanced Amount remaining
after July 1, 2007, until the entire Advanced Amount has been repaid in
full to Licensee. The Parties agree that
-17-
as of the Amendment Date, Licensor shall execute a promissory note, the
form of which is attached as Exhibit 3.7.4 (the "Note"), in the amount of
the Unpaid Advanced Amount as of the Amendment Date (and as may be reduced
pursuant to the terms of this Agreement and the terms of the attached
Note).
3.8 Royalty Calculation. In addition to any other rights provided at law or
equity, if the Advanced Amount has not been fully repaid by Licensor to
Licensee as required hereunder, the amount of any royalties that might
otherwise be due and owing from Licensee to Licensor under this Agreement
shall in all instances be the amount determined in accordance with the other
Sections of this Article 3, less the amount of Unpaid Advanced Amount at the
time of such determination.
ARTICLE 4. LICENSE AND MAINTENANCE FEES.
4.1 License and Maintenance Fees. Licensee shall pay one-time license and
maintenance fees ("Milestone Payments") for the achievement of certain goals
set forth in Exhibit 4.1 to Licensor within ten (10) business days after each
of the events specified in Exhibit 4.1.
ARTICLE 5. DEVELOPMENT OF LICENSED PRODUCTS
5.1 Joint Diligence Obligation. Licensor and Licensee shall both use
reasonable commercial efforts to comply with all diligence obligations under
the UKRF Licenses to the extent required by the UKRF Licenses.
5.2 Licensee's General Diligence Obligations. Licensee shall use commercially
reasonable efforts to Develop and Commercialize First Generation Exclusive
Licensed Products.
5.3 (a) Licensee's Specific Diligence Obligations - Uveitis. Licensee agrees
to the following specific obligations:
(i) Licensee shall file an NDA with respect to a First Generation
Exclusive Licensed Product for Uveitis by the later of (a) [*] or
(b) [*] then within a commercially reasonable time after [*] has
been identified and found to be acceptable to the FDA, provided
that Licensee has diligently pursued [*].
(ii) Licensee shall make the first commercial sale of a First Generation
Exclusive Licensed Product for Uveitis in the United States within
six (6) months after approval of an NDA for such First Generation
Exclusive Licensed Product.
(b) Licensee's Specific Diligence Obligations - Other First Generation
Exclusive Licensed Product. In the event Licensee has failed to meet its
diligence obligations with respect to First Generation Exclusive Licensed
Product for Uveitis pursuant to Section 5.3(a) above, then Licensee agrees
to the specific obligations with respect to at least one First Generation
Exclusive Licensed Product for an indication other than Uveitis as set
forth in Exhibit 5.3.
[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-18-
5.4 Licensee's Specific Diligence Obligations - Non-Exclusive Licensed
Products. In addition to the general obligations set forth in Section 5.2,
Licensee further agrees to the specific obligations with respect to
Non-Exclusive Licensed Products set forth in Exhibit 5.4.
5.5 Failure to Comply with Diligence Obligations.
(a) If Licensee fails to meet its obligations under Article 5 with respect
to a First Generation Exclusive Licensed Product for Uveitis, and does not cure
such breach within 90 days after written notice from Licensor, Licensee shall
lose its exclusive rights with respect to First Generation Exclusive Licensed
Products for Uveitis. In addition, if Licensee fails to meet the specific
obligations as set forth in Section 5.3(b) for a First Generation Exclusive
Licensed Product for an indication other than Uveitis, and does not cure such
breach within 90 days after written notice from Licensor, Licensee shall lose
its exclusive rights with respect to First Generation Exclusive Licensed
Products.
(b) If Licensee fails to meet its obligations under Article 5 with respect
to any Non-Exclusive Licensed Product and does not cure such breach within 90
days after written notice from Licensor, Licensee shall lose its rights with
respect to the applicable Non-Exclusive Licensed Product. For example, if the
diligence obligations as set forth in Exhibit 5.4 have not been met with respect
to a Non-Exclusive Licensed Product that (a) has [*] as an active ingredient;
(b) is [*]; (c) is [*]; (d) has a [*] delivery system; (e) is located [*]; and
(f) is for [*] indications, then Licensee would lose its rights with respect to
such Non-Exclusive Licensed Product ("Product A"). As a further example, if the
diligence obligations for the above Product A have been met, but any diligence
obligation has not been met with respect to a Non-Exclusive Licensed Product
that (a) has [*] as an active ingredient; (b) is [*]; (c) is [*]; (d) has a [*];
(e) is located [*]; and (f) is for [*] indications rather than [*] indications
("Product B"), then Licensee would not lose rights to Product A, but would lose
rights to Product B.
(c) The parties agree that Licensee's failure to meet its diligence
obligations under Article 5 shall not constitute a basis for termination of this
Agreement under Section 11.3.2.
ARTICLE 6. MARKETING OBLIGATIONS. During the term of this Agreement, Licensee
and its Affiliates shall use commercially reasonable efforts, consistent with
the efforts expended by Licensee with respect to its own proprietary ophthalmic
products to:
(i) Market, sell, distribute, and support the First Generation Exclusive
Licensed Product - Uveitis, including, without limitation,
establishing, directly or through Sublicensees, an adequate sales
force in each Target Market;
(ii) Obtain third party reimbursement for such Licensed Product, where
applicable;
(iii) Maintain and provide Licensor with such sales and other information
customarily maintained by Licensee for purposes of monitoring sales
progress on a country by country basis;
[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-19-
(iv) Keep Licensor promptly and fully informed of developments in the
markets where such Licensed Product is being sold; and
(v) Comply with export laws and restrictions and regulations of the
Department of Commerce or other United States or foreign agency or
authority.
Nothing contained in this Article 6 shall limit any other obligations
Licensee may have under this Agreement.
ARTICLE 7. REPORTING AND ACCOUNTING PROVISIONS:
7.1 Royalty Report. Licensee shall make written royalty reports ("Royalty
Reports") to Licensor within thirty (30) days after the end of each fiscal
quarter of Licensee during the term of this Agreement, stating in each such
report the number, description, and aggregate Net Sales of each Licensed
Product sold during the preceding three (3) fiscal months of Licensee and
upon which a royalty is payable as provided in Article 3 (on a Licensed
Product-by-Licensed Product basis; provided, however, that solely with
respect to any report with respect to Net Sales made pursuant to Sections
1.28(a) and (b) herein, such thirty (30) day period may be extended to such
longer period as Licensee may reasonably require, not to exceed ninety (90)
days, to determine the amount of such Net Sales for such fiscal quarter. The
first such report shall include all such Licensed Products so sold prior to
the date of such report. The first such report shall include all such
Licensed Products so sold prior to the date of such report, provided that
with respect to Vitrasert Licensed Product, the first such report after the
Amendment Date shall reflect only the preceding fiscal months since the last
such report for Vitrasert Licensed Product.
7.2 Record Keeping by Licensee. Licensee shall keep records showing the sales
of Licensed Products and Third Party Licensed Products in sufficient detail
to enable the royalties payable hereunder to be determined. Licensee shall
permit its books and records to be examined at Licensor's expense by an
independent auditor chosen by Licensor and reasonably acceptable to Licensee
during regular business hours and upon reasonable advance notice, but not
later than two years following the rendering of any written report and no
more often than once per calendar year. Such audit shall be permitted only to
the extent necessary to verify the reports provided for in this Article 7.
The auditor shall report to Licensor only the amount of royalty payable for
the period under audit and shall keep confidential any information learned or
obtained during the examination. If the audit shows an underpayment of more
than the greater of (i) $50,000, or (ii) five percent (5%) of the amount
otherwise due, Licensee shall reimburse Licensor for the reasonable costs of
the audit. Licensee shall promptly remit any underpayment to Licensor. If the
audit shows an overpayment, Licensor shall promptly pay such overpayment
amount to Licensee upon request, or, at Licensee's election, Licensee may
offset such amount against the next payment of royalties or other amounts due
Licensor hereunder.
7.3 Termination Report. Licensee also shall make a written report to Licensor
within thirty (30) days after the date of any termination of this Agreement
providing to Licensor the same information described in Section 7.1 with
respect to any Net Sales which were not previously reported to Licensor.
-20-
ARTICLE 8. OWNERSHIP:
8.1 Ownership. Except as expressly provided otherwise in this Agreement,
ownership of Inventions will be determined in accordance with United States
patent law and related principles.
8.2 Inventorship. Inventorship of all Inventions (including, without
limitation, Improvements) made during the term of this Agreement will be
determined in accordance with United States patent law and related
principles.
8.3 Licensee Improvements.
(a) Licensee Improvements. If Licensee files any patent application
("Licensee Improvement Application") for any Improvement created, invented or
discovered before [*] ("Licensee Improvement"), Licensee agrees to grant, and
hereby grants, to Licensor a non-exclusive, worldwide right and license, with
the right to sublicense, under Licensee's interest in such Licensee Improvement
Applications, and in any issued patents claiming priority thereto ("Licensee
Improvement Patent") or any patent applications claiming priority thereto, to
make, have made, use, sell, offer to sell, and import. For the sake of clarity,
a Licensee Improvement shall be any Improvement of a product, if the product
with respect to which the Improvement was made was a Licensed Product at the
time such Improvement was made. Licensee shall promptly notify Licensor of the
filing of such Licensee Improvement Application. Notwithstanding the foregoing,
in the event of (i) any transfer by Licensee of substantially all of the assets
or stock of Licensee's proprietary (branded and/or generic) ophthalmic
pharmaceutical business; or (ii) any transfer by Licensor of substantially all
of the assets or stock of Licensor's ophthalmics business, "Licensee
Improvement" shall only include Improvements created, invented or discovered
before the earlier of (x) the effective date of such transfer or (y) [*].
(b) Royalties. Upon issuance of a Licensee Improvement Patent, and for so
long as the making, using, selling, offering to sell, or importing of the
Licensee Improvement covered by such Licensee Improvement Patent does not
infringe a Valid Claim of a Licensed Patent, Licensor Improvement Patent or
other Patent Rights of Licensor, Licensor will owe a royalty to Licensee equal
to the lesser of: (i) [*] of net sales of products the making, using, selling,
offering for sale or importing of which would infringe an Issued Patent Claim of
a Licensee Improvement Patent ("Licensor Improvement Product"), or (ii) [*] of
all running royalties received by Licensor based on net sales of Licensor
Improvement Product by licensees or sublicensees of Licensor. For the avoidance
of doubt, if the making, using, selling, offering to sell, or importing of such
Licensee Improvement infringes a Valid Claim of a Licensed Patent, Licensor
Improvement Patent or other Patent Rights of Licensor, then Licensor will not
owe a royalty to Licensee.
(c) Net Sales. For the purposes of this Section 8.3, net sales means, in
any case where a Licensor Improvement Product is sold or commercially disposed
of for value by Licensor or any sublicensee of Licensor in an arm's length
transaction with a third party (other than an Affiliate of Licensor or
sublicensee of Licensor), the gross invoice price for such Licensor Improvement
Product, less the following: (i) discounts, chargebacks, Medicare or other
[*] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-21-
government rebates, and rebates to purchasers actually taken or allowed; (ii)
credits or allowances given or made for rejections or return of any previously
sold products actually taken or allowed; (iii) to the extent included in such
gross invoice price any tax or government charge imposed on the production,
import, export, sale, delivery or use of such products, including, without
limitation, any value added or similar tax or government charge, but not
including any tax levied with respect to income; and (iv) to the extent included
in such gross invoice price any reasonable and documented packaging and
distribution charges. Net sales shall also include and be deemed to have been
made with respect to (A) any Licensor Improvement Product not sold or otherwise
transferred to any third party but rather used by Licensor to provide a
commercial service and (B) any other transfer of a Licensor Improvement Product
for less than arm's length value other than intercompany transfers where the
transferee is not the end user. The amount of any net sale as defined in the
preceding sentence shall be imputed using the price or prices at which the
Licensor Improvement Product at issue is then being sold in transactions covered
by the first sentence of this Section or, if no such transactions have occurred,
on a reasonable basis to be determined at the time by the Parties.
Notwithstanding any other provision of this Section, net sales shall not include
the transfer without consideration of any Licensor Improvement Product by
Licensor (x) for use in any clinical trial or in any preclinical or other
research, (y) as detailing samples or other use to promote additional net sales
in amounts consistent with the normal business practices of Licensor, or (z) for
compassionate use.
(d) Offsets. If (a) any Licensor Improvement Product is covered by an
issued patent or other intellectual property right held by one or more third
parties and it becomes necessary for Licensor to obtain a license from such
third party or parties under such patent, and/or other intellectual property
right and accordingly to pay royalties to such third party(ies) with respect to
any net sale or transfer of any Licensor Improvement Product or (b) the
therapeutic effect of any Licensor Improvement Product is derived in part from
any proprietary product, compound, method or process in-licensed or acquired by
Licensor from an unaffiliated third party on an arm's length basis (a "Third
Party Licensor Improvement Product"), then Licensor may reduce any royalty
otherwise due Licensee by [*] of the amount of royalty due to such third party,
but in no event to less than [*] of the royalty or other payment which may then
be due to Licensee. In addition, if Licensor is required to pay any an upfront
or similar fee to any third party(ies), Licensee shall share in the payment of
any such consideration which involves more than a running royalty as follows.
If, for example, Licensor is required to pay an upfront fee of $1 Million to a
third party, the total consideration then due under Section 8.3 to Licensee
shall be reduced by [*] until [*] of the upfront fee [*] has been recouped by
Licensor.
(e) Royalties Payable Only Once. Licensor's obligation to pay royalties
under this Section 8.3 shall be imposed only once with respect to any net sale
of any Licensor Improvement Product. Only a single royalty shall be due and
payable by Licensor under this section 8.3 with respect to a Licensor
Improvement Product regardless of whether the Licensor Improvement Product is
covered by more than one claim of a Licensee Improvement Patent.
(f) Timing of Royalty Payments. Within thirty (30) days after the end of
each fiscal quarter of Licensor, Licensor shall pay to Licensee the royalty
payment due for each such quarter in U.S. dollars, provided, however, that
solely with respect to any royalty payment due with respect to net sales made
pursuant to Sections 8.3(c)(A) or (B) herein, such thirty (30) day period
[*] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-22-
may be extended to such longer period as Licensor may reasonably require, not to
exceed ninety (90) days, to determine the amount of such net sales for such
fiscal quarter. If consideration received by Licensor, or a sublicensee of
Licensor, pursuant to Section 8.3(c) is in a currency other than U.S. Dollars,
the consideration shall be converted from the currency of the country in which
the sales were made into U.S. Dollars at the month-end exchange rate for such
currency for such sales made during such month as determined by Licensor in
accordance with its standard accounting policies and procedures consistently
applied during each of Licensor's fiscal quarters. If any royalty or other
amount due Licensee is in a non-U.S. Dollar currency, and Licensor is prohibited
from exporting that currency from that jurisdiction, Licensor shall pay an
amount equal to the royalty or other amount due in such blocked currency into a
bank account of Licensee's choice in such jurisdiction, and such deposit shall
be deemed to be full satisfaction of Licensor's obligation to make the
applicable payment to Licensee.
(g) Withholding Taxes. Licensee and Licensor shall use all commercially
reasonable and legal efforts to reduce tax withholding on any payments to be
made to Licensee pursuant to Section 8.3. If Licensor concludes that,
notwithstanding such efforts, tax withholding under the laws of any country is
required with respect to any royalty payment to be made to Licensee under this
Agreement, Licensor shall pay any applicable withholding taxes imposed by any
such political jurisdiction on such royalty payments, and the amount of any such
payments shall be credited against Licensor's royalty obligation under Section
8.3. Licensor shall promptly provide Licensee with, or promptly cause Licensee
to be provided with, original receipts or other evidence sufficient to allow
Licensee to obtain the benefits of any such tax withholding.
(h) Expiration of Royalty Obligations. Subject to the next sentence, with
respect to Licensor Improvement Product, Licensor's obligation to pay a running
royalty shall terminate on a Licensor Improvement Product -by- Licensor
Improvement Product and country-by-country basis, upon the date that the last to
expire of any issued and enforceable Licensee Improvement Patent which covers
the manufacture, use, sale, or importing of such Licensor Improvement Product.
At the end of each such term, and on a country by country basis, Licensor shall
have a non-exclusive, worldwide, irrevocable, fully paid up license to make,
have made, use, offer to sell, sell, have sold (including through distributors),
and import such Licensor Improvement Product in such country. Notwithstanding
any other provision of this Agreement, the provisions of this Section 8.3 shall
survive any termination of this Agreement, except in the event Licensee
terminates this Agreement pursuant to Section 11.4.2 for Licensor's breach of
Section 8.3.
ARTICLE 9. FILING AND MAINTENANCE OF PATENTS:
Licensor shall in good faith file, prosecute, and maintain all Licensed Patents
in the Licensed Territory at its sole discretion and expense (except for
Co-Owned Patents for so long as Licensee has exclusive rights to First
Generation Exclusive Licensed Products), and except as follows. With respect to
Licensed Patents which include claims that cover First Generation Exclusive
Licensed Products, for so long as Licensee has exclusive rights to any First
Generation Exclusive Licensed Product, Licensor shall keep Licensee informed
with respect to the course and conduct of patent applications and prosecution
matters. With respect only to Licensed Patents which include claims that cover
First Generation Exclusive Licensed Products, Licensor shall use best efforts to
incorporate claims and arguments suggested by Licensee, provided said arguments
would not materially limit Licensor's ability to prosecute or enforce claims
directed to products
-23-
and methods outside the definition of First Generation Exclusive Licensed
Products. Licensee represents, warrants and covenants that it will not make
suggestions for claims and arguments that, in good faith, Licensee knows or
should know would limit the scope of Licensed Patents so as to not cover
(directly or under the Doctrine of Equivalents) any product or method of use of
a product marketed or to be marketed by Licensee. Licensor shall prosecute and
maintain Licensed Patents in the [*]. At
Licensee's expense, Licensor will prosecute and maintain Licensed Patents in
[*] and any other countries as
Licensee may request. Notwithstanding the foregoing in this Article 9, Licensee
shall have the sole right to file, prosecute, and maintain the Co-Owned Patents
for so long as Licensee has exclusive rights to First Generation Exclusive
Licensed Products, provided that Licensee shall keep Licensor informed with
respect to the course and conduct of patent applications and prosecution
matters.
ARTICLE 10. ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS:
10.1 Notice to Licensor. Licensee shall inform Licensor promptly in writing
of any activity by a third party (an "Infringer"), if Licensee believes such
activity might constitute infringement of any Licensed Patent in the Licensed
Field, including details then known to Licensee, and provided that Licensee's
failure to provide notice under this Section 10.1 shall not impact Licensee's
rights under Section 10.6.
10.2 Right to Bring Suit - Licensor; Settlement. With respect only to suits
brought against Infringers by Licensor with respect to infringing products
that fall within the definition of First Generation Exclusive Licensed
Products for which Licensee has exclusive rights under this Agreement,
Licensor shall consult with and keep Licensee informed of the progress of
such proceedings, including, without limitation, furnishing copies of
communications, pleadings and other documents and keeping Licensee informed
of settlement efforts and developments, and Licensee shall be entitled to
participate with counsel in such proceedings, but at its own expense. With
respect only to suits brought against Infringers by Licensor with respect to
infringing products that fall within the definition of First Generation
Exclusive Licensed Products for which Licensee has exclusive rights under
this Agreement, no settlement, consent, judgment, or other voluntary final
disposition of a suit with respect to infringement of any Licensed Patent may
be entered into without the consent of Licensee, which consent may only be
withheld based on Licensee's reasonable business judgment. Notwithstanding
the foregoing, Licensor shall not have the right to bring suit under any
Co-Owned Patents for so long as Licensee has exclusive rights to First
Generation Exclusive Licensed Products.
10.3 Right to Bring Suit - Licensee. With respect only to Licensed Patents
(except for Co-Owned Patents for so long as Licensee has exclusive rights to
First Generation Exclusive Licensed Products) and with respect to infringing
products that fall within the definition of First Generation Exclusive
Licensed Products or the Vitrasert Licensed Product for which Licensee has
exclusive rights under this Agreement, if Licensor has not taken legal action
or been successful in obtaining cessation of the infringement within (a)
ninety (90) days from the date of notice by Licensee; (b) thirty (30) days
after Licensee notifies Licensor that Licensee would like to move for
injunctive relief; or (c) ten (10) days before the expiration of a period of
time set by applicable law in which action must be taken with respect to the
alleged infringement (e.g., as may be required under the Xxxxx-Xxxxxx Act and
35 USC Section 271),
[*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH
THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND
EXCHANGE ACT OF 1934, AS AMENDED.
-24-
Licensee has the right but not the obligation to bring suit against an
Infringer at Licensee's own expense. This right of Licensee to bring suit, as
well as to continue an existing suit, is also conditioned on all of the
following requirements:
(i) If Licensee owns (or has licensed from a third party and has the
right to enforce) any patent(s) that literally reads-on the
allegedly infringing device or method (collectively, the "Accused
Device") practiced by the Infringer, Licensee will include in the
complaint one or more claims alleging infringement of all such other
patent(s);
(ii) Licensee has provided evidence to Licensor that there is a good
faith basis to believe that the Accused Device is being prepared for
commercialization;
(iii) Licensee will use reasonable efforts to keep Licensor reasonably and
timely informed of the pre-litigation and litigation issues and
strategy (including, without limitation, furnishing copies of
communications, pleading, and other documents and keeping Licensor
informed of settlement efforts and developments), and will use
reasonable effort to obtain suggestions and strategy from Licensor,
including during pre-trial motions and discovery;
(iv) In the instance of litigation issues and strategies pertaining to
defenses or setting strategy for the scope of claims, Licensee shall
incorporate all suggestions and strategy from Licensor as may be
deemed appropriate in the reasonable business judgment of Licensor;
and
Except for joining the legal actions described in this Section 10.3 as a party
at Licensee's request, Licensor shall have no obligation regarding such actions
unless required to participate by law or contract, but Licensor will provide
reasonable assistance at the request of Licensee as provided in Section 10.5
below. However, Licensor shall have the right to participate in any such actions
through its own counsel and at its expense.
No settlement, consent judgment or other voluntary disposition of a suit
(collectively, "Settlements") with respect to infringement of any Licensed
Patent (except for Co-Owned Patents for so long as Licensee has exclusive rights
to First Generation Exclusive Licensed Products) may be entered into without the
consent of Licensor, which shall not be unreasonably withheld or delayed, and
provided that no such consent shall be required where the impact of the
settlement, consent judgment or other voluntary disposition is limited to the
Licensed Field for First Generation Exclusive Licensed Product for which
Licensee has exclusive rights under this Agreement.
10.4 UKRF. If neither Party commences actions or proceedings against
Infringers or unauthorized users of any Licensed Patent or Know-how that has
been licensed from UKRF within the time periods specified above, UKRF shall,
at its expense, have the right to initiate and pursue such action and receive
all resulting benefits.
10.5 Expense. If either Party shall initiate or carry on legal proceedings
against any Infringer as contemplated hereby, the other Party shall fully
cooperate with and supply all assistance
-25-
reasonably required by the first Party. The first Party shall consult with
and keep the other Party informed of the progress of such proceedings,
including, without limitation, furnishing copies of communications, pleadings
and other documents and keeping the other Party informed of settlement
efforts and developments, and the other Party shall be entitled to
participate with counsel in such proceedings, but at its own expense.
If Licensee initiates and carries on such proceedings, it may offset [*],
including reasonable legal expenses, incurred in regard thereto against any
payments owed to Licensor under Article 3 of this Agreement, provided, however,
that after the initiation of any such proceedings, no such payment shall be
reduced by more than [*].
Any award paid by any third party as a result of such proceedings (whether by
way of settlement or otherwise) shall be first applied to reimbursement of the
unreimbursed legal fees and expenses incurred by the Parties, pro rata in
proportion to such fees and expenses, then to the payment to Licensor of any
amounts that were offset against royalty or other payments as provided above,
and then the remainder shall be divided by the Parties pro rata in proportion to
the fees and expenses incurred by the Parties, after reimbursement by Licensor
of Licensee's expenses pursuant to the royalty off-set set forth above, in
connection with any action against the Infringer; provided, however, that each
Party (regardless of the extent, if any, to which such Party participates in
such action) shall be entitled, after reimbursement of any applicable expenses
and royalties as provided herein, to no less than [*] of any net recovery.
10.6 Co-Owned Patents. Notwithstanding anything to the contrary in this
Section 10.6, Licensee has the sole right, at Licensee's own expense, to
bring and control any suits under the Co-Owned Patents against a third party
for so long as Licensee has exclusive rights to First Generation Exclusive
Licensed Products. Licensor shall have the right to participate in any such
suits through its own counsel and at its expense. Licensor shall reasonably
assist Licensee, with respect to such suits, at Licensee's request and
expense. If required by law, Licensee may join Licensor as a party to any
such suit, provided that Licensee shall hold Licensor harmless from, and
indemnify Licensor against, any costs, expenses, or liability that Licensor
incurs in connection with such suit. To the extent a suit is related to
Co-Owned Patents and not any Licensed Patents, Licensor Improvement Patents
or Other Technology, Licensee shall have the right to settle any such suit
for so long as Licensee has exclusive rights to First Generation Exclusive
Licensed Products. Any award paid by any third party as a result of such
proceedings (whether by way of settlement or otherwise) (a) shall be first
applied to reimbursement of the unreimbursed legal fees and expenses incurred
by either Party pro rata in proportion to such fees and expenses, then (b)
Licensor shall receive an amount equal to such reasonable approximation of
the royalties that Licensee would have paid to Licensor if Licensee had sold
the infringing products and services rather than the infringer. Any remaining
amounts after reimbursement pursuant to (a) and (b) above shall be solely for
the account of Licensee for proceedings under this Section 10.6.
[*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH
THE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND
EXCHANGE ACT OF 1934, AS AMENDED.
ARTICLE 11. TERM; TERMINATION:
11.1 Expiration of Royalty Obligations. Subject to the next sentence, with
respect to Non-Exclusive Licensed Products, Licensee's obligation to pay a
running royalty shall terminate on a Licensed Product-by-Licensed Product
and country-by-country basis, upon the date that the last to expire of any
issued and enforceable Licensed Patent or Licensor Improvement Patent
which covers the manufacture, use, sale, or importing of such
Non-Exclusive Licensed Product in such country expires. At the end of each
such term, and on a country by country basis, Licensee shall have a
non-exclusive, worldwide, irrevocable, fully paid up license to make, have
made, use, offer to sell, sell, have sold (including through
distributors), and import such Licensed Products in such country. Subject
to the next sentence, with respect to First Generation Exclusive Licensed
Products, Licensee's obligation to pay a running royalty shall terminate
on a Licensed Product-by-Licensed Product and country-by-country basis,
upon the date that is the later of (i) the last to expire of any issued
and enforceable Licensed Patent or Licensor Improvement Patent which
covers the actual manufacture, use, sale, or importing of such Licensed
Product in such country, or (ii) ten (10) years from the last new FDA or
other comparable approval with respect to an indication for the applicable
Licensed Product in the applicable country but in no event more than
twenty (20) years from the date of the first FDA or comparable approval
for the first indication with respect to such Licensed Product in such
country. At the end of each such term, and on a country by country basis,
Licensee shall have an irrevocable, fully paid up license under the
Licensed Patents in the Licensed Field to make, have made, use, offer to
sell, sell, and import such Licensed Product in such country.
11.2 Term. This Agreement shall continue for the Term, unless earlier
terminated by Licensor or Licensee as provided herein.
11.3 Termination by Licensor. Licensor shall have the right to terminate
this Agreement and the licenses granted hereunder upon the happening of
any of the following events:
11.3.1 Failure to Pay. Licensee fails to pay or cause to be paid any royalty or
other payment which has become due to Licensor under this Agreement,
within thirty (30) days after receiving a written request from Licensor to
make such payment or to cause such payment to be made; provided, however,
that if any payment is disputed in good faith by Licensee, Licensee may
delay paying the disputed portion of such payment by invoking the dispute
resolution procedure set forth in Article 22. If the dispute resolution
procedure results in a final determination that Licensee owes some or all
of such disputed amount, Licensee shall pay such owed amount within thirty
(30) days of the determination pursuant to Article 22 as provided therein,
together with interest thereon from the date such amount was due at one
and one-half (1.5) times the prime rate in effect at such determination as
announced by Chase Manhattan Bank, N.A. In addition to any other
termination rights Licensor may have under this Section, if Licensee fails
to pay Licensor such owed amount within thirty (30) days of the final
determination as set forth above, Licensor may, subject to the next
sentence, terminate this Agreement upon thirty (30) days' written notice
to Licensee. Notwithstanding the foregoing, if Licensee's failure to pay
or cause to be paid royalties or other payments is limited to royalties or
payments for: (a) a First Generation Exclusive Licensed Product, then
Licensor's right to terminate pursuant to the provisions of this Section
11.3.1 shall be limited to termination
-27-
of Licensee's rights to all First Generation Exclusive Licensed Product;
(b) a Non-Exclusive Licensed Product, then Licensor's right to terminate
pursuant to the provisions of this Section 11.3.1 shall be limited to
termination of Licensee's rights to all Non-Exclusive Licensed Product;
and (c) a Vitrasert Licensed Product, then Licensor's right to terminate
pursuant to the provisions of this Section 11.3.1 shall be limited to
termination of Licensee's rights to all Vitrasert Licensed Product;
11.3.2 Breach. Licensee has materially breached or materially defaulted under
this Agreement as a result of a breach or default of any other provision
of this Agreement and has not cured such breach or default within ninety
(90) days after written notice from Licensor to Licensee specifying the
nature of such breach or default in reasonable detail; provided, however,
that if Licensee has invoked the dispute resolution procedure set forth in
Article 22, this Agreement may not be terminated except in accordance with
such Article; and further provided that if Licensee's material breach or
default is limited to a material breach or default relating to: (a) First
Generation Exclusive Licensed Product, then Licensor's right to terminate
pursuant to the provisions of this Section 11.3.2 shall be limited to
termination of (i) the specific First Generation Exclusive Licensed
Product for which the breach or default occurred; or (ii) with respect to
any further material breach or default thereafter, Licensee's rights to
all First Generation Exclusive Licensed Product; (b) Non-Exclusive
Licensed Product, then Licensor's right to terminate pursuant to the
provisions of this Section 11.3.2 shall be limited to termination of (i)
the specific Non- Exclusive Licensed Product for which the breach or
default occurred; or (ii) with respect to any further material breach or
default thereafter, Licensee's rights to all Non-Exclusive Licensed
Product; and (c) Vitrasert Licensed Product, then Licensor's right to
terminate pursuant to the provisions of this Section 11.3.2 shall be
limited to termination of Licensee's rights to all Vitrasert Licensed
Product; or
11.3.3 Bankruptcy. The filing of a bankruptcy petition by or against the
Licensee, the entry by Licensee into a trust deed, creditor's arrangement
or comparable proceeding, or the appointment of a receiver for
substantially all of the assets or business of Licensee that is not
dismissed within ninety (90) days from the date of such filing or
appointment.
11.4 Termination by Licensee. Licensee shall have the right to terminate
this Agreement and the licenses granted hereunder upon the happening of
any of the following events:
11.4.1 Without Cause. Licensee may terminate this Agreement at any time without
cause in its entirety or with respect to a Vitrasert Licensed Product or a
Non-Exclusive Licensed Product on ninety (90) days' written notice to
Licensor. Upon termination of this Agreement in its entirety, Licensee
shall remain liable for all Milestone Payments, royalty payments, and
other payments under this Agreement falling due before the end of the
first ninety (90) days after Licensor's receipt of the notice of
termination without cause. Thereafter, for an additional ninety (90) days
(for a total of one hundred eighty (180) days after Licensor's receipt of
the notice of termination), Licensee shall continue to be liable for all
payments, including, but not limited to, royalty payments, due under the
Agreement, excluding Milestone Payments. Upon termination of this
Agreement with respect to a Vitrasert Licensed Product or a Non-Exclusive
Licensed Product, Licensee shall remain liable for all payments then due
with respect to such Licensed
-28-
Product(s), and thereafter Licensee shall have the right for one hundred
eighty (180) days to sell off any inventory of such Licensed Product(s),
and shall remain liable for the royalties due, if any, with respect to
such sales.
11.4.2 Breach. Licensee may terminate this Agreement if Licensor has materially
breached or defaulted under any provision of this Agreement and has not
cured such breach or default within ninety (90) days after written notice
from Licensee to Licensor specifying the nature of such breach or default
in reasonable detail; provided, however, that if Licensor has invoked the
dispute resolution procedure set forth in Article 22, this Agreement may
not be terminated except in accordance with such Article.
11.5 Bankruptcy. All rights and licenses granted under or pursuant to this
Agreement by one Party to the other are, for all purposes of Section
365(n) of Title 11 of the United States Code ("Title 11"), licenses of
rights to "intellectual property" as defined in Title 11. During the term
of this Agreement each Party shall create and maintain current copies to
the extent practicable of all such intellectual property. If a bankruptcy
proceeding is commenced by or against one Party under Title 11, the other
Party shall be entitled to a copy of any and all such intellectual
property and all embodiments of such intellectual property, and the same,
if not in the possession of such other Party, shall be promptly delivered
to it (a) upon such Party's written request following the commencement of
such bankruptcy proceeding, unless the Party subject to such bankruptcy
proceeding, or its trustee or receiver, elects within thirty (30) days to
continue to perform all of its obligations under this Agreement, or (b) if
not delivered as provided under clause (a) above, upon such other Party's
request following the rejection of this Agreement by or on behalf of the
Party subject to such bankruptcy proceeding. If Licensee has taken
possession of all applicable embodiments of the intellectual property of
Licensor pursuant to this Section 10.5 and the trustee in bankruptcy of
Licensor does not reject this Agreement, Licensee shall return such
embodiments upon request. If Licensor seeks or involuntarily is placed
under Title 11 and the trustee rejects this Agreement as contemplated
under 11 U.S.C. 365(n)(1), Licensee hereby elects, pursuant to Section
365(n) to retain all rights granted to Licensee under this Agreement to
the extent permitted by law.
11.6 Effect of Termination. Upon termination of this Agreement for any
reason, nothing herein shall be construed to release either Party from any
obligation that matured prior to the effective date of such termination.
The provisions of the following Sections shall survive termination of this
Agreement for any reason: Article 1, Sections 2.4, 2.7, 2.8 (except as set
forth therein), 2.9, 2.10, 3.5, 3.7, 7.2, 7.3, 8.1, 8.2, 8.3 (except where
termination of this Agreement is pursuant to Section 11.4.2 for Licensor's
breach of Sections 8.3), Sections 11.1, 11.3, 11.4, 11.5, 11.6, 11.7,
Articles 12, 14, 15, 16, 17, 21, 22, 23, 24, 25, 26, 27, 28, 30, 31, 32,
34, 35 and 36. Licensee and any Sublicensee may, after a termination, sell
all Licensed Products which are in inventory at the time of termination
and complete and sell Licensed Products which Licensee can clearly
demonstrate were in the process of manufacture at the time of such
termination, provided that Licensee shall pay to Licensor any royalties or
other payments due on the sale of such Licensed Products and shall submit
reports, in accordance with this Agreement.
11.7 Grant Back. Except under the circumstances described in the last
sentence of this Section, solely for the purpose of enabling Licensor and
its licensees to continue the
-29-
development and commercialization of First Generation Exclusive Licensed
Products to which Licensee no longer has rights, Licensee shall grant to
Licensor a fully paid-up, irrevocable, non-exclusive, worldwide license,
with the right to grant sublicenses under the Licensee Patents (as defined
below), if any, to make, have made, use, sell, and import any First
Generation Exclusive Licensed Product that is at the time being
commercialized (other than a Third Party Licensed Product) and for no
other purpose. For purposes of the foregoing, "Licensee Patent" means any
Patent Right existing at the time of termination of this Agreement which
would block Licensor from practicing any Patent Right included in the
Licensed Patents. Licensor shall not be entitled to any grant back under
this Section if this Agreement is terminated by Licensee under Section
11.4.2 or 11.5 or if Licensee's obligation to pay royalties has expired
pursuant to Section 11.1.
ARTICLE 12. OWNERSHIP OF CLINICAL IP:
12.1 Clinical IP Outside Licensees License Rights. Subject to any rights
or restrictions imposed by applicable third parties, and to protections
for Confidential Information herein, Licensee shall provide Licensor with
a Right of Access to Clinical IP, provided that Licensor shall not use
such Clinical IP for a Licensed Product in the Licensed Field so long as
Licensee has a license for such Licensed Product under this Agreement.
12.2 Clinical IP-Cooperation. Licensee shall use commercially reasonable
efforts, and shall reasonably cooperate with Licensor, to provide Licensor
with such waivers, irrevocable cross reference letters, assignments,
and/or other reasonable documentation as may be necessary or useful for
Licensor's full exercise of any Right of Access to Clinical IP granted by
Licensee to Licensor pursuant to this Article 12.
ARTICLE 13. UNIVERSITY OF KENTUCKY RESEARCH FOUNDATION LICENSES:
Licensor shall maintain the UKRF Licenses in full force and effect, including
(without limitation) making all royalty payments. Licensor shall not, after the
Amendment Date, amend or modify the UKRF Licenses without Licensee's prior
written consent, which consent shall not be unreasonably withheld or delayed,
provided, however, that after providing prior written notice to Licensee,
Licensor may amend or modify the UKRF Licenses without Licensee's prior written
consent so long as such amendment would not have an adverse impact on Licensee's
rights or increase the cost to Licensee of exercising such rights.
Notwithstanding the foregoing, if UKRF delivers a notice of nonpayment of
royalties or of any other breach of any of the UKRF Licenses to Licensor,
Licensor shall immediately notify Licensee and Licensee shall have the right to
make such payments directly to UKRF or otherwise to cure such breach. In
addition, Licensor shall inform UKRF of the existence of this Agreement and
request UKRF to send a copy of all default notices to Licensee simultaneously
with any notice of default to Licensor and to permit Licensee to assume, upon
receipt of written notice from Licensee to UKRF, Licensor's obligations under
the UKRF License(s) to which such default notice applies. Licensee shall have
the right to offset the payments made to UKRF and the cost of curing any default
under any of the UKRF Licenses against future royalties or other payments due
Licensor under this Agreement as provided in Article 19.
-30-
ARTICLE 14. INDEMNIFICATION:
14.1 Indemnification of Licensee. Subject to Sections 14.2 and 14.3,
Licensor shall indemnify, defend and hold Licensee and each of its
officers, directors, employees, agents and consultants (each a "Licensee
Indemnitee") harmless from and against all third party costs, claims,
suits, expenses (including reasonable attorneys' fees and expenses,
whether incurred as a result of a third party claim or a claim to enforce
this provision), damages, and, solely with respect to the Vitrasert
Licensed Product, any amounts paid by Licensee to a third party pursuant
to any agreement between Licensee and the third party for the manufacture,
distribution, promotion, or sale of the Vitrasert Licensed Product (a
"Vitrasert Third Party Loss") (collectively, including a Vitrasert Third
Party Loss, "Losses") to the extent arising out of or resulting from (i)
any material breach or failure by Licensor in the performance or
non-performance of its obligations or covenants under this Agreement; (ii)
any breach by Licensor of any representation or warranty hereunder; (iii)
the manufacture, marketing, possession, use, sale or other disposition by
Licensor or any of its sublicensees other than Licensee or any Sublicensee
of any Licensed Product (except to the extent where such Losses arise or
result from any negligence of Licensee (or any contract manufacturer of
Licensee) in the manufacture of any such Licensed Product or the failure
of Licensee (or any contract manufacturer of Licensee) to manufacture such
Licensed Product in accordance with GMPs); (iv) FDA enforcement actions,
inspections, product recalls or market withdrawals relating to a Licensed
Product to the extent arising out of or resulting from Licensor's
marketing, possession, use, sale or other disposition of the Licensed
Product; and (v) any material breach or failure by Licensor in the
performance of any Clinical Agreement or Trial Agreement except for (a)
the payment obligations expressly assumed by Licensee pursuant to Article
36, and (b) breaches of a Clinical Agreement or Trial Agreement to the
extent resulting from a delay by Licensee in providing notice of
termination or assignment and assumption to third parties pursuant to
Article 36. Notwithstanding the foregoing or anything else in the
Agreement to the contrary, Licensee's remedies under this Section 14.1 or
any other provision of this Agreement, including without limitation
Section 2.11, for any Vitrasert Third Party Loss and for Frustration
Claims pursuant to Section 2.11 herein, shall be limited to, in the
aggregate, and satisfied solely out of, the amount of royalties for
Vitrasert Licensed Products received by Licensor after the date of
Licensor's receipt of written notice from Licensee of such Frustration
Claim or Vitrasert Third Party Loss specifying the nature and amount of
the claim or loss in reasonable detail.
14.2 Indemnification of Licensor. Subject to Sections 14.1 and 14.2,
Licensee shall indemnify, defend and hold Licensor and each of its
officers, directors, employees, agents and consultants (each a "Licensor
Indemnitee") harmless from and against all Losses to the extent arising
out of or resulting from (i) any material breach or failure by Licensee in
the performance or non-performance of its obligations or covenants under
this Agreement; (ii) any breach by Licensee of any representation or
warranty hereunder; (iii) the manufacture, marketing, possession, use,
sale or other disposition of any Licensed Product by Licensee or any
Sublicensee (except to the extent where such Losses arise or result from
any negligence of Licensor (or any contract manufacturer of Licensor) in
the manufacture of any such Licensed Product or the failure of Licensor
(or any contract manufacturer of Licensor) to manufacture the Licensed
Product in accordance with GMPs); and (iv) FDA enforcement actions,
inspections, product recalls or market withdrawals relating to a Licensed
Product to the extent
-31-
arising out of or resulting from Licensee's marketing, possession, use,
sale or other disposition of the Licensed Product or the failure of
Licensee (or any contract manufacturer of Licensee) to manufacture the
Licensed Product in accordance with GMPs or the specifications for the
Licensed Product.
14.3 Limitation of Liability. Except where a Party commits a willful,
intentional breach of any material provision of this Agreement, no
breaching Party shall be responsible or liable under any provision of this
Agreement or under any contract, theory of negligence or strict liability,
or under any other legal or equitable theory for any resulting indirect,
special, incidental, consequential, punitive, or exemplary damages of the
other Party, including (without limitation) damages such as lost revenues
or profits and damage to goodwill or reputation. Nothing in this Section
shall relieve any Party of any obligation with respect to any third party
claim.
14.4 Procedure for Indemnification. If an event occurs which a Party
believes requires indemnification (Indemnification Event"), the Party
seeking indemnification ("Indemnified Party") shall give prompt written
notice to the other Party ("Indemnifying Party") providing reasonable
details of the nature of the event and the basis of the indemnity claim.
The Indemnifying Party shall then have the right, at its expense and with
counsel of its choice, to defend, contest, or otherwise protect against
any such action. The Indemnified Party shall also have the right, but not
the obligation, to participate at its own expense in the defense with
counsel of its choice. The Indemnified Party shall cooperate as requested
by the Indemnifying Party to assist it in defending or contesting any such
action. If the Indemnified Party fails to promptly notify the Indemnified
Party of the occurrence of an Indemnification Event, to the extent, but
only to the extent, that such failure results in a material adverse effect
on the Indemnifying Party, the Indemnified Party shall not be entitled to
indemnification with respect to such Indemnification Event. If the
Indemnifying Party fails within thirty (30) days after receipt of such
notice: (a) to notify the Indemnified Party of its intent to defend, or
(b) to defend, contest, or otherwise protect against such suit, action,
investigation, claim or proceeding, or fails to diligently continue to
provide such defense after undertaking to do so, the Indemnified Party
shall have the right, upon ten (10) days' prior written notice to the
Indemnifying Party, to defend, settle and satisfy any such suit, action,
claim, investigation or proceeding and recover the costs of the same from
the Indemnifying Party.
14.5 Insurance. To the extent required by the UKRF Licenses, Licensee will
maintain product liability insurance, with an endorsement naming UKRF, the
University of Kentucky, its Board of Trustees, agents, officers, and
employees as additional insureds covering liabilities for the production,
manufacture and/or sale of the Licensed Product by Licensee or any
Sublicensee. The policy of insurance shall contain a provision of
non-cancellation except upon the provision of thirty (30) days' notice to
the University of Kentucky. Policy limits shall be not less than
$1,000,000 per occurrence.
ARTICLE 15. TRADEMARKS:
Licensee shall own the logos, trade names, copyrights, trademarks, and other
commercial symbols ("Marks") developed or used in connection with any and all
Licensed Products. During and after the term of this Agreement, Licensor shall
not directly or indirectly contest the
-32-
ownership, validity or originality of the Marks for the Licensed Products, the
Third Party Licensed Products, and the goodwill represented by any of the
foregoing Marks. Licensor will not use any name or other symbol confusingly
similar to or, in the reasonable judgment of Licensee, suggestive of any of the
foregoing Marks. If Licensor learns of any unauthorized use of any such Marks it
shall promptly inform Licensee in writing.
ARTICLE 16. REPRESENTATIONS AND WARRANTIES:
16.1 Representations and Warranties of Both Parties. As of the Amendment
Date, each Party hereby represents and warrants to the other Party that:
(i) It is a corporation duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation.
(ii) It has all requisite corporate power and authority and is free to
enter into this Agreement and to perform its obligations hereunder
without the need for any other action or consent;
(iii) It has taken all corporate and other action to authorize the
execution and delivery of this Agreement, any other documents
executed and delivered in connection herewith and the performance of
its obligations hereunder and thereunder, all of which shall be
valid, binding and enforceable in accordance with its or their
terms;
(iv) The execution, delivery, and performance of this Agreement (a) will
not violate or require it to obtain any consent or approval, to make
any filing or to provide any notice, or (b) will not conflict with
or result in a breach of any agreement or other instrument to which
it is a party or by which it is bound;
(v) It is not a party to any agreement with any third party which is in
conflict with the rights granted to the other pursuant to this
Agreement, including, without limitation, with respect to the
Licensed Patents; and
(vi) Except as described in Exhibit 16.1(vi), there is no litigation,
proceeding, or governmental investigation to which it is a party
pending or threatened against it, or, to its knowledge, against any
third party, as to which there is a likelihood of an outcome(s) that
would, individually or in the aggregate, reasonably be expected to
delay or otherwise materially impair its ability to perform its
obligations contemplated by this Agreement.
16.2 Representations and Warranties of Licensor. Licensor hereby represents and
warrants to Licensee as of the Amendment Date that:
(i) The UKRF Licenses set forth in Exhibit 1.47 are the only UKRF
Licenses, all of which are in full force and effect and have not
been amended or modified without Licensee's written consent;
Licensor has complied with all provisions of the UKRF Licenses;
Licensor owes no royalty or other payment to UKRF or any affiliate
of UKRF under the UKRF Licenses and there does not exist any event
of
-33-
default with respect to Licensor under any of the UKRF Licenses
which, after notice or lapse of time or both, would constitute an
event of default with respect to Licensor;
(ii) Licensor has all rights and consents necessary to grant the rights
and licenses granted to Licensee under this Agreement;
(iii) Except for the Co-Owned Patents, and as described in Exhibit
16.2(iii), Licensor warrants that it owns the entire right, title,
interest in and to the Licensed Patents and that the entire interest
is not encumbered in any manner;
(iv) Licensor has made written request of all patent counsel engaged by
Licensor for all opinions of counsel, clearances, studies, licenses,
and agreements relating to Licensed Products, and has provided
Licensee with all information relating to Licensed Products received
by Licensor as of the Amendment Date in response to such requests
and further, has provided Licensor all other formal written opinions
of counsel, licenses, and agreements relating to First Generation
Exclusive Licensed Products;
(v) The Persons who are listed on Exhibit 16.2(v) are all of the
officers, employees, and consultants of Licensor as of the Amendment
Date. Except as set forth in Exhibit 16.2(v), each of such Persons
has signed a confidentiality and invention disclosure and assignment
agreement (a) which requires such individual to observe
confidentiality restrictions at least as strict as those between the
Parties, and (b) which results in Licensor having unrestricted
ownership of any intellectual property created by such individual
during his or her employment or engagement by Licensor, including
(without limitation) all intellectual property created or developed
by such individual before the date of this Agreement during such
employment or engagement; and
(vi) Licensor has not received any written communication from a third
party that a Licensed Product may or actually does infringe or
otherwise violate any intellectual property right of such third
party. Licensor's officers as of the Amendment Date have not
received any oral communication from a third party that a Licensed
Product may or actually does infringe or otherwise violate any
intellectual property right of such third party.
As used in this Agreement, (i) "to Licensor's knowledge" (or any equivalent
term) means to the best actual knowledge, as of the date of this Agreement, of
Licensor and its officers after diligent investigation, without commissioning
special searches or studies, and (ii) "to Licensee's knowledge" (or any
equivalent term) means to the best actual knowledge, as of the date of this
Agreement, of Licensee and its officers after diligent investigation, without
commissioning special searches or studies.
ARTICLE 17. WARRANTY DISCLAIMER:
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES,
AND HEREBY DISCLAIMS, ANY EXPRESS OR IMPLIED WARRANTY INCLUDING, WITHOUT
LIMITATION, ANY IMPLIED
-34-
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR
NON-INFRINGEMENT WITH RESPECT TO ANY OF THE RIGHTS OR INTERESTS GRANTED
HEREUNDER, INCLUDING WITHOUT LIMITATION THOSE WITH RESPECT TO THE LICENSED
PATENTS OR LICENSOR IMPROVEMENT PATENTS OR KNOW-HOW OR ANY LICENSED PRODUCT.
ARTICLE 18. OPERATIONS IN COMPLIANCE WITH LAW:
Up to the date of this Agreement, each Party has complied, and in exercising the
rights granted to each Party by this Agreement, each Party shall comply, in all
material respects with all applicable laws, including, without limitation, the
requirements of 35 U.S.C. Section 200 et seq. and all regulations promulgated
thereunder, as amended, and any similar or successor statutory regulations
(collectively, the "Federal Patent Policy"). To the extent that any Licensed
Patent or Licensor Improvement Patent claims an invention subject to Federal
Patent Policy, the license granted to Licensee hereunder with respect to such
Licensed Patent or Licensor Improvement Patent may be subject to any
royalty-free, non-exclusive license granted to the United States Government
pursuant to 35 U.S.C. Section 204(c)(4).
ARTICLE 19. INFRINGEMENT OF THIRD PARTY'S PATENTS:
Licensee shall promptly send Licensor a copy of any notice or communication from
a third party alleging that Licensee's exercise of its rights under this
Agreement infringe or otherwise violate such third party's intellectual property
rights ("Notice"). Licensor shall have the first right, but shall not be
obligated, to respond to the Notice. If Licensor does not elect to respond,
Licensor shall promptly inform Licensee and Licensee may respond to the Notice.
If Licensee defends such proceedings, it may offset [*], including reasonable
legal expenses, incurred in regard thereto against any payments owed to Licensor
under Article 3, provided, however, that no such payment shall be reduced by
more than [*] by any such offset [*]. Licensee shall continue to perform its
reporting obligations under Article 7 and otherwise continue to perform its
obligations hereunder.
Licensee shall not settle any infringement, misappropriation, or other claim
subject to this Article 19 without the consent of Licensor.
If any Licensed Product is covered by an issued patent or other intellectual
property right held by one or more third parties and it becomes necessary for
Licensee to obtain a license from such third party or parties under such patent,
and/or other intellectual property right and accordingly to pay royalties to
such third party(ies) with respect to any Net Sale of any Licensed Product, then
Licensee may reduce any royalty otherwise due Licensor by [*] of the amount of
royalty payment due to such third party, but in no event to less than [*] of the
royalty which may then be due to Licensor. In addition, if Licensee is required
to pay any an upfront or similar fee to any third party(ies), Licensor shall
share in the payment of any such consideration which involves more than a
running royalty as follows. If, for example, Licensee is required to pay an
upfront fee of $1 Million to a third party, the royalty payments then due
Licensor shall be reduced by [*] until [*] of the upfront fee [*] has been
recouped by Licensee.
[*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-35-
If Licensee is required to pay any damages (i.e., something other than
prospective royalties and upfront or similar fees ) to the third party, Licensee
shall be responsible for the payment of any such damages to the third party and
shall be permitted to recoup one-half (1/2) of such payment from Licensor as
follows: If, for example, Licensee is required to pay damages of $1 Million to
the third party, Licensor's royalty payments otherwise due under this Agreement
shall be reduced by [*] until [*] of the damages [*] have been recouped by
Licensee.
Except as set forth below, any reduction of royalties due to Licensor as a
result of a recoupment of running royalties, upfront fees, and damages in the
aggregate arising out of a third party claim of infringement or violation of
intellectual property rights under this Section shall not reduce any single
royalty payment otherwise due Licensor hereunder by more than [*].
Licensor shall provide Licensee with a copy of any notice of default or breach
received by Licensor which relates in any way to the UKRF Rights within five (5)
business days of receipt of such notice. If Licensor fails to make any payment
before any applicable cure period has expired, Licensee may make such payment in
Licensor's name and on Licensor's behalf before such cure period expires, and
Licensee may fully recover any payment made by Licensee under this paragraph at
the applicable rate described in the next paragraph. Licensor's remedy for
recovering payments made by Licensee to any third party pursuant to this
paragraph shall be limited to recovery from such third party and not Licensee.
Except as set forth below, where Licensee seeks recoupment for payment(s) made
to UKRF as a result of Licensor's failure to make any payment to UKRF, Licensee
shall be permitted to recoup [*] of such payment to UKRF against [*] percent of
the royalty then due to Licensor as follows ("[*] Recoupment Rate"): Licensee
may reduce any royalty payment otherwise due to Licensor hereunder by [*] of
such royalty payment less any royalties payable by Licensor to UKRF ("Net
Royalty Amount"). [*]. The [*] Recoupment Rate shall not apply where Licensee
seeks recoupment for payment(s) made to UKRF where Licensor's decision not to
make any payment to UKRF (i) was made on the basis of a written opinion of
reputable outside patent counsel; (ii) the opinion and any other relevant
information was fully disclosed to Licensee within a reasonable time prior to
Licensor's decision not to pay; and (iii) where, following such disclosure,
Licensee failed to require Licensor to make the payment in accordance with the
provisions of the previous paragraph on the basis of the written opinion of
counsel as provided therein. In such case Licensee shall be permitted to recoup
[*] of Licensee's payment to UKRF by reducing any royalty payment otherwise due
to Licensor hereunder by [*].
[*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-36-
ARTICLE 20. FORCE MAJEURE:
Neither Party shall be liable for any failure to perform arising out of causes
beyond the control and without the fault or negligence of such Party. Such
causes include, but are not limited to, acts of God; acts of the public enemy;
acts of terrorism, natural disasters such as fire or flood or unusually severe
weather; quarantine restrictions; strikes; and freight embargoes.
ARTICLE 21. CHOICE OF LAW/FORUM:
Any legal or other action hereunder shall be brought in the State and federal
courts nearest the principal place of business of the defendant in any such
action, and this Agreement shall be construed and interpreted and its
performance shall be governed by the substantive laws of the State where such
courts are located, i.e., New York, if Licensee is the defendant, and
Massachusetts, if Licensor is the defendant, without regard to the state's
conflict of laws principles. The Parties consent to the exclusive personal
jurisdiction and venue of such courts in the event of such action. In construing
this Agreement, neither Party shall have been deemed to have drafted this
Agreement, and no court or arbitrator will construe or interpret this Agreement
in favor of a Party based on the presumption that it did not draft the term or
clause at issue, it being agreed that each Party has ably represented itself and
has been ably represented by counsel.
ARTICLE 22. DISPUTE RESOLUTION:
If there is any dispute arising out of or relating to this Agreement or a
Party's performance or failure to perform hereunder, such dispute shall, at the
written request of either Party be submitted to the top executive officer of
each Party, or another executive officer of a Party designated by the top
executive officer as his or her representative for such purpose. The initial
Representatives are the General Manager, North American Pharmaceuticals, for
Licensee, and the President of Licensor. The Representatives shall meet as soon
as reasonably practicable to consider the matter and each shall each use
reasonable commercial efforts to effect a resolution. If the Representatives are
able to resolve the dispute, the resolution shall be set forth in a written
instrument signed by each of them.
If the Representatives are not able to resolve the dispute within thirty (30)
days of their first meeting or within such extended period they agree upon, they
shall proceed to non-binding arbitration by a skilled mediator familiar with the
commercial and manufacturing processes of the pharmaceutical industry and
pursuant to the rules of an organization specializing in alternatives to
disputes, such as the CPR Institute for Dispute Resolution, End Dispute, or the
AAA. If the Parties cannot agree upon a single mediator within the next 30 days,
they shall each select a mediator and the two selected shall select the sole
mediator. If a Party does not select a mediator, the mediator selected by the
other Party shall be the sole mediator. The selected mediator shall use his best
efforts to make a nonbinding decision on the merits of the case within sixty
(60) days, and the Parties shall use their best reasonable commercial efforts to
cooperate with the mediator. The mediator need not give reasons for his
decision.
If the Parties are not able to resolve their dispute through mediation, such
dispute may, if they agree, be submitted to binding arbitration pursuant to the
expedited procedures and in accordance
-37-
with the Patent Licensing Rules of the AAA. The arbitrator shall be mutually
selected by the Parties or, if they cannot agree, each Party shall designate one
arbitrator to represent it in the selection process and the two arbitrators
shall appoint a third arbitrator who shall arbitrate such dispute or difference.
Such selection process shall be completed within sixty (60) days from the end of
the period during which they attempted to resolve the dispute through the
mediation process. The disputed matter shall be arbitrated at such location as
the Parties shall mutually designate or, if they are not able to agree on such
location, at a location selected by the arbitrator. The selected arbitrator
shall, if reasonably possible, be one who is familiar with the commercial and
manufacturing practices of the pharmaceutical industry.
The arbitrator's award shall be final and binding on the Parties and enforceable
by either Party in any court of competent jurisdiction. The fees and expenses of
the arbitrator shall be shared equally by the Parties.
ARTICLE 23. NOTICES:
Any notice, request, instruction or other communication required or permitted to
be given under this Agreement shall be in writing and shall be given by sending
such notice properly addressed to the other Party's address shown below (or any
other address as either Party may indicate by notice in writing to the other
from time to time as required by this Article): (i) by hand or by prepaid
registered or certified mail, return receipt requested, (ii) by a nationally
recognized overnight courier service, or (iii) via facsimile (provided such
facsimile is sent by a machine which acknowledges receipt of the transmission)
at the following addresses:
If to Licensor:
Control Delivery Systems
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx, Ph.D., President
Facsimile Number: 000-000-0000
With a copy to:
Control Delivery Systems
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx, General Counsel
Facsimile Number: (000) 000-0000
-38-
and to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxx
Facsimile Number: (000) 000-0000
If to Licensee:
Bausch & Lomb Incorporated
0000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx, M.D.
Corporate Vice President, Global Pharmaceutical and
Vitreoretinal
Facsimile Number: (000) 000-0000
With a copy to:
Bausch & Lomb Pharmaceuticals, Inc.
Xxx Xxxxxx & Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Senior Vice President and General Counsel
Facsimile Number: (000) 000-0000
Any notice, if mailed properly addressed, postage prepaid, shall be deemed made
(i) three (3) days after the date of mailing as indicated on the certified or
registered mail receipt, (ii) on the next business day if sent by overnight
courier service, or (iii) on the date of delivery if hand delivered or the date
of transmission if sent by facsimile transmission.
ARTICLE 24. MERGER CLAUSE:
This Agreement contains the entire understanding between the Parties and
supersedes all proposals, oral and written, all negotiations, conversations or
discussions between or among the Parties relating to the subject matter of this
Agreement and restates the 1999 Agreement and the Vitrasert Agreement, both as
amended, in their entirety.
ARTICLE 25. INTEGRATION CLAUSE:
No amendment or modification to this Agreement shall be valid or binding upon
the Parties unless made in writing and executed by authorized representatives of
both Parties.
ARTICLE 26. SEVERABILITY CLAUSE:
Any terms or provision of this Agreement which is found to be invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity of enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
-39-
ARTICLE 27. NO WAIVER:
The failure of either Party to terminate, seek redress for a breach of, or to
insist on strict performance of any term, covenant, condition, or provision
contained in this Agreement shall not act as a waiver of rights or of the right
to require future compliance and the term, covenant or provision in question
shall remain in full force and effect.
ARTICLE 28. TRANSFERABILITY OF RIGHTS AND OBLIGATIONS:
This License and Agreement shall inure to the benefit of and be binding upon the
successors, assigns, or other legal representatives of the Parties.
Notwithstanding the foregoing, neither Party may assign, delegate, or
subcontract its right and obligations hereunder without the prior written
consent of the other Party, which shall not be unreasonably withheld, except
that (i) no consent to assignment shall be necessary in the case of any transfer
by Licensee of substantially all of the assets or stock of Licensee's
proprietary (branded and/or generic) ophthalmic pharmaceutical business, (ii) no
consent shall be necessary in the case of any Sublicense pursuant to Section
2.1.1, and (iii) no consent to assignment shall be necessary in the case of any
transfer by Licensor of substantially all of the assets or stock of Licensor's
ophthalmics business. In addition, if Licensor directly or indirectly delegates
or transfers any rights or obligations under this Agreement, it shall be a
condition of such delegation or transfer that its obligations under Sections 2.3
and 2.4 are expressly assumed by, and become binding upon, such delegatee or
transferee.
ARTICLE 29. PATENT MARKING:
Licensee shall xxxx all Licensed Products sold or otherwise disposed of by it in
the United States under the license granted in this Agreement with the word
"Patent" and the number of the Licensed Patent. All License Products shipped of
sold in other countries shall be marked in such a manner as to conform with the
patent laws and practice of the country to which such products are shipped or in
which such products are sold.
ARTICLE 30. INTENTIONALLY OMITTED
ARTICLE 31. INDEPENDENT CONTRACTORS:
Licensor and Licensee are not partners, joint venturers or agents of one another
and shall at all times act as independent contractors without the right or
authority to bind each other with respect to any agreement, representation, or
warranty made with or to any third party. Except as otherwise stated herein,
Licensor and Licensee each shall be responsible for all costs, expenses, and
taxes, arising from the conduct of its own business.
ARTICLE 32. CONFIDENTIALITY:
32.1 Confidentiality. Notwithstanding any other provision herein, during
the term of this Agreement and for a period of ten (10) years from
termination of this Agreement, each Party ("Receiver") will hold in
confidence, will not disclose to others (except those Affiliates,
attorneys, accountants, stockholders, investment bankers, advisers or
other consultants who are bound by an obligation of confidentiality), and
will not use for any purpose not contemplated
-40-
by this Agreement, any technical or business information (including the
terms and conditions of this Agreement) Receiver obtains from the other
Party ("Discloser") in connection with this Agreement (collectively, the
"Confidential Information") provided that the Receiver may disclose
Confidential Information: (a) as otherwise expressly provided in this
Agreement, (b) as required by applicable law or any listing agreement
with, or the rules and regulations of, any applicable securities exchange
or the National Association of Securities Dealers, (c) necessary to secure
any required consents under this Agreement as to which the other Party has
been advised, (d) consented to in writing by the furnishing Party, (e) in
confidence, to accountants, banks, and financing sources and their
advisers, or (f) in confidence, to the other party (and their Affiliates,
attorneys, accountants, stockholders, investment bankers, advisers or
other consultants who are bound by an obligation of confidentiality) in a
merger, acquisition or license or proposed merger, acquisition or license,
or the like, and further provided that with respect to disclosures of the
terms and conditions of this Agreement made pursuant to the filing of this
Agreement as an exhibit to a document filed with the SEC, the filing Party
shall use commercially reasonable efforts to obtain confidential treatment
under the Securities Act of 1933 or the Securities Exchange Act of 1934 of
those portions of this Agreement identified to the filing Party in writing
by the other Party in advance of the filing (the filing party shall
provide the other Party with reasonable advance notice of the filing to
permit the other Party to make the confidentiality request described
above). Except as otherwise set forth above, Receiver shall make
Discloser's Confidential Information available to persons within
Receiver's organization only on a "need to know" basis, and Receiver shall
inform all persons to whom such Confidential Information is made available
of the confidential nature of the Confidential Information and the
restrictions comprised hereunder and shall require such persons to keep
the Confidential Information confidential as provided in this Section.
However, this confidentiality obligation shall not extend to any portion
of the Confidential Information which: (i) is known to Receiver as
documented by its written records at the time of disclosure; or (ii) is or
becomes public or generally available to the public through publication or
otherwise but through no fault of Receiver; or (iii) corresponds in
substance to information furnished to Receiver on a nonconfidential basis
by a third party having a bona fide right to do so and not having any
confidential obligation, direct or indirect, to Discloser with respect to
the same; or (iv) corresponds to information furnished by Discloser to any
third party on a nonconfidential basis except in limited consumer testing;
or (v) Receiver can demonstrate was developed by Receiver independently of
the disclosure of the Confidential Information by Discloser; or (vi) is
disclosed by Receiver pursuant to a legal requirement, provided Receiver
has complied with the provisions set forth in Section 32.2 below.
32.2 External Disclosure. If Receiver becomes legally required to disclose
any of Discloser's Confidential Information, Receiver shall notify
Discloser promptly of such requirement so that Discloser may seek a
protective order or other appropriate remedy concerning such disclosure.
Receiver will consult with Discloser, if requested to do so, regarding the
nature and extent of the required disclosure and will cooperate to limit
such disclosure to the extent practical. Unless specifically requested
otherwise by Control Delivery Systems Inc., Bausch & Lomb Incorporated
will direct all communications it receives from potential or existing
investors in Control Delivery Systems, Inc. to Xxxxx XxXxxxxx (Senior Vice
President and Chief Financial Officer), Xxxxxx Xxxxxx (Vice President,
Assistant General Counsel and Assistant Secretary), or Xxxx Xxxxxxxx
(Corporate Vice President, Global Pharmaceutical and Vitreoretinal) (or
their respective successors).
-41-
ARTICLE 33. RELINQUISHMENT:
33.1 UKRF Letter Agreement. The Licensee hereby relinquishes, agrees to
relinquish and shall not exercise, any and all rights or causes of actions
Licensee has, now, in the past, or in the future, pursuant to the Letter
Agreement dated June 9, 1999, as between UKRF, Licensor and Licensee (the
"UKRF Letter Agreement"). Licensee hereby agrees that the relinquishment
of its rights under the UKRF Letter Agreement shall be fully evidenced by
this Amendment without the need for further documentation of such
relinquishment, and supercedes any prior negotiations, understandings,
agreements, instruments and representations with respect to the UKRF
Letter Agreement.
33.2 Covenant Not to Compete. The Licensee hereby relinquishes, agrees to
relinquish and shall not exercise, any and all rights or causes of actions
Licensee has, now, in the past, or in the future, pursuant to the Covenant
Not to Compete dated June 9, 1999, as between Licensee and Xxxx Xxxxxx,
Ph.D. (the "Covenant Not to Compete"). Licensee hereby agrees that waiver
of its rights under the Covenant Not to Compete shall be fully evidenced
by this Amendment, and supersedes any prior negotiations, understandings,
agreements, instruments and representations with respect to the Covenant
Not to Compete.
ARTICLE 34. NO LIMIT TO REMEDIES:
Subject to the terms of this Agreement, the existence or choice of any one
remedy available to a Party shall not limit or otherwise restrict a Party from
choosing any remedy available, it being understood that a Party's remedies are
cumulative.
ARTICLE 35. COUNTERPARTS:
This Agreement may be executed in counterparts, each of which shall be
enforceable against the Party actually executing such counterpart, and which
together shall constitute one instrument.
ARTICLE 36. TRANSITION OBLIGATIONS:
36.1 Clinical/Trial Agreements. The Parties wish to reflect the transfer
to Licensee of pre-clinical, clinical, manufacturing and regulatory
activities which were being performed by Licensor and/or Licensee with
respect to current clinical trials relating to DME, Uveitis and ARMD (the
"Clinical Activities"). As agreed upon by the Parties, prior to Licensor's
withdrawal of its IND covering such Clinical Activities, Licensee has
provided: (a) notice of assignment and assumption to third parties under
the third party contracts related to the Clinical Activities listed on
Exhibit 36.1A (the "Clinical Agreements"); and (b) a notice of termination
(as executed by Licensor) to third parties under third party clinical
trial agreements listed on Exhibit 36.1B ("Trial Agreements").
Consequently, Licensor hereby transfers and assigns to Licensee, and
Licensee hereby assumes, (i) all Clinical Agreements; (ii) all outstanding
bills for Clinical Activities provided by Licensor to Licensee as of June
18, 2003; (iii) all payment obligations arising on or after June 18, 2003
under the Clinical Agreements; and (iv) all payments obligations for
services required under the Trial Agreements through the date of
termination of such Trial Agreements. However, notwithstanding any
payments by Licensee with respect to any Clinical or Trial Agreement,
Licensor shall be responsible for any material breach or failure by
Licensor in the performance of any such agreement prior to the
-42-
assumption by Licensee, or the termination, of such agreement, except for
(x) the payment obligations assumed by Licensee pursuant to this Section
36.1; or (y) breaches of a Clinical or Trial Agreement resulting from a
delay by Licensee in providing notice of termination or assignment and
assumption to third parties pursuant to subsections (a) or (b) above.
36.2 Clinical Activities Data. Up through December 31, 2003 ("Transition
Period"), Licensor shall cooperate with Licensee and provide reasonable
access to, answer questions regarding, and transfer to Licensee, all
relevant information possessed by Licensor regarding the Clinical
Activities.
36.3 Transition Space. Licensor shall have the right to control its
premises, but Licensor shall provide space at its premises during the
Transition Period through November 30, 2003, to permit Licensee and its
consultants and representatives ("Licensee Transition Personnel") to
transition the Clinical Activities to Licensee. Licensor hereby grants to
Licensee a license to permit Licensee Transition Personnel to use and
occupy such portions of Licensor's premises as are reasonably designated
by Licensor to the extent needed to perform such transition activities on
behalf of Licensee. The Licensee Transition Personnel shall have access to
all applicable records and information reasonably necessary to complete
the transition of the Clinical Activities to Licensee as contemplated in
this Article 36. Licensee shall require all Licensee Transition Personnel
to (i) observe Licensor's codes of conduct and attire; (ii) observe all
building security rules and procedures at Licensor's premises; (iii)
return all building passes, security cards or other access materials
immediately upon completion and delivery of the transition activities
contemplated under this Agreement; (iv) work during Licensor's ordinary
business hours, unless otherwise agreed, and follow Licensor's reasonable
instructions as to where to work; and (v) adhere to Licensor's reasonable
restrictions regarding confidential information they may be exposed to at
Licensor's premises. As soon as possible after receipt of Licensor's
reasonable request that Licensee remove from Licensor's premises any
Licensee Transition Personnel failing to adhere to such restrictions,
Licensee will cause such individual to be removed.
36.4 Insurance. In connection with the assumption of the payment
obligations pursuant to Section 36.1, Licensor shall promptly provide
Licensee with a copy of all insurance policies maintained as of the date
hereof in connection with Clinical Activities, including without
limitation the Clinical and Trial Agreements. Such insurance shall be in
form, substance, and amount reasonably satisfactory to Licensee. Licensor
shall maintain such insurance in force for as long as any obligation under
any Clinical or Trial Agreement. Licensee shall be named as an additional
insured on all such policies, none of which may be cancelled or materially
amended without prior notice to, and the written consent of, Licensee,
which consent will not be unreasonably withheld. If there is any default
under any such policy, Licensee shall have the right, but not the
obligation, to cure such default, including paying any premiums
thereunder. If Licensee pays any premium or other amount due from Licensor
under any such policy or otherwise incurs any out-of-pocket cost in curing
any such default, such amount(s) will be deemed part of and added to the
Unpaid Advanced Amount under Article 3.
-43-
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed
in duplicate originals by its duly authorized officer or representative.
BAUSCH & LOMB INCORPORATED CONTROL DELIVERY SYSTEMS, INC.
By: /s/Xxxx Xxxxxxxx By: /s/ Xxxxxxx X. Xxxx
------------------------------ ----------------------------
Printed Name: Xxxx Xxxxxxxx Printed Name: Xxxxxxx X. Xxxx
-------------------- -----------------
Title: Corporate Vice President Title: V. Ex President and CFO
--------------------------- ------------------------
EXHIBIT 1.14
FIRST GENERATION EXCLUSIVE LICENSED PRODUCT SPECIFICATIONS/DRAWINGS
FIGURE 1
[*]
FIGURE 2
[*]
[*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-45-
EXHIBIT 1.23(a)
LICENSED PATENTS, PATENT APPLICATIONS AND IDFs
I. ISSUED PATENTS AND PENDING PATENT APPLICATIONS
[*]
[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-46-
EXHIBIT 1.23(b)
EXCLUDED PATENTS, PATENT APPLICATIONS AND IDFs
[*]
[*] - INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-52-
EXHIBIT 1.33
NON-EXCLUSIVE LICENSED PRODUCT
[*]
[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-58-
EXHIBIT 1.47
UKRF LICENSES
1. License Agreement By and Between University of Kentucky Research
Foundation and Controlled Delivery Systems, Inc., dated October 20, 1991, as
amended August 10, 1993
-Patent Rights: US Patent No. 5,378,475 "Sustained Release Drug
Delivery Devices"
2. License Agreement By and Between University of Kentucky Research
Foundation and Controlled Delivery Systems, Inc. dated October 31, 1995
-Patent Rights: USSN 08/187,462 "Co-drugs as a Method of Controlled
Delivery" (abandoned)
3. License Agreement By and Between University of Kentucky Research
Foundation and Controlled Delivery Systems, Inc. dated September 9, 1997
-Patent Rights: US Patent No. 5,836,935 "Implantable Refillable
Controlled release Device to Delivery Drugs Directly into an Internal Portion
of the Body"
4. License Agreement By and Between University of Kentucky Research
Foundation and Controlled Delivery Systems, Inc. dated September 9, 1997
-Patent Rights: US Patent No. 5,773,019 "Implantable Controlled
Release Device to Delivery Drugs to an Internal Portion of the Body"
5. License Agreement By and Between University of Kentucky Research
Foundation and Controlled Delivery Systems, Inc. dated September 9, 1997
-Patent Rights: US Patent No. 5,681,964 "Permeable Non-Irritating
Prodrugs of non-steroidal, anti-inflammatory agents"
-61-
EXHIBIT 2.3
PATENTS, PATENT APPLICATIONS, AND INVENTION DISCLOSURE FORMS
NOT SUBJECT TO NON-SUIT
[*]
[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-62-
EXHIBIT 2.8
CO-OWNED PATENTS
[*]
[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-63-
EXHIBIT 2.9
LICENSEE NON-SUIT
[*]
[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-64-
EXHIBIT 2.10
LICENSEE COVENANT NOT TO FILE: IDFS
-65-
[*]
[*]- Indicates material that has been omitted and for which confidential
treatment has been requested. All such information has been filed with the
Commission pursuant to Rule 24b-2 promulgated under the Securities and Exchange
Act of 1934, as amended.
EXHIBIT 3.7.3
FORM OF OPTION
OPTION CERTIFICATE
No. [___] [DATE]
BAUSCH & LOMB INCORPORATED, a New York corporation ( "B&L"), for value
received and pursuant to Section 3.7.3 of an Amended and Restated License
Agreement (the "License Agreement"), dated as of December 9th, 2003, by and
between B&L and Control Delivery Systems, Inc., a Delaware corporation ("CDS"),
hereby certifies that CDS, or its registered assigns (the "Option Holder"), is
entitled to purchase from B&L, in whole or in part, 600,000 shares (the "Option
Shares") of CDS common stock, par value $0.01 per share ("Common Stock"), at the
purchase price of $5.00 per share (the "Exercise Price"), at any time or from
time to time prior to 5:00 P.M., New York, New York time, on JUNE 30, 2004 (the
"Expiration Time"), all subject to the terms, conditions and adjustments set
forth below in this Option Certificate.
1. Exercise.
a. Notice of Exercise. The Option Holder may exercise this option, from
time to time, in whole or in part, by delivering a notice of
exercise to B&L in substantially the attached form at any time prior
to the Expiration Time.
b. Closing of Exercise. The closing of any exercise of this option must
occur at the offices of B&L.
i. B&L Deliveries. At the closing, B&L shall deliver to the
Option Holder:
A. certificates representing the Option Shares being
purchased endorsed for transfer or accompanied by
executed stock powers,
B. customary representations regarding ownership of the
Option Shares, and
C. an agreement to indemnify the Option Holder for any
breach of the representations regarding ownership of the
Option Shares
ii. Option Holder Deliveries. At the closing, the Option Holder
shall deliver to B&L the aggregate exercise price for the
Option Shares being purchased by wire transfer or check drawn
on immediately available funds.
2. Transferability of Option. This option is transferable by the Option Holder
in whole or in part. B&L shall maintain a register of the names and addresses of
Option Holders and the transferees of this option. Upon the surrender of this
Option Certificate and a completed assignment form in substantially the attached
form, B&L shall at its expense execute and deliver
66
to the Option Holder, its transferees, or both a new Option Certificate or
Certificates covering the total number of Option Shares covered by the
surrendered Option Certificate or Certificates.
3. Representations, Warranties and Covenants.
a. Representations. B&L represents and warrants to the Option Holder as
follows as of the date of this Option Certificate:
i. B&L has the full power and authority to grant this option.
ii. B&L is the registered holder and beneficial owner of the
Option Shares.
iii. The Option Shares are unencumbered except for encumbrances
imposed by the Stockholders' Agreement (the "Stockholders
Agreement"), dated as of August 8, 2000, by and among CDS and
the stockholders party thereto, and the Standstill Agreement
(the "Standstill Agreement"), entered into in connection with
the License Agreement by CDS and B&L.
b. No Disposition of Option Shares. Until the Expiration Time, B&L
shall not and shall not agree to dispose of any interest in the
Option Shares or create or allow to be created any encumbrance on
the Option Shares.
c. Cooperation. B&L shall cooperate with the Option Holder to
effectuate any amendments or waivers to the Stockholders Agreement,
the Standstill Agreement or any other similar agreement, or any
amendment to CDS' Certificate of Incorporation, to enable the
closing of any purchase of Option Shares to occur, provided that B&L
shall not be required to incur any costs or expenses other than out
of pocket expenses or costs to its own advisors in connection
therewith.
4. Adjustment to Option Shares.
a. Recapitalization. If the outstanding shares of Common Stock are
changed into or exchanged for a different number or kind of shares
or other CDS securities by reason of any recapitalization,
reclassification, stock split, stock dividend, combination,
subdivision or similar transaction, the number and kind of Option
Shares and the Exercise Price shall be appropriately and
proportionally adjusted.
b. Sale of CDS. If CDS consolidates or merges with any other entity and
the Common Stock is converted into or exchanged for stock or other
securities of another entity or for cash or other property (any of
the foregoing, "Merger Consideration"), B&L shall retain the Merger
Consideration, and the Option Holder shall receive upon exercise the
Merger Consideration attributable to the shares of Common Stock
being purchased.
5. Miscellaneous.
a. Remedies/No Waivers. B&L stipulates that in the event of any default
or threatened default by B&L in the performance of this Option
Certificate, the Option Holder's remedies at law will be inadequate.
A court may specifically enforce the terms of this
67
Option Certificate or enjoin any violation or impending violation of
the terms of this Option Certificate. Any delay or failure to
enforce this Option Certificate does not impair the right to
enforcement and is not a waiver of any breach or any future breach.
All remedies of the Option Holder shall be cumulative and not
alternative.
b. Choice of Law/Forum. Any legal or other action pertaining to the
terms of this Certificate must be brought in the state and federal
courts nearest the principal place of business of the defendant in
the action. This Option Certificate shall be construed and
interpreted in accordance with, and its performance shall be
governed by, the substantive laws of the state where such courts are
located, without regard to the state's conflict of laws principles.
B&L and the Option Holder consent to the exclusive personal
jurisdiction and venue of such courts in the event of such action.
c. Notices.
i. Delivery. Any notice, request, instruction or other
communication required or permitted to be given pursuant to
this Option Certificate shall be in writing and shall be given
as follows to the address indicated in Section 5(c)(iii):
A. by hand,
B. by prepaid registered or certified mail, return receipt
requested,
C. by a nationally recognized overnight courier service, or
D. via facsimile.
ii. Timing of Effectiveness. Any notice shall be deemed made as of
the time set forth in this Section 5(c)(ii).
A. If delivered by hand, upon delivery.
B. If sent by mail, 3 days after the date of mailing
indicated on the certified or registered mail receipt.
C. If sent by overnight courier service, on the next
business day.
D. If sent by facsimile, on the date of confirmed
receipt.
iii. Addresses for Notice. The addresses for notice are as
follows:
A. If to the original Option Holder
Control Delivery Systems
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx, Ph.D., President
Facsimile Number: 000-000-0000
68
with a copy to:
Control Delivery Systems
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx, General Counsel
Facsimile Number: (000) 000-0000
and to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxx
Facsimile Number: (000) 000-0000.
B. If to a subsequent Option Holder, to the address showing
on the transfer register maintained by B&L for such
Option Holder.
C. If to B&L:
Bausch & Lomb Incorporated
0000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx, M.D.
Corporate Vice President, Global Pharmaceutical
and Vitreoretinal
Facsimile Number: (000) 000-0000
with a copy to:
Bausch & Lomb Pharmaceuticals, Inc.
Xxx Xxxxxx & Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Senior Vice President and General Counsel
Facsimile Number: (000) 000-0000
d. Amendments and Waivers. This Option Certificate may be amended only
by a written instrument signed by B&L and the Option Holder. B&L
shall record any amendments of this Option Certificate in the
register maintained to record transfers. Any term of this Option
Certificate may be waived only by a written instrument signed by the
waiving party.
e. Severability. Any terms or provision of this Option Certificate
which are invalid or unenforceable in any jurisdiction are
ineffective only to the extent of such invalidity or
unenforceability and only in such jurisdiction. The invalidity of
any term of this Option Certificate in one jurisdiction does not
impair the enforceability of the
69
remaining terms or affect the validity of the term in any other
jurisdiction.
f. Construction. The headings contained in this Option Certificate are
for convenience only and are not a part of this Option Certificate.
70
IN WITNESS WHEREOF, this Option Certificate has been duly executed by B&L
and as of the date first written above.
BAUSCH & LOMB INCORPORATED
By:_____________________________
Name:
Title:
[SIGNATURE PAGE TO B&L OPTION CERTIFICATE]
FORM OF NOTICE OF EXERCISE
[To be executed and delivered only upon exercise of option]
To:Bausch & Lomb Incorporated
The undersigned registered holder of an option to purchase Control
Delivery Systems, Inc. common stock, par value $.01 per share, from Bausch &
Lomb Incorporated hereby exercises such Option for [_______________] shares. The
closing of this exercise shall occur on [_______________].(1) At the closing,
the undersigned requests that B&L transfer the shares being purchased to
[______________], whose address is [________________].
Dated: [_____________]
_________________________________
Signature(2)
----------
(1) This date must be a business day on or before the 30th day following the
date of the notice of exercise.
(2) The signature must conform to the name of the holder as specified on
the face of the Option Certificate or to a registered assign on the
transfer register maintained by B&L. Otherwise, the person or entity
must provide B&L with evidence of valid assignment.
[FORM OF EXERCISE FOR B&L OPTION CERTIFICATE]
FORM OF ASSIGNMENT
[To be executed and delivered to Bausch & Lomb only upon assignment of option,
in whole or in part]
For value received, the undersigned registered holder of an option to
purchase Control Delivery Systems, Inc. common stock, par value $.01 per share,
from Bausch & Lomb Incorporated hereby sells, assigns and transfers unto
[________________], whose address is [____________], the rights represented by
such option to purchase [______________](3) shares of Control Delivery Systems,
Inc. common stock and appoints [____________] attorney to make such transfer on
the transfer register maintained by Bausch & Lomb Incorporated for such
purposes, with full power of substitution in the premises.
Dated: [________________]
_____________________________
Signature(4)
----------
(3) Insert the number of shares assigned. In the case of a partial assignment,
Bausch & Lomb Incorporated will execute and deliver a new Option
Certificate representing the unassigned portion of the option to the
assigning holder.
(4) The signature must conform to the name of the holder as specified on
the face of the Option Certificate or to a registered assign on the
transfer register maintained by B&L. Otherwise, the person or entity must
provide B&L with evidence of valid assignment.
EXHIBIT 3.7.4
FORM OF PROMISSORY NOTE
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR SUCH LAWS COVERING THE TRANSFER OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE BORROWER THAT SUCH
REGISTRATION IS NOT REQUIRED.
PROMISSORY NOTE
$6,794,719.00 December 9th, 2003
FOR VALUE RECEIVED, the undersigned Control Delivery Systems, Inc. (the
"Borrower") promises to pay to Bausch & Lomb Incorporated (the "Lender") on the
Maturity Date (as hereinafter defined), the principal sum of Six Million Seven
Hundred Ninety-Four Thousand Seven Hundred and Nineteen Dollars ($6,794,719), or
such lesser principal amount as may be outstanding hereunder. Payments hereunder
shall be made to the Lender at 0000 X. Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx or at
such other address as the Lender may specify.
1. MATURITY DATE. The term "Maturity Date" means July 1, 2007. If the
Borrower has not repaid the entire principal amount due to the Lender under this
Note by the Maturity Date (whether by prepayment or by offset as described
below), the Borrower will be liable for and shall pay a late charge at an annual
rate of one and one-half (1.5) times the prime rate in effect as announced by
the JPMorgan Chase Bank, N.A. from time to time, on any outstanding balance of
the principal amount remaining after the Maturity Date. This late charge will
compound annually and will accrue commencing on the day following the Maturity
Date until the entire remaining principal amount of this Note has been repaid.
-74-
2. OFFSET. The Borrower agrees that the Lender will have the right to
offset and apply certain amounts owing by the Lender to the Borrower under the
Amended and Restated License Agreement dated as of December 9th, 2003 between
the Borrower and the Lender (the "License Agreement") against the amount of
principal due under this Note. Such amounts that may be offset include (a) any
Milestone Payments (as defined in the License Agreement) owing from Lender to
Borrower, and (b) any royalty payments otherwise due Borrower under Article 3 of
the License Agreement, in each case until the entire remaining principal amount
of this Note has been fully repaid. If the Lender elects to apply any amounts
described in the preceding sentence against principal due hereunder, the Lender
shall provide an executed Certificate of Offset of Principal in the form of
Exhibit A to the Borrower promptly after each such application; provided,
however, that if such application is with respect to royalty payments owed by
the Lender to the Borrower, Lender shall furnish the Certificate of Offset of
Principal to the Borrower in conjunction with the Royalty Report referenced in
Section 7.1 of the License Agreement. The remaining principal amount owed under
this Note shall be reduced to the amount indicated on such Certificate.
Notwithstanding the foregoing, neither the existence of this Note nor the
provision of one or more Certificates of Offset of Principal by the Lender shall
affect any of the Borrower's rights under the License Agreement, including
without limitation the Borrower's right to audit and dispute the amounts of any
royalty payments pursuant to Sections 7.1 and 7.2 of the License Agreement.
3. PREPAYMENTS. This Note may be prepaid in whole or from time to time
in part without premium or penalty, including without limitation by means of any
payment made by the Borrower under Section 3.7.3 of the License Agreement.
4. UNSECURED. The indebtedness represented by this Note is unsecured.
5. DEFAULT.
5.1 Each of the following shall constitute an "Event of Default"
for purposes of this Note:
-75-
5.1.1 the Borrower fails to pay any amount
on this Note when it is due and payable;
5.1.2 there occurs any material event of default by the Borrower
under the License Agreement, and any applicable grace period shall have
expired;
5.1.3 if the Borrower files a petition in bankruptcy
or is adjudicated bankrupt, or if a petition in bankruptcy is filed
against the Borrower and such petition is not discharged or dismissed
within sixty (60) days thereafter, or if the Borrower makes any assignment
for the benefit of its creditors or any arrangement pursuant to any
bankruptcy law, or if a trustee, custodian or receiver is appointed for
the Borrower or any of its assets or property;
5.1.4 there occurs any material event of default by
Borrower under any agreement relating to its Material Financing Debt.
"Material Financing Debt" means any financing debt (other than under this
Note) outstanding in an aggregate amount of principal (whether or not due)
and accrued interest exceeding $5,000,000; or
5.1.5 the dissolution or liquidation of Borrower.
5.2 If there shall occur an Event of Default under subparagraphs 5.1.1,
5.1.2 or 5.1.4 above, Lender shall be entitled by notice to Borrower to declare
this Note and any interest accrued hereon and all liabilities of Borrower
hereunder to be forthwith due and payable; and if there shall occur an Event of
Default under subparagraphs 5.1.3 or 5.1.5 above, then this Note and any
interest accrued hereon and all liabilities of Borrower hereunder to Lender
shall automatically become forthwith due and payable; and in each case the same
shall thereupon become due and payable without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived.
5.3 Borrower agrees to pay all reasonable costs and expenses incurred by
Lender (including reasonable attorney's fees), if any, in connection with the
enforcement or collection of this Note arising after the occurrence of any Event
of Default or any event which with notice or lapse of time or both would
constitute an Event of Default, unless such occurrence is cured by Borrower
within any applicable grace period or such reimbursement is not required
-76-
by the terms of any waiver granted by Lender in respect of such occurrence. The
obligations of Borrower under this paragraph shall survive the payment of this
Note.
6. WAIVERS. The Borrower waives to the extent not prohibited by
applicable law (a) all presentments, demands for performance, notices of
nonperformance (except to the extent required by the provisions hereof),
protests, notices of protest and notices of dishonor, (b) any requirement of
diligence or promptness on the part of the Lender in the enforcement of its
rights under this Note, (c) all notices of every kind which may be required to
be given by any statute or rule of law, (d) any valuation, stay, appraisement or
redemption laws and (e) any defense of any kind (other than payment) which the
Borrower may now or hereafter have with respect to its liability under this
Note. No failure or delay on the part of Lender in the exercise of any power or
right in this Note shall operate as a waiver thereof, and no exercise or waiver
of any single power or right, or the partial exercise thereof, shall affect the
Lender's rights with respect to any and all other rights and powers.
7. ASSIGNABILITY. This Note shall bind and inure to the benefit of the
Borrower and the Lender and their permitted successors and assigns.
Notwithstanding the foregoing, neither party may assign, delegate, or
subcontract its rights and obligations hereunder without the prior written
consent of the other party, which shall not be unreasonably withheld or delayed,
except that (i) no consent to assignment shall be necessary in the case of any
transfer by the Lender of substantially all of the assets or stock of Lender's
proprietary (branded and/or generic) ophthalmic pharmaceutical business, and
(ii) no consent to assignment shall be necessary in the case of any transfer by
the Borrower of substantially all of the assets or stock of the Borrower's
opthalmics business, and provided that such assignee, delegatee or transferee
shall be at least as creditworthy as the Borrower (where creditworthiness of the
assignee, delegatee or transferee shall take into account the fair value of the
opthalmics business being transferred to such assignee, delegatee or
transferee)
-77-
8. LOSS OR MUTILATION OF NOTE. Upon receipt by the Borrower of evidence
satisfactory to the Borrower of the loss, theft, destruction or mutilation of
this Note, together with indemnity reasonably satisfactory to the Borrower, in
the case of loss, theft or destruction, or the surrender and cancellation of the
Note, in the case of mutilation, the Borrower shall execute and deliver to
Lender a new Note of like tenor as this Note.
9. NOTICES. Any notice, request, instruction or other communication
required or permitted to be given under this Note shall be in writing and shall
be given by sending such notice properly addressed to the other party's address
shown below (or any other address as either party may indicate by notice in
writing to the other from time to time as required by this paragraph): (i) by
hand or by prepaid registered or certified mail, return receipt requested, (ii)
by a nationally recognized overnight courier service, or (iii) via facsimile
(provided such facsimile is sent by a machine which acknowledges receipt of the
transmission) at the following addresses:
If to the Borrower:
Control Delivery Systems
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Chief Executive Officer
Facsimile Number: 000-000-0000
With a copy to:
Control Delivery Systems
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx, General Counsel
Facsimile Number: (000) 000-0000
-78-
and to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxx X. Xxxxx
Facsimile Number: (000) 000-0000
If to the Lender:
Bausch & Lomb Incorporated
0000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx, M.D.
Corporate Vice President, Global Pharmaceutical and
Vitreoretinal
Facsimile Number: (000) 000-0000
With a copy to:
Bausch & Lomb Pharmaceuticals, Inc.
Xxx Xxxxxx & Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Senior Vice President and General Counsel
Facsimile Number: (000) 000-0000
Any notice, if mailed properly addressed, postage prepaid, shall be deemed made
(i) three (3) days after the date of mailing as indicated on the certified or
registered mail receipt, (ii) on the next business day if sent by overnight
courier service, or (iii) on the date of delivery if hand delivered or the date
of transmission if sent by facsimile transmission.
10. GOVERNING LAW; CONSENT TO JURISDICTION. This Note shall be governed
by and construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed entirely within such State,
including all matters of construction, validity and performance (including
Section 5-1401 and 5-1402 of the New York General Obligations Law but excluding
all other choice of law and conflicts of law rules). Any legal or other action
hereunder shall be brought in the State and federal courts nearest the
-79-
principal place of business of the defendant in any such action, and the parties
consent to the exclusive personal jurisdiction and venue of such courts in the
event of such action.
11. CONSTRUCTION. In construing this Note, neither party shall have been
deemed to have drafted this Note, and no court or arbitrator will construe or
interpret this Note in favor of a party based on the presumption that it did not
draft the term or clause at issue, it being agreed that each party has ably
represented itself and has been ably represented by counsel.
12. WAIVER AND AMENDMENT. Any term of this Note may only be amended,
waived or modified with the written consent of the Borrower and the Lender of
this Note.
[The remainder of this page is intentionally left blank.]
-80-
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed as
of the date first above written.
BORROWER CONTROL DELIVERY SYSTEMS, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
LENDER BAUSCH & LOMB INCORPORATED
By:_________________________________
Name:_______________________________
Title:______________________________
-81-
PAYMENTS OF PRINCIPAL
Amount of Unpaid
Principal Principal Notation
Date Repaid/Offset Balance Made By
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
-82-
Exhibit A to
Promissory Note
CERTIFICATE OF OFFSET OF PRINCIPAL
Reference is hereby made to the Promissory Note dated December 9th, 2003
by Control Delivery Systems, Inc. in favor of Bausch & Lomb Incorporated in the
original principal amount of $6,794,719 (the "Note"). Capitalized terms not
defined herein have the meanings given such terms in the Note.
In accordance with paragraph 2 of the Note, the Lender hereby certifies to
the Borrower that the Lender has elected to offset against the remaining
principal amount of the Note the following funds owed by the Lender to the
Borrower under the License Agreement:
Description of Amount Remaining Principal Balance
Date of Offset Amounts Offset Offset of Note (after Offset)
-------------- -------------- ------ ---------------------------
IN WITNESS WHEREOF, the undersigned has caused this Certificate to be
executed as of the date first above written.
LENDER BAUSCH & LOMB INCORPORATED
By:______________________________
Name:____________________________
Title:___________________________
-83-
EXHIBIT 4.1
MILESTONE PAYMENTS
Licensee shall make the following one-time Milestone Payments to Licensor within
ten (10) business days after each of the following events:
(i) [*] - the later of (a) June 1, 2000, or (b) the date Phase III
clinicals for uveitis have begun for the first Licensed Product;
(ii) [*] - the later of (a) March 1, 2001, or (b) the date Phase III
clinicals for the first Licensed Product for DME or ARMD have begun;
(iii) [*] - the later of (a) September 1, 2002, or (b) the date an NDA
has been filed for the first Licensed Product for uveitis;
(iv) [*] - the later of (a) March 1, 2003, or (b) the date an NDA has
been filed for the first First Generation Exclusive Licensed Product for either
DME or ARMD;
(v) [*] - the later of (a) November 1, 2003, or (b) the date the FDA
has approved the NDA for the first First Generation Exclusive Licensed Product
for a uveitis related indication; and
(vi) [*] - the later of (a) April 1, 2004, or (b) the date the FDA has
approved the NDA for the first First Generation Exclusive Licensed Product for
either a DME or ARMD related indication.
[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-84-
EXHIBIT 5.3
LICENSEE'S SPECIFIC DILIGENCE OBLIGATIONS - FIRST GENERATION EXCLUSIVE
LICENSED PRODUCT (NON-UVEITIS INDICATIONS)
[*]
[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-85-
EXHIBIT 5.4
LICENSEE'S SPECIFIC DILIGENCE OBLIGATIONS - NON-EXCLUSIVE LICENSED PRODUCTS
[*]
[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-86-
EXHIBIT 16.1(vi)
LITIGATION, PROCEEDINGS, GOVERNMENTAL INVESTIGATIONS
Not Applicable
-87-
EXHIBIT 16.2(iii)
EXCEPTIONS TO OWNERSHIP OF LICENSED PATENTS
1. US Patent No. 5,378,475 "Sustained Release Drug Delivery Devices"
Owned by University of Kentucky Research Foundation and licensed to Control
Delivery Systems, Inc. pursuant to the License Agreement By and Between
University of Kentucky Research Foundation and Control Delivery Systems, Inc.,
dated October 20, 1991, as amended August 10, 1993
2. USSN 08/187,462 "Co-drugs as a Method of Controlled Delivery" (abandoned)
Owned by University of Kentucky Research Foundation and licensed to Control
Delivery Systems, Inc. pursuant to the License Agreement By and Between
University of Kentucky Research Foundation and Control Delivery Systems, Inc.
dated October 31, 1995
3. US Patent No. 5,836,935 "Implantable Refillable Controlled release Device to
Delivery Drugs Directly into an Internal Portion of the Body"
Owned by University of Kentucky Research Foundation and licensed to Control
Delivery Systems, Inc. pursuant to the License Agreement By and Between
University of Kentucky Research Foundation and Control Delivery Systems, Inc.
dated September 9, 1997
4. US Patent No. 5,773,019 "Implantable Controlled Release Device to Delivery
Drugs to an Internal Portion of the Body"
Owned by University of Kentucky Research Foundation and licensed to Control
Delivery Systems, Inc. pursuant to the License Agreement By and Between
University of Kentucky Research Foundation and Control Delivery Systems, Inc.
dated September 9, 1997
5. US Patent No. 5,681,964 "Permeable Non-Irritating Prodrugs of non-steroidal,
anti-inflammatory agents"
Owned by University of Kentucky Research Foundation and licensed to Control
Delivery Systems, Inc. pursuant to the License Agreement By and Between
University of Kentucky Research Foundation and Controlled Delivery Systems, Inc.
dated September 9, 1997
-88-
EXHIBIT 16.2(v)
LICENSOR DISCLOSEES
I. ALL OFFICERS, EMPLOYEES, AND CONSULTANTS OF LICENSOR AS OF THE AMENDMENT DATE
[*]
[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-89-
EXHIBIT 36.1A
CLINICAL AGREEMENTS
[*]
[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-92-
EXHIBIT 36.1B
TRIAL AGREEMENTS
[*]
[*]-INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES AND EXCHANGE
ACT OF 1934, AS AMENDED.
-93-
