TERMINATION OF EXCLUSIVE LICENSING AGREEMENT
THIS AGREEMENT (the "Termination Agreement") effective as of this 12th
day of October, 1999, between Glaxo Wellcome Inc., a corporation organized and
existing under the laws of the State of North Carolina, with its principal place
of business at Five Xxxxx Drive, Research Xxxxxxxx Xxxx, Xxxxx Xxxxxxxx 00000
(hereinafter, "GW") and Cellegy Pharmaceuticals, Inc., a corporation organized
and existing under the laws of the State of California, with its principal
office at 000 Xxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000, Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx
00000 (hereinafter, "Cellegy"), is entered into by the parties in order to
terminate by mutual agreement the Exclusive License Agreement between them,
dated the 11th of November, 1996 (the "License Agreement") pursuant to which GW
obtained an exclusive license to certain rights to the compound Glylorin under
patent rights and know-how possessed by Cellegy.
WHEREAS, GW and Cellegy mutually agree to terminate the License
Agreement, subject to the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the premises, the mutual covenants
contained herein and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, GW and Cellegy hereby agree as follows:
1. Definitions. Except as otherwise defined herein, all capitalized
terms used herein but not defined herein shall have the meanings ascribed to
such terms in the License Agreement.
2. Termination of Agreement. GW and Cellegy hereby agree that the
License Agreement is terminated in its entirety at the close of business on
October 15, 1999 (the "Effective Date") and, accordingly, all of their
respective rights, obligations and duties under the Agreement shall be
terminated as of the Effective Date and shall thereafter no longer have any
force or effect, except as may be specifically set forth in this Termination
Agreement.
3. Certain Payments. This effective date for the cut off of
charge-backs to GW for ongoing expenses, including, patent prosecution costs and
trademark costs, charges for ongoing stability work, toxicology work and
pharmaceutical professional fees, as well as all other charges relating to the
Compound, shall be the Effective Date. All such charges (up to a maximum of
$104,427.56) incurred prior to the Effective Date will be paid in full by GW.
Cellegy will ensure that all outstanding charges are submitted to GW for
collection prior to the Effective Date. Cellegy will pay GW $200,000 which
such amount represents the net amount for (i) the return of the prepaid
toxicology milestone payments referenced in Section 4.4 of the License
Agreement, less (ii) an amount which has been previously agreed to by the
parties as settlement of a proof of principal payment due to Cellegy under the
License Agreement.
4. Transfer of Regulatory Filings. (a) The IND with respect to the
ichthyosis vulgaris indication (IND # 54,243), as well as copies of all
regulatory correspondence between GW and FDA related thereto, will be
transferred to Cellegy within sixty (60) days of the Effective Date. All FDA
reporting requirements related to such IND will be updated and completed by GW
through the Effective Date. Upon the date that GW transfers to Cellegy the IND
referred to above, Cellegy shall assume all regulatory responsibilities related
to such IND, including the preparation and filing of annual reports with respect
to the IND.
(b) The IND with respect to the n-CIE indication (IND # 41,553), as
well as copies of all regulatory correspondence between GW and FDA related
thereto, will be transferred to Cellegy within sixty (60) days of the Effective
Date. All FDA reporting requirements related to such IND will be updated and
completed by GW through the Effective Date. Upon the date that GW transfers to
Cellegy the IND referred to above, Cellegy shall assume all regulatory
responsibilities related to such IND, including the preparation and filing of
annual reports with respect to the IND.
5. Transfer of Clinical Trial Material. (a) Within sixty (60) days of
the Effective Date, GW shall transfer to Cellegy all quantities of the Compound
that GW has in its possession (hereinafter, the "Bulk Compound"). Thereafter, GW
and Cellegy agree that Cellegy shall have legal title to the Bulk Compound.
Cellegy shall pay to GW a non-refundable fee of $33,225.68 in order to acquire
possession and legal title to the Bulk Compound.
(b) GW DOES NOT MAKE, AND SHALL NOT BE DEEMED TO HAVE MADE, ANY
REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO THE QUALITY, SAFETY OR
UTILITY OF THE BULK COMPOUND, AND SUCH BULK COMPOUND IS BEING TRANSFERRED TO
CELLEGY ON AN "AS IS" BASIS. GW EXPRESSLY DISCLAIMS ANY WARRANTIES OF
MERCHANTIBILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ANY OTHER WARRANTIES
(EXPRESS OR IMPLIED) WITH RESPECT TO THE QUALITY, SAFETY, OR UTILITY OF THE BULK
COMPOUND.
(c) Cellegy agrees that Cellegy shall bear all regulatory
responsibility and liability for the use of the Bulk Compound. Cellegy agrees
that it shall not use any of the Bulk Compound in any clinical trial or
otherwise in humans unless the results of Cellegy's quality assurance testing
indicate that the Bulk Compound meets the specifications set forth in an IND
(which has been filed with, and not withdrawn from, the FDA) with respect to the
Compound.
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6. Payment Mechanics. Each of GW and Cellegy acknowledge and agree that
the net total of the payments referred to in Section 3 and Section 5(a) of this
Agreement results in a net amount due to GW equal to $128,798.12, which such
amount shall be paid by Cellegy to GW by wire transfer within thirty (30) days
of the Effective Date to an account designated by GW. The foregoing payment
shall constitute full and complete payment of all amounts owed by Cellegy to GW,
and by GW to Cellegy, under the terms of the License Agreement.
7. Acknowledgement. Cellegy acknowledges that prior to the date of this
Termination Agreement, GW has transferred to Cellegy the completed Phase III
clinical trial protocol for ichthyosis vulgaris free of charge.
8. Transfer of Project Files. Within sixty (60) days of the Effective
Date, GW shall transfer to Cellegy a copy of all of the GW clinical and
nonclinical project files relating to the Compound. Following the return and
review of the project files by Cellegy, GW shall, at Cellegy's request (which
such request shall be made, if at all, within thirty (30) days from the receipt
of the project files referred to above), participate in a single video
conference with Cellegy (but such video conference shall not include any
potential future licensees or sublicensees of the Compound), the purpose of
which shall be to answer any outstanding questions that Cellegy may have
regarding the development of the Compound. Other than as specified above, GW
shall be under no obligation to provide any further data or information
regarding the Compound.
9. Certain Rights. Upon the Effective Date of this Termination
Agreement, all rights licensed or otherwise transferred by Cellegy to GW under
the License Agreement, or inventions developed by GW pursuant to the License
Agreement relating to Patent Rights, Trademarks, the Compound, a Licensed
Product, intellectual property or otherwise relating to the License Agreement,
shall revert to Cellegy and shall be transferred and assigned back to Cellegy.
GW shall take such actions and execute such instruments as Cellegy may
reasonably request to reflect such transfer. Upon the Effective Date of this
Termination Agreement, GW shall retain all rights, under Section 12.5(d) of the
License Agreement, to use the Know-How to which it was licensed under the
License Agreement; provided, however, that GW complies with its confidentiality
obligations under the License Agreement to the extent that such Know-How may
relate to the Compound, a Licensed Product or other Confidential Information of
Cellegy.
10. No Grant of Rights. GW represents and warrants to Cellegy that GW
has not granted, assigned nor sublicensed any of its rights acquired pursuant
to, or relating to the License Agreement to any other person or entity. To the
best of GW's knowledge, GW has taken reasonable measures to protect the
confidentiality of the Know-How, but Cellegy acknowledges that GW has disclosed
material portions of the Know-How or other Confidential Information regarding
the Compound to the third parties listed on Exhibit A hereto. GW represents that
it has confidentiality agreements, or that GW's clinical research organization,
CliniCor, Inc., has clinical investigator agreements which contain
confidentiality provisions with the third parties listed on Exhibit A hereto,
relating to such Know-How or Confidential Information.
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11. Release from Confidentiality. Upon the Effective Date of this
Termination Agreement, Cellegy's confidentiality and non-use obligations under
Section 10 of the License Agreement shall terminate and be of no further force
and effect as applied to any Confidential Information supplied by or on behalf
of GW to Cellegy under the License Agreement, and shall terminate and be of no
further force and effect, notwithstanding anything to the contrary in the
License Agreement.
12. Limitation of Liability. The parties acknowledge that GW is
terminating its involvement in the development of the Compound. GW shall not be
liable to Cellegy, its Affiliates, its sublicensees or other marketing
collaborators, or their customers, or any third party, for any damages or losses
whatsoever (including without limitation special, incidental, indirect,
consequential or exemplary damages) resulting from the manufacture, testing,
design, labeling, use, development, testing, promotion, marketing, sale or
disposal of the Compound. It is acknowledged and agreed, however, that the
obligation of GW to make the deliveries to Cellegy contemplated by Sections 4,
5, 8 and 9 hereof shall not be limited by the foregoing sentence.
13. Indemnification. (a) Cellegy agrees to defend, indemnify and hold
harmless GW and its Affiliates, directors, officers and employees from and
against any liabilities, losses, fines, penalties, damages, expenses (including
reasonable attorney's fees and expenses incurred in connection with this
provision), actions, or claims brought or threatened after the Effective Date
and which relate to, or arise out of, the manufacture, testing, design,
labeling, use, development, testing, promotion, marketing, sale or disposal of
the Compound by Cellegy or its Affiliates, sublicensees, successors and assigns.
It is acknowledged and agreed, however, that the foregoing obligation to defend,
indemnify and hold harmless shall not apply with respect to any Compound or
Licensed Product which was part of manufactured batch numbers C1148 and C0527
(hereinafter, the "Excluded Batches").
(b) GW agrees to defend, indemnify and hold harmless Cellegy and its
Affiliates, directors, officers and employees from and against any liabilities,
losses, fines, penalties, damages, expenses (including reasonable attorney's
fees and expenses incurred in connection with this provision), actions, or
claims brought or threatened after the Effective Date and which relate to, or
arise out of, the manufacture, testing, design, labeling, use, development, or
testing of the Excluded Batches.
(c) A party which intends to seek indemnification under this Section 13
(such party hereinafter referred to as the "Indemnitee") in respect to a
liability, loss, fine, penalty, damage, expense, action, or claim brought or
threatened against such Indemnitee by a Third Party (such claim hereinafter
referred to as a "Third Party Claim"), shall promptly give written notice
thereof to the party from whom indemnification is sought (such other party
hereinafter referred to as the "Indemnitor") within a reasonable period of time
after the assertion of such Third Party Claim by such Third Party; provided,
however, that the failure to provide written notice of such Third Party Claim
within a reasonable period of time shall not relieve the Indemnitor of any of
its obligations hereunder, except to the
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extent that the Indemnitor is prejudiced by such failure. The Indemnitor shall
have the right to assume the complete control of the defense, compromise or
settlement of any Third Party Claim (provided that no settlement of any Third
Party Claim shall include any admission of wrongdoing on the part of an
Indemnitee, without the prior written consent of such Indemnitee, which such
consent shall not be unreasonably withheld), including, at its own expense,
employment of legal counsel, and at any time thereafter the Indemnitor shall be
entitled to exercise, on behalf of the Indemnitee, any rights which may mitigate
the extent or amount of such Third Party Claim; provided, however, that if the
Indemnitor shall have exercised its right to assume control of such Third Party
Claim, the Indemnitee (i) may, in its sole discretion and at its own expense,
employ legal counsel to represent it (in addition to the legal counsel employed
by the Indemnitor) in any such matter, and in such event legal counsel selected
by the Indemnitee shall be required to confer and cooperate with such counsel of
the Indemnitor in such defense, compromise or settlement for the purpose of
informing and sharing information with the Indemnitor; (ii) shall, at its own
expense, make available to Indemnitor those employees, officers and directors or
Indemnitee whose assistance, testimony or presence is necessary or appropriate
to assist the Indemnitor in evaluating and in defending any such Third Party
Claim; provided, however, that any such access shall be conducted in such a
manner as not to interfere unreasonably with the operations of the businesses of
Indemnitee; and (iii) shall otherwise fully cooperate with the Indemnitor and
its legal counsel in the investigation and defense of such Third Party Claim.
14. Headings. All headings are for reference purposes only and shall
not in any way affect the meaning or interpretation of this Termination
Agreement.
15. Notices. Any notice required or permitted to be given hereunder
shall be either delivered by hand or mailed by certified or registered mail or
delivered by nationally recognized courier service, to the party to whom such
notice is required or permitted to be given hereunder. Any notice shall be
deemed to have been given when delivered, if delivered by hand, or then received
by the other party if otherwise mailed or delivered.
All notices to GW shall be addressed as follows:
Glaxo Wellcome Inc. Glaxo Wellcome Inc.
Five Xxxxx Drive Five Xxxxx Drive
Research Xxxxxxxx Xxxx, XX 00000 Research Xxxxxxxx Xxxx, XX 00000
Attn.: Vice President-Dermatology Attn.: General Counsel
All notices to Cellegy shall be addressed as follows:
Cellegy Pharmaceuticals, Inc.
000 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn.: A. Xxxxxxx Xxxxxx
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16. Successors and Assigns. This Termination Agreement shall bind,
inure to the benefit of, and be enforceable by the successors and assigns of the
parties hereto.
17. Expenses. Cellegy and GW shall each bear their own fees, costs and
expenses incurred by them in connection with the negotiation, execution and
performance of this Agreement.
18. Entire Agreement; Modifications. This Termination Agreement
constitutes the entire agreement and understanding between the parties with
respect to the termination of the License Agreement. There are no collateral
understandings, agreements or other representations, expressed or implied,
between the parties relating to such termination. Any previous discussions,
agreements or understandings between the parties regarding such termination are
hereby superseded by this Termination Agreement. This Termination Agreement may
not be modified, altered or amended except by written agreement of authorized
representatives of the parties.
19. Governing Law. This Termination Agreement shall be governed by and
construed in accordance with the laws of the North Carolina, exclusive of its
choice-of-law rules.
20. Counterparts. This Termination Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, and all of which
shall constitute one and the same instrument.
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IN WITNESS HEREOF, the parties have executed this Termination Agreement
as of the Effective Date.
GLAXO WELLCOME INC. CELLEGY PHARMACEUTICALS, INC.
/s/ Xxxx X. Xxxxxxxx /s/ K. Xxxxxxx Xxxxxxx
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By: Xxxx X. Xxxxxxxx By: K. Xxxxxxx Xxxxxxx
Vice President, Business President and
Development and Planning, Chief Executive Officer
General Manager, Specialty
Divisions
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