EXHIBIT 10.3
CONFIDENTIAL TREATMENT
LICENSE AGREEMENT
This LICENSE AGREEMENT (this "AGREEMENT") effective as of July 31, 2002
(the "EFFECTIVE DATE"), is between CUBIST PHARMACEUTICALS, INC., a corporation
organized and existing under the laws of Delaware (together with its Affiliates
(as defined below) referred to herein as "CUBIST") and BIOCHEMIE GMBH, a
corporation organized and existing under the laws of Austria (together with its
Affiliates referred to herein as "BIOCHEMIE"). BIOCHEMIE and CUBIST are
sometimes hereinafter referred to each as a "Party" and collectively as the
"Parties."
WITNESSETH:
WHEREAS, BIOCHEMIE has developed a proprietary compound known as CAB-175
using BIOCHEMIE Know-How (as defined below) and has rights to BIOCHEMIE Patent
Rights (as defined below); and
WHEREAS, CUBIST desires to obtain a license under the BIOCHEMIE Patent
Rights and BIOCHEMIE Know-How upon the terms and conditions set forth herein for
purposes of developing and commercializing CAB-175 and certain other compounds
in the Territory (as defined below), and BIOCHEMIE desires to grant such a
license.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Unless specifically set forth to the contrary herein, the following terms,
whether used in the singular or plural, shall have the respective meanings set
forth below:
1.1 "Abandoned Product" shall have the meaning set forth in Section 3.5(b).
1.2 "Affiliate" shall mean, with respect to any Person, (i) any other
Person of which fifty percent (50%) or more of the securities or other
ownership interests representing the equity, the voting stock or
general partnership interest are owned, controlled, or held, directly
or indirectly by, or under common ownership or control with, such
Person; or (ii) any other Person that, directly or indirectly, owns,
controls, or holds fifty percent (50%) or more of the securities or
other ownership interests representing the equity, the voting stock or,
if applicable, the general partnership interest, of such Person.
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1.3 "Agreement" shall have the meaning set forth in the preamble.
1.4 "BIOCHEMIE Improvement" shall mean any improvement or enhancement
in or to (i) the manufacture, formulation, ingredients, preparation,
presentation, means of delivery, dosage or packaging of Licensed
Products or (ii) any invention that is necessary or useful in
connection with the research, development, manufacture, marketing,
promotion, use, sale, import or export of Licensed Products, which
improvement or enhancement is owned or licensed by BIOCHEMIE at any
time during the term of this Agreement.
1.5 "BIOCHEMIE Indemnitees" shall have the meaning set forth in Section
7.2.1.
1.6 "BIOCHEMIE Inventions" shall have the meaning set forth in Section
8.1.
1.7 "BIOCHEMIE Joint Patent Rights" shall mean all of BIOCHEMIE's
right, title and interest in and to the Joint Patents.
1.8 "BIOCHEMIE Know-How" shall mean all information and materials
including, but not limited to, discoveries, BIOCHEMIE Improvements,
processes, formulas, data, inventions, know-how and trade secrets,
patentable or otherwise, that (i) at any time during the term of this
Agreement are owned by BIOCHEMIE or that BIOCHEMIE, through license or
otherwise, has or acquires rights, in each case that are capable of
being licensed or sublicensed to CUBIST, (ii) are not generally known
and are not disclosed in any published BIOCHEMIE Patents, and (iii) are
necessary or useful in connection with the research, development,
manufacture, marketing, promotion, use, sale, import or export of
Licensed Products, including, without limitation, all data and
information regarding the safety and efficacy of Licensed Products.
1.9 "BIOCHEMIE Patents" shall mean any and all patents, patent
applications, utility models and supplementary protection certificates
(which for the purposes of this Agreement shall be deemed to include
certificates of invention and applications for certificates of
invention) that during the term of this Agreement are owned by
BIOCHEMIE or to which BIOCHEMIE through license or otherwise has or
acquires sublicenseable rights, in each case that are capable of being
licensed or sublicensed to CUBIST, and that: (i) claim the structure or
composition of any Licensed Products or claim any method of use of any
Licensed Products; (ii) claim any invention necessary or useful in
connection with the research, development, manufacture, marketing,
promotion, use, sale, import or export of Licensed Products, including,
without limitation, all data and information regarding the safety and
efficacy of Licensed Products; (iii) claim BIOCHEMIE Improvements; (iv)
are divisions, continuations, continuations-in-part, reissues,
renewals, extensions, supplementary protection certificates, utility,
models and the like of any patents and patent applications claiming
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any of the items referred to in the foregoing clauses (i)-(iii); or (v)
are foreign equivalents or counterparts of any patents or patent
applications filed in any country and claiming any of the items
referred to in the foregoing clauses (i)-(iii) or are foreign
equivalents or counterparts of any of the items referred to in the
foregoing clause (iv). Notwithstanding the foregoing, the term
"BIOCHEMIE Patents" shall not include any Joint Patents. Without
limiting the generality of any of the foregoing, SCHEDULE 1 sets forth
a list of all BIOCHEMIE Patents as of the Effective Date.
1.10 "BIOCHEMIE Retained Manufacturing Rights" shall have the meaning
set forth in Section 3.2 hereof.
1.11 "BIOCHEMIE Retained Research Rights" shall have the meaning set
forth in Section 3.2 hereof.
1.12 "BIOCHEMIE Retained Rights" shall mean both the BIOCHEMIE Retained
Manufacturing Rights and the BIOCHEMIE Retained Research Rights.
1.13 "BIOCHEMIE Similar Compound" shall mean (i) any cephalosporin
compound that is listed on SCHEDULE 2, (ii) any cephalosporin compound
that meets the criteria set forth on SCHEDULE 3 and that is either
owned or licensed by BIOCHEMIE or (iii) any pharmaceutical composition
containing any of the items referred to in the foregoing clauses (i)
and (ii).
1.14 "BIOCHEMIE Trademark" shall mean any registered or unregistered
trademark or service xxxx owned or licensed by BIOCHEMIE for use or
proposed use in conjunction with Licensed Products, including, without
limitation, any trademark or service xxxx that BIOCHEMIE has applied to
register, or applies to register, anywhere in the Territory in
connection with Licensed Products. Without limiting the generality of
the foregoing, SCHEDULE 4 sets forth a list of all BIOCHEMIE Trademarks
as of the Effective Date.
1.15 "Calendar Quarter" shall mean a period of three (3) consecutive
calendar months ending on March 31, June 30, September 30 or December
31.
1.16 "Calendar Year" shall mean a period of twelve (12) consecutive
calendar months commencing on January 1 and ending on December 31.
1.17 "Code" shall have the meaning set forth in Section 9.5(d).
1.18 "Combination Product" shall mean (i) any product or pharmaceutical
composition
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consisting of, among other things, at least two distinct active
pharmaceutical ingredients, one of which shall be a Licensed Product or
(ii) two or more products or pharmaceutical compositions that are
marketed and sold together in the same package, where at least one of
such products or pharmaceutical compositions is a Licensed Product and
at least one of the other products or pharmaceutical compositions are
not Licensed Products (including, without limitation, (1) a
pharmaceutical composition containing an active pharmaceutical
ingredient distinct from the active pharmaceutical ingredient of such
Licensed Product, (2) a delivery device or (3) a delivery system).
1.19 "Compound" shall mean CAB-175, the structure of which is set forth
in SCHEDULE 5.
1.20 "CUBIST" shall have the meaning set forth in the preamble.
1.21 "CUBIST Indemnitees" shall have the meaning set forth in Section
7.2.2.
1.22 "CUBIST Inventions" shall have the meaning set forth in Section
8.1.
1.23 "Default Major Market Countries" shall have the meaning set forth
in Section 9.4(a).
1.24 "Directly Competitive Product" shall mean [*] in any formulation
[*] and [*].
1.25 "Dispute Notice" shall have the meaning set forth in Section 10.1.
1.26 "Effective Date" shall have the meaning set forth in the preamble.
1.27 "FDA" shall mean the United States Food and Drug Administration.
1.28 [*] shall mean, with respect to any country within the Territory,
[*] that can be sold or otherwise commercialized in such country by [*]
that does not [*] in such country, and where the sale or other
commercialization of [*] in such country by [*] does not [*],
including, without limitation, the [*].
1.29 "ICC" shall have the meaning set forth in Section 10.2(a).
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1.30 "ICC Rules" shall have the meaning set forth in Section 10.2(a).
1.31 "Intravenous Licensed Product" shall mean any Licensed Product
formulated for intravenous delivery.
1.32 "Japan License" shall have the meaning set forth in Section 3.3.
1.33 "Joint Development Committee" shall mean the committee established
pursuant to the Manufacturing and Supply Agreement.
1.34 "Joint Inventions" shall have the meaning set forth in Section
8.1.
1.35 "Joint Patents" shall mean any and all patents, patent
applications, utility models and supplementary protection certificates
(which for the purposes of this Agreement shall be deemed to include
certificates of invention and applications for certificates of
invention) that: (i) claim Joint Inventions; (ii) are divisions,
continuations, continuations-in-part, reissues, renewals, extensions,
supplementary protection certificates, utility, models and the like of
any patents and patent applications claiming Joint Information and
Inventions; or (iii) are foreign equivalents or counterparts of any
patents or patent applications filed in any country and claiming Joint
Inventions or are foreign equivalents or counterparts of any of the
items referred to in the foregoing clause (ii).
1.36 "Licensed Product(s)" shall mean any one or more of the following:
(i) Compound, (ii) any BIOCHEMIE Similar Compound, (iii) any [*] or
(iv) any pharmaceutical composition containing any of the items
referred to in the foregoing clauses (i)-(iii). Each distinct
formulation (including, but not limited to, any formulations in the
form of solution for injection, oral suspension and oral solid dosage
form) of any of the items referred to in the foregoing clauses (i)-(iv)
shall be [*]. Without limiting the generality of the foregoing, an [*].
CUBIST's rights to develop and commercialize BIOCHEMIE Similar
Compounds shall be subject to the limitations set forth in Section
3.5(a) hereof and CUBIST's rights to commercialize Oral Licensed
Products shall be subject to the limitations set forth in Section
3.5(c) hereof.
1.37 "Losses" shall have the meaning set forth in Section 7.2.1.
1.38 "Major Market Countries" shall mean [*].
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1.39 "Manufacturing and Supply Agreement" shall mean a Manufacturing
and Supply Agreement to be negotiated and executed by the Parties after
the Effective Date, pursuant to which, among other things, BIOCHEMIE
shall agree to manufacture and supply to CUBIST, and CUBIST shall agree
to purchase from BIOCHEMIE, Licensed Products, all upon such terms and
conditions as shall be mutually satisfactory to CUBIST and BIOCHEMIE
and set forth in such Manufacturing and Supply Agreement.
1.40 "NDA" shall mean a New Drug Application filed in the United
States.
1.41 "Net Sales" shall mean the aggregate gross sales [*] after
deducting, if not previously deducted, from the amount received:
(a) [*] and as required to do business in the Territory;
(b) [*] and as required to do business in the Territory;
(c) [*]; and
(d) [*].
For purposes of this Agreement, independent third party distributors of
CUBIST shall not be deemed to be sublicensees.
In the event that a Licensed Product is sold as a component of a
Combination Product, then Net Sales shall be determined by multiplying
the Net Sales of the Combination Product by the fraction A/(A+B) where
A EQUALS the average selling price of such Licensed Product sold
separately in finished form and B EQUALS the aggregate average selling
price of the relevant other product sold separately in finished form,
IN EACH CASE in the relevant country in which sales were made. In the
event that no separate sale of either Licensed Product or the relevant
other product is made during the applicable royalty reporting period
and in the relevant country in which the sale of the Combination
Product was made, then Net Sales shall be determined by multiplying the
Net Sales of the Combination Product by a fraction (C/(C+D)), where C
EQUALS CUBIST's standard fully-absorbed cost of Licensed Product and D
EQUALS the standard fully-absorbed cost of the relevant other product,
IN EACH CASE determined in accordance with United States generally
accepted accounting principles for the relevant country in which sales
were made. If the relevant other product is sold separately in finished
form and Licensed Product is not, then Net Sales shall be determined by
multiplying the Net Sales of the Combination Product by the fraction (E
- B)/E, where E EQUALS the average selling price of the Combination
Product for the country in which sales were made.
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1.42 "Oral Licensed Product(s)" shall mean any Licensed Product that is
formulated to be orally bioavailable (including, without limitation, in
oral suspension form or oral solid dosage form) or that is administered
to the intended patient population orally.
1.43 "Party" shall have the meaning set forth in the preamble.
1.44 "Person" shall mean any individual, entity, association,
corporation, partnership, limited liability company, government (or
agency or subdivision thereof), trust, joint venture, or
proprietorship.
1.45 "Proprietary Information" shall mean all inventions, discoveries,
improvements, processes, formulas, materials, know-how and trade
secrets, and all other scientific, clinical, regulatory, marketing,
financial and commercial information or data, whether communicated in
writing or orally or by sensory detection, which is provided by, or on
behalf of, one Party to the other Party in connection with this
Agreement or the Manufacturing and Supply Agreement.
1.46 "Section 3.3 CUBIST License" shall have the meaning set forth in
Section 3.3.
1.47 [*].
1.48 "Territory" shall mean all countries of the world; PROVIDED,
HOWEVER, that in the event that BIOCHEMIE terminates the Japan License
pursuant to, and in accordance with, the provisions of Section 3.3,
then the term "Territory" shall not include Japan.
1.49 "TM Infringement" shall have the meaning set forth in Section 8.9.
1.50 "Valid Claim" shall mean (i) an unexpired claim of an issued
patent within BIOCHEMIE Patents which has not been found to be invalid
or unenforceable by a court or other authority in the subject country,
from which decision no appeal is taken or can be taken; or (ii) a claim
of a pending patent application within the BIOCHEMIE Patents, which
patent application claims a first priority no more than ten (10) years
prior to the date upon which pendency is determined.
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ARTICLE II
TRANSFER OF KNOW-HOW AND INFORMATION; TECHNICAL ASSISTANCE
2.1 TRANSFER OF KNOW-HOW AND INFORMATION.
(a) [*] days of the Effective Date, BIOCHEMIE shall provide CUBIST
with a written report setting forth a summary and status of all
BIOCHEMIE Patents and all BIOCHEMIE Know-How as of such date.
Thereafter, on [*] of each calendar year during the term of this
Agreement, BIOCHEMIE shall provide CUBIST with a written report
setting forth a summary and status of (i) all additional BIOCHEMIE
Know-How that BIOCHEMIE may develop or acquire or that BIOCHEMIE
has not previously disclosed to CUBIST pursuant to this Section
2.1(a) and (ii) all BIOCHEMIE Patents that have not been
previously disclosed to CUBIST pursuant to this Section 2.1(a).
Promptly after BIOCHEMIE discloses to CUBIST any BIOCHEMIE Patents
pursuant to this Section 2.1(a) that are not listed on SCHEDULE 1
to this Agreement, CUBIST and BIOCHEMIE agree to execute and
deliver to each other a written instrument listing or otherwise
identifying such BIOCHEMIE Patents and [*] for all purposes of
this Agreement. From time to time during the term of this
Agreement (but in no event less frequently than on [*] of each
calendar year), BIOCHEMIE shall provide CUBIST with a written
report detailing the activities undertaken by BIOCHEMIE, and the
results obtained from such activities, in connection with the
exercise by BIOCHEMIE of the [*]. At any time during the term of
this Agreement, upon request by CUBIST, BIOCHEMIE shall deliver to
CUBIST or its designee copies of all [*] specified by CUBIST in
such request, and copies of all [*] specified in such request.
From time to time during the term of this Agreement, BIOCHEMIE
shall also take such actions, and deliver to CUBIST such [*] in
such request. Notwithstanding anything expressed or implied in
this Section 2.1(a) to the contrary, [*] under this Section 2.1(a)
to [*] any [*] to [*] only if and to the extent that such [*].
(b) BIOCHEMIE will, as soon as reasonably practicable after the
Effective Date but in no event later than [*] days after the
Effective Date, provide CUBIST copies of all regulatory filings,
and the results of all clinical and non-clinical
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testing of Licensed Products performed by or on behalf of
BIOCHEMIE. On an ongoing basis during the term of this Agreement,
BIOCHEMIE will provide to CUBIST (i) all information in
BIOCHEMIE's possession regarding pre-clinical testing and clinical
testing performed or to be performed by or on behalf of BIOCHEMIE
with respect to the Licensed Products (including, without
limitation, information concerning the design and plans with
respect to such pre-clinical testing or clinical testing) as such
information becomes available, (ii) the results of all clinical
and non-clinical testing performed by or on behalf of BIOCHEMIE
with respect to the Licensed Products as such information becomes
available, (iii) all information in BIOCHEMIE's possession
regarding Licensed Products necessary or useful for making
regulatory filings in the Territory with respect to Licensed
Products as such information becomes available, and (iv) copies of
all regulatory filings made by or on behalf of BIOCHEMIE with
respect to Licensed Products promptly after such regulatory
filings are made. CUBIST shall have a right of access, a right of
reference and the right to use and incorporate all information
provided to it pursuant to this subparagraph (b) in its
applications for regulatory approvals of Licensed Products within
the Territory and for all other purposes related to the research,
development, manufacture, use and commercialization of Licensed
Products.
(c) Notwithstanding anything expressed or implied in the foregoing
provisions of this Section 2.1 to the contrary, nothing in this
Section 2.1 or elsewhere in this Article II are intended to
diminish the scope of the exclusive rights licensed by BIOCHEMIE
to CUBIST pursuant to Article III below or to suggest that, from
and after the Effective Date, BIOCHEMIE retains any rights to
research, develop, seek regulatory approval for, manufacture, use
or commercialize any Licensed Product, other than the BIOCHEMIE
Retained Rights.
2.2 BIOCHEMIE ASSISTANCE. During the term of this Agreement, BIOCHEMIE
shall provide CUBIST with reasonable access to consult with pertinent
BIOCHEMIE employees (including, but not limited to, [*] that have had
prior experience working with any Licensed Products or any BIOCHEMIE
Similar Compound. Except for participation in the Joint Development
Committee, such consultations shall occur at the request of CUBIST,
[*]. [*] in connection [*]. The subject matter and scope of such
consultations shall be defined jointly by CUBIST and BIOCHEMIE and
shall in any event allow CUBIST to take advantage of such pertinent
BIOCHEMIE employees' expertise and resources for purposes of assisting
CUBIST in the research, development, manufacture, use, marketing,
promotion, sale and other commercialization of Licensed Products.
2.3 HEALTH HAZARDS. BIOCHEMIE will notify CUBIST immediately of any
material health hazards with respect to Licensed Products that may
impact employees involved in the research, development, manufacture,
production or supply of Licensed Products.
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2.4 ENGLISH LANGUAGE. All disclosures or information delivered or made
available by either Party or its employees and agents to the other
Party and its employees or agents pursuant to this Article II or any of
the other provisions of this Agreement or the Manufacturing and Supply
Agreement shall be made in English.
ARTICLE III
LICENSE; RETAINED RIGHTS; DILIGENCE; RIGHT OF FIRST NEGOTIATION
3.1 LICENSE GRANT. Subject to the terms and conditions of this
Agreement (including, without limitation, the rights retained by
BIOCHEMIE pursuant to Sections 3.2 and 3.3 below and the limitations
set forth in Section 3.5 below on certain of the rights granted to
CUBIST in this Section 3.1), BIOCHEMIE hereby grants to CUBIST the
exclusive right and license (even as to BIOCHEMIE), including the right
to sublicense, under the BIOCHEMIE Patents, the BIOCHEMIE Know-How and
the BIOCHEMIE Joint Patent Rights to research, develop, make, have
made, use, promote, market, sell, offer to sell, import or export
Licensed Products in the Territory for any and all purposes and uses.
Notwithstanding the grant by BIOCHEMIE of the foregoing license,
BIOCHEMIE retains the BIOCHEMIE Retained Rights. CUBIST may grant
sublicenses of the rights licensed to CUBIST pursuant to this Section
3.1. It is understood that this Section 3.1 does not provide for the
license to CUBIST of any rights that a third party may own in or to a
BIOCHEMIE Similar Compound and that have not been licensed by such
third party to BIOCHEMIE; PROVIDED, HOWEVER, that such third party has
not acquired such rights from BIOCHEMIE in violation of the rights
granted by BIOCHEMIE to CUBIST pursuant to this Section 3.1.
3.2 CERTAIN RESEARCH AND MANUFACTURING RIGHTS RETAINED BY BIOCHEMIE.
Notwithstanding the license granted pursuant to Section 3.1 above,
BIOCHEMIE shall retain those rights under the BIOCHEMIE Patents, the
BIOCHEMIE Know-How and the BIOCHEMIE Joint Patent Rights as may be
necessary to perform BIOCHEMIE's obligations under the Manufacturing
and Supply Agreement, including, without limitation, (i) the right to
engage in technical development relative to chemical, analytical and
method validation in order to enable the manufacture of Licensed
Products pursuant to the Manufacturing and Supply Agreement in
conformity with good manufacturing practices and (ii) the right to
manufacture Licensed Product pursuant to, and in accordance with, the
Manufacturing and Supply Agreement (collectively, the "BIOCHEMIE
RETAINED MANUFACTURING RIGHTS"). In addition, BIOCHEMIE shall retain
those rights under the BIOCHEMIE Patents, the BIOCHEMIE Know-How and
the BIOCHEMIE Joint Patent Rights as may be necessary to allow
BIOCHEMIE to engage only in [*] (the "BIOCHEMIE RETAINED RESEARCH
RIGHTS"). In no event shall the BIOCHEMIE Retained Research Rights
include the right of BIOCHEMIE to engage in [*]. BIOCHEMIE shall
exercise the BIOCHEMIE Retained Manufacturing Rights pursuant to, and
in accordance with, the Manufacturing and Supply Agreement. The right
of BIOCHEMIE to exercise the BIOCHEMIE Retained Research Rights shall
be co-
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exclusive with the right of CUBIST, pursuant to Section 3.1 above, to
engage in research and preclinical development of Licensed Products.
BIOCHEMIE may not sublicense or assign any of the BIOCHEMIE Retained
Research Rights or, except to the extent otherwise provided in the
Manufacturing and Supply Agreement, any of the BIOCHEMIE Retained
Manufacturing Rights.
3.3 RETAINED RIGHTS TO JAPAN. [*] to terminate the license granted to
CUBIST pursuant to Section 3.1 with respect to Japan only (such license
to be referred to as the "JAPAN LICENSE"), if and only if, on or prior
to [*], [*] that [*]. From and after the date [*] (provided such date
is no later than [*]. In the event that [*] pursuant to, and in
accordance with, the provisions of this Section 3.3, [*], by giving
written notice to [*], a [*] during the period commencing on the
Effective Date and ending on the effective date of [*] and that are
necessary and useful to the [*] (the "SECTION 3.3 CUBIST LICENSE").
Upon CUBIST's receipt of such written notice, [*] for a period not to
exceed [*] days to see if the [*] for the [*]. In the event that [*],
the Parties shall, within [*] days after [*] during the period
commencing on [*] (including, without limitation, [*] and that is [*].
The [*] shall occur [*] for the [*]. Following the [*], the Parties
shall, from time to time during the term of this Agreement, [*] within
the Parties' [*] that was [*] and that is [*]. Any such [*] for such
[*]. At any time during the term of this Agreement, the [*] within the
Parties' respective [*] and that is [*]. Any such
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[*] by the Parties shall be [*].
3.4 CUBIST'S RIGHT TO ABANDON LICENSED PRODUCTS. CUBIST shall have the
right to abandon research, development or commercialization of any
Licensed Product because of [*]. [*]. CUBIST shall exercise its rights
under this Section 3.4 to abandon research, development or
commercialization of any Licensed Product by giving written notice of
such abandonment at least [*] days prior to the effective date of such
abandonment specified in such written notice. In the event that CUBIST
exercises its right under this Section 3.4 to abandon research,
development or commercialization of any Licensed Product, then the
license granted to CUBIST pursuant to Section 3.1 shall terminate
automatically with respect to such abandoned Licensed Product only.
3.5 LIMITATION ON CUBIST'S RIGHTS WITH RESPECT TO CERTAIN LICENSED
PRODUCTS.
(a) Notwithstanding any provision in this Agreement to the
contrary (including, without limitation, the provisions of Section
3.1 above), CUBIST shall not have the right to develop or
commercialize any BIOCHEMIE Similar Compound unless otherwise
provided in Section 3.5(b) below. The foregoing limitation on
CUBIST's right to develop and commercialize BIOCHEMIE Similar
Compounds shall not imply or be construed as if BIOCHEMIE, other
than in the case of the BIOCHEMIE Retained Rights, were retaining
any right to develop or commercialize any BIOCHEMIE Similar
Compounds. BIOCHEMIE hereby acknowledges and agrees that it has
granted to CUBIST an exclusive right and license to all BIOCHEMIE
Similar Compounds and all other Licensed Products pursuant to the
provisions of Section 3.1 above and that, although such exclusive
right and license granted to CUBIST is, in the case of BIOCHEMIE
Similar Compounds, subject to the limitation set forth in the
first sentence of this Section 3.5(a), BIOCHEMIE nevertheless,
except for the BIOCHEMIE Retained Rights, does not retain any of
the rights granted to CUBIST pursuant to Section 3.1 above,
including, without limitation, any of the rights granted to CUBIST
with respect to BIOCHEMIE Similar Compounds.
(b) In the event that CUBIST abandons a Licensed Product pursuant
to, and in accordance with, the provisions of Section 3.4 above
(in each case, an "ABANDONED PRODUCT"), then CUBIST shall be
entitled to replace such Abandoned Product with a BIOCHEMIE
Similar Compound
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[*]. CUBIST shall exercise its right to replace an Abandoned
Product pursuant to this Section 3.5(b) by giving written notice
to BIOCHEMIE no later than [*] days after the abandonment of such
Abandoned Product, stating that CUBIST is exercising such right.
Within [*] days after receipt of such written notice given by
CUBIST, BIOCHEMIE shall [*] the [*]. Any such [*] shall be deemed
to [*] made by [*] that the [*]. At the time of such [*] all of
the [*] so [*]. Effective immediately upon such [*] as the [*],
such BIOCHEMIE Similar Compound shall replace such Abandoned
Product, the limitations set forth in the first sentence of
Section 3.5(a) on CUBIST's right to develop and commercialize such
BIOCHEMIE Similar Compound shall terminate and CUBIST shall be
entitled to exercise all of the rights granted to it pursuant to
Section 3.1 above with respect to such BIOCHEMIE Similar Compound.
The Parties hereby acknowledge that upon the abandonment by CUBIST
of a BIOCHEMIE Similar Compound selected pursuant to this Section
3.5(b), BIOCHEMIE may, subject to, and in accordance with, the
terms and conditions of Section 9.4(c), terminate this Agreement.
(c) Notwithstanding any provision in this Agreement to the
contrary (including, without limitation, the provisions of Section
3.1 above), [*] unless and until the Parties, in accordance with
the provisions of Section 6.2 hereof, shall have negotiated in
good faith the [*]. The foregoing [*] to [*] shall not [*] were
[*]. [*] that it has [*] and all other [*] and that, although such
[*], subject to the [*], [*] nevertheless, except for the [*],
does not [*], including, without limitation, [*] with [*]. In the
event that [*], then the Parties shall [*] in
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connection with such [*] and shall [*] that evidences such [*].
3.6 CUBIST DILIGENCE. Subject to, and in accordance with, the terms and
conditions of this Agreement and all requirements of applicable laws,
rules and regulations, CUBIST shall use commercially reasonable efforts
to research, develop, promote, market, sell, offer to sell and
otherwise commercialize one Licensed Product in the Major Market
Countries. The sole remedy of BIOCHEMIE for any breach by CUBIST of its
obligations under this Section 3.6 is to exercise BIOCHEMIE's special
termination rights pursuant to Section 9.4 hereof. Any abandonment by
CUBIST of any Licensed Product pursuant to, and in accordance with, the
provisions of Section 3.4 hereof shall not be deemed to constitute a
breach of the provisions of this Section 3.6.
3.7 [*]. Subject to the [*], in the event that [*] to [*] to [*] to [*]
a [*], [*] shall so [*] with [*] with respect to [*]. If, within [*]
days after [*] that it [*] such [*], then the [*] of [*] days to see if
the [*] pursuant to which [*] such [*]. If [*] cannot [*] days, then
[*] into [*] with [*], and [*] with [*], for the [*] to [*] to [*].
During the [*] day [*] are [*], such [*] and [*] with [*] regarding the
[*] to [*] to [*]. Notwithstanding anything expressed or implied in the
foregoing provisions of this Section 3.7, [*] under this Section 3.7 at
any time when (i) [*], (ii) the [*] determine that [*] or (iii) [*].
The Parties acknowledge and agree that, [*], (A) BIOCHEMIE may [*] and
[*] regarding the [*]
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or to [*] without having [*], and (B) BIOCHEMIE may [*] to [*] to [*]
if and to the extent that such [*].
3.8 TRADEMARKS. BIOCHEMIE hereby grants CUBIST an exclusive,
royalty-free license under its entire right, title and interest in and
to the BIOCHEMIE Trademarks, if any, to use and display the BIOCHEMIE
Trademarks in connection with the commercialization of Licensed
Products within the Territory. CUBIST shall not use BIOCHEMIE's trade
names and/or marks in a way which would be confusing or otherwise
adversely affect their value. CUBIST shall not be obligated to use
BIOCHEMIE Trademarks, and shall be free to select, create and use its
own trade names and marks for its use, in connection with the Licensed
Products in the Territory.
3.9 USE OF NAME. Neither Party shall use the other Party's name without
the prior written consent of such other Party, which consent may be
given or withheld at such other Party's sole discretion.
ARTICLE IV
CONFIDENTIALITY
4.1 NONDISCLOSURE OBLIGATION. All Proprietary Information disclosed by
or on behalf of one Party to the other Party under this Agreement or
the Manufacturing and Supply Agreement shall be maintained in
confidence by the receiving Party and shall not be disclosed to a
non-Party or used for any purpose whatsoever without the prior written
consent of the other Party, except to the extent that such Proprietary
Information:
(a) is known by recipient at the time of its receipt, and not
through a prior disclosure by or on behalf of the disclosing
Party, as documented by contemporaneous business records;
(b) is properly in the public domain through no fault of the
recipient;
(c) is subsequently disclosed to a receiving Party by a third
party who may lawfully do so and is not directly or indirectly
under an obligation of confidentiality to the disclosing Party, as
documented by written business records in existence prior to the
receipt of such information from the disclosing Party;
(d) is developed by the recipient independently of, and without
reference to or use of, Proprietary Information received from the
disclosing Party;
(e) is required to be disclosed to governmental or other
regulatory agencies in order to obtain patents, to obtain approval
to conduct clinical trials or to market Licensed Products, or to
comply with applicable NASDAQ or Securities and Exchange
Commission regulations; PROVIDED HOWEVER, that such disclosure may
be only to the extent reasonably necessary to obtain patents or
approval, or to
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comply with regulations as appropriate and that confidential
treatment will be sought to the extent reasonably practicable;
(f) is disclosed to actual or potential permitted sublicensees or
permitted assignees and/or other third parties (1) for the purpose
of conducting activities under this Agreement and the
Manufacturing and Supply Agreement (or for such actual or
potential permitted sublicensees or permitted assignees and/or
other third parties to determine their interest in performing such
activities) in accordance with this Agreement and the
Manufacturing and Supply Agreement or (2) for the purpose of
allowing the Party making such disclosure to effectively exploit
its rights under this Agreement and the Manufacturing and Supply
Agreement and obtain all of the benefits under this Agreement and
the Manufacturing and Supply Agreement to which such Party is
entitled as contemplated by this Agreement and the Manufacturing
and Supply Agreement, PROVIDED, HOWEVER, that such actual or
potential permitted sublicencees or permitted assignees and/or
other third parties have agreed to be bound by confidentiality
obligations substantially equivalent to the terms herein for no
less than five years from the date of disclosure, and PROVIDED,
FURTHER, that, notwithstanding the provisions set forth above in
this subsection (f), CUBIST shall not disclose to third party
manufacturers any Proprietary Information of BIOCHEMIE with
respect to the manufacture of Licensed Products except to the
extent that such disclosure is permitted pursuant to the
provisions of the Manufacturing and Supply Agreement;
(g) is disclosed to employees, officers, directors, consultants,
agents, investors or potential investors of , or lenders or
potential lenders to, the Party making such disclosure, PROVIDED,
HOWEVER, that such employees, officers, directors, consultants,
agents, investors, potential investors, lenders and potential
lenders have agreed to be bound by confidentiality obligations
substantially equivalent to the terms herein for no less than five
years from the date of disclosure, and PROVIDED, FURTHER, that,
notwithstanding the provisions set forth above in this subsection
(g), neither Party shall disclose Proprietary Information of the
other Party to potential investors or potential lenders except to
the extent that such disclosure is made in the context of such
potential investors' or potential lenders' due diligence
investigation of the Party making such disclosure;
(h) is used by the receiving Party for the purpose of conducting
activities under this Agreement and the Manufacturing and Supply
Agreement in accordance with their respective terms or is used by
the receiving Party for the purpose of allowing the receiving
Party to effectively exploit its rights under this Agreement and
the Manufacturing and Supply Agreement and obtain all of the
benefits under this Agreement and the Manufacturing and Supply
Agreement to which such receiving Party is entitled as
contemplated by this Agreement and the Manufacturing and Supply
Agreement; or
(i) is required to be disclosed by law or court order, PROVIDED
that notice is promptly delivered to the other party in order to
provide an opportunity to
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challenge or limit the disclosure obligations, and PROVIDED
FURTHER that such disclosure may be only to the extent reasonably
necessary to comply with the applicable law or court order.
4.2 NO DISCLOSURE OF TERMS. Either Party may disclose the existence of
this Agreement and the Manufacturing and Supply Agreement, but, except
to the extent otherwise provided below in this Section 4.2, neither
Party shall disclose the terms of this Agreement or the Manufacturing
and Supply Agreement without the prior written consent of the other
Party. Notwithstanding the foregoing, either Party may disclose the
terms of this Agreement or the Manufacturing and Supply Agreement
pursuant to the provisions of subparagraphs (b), (e), (f), (g) or (i)
of Section 4.1 to the same extent as if the terms of this Agreement or
the Manufacturing and Supply Agreement, as the case may be, were
Proprietary Information of the non-disclosing Party.
4.3 NO PUBLICATION. BIOCHEMIE shall not publish or present any
BIOCHEMIE Know-How or any of the inventions claimed under any BIOCHEMIE
Patents without the prior written consent of CUBIST, which consent
shall not be unreasonably withheld. Nothing in this Section 4.3 shall
limit BIOCHEMIE's ability to apply for any patent protection.
4.4 PRESS RELEASES, ETC. Notwithstanding anything set forth in Section
4.1, 4.2 or 4.3 above to the contrary, the Parties agree that any
publication, news release or other public announcement by either Party
relating to this Agreement or the Manufacturing and Supply Agreement or
to the Parties performance hereunder or thereunder, shall first be
reviewed and approved by the other Party, which approval shall not be
unreasonably withheld or delayed. The foregoing provisions of this
Section 4.4 shall not apply to the extent that the application thereof
would prevent either Party from complying with any applicable law,
PROVIDED that such Party shall have used all reasonable efforts to
comply with the provisions of this Section 4.4 without violating such
Party's legal obligations. The provisions of this Section 4.4 are not
intended to narrow the scope of any of the obligations of the Parties
under Section 4.1, Section 4.2 or Section 4.3 above. Each Party expects
full compliance by the other Party with all of the provisions of
Section 4.1, Section 4.2 and Section 4.3 hereof in addition to
compliance with the provisions of this Section 4.4, if and to the
extent applicable in any case.
ARTICLE V
LICENSE AND MILESTONE PAYMENTS
5.1 CONSIDERATION FOR LICENSE. In consideration for the licenses granted to
CUBIST under Article III, CUBIST shall, subject to the provisions of
Section 5.5(c) below, make a cash payment to BIOCHEMIE of [*].
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5.2 UPFRONTS.
(a) Subject to the terms and conditions in this Agreement
(including, without limitation, the provisions of Sections 5.2(b),
5.2(c), 5.3 and 5.5 below), CUBIST shall make cash payments to
BIOCHEMIE in the respective amounts set forth below upon the
occurrence of the events set forth below:
EVENT AMOUNT
[*].................................................................... USD $[*]
(as further defined in Section 5.3 below)
[*].................................................................... USD $[*]
(as further defined in Section 5.3 below)
(b) CUBIST shall promptly notify BIOCHEMIE in writing upon the
occurrence of any of the events set forth above in Section 5.2(a)
above and CUBIST shall have [*] days to make the corresponding
payment due. All payments under this Section 5.2 shall be in
United States dollars.
(c) CUBIST shall make the payments set forth in Section 5.2(a)
only once upon the first occurrence of the applicable event. After
the occurrence of a given event and the payment required to be
made by CUBIST pursuant to Section 5.2(a) above in connection with
the occurrence of such event, no further payment shall be due or
owed by CUBIST in connection with any subsequent occurrence of
such event, regardless of how many times the same event occurs in
connection with the same Licensed Product and regardless of how
many times the same event occurs with respect to different or
multiple Licensed Products.
5.3 APPLICABLE CRITERIA FOR THE OCCURRENCE OF CERTAIN EVENTS.
(a) For purposes of the first event listed on the table in Section
5.2(a) above [*], such event shall be deemed to have occurred if
and when all of the criteria set forth on SCHEDULE 6 have been
satisfied.
(b) For purposes of the second event listed on the table in
Section 5.2(a) above [*], such event shall be deemed to have
occurred if and when all of the criteria set forth on SCHEDULE 7
have been satisfied. The Parties will cooperate in good faith to
[*].
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5.4 MILESTONES.
(a) Subject to the terms and conditions in this Agreement
(including, without limitation, the provisions of Sections 5.4(b),
5.4(c), 5.4(d) and 5.5 below), CUBIST shall make cash payments to
BIOCHEMIE in the respective amounts set forth below upon
attainment of the milestones set forth below:
EVENT WITH JAPAN WITHOUT JAPAN
LICENSE LICENSE
[*].................................................................. USD $[*] USD $[*]
[*].................................................................. USD $[*] USD $[*]
[*].................................................................. USD $[*] USD $[*]
[*].................................................................. USD $[*] USD $[*]
[*].................................................................. USD $[*] USD $[*]
(b) In the event that the Japan License is not terminated by
BIOCHEMIE pursuant to Section 3.3 hereof, then, upon the
achievement of the milestones set forth in the table included in
Section 5.4(a) above, the amount of the payment due by CUBIST
under Section 5.4(a) above shall be the amount set forth opposite
the description of such milestone in such table under the caption
"WITH JAPAN LICENSE". In the event that the Japan License is
terminated by BIOCHEMIE pursuant to Section 3.3 hereof, then, upon
the achievement of the milestones set forth in the table included
in Section 5.4(a) above, the amount of the payment due by CUBIST
under Section 5.4(a) above shall be the amount set forth opposite
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the description of such milestone in such table under the caption
"WITHOUT JAPAN LICENSE".
(c) CUBIST shall promptly notify BIOCHEMIE in writing upon the
achievement of any of the milestones set forth above in Section
5.4(a) and CUBIST shall have [*] days to make the corresponding
milestone payment due. All milestone payments shall be in United
States dollars.
(d) CUBIST shall make the payments set forth in Section 5.4(a)
only once upon the first achievement of the applicable milestone
by the first Licensed Product to achieve such milestone. After the
achievement of a given milestone and the payment required to be
made by CUBIST pursuant to Section 5.4(a) above in connection with
the achievement of such milestone, no further payment shall be due
or owed by CUBIST in connection with such milestone, regardless of
how many times the same milestone is achieved by the same Licensed
Product and regardless of how many times the same milestone is
achieved by different or multiple Licensed Products.
5.5 REDUCTION OF MILESTONE PAYMENTS.
(a) Notwithstanding any provision in this Article V or elsewhere
in this Agreement to the contrary, CUBIST shall be entitled to
deduct from any and all payments required to be made by CUBIST to
BIOCHEMIE pursuant to Sections 5.2 and 5.4 above (after giving
effect to all prior reductions thereof pursuant to this Section
5.5) [*] that CUBIST [*] in order to [*] by CUBIST anywhere in the
Territory [*]. The procedures set forth below in the remainder of
this Section 5.5(a) shall apply and be required with respect to a
[*] only if and to the extent that [*] to any [*] in order to [*].
Any failure by [*] shall result in [*] under the foregoing
provisions of this Section 5.5(a) with respect to any [*] in order
to [*]. [*] shall give [*] of [*] that it is appropriate to [*] in
order to [*]. Such [*] of the [*] in order [*]. Upon [*] shall
have a period of up to [*] days to [*] from
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[*] in order to [*]. The [*] such [*] shall be [*] thereof set
forth in such [*]. BIOCHEMIE hereby agrees to [*] to [*] as [*] of
[*] and in any event [*] of such [*] day period as possible. In
the event that, at the end of such [*] day period, [*] to [*],
then [*] to [*] with [*] and shall have the right to [*], PROVIDED
that the [*] are [*]. [*] that it shall [*] of such [*] and that
it shall [*] to [*] in connection with the [*] and as to the [*]
with [*]. [*] take into account any such [*] and, whenever
reasonable and practical, [*] with such [*] in response to such
[*].
(b) Notwithstanding any provision in this Article V or elsewhere
in this Agreement to the contrary, (I) in the event that there is
no [*] with respect to the [*] in at least one Licensed Product
such that the [*] of such Licensed Product by a [*] would not [*]
of such [*], then CUBIST shall be entitled to [*] that CUBIST is
required to make to [*] an [*] to [*], and (II) in the event that
there is no [*] with respect to the [*] in at least one Licensed
Product such that the [*] of such Licensed Product by a [*] would
not constitute [*] of such [*], then CUBIST shall not be required
to [*].
(c) Notwithstanding any provision in this Article V or elsewhere
in this Agreement to the contrary, in the event that this
Agreement is executed and delivered after July 31, 2002, then the
amounts payable by CUBIST pursuant to Sections 5.1 and 5.2 shall
be reduced by [*], PROVIDED HOWEVER, in no event shall the
aggregate amount of such
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reductions exceed [*]. The [*] pursuant to the provisions of this
Section 5.5(c) shall be charged all to the payment due by CUBIST
pursuant to Section 5.1 hereof. The [*] shall be charged to the
payment due upon the occurrence of the first event described in
Section 5.2(a) above and the [*] shall be charged to the payment
due upon the occurrence of the second event described in Section
5.2(a) above. Thereafter, any [*] shall continue to be charged in
iterative fashion to the payment due by CUBIST pursuant to Section
5.1 hereof, the payment due by CUBIST pursuant to Section 5.2(a)
upon the occurrence of the first event and the payment due by
CUBIST pursuant to Section 5.2(a) upon the occurrence of the
second event, [*] or the aggregate amount of such reductions is
equal to [*]. The provisions of this Section 5.5(c) shall only
entitle CUBIST to reduce the amount of certain payments that it
would otherwise owe BIOCHEMIE and such provisions shall in no
event be construed or interpreted as requiring BIOCHEMIE to make
payments to CUBIST in the event that the amount of the reductions
contemplated under this Section 5.5(c) exceed the amount of the
payments that CUBIST would otherwise owe BIOCHEMIE.
ARTICLE VI
ROYALTIES
6.1 ROYALTIES ON LICENSED PRODUCTS THAT ARE NOT ORAL LICENSED PRODUCTS.
In consideration of the license granted to CUBIST pursuant to Section
3.1, CUBIST shall pay to BIOCHEMIE, subject to the terms and conditions
of this Agreement (including, without limitation, the provisions of
Sections 6.3, 6.4, 6.5 and 6.10), a royalty on the aggregate annual Net
Sales for all Licensed Products [*] and that are sold in the Territory,
equal to [*] of aggregate annual Net Sales for all of such Licensed
Products [*].
6.2 [*]. CUBIST and BIOCHEMIE shall, prior to commercial launch of any
[*], negotiate in good faith a commercially reasonable royalty for each
[*] that is sold in the Territory. Any such royalty shall be paid by
CUBIST in consideration of the license granted to CUBIST pursuant to
Section 3.1 in respect to [*]. Payment of any such royalty shall be
subject to the terms and conditions of this Agreement (including,
without limitation, the provisions of Sections 6.3, 6.4, 6.5 and 6.10
hereof.
6.3 TERM OF ROYALTIES. BIOCHEMIE's right to receive royalties under
Section 6.1 and Section 6.2 shall expire on a country-by-country and
product-by-product basis upon the later of (i) [*] years from the first
commercial sale of the applicable Licensed Product in the applicable
country in the Territory or (ii) the expiration of the last to expire
Valid Claim that, absent the license granted to CUBIST pursuant to
Section 3.1 hereof, would be
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infringed by the sale or commercialization of such Licensed Product in
such country. In the event that BIOCHEMIE's right to receive royalties
under Section 6.1 or Section 6.2 expires with respect to any Licensed
Product in any country within the Territory pursuant to the provisions
of this Section 6.3, then the [*] for purposes of calculating any
royalty owed by CUBIST to BIOCHEMIE pursuant to Section 6.1 or Section
6.2 above. In the event that, in accordance with the provisions of this
Section 6.3, the right of BIOCHEMIE to receive royalties in connection
with sales of License Product in any country in the Territory expires,
CUBIST shall nevertheless remain obligated to pay royalties to
BIOCHEMIE in connection with all sales of Licensed Product in such
country that occurred prior to such expiration, and CUBIST shall no
longer be obligated to pay royalties to BIOCHEMIE in connection with
any and all sales of Licensed Product in such country that occur on or
after such expiration.
6.4 REDUCTION OF ROYALTY.
(a) Notwithstanding any provision in this Article VI or elsewhere
in this Agreement to the contrary, (I) in the event that there is
no [*] in any given country within the Territory with respect to
the [*] in any Licensed Product such that the [*] of such Licensed
Product by a [*] in such country would not [*] of such [*], then
the portion of total royalties that would otherwise be payable by
CUBIST to BIOCHEMIE pursuant to Section 6.1 or Section 6.2, as
applicable, (after giving effect to all other reductions of such
total royalties pursuant to this Section 6.4) as a result of the
Net Sales of such Licensed Product in such country shall be
reduced by [*] and (II) in the event that there is no [*] in any
given country within the Territory with respect to the [*] in any
Licensed Product such that the [*] of such Licensed Product by a
[*] in such country would not [*] of such [*], then the portion of
total royalties that would otherwise be payable by CUBIST to
BIOCHEMIE pursuant to Section 6.1 or Section 6.2, as applicable,
(after giving effect to all other reductions of such total
royalties pursuant to this Section 6.4) as a result of the Net
Sales of such Licensed Product in such country shall be [*].
CUBIST agrees to give BIOCHEMIE [*] days notice prior to the [*]
in any country in the Territory in which CUBIST intends to [*] and
in which CUBIST is not aware that any [*].
(b) Notwithstanding any provision in this Article VI or elsewhere
in this Agreement to the contrary, in the event that CUBIST [*] in
order to
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[*] by CUBIST in any country within the Territory [*], then the
portion of total royalties that would otherwise be payable by
CUBIST to BIOCHEMIE pursuant to Section 6.1 or Section 6.2, as
applicable, (after giving effect to all other reductions of such
total royalties pursuant to this Section 6.4) as a result of the
Net Sales of such Licensed Product in such country shall be
reduced [*] by the [*] on account of the Net Sales of such
Licensed Product in such country.
6.5 ROYALTY PAYMENTS AND REPORTS. Royalties shall be calculated by
converting all applicable Net Sales into U.S. dollars (other than Net
Sales with respect to sales of Licensed Products as to which CUBIST's
royalty payment obligation, as provided below in this Section 6.5, is
in Euros) in accordance with the provisions of Section 6.8 below and
applying the appropriate royalty percentages set forth in, or
determined in accordance with, Section 6.1 or Section 6.2, as
applicable. During the term of this Agreement, royalties shall be paid
within [*] days after the close of each fiscal year of CUBIST, and
royalty payments shall be made in the following currencies: (i) in the
case that a portion of CUBIST's royalty payment obligation is
attributable to sales of Licensed Products [*], CUBIST shall make
payment [*]; and (ii) in the case that a portion of CUBIST's royalty
payment obligation is attributable to sales of License Products [*],
CUBIST shall make payment [*]. Within [*] days of the end of each
fiscal year of CUBIST, CUBIST shall furnish to BIOCHEMIE a report
showing: (i) the calculation of Net Sales [*] for all Licensed Products
[*] and that were sold in the Territory on a country-by-country basis
during such fiscal year, (ii) the calculation of Net Sales [*] for each
[*] that was sold in the Territory on a country-by-country basis during
such fiscal year, (iii) royalties accrued to BIOCHEMIE pursuant to
Section 6.1 and pursuant to Section 6.2 during such fiscal year, (iv)
the amount of any credits or off-sets against royalties (if any), and
(v) the currency exchange rates used in determining the amount of [*],
as applicable, payable to BIOCHEMIE. If no royalty payments are due for
any period hereunder, CUBIST shall so report. All reports delivered
pursuant to this Section 6.5 and any information that can be derived
therefrom shall constitute Proprietary Information of CUBIST for
purposes of Section 4.1 hereof.
6.6 RECORDKEEPING BY CUBIST. CUBIST shall keep, and shall cause each of
its sublicensees to keep, full and accurate books of account containing
all particulars that may be necessary for the purpose of calculating
Net Sales and all royalty payments payable to BIOCHEMIE pursuant to
Section 6.1 or Section 6.2, as applicable. Such books of account shall
be kept at CUBIST's principal place of business and, with all necessary
supporting data shall, for the [*] years next following the end of the
calendar year to which each shall pertain be open for inspection by
BIOCHEMIE.
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6.7 AUDITS. Upon the written request of BIOCHEMIE, CUBIST shall permit
an independent certified public accounting firm of nationally
recognized standing selected by BIOCHEMIE and reasonably acceptable to
CUBIST, at BIOCHEMIE's expense, to have reasonable access during normal
business hours to such of the records of CUBIST or its sublicensees as
may be reasonably necessary to verify the accuracy of the royalty
reports hereunder in respect of any calendar quarter ending not more
than [*] months prior to the date of such request. All such
verifications shall be conducted not more than once in each Calendar
Year during the term of this Agreement. If such accounting firm
concludes that additional payments were owed during such period and
there is no dispute concerning whether such payments are owed, CUBIST
shall pay the additional payments within [*] days of the date BIOCHEMIE
delivers to CUBIST such accounting firm's written report so concluding.
If such accounting firm concludes that CUBIST made payments to
BIOCHEMIE in excess of what CUBIST was required to pay BIOCHEMIE
pursuant to the terms of this Agreement, then BIOCHEMIE shall return
such excess payments to CUBIST within [*] days of the date of such
accounting firm's written report concluding that such excess payments
were made. BIOCHEMIE shall promptly inform CUBIST of the findings of
any accounting firm engaged by BIOCHEMIE for any of the purposes
contemplated under this Section 6.7, and shall promptly deliver to
CUBIST a copy of any written report prepared by such accounting firm.
The fees and expenses of any such accounting firm shall be borne by
BIOCHEMIE unless such accounting firm determines that CUBIST underpaid
royalties due to BIOCHEMIE during any year by more than [*], in which
case CUBIST shall make payment of all of such fees and expenses.
6.8 EXCHANGE RATE. The rate of exchange to be used in computing Net
Sales in each country within the Territory shall be made at the average
rate of exchange for such country's currency published in the Wall
Street Journal (New York Edition) for each business day of the fiscal
year to which such Net Sales relate.
6.9 INTEREST ON OVERDUE PAYMENTS. Any amounts not paid by CUBIST or
BIOCHEMIE when due under this Agreement shall be subject to interest
from and including the date payment is due through and including the
date upon which CUBIST or BIOCHEMIE, as the case may be, has made such
payment at a rate equal to [*] quoted in the Money Rates section of the
Wall Street Journal (New York Edition) calculated daily on the basis of
a 365-day year, or similar reputable data source, or, if lower, the
highest rate permitted under applicable law.
6.10 TAXES. If CUBIST is required by law, rule or regulation to
withhold taxes from any payments due to BIOCHEMIE from CUBIST
hereunder, CUBIST will (i) deduct those taxes from the remittable
amount, (ii) pay the taxes to the proper taxing authority, and (iii)
send evidence of the obligation together with proof of payment to
BIOCHEMIE within [*] business days following that payment. Without
limiting the generality of the foregoing provisions of this Section
6.10, CUBIST shall be responsible for all taxes imposed on or
attributable to it under applicable law and BIOCHEMIE shall be
responsible for all taxes imposed on or attributable to it under
applicable law.
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ARTICLE VII
REPRESENTATIONS, WARRANTIES AND INDEMNITY
7.1 REPRESENTATIONS AND WARRANTIES.
7.1.1 MUTUAL REPRESENTATIONS AND WARRANTIES. Each Party hereby
represents and warrants to the other Party that:
(a) it is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is
incorporated, and has full corporate power and authority and the
legal right to own and operate its property and assets and to
carry on its business as it is now being conducted and as
contemplated in this Agreement;
(b) it has the corporate power and authority and the legal right
to enter into this Agreement and perform its obligations
hereunder; it has taken all necessary corporate action on its part
required to authorize the execution and delivery of this Agreement
and the performance of its obligations hereunder; and this
Agreement has been duly executed and delivered on behalf of such
Party, and constitutes a legal, valid and binding obligation of
such Party that is enforceable against it in accordance with its
terms;
(c) it has not entered, and will not enter, into any agreement
with any third party that is in conflict with the rights granted
to the other Party under this Agreement, and has not taken and
will not take any action that would in any way prevent it from
granting the rights granted to the other Party under this
Agreement, or that would otherwise materially conflict with or
adversely affect the rights granted to the other Party under this
Agreement;
(d) its performance and execution of this Agreement will not
result in a breach of any other contract to which it is a party;
and
(e) in the course of the development of Licensed Products, such
Party shall not have used and shall not use any employee or
consultant that has been debarred by the FDA or other regulatory
authority, or, to the best of such Party's knowledge, is the
subject of debarment proceedings by the FDA or other regulatory
authority.
7.1.2 BIOCHEMIE GENERAL REPRESENTATIONS AND WARRANTIES. BIOCHEMIE
represents and warrants that:
(a) BIOCHEMIE has not taken any action to encumber any of its
right, title and interest in BIOCHEMIE Patents or BIOCHEMIE
Know-How in the Territory;
(b) BIOCHEMIE has sufficient rights in and to the BIOCHEMIE
Patents and BIOCHEMIE Know-How to grant the rights set forth in
this Agreement to CUBIST;
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(c) BIOCHEMIE has not and shall not misappropriate the trade
secrets or intellectual property rights of any other Person in its
activities to develop the BIOCHEMIE Patents and the BIOCHEMIE
Know-How;
(d) BIOCHEMIE is unaware of any activities by third parties that
would constitute infringement of BIOCHEMIE Patents or
misappropriation of BIOCHEMIE Know-How or of any of the inventions
claimed under the BIOCHEMIE Patents;
(e) the exercise of the licenses granted to CUBIST under the
BIOCHEMIE Patents and BIOCHEMIE Know-How, including for the
research, development, use, manufacture, promotion, marketing,
sale, offer for sale, import and export of Licensed Products in
the Territory do not infringe any intellectual property rights
owned or possessed by any third party which such intellectual
property is published prior to the Effective Date;
(f) it is not aware of any claims, judgments or settlements
against or owed by BIOCHEMIE and has not received notice of any
pending or threatened claims or litigation relating to the
BIOCHEMIE Patents or BIOCHEMIE Know-How; and
(g) as of the Effective Date, BIOCHEMIE does not own or have any
rights to develop, manufacture or commercialize any cephalosporin
compound that meets the criteria set forth on SCHEDULE 3 and is
not described or listed on SCHEDULE 2.
7.2 INDEMNITY.
7.2.1 CUBIST hereby agrees to defend, hold harmless and indemnify
BIOCHEMIE and its agents, directors, officers and employees (the
"BIOCHEMIE INDEMNITEES") from and against any and all suits, claims,
actions, demands, liabilities, expenses and/or losses, including,
without limitation, reasonable legal expenses and attorneys' fees
(collectively "LOSSES") resulting directly or indirectly from:
(a) a material breach of any of the provisions of this Agreement
by CUBIST or any of its agents or employees; or
(b) the negligence, recklessness, or willful misconduct by CUBIST
or any of its agents or employees in the performance of any
obligations of CUBIST under this Agreement.
7.2.2 BIOCHEMIE hereby agrees to defend, hold harmless and indemnify
CUBIST and its agents, directors, officers, employees, sublicensees and
distributors (the "CUBIST INDEMNITEES") from and against any and all
Losses resulting directly or indirectly from:
(a) a material breach of any of the provisions of this Agreement
by BIOCHEMIE or any of its agents or employees;
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(b) the negligence, recklessness, or willful misconduct by
BIOCHEMIE or any of its agents or employees in the performance of
any obligations of BIOCHEMIE under this Agreement;
(c) the infringement of any third party intellectual property
right which such intellectual property is published prior to the
Effective Date, [*], and any related patents, foreign equivalents,
or counterparts, caused by the research, development, manufacture,
use, promotion, marketing, sale, offer for sale, importation or
exportation of Licensed Products in the Territory by CUBIST and
its sublicensees or distributors, other than infringement
resulting from work performed by CUBIST on Compound or BIOCHEMIE
Similar Compound as part of the development of Compound or
BIOCHEMIE Similar Compound provided such infringement does not
relate to, involve or arise from (i) BIOCHEMIE Patents or
BIOCHEMIE Know-How, (ii) CUBIST's use thereof, or (iii) the
exercise by CUBIST of its licensed rights thereto; or
(d) the misappropriation of any third party intellectual property
right by BIOCHEMIE or any of its agents or employees.
7.2.3 If either Party is seeking indemnification under this Section 7.2
in connection with a third party claim, it shall inform the
indemnifying Party of such third party claim giving rise to the
obligation to indemnify as soon as reasonably practicable after
receiving notice of the claim. Subject to the provisions of Section
8.6(b) hereof, the indemnifying Party shall have the right to assume
the defense of, and take control of, any such third party claim for
which it is obligated to indemnify the indemnified Party under this
Section 7.2. The indemnified Party shall cooperate with the
indemnifying Party (and its insurer) as the indemnifying Party may
reasonably request. The indemnified Party shall have the right to
participate, at its own expense and with counsel of its choice, in the
defense of any claim or suit that has been assumed by the indemnifying
Party. Neither Party shall have any obligation to indemnify the other
Party in connection with any settlement made without the indemnifying
Party's written consent, provided that the indemnifying Party does not
unreasonably withhold or delay any such written consent.
7.2.4 Notwithstanding anything expressed or implied to the contrary in
this Article VII, the amount of any Losses subject to indemnification
shall be reduced by the amount of any insurance proceeds received by
the indemnified Party with respect to such Losses; and there shall be
no obligation under this Agreement to indemnify such indemnified Party
for the amount of Losses so reduced.
7.3 LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER
PARTY FOR LOST PROFITS OR FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL,
SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES OF THE OTHER PARTY IN CONNECTION
WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY.
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7.4 INSURANCE. BIOCHEMIE and CUBIST shall each procure and maintain
insurance, including product liability insurance, adequate to cover its
obligations hereunder and that are consistent with normal business
practices of prudent companies similarly situated. It is understood
that such insurance shall not be construed to create a limit of the
Parties' liability with respect to its indemnification obligations
under this Article VII. CUBIST and BIOCHEMIE shall provide each other
with written evidence of such insurance upon request (which evidence
need not necessarily be insurance certificates). CUBIST and BIOCHEMIE
shall provide the other with written notice at least ten (10) days
prior to the cancellation, non-renewal or material change in such
insurance that materially adversely affects the other Party's rights
hereunder.
ARTICLE VIII
INTELLECTUAL PROPERTY PROVISIONS
8.1 INVENTIONS. The entire right, title and interest in and to all
discoveries, improvements, processes, formulas, data, inventions,
enhancements, know-how and trade secrets, patentable or otherwise, that
arise from activities under this Agreement or the Manufacturing and
Supply Agreement or that are necessary or useful in connection with the
research, development, manufacture, marketing, promotion, use, sale,
import or export of Licensed Products, and that were or are developed
or invented:
(a) solely by employees of CUBIST ("CUBIST INVENTIONS") shall be
owned solely by CUBIST;
(b) solely by employees of BIOCHEMIE ("BIOCHEMIE INVENTIONS")
shall be owned solely by BIOCHEMIE; and
(c) jointly by employees of CUBIST and BIOCHEMIE ("JOINT
INVENTIONS") shall be owned jointly by CUBIST and BIOCHEMIE.
Inventorship shall be determined in accordance with U.S. patent laws.
8.2 FILING, PROSECUTION AND MAINTENANCE OF PATENTS. CUBIST shall be
entitled to file, prosecute and maintain in the Territory all patent
applications and patents that claim any CUBIST Inventions. BIOCHEMIE
agrees to file, prosecute and maintain in [*] and, to the extent
included [*] , upon appropriate consultation with CUBIST, the BIOCHEMIE
Patents. Except to the extent otherwise provided pursuant to the next
sentence, BIOCHEMIE may, at its discretion, choose to file, prosecute
and maintain the BIOCHEMIE Patents in [*] upon appropriate consultation
with CUBIST. BIOCHEMIE shall also file, prosecute and maintain the
BIOCHEMIE Patents in any country in the Territory [*]. In the event
that BIOCHEMIE is unwilling, unable or otherwise fails to file any
BIOCHEMIE Patents in any country in the Territory [*], then CUBIST
shall have such right and, upon exercise of such right by CUBIST,
CUBIST shall be entitled to file, prosecute and maintain such BIOCHEMIE
Patents in such country, and BIOCHEMIE shall
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[*] as may be reasonably necessary to allow [*] in such country in a
timely manner. [*] shall have the first right to file, prosecute and
maintain in the Territory, upon appropriate consultation with [*],
Joint Patents; HOWEVER, in the event that [*] elects not to file any
patent application in the Territory with respect to any Joint
Invention, [*] shall have such right and upon exercise by [*] of such
right, [*] shall have the right to prosecute and maintain in the
Territory, upon appropriate consultation with [*], the Joint Patents to
which such Joint Invention relates. Each of BIOCHEMIE and CUBIST shall
execute such documents and perform such acts as may be reasonably
necessary to allow [*], in the first instance, and [*], in the second
instance, to file, prosecute and maintain Joint Patents in any country
within the Territory in a timely basis. In each case, the filing Party
shall give the non-filing Party an [*] before filing (but in no event
less than [*] days), shall [*] with the non-filing Party with respect
thereto, shall, prior to filing any application, [*] that the
non-filing Party [*] on a timely basis to such application and shall
supply the non-filing Party with a copy of the application as filed,
together with notice of its filing date and serial number and all
substantive prosecution. Each Party shall keep the other advised of the
status of the actual and prospective patent filings described above in
this Section 8.2 and, upon the request of the other, [*] related to the
filing, prosecution and maintenance of such patent filings. [*] shall
promptly give notice to [*] of the grant, lapse, revocation, surrender,
invalidation or abandonment in the Territory of any Joint Patent being
prosecuted by [*]. [*] shall promptly give notice to [*] of the grant,
lapse, revocation, surrender, invalidation or abandonment of any [*]or
[*] being prosecuted by [*]. With respect to all filings hereunder, the
filing Party shall be responsible for payment of all costs and expenses
related to such filings.
8.3 OPTION OF THE PARTIES TO PROSECUTE AND MAINTAIN PATENTS. Each Party
shall give notice to the other Party of any desire to cease prosecution
and/or maintenance in the Territory of [*] or [*] that such Party is
then prosecuting or maintaining, and, in such case, shall permit the
other Party, in its sole discretion, to continue such prosecution or
maintenance in the Territory at its own expense. If the other Party
then elects to continue prosecution or maintenance in the Territory,
each Party shall execute such documents and perform such acts as may be
reasonably necessary to effect a Power of Attorney of such [*] or [*],
as the case may be, to the other in a timely manner to allow
continuation of such prosecution or maintenance in the Territory.
8.4 OPPOSITION, REEXAMINATION AND REISSUE.
(a) Each Party shall, within [*] days of learning of such event,
inform the other of any request for, or filing or declaration of,
any interference, opposition, reexamination, revocation, nullity
proceeding or declaration of non-infringement (or the equivalent
of any of the foregoing) in the Territory relating to the [*] or
the [*], as the case may be. BIOCHEMIE and CUBIST shall thereafter
consult and cooperate fully to determine a course of
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action with respect to any such proceeding. Each Party shall have
the right to review and approve any submission to be made in
connection with such proceeding.
(b) [*] shall not initiate any reexamination, interference,
reissue, revocation, nullity or declaration of non-infringement
proceeding in the Territory relating to [*] or [*] without the
prior written consent of [*], which consent shall not be
unreasonably withheld. [*] shall not initiate any reexamination,
interference, reissue, revocation, nullity or declaration of
non-infringement proceeding in the Territory relating to [*] or
[*] without the prior written consent of [*], which consent shall
not be unreasonably withheld.
(c) In connection with any interference, opposition,
reexamination, reissue, revocation, nullity or declaration of
non-infringement proceeding (or the equivalent of any of the
foregoing) in the Territory relating to [*] or [*], BIOCHEMIE and
CUBIST will cooperate fully and will provide each other with any
information or assistance that either may reasonably request. The
Parties shall keep each other informed of developments in any such
action or proceeding, including to the extent permissible by law
and contracts, the status of any settlement negotiations and the
terms of any offer related thereto.
(d) BIOCHEMIE, in the case of BIOCHEMIE Patents, shall bear the
expense of any interference, opposition, reexamination, reissue,
revocation, nullity or declaration of non-infringement proceeding
(or the equivalent of any of the foregoing) relating thereto. The
expenses of any interference, opposition, reexamination, reissue,
revocation, nullity or declaration of non-infringement proceeding
with respect to Joint Patents shall be shared equally by the
Parties.
(e) This Section 8.4 relates only to proceedings before the United
States Patent and Trademark Office or other applicable patent
authorities. Any revocation, nullity or declaration of
non-infringement proceeding before a court, arbitration panel or
similar body, shall not be governed by this Section 8.4 but shall
be governed by Sections 8.5 and 8.6 hereof.
8.5 ENFORCEMENT.
(a) BIOCHEMIE shall give CUBIST notice of (i) any infringement of
BIOCHEMIE Patents or Joint Patents, (ii) any misappropriation or
misuse of BIOCHEMIE Know-How, or (iii) any infringement or
misappropriation of any CUBIST Inventions (regardless of whether
or not such Cubist Inventions have been claimed in a patent or
patent application filed by CUBIST), in each case that may come to
BIOCHEMIE's attention. CUBIST shall give BIOCHEMIE notice of (A)
any infringement of BIOCHEMIE Patents or Joint Patents or (B) any
misappropriation or misuse of BIOCHEMIE Know-How, in each case
that may come to CUBIST's attention. BIOCHEMIE and CUBIST shall
thereafter consult
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and cooperate fully to determine a course of action, including but
not limited to the commencement of legal action by either or both
BIOCHEMIE and CUBIST, to terminate any infringement of [*] or [*]
or to terminate any [*]. [*], upon notice to [*], shall [*], at
[*] and [*], and as appropriate, [*], with respect to [*]. In the
event that [*] elects not to [*], then [*] shall promptly inform
[*] of [*] election and [*] shall thereafter [*] and, if
necessary, [*]. Each Party shall [*].
(b) For any infringement action concerning [*] or [*] or any
misappropriation or misuse of [*] or [*], in the event that [*]
but is unable to do so [*], [*] will [*], and at [*] expense, will
execute all documents necessary for [*] to initiate litigation to
prosecute and maintain such action. In the event that [*] elects
to be represented by its own counsel in connection with any matter
pertaining to such action, [*] shall pay all of the costs and
expenses of its own counsel. In connection with any such action,
BIOCHEMIE and CUBIST will cooperate fully and will provide each
other with any information or assistance that either may
reasonably request. The Parties shall keep each other informed of
developments in any such action or proceeding, including to the
extent permissible by law and contracts, the status of any
settlement negotiations and the terms of any offer related
thereto.
(c) Any recovery of damages or an award obtained by either or both
of BIOCHEMIE and CUBIST in connection with or as a result of any
action contemplated by this Section 8.5 or Section 8.6 below,
whether by settlement or otherwise, shall be shared in order as
follows:
(i) the Party or Parties that prosecuted the action shall
recoup all of its or their costs and expenses incurred in
connection with the action;
(ii) the other Party (to the extent that it did not
prosecute the action) shall then, from funds remaining,
recover its costs and expenses incurred in connection with
the action to the extent that such costs and expenses are
reasonably incurred to comply with such Party's obligations
under Section 8.5 or to the extent that such other Party
participates in the prosecution of such action but not as a
party thereto; and
(iii) any amount remaining shall be allocated [*] to CUBIST
and [*] to BIOCHEMIE.
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8.6 DEFENSE OF THIRD PARTY INFRINGEMENT CLAIMS.
(a) NOTICE. If any Licensed Product becomes the subject of a third
party claim, or there is the potential for a claim, of patent
infringement relating to the research, development, use,
manufacture, promotion, marketing, sale, offer for sale,
importation or exportation of such Licensed Product in the
Territory, the Party first having notice of the claim shall
promptly notify the other Party, and the Parties shall promptly
meet to consider the claim and the appropriate course of action.
(b) DEFENSE. Except as provided herein, the Party against which
such third party infringement claim is brought shall defend
against such claim at its sole expense and the other Party shall
have the right, but not the obligation, to participate in any such
suit, at its sole option and at its own expense. Such other Party
shall reasonably cooperate with the Party conducting the defense
of the claim. Notwithstanding the foregoing provisions of this
Section 8.6(b), BIOCHEMIE shall have the obligation to assume the
defense of any infringement claim for which BIOCHEMIE must
indemnify CUBIST pursuant to Section 7.2.2(c) hereof.
(c) SETTLEMENT. Neither Party shall enter into any settlement that
materially affects the other Party's rights or interests without
such other Party's written consent, which consent shall not be
unreasonably withheld or delayed.
8.7 PATENT TERM RESTORATION AND REGULATORY EXCLUSIVITY. The Parties
shall cooperate with each other in obtaining patent term restoration or
extension, supplementary protection certificates, regulatory data
extensions or exclusivity, or their equivalents, in the Territory where
applicable to [*]. [*] shall have the first right to make any elections
in the Territory regarding such patent term restoration or extension or
regulatory extension or exclusivity with respect to [*], as applicable.
If CUBIST decides not to obtain patent term restoration or extension or
regulatory extension or exclusivity in the Territory with respect to
[*], as applicable, BIOCHEMIE shall, at its sole cost and expense, have
the right to obtain any such patent term restoration or extension or
regulatory extension or exclusivity in the Territory. In such event,
the Parties shall cooperate with each other, including providing copies
of relevant regulatory submissions and correspondence and executing
requisite documentation.
8.8 PATENT MARKING. CUBIST shall xxxx all Licensed Products sold with
appropriate patent numbers or indicia at BIOCHEMIE's request to the
extent required and/or permitted by law.
8.9 TRADEMARKS. CUBIST shall have the right to determine appropriate
trademark, trade dress and other related intellectual property usage in
connection with marketing Licensed Products under this Agreement.
CUBIST shall have the exclusive right to use any trademarks in
connection with marketing Licensed Products under this Agreement
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in the Territory. Each Party shall notify the other Party promptly upon
learning of any actual, alleged or threatened infringement of any
BIOCHEMIE Trademark or CUBIST trademark or of any unfair trade
practices, trade dress imitation, passing off of counterfeit goods, or
like offenses, or any such claims brought by a third party against a
Licensed Product (hereinafter "TM INFRINGEMENT"). Upon learning of such
TM Infringement, the Parties shall confer as to the best response to
such TM Infringement. CUBIST shall have the sole right, in its own
discretion and at its own expense, to bring an action to address such
TM Infringement, in which case the proceeds thereof shall be allocated
FIRST to pay CUBIST's costs and expenses in connection with such
action, SECOND to pay any costs and expenses incurred by BIOCHEMIE in
connection with such action, and THIRD [*] to CUBIST and [*] to
BIOCHEMIE.
ARTICLE IX
TERM AND TERMINATION
9.1 TERM. This Agreement shall be effective as of the Effective Date
and, unless terminated pursuant to Section 9.2 or Section 9.3 below,
shall continue in effect until any and all royalty payment obligations
of CUBIST shall have expired in accordance with the provisions of
Section 6.3 hereof. Upon expiration of all royalty payment obligations
of CUBIST in accordance with the provisions of Section 6.3 hereof, the
term of this Agreement shall be deemed to have expired.
9.2 TERMINATION BY EITHER PARTY FOR CAUSE. This Agreement may be
terminated by written notice given by either Party to the otherParty at
any time during the term of this Agreement:
(a) if the other Party is in breach of its material obligations
hereunder and has not cured such breach within [*] days after
notice requesting cure of the breach; or
(b) upon the filing or institution of bankruptcy, liquidation or
receivership proceedings, or upon an assignment of a substantial
portion of the assets for the benefit of creditors by the other
Party; PROVIDED, HOWEVER, in the case of any involuntary
bankruptcy proceeding such right to terminate shall only become
effective if such other Party consents to the involuntary
bankruptcy or such proceeding is not dismissed within [*] days
after the filing thereof.
9.3 SPECIAL TERMINATION RIGHTS OF CUBIST. This Agreement may be
terminated by CUBIST at any time during the term of this Agreement for
any reason or no reason if CUBIST gives at least [*] days prior written
notice of termination to BIOCHEMIE.
9.4 SPECIAL TERMINATION RIGHTS OF BIOCHEMIE.
(a) In the event that CUBIST breaches its diligence obligation
under Section 3.6 hereof by not using commercially reasonable
efforts to research, develop,
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promote, market, sell, offer to sell and otherwise commercialize
at least one Licensed Product in all or some of the Major Market
Countries (the "DEFAULT MAJOR MARKET COUNTRIES") at any time
during the term of this Agreement and such breach has not been
cured within [*] days after BIOCHEMIE gives written notice of such
breach to CUBIST requesting cure of the breach, then BIOCHEMIE may
terminate CUBIST's rights under this Agreement (including, without
limitation, under Section 3.1 hereof) to research, develop,
promote, market, sell, offer to sell and otherwise commercialize
Licensed Products in any of the Default Major Market Countries by
giving written notice to CUBIST specifying the Default Major
Market Countries as to which BIOCHEMIE is exercising its
termination right under this Section 9.4., PROVIDED that BIOCHEMIE
must deliver such notice of termination no later than [*] days
after the expiration of such [*] day cure period. Upon termination
by BIOCHEMIE pursuant to this Section 9.4(a) of CUBIST's right to
research, develop, promote, market, sell, offer to sell and
otherwise commercialize Licensed Products in any Default Major
Market Country, neither Party shall have any liability or
obligation to the other Party under this Agreement with respect to
such Default Major Market Country, including with respect to
Article VI, PROVIDED HOWEVER, that termination pursuant to this
Section 9.4(a) of CUBIST's right under this Agreement with respect
to such Default Major Market Country shall not relieve CUBIST of
its obligations under Article VI with respect to such Default
Major Market Country to the extent that such obligations have
accrued prior to the effective date of such termination. The
license granted to CUBIST under Section 3.1 shall terminate with
respect to such Default Major Market Country. Notwithstanding the
foregoing, CUBIST shall have the right to sell out in such Default
Major Market Country all of its inventory of Licensed Products for
sale in such Default Major Market Country for a period of [*]
months from the date of termination. CUBIST and BIOCHEMIE hereby
agree that, upon termination pursuant to this Section 9.4(a) of
CUBIST's right to research, develop, promote, market, sell, offer
to sell and otherwise commercialize Licensed Products in any
Default Major Market Country, the Parties shall discuss mutually
acceptable actions that the Parties could consider and ultimately
decide to implement in order to accelerate the exercise by CUBIST
of its right to sell out in such Default Major Market Country all
of CUBIST's inventory of Licensed Products for sale in such
Default Major Market Country.
(b) In the event that [*] with respect to [*] for the [*] in
accordance with [*] or in the event that [*] with respect to [*]
for the
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[*], then [*], PROVIDED that [*]. The [*]. Notwithstanding
anything expressed or implied in this Section 9.4(b) to the
contrary, [*] or [*], respectively, specified above in this
Section 9.4(b) [*], including, but not limited to, [*].
(c) In the event that, at any time during the term of this
Agreement, CUBIST is not researching, developing or
commercializing any Licensed Products and that CUBIST no longer
has the right to replace any Abandoned Product with a BIOCHEMIE
Similar Compound pursuant to Section 3.5(b) hereof, then BIOCHEMIE
shall have the right to terminate this Agreement by giving [*]
days' prior written notice of termination to CUBIST, PROVIDED that
at the time such written notice of termination is given the
conditions specified in this Section 9.4(c) for the exercise of
such termination right continue to exist.
9.5 EFFECT OF EXPIRATION OR TERMINATION OF THIS AGREEMENT.
(a) In the event that the term of this Agreement expires pursuant
to Section 9.1 hereof, then this Agreement shall terminate, and,
except to the extent otherwise provided in this Section 9.5(a) and
Section 9.5(e) below, neither Party shall have any liability or
obligation to the other Party under this Agreement, including,
without limitation, under Article V and Article VI.
Notwithstanding the foregoing sentence, the licenses granted to
CUBIST under Article III shall survive such termination and such
licenses shall be deemed to be fully paid up.
(b) In the event that CUBIST terminates this Agreement pursuant to
Section 9.2, then this Agreement shall terminate, and, except to
the extent otherwise provided in this Section 9.5(b) and Section
9.5(e) below, neither Party shall have any liability or obligation
to the other Party under this Agreement. Notwithstanding the
foregoing sentence, (i) the rights (but not the obligations) of
CUBIST, and the obligations (but not the rights) of BIOCHEMIE,
under Articles II and III (including, without limitation, the
licenses granted to CUBIST under Article III) shall survive such
termination and (ii) the rights and obligations of the Parties
under Article VI shall survive such termination.
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(c) In the event that CUBIST terminates this Agreement pursuant to
Section 9.3, or in the event that BIOCHEMIE terminates this
Agreement pursuant to Section 9.2, Section 9.4(b) or Section
9.4(c) hereof, then this Agreement shall terminate, and, except to
the extent otherwise provided in this Section 9.5(c) and Section
9.5(e) below, neither Party shall have any liability or obligation
to the other Party under this Agreement, including with respect to
Article V and Article VI. The licenses granted to CUBIST under
Article III shall terminate. Notwithstanding the foregoing, in the
event that CUBIST terminates this Agreement pursuant to Section
9.3 or BIOCHEMIE terminates this Agreement pursuant to Section
9.2, CUBIST shall have the right to sell out in the Territory all
of its inventory of Licensed Products for a period of [*] months
from the date of termination. In the event that CUBIST terminates
this Agreement pursuant to Section 9.3, then, within [*] days
following the effective date of such termination, [*] either (1)
to [*] developed by [*] and that are [*] or (2) a [*] of any then
[*]. If [*] within such [*], it shall [*]. If [*], [*] within [*]
days after [*].
(d) In the event this Agreement is terminated due to the rejection
of this Agreement by or on behalf of a Party under Section 365 of
the United States Bankruptcy Code (the "CODE"), all licenses and
rights to licenses granted under or pursuant to this Agreement by
one Party to the other are, and shall otherwise be deemed to be,
for purposes of Section 365(n) of the Code, licenses of rights to
"intellectual property" as defined under Section 101(35A) of the
Code. The Parties agree that the licensed Party, as a licensee of
such rights under this Agreement, shall retain and may fully
exercise all of its rights and elections under the Code, and that
upon commencement of a bankruptcy proceeding by or against a Party
under the Code, the other Party shall be entitled to a complete
duplicate of or complete access to, any such intellectual property
and all embodiments of such intellectual property. Such
intellectual property and all embodiments thereof shall be
promptly delivered to the other Party (i) upon any such
commencement of a bankruptcy proceeding upon written request
therefor by a Party, unless the Party elects to continue to
perform all of its obligations under this Agreement or (ii) if not
delivered under (i) above, upon the rejection of this Agreement by
or on behalf of the Party upon written request therefor. The
foregoing is without prejudice to any rights either Party may have
arising under the Code or other applicable law.
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(e) Termination of this Agreement shall not relieve either Party
of any obligation of such Party accruing prior to such
termination. Any termination of this Agreement shall be without
prejudice to the rights of either Party against the other accrued
or accruing under this Agreement prior to termination. The
provisions of Article I, Article VII (except with respect to
Section 7.1.1(c)), Section 8.1, Article IX, X and Article XI shall
survive the termination of this Agreement. The provisions of
Article IV shall survive any termination of this Agreement for a
period of ten (10) years. The provisions of Article VIII (other
than Section 8.1 above) shall survive the termination of this
Agreement to the extent necessary to protect CUBIST's rights under
any licenses granted to CUBIST that survive any such termination
of this Agreement.
ARTICLE X
DISPUTE RESOLUTION
10.1 ESCALATION. The parties shall attempt to resolve any controversy
or dispute that arises under or relates to this Agreement through good
faith discussions. The Parties shall initiate such discussions using
the following procedure. Either Party shall notify the other Party of
the nature of the controversy or dispute, providing sufficient detail
to permit the other Party to understand same (a "DISPUTE NOTICE"). The
representatives of the Parties shall meet within [*] days after the
date that the non-sending Party receives the Dispute Notice to attempt
to reach an agreement about the nature of the dispute and a resolution
of the dispute. If they are unable to resolve the dispute within [*]
days after their meeting, and do not agree to extend the time period
for resolving the dispute, or if the terms and conditions of the
resolution or settlement of the dispute are breached, the dispute shall
be resolved by arbitration pursuant to the provisions of Section 10.2.
Pending resolution of any dispute covered by this Section 10.1, both
Parties will continue their performance under this Agreement including,
without limitation, the payment of all amounts due to the other Party
that are not in dispute.
10.2 ARBITRATION.
(a) Any claim, dispute, or controversy arising out of or relating
to this Agreement that is not resolved in accordance with the
provisions of Section 10.1 and that the Parties agree to submit to
binding arbitration pursuant to this Section 10.2 will be
submitted by the parties to arbitration by the International
Chamber of Commerce ("ICC") under the International
Arbitration Rules then in effect for the ICC in New York, New York
U.S.A. ("ICC RULES"), as modified herein or by agreement
of the parties. Any such arbitration shall be conducted in New
York, New York by three (3) arbitrators, unless two out of the
three arbitrators elect to conduct such arbitration in Paris,
France, in which case such arbitration shall be conducted in
Paris, France. Each Party shall select one (1) arbitrator and such
arbitrators shall jointly appoint the third arbitrator who shall
act as the chairman. If either Party fails to appoint an
arbitrator within [*] days of a request by the other Party, or if
the arbitrators selected by the parties cannot agree on a chairman
within [*] days after they have been selected, then either Party
may
* Confidential Treatment Requested: omitted portions filed with the Commission.
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request the President of the ICC to appoint such co-arbitrator
(for the non-responsive Party) or the chairman. Such appointment
shall be binding on the Parties. Each Party irrevocably and
unconditionally (i) consents to the jurisdiction of any such
proceeding and waives any objection that it may have to personal
jurisdiction or the laying of venue of any such proceeding; and
(ii) knowingly and voluntarily waives its rights to have disputes
tried and adjudicated by a judge and jury except as otherwise
expressly provided herein. The Parties will cooperate with each
other in causing the arbitration to be held in as efficient and
expeditious a manner as practicable. Unless the Parties agree
otherwise, they shall be limited in their discovery to directly
relevant documents. Responses or objections to a document request
shall be served [*] days after receipt of the request. The
arbitrators shall resolve any discovery disputes. Nothing herein
shall prevent the Parties from settling any dispute by mutual
agreement at any time.
(b) The arbitration shall be of each Party's individual claims
only, and no claim of any other Party shall be subject to
arbitration in such proceeding. Except as otherwise required by
law, the Parties and the arbitrator(s) shall maintain as
confidential all information or documents obtained during the
arbitration process, including the resolution of the dispute. The
arbitration shall be conducted in English language.
(c) The arbitrator(s) shall not have the authority to award any
injunctive relief or to award exemplary or punitive damages, and
the Parties expressly waive any right to such damages. The
arbitrator(s) shall have the authority to award actual money
damages (including interest on unpaid amounts from the date due).
The costs and expenses of the arbitration, but not the costs and
expenses of the Parties, shall be shared equally by the Parties,
provided that the non-prevailing Party in any arbitration shall
pay the other Party's costs and expenses (including travel
expenses) and reimburse such Party for its portion of the
arbitration costs. In the event that neither Party wins totally,
reimbursement shall be made proportionally in accordance with the
ICC Rules. Any award rendered by the arbitrator(s) shall be final
and binding upon the Parties. Judgment upon the award may be
entered in any court of competent jurisdiction. If a Party fails
to proceed with arbitration, unsuccessfully challenges the
arbitration award, or fails to comply with the arbitration award,
the other Party is entitled to costs, including reasonable
attorneys' fees, for having to compel arbitration or defend or
enforce the award.
ARTICLE XI
MISCELLANEOUS
11.1 FORCE MAJEURE. Neither Party shall be held liable or responsible
to the other Party nor be deemed to have defaulted under or breached
the Agreement for failure or delay in fulfilling or performing any term
of the Agreement when such failure or delay is caused by or results
from causes beyond the reasonable control of the affected Party
including,
* Confidential Treatment Requested: omitted portions filed with the Commission.
-40-
but not limited to, earthquakes, fire, floods, embargoes,
insurrections, riots, civil commotions, strikes, lockouts or other
labor disturbances, acts of God or acts, omissions or delays in acting
by any governmental authority or the other Party. The affected Party
shall notify the other Party of such force majeure circumstances as
soon as reasonably practical.
11.2 ASSIGNMENT. Except as otherwise expressly provided in this Section
11.2 or elsewhere in this Agreement, this Agreement may not be assigned
or otherwise transferred, nor may any right or obligation hereunder be
assigned or transferred, by either Party without the prior written
consent of the other Party. Either Party may, without the prior written
consent of the other Party, assign this Agreement and such Party's
rights and obligations hereunder in connection with the transfer or
sale of all or substantially all of such Party's assets related to
Licensed Products or the business, or in the event of its merger or
consolidation or change in control or similar transaction. Any
permitted assignee shall assume all obligations of its assignor under
the Agreement except as otherwise provided herein.
11.3 SEVERABILITY. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability
of the remaining provisions contained herein shall not in any way be
affected or impaired thereby, unless the absence of the invalidated
provision(s) adversely affect the substantive rights of the Parties.
The Parties shall in such an instance use their best efforts to replace
the invalid, illegal or unenforceable provision(s) with valid, legal
and enforceable provision(s) that, insofar as practical, implement the
purposes of this Agreement.
11.4 NOTICES. All notices or other communications that are required or
permitted hereunder shall be in writing and sufficient if delivered
personally, sent by telecopier (and promptly confirmed by personal
delivery, registered or certified mail or overnight courier), sent by
nationally-recognized overnight courier or sent by registered or
certified mail, postage prepaid, return receipt requested, addressed as
follows:
if to CUBIST, to:
Cubist Pharmaceuticals, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: President
Telecopier No.: (000) 000-0000
with a copy to: Cubist Pharmaceuticals, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
-41-
also with a copy to: Xxxxxxx XxXxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxx, Esq.
Telecopier No.: (000) 000-0000
if to BIOCHEMIE, to: Biochemie GmbH
Xxxxxxxxxxxxxxxx 00
X-0000 Xxxxx, Xxxxxxx
Attention: General Counsel
Telecopier No.: xx00 0000 0000
with a copy to: Xxxxxxxxx XxxX
Xxxxxxx Xxxxxxx 00
X-0000 Xxxxxx, Xxxxxxx
Attention: Head Antibiotic Research
Institute
Telecopier No.: xx00 0 000 00 000
or to such other address as the Party to whom notice is to be given may
have furnished to the other Party in writing in accordance herewith.
Any such communication shall be deemed to have been given when
delivered if personally delivered or sent by telecopier on a business
day, on the business day after dispatch if sent by
nationally-recognized overnight courier and on the third business day
following the date of mailing if sent by mail.
11.5 APPLICABLE LAW; JURISDICTION; VENUE. The Agreement shall be
governed by and construed in accordance with the laws of the United
Kingdom without reference to any rules of conflict of laws. The Parties
irrevocably consent to the exclusive personal jurisdiction (except as
to actions for the enforcement of a judgment, in which case such
jurisdiction shall be non-exclusive) of the federal and state courts
located in Suffolk County, Massachusetts, and venue in Suffolk County,
Massachusetts.
11.6 ENTIRE AGREEMENT. The Agreement contains the entire understanding
of the Parties with respect to the subject matter hereof. All express
or implied agreements and understandings, either oral or written,
heretofore made are expressly merged in and made a part of the
Agreement. Except as expressly set forth in this Agreement, the
Agreement may be amended, or any term hereof modified, only by a
written instrument duly executed by both Parties.
11.7 HEADINGS. The captions to the several Articles and Sections hereof
are not a part of the Agreement, but are merely guides or labels to
assist in locating and reading the several Articles and Sections
hereof.
11.8 INDEPENDENT CONTRACTORS. It is expressly agreed that CUBIST and
BIOCHEMIE shall be independent contractors and that the relationship
between the two Parties shall not constitute a partnership, joint
venture or agency. Neither CUBIST nor BIOCHEMIE
-42-
shall have the authority to make any statements, representations or
commitments of any kind, or to take any action, which shall be binding
on the other, without the prior consent of the other Party.
11.9 WAIVER. The waiver by either Party hereto of any right hereunder
or the failure to perform or of a breach by the other Party shall not
be deemed a waiver of any other right hereunder or of any other breach
or failure by said other Party whether of a similar nature or
otherwise.
11.10 COUNTERPARTS. The Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
11.11 WAIVER OF RULE OF CONSTRUCTION. Each Party has had the
opportunity to consult with counsel in connection with the review,
drafting and negotiation of this Agreement. Accordingly, the rule of
construction that any ambiguity in this Agreement shall be construed
against the drafting Party shall not apply.
11.12 THIRD PARTY BENEFICIARIES. Except as otherwise expressly provided
in this Agreement, nothing herein expressed or implied is intended or
shall be construed to confer upon or to give to any third party any
rights or remedies by reason of this Agreement. Except as otherwise
expressly provided in this Agreement, there are no intended third party
beneficiaries under or by reason of this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
-43-
IN WITNESS WHEREOF, the Parties have executed this
License Agreement as a
sealed instrument as of the date first set forth above.
BIOCHEMIE GMBH CUBIST PHARMACEUTICALS, INC.
By:/s/X. Xxxxxx /s/ X. Xxxxxxxxxxxx By:/S/ X.X. Xxxxxxxx
--------------------------------- ------------------------
Name: X. Xxxxxx X. Xxxxxxxxxxxx Name: Xxxxx X. Xxxxxxxx
Title Head ABRI General Counsel Title: Chairman and CEO
SCHEDULE 1
(Section 1.9 - BIOCHEMIE Patents as of the Effective Date)
[*]
* Confidential Treatment Requested: omitted portions filed with the Commission.
SCHEDULE 2
(Section 1.13 - BIOCHEMIE Similar Compounds as of the Effective Date)
[*]
* Confidential Treatment Requested: omitted portions filed with the Commission.
SCHEDULE 3
(Section 1.13 - Criteria for BIOCHEMIE Similar Compounds Not Listed on
SCHEDULE 2)
[*]
* Confidential Treatment Requested: omitted portions filed with the Commission.
SCHEDULE 4
(Section 1.14 - BIOCHEMIE Trademarks)
[*]
* Confidential Treatment Requested: omitted portions filed with the Commission.
SCHEDULE 5
(Section 1.19 - Compound)
[*]
* Confidential Treatment Requested: omitted portions filed with the Commission.
SCHEDULE 6
(Section 5.3(a) - [*])
[*]
* Confidential Treatment Requested: omitted portions filed with the Commission.
SCHEDULE 7
(Section 5.3(b) - [*])
[*]
* Confidential Treatment Requested: omitted portions filed with the Commission.
