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EXHIBIT 10.35
*** DESIGNATED PORTIONS OF THIS EXHIBIT 10.35 HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE SECURITIES AND
EXCHANGE ACT OF 1934.
LICENSE AND SUPPLY AGREEMENT
This License and Supply Agreement ("Agreement") is made and entered into
as of the 23rd day of December, 1996 ("Effective Date") by and between LA JOLLA
PHARMACEUTICAL COMPANY, a corporation organized and existing under the laws of
the State of Delaware and having its principal office at 0000 Xxxxx Xxxxx Xxxxx,
Xxx Xxxxx, Xxxxxxxxxx, XXX 00000 ("LJP"), and XXXXXX LABORATORIES, a corporation
organized and existing under the laws of the State of Illinois, and having its
principal office at 000 Xxxxxx Xxxx Xxxx, Xxxxxx Xxxx, Xxxxxxxx, XXX 00000-0000
("Abbott").
WHEREAS, LJP has expertise regarding research and development and has
developed a novel and patented technology for the treatment of Systemic Lupus
Erythematosus ("SLE");
WHEREAS, Abbott has expertise regarding research and development, clinical
development, marketing and sale of pharmaceutical products;
WHEREAS, LJP has identified a candidate compound (LJP 394) currently in
Phase II/III clinical trials and suitable for further development as a drug for
the treatment of SLE; and
WHEREAS, Abbott and LJP are interested in collaborating in the development
and marketing of LJP 394 and/or related compounds thereof;
NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms shall be defined as
set forth below. Additional terms used in specific Sections of this Agreement
shall be defined in such Sections .
1.1 "ABBOTT REGULATORY KNOW-HOW" shall mean all Abbott owned or controlled
present and future non-patented and unpublished regulatory documentation,
information and data, as well as the organization and compilation of the data,
including but not limited to all the data and information contained in
governmental registrations required for marketing Product.
1.2 "ABBOTT TRADEMARKS" shall mean the trademarks Abbott selects for and
applies to the Product in the Territory in accordance with Section 9.1 of this
Agreement.
1.3 "AFFILIATE" shall mean any business entity controlled by a Party (as
defined below), or which controls a Party, or which is under common control with
a Party. "Control" herein means the direct or indirect ownership of more than
fifty percent (50%) of the authorized issued voting shares in such entity, or
such other relationship as results in effective control over the management,
business and affairs of such entity or Party, as the case may be. A business
entity shall be deemed an Affiliate of a Party only so long as such control
relationship exists. For purposes of this Agreement, Abbott Affiliates shall
also include the following entities: ***. For purposes of this Agreement, Abbott
Affiliates shall exclude TAP Holdings, Inc., and TAP Pharmaceuticals, Inc.
1.4 "ANNUAL NET SALES" shall mean Net Sales (as defined below) recorded in
any calendar year.
1.5 "BACK-UP COMPOUNDS" shall mean compounds other than LJP 394 that
***.
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1.6 "CALENDAR QUARTER" shall mean each of the three (3) month periods
beginning on January 1, April 1, July 1 and October 1 of each year during the
Term (as defined below).
1.7 "COMBINATION PRODUCT" shall mean a pharmaceutical product containing
the Product (as defined below) and at least one (1) other therapeutically active
ingredient.
1.8 "COMMERCIALLY REASONABLE EFFORTS" shall mean a level of effort by a
Party equivalent to the degree of the effort the Party uses to develop (for
purposes of Section 6.1), file and obtain Regulatory Approvals (for purposes of
Section 6.1(A and C)), launch (for purposes of Section 7.1), market (for
purposes of Section 7.2), obtain patent extension for (for purposes of Section
11.1), prevent unauthorized export or sale of (for purposes of Section 20.1
(D)), or manufacture and supply (for purposes of Sections 1.2, 4.2 (D) and 5 of
the Supply Agreement), as applicable, products having a comparable proprietary
position and market potential as the Product in the applicable countries during
the same time period.
1.9 "COMPETING PRODUCT" shall mean ***.
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1.10 "COMPETITION" shall mean the presence on the market in a given
country where no Valid Claims exist of a product chemically similar or
functionally equivalent to the Product marketed and sold by one or more third
parties.
1.11 "DEVELOPMENT PLAN" shall mean the Product Development Plan pursuant
to Section 6.3 (A) as the same may be modified from time to time pursuant to
Section 6.3 (B). The plan will include all development activities including, but
not limited to, ***.
1.12 "EFFECTIVE DATE" shall mean the date set forth on the first page of
this Agreement.
1.13 "EMEA" shall mean European Medicines Evaluation Agency or any
successor agency thereto.
1.14 "FULLY-BURDENED DEVELOPMENT COST" shall have the meaning set forth in
Appendix B attached hereto and made a part hereof.
1.15 "FULLY-BURDENED MANUFACTURING COST" shall have the meaning set forth
in Appendix C attached hereto and made a part hereof.
1.16 "INITIAL COMMERCIAL SALE" shall mean the first commercial sale by
Abbott, or any Abbott Affiliate of Product to any third party customer.
1.17 "INTERIM PRODUCT" shall mean the Substance formulated, filled and
packaged for development studies by LJP or its approved subcontractors.
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1.18 "LJP COMPOSITION PATENTS" shall mean (A) the LJP Patents (as defined
below) identified as LJP Composition Patents in Part I of Appendix D attached
hereto and made a part hereof (including any divisions, continuations,
continuations-in-part, reexaminations, reissues, additions, renewals and
extensions thereof), (B) any LJP Patents issued at any time during the Term from
LJP Patent Applications (as defined below) identified as LJP Compositions Patent
Applications in Part II of Appendix D (including any divisions, continuations,
continuations-in-part, reexaminations, reissues, additions, renewals and
extensions thereof) and (C) any composition of matter patents of LJP and its
Affiliates in the Territory issued at any time during the Term that claim the
priority of a United States LJP Composition Patent (including any divisions,
continuations, continuations-in-part, reexaminations, reissues, additions,
renewals and extensions thereof).
1.19 "LJP MANUFACTURING KNOW-HOW" shall mean all non-patented and
unpublished documentation, information, and data relating to the formulation,
manufacture and/or quality control of the Substance or the Interim Product owned
or controlled by LJP and its Affiliates which LJP is not prohibited from
disclosing as of the Effective Date or at any time during the Term.
1.20 "LJP NON-MANUFACTURING KNOW-HOW" shall mean any non-patented and
unpublished nonclinical, preclinical and clinical documentation, information and
data relating to the Substance or the Interim Product owned or controlled by LJP
and its Affiliates, which LJP is not prohibited from disclosing as of the
Effective Date or at anytime during the Term, including but not limited to,
documentation, information and data pertaining to development, Regulatory
Approval, quality control, quality assurance, formulation, marketing or sales of
the Substance, Interim Product or Product.
1.21 "LJP PATENTS" shall mean the LJP patents identified in Part I of
Appendix D attached hereto and made a part hereof and all other issued patents
of LJP and its Affiliates in the Territory as of the Effective Date and other
patents of LJP and its Affiliates in the Territory issued at any time during the
Term that in each case would be infringed by the use, manufacture, having
manufactured, importation, offer for sale or sale or development of the
Substance or Product in the Territory (including any divisions, continuations,
continuations-in-part, reexaminations, reissues, additions, renewals and
extensions thereof). It is understood and agreed that where an LJP patent as
described above contains multiple claims, such patent shall be considered an LJP
Patent only with respect to the claims that would be
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infringed by the use, manufacture, having manufactured, importation, offer for
sale, sale or development of the Substance (including as an element of the
Product) in the Territory , and LJP shall retain all right, title and interest
in and to the remaining claims of any such patent, free and clear of any rights
on the part of Abbott. LJP Patents in existence as of the Effective Date are set
forth in Part I of Appendix D and such Appendix shall be amended by LJP from
time to time during the Term to include future LJP Patents issuing from LJP
Patent Applications.
1.22 "LJP PATENT APPLICATIONS" shall mean the LJP patent applications
identified in Part II of Appendix D and all other patent applications of LJP and
its Affiliates in the Territory as of the Effective Date and other patent
applications of LJP and its Affiliates in the Territory filed at any time during
the Term that could issue patents that, in each case would be infringed by the
use, manufacture, having manufactured, importation, offer for sale, sale or
development of the Substance or Product in the Territory including any
divisions, continuations, continuations-in-part, reexaminations, reissues,
additions, renewals and extensions thereof. LJP Patent Applications in existence
as of the Effective Date are set forth in Part II of Appendix D, and such
Appendix shall be amended by LJP from time to time during the Term to include
future LJP Patent Applications. It is understood and agreed that where an LJP
patent or patent application as describe above contains multiple claims, such
patent or patent application shall be considered an LJP Patent or LJP Patent
Application only with respect to the claims that would be infringed by the use,
manufacture, having
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manufactured, importation, offer for sale, sale or development of the Substance
(including as an element of the Product) in the Territory, and LJP shall retain
all right, title and interest in and to the remaining claims of any such patent
or patent application, free and clear of any rights on the part of Abbott.
1.23 "LJP PATENT RIGHTS" shall mean LJP Patents and LJP Patent
Applications.
1.24 "MAJOR COUNTRIES" shall mean the following countries individually
or collectively, as applicable: France, Germany, Spain, the United Kingdom,
Italy.
1.25 "MANUFACTURING SCALE-UP" shall mean: the definition as provided
in Appendix, B.
1.26 "MANUFACTURING PLAN" shall mean the manufacturing plan as defined in
Section 3 of the Supply Agreement, Appendix G.
1.27 "NET SALES" shall mean
(A) With respect to the Product sold alone, the gross sales of the
Product in the Territory by Abbott, and its Affiliates to unrelated third party
customers (as defined below) to any national or local governments, hospitals,
drug wholesalers, pharmacies, and other third party customers (such as
distributors, agents, or Unaffiliated Sublicensees, surgicenters and other
institutions, the primary business of which is providing medical care), which
are not (except as otherwise provided in Section 4.5) Abbott Affiliates, less
the following deductions ("Deductions"): ***.
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(B) With respect to a Combination Product, the gross sales of such
Combination Product in the Territory by Abbott and its Affiliates to unrelated
third party customers except as otherwise provided in Section 4.5 less the
Deductions referenced in (A) above, multiplied by a fraction ***. The royalty
paid to LJP on the Combination Product will not be less than the royalty paid to
LJP on the Product sold alone. *** Notwithstanding the foregoing, in no event
shall the amount computed in accordance with the first sentence of this clause
(B) be less than ***.
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(C) With respect to the product when it is sold in a Premium
Delivery System (as defined below), an amount equal to ***. As used herein,
"Premium Delivery System" means a drug delivery system which comprises *** An
example calculation is provided in Appendix I.
1.28 "PARTY" (and "PARTIES") shall mean either LJP or Abbott (or both), as
the context requires.
1.29 "PRODUCT(S)" shall mean formulated, filled and packaged
pharmaceutical compositions and dosage units and the like containing the
Substance.
1.30 "REGULATORY APPROVAL" shall mean all governmental approvals required
to market and sell the Product in any given country in the Territory, including
but not
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limited to, product registrations, medical approvals, and price and
marketing approvals. Such approvals must be based upon (i) LJP or any LJP
Affiliates or approved subcontractors as an approved manufacturer of the
Substance at LJP's or any LJP Affiliates' or approved subcontractor's
manufacturing facilities and (ii) to the extent required by applicable laws and
regulations such approvals must be based upon approval of Abbott with respect to
Xxxxxx'x finished Product filling, packaging and labeling facilities pursuant to
the Supply Agreement, Appendix G.
1.31 "RENAL CARE" shall mean the field of care covering products ***.
1.32 "SPECIFICATIONS" shall mean the quality and other specifications for
the Substance and the Interim Product to be manufactured by LJP or its
Affiliates or approved subcontractors for supply to Abbott, its Affiliates and
Unaffiliated Sublicensees, which Specifications shall comply with applicable
regulatory requirements and shall be based upon LJP's current specifications for
the Substance and the Interim Product included with LJP's U.S. IND (as defined
below). A copy of such current specifications is set forth in Appendix E
attached hereto and made a part hereof. Such Specifications shall be agreed upon
by the Parties in writing as soon as practicable after the Effective Date, but
in no event later than six (6) months thereafter, and may be amended from time
to time during the Term by written agreement of the Parties.
1.33 "STOCK PURCHASE AGREEMENT" shall mean that certain Stock Purchase
Agreement between the Parties bearing even date herewith under which Abbott
shall purchase certain LJP common stock as described therein.
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1.34 "SUBSTANCE" shall mean LJP 394 as defined in Appendix A to this
Agreement, in bulk drug form.
1.35 "TERM" shall mean the period commencing on the Effective Date and
continuing until ***.
1.36 "TERRITORY" shall mean all countries, territories and other areas
of the world.
1.37 "UNAFFILIATED SUBLICENSEE" shall mean any sublicensee of Abbott under
this Agreement other than an Abbott Affiliate.
1.38 "U.S. FDA" shall mean the United States Food and Drug
Administration and any successor regulatory agency.
1.39 "U.S. FD&C ACT" shall mean the United States Food, Drug and Cosmetic
Act, including any amendments thereto and all regulations promulgated
thereunder.
1.40 "U.S. IND" shall mean an Investigational New Drug Application
filed with the U.S. FDA.
1.41 "U.S. NDA" shall mean a New Drug Application filed with the U.S.
FDA.
1.42 "VALID CLAIM" shall mean one (1) or more claims of an issued and
unexpired LJP Patent which neither has been held unenforceable, unpatentable or
invalid by a decision of a court or governmental agency of competent
jurisdiction, unappealable or unappealed within the time allowed for appeal, nor
has been admitted
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by the holder of the LJP Patent to be invalid or unenforceable through reissue,
disclaimer, abandonment or otherwise.
ARTICLE II
GRANT AND SCOPE OF RIGHTS GRANTED
2.1 License Rights Granted - LJP hereby grants to Abbott and Abbott
Affiliates an exclusive license under LJP Patent Rights and LJP Non
Manufacturing Know-How to use, import, offer for sale, and sell the Product in
the Territory, which license shall be exclusive even as to LJP and its
Affiliates, except as provided in Section 2.2. LJP also hereby grants to Abbott
and Abbott Affiliates a non-exclusive, limited license under LJP Patent Rights
and LJP Manufacturing Know-How to make and have made the Substance and Product
in the Territory, solely in accordance with Article XIV, and Appendix G (Supply
Agreement).
2.2 Manufacturing and Use Rights Reserved - Except as otherwise provided
in Article XIV and Appendix G (Supply Agreement), LJP retains the exclusive
right to manufacture or have manufactured the Substance, provided that Abbott
and its Affiliates shall have the right during the Term to use Substance
supplied by LJP hereunder ***. Notwithstanding Section 2.1, LJP retains the
right to use, but not market or sell the Substance, the Interim Product and the
Product and practice the LJP Patents to develop any product or to develop any
product or compound, including (without limitation) any Back-Up Compounds
subject to Sections 2.5 and 12.1.
2.3 Use of LJP Non-Manufacturing Know-How and LJP Manufacturing Know-How -
Under the license granted pursuant to Section 2.1, Abbott shall have the right
to use and reference LJP Non-Manufacturing Know-How provided to Abbott by LJP in
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support of ***. Under the license granted pursuant to Section 2.1, Abbott may
use LJP Manufacturing Know-How only upon receipt thereof in accordance with
Article XIV below and solely for the manufacture of the Substance and the
Product only to the extent authorized under Article XIV. Abbott shall limit
access to LJP Non-Manufacturing Know-How and LJP Manufacturing Know-How to those
Abbott personnel with a need to know at the time of disclosure to such
personnel, and such access shall be limited to the duration of such need to
know. Subject to the license rights granted hereunder, LJP retains all ownership
rights to all LJP Patent Rights, LJP Non-Manufacturing Know-How and LJP
Manufacturing Know-How.
2.4 Sub-licensing - Abbott shall have the right to sublicense its rights
under this Agreement to Unaffiliated Sublicensees, provided that Abbott has
obtained LJP's prior written consent on a case-by-case basis, which consent
shall not be unreasonably withheld, and that such sub-licensing of Xxxxxx'x
rights shall not relieve Abbott of any obligations hereunder, including
obligations hereunder relating to the activities of its Unaffiliated
Sublicensees.
2.5 Back up Compounds - During the Term, Abbott shall also have the right
to exclusively license from LJP and develop with LJP, Back up Compounds ***. LJP
shall give Abbott prompt written notice of any such Back up Compounds when
nominated for preclinical development. Abbott shall have *** from receipt of
such notice to give LJP written notice of Xxxxxx'x intention to negotiate with
LJP for rights to such Back up Compound.
2.6 Other Compounds - During the Term, Abbott shall also have the right of
first negotiation to exclusively license compounds ***.
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LJP shall give Abbott prompt written notice of any such compounds when
nominated for preclinical development. ***
2.7 No Implied Licenses - Any rights not expressly granted by either Party
to the other Party in this Agreement are expressly reserved by the Party owning
or controlling such rights and, accordingly, no licenses other than those
specified herein shall be deemed granted by this Agreement by implication,
estoppel or otherwise.
2.8 Affiliate Performance: Abbott hereby guarantees the performance
of its Affiliates of all Abbott obligations under this Agreement.
ARTICLE III
MILESTONE PAYMENTS
3.1 Payments - In consideration of LJP's entering into this Agreement and
the rights and licenses granted to Abbott hereunder, during the Term Abbott
shall pay LJP milestone payments according to the following payment schedule,
consisting of the following milestone payments:
(1) Effective Date - Within ten (10) business days after the
Effective Date, Abbott shall pay LJP Four Million Dollars ($4,000,000).
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(2) ***
(3) ***
(4) ***
(5) ***
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(a) ***
(b) ***
(c) ***
3.2 No Refundability - All milestone payments which Abbott is required to
make to LJP pursuant to Section 3.1 shall become payable upon the occurrence of
the applicable event, and shall be non-refundable once paid. However, if this
Agreement is terminated for any reason prior to a given milestone payment
becoming due or if the events specified for a given milestone payment do not
occur, then Abbott shall have no obligation to make such milestone payment.
ARTICLE IV
ROYALTY RATES AND INCENTIVE PAYMENTS
4.1 Royalty Rates - in further consideration of the rights and licenses
granted to Abbott hereunder, Abbott shall pay LJP royalties at the rates set
forth below:
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(A) The royalties shall apply on a country-by-country basis (i) ***
from Initial Commercial Sale in a Major Country or the United States or (ii)
***, or (iii) ***.
(B) Countries without Competition - Abbott shall pay LJP an annual
royalty ("Full Royalty") calculated on the total worldwide aggregate Annual Net
Sales in the Territory excluding Net Sales in any country in which royalties are
no longer payable pursuant to Section 4.1 (A) during the time in which no
Competition exists in a particular country as follows:
(1) on the portion less than ***
(2) on the portion between ***
(3) on the portion between ***; and
(4) on the portion greater than ***.
(C) Countries With Competition - In countries where Competition
exists, the "Full Royalty" shall be reduced, but only for so long as such
Competition exists, in a manner reflective of ***. Royalties shall be payable at
the Full Royalty rate until ***
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Any adjustments to the Full Royalty rate based on the existence of
Competition shall be calculated in accordance with the following formula:
(1) where Xxxxxx'x market share is *** than Xxxxxx'x market
share prior to the existence of Competition, the royalty shall be *** of the
applicable Full Royalty
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(2) where Xxxxxx'x market share is *** of Xxxxxx'x market
share prior to the existence of Competition, the royalty shall be *** of the
applicable Full Royalty;
(3) where Xxxxxx'x market share is *** of Xxxxxx'x market
share prior to the existence of Competition, the reduced royalty shall be *** of
the applicable Full Royalty;
(4) where Xxxxxx'x market share is *** of Xxxxxx'x market
share prior to the existence of Competition, the royalty shall be *** of the
applicable Full Royalty, and
(5) where Xxxxxx'x market share is less than *** of Xxxxxx'x
market share prior to the existence of Competition, the reduced royalty shall be
*** of the applicable Full Royalty.
***
Total worldwide aggregate Annual Net Sales figure shall determine the
applicable Full Royalty rate. The applicable Full Royalty rate shall then be
applied to Annual Net Sales in a particular country on a country-by-country
basis in accordance with the level of patent protection and Competition set
forth above.
(D) Royalty Calculation Example for Countries without
Competition
For illustration purposes, in a calendar year when Annual Net Sales in the
entire Territory are ***, the aggregate total royalty to LJP for countries
without Competition would be ***, calculated as follows:
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*** x *** = ***
*** x *** = ***
*** x *** = ***
*** x *** = ***
--- ---
*** ***
(E) Royalty Calculation Example for Countries with Competition
For illustration purposes, in a calendar year when Annual Net Sales in the
entire Territory are ***, the aggregate total royalty to LJP for countries
without Competition would be ***, calculated as follows:
*** x *** = ***
*** x *** = ***
*** x *** = ***
*** x *** = ***
--- ---
*** ***
Average Royalty Rate ***
Royalty adjustments shall be made by Abbott on a country-by-country basis using
the average royalty rate reduced by the Xxxxxx'x local market share as follows:
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Sales in Countries with Competition ***
Applicable Full Royalty Rate ***
Royalty Due Before Adjustments ***
Market Share Adjustment Royalty Due
*** *** ***
4.2 Incentive Payments -
(A) Incentive Payments Schedule - Abbott also shall pay LJP the following
one time only sales incentive payments for the first year during the Term in
which total worldwide aggregate Annual Net Sales achieve each of the following
milestone levels:
MILESTONE LEVEL INCENTIVE PAYMENT
Upon reaching Annual Net ***
Sales levels of ***
Upon reaching Annual Net ***
Sales levels of ***
Upon reaching Annual Net ***
Sales levels of ***
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Upon reaching Annual Net ***
Sales levels of ***
Upon reaching Annual Net ***
Sales levels of ***
TOTAL ***
Abbott shall make incentive payments within thirty (30) days of the end of
the Calendar Quarter in which the applicable milestone level is achieved.
(B) Incentive Payments Example
For illustration purposes, one time incentive payments shall be paid for the
calendar year in which the total worldwide aggregate Annual Net Sales achieve
the designated milestone levels as shown below:
Year Yr. 1 Yr.2 Yr. 3 Yr. 4 Yr. 5 Yr. 6 Yr. 7
----- ---- ----- ----- ----- ----- -----
Annual Net Sales ($MM) *** *** *** *** *** *** ***
One Time Incentive Payments ($MM) *** *** *** *** *** *** ***
4.3 Royalty Reports and Payments - Commencing with the first Calendar
Quarter in which Abbott, and its Affiliates make the Initial Commercial Sale,
Abbott shall provide LJP with a written report of Net Sales on a
country-by-country basis within *** after the last day of March, June, September
and December for royalties accruing on Net Sales in the United States during the
*** preceding calendar months and within *** after the last day of February,
May, August and
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November for royalties accruing on Net Sales in the Territory outside of the
United States during the *** preceding calendar months. Concurrently with the
submission of each such written report, Abbott shall pay or cause to be paid to
LJP the total amount of royalties shown to be due thereon. In addition, Abbott
shall provide LJP with a total worldwide monthly preliminary sales estimate for
Product within *** after the last day of each ***.
4.4 Currency- Abbott shall make all royalty and cost of goods payments to
LJP pursuant to Section 4.3 and all other payments due hereunder in U.S.
Dollars. Royalty and cost of goods and other payments earned shall be first
determined by Abbott in the currency of the country where the Net Sales were
made and then converted by Abbott directly to its equivalent in U.S. Dollars.
The rates of exchange for converting the currencies involved to U.S. Dollars as
quoted by the Wall Street Journal (Midwest Edition) as Foreign Exchange Rates
quoted in New York as market rate (bid) on the last business day of the
quarterly period in which the royalty and cost of goods payments were earned
shall be used by Abbott to determine such conversion rates.
4.5 No Royalties Payable Between Affiliates - No royalties shall be
payable to LJP on sales between Abbott and its Affiliates or between Abbott
Affiliates unless the purchaser is the end user of the Product, in which case
royalties shall be payable as provided above.
4.6 No Multiple Royalties - No multiple royalties shall be payable because
the Product, its manufacture, use, import, offer for sale or sale is or shall be
covered by multiple LJP Patents.
ARTICLE V
PAYMENT, RECORD KEEPING AND AUDIT RIGHTS
5.1 Method of Payment - All payments by either Party to the other Party
hereunder (including, but not limited to, Xxxxxx'x milestone and incentive
payments
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under Sections 3.1 and 4.2 and royalty and costs of goods payments under Section
4.1 and Sections 6.2, 6.3, and 6.4 of Appendix G.) shall be made in U.S. Dollars
and without deduction of any withholdings for any purposes other than taxes, if
applicable, to the extent required by law. In the event of any tax withholding,
the paying Party will provide the receiving Party with any relevant certificates
or documents required for national, state or local tax credit and reporting
purposes. Payments hereunder shall not be creditable against any other amounts
payable by the other Party under this Agreement. Payments to LJP shall be made
by wire transfer to LJP's bank as follows:
***
Abbott shall provide LJP with appropriate wire transfer instructions for
payments to Abbott. Either Party may change wire instructions for payments to
that Party upon written notice to the other Party.
5.2 Record Keeping and Audit Rights - Each Party shall keep or cause to be
kept accurate records relating to Net Sales, royalties, Fully Burdened
Development Costs, Fully-Burdened Manufacturing Costs, and any other costs and
expenses subject to payment or reimbursement by either Party to the other Party
in sufficient detail to enable the amounts payable hereunder to be determined.
Upon the written request of either Party (but not more frequently than once in
any calendar year), the requesting Party may retain a nationally-recognized,
independent certified public accountant,
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subject to written approval by the other Party (which approval shall not be
unreasonably withheld), to review such records to verify the accuracy of the
payments made or payable hereunder. Such accountant shall be required to execute
a confidentiality agreement in a form reasonably acceptable to the audited Party
and shall report to the auditing Party only the amount of any underpayment or
overcharge. Within *** after completion of such review, the Parties shall
reconcile any underpayment or overcharge. The auditing Party shall pay the cost
of any review of records conducted at its request under this Section . However,
if the review establishes underpayment or overcharge by the audited Party of
over *** during the period of the review, the audited Party shall promptly
reimburse the auditing Party for the fees and expenses of the accountant. Such
audit rights shall survive termination or expiration of this Agreement, but may
be exercised by the Parties only with respect to records for the current
calendar year and the preceding ***.
ARTICLE VI
PRODUCT DEVELOPMENT AND REGISTRATIONS
6.1 Development and Registration Activities
(A) Xxxxxx Activities - In accordance with the Development Plan,
Xxxxxx shall undertake development and registration activities for the Product
in the Territory, including but not limited to conducting or having conducted,
and completing or having completed, all clinical studies and other activities
required for Regulatory Approvals under the Development Plan. Xxxxxx shall use
Commercially Reasonable Efforts to pursue such development and registration
activities under the Development Plan with the objective of filing applications
for Regulatory Approval throughout the Territory. Xxxxxx'x Regulatory Approvals
in the Territory shall be owned solely by Xxxxxx.
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(B) LJP Access to Data - Xxxxxx shall provide LJP, within a
reasonable time, with access to information and data reasonably requested by LJP
relating to Xxxxxx'x development and registration activities, including but not
limited to, medical and statistical study reports for individual studies,
clinical data summaries, and expert reports, but excluding Product registration
packages and registrations.
(C) LJP Activities - Pursuant to the Development Plan, LJP shall use
Commercially Reasonable Efforts to assist Xxxxxx in performing development and
registration activities for the Product in the Territory.
(D) Health registrations - Xxxxxx shall use Commercially Reasonable
Efforts to obtain all necessary Regulatory Approvals in the Territory taking
into account the relative importance of the individual markets on a per country
basis. Xxxxxx and LJP shall keep each other informed concerning regulatory
filings for the Product. The parties agree that they will work together to
minimize regulatory issues that may become problems for one another. Xxxxxx and
LJP also agree to keep one another fully informed of changes in the manufacture
of Substance or Products that may create regulatory issues for one another and
will work with one anther to minimize these issues. Xxxxxx further agrees to use
its Commercially Reasonable Efforts to file for all Regulatory Approvals in the
United States and Major Countries for Products within *** from the Effective
Date.
(E) Decision on United States/European Clinical Trials - Within ***
of the availability of the final Xxxxxx approved scientific report from the
90-05 study, and any other United States or European major clinical study,
Xxxxxx will inform LJP whether it has decided to file for Regulatory Approval,
initiate additional studies or terminate the Agreement pursuant to Section
19.4(C) or take other action after review with LJP, provided that any other
actions shall be mutually agreed upon.
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6.2 Development Costs - Commencing as of January 1, 1997 and continuing
for the remainder of the Term, Xxxxxx shall bear the costs and expenses related
to clinical development for the Product, including toxicology, carcinogenicity,
process development, registration and regulatory activities, including costs of
filing, obtaining and maintaining all Regulatory Approvals throughout the
Territory, including existing obligations, such as the LJP 90-05 Study. Xxxxxx
will transfer funds to LJP at LJP's Fully Burdened Development Cost as defined
in Appendix B, and excluding the activities being directly funded by Xxxxxx.
Xxxxxx will transfer these funds, as needed, at least *** in advance, on a
monthly rolling basis for each subsequent time period based on the approved
budget, except for the first payment, which shall be due on *** upon completion
of the Development Plan for the first Calendar Quarter. LJP shall bear the cost
of providing manufacturing capacity and Manufacturing Scale Up subject to
Appendix B and the Supply Agreement, Appendix G.
6.3 Development Plan
(A) Completion of Development Plan - The Parties shall in good faith
agree upon and complete the Development Plan within *** days after the Effective
Date. The Development Plan shall cover the detailed plans for various studies
including costs, timing, data management, adverse event reporting, etc., as well
as include language concerning diligence, delays and remedies for potential
problems. ***
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(B) Changes - The Parties recognize that LJP has developed a level
of clinical development capability, expertise and staffing and that it is LJP's
intention to maintain a clinical development team and it is Xxxxxx'x intention
to access the capabilities of this team in support of development of the
Product. Xxxxxx may make any changes to the Development Plan as Xxxxxx deems
necessary or appropriate, provided that Xxxxxx will not, if at all practical,
adversely impact LJP clinical development capability and shall give due
consideration to the intentions of the Parties under the preceding sentence and
that LJP has been given a reasonable opportunity to review and consult with
Xxxxxx as to any such changes.
6.4 Executive Committee and Development Team
(A) Within *** of the Effective Date, the Parties shall form an
executive committee ("Committee"), which shall be primarily responsible to ***.
The Committee shall consist of *** members from Xxxxxx and *** members from LJP.
Each Party shall notify the other Party in writing of its designated members and
any replacements.
(B) The Parties shall also appoint a project team ("Development
Team") to ***. The Development Team shall report to the Committee on the
progress of the Development Plan on a *** basis.
(C) The Parties shall also designate a key contact person at each
company who will be responsible for managing all communications between the
Parties.
6.5 Development Team Responsibilities
(A) As part of its responsibilities, the Development Team shall
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(1) ***;
(2) ***;
(3) ***;
(4) ***. The Party hosting each meeting of the Development
Team promptly shall prepare, and deliver to the other Party within *** after the
date of such meeting, minutes of such meeting setting forth all decisions of the
Development Team relating to the Development Plan in a form and content
reasonably acceptable to the other Party.
(B) The Development Team shall meet at least once every *** during
the term of the development of the Product(s), at such times and places as
agreed to by LJP and Xxxxxx, alternating between San Diego and Xxxxxx Park, or
such other locations as the parties shall agree. Meetings of the Development
Team may be attended by such other directors, officers, employees, consultants
and other agents of LJP and Xxxxxx as the Parties from time to time reasonably
agree.
6.6 Research and Development Budget
(A) The Development Team shall be responsible for reviewing and
proposing timelines for research and development activities as well as an annual
research and development budget ("Annual R&D Budget"). The Parties shall prepare
general timelines and detailed budget estimates for all research and development
activities as part of the Development Plan. In addition, the Development Plan
shall also contain the agreed upon Annual R&D Budget for 1997. Within *** of the
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Effective Date, the Development Team will prepare a detailed budget
for 1997 ***.
(B) For 1998 and every year of the Development Plan thereafter, the
Development Team shall propose an Annual R&D Budget to the Committee for
approval by *** of the preceding year. On or before *** of the preceding year,
the Committee shall review the Development Team's proposed Annual R&D Budget and
submit it, together with any recommended changes for Xxxxxx'x final review and
approval.
(C) The Development Team may propose adjustments to the Annual R&D
Budget up to two (2) times per year, using the same mechanism referenced above
in (B) for the initial Annual R&D Budget, in accordance with the following time
frames:
Development Team Committee Review
Proposes and Proposes Xxxxxx Approves
---------------- ---------------- ---------------
1. *** *** ***
2. *** *** ***
(D) Subject to Xxxxxx'x obligations under Sections 6.1A Xxxxxx shall
have the ultimate right to approve the Annual R&D Budget (and any adjustments
thereto) for each year during the Development Plan.
6.7 LJP Documentation and Data
(A) LJP Non-Manufacturing Know-How - As soon as practicable after
the Effective Date, but in no event later than *** thereafter, LJP shall provide
Xxxxxx with the LJP Non-Manufacturing Know-How, primarily the data included in
LJP's United States IND, and all other documentation, information and data
listed
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or referenced in the Development Plan, but not LJP Manufacturing Know-How and
Xxxxxx shall be authorized to use and reference the same solely as provided in
Section 2.3 above. Any Product Drug Master Files ("DMFs") compiled or owned by
LJP shall remain the property of LJP, but LJP shall provide appropriate
authorization letters to relevant regulatory bodies in the Territory within ***
after the Effective Date to enable Xxxxxx to reference such DMFs for purposes of
Xxxxxx'x applications for Regulatory Approval and regulatory compliance
activities in the Territory. At Xxxxxx'x option, LJP shall also take all actions
necessary or appropriate to transfer the sponsor obligation for the U.S. IND and
equivalent regulatory filings for the Product in the Territory to Xxxxxx within
*** after the Effective Date. Xxxxxx agrees not to access the proprietary
information in the CMC section of the existing or previous INDs, except as
provided in Article XIV but will be able to access the non-proprietary CMC
sections which LJP shall supply to Xxxxxx. If Xxxxxx requests LJP to transfer
the sponsor obligation to Xxxxxx, LJP shall create a DMF for the proprietary
section information and file the DMF and provide Xxxxxx the DMF's reference
number. At Xxxxxx'x option, Xxxxxx may require LJP to support the U.S. IND and
file the U.S. NDA with the FDA. Xxxxxx shall still maintain all responsibility
and control of this NDA filing, subject to Sections 6.1A and 6.1D.
(B) Xxxxxx Access to Data - During the Term, LJP shall provide
Xxxxxx, within a reasonable time, with access to all clinical documentation,
information and data resulting from LJP's Product research and development
activities in the Territory which Xxxxxx requires for regulatory filings in the
Territory or which Xxxxxx may reasonably request, including but not limited to,
case report forms, monitoring documents, patient informed consents,
institutional review board approvals, medical and statistical study reports for
individual studies, clinical data summaries, and expert reports. Upon Xxxxxx'x
request, LJP shall provide Xxxxxx with copies of such documentation and data.
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(C) Information and Documentation for LJP Patent Extensions - Xxxxxx
shall notify and provide to LJP, within *** after each Regulatory Approval in
the Territory has been received in writing by Xxxxxx, written confirmation of
such Regulatory Approval to enable LJP to fulfill its obligations with respect
to seeking LJP Patent extensions pursuant to Section 11.1. Xxxxxx, shall also
provide to LJP any other documentation required by the relevant patent
authorities, as requested by LJP, as soon as practical.
ARTICLE VII
PRODUCT MARKETING AND SALES ACTIVITIES
7.1 Product Launch - Xxxxxx shall use Commercially Reasonable Efforts to
launch the Product or cause the Product to be launched as soon as practical in
every country of the Territory where Xxxxxx or its Affiliates or Unaffiliated
Sublicensees have obtained Regulatory Approval. Notwithstanding the foregoing,
Xxxxxx may, acting in good faith in the exercise of its reasonable business
judgment, determine either to delay the launch of the Product or not to launch
the Product in any given country of the Territory, which decision shall not be
deemed a failure by Xxxxxx to use Commercially Reasonable Efforts in such
country and also shall not be deemed an abandonment of Xxxxxx'x rights in such
country. If Xxxxxx or its Affiliates or Unaffiliated Sublicensees delay the
launch of the Product in any country for more than *** after Xxxxxx or its
Affiliates or Unaffiliated Sublicensees have obtained Regulatory Approval in
such country, LJP may commence dispute resolution proceedings against Xxxxxx
pursuant to Article XXIV and Xxxxxx shall have the burden of proving that such
delay was attributable to bona fide business reasons affecting the Product.
7.2 Xxxxxx Sales and Marketing Activities - During the period commencing
with Regulatory Approval in each country of the Territory on a
country-by-country basis and for the remainder of the Term, Xxxxxx shall use
Commercially Reasonable Efforts to promote, market and sell the Product in the
Territory.
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7.3 Marketing Costs and Expenses - Except as provided in Section 7.4 and
as otherwise agreed in writing by the Parties, Xxxxxx shall bear all costs and
expenses related to sales and marketing activities for the Product under this
Agreement.
7.4 Cooperative Marketing Activities
(A) LJP, at its option and its own expense, may hire marketing
support specialists to assist Xxxxxx in educating the rheumatologists, in
their offices in the U.S. All activities will be coordinated with Xxxxxx and
agreed by the Parties in writing. All educational and promotional material
must have Xxxxxx medical, regulatory, and commercial approval and comply with
all regulatory filings, approvals and requirements.
(B) Xxxxxx will be solely responsible for calls on nephrologists,
managed care, integrated systems, family practitioners, and the acute
hospital setting.
7.5 Marketing Review Meetings - At least once each *** after Xxxxxx'x
first Regulatory Approval, for a period of *** thereafter, and at least once
each *** after such *** period, representatives of the Parties shall review
Xxxxxx sales and marketing activities and LJP cooperative activities.
7.6 Export Control Xxxx - Xxxxxx shall comply with all applicable export
laws and restrictions and regulations of the Department of Commerce or other
United States or foreign agency or authority, shall not export, or allow the
export or re-export of any Confidential Information or Products or any direct
product thereof in violations of any such restrictions, laws or regulations or,
without obtaining all necessary approvals and authorizations if any, to
Afghanistan, the People's Republic of China or any Group Q, S, W, Y or Z country
specified in the then current Supplement No. 1 to Section 770 of the U.S. Export
Administration Regulations or any successor supplement or regulations);
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Xxxxxx shall obtain and bear all expenses relating to any necessary licenses
and/or exemptions with respect to the export from the U.S. of all material or
items deliverable by LJP to any location and shall at LJP's request demonstrate
to LJP compliance with all applicable laws and regulations prior to delivery
thereof by LJP.
7.7 Xxxxxx Product Claims - Xxxxxx shall only make claims, representations
or warranties directly or indirectly to any third party about the Product that
are consistent with the Product's Regulatory Approvals and other scientific
literature.
7.8 Sample Distribution - Xxxxxx shall be solely responsible for complying
with all laws and regulations related to the distribution of samples of Products
in any part of the Territory. Any fines and/or penalties for failure by Xxxxxx
to comply with any requirement or regulation shall be the sole responsibility of
Xxxxxx
ARTICLE VIII
CONFIDENTIALITY AND PUBLICITY
8.1 Confidentiality Obligation - Each Party shall hold the other Party's
Confidential Information (as defined below) of which it becomes informed in
connection with this Agreement in strictest confidence and shall not disclose
such Confidential Information to third parties or otherwise use it, except to
the extent such use or disclosure is expressly permitted by the terms of this
Agreement or is reasonably necessary for the performance of this Agreement.
8.2 Permitted Disclosures - Permitted disclosures of Confidential
Information hereunder include, but are not limited to: (A) disclosures to
regulatory agencies to the extent required for Regulatory Approval, including
but not limited to, Xxxxxx Product registrations and applications in the
Territory and (B) disclosures to the Parties' Affiliates, employees, agents and
independent approved subcontractors (including clinical investigators,
consultants and contract research organizations) who have a bonafide "need to
know," and Unaffiliated Sublicensees (in the case of Xxxxxx),
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provided that for disclosures to parties other than Affiliates the disclosing
Party shall obligate the recipients to maintain the confidentiality of
Confidential Information under terms substantially similar to those contained in
this Article VIII.
8.3 Confidential Information - "Confidential Information" includes, but is
not limited to, any information relating to the terms of this Agreement, the
Product, LJP Non-Manufacturing Know-How, LJP Manufacturing Know-How, the
Development Plan, Xxxxxx Regulatory Know-How, clinical and non-clinical studies
involving the Product, and all sales and marketing plans for the Product, as
well as information concerning all other products and the business affairs,
manufacturing processes and other activities of the disclosing Party that are
designated as confidential in writing or orally disclosed, provided such oral
disclosure is confirmed as confidential in writing within thirty (30) days
thereafter. However, Confidential Information shall not include any information:
(A) Publicly Available Information - Which at the time of disclosure
is or later comes into public domain by publication or otherwise through no
fault of the receiving Party;
(B) Previously Known Information - Which can be demonstrated by
documentation or other competent proof to have been in the receiving Party's
possession prior to disclosure hereunder;
(C) Subsequently Received Information - Which is subsequently
received by the receiving Party from a third party who is not bound by any
confidentiality undertaking to the disclosing Party or to any of its Affiliates
with respect to said information;
(D) Independently Developed Information - Which can be demonstrated
by documentation or other competent proof to have been independently
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developed by or for the receiving Party without reference to the disclosing
Party's Confidential Information, or
(E) Legally Required Disclosures of Information - Which is legally
required to be disclosed pursuant to any statute or regulation or any judicial
or administrative order.
8.4 Duration of Confidentiality Obligation - The confidentiality
obligations of the Parties hereunder shall remain in effect during the Term and
for *** thereafter.
8.5 Publicity and Announcements - It is recognized by the Parties that LJP
may under certain circumstances need to disclose development and
commercialization activities and Xxxxxx will not unreasonably withhold its
approval and support of the LJP development and commercial activities necessary
to generate and disclose this information. Unless agreed upon in writing by the
Parties, neither Party shall originate any publicity, news release or other
public announcement, written or oral, whether to the public press, stockholders
or otherwise, relating to this Agreement, any amendment hereto, performance by
the Parties hereunder, or the Product, except where a Party believes in good
faith that disclosure is required or advisable under applicable laws or
regulations in which event such Party shall give the other Party *** to review
the form and content of any written announcement before such legally required or
advisable disclosure is made. Except for customary discussions with current or
prospective investors and analysts, or at securities, industry, scientific, or
similar
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conferences or as required or advisable under applicable laws or regulations,
each Party shall give the other Party a reasonable opportunity (not to exceed
***) to review the content of any oral announcement before it is made.
Notwithstanding the foregoing, however, where urgent, unusual and rare
circumstances required immediate disclosure in the opinion of the Parties'
counsel, the Parties shall use their best efforts to provide advanced notice to
each other, but the *** notice requirement shall not apply.
8.6 Scientific Media Plan and Publication - Xxxxxx shall develop a
media strategy for the Product and shall consult with LJP for its input. The
objective of the media strategy shall be to detail the publication of the
Product's clinical data and to present the clinical data at the appropriate
marketing meetings/targets. The media strategy shall focus on primary
presentations and journal submissions of the clinical and preclinical studies of
the Product to be submitted as part of the U.S. NDA. Specific end point for
media targets shall be defined so that abstract and manuscript concepts may be
developed and authors determined. LJP and Xxxxxx employees may be considered as
authors in addition to investigators and outside experts. Xxxxxx shall have the
responsibility to maintain and update the media strategy. Xxxxxx shall consult
with LJP, but Xxxxxx shall have the final responsibility, except in the 90 - 05
study, where the authorship mechanism has already been defined, to assign
authors, draft publications, and submit to journals. Following the Effective
Date, LJP shall not submit scientific publications on the Substance or the
Product without Xxxxxx'x prior written approval within ***, which approval shall
not be unreasonably withheld.
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ARTICLE IX
TRADEMARKS
9.1 Xxxxxx Trademarks - Xxxxxx and its Affiliates shall market and
sell the Product in the Territory under Xxxxxx Trademarks to be selected and
owned by Xxxxxx and its Affiliates. Xxxxxx and its Affiliates shall, at its
expense, file applications for registration, prosecute and maintain the Xxxxxx
Trademarks.
9.2 Use of LJP Trademarks and LJP Tradedress - At each Party's option, the
Products may bear the tradedresses of Xxxxxx and LJP wherever possible. The name
of LJP as manufacturer will appear on the Product's package label and insert.
LJP's name as a manufacturer will appear on certain promotion materials, except
where prohibited by law or regulation. Xxxxxx shall have a royalty free license
to use those LJP technology related trademarks that LJP uses or intends to use
with products. If Xxxxxx abandons a market, or the Agreement is terminated in
its entirety or in any country, except by Xxxxxx under Section 19.2 for breach
by LJP, LJP shall have the option to obtain a royalty bearing license on the
Xxxxxx Trademark, for use exclusively with the Product upon reasonable terms to
be negotiated and if LJP so elects, then LJP shall pay the applicable
maintenance fees and enforcement costs.
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9.3 No Inconsistent Actions - Neither Party shall take any actions
inconsistent with the other Party's ownership of such other Party's trademarks,
trade names, logos or the like, including (without limitation) by registering or
attempting to register the same. Neither Party shall use any trademarks, trade
names, logos or the like that are confusingly similar to the trademarks, trade
names, logos or the like of the other Party for any Product. Each Party shall
obtain the prior written consent of the other Party, not to be unreasonably
withheld or delayed, to such Party's manner of using the other Party's
trademarks, trade names, logos and the like.
ARTICLE X
PATENT OWNERSHIP, KNOW-HOW AND WARRANTIES
10.1 LJP Patent Rights Ownership - Subject to the license rights granted
to Xxxxxx hereunder, LJP retains all ownership of all LJP Patent Rights and
shall be responsible for filing, prosecuting, maintaining and defending LJP
Patent Rights pursuant to Article XI.
10.2 Ownership of Joint Inventions - For all inventions (if any), made
jointly by the Parties according to the named inventors therefor, which
inventions arise from the performance of this Agreement, the Parties shall apply
for patent protection therefor upon the written request of either Party. Patent
protection for such invention(s) shall be applied for jointly in the name of the
Parties as co-assignees and co-owners of such invention(s) and all patent
application preparation, filing, maintenance and prosecution responsibilities
and costs thereof in the Territory shall be shared equally by the Parties. If
one of the Parties does not wish to share equally in the patent application and
related costs and expenses in any country of the Territory, then the other Party
may seek, obtain and maintain such patent(s) solely in its own name and at its
sole expense and shall have sole and exclusive rights to use the inventions
covered by such patent(s) without payment of any royalties or compensation to
the non-paying Party. Without limiting the generality of the foregoing, in the
event that either party does not wish to
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share in such cost and expenses, then notwithstanding anything to the contrary
contained in this Agreement, such party shall have no license or other rights in
respect of such patent(s). Joint Inventions pursuant to this Section shall not
be included within LJP Patent Rights.
10.3 LJP Patent Warranties - LJP warrants and represents that: (A)
Appendix D sets forth all of the LJP Patent Rights as of the Effective Date; (B)
LJP has not granted any licenses or other rights to any third party inconsistent
with the licenses and other rights granted to Xxxxxx hereunder; and (C) to the
best of LJP's knowledge, LJP is not aware of any prior art which would cause LJP
Patent Rights to be invalid and unenforceable, (D) to the best of LJP's
knowledge there are no existing valid third party patents or other proprietary
rights in the Territory that might be infringed by the manufacture, marketing,
sale or use of the Product (excluding any aspects thereof other than Substance)
in the Territory by Xxxxxx, its Affiliates and Unaffiliated Sublicensees or by
the manufacture of the Substance in the Territory by LJP and its Affiliates and
approved subcontractors.
10.4 Know-How - LJP warrants and represents that as of the Effective Date,
it is not subject to any legal or contractual obligations that would prohibit it
from licensing or disclosing to Xxxxxx any LJP Non-Manufacturing Know-How or LJP
Manufacturing Know-How in accordance with the terms of this Agreement.
10.5 Xxxxxx Intellectual Property - Except as expressly stated in Article
IX, Section 10.2 and section 20.1 (C), Xxxxxx Trademarks, Xxxxxx Regulatory
Know-How and all other Xxxxxx owned or controlled trademarks, copyrights and
patents shall remain the sole and exclusive property of Xxxxxx and LJP shall
acquire no rights thereto.
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ARTICLE XI
PATENT PROSECUTION AND INFRINGEMENT
11.1 Patent Filing and Prosecution - During the Term, except as otherwise
provided in Section 10.2, LJP shall, at its sole expense, file, prosecute,
maintain and defend LJP Patent Rights in the countries listed in Appendix D and
LJP shall control all LJP Patent Rights filings and actions. LJP shall file and
prosecute to obtain extensions of all LJP Patents included in LJP Patent Rights
in any countries in which such extensions are available. Notwithstanding the
foregoing, LJP shall not be required to file, maintain or defend any LJP Patent
Rights or to obtain any LJP Patent extensions where LJP does not believe that
such activities are commercially justified, except that LJP shall not, without
Xxxxxx'x prior written consent, abandon (i) any currently issued LJP Patents, or
(ii) any LJP Patent Applications or (iii) petitions for extensions of LJP Patent
Rights. In the event that LJP determines that any of the foregoing activities
are not commercially justified, LJP shall promptly notify Xxxxxx, and Xxxxxx
shall have the right, at its sole expense, to undertake such activities. LJP
shall assist Xxxxxx, as reasonably requested by Xxxxxx and at Xxxxxx'x expense,
in the event Xxxxxx determines to undertake such activities.
11.2 Notification of Infringement - The Parties shall promptly inform each
other of any information that comes to their attention involving actual or
apparent infringements or misappropriations of LJP Patent Rights, LJP
Manufacturing Know-How, LJP Non-Manufacturing Know-How, Xxxxxx Regulatory
Know-How or Xxxxxx Trademarks by any third party, or claims of alleged
infringement made by any third party in the Territory against LJP, LJP
Affiliates, Xxxxxx, Xxxxxx Affiliates, or any Unaffiliated Sublicensees
resulting from the manufacture, import, offer for sale, sale or use of the
Substance or the Product.
11.3 Infringement of Third Party Rights - LJP shall direct or defend in
its own name and at its own expense any legal or other action or proceeding,
including any
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settlement or negotiation, with respect to any alleged infringement of a third
party patent or other proprietary right as a result of Xxxxxx, its Affiliates or
Unaffiliated Sublicensees making, having made, using or selling the Product in
the Territory (but only to the extent relating to the Substance) or LJP or its
Affiliates or approved subcontractors manufacturing the Substance.
Notwithstanding the foregoing, LJP may elect, following consultations with
Xxxxxx, not to defend any such action based on an analysis of the market
potential in the affected country. During the pendency of any such proceeding or
any appeal thereof, *** of royalties payable under Section 4.1 in the country in
which such proceeding is pending shall be paid by Xxxxxx into an
interest-bearing escrow account pending the outcome of such proceeding. Upon a
favorable final resolution of such proceeding or any appeal thereof, Xxxxxx
shall resume paying LJP full royalties in such country, and all funds in such
escrow account shall be paid to LJP. Upon an unfavorable final resolution of
such proceeding or any appeal thereof or if LJP fails to defend such action, the
funds in such escrow account shall be applied toward the damage award in such
action, if any, and the balance, if any, paid to LJP.
11.4 Termination for Infringement - Should Xxxxxx be prevented by reason
of a non-appealable judgment of a court of competent jurisdiction against it
from making pursuant to Section 14.1 using or selling the Product in the United
States or any Major Country, then, as to that part of the Territory so affected,
Xxxxxx may terminate this Agreement upon written notice to LJP, and the Parties
shall make a final transition accounting and settlement for outstanding bona
fide costs, payments and expenses to which each Party is entitled hereunder.
11.5 Third- Party Infringement of LJP Patents
(A) LJP Enforcement - LJP shall, at its own expense, have the first
right to commence appropriate measures to enforce LJP Patents against third
party infringements after LJP becomes aware of such infringement including, but
not limited to,
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notifying the infringing third party of such infringement and demanding that
such third party cease and desist from such infringement within the following
time frames: (i) with respect to LJP Composition Patents, *** (ii) all other LJP
Patents, *** in any of the countries listed in Appendix H. If such infringement
does not cease, LJP shall commence a legal proceeding to enforce LJP Patents
against third party infringements within *** of the date LJP becomes aware of
such infringement. Upon LJP's request, Xxxxxx shall provide reasonable
assistance in pursuing infringers. LJP shall, at its own expense, use
Commercially Reasonable Efforts to enforce its patents against unlicensed third
parties selling Competing Products not encompassed by the LJP Patent Rights
granted to Xxxxxx. If LJP elects not to enforce such patents, Xxxxxx shall have
the option to commence legal proceedings pursuant to Section 11.5(B).
(B) Xxxxxx Enforcement - If within *** of the date LJP becomes aware
of any alleged third party infringement, either directly or by notice from
Xxxxxx, LJP fails to commence a legal proceeding pursuant to Section 11.5A, or
if at any time LJP discontinues such proceeding, Xxxxxx may, at its option,
commence, continue or intervene, as the case may be, in such proceeding.
Xxxxxx'x commencement, continuation or intervention in such proceeding shall be
at Xxxxxx'x own expense, provided that Xxxxxx shall be entitled to retain all
recoveries in such proceeding or any appeal thereof. Such commencement,
continuation or intervention by Xxxxxx shall not relieve LJP of its obligations
under Section 11.5(A) provided that in any dispute resolution proceeding brought
by Xxxxxx against LJP for a breach of
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Section 11.5(A) Xxxxxx shall not be entitled to recover the costs of
such commencement, continuation or intervention.
(C) Notwithstanding (A) and (B) above, where statutory notice
provisions apply, LJP shall have *** after LJP becomes aware of third party
infringement to commence appropriate measures to enforce the Patents against
third party infringement. After ***, provided LJP has not commenced legal
actions, Xxxxxx may at its option take action under 11.5 (B).
11.6 Allocation of Recoveries - In any action brought by or against a
third party infringer, any monetary damages or compensation recoveries obtained
in LJP's and/or Xxxxxx'x favor in connection with such actions shall be
allocated as follows: (A) first, the prosecuting Party or Parties shall recover
reasonable attorneys' fees and expenses and (B) the remainder shall be allocated
between Xxxxxx and LJP so as to fairly reflect (i) Xxxxxx'x lost profits and
other damages, and (ii) the amounts that LJP would have been paid hereunder had
Xxxxxx made the lost sales for which Xxxxxx is being compensated through such
damage award.
11.7 Mutual Cooperation - In the event of any patent infringement
litigation in the Territory involving the Product and any LJP Patent Rights, the
non-prosecuting or non-defending Party shall render such reasonable assistance
as may be requested by the prosecuting or defending Party in connection with
such infringement actions. If one party requests the other Party's reasonable
assistance in connection with such infringement claims or actions, the
requesting Party shall reimburse the other Party for such direct, documented
out-of-pocket expenses as are reasonably incurred during the course of its
providing such requested assistance. Before incurring such expenses, the Parties
shall in good faith agree in writing on the nature and extent of assistance to
be
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rendered, and an estimate of the total expenses, which expenses shall be
monitored periodically.
ARTICLE XII
COMPETING PRODUCTS
12.1 Obligations With Respect to Competing Products - For a period from
the Effective Date until (a) *** after the first Regulatory Approval in any
country in the Territory, or (b) expiration or Termination of the Agreement,
whichever is sooner, each Party and its Affiliates shall not ***.
ARTICLE XIII
PRODUCT WARRANTIES AND INDEMNIFICATION
13.1 Warranties and Limitations
(A) LJP Warranties - LJP warrants and represents that the Substance
and Interim Product manufactured by LJP, its Affiliates or approved
subcontractors and delivered to Xxxxxx, its Affiliates or Unaffiliated
Sublicensees hereunder shall (i) from the date of shipment until the end of the
specified shelf life conform to the Specifications and all applicable laws and
regulations relating to the manufacture of the Substance and Interim Product,
including, but not limited to, applicable supranational, national and local laws
in the country where manufacturing occurs and U.S. FDA Good Manufacturing
Practices and equivalent Good Manufacturing Practices in Europe and Japan to the
extent applicable to LJP, its Affiliates or approved subcontractors as the
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manufacturer(s) of the Substance and Interim Product and (ii) be transferred
free and clear of any security interests, liens and encumbrances.
(B) Limitations - Except as otherwise expressly stated herein,
no warranties or representations, express or implied, including the warranties
of fitness for a particular purpose and merchantability, regarding the Product,
the Substance and Interim Product, or any other matters are made or shall be
deemed to have been made by LJP. Subject to LJP's warranty and indemnification
obligations hereunder for the Substance and Interim Product, LJP shall have no
responsibility or liability for Product used, supplied, marketed, or sold by
Xxxxxx, its Affiliates or Unaffiliated Sublicensees after the Substance has been
incorporated into Product by Xxxxxx, its Affiliates or Unaffiliated
Sublicensees.
13.2 Reciprocal Indemnification Provisions
(A) LJP Indemnification - LJP shall defend, indemnify and hold
Xxxxxx, its Affiliates, and Unaffiliated Sublicensees, and the officers,
directors, employees and agents of each, harmless from and against any and all
liabilities, damages, claims, demands, costs, or expenses (including reasonable
attorneys' fees) claimed by any third party for any property or other economic
loss or damage or injury or death suffered by it to the extent the same is
determined to have been caused by the negligence, fault, willful wrongdoing or
any other act or omission or breach of this Agreement relating to LJP's, its
Affiliates' or approved subcontractors' manufacture of the Substance and Interim
Product supplied to Xxxxxx, its Affiliates and Unaffiliated Sublicensees,
subject to the conditions of indemnification set forth in Section 13.3.
(B) Xxxxxx Indemnification - Xxxxxx shall defend, indemnify and hold
LJP, its Affiliates and approved subcontractors, and the officers, directors,
employees and agents of each, harmless from and against any and all liabilities,
damages, claims, demands, or costs, or expenses (including reasonable attorneys'
fees) claimed by any
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third party for any property or other economic loss or damage, injury or death
suffered by it to the extent the same is determined to have been caused by the
negligence, fault, willful wrongdoing or any other act or omission, or breach of
this Agreement relating to Xxxxxx'x, its Affiliates' or Unaffiliated
Sublicensees' manufacture, development, registration, marketing or sale
activities involving the Product, subject to the conditions of indemnification
set forth in Section 13.3.
13.3 Conditions of Indemnification - With respect to any indemnification
obligations of either Party to the other Party under this Agreement, including
but not limited to the indemnification obligations of the Parties under Sections
13.2(A) and 13.2(B), the following conditions must be met for such
indemnification obligations to become applicable: (A) the indemnified Party
shall notify the indemnifying Party promptly in writing of any claim which may
give rise to an obligation on the part of the indemnifying Party hereunder; (B)
the indemnifying Party shall be allowed to timely undertake the sole control of
the defense of any such action and claim, including all negotiations for the
settlement, or compromise of such claim or action at its sole expense; and (C)
the indemnified Party shall render reasonable assistance, information,
co-operation and authority to permit the indemnifying Party to defend such
action, it being agreed that any out-of-pocket expenses or other expenses
incurred by the indemnified Party in rendering the same shall be borne or
reimbursed promptly by the indemnifying Party.
ARTICLE XIV
STANDBY MANUFACTURING RIGHTS
14.1 Inability to Manufacture - LJP shall promptly notify Xxxxxx in
writing of any circumstances rendering it unable to manufacture or supply the
Substance and the Interim Product for more than *** pursuant to its obligation
under the Supply Agreement, Appendix G, and the estimated duration of such
circumstances. If LJP is unable to supply the Substance and the Interim Product
pursuant to its obligations
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under the Supply Agreement, Appendix G, *** or more consecutive days for any
reason (including but not limited to a Force Majeure event), representatives of
the Parties shall meet to review the reasons for the inability to supply and
discuss whether LJP, Xxxxxx or a third party would be in the better position to
resume or commence (as applicable) manufacture of the Substance and Interim
Product as expeditiously as possible. If LJP (A) does not inform Xxxxxx that LJP
believes it (or its approved subcontractor) is in the better position to do so,
with reasonable technical assistance from Xxxxxx, or (B) LJP cannot demonstrate
to Xxxxxx'x reasonable satisfaction that LJP (or its approved subcontractor) is
in a better position to do so, with reasonable technical assistance from Xxxxxx,
then Xxxxxx may, at its option and expense, elect to manufacture or have a third
party manufacture subject to the limitations of this paragraph. Within *** after
the Effective Date, and with updates as appropriate thereafter, LJP will place
all regulatory filing documentation including the drug master file for Substance
and Interim Product and all LJP Manufacturing Know-How documentation necessary
for Xxxxxx to manufacture the Substance and the Interim Product with an
independent third party escrow agent for Xxxxxx'x use under this standby right.
To the extent necessary to implement such standby manufacturing rights, LJP
hereby grants Xxxxxx a contingent non-exclusive license under LJP's Patent
Rights and LJP Manufacturing Know-How to make, have made, use, import, the
Substance and Interim Product in the Territory, which license shall become
effective only under the circumstances specified in this Section 14, and LJP
shall provide Xxxxxx with such manufacturing assistance and documentation as
Xxxxxx may require in connection therewith. To the extent that Xxxxxx'x use of
LJP's Manufacturing Know-How results in a liability for LJP to pay royalties to
a third party, Xxxxxx shall bear the expense of such royalties for the duration
of Xxxxxx'x use of LJP's Manufacturing Know-
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How. Xxxxxx'x exercise of this right will not supersede LJP's obligation to
manufacture all of Xxxxxx'x requirements for Substance and the Interim Product.
LJP shall notify Xxxxxx when it can manufacture all of Xxxxxx'x requirements for
Substance and the Interim Product, and then Xxxxxx shall cease to manufacture or
have manufactured within a reasonable time period, except where Xxxxxx has
incurred a substantial and irrevocable investment in facilities and equipment
that is not reimbursed by LJP. LJP will also provide Xxxxxx, at its expense,
reasonable manufacturing support during the time when Xxxxxx is exercising these
standby manufacturing rights.
14.2 Mutual Agreement - In addition, LJP may, at any time, xxxxx Xxxxxx
the option to exercise standby manufacturing rights for the Substance and the
Interim Product upon such terms as shall be agreed upon in writing by the
Parties, provided that such grant to Xxxxxx shall not relieve LJP of its supply
obligations under the Supply Agreement, Appendix G.
ARTICLE XV
MANUFACTURING INSPECTIONS AND CHANGES
15.1 Inspections - Each Party reserves the right to inspect the other
Party's manufacturing facilities for the Substance, Interim Product and Product
and related books and records at any time upon reasonable prior notice to the
extent necessary or appropriate to ensure the other Party's compliance with the
terms of this Agreement relating to the manufacture of Substance Interim Product
and Product and prior to any Regulatory Approval and prior to LJP's commencement
of manufacturing operations. The books and records subject to inspection
include, but are not limited to, batch records, manufacturing procedures and
guidelines, and all quality assurance/quality control documentation. Each party
shall furnish to the other copies of all reports prepared concerning these
inspections or audits. The foregoing books and records, and all information and
data contained therein, shall be deemed LJP Confidential Information or Xxxxxx
Confidential Information hereunder, as applicable, and shall not
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be used for any purpose other than as provided in the Section 15.1 or as
otherwise expressly authorized in this Agreement.
15.2 Regulatory Inspections - LJP shall allow representatives of the U.S.
FDA and any other regulatory agency or authority with jurisdiction over the
manufacture of Substance or Interim Product to tour and inspect all facilities
utilized by LJP in the manufacture, testing, packaging, storage, and shipment of
the Substance Product or Interim Product sold under this Agreement, upon prior
reasonable notice, and shall cooperate with such representatives in every
reasonable manner. LJP shall notify Xxxxxx promptly whenever LJP receives notice
of a pending inspection of its manufacturing facilities by any regulatory
agency. LJP shall also provide Xxxxxx with a copy of any U.S. FDA Form 483
notices of adverse findings, regulatory letters or similar notifications it
receives from any other governmental authority setting forth adverse findings or
non-compliance with any applicable laws, regulations or standards relating to
the items supplied by it hereunder within *** of its own receipt thereof. LJP
shall also provide Xxxxxx with a copy of LJP's proposed written response to such
governmental authority before submission and shall incorporate any changes
thereto which Xxxxxx may reasonably and timely request.
15.3 Manufacturing Changes
(A) Required Manufacturing Changes - Such changes that are required
to comply with applicable laws and regulations shall be deemed "Required
Manufacturing Changes." LJP shall implement Required Manufacturing Changes
as soon as practicable in a reasonable time period, after receipt of Xxxxxx'x
request or within the time frame required by the U.S. FDA or any corresponding
regulatory authority in the Territory. If LJP does not implement Required
Manufacturing Changes
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within the time frame referenced in the preceding sentence or notify Xxxxxx in
writing that LJP disputes whether Xxxxxx'x requested changes are Required
Manufacturing Changes, then Xxxxxx shall have the option to exercise standby
manufacturing rights for the Substance and the Product pursuant to Section 14.1
until such time as LJP implements such Required Manufacturing Changes except
where Xxxxxx shall incur a substantial and irrevocable investment in facilities
and equipment which is not reimbursed by LJP. If LJP notifies Xxxxxx in writing
that LJP disputes whether Xxxxxx'x requested changes are Required Manufacturing
Changes, then LJP shall implement such changes at Xxxxxx'x expense such changes
at Xxxxxx'x expense and the Parties shall resolve such dispute by reference to a
mutually agreed upon independent third party regulatory expert as soon as
possible for a binding determination of whether the requested changes are
Required Manufacturing Changes. If such independent third party regulatory
expert determines that Xxxxxx'x requested changes are Required Manufacturing
Changes, LJP shall repay Xxxxxx for such changes as soon as possible.
(B) Xxxxxx-Initiated Manufacturing Changes - Xxxxxx may, from time
to time during the Term, make a written request for changes in LJP's
manufacturing operations for the Substance or Interim Product that are not
Required Manufacturing Changes, but that are intended to promote quality
control/quality assurance and/or achieve greater efficiency or cost savings in
the manufacturing process ("Other Manufacturing Changes"). These Other
Manufacturing Changes are at Xxxxxx'x own expense except to the extent of
manufacturing changes necessary to meet LJP's obligations under the Supply
Agreement, Appendix G, Section 6.3 A. LJP shall give due consideration to making
Other Manufacturing Changes. LJP shall have *** from receipt of Xxxxxx'x written
request for Other Manufacturing Changes to provide Xxxxxx a written response to
such request indicating whether LJP shall comply with such request.
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(C) LJP-Initiated Manufacturing Changes - During the Term, LJP shall
not make any changes to its manufacturing operations for the Substance and
Interim Product that could reasonably be expected to prevent LJP from complying
with its regulatory obligations hereunder without the prior written consent of
Xxxxxx, which consent shall not be unreasonably withheld. Xxxxxx shall provide,
at LJP's request, reasonable regulatory assistance to implement such changes and
the parties shall use their best efforts to effectively manage the frequency of
these changes.
ARTICLE XVI
PRODUCT RECALLS
16.1 Recall Notification and Implementation - Each Party shall promptly
notify the other Party in writing of any facts relating to the advisability of
the recall, destruction or withholding from the market of the Product anywhere
in the world (collectively, "Recall"). If at any time (A) any governmental or
regulatory authority in the Territory issues a request, directive or order for a
Recall; (B) a court of competent jurisdiction orders a Recall in the Territory;
or (C) Xxxxxx determines, following consultation with LJP (except in emergency
situations in which there is insufficient time for such consultation), that a
Recall in the Territory is necessary or advisable, Xxxxxx shall take all
appropriate corrective actions to effect the Recall and LJP shall provide Xxxxxx
with such cooperation in connection with the Recall as Xxxxxx may reasonably
request.
16.2 Recall Costs and Expenses - Each Party shall bear the costs and
expenses of any Recall in the Territory to the extent such Recall is the result
of any fault attributable to that Party or its Affiliates.
16.3 Records of Sales - Both Parties shall keep for *** after termination
of this Agreement records of their respective sales and customers and batch
reports of
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Products sufficient to adequately administer a recall of any Product
and to fully cooperate in any decision to recall, retrieve and/or replace any
Product.
ARTICLE XVII
ADVERSE DRUG EXPERIENCES
During the Term, each Party shall promptly inform the other Party of any
information it obtains or develops regarding the safety of the Product anywhere
in the world and shall promptly report to the other Party any information
regarding serious adverse reactions or side effects related to the use of the
Product. The responsibility for determining the Party informing the appropriate
regulatory authority will be defined in the Developmental Plan. To allow the
Parties to comply with the adverse drug experience reporting requirements for
the Product to the U.S. FDA and its counterpart regulatory agencies around the
world, each Party shall notify the other Party in writing of any "adverse drug
experience" that is considered "serious" and adverse as defined in U.S. FDA
regulations (21 CFR 314.80) or the comparable regulations of other regulatory
agencies, regardless of source, so that the other Party will receive such notice
within *** of a Party's first having "obtained or otherwise received" such
"adverse drug experience" from "any source", or in a time period for expedited
reporting as agreed to by the appropriate regulatory authority as those terms
are defined in U.S. FDA regulations (21 CFR 314.80) and other equivalent country
regulations. Such information shall be communicated by the Parties to each other
at the following addresses:
To Xxxxxx: Xxxxxx Laboratories
Attn: Manager, Medical Product Complaints
Dept. 98Q, Bldg. AP30
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx, XXX 00000-0000
Telephone: (847) ***
Facsimile: (847) ***
To LJP: La Jolla Pharmaceutical Company
Attn: Vice President, Clinical Development
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6455 Xxxxx Xxxxx Xxxxx,
Xxx Xxxxx, Xxxxxxxxxx, XXX 00000
Telephone: (619) ***
Facsimile: (619) ***
Each Party shall provide the other with copies of all adverse drug
experience reports on the Product filed with the U.S. FDA or other regulatory
agencies in the Territory.
ARTICLE XVIII
REPRESENTATIONS, WARRANTIES AND COVENANTS
18.1 Mutual Representations and Warranties Each Party hereby represents
and warrants to the other Party as follows:
(A) Corporate Status - It is a corporation duly organized and
validly existing under the laws of its state or other jurisdiction of
incorporation or formation;
(B) Authority - It has the power and authority to execute and
deliver this Agreement, and to perform its obligations hereunder;
(C) No Conflicts - The execution, delivery and performance by it of
this Agreement and its compliance with the terms and provisions hereof does
not and will not conflict with or result in a breach of any of the terms and
provisions of or constitute a default under (i) any loan agreement, guaranty,
financing agreement, agreement affecting a product or other agreement or
instrument binding or affecting it or its property; (ii) the provisions of
its charter documents or by-laws; or (iii) any order, writ, injunction or
decree of any court or governmental authority entered against it or by which
any of its property is bound;
(D) No Approvals - Except for the regulatory filings and approvals
for the Product referenced herein, no authorization, consent or approval of
any
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governmental authority or third party is required on the part of such Party for
the execution, delivery or performance by it of this Agreement, and the
execution, delivery or performance of this Agreement on the part of such Party
will not violate any law, rule or regulation applicable to such Party;
(E) Enforceability - This Agreement has been duly authorized,
executed and delivered on the part of such Party and constitutes its legal,
valid and binding obligation enforceable against it in accordance with its
terms subject, as to enforcement, to bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or affecting creditors'
rights and to the availability of particular remedies under general equity
principles; and
(F) Compliance With Laws - It shall comply with all applicable laws
and regulations relating to its activities under this Agreement.
18.2 Each Party covenants:
(A) To keep the other Party informed as to any material problems
discovered by that Party relating to the Substance, the Interim Product or the
Product and any resolutions implemented for such problems; and
(B) To promptly notify the other Party of any actual or potential
government action relating to the Substance, the Interim Product or the Product
and to discuss with the other Party the appropriate response to such action.
ARTICLE XIX
TERM AND EARLY TERMINATION RIGHTS
19.1 Term - The Term shall be as stated in Section 1.35
19.2 Termination for Cause - Either Party shall have the right, without
prejudice to any other rights or remedies available to it, to terminate this
Agreement for cause by written notice to the other Party in any of the following
events:
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(A) Bankruptcy - If the other Party is unable to fulfill its
obligations and becomes insolvent, is adjudged bankrupt, applies for judicial or
extra-judicial settlement with its creditors, makes an assignment for the
benefit of its creditors, voluntarily files for bankruptcy or has a receiver or
trustee (or the like) in bankruptcy appointed by reason of its insolvency, or in
the event an involuntary bankruptcy action is filed against the other Party and
not dismissed within ninety (90) days, or if the other Party becomes the subject
of liquidation or dissolution proceedings, which proceedings are not dismissed
within ninety (90) days, or otherwise discontinues business.
(B) Material Breach - If the other Party commits a Material Breach
of this Agreement (as defined in Section 24.2 (C) ) and the Party alleged to be
in breach fails to either (i) cure such breach within *** after receipt of
written notice from the Party asserting the breach, or (ii) commence dispute
resolution proceedings under Article XXIV contesting whether a breach has
occurred and/or whether such breach is a Material Breach within *** after
receipt of written notice from the Party asserting the breach.
19.3 Termination by Mutual Agreement - This Agreement may be terminated at
any time by written agreement of the Parties.
19.4 Termination by Xxxxxx
(A) FDA or other Regulatory Authority Decision - If at any time
during the Term, the U.S. FDA or other Major Country Regulatory Authority
reaches a final decision, not subject to further action or discussion within the
U.S. FDA, or other Major
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Country Regulatory Authority that there can be no further testing or use of the
Substance, Interim Product, or Product in humans, then Xxxxxx shall have the
right at any time within *** following such decision, to terminate this
Agreement at Xxxxxx'x option either in its entirety or on a country by country
basis, upon *** prior written notice to LJP.
(B) Safety or Efficacy - In addition, if at any time during the
Term, but in no event prior to the first anniversary of the Effective Date (i)
Xxxxxx decides not to file an application for Regulatory Approval in the United
States or a Major Country or decides to withdraw such applications previously
filed in the United States or in a Major Country in each case due to documented
adverse reactions or other safety issues based on a scientifically documented
test with the Product or the Product's lack of efficacy or limited efficacy
(collectively, "Safety or Efficacy Issues") or (ii) Xxxxxx'x application for
Regulatory Approval in the United States or a Major Country is rejected due to
Safety or Efficacy Issues or (iii) Xxxxxx'x application(s) for Regulatory
Approval in the United States or a Major Country is subsequently withdrawn
because of Safety or Efficacy Issues or (iv) the Product is withdrawn or
recalled from the market in the United States or a Major Country because of
Safety or Efficacy Issues, then Xxxxxx may, at its option, terminate this
Agreement with respect only to the affected country upon sixty (60) days prior
written notice to LJP. If Xxxxxx does so, Xxxxxx'x termination notice shall
specify the country or countries of the Territory affected.
(C) Without Cause - Within *** of the availability of the final
Xxxxxx approved scientific report of the 00 - 00 Xxxxx, Xxxxxx shall have the
right to terminate this Agreement without cause upon *** prior written notice to
LJP.
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ARTICLE XX
CONSEQUENCES OF TERMINATION
20.1 Effect of Termination
(A) Termination or expiration of this Agreement in its entirety or
on a country-by-country basis through any means and for any reason shall not
relieve the Parties of any obligations, including without limitation all payment
obligations accruing prior to termination or expiration, including, but not
limited to, milestone and incentive payments, Xxxxxx purchase of Substance and
Interim Product which have been properly ordered, funding of all approved
ongoing development expenses which cannot be canceled, and royalties accrued and
unpaid at the effective date of such termination, and shall be without prejudice
to the rights and remedies of either Party with respect to any prior breach of
any of the provisions of this Agreement.
(B) In case of termination of this Agreement, Xxxxxx shall retain
no rights whatsoever to Products, Substance, LJP Patent Rights, LJP
Manufacturing Know-How and LJP Non-Manufacturing Know-How, LJP Inventions or LJP
Confidential Information relating thereto
(C) If this Agreement is terminated, for any reason other than by
Xxxxxx pursuant to Section 19.2, (i) the parties shall work together to stop or
transfer to LJP, at LJP's option, in an efficient and effective manner, all
recently started or ongoing joint programs and not to initiate any new joint
programs; (ii) Xxxxxx will fully cooperate with LJP in the rapid transfer of all
available Confidential Information to LJP, as well as all appropriate
information concerning ongoing clinical studies, regulatory and marketing
matters, etc; (iii) the parties will agree on appropriate terms of a
non-exclusive license with a reasonable royalty which shall enable LJP to
exploit any Inventions in relation to Substance or Products made by Abbott
hereunder; and (iv) Abbott will also transfer to LJP the ownership and title and
all documentation related to all pending and approved
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regulatory filings, registration documents, information, and data for Products
in the Territory. If Abbott chooses to terminate this Agreement, LJP will have
the right to review and preapprove within *** the text and timing of all
announcements related to termination, provided that such approval shall not be
unreasonably withheld.
(D) In the event of a termination of this Agreement as to a
particular country, and not as a whole, the reciprocal non-competition
obligations of the Parties under Section 12.1 shall no longer apply to that
country, provided that each party shall use Commercially Reasonable Efforts,
consistent with any applicable laws or regulations, to ensure that Competing
Products are not developed, marketed or sold in that country for export, to or
sale in another country to which the reciprocal non-competition obligations of
the Parties under Section 12.1 remain applicable.
(E) The Party's respective indemnification obligations hereunder
shall survive any expiration or termination of this Agreement. The limitation of
damages set forth in Article 25 hereof shall survive expiration or termination
of this Agreement.
20.2 License Rights - If Abbott terminates this Agreement pursuant to
Section 19.4 or if LJP terminates this Agreement pursuant to Section 19.2,
Xxxxxx'x license rights in LJP Patent Rights and LJP Manufacturing Know How and
LJP Non-Manufacturing Know How hereunder shall terminate.
20.3 Fully Paid-Up License - Except as otherwise provided in Section 4.1
or 20.2, upon expiration of the Term of this Agreement, Xxxxxx'x license rights
in LJP Patent Rights and LJP Non-Manufacturing Know-How hereunder shall become
nonexclusive, fully paid-up and irrevocable.
20.4 Mutual Agreement - If the Parties terminate this Agreement by mutual
written agreement pursuant to Section 19.3, the Parties shall specify the
consequences of such termination in such written agreement.
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ARTICLE XXI
NOTICES
21.1 Manner of Giving Notices - All notices required or permitted in
connection with this Agreement shall be writing and may be given by personal
delivery, prepaid registered or certified mail, telegram, telex or telecopier,
addressed to the Party to receive the same at its address set forth below, or to
such other address as it shall later designate by like notice to the other
Party. Notice of termination of this Agreement if given by telex, telegram or
telecopier, shall be confirmed by prepaid registered or certified mail dated and
posted within twenty-four (24) hours. The effective date of receipt of any
notice if served by telegram, telex or telecopier shall be deemed the first
business day in the city of destination following the dispatch thereof and if
given by mail only, it shall, unless earlier received, be deemed effective not
later than five (5) days after the date of posting. Notice by personal delivery
shall be effective as of the date of such delivery.
21.2 Addresses for Notices
Notices to LJP shall be sent to:
La Jolla Pharmaceutical Company
Attn: President and CEO
0000 Xxxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx, XXX 00000
Facsimile: (619) ***
With a copy to:
Xxxxxxxx & Xxxxxxxx, LLP
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx, XXX 00000
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Attn: Xxxxxx X. Xxxxxx, Esq.
Facsimile: (415) ***
Notices to Abbott shall be sent to:
Xxxxxx Laboratories
Hospital Products Division
Attn: Xxxxxxxxx
Xxxx. 0000, Xxxx. XX00
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx, XXX 00000-0000
Facsimile: (847) ***
and
Xxxxxx Laboratories
Xxxxxx International
Attn: President
Dept. 06WP, Bldg. AP30
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx, XXX 00000-0000
Facsimile: (847) ***
With a copy to:
Xxxxxx Laboratories
General Counsel
Dept. 364, Bldg. AP6C
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx, XXX 00000-0000
Facsimile: (847) ***
21.3 Notification - Abbott shall also be responsible for notifying,
reporting or registering this Agreement or the business relationship created
hereby with any government authorities in the Territory to the extent legally
required. LJP shall provide Abbott with such assistance as Abbott may reasonably
request in connection therewith.
ARTICLE XXII
INTEGRATION
This Agreement and the Stock Purchase Agreement represent the entire
Agreement between the Parties relating to the subject matter hereof and
supersedes all
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prior understandings, and agreements between the Parties, whether written or
oral, including, but not limited to the confidentiality agreements between the
Parties dated November 20, 1995 and January 25, 1996. No supplement,
modification or amendment of this Agreement shall be binding unless executed by
the Parties in writing and signed by the duly authorized representatives of both
Parties.
ARTICLE XXIII
ASSIGNMENT
Neither Party may assign this Agreement or any of its rights hereunder, nor
delegate any of its duties or obligations hereunder, to any third party without
the prior written consent of the other Party, except (i) to an Affiliate, or
(ii), in connection with the acquisition of either Party, whether by merger,
consolidation, or sale of all or substantially all of its assets. It shall be a
condition to the effectiveness of any permitted assignment that the assignee
agree in writing to be bound by all terms and conditions of this Agreement and
to assume all of the assignor's obligations hereunder. In the case of an
assignment to an Affiliate, the assignor shall remain liable for all of its
obligations hereunder. Any attempted assignment in violation of the foregoing
shall be null and void. In the event that LJP decides to sell or otherwise
dispose of its manufacturing operations relating to the supply of the Substance,
including, but not limited to in connection with an acquisition of LJP as a
whole, LJP shall provide Abbott with notice thereof and an opportunity to make
an offer to acquire such operations, subject in each case to any legal or
contractual restrictions on LJP's ability to provide such notice and
opportunity.
ARTICLE XXIV
GOVERNING LAW AND DISPUTE RESOLUTION
24.1 Governing Law - This Agreement, including the validity, construction,
interpretation and performance thereof, shall be governed entirely by the laws
of the State of California, USA, without regard to its conflict of laws
provisions. It is the
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specific intent and agreement of the Parties that the United Nations Convention
on the International Sale of Goods shall not apply to this Agreement.
24.2 Dispute Resolution - All disputes arising out of or in connection
with this Agreement, except those involving actions commenced by or involving
third parties and affecting or involving only one of the Parties or involving a
breach of Section 8.1, 8.2 and 8.3, shall be resolved with the following
mechanism:
(A) Attempted Amicable Resolution - The Parties shall promptly give
each other written notice of any disputes requiring resolution hereunder, which
written notice shall specify the Section (s) of this Agreement the other Party
is alleged to have breached and shall briefly state the initiating Party's
claims, and the Parties shall use reasonable efforts to resolve any such
disputes in an amicable manner.
Any disputes arising in connection with this Agreement which cannot be
resolved in an amicable manner by representatives of the Parties shall be
referred, not later than thirty (30) days after initiation of dispute resolution
proceedings under this Section 24.2, to the following corporate officers of the
Parties for resolution:
For Abbott:
President of the Hospital Products Division or Xxxxxx International
President as determined by Abbott (or his or her designee)
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For LJP:
President and CEO of LJP (or his or her designee)
Such officers (or their designees) shall attempt to resolve the dispute
and shall communicate with each other by facsimile or telephone or in personal
meetings in an effort to resolve the dispute.
(B) Alternative Dispute Resolution - Any disputes arising in
connection with this Agreement which cannot be resolved by the Parties within
twenty eight (28) days after initiation of dispute resolution proceedings under
Section 24.2 shall be finally settled by binding Alternative Dispute Resolution
in accordance with the procedure set forth in Appendix F. Judgment upon any
award rendered by the neutral in such proceedings may be issued and enforced by
any court having competent jurisdiction.
(C) ADR Ruling - The neutral in any ADR proceeding under Section
24.2 shall determine and advise the Parties in writing:
(i) whether either Party has committed a breach of any of its
obligations under this Agreement; and
(ii) if either Party has committed a breach;
(a) whether such breach is a Material Breach or a breach
other than a Material Breach; and
(b) the appropriate remedy for any such breach pursuant
to Section 24.2 D.
As used herein, "Material Breach" by Abbott shall mean (i) a failure by
Abbott to pay any milestone or incentive payments pursuant to Section 3.1 or 4.2
or any royalty payments pursuant to Section 4.1 or any other amount owing to LJP
hereunder within *** of written notice of breach from LJP, or (ii) a failure by
Abbott to purchase XXX
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common stock required to be purchased under the Stock Purchase Agreement within
*** of Xxxxxx'x receipt of written notice of breach from LJP, or (iii) any
breach by Abbott of its non-competition obligations under Section 12.1 that is
not remedied within *** of Xxxxxx'x receipt of written notice of breach from
LJP. As used herein, "Material Breach" by LJP shall mean (i) a failure by LJP to
pay any amount owing to Abbott that is not remedied within *** of LJP's receipt
of written notice of breach from Abbott, or (ii) any breach by LJP of its
non-competition obligations under Section 12.1 that is not remedied within ***
of LJP's receipt of written notice of breach from Abbott. If either Party is
alleged to have committed a Material Breach as defined above and disputes in
good faith whether a Material Breach has occurred, the affected Party may
initiate an ADR proceeding hereunder within the above *** notice period without
having this Agreement terminated, provided the affected Party complies with the
ruling of the ADR neutral with respect to the alleged Material Breach.
(D) Remedies - The neutral in any ADR proceeding under Section 24.2
shall have the authority to award the non-breaching Party the following relief
(except as otherwise provided in Section 24.2F):
(i) for a Material Breach, an order to pay the amount due, an
award of damages, if any, and equitable relief, if appropriate, and termination
of this Agreement; and
(ii) for a breach other than a Material Breach, an award of
damages and/or equitable relief.
(E) Dispute Resolution for Sections 7.1 and 7.2 - LJP shall be
entitled to commence dispute resolution proceedings pursuant to Section 24.2 to
challenge
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Xxxxxx'x compliance with its Commercially Reasonable Efforts obligations in the
United States or any Major Country pursuant to Sections 7.1 and 7.2, not more
than once every *** for each respective country. The determination of whether
Abbott has used its Commercially Reasonable Efforts in each respective country
shall be based on the totality of circumstances. If LJP successfully establishes
that Abbott has failed to use its Commercially Reasonable Efforts, in any given
country (i) for *** such violations, the ADR neutral shall have the authority to
award damages or equitable relief to LJP (but not termination of Xxxxxx'x
license rights in such country) and (ii) for *** violations in the same country,
the ADR neutral shall have the authority to award, in the ADR neutral's
discretion, damages, equitable relief and/or termination of Xxxxxx'x license
rights in the country where such breach occurs.
(F) Breach of Confidentiality Obligation - For an alleged breach of
Sections 8.1, 8.2 or 8.3, either Party may, at its option, initiate judicial
proceedings to seek injunctive relief against the breaching Party, but not any
other type of relief, provided that the injured Party may also seek money
damages in an ADR proceeding.
24.3 Effect of Commencing Dispute Resolution - If either Party in good
faith commences dispute resolution proceedings under Section 24.2, (A) any
applicable notice periods or cure periods hereunder shall be temporarily
suspended pending the outcome of such dispute resolution proceedings and (B) the
initiating Party may, at its option, pay any amounts payable to the other Party
that are in dispute into an interest-bearing escrow account pending the outcome
of such dispute resolution proceedings.
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ARTICLE XXV
LIMITATION OF DAMAGES
In no event shall either Party be liable to the other Party for any
indirect, incidental or consequential damages in connection with the performance
of this Agreement or any breach of this Agreement.
ARTICLE XXVI
FORCE MAJEURE
Neither Party shall be held in breach of this Agreement for failure to
perform any of its obligations hereunder (other than the payment of amounts due
hereunder) to the extent and for the time period such performance is prevented
in whole or in part by reason of any Force Majeure event, including but not
limited to industrial disputes, strikes, lockouts, riots, mobs, fires, floods,
and other natural disasters and Acts of God, wars declared or undeclared, civil
strife, embargo, delays in delivery or defects or shortages of raw materials
from suppliers, loss or breakdown of any production equipment, losses or
shortage of power, damage to or loss of goods in transit, currency restrictions,
or events caused by reason of laws, regulations or orders by any government,
governmental agency or instrumentality or by any other supervening unforeseeable
circumstances whatsoever beyond the control of the Party so affected. The Party
so affected shall (A) give prompt written notice to the other Party of the
nature and date of commencement of the Force Majeure event and its expected
duration and (B) use its reasonable efforts to avoid or remove the Force Majeure
event as soon as possible to the extent it is so able to do.
ARTICLE XXVII
RELATIONSHIP OF PARTIES
The relationship of the Parties under this Agreement is that of
independent contractors. Nothing contained in this Agreement shall be construed
so as to constitute
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the Parties as partners, joint venturers or agents of the other. Neither Party
has any express or implied right or authority under this Agreement to assume or
create any obligations or make any warranties and representations on behalf of
or in the name of the other Party, or to bind the other Party to any contract,
agreement or undertaking with any third party, and no conduct of the Parties
pursuant to the terms of this Agreement shall be deemed to establish such right
or authority. Neither Party shall make any representation to third parties that
the relationship created hereby constitutes a partnership, joint venture or
agency relationship.
ARTICLE XXVIII
SEVERABILITY OF CLAUSES
In case one or more of the provisions contained in this Agreement shall,
for any reason, be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Agreement, but this Agreement shall be construed by limiting such
invalid, illegal or unenforceable provision, if such is not possible, by
deleting such provision from this Agreement.
ARTICLE XXIX
NON-WAIVER
The failure by either Party at any time to enforce any of the terms or
provisions or conditions of this Agreement or exercise any right hereunder shall
not constitute a waiver of the same or affect that Party's rights thereafter to
enforce or exercise the same. No waiver of any of the provisions of this
Agreement shall be deemed binding unless executed in writing by the Party to be
bound by it.
ARTICLE XXX
HEADINGS
The headings in this Agreement are for convenience of reference only and
shall not be used in the interpretation of any provisions hereof.
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ARTICLE XXXI
EXECUTION
This Agreement shall be executed by the Parties in two (2) original
counterparts, one (1) original counterpart being retained by each Party and
either of which shall be deemed sufficient to prove the existence and terms and
conditions hereof. This Agreement may be executed by the Parties by the exchange
of facsimile signature pages, with signed original counterparts of the Agreement
to be exchanged by the Parties promptly thereafter.
IN WITNESS WHEREOF, the Parties' duly authorized representatives hereto have
executed this Agreement as of the Effective Date.
LA JOLLA PHARMACEUTICAL XXXXXX LABORATORIES
COMPANY
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxxxx, Xx.
--------------------------- ----------------------------------
Title: President & CEO Title: Senior Vice President,
International Operations
Date: 12/23/96 Date: 12/23/96
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APPENDIX A
DEFINITION OF SUBSTANCE
***
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APPENDIX B
FULLY BURDENED DEVELOPMENT COST
***
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***
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***
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***
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***
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***
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APPENDIX C
FULLY BURDENED MANUFACTURING COST
Definitions
***
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***
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***
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***
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APPENDIX D
PART I
LJP PATENTS
***
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***
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APPENDIX D
PART II
LJP PATENT APPLICATIONS
***
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APPENDIX D
PART II (CONT'D)
LJP PATENT APPLICATIONS
***
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APPENDIX E
SPECIFICATIONS
1.0 SPECIFICATIONS FOR INTERIM PRODUCT
Test Specification
*** ***
2.0 SPECIFICATIONS FOR SUBSTANCE
Test Specification
*** ***
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*** ***
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APPENDIX F
ALTERNATIVE DISPUTE RESOLUTION
The parties recognize that a bona fide dispute as to certain matters may arise
from time to time during the term of this Agreement which relates to either
party's rights and/or obligations. To have such a dispute resolved by the
Alternative Dispute ("ADR") provision, a party first must send written notice of
the dispute to the other party for attempted resolution by good faith
negotiations between their respective presidents (or their equivalents) of the
affected subsidiaries, divisions, or business units within twenty-eight (28)
days after such notice is received (all references to "days" in this ADR
provision are to calendar days).
If the matter has not been resolved within twenty-eight (28) days of the notice
of dispute, or if the parties fail to meet within such twenty-eight (28) days,
either party may initiate an ADR proceeding as provided herein. The parties
shall have the right to be represented by counsel in such a proceeding.
1. To begin an ADR proceeding, a party shall provide written notice to the
other party of the issues to be resolved by ADR. Within fourteen (14) days
after its receipt of such notice, the other party may, by written notice
to the party initiating the ADR, add additional issues to be resolved
within the same ADR.
2. Within twenty-one (21) days following receipt of the original ADR
notice, the parties shall select a mutually acceptable neutral to
preside in the resolution of any disputes in this ADR proceeding. If
the parties are unable to agree on a mutually acceptable neutral within
such period, either party may request the President of the CPR
Institute for Dispute Resolution ("CPR"), 000 Xxxxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, to select a neutral pursuant to the
following procedures:
(a) The CPR shall submit to the parties a list of not less than
five (5) candidates within fourteen (14) days after receipt of
the request, along with a Curriculum Vitae for each candidate.
No candidate shall be an employee, director, or shareholder of
either party or any of their subsidiaries or affiliates.
(b) Such list shall include a statement of disclosure by each
candidate of any circumstances likely to affect his or her
impartiality.
(c) Each party shall number the candidates in order of preference
(with the number one (1) signifying the greatest preference)
and shall deliver the list to the CPR within seven (7) days
following receipt of
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the list of candidates. If a party believes a conflict of
interest 18 exists regarding any of the candidates, that party
shall provide a written explanation of the conflict to the CPR
along with its list showing its order of preference for the
candidates. Any party failing to return a list of preferences
on time shall be deemed to have no order of preference.
(d) If the parties collectively have identified fewer than
three (3) candidates deemed to have conflicts, the CPR
immediately shall designate as the neutral the candidate
for whom the parties collectively have indicated the
greatest preference. If a tie should result between two
candidates, the CPR may designate either candidate. If the
parties collectively have identified three (3) or more
candidates deemed to have conflicts, the CPR shall review
the explanations regarding conflicts and, in its sole
discretion, may either (i) immediate designate as the
neutral the candidate for whom the parties collectively
have indicated the greatest preference, or (ii) issue a new
list of not less than five (5) candidates, in which case
the procedures set forth in subparagraphs 2(a) - 2(d) shall
be repeated.
3. No earlier than twenty-eight (28) days or later than fifty-six (56)
days after selection, the neutral shall hold a hearing to resolve each
of the issues identified by the parties. The ADR proceeding shall take
place at a location agreed upon by the parties. If the parties cannot
agree, the neutral shall designate a location other than the principal
place of business of either party or any of their subsidiaries or
affiliates. Each party to the proceeding shall be entitled to make one
document request to the other party, subject to the right of the
neutral to rule on any objections to such request, which shall not be
subject to appeal.
4. At least seven (7) days prior to the hearing, each party shall submit
the following to the other party and the neutral:
(a) a copy of all exhibits on which such party intends to rely
in any oral or written presentation to the neutral;
(b) a list of any witnesses such party intends to call at the
hearing, and a short summary of the anticipated testimony
of each witness;
(c) a proposed ruling on each issue to be resolved, together with
a request for a specific damage award or other remedy for each
issue. The proposed rulings and remedies shall not contain any
recitation of the facts or any recitation of the facts or any
legal arguments and shall not exceed one (1) page per issue.
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(d) a brief in support of such party's proposed rulings and
remedies, provided that the brief shall not exceed twenty (20)
pages. This page limitation shall apply regardless of the
number of issues raised in the ADR proceeding.
5. The hearing shall be conducted on two (2) consecutive days and shall
be governed by the following rules:
(a) Each party shall be entitled to five (5) hours of hearing time
to present its case. The neutral shall determine whether each
party has had the five (5) hours to which it is entitled.
(b) Each party shall be entitled, but not required, to make an
opening statement, to present regular and rebuttal testimony,
documents or other evidence, to cross-examine witnesses, and
to make a closing argument. Cross-examination of witnesses
shall occur immediately after their direct testimony, and
cross-examination time shall be charged against the party
conducting the cross-examination.
(c) The party initiating the ADR shall begin the hearing and, if
it chooses to make an opening statement, shall address not
only issues it raised but also any issues raised by the
responding party. The responding party, if it chooses to make
an opening statement, also shall address all issues raised in
the ADR. Thereafter, the presentation of regular and rebuttal
testimony and documents, other evidence, and closing arguments
shall proceed in the same sequence.
(d) Except when testifying, witnesses shall be excluded from the
hearing until closing arguments.
(e) Settlement negotiations, including any statements made
therein, shall not be admissible under any circumstances.
Affidavits prepared for purposes of the ADR hearing also shall
not be admissible. As to all other matters, the neutral shall
have sole discretion regarding the admissibility of any
evidence.
6. Within seven (7) days following completion of the hearing, each party may
submit to the other party and the neutral a post-hearing brief support of
its proposed rulings and remedies, provided that such brief shall not
contain or discuss any new evidence and shall not exceed ten (10) pages.
This page limitation shall apply regardless of the number of issues raised
in the ADR proceeding.
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7. The neutral shall rule on each disputed issue within fourteen (14) days
following completion of the hearing. Such ruling shall adopt in its
entirety the proposed ruling and remedy of one of the parties on each
disputed issue but may adopt one party's proposed rulings and remedies on
some issues and the other party's proposed rulings and remedies on other
issues. The neutral shall not issue any written opinion or otherwise
explain the basis of the ruling.
8. The neutral shall be paid a reasonable fee plus expenses. These fees and
expenses, along with the reasonable legal fees and expenses of the
prevailing party (including all expert witness fees and expenses), the
fees and expenses of a court reporter, and any expenses for a hearing
room, shall be paid as follows:
(a) If the neutral rules in favor of the one party on all disputed
issues in the ADR, the losing party shall pay 100% of such
fees and expenses.
(b) If the neutral rules in favor of one party on some issues and
the other party on other issues, the neutral shall issue with
the rulings a written determination as to how such fees and
expenses shall be allocated between the parties. The neutral
shall allocate fees and expenses in a way that bears a
reasonable relationship to the outcome of the ADR, with the
party prevailing on more issues, or on issues of greater value
or gravity, recovering a relatively larger share of its legal
fees and expenses.
1. The rulings of the neutral and the allocation of fees and expenses shall
be binding, non-reviewable, and non-appealable, and may be entered as a
final judgment in any court having jurisdiction.
2. Except as provided in paragraph 9 or as required by law, the existence of
the dispute, any settlement negotiations, the ADR hearing, any submissions
(including exhibits, testimony, proposed rulings, and briefs), and the
rulings shall be deemed Confidential Information. The neutral shall have
the authority to impose sanctions for unauthorized disclosure of
Confidential information.
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APPENDIX G
SUPPLY AGREEMENT
1. LJP Supply Obligations
1.1 Substance and Interim Product Supply - Subject to the terms and
conditions of this Supply Agreement prior to Initial Commercial Sales of
Product, LJP shall supply Xxxxxx, its Affiliates and Unaffiliated Sublicensees
with their requirements of Interim Product. Subject to the terms and conditions
of this Supply Agreement during the Term, LJP shall supply Xxxxxx, its
Affiliates and Unaffiliated Sublicensees with their requirements of Substance.
1.2 Delivery - LJP shall supply the Substance and the Interim
Product to Xxxxxx only against receipt of Xxxxxx'x written purchase orders.
Except as otherwise provided herein or as otherwise expressly agreed in writing
by the Parties, delivery shall be within *** from receipt and acceptance of
Xxxxxx'x purchase order or later as specified in the written purchase order from
Xxxxxx. LJP shall accept and confirm in writing the delivery dates within ***
after receipt of Xxxxxx'x purchase orders and, subject to the provisions of
Section 5.1, LJP shall use Commercially Reasonable Efforts to fill such orders
on the requested delivery dates, but shall in any event fill such orders to the
extent consistent with the forecast described below within *** from receipt and
acceptance of Xxxxxx'x purchase order, unless the Xxxxxx written purchase order
requests delivery for a later date. LJP shall deliver the Substance and the
Interim Product F.O.B. plant to a carrier designated by Xxxxxx. Xxxxxx shall pay
shipping costs and shall assume title to and risk of loss for the Substance and
the Interim Product purchased hereunder upon delivery to Xxxxxx'x designated
carrier.
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1.3 Acknowledgment - Within *** after receipt of any Purchase Order from
Xxxxxx, LJP shall respond in writing confirming Xxxxxx'x Purchase Order (an
"Acknowledgment"), provided that such Purchase Order is consistent with the
terms of this Agreement. LJP's failure to acknowledge a written purchase order
within *** of receipt shall be deemed to be acceptance of such Purchase Order in
its entirety, subject to all conditions in this Agreement. Purchase Orders may
be made in any form including computer-generated reports and telefaxes. Xxxxxx
shall use Commercially Reasonable Efforts to schedule orders to avoid creating
over or under capacity problems for LJP.
1.4 Shipping Instructions - Xxxxxx shall provide LJP with appropriate
instructions for each shipment of the Substance and the Interim Product
hereunder designating the desired carrier, destination and method of transport.
If LJP becomes aware that the designated carrier is unable to accept the desired
shipment within the requested delivery period, LJP shall promptly notify Xxxxxx
and Xxxxxx shall promptly designate another carrier or carriers.
2. LJP Affiliates and Approved Subcontractors - LJP may satisfy its supply
obligations under this Agreement either directly or through any LJP Affiliate,
provided that each manufacturing site utilized by such LJP Affiliate has
received all required regulatory approvals and that LJP guarantees the
performance of such Affiliate, and such supply by LJP or by LJP Affiliates shall
not be deemed an infringement of Xxxxxx'x exclusive rights hereunder. LJP may
not subcontract its supply obligations under this Agreement to any party other
than an LJP Affiliate without Xxxxxx'x prior written consent, not to be
unreasonably withheld.
3. LJP Manufacturing Capabilities: Manufacturing Plan - LJP shall be
responsible for developing capabilities to manufacture Substance and the Interim
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Product, filing manufacturing-related regulatory documents (e.g., drug master
file), Manufacturing Scale Up and the capital investment in a commercial
manufacturing facility based on progress under the Development Plan, clinical
testing results, and Xxxxxx'x market forecasts. Xxxxxx and LJP shall jointly
develop a manufacturing plan for the Substance and the Product ("Manufacturing
Plan") which shall contain equipment throughput, yield and capacity assumptions,
capital requirements and timing associated with manufacturing. Xxxxxx and LJP
shall update the Manufacturing Plan at least semi-annually and upon reviewing
the dose maintenance results.
4. Forecasts and Ordering
4.1 Intent - LJP will attempt to meet all of Xxxxxx'x requirements for
Substance. Xxxxxx and LJP recognize that it is difficult to accurately forecast
new product material requirements, especially during the launch of a new
product. Nonetheless, the parties understand that this Appendix is designed to
permit LJP to plan the size of its manufacturing facility, and its production
schedules to meet Xxxxxx'x needs in an uncertain situation. The parties agree to
cooperate closely in order to assure an efficient and effective process. LJP
will, with the assistance of Xxxxxx, identify and qualify back-up vendors in the
DMF and U.S. NDA and other equivalent regulatory filings as deemed necessary by
the parties. It is recognized that LJP may have certain limitations during
manufacturing start-up including a manufacturing learning curve, staffing, and
raw material lead times. Xxxxxx shall provide purchase orders and forecasts to
LJP with sufficient notice and in sufficient quantities to allow LJP to meet its
obligation to supply Substance.
4.2 Forecasts and Ordering - All forecasts will be reasonable and
made in good faith with the understanding that LJP will rely on these forecasts
for planning its
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production infrastructure. With respect to the development and sale of
Product in the Territory, Xxxxxx shall deliver to LJP:
(A) Preliminary Forecast - For clinical and manufacturing
development planning purposes, and within *** of the Effective Date, a
preliminary marketing forecast of Substance from Xxxxxx. This forecast will
be updated *** by Xxxxxx until Xxxxxx receives its initial Regulatory
Approval.
(B) Long Term Forecast - For long-term marketing and plant capacity
planning purposes, within *** of the Effective Date a *** sales forecast for
the Territory. This forecast will include a detailed projection of the
quantities needed for launch and will be updated every *** by Xxxxxx until
*** years after the Initial Commercial Sale of the product, after which
Xxxxxx shall *** update such forecast.
(C) Delivery Forecast - A *** rolling delivery forecast for the
Territory. This Delivery forecast will be updated every *** by Xxxxxx and
used to determine orders for Substance as provided in Section 5 below. If a
required forecast or order for any *** is not submitted for Substance within
the required time frame, the immediately preceding forecast or order for that
*** shall become the new forecast or order.
(D) Orders Exceeding Forecast - Subject to the lead times associated
with plant construction, equipment deliveries and other required deliveries,
if orders exceed the forecast in Section 4.2 (B), then LJP is not obligated
to supply Substance in excess of LJP's capacity. However, LJP will use
Commercially Reasonable Efforts in cooperation with Xxxxxx, to supply Xxxxxx
with Substance, in excess of the forecasted amounts.
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(E) Manufacturing Plan - Based on the Manufacturing Plan, the parties
will determine the timing, size and capacity of LJP's existing and future
facilities as well as LJP approved subcontractors. The orders specified in the
following sections shall conform to the plant capacities and timing of the
Manufacturing Plan. Commencing not later than *** prior to Xxxxxx'x first
commercial delivery date of the Substance from LJP for Xxxxxx'x Product launch
anywhere in the Territory, Xxxxxx will provide the *** , a firm purchase order
for next *** and a *** forecast which is updated ***. Following the initial
forecasts, an additional firm purchase order for at least *** (*** in the
future) as well as an updated *** rolling forecast will be provided by Xxxxxx.
LJP shall not have to deliver an amount of Substance in excess of the forecast
except when sufficient raw materials and manufacturing capacity are available.
LJP will supply Xxxxxx with forecasts for raw ingredients necessary to meet the
*** forecast. During the first *** following Initial Commercial Sale, Xxxxxx
will purchase these specified raw ingredients and place them on consignment at
LJP. LJP shall manufacture Substance for Xxxxxx from raw ingredients supplied
and paid for by Xxxxxx. Such material supplied by Xxxxxx shall be utilized by
LJP solely for the purpose of formulating Xxxxxx'x requirements of the
Substance. The raw materials shall be delivered F.O.B. LJP's plant pursuant to
no cost purchase orders issued by LJP to Xxxxxx. LJP shall render quarterly
reports to Xxxxxx accounting for the disposition of the raw materials supplied
hereunder. LJP shall, for a period of *** after delivery, maintain accurate
books and records showing raw ingredients in inventory, in process and shipments
to Xxxxxx. Xxxxxx shall be permitted to conduct a physical inventory of the
consigned inventory ***. LJP will deduct the cost of Xxxxxx'x supplied raw
ingredients used to manufacture Substance from the price of Substance specified
in Section 6 of this Supply Agreement.
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LJP shall have the risk of loss or damage to the raw materials supplied
hereunder from the time it is delivered to LJP and until the Substance is
delivered to Xxxxxx. LJP shall procure and maintain sufficient insurance to
cover the cost of replacing consigned Inventory.
5. Supply - Subject to the terms and conditions of this Agreement, LJP
shall use Commercially Reasonable Efforts to fill (by full or partial shipment)
Xxxxxx'x orders for Substance for the Territory.
5.1 Purchase Orders - During the Term of this Agreement, Xxxxxx may
order Substance in amounts specified in Section 4.2(E) from LJP by submitting
written Purchase Orders to LJP specifying the amount of Substance ordered, the
location for delivery of such Substance (the "Delivery Location") and the
required date(s) of delivery (the "Delivery Date"). A purchase order must be
approved and signed by a representative of Xxxxxx. LJP agrees to manufacture and
sell to Xxxxxx all Substance properly ordered and to deliver all such Substance
to Xxxxxx at the Delivery Location by the Delivery Date. LJP shall not be
required to accept any purchase orders that are inconsistent with the terms of
this Supply Agreement. Notification of non-acceptance of purchase orders must be
provided to Xxxxxx within *** after receipt of the Xxxxxx purchase order. Each
Purchase Order shall be governed by and subject to all the terms and conditions
of this Agreement. LJP agrees to accept all properly placed Purchase Orders from
Xxxxxx for Substance.
6. Prices and Payment
6.1 Price of Substance and Interim Product for Development The price
of the Substance or Interim Product sold by LJP to Xxxxxx shall be ***.
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6.2 Price of Substance for Product For Sale prior to Initial
Commercial Sale - Prior to launch, the price of Substance shall be LJP's Fully
Burdened Manufacturing Cost as specified in Appendix C, which will then be
adjusted as specified in Section 8 of this Supply Agreement, Appendix G.
6.3 Price of Substance For Commercial Sale After Initial Commercial
Sale - After the Initial Commercial Sale, the price of Substance sold for
commercial sale anywhere in the Territory to Xxxxxx by LJP shall be ***.
(A) ***
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(B) ***
6.4 ***
(A) ***;
or
(B) ***.
7. Payments - Payments for Substance shipped to Xxxxxx will be due within
*** of invoice as described in Section 5.1 of the Agreement, which LJP shall
issue when or after it ships Substance to Xxxxxx.
8. Unit Net Sales Xxxxx - Xxxxxx will provide good faith reasonable
estimates of unit Net Sales price for Product at ***. Bona fide sample units and
clinical trial units of Product will not be included in any calculations of
average per unit Net Sales prices. Within *** of the end of each *** as
specified in Section 4.3 of the Agreement for the reporting of royalties, Xxxxxx
shall provide a revised estimated unit Net Sales price for Products based on the
***. All such average unit Net Sales
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prices will be based on ***. Accounts will be reconciled promptly within *** of
the end of each *** during the first *** and then at the end of each ***
thereafter to reflect actual Net Sales or costs and balancing payments which
include ***.
9. Shipments
9.1. Delivery Location - LJP shall ship all Substance F.O.B. Plant to
the Delivery Location specified in the Purchase Order or, unless the Substance
has already been shipped, to such other location as may be requested by Xxxxxx
in writing not less than *** prior to the scheduled Delivery Date. Partial
delivery of Substance shall not be permitted unless specifically authorized in
writing by Xxxxxx and LJP.
9.2. Other Delivery Costs - The price and payments for the Substance
shall be exclusive of all insurance, shipping, import duties and taxes,
inventory storage, disposal of returns, withholding and the like. These costs
shall be added to the invoice and paid by Xxxxxx.
9.3 Title and Risk of Loss - Title and risk of loss of Product sold
under this Agreement shall pass to Xxxxxx upon delivery of the same at the LJP
shipping site to the carrier designated by Xxxxxx, or, if no carrier is chosen
by Xxxxxx, upon delivery by LJP to a carrier chosen by LJP in a commercially
reasonable manner. Thereafter, in addition to assuming all risk of loss, Xxxxxx
shall be responsible for compliance with all
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governmental regulations and ordinances with regard to storage or placement of
Products. LJP warrants that, upon delivery and acceptance of any Substance,
title will pass to Xxxxxx free and clear of all liens, claims, security
interests or encumbrances and that no Substance purchased hereunder shall be
subject to any agreement under which any interest therein or encumbrance thereon
is retained by any third party.
10. Delivery - Substance delivered to Xxxxxx pursuant to the terms
hereof shall be deemed accepted by Xxxxxx upon the earlier of (i) receipt by LJP
of a written notice of acceptance from Xxxxxx or (ii) expiration of the
Inspection Period (as defined below) without rejection by Xxxxxx of any such
Substance. Xxxxxx shall have the right to inspect the Substance at the Delivery
Location within *** after delivery to the Xxxxxx U.S. plants and *** after
receipt at Xxxxxx International plants before accepting such Substance (the
"Inspection Period"). If any Substance is found to be defective in material or
workmanship, or otherwise not in conformity with the mutually agreed upon
requirements of the applicable Purchase Order, Xxxxxx, in addition to any other
rights it may have under warranty or otherwise, shall have the right to reject
and return any or all such Substance on a carrier selected by LJP at LJP's
expense and risk.
11. Certificate of Analysis - LJP shall furnish Xxxxxx with one or
more certificates of analysis, in the form required by law in each country of
the Territory where the Product is marketed, for each batch of the Substance or
the Interim Product supplied hereunder with shipment of each such batch.
12. Product Inspections
12.1 Xxxxxx Inspection and Analysis - Xxxxxx and LJP shall agree on
validated test methods and shall work together to confirm the performance of
these methods. Xxxxxx shall inspect and analyze a representative sample of the
Substance
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from batches supplied by LJP promptly after receipt. If, after inspection,
Xxxxxx reasonably believes the shipment does not meet the Specifications, Xxxxxx
shall notify LJP in writing within *** after Xxxxxx'x receipt of such Substance.
If Xxxxxx does not so notify LJP, Xxxxxx shall be deemed to have waived all
claims against LJP for said quantity delivered, except for any latent deviations
from the Specifications that could not have been reasonably discovered upon such
inspection. Any claims by Xxxxxx regarding Substance delivered shall specify in
reasonable detail the nature and basis for the claim and cite relevant LJP lot
numbers or other information to enable specific identification of the Substance
involved. After stability data has been developed for the Substance, the Parties
will agree on an acceptable expiration dating for Substance shipped to Xxxxxx
from LJP.
12.2 LJP Response - LJP shall respond to all claims made by Xxxxxx on
a case-by-case basis during which time LJP shall have the right to first inspect
any Substance involved before being required to take any action with respect
thereto. LJP shall review any such claim of nonconformity made by Xxxxxx within
*** of receipt and conduct any required testing of the Substance involved as
soon as possible, but in no event later than *** after receipt thereof or
earlier if the U.S. FDA or any corresponding regulatory authority in the
Territory requires an earlier response from LJP. If such review and testing by
LJP (or testing by an independent laboratory as set forth below) confirms that a
claimed quantity does not meet the Specifications, then, at LJP's expense,
Xxxxxx shall dispose of or return such quantity involved as LJP shall direct in
writing and LJP shall replace such quantity with conforming Substance as soon as
possible, using Commercially Reasonable Efforts which shall be Xxxxxx'x sole and
exclusive remedy for such non-conformity. If the Parties fail to agree as to
whether a delivered quantity meets the Specifications, then the Parties shall
have the batch in dispute analyzed by a mutually agreed upon
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independent testing laboratory. Such laboratory's determination shall be deemed
final as to any dispute over the Specifications and the non-prevailing Party
shall bear the costs of such independent laboratory's testing.
13. Product Storage - Each Party shall properly store the Substance
under conditions that will not adversely affect the quality or normal shelf
life thereof.
14. Xxxxxx Obligations - Xxxxxx shall formulate fill, package Substance
into Product to current Good Manufacturing Practices (CGMP) or equivalent
standards. Xxxxxx shall maintain *** of Substance and Product inventory.
15. Xxxxxx'x Labeling Obligation - Xxxxxx shall be responsible for
all labeling, inserts, promotional materials and any other materials which
accompany, are distributed with, used or referred to in any way by Xxxxxx,
its Affiliates or Unaffiliated Sublicenses in connection with the Product.
Such materials shall conform to all legal requirements in each country of the
Territory in which the Product is sold.
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APPENDIX H
CORE COUNTRIES
***
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APPENDIX I
ROYALTY CALCULATION ASSOCIATED WITH PREMIUM DELIVERY SYSTEM EXAMPLE
Basic Product
Basic Product Selling Price ***
Royalty Rate ***
Royalty paid on sale ***
Premium Delivery System Calculation Example 1
Basic Product Selling Price ***
Premium System Selling Price ***
Contribution of Basic Product ***
Calculation of Basic Product Contribution ***
Royalty calculation ***
Premium Delivery System Calculation Example 2
Basic Product Selling Price ***
Premium System Selling Price ***
Contribution of Basic Product ***
Calculation of Basic Product Contribution ***
Royalty calculation ***
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