Exhibit 10.23
SUPPLY AND LICENSE AGREEMENT
This is an Agreement, made and effective as of the 19th day of March, 1992
by and between E. Merck Fine Chemicals Division, a German corporation having its
principal place of business at Xxxxxxxxxxx XxxxXx 000, X-0000 Xxxxxxxxx 0,
Xxxxxxx, EM Industries, Incorporated, a New York corporation, having its
principal place of business at 0 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx, 00000
(collectively herein "LICENSOR") and MGI PHARMA, INC., a Minnesota corporation,
having its principal place of business at Suite 300E Opus Center, 0000 Xxxx Xxxx
Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000 ("LICENSEE").
BACKGROUND
LICENSOR is an established chemical and pharmaceutical company which has
substantial experience in the development and manufacture of pharmaceutical
products for a variety of purposes. Through its Fine Chemicals Division,
LICENSOR supplies a variety of active drug substances to the pharmaceutical
industry.
One of LICENSOR's (and its AFFILIATES') pharmaceutical products is
pilocarpine, which is currently marketed by LICENSOR on a world-wide basis for
use as an active drug substance in a dose form applied directly to the eye for
ophthalmic indications, primarily for the treatment of glaucoma.
LICENSEE is an emerging specialty pharmaceutical company that is focused on
developing and marketing medically important compounds to physician specialist
markets. In pursuit of its corporate goals, LICENSEE selects pharmaceutical
products for development that are well into the developmental stage and which
satisfy certain efficacy and safety standards.
LICENSOR has agreed to supply pilocarpine to LICENSEE so as to allow
LICENSEE to manufacture, or have manufactured on its behalf, and to sell ORAL
PRODUCT (as defined hereinafter) containing pilocarpine and LICENSEE wishes to
purchase pilocarpine pursuant to the terms and conditions set forth in this
AGREEMENT.
In connection with the purchase of pilocarpine from LICENSOR by LICENSEE,
LICENSOR has agreed to grant to LICENSEE exclusive world-wide rights to
LICENSOR's pilocarpine product for use in ORAL PRODUCT containing pilocarpine,
as well as to grant to LICENSEE the exclusive world-wide rights to certain
KNOW-HOW (as defined hereinafter) connected with such pilocarpine.
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THE AGREEMENT
LICENSEE and LICENSOR, intending to be legally bound and in consideration
of LICENSEE's acquisition of certain rights to LICENSOR's products and the
agreement of LICENSEE to purchase certain products from LICENSOR during the TERM
of this AGREEMENT, have agreed as follows. All references to LICENSOR herein
includes LICENSOR's AFFILIATES (as defined in this AGREEMENT) and LICENSOR is
entering into this AGREEMENT with the intention of legally binding its
AFFILIATES to the terms and conditions of this AGREEMENT.
ARTICLE I
DEFINITIONS
The following capitalized terms, whether used in the singular, plural or
possessive, shall have the following meanings, only:
1.1 "PRODUCT" means pilocarpine drug substance, as described and defined in
the Type II Drug Master File No. 8453 and all other derivative forms of
pilocarpine including pilocarpine base and pilocarpine nitrate.
1.2 "NEW PRODUCT" shall mean the pilocarpine drug substance that is
described and defined by the specification set forth in Attachment A hereto,
pursuant to the requirements of Section 2.2 of this AGREEMENT.
1.3 "ORAL PRODUCT" means any oral or other systemic dose form drug product,
other than dose forms applied directly to the eye for ophthalmic indications,
containing (or anticipated to contain) pilocarpine drug substance, including
derivative forms (e.g., pilocarpine base and salts) of pilocarpine drug
substance, whether now existing or developed in the future.
1.4 "DMF" means Drug Master File or similar file submitted to a regulatory
agency that describes manufacturing processes and specifications for a drug
substance to be referenced by manufacturers of finished drug product.
1.5 "KNOW-HOW" means all proprietary data of LICENSOR relating to PRODUCT
or NEW PRODUCT, including the data contained in the information package that
documents the manufacture and control of PRODUCT or NEW PRODUCT, including any
DMF relating to pilocarpine drug substance, which is required to support NDA and
similar regulatory filings in the TERRITORY for ORAL PRODUCT.
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1.6 "TERRITORY" means all of the countries in the world, with no
exceptions.
1.7 "FDA" means the United States Food and Drug Administration and its
various subdivisions or any successors thereto.
1.8 "AGREEMENT" means this Agreement, including its Attachments.
1.9 "EXCLUSIVE TERM" means that time period ending ten (10) years after
sales of ORAL PRODUCT have occurred in the United States of America, in the
Europe Economic Community and in Japan or (ii) December 31, 2007, whichever date
is earlier, unless earlier terminated pursuant to the provisions of ARTICLE X of
this AGREEMENT; provided that, unless early termination pursuant to ARTICLE X
occurs, the TERM of this AGREEMENT may be extended for successive five (5) year
periods, upon the mutual agreement of LICENSEE and LICENSOR.
1.10 "NON-EXCLUSIVE TERM" means perpetual after the end of the EXCLUSIVE
TERM, although some of the terms, conditions and limitations will expire as set
forth herein, and except as early termination is permitted in ARTICLE X of this
AGREEMENT.
1.11 "PRIMARY MARKETS" means the United States of America, Canada, Great
Britain, France, Japan, Italy and Germany.
1.12 "AFFILIATES" mean a company directly or indirectly controlling,
controlled by or under common control with one of the parties hereto. A company
is controlled by ownership of more than forty percent (40%) of the stock having
the right to vote for directors or persons performing a function similar to
directors thereof.
ARTICLE II
GRANT OF LICENSE, RELATED RIGHTS AND COVENANTS
2.1 EXCLUSIVE RIGHT TO PURCHASE NEW PRODUCT AND PRODUCT FOR USE AS ORAL
PRODUCT: LICENSOR hereby grants to LICENSEE for the EXCLUSIVE TERM of this
AGREEMENT, the sole and exclusive right to purchase NEW PRODUCT for any and all
purposes in the TERRITORY. LICENSOR hereby agrees not to knowingly sell or
otherwise supply PRODUCT to any party other than LICENSEE for the testing,
development, manufacturing, registration or marketing of an ORAL PRODUCT.
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2.2 SEPARATE DESIGNATION AND PRODUCT NUMBER FOR NEW PRODUCT: LICENSOR
agrees to submit to the FDA and other regulatory authorities as appropriate and
as requested by LICENSEE, a new product specification for NEW PRODUCT intended
for use in ORAL PRODUCT, consistent with the Product Release Specifications
(based on data available to LICENSOR and additional data received from LICENSEE)
set forth in Attachment A, which is attached hereto and made a part hereof (the
"NEW PRODUCT SPECIFICATION"). LICENSOR further agrees to keep all information
relating to the NEW PRODUCT SPECIFICATION created pursuant to this Section 2.2
confidential, except as permitted under the terms of this AGREEMENT and except
to the extent that disclosure of information relating to such NEW PRODUCT
SPECIFICATION is required by law.
2.3 EXCLUSIVE RIGHT TO NEW PRODUCT AND DMF: LICENSOR hereby grants to
LICENSEE for the EXCLUSIVE TERM of this AGREEMENT, the sole and exclusive right
to have access to and to otherwise use the NEW PRODUCT SPECIFICATION created
pursuant to the terms of Section 2.2 for any purpose in the TERRITORY. LICENSOR
further agrees that it shall not allow, permit, license or otherwise authorize
any third party from November 11, 1991 and during the EXCLUSIVE TERM of this
AGREEMENT to have access to or to otherwise use any DMF relating to pilocarpine
drug substance to gain FDA or other regulatory approval in any jurisdiction to
market any ORAL PRODUCT in the TERRITORY, and shall take any and all action
necessary to prevent any third party from relying on or making use of any such
DMF relating to pilocarpine drug substance in any FDA or other regulatory
filings seeking regulatory approval to market ORAL PRODUCT. LICENSEE understands
that LICENSOR has issued prior to November 11, 1991, DMF letters of
authorization or their equivalent to certain companies for certain countries. A
complete list of these letters of authorization is included in Attachment B.
LICENSOR agrees to issue letters to the appropriate regulatory agencies that
revoke previous DMF authorizations and that issue new authorizations for use of
pilocarpine to be applied directly to the eye for ophthalmic indications only.
LICENSOR further agrees not to grant additional DMF letters of authorization (or
their equivalent) after November 11, 1991 unless such letters specifically
restrict use of the DMF to drug products applied directly to the eye for
ophthalmic indications.
2.4 EXCLUSIVE RIGHT TO KNOW-HOW: LICENSOR hereby grants to LICENSEE for the
EXCLUSIVE TERM of this AGREEMENT, the sole and exclusive right to have access to
and to otherwise use KNOW-HOW to gain FDA or other regulatory approval to market
ORAL PRODUCT in the TERRITORY. LICENSOR further agrees that it shall not allow,
permit, license or otherwise authorize any third party during the EXCLUSIVE TERM
of this AGREEMENT to have access to or to otherwise use KNOW-HOW to gain FDA or
other regulatory approval to test, evaluate or market any ORAL PRODUCT in the
TERRITORY, and
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shall take any and all action necessary to prevent any third party from relying
on or making use of such KNOW-HOW in any FDA or other regulatory filings
relating to the marketing of ORAL PRODUCT. Notwithstanding the provisions of
this Section 2.4, LICENSOR retains the right to use the same KNOW-HOW for use in
connection with other LICENSOR products which are not used as, or in the
manufacture of, ORAL PRODUCTS as defined in Section 1.3 of this AGREEMENT.
2.5 RIGHT TO IMPROVEMENTS: LICENSEE shall also have rights, as granted
under Sections 2.1 and 2.4, to all improvements in PRODUCT and NEW PRODUCT and
in KNOW-HOW related to ORAL PRODUCT made or acquired by LICENSOR. Such
improvements shall be included under this AGREEMENT as if they were part of the
PRODUCT, NEW PRODUCT or KNOW-HOW from the date of the signing of this AGREEMENT.
2.6 CONFIDENTIALITY: Any unpublished KNOW-HOW to be transferred from
LICENSOR to LICENSEE shall be treated by LICENSEE as "confidential information"
and LICENSEE shall take reasonable precautions to minimize the risk of any
unauthorized use or disclosure of such confidential information. LICENSEE's
obligations of confidentiality under this Section 2.6 shall not apply:
(a) to information which is now or hereafter becomes public knowledge
through no fault of LICENSEE;
(b) to information which LICENSEE already had in its possession prior to
the date on which the know-how was first transferred to LICENSEE by
LICENSOR;
(c) to information which LICENSEE lawfully acquires from any third party
free of any obligation of confidentiality;
(d) to any information from and after two years following termination of
this AGREEMENT; and
(e) to any information which LICENSEE is legally required to disclose.
2.7 LICENSOR ASSISTANCE IN SECURING REGULATORY APPROVALS: LICENSOR shall
provide reasonable assistance, information and data to LICENSEE to assist
LICENSEE in complying with FDA and other similar registration requirements in
the TERRITORY; LICENSOR further agrees to assist LICENSEE in responding to
inquiries from the FDA and other regulatory authorities in the TERRITORY
relating to PRODUCT, NEW PRODUCT or to ORAL PRODUCT; provided, however, that
information that LICENSOR deems to be confidential may be communicated directly
to the appropriate regulatory agency on a confidential
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basis, at LICENSOR's option, for purposes of satisfying LICENSOR's obligations
under this Section 2.7.
2.8 COVENANT NOT TO FORM COMPETING BUSINESS: LICENSOR agrees and covenants
that during the EXCLUSIVE TERM of this AGREEMENT, it shall not take any action
to form a separate business or to transfer any KNOW-HOW or related information
to a separate entity for the purpose of evading the obligations and terms of
this AGREEMENT. LICENSOR acknowledges that the formation of any such separate
business, the submission and maintenance of an existing or additional Drug
Master File number and designation for ORAL PRODUCT (other than as required
under the provisions of Section 2.2 of this AGREEMENT), the transfer of any
KNOW-HOW in contravention of this AGREEMENT or the taking of any action contrary
to the terms and the intentions of this AGREEMENT, would constitute a material
breach of this AGREEMENT and would cause LICENSEE irreparable harm.
2.9 RETAINED RIGHTS OF LICENSOR: Nothing in this AGREEMENT shall in any way
be construed to limit or restrict LICENSOR's free and unfettered rights to sell
PRODUCT for any use not covered in Section 2.1 of this AGREEMENT or to in any
way restrict or limit LICENSOR's rights to use its DMFs (other than for the NEW
PRODUCT SPECIFICATION created pursuant to Section 2.2 of this AGREEMENT) for any
purpose other than the purposes set forth in Section 2.3 of this AGREEMENT.
2.10 COVENANT TO PURSUE PRIMARY MARKETS: (a) LICENSEE covenants and agrees
that it shall diligently pursue approval for marketing of at least one ORAL
PRODUCT with the FDA. LICENSEE further agrees that, no later than four (4) years
following the effective date of this AGREEMENT, it will diligently pursue
similar marketing approval of at least one ORAL PRODUCT in each of the countries
which comprise the PRIMARY MARKETS.
(b) In the event that LICENSEE fails to secure marketing approval for one
ORAL PRODUCT in the United States within six (6) years of the signing of this
AGREEMENT, the licenses granted under this AGREEMENT shall become non-exclusive
in the United States (but only with respect to the United States and not with
respect to any other country in the TERRITORY) upon sixty (60) days written
notice from LICENSOR to LICENSEE and the licensee fees contemplated under the
provisions of Section 5.1 hereof shall no longer be due and payable by LICENSEE.
(c) (i) In the event that no marketing approval is granted within ten (10)
years following the effective date of this AGREEMENT for, at least one ORAL
PRODUCT in the countries which comprise the PRIMARY MARKETS (other than the
United States), as required under the provisions of Section 2.10(a), then
LICENSOR may (upon sixty (60) days written notice from LICENSOR to LICENSEE)
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convert the licenses granted under this Article II into non-exclusive licenses
with respect to the country or countries in which LICENSEE has not received
marketing approval (but only with respect to such countries). At such time as
the licenses granted under Article II become non-exclusive with respect to any
country or countries in the PRIMARY MARKETS, the license fees contemplated under
the provisions of Section 5.1 hereof shall no longer be due and payable for such
country or countries.
(ii) The provisions of Section 2.10(c)(i) notwithstanding, LICENSEE shall
have the right, within fifteen (15) days of receiving notice from LICENSOR of
its intent to convert the licenses under this Article II into non-exclusive
licenses for any country or countries in the PRIMARY MARKETS (other than the
United States), to submit the issue of exclusivity to an arbitrator, under the
provisions of Section 11.5 of this Agreement. If the arbitrator determines that
LICENSEE has diligently pursued marketing approval in such country or countries
and marketing approval has not been granted through no fault of LICENSEE, then
LICENSOR shall not be entitled to convert the licenses granted with respect to
such countries into non-exclusive licenses for so long as LICENSEE continues to
diligently pursue marketing approval in such country.
2.11 RIGHTS UPON END OF EXCLUSIVE TERM: The rights and licenses granted by
LICENSOR to LICENSEE under this ARTICLE II shall, upon the end of the EXCLUSIVE
TERM of this AGREEMENT and the commencement of the NON-EXCLUSIVE TERM of this
AGREEMENT, become non-exclusive rights and licenses of LICENSEE with respect to
any country or countries in the TERRITORY for which the EXCLUSIVE TERM has
ended.
ARTICLE III
AGREEMENTS TO PURCHASE AND SUPPLY PRODUCT
3.1 SUPPLY OBLIGATIONS: Subject to the provisions of Section 11.9 (Force
Majeure) of this AGREEMENT, LICENSOR hereby agrees that it will, during the
EXCLUSIVE TERM and the NON-EXCLUSIVE TERM of this AGREEMENT, manufacture for and
supply to LICENSEE, LICENSEE's requirements of PRODUCT and NEW PRODUCT for use
in the TERRITORY. LICENSOR shall be solely responsible for:
(a) Manufacturing, processing, packaging testing, releasing and shipping of
PRODUCT and NEW PRODUCT in a manner consistent with then current Good
Manufacturing Practices, as defined in Title 21 of the United States Code
of Federal Regulations ("CFR") or similar requirements, so as to ensure
that PRODUCT and NEW PRODUCT
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shall be suitable for use as a pharmaceutical ingredient for oral
consumption as a human therapeutic; provided, that, this Section shall not
be construed to require LICENSOR to comply with any amendments to such Good
Manufacturing Practices that are adopted after the effective date of this
AGREEMENT and which would, in the reasonable business judgment of LICENSOR,
create an unreasonable economic burden on LICENSOR in attempting to comply
with such amendments; LICENSOR agrees to consult with LICENSEE in the event
that LICENSOR determines compliance with new procedures imposes an
unreasonable economic burden in order to allow LICENSOR and LICENSEE to
attempt to develop a mutually acceptable solution that enables LICENSOR to
continue to comply with Good Manufacturing Practices;
(b) LICENSOR shall immediately notify LICENSEE of any and all emergency
changes, and shall provide sufficient advance notification of planned
changes (so as to allow LICENSEE to satisfy all then-current legal,
regulatory, and quality assurance requirements), to LICENSOR's
manufacturing, testing, and control of PRODUCT and NEW PRODUCT. LICENSOR
warrants that any and all such changes shall be in strict compliance with
FDA and all other applicable laws and regulations; and
(c) LICENSOR, at its cost, shall maintain a six (6) month supply of
LICENSEE's requirements of NEW PRODUCT, and/or PRODUCT, as appropriate, at
all times, based on LICENSEE's quarterly forecasts for future sales.
3.2 PURCHASE OBLIGATIONS: During the EXCLUSIVE TERM of this AGREEMENT,
LICENSEE will purchase all of its and its sublicensees' requirements of PRODUCT
and NEW PRODUCT from LICENSOR. LICENSEE hereby covenants and agrees that it
shall, during the EXCLUSIVE TERM of this AGREEMENT, use its reasonable efforts
consistent with the exercise of its best judgment to secure the registration,
and the subsequent marketing of ORAL PRODUCT in the PRIMARY MARKETS. LICENSEE,
during the EXCLUSIVE TERM of this AGREEMENT, shall diligently investigate and
pursue the registration, and subsequent marketing, of ORAL PRODUCT in such other
countries in the TERRITORY (outside of the PRIMARY MARKETS) as it deems
reasonable in its best judgment.
3.3 PRICE: The price of PRODUCT and NEW PRODUCT, inclusive of all packaging
and handling charges, payable by LICENSEE shall be equal to the price (in the
respective market or country of purchase) for comparable volumes of PRODUCT sold
by LICENSOR for use in ophthalmic products.
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Actual quantities and delivery dates of PRODUCT and NEW PRODUCT shall be as
specified in firm purchase orders submitted by LICENSEE, and LICENSOR shall make
delivery of each order at the time and place specified by LICENSEE.
3.4 TERMS AND CONDITIONS: (a) LICENSOR represents and warrants that PRODUCT
and NEW PRODUCT supplied by it to LICENSEE under this AGREEMENT will conform to
the Product Release Specifications for such PRODUCT or NEW PRODUCT. Except for
the warranties set forth in Article VI hereof, the guarantees set forth in
Section 3.4(d) hereof and the warranty set forth in this Section 3.4(a),
LICENSOR makes no other representation and warranty of any kind with regard to
its products. LICENSOR hereby disclaims any implied warranties, including
without limitation, the implied warranties of merchantability and fitness for a
particular purposes. LICENSOR shall not, under any circumstances, be liable for
incidental or consequential damages of any kind. LICENSEE assumes all risk and
liability for loss or damage resulting from storage, handling, use or sales of
PRODUCT or NEW PRODUCT, provided that this sentence shall not be construed to
imply any additional liability to LICENSOR by LICENSEE other than as
specifically agreed to under the provisions of Section 8.2 of this AGREEMENT.
(b) LICENSOR shall ship PRODUCT or NEW PRODUCT F.O.B. Hawthorne, New York
in accordance with the quantities, delivery dates, and delivery and shipping
instructions specified in LICENSEE's purchase orders. In the event that LICENSEE
designates no carrier or if the designated carrier is not available or not
feasible, then LICENSOR shall select a reasonable alternative mode of shipment.
LICENSOR's responsibility shall be to deposit the ordered PRODUCT or NEW PRODUCT
with the carrier within the shipping periods specified, and LICENSOR shall not
be liable for late delivery if so accomplished. Title and risk of loss shall
pass to LICENSEE upon delivery to the carrier for shipment.
(c) The prices agreed to herein do not include the costs of any taxes,
licenses, permits, fees or tariffs which may be levied by any government or
governmental agency on the sale or transport of PRODUCT or NEW PRODUCT
hereunder. LICENSOR shall invoice LICENSEE and LICENSEE shall pay when so
invoiced, any such taxes, licenses, permits, fees or tariffs which are paid by
LICENSOR.
(d) LICENSOR guarantees that no PRODUCT or NEW PRODUCT delivered by
LICENSOR under this AGREEMENT will be adulterated or misbranded within the
meaning of the United States Food, Drug and Cosmetic Act, or within the meaning
of any other applicable law in which the definition of adulteration or
misbranding are substantially the same as those contained in the Food, Drug and
Cosmetic Act, as such laws are constituted and effective at the time of such
shipment or delivery, or as an article which may not, under the provisions of
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Sections 404 or 505 of such Act be introduced into interstate commerce.
(e) (i) LICENSEE may reject any PRODUCT or NEW PRODUCT supplied hereunder
which does not conform to the Product Release Specifications for such PRODUCT or
NEW PRODUCT, provided that such non-conformance is not due to any failure by
LICENSEE or its agents, representatives or customers to handle, maintain, or
store PRODUCT or NEW PRODUCT as required by labeling or the Product Release
Specifications therefore. LICENSEE shall provide written notice to LICENSOR
which shall specify the reason for such rejection.
(ii) At the request and expense of LICENSOR, LICENSEE shall return
defective PRODUCT or NEW PRODUCT, or a representative sample thereof, to
LICENSOR for testing. Should LICENSOR's test results reasonably confirm the
PRODUCT's or NEW PRODUCT's non-conformance with Product Release Specifications,
LICENSOR shall replace all non-conforming PRODUCT or NEW PRODUCT at no expense
to LICENSEE. Should LICENSOR's test results fail to confirm PRODUCT=s or NEW
PRODUCT's non-conformance, and should LICENSOR and LICENSEE fail to otherwise
resolve the dispute over conformance to Product Release Specifications, the
parties shall submit the PRODUCT or NEW PRODUCT, or a representative sample
thereof, to a mutually acceptable laboratory along with mutually agreeable
interrogatories to be answered by such laboratory. The determination of the
laboratory regarding the PRODUCT's or NEW PRODUCT's conformance or
non-conformance to the Product Release Specifications shall be binding upon
LICENSOR and LICENSEE. The nonprevailing party shall pay all laboratory costs in
connection with the dispute.
ARTICLE IV
SUBLICENSING BY LICENSEE
4.1 RIGHT TO SUBLICENSE: Upon the prior written consent of LICENSOR, which
consent shall not be unreasonably withheld, LICENSEE shall have the right to
sublicense others to use all or any part of the rights herein conveyed to
LICENSEE under the terms of this AGREEMENT within the TERRITORY. A sublicensee
of LICENSEE under this AGREEMENT shall be entitled to all of the rights and
privileges afforded to LICENSEE and shall be subject to all of the obligations
and commitments to LICENSOR arising under the terms of this AGREEMENT. All fees
and expenses associated with such sublicenses shall be borne solely by LICENSEE.
4.2 NOTICE TO SUBLICENSEES: LICENSOR agrees to give notice to all
Sublicensees pursuant to this ARTICLE IV of the proposed early termination of
this AGREEMENT, pursuant to the provisions of Section 10.2, at the same time as
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LICENSOR notifies LICENSEE of such proposed termination under Section 10.2
hereof.
ARTICLE V
LICENSE FEE
5.1 LICENSE FEE: During the EXCLUSIVE TERM of this AGREEMENT, LICENSEE
shall pay LICENSOR for the rights granted by LICENSOR to LICENSEE pursuant to
ARTICLE II of this AGREEMENT, a fee equal to *** of the purchase price for
PRODUCT and NEW PRODUCT purchased by LICENSEE pursuant to Section 3.4 of this
AGREEMENT (the "License Fee"). The License Fee payable pursuant to this Section
5.1 shall be payable contemporaneously with payments made for PRODUCT and NEW
PRODUCT under the terms of Section 3.4. LICENSOR shall identify the License Fee
payable pursuant to this Section 5.1 as a separate line item on each invoice for
the purchase of PRODUCT and NEW PRODUCT by LICENSEE under this AGREEMENT.
5.2 GENERIC COMPETITION: (a) If at any time during the EXCLUSIVE TERM of
this AGREEMENT, LICENSEE shall encounter any form of generic competition of an
ORAL PRODUCT with LICENSEE's ORAL PRODUCT in any country that comprises the
LICENSEE'S PRIMARY MARKETS, and such generic competition results in a loss of
twenty percent (20%) or greater market share or a twenty percent (20%) or
greater price decrease for LICENSEE's ORAL PRODUCT or PRODUCTS in such country
in the PRIMARY MARKETS, then the Licensee Fee payable pursuant to Section 5.1 of
this AGREEMENT shall no longer be due and payable for such country in the
PRIMARY MARKETS.
(b) No License Fee payable under Section 5.1 shall be assessed, pursuant to
the provisions of this Section 5.2, commencing with the first purchase order
submitted by LICENSEE after LICENSEE notifies LICENSOR of the occurrence of an
event under this Section 5.2. LICENSEE agrees to provide such information as is
reasonably requested by LICENSOR to document the amount of PRODUCT purchased for
such country in the PRIMARY MARKETS in order to determine the amount of the
License Fee due under Section 5.1.
5.3 ELECTION TO TERMINATE EXCLUSIVE LICENSE: In the event that no License
Fee is payable for any country in the PRIMARY MARKETS under the provisions of
Section 5.2, LICENSEE may, upon thirty (30) days written notice to LICENSOR,
elect to cease paying the License Fee for any other country or countries in the
TERRITORY. Upon such an election by LICENSEE, the provisions of this AGREEMENT
granting exclusive rights to LICENSEE during the EXCLUSIVE TERM of this
AGREEMENT shall become NON-EXCLUSIVE rights with respect to any
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
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country in the TERRITORY in which no License Fee is paid pursuant to the
provisions of this Section 5.3.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF LICENSOR
6.1 TITLE AND INTEREST: LICENSOR owns or exclusively holds title and
interest to and all rights to use, free and clear of all liens, claims and
restriction, and to sell, convey and transfer PRODUCT, NEW PRODUCT and KNOW-HOW
in the TERRITORY and the grant of the Licenses and the other agreements made
herein by LICENSOR do not infringe upon the right or claimed right of any person
under or with respect to any of the above.
6.2 POWER; DUE AUTHORIZATION: The execution, delivery and performance by
LICENSOR of this AGREEMENT have been authorized by proper corporate action and
are within its corporate powers. This AGREEMENT constitutes the legal, valid and
binding obligation of LICENSOR, which is enforceable against LICENSOR in
accordance with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights or by general principles of equity.
6.3 LEGAL COMPLIANCE: LICENSOR warrants that the manufacture of PRODUCT and
NEW PRODUCT and all of its other activities conducted in connection with the
AGREEMENT shall be in strict compliance with all applicable FDA Good
Manufacturing Practices, comparable laws and regulations of other jurisdictions,
and other applicable laws, regulations and rules. LICENSEE shall be provided
with detailed information as to any and all actions taken by LICENSOR which
involve, any contacts made by or with the FDA or other comparable regulatory
bodies in other jurisdictions, to the extent that such actions or contacts
affect LICENSEE's use of PRODUCT or NEW PRODUCT.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF LICENSEE
7.1 POWER; DUE AUTHORIZATION: The execution, delivery and performance by
LICENSEE of this AGREEMENT have been authorized by proper corporate action and
are within its corporate powers. This AGREEMENT constitutes the legal, valid and
binding obligation of LICENSEE, which is enforceable against LICENSEE in
accordance with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
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affecting enforcement of creditors' rights or by general principles of equity.
7.2 LEGAL COMPLIANCE: LICENSEE warrants that any and all uses, including
the manufacture of ORAL PRODUCT, that it makes of PRODUCT or NEW PRODUCT
acquired from LICENSOR under the terms of this AGREEMENT shall fully comply with
the rules and regulations of the FDA and any other applicable regulatory agency
with jurisdiction over LICENSEE and any ORAL PRODUCT manufactured and marketed
by LICENSEE in the TERRITORY.
ARTICLE VIII
INDEMNIFICATION
8.1 INDEMNIFICATION BY LICENSOR: LICENSOR shall defend, indemnify and hold
LICENSEE harmless against any claim, demand or liability whatsoever (including
reasonable attorney's fees) arising out of:
(a) a breach of the warranties and representations contained in ARTICLE VI
hereof; or
(b) a breach of any License granted under the terms of this AGREEMENT by
LICENSOR; or
(c) a claim of patent or copyright infringement related to PRODUCT or NEW
PRODUCT in the form in which it is sold to LICENSEE;
provided, that, any liability of LICENSOR arising as a result of a breach of the
warranty made pursuant to the provisions of Section 3.4(a) hereof shall be
limited to the purchase price of such PRODUCT or NEW PRODUCT (including the
portion of the license fee paid pursuant to the provisions of Section 5.1 hereof
in connection with such amount of PRODUCT or NEW PRODUCT) which does not conform
to the Product Release Specifications set forth in this AGREEMENT.
8.2 INDEMNIFICATION BY LICENSEE: LICENSEE shall defend, indemnify and hold
LICENSOR harmless against any claim, demand or liability whatsoever (including
reasonable attorney's fees) arising out of:
(a) a breach of the warranties and representations contained in ARTICLE VII
hereof; or
(b) the marketing or sale of ORAL PRODUCT by LICENSEE in the TERRITORY,
provided, that, the provisions of this Section 8.2(b) shall not apply if
such claim, demand or liability arises because PRODUCT or
13
NEW PRODUCT supplied to LICENSEE under the terms of this AGREEMENT does not
conform to the Product Release Specifications set forth in Attachment A
hereto.
ARTICLE IX
NOTICES
9.1 NOTICES: All notices, requests, demands, and other communications
provided for herein shall be in writing, shall be in English, and shall be
deemed to have been duly given if made by hand delivery, by facsimile
transmission, by overnight courier or by registered or certified mail (postage
prepaid and return receipt requested) to the parties at the following address
(or at such other address for a party as shall be specified by it by like
notice):
IF TO LICENSOR:
EM Industries, Incorporated E. Merck Fine Chemicals Division
Fine Chemicals Division Frankfurter StraBe 250
5 Skyline Drive D-6100 Xxxxxxxxx 0, Xxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx
Attention: Xxxxxx Xxxxxxx Marketing & Sales
Group Vice President Manager
Pharmaceutical Industry
Fax No.: (000) 000-0000 Fax No.: (O 61 51) 78 13 33
IF TO LICENSEE:
with a copy to:
MGI PHARMA, INC. Xxxxx X. Xxxxxxx, Esq.
Suite 300E, Opus Center Merchant & Xxxxx
9900 Bren Road East 0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000 Xx. Xxxx, Xxxxxxxxx 00000
Attention: Vice President, General Counsel
Fax No.: (000) 000-0000 Fax No.: (000) 000-0000
14
ARTICLE X
DEFAULT AND TERMINATION
10.1 FULL FORCE AND EFFECT: This AGREEMENT shall be in full force and
effect during the EXCLUSIVE TERM and the NON-EXCLUSIVE TERM of this AGREEMENT,
as set forth in Sections 1.09 and 1.10 hereof, unless terminated at an earlier
date pursuant to the terms of Sections 10.2 or 10.3 hereof. The early
termination of this AGREEMENT pursuant to the provisions of this ARTICLE X shall
not relieve a defaulting party hereunder from any liabilities existing prior to
termination in law or in equity as a result of such default, and the
non-defaulting party shall be entitled to seek damages or equitable relief as
appropriate under the circumstances.
10.2 EARLY TERMINATION BY LICENSOR: LICENSOR may, at its election,
terminate this AGREEMENT immediately upon written notice to LICENSEE, without
refunding to LICENSEE any payments already received under the terms of this
AGREEMENT:
(a) If any payment required by this AGREEMENT to be made by LICENSEE shall
not be made when due and such default shall continue unremedied for ninety
(90) days after written notice thereof given by LICENSOR; or
(b) If LICENSEE shall make or suffer to exist any default, other than a
payment default under the provisions of Section 10.2(a) of this AGREEMENT,
on its part under the provisions of this AGREEMENT, and such other default
shall continue unremedied for ninety (90) days after written notice thereof
given by LICENSOR.
10.3 EARLY TERMINATION BY LICENSEE: LICENSEE may, at its election,
terminate this AGREEMENT immediately upon written notice to LICENSOR:
(a) If LICENSOR shall make or suffer any material default on its part under
the provisions of this AGREEMENT, and such default shall continue
unremedied for sixty (60) days after notice thereof given to LICENSOR by
LICENSEE; or
(b) If LICENSOR shall choose to not comply with amendments or modifications
to Good Manufacturing Practices, under Title 21 of CFR, pursuant to the
provisions of Section 3.l(a) of this AGREEMENT, although such noncompliance
is not deemed to be a breach of the AGREEMENT under the terms of Section
3.l(a).
15
10.4 POST-TERMINATION RIGHTS: The early termination of this AGREEMENT
pursuant to the provisions of Sections 10.2 or 10.3 of this ARTICLE, shall not:
(a) relieve either party of any liability accrued prior to the date of
termination;
(b) except in the case of early termination of this AGREEMENT as a result
of an intentional default on the part of LICENSEE pursuant to the
provisions of Section 10.2 of this AGREEMENT, affect any sublicenses
granted to third parties by LICENSEE under this AGREEMENT and such
sublicenses shall continue in full force and effect for the term of such
sublicense, provided, that, such sublicensees comply with the provisions of
this AGREEMENT in each and every respect as such provisions apply to the
sublicensee;
(c) affect the continued operation or enforcement or any provision of this
AGREEMENT which by its express terms is to survive termination; and
(d) if such early termination occurs pursuant to the provisions of Section
10.3(a) hereof, the licenses granted to LICENSEE under Sections 2.3 and 2.4
of this AGREEMENT under the terms and conditions specified therein shall
from the date of such early termination become non-exclusive perpetual,
paid-up licenses, free of any further License Fee.
ARTICLE XI
GENERAL PROVISIONS
11.1 ENTIRE AGREEMENT: This AGREEMENT constitutes the entire understanding
between the parties hereto with respect to the Licenses and rights herein
granted and replaces all other agreements concerning PRODUCT or NEW PRODUCT
which may have previously existed between the parties hereto or their prior
parties in interest, whether written or oral. This AGREEMENT can be amended or
modified only by a written instrument signed by both LICENSOR and LICENSEE.
11.2 HEADINGS: Section and article headings used in this AGREEMENT have no
legal significance and are used solely for convenience of reference.
16
11.3 BINDING NATURE; ASSIGNABILITY: This AGREEMENT shall be binding upon
and enure to the benefit of and be enforceable against the parties hereto and
their respective successors, including the resultant entity of any merger,
consolidation or reorganization. This AGREEMENT may not be assigned by either
party without the prior written consent of the other party to this AGREEMENT,
except that it may be transferred to an AFFILIATE or the successor to the entire
business of a party hereto.
11.4 CHOICE OF LAW: This AGREEMENT shall in all respects be governed by,
and enforced and interpreted in accordance with, the laws of the State of New
York, except with respect to its rules relating to conflicts of law.
11.5 ARBITRATION: All disputes arising out of or relating to this AGREEMENT
(including any questions of fraud or questions concerning the validity or
enforceability of this AGREEMENT or any of the rights herein conveyed) shall be
settled by arbitration, to be held in Minneapolis, Minnesota if demanded by
LICENSOR and in White Plains, New York if demanded by LICENSEE. Such arbitration
shall be held before one arbitrator in accordance with the then-existing
Commercial Rules of the American Arbitration Association. All arbitration
proceedings shall be conducted in English. The arbitrator shall have knowledge
of and experience in dealing with the pharmaceutical industry. The arbitration
shall be speedily concluded with the hearing to take place within ninety (90)
days of the date on which the American Arbitration Association receives a demand
for arbitration, and the award shall be rendered in writing within thirty (30)
days after the conclusion of the hearing. Judgment upon the award rendered by
the arbitrator shall be binding upon the parties hereto and may be entered in
any court having jurisdiction. Specific performance and injunctive relief may be
ordered by the award. Costs and attorney fees shall be paid as the Arbitrators'
award shall specify. As the sole exception to arbitration, each party shall have
the right to obtain injunctive relief, only, from any court having jurisdiction
so as to preserve that party's rights for resolution in any pending or imminent
arbitration proceedings, but no such injunction shall prohibit or postpone such
arbitration proceedings and the injunctions may be modified or vacated as a
result of the arbitration award. This Paragraph 11.5 shall survive any
termination of this AGREEMENT.
11.6 SEVERABILITY: Each and every provision of this AGREEMENT shall be
deemed valid, legal and enforceable in all jurisdictions to the fullest extent
possible. Any provision of this AGREEMENT that is determined to be invalid,
illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be
adjusted and reformed rather than voided, if possible, in order to achieve the
intent of the parties. Any provision of this AGREEMENT that is determined to be
invalid, illegal or unenforceable in any jurisdiction which cannot be adjusted
and reformed shall, for the purposes of that jurisdiction, be voided. Any
adjustment, reformation or voidance of any provision of this AGREEMENT shall
only be effective in the
17
jurisdiction requiring such adjustment or voidance, without affecting in any way
the remaining provisions of this AGREEMENT in such jurisdiction or adjusting,
reforming, voiding or rendering that provision or any other provision of this
AGREEMENT invalid, illegal or unenforceable in any other jurisdiction.
11.7 COUNTERPARTS: This AGREEMENT may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.8 EXPENSES: Except to the extent otherwise provided in this AGREEMENT,
each party shall pay for its own legal, accounting and other similar expenses
incurred in connection with the transactions contemplated by this AGREEMENT,
whether or not such transactions are consummated.
11.9 FORCE MAJEURE: Neither party shall be responsible or liable to the
other hereunder for failure or delay in performance of this AGREEMENT due to any
war, fire, accident, or other casualty, unavoidable shortage of raw materials,
or any labor disturbance, civil unrest or disturbance, or Act of God, or any
other contingency beyond such party's reasonable control. In the event of the
applicability of this Section, the party affected shall use its best efforts to
eliminate, cure, and overcome any such causes and to resume performance of its
obligation at the earliest date.
IN WITNESS WHEREOF, LICENSOR and LICENSEE have caused this AGREEMENT to be
executed on the date above written.
EM INDUSTRIES, INCORPORATED E. MERCK FINE CHEMICALS
DIVISION
By /S/ X. XXXXXXX X.X. XXXXXXXX By /S/ X. XXXX X. XXXXXXXXX
----------------------------- ----------------------------
3/24/92 3/25/92 ppa. ppa.
its GROUP VP GENERAL MANAGER its
----------------------------- ----------------------------
Fine Chemicals Division
Darmstadt, 03/19/92
MGI PHARMA, INC.
By XXXX X. XXXX 3/31/92
-----------------------------
its VICE PRESIDENT, BUSINESS OPERATIONS
------------------------------------
18
ATTACHMENT A
Specification For NEW PRODUCT
PILOCARPINE HYDROCHLORIDE, USP, DAB, PH Eur, BP, JP
FOR MANUFACTURING PHARMACEUTICAL PRODUCTS
FOR ***
ANALYTICAL DATA SPECIFICATION
--------------- -------------
***
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
19
ATTACHMENT B
Companies Authorized To Access DMF Information By Country
APPLIED WITH
------------
***
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
20
