AMENDED AND RESTATED LICENSE AGREEMENT
Exhibit 10.5
AMENDED AND RESTATED LICENSE AGREEMENT
This Amended and Restated License Agreement (“Agreement”) is made and entered into as of
September 15, 2010 (the “Agreement Date”), and is deemed effective as of the Effective Date
(hereinafter defined), by and between Somaxon Pharmaceuticals, Inc. (“Somaxon”) and ProCom One,
Inc. (“ProCom One”).
RECITALS
WHEREAS, ProCom One and Somaxon are parties to that certain License Agreement dated August 25,
2003, as amended, which agreement the parties now wish to amend and restate in its entirety with
this Agreement;
WHEREAS, ProCom One is the owner of all right, title and interest in certain Patent Rights and
Know-How (both as hereinafter defined); and
WHEREAS, ProCom One agrees to grant, and Somaxon accepts, an exclusive, worldwide license to
the Patent Rights and the Know-How to develop and commercialize the Licensed Products (hereinafter
defined).
AGREEMENT
NOW, THEREFORE, for and in consideration of the above described recitals, the mutual covenants
of the parties hereinafter contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the parties, the parties hereto, intending to be
legally bound, enter into the agreements contained herein.
| 1. | DEFINITIONS |
For purposes of this Agreement, the following terms shall have the meanings set forth below
unless the context dictates otherwise.
1.1 “Combination Product” shall mean any Licensed Product that (a) incorporates one or
more active ingredients which alone would be outside the scope of a valid claim under the Patent
Rights, (b) incorporates a proprietary dosage delivery system and/or (c) is sold together with one
or more products for a single invoiced price. For the avoidance of doubt, the scope of the Somaxon
Licenses shall extend to Combination Products.
1.2 “Commercially Reasonable Efforts” shall mean efforts and resources normally used
by a party required to use such efforts and resources for a product, proposed product or technology
owned by it or to which it has rights, which is of similar commercial potential at a similar stage
in its development or product life, taking into account issues of safety and efficacy; market size;
competition; the proprietary position of the product, proposed product or technology; third party
rights; the regulatory status of the product, proposed product or technology and other applicable
regulatory considerations; reimbursement matters; actual and/or projected profitability of the
product, proposed product or technology; and other relevant factors.
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1.3 “Compounds” shall mean doxepin, amitriptyline, trimipramine, trazodone and
nortriptyline (as well as any respective prodrugs, hydrates, salts, esters, metabolites, isomers,
polymorphs or analogues thereof).
1.4 “Effective Date” shall be August 25, 2003.
1.5 “FDA” shall mean United States Food and Drug Administration of the United States
Department of Health and Human Services, its successor agencies or its foreign counterparts outside
the United States.
1.6 “Field” shall mean the prevention, treatment or control of insomnia, and any other
use of the Compounds within the Ranges.
1.7 “Improvements” shall mean any modification to a Licensed Product, including,
without limitation, (i) any modification in use, manufacture, preparation, means of delivery or
dosage, (ii) reformulations (including, without limitation, extended release formulations and flash
dose formulations), and (iii) any modification to any compounds, metabolites, active moieties,
intermediates or active ingredients, with the proviso that the composition following such
modification(s) still contains at least one Compound within its Range.
1.8 “Know-How” shall mean all trade secrets, inventions, data, processes, procedures,
devices, methods, formulas, protocols, information and other know-how, whether or not patentable,
in each case which are owned by or licensed to ProCom One during the Term and are necessary or
useful for the commercial exploitation of: (i) the Patent Rights or any product, process, design or
other matter covered by the Patent Rights; (ii) the design, development, manufacture, testing, use,
or sale of the Licensed Products; or (iii) any other information relating to the Patent Rights or
the Licensed Products which would be useful to Somaxon in the development of Licensed Products.
1.9 “Licensed Products” shall mean: (i) any product the manufacture, use, sale or
importation of which would infringe a valid claim under the Patent Rights but for the Somaxon
Licenses contemplated hereby; and/or (ii) any composition containing at least one Compound within
its Range, regardless of its intended use.
1.10 “NDA” shall mean a New Drug Application filed with the FDA, as defined in the
U.S. Federal Food, Drug and Cosmetic Act and applicable regulations promulgated thereunder, as
amended from time to time.
1.11 “NDA Acceptance” shall mean the written notice of acceptance of a NDA sent by the
FDA.
1.13 “NDA Approval” shall mean the approval, license, registration or authorization,
however called, of a NDA by the FDA necessary for the marketing, use, and sale in the United States
of the drug identified in the NDA.
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1.14 “Net Sales”
A. For Licensed Products other than Combination Products, “Net Sales” shall mean the
total gross amount invoiced by Somaxon, its affiliates or sublicensees from the
sale of any Licensed Product to third parties less the sum of (a) returns, credits and
allowances to third parties actually allowed or paid, (b) wholesale or cash or trade or quantity
discounts, refunds, rebates, charge-backs or retroactive price adjustments, actually allowed or
paid, (c) sales, use or excise taxes or duties imposed on the transaction and paid by Somaxon, its
affiliates or sublicensees, (d) bad debts actually incurred, and (e) charges for freight,
transportation and insurance directly related to the distribution of the Licensed Products
(excluding amounts reimbursed by third party customers).
B. In the case of the sale of a Combination Product under Section 1.1(a), (b) or (c), the Net
Sales for such Combination Product, except as may be provided through the operation of Section
1.14(C) shall equal the gross amount invoiced for such Combination Product less
| (1) | the adjustments (a)-(e) specified in Section 1.14(A) above, |
||
| (2) | the lesser of: |
| (x) | ten (10%) of the gross amount
invoiced for such Combination Product, or |
||
| (y) | any royalty and/or other cost of
goods payable by Somaxon, its affiliate or sublicensee to any
third party due to the presence in the Combination Product of a
proprietary dosage delivery system and/or at least one active
ingredient which alone would be outside the scope of a valid
claim under the Patent Rights; and |
| (3) | an amount equal to the fraction (A-B)/2, where: |
| A | = | the gross amount invoiced for
such Combination Product less the deductions under clauses (1)
and (2) of this Section 1.14(B), and |
|
| B | = | the gross amount invoiced for
the initial Licensed Product sold by Somaxon, its affiliate or
sublicensee less the deductions under clauses (a)-(e) in the
definition of Net Sales in Section 1.14(A) above. |
C. For purposes of calculating the Royalty in Section 4.2, in no event shall the Net Sales of
any single unit of any Licensed Product sold by Somaxon, its affiliate or sublicensee subsequent to
the initial Licensed Product, including any Combination Product, be less than the Net Sales of a
single unit of the initial Licensed Product.
D. For the avoidance of doubt, sales of a Licensed Product by and between Somaxon and an
affiliate or sublicensee are not sales to third parties and shall be excluded from Net Sales
calculations for all purposes.
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1.15 “Patent Rights” shall mean: (i) U.S. Patent Nos. 5,502,047, 5,643,897, 6,211,229
and 6,344,487; (ii) all other existing U.S. and international patents and/or patent applications
now owned, co-owned, licensed or controlled by ProCom One directed to the Compounds within the
Ranges; and (iii) all U.S. and international patent applications and patents on Improvements owned,
co-owned, licensed or controlled by ProCom One during the Term. For the avoidance of doubt, the
existing patent applications referenced in subclause (ii) of this Section 1.15 shall include, but
not be limited to, the rights of ProCom One in the following patent applications:
| (a) | U.S. patent application number 12/446,914, | |||
| (b) | U.S. patent application number 11/804,722, | |||
| (c) | U.S. patent application number 11/804,720, | |||
| (d) | Japanese patent application number 2009-511109, | |||
| (e) | Canadian patent application number 2687118, | |||
| (f) | U.S. patent application number 11/867,595, | |||
| (g) | U.S. patent application number 12/535,640 | |||
| (h) | U.S. patent application number 12/535,623 | |||
| (i) | U.S. patent application number 12/517,507, | |||
| (j) | U.S. patent application number 12/301,223, | |||
| (k) | E.P.O. patent application number 7,795,135.8, | |||
| (l) | Japanese patent application number 2009-511110, and | |||
| (m) | Canadian patent application number 2687124. |
The Patent Rights shall further include all divisions, provisionals, renewals, continuations,
continuations-in-part, reissues, extensions or substitutions thereof and any foreign patent
applications and patents corresponding thereto related to any of the foregoing.
1.16 “Ranges” shall mean the following recited dosage range for each of the Compounds:
| (a) | Doxepin | 0.0001-20 mg | ||||
| (b) | Amitriptyline | 0.5-20 mg | ||||
| (c) | Trimipramine | 0.5-20 mg | ||||
| (d) | Trazodone | 0.5-20 mg | ||||
| (e) | Nortriptyline | 0.5-10 mg |
For the avoidance of doubt, “dosage” shall mean the amount of active material to be
administered at a given time, irrespective of the number or type of dosage units (e.g., tablets,
capsules, etc.) used in such administration.
| 2. | GRANT OF RIGHTS |
2.1 License. During the Term, ProCom One grants to Somaxon an exclusive (even as to
ProCom One), world-wide license under the Patent Rights and the Know-How to develop, make, have
made, use, sell, have sold, offer for sale, import or otherwise commercialize Licensed Products and
Improvements in the Field (collectively “Somaxon Licenses”). For the avoidance of doubt,
the scope of the Somaxon Licenses shall extend to Combination Products.
2.2 Right to Sublicense. Somaxon may sublicense the Somaxon Licenses to any third
party, however, such sublicense(s) shall not relieve Somaxon of its obligations to ProCom One under
this Agreement. Somaxon shall promptly inform ProCom One of the issuance of all such sublicenses.
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2.3 Disclosure of Know-How and Patent Rights. ProCom One shall promptly deliver to
Somaxon or provide Somaxon with copies of (1) all documents, drawings, specifications, programs,
devices and equipment relating to, and all other tangible manifestations of, the Know-How; and (2)
all patent applications (for which U.S. and international patents have not issued) included in the
Patent Rights.
2.4 Improvements. ProCom One shall promptly disclose and communicate to Somaxon any
Improvements discovered, invented, originated, made, conceived or acquired by ProCom One after the
Effective Date (collectively “ProCom One Improvements”) and all such ProCom One
Improvements shall automatically be included within the scope of the Know-How and Patent Rights and
each party’s rights to such ProCom One Improvements shall be governed in accordance with the terms
of this Agreement. Each party to this Agreement shall take Commercially Reasonable Efforts to
protect and ensure the secrecy, confidentiality and value of all Improvements, excluding any
portion of the Improvements that shall have become generally known to the public (other than as a
result of the improper disclosure thereof by such party). Nothing in this Agreement imposes any
duty or obligation on either party to acquire, discover, invent, originate or develop any
Improvement.
2.5 Additional Patents. Consistent with clause (iii) of the definition of Patent
Rights, if, during the term of this Agreement, ProCom One obtains the rights to any patents or
patent applications, the claims of which cover any Improvements, such patents and patent
applications shall be automatically, without any further action of the parties, be included in the
licensed Patent Rights. ProCom One shall provide reasonably prompt notice to Somaxon of any
prospective patentable rights and shall consult with Somaxon concerning ProCom One’s plans for the
prosecution of the related patent rights. Furthermore, ProCom One shall provide Somaxon with a
reasonable period of time to comment on any related patent application prior to the filing of such
patent application and shall use Commercially Reasonable Efforts to accommodate any comments and
other suggestions from Somaxon with respect to the patent application and patent prosecution
strategy.
2.6 Intellectual Property Rights beyond Somaxon Licenses.
2.6.1 Somaxon will have the right of first negotiation to acquire rights under any
intellectual property rights developed by Xx. Xxxxx and/or ProCom One beyond the Somaxon Licenses
which do not constitute ProCom One Improvements. ProCom One will promptly provide notice to
Somaxon of such developments and Somaxon will have the right of first negotiation to acquire rights
thereunder during a period of ninety (90) days following its receipt of such notice. In the event
the parties fail to come to terms with respect to any such additional intellectual property rights,
ProCom One shall have the right to enter into a transaction with any third party with respect to
the specific intellectual property rights it had offered to Somaxon on terms that are more
favorable to ProCom One than those last offered by Somaxon to ProCom One in connection with the
parties’ negotiations.
2.6.2 In order to facilitate verification by Somaxon that the terms of any third party
transaction are in fact more favorable to ProCom One than those last offered to ProCom One by
Somaxon in connection with the parties’ negotiations under Section 2.6.1 above, prior to entering
into any definitive agreement with a third party concerning any matter that is subject to the
foregoing right of first negotiation, ProCom One shall provide Somaxon with a true, accurate and
complete copy of the proposed definitive agreement certified as such by an officer of
ProCom One and shall thereafter provide to Somaxon a copy of any amendments to the definitive
agreement affecting the economic and other materials terms thereof. The terms of any such
definitive agreement and amendments shall be deemed to be confidential information for purposes of
Section 6 below, provided that Somaxon may submit such agreement and amendments to the arbitrator
in the event of any dispute under Section 10 below.
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| 3. | COMMERCIALIZATION |
3.1 Development. Somaxon shall use Commercially Reasonable Efforts to: (i) develop at
least one Licensed Product, (ii) obtain regulatory approval of the initial Licensed Product and,
(iii) subject to applicable regulatory and marketing approval, commercialize such Licensed Product.
In furtherance of such development, Somaxon shall consult with ProCom One with respect to
development plans, timelines and budgets and generally keep ProCom One informed of material
progress and delays, if any, in the development through the periodic meetings of Somaxon’s Board of
Directors (to which ProCom One is entitled to appoint a designee as set forth in Section 3.5
below). In the event that any dispute between the parties arises related to Somaxon’s compliance
with the diligence requirements of this Agreement, the parties shall resolve such dispute in
accordance with Section 10.
3.2 Clinical Trials. Somaxon shall be responsible for conducting all clinical trials
and for all regulatory filings and interactions with clinical trial sites and any regulatory
authorities, including without limitation pharmacovigilance. Somaxon shall actively consult with
Xx. Xxxxx on the design and implementation of the clinical trials.
3.3 Commercialization. Somaxon shall be solely responsible for the commercial
development, marketing, promotion, manufacture, sale and distribution of the Licensed Products.
3.4 Intentionally left blank.
3.5 Seat on Somaxon’s Board of Directors. During the Term, ProCom One may appoint one
designee to Somaxon’s Board of Directors, which designee must be reasonably acceptable to Somaxon
at the time of appointment to Somaxon’s Board of Directors.
| 4. | PAYMENTS |
4.1 Milestone Payments. The parties hereby acknowledge and agree that all milestone
payments to be paid as consideration for the licenses granted hereunder have been fully paid prior
to the Agreement Date.
4.2 Royalty. During the Term, Somaxon shall pay to ProCom One a five percent (5%)
royalty (“Royalty”) on worldwide Net Sales of Licensed Products.
4.3 Royalty Payment and Reports. Within forty-five (45) days after the end of each
calendar quarter, Somaxon shall submit to ProCom One a written report setting forth for such
preceding calendar quarter, the Net Sales and the calculation of the Royalty payable to ProCom One
pursuant to Section 4.2. Such royalty report shall be accompanied by the total Royalty due to
ProCom One. All payments shall be made in U.S. Dollars.
Page 6 of 15
4.4 Record keeping by Somaxon. Somaxon shall keep accurate books of accounts of
record in connection with the manufacture, use and sale of Licensed Products to permit verification
of Royalty payments required hereunder. Such records shall be maintained for a period of at least
three (3) years from the date on which they were generated.
4.5 Audit by ProCom One. ProCom One shall have the right, at its own expense, to
access books and records of Somaxon as may be reasonably necessary to verify the accuracy of the
reports and payments made hereunder. Such access shall be conducted upon reasonable written notice
to Somaxon and during normal business hours. Such access shall not be more frequent than once per
calendar year. Upon Somaxon’s written request, ProCom One shall require the auditing party to sign
a confidentiality agreement for the benefit of Somaxon. The results of such audit shall be made
available to Somaxon. If any audit discloses that the payments by Somaxon to ProCom One are
incorrect in either Somaxon’s or ProCom One’s favor, then the other party shall pay any amount due
to the other party within ten (10) days after receipt of the necessary documentation of the amount
owed. If ProCom One’s audit demonstrates an underpayment of more than five percent (5%) for the
payment due to ProCom One during any individual calendar quarter, Somaxon shall be liable for
ProCom One’s cost of the audit that discovered such underpayment. Otherwise, the parties shall
bear their own costs of such audits.
4.6 Withholding Taxes. Each party shall be responsible for the payment of taxes
attributed to its share of Net Sales. Where required to do so by applicable law, rule or order of
a governmental body, Somaxon shall withhold taxes required to be paid to a taxing authority in
connection with any payments to ProCom One hereunder, and, upon request of ProCom One, Somaxon
shall furnish ProCom One with satisfactory evidence of such withholding and payment. Somaxon shall
cooperate with ProCom One in obtaining exemption from withholding taxes where available under
applicable law.
4.7 Equity. The parties hereby acknowledge and agree that all Somaxon equity to be
issued to ProCom One, Xx. Xxxxx or Xx. Xxxx as consideration for the licenses granted hereunder has
been duly and validly issued prior to the Agreement Date.
| 5. | PATENT RIGHTS |
5.1 Patent Prosecution and Maintenance. Except to the extent otherwise agreed by the
parties, Somaxon shall be responsible for the preparation, filing, prosecution and maintenance of
the Patent Rights, including all payment obligations. Somaxon will provide ProCom One with notice
of Somaxon’s intent to amend any patent claims within the Patent Rights and, time permitting, will
permit to ProCom One to review prosecution drafts, to provide input and strategy suggestions,
however, Somaxon will have the sole discretion to determine and direct claim amendments and
prosecution strategy. Somaxon acknowledges that ProCom One has provided to Somaxon a schedule
setting forth the timing of all maintenance fees and other material prosecution and maintenance
activities scheduled with respect to the Patent Rights, to the extent, with respect to patent
applications contained therein, that such patent applications are not being prepared and/or
prosecuted by or on behalf of Somaxon. ProCom One shall timely execute powers of attorney and such
other documentation as shall be reasonably requested by Somaxon to facilitate Somaxon’s performance
as contemplated herein. Somaxon shall provide written notice to ProCom One from time to time as
Somaxon makes any required maintenance payments and as any new material information relating to the
preparation, filing, prosecution or maintenance of the Patent Rights comes to its attention.
Somaxon will provide ProCom One with notice of Somaxon’s intent to abandon any pending patent
application included within the Patent Rights or to terminate payment of any maintenance fees
relating to the Patent Rights in sufficient time prior to the abandonment date or maintenance fee
due date to permit Procom One at its own expense to make any such required payments or take any
such required action.
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5.2 Patent Enforcement.
5.2.1 If either party should become aware of any infringement or misappropriation or
threatened infringement or misappropriation of the Patent Rights, it shall promptly notify the
other party in writing and provide any information available to that party relating to such alleged
infringement or misappropriation.
5.2.2 Somaxon shall have the primary right, but not the obligation, to take action in its own
name and its expense to secure the cessation of any infringement or misappropriation or to
institute, prosecute and control legal proceedings to prevent or restrain such infringement or
misappropriation concerning the Patent Rights in the Field. ProCom One agrees to assist Somaxon,
at Somaxon’s expense, in the prosecution of any action or legal proceedings related to infringement
or misappropriation of the Patent Rights in the Field. If requested by Somaxon, ProCom One agrees
(a) to join any action or legal proceeding to enforce the Patent Rights in the Field against any
third party or (b) to bring such action or proceeding in its own name (at Somaxon’s expense and
subject to Somaxon’s prosecution and control), if required by applicable law or regulation for such
action or proceeding to be brought or continue. If Somaxon takes action or prosecutes legal
proceedings relating to the infringement or misappropriation of the Patent Rights in the Field,
after payment of ProCom One’s out-of-pocket costs and Royalty due to ProCom One on any award of
lost profits, all other damages and costs recovered in any action or proceedings or by way of
settlement shall belong to Somaxon.
5.2.3 In the event that Somaxon takes no action within six (6) months of notice of any such
infringement or misappropriation, ProCom One shall have the right, but not the obligation, to take
action in its own name and its expense to secure the cessation of any such infringement or
misappropriation or to institute, prosecute and control legal proceedings to prevent or restrain
such infringement or misappropriation concerning the Patent Rights in the Field. If requested by
ProCom One, Somaxon agrees to join any action or legal proceeding to enforce the Patent Rights in
the Field against any third party. If ProCom One takes action or prosecutes legal proceedings
relating to the infringement or misappropriation of the Patent Rights in the Field, after payment
of Somaxon’s out-of-pocket costs, all other damages and costs recovered in any action or
proceedings or by way of settlement shall belong to ProCom One.
5.3 Infringement Action by a Third Party. In the event of the institution of any
suit by a third party against Somaxon for patent infringement arising from the manufacture, use,
sale, distribution or marketing of any Licensed Product, Somaxon shall promptly notify ProCom One
in writing of such suit. Somaxon shall have the sole right to defend such suit at its own cost and
expense, and ProCom One shall, at Somaxon’s expense, assist and cooperate with Somaxon in the
defense of such suit. If a judgment is rendered against Somaxon in such suit and Somaxon is
required to pay any monies or royalty for past or future use (“Third Party Expense”) based
solely upon use of the Compounds both (i) in the Field, and (ii) within the Ranges, Somaxon may
deduct the Third Party Expense (and its cost of defense of such action) from its future royalty
payment obligations to ProCom One pursuant to Section 4.3 up to an amount not to exceed one-half
(1/2) of such future Royalty payment obligations to ProCom One pursuant to such Section 4.2. Such
deductions shall further not exceed one-half (1/2) of each quarterly Royalty payment made by
Somaxon to ProCom One pursuant to Section 4.2 hereof.
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| 6. | CONFIDENTIAL INFORMATION |
6.1 Non-disclosure Obligation. Each of ProCom One and Somaxon shall use any
information received by it from the other party in connection with this Agreement only in
accordance with the terms of this Agreement and shall not disclose such information to any third
party, without the prior written consent of the other party. These obligations shall survive the
expiration or termination of this Agreement for a period of three (3) years. These obligations
shall not apply to information that:
6.1.1 is known by the receiving party, as evidenced by its records, at the time of receipt and
not through a prior disclosure by the disclosing party;
6.1.2 is at the time of disclosure or thereafter becomes published or otherwise part of the
public domain through no breach of this Agreement by the receiving party;
6.1.3 is subsequently disclosed to the receiving party as evidenced by its records, by a third
party having the right to make such a disclosure;
6.1.4 is developed by the receiving party as evidenced by its records independently of
information received by it from the disclosing party hereunder;
6.1.5 is disclosed to any regulatory authority in order to obtain approval to market the
Licensed Products, but such disclosure may be made only to the extent necessary to obtain such
approval; or
6.1.6 is required by law, regulation, rule, act or order of any governmental authority or
agency to be disclosed by a party, provided that notice is promptly given to the other party in
order to provide it an opportunity to seek a protective order or the like with respect to such
information.
6.2 Permitted Disclosure. Information provided under this Agreement may be disclosed
to employees, agents, consultants, or suppliers of the receiving party, but only to the extent
required to accomplish the purposes of this Agreement.
6.3 Publicity. Except as required by law, regulation or court order, all publicity,
press releases and other announcements relating to the terms of this Agreement or the transactions
contemplated hereby shall be reviewed in advance by, and shall be subject to the written approval
of, both parties.
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| 7. | REPRESENTATIONS AND WARRANTIES AND COVENANTS |
7.1 Corporate Existence and Power. As of the Effective Date and the Agreement Date,
each party represents and warrants to the other that it (1) is a corporation duly organized,
validly existing and in good standing under the laws of the state in which it is incorporated, and
(2) has full corporate power and authority and the legal right to own and operate its property and
assets and to carry on its business as it is now being conducted and is contemplated in this
Agreement, including, without limitation, the right to grant the licenses granted hereunder.
7.2 Authority. As of the Effective Date and the Agreement Date, each party represents
and warrants to the other that it (1) has the corporate power and authority and the legal right to
enter into this Agreement and perform its obligations hereunder; (2) has taken all necessary
corporate action on its part required to authorize the execution and delivery of this Agreement and
the performance of its obligations hereunder; (3) this Agreement has been duly executed and
delivered on behalf of such party, and constitutes a legal, valid and binding obligation of such
party and is enforceable against it in accordance with its terms; and (4) all necessary consents,
approvals and authorizations of all governmental authorities and other persons or entities required
to be obtained by such party in connection with entry into this Agreement have been obtained.
7.3 Intellectual Property.
7.3.1 ProCom One represents and warrants to Somaxon that it is not aware of any pending or
threatened litigation (and has not received any communication relating thereto) which alleges that
the practice of a method claimed in any of U.S. Patent Nos. 5,502,047, 5,643,897, 6,211,229 and
6,344,487 or any of the other Patent Rights infringes the intellectual property rights of any third
party.
7.3.2 ProCom One represents and warrants that to the best of ProCom One’s knowledge, there is
no material unauthorized use, infringement or misappropriation of any of the Patent Rights or
Know-How by any third party.
7.3.3 ProCom One represents and warrants that with the exception of certain past and present
employees of Somaxon, no present or former collaborator, partner, employee or consultant of ProCom
One or Xx. Xxxx X. Xxxxx owns or has any proprietary, financial or other interest, direct or
indirect, in the Patent Rights or Know-How, and no third party’s confidential information is
included in the Patent Rights or Know-How.
7.3.4 ProCom One agrees not to disclose to Somaxon, or use in connection with ProCom One’s
efforts for Somaxon, any confidential or proprietary information belonging to any third party.
7.4 Intentionally left blank.
7.5 Kavey Agreement. ProCom One shall not, without Somaxon’s prior written consent,
amend, modify, waive any rights with respect to, or terminate that certain Agreement for Assignment
of Inventions and Covenant Against Disclosure dated June 27, 2003 between ProCom One and Xxxx X.
Xxxxx, M.D.
Page 10 of 15
| 8. | INDEMNIFICATION |
8.1 Indemnification by ProCom One. ProCom One shall indemnify, defend and hold
harmless Somaxon and its affiliates and each of their respective employees, officers, directors and
agents from and against any and all liability, loss, damage, cost and expense (including reasonable
attorney’s fees) resulting from or in connection with the breach by ProCom One of any
representation or warranty or any of its obligations under this Agreement.
8.2 Indemnification by Somaxon. Somaxon shall indemnify, defend and hold harmless
ProCom One and its affiliates and each of their respective employees, officers, directors and
agents from and against any and all liability, loss, damage, cost and expense (including reasonable
attorney’s fees) resulting from or in connection with (i) the breach by Somaxon of any
representation or warranty or any of its obligations under this Agreement or (ii) claims,
settlements, suits, actions, demands, or judgments arising out of any theory of product liability
(including, but not limited to, actions in the form of tort, warranty, or strict liability) by any
third party concerning any product that is made, used, marketed or sold by Somaxon or its
affiliates or sublicensees, including Licensed Products, provided, however, that such
indemnification right shall not apply to any liability, damage, loss, or expense to the extent
directly attributable to the negligence, reckless misconduct, or intentional misconduct of a party
seeking indemnification under this Section 8.2.
| 9. | TERM AND TERMINATION |
9.1 Term. The term of this Agreement shall begin upon the Effective Date, and unless
sooner terminated as hereinafter provided, shall continue in full force and effect until expiration
of the last to expire patent within the Patent Rights (“Term”).
9.2 Termination by Somaxon. Somaxon may terminate this Agreement at any time by
giving thirty (30) days written notice of its intention to terminate to ProCom One if Somaxon has
the good faith belief that the use of any Licensed Product poses an unacceptable safety risk or if,
in Somaxon’s reasonable opinion, the Licensed Product fails to achieve a satisfactory level of
efficacy.
9.3 Termination for Cause. Either party may terminate this Agreement upon thirty (30)
days prior written notice provided to the other at any time during the term of this Agreement upon
the occurrence of one or more of the following:
9.3.1 if the other party commits a material breach of any of its obligations under this
Agreement and fails to remedy the breach within ninety (90) days after receiving written notice of
such breach from the other party; however, if the breach cannot reasonably be cured within the
ninety (90) day period, this Agreement may only be terminated if the party in default fails to
properly commence and thereafter uses Commercially Reasonable Efforts to prosecute actions to cure
such breach; or
9.3.2 upon the filing and institution of bankruptcy, reorganization, liquidation, or
receivership proceedings, or upon an assignment of a substantial portion of the assets for the
benefit of creditors by the other party, or in the event a receiver or custodian is appointed for
such party’s business, or if a substantial portion of such party’s business is subject to
attachment or similar process, provided, however, that in the case of any involuntary
bankruptcy proceeding, such right to terminate shall only become effective if the proceeding is not
dismissed within sixty (60) days after the filing thereof.
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9.4 Procedure upon Termination. Upon the termination of the Agreement by Somaxon
pursuant to Section 9.2 or by ProCom One pursuant to Section 9.3, Somaxon shall assign to ProCom
One all information and data developed or acquired by Somaxon, including all data and other
information from clinical trials, relating to the Licensed Products which ProCom One shall be free
to use and disclose without further obligation to Somaxon. Upon the expiration of this Agreement
or any termination of this Agreement by Somaxon pursuant to Section 9.3, Somaxon shall have a
paid-up, perpetual, exclusive license to use the Know-How with regard to the Licensed Products in
the Field with no obligation of accounting or otherwise to ProCom One and ProCom One shall have no
right to receive or use any information developed or acquired by Somaxon, including all data and
other information from clinical trials, relating to the Licensed Products. Furthermore, such
termination shall not relieve either party of any obligations which have accrued prior to the
effective date of such termination.
9.5 Survival. Except as expressly provided herein, Sections 6, 8, 9.4, 9.5, 10 and 11 shall
survive any expiration or early termination of this Agreement, as well as any other provisions
which by their nature are intended to survive expiration or early termination.
| 10. | DISPUTE RESOLUTION |
10.1 Informal Resolution. In the event of any dispute relating to this Agreement,
prior to instituting any arbitration on account of such dispute, the parties shall attempt in good
faith to settle such dispute first by negotiation and consultation between themselves, including
referral of such dispute to the Chief Executive Officer of Somaxon and the Chief Executive Officer
of ProCom One. In the event said executives are unable to resolve such dispute or agree upon a
mechanism to resolve such dispute within thirty (30) days of the first written request for dispute
resolution under this Section 10.1, then the parties shall resolve all such disputes in accordance
with Section 10.2.
10.2 Arbitration.
10.2.1 Subject to Section 10.1, any controversy, dispute or claim arising out of, in
connection with, or in relation to the interpretation, performance, or alleged breach of this
Agreement which has not been resolved by good faith negotiations between the parties shall be
submitted to binding arbitration by Judicial Arbitration & Mediation Services, Inc./Endispute
(“J.A.M.S.”) or a similar private judging service employing retired judges agreed to by the
parties.
10.2.2 The parties may agree on a retired judge from the J.A.M.S. panel or the panel of any
alternate private judging service agreed upon by the parties. If the parties are unable to agree,
J.A.M.S. or the alternative service shall be requested to provide a list of three available judges
and each party may strike one. The remaining judge will serve as the arbitrator.
Page 12 of 15
10.2.3 Either party may initiate the arbitration by sending written notice of such submission
by registered or certified mail to the other party and to J.A.M.S. or the alternative
service describing the dispute, the amount involved and the remedy sought. The arbitrator will
schedule a pre-hearing conference to reach agreement on procedural matters and discovery, arrange
for the exchange of information, obtain stipulations, and attempt to narrow the issues. The
arbitrator’s decision shall comply with applicable rules of law.
10.2.4 The decision of the arbitrator will be final and may be entered in any court of
competent jurisdiction. The prevailing party shall be entitled to recover its reasonable
attorneys’ fees and costs, including, without limitation, expert witness fees and costs, as
determined by the arbitrator, as applicable. Under no circumstances may the arbitrator award any
punitive damages.
10.3 Governing Law. This Agreement shall be governed by the laws of the State of
California, excluding that body of law known as conflicts of law.
| 11. | MISCELLANEOUS |
11.1 Interpretation. All titles and captions in this Agreement are for convenience
only and shall not be interpreted as having any substantive meaning. All words used in this
Agreement, regardless of the gender in which they are used, shall be construed to include any other
gender, as the context or sense may require. Words in the singular number shall include the plural
and vice versa, as the context or sense may require
11.2 Unenforceability. Both parties hereby expressly state that it is the intention
of neither party to violate any rule, law or regulation. If any of the provisions of this
Agreement are held to be void or unenforceable, then such void or unenforceable provisions shall be
replaced by valid and enforceable provisions which will achieve as far as possible the economic
business intentions of the parties.
11.3 No Waiver. The failure by either party to take any action or assert any right
hereunder shall in no way be construed to be a waiver of such right, nor in any way be deemed to
affect the validity of this Agreement or any part hereof, or the right of a party to thereafter
enforce each and every provision of this Agreement.
11.4 Drafting. This Agreement shall not be construed more strictly against one party
than the other because it may have been drafted by one of the parties or its counsel, each party
having contributed through its counsel substantially and materially to the negotiation and drafting
thereof.
11.5 Assignment. This Agreement and the parties’ rights and obligations hereunder
shall not be assignable except with the prior written consent of the other party; except that (i)
Somaxon shall have the right to assign this Agreements and/or its rights and obligations hereunder
to any of its affiliates, successors in interest or acquirers of all or substantially all of its
assets relating to the Licensed Products, and (ii) with Somaxon’s prior written consent, ProCom One
shall have the right to assign this Agreement and/or its rights and obligations hereunder to any of
its affiliates, successors in interest or acquirers of all or substantially all of its assets.
Page 13 of 15
11.6 Notices. Every notice, demand, consent, request, approval, report, offer,
acceptance, certificate, or other communication which may be, or is required to be, given or
delivered under or with respect to this Agreement or by applicable law or statute shall be in
writing and sent postage prepaid by United States registered or certified mail, return receipt
requested, and directed to the other party at its address set forth below, or at such other address
within the continental United States as any party may hereafter designate by similar notice to the
other.
For ProCom One:
ProCom One, Inc.
c/o Xxxxx Xxxx
000 X. Xxx Xxxxxxx, Xxx 000
Xxx Xxxxxx XX 00000
Telephone: ( ) ___ - _____
Fax: ( ) ___ - _____
ProCom One, Inc.
c/o Xxxxx Xxxx
000 X. Xxx Xxxxxxx, Xxx 000
Xxx Xxxxxx XX 00000
Telephone: ( ) ___ - _____
Fax: ( ) ___ - _____
For Somaxon:
President and Chief Executive Officer
Somaxon Pharmaceuticals, Inc.
c/o General Counsel
0000 Xxxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
President and Chief Executive Officer
Somaxon Pharmaceuticals, Inc.
c/o General Counsel
0000 Xxxxxx Xxxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
11.7 Entire Agreement. This Agreement contains the entire understanding between the
parties relating to the subject matter hereof and supercedes any and all prior agreements,
understandings and arrangements, whether written or oral, between the parties. No amendments,
changes, modifications or alterations of the terms and conditions of this Agreement shall be
binding upon either party hereto unless in writing and signed by both parties.
11.8 Counterparts. This Agreement may be executed in counterparts and each such
counterpart shall be deemed an original hereof.
Page 14 of 15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Agreement Date.
| ProCom One, Inc. |
||||
| By: | /s/ Xxxxx Xxxx | |||
| Name: | Xxxxx Xxxx | |||
| Title: | President | |||
| Agreed: | /s/ Xxxx Xxxxx, MD | |||
| Xxxx Xxxxx, MD | ||||
| Somaxon Pharmaceuticals, Inc. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxx | |||
| Title: | President and Chief Executive Officer | |||
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