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Exhibit 10.19
OPTION AGREEMENT
THIS OPTION AGREEMENT is entered into this 6th day of July, 1998, by
and between Leiras Oy, a Finnish corporation with its offices at Xxxxxxxxxx 00,
XXX-00000 Xxxxx, Xxxxxxx (hereinafter referred to as "Leiras"), Berlex
Laboratories, Inc., a Delaware corporation with offices at 000 Xxxxxxxxxxxx
Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000-0000 (hereinafter referred to as "Berlex"),
and Anthra Pharmaceuticals, Inc., a Delaware corporation with its offices at 00
Xxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter referred to as "Anthra").
W I T N E S S E T H:
WHEREAS, the parties hereto have signed a Term Sheet dated December
12, 1997 pursuant to which they agreed to enter into negotiations for the
development and marketing of dosage forms containing as the active ingredient
disodium clodronate in the United States of America; and
WHEREAS, pursuant thereto, among other things, the parties have
negotiated the terms of a Development Agreement and a Manufacturing Agreement
(each as hereinafter defined); and
WHEREAS, Anthra has requested additional time within which to
consider whether to enter into the Agreements (as hereinafter defined) ; and
WHEREAS, Leiras has agreed to grant Anthra an option to enter into
the Agreements, and Anthra and Berlex have agreed thereto, subject to and in
accordance with the terms hereof.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Definitions
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(a) "Development Agreement" shall mean the undated form of Development
and Commercialization Agreement among Leiras, Berlex and Anthra
identified as 4429/18/JKK, annexed hereto as Exhibit A and initialed
by the parties for purposes of further identification.
(b) "Manufacturing Agreement" shall mean the undated form of
Manufacturing Agreement between Leiras and Anthra identified as
4430/13/JKK, annexed hereto as Exhibit B, and initialed by the
parties for purposes of further identification.
(c) "Agreements" shall mean the Manufacturing Agreement and the
Development Agreement.
(d) "Pre-Clinical Studies", "FDA" and "NDA" as used in Section 4 hereof
and "Affiliate" and "Schering Group" as used in Section 7 hereof
shall have the meanings set forth in the Development Agreement.
2. Grant of Option
(a) For and in consideration of the nonrefundable sum of Two Hundred
Thousand U.S. Dollars (USD 200,000), paid by Anthra to Leiras by wire
transfer on the date hereof, Leiras hereby grants Anthra the option
to enter into the Agreements. Such option shall be exercisable by
written notice from Anthra to Leiras on or before 5 P.M. local time,
Helsinki, Finland, September 30, 1998, accompanied by wire transfer
payment to Leiras of Eight Hundred Thousand U.S. Dollars (USD
800,000), representing the balance of the portion of the
nonrefundable payment due under Section 5.1(a) of the Development
Agreement, it being agreed by the parties hereto that the foregoing
amount of Two Hundred Thousand U.S. Dollars (USD 200,000) shall be
credited toward the One Million U.S. Dollars (USD 1,000,000) due
under said Section 5.1(a) if, and only if, the option hereunder is
duly exercised. Upon the exercise of the option, Leiras, Anthra and
Berlex shall
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be bound by all of the terms and conditions of the Development
Agreement and Leiras and Anthra shall be bound by all of the terms
and conditions of the Manufacturing Agreement, in each case effective
as of the date of such exercise. The parties hereto shall be so bound
without further execution and delivery of the Agreements, but may,
for purposes of convenience, execute and deliver such respective
Agreements.
(b) In the event that the foregoing option is not exercised on or before
September 30, 1998, the option shall expire in its entirety, and no
party hereto shall have any obligation to any other party hereto
under the Agreements. The provisions of Sections 3, 4(c), 5, 6, 7, 8
and 9 of this Option Agreement shall survive such expiration.
3. Confidential Information
(a) Nondisclosure. Except to the extent permitted by this Section 3 or as
otherwise agreed by the parties in writing, the parties agree that,
at all times during the term of this Option Agreement and for thirty
(30) years and three (3) months thereafter, the party receiving
information hereunder (the "Receiving Party") shall keep completely
confidential, shall not publish or otherwise disclose and shall not
use directly or indirectly for any purpose other than in connection
with this Option Agreement and the Agreements any information
furnished to it by another party (the "Disclosing Party") pursuant to
this Option Agreement or otherwise relating to any transaction
contemplated hereby or by the Agreements, including information
heretofore furnished to it (the "Confidential Information"), except
to
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the extent that the Receiving Party can establish by competent proof
that such information:
(i) was already known to the Receiving Party, other than under
an obligation of confidentiality, at the time of disclosure
by the Disclosing Party, as evidenced by the Receiving
Party's prior written records;
(ii) was part of the public domain at the time of its disclosure
by the Disclosing Party;
(iii) became part of the public domain after its disclosure by
the Disclosing Party, other than through any act or
omission of the Receiving Party in breach of this
Agreement; or
(iv) was disclosed to the Receiving Party by a third party who
had no obligation not to disclose such information to
others.
(b) Authorized Disclosure. Each party may disclose Confidential
Information to the extent that such disclosure is:
(i) Made in response to a valid order of a court of competent
jurisdiction or other governmental body of a country or any
political subdivision thereof of competent jurisdiction;
provided, however , that the Receiving Party shall first
have given notice to the Disclosing Party and given the
Disclosing Party a reasonable opportunity to quash such
order and to obtain a protective order requiring that the
Confidential Information and/or documents that are the
subject of such order be held in confidence by such court
or agency or, if disclosed, be used only for the purposes
for which the order was issued; and provided further that
if a disclosure order
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is not quashed or a protective order is not obtained, the
Confidential Information disclosed in response to such
court or governmental order shall be limited to that
information which is legally required to be disclosed in
such response to such court or governmental order;
(ii) Otherwise required by law, in the opinion of legal counsel
to the Receiving Party as expressed in an opinion letter in
form and substance reasonably satisfactory to the
Disclosing Party, which shall be provided to the Disclosing
Party at least forty-eight (48) hours prior to the
Receiving Party's disclosure of the Confidential
Information pursuant to this Section 3(b);
(c) Public Announcements. No party hereto shall make any public
announcements regarding this Option Agreement or the Agreements or
the transactions contemplated hereby or thereby without the written
consent of the other parties; provided, however, that each party
shall be entitled to disclose information to the extent required to
comply with applicable securities laws, including those relating to
initial public offerings. The disclosing party shall be solely
responsible for the accuracy and completeness of any such disclosure.
Except as required by law, no party to this Option Agreement shall
use the name of another party or any of its Affiliates or parent
companies, including, without limitation, Schering AG in any public
announcement, press release or other public document without the
prior written consent of such other party.
(d) Notification. The Receiving Party shall notify the Disclosing Party
immediately, and cooperate with the Disclosing Party as the
Disclosing Party may reasonably
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request, upon the Receiving Party's discovery of any loss or
compromise of the Disclosing Party's Confidential Information.
(e) Remedies. Each Receiving Party agrees that the unauthorized use or
disclosure of any material Confidential Information by the Receiving
Party in violation of the provisions of this Section 3 will cause
severe and irreparable damage to the Disclosing Party. In the event
of any violation of this Section 3, the Receiving Party agrees that
the Disclosing Party shall be authorized and entitled to obtain from
any court of competent jurisdiction injunctive relief, whether
preliminary or permanent, as well as any other relief permitted by
applicable law. The Receiving Party agrees to waive any requirement
that the Disclosing Party post a bond as a condition for obtaining
any such relief.
4. Development Work
(a) Promptly following execution of the Option Agreement,
Anthra agrees to commence, and thereafter diligently
continue to conduct development activities contemplated
under Article 4 of the Development Agreement to the extent
necessary or appropriate as preparatory to the pre-NDA
meeting with the FDA contemplated under Section 4.7 of the
Development Agreement.
(b) Promptly following execution of this Option Agreement,
Leiras agrees to furnish Anthra with copies of its reports
of clinical and preclinical studies as contemplated under
Article 3.1 of the Development Agreement for purposes of
assisting Anthra in its preparation for the pre-NDA meeting
referred to in paragraph (a) hereof.
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(c) In the event the option under Section 2 of this Option
Agreement is not duly exercised in accordance with its
terms, then on or before October 5, 1998, Anthra shall, at
Anthra's sole cost and expense and without any compensation
from Leiras or Berlex: (i) return to Leiras all study
reports and any other Confidential Information furnished by
Leiras to Anthra, and (ii) provide Leiras with all
preparatory work undertaken by Anthra under paragraph (a)
hereof, and Anthra shall have no right to use such study
reports or other Confidential Information or preparatory
work.
5. Applicable Law
The validity, interpretation and implementation of this Agreement
shall be governed by the internal laws of the State of New York,
without regard to the choice of law provisions thereof.
6. Arbitration
Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association to be held in New York, New York, and
judgment upon the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof.
There shall be three arbitrators appointed. Anthra, on the one hand,
and Leiras, on the other hand, shall each appoint one such
arbitrator, and the two arbitrators shall appoint a third,
arbitrator; provided, however, if the controversy or claim is between
Berlex and Anthra, Berlex shall appoint an arbitrator in place of
Leiras. If, the party-appointed arbitrators cannot agree on the third
arbitrator, the third arbitrator shall be appointed in
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accordance with the Commercial Arbitration Rules of the American
Arbitration Association. All proceedings under this Section 6 shall
be conducted in English in New York, New York, or at such other
location as the parties may agree. All arbitration rulings and awards
shall be final and binding on the parties. The losing party shall
bear the cost of conducting the arbitration, but each party shall
otherwise bear its own expenses thereof, including, without
limitation, its own legal fees.
7. Assignment
No party may assign any of its rights and obligations under this
Agreement without the prior written consent of the other parties,
except that Leiras or Berlex may assign its rights to another member
of the Schering Group.
8. Entire Agreement
This Agreement together with Exhibits A and B hereto constitutes the
entire agreement between the parties with respect to the subject
matter hereof, supersedes any prior expression of intent or
understanding relating hereto and may only be modified or amended by
a written instrument signed by the authorized representatives of the
parties.
9. Notices
All notices given by a party to the other shall be in writing in
English and sent by courier service delivered letter, or by
facsimile, cable, telex or telefax (copies of which are to be
subsequently forwarded as confirmation by courier service delivered
letter), to the other party's address as indicated below or any other
address notified in lieu thereof. All notices shall be effective upon
receipt.
Leiras
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To: Leiras Oy
Pansiontie 47
P.O. Box 415
Fin-20101 Turku
Finland
Attention: Legal Department
Telecopier No.: 011 358 2 333 2465
Anthra
To: Anthra Pharmaceuticals, Inc.
00 Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxxx, CEO
Telecopier No.: 0-000-000-0000
Anthra
To: Anthra Pharmaceuticals, Inc.
00 Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxxx, CEO
Telecopier No.: 0-000-000-0000
Berlex
To: Berlex Laboratories, Inc.
000 Xxxxxxxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Legal Department
Telecopier No.: 0-000-000-0000
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized representatives as of the date
first above written.
LEIRAS OY
By:/s/ Xxxxxxx Xxxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: President
By:/s/ Xxxx Xxxxxxxxxxx
----------------------------------
Name: Xxxx Xxxxxxxxxxx
Title: Vice President
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BERLEX LABORATORIES, INC.
By: /s/ Xxxx Xxxxxxxxx
----------------------------------
Name: Xxxx Xxxxxxxxx
Title: Treasurer
ANTHRA PHARMACEUTICALS, INC.
By: /s/ Xxxxxxx Xxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
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EXHIBIT A
DEVELOPMENT AND COMMERCIALIZATION AGREEMENT
among
LEIRAS OY,
BERLEX LABORATORIES, INC.
and
ANTHRA PHARMACEUTICALS, INC.
Dated: ____________________, 1998
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DEVELOPMENT AND COMMERCIALIZATION AGREEMENT
THIS DEVELOPMENT AND COMMERCIALIZATION AGREEMENT (the Development
Agreement is entered into this ____ day of _____________, 1998, by and between
Leiras Oy, a Finnish corporation with its offices at Xxxxxxxxxx 00, XXX-00000
Xxxxx, Xxxxxxx (hereinafter referred to as "Leiras"), Berlex Laboratories, Inc.,
a Delaware corporation with offices at 000 Xxxxxxxxxxxx Xxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000-0000 (hereinafter referred to as "Berlex"), and Anthra
Pharmaceuticals, Inc., a Delaware corporation with its offices at 00 Xxxxxx
Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter referred to as "Anthra").
W I T N E S S E T H:
WHEREAS, the parties hereto have signed a Term Sheet dated December
12, 1997 pursuant to which they have agreed to enter into negotiations for the
development and marketing of dosage forms containing as the active ingredient
disodium clodronate in the United States of America; and
WHEREAS, pursuant thereto, among other things, the parties have
agreed to negotiate a Development Agreement; and
WHEREAS, the parties have agreed to the terms and conditions as
further hereinafter set forth, and Leiras and Anthra are simultaneously herewith
entering into a Manufacturing Agreement as contemplated by the Term Sheet.
NOW, THEREFORE, the parties hereto hereby agree as follows:
10. DEFINITIONS
The following terms used in this Development Agreement shall have the
following meanings:
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(a) "Additional Studies" shall have the meaning set forth in
Section 4.7.
(b) "Affiliate" of a Person shall mean any other Person which,
directly or indirectly, is Controlled by, or is under
common Control with, such Person.
(c) "Applicable Rate" shall have the meaning set forth in
Section 6.1 (e)(iii)
(d) "Clinical Studies" shall have the meaning set forth in
Section 3.1.
(e) "CMC Data" shall mean all information contained in, and
data supporting, the CMC Section of all INDs, NDAs or SNDAs
covering the Product for the Indications.
(f) "CMC Section" shall mean the Chemistry, Manufacturing and
Control and Facilities section of the IND, NDA or SNDA, as
the case may be, for the Product for the H-Indication or
O-Indication.
(g) "Control" shall mean the power to direct or cause the
direction of the management or policies of a Person,
whether through the ownership of voting securities, by
contract, resolution, regulation or otherwise.
(h) "Effective Date" shall mean the date first above written.
(i) "FDA" shall mean the Food and Drug Administration of the
U.S. Department of Health and Human Services, and any
successor agency having substantially the same functions.
(j) "Force Majeure" shall have the meaning set forth in Section
16.1.
(k) "H-Indication" shall mean the treatment of hypercalcemia in
humans due to malignancy.
(l) "IAS" shall mean the international accounting standards
promulgated by I the International Accounting Standards
Committee.
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(m) "Improvements" shall mean all discoveries, formulae, data,
inventions, know-how and trade secrets, procedures,
devices, technology, formulations, and other intellectual
property covering any enhancement in the formulation,
ingredients, presentation, means of delivery, dosage or
packaging of the Product or covering a new indication or
application for the Product. In no event shall
"Improvements" include any methods or processes or other
means of manufacture of the Product or any part thereof.
(n) "IND" shall mean the Investigational New Drug Application
number IND 44.160 filed with the FDA by Leiras relating to
the Product.
(o) "Indications" shall mean the H-Indication and the
O-Indication in humans.
(p) "Launch" shall mean the first commercial sale of the
Product in the Territory following the approval of an NDA
for the O-Indication or the H-Indication.
(q) "Manufacturing Agreement" shall mean the Manufacturing
Agreement of even date herewith between Leiras and Anthra.
(r) "Market" or "Marketing" shall mean all programs and
activities relating to the promotion and sale of the
Product in the Territory, including but not limited to,
advertising, seminars, symposia, training and education, as
well as detailing, selling, contracting for sale of, and
distributing the Product.
(s) "Minimum Royalty" shall mean with respect to each Royalty
Period (or part thereof) for which Berlex is obligated to
pay Anthra a royalty under Section 6.1(e)(iii) below, the
product of (a) fifty percent (50%), and (b) the Applicable
Rate and (c) the Net Sales for such Royalty Period as
projected in a written determination made by an independent
third party mutually selected by Berlex
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and Anthra, within one year prior to the anticipated date
of Launch. In the event, however, that there is any
material change in any assumption relied upon by such
independent third party in projecting the Net Sales for any
Royalty Period(s), the independent third party, or, in his
absence or unavailability, a successor to be mutually
selected by Berlex and Anthra, shall revise the Net Sales
for such Royalty Period(s) accordingly. Without limiting
the foregoing, in the event that the FDA-approved labeling
differs materially from the labeling initially proposed by
Anthra to the FDA, a material change in the assumptions
relied on by the independent third party shall be deemed to
have occurred.
(t) "NDA" shall mean a New Drug Application to the FDA for the
Product.
(u) "Net Sales" shall mean the amount invoiced for the Product
per unit by (a) Anthra and, if it sublicenses the selling
rights, its sublicensees (hereinafter "the selling party")
and (b) in the event that Berlex exercises the Option,
Bedex and, if it sublicenses the selling rights, its
sublicensees (hereinafter "the selling party") to third
parties in the Territory, less reasonable and customary
deductions applicable for (i) transportation charges and
charges such as insurance, relating thereto paid by the
selling party; (ii) sales and excise taxes or customs
duties paid by the selling party and any other governmental
charge imposed upon the sale of the product and paid by the
selling party; (iii) distributors' discounts, rebates or
allowances actually granted, allowed or incurred; (iv)
quantity discounts, cash discounts or chargebacks actually
granted, allowed or incurred in the ordinary course of
business in connection with the sale of the Product; (v)
allowances or credits to customers, not in excess of the
selling price of the product, on account
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of governmental requirements, rejection, outdating, recalls
or return of the product, and (vi) costs of customer
programs such as cost-effectiveness or patient assistance
programs designed to aid in patient compliance to maintain
medication schedules, for the purpose of securing managed
care contracts (to the extent that such programs directly
result in incremental the Product sales); provided,
however, that any deduction pursuant to clause (vi) shall
be prorated over the term of the relevant contracts.
Notwithstanding anything to the contrary contained in the
foregoing sentence, Net Sales to customers other than U.S.
governmental entities and state programs for indigent
patients shall be deemed in the aggregate to be not less
than eighty percent (80%) of the selling party's published
wholesale price multiplied by the number of units of the
Product sold to customers in the Territory, less deductions
for freight, postage, shipping and insurance to the extent
included in such wholesale price.
For the purpose of calculating a selling party's Net Sales, the
parties recognize that (a) a selling party's customers may include
persons in the chain of commerce who enter into agreements with a
selling party as to price even though title to the product does not
pass directly from a selling party to such customers, and even though
payment for such Product is not made by such customers directly to a
selling party and (b) in such cases chargebacks listed above and paid
by a selling party to or through a third party (such as a wholesaler)
can be deducted by a selling party from gross revenue in order to
calculate Net Sales. Any deductions listed above, which involve a
payment by a selling party shall be taken as a deduction against
aggregate sales for the period in which the payment is made. Sale of
the Product between a party and its sublicensees solely for research
or
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clinical testing purposes shall be excluded from the computation of
Net Sales. Net Sales will be accounted for in accordance with IAS.
(v) "O-Indication" shall mean the treatment of osteolysis
(osteolytic bone metastases) in humans.
(w) "OP-Indication" shall mean the prevention of osteolysis
(osteolytic bone metastases) in humans.
(x) "Option" shall have the meaning set forth in Section
6.1(a).
(y) "Option Period" shall have the meaning set forth in Section
6.1(b).
(z) "Person" shall mean an individual, sole proprietorship,
partnership, limited partnership, limited liability
partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated
association, joint venture or other similar entity or
organization, including, without limitation, a government
or political subdivision, department or agency of a
government.
(aa) "Pre-Clinical Studies" shall have the meaning set forth in
Section 4.7.
(bb) "Product" shall mean disodium clodronate in the finished
dosage forms listed and conforming to the Specifications
which are set forth in Exhibit 1.28.
(cc) "Royalty Period" shall mean each twelve (12) consecutive
month period commencing on the date of Launch and each
anniversary thereof.
(dd) "Schering Group" shall mean Schering AG and its Affiliates,
including, but not limited to, Leiras and Berlex.
(ee) "Specifications" shall mean the specifications for the
Product as set forth in Exhibit 1.28 hereto.
(ff) "SNDA" shall mean a Supplemental New Drug Application for
the Product.
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(gg) "Technology" shall mean any information, technical
knowledge, expertise, practice, inventions, procedures,
formulae, trade secrets, analytical methodology, stability
and other data, toxicological information, and know-how in
tangible or intangible form, whether patented (including
the Patents referred to in Section 13.1 hereof), patentable
or otherwise, other than the Pre-Clinical Studies and
Clinical Studies, in which any member of the Schering Group
has an ownership or a license, and which relates to
preclinical, CMC and clinical experience regarding the
Product and which is pertinent to the NDA or the SNDA for
the Indications. In no event shall Technology include any
methods or processes or other means of manufacture of the
Product or any part thereof.
(hh) "Territory" shall mean the United States of America, and
its territories and possessions and the Commonwealth of
Puerto Rico.
(ii) "Trademark" shall mean the trademark BONEFOS(R), as further
described on Exhibit 1.35.
(jj) "Transfer Date" shall mean the date of the transfer and
assignment of Anthra's rights to Berlex under Section 6.1
(e) of this Agreement in the event Berlex exercises its
Option.
11. RIGHTS AND LICENSES
(a) Subject to the terms and conditions of this Agreement,
including without limitation, Article 6, Leiras hereby
grants to Anthra a perpetual exclusive license under the
Technology to develop and Market, sell and distribute the
Product in the Territory for the H-Indication, the
O-Indication and such other indications as the parties may
agree, and a non-exclusive royalty-free license to use the
Clinical
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Studies, Pre-Clinical Studies, and CMC Data solely for the
purpose of preparing, securing approval of, and maintaining
the NDA and SNDA for the Product for the Indications, and
such other indications as the parties may agree, and for
Marketing the Product in the Territory. The license granted
to Anthra hereunder is limited to the Product which has
been purchased from Leiras under the Manufacturing
Agreement, or purchased by Anthra from (i) a Second Source
to the extent permitted under Section 11.1 of the
Manufacturing Agreement or (ii) under the terms of the
license referred to in Section 15.6 of the Manufacturing
Agreement following termination of the Manufacturing
Agreement as provided in said Section 15.6. In the event
that Anthra wishes to develop the Product in the Territory
for any additional indications (other than the oncology
indications), Anthra shall obtain Leiras' prior written
consent for such development on terms to be negotiated
between Leiras and Anthra.
(ii) The license granted hereunder includes the right
to sublicense distribution, Marketing and sales
rights to any entity that does not, and whose
parent company and Affiliates do not, Market,
sell or distribute any product competing with the
Product in the Territory, provided however that,
subject to Section 6.1(g)(4), in the event Berlex
exercises the Option, this Section 2.1(b) shall
not apply to Berlex, any of its Affiliates, or
any sublicensees.
(iii) Any sublicense under Section 2.1(b) shall be
subject to all of the terms and conditions of
this Development Agreement.
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(b) Anthra expressly acknowledges and agrees that, other than
the rights and licenses granted under this Development
Agreement, it does not hereby acquire and has no right or
claim hereunder to any other rights in, or to the use of,
other trademarks, patents or other industrial property
rights or technical knowledge owned, used or adopted by
Leiras. Without limitation on the foregoing, no right or
license to manufacture the Product is granted to Anthra
hereunder.
12. TECHNICAL DOCUMENTATION
(a) Leiras shall provide Anthra, within thirty (30) days after
the Effective Date, at Leiras' expense, with a copy of (i)
all reports of clinical studies which it has conducted with
respect to the Product, as described on Exhibit 3.1 hereto
(the "Clinical Studies"), and (ii) all reports of
preclinical studies as described on Exhibit 4.7 (the
"Pre-Clinical Studies"). In addition, Leiras shall provide
Anthra, in the form available and in the possession of
Leiras or any member of Schering Group, within thirty (30)
days after notice from Anthra, with a copy of (x) such CMC
Data as Anthra may specify and (y) such Technology as
Anthra may reasonably request in connection with
preparation or securing approval of, and maintenance of,
the NDA or SNDA for the Product for the Indications. All of
the CMC Data and other Technology as available at Leiras
shall be made available to Anthra for audit and review.
Leiras represents and warrants to Anthra that Leiras has
access to all such Technology, and has the authority to
give and the power to perform the provisions of this
Article 3 set forth above.
(b) Due Diligence. Leiras acknowledges the receipt of the list
in Exhibit 3.2 on which Anthra has outlined certain
practices. Leiras agrees to consult with Anthra
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and to consider the items listed on such Exhibit, but
implementation thereof shall be in Leiras' sole discretion,
subject however to compliance with Articles 4.12 and 11.2
of this Development Agreement.
13. REGULATORY APPROVALS
(a) Anthra shall conduct or cause to be conducted, at its
expense, all clinical trials, studies or other similar
development activities required in order to prepare an NDA
or SNDA, as the case may be, for the Product for the
H-Indication and the O-Indication.
(b) Anthra shall obtain from Leiras, and Leiras shall supply to
Anthra, all clinical supplies of the Product required by
Anthra at any time prior to approval of the NDA and SNDA
for the Indications. Anthra shall pay Leiras $3.00 for each
vial and $0.20 for each capsule of Product, in
fully-packaged form. In the event that Berlex shall
exercise the Option, then Berlex shall reimburse Anthra,
within thirty (30) business days thereafter, for the
aggregate cost of such clinical supplies.
(c) Nothing contained herein shall prevent Leiras itself from
conducting such additional clinical trials as it may
consider necessary or appropriate, provided however that
Leiras agrees (i) not to conduct any company initiated
trials for the Product in the Territory until Anthra has
filed an NDA for one of the Indications, and (ii) to
conduct company initiated trials only relating to the first
Indication so filed until the SNDA for the second
Indication has been filed, provided further that such
restrictions shall not apply if Leiras obtains Anthra's
prior consent, which Anthra agrees not to unreasonably
withhold. Once the NDA and SNDA for both
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Indications have been filed, but in any case no later than March 31,
2004, no further consent shall be required.
(d) Anthra shall supply free of charge to Leiras all data
arising from the clinical trials referred to in Section
4.1, including, without limitation, all results obtained,
for use in the manner set forth in Section 4.11.
(e) Leiras shall transfer ownership of the IND to Anthra within
thirty (30) days after the Effective Date.
(f) Subject to this Article 4, Anthra shall prepare and file an
NDA, in its own name, for the H-Indication or the
O-Indication, and prepare and file an SNDA, in its own
name, for the other of the Indications. Anthra shall
immediately notify Leiras and Bedex in writing upon its
submission to the FDA of an NDA or SNDA for either of the
Indications and shall immediately notify Leiras and Bedex
of FDA acceptance for filing of such NDA or SNDA as well as
of the approval of such NDA or SNDA. Anthra shall use its
commercially reasonable efforts to secure, as soon as
commercially practicable and in any case no later than
March 31, 2005, FDA approval of an NDA or SNDA, as the case
may be, for both of the Indications. No later than December
31, 1998, Anthra shall submit to the FDA the protocol(s)
for the clinical trial(s) for the Indication for which an
SNDA shall be filed.
(g) Anthra shall prepare, and Leiras shall assist Anthra in
preparing, the pre-clinical section of the NDA and SNDA to
be filed by Anthra for the Product for the H-Indication and
the O-Indication. Anthra has had the full access and
opportunity to review such studies during the course of its
due diligence prior to the signing of this Agreement. In
the event that Anthra reasonably determines that
23
any of the Pre-Clinical Studies do not meet the FDA Good
Laboratory Practices requirements, or are otherwise
deficient, then Anthra shall notify Leiras of the
additional preclinical studies ("Additional Studies") to be
performed in connection with the preparation of the NDA or
SNDA submission, as the case may be, within thirty days
after the pre-NDA meeting, or within thirty days after such
later time as the FDA may notify Anthra of additional
preclinical requirements, or upon making its determination
that there is a deficiency, as the case may be. In the
event that Leiras agrees to undertake the Additional
Studies, it shall so notify Anthra within thirty (30) days
after receipt of notice from Anthra of the Additional
Studies, and shall use commercially reasonable efforts to
complete them and prepare and provide to Anthra the
preclinical section of such NDA or SNDA not less than six
months prior to the NDA or SNDA submission date projected
by Anthra; provided, however, that if it is not practicable
to complete such work by such date, then Leiras agrees to
work diligently to complete such work as soon thereafter as
practicable. If Leiras shall fail to notify Anthra in
writing that Leiras has begun work on the Additional
Studies as soon as practicable, however, no later than
within three months after receipt of notice from Anthra of
such Additional Studies, then, upon written notice to
Leiras, Anthra may commission a contract research
organization to conduct such studies, in which case Anthra
shall prepare the preclinical section of such NDA or SNDA,
as the case may be, and Leiras shall have no obligation to
assist therewith. In the event that Leiras conducts such
Additional Studies, then Anthra shall semiannually, within
thirty (30) days after being invoiced therefor by Leiras,
24
reimburse Leiras' costs of the Additional Studies and of
assisting Anthra in preparing the preclinical section of
the NDA or the SNDA, calculated in the manner referenced in
Section 5.5. In the event that Berlex exercises the Option,
then Berlex shall, within thirty (30) business days after
such exercise, reimburse Anthra for any payments made by
Anthra in connection with the Additional Studies. In such
event Anthra shall supply free of charge to Leiras and
Berlex all data arising from the Additional Studies
including without limitation, all results obtained. Leiras
and Bedex shall be entitled to use such results and other
data in the manner set forth in Section 4.11.
(h) Leiras shall prepare and submit to Anthra, at the expense
of Leiras, the CMC Sections of the NDA and SNDA to be filed
by Anthra for the Product for the H-Indication and the
O-Indication. As soon as reasonably practical after being
notified by the FDA at or after the pre-NDA meeting with
the FDA, Anthra shall provide Leiras with details of all
outstanding CMC issues and the anticipated date of filing
of the NDA or the SNDA, as the case may be. Leiras shall
undertake commercially reasonable efforts to provide Anthra
with the CMC section of the NDA or the SNDA, as the case
may be, six months before the projected filing date
thereof.
(i) The FDA filings will be made at Anthra's expense except as
otherwise provided in this Article 4.
(j) In the event that Berlex exercises the Option, Anthra shall
execute or have executed the relevant documents necessary
to transfer ownership of the IND and any other
investigational new drug application relating to the
Product, the NDA
25
and any SNDA to Berlex within five (5) business days after
the grant of the Marketing authorization for the second
Indication to be approved, but in any case no later than
March 31, 2006; provided, however, that Anthra shall
transfer such approvals to Berlex upon any earlier
termination of this Development Agreement by Berlex or
Leiras in accordance with Sections 18.2, 18.3, 18.4, 18.5
or 18.7.
(k) During the term of this Development Agreement, Anthra shall
be the exclusive FDA contact with respect to the Product
until such time as Berlex shall exercise the Option and the
IND and any other investigational new drug application
relating to the Product, NDA and SNDA's are transferred to
Berlex, but Anthra shall in any case provide Berlex and
Leiras with a copy of all documentation and correspondence
submitted to, or received from, the FDA, including, without
limitation, the NDAs and SNDAs and any updated versions
thereof. With respect to submissions to the FDA, Anthra
shall be required to submit to Leiras and Bedex, on a
periodic basis, summaries of its submissions to FDA
relating to the Product. All clinical data submitted to
Leiras or Berlex shall be used, before the transfer of the
regulatory approvals pursuant to Section 4.10, solely for
the purpose of complying with the regulatory obligations of
the Schering Group, evaluating the Option, or on a
confidential basis with respect to development or
commercialization outside the Territory, provided however
that (x) after NDA approval for the first Indication all
such clinical data may be used freely by Leiras outside the
Territory but may not be disclosed by Leiras (except on a
confidential basis) prior to the disclosure of such data by
Anthra on a non-confidential basis, and (y) if the Option
is exercised, then after the date of the
26
transfer pursuant to Section 4.10 all such clinical data may
be used freely, in a manner consistent with Leiras' use of its
own clinical data, by Leiras or Berlex within or outside the
Territory. Further, Anthra agrees to provide Berlex and Leiras
with copies of all contact reports that it prepares
memorializing its communications with the FDA relating to the
Product. If Berlex exercises the Option, then Berlex may apply
for an SNDA for the Product for the OP-Indication prior to the
transfer of the NDA to Berlex, in which case all
communications with the FDA regarding such SNDA shall be
conducted through Anthra; provided, however, that Berlex shall
not commence any clinical trials with respect thereto until
Anthra has filed an NDA for one of the Indications and SNDA
for the other Indication, or, if earlier, until Berlex obtains
Anthra's consent, which Anthra shall not unreasonably
withhold. If Anthra does not give such consent, it shall have
the burden of proof in providing substantiation therefor. In
any case, if Berlex has exercised the Option, Berlex may
conduct such trials anytime after December 31, 2003 without
Anthra's approval.
(l) Anthra, Leiras and Berlex shall each perform its respective
activities under Sections 3 and 4 of this Development
Agreement in good scientific manner, and in compliance with
all requirements of applicable laws, rules and regulations,
including, without limitation, Good Clinical Practices, Good
Manufacturing Practices and Good Laboratory Practices as set
forth from time to time by the FDA, insofar as applicable.
14. PAYMENT, EXPENSES
27
(a) Anthra shall pay to Leiras, for the rights and license granted
under this Development Agreement, a nonrefundable payment of
Three Million Five Hundred Thousand Dollars ($3,500,000), as
follows:
(i) One Million Dollars ($1,000,000) on or before the
Effective Date of this Development Agreement of which
Leiras acknowledges receipt of Two Hundred Thousand
Dollars ($200,000) in accordance with the Option
Agreement dated July 6, 1998; and
(ii) Two Million Five Hundred Thousand Dollars
($2,500,000) on the earlier of (i) thirty (30) days
after the pre-NDA meeting between representatives of
Anthra and the FDA and (ii) December 31, 1998.
(b) Subject to the foregoing payments, and, except as provided in
Section 5.6 hereof, no royalty shall be payable by Anthra to
Leiras for the right and licenses granted to Anthra under this
Development Agreement.
(c) All payments to be made by Anthra to Leiras under this
Development Agreement shall be made in United States Dollars
and shall be made by wire transfer to such bank account as
shall be specified in writing five (5) days in advance by
Leiras.
(d) Anthra shall pay to the proper taxing authority any and all
withholding taxes or similar charges imposed by any
governmental unit in the Territory on any amounts due to
Leiras from Anthra pursuant to this Section 5, and shall use
commercially reasonable efforts to obtain and send to Leiras
proof of such payment of such taxes or charges. All amounts
paid by Anthra pursuant to this
28
Section 5.4 shall be paid for the account of Leiras and
deducted from the amounts due from Anthra to Leiras pursuant
to this Section 5.
(e) The compensation for Leiras' services in conducting the
Additional Studies shall be FIM 3.100 per person day on each
day exceeding 10 person days plus all direct out-of-pocket
costs (which compensation does not include any financial costs
or general and administrative costs). Further, in the event
Anthra requests Leiras' assistance in clinical or regulatory
matters, Anthra shall pay Leiras a compensation of FIM 3.100
per person day plus direct outside costs, however, Leiras
shall not be requested to provide more than ten (10) person
days of such assistance to Anthra. The above mentioned daily
compensation of FIM 3.100 is valid as of the Effective Date
and will be increased annually by a cost increase, if any, due
to collective bargaining agreements, as applied customarily by
Leiras.
(f) If Anthra grants any third party any rights to Market,
distribute or sell the Product and the aggregate receipts
(taking into account both lump sum payments and royalty flows)
from such third party exceed the aggregate expected receipts
from Berlex to Anthra pursuant to Section 6.1(e), Anthra shall
pay Berlex a portion of the excess if and to the extent that
such excess is actually received. In determining the excess
under this Section 5.6(a), Anthra may deduct fifty per cent
(50%) of the payments made by Anthra in connection with
Additional Studies under Section 4.7. Any excess remaining
after such deduction shall first be paid by Anthra prorata
against Anthra's costs of biostudy and Leiras' costs of CMC
Sections for the development of the tablet form authorized and
agreed in
29
accordance with Section 13.9 hereof and one-third of the
remainder shall be paid by Anthra to Berlex.
15. BERLEX OPTION
(a) Option
(i) Subject to this Section 6.1, Anthra hereby grants
Berlex an option to acquire irrevocably all right,
title and interest of Anthra to its perpetual
exclusive right and license under Section 2.1,
subject to Anthra retaining such rights as Anthra may
require for the maintenance of the IND and the NDA
and the filing of the SNDA for the second Indication
until the date of transfer thereof to Berlex pursuant
to Section 4.10. Berlex shall have the right to grant
to third parties sublicenses under such right and
license, subject to the prior written approval of
Anthra, which approval shall not be unreasonably
withheld, and further provided that Anthra's consent
shall not be required with respect to any sublicensee
which is a member of the Schering Group.
(ii) The Option may be exercised by Berlex, at any time
during the period (the "Option Period") commencing on
the Effective Date and ending on the 180th day
following the acceptance for filing of the NDA for
the first Indication for which the filing shall be
accepted, by providing written notice thereof to
Anthra.
(iii) Prior to Berlex exercising the Option, no member of
the Schering Group shall discuss, negotiate, or enter
into any agreement with any
30
prospective sublicensee, concerning the
commercialization of the Product in the Territory.
(iv) In the event that Berlex exercises the Option, Berlex
shall have the right to develop the Product for the
OP Indication and obtain FDA approval for an SNDA for
the OP Indication.
(v) In the event Berlex exercises its Option, Anthra
shall transfer and assign to Berlex, free and clear
of all liens and encumbrances, all right, title and
interest of Anthra to its perpetual exclusive right
and license under Section 2.1, subject to such rights
as Anthra may require for the maintenance of the IND
and the NDA and the filing of the SNDA for the second
Indication until the date of transfer thereof to
Berlex, such transfer and assignment to be made
substantially in accordance with the assignment set
forth in Exhibit 6.1(e). Berlex shall pay Anthra the
following amounts:
(A) within thirty-three (33) days of FDA approval of
an NDA or SNDA for the Product for the H-Indication, a payment
of Six Million U.S. Dollars (U.S. $6,000,000);
(B) within thirty-three (33) days of FDA approval of
an NDA or SNDA for the Product for the O-Indication, a payment
of Fifteen Million U.S. Dollars (U.S. $15,000,000).
None of the amounts paid pursuant to this Section 6.1(e)(i)
and (ii) shall be refundable or creditable towards any other
payments due under this Section 6.1;
(C) a royalty for each Royalty Period (or part
thereof) on the Net Sales of the Product in the Territory
during the period commencing on the date of Launch and ending
on the fifteenth (15th) anniversary of the Effective Date. The
royalty shall be payable at the fixed rate set forth in the
table below relating to the Indication for which an NDA is
approved and the twelve (12) month period in which such NDA is
approved by the FDA (the "Applicable Rate"). The royalty
payable with respect to any Royalty Period shall be computed
by multiplying the
31
Applicable Rate by the Net Sales of the Product in the
Territory during such Royalty Period.
H-Indication Table
Period of NDA Approval Applicable Rate
---------------------- ---------------
4/15/00 - 4/14/01 12%
4/15/01 - 4/14/02 12%
4/15/02 - 4/14/03 11%
4/15/03 - 4/14/04 9%
4/15/04 - 4/14/05 7%
4/15/05 - 4/14/06 5%
4/15/06 - 4/14/07 3%
4/15/07 - 4/14/08 1%
4/15/08 and Later 0%
O-Indication Table
Period of NDA Approval Applicable Rate
---------------------- ---------------
4/15/02 - 4/14/03 12%
4/15/03 - 4/14/04 12%
4/15/04 - 4/14/05 11%
4/15/05 - 4/14/06 9%
4/15/06 - 4/14/07 7%
4/15/07 - 4/14/08 5%
4/15/08 - 4/14/09 3%
4/15/09 - 4/14/10 1%
4/15/10 and Later 0%
provided, however, that if the FDA approves an NDA for either
the H-Indication or the O-Indication, and then approves an
SNDA for the other such Indication, the Applicable Rate
effective as of the date on which such SNDA is granted, and
for all succeeding Royalty Periods (or parts thereof), shall
be determined in accordance with the following formula:
(M+N)/2
where M is the Applicable Rate with respect to the Indication
for which the NDA was obtained and N is rate which would have
been the Applicable Rate if an NDA had been granted for the
other Indication,
32
(both rates determined with reference to the tables above);
and it is further provided that the royalty payable by Berlex
to Anthra under this Section 6.1(e)(iii) for any Royalty
Period shall not be less than the Minimum Royalty for such
Royalty Period; and
(D) in the event that Berlex obtains FDA approval for
an SNDA for the OP-Indication, the royalty payable by Berlex
pursuant to Section 6.1(e)(iii) above shall be reduced as
follows:
(x) during those parts of the Royalty Periods
which fall within the first twelve (12)
month period following the approval of the
SNDA for OP-Indication, the Applicable Rate
shall be seventy-five percent (75%) of the
Applicable Rate determined in accordance
with Section 6.1(e)(iii) above,
(y) during those parts of the Royalty Periods
falling within the second twelve (12) month
period following the approval of the SNDA
for OP-Indication, the Applicable Rate shall
be fifty-five percent (55%) of the
Applicable Rate determined in accordance
with Section 6.1 (e)(iii) above,
(z) during all parts of subsequent Royalty
Periods for which a royalty is due under
Section 6.1(e)(iii) above, the Applicable
Rate shall be fifty percent (50%) of the
Applicable Rate determined in accordance
with Section 6.1(e)(iii) above.
(vi) Notwithstanding anything to the contrary in this
Development Agreement, Berlex shall have no
obligation to pay Anthra any royalty with respect to
Net Sales occurring on or after the fifteenth (15th)
anniversary of the Effective Date.
33
Each royalty payment made pursuant to Section 6.1(e)(iii) or
(iv) shall be accompanied by written report, providing a
detailed breakdown of the Net Sales, and the components
thereof, during the relevant Royalty Period, and showing the
manner of calculation of such payment.
(vii) In the event that Berlex exercises the Option, it
shall (1) use commercially reasonable efforts to
Market and sell the Product in the Territory, and
commence Marketing of the Product in the Territory as
soon as practicable after the grant of the NDA for
the first Indication of the Product to be approved
and in any case no later than six (6) months
thereafter, (2) conduct all Marketing, sales and
distribution activities at its own expense, (3) have
the sole right to establish pricing in the Territory,
and (4) (i) during the term of this Agreement, and
for one year thereafter if the Agreement has been
terminated by Anthra in accordance with Section
18.2(b) or 18.3(b) hereof, shall not, and shall not
permit any member of the Schering Group or its
licensees of the Product to, Market or sell in the
Territory disodium clodronate in dosage forms other
than those for the Product, and (ii) for a period of
five (5) years following the date of Launch, shall
not, and shall not permit any member of the Schering
Group or its licensees of the Product to, Market or
sell in the Territory any bisphosphonate product
(whether internally developed or licensed from a
third party) which competes with the Product (which
restriction the parties acknowledge to be reasonable,
valid and necessary for the adequate protection for
the Product business). All Product sales in the
Territory
34
shall be made by, and for the account of, Berlex or
its Affiliates or sublicensees, as the case may be.
(viii) In the event that Berlex exercises the Option, during
the term of this Development Agreement and for three
(3) years thereafter, Berlex shall maintain, at its
sole expense, product liability insurance relating to
the Product that is comparable in type and amount to
the insurance it maintains with respect to its other
pharmaceutical products with a similar risk profile
that are Marketed, distributed and sold in the
Territory.
(ix) In the event that Berlex shall not exercise the
Option, Berlex shall not Market, distribute or sell
the Product to any Person in the Territory, or to any
Person outside the Territory that it knows intends to
directly or indirectly Market, distribute or sell the
Product to any Person in the Territory.
(x) All payments to be made by Berlex to Anthra under the
Development Agreement shall be made in United States
dollars and shall be made by wire transfer to such
bank account as shall be specified in writing no less
than five (5) days in advance by Anthra.
(xi) Until transfer of the IND, NDA and any SNDA to Berlex
under Section 4.10, Berlex shall furnish to Anthra
for approval with all Marketing materials proposed to
be distributed by Berlex in connection with the
Product, provided, however, that Anthra may withhold
approval only for reasons for scientific or technical
accuracy or completeness, or otherwise if Anthra's
medical director determines in good faith that use of
35
such materials in the Territory may give rise to
liability under applicable law or regulations and
notifies Berlex in writing of the reasons therefor.
Anthra shall not unreasonably withhold its approval.
If Anthra does not respond within ten (10) working
days, such materials shall be deemed to be approved.
(b) Third Party Negotiations
(i) At any time after the acceptance for filing of the
first NDA for the Product that shall be accepted for
filing, Anthra may enter into negotiations with
prospective sublicensees of the Technology to sell,
Market and distribute the Product in the Territory.
Anthra may disclose such information relating to the
clinical development of the Product as may be
necessary to advance such discussions, subject to the
condition that all third parties to which Anthra
shall make such disclosures shall first enter into
confidentiality agreements that impose
confidentiality obligations not less stringent than
those set forth in Article 8.
(ii) Subject to Berlex's Option, Anthra shall have an
exclusive, royalty-free license to Market, sell and
distribute the Product in the Territory, including
the right to sublicense to any entity which does not
Market, sell or distribute in the Territory during
the term of this Development Agreement any product
which competes with the Product, provided however
that if Anthra proposes at any time to grant a
license to a sublicensee on terms more favorable than
the terms offered to Berlex under this Article 6,
then Anthra shall first give Berlex written notice
thereof, setting forth the terms in detail, and Bedex
shall have a right of first refusal, exercisable on
written
36
notice to Anthra within the later of (i) forty-five
(45) days after receipt of Anthra's notice, or (ii)
unless Berlex has notified Anthra that it will
exercise the Option, forty-five (45) days after
expiration of the Option Period, to accept such more
favorable terms.
(c) In the event that Bedex does not exercise the Option, then
Anthra shall use commercially reasonable efforts to Market and
sell the Product in the Territory. Anthra shall commence
Marketing of the Product in the Territory as soon as
practicable after the grant of the NDA for the first
Indication of the Product has been approved and in any event
not later than six (6) months thereafter. Anthra, its
Affiliates and sublicensees shall bear all costs and expenses
arising out of or relating to such Marketing, distribution and
sale of the Product. All Product sales in the Territory shall
be made by, and for the account of, Anthra or its Affiliates
or sublicensees, as the case may be.
(d) So long as Berlex does not exercise its Option, Anthra shall
have sole right to establish pricing for the Product in the
Territory.
(e) During the term of this Agreement, prior to the Launch, Anthra
shall maintain, at its sole expense, product liability
insurance relating to the Product with single occurrence
coverage of not less than five (5) million (US$ 5,000,000)
dollars, with Leiras named as an additional insured. In the
event that Berlex does not exercise the Option, then during
the term of this Agreement after the Launch, and for a period
of five (5) years thereafter, Anthra and its sublicensees
shall maintain, at their sole expense, product liability
insurance relating to the Product with single occurrence
coverage of not less than twenty-five million (US$ 25,000,000)
dollars, with Leiras as a named insured. Anthra shall furnish
Leiras with a
37
certificate from the insurer evidencing such US$ 5,000,000
insurance coverage within thirty (30) days after the Effective
Date hereof, and evidencing such US$ 25,000,000 insurance
coverage within twenty (20) days after expiration of Option
period in the event the Option is not exercised and in each
case at least thirty (30) days prior to any insurance
expiration with respect to renewals.
(f) In the event that Berlex exercises the Option, Anthra or its
Affiliates (i) during the term of this Agreement, and for one
year thereafter if the Agreement has been terminated by Leiras
or Berlex in accordance with Sections 18.2(a), 18.3(a), 18.4
or 18.5, shall not, directly or indirectly, sell, Market or
distribute in the Territory disodium clodronate in any dosage
forms, or (ii) for a period of five (5) years following the
date of Launch of the Product directly or indirectly, sell,
Market or distribute in the Territory any bisphosphonate
product that competes with the Product. Additionally, as long
as the Manufacturing Agreement is in effect, Anthra shall not,
directly or indirectly, sell, Market or distribute in the
Territory any biophosphonate product that competes with the
Product.
(ii) The parties acknowledge that all restrictions
contained in this Section 6.7 are reasonable, valid
and necessary for the adequate protection of the
Product business.
16. ACCOUNTS AND RECORDS
(a) In the event that Berlex shall exercise the Option, Berlex
shall keep accurate and complete books and records, maintained
in accordance with IAS, of all Product sold, including the
quantities and sale prices, and any deductions therefrom,
together with copies of invoices and other relevant documents
showing all orders
38
placed and executed. Berlex shall continue to keep such books
and records for six (6) years following the relevant
transactions.
(b) Leiras shall keep accurate and complete books and records,
maintained in accordance with IAS, of all costs and expenses
pertaining to its activities pursuant to Section 4.7. Leiras
shall continue to keep such books and records for six (6)
years following the relevant transactions.
(c) Anthra shall keep accurate and complete books and records,
maintained in accordance with IAS, of all costs and expenses
pertaining to its payments pursuant to Section 4.7 with
respect to Additional Studies. Anthra shall continue to keep
such books and records for six (6) years following the
relevant transactions.
(d) Berlex and Leiras shall permit the independent public
accountants of Anthra, at reasonable times during normal
business hours, to inspect and take copies of or extracts from
any relevant documents in the possession or under their
control for the purpose of reporting to Anthra with respect to
verification of compliance with Sections 4 or 6 hereof, as the
case may be, and subject to such accountants agreeing to the
confidentiality provisions of Section 8 hereof or
substantially similar provisions as to confidentiality.
(e) Anthra shall permit the independent public accountants of
Berlex, at reasonable times during normal business hours, to
inspect and take copies of or extracts from any relevant
documents in the possession or under their control for the
purpose of reporting to Berlex with respect to verification of
payments made by Anthra under Sections 4.2 and 4.7, as the
case may be, and subject to such
39
accountants agreeing to the confidentiality provisions of
Section 8 hereof or substantially similar provisions as to
confidentiality.
(f) In the event of a dispute regarding such books and records,
including, without limitation, the amount of payments owed to
Leiras under Section 4.7 then Leiras, Berlex and Anthra shall
work in good faith to resolve the disagreement. If the parties
are unable to reach a mutually acceptable resolution of any
such dispute within thirty (30) days, the dispute shall be
submitted for arbitration to a certified public accounting
firm selected by the certified public accountants representing
the parties involved in the dispute, or to such other Person
as the parties shall mutually agree, whose decision shall be
final. The losing party(ies) shall bear the cost of conducting
such arbitration as well as the initial audit, but each party
shall otherwise bear its own expenses thereof, including,
without limitation, its own legal fees.
17. CONFIDENTIALITY
(a) Except to the extent permitted by this Section 8 or as
otherwise agreed by the parties in writing, the parties agree
that, at all times during the term of this Agreement and
thereafter for a period of thirty (30) years, the party
receiving information hereunder (the "Receiving Party") shall
keep completely confidential, shall not publish or otherwise
disclose and shall not use directly or indirectly for any
purpose other than in connection with this Agreement any
information furnished to it by another party (the "Disclosing
Party") pursuant to this Agreement or otherwise relating to
any transaction contemplated hereby, including Information
heretofore furnished to it (the "Confidential Information"),
40
except to the extent that the Receiving Party can establish by
competent proof that such information:
(i) was already known to the Receiving Party, other than
under an obligation of confidentiality, at the time
of disclosure by the Disclosing Party, as evidenced
by the Receiving Party's prior written records;
(ii) was part of the public domain at the time of its
disclosure by the Disclosing Party;
(iii) became part of the public domain after its disclosure
by the Disclosing Party, other than through any act
or omission of the Receiving Party in breach of this
Development Agreement; or
(iv) was disclosed to the Receiving Party by a third party
who had no obligation not to disclose such
information to others.
(b) Each party may disclose Confidential Information to the extent
that such disclosure is:
(i) Made in response to a valid order of a court of
competent jurisdiction or other governmental body of
a country or any political subdivision thereof of
competent jurisdiction; provided, however, that the
Receiving Party shall first have given notice to the
Disclosing Party and given the Disclosing Party a
reasonable opportunity to quash such order and to
obtain a protective order requiring that the
Confidential Information and/or documents that are
the subject of such order be held in confidence by
such court or agency or, if disclosed, be used only
for the purposes for which the order was issued; and
provided further that if a disclosure order
41
is not quashed or a protective order is not obtained,
the Confidential Information disclosed in response to
such court or governmental order shall be limited to
that information which is legally required to be
disclosed in such response to such court or
governmental order;
(ii) Otherwise required by law, in the opinion of legal
counsel to the Receiving Party as expressed in an
opinion letter in form and substance reasonably
satisfactory to the Disclosing Party, which shall be
provided to the Disclosing Party at least forty-eight
(48) hours prior to the Receiving Party's disclosure
of the Confidential Information pursuant to this
Section 8.2(b);
(iii) Made by the Receiving Party to the FDA as required in
connection with NDA and SNDA submissions for the
Product, provided that reasonable measures shall be
taken to assure confidential treatment of such
Confidential Information; or
(iv) Made by the Receiving Party to third parties as may
be necessary in connection with the development and
commercialization of the Product as contemplated by
this Development Agreement, including, without
limitation, subcontracting and sublicensing
transactions in connection therewith, provided that
the Receiving Party in question shall in each case
obtain from the proposed third party recipient a
written confidentiality undertaking containing
confidentiality obligations no less stringent than
those set forth in this Section 8.
(c) Public Announcements. No party hereto shall make any public
announcements regarding this Development Agreement or the
transactions
42
contemplated hereby without the written consent of the other
parties; provided, however, that each party shall be entitled
to disclose information to the extent required to comply with
applicable securities laws, including those relating to
initial public offerings. The disclosing party shall be solely
responsible for the accuracy and completeness of any such
disclosure. Except as required by law, no party to this
Agreement shall use the name of another or any of its
Affiliates or parent companies, including, without limitation,
Schering AG in any public announcement, press release or other
public document without the prior written consent of such
other party, Affiliate or parent Company, as the case may be.
(d) Notification. The Receiving Party shall notify the Disclosing
Party immediately, and cooperate with the Disclosing Party as
the Disclosing Party may reasonably request, upon the
Receiving Party's discovery of any loss or compromise of the
Disclosing Party's Confidential Information.
(e) Remedies. Each Receiving Party agrees that the unauthorized
use or disclosure of any material Confidential Information by
the Receiving Party in violation of this Agreement will cause
severe and irreparable damage to the Disclosing Party. In the
event of any violation of this Article 8, the Receiving Party
agrees that the Disclosing Party shall be authorized and
entitled to obtain from any court of competent jurisdiction
injunctive relief, whether preliminary or permanent, as well
as any other relief permitted by applicable law. The Receiving
Party agrees to waive any requirement that the Disclosing
Party post a bond as a condition for obtaining any such
relief.
18. EXECUTIVE MANAGEMENT COMMITTEE
43
(a) Formation of the Executive Management Committee. Anthra,
Leiras, and Berlex shall establish a project oversight and
management committee (the "Executive Management Committee")
comprised of six (6) members. Anthra, Leiras, and Berlex each
shall appoint two (2) members to the Executive Management
Committee, which members shall be employees or members of the
Board of Directors of any party hereto. Initial appointments
shall be made within thirty (30) days of the Effective Date. A
member of the Executive Management Committee may be removed at
any time, with or without cause, by the party that appointed
such member. A member of the Executive Management Committee
shall serve until a successor is named by the party that
appointed such member.
(b) Authority of the Executive Management Committee. The Executive
Management Committee shall (a) monitor and review the progress
of the development activities conducted by the parties, (b)
monitor and review the progress of all Product Marketing and
sales activities conducted pursuant to this Development
Agreement, provided however that in the event Berlex exercises
its Option, Berlex shall be obligated to inform the Executive
Management Committee of Marketing issues and progress only for
so long as Anthra holds the Product NDA and SNDA(s), and (c)
take such other actions as the parties may mutually agree,
except that the Executive Management Committee may not take
any action that would conflict with any provision of this
Development Agreement. It is not intended that the Executive
Management Committee have any power or authority to direct the
conduct of the affairs or the decision-making of any party
hereto. Each party to this Development Agreement shall retain
the
44
rights, powers, and discretion granted to it under this
Development Agreement, and no such rights, powers, or
discretion shall be delegated to or vested in the Executive
Management Committee unless such delegation or vesting of
rights is expressly provided for in this Development Agreement
or the parties expressly so agree in writing. The Executive
Management Committee shall not have the power to amend or
modify this Development Agreement, which may only be amended
or modified as provided in Section 22.3.
(c) Procedural Rules of the Executive Management Committee.
(i) The Executive Management Committee shall adopt such
standing rules as shall be necessary for its work.
(ii) A quorum of the Executive Management Committee shall
exist whenever there is present at a meeting at least
one (1) member appointed by each party. Members of
the Executive Management Committee may attend a
meeting either in person or by telephone or video
conference. Representation by proxy shall not be
allowed.
(iii) The Executive Management Committee shall take action
(i) by consensus of the members present at a meeting
at which a quorum exists, or (ii) by written
resolutions approved in writing by all of the
members. In the event that the Executive Management
Committee cannot or does not, after good faith
efforts, reach agreement on an issue, then such issue
shall be referred to the chief executive officers of
Anthra, Leiras, and in the case of Berlex its
designee who shall confer on the resolution of the
issue. Any final decision mutually agreed to by such
chief executive officers and
45
Berlex's designee shall be in writing, and shall be
conclusive and binding upon the parties.
(iv) The Executive Management Committee shall have one (1)
chairperson. The chairperson shall serve for a
one-year term and shall alternately be designated by
Anthra, Leiras, and Berlex from among the
representatives appointed by each. The initial
chairperson shall be designated by Anthra. The
chairperson shall have one vote only, and no
authority to break a tie-vote.
(v) The Executive Management Committee shall meet once
every three (3) months, or more frequently as
mutually agreed to by the members, at times and
places to be mutually agreed upon. Thirty (30)
calendar days' prior written notice of any such
meeting shall be provided to the members, unless such
notice is waived in writing by all the members.
(d) Reports to the Executive Management Committee. The parties
shall use commercially reasonable efforts to keep the
Executive Management Committee informed of their activities
conducted pursuant to this Development Agreement, including
without limitation material developments relating to the
performance of their respective obligations under this
Development Agreement.
19. INTELLECTUAL PROPERTY
(a) Anthra and its Affiliates shall own any Improvements generated
by Anthra and its Affiliates arising out of, or related to,
the performance by Anthra of its obligations under this
Development Agreement; provided, however, that Anthra shall
promptly xxxxx Xxxxxx a perpetual, exclusive, royalty-free
license to use such
46
Improvements solely in connection with the development,
registration, manufacturing, Marketing and sale of the Product
outside the Territory (and to Berlex inside the Territory if
Berlex has exercised the Option). Anthra shall promptly assign
to Leiras, without further consideration, any such
Improvements that relate directly and solely to the Product;
provided, however, that Leiras shall promptly grant Anthra a
perpetual, exclusive, royalty-free license to use such
Improvements in connection with the Marketing and sale of the
Product in the Territory in the event that Berlex does not
exercise the Option.
(b) Leiras and its Affiliates shall own any improvements generated
by Leiras and its Affiliates during the term of this
Development Agreement; provided, however, that Leiras shall
grant Anthra a perpetual, exclusive, royalty-free license to
use such Improvements solely in connection with the Marketing
and sale of the Product for oncology-related indications in
the Territory in the event that Berlex does not exercise the
Option, and shall grant such license to Berlex if Berlex does
exercise the Option. As to other indications, the respective
parties agree to negotiate in good faith the terms of a
license in the Territory for such indications.
(c) In the event of any infringement in the Territory by a third
party of any intellectual property rights covering the Product
(other than any Improvements owned or controlled solely by
Anthra), including, without limitation, the Technology, the
Trademark, and any other Improvements owned or controlled by
Leiras (other than Improvements licensed to Leiras under
Section 10.1, but including Improvements assigned to Leiras
thereunder), Leiras shall have the first right (but not the
obligation) to pursue any and all injunctive, compensatory and
47
other remedies and relief (collectively, "Remedies") against
such third party. If Leiras shall determine not to pursue
Remedies with respect to any such intellectual property
licensed to Anthra hereunder, or with respect to the
Trademark, within one-hundred and twenty (120) days after
notice from Anthra, accompanied by a detailed statement from
Anthra's chief financial officer demonstrating that such
infringement has a material adverse effect on Anthra's sales
of the Product under this Development Agreement, requesting
Leiras to do so, then Leiras shall, within sixty (60) days
thereafter obtain an opinion for its outside intellectual
property legal counsel, who shall be reasonably acceptable to
Anthra, with respect to such infringement. If such counsel
confirms that there is a material infringement, then unless
Berlex shall theretofore have exercised its Option, Anthra
shall have the right (but not the obligation) to pursue
Remedies against such third party.
(ii) In the event of any infringement in any country of
the world by a third party of any intellectual
property rights relating to the Improvements owned or
controlled solely by Anthra (other than those Anthra
Improvements as to which Leiras has the first right
to initiate Remedies under paragraph (a) of this
Section 10.3), Anthra shall have the first right (but
not the obligation) to pursue any and all Remedies
against such third party. If Anthra shall determine
not to pursue Remedies with respect to any
intellectual property licensed to Leiras hereunder
within one-hundred and twenty (120) days after notice
from Leiras requesting Anthra to do so, then Anthra
shall, within sixty (60) days thereafter, give
written notice to
48
Leiras thereof, and then Leiras shall have the right
(but not the obligation) to pursue Remedies against
such third party.
(iii) In the event that a party shall pursue Remedies
hereunder, the other parties shall use all reasonable
efforts to assist and cooperate with the party
pursuing such Remedies. Each party shall bear its own
costs and expenses relating to such pursuit. Any
damages or other amounts collected shall be
distributed, first, to the party that pursued
Remedies to cover its costs and expenses and, second,
to the other parties to cover their costs and
expenses, if any, relating to the pursuit of such
Remedies; any remaining amount shall be distributed
to the party that pursued the Remedies.
20. WARRANTY; INDEMNITY
(a) Representations, Warranties and Covenants. Each party
represents and warrants to the other parties as follows: (i)
it is a duly organized and validly existing corporation under
the laws of its jurisdiction of incorporation; (ii) it has
full corporate power and authority and has taken all corporate
action necessary to enter into and perform this Development
Agreement; (iii) the execution and delivery of this
Development Agreement and the transactions contemplated herein
do not violate, conflict with, or constitute a default under
its charter or similar organization document, its bylaws or
the terms or provisions of any material agreement or other
instrument to which it is a party or by which it is bound, or
any order, award, judgment or decree to which it is a party or
by which it is bound; and (iv) this Development Agreement is
its legal, valid and binding obligation, enforceable in
accordance with the terms and conditions hereof.
49
(b) Warranties of Leiras: Limitations. Leiras warrants to Anthra
that (a) the Trademark is registered in the U.S. Patent and
Trademark Office, registration no. 1428078 in Class 5
(international classification) and Leiras owns all right,
title and interest in the registration; (b) Leiras has the
right, power and authority to grant the licenses set forth in
Section 2.1; (c) at the time of the delivery, the clinical
supplies provided to Anthra pursuant to Section 4.2 will have
been manufactured and stored in accordance with all applicable
Good Manufacturing Practices and the Product Specifications;
(d) the CMC Data were, and will have been, prepared in
compliance with all applicable Good Manufacturing Practices;
(e) to the best knowledge of Leiras, the Pre-Clinical Studies
were prepared in accordance with European Good Laboratory
Practices and/or FDA Good Laboratory Practices as specified in
the study reports and in Exhibit 4.7; and (f) any work
performed by Leiras on the Additional Studies will have been
done in accordance with FDA Good Laboratory Practices.
(c) Anthra warrants to Leiras that (a) Anthra has adequate and
necessary resources and capability to carry out its
development obligations under this Development Agreement, (b)
any clinical studies relating to the Product which may be
conducted by Anthra and any protocols, documentation,
including NDAs or SNDAs prepared or submitted by or on behalf
of Anthra to the FDA or any other regulatory authority, shall
be conducted or prepared in compliance with FDA regulations
and any other applicable provisions of law.
(d) Disclaimer. EXCEPT AS SET FORTH IN SECTIONS 11.1, 11.2 AND
11.3, EACH PARTY HEREBY DISCLAIMS ANY AND ALL WARRANTIES,
WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, WITH
50
RESPECT TO THE TECHNOLOGY, THE DEVELOPMENT OR OTHER ACTIVITIES
UNDER THIS DEVELOPMENT AGREEMENT, OR THE PRODUCT, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTY OF QUALITY, PERFORMANCE,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE.
(e) Leiras Indemnity. Subject to Section 11.8, Leiras shall
indemnify and hold Anthra and its officers, directors,
employees, agents, representatives and consultants (each a
"Leiras Indemnitee"), harmless from and against any and all
losses, damages, costs and expenses (including, without
limitation, reasonable attorneys' fees) (collectively
"Losses") incurred or payable by any Leiras Indemnitee in
connection with any and all suits, investigations, claims or
demands by third parties (whether based on death, personal
injury or otherwise, and whether or not a proceeding is
commenced against, or names as a party thereto, any Leiras
Indemnitee), arising out of any breach of Leiras' warranty
under Section 11.2 of this Development Agreement.
(f) Anthra Indemnity. Subject to Section 11.8, Anthra shall
indemnify and hold Leiras and Berlex and their respective
officers, directors, employees, agents, representatives and
consultants (each an "Anthra Indemnitee"), harmless from and
against any and all Losses incurred or payable by any Anthra
Indemnitee in connection with any and all suits,
investigations, claims or demands by third parties (whether
based on death, personal injury or otherwise, and whether or
not a proceeding is commenced against, or names as a party
thereto, any Anthra Indemnitee), (A) arising out of or in
connection with (i) any breach by Anthra or any of its
sublicensees of any of their respective obligations under this
51
Development Agreement, or (ii) any other action or failure to
act on the part of Anthra or any of its sublicensees, or (B)
otherwise arising out of or in connection with the
development, Marketing, distribution, sale or use of the
Product in the Territory, other than (x) resulting from a
breach of Leiras' warranty under Section 11.2. hereof or (y)
to the extent caused by modification of, or tampering with,
the Product by an intentional third party intervention.
In the event that Berlex exercises its Option, then from and after
Transfer Date, Anthra shall be relieved of its obligation of indemnity
to Leiras and Berlex under subpart (B) (but not subpart (A)) of this
Section 11.6. in respect of all Losses arising out of or in connection
with (i) development, Marketing, distribution or sale of the Product
after the Transfer Date, or (ii) use of the Product Marketed,
distributed or sold after the Transfer Date, except that Anthra's
indemnity under subpart (B) shall remain in full force and effect with
respect to any Losses arising out of, or in connection with the
exercise or non-exercise by Anthra of any of the rights retained by
Anthra under Section 6.1 (a) or 6.1 (e) of this Development Agreement.
(g) Berlex Indemnity. Subject to Section 11.8, in the event that
Berlex exercises the Option, Berlex shall indemnify and hold
Anthra and its respective officers, directors, employees,
agents, representatives and consultants (each a "Berlex
Indemnitee"), harmless from and against any and all losses,
damages, costs and expenses (including, without limitation,
reasonable attorneys' fees) (collectively "Losses") incurred
or payable by any Berlex Indemnitee in connection with any and
all suits, investigations, claims or demands by third parties
(whether based on death, personal injury or otherwise, and
whether or not a proceeding is
52
commenced against, or names as a party thereto, any Berlex
Indemnitee), (A) arising out of or in connection with (i) any
breach by Berlex or any of its sublicensees after the Transfer
Date of any of their respective obligations under this
Development Agreement, or (ii) any other action or failure to
act after the Transfer Date on the part of Berlex or any of
its sublicensees, or (B) otherwise arising out of the
development of the Product after the Transfer Date by Berlex
or any of its sublicensees or the Marketing, distribution,
sale or use of the Product in the Territory, other than (x)
resulting from a breach of Leiras' warranty under Section 11.2
hereof, or (y) use of the Product Marketed, distributed or
sold by Anthra or its sublicensees prior to the Transfer Date.
(h) Indemnification Procedure.
(i) Each Indemnitee agrees to give the indemnifying party
prompt written notice of any Losses or the discovery
of a fact upon which such Indemnitee intends to base
a request for indemnification under Sections 11.5,
11.6 or 11.7.
(ii) The indemnifying party and the Indemnitee shall each
furnish promptly to the other, copies of all claims
or demands and official documents received in respect
of any Losses. The Indemnitee shall cooperate as
reasonably requested by the indemnifying party in the
defense against any Losses, subject to the right of
the Indemnitee to retain its own counsel at its own
expense.
(iii) With respect to any Losses relating solely to the
payment of money damages and which will not result in
the Indemnitee becoming subject to
53
injunctive or other relief or otherwise adversely
affecting the business of the Indemnitee in any
manner, and as to which the indemnifying party shall
have acknowledged in writing the obligation to
indemnify the Indemnitee hereunder, the indemnifying
party shall have the sole right to defend, settle or
otherwise dispose of such Losses, on such terms as
the Indemnifying party, in its sole discretion, shall
deem appropriate.
(iv) With respect to Losses relating to all other matters
as to which the indemnifying party shall have
acknowledged in writing the obligation to indemnify
the Indemnitee hereunder, the indemnifying party
shall have the sole right to control the defense of
such matter, provided that the indemnifying party
shall obtain the written consent of the Indemnitee,
which shall not be unreasonably withheld, prior to
ceasing to defend, settling or otherwise disposing of
any Losses if as a result thereof (i) the Indemnitee
would become subject to injunctive or other equitable
relief or any remedy other than the payment of money
by the indemnifying party or (ii) the business of the
Indemnitee would be adversely affected.
(v) The Indemnitee shall have the right to control the
defense of all other matters, provided that the
indemnifying party shall not be liable for any
settlement or other disposition of a Loss by the
Indemnitee which is reached without the written
consent of the indemnifying party, which consent
shall not be unreasonably withheld.
Except as provided above, the costs and expenses, including
reasonable fees and disbursements of counsel, incurred by any
Indemnitee in connection with any
54
claim shall be reimbursed on a calendar quarter basis by the
indemnifying party, without prejudice to the indemnifying
party's right to contest the Indemnitee's right to
indemnification and subject to refund in the event the
indemnifying party is ultimately held not to be obligated to
indemnify the Indemnitee.
(i) Limitation. In no event shall either Leiras or Anthra be
liable to the other for Losses in respect of a suit,
investigation, claim or demand to the extent of which Leiras
or Anthra, respectively, has previously indemnified the other
under the Manufacturing Agreement.
21. TRADEMARK
(a) Anthra undertakes to Market, promote, distribute and sell the
Product exclusively under the Trademark. The Trademark shall
be the exclusive property of Leiras.
(b) Anthra recognizes the rights of Leiras as owner of the
Trademark. The use thereof by Anthra shall always be on behalf
and for the benefit of Leiras.
(c) Nothing contained in this Development Agreement shall be
construed to give Anthra a right to use the Trademark or
portions thereof or any word similar to the Trademark or the
name of Leiras or portions thereof or any word similar to the
name of Leiras, Berlex or Schering AG as Anthra's corporate
name or any part thereof or otherwise, in any manner other
than in accordance with Section 12.1. Anthra shall not at any
time adopt any word or symbol which is similar to the
Trademark or to the name of Leiras on any pharmaceutical or
chemical or healthcare product, or in any other manner
whatsoever, unless specifically consented to by Leiras in
writing.
55
(d) Anthra shall not register or attempt to register for any
purpose any trademark or name of Leiras without Leiras' prior
written consent.
22. PATENTS
(a) Leiras hereby represents and warrants to Anthra that:
(A) Leiras is the owner of the entire right, title
and interest in and to the United States patents and patent
applications listed in Exhibit 13.1(i) hereto and to the
extent set forth in Exhibit 13.1(i) (collectively, the
"Patents");
(B) Leiras is not aware of any claim of infringement
of, or interference with, any of the Patents in the Territory
by a third party;
(C) Leiras is not aware of any legal or
administrative actions, proceedings, judgments or settlements,
including, without limitation, any reexamination or reissue
proceedings, currently pending with respect to the Patents,
and no such actions or proceedings of which Leiras is aware
have been threatened against Leiras in the Territory;
(D) Leiras is not aware of any prior art or event
not cited or disclosed during prosecution of the Patents which
was required to be cited or disclosed therein.
(E) Leiras is not aware of any third party patent
(or patent application) in the Territory, the claims of which
cover the manufacturing, use or sale of the Product under the
Technology.
For purposes of determining whether Leiras is "aware" of any
matter hereinabove referred to only the actual knowledge of
any senior executive or of the Head of Leiras' Patent
Department shall be considered, and does not mean that any
investigation or inquiry has been conducted.
Furthermore, Anthra has inspected Leiras' patent file
regarding the Product as indexed in the Exhibit 13.1 and
anything Anthra could have seen in the patent file is not
included in the above representations.
(b) Except as provided in Section 13.1, Leiras does not make, and
hereby excludes, any and all express or implied, written or
unwritten, representations or
56
warranties against patent infringement with respect to the
Products supplied by Leiras hereunder.
(c) Upon knowledge of the commencement of any suit against Leiras
or Anthra which is based in whole or in part on a claim that
any Products supplied by Leiras hereunder or under the
Manufacturing Agreement and Marketed, sold or distributed by
Anthra under its license from Leiras under this Development
Agreement, constitutes an infringement of any United States
patent, Leiras or Anthra, as the case may be, shall promptly
notify the other in writing. Subject to clause 13.6 hereof,
Leiras shall, with counsel reasonably acceptable to Anthra,
assume and conduct the defense of any suit or claims brought
or asserted, or demand made, against Leiras or Anthra insofar
as it is based on such claim of infringement. The damages and
costs awarded as a result of such suit or the amount of any
settlement in respect of such suit, claim or demand shall be
paid by Leiras subject to reimbursement by Anthra as provided
in clause 13.6. Leiras agrees to consider, but shall not be
obligated to accept, any reasonable offer by the claimant of a
license to the allegedly infringing patent.
(d) With respect to any suit, claim or demand that is subject to
the indemnity set forth in this Article 13, (i) Anthra shall
be advised periodically with respect to all strategy and
proceedings conducted by Leiras under clause 13.3, (ii) Anthra
may, at Anthra's expense, participate in the defense thereof
through counsel selected by Anthra if Anthra's interests may
be affected thereby, and (iii) Anthra shall have the right to
consent to any proposed settlement thereof, which consent
shall not be unreasonably withheld.
57
(e) Anthra agrees to take all action reasonably requested by
Leiras to assist Leiras in connection with the defense and
settlement of any suit, claim or demand under subsection 13.3
hereof.
(f) Anthra shall, within thirty (30) days upon being invoiced
therefor by Leiras, pay to Leiras sixty-seven and a half
percent (67.5%) of (x) any costs and expenses incurred by
Leiras in defending any suit or claim under clause 13.3, (y)
any lump sum damages to the date of any judgment and costs
awarded as a result of such suit or paid in settlement of such
suit, claim or demand (with Anthra's approval, as required
under clause 13.4), and (z) any royalties awarded as a result
of such suit or paid in settlement of such suit, claim or
demand (with Anthra's approval, as required under clause 13.4)
provided however that after the aggregate of all costs,
expenses, damages and royalties under clauses (x), (y) and (z)
and corresponding clauses (x), (y) and (z) of Section 12.5 of
the Manufacturing Agreement reaches 9,230,769 US Dollars (and
Anthra's sixty-seven and a half percent (67.5%) share has
reached 6,230,769 US Dollars), then thereafter Anthra shall be
responsible for reimbursing Leiras for one hundred percent
(100%) of all further costs, expenses, damages and royalties
enumerated under clauses (x), (y) and (z), if any. Anthra
shall take all appropriate action to minimize damages which
may be assessed in any such suit, including, without
limitation, accepting any reasonable reformulation of the
Product which Leiras, at its reasonable option, may determine
to be required.
(g) The provisions of Sections 13.3 through 13.6 and the last
sentence of Section 13.8 shall not apply in the event Berlex
exercises its Option, except that, any
58
claim of infringement made under 35 USC Section 271(e)(2) by
reason of any application filed by Anthra with the FDA shall
be considered to be included under Sections 13.3 through 13.6.
(h) Anthra has advised Leiras that Anthra will obtain from its
patent counsel an opinion as to whether Marketing or sale of
the Product in the Territory may infringe Boehringer Mannheim
("BM"), U.S. patent no. 4,859,472. Following receipt of the
opinion of Anthra patent counsel, Anthra will furnish Leiras
with a copy thereof and Leiras, Leiras' patent counsel, Anthra
and Anthra's patent counsel shall consult with each other, and
if the opinion of Anthra patent counsel or Leiras patent
counsel, or both, is that there is or may be infringement,
then, either Leiras or Anthra may, by written notice to the
other, advise the other that it is necessary or desirable to
obtain a license with respect to the Product under such patent
from BM for the Territory. Thereafter either Leiras or Anthra
may commence negotiations with BM with the objective of
obtaining license for both Leiras and Anthra and their
respective Affiliates, and Leiras and Anthra shall cooperate
in such negotiations and each allow the other, to the extent
practicable, to participate in its negotiation. Any license
negotiated shall provide for a royalty not to exceed five
percent (5%) of Net Sales of Products with no up front cash
payment, unless otherwise mutually agreed by the parties. As
between Leiras and Anthra, Leiras shall be liable for 32.5% of
the royalties and Anthra shall be liable for 67.5% of the
royalties, and the royalties shall be counted as royalties
under Section 13.6 clause (z) of this Development Agreement
and corresponding Section 12.6 clause (z) of the Manufacturing
Agreement for purposes of
59
determining when the aggregate of 9,230,769 US Dollars under
Sections 13.6 and 12.6 thereof, respectively, has been
reached, and thereafter, Anthra, in addition to its other
obligations thereunder, shall be liable for one hundred
percent (100%) of the royalties due to BM under the license.
(i) Leiras undertakes to use commercially reasonable efforts to
complete a biostudy of the tablet form of the Product by March
31, 1999. Upon completing such study, Leiras agrees promptly
to provide Anthra with the data and analysis thereof. In the
event that the parties mutually agree to develop a tablet form
of the Product, then Anthra shall be responsible for the
clinical development work in connection therewith in the
Territory, and Leiras shall prepare the CMC Data therefor. The
parties agree to share equally the costs of any license that
is required to be obtained from any third party, including
without limitation Penwest Pharmaceutical Co., in connection
with the manufacture, marketing or sale of any such tablet
formulation in the Territory. In the event that Berlex
exercises the Option, then in all events such rights in and to
such development work shall inure to the benefit of Berlex and
Berlex shall, within thirty (30) business days after such
exercise, reimburse Anthra for all costs and expenses incurred
by Anthra in connection with the development of such tablet
form of the Product. In the event that Anthra and Leiras
decide not to develop a tablet form of the Product, then
either party may seek to negotiate a license pursuant to
Section 13.8.
(j) The provisions of this Section 13 shall constitute the
exclusive obligations of Leiras or any member of the Schering
Group to Anthra and the exclusive rights of Anthra in respect
of any claim of patent infringement referred to in Section
13.3.
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23. BERLEX OBLIGATION NOT TO COMPETE
In the event that Berlex does not exercise the Option, then (i) during
the term of this Agreement and for one year thereafter if this Agreement is
terminated by Anthra in accordance with Section 18.2(b) or 18.3(b), Berlex shall
not, and shall not permit any of the Schering Group to, sell, Market or
distribute in the Territory disodium clodronate in any dosage forms, and (ii)
for a period of five years after Launch of the Product in the Territory, Berlex
shall not, and shall not permit any of the Schering Group to (A) sell, Market or
distribute in the Territory any competing bisphosphonate product that has been
internally developed by the Schering Group, or (B) actively solicit from any
third party any in-licensing opportunity to sell, Market or distribute a
competing bisphosphonate product in the Territory.
24. PROMOTIONAL MATERIAL
(a) Anthra shall furnish Leiras with copies of all brochures,
pamphlets or other documents relating to the Product which are
developed, produced or used by Anthra in connection with the
distribution, sale, promotion or Marketing of the Product and
should Leiras not object within ten (10) working days, such
material is deemed to be approved by Leiras. Any objection by
Leiras shall be directed either to (i) scientific or technical
accuracy or completeness, or (ii) in the event any reference
to the Trademark is made, objections as to form or quality
taking into account the goodwill associated with the
Trademark. Anthra agrees not to use any such material, or any
labels, printed packaging materials, advertising or other
promotional and similar materials without such approval except
that layout and pictures (but not text) may be reformatted by
Anthra without Leiras' prior review. Any such approval shall
be valid only for 12 months or such shorter period as may be
designated by Leiras.
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(b) Leiras shall make available to Anthra, for information and
reference purposes only, copies of brochures, pamphlets,
instructions or other published documents of material
importance, and marketing materials of a general nature
relating to the Product which it distributes to customers
outside the Territory.
25. FORCE MAJEURE
(a) Definition. "Force Majeure" shall mean all events which are
beyond the control of the parties to this Development
Agreement, and which are unforeseen, unavoidable or
insurmountable, and which arise after the Effective Date and
which prevent total or partial performance by a party. Such
events shall include earthquakes; typhoons; flood; fire; war;
failure or delay on land, water or air transportation;
governmental prohibition or restriction; strikes or other
labor disputes; shortage of labor, fuel, power or energy;
technical failures; or any other instances which cannot be
foreseen, prevented or controlled, including instances which
are accepted as force majeure in general international
commercial practice. Without limitation on the foregoing,
Force Majeure shall include inability to obtain suitable
materials, components or equipment to sustain the quality of
the Product, or inability to manufacture, supply, Market,
distribute or sell the Product, on commercially practicable
terms.
(b) Suspension. If an event of Force Majeure occurs, a party's
contractual obligations affected by such an event under this
Development Agreement shall be suspended during the period of
delay caused by the Force Majeure and shall be automatically
extended, without penalty, for a period equal to such
suspension.
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(c) Informing. The party claiming Force Majeure shall promptly
inform the other party in writing and shall furnish within 15
days thereafter sufficient proof of the occurrence and
duration of such Force Majeure. The party claiming Force
Majeure shall also use all reasonable endeavors to terminate
the Force Majeure.
(d) Consulting. In the event of Force Majeure, the parties shall
immediately consult with each other in order to find an
equitable solution and shall use all reasonable endeavors to
minimize the consequences of such Force Majeure.
26. COMPLIANCE WITH APPLICABLE LAWS
Anthra agrees that, prior to exercise of the Option and thereafter in
the event the Option is not exercised, and Berlex agrees that after exercise of
the Option, it shall, at its own cost, comply and cause its Affiliates and
sublicensees to comply, with all applicable laws, rules, regulations, NDAs and
SNDAs in the Territory relating to the import, Marketing, sale, stock, use and
distribution of the Product, all applicable safety laws and regulations relating
to the Product, and all applicable laws and regulations relating to advertising
and promotional material for the Product. Further, after exercise of the Option
and until transfer of the IND, NDA and any SNDA to Berlex in accordance with
Section 4.10, Anthra shall at its own cost, comply with all of the foregoing
laws, rules, regulations, NDAs and SNDAs to the extent applicable in respect of
its maintenance rights reserved under Section 6.1 (a) and (e).
27. TERM AND TERMINATION
(a) Term
Unless earlier terminated in accordance with the provisions set forth
below, this Development Agreement shall have immediate force and effect on the
Effective Date and shall remain in effect for a period of fifteen (15) years.
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(b) Termination for Material Breach.
(i) This Development Agreement shall be subject to
termination by Berlex or Leiras, as the case may be,
in the event of a material breach hereof or of the
Manufacturing Agreement by Anthra, which breach is
not cured within sixty (60) days (or, in the case of
a payment default, ten (10) business days) following
written notice thereof by Berlex or Leiras,
respectively.
(ii) This Agreement shall be subject to termination by
Anthra in the event of a material breach hereof or of
the Manufacturing Agreement by Berlex or Leiras, as
the case may be, which breach is not cured within
sixty (60) days (or, in the case of a payment
default, ten (10) business days) following written
notice thereof to Berlex and Leiras by Anthra.
(c) Termination for Other Events.
(i) Berlex or Leiras may terminate this Agreement upon
thirty (30) days' prior written notice to Anthra if,
at any time, Anthra shall file in any court or agency
pursuant to any statute or regulation of any state or
country, a petition in bankruptcy or insolvency or
for reorganization or for an arrangement or for the
appointment of a receiver or trustee of that party or
of its assets, or if Anthra proposes a written
agreement of composition or extension of its debts,
or if Anthra shall be served with an involuntary
petition against it, filed in any insolvency
proceeding, and such petition shall not be dismissed
within sixty (60) days after the filing thereof, or
if Anthra shall propose or be a party to any
dissolution or liquidation, or if Anthra shall make
an assignment for the benefit of its creditors.
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(B) In the event that, at any time during the period
between the Effective Date and the later to occur of (A) the
date of FDA approval of an NDA for AD 32, a doxorubicin
derivative, for one or more indications pursuant to an
application filed by Anthra, and (B) the date of EMEA approval
of AD 32 for one or more indications pursuant to an
application filed by Anthra (the "Certification Period"),
Anthra's total Shareholders' Equity (or irrevocable
commitments therefor) is less than USD 5,000,000 or cash and
cash equivalents (or irrevocable commitments therefor) are
less than USD 5,000,000, Leiras and Berlex may terminate this
Development Agreement upon ten (10) days prior written notice
to Anthra, in the event that Anthra shall fail to remedy such
short fall and meet such criteria during such ten-day period.
In the event of such termination, upon Anthra's compliance
with its obligations under Section 18.6, and compliance with
its obligations under the Manufacturing Agreement to pay any
accrued amounts payable to Leiras thereunder, Leiras agrees to
reimburse Anthra for the out of pocket development costs
reasonably incurred by Anthra under Article 4. Anthra will
provide Leiras and Berlex on a monthly basis during the
Certification Period a statement signed by Anthra's CFO that
Anthra's financial standing meets the above criteria. Should
Anthra become aware of any circumstance which would make it
reasonably likely that Anthra would fail to meet such
criteria, Leiras and Berlex will be notified by Anthra's CFO
within two (2) business days. Nothing herein shall modify or
amend any other rights of Berlex or Anthra under this
Development Agreement with respect to termination or otherwise
in the event of material breach or other event. Shareholders'
Equity shall be determined in accordance with generally
accepted accounting principles.
(ii) Anthra may terminate this Agreement upon thirty days'
prior written notice to Leiras and Berlex if, at any
time, Leiras or Berlex shall file in any court or
agency pursuant to any statute or regulation of any
state or country, a petition in bankruptcy or
insolvency or for reorganization or for an
arrangement or for the appointment of a receiver or
trustee of that party or of its assets, or if Leiras
or Berlex proposes a written agreement of composition
or extension of its debts, or Leiras or Berlex shall
be served with an involuntary petition against it,
filed in any insolvency proceeding, and such petition
shall not be dismissed within sixty (60) days after
the filing thereof, or if Leiras or Berlex shall
propose
65
or be a party to any dissolution or liquidation, or
if Leiras or Berlex shall make an assignment for the
benefit of its creditors.
(d) Leiras and Berlex, if it exercises the Option or if it
exercises its right of first refusal under Section 6.2(b),
shall have the further right to terminate this Development
Agreement immediately, on written notice to Anthra if there
shall be a change of ownership in Anthra such that fifty (50)
per cent or more of its shares of stock are owned or
controlled by an entity which is a competitor of Leiras or
Berlex in the bisphosphonate business in the Territory.
(e) Any rights or licenses granted to Anthra under this
Development Agreement shall, at Leiras' option, on written
notice to Anthra, revert to Leiras and this Development
Agreement shall terminate, if (1) Anthra has not filed an NDA
for one of the Indications on or before February 15, 2002,
provided that such failure is not due to any delay or failure
by Leiras, or (2) if between enrollment of the first patient
into a study for one of the Indications, under a protocol for
which an Anthra-sponsored amendment has been approved by the
Institutional Review Body for all study locations, and
completion of the accrual of patients into the last such
clinical trial for such Indication, there is a period of 3
months in which no patients are enrolled.
(f) Upon the termination of this Development Agreement by Leiras
or Berlex in accordance with the provisions of Section 18.2,
18.3, 18.4, 18.5 or 18.7:
(A) Anthra shall return immediately to Leiras or
another member of the Schering Group all clinical studies and
other information, including but not limited to Technology,
disclosed to Anthra by Leiras or such other member of the
Schering Group, respectively, without retaining copies thereof
(other than one copy for archival purposes to be used only in
the event of a dispute under this Development Agreement or for
FDA compliance purposes) and Anthra shall
66
immediately cease Marketing, distribution and sale of the
Product and shall have no right to use such studies and other
confidential information without the prior written
authorization of Leiras;
(B) Anthra shall transfer to Leiras any IND,
investigational new drug application, NDA and SNDA obtained by
Anthra in connection with this Development Agreement; and
(C) Anthra shall assign or license, as the case may
be, to Leiras all rights to the Improvements required to be
assigned or licensed under Section 10.1 and not previously
assigned or licensed.
(g) Termination for Safety. Leiras, Berlex or Anthra shall
terminate this Development Agreement in the event they
reasonably determine by written agreement of all parties, that
termination is required for reasons related to the safety of
the Product, except that Anthra's agreement shall not be
required if the Option has been exercised or if Berlex shall
have exercised its right of first refusal under Section
6.2(b). In the event of such termination, Anthra shall, at the
request of Leiras, relinquish, and shall cause its
sublicensees to relinquish, all of their respective rights
hereunder and assign, and cause its sublicensees to assign, to
Leiras, without additional consideration, all of their
respective rights, titles and interests, if any, to the
Product, including, without limitation, all rights to the
Improvements.
(h) Termination under any of the provisions of Section 18 shall be
without prejudice to any other rights or remedies for failure
to meet obligations under this Agreement, but in no event
whatsoever shall Leiras, Anthra or Berlex be entitled to any
compensation for loss of profits or business, or for any other
incidental, indirect or consequential damages arising out of,
or in connection with, their respective obligations under this
Development Agreement. The foregoing limitation shall not
apply to any damages payable by any Leiras Indemnitee,
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Anthra Indemnitee or Berlex Indemnitee in connection with a
suit, investigation, claim or demand under Sections 10.5, 10.6
or 10.7, respectively.
(i) The provisions of Articles 6.1(g)(4) (in the event of
termination by Anthra pursuant to Section 18.2(b)), 14 (in the
event of termination by Anthra pursuant to Section 18.2(b)),
13 (with respect to actions commenced prior to expiration or
termination of this Development Agreement), 21 (with respect
to obligations to report), Articles 7, 8, 10.1 and 10.2 (in
respect of Improvements generated prior to termination), 11,
12, 19, 20, and 22 and Sections 18.6, 18.7, 18.8 and this
Section 18.9 shall survive the expiration or termination of
this Development Agreement.
28. APPLICABLE LAW
The validity, interpretation and implementation of this Development
Agreement shall be governed by the internal laws of the State of New York,
without regard to the choice of law provisions thereof. The parties hereto
expressly exclude application hereto of the U.N. Convention on Contracts for the
International Sale of Goods.
29. ARBITRATION
Any controversy or claim arising out of or relating to this Development
Agreement, or the breach thereof, shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association to
be held in New York, New York, and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. There shall
be three arbitrators appointed. Anthra, on the one hand, and Leiras, on the
other hand, shall each appoint one such arbitrator, and the two arbitrators
shall appoint a third arbitrator; provided, however, if the controversy or claim
is between Berlex and Anthra, Berlex shall appoint an arbitrator in place of
Leiras. If the party-appointed arbitrators
68
cannot agree on the third arbitrator, the third arbitrator shall be appointed in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. All proceedings under this Section 20 shall be conducted in English
in New York, New York, or a such other location as the parties may agree. All
arbitration rulings and awards shall be final and binding on the parties. The
losing party shall bear the cost of conducting the arbitration, but each party
shall otherwise bear its own expenses thereof, including, without limitation,
its own legal fees.
30. ADVERSE EVENTS
The parties shall notify each other of the adverse events in accordance
with the procedure set out on Exhibit 21.
31. MISCELLANEOUS
(a) No party may assign any of its rights and obligations under
this Development Agreement without the prior written consent
of the other parties, except that Leiras or Berlex may assign
its rights to another member of the Schering Group. Further,
Anthra may, without the prior written consent of the other
parties, assign its rights to another Anthra Affiliate, so
long as (i) such Affiliate assumes in writing satisfactory to
Leiras and Berlex all of Anthra's obligations hereunder, (ii)
such assignment is valid only for the period of time during
which such Affiliate remains an Affiliate (as defined in
Section 1.2 of this Agreement) and such limitation is
acknowledged in writing by the Affiliate, and (iii) the
clinical trials, studies or other development activities under
Section 4.1 and the obligations under Sections 4.4, 4.6 and
4.7, 4.10 and 4.11 shall continue to be conducted directly by
or under the direct supervision of Anthra, and (iv) such
assignment shall not release Anthra from any of its
obligations under this Agreement. Anthra
69
and such Affiliate shall execute and deliver to Leiras such
further documents as Leiras may reasonably require to confirm
their compliance with the requirements hereunder of any such
assignment. Any assignment or transfer in violation hereof
shall be void.
(b) Any part or provision of this Development Agreement which may
be held for any reason to be illegal, invalid, unenforceable
in or in conflict with the applicable laws or regulations
shall be ineffective to the extent of such illegality,
invalidity, unenforceability or conflict, and shall be
replaced by the parties with a part or provision that
accomplishes, to the extent possible, the original commercial
purpose and economic benefit of such part or provision in a
valid and enforceable manner, without affecting, impairing or
invalidating the remaining provisions, which provisions shall
remain binding upon the parties hereto and in full force and
effect.
(c) This Development Agreement together with the Manufacturing
Agreement constitute the entire agreement between the Parties
with respect to the subject matter hereof, supersede any prior
expression of intent or understanding relating hereto and may
only be modified or amended by a written instrument signed by
the authorized representatives of the parties.
(d) This Development Agreement does not designate any party hereto
the agent, partner or legal representative of any other party
for any purpose whatsoever, and the business conducted by each
party pursuant to this Development Agreement with third
parties shall be wholly at its own risk and account as an
independent contractor. No party is granted any right or
authority to assume or create any
70
obligation or responsibility, express or implied, on behalf of
or in the name of any other or to bind any other in any manner
whatsoever.
(e) Failure or delay on the part of any party hereto to exercise
any right, power or privilege under this Development Agreement
shall not operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege preclude any
other future exercise thereof.
(f) All notices given by a party to the other shall be in writing
in English and sent by courier service delivered letter, or by
facsimile, cable, telex or telefax (copies of which are to be
subsequently forwarded as confirmation by courier service
delivered letter), the other party's address as indicated
below or any other address notified in lieu thereof. All
notices shall be effective upon receipt.
Leiras
To: Leiras Oy
Pansiontie 47
P.O. Box 415
Fin-20101 Turku
Finland
Attention: Legal Department
Telecopier No.: 011 358 2 333 2465
Anthra
To: Anthra Pharmaceuticals Inc.
00 Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxxx, CEO
Telecopier No.: 0-000-000-0000
Berlex
To: Berlex Laboratories, Inc.
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000 Xxxxxxxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Legal Department
Telecopier No.: 0-000-000-0000
IN WITNESS WHEREOF, the parties hereto have caused this Development
Agreement to be executed by their duly authorized representatives as of the date
first above written.
LEIRAS OY
By:______________________________________________
Name:
Title:
BERLEX LABORATORIES, INC.
By:______________________________________________
Name:
Title:
ANTHRA PHARMACEUTICALS, INC.
By:______________________________________________
Name:
Title:
72
EXHIBIT B
MANUFACTURING AGREEMENT
between
LEIRAS OY
and
ANTHRA PHARMACEUTICALS, INC.
Dated: ___________________ 1998
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MANUFACTURING AGREEMENT
This Manufacturing Agreement is made this ____ day of __________, 1998
between LEIRAS OY, a Finnish corporation with offices at Xxxxxxxxxx 00,
XXX-00000 Xxxxx Xxxxxxx (hereinafter referred to as "Leiras") and ANTHRA
PHARMACEUTICALS, INC., a Delaware corporation with offices at 00 Xxxxxx Xxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter referred to as "Anthra").
W I T N E S S E T H
WHEREAS, the parties hereto have signed a Term Sheet dated December 12,
1997 pursuant to which they have agreed to enter into negotiations for the
manufacture by Leiras for sale to Anthra, and purchase by Anthra from Leiras of
dosage forms containing as the active ingredient disodium clodronate for
development and marketing, distribution and sale by Anthra in the United States
of America; and
WHEREAS, pursuant thereto, among other things, Leiras and Anthra have
agreed to such manufacture and sale and purchase, in accordance with the terms
and conditions herein set forth; and
WHEREAS, Leiras, Berlex Laboratories, Inc. ("Berlex") and Anthra have
entered into a Development and Commercialization Agreement of even date
herewith, as contemplated by the Term Sheet.
NOW THEREFORE, the parties hereto hereby agree as follows:
32. DEFINITIONS
The following terms in the Manufacturing Agreement shall have the
following meanings:
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(a) "Affiliate" shall mean any entity which, directly or
indirectly, is Controlled by, or under common Control with, an
entity referred to.
(b) "Control" shall mean the power to direct or cause the
direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract,
resolution, regulation or otherwise.
(c) "Development Agreement" shall mean the Development and
Commercialization Agreement of even date herewith among
Berlex, Leiras and Anthra.
(d) "FDA" shall mean the Food and Drug Administration of the U.S.
Department of Health and Human Services, and any successor
agency having substantially the same functions.
(e) "GMP" shall mean the current Good Manufacturing Practices set
forth from time to time by the FDA.
(f) "H-Indication" shall mean the treatment of hypercalcemia in
humans due to malignancy.
(g) "IAS" shall mean the international accounting standards
promulgated by the International Accounting Standards
Committee.
(h) "Indications" shall mean the H-Indication and the O-Indication
in humans.
(i) "Market" or "Marketing" shall mean all programs and activities
relating to the promotion and sale of the Product in the
Territory, including but not limited to advertising, seminars,
symposia, training and education, as well as detailing,
selling, contracting for sale of, and distributing the
Product.
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(j) "Net Sales" shall mean the amount invoiced for the Product by
Anthra and, if it sublicenses the selling rights, its
sublicensees (hereinafter "the selling party"), to third
parties in the Territory, less reasonable and customary
deductions applicable for (i) transportation charges and
charges such as insurance, relating thereto paid by the
selling party; (ii) sales and excise taxes or customs duties
paid by the selling party and any other governmental charge
imposed upon the sale of the product and paid by the selling
party; (iii) distributors' discounts, rebates or allowances
actually granted, allowed or incurred; (iv) quantity
discounts, cash discounts or chargebacks actually granted,
allowed or incurred in the ordinary course of business in
connection with the sale of the product; (v) allowances or
credits to customers, not in excess of the selling price of
the product, on account of governmental requirements,
rejection, outdating, recalls or return of the product, and
(vi) costs of customer programs such as cost-effectiveness or
patient assistance programs designed to aid in patient
compliance to maintain medication schedules, for the purpose
of securing managed care contracts (to the extent that such
programs directly result in incremental Product sales);
provided, however, that any deduction pursuant to clause (vi)
shall be prorated over the term of the relevant contracts.
Notwithstanding anything to the contrary contained in the
foregoing sentence, Net Sales to customers other than U.S.
governmental entities and state programs for indigent patients
shall be deemed in the aggregate to be not less than eighty
percent (80%) of the selling party's published wholesale price
multiplied by the number of units of Product sold to customers
in the Territory,
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less deductions for freight, postage, shipping and insurance
to the extent included in such wholesale price.
For the purpose of calculating a selling party's Net Sales, the parties
recognize that (a) a selling party's customers may include persons in
the chain of commerce who enter into agreements with a selling party as
to price even though title to the product does not pass directly from a
selling party to such customers, and even though payment for such
product is not made by such customers directly to a selling party and
(b) in such cases chargebacks listed above and paid by a selling party
to or through a third party (such as a wholesaler) can be deducted by a
selling party from gross revenue in order to calculate Net Sales. Any
deductions listed above which involve a payment by a selling party
shall be taken as a deduction against aggregate sales for the period in
which the payment is made. Sale of the product between Anthra and its
sublicensees solely for research or clinical testing purposes shall be
excluded from the computation of Net Sales. Net Sales will be accounted
for in accordance with IAS.
(k) "O-Indication" shall mean the treatment of osteolysis
(osteolytic bone metastases) in humans.
(l) "Option" shall mean the option granted by Anthra to Berlex as
defined in Section 5A.1 of the Development Agreement.
(m) "Person" shall mean an individual, sole proprietorship,
partnership, limited partnership, limited liability
partnership, corporation, limited liability company, business
trust, joint stock company, trust, unincorporated association,
joint venture or other similar entity or organization,
including, without limitation, a government or political
subdivision, department or agency of a government.
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(n) "Product" shall mean disodium clodronate, in the finished
dosage forms listed and conforming to the Specifications which
are set forth, in Exhibit 1.14.
(o) "Schering Group" shall mean Schering AG and its Affiliates,
including, but not limited to, Leiras and Berlex.
(p) "Specifications" shall mean the specifications for the Product
as set forth in Exhibit 1.14 hereto.
(q) "Territory" shall mean the United States of America, and its
territories and possessions and the Commonwealth of Puerto
Rico.
(r) "Transfer Date" shall mean the date of the transfer and
assignment of Anthra's rights to Berlex under Section 5A.1(e)
of the Development Agreement, in the event Berlex exercises
its Option.
33. SUPPLY OF THE PRODUCT
(a) Requirements. Subject to Section 11, Leiras agrees to sell to
Anthra, and Anthra agrees to buy, all of Anthra's requirements
of the Product for the Territory exclusively from Leiras. All
such Product shall be used exclusively in accordance with the
terms and conditions, and subject to the limitations, set
forth in the Development Agreement. In no event shall Anthra
offer for resale, sell, market or distribute the Product other
than for the Indications licensed to Anthra for the Territory
under the terms of the Development Agreement, or such other
indications as may be mutually agreed in writing between
Leiras and Anthra in accordance with the terms thereof;
provided however that Anthra shall not be in breach of this
Section 2.1 by reason of physician-initiated off-label use of
the Product not authorized by Anthra or its sublicensees.
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(b) Competing Products. Further, Anthra or its sublicensee(s)
shall not, directly or indirectly, sell, Market or distribute
in the Territory any disodium clodronate in dosage forms other
than those for the Product (unless purchased from Leiras) or
any bisphosphonate product that competes with the Product. The
parties acknowledge that the restrictions contained herein are
reasonable, valid and necessary for the adequate protection of
the Product business.
34. SPECIFICATIONS
Leiras shall supply the Product in accordance with GMP requirements and
the Specifications.
35. WARRANTY
(a) Each party represents and warrants to the other parties as
follows: (i) it is a duly organized and validly existing
corporation under the laws of its jurisdiction of
incorporation; (ii) it has full corporate power and authority
and has taken all corporate action necessary to enter into and
perform this Manufacturing Agreement; (iii) the execution and
delivery of this Manufacturing Agreement and the transactions
contemplated herein do not violate, conflict with, or
constitute a default under its charter or similar organization
document, its bylaws or the terms or provisions of any
material agreement or other instrument to which it is a party
or by which it is bound, or any order, award, judgment or
decree to which it is a party or by which it is bound; and
(iv) this Manufacturing Agreement is its legal, valid and
binding obligation, enforceable in accordance with the terms
and conditions thereof.
(b) Warranty.
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(i) Leiras warrants to Anthra only that, at the time of
delivery of the Product to Anthra, the Product (i)
will have been manufactured, packaged and stored in
accordance with applicable GMPs and all other
applicable laws, rules and regulations, (ii) will
have been manufactured, packaged and stored in
accordance with the Specifications and the applicable
NDA, (iii) will not be adulterated or misbranded
within the meaning of the Federal Food, Drug, and
Cosmetic Act, codified at 21 U.S.C. 301 et seq., as
amended ("FFDCA"), (iv) will not constitute an
article which may not under the provisions of Section
505 of the FFDCA, be introduced into interstate
commerce, and (v) for capsules only, will have
expiration dating not less than twenty-four (24)
months, and for vials not less than eighteen (18)
months, on the date of delivery thereof to Anthra.
(ii) Anthra warrants to Leiras that any labelling,
branding or instructions which it may request Leiras
to place on, with or in connection with the Product
shall be in compliance with the applicable NDA, and
the provisions of the FFDCA and all other applicable
laws, rules and regulations. Leiras shall not be in
breach of its warranty under paragraph (a) of this
Section 4.2 by reason of any such labelling, branding
or instructions, which accompany Product delivered in
accordance with the Specifications.
(c) Remedy. Subject to the provisions of Section 4.5, Anthra's
exclusive remedy and Leiras's sole liability for any claim
involving Product sold to Anthra hereunder, whether in
contract, tort, strict liability or under any other theory, is
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expressly limited to replacement of the specific quantity of
Product supplied by Leiras shown to be other than as
warranted, as soon as commercially practicable, but not later
than ninety (90) days after (i) Leiras agrees in writing to
the nonconformity, if it does, or (ii) the independent testing
laboratory referred to below makes a determination, whichever
is earlier. Any replacement is conditional on Anthra giving
Leiras notice of any such claim (including a sample from the
shipment) within twenty (20) days from receipt of delivery or,
in the case of defects which cannot be discovered by the
exercise of reasonable diligence, (which shall not include
laboratory testing, or other chemical analysis, unless
required by the NDA), twenty (20) days from the date of
discovery of the defect. Anthra agrees to conduct all routine
laboratory testing and other chemical analysis of shipments of
Product within forty-five (45) days after receipt thereof. If
Leiras confirms such non-conformity, it shall promptly so
notify Anthra. If Leiras does not confirm such non-conformity,
it shall promptly so notify Anthra, and the parties shall
submit the disputed shipment for testing to an independent
testing laboratory that is mutually acceptable to the parties.
The findings of the testing laboratory shall be binding on the
parties. The expenses of such testing shall be borne by Leiras
if the testing confirms the non-conformity, and otherwise by
Anthra. Failure by Anthra to give this notice within the
respective twenty (20) day periods shall constitute a waiver
by Anthra of all claims with respect to such Product under
this Section 4.3. If required by Leiras, all non-conforming
Product in the possession of Anthra and which is the subject
of such a claim shall be returned to Leiras and Leiras will
pay the return freight and insurance charges.
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(d) Disclaimer. EXCEPT AS SET FORTH IN SECTIONS 4.2 and 4.3,
LEIRAS HEREBY DISCLAIMS ANY AND ALL WARRANTIES, WHETHER
WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, WITH RESPECT TO THE
PRODUCT, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
QUALITY, PERFORMANCE, MERCHANTABILITY OR FITNESS FOR A
PARTICULAR USE OR PURPOSE.
(e) Leiras Indemnity. Subject to the provisions of Section 4.7,
Leiras shall indemnify and hold Anthra and its officers,
directors, employees, agents, representatives and consultants
(each a Leiras "Indemnitee"), harmless from and against any
and all losses, damages, costs and expenses (including,
without limitation, reasonable attorneys' fees) (collectively
"Losses") incurred or payable by any Leiras Indemnitee in
connection with any and all suits, investigations, claims or
demands by third parties (whether based on death, personal
injury or otherwise, and whether or not a proceeding is
commenced against, or names as a party thereto, any Leiras
Indemnitee), arising out of any breach of Leiras' warranties
as set forth in Section 4.2.
(f) Anthra Indemnity. Subject to the provisions of Section 4.7,
Anthra shall indemnify and hold Leiras and its officers,
directors, employees, agents, representatives and consultants
(each an Anthra "Indemnitee"), harmless from and against any
and all Losses, incurred or payable by any Anthra Indemnitee
in connection with any and all suits, investigations, claims
or demands by third parties (whether based on death, personal
injury or otherwise, and whether or not a proceeding is
commenced against, or names as a party thereto, any Anthra
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Indemnitee), (A) arising out of or in connection with (i) any
breach by Anthra or any of its sublicensees of any of their
respective obligations under this Manufacturing Agreement, or
(ii) any other action or failure to act on the part of Anthra
or any of its sublicensees, or (B) otherwise arising out of or
in connection with the development, marketing, distribution,
sale or use of the Product in the Territory, other than (x)
resulting from a breach of Leiras' warranty under Section 4.2
hereof or (y) to the extent caused by modification of, or
tampering with, the Product by an intentional third party
intervention.
In the event that Berlex exercises its Option, then from and after
Transfer Date, Anthra shall be relieved of its obligation of indemnity
to Leiras under subpart (B) (but not subpart (A)) of this Section 4.6
in respect of all Losses arising out of or in connection with (i)
development, Marketing, distribution or sale of the Product after the
Transfer Date, or (ii) use of the Product Marketed, distributed or sold
after the Transfer Date, except that Anthra's indemnity under subpart
(B) shall remain in full force and effect with respect to any Losses
arising out of, or in connection with the exercise or non-exercise by
Anthra of any of the rights retained by Anthra under Section 6.1(a) or
6.1(e) of the Development Agreement.
(g) Indemnification Procedure.
(i) Each Indemnitee agrees to give the indemnifying party
prompt written notice of any Losses or the discovery
of a fact upon which such Indemnitee intends to base
a request for indemnification under Section 4.5 or
4.6.
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(ii) The indemnifying party and the Indemnitee shall each
furnish promptly to the other, copies of all claims
or demands and official documents received in respect
of any Losses. The Indemnitee shall cooperate as
reasonably requested by the indemnifying party in the
defense against any Losses, subject to the right of
the Indemnitee to retain its own counsel at its own
expense.
(iii) With respect to any Losses relating solely to the
payment of money damages and which will not result in
the Indemnitee becoming subject to injunctive or
other relief or otherwise adversely affecting the
business of the Indemnitee in any manner, and as to
which the indemnifying party shall have acknowledged
in writing the obligation to indemnify the Indemnitee
hereunder, the indemnifying party shall have the sole
right to defend, settle or otherwise dispose of such
Losses, on such terms as the Indemnifying party, in
its sole discretion, shall deem appropriate.
(iv) With respect to Losses relating to all other matters
as to which the indemnifying party shall have
acknowledged in writing the obligation to indemnify
the Indemnitee hereunder, the indemnifying party
shall have the sole right to control the defense of
such matter, provided that the indemnifying party
shall obtain the written consent of the Indemnitee,
which shall not be unreasonably withheld, prior to
ceasing to defend, settling or otherwise disposing of
any Losses if as a result thereof (i) the Indemnitee
would become subject to injunctive or other equitable
relief or
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any remedy other than the payment of money by the
indemnifying party or (ii) the business of the
Indemnitee would be adversely affected.
(v) The Indemnitee shall have the right to control the
defense of all other matters, provided that the
indemnifying party shall not be liable for any
settlement or other disposition of a Loss by the
Indemnitee which is reached without the written
consent of the indemnifying party, which consent
shall not be unreasonably withheld.
(vi) Except as provided above, the costs and expenses,
including reasonable fees and disbursements of
counsel, incurred by any Indemnitee in connection
with any claim shall be reimbursed on a calendar
quarter basis by the indemnifying party, without
prejudice to the Indemnitee's right to contest the
indemnifying party's right to indemnification and
subject to refund in the event the indemnifying party
is ultimately held not to be obligated to indemnify
the Indemnitee.
(h) Limitation. In no event shall either Leiras or Anthra be
liable to the other for Losses in respect of a suit,
investigation, claim or demand to the extent of which Leiras
or Anthra, respectively, has previously indemnified the other
under the Development Agreement.
36. QUALITY CONTROL, REGULATORY MATTERS
(a) Leiras shall perform its obligations under this Agreement in
compliance with the Specifications, the applicable NDA or
SNDA, applicable GMPs, and any other applicable laws, rules
and regulations.
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(b) Leiras Information. Leiras shall, at Anthra's request, provide
Anthra with such CMC-related information and assistance as may
be required under FDA rules and regulations for purposes of
maintaining the NDA and any applicable SNDAs for the Product
in the Territory, including, without limitation, providing
Anthra with all required reports, certificates, specifications
and other documentation in the possession or under the control
of Leiras relating to the Product or any component thereof.
Leiras shall not be requested to provide such assistance for
more than ten (10) person days. Should Leiras not be in
position to disclose to Anthra information required by the
FDA, Leiras shall be entitled to make such information
available directly to the FDA on Anthra's behalf. Leiras
hereby grants Anthra a royalty-free license to use such
information in the Territory only for the purpose of
maintaining any and all such regulatory filings in connection
with the Product.
(c) Specification Changes. Either party may, in writing, propose
to the other changes in the Specifications. A change shall not
take effect unless agreed in writing by both parties, except
if required in order to comply with applicable laws and is
technically feasible and commercially practicable, and the
cost of making the change, and complying with any additional
regulatory requirements shall be borne by the party requesting
the change, except that if required to comply with applicable
law, then Anthra shall in any case bear the cost.
(d) Equipment Changes. Leiras agrees not to make material changes
in any equipment, materials, or methods of production or
testing, or the facility used in the manufacture of the
Product, without providing sufficient prior written notice
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thereof to Anthra to permit required amendments to the NDA or
SNDA to be made without delaying Marketing or sales of the
Product. Leiras shall bear the cost of making any such change
and making any regulatory submissions required in connection
therewith, except that, if the FDA or other regulatory
authority acting for the FDA requires a change in any
equipment, materials or methods of production or testing or
facility, then Anthra shall bear the cost of making such
change and regulatory submissions relating to such change.
(e) Atypical Events. Leiras agrees to report to Anthra, without
delay, process events that are likely materially to affect the
safety, efficacy or regulatory status of the Product in the
Territory.
(f) Anthra Visits. Anthra shall have the right, not more than once
per year, during normal business hours and with reasonable
advance notice, and (in its sole discretion) in the company of
representatives of one or more third parties to which Anthra
has granted a license to market and sell the Product, to visit
the Leiras manufacturing facility for the Product for the
purpose of observing the manufacturing, packaging, testing,
and storage of the Product, and to inspect for compliance with
GMPs and other applicable regulatory requirements and review
records relevant to such compliance.
(g) FDA Inquiries. Leiras agrees to notify Anthra as soon as
practicable but no later than fifteen (15) working days after
the initiation of any inquiries, notifications, or inspection
activity by the FDA or any other United States governmental
authority, or authority acting on behalf of the United States
governmental authority, with regard to the Product. Further,
Leiras shall provide a
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reasonable description to Anthra of any such governmental
inquiries or notifications promptly (but in no event later
than 15 calendar days) after such inquiry. Leiras shall
furnish to Anthra, (a) within 15 days after receipt, any
report or correspondence issued by the FDA or any other such
authority in connection with such inquiry, including but not
limited to, any FDA Form 483, Establishment Inspection Report,
or warning letter, and (b) prior to submission (if
practicable) or at the time of submission thereof by Leiras,
copies of any and all responses or explanations to any such
authority relating to items set forth above, in each case
purged only of trade secrets of Leiras that are unrelated to
its obligations under this Agreement and are unrelated to the
Product. Leiras agrees to consider Anthra's reasonable views
and requests, if timely received, prior to submission of such
reports and communications to any such authority. Further,
Leiras agrees that Anthra may disclose to one or more third
parties to which Anthra has granted a license to market and
sell the Product the information and documentation provided to
Anthra pursuant to this Section 5.7.
(h) Adverse Events. The parties shall notify each other of adverse
events in accordance with the procedure set forth in Exhibit
5.9 hereto.
(i) Debarment. Leiras represents and warrants that it has not been
debarred and is not subject to debarment and that it will not
use in any capacity, in connection with the services to be
performed under this Agreement, any person who has been
debarred pursuant to section 306 of the Federal Food, Drug,
and Cosmetic Act, 21 U.S.C. 335a, or who is the subject of a
conviction described in such. Leiras agrees to inform Anthra
in writing immediately if it or any other person who is
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performing services hereunder is debarred or is the subject of
a conviction described in section 306, or if any action, suit,
claim, investigation, or legal or administrative proceeding is
pending or, to the best of Leiras' knowledge, is threatened,
relating to the debarment or conviction of Leiras or any
person performing services hereunder.
37. PRODUCT RECALL
(a) Notification. In the event that any governmental agency or
authority issues or requests a recall or takes similar action
in connection with the Product, or in the event that either
party determines an event, incident or circumstance has
occurred which may result in the need for a recall or market
withdrawal, the party notified of or desiring such recall or
similar action shall within twenty-four (24) hours, advise the
other parties thereof by telephone or facsimile, and the
parties shall determine an appropriate course of action,
including the respective responsibilities of the parties with
respect to any recall.
(b) Recall Action. Following notification of a recall, within
forty-eight (48) hours, the parties' representatives from
business, medical, regulatory, quality assurance and legal
functions (and any others deemed necessary by a party) shall
discuss whether or not to conduct a recall (except in the case
of a government-mandated recall), and if so, the timing of the
recall, the breadth, extent and level of customer to which the
recall shall reach, the strategies and notifications to be
used, and other related issues. Nothing in this Section 6
shall prohibit either party from taking action required to
comply with applicable law.
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(c) Recall Expenses. Anthra shall bear the expenses of any recall,
unless such recall results from breach of Leiras' warranty
under Section 4.2. Such expenses of recall shall include,
without limitation, the direct expenses of notification and
destruction or return of the recalled Product and any refund
to consumers of amounts paid for the recalled Product.
38. PRICE AND PAYMENT TERMS
(a) Actual Purchase Price. Leiras shall sell each formulation,
dosage form and quantity of the Product to Anthra at a price
(the "Actual Purchase Price") equal to the higher of (a)
thirty-two and one-half percent (32 1/2%) of the weighted
average unit Net Sales price thereof in each calendar
half-year of the term hereof ("Average Purchase Price"), and
(b) the floor prices for such formulation, dosage form and
quantity determined in accordance with Exhibit 7.1. Leiras
agrees to enter into further good faith negotiations with
Anthra at its request, with respect to the floor prices, in
the event Anthra demonstrates a material change in the
competitive market situation or in the event of an entry by
another directly competing disodium clodronate product by a
third party. Leiras agrees to use commercially reasonable
efforts to supply the Product to Anthra at a price that
supports Anthra's efforts to maintain a competitive price for
the Product, but Leiras shall be under no obligation to revise
the floor prices, and no revisions shall take effect unless
and until the parties shall agree thereto in a mutually
satisfactory written agreement.
(b) Initial Purchase Price. The parties shall agree on an initial
purchase price ("Initial Purchase Price") to be used for each
formulation, dosage form and
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quantity of the Product for purposes of the payments due to
Leiras for the first calendar half-year in which there is a
Launch of the Product, subject to adjustment as hereinafter
provided. Each Initial Purchase Price for such period shall be
determined ninety (90) days prior to Launch by agreement based
on the projected weighted average unit Net Sales price
therefor for such calendar quarter but in no event less than
the floor prices set out on Exhibit 7.1.
(c) Subsequent Determinations. The parties shall agree on new
Initial Purchase Prices for each subsequent calendar half-year
at least ninety (90) days prior thereto, based upon Anthra's
good faith estimation, determined in accordance with its
regular budgeting process, of its weighted average unit Net
Sales price for such calendar half-year, but in no event less
than the floor price for the Product under Article 7.1 and
Exhibit 7.1. Should the parties not reach an agreement for any
such calendar half-year on such Initial Purchase Price, the
Initial Purchase Price for the applicable calendar half-year
shall be the weighted average unit Net Sales Price of the
calendar half-year ending six (6) months prior thereto. Leiras
agrees to invoice Anthra promptly upon shipment of the
Product.
(d) Adjusted Payments. Payment of the applicable Initial Purchase
Price for each delivery of Product shall be made within sixty
(60) days from the later of the date of invoice or the date of
delivery. Within sixty (60) days of the end of each calendar
half-year, Anthra shall prepare an accounting of the weighted
average unit Net Sales price for [each formulation, dosage
form and quantity of] the Product sold during such half-year
and shall forward such accounting to Leiras together with an
additional payment if the Initial Purchase Price has been less
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than such price, If the Initial Purchase Price has been
greater than such price, Leiras shall provide Anthra a
quantity of Product free of charge in the amount of such
shortfall. Each accounting shall contain at least the
following information separately on each dosage form: the
total amount of Product sold, returned and the reasons for
returns; the dollar volume of sales and returns; and the price
of each return, sale and itemized deductions from sales.
(e) Wire Transfer. All payments to be made by Anthra to Leiras
under this Manufacturing Agreement shall be made in United
States Dollars and shall be made by wire transfer to such bank
account as shall be specified in writing five (5) days in
advance by Leiras.
(f) Withholding Taxes. Anthra shall pay to the proper taxing
authority any and all withholding taxes or similar charges
imposed by any governmental unit in the Territory on any
amounts due to Leiras from Anthra pursuant to this Section 7,
and shall use commercially reasonable efforts to obtain and
send to Leiras proof of such payment of such taxes or charges.
All amounts paid by Anthra pursuant to this Section 7.6 shall
be paid for the account of Leiras and deducted from the
amounts due from Anthra to Leiras pursuant to this Section 7.
39. VERIFICATION
(a) Anthra Books and Records. Anthra shall keep, and shall require
its sublicensees to keep, accurate and complete books and
records, maintained in accordance with IAS, of all Product
sold, including the quantities and sale prices, and any
deductions therefrom, together with copies of invoices and
other relevant
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documents showing all orders placed and executed. All such
books and records shall be kept for six (6) years.
(b) Leiras Books and Records. Leiras shall keep accurate and
complete books and records, maintained in accordance with IAS,
of all costs and expenses of establishing and maintaining the
Second Source, and, of any Products manufactured by the Second
Source for customers of Leiras other than Anthra. Leiras shall
continue to keep such books and records for six (6) years.
(c) Inspection. Each party shall permit the other party's
independent public accountants at reasonable times during
normal business hours to inspect and take copies of or
extracts from any relevant documents in the possession or
under the control of such party for the purpose of reporting
to the other party with respect to verification of the
information in Section 8.1 or 8.2 hereof, as the case may be,
and subject to such accountants agreeing to the
confidentiality provisions of Section 13 hereof or
substantially similar provisions as to confidentiality. Upon
Leiras' request not more frequently than annually, Anthra
shall arrange for its certified public accountant to inspect
relevant documents of Anthra's sublicensees and provide to
Leiras a written certification that the sublicensees are in
compliance with the calculation of Net Sales in accordance
with Section 1.10. Each party shall bear the expense of its
own certified public accountant with respect to any inspection
hereunder.
40. ORDERING AND DELIVERY
(a) Forecasts.
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(i) Anthra shall submit to Leiras at least one hundred and eighty
(180) days prior to the commencement of each calendar quarter
a rolling forecast for the following four (4) quarters showing
the estimated quantities of the Product needed for such
quarters. Leiras agrees to supply up to 120% of the latest
forecast for the first quarter of each such forecast. Anthra
agrees to order at least 80% of the latest forecast for such
quarter, but Leiras shall use commercially reasonable efforts
within its available capacity to deliver orders placed up to
150% of the latest forecast for such first quarter.
(ii) In addition to the above, Anthra shall also provide Leiras on
an annual basis on or before September 1 with a sales forecast
for the coming two (2) calendar years. Such forecast shall not
be binding on either party.
(b) Ordering; Minimum Quantities.
(i) All orders shall be placed by Anthra at least ninety
(90) days prior to the requested delivery date. All
orders shall be placed in whole production batch
quantities, as specified on Exhibit 9.2(a). Leiras
will confirm its delivery dates within ten (10) days
of receipt of the order.
(ii) Except as expressly set forth in Section 9.2 (a)
hereof, orders presented by Anthra shall bind Leiras
and Anthra only after written confirmation of
acceptance thereof by Leiras.
(iii) Leiras shall supply, and Anthra shall purchase, take
delivery and pay for a minimum quantity of the
Product in each calendar year of the term of this
Manufacturing Agreement equal to the product of fifty
(50)
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per cent and the quantity of the Product projected to
be sold in such year by Anthra and its sublicensees,
as determined by the independent third party for the
purposes of calculating the Minimum Royalty pursuant
to Section 1.19(c) of the Development Agreement. Such
quantity shall be prorated for any portion of a year.
(c) Delivery. The Product shall be delivered by Leiras,
accompanied by a certificate of analysis, in accordance with
the terms ex works Leiras, Turku, Finland (Incoterms 1990).
Leiras shall not be obligated to deliver Product more than
once per calendar quarter. Without affecting risk of loss or
liability or risk allocation under such terms, Leiras agrees,
upon Anthra's request, to arrange for shipping and insurance,
if available, of the Product at the expense of Anthra, by
carriers selected by Anthra.
41. HANDLING, STORING AND TRANSPORTATION
The Product shall be handled, transported and stored at all times in
accordance with the Specifications and instructions attached hereto as Exhibit
10.
42. SECOND SOURCE
(a) Establishment. Subject to this Section 11.1, Anthra shall
purchase its requirements of the Product only from Leiras.
However, in the event that (i) the Option Period shall have
expired and the Option has not been exercised by Berlex, (ii)
Leiras or a Leiras Affiliate shall not have established and
qualified a second site of its own for disodium clodronate,
and (iii) for any reason Leiras is not able to supply at least
fifty percent (50%) of Anthra's requirements of Product
ordered for two consecutive calendar quarters thereafter,
then, unless prior to the
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end of the second such calendar quarter Berlex shall have
exercised its right of first refusal in accordance with
Section 6.2(b) of the Development Agreement, Anthra shall be
free to purchase its requirements of disodium clodronate for
the Product from a third party, herein called the "Second
Source", subject to the conditions set forth below. Anthra may
purchase from the Second Source only such quantities of
disodium clodronate for the Product which Leiras is not able
to supply and shall commence repurchasing its requirements of
Product incorporating Leiras disodium clodronate from Leiras
immediately after a written notice from Leiras that it is able
to recommence the supply, provided however that for a period
of up to twenty-four (24) months from such notice, during
which Anthra shall use its best efforts to purchase from
Leiras as much of its requirements as possible, Anthra may,
subject to such best efforts, purchase a portion of its
requirements of disodium clodronate for the Product from the
Second Source, as follows: in the first six (6) months, it may
purchase up to fifty percent (50%) of its requirements; in the
second six (6) months, it may purchase up to twenty-five
percent (25%) of its requirements; and in the last twelve (12)
months, it is agreed that the portion of its requirements
shall be scaled-down from twenty-five percent (25%) to five
percent (5%) on a basis to be negotiated in good faith by
Anthra with Leiras. After the twenty-four (24) months expire,
Anthra shall continue to use its best efforts to purchase from
Leiras as much of its requirements as possible, but Anthra
may, subject to such best efforts, continue to purchase the
five percent (5%), as long as Anthra pays to Leiras on a
calendar quarterly basis (x) an amount equal to the profit
Leiras would have made on such
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five percent (5%) disodium clodronate and (y) any additional
costs and expenses incurred by Leiras as a result of using
Second Source disodium clodronate instead of its own disodium
clodronate.
(b) Costs and Expenses. Subject to Section 11.1, Anthra and Leiras
shall both agree in writing on the Second Source, provided
however that Leiras shall not unreasonably withhold its
agreement and provided further that Anthra shall not establish
and qualify another party as the Second Source on terms for
the purchase by Anthra of disodium clodronate more favorable
than such terms offered to Schering Group; if a Second Source
is proposed, such proposal shall be made no earlier than the
date of expiration of the Option Period, and Anthra shall
first give Leiras written notice thereof, setting forth the
terms in detail, and Schering Group shall have a right of
first refusal, exercisable on written notice to Anthra within
ninety (90) days after receipt of Anthra's notice. All the
costs and expenses of establishing and maintaining the Second
Source as a back-up facility shall be borne by Anthra. Leiras
shall reasonably cooperate with Anthra, at Anthra's cost and
expense, in establishing the Second Source, and, in
particular, Leiras shall grant Anthra a limited nonexclusive
royalty-free license during the term of this Agreement only,
under Leiras' patents and technology required for manufacture
of the disodium clodronate only by the Second Source for
Anthra, and Anthra may sublicense the Second Source
thereunder, subject to the Second Source agreeing in writing
with Anthra (i) to keep the necessary technology confidential
in all material respects and (ii) to use the sublicense only
in making Product for supply to Anthra in the Territory under
the conditions of this Article
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11. Anthra covenants and warrants to Leiras that any such
Second Source shall comply with such agreement of 11.2 (i) and
(ii), and any breach thereof by the Second Source shall,
without limiting Leiras' remedies against the Second Source,
constitute a material breach of Anthra's obligations under
this Manufacturing Agreement provided however that a single
breach by the Second Source during the term of this
Manufacturing Agreement not exceeding twenty kilograms from
one lot of Product shall not constitute a material breach
hereof by Anthra. Anthra shall provide Leiras with a true copy
of any purchase agreement it has with the Second Source, and
Leiras shall be provided with full access to the books and
records of the Second Source and inspection rights consistent
with Sections 8.1 and 8.3 hereof for the purpose of verifying
compliance with the provisions hereof. Anthra further warrants
that the disodium clodronate made by the Second Source (i)
will have been manufactured, packaged and stored in accordance
with applicable GMPs and all other applicable laws, rules and
regulations, (ii) will have been manufactured, packaged and
stored in accordance with the specifications therefor and the
applicable NDA, (iii) will not be adulterated or misbranded
within the meaning of under the Federal Food, Drug and
Cosmetic Act, 21 USC 301 et seq., as amended ("FFDCA"), and
(iv) will not constitute an article which may not, under the
provisions of Section 505 of the FFDCA be introduced into
interstate commerce, and any breach of such warranty shall
constitute a breach of Anthra's obligations under this
Manufacturing Agreement. Leiras shall not be required to
provide more than ten person days of assistance to Anthra or
the Second Source in connection with such cooperation.
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Notwithstanding the aforesaid, in the event that Leiras shall
use the Second Source for manufacturing of the Product in
significant commercial quantities for customers of Leiras
other than Anthra during the term of this Manufacturing
Agreement, then Leiras agrees to reimburse Anthra for fifty
percent (50%) of the agreed costs of setting up the Second
Source. For this purpose, "significant commercial quantities"
shall mean the quantities required by Leiras for one full
production batch of the Product. Leiras shall be entitled to
be supplied disodium clodronate by the Second Source at no
cost for manufacture of the Product for Anthra under this
Manufacturing Agreement, and purchases of disodium clodronate
by Anthra from the Second Source shall be made available by
Anthra to Leiras for such manufacture by Leiras of the Product
for Anthra on a first priority basis, so that if Leiras is
able to manufacture the Product from disodium clodronate, but
its ability to make disodium clodronate has been interrupted,
Anthra shall, notwithstanding any other provision of Section
11, purchase its requirements of the Product from Leiras. The
Actual Purchase Price of the Product shall be reduced by
Leiras' standard manufacturing cost of the disodium clodronate
and the related margin to the extent provided at no cost to
Leiras. The parties shall discuss in good faith the procedure
for manufacture of the Product by another person if, and
during the period that, Leiras is unable to do so.
Leiras shall conduct laboratory testing and chemical analysis of Second
Source disodium clodronate supplied to Leiras, and Anthra shall arrange
for the Second Source to replace any disodium clodronate which does not
meet the specifications therefor or is otherwise defective, but nothing
herein shall relieve Anthra from any liability for all
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such disodium clodronate and Leiras shall, as provided by Section 11.3,
have no liability in respect thereof.
(c) Liability. Leiras shall have no liability whatsoever for any
product supplied to Anthra or Leiras by the Second Source and
Anthra expressly assumes liability for all such products
including without limitation to any claim involving such
products whether in contract, tort, strict liability or
otherwise. All claims shall be subject to Anthra's Indemnity
under clause 4.6.
(d) Anthra's right to purchase from a Second Source (or to
purchase the Product from Leiras), subject to and in
accordance with the provisions of this Section 11 shall
constitute Anthra's exclusive remedy for any non-delivery of
the Product under the other terms and conditions of the
Manufacturing Agreement.
43. PROPRIETARY RIGHTS AND INFRINGEMENT
Leiras hereby represents and warrants to Anthra that:
(a) (i) Leiras is the owner of the entire right, title and interest in
and to the United States patents and patent applications
listed in Exhibit 12.1 (i) and to the extent set forth in
Exhibit 12.1. (i) hereto (collectively, the "Patents");
(B) Leiras is not aware of any claim of infringement of,
or interference with, any of the Patents in the
Territory by a third party;
(C) Leiras is not aware of any legal or administrative
actions, proceedings, judgments or settlements,
including, without limitation, any reexamination or
reissue proceedings, currently pending with respect
to the Patents, and no such actions or proceedings of
which Leiras is aware have been threatened against
Leiras in the Territory;
(D) Leiras is not aware of any prior art or event not
cited or disclosed during prosecution of the Patents
which was required to be cited or disclosed therein.
(E) Leiras is not aware of any third party patent (or
patent application) in the Territory, the claims of
which cover the manufacturing, use or sale of the
Product under the Technology.
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For purposes of determining whether Leiras is "aware" of any
matter hereinabove referred to only the actual knowledge of
any senior executive or of the Head of Leiras' Patent
Department shall be considered, and it does not mean that any
investigation or inquiry has been conducted. Furthermore,
Anthra has inspected Leiras' patent file regarding the Product
as indexed in the Exhibit 12.1 and anything Anthra could have
seen in the patent file is not included in the above
representations.
(b) Except as set forth in Section 12.1, Leiras does not make, and
hereby excludes, any and all express or implied, written or
unwritten, representations or warranties against patent
infringement with respect to the Products supplied by Leiras
hereunder.
(c) Upon knowledge of the commencement of any suit against Leiras
or Anthra which is based in whole or in part on a claim that
any Products supplied by Leiras hereunder or under the
Development Agreement and Marketed, sold or distributed by
Anthra under its license from Leiras under the Development
Agreement, constitutes an infringement of any United States
patent, Leiras or Anthra, as the case may be, shall promptly
notify the other in writing. Subject to clause 12.6 hereof,
Leiras shall, with counsel reasonably acceptable to Anthra,
assume and conduct the defense of any suit or claims brought
or asserted, or demand made, against Leiras or Anthra insofar
as it is based on such claim of infringement. The damages and
costs awarded as a result of such suit or the amount of any
settlement in respect of such suit, claim or demand shall be
paid by Leiras subject to reimbursement by Anthra as provided
in clause 12.6. Leiras agrees to consider,
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but shall not be obligated to accept, any reasonable offer by
the claimant of a license to the allegedly infringing patent.
(d) With respect to any suit, claim or demand that is subject to
the indemnity set forth in this Article 12, (i) Anthra shall
be advised periodically with respect to all strategy and
proceedings conducted by Leiras under clause 12.3, (ii) Anthra
may, at Anthra's expense, participate in the defense thereof
through counsel selected by Anthra if Anthra's interests may
be affected thereby, and (iii) Anthra shall have the right to
consent to any proposed settlement thereof, which consent
shall not be unreasonably withheld.
(e) Anthra agrees to take all action reasonably requested by
Leiras to assist Leiras in connection with the defense and
settlement of any suit, claim or demand under subsection 12.3
hereof.
(f) Anthra shall, within thirty (30) days upon being invoiced
therefor by Leiras, pay to Leiras sixty-seven and a half
percent (67.5 %) of (x) any costs and expenses incurred by
Leiras in defending any suit or claim under clause 12.3, (y)
any lump sum damages to the date of any judgment and costs
awarded as a result of such suit or paid in settlement of such
suit, claim or demand (with Anthra's approval, as required
under clause 12.4), and (z) any royalties awarded as a result
of such suit or paid in settlement of such suit, claim or
demand (with Anthra's approval, as required under clause 12.4)
provided however that after the aggregate of all costs,
expenses, damages and royalties under clauses (x), (y) and (z)
and corresponding clauses (x), (y) and (z) of Section 12.5 of
the Development Agreement reaches 9,230,769 dollars (and
Anthra's sixty-seven and a half percent
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(67.5 %) share has reached 6,230,769 dollars), then thereafter
Anthra shall be responsible for reimbursing Leiras for one
hundred percent (100%) of all further costs, expenses, damages
and royalties enumerated under both such clauses (x), (y) and
(z), if any. Anthra shall take all appropriate action to
minimize damages which may be assessed in any such suit,
including, without limitation, accepting any reasonable
reformulation of the Product which Leiras, it its reasonable
option, may determine to be required.
(g) The provisions of Sections 12.3 through 12.6 and the last
sentence of Section 12.8 shall not apply in the event that
Berlex exercises its Option, except that, any claim of
infringement made under 35 USC Section 271(e)(2) by reason of
any application filed by Anthra with the FDA shall be
considered to be included under Sections 12.3 through 12.7.
(h) Anthra has advised Leiras that Anthra will obtain from its
patent counsel an opinion as to whether Marketing or sale of
the Product in the Territory may infringe Boehringer Mannheim
("BM"), U.S. patent no. 4,859,472. Following receipt of the
opinion of Anthra patent counsel, Anthra will furnish Leiras
with a copy thereof and Leiras, Leiras' patent counsel, Anthra
and Anthra's patent counsel shall consult with each other, and
if the opinion of Anthra patent counsel or Leiras patent
counsel, or both, is that there is or may be infringement,
then, either Leiras or Anthra may, by written notice to the
other, advise the other that it is necessary or desirable to
obtain a license with respect to the Product under such patent
from BM for the Territory. Thereafter either Leiras or Anthra
may commence negotiations with BM with the objective of
obtaining such license for
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both Leiras and Anthra and their respective Affiliates, and
Leiras and Anthra shall cooperate in such negotiations and
each shall allow the other, to the extent practicable, to
participate in its negotiations. Any license negotiated shall
provide for a royalty not to exceed five percent (5%) of Net
Sales of Products with no upfront cash payment, unless
otherwise mutually agreed by the parties. As between Leiras
and Anthra, Leiras shall be liable for 32.5% of the royalties
and Anthra shall be liable for 67.5% of the royalties, and the
royalties shall be counted as royalties under Section 12.6
clause (z) of this Manufacturing Agreement and corresponding
Section 13.6 clause (z) of the Development Agreement for
purposes of determining when the aggregate of 9,230,769 US
Dollars under Sections 12.6 and 13.6 thereof, respectively,
has been reached, and thereafter, Anthra, in addition to its
other obligations thereunder, shall be liable for one hundred
percent (100%) of the royalties due to BM under the license.
(i) Leiras undertakes to use commercially reasonable efforts to
complete a biostudy of the tablet form of the Product by March
31, 1999. Upon completing such study, Leiras agrees promptly
to provide Anthra with the data and analysis thereof. In the
event that the parties mutually agree to develop a tablet form
of the Product, then Anthra shall be responsible for the
clinical development work in connection therewith in the
Territory, and Leiras shall prepare the CMC Data therefor. The
parties agree to share equally the costs of any license that
is required to be obtained from any third party, including
without limitation Penwest Pharmaceutical Co., in connection
with the manufacture, marketing or sale of any such tablet
formulation in the Territory. In the event that Berlex
exercises the
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Option, then in all events such rights in and to such
development work shall inure to the benefit of Berlex and
Berlex shall, within thirty (30) business days after such
exercise, reimburse Anthra for all costs and expenses incurred
by Anthra in connection with the development of such tablet
form of the Product. In the event that Anthra and Leiras
decide not to develop a tablet form of the Product, then
either party may seek to negotiate a license pursuant to
Section 12.8.
(j) The provisions of this Section 12 shall constitute the
exclusive obligations of Leiras or any member of the Schering
Group to Anthra and the exclusive rights of Anthra in respect
of any claim of patent infringement referred to in Section
12.3.
44. CONFIDENTIAL INFORMATION
(a) Confidential Information. Except to the extent permitted by
this Section 13 or as otherwise agreed by the parties in
writing, the parties agree that, at all times during the term
of this Agreement and for thirty (30) years thereafter, the
party receiving information hereunder (the "Receiving Party")
shall keep completely confidential, shall not publish or
otherwise disclose and shall not use directly or indirectly
for any purpose any information furnished to it by another
party (the "Disclosing Party") pursuant to this Agreement or
otherwise relating to any transaction contemplated hereby,
including Information heretofore furnished to it (the
"Confidential Information"), except to the extent that the
Receiving Party can establish by competent proof that such
information:
(i) was already known to the Receiving Party, other than
under an obligation of confidentiality, at the time
of disclosure by the Disclosing Party, as evidenced
by the Receiving Party's prior written records;
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(ii) was part of the public domain at the time of its
disclosure by the Disclosing Party;
(iii) became part of the public domain after its disclosure
by the Disclosing Party, other than through any act
or omission of the Receiving Party in breach of this
Agreement; or
(iv) was disclosed to the Receiving Party by a third party
who had no obligation not to disclose such
information to others.
(b) Authorized Disclosure. Each party may disclose Confidential
Information to the extent that such disclosure is:
(i) Made in response to a valid order of a court of
competent jurisdiction or other governmental body of
a country or any political subdivision thereof of
competent jurisdiction; provided, however, that the
Receiving Party shall first have given notice to the
Disclosing Party and given the Disclosing Party a
reasonable opportunity to quash such order and to
obtain a protective order requiring that the
Confidential Information and/or documents that are
the subject of such order be held in confidence by
such court or agency or, if disclosed, be used only
for the purposes for which the order was issued; and
provided further that if a disclosure order is not
quashed or a protective order is not obtained, the
Confidential Information disclosed in response to
such court or governmental order shall be limited to
that information which is legally required to be
disclosed in such response to such court or
governmental order;
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(ii) Otherwise required by law, in the opinion of legal
counsel to the Receiving Party as expressed in an
opinion letter in form and substance reasonably
satisfactory to the Disclosing Party, which shall be
provided to the Disclosing Party at least forty-eight
(48) hours prior to the Receiving Party's disclosure
of the Confidential Information pursuant to this
Section 13.2(b);
(iii) Made by the Receiving Party to the FDA as required in
connection with NDA and SNDA submissions for the
Product, provided that reasonable measures shall be
taken to assure confidential treatment of such
Information; or
(iv) Made by the Receiving Party to third parties as may
be necessary in connection with the development and
commercialization of the Product as contemplated by
this Agreement, including, without limitation,
subcontracting and sublicensing transactions in
connection therewith, provided that the Receiving
Party in question shall in each case obtain from the
proposed third party recipient a written
confidentiality undertaking containing
confidentiality obligations no less onerous than
those set forth in this Section 13.
(c) Public Announcements. No party hereto shall make any public
announcements regarding this Agreement or the transactions
contemplated hereby without the written consent of the other
party; provided, however, that each party shall be entitled to
disclose information to the extent required to comply with
applicable securities laws, including those relating to
initial public offerings. The
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disclosing party shall be solely responsible for the accuracy
and completeness of any such disclosure. Except as required by
law, no party to this Agreement shall use the name of the
other party in any public announcement, press release or other
public document without the prior written consent of such
other party.
(d) Notification. The Receiving Party shall notify the Disclosing
Party immediately, and cooperate with the Disclosing Party as
the Disclosing Party may reasonably request, upon the
Receiving Party's discovery of any loss or compromise of the
Disclosing Party's Confidential Information.
(e) Remedies. Each party agrees that the unauthorized use or
disclosure of any material Confidential Information by the
Receiving Party in violation of this Agreement will cause
severe and irreparable damage to the Disclosing Party. In the
event of any violation of this Section 13, the Receiving Party
agrees that the Disclosing Party shall be authorized and
entitled to obtain from any court of competent jurisdiction
injunctive relief, whether preliminary or permanent, as well
as any other relief permitted by applicable law. The Receiving
Party agrees to waive any requirement that the Disclosing
Party post a bond as a condition for obtaining any such
relief.
45. FORCE MAJEURE
(a) Definition. "Force Majeure" shall mean all events which are
beyond the control of the parties to this Manufacturing
Agreement, and which are unforeseen, unavoidable or
insurmountable, and which arise after the date hereof and
which prevent total or partial performance by a party. Such
events shall include earthquakes; typhoons; flood; fire; war;
failure or delay on land, water or air
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transportation; governmental prohibition or restriction;
strikes or other labor disputes; shortage of labor, fuel,
power or energy; technical failures; or any other instances
which cannot be foreseen, prevented or controlled, including
instances which are accepted as force majeure in general
international commercial practice. Without limitation on the
foregoing, Force Majeure shall include inability to obtain
suitable materials, components or equipment to sustain the
quality of the Product, or inability to manufacture, supply,
Market, distribute or sell the Product, on commercially
practicable terms.
(b) Suspension. If an event of Force Majeure occurs, a party's
contractual obligations affected by such an event under this
Manufacturing Agreement shall be suspended during the period
of delay caused by the Force Majeure and shall be
automatically extended, without penalty, for a period equal to
such suspension.
(c) Informing. The party claiming Force Majeure shall promptly
inform the other party in writing and shall furnish within 15
days thereafter sufficient proof of the occurrence and
duration of such Force Majeure. The party claiming Force
Majeure shall also use all reasonable endeavors to terminate
the Force Majeure.
(d) Consulting. In the event of Force Majeure, the parties shall
immediately consult with each other in order to find an
equitable solution and shall use all reasonable endeavors to
minimize the consequences of such Force Majeure.
46. TERM AND TERMINATION
(a) Term. This Manufacturing Agreement shall have immediate force
and effect on the date hereof and, unless earlier terminated
pursuant to this Section 15, shall remain in effect until
fifteen (15) years after the date of expiration of the Option
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Period under the Development Agreement, and thereafter unless
terminated by either party on two (2) years' prior notice
effective at the end of such fifteen (15) year period or any
anniversary thereof.
(b) Unilateral Termination by Either Party. Either party shall
have the right to terminate this Manufacturing Agreement,
immediately on written notice to the other, under any of the
following circumstances:
(i) if the other party has failed to make a payment due
under this Manufacturing Agreement or under the
Development Agreement, and such failure is not cured
within ten (10) days after written notice to the
party whose payment is due;
(ii) if the other party has committed a material breach of
any other provision of this Manufacturing Agreement
or the Development Agreement and such breach is not
cured within sixty (60) days after written notice to
the party in breach; or
(iii) if the other party shall file in any court or agency
pursuant to any statute or regulation of any state or
country, a petition in bankruptcy or insolvency or
for reorganization or for an arrangement or for the
appointment of a receiver or trustee of that party or
of its assets, or proposes a written agreement of
composition or extension of its debts, or shall be
served with an involuntary petition against it, filed
in any insolvency proceeding, and such petition shall
not be dismissed within sixty (60) days after the
filing thereof, or shall propose or be a party to any
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dissolution or liquidation, or shall make an
assignment for the benefit of its creditors.
(c) Leiras Termination Rights. Leiras shall have the further right
to terminate this Manufacturing Agreement immediately, on
written notice to Anthra, if (a) the Development Agreement has
been terminated by Leiras in accordance with Sections
18.3(a)(ii), 18.5 or 18.7, (b) there shall be a change of
ownership in Anthra such that fifty (50) per cent or more of
its shares of voting stock are owned or controlled by an
entity which is a competitor of Leiras or Berlex in the
Territory, or (c) in the event Berlex exercises its Option.
(d) Anthra Termination Right. Anthra shall have the further right
to terminate this Manufacturing Agreement immediately, on
written notice to Leiras, if (a) the Development Agreement has
been terminated by Anthra in accordance with Section 18.7
thereof, or (b) in the event Berlex exercises its Option.
(e) Moneys Due. Upon expiration or termination of this
Manufacturing Agreement any moneys accrued, due and payable by
one party to the other party hereunder shall be fully paid
within one (1) month.
(f) Leiras License. If Leiras terminates this Manufacturing
Agreement in accordance with Section 15.1 hereof, or Anthra
terminates the Manufacturing Agreement in accordance with
Section 15.2 hereof, then Leiras shall within thirty (30) days
after the effective date of such termination, grant to Anthra
or a third party designated by Anthra a nonexclusive perpetual
license under the Leiras' patents and technology required for
the manufacture of the Product in the Territory for sale in
the Territory to Anthra or a third party designated by Anthra,
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at a royalty equal to five percent (5%) of Net Sales of the
Product manufactured using such patents and technology,
payable for a period of ten years after the date of such
transfer, provided, however, that such royalty per unit of the
Product shall not exceed the difference between (i) the
weighted average unit Net Sales price in effect for sales of
the Product from Leiras to Anthra for the six (6) months prior
to the date of termination and (ii) the Net Sales price
charged to Anthra by such third party, as the case may be, and
provided further that the minimum payment to Leiras during the
first year of the license shall be an amount equal to all of
Leiras reasonable costs and expenses incurred by Leiras in
licensing the technology to Anthra or such third party. After
the date that a generic version of disodium clodronate shall
be marketed and sold in significant commercial quantities in
the Territory, no such royalty shall be payable; provided,
however, that Anthra shall reimburse all reasonable costs and
expenses incurred by Leiras in licensing such technology to
Anthra or such third party. Such technology license shall be
based on the assumption of use by the third party of machinery
and equipment, raw materials and reagents similar to those
used by Leiras. Leiras shall, upon Anthra's request, provide
not more than ten person-days of technical assistance to
Anthra or such third party in connection with such license.
(g) Survival. The provisions of Articles 4, 6 (with respect to the
Product supplied to Anthra by Leiras), 8, 12 (with respect to
actions commenced prior to expiration or termination of this
Manufacturing Agreement), 13, 16 and 17 and Sections 15.5,
15.6, 15.8, 16, 17 and 18 and this 15.7 shall survive the
expiration or termination of this Manufacturing Agreement.
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(h) Limitation of Liability. Termination under any of the
provisions of Section 15 shall be without prejudice to any
other rights or remedies for failure to meet obligations under
this Agreement, but in no event whatsoever shall Leiras or
Anthra be entitled to any compensation for loss of profits or
business, or for any other incidental, indirect or
consequential damages arising out of, or in connection with,
their respective obligations under this Manufacturing
Agreement. The foregoing limitation shall not apply to any
damages payable by any Leiras Indemnitee or Anthra Indemnitee
in connection with a suit, investigation, claim or demand
under Sections 4.5 or 4.6, respectively.
47. APPLICABLE LAW
The validity, interpretation and implementation of this Manufacturing
Agreement shall be governed by the internal laws of the State of New
York, without regard to the choice of law provisions thereof. The
parties hereto expressly exclude application hereto of the U.N.
Convention on Contracts for the International Sale of Goods.
48. ARBITRATION
Any controversy or claim arising out of or relating to this
Manufacturing Agreement, or the breach thereof, shall be settled by
arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association to be held in New York, New York, and
judgment upon the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof. There shall be three arbitrators
appointed. Anthra, on the one hand, and Leiras, on the other hand,
shall each appoint one such arbitrator, and the two arbitrators shall
appoint a third arbitrator. If the party-appointed arbitrators cannot
agree on the third arbitrator, the third arbitrator shall be appointed
in accordance
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with the Commercial Arbitration Rules of the American Arbitration
Association. All proceedings under this Section 17 shall be conducted
in English in New York, New York, or at such other location as the
parties may agree. All arbitration rulings and awards shall be final
and binding on the parties. The losing party shall bear the cost of
conducting the arbitration, but each party shall otherwise bear its own
expenses thereof, including, without limitation, its own legal fees.
49. COMPLIANCE WITH LAWS
Anthra shall, in the performance of its obligations under this
Agreement, comply and shall cause its Affiliates and sublicensees to
comply, with all applicable laws, rules, regulations, NDAs and SNDAs
relating to the Product.
50. MISCELLANEOUS
(a) Neither party may assign any of its rights and obligations
under this Manufacturing Agreement without the prior written
consent of the other party, except that Leiras may assign its
rights to another member of the Schering Group. Further,
Anthra may, without the prior written consent of Leiras,
assign its rights to another Anthra Affiliate, so long as (i)
such Affiliate assumes in writing satisfactory to Leiras all
of Anthra's obligations hereunder, (ii) such assignment is
valid only for the period of time during which such Affiliate
remains an Affiliate (as defined in Section 1.1 of this
Agreement) and such limitation is acknowledged in writing by
the Affiliate, and (iii) such assignment shall not release
Anthra from any of its obligations under this Agreement.
Anthra and such Affiliate shall execute and deliver to Leiras
such further documents as Leiras may reasonably
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require to confirm their compliance with the requirements
hereunder of any such assignment. Any assignment or transfer
in violation hereof shall be void.
(b) Any part or provision of this Manufacturing Agreement which
may be held for any reason to be illegal, invalid,
unenforceable in or in conflict with the applicable laws or
regulations shall be ineffective to the extent of such
illegality, invalidity, unenforceability or conflict, and
shall be replaced by the parties with a part or provision that
accomplishes, to the extent possible, the original commercial
purpose and economic benefit of such part or provision in a
valid and enforceable manner, without affecting, impairing or
invalidating the remaining provisions, which provisions shall
remain binding upon the parties hereto and in full force and
effect.
(c) This Manufacturing Agreement together with the Development
Agreement constitute the entire agreement between the parties
with respect to the subject matter hereof, supersede any prior
expression of intent or understanding relating hereto and may
only be modified or amended by a written instrument signed by
the authorized representatives of the parties.
(d) This Manufacturing Agreement does not designate either Leiras
or Anthra the agent, partner or legal representative of the
other for any purpose whatsoever, and the business conducted
by each party pursuant to this Manufacturing Agreement with
third parties shall be wholly at its own risk and account as
an independent contractor. Neither party is granted any right
or authority to assume or create any obligation or
responsibility, express or implied, on behalf of or in the
name of the other or to bind the other in any manner
whatsoever.
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(e) Failure or delay on the part of either party hereto to
exercise any right, power or privilege under this
Manufacturing Agreement shall not operate as a waiver thereof;
nor shall any single or partial exercise of any right, power
or privilege preclude any other future exercise thereof.
(f) All notices given by either party to the other shall be in
writing in English and sent by courier service delivered
letter, or by facsimile, cable or telex (copies of which are
to be subsequently forwarded as confirmation by courier
service delivered letter), the other party's address as
indicated below or any other address notified in lieu thereof.
All notices shall be effective upon receipt.
Leiras
To: Leiras Oy
Pansiontie 47
P.O. Box 415
Fin-20101 Turku
Finland
Attention: Legal Department
Telecopier No.: 011 358 2 333 2465
Anthra
To: Anthra Pharmaceuticals, Inc.
00 Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxxx, CEO
Telecopier No.: 0-000-000-0000
(g) Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed to be an original,
and both of which, taken together, shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
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LEIRAS OY
By:
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Name:
Title:
ANTHRA PHARMACEUTICALS, INC.
By:
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Name:
Title:
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