AGREEMENT
AND
AMENDMENT NO. 1 TO LICENSE AGREEMENT
DATED FEBRUARY 10, 1997
This Agreement and Amendment No. 1 to License Agreement dated as of
February 10, 1997 (the "Agreement") is made effective as of the 10th day of
February, 1997 by and between ALZA Corporation ("ALZA") and Therapeutic
Discovery Corporation ("TDC").
RECITALS
WHEREAS, ALZA and TDC have entered into that certain Development
Agreement dated as of March 10, 1993 (the "Development Contract") pursuant to
which ALZA performs research and development activities on behalf of TDC
directed toward the development of pharmaceutical products; and
WHEREAS, under the terms of the Development Contract, ALZA has performed
research and development activities on behalf of TDC directed toward the
development of a product, referred to by the parties as "TDC-4", for the
delivery of hydromorphone by means of ALZA's XXXX-Registered
Trademark- technology (the "Licensed Product"); and
WHEREAS, ALZA and TDC have entered into that certain License Option
Agreement dated as of March 10, 1993 (the "Option Agreement") pursuant to
which TDC granted ALZA an option to license any product accepted by TDC for
development under the Development Contract on a product-by-product and
country-by-country basis; and
WHEREAS, ALZA exercised its option to license the Licensed Product on a
worldwide basis effective as of February 10, 1997 and entered into a License
Agreement dated as of February 10, 1997 (the "Product License Agreement"), in
the form required under the Option Agreement, to memorialize ALZA's license
of the Licensed Product; and
WHEREAS, ALZA has entered into an agreement with Xxxxx Pharmaceutical
Company and its parent Xxxxx XX (collectively, "Xxxxx") for the continued
development and worldwide commercialization of the Licensed Product; and
WHEREAS, ALZA and TDC desire to amend the Product License Agreement to
reflect the agreement of the parties with respect to certain payments to be
made by ALZA to TDC under the Product License Agreement and to memorialize
certain other arrangements between the parties.
NOW, THEREFORE, in consideration of the foregoing and the agreements
contained herein, ALZA and TDC hereby agree as follows:
1. DEFINITIONS. Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to them in the Product License
Agreement.
2. AMENDMENTS TO SECTION 3.1 OF THE PRODUCT LICENSE AGREEMENT. The
first sentence of Section 3.1 of the Product License Agreement is hereby
deleted in its entirety and the following substituted therefor:
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3.1 PAYMENTS. In consideration of the grant of the license,
ALZA shall pay TDC royalties with respect to the Licensed Product as
follows:
(a) up to a maximum of 5% of Net Sales of the Licensed
Product in the Territory determined as follows: 2% of such Net Sales,
plus an additional 0.1% of such Net Sales for each full one million
dollars of Development Costs of the Licensed Product paid by TDC; plus
(b) up to a maximum of 50% of Sublicensing Revenues in
respect of sales of the Licensed Product in the Territory determined
as follows: 20% of such Sublicensing Revenues, plus an additional 1%
of such Sublicensing Revenues for each full one million dollars of
Development Costs of the Licensed Product paid by TDC.
3. EXCLUSIONS FROM SPECIAL ROYALTY PAYMENTS AND SUBLICENSING REVENUES.
ALZA and TDC hereby agree that, for purposes of the Product License
Agreement, the payments due to ALZA from Xxxxx in the first quarter of 1997
with respect to the Licensed Product shall not be included within the
definition of Special Royalty Payments or Sublicensing Revenues with respect
to the Licensed Product.
4. LICENSED PRODUCT CLINICAL SUPPLIES. The parties acknowledge that
substantial clinical supplies and other materials have been acquired by ALZA
in connection with the development of the Licensed Product and paid for by
TDC under the Development Contract. Certain of those supplies and other
materials are expected to be utilized by Xxxxx in the ongoing development of
the Licensed Product. TDC hereby grants to ALZA, and ALZA hereby accepts, the
right to use (i) all clinical supplies of the Licensed Product which have
been manufactured as of the date hereof under the Development Contract, and
(ii) all materials, goods and services (including supplies of hydromorphone,
placebos and comparator drugs to be used in clinical studies) which have been
purchased or manufactured for use under the development program for the
Licensed Product pursuant to the Development Contract (collectively, the
"Supplies"). TDC grants ALZA the right to use, and ALZA accepts, the
Supplies on an "AS-IS" and "WHERE-IS" basis. TDC EXPRESSLY DISCLAIMS ANY AND
ALL WARRANTIES WITH RESPECT TO THE SUPPLIES, WHETHER EXPRESS OR IMPLIED,
INCLUDING ANY WARRANTY OF TITLE, MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
5. MISCELLANEOUS. Except as otherwise expressly provided herein,
the terms of the Product License Agreement shall remain in full force and
effect. This Agreement may not be amended except by a writing signed by both
parties. This Agreement shall be governed by the laws of the State of
California as applied to residents of that state entering into contracts to
be performed in that state. The headings set forth at the beginning of the
various sections of this Agreement are for reference and convenience and shall
not affect the meanings of the provisions of this Agreement.
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IN WITNESS WHEREOF, ALZA and TDC have caused this Agreement to be
executed as of the date first set forth above by their duly authorized
representatives.
ALZA Corporation Therapeutic Discovery Corporation
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxx
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Xxxxx X. Xxxxxx Xxxx X. Xxxx
Senior Vice President and President and Chief Executive Officer
Chief Financial Officer
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