PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED PORTIONS, MARKED BY AN * AND [ ], HAVE BEEN
SEPARATELY FILED WITH THE COMMISSION.
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SUBLICENSE AGREEMENT
THIS SUBLICENSE AGREEMENT, effective as of the 20th day of November,
1997, between TITAN PHARMACEUTICALS, INC., a corporation organized under the
laws of the State of Delaware and having its principal office at 000 Xxxxxx
Xxxxx Xxxx., Xxxxx 000, Xxxxx Xxx Xxxxxxxxx, XX 00000 (hereinafter "TITAN"), and
NOVARTIS PHARMA A.G., a corporation organized under the laws of Switzerland and
having its principal office at Xxxxxxxxxxxx 00, XX 0000 Xxxxx, Xxxxxxxxxxx
(hereinafter "NOVARTIS").
WITNESSETH THAT:
WHEREAS, TITAN is the exclusive worldwide licensee of HOECHST XXXXXX
XXXXXXX, INC. ("HMRI"), under a License Agreement between TITAN and HMRI having
an Effective Date of December 31, 1996 (the "License Agreement"); and
WHEREAS, under such License Agreement, TITAN has rights with respect to
certain patents and patent applications, identified in Appendix A hereto, and
know-how relating to a compound known as Iloperidone; and
WHEREAS, NOVARTIS desires to obtain certain exclusive sublicenses from
TITAN under the aforesaid License Agreement, and TITAN is willing to grant to
NOVARTIS such sublicenses;
NOW, THEREFORE, in consideration of the covenants and obligations
expressed herein, and intending to be legally bound, the parties agree as
follows:
1. DEFINITIONS.
1.1 "HMRI" shall mean HOECHST XXXXXX XXXXXXX, INC.
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1.2 "TITAN" shall mean TITAN PHARMACEUTICALS, INC.
1.3 "NOVARTIS" shall mean NOVARTIS PHARMA A.G.
1.4 "AFFILIATE" shall mean any corporation, firm, partnership
or other entity, whether de jure or de facto, which directly or indirectly owns,
is owned by or is under common ownership with a party to this Sublicense
Agreement, or HMRI, to the extent of more than fifty percent (50%) of the equity
(or such lesser percentage which is the maximum allowed to be owned by a foreign
corporation in a particular jurisdiction) having the power to direct the affairs
of the entity and any person, firm, partnership, corporation or other entity
actually controlled by, controlling or under common control with a party to this
Sublicense Agreement or HMRI.
1.5 "COMPETITIVE INDUSTRY STANDARD LEVEL" shall mean PRODUCT
shall be marketed by or on behalf of NOVARTIS, its AFFILIATES or SUBLICENSEES in
the countries of the TERRITORY where PATENTS are issued and enforced with at
least the same diligence that NOVARTIS would use in marketing its own products
in such countries, in a manner consistent with the effort devoted by the
pharmaceutical industry to products having the same or similar potential value
of PRODUCT in those countries when PRODUCT is launched.
1.6 "COMPOUND" shall mean the chemical compound known as
Iloperidone, whose more specific chemical name is
1-[4-[3-[4-(6-fluoro-1,2-benzisoxazol-3-yl)-1-
piperidinyl]propoxy]-3-methoxyphenyl]ethanone, including any salts, hydrates,
solvates, and/or stereoisomers thereof, and only the metabolites listed in
Appendix B hereto, including any salts, hydrates, solvates and/or stereoisomers
of such metabolites.
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1.7 "EEA" shall mean the European Economic Area, which
consists of the EUROPEAN UNION and Iceland, Xxxxxxxxxxxx and Norway.
1.8 "EUROPEAN UNION" shall mean the member states of the
European Union, as may exist from time to time, which as of the date hereof
include Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland,
Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United
Kingdom.
1.9 "EXCLUSIVE" shall have the meaning specified in Section
2.1 hereof.
1.10 "FDA" shall mean the United States Food and Drug
Administration.
1.11 "FD&C ACT" shall mean the Federal Food, Drug and Cosmetic
Act (21 U.S.C. 301ff), as amended from time to time.
1.12 "FIELD" shall mean the treatment in humans of psychiatric
disorders, including psychotic disorders, and analgesia.
1.13 "IND" shall mean an Investigational New Drug Application.
1.14 "KNOW-HOW" shall mean all technical information and
know-how: (a) presently developed and owned or controlled by HMRI and its
AFFILIATES, (b) developed and owned or controlled by TITAN and its AFFILIATES
after the date of the License Agreement, and (c) developed and owned or
controlled by HMRI and its AFFILIATES, or TITAN and its AFFILIATES, after the
date hereof and included within this definition of "KNOW-HOW" by operation of
Section 2.3 hereof, which relates to COMPOUND or PRODUCT in the FIELD and which
constitutes a proprietary "trade secret" or other valid intellectual property
right under U.S. or other applicable law which is substantial, secret and
identifiable, including, without limitation,
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all biological, chemical, pharmacological, toxicological, clinical, regulatory,
analytical, quality control and manufacturing data and any other information
(whether technical or commercial) relating to COMPOUND or PRODUCT that may be
useful for the development, regulatory approval, manufacture and
commercialization of COMPOUND or PRODUCT.
1.15 "NDA" shall mean any and all applications (New Drug
Applications) submitted to the FDA under Sections 505, 507 or 512 of the FD&C
ACT and applicable regulations related to PRODUCT, including without limitation,
full NDAs, "paper" NDAs and abbreviated NDAs (ANDAs) and all amendments and
supplements thereto or equivalent applications in the EUROPEAN UNION.
1.16 "NET SALES" shall be calculated as follows: From the
gross invoice price of PRODUCT sold by NOVARTIS or its AFFILIATES or
SUBLICENSEES to independent, THIRD PARTIES in bona fide, arms-length
transactions there shall be subtracted, if not previously deducted in the amount
invoiced or received, (i) quantity and cash discounts actually allowed or taken,
(ii) freight, postage and shipping insurance allocated in accordance with
NOVARTIS' standard allocation procedure, (iii) customs duties and taxes, if any,
directly related to the sale, (iv) amounts repaid or credited by reason of
rejections, return of goods and retroactive price reductions mandated by or
granted in response to state, provincial or federal law or regulation and
specifically identifiable as relating to PRODUCT, (v) amounts incurred as a
result of governmental (or governmental agency) mandated rebate programs, (vi)
third party rebates and wholesaler chargebacks related to the sale of PRODUCT to
the extent actually allowed and (vii) as agreed by the parties in writing, any
other specifically identifiable amounts included in PRODUCT's gross
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sales that were or ultimately will be credited and that are substantially
similar to those listed hereinabove.
The computation of NET SALES shall not include sales between
or among a party and its AFFILIATES or SUBLICENSEES, except where such
AFFILIATES or SUBLICENSEES are end users. For purposes of this Sublicense
Agreement, sales of PRODUCT to independent distributors, wholesalers or other
parties who purchase and take title to PRODUCT are considered to be sales to
THIRD PARTIES. If PRODUCT is sold through intermediaries such as agents or
co-promoters who do not purchase and take title to PRODUCT, royalties shall be
due on NET SALES to THIRD PARTIES who purchase PRODUCT through such
intermediaries. It is agreed that there shall be no sales of COMPOUND to THIRD
PARTIES by or on behalf of NOVARTIS, its AFFILIATES or SUBLICENSEES. In the
event there are sales of COMPOUND to THIRD PARTIES by or on behalf of NOVARTIS,
its AFFILIATES or SUBLICENSEES, such sales shall be subject to the payment of
royalties by NOVARTIS to TITAN or HMRI (as the case may be) to the same extent
as payments of royalties are due on sales of PRODUCT pursuant to this Agreement.
1.17 "PATENTS" shall mean all patents and patent applications
set forth in Appendix A, including continuations, continuations-in-part,
divisions, patents of addition, reissues, re-examinations, renewals or
extensions thereof, along with supplementary protection certificates and other
administrative protection of any kind in the TERRITORY owned or controlled by
HMRI or its AFFILIATES to the extent they claim COMPOUND or PRODUCT, or use,
formulations or manufacture thereof, for use in the FIELD, but not any other
compound or use outside of the FIELD
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disclosed or claimed in those patents or patent applications. Any patent
relating to COMPOUND or PRODUCT for use in the FIELD which is issued during the
term of this Sublicense Agreement in any country of the TERRITORY shall
automatically be deemed as of the date of such issuance to be included in
PATENT, as defined hereunder.
1.18 "PRODUCT" shall mean any bulk or finished pharmaceutical
composition containing COMPOUND as the sole pharmaceutically active ingredient
for use in the FIELD.
1.19 "SEC" shall mean the United States Securities and
Exchange Commission.
1.20 "SUBLICENSEE" shall mean a THIRD PARTY (as defined below)
to whom a party sublicenses rights to manufacture and sell (or have manufactured
and sold) COMPOUND under PATENTS, but shall not include any THIRD PARTIES to
whom rights to manufacture COMPOUND have not been granted. Unless such party
grants to such THIRD PARTY the right to manufacture COMPOUND, the following
THIRD PARTIES shall not be considered SUBLICENSEES hereunder: agents,
distributors, wholesalers, subcontractors, co-marketers, co-promoters, partners
or joint venturers. SUBLICENSEES shall not include compulsory licensees as
described in Section 4.1(a).
1.21 "TERRITORY" shall mean all countries and territories of
the world except Japan; provided that any country(ies) in which this Sublicense
Agreement is terminated shall be removed from the scope of this definition.
1.22 "THIRD PARTY" shall mean any party other than a party to
this Sublicense Agreement or an AFFILIATE thereof.
2. GRANT.
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2.1 TITAN hereby grants to NOVARTIS an EXCLUSIVE sublicense in
the FIELD under the PATENTS (to the extent, but only to the extent, that such
patents or patent applications claim COMPOUND or PRODUCT or the manufacture,
formulation, or use thereof) and KNOW-HOW to develop, have developed, make, have
made, use, import, sell, offer for sale and have sold COMPOUND and PRODUCT in
the TERRITORY, subject to the terms and conditions of this Sublicense Agreement.
The foregoing sublicense shall include the right to sublicense, but only upon
HMRI's and TITAN's prior written consent, which consent shall not be
unreasonably withheld. Any such sublicense(s) shall impose upon SUBLICENSEE(S)
substantially the same terms and conditions as NOVARTIS assumes in this
Sublicense Agreement, except no such sublicense(s) shall be required to contain
obligations on the part of the SUBLICENSEE regarding payment of an upfront
license fee, milestone payments or the same or similar royalty rates. As used in
this Sublicense Agreement, the term "EXCLUSIVE" shall mean neither HMRI nor
TITAN or any of their respective AFFILIATES shall grant any other license to,
nor themselves exploit, the PATENTS and KNOW-HOW with respect to COMPOUND and
PRODUCT in the FIELD (unless otherwise specified herein) and be limited as
follows:
(a) With respect to all geographic areas in the
TERRITORY outside of the EEA, such sublicense shall be exclusive for the
duration and validity of the intellectual property rights constituting the
PATENTS and/or KNOW-HOW.
(b) With respect to all geographic areas in the
TERRITORY within the EEA, such sublicense shall be exclusive for the following
time periods:
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(i) For each of the countries within the EEA
where only PATENTS (and not KNOW-HOW) exist and are sublicensed to NOVARTIS
hereunder, the period of exclusivity for each such country shall be limited to
the duration of the relevant PATENTS in such country, provided that "PATENTS"
for purposes of the interpretation of this paragraph shall be limited to patents
existing, and patents issuing from patent applications existing, and patents
issuing from patent applications covering inventions existing as of the date of
the License Agreement;
(ii) For each of the countries within the
EEA where PATENTS and KNOW-HOW exist and are sublicensed to NOVARTIS hereunder,
the period of exclusivity for each such country shall be limited to the duration
of the relevant PATENTS in such country, provided that "PATENTS" for purposes of
the interpretation of this paragraph shall be limited to patents existing, and
patents issuing from patent applications existing, as of the date of the License
Agreement and, provided, further, that if the duration of such PATENTS is less
than ten (10) years from the date of first marketing of PRODUCT in the EEA but
the KNOW-HOW continues to be sublicensed hereunder, the duration of exclusivity
shall be for ten (10) years from the date of first marketing of PRODUCT in the
EEA; and
(iii) For each of the countries within the
EEA where KNOW-HOW (and not PATENTS) exists and is sublicensed to NOVARTIS
hereunder, the period of exclusivity for each such country shall be limited to
ten (10) years from the date of first marketing of PRODUCT in the EEA;
Thereafter, such sublicense within the EEA shall be on a nonexclusive
basis.
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(c) Notwithstanding the provisions of clause 2.1(b),
above, in the event that the TERRITORY (for whatever reason) does not include
all countries within the EEA, this Sublicense Agreement shall be deemed to be
amended in a reciprocal fashion to comply with applicable competition law
requirements, while preserving the EXCLUSIVE rights of the parties hereto to the
extent possible.
(d) For all purposes, such exclusivity shall be
subject to Section 2.3 hereof.
(e) HMRI and its AFFILIATES and licensed THIRD
PARTIES shall be entitled to utilize the PATENTS and KNOW-HOW in the FIELD
within the TERRITORY for the development and manufacture of COMPOUND and PRODUCT
for marketing, distribution and sale outside of the TERRITORY (where TITAN's
rights under the License Agreement have been terminated).
(f) TITAN and its AFFILIATES and SUBLICENSEES shall
also be entitled to utilize the PATENTS and KNOW-HOW in the FIELD within the
TERRITORY for the development and manufacture of COMPOUND and PRODUCT for
marketing, distribution and sale outside of the TERRITORY (in Japan and where
NOVARTIS' rights under this Sublicense Agreement have been terminated).
The duration of the sublicense granted by this Section 2.1 shall be
limited to the duration, on a country-by-country basis, of the intellectual
property rights which comprise the PATENTS and KNOW-HOW with respect to a
relevant country, provided that the termination of any portion of any
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sublicense shall be without prejudice to the requirement of NOVARTIS to pay
royalties pursuant to the terms of this Sublicense Agreement.
Notwithstanding the foregoing but subject to Sections 3.4 and 3.5
hereof, TITAN acknowledges and agrees that NOVARTIS shall as a matter of law
have the right to continue to use on a royalty-free, nonexclusive basis the
information which constitutes the PATENTS and KNOW-HOW on a country-by-country
basis in the TERRITORY for the FIELD after the PATENTS expire or cease to be
valid or enforceable and/or KNOW-HOW has entered into the public domain.
2.2 Subject to NOVARTIS' right of first negotiation under
Section 5.6 hereof and TITAN's right of first negotiation under Section 5.6 of
the License Agreement, with respect to uses or indications outside the FIELD,
HMRI shall have the right for either HMRI, its AFFILIATES or SUBLICENSEES to
develop, have developed, make, have made, use, import, sell, offer for sale and
have sold COMPOUND and PRODUCT for uses outside the FIELD.
2.3 Subject to Sections 2.3(a) and 2.3(b) below, HMRI and
TITAN also shall have the right to make and use COMPOUND or PRODUCT for the use
in the FIELD limited solely to further study, investigation or experimentation
purposes to further understand the category of compounds in the FIELD, how they
work and their comparison to other compounds. The reservations stated in this
provision shall be understood by the parties to comprise independent work by
HMRI, TITAN and their respective AFFILIATES, SUBLICENSEES or collaborators (who
are subject to obligations of nonuse and nondisclosure with respect thereto).
(a) In the event that the results of such work
described in the immediately preceding paragraph would be relevant to COMPOUND
or PRODUCTS with respect to the FIELD
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and could appropriately be included within the PATENTS and KNOW-HOW licensed
hereunder, and if HMRI or TITAN (as the case may be) has the legal right to do
so, all as determined in the reasonable discretion of HMRI or TITAN (as the case
may be), then if such work was conducted by HMRI, its AFFILIATES, SUBLICENSEES
or collaborators, HMRI shall offer such results to TITAN and, if such work was
conducted by TITAN, its AFFILIATES, SUBLICENSEES or collaborators, TITAN shall
offer such results to NOVARTIS. If such results are offered to TITAN by HMRI,
TITAN shall make such results available to NOVARTIS.
(b) If NOVARTIS notifies TITAN, within forty-five
(45) days after receiving such results (whether offered by HMRI to TITAN or
resulting from work conducted by TITAN, its AFFILIATES, SUBLICENSEES or
collaborators), that NOVARTIS wishes such results to be included within the
PATENTS and KNOW-HOW sublicensed hereunder, then with respect to results offered
by HMRI to TITAN, TITAN shall accept such results in writing, and such results
shall be included, as appropriate, within the PATENTS and KNOW-HOW sublicensed
hereunder. If such results are declined by NOVARTIS, and are not otherwise
accepted by TITAN if such results were offered to TITAN by HMRI, such results
may be used, assigned or licensed by HMRI or TITAN, as the case may be, subject
to provisions of the License Agreement.
(c) It is mutually understood by the parties that
independent experimental use of COMPOUND or PRODUCT or of results as described
in this Section 2.3 shall not be used in any way that could be damaging or
otherwise detrimental to COMPOUND or PRODUCT or their development, manufacture
or commercialization by TITAN, NOVARTIS or HMRI or their respective AFFILIATES
or SUBLICENSEES. Within twenty (20) days of HMRI's or TITAN's
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request, NOVARTIS shall provide to HMRI or TITAN, as the case may be, free of
charge reasonable quantities of COMPOUND or PRODUCT for such experimental use in
laboratory or animal studies. This does not prevent HMRI or TITAN from making
COMPOUND or PRODUCT for experimental use only in laboratory or animal studies.
2.4 TITAN grants to NOVARTIS a nonexclusive, worldwide
sublicense to make or use any analytical reference standards, intermediate or
metabolite of COMPOUND or PRODUCT not listed in Appendix B hereto which may be
claimed in PATENTS limited solely to making or using the COMPOUND or PRODUCT.
The foregoing sublicense shall include the right to sublicense, but only upon
HMRI's prior written consent, which consent shall not be unreasonably withheld.
Any such sublicense shall impose upon SUBLICENSEE(S) substantially the same
terms and conditions as NOVARTIS assumes in this Sublicense Agreement, except no
such sublicense(s) shall be required to contain obligations on the part of the
SUBLICENSEE regarding payment of an upfront license fee, milestone payments or
the same or similar royalty rates.
2.5 NOVARTIS shall promote, market and sell PRODUCT under a
registered NOVARTIS trademark(s) approved by HMRI, which approval shall not be
unreasonably withheld. NOVARTIS shall be responsible for the selection and
registration of such trademark(s) in all countries of the TERRITORY at its own
cost. In the event the sublicense granted hereunder is terminated in a
particular country, other than pursuant to Section 10.3 or as a result of
NOVARTIS' termination of this Sublicense Agreement for breach pursuant to
Section 10.5, and HMRI or its designee(s) exercises the right to promote, market
or sell PRODUCT in such country then upon HMRI's request (a) NOVARTIS shall
grant HMRI or its designee(s) a trademark license at a royalty
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to be negotiated in good faith (which royalty shall not be less than [ * ]
and no more than [ * ] on net sales of PRODUCT by HMRI and/or its designees) at
such time to use such trademark in connection with marketing PRODUCT in such
country, subject to reasonable quality control by NOVARTIS with respect to the
PRODUCT sold under this Section 2.5(a), or (b) HMRI or its designee(s) shall
select and register at HMRI's cost a trademark of its own in connection with the
marketing of PRODUCT in such country, provided such HMRI trademark is not in any
way confusingly similar to NOVARTIS' trademark. HMRI shall use an HMRI trademark
(rather than a NOVARTIS trademark) in promoting, marketing or selling PRODUCT in
any country that is a member of a free trade union or other economic grouping
(e.g., the EUROPEAN UNION, EEA, NAFTA, ASEAN and ANDEAN PACT countries) where
NOVARTIS is promoting, marketing or selling PRODUCT under a NOVARTIS trademark.
2.6 If NOVARTIS notifies TITAN in writing that NOVARTIS
(and/or its AFFILIATE(S)) is not willing or does not have the capability itself
or cannot enter into a Sublicense or other agreement (providing the necessary
expertise and resources) in country(ies) outside those covered by NAFTA and the
EUROPEAN UNION to: (a) develop COMPOUND or PRODUCT (as the case may warrant),
and (b) manufacture COMPOUND and/or market PRODUCT (as the case may warrant) at
a COMPETITIVE INDUSTRY STANDARD LEVEL at the date of PRODUCT approval in such
country(ies), then TITAN shall have the right to terminate the sublicense
granted by this Sublicense Agreement but only with respect to such country(ies),
unless the parties agree in writing to extend such time frame.
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2.7 If PRODUCT is not launched in each of the United States,
France and Germany, respectively, at a COMPETITIVE INDUSTRY STANDARD LEVEL by
NOVARTIS, its AFFILIATE and/or SUBLICENSEE within six (6) months after the date
of receiving the approvals necessary to commercialize PRODUCT in each of the
United States, Germany and France, respectively, NOVARTIS, TITAN and HMRI shall
review the progress of launch efforts, it being understood the parties, at the
request of either party, may review the progress of launch efforts prior to the
end of such six (6) month period. NOVARTIS shall keep TITAN informed on a
regular basis of the status of its launch efforts after receiving the approvals
necessary to commercialize PRODUCT in each of the United States, Germany and
France, respectively, until such time that launch is achieved in the United
States, Germany or France. If launch in each of the United States, France or
Germany, respectively, is not achieved within one (1) year after the date of
receiving the approvals necessary to commercialize PRODUCT in such country(ies)
(circumstances shall not include events of force majeure as defined in Section
13), or in any event within two (2) years after PRODUCT approval then the
sublicense granted by this Sublicense Agreement shall terminate, but only with
respect to the particular country where launch was not achieved within such one
(1) year or two (2) year time frame, as the case may be, unless the parties
agree in writing to extend such time frame (e.g., the parties shall discuss, in
such event, factors including but not limited to the necessity to obtain
approval of PRODUCT for its target indication(s)).
2.8 If an NDA or equivalent ex-U.S. regulatory approval in the
EUROPEAN UNION (Marketing Authorization Application via the Centralized
Procedure or marketing approvals
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for the member countries of the EUROPEAN UNION via the mutual recognition
procedure) for PRODUCT is not obtained within three (3) years of NOVARTIS' or
its AFFILIATE's or SUBLICENSEE's filing of an NDA or such other equivalent
ex-U.S. filing, and such failure is solely due to circumstances within NOVARTIS'
reasonable control, then the parties shall discuss the reasons and proposed
remedies for such failure in good faith; provided, however, that if the parties
are unable to agree on any such remedies, TITAN shall have the right to
terminate the sublicense granted by this Sublicense Agreement, but only with
respect to the United States or the EUROPEAN UNION where such approval was not
obtained, unless the parties agree in writing to extend such time frame. If,
however, NOVARTIS, TITAN and HMRI determine that such failure is due to
circumstances beyond the reasonable control of NOVARTIS (including without
limitation delays on the part of the regulatory agencies), the three (3) year
period shall be extended to take into account such circumstances, the duration
of any such extension to be mutually agreed.
2.9 Subject to the provisions of Section 2.9(d), TITAN shall
not be obligated to refund any upfront license fees and milestone payments paid
to TITAN with respect to any country(ies) which cease to be included within the
TERRITORY, and in the event that (i) TITAN, HMRI or their respective
AFFILIATE(S) or SUBLICENSEE(S) elects to commercialize PRODUCT or COMPOUND in
such country(ies) and (ii) NOVARTIS, its AFFILIATE(S) or SUBLICENSEE(S) has an
NDA filing in the United States or an equivalent filing in the EUROPEAN UNION,
then in consideration for use of any IND, NDA or other governmental approval or
associated developmental work held or owned by NOVARTIS related to COMPOUND or
PRODUCT:
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(a) At TITAN's request, and subject to Sections 6.3
and 11.5 hereof, NOVARTIS shall license or otherwise make available under
applicable law the benefit of such approvals or work to TITAN or an AFFILIATE or
THIRD PARTY designated by TITAN (which third party could be HMRI), who shall
thereafter have the rights to develop, register, manufacture, market and sell
COMPOUND and PRODUCT in such country(ies) utilizing such approvals or work, and
TITAN (or such AFFILIATE or THIRD PARTY) shall pay to NOVARTIS a royalty to be
negotiated in good faith at the time TITAN exercises such option, on net sales
of PRODUCT by TITAN or its designees in such country to equitably recognize the
value added by NOVARTIS to COMPOUND and/or PRODUCT through its development
efforts. Such royalty shall not be greater than [ * ] on net sales of PRODUCT by
TITAN or its designees. Upon expiration of PATENT in such country, only the
royalty paid to NOVARTIS for HMRI's and/or TITAN's use of the NOVARTIS trademark
under Section 2.5 shall be paid to NOVARTIS for so long as such trademark is
utilized. If a trademark license has not been granted to HMRI or TITAN in such
country, no royalty shall be paid to NOVARTIS upon expiration of PATENT.
(b) TITAN shall share equally with NOVARTIS any
upfront license fees, milestone payments or other payments such as prepaid
royalties received from a THIRD PARTY in connection with the exercise of such
option only. If NOVARTIS has not paid to TITAN the upfront license fee and all
of the milestone payments provided for in Sections 3.1(a) through (c), then
NOVARTIS' share of the amount shall be multiplied by a fraction, the numerator
of which is equal to the total of the payments that have been made by NOVARTIS
to TITAN under Sections 3.1(a) through (c), and the denominator of which is
equal to the total of the payments that
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NOVARTIS otherwise would have been required to pay to TITAN under Sections
3.1(a) through (c) had the sublicense not been terminated.
(c) Notwithstanding anything contained herein to the
contrary, TITAN shall not be required to pay to NOVARTIS a royalty on sales of
PRODUCT that, when added to the royalty payments for a license under the
NOVARTIS trademark that HMRI and/or TITAN may be required to pay to NOVARTIS
under Section 2.5, exceeds in the aggregate [ * ].
(d) If the circumstances leading up to the
termination of the Sublicense Agreement pursuant to Section 2.8 are due to any
misrepresentations, omissions (of information owned or controlled by HMRI or its
AFFILIATES or TITAN or its AFFILIATES as of the date hereof) or falsifications
with respect to such KNOW-HOW, information or data or fraud by HMRI or its
AFFILIATES or TITAN or its AFFILIATES, then subject to the following sentence,
TITAN shall repay to NOVARTIS, within ninety-five (95) days of such termination,
that portion of the upfront license fee and milestone payments TITAN had
received from NOVARTIS up to the date of such termination (including in the form
of NOVARTIS' purchase of TITAN convertible preferred stock). In the case of
misrepresentations, omissions (of information owned or controlled by HMRI or its
AFFILIATES as of the date hereof) or falsifications with respect to such
KNOW-HOW, information or data or fraud only by HMRI or its AFFILIATES, and a
termination of the License Agreement pursuant to Section 2.5 of the License
Agreement, TITAN shall be obligated to make the foregoing repayments to NOVARTIS
if, and only if, HMRI has repaid the upfront license fee and milestone payments
to TITAN under Section 2.6(d) of the License Agreement.
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2.10 In the event NOVARTIS or a SUBLICENSEE intends to seek a
co-promotion or co-marketing partner for PRODUCT in the United States, NOVARTIS
shall notify TITAN thereof in writing. TITAN shall then notify HMRI thereof, and
HMRI shall have a right of first negotiation with NOVARTIS or the SUBLICENSEE on
such a collaboration. If HMRI exercises its right of first negotiation, then
HMRI and NOVARTIS or the SUBLICENSEE shall negotiate in good faith for a period
of ninety (90) days from the date of notification by TITAN to HMRI. If the
negotiating parties are unable to enter into a separate definitive written
agreement regarding such collaboration by the end of such ninety (90) day
period, NOVARTIS or the SUBLICENSEE shall be free to enter into a collaboration
with any THIRD PARTY subject to all other terms of this Sublicense Agreement and
shall have no further obligation to negotiate with HMRI. For purposes of this
Section 2.10, the term "co-promotion or co-marketing partner" will not include
an independent contract field sales force that may be engaged by NOVARTIS or a
SUBLICENSEE.
3. PAYMENTS AND ROYALTIES.
3.1 As consideration for the sublicenses granted to NOVARTIS
by TITAN under this Sublicense Agreement, NOVARTIS shall make the following
payments to TITAN:
(a) An upfront license fee of Twenty Million Dollars
(U.S. $20,000,000) shall be paid by NOVARTIS to TITAN in cash within ten (10)
business days of both parties' execution of this Sublicense Agreement. TITAN
acknowledges that, as of the effective date of this Sublicense Agreement,
NOVARTIS has already paid to TITAN Five Million Dollars (U.S. $5,000,000) of
such Twenty Million Dollar (U.S. $20,000,0000) amount; therefore, as of the
effective date of this Sublicense Agreement, NOVARTIS is obligated to pay to
TITAN the
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remaining Fifteen Million Dollars (U.S. $15,000,000) of such Twenty Million
Dollar (U.S. $20,000,000) upfront license fee. Up to Five Million Dollars (U.S.
$5,000,000) of such Twenty Million Dollar amount may, at NOVARTIS' option, be
paid in the form of an equity investment made by NOVARTIS in TITAN convertible
preferred stock at a price per share as provided for in the Convertible
Preferred Stock Agreement between TITAN and NOVARTIS of even date herewith and
attached hereto as Appendix C and incorporated herein by reference. NOTE: the
immediately preceding sentence will be deleted from this Sublicense Agreement if
the parties do not enter into the Convertible Preferred Stock Agreement referred
to above simultaneously with the execution of this Sublicense Agreement. The
Twenty Million Dollar payment provided for herein shall, unless otherwise
expressly provided for herein, be non-refundable.
(b) A first development milestone payment of [ * ]
shall be payable by NOVARTIS to TITAN upon submission by TITAN to NOVARTIS of an
invoice therefor substantially in the form of the sample invoice attached hereto
as Appendix D (the "Invoice"), one time only upon the first NDA Filing (based on
a full and complete regulatory package and for these purposes not to include an
ANDA or "Paper" NDA) for PRODUCT in the FIELD in the United States (New Drug
Application) or the Initial Filing in Europe (Marketing Authorization
Application via the Central Procedure, or the mutual recognition procedure) by
NOVARTIS, its AFFILIATE or SUBLICENSEE. As used in this Section, "NDA Filing" or
"Initial Filing in Europe" (as the case may be) shall mean the notification in
writing to NOVARTIS, its AFFILIATE or SUBLICENSEE from the FDA or an equivalent
EUROPEAN UNION regulatory authority (via the Centralized Procedure or the mutual
recognition procedure) that the NDA or Initial
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Filing in Europe (as the case may be) is sufficiently complete to permit a
substantive review. Such milestone payment shall be paid in cash by NOVARTIS
directly to HMRI within seven (7) business days of the date of such first
filing, and NOVARTIS shall notify TITAN of such payment concurrently with such
payment to HMRI. The [ * ] payment provided for herein shall, unless otherwise
expressly provided for herein, be non-refundable.
(c) Following prior receipt by NOVARTIS of TITAN's
Invoice therefor, a second development milestone payment of [ * ] which shall be
payable one time only by NOVARTIS to HMRI as follows: (i) [ * ] shall be paid in
cash by NOVARTIS directly to HMRI, within seven (7) business days of receipt by
NOVARTIS, its AFFILIATE or SUBLICENSEE of the FDA approval letter or the
regulatory agency for the EUROPEAN UNION (Marketing Authorization via the
Centralized Procedure or mutual recognition procedure), that PRODUCT is approved
for marketing and commercialization by NOVARTIS , its AFFILIATE or SUBLICENSEE
(or their designee) for a major indication having an approval comparable to the
principal indication(s) of leading competing products in the FIELD, and NOVARTIS
shall notify TITAN of such payment concurrently with such payment to HMRI; and
(ii) [ * ] shall be paid in cash by NOVARTIS directly to HMRI within six (6)
months after receipt of such notification, and NOVARTIS shall notify TITAN of
such payment concurrently with such payment to HMRI. The [ * ] payment provided
for herein shall, unless otherwise expressly provided for herein, be
non-refundable.
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(d) NOVARTIS shall notify TITAN in writing thirty
(30) business days prior to NOVARTIS' estimated achievement of each milestone
event described in Sections 3.1(b) and 3.1(c)(i) above. Upon the receipt of such
notification, TITAN shall send NOVARTIS an Invoice for the milestone payment due
as a result of the achievement of such milestone event, and NOVARTIS shall make
each such payment within seven (7) business days of the achievement of the
milestone event for which such payment is due.
3.2 (a) Unless TITAN instructs NOVARTIS in writing otherwise,
all cash payments by NOVARTIS to TITAN (including, without limitation, upfront
payments, milestone payments, and royalties) shall be made by bank wire transfer
as follows:
Bank of America-San Francisco
ABA #000000000
Titan Pharmaceuticals, Inc.
Account #0000-0-00000
(b) All cash payments by NOVARTIS to HMRI (including,
without limitation, milestone payments and royalties) shall be made by bank wire
transfer as follows:
Citibank-New York
ABA#000000000
Hoechst Xxxxxx Xxxxxxx, Inc.
Account #-00000000
(c) At least two (2) business days prior to the
planned wire transfer to either of the above accounts, NOVARTIS shall notify
TITAN's Chief Financial Officer by facsimile (000) 000-0000, Attention: Mr.
Xxxxxx Xxxxxxx) and HMRI's Treasurer (if applicable) by facsimile (000-000-0000,
Attention: Cash Manager) of the amount and date the cash shall be transferred.
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(d) In the event of a late payment hereunder by
NOVARTIS to TITAN (or HMRI, as the case may be), NOVARTIS shall pay to TITAN (or
HMRI, as the case may be) interest based on the prime rate as stated in The Wall
Street Journal, New York edition, on the date such payment is due (or the
immediately preceding business date if such payment date is not a business date)
plus two percent (2%) on the outstanding balance until such balance, including
interest, is paid in full to TITAN. The acceptance of such late payment shall
act as a waiver of any rights TITAN may have hereunder due to a breach by
NOVARTIS relating solely to such payment being made late.
3.3 As consideration for the sublicense granted to NOVARTIS in
this Sublicense Agreement, NOVARTIS shall pay to TITAN, in those countries
where, and for the period, PATENTS claiming a priority date of May 19, 1989 and
December 29, 1989 in a particular country in the TERRITORY for which a patent
had been granted validly claiming Iloperidone or the manufacture, formulation or
the use thereof for use in the FIELD exist: (a) a [ * ] royalty on annual NET
SALES of PRODUCT in the TERRITORY up to [ * ], and (b) a [ * ] royalty on annual
NET SALES of PRODUCT in the TERRITORY in excess of [ * ]; in each case on
NOVARTIS', its AFFILIATES' and SUBLICENSEES' annual NET SALES of PRODUCT in the
TERRITORY.
3.4 (a) In order to spread royalty payments hereunder over a
sufficient period of time, in each of those countries in the TERRITORY where
PATENTS claiming a priority date of May 19, 1989 and December 29, 1989 in a
particular country for which a patent had been granted
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validly claiming Iloperidone or the manufacture, formulation or use thereof for
use in the FIELD have expired, NOVARTIS' obligations to pay royalties for use of
PATENTS in such country shall cease, and NOVARTIS and/or any of its SUBLICENSEES
shall pay directly to HMRI a royalty for KNOW-HOW not relating to manufacturing
(whether or not such KNOW-HOW continues as a valid intellectual property right
or is in the public domain) of [ * ] on NOVARTIS', its AFFILIATES' and any
SUBLICENSEES' annual NET SALES of PRODUCT in each such country for a period of
ten (10) years after the expiration of the final remaining PATENT in each such
country. After the end of such ten (10) year period, no further royalties
arising from sales of PRODUCT in such country shall be due to HMRI and NOVARTIS
shall be entitled to continue to use the KNOW-HOW on a fully-paid, irrevocable
basis in accordance with Section 10.3.
(b) In the event a THIRD PARTY's generic version of
Iloperidone is actively marketed in a process patent country (that is, any
country in which only protection in relation to processes for the manufacture of
Iloperidone has been obtained and not protection for Iloperidone as a new
chemical entity per se) in the TERRITORY where a PATENT(s) claiming a priority
date of May 19, 1989 and December 29, 1989 has been granted validly claiming
Iloperidone or the manufacture, formulation or use thereof for use in the FIELD
exists, then subject to Sections 3.4(c) and (d) below, the royalty rate that
NOVARTIS shall pay to TITAN on NOVARTIS' or its AFFILIATE's or SUBLICENSEE's
annual NET SALES of PRODUCT in that process patent country shall be [ * ] until
such PATENT(s) expires, provided:
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(i) NOVARTIS has obtained, or has made every effort
to obtain, the maximum allowable period of exclusivity to
which it is entitled based on PRODUCT's registration data in
that process patent country to the extent such exclusivity is
available; and
(ii) The PARTIES and HMRI, in accordance with Article
8 of this Sublicense Agreement, will implement an appropriate
strategy for addressing the commercialization of Iloperidone
by said THIRD PARTY. Unless otherwise agreed to by the
PARTIES, NOVARTIS shall at its sole cost be obligated to
diligently enforce PATENT(s) until there is a binding,
unappealable judicial determination as to whether the
manufacture, formulation or use of such generic version of
Iloperidone infringes PATENT(s) or until it is demonstrated to
the satisfaction of both PARTIES that PATENT(s) are not being
infringed in such country
(c) If it is demonstrated to the satisfaction of both PARTIES.
or the binding, unappealable judicial determination under Section 3.4(b)(ii)
holds that PATENT(s) are not being infringed in such process patent country, the
royalty rate that NOVARTIS shall pay to TITAN on NOVARTIS' or its AFFILIATE's or
SUBLICENSEE's annual NET SALES of PRODUCT in that process patent country shall
continue to be [ * ] until such PATENT(s) expires.
(d) If the binding, unappealable judicial determination under
Section 3.4(b)(ii) holds that PATENT(s) are being infringed in such process
patent country, NOVARTIS shall take reasonable steps to have enforced such
determination. If as a result, the commercialization of Iloperidone by the THIRD
PARTY in that country is discontinued:
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(i) the royalty rate(s) that NOVARTIS shall pay to
TITAN on NOVARTIS' or its AFFILIATE's or SUBLICENSEE's annual
NET SALES of PRODUCT in that process patent country shall be,
commencing on the later of: (A) the date such binding,
unappealable judicial determination is rendered, and (B) the
date (if any) specified in such determination that
commercialization of such THIRD PARTY generic version of
PRODUCT is to be discontinued, those royalty rates provided
for in Section 3.3 until such PATENT(s) expires; and
(ii) NOVARTIS shall repay to TITAN, within thirty
(30) days after the later of: (A) the date such binding,
unappealable judicial determination was rendered, and (B) the
date (if any) specified in such determination that
commercialization of such THIRD PARTY generic version of
PRODUCT is to be discontinued, an amount equal to the
difference between the royalties that NOVARTIS would have paid
to TITAN under Section 3.3, and the amount of royalties that
NOVARTIS actually paid to TITAN at the [ * ] rate, for the
period commencing on the date the royalty rate for that
process patent country was reduced to [ * ] pursuant to
Section 3.4(b), and ending on the later of: (A) the date such
binding, unappealable judicial determination was rendered, and
(B) the date (if any) specified in such determination that
commercialization of such THIRD PARTY generic version of
PRODUCT is to be discontinued.
(e) After PATENT(s) in any process patent country expires,
NOVARTIS and/or its SUBLICENSEE shall pay directly to HMRI royalties as provided
for in Section 3.4(a).
3.5 As consideration for the sublicense granted to NOVARTIS
under this Sublicense Agreement in those countries in the TERRITORY for which
(a) a PATENT application
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for COMPOUND or PRODUCT is pending or (b) no PATENT application has been filed
or (c) PATENTS have been abandoned or been held invalid or unenforceable by a
decision of a court or tribunal of competent jurisdiction from which no appeal
is or can be taken (collectively, "Non-Patent Countries"), NOVARTIS shall pay to
TITAN, on a country-by-country basis, a [ * ] royalty for KNOW-HOW not relating
to manufacturing (whether or not such KNOW-HOW continues as a valid intellectual
property right or is in the public domain) on NOVARTIS', its AFFILIATES' and any
SUBLICENSEES' annual NET SALES of PRODUCT in the Non-Patent Countries for a
period of five (5) years from the date of the first commercial sale of PRODUCT
in each such country by NOVARTIS, its AFFILIATES or SUBLICENSEES. After the end
of such five (5) year period, no further royalties arising from sales of PRODUCT
in such country shall be due. However, with respect to Section 3.5(a) or (b), if
at any time during or after such five (5) year period a PATENT for COMPOUND or
PRODUCT is issued in such country, subject to Section 3.4, NOVARTIS shall pay to
TITAN, from the date the PATENT was issued, the same royalties as provided for
in Sections 3.3(a) and (b) above. Upon expiration of NOVARTIS' obligation to pay
a royalty under such PATENT, notwithstanding Section 3.4, a [ * ] royalty for
KNOW-HOW not relating to manufacturing (whether or not such KNOW-HOW continues
as a valid intellectual property right or is in the public domain), on NET SALES
of PRODUCT in such country, shall be paid by NOVARTIS and/or any of its
SUBLICENSEES directly to HMRI for a period of five (5) years after which
NOVARTIS shall be entitled to continue to use the KNOW-HOW on a fully-paid,
irrevocable basis in accordance with Section 10.3.
4. COMPULSORY LICENSES AND THIRD PARTY LICENSES.
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4.1 (a) In the event that during the term of this Sublicense
Agreement a governmental agency in the TERRITORY grants or compels HMRI and/or
TITAN to grant a license to any THIRD PARTY for COMPOUND or PRODUCT in a
country(ies), it is the intent of the parties that NOVARTIS not be placed at a
competitive disadvantage as a result of a lower royalty rate being granted to a
THIRD PARTY compulsory licensee. Therefore, in the event TITAN or HMRI is
compelled to grant a license to a THIRD PARTY, TITAN, NOVARTIS and HMRI will
meet to discuss in good faith equitable arrangements, which could include
adjustments to NOVARTIS' original royalty rates in Section 3.3 of this
Sublicense Agreement which are to be paid on NET SALES of PRODUCT in such
country, to accomplish the intent of TITAN and NOVARTIS set forth above. In such
discussions, consideration will be given to TITAN's obligations to HMRI under
Section 4.1(a) of the License Agreement.
(b) If a governmental authority in a country in the
TERRITORY imposes a maximum royalty rate, such that lower royalty rates than
would otherwise apply under this Sublicense Agreement are mandated in such
country, then the royalty rates provided for herein shall be reduced to equal
such lower rates for sales of PRODUCT in such country for the period such lower
royalty rate is required by any governmental authority and shall cease when
NOVARTIS' royalty payment obligations cease under this Sublicense Agreement.
4.2 If, during the term of this Sublicense Agreement, HMRI and
NOVARTIS agree that a patent(s) of a THIRD PARTY exists in the TERRITORY
covering the manufacture, use or sale of COMPOUND or PRODUCT, and if it should
prove, in the reasonable judgment of NOVARTIS and HMRI, impractical or
impossible for NOVARTIS or its AFFILIATES or
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SUBLICENSEES to continue the activity or activities sublicensed hereunder in the
FIELD without obtaining a royalty-bearing license from such THIRD PARTY under
such patent(s) or if NOVARTIS and HMRI otherwise agree it is desirable for HMRI
to acquire any THIRD PARTY patent or license in connection with the development
or manufacture of COMPOUND or PRODUCT covered by PATENTS in the TERRITORY, then
in either case the provisions of Section 8.8(c) shall apply.
4.3 If, after attempting in good faith to resolve the issue
relating to licensing THIRD PARTY patents in Section 4.2 between themselves,
NOVARTIS and HMRI are unable to agree within ninety (90) days as to whether it
is impracticable or impossible for NOVARTIS , its AFFILIATES or SUBLICENSEES to
continue the activity or activities sublicensed hereunder without obtaining a
royalty-bearing license from a THIRD PARTY, the issue shall be submitted to a
disinterested, competent and experienced patent attorney reasonably acceptable
to both NOVARTIS and HMRI for resolution. If NOVARTIS and HMRI cannot agree on
the selection of such patent attorney, then each party shall select a patent
attorney and the selected patent attorneys shall select a mutually acceptable
patent attorney who will determine whether such THIRD PARTY rights materially
inhibit NOVARTIS' ability to manufacture, distribute or sell COMPOUND or
PRODUCT. The compensation to, and expense of such patent attorney shall be borne
by the party whose position is not upheld by such patent attorney (that is, for
example, if the patent attorney determines that such THIRD PARTY rights do not
materially inhibit NOVARTIS' ability to manufacture, distribute or sell COMPOUND
or PRODUCT, then the costs of such patent attorney shall be borne by NOVARTIS).
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5. DEVELOPMENT.
5.1 Upon the signing of this Sublicense Agreement, NOVARTIS
shall have full legal and financial responsibility for all costs that are
incurred and all activities that are undertaken after the signing of this
Sublicense Agreement, which are related to development, safety and required
periodic reporting to the FDA and equivalent ex-U.S. regulatory agencies,
marketing, regulatory approvals, price registrations, and other activities
required by NOVARTIS or its SUBLICENSEE(S) (or their respective agents or
distributors) to obtain appropriate government approvals for, and to
commercialize, COMPOUND and PRODUCT in the TERRITORY. Other than as expressly
provided for in Section 5.4, NOVARTIS shall not assume, nor shall NOVARTIS be
liable for, any costs or activities (whether scientific, financial or otherwise)
relating to the COMPOUND or PRODUCT that were incurred or undertaken prior to
the signing of this Sublicense Agreement (including without limitation any
costs, expenses, damages, losses, fines, penalties or the like that may be
awarded or assessed after the signing of this Sublicense Agreement, but which
arise out of events and activities that occurred prior to the signing of this
Sublicense Agreement).
5.2 Provided that the AFFILIATES, SUBLICENSEES and other THIRD
PARTIES agree to substantially the same terms of confidentiality in Section 6.4
hereof, NOVARTIS may appoint such AFFILIATES, SUBLICENSEE(S) and other THIRD
PARTIES to perform any and all development activities necessary to obtain
government approvals for PRODUCT in the TERRITORY. The appointment of any
SUBLICENSEE shall require HMRI's prior written consent, which consent shall not
be unreasonably withheld.
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5.3 NOVARTIS shall, in a manner consistent with the effort
NOVARTIS devotes to its own products having the same or similar potential value
as PRODUCT, exercise its reasonable efforts and diligence in developing and
commercializing PRODUCT, and in undertaking those investigations and actions
required to obtain appropriate governmental approvals to manufacture COMPOUND
and market PRODUCT in the TERRITORY. All such activity shall be undertaken at
NOVARTIS' expense. TITAN shall arrange with HMRI to provide assistance or
consultation at NOVARTIS' expense in support of the development of COMPOUND or
PRODUCT, but HMRI in its discretion may limit such assistance and consultation.
5.4 All direct costs incurred by, or on behalf of, TITAN
relating to the development and registration of COMPOUND and PRODUCT in the
TERRITORY will be reimbursed to TITAN by NOVARTIS within thirty (30) days of
execution by both parties of this Sublicense Agreement. The parties agree that
direct costs incurred by or on behalf of TITAN through August, 1997 are
approximately one million seven hundred thousand dollars ($1,700,000).
Additional direct costs estimated to be incurred by or on behalf of TITAN
through date of execution of the Heads of Agreement between the parties dated
October 21, 1997, are approximately three hundred thousand dollars ($300,000).
Additional direct costs estimated to be incurred by or on behalf of TITAN in the
period from the date of the Heads of Agreement until the effective date of this
Sublicense Agreement will be determined by the scope of that part of the Phase
III clinical program for PRODUCT that was initiated by TITAN prior to the date
hereof and called "Clinical Protocol 300", but will not exceed one million
dollars ($1,000,000). The PARTIES further agree that:
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(a) TITAN will be informed by NOVARTIS on a timely
and regular basis of the development, registration and commercialization of
COMPOUND and PRODUCT in the TERRITORY, and will have an opportunity to regularly
meet with NOVARTIS and provide input into the development and registration
process, and
(b) all of TITAN's contractual obligations to THIRD
PARTIES involved in the development and registration process for the COMPOUND
and PRODUCT (including Contract Research Organizations (CROs) existing as of the
date of this Sublicense Agreement, which CROs are identified in Appendix E),
will be honored to the extent they are not inconsistent with NOVARTIS' Standard
Operating Procedures. However, if any such contractual obligation is terminated
by or at the request of NOVARTIS, NOVARTIS will be responsible for the payment
of any amounts that may be due as a result of such termination.
(c) NOVARTIS shall be solely responsible for
negotiation of contracts with any CROs and other organizations it desires to
work on development activities relating to COMPOUND and/or PRODUCT and NOVARTIS
shall bear all legal and financial responsibility under such contracts.
5.5 Any inventions or discoveries or improvements which arise
from NOVARTIS', its AFFILIATES' or SUBLICENSEES' work relating to the
development and/or manufacture of the COMPOUND and/or PRODUCT shall be owned by
NOVARTIS , but shall be licensed to HMRI, at HMRI's option on a worldwide,
nonexclusive, perpetual basis, at a license fee and/or royalty to be negotiated
at such time. Furthermore, it is agreed that NOVARTIS and TITAN's sublicensee
for Japan (if any) shall license to each other, for use in the other party's
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TERRITORY in the FIELD, on a non-exclusive royalty-free basis, any discoveries,
improvements or inventions relating to COMPOUND and PRODUCT, and TITAN will
require such reciprocal rights for NOVARTIS from TITAN's sublicensee for Japan
(if any). To the extent permitted under the License Agreement, NOVARTIS shall
have the right to license or sublicense, as the case may be, its discoveries,
improvements or inventions.
5.6 (a) In the event uses or indications for COMPOUND outside
the FIELD are identified by HMRI, TITAN or NOVARTIS, NOVARTIS shall notify TITAN
of such other uses or indications if identified by NOVARTIS, and TITAN shall
notify NOVARTIS of such other uses or indications if identified by HMRI or
TITAN. If so desired by NOVARTIS, TITAN shall transfer to NOVARTIS, TITAN's
right of first negotiation under Section 5.6 of the License Agreement, for a
separate license from HMRI to develop and commercialize such other uses and
indications under terms to be negotiated in good faith at such time. Such right
of first negotiation shall mean that HMRI shall offer to NOVARTIS the right to
develop and commercialize such uses and indications under a separate license,
the financial terms of which may be no less favorable than the financial terms
provided for in the License Agreement, except that NOVARTIS shall not be
required to pay to HMRI or TITAN any upfront license fees or milestone payments.
If TITAN has transferred to NOVARTIS such right of first negotiation, HMRI and
NOVARTIS shall negotiate in good faith for a period of ninety (90) days and, if
the parties are unable to enter into a separate definitive written agreement
regarding such license by the end of such ninety (90) day period, HMRI or an
AFFILIATE shall be free to develop and commercialize such other use or
indication itself or to enter
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into a license or other agreement with TITAN or a THIRD PARTY, and shall have no
further obligations to negotiate with NOVARTIS or further license obligations
with respect thereto.
(b) If NOVARTIS acquires the right to develop and
commercialize a use or indication outside the FIELD for the COMPOUND pursuant to
Section 5.6(a), this Sublicense Agreement shall be amended by the parties to
include such other use or indication, such that the FIELD will be expanded to
include such other use or indication, and NOVARTIS will be obligated to develop
and commercialize such other use or indication in the TERRITORY to the extent
required under this Sublicense Agreement.
(c) To the extent TITAN acquires the right to develop
and commercialize a use or indication outside the FIELD for the COMPOUND under
the License Agreement, such other use or indication will be offered first to
NOVARTIS for the TERRITORY. If NOVARTIS accepts such offer, the parties will
negotiate in good faith an amendment to this Sublicense Agreement to include
such other use or indication, such that the FIELD will be expanded to include
such other use or indication, and NOVARTIS will be obligated to develop and
commercialize such other use or indication in the TERRITORY to the extent
required under this Sublicense Agreement. If NOVARTIS does not accept such other
use or indication, TITAN will be free to offer such other use or indication to a
THIRD PARTY, even in the TERRITORY, without further obligation to NOVARTIS with
respect to such other use or indication; provided, however, that TITAN, if
requested and with the support of NOVARTIS, will use reasonable efforts to
ensure that such "new product" can be commercially differentiated in such a way
(formulation, dosage, delivery system and/or other measures of distinctiveness)
as to discourage interchangeability and free substitution
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between such "new product" and PRODUCT on the marketplace. If a license to such
other use or indication is granted to a THIRD PARTY, it will be limited solely
to such other use or indication, and the THIRD PARTY licensee will not have the
right to develop or sell COMPOUND in the FIELD in the TERRITORY during the term
of this Sublicense Agreement.
(d) If neither TITAN nor NOVARTIS acquires the right
to develop and commercialize such other use or indication outside the FIELD for
COMPOUND under the License Agreement, HMRI or an AFFILIATE shall be free to
develop and commercialize such other use or indication itself or to enter into a
license or other agreement with a THIRD PARTY, and shall have no further
obligations to negotiate with TITAN or NOVARTIS or further license obligations
with respect thereto.
5.7 In addition to that which is required under Section
5.4(a), NOVARTIS shall provide to TITAN regular written reports at least every
six (6) months setting forth significant developments and improvements,
including the status and progress of the development and/or registration
activities, that affect COMPOUND or PRODUCT.
5.8 NOVARTIS, or its SUBLICENSEES, shall promptly advise TITAN
in writing upon the submission and filing for government regulatory approval to
manufacture and market PRODUCT, and upon the receipt of government regulatory
approval to market PRODUCT, in each case in each country in the TERRITORY, and
shall commence marketing PRODUCT in such country in accordance with Section 5.3.
5.9 Subject to applicable laws and regulations, labeling on
all PRODUCT sold by or on behalf of NOVARTIS pursuant to this Sublicense
Agreement, and all advertising,
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marketing and promotional materials used in connection therewith, will identify
TITAN as the licensor of the PRODUCT.
5.10 If at any time during the term hereof a product is
developed by NOVARTIS or any of its AFFILIATES or SUBLICENSEES, which product
contains COMPOUND and one or more other pharmaceutically active ingredients for
use in the FIELD (a "Combination Product"), TITAN shall negotiate in good faith
with HMRI an amendment to the License Agreement, which amendment will provide,
inter alia, for how royalties to be paid by TITAN to HMRI for NET SALES of such
Combination Product will be calculated and for how long such royalties shall be
paid. After such amendment to the License Agreement has been executed by TITAN
and HMRI, this Sublicense Agreement shall be similarly amended by TITAN and
NOVARTIS to provide for such Combination Product.
6. EXCHANGE OF INFORMATION AND CONFIDENTIALITY.
6.1 Upon the signing of this Sublicense Agreement, TITAN shall
deliver to NOVARTIS, all available KNOW-HOW, documents, information and data
which is owned or controlled by TITAN and its AFFILIATES, which may be
reasonably expected to assist NOVARTIS in developing, registering, manufacturing
and marketing COMPOUND and PRODUCT in the TERRITORY. After the execution of this
Sublicense Agreement, there shall be a sixty (60) day transition period during
which TITAN shall provide, at its own cost, reasonable resources, expertise, and
documents to effectively transfer the KNOW-HOW and development activity to
NOVARTIS. Upon TITAN's receipt of the upfront license fee referred to in Section
3.1(a) hereof, NOVARTIS and TITAN each shall promptly provide written
notification to the FDA that TITAN
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assigns and that NOVARTIS assumes sponsorship of the U.S. IND No. 36,827 (as
specified in 21 CFR 314.72). Within ten (10) days after the date of such written
notification, TITAN shall transfer the U.S. IND for COMPOUND or PRODUCT to
NOVARTIS. Until such transfer is made, NOVARTIS shall have the right to make
reference to such COMPOUND or PRODUCT owned or controlled by TITAN or its
AFFILIATES. Furthermore, upon TITAN's receipt of the upfront license fee
referred to in Section 3.1(a), TITAN shall arrange for the transfer by HMRI to
NOVARTIS of Canadian IND Control No. 27740.
6.2 NOVARTIS shall have EXCLUSIVE use, subject to the terms of
this Sublicense Agreement and in particular Section 2.3, of all KNOW-HOW,
documents, information, data and material for the development, registration,
manufacture and marketing of COMPOUND and PRODUCT for use in the FIELD in the
TERRITORY. HMRI (under the License Agreement), TITAN and their respective
AFFILIATES shall keep confidential all KNOW-HOW, documents, information and data
in their possession or received from or generated by or on behalf of NOVARTIS
that is not already in the public domain relating to COMPOUND and PRODUCT
regarding the use in the FIELD with the same level of care TITAN uses for its
own confidential information. Upon TITAN's request during the term of this
Sublicense Agreement, NOVARTIS shall deliver to TITAN a copy of all such
information and data in a form to be mutually agreed upon, within thirty (30)
days after TITAN's request, it being understood and agreed that any and all such
information and data will be made available by TITAN to HMRI, upon HMRI's
request.
6.3 Subject to the confidentiality obligations of this Article
6, NOVARTIS shall make available and HMRI and TITAN shall be able to freely use
KNOW-HOW and documents,
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information and data relating to COMPOUND and/or PRODUCT disclosed or generated
by NOVARTIS, its AFFILIATES and SUBLICENSEES and applications for government
approvals (United States or EUROPEAN UNION), reports on the status and progress
of the development of COMPOUND or PRODUCT and the like in any country(ies)
deleted from the TERRITORY and as to which this Sublicense Agreement has been
terminated pursuant to the terms hereof. Furthermore, if TITAN grants a
sublicense(s) to a THIRD PARTY(IES) for Japan, NOVARTIS agrees to share with
such THIRD PARTY(IES) any data and information (including pre-clinical and
clinical results) requested by such THIRD PARTY (IES) that have been generated
by or on behalf of NOVARTIS regarding the COMPOUND and PRODUCT and all
regulatory submissions relating thereto, but only to the extent such THIRD
PARTY(IES) agree to share with NOVARTIS, if requested, all such similar data and
information generated by or on behalf of such THIRD PARTY(IES); provided,
however, that should NOVARTIS or such THIRD PARTY(IES) submit to any regulatory
agency(ies) said data generated by the other, or modifications thereof, the
benefiting party shall compensate the party supplying said data, for the
supplying party's contributions to the data required for the benefiting party's
regulatory submissions, which compensation shall be agreed to in good faith.
6.4 During the period of time during which NOVARTIS is
obligated to pay royalties hereunder and for seven (7) years thereafter,
irrespective of any termination with respect to a particular country or
countries in the TERRITORY, NOVARTIS shall not reveal or disclose to THIRD
PARTIES or use for any purpose other than to perform its obligations herein any
Confidential Information (as defined below) without first obtaining the written
consent of TITAN,
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except as may be otherwise provided herein, or for securing essential or
desirable authorizations, privileges, licenses, registration or rights from
governmental agencies, or is required to be disclosed to a governmental agency
or is necessary to file or prosecute PATENT applications concerning COMPOUND or
PRODUCT or to carry out any litigation concerning COMPOUND or PRODUCT; provided,
however, that NOVARTIS notifies TITAN in writing in a reasonably sufficient time
frame prior to making such disclosure that NOVARTIS intends to make such
disclosures and the details thereof, and NOVARTIS seeks confidential treatment
where available of such Confidential Information from such governmental
agencies. This confidentiality obligation shall not apply to such information
which is or becomes a matter of public knowledge through no fault of NOVARTIS',
or is already in the possession of NOVARTIS as evidenced by written records, or
is disclosed to NOVARTIS by a THIRD PARTY having the right to do so, or is
subsequently and independently developed by employees of NOVARTIS or its
AFFILIATES who had no knowledge of the Confidential Information. NOVARTIS shall
take reasonable measures to assure that no unauthorized use or disclosure is
made by others to whom access to such information is granted. As used herein,
"Confidential Information" means, any confidential or proprietary information of
HMRI or TITAN or their AFFILIATES, including any present or future formulas,
research project, work in process, inventions, procedures, development,
scientific, engineering, manufacturing, marketing, business or financial plan or
records, products, sales, suppliers, customers, or investors, whether such
confidential or proprietary information is in oral, written, graphic or
electronic form (including all copies in whole or in part of any of the
foregoing) and which derives value from being known to the disclosure or owner.
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6.5 After transfer of the United States and Canadian INDs to
NOVARTIS under Section 6.1, TITAN and NOVARTIS shall cooperate with respect to
the exchange of adverse event and safety information associated with COMPOUND
and PRODUCT, and such information shall be coordinated by NOVARTIS' central
Clinical Safety and Epidemiology organization. Details of the obligations of the
parties with respect to reporting such information to each other, and processing
of this data shall be covered in an addendum following execution of this
Sublicense Agreement.
6.6 Nothing herein shall be construed as preventing NOVARTIS
from disclosing any information received from TITAN to an AFFILIATE,
SUBLICENSEE, distributor, contractor, agent, consultant, legal counsel or other
THIRD PARTY involved in the development, manufacture, marketing, promotion or
sale of COMPOUND or PRODUCT, provided such AFFILIATE or SUBLICENSEE or other
THIRD PARTY has undertaken a similar obligation of confidentiality with respect
to the Confidential Information.
6.7 In the event that a court or other legal or administrative
tribunal, directly or through an appointed master, trustee or receiver, assumes
partial or complete control over the assets of NOVARTIS based on the insolvency
or bankruptcy of NOVARTIS, NOVARTIS shall promptly notify the court or other
tribunal (i) that Confidential Information received from TITAN remains the
property of HMRI or TITAN, or their respective AFFILIATES, as the case may be,
and (ii) of the confidentiality obligations under this Sublicense Agreement. In
addition, NOVARTIS shall, to the extent permitted by law, take all steps
reasonably necessary or desirable to maintain the confidentiality of the
Confidential Information of HMRI or TITAN, as the case may be, and to
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ensure that the court, other tribunal or appointee maintains such information in
confidence in accordance with the terms of this Sublicense Agreement.
6.8 No public announcement or other disclosure to THIRD
PARTIES concerning the existence of or terms of this Sublicense Agreement shall
be made, either directly or indirectly, by either party to this Sublicense
Agreement, except as may be legally required, without first obtaining the
approval of the other party, which approval shall not be unreasonably withheld,
and shall be given within a reasonable time. The party desiring to make any such
public announcement or other disclosure shall provide the other party with a
written copy of the proposed announcement or disclosure in sufficient time prior
to proposed public release, to allow such other party to comment upon the
nature, text and timing of such announcement or disclosure, prior to proposed
public release.
6.9 Neither party shall submit for written or oral publication
any manuscript, abstract or the like which includes KNOW-HOW, data or other
information generated and/or provided by HMRI, TITAN or NOVARTIS pursuant to
this Sublicense Agreement without first obtaining the prior written consent of
the party generating or providing such information, which consent shall not be
unreasonably withheld. The contribution of each party shall be noted in all
publications or presentations by acknowledgment or co-authorship, whichever is
appropriate.
7. TITAN SUPPLY OF COMPOUND AND PRODUCT TO NOVARTIS.
7.1 TITAN shall supply COMPOUND and PRODUCT to NOVARTIS under
the following conditions:
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(a) Within a reasonable period of time after the
effective date of this Sublicense Agreement as agreed to by the PARTIES in good
faith, TITAN will, at no cost to NOVARTIS, arrange for the transfer by HMRI to
NOVARTIS, to a single site to be designated by NOVARTIS, all quantities of
unmilled COMPOUND available as of the effective date of this Sublicense
Agreement at HMRI, Frankfurt, Germany. The PARTIES recognize, however, that a
portion of the COMPOUND, not to exceed one hundred (100) kilograms, must be
reserved for use by TITAN's sublicensee for Japan, subject to Section 7.1(d).
(b) At no cost to NOVARTIS, TITAN will arrange, upon
written request by NOVARTIS, for the transfer to a single site in the United
States to be designated by NOVARTIS, of all quantities of COMPOUND and PRODUCT
available as of the effective date of this Sublicense Agreement at Bio-Pharm
Pharmaceutics Services, Ft. Washington, Pennsylvania.
(c) The PARTIES will agree in good faith on a
procedure which will allow NOVARTIS to transfer COMPOUND and PRODUCT to Japan
for use by the Japanese sublicensee.
(d) Title to, and risk of loss with respect to, all
COMPOUND and PRODUCT supplied by TITAN to NOVARTIS under this Section 7.1 shall
pass to NOVARTIS upon the receipt of such COMPOUND and PRODUCT by NOVARTIS or
its designee at its point of delivery; provided that with respect to the one
hundred (100) kilograms of COMPOUND reserved for use by TITAN's SUBLICENSEE for
Japan under Section 7.1(a), NOVARTIS shall not be liable for any loss of such
COMPOUND except where such loss is the result of NOVARTIS' negligence or willful
misconduct.
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(e) TITAN shall provide to NOVARTIS an HMRI
certificate of analysis for any shipment of COMPOUND or PRODUCT.
(f) All COMPOUND and PRODUCT supplied by TITAN to
NOVARTIS for clinical trials will conform to the IND specifications therefor as
well as all laws and regulatory requirements, including current Good
Manufacturing Practices, applicable to the COMPOUND and PRODUCT when used in
said clinical trials in accordance with said IND.
7.2 TITAN shall provide information and assistance to NOVARTIS
with respect to COMPOUND and PRODUCT as follows:
(a) Within sixty (60) days after the full execution
and delivery of this Sublicense Agreement, TITAN shall deliver to NOVARTIS any
and all KNOW-HOW, documentation, data and other information owned or controlled
by TITAN and its AFFILIATES, that NOVARTIS may reasonably require for the
manufacture of COMPOUND and PRODUCT. Such information shall include without
limitation the specifications for COMPOUND and PRODUCT and methods of analysis
for testing COMPOUND and PRODUCT, as currently described within the IND
regulatory documentation, including Chemistry-Manufacturing/Controls (CMC)
information amendments and the technology transfer file.
(b) TITAN shall arrange for HMRI to provide to
NOVARTIS or its designated THIRD PARTY assistance for the transfer of
manufacturing technology, through documentation, consultation and face-to-face
meetings, to enable NOVARTIS or such THIRD PARTY to proceed with development of
commercial-scale manufacturing. If requested by NOVARTIS or such THIRD PARTY,
TITAN shall visit the designated commercial manufacturing
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facility, with the limitation of three (3) visits, not to exceed a total of ten
(10) business days, for which NOVARTIS shall bear all the costs of reasonable
travel and other out-of-pocket expenses.
7.3 HMRI has represented and warranted to TITAN, and TITAN has
relied in good faith upon such representation and warranty that:
(a) all COMPOUND and PRODUCT supplied hereunder shall
meet the specifications therefor at the time COMPOUND and PRODUCT are delivered
to NOVARTIS or its designee;
(b) all COMPOUND and PRODUCT supplied hereunder shall
be manufactured, stored and shipped in accordance with GMPs and all other
applicable laws and regulations; and
(c) none of the COMPOUND or PRODUCT supplied
hereunder shall be adulterated or misbranded as provided for under applicable
laws and regulations.
7.4 TITAN represents and warrants that:
(a) the specifications for COMPOUND and PRODUCT are
consistent with those set out in the INDs sponsored by TITAN; and
(b) as of the date of this Sublicense Agreement, the
raw materials for the manufacture of COMPOUND are readily available in the
marketplace.
7.5 NOVARTIS shall return to HMRI all unused COMPOUND or
PRODUCT supplied by TITAN to NOVARTIS hereunder.
8. PATENT PROSECUTION; MAINTENANCE AND EXTENSION; INFRINGEMENT.
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8.1 HMRI shall be responsible for the filing, prosecution
(including oppositions) and maintenance of the PATENTS at HMRI's expense. For so
long as the license grants set forth in Article 2 remain in effect, HMRI agrees
to file and prosecute and maintain the PATENTS in the TERRITORY, provided that
the foregoing is subject to HMRI's reasonable business judgment. TITAN shall
keep NOVARTIS informed, to the same extent HMRI keeps TITAN informed, of
important issues relating to the preparation, filing, prosecution and
maintenance of such patent applications and patents. NOVARTIS, through TITAN,
shall have the right to comment on HMRI's preparation, filing, prosecution and
maintenance of patent applications and PATENTS, and HMRI shall give due
consideration to NOVARTIS' comments, but HMRI shall make all decisions regarding
same.
8.2 If HMRI elects not to seek patent protection in countries
listed in Appendix F or to maintain patent protection on PATENTS listed in
Appendix A in any country in the TERRITORY to the extent that PATENTS claim
COMPOUND or PRODUCT (or formulations, use or manufacture thereof), NOVARTIS
shall have the right, at its option and at HMRI's expense, which expense must be
approved in advance by HMRI (approval which shall not be unreasonably withheld),
to file, prosecute (including oppositions) and maintain any such patent
applications and patents in HMRI's name, and any patent issued therefrom shall
be owned by HMRI. TITAN shall advise NOVARTIS of HMRI's decision not to seek or
maintain patent protection in a reasonably timely manner. In the event that a
PATENT is issued covering COMPOUND or PRODUCT in any country in the TERRITORY
under the conditions of this Section 8.2, NOVARTIS shall pay directly to HMRI a
three percent (3%) royalty on NET SALES of PRODUCT in such country, for a period
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of five (5) years from the date of such patent issuance in such country, in
recognition of HMRI's KNOW-HOW and manufacturing rights and the right to make
and sell COMPOUND or PRODUCT in such country. Legal fees and expenses, as
confirmed by HMRI, incurred by NOVARTIS shall be deducted from the royalty paid
to HMRI.
8.3 Each of HMRI, TITAN and NOVARTIS shall make available to
the other, its employees, agents, subcontractors or consultants (including its
authorized attorneys) to the extent reasonably necessary or appropriate to
enable the appropriate party to file, prosecute and maintain patent applications
and resulting patents subject to this Sublicense Agreement to the extent that
PATENTS claim COMPOUND or PRODUCT (or formulations, use or manufacture thereof).
Where appropriate, each of HMRI, TITAN and NOVARTIS shall sign or cause to have
signed all documents relating to said patent applications or patents at no
charge to the other.
8.4 Promptly after it is notified by HMRI, TITAN shall notify
NOVARTIS in writing of (a) the issuance of each PATENT giving the date of issue
and patent number for each patent, and (b) each notice pertaining to any PATENT
which HMRI receives as patent owner pursuant to the Drug Price Competition and
Patent Term Restoration Act of 1984, or other similar laws now or hereafter in
effect which extend the PATENT life, or pursuant to comparable laws or
regulations in other countries in the TERRITORY. At HMRI's expense, HMRI, TITAN
and NOVARTIS shall cooperate with each other in applying for patent term
extensions (including Supplementary Protection Certificate in EUROPEAN UNION
member states) where applicable in any country of the TERRITORY. HMRI shall have
full responsibility and authority in the decisions regarding filing for the
foregoing PATENT extensions at its own expense although NOVARTIS,
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through TITAN, shall be consulted and its opinions given due consideration in
such decision-making process. If HMRI elects not to pursue extension of any
PATENTS, NOVARTIS shall have the right (but not the obligation) to apply for
such extension in HMRI's name and at NOVARTIS' expense, and HMRI shall
reasonably cooperate in the filing and procurement thereof.
8.5 Except as otherwise expressly provided in this Sublicense
Agreement, under no circumstances shall a party hereto, as a result of this
Sublicense Agreement, obtain any ownership interest in or other right to any
technology, KNOW-HOW, patents, pending patent applications, products, or
biological material of the other party, or HMRI, including items owned,
controlled, discovered, invented or developed by the other party, or HMRI, or
transferred by the other party or HMRI to said party, at any time pursuant to
this Sublicense Agreement which is not a direct result of the study, KNOW-HOW
and experimentation of COMPOUND and PRODUCT. It is understood and agreed that
this Sublicense Agreement does not grant NOVARTIS any license to other uses for
COMPOUND or PRODUCT outside the FIELD.
8.6 Each of NOVARTIS, TITAN and HMRI shall promptly, but in
any event no later than ten (10) business days after receipt of notice of such
action, notify the other in writing of any PATENT nullity actions, any
declaratory judgment actions or any alleged or threatened infringement of
PATENTS or misappropriation of intellectual property comprising PATENTS, or if
NOVARTIS, HMRI or TITAN, or any of their respective AFFILIATES or SUBLICENSEES,
shall be individually named as a defendant in a legal proceeding by a THIRD
PARTY alleging infringement of a patent or other intellectual property right of
such THIRD PARTY as a result of
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the manufacture, production, use, development, marketing, selling or
distribution of COMPOUND or PRODUCT, or of any information or notification
regarding the PATENTS.
8.7 HMRI shall have the first right to respond to, defend or
prosecute any actions, challenges, infringements, misappropriations or
proceedings by a THIRD PARTY alleging infringement described in Section 8.6. In
the event HMRI elects to do so, NOVARTIS will cooperate with HMRI and its legal
counsel, join in such suits as may be brought by HMRI, and be available at
HMRI's reasonable request to be an expert witness or otherwise to assist in such
proceedings and at HMRI's expense. Through TITAN, HMRI will cooperate with
NOVARTIS and its legal counsel and keep NOVARTIS and its counsel reasonably
informed at all times as to the status of HMRI's response or defense.
8.8 In the event that HMRI elects to respond to, defend or
prosecute any actions, challenges, infringements, misappropriations or
proceedings by a THIRD PARTY claiming infringement described in Section 8.6
hereof, then:
(a) legal fees and other costs and expenses of HMRI
associated with such response or defense shall be paid by HMRI;
(b) legal fees and other costs and expenses
associated with such response or defense incurred by NOVARTIS at HMRI's request,
shall be paid by HMRI;
(c) costs of acquiring THIRD PARTY patents or
licenses and any settlement, court award, judgment or other damages shall be
paid by HMRI to such THIRD PARTIES out of royalties projected to be received
from NOVARTIS (either directly or through TITAN); provided, however, HMRI shall
not be obligated to pay for any patents or licenses for uses
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of COMPOUND or PRODUCTS not disclosed in PATENTS as of the date of the execution
of the License Agreement; and
(d) any amounts recovered from THIRD PARTIES in
connection with such response or defense shall be applied fifty percent (50%) to
NOVARTIS (through TITAN), and fifty percent (50%) to HMRI, subject first to
reimbursement of expenses of HMRI, NOVARTIS and TITAN.
8.9 In the event that HMRI elects not to respond to, defend or
prosecute any actions, challenges, infringements, misappropriations or
proceedings by a THIRD PARTY alleging infringement described in Section 8.6
hereof or HMRI abandons any such action, TITAN shall notify NOVARTIS promptly
after receiving notification from HMRI of such actions, challenges,
infringements, misappropriations, proceeding or HMRI's decision to abandon any
such action. In such event, NOVARTIS shall have the option to respond, defend or
prosecute such action at NOVARTIS' sole cost, provided that HMRI shall cooperate
with and provide assistance to NOVARTIS at HMRI's expense. All amounts recovered
from any THIRD PARTY shall be applied fifty percent (50%) to NOVARTIS and fifty
percent (50%) to HMRI, subject first to reimbursement of expenses of HMRI,
NOVARTIS and TITAN.
8.10 In the event that HMRI and NOVARTIS mutually agree that
it is desirable for HMRI to acquire any THIRD PARTY patent or license in
connection with the development or manufacture of COMPOUND or PRODUCT covered by
PATENTS in the TERRITORY, then the costs of acquiring such THIRD PARTY patent or
license shall be paid by HMRI to such THIRD PARTIES out of royalties received
from NOVARTIS (either directly or through TITAN). HMRI
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shall not be obligated to pay for any patents or licenses for uses of COMPOUND
or PRODUCT not disclosed in PATENTS as of the date of the execution of the
License Agreement.
8.11 NOVARTIS recognizes that HMRI has reserved certain rights
in the patents set forth in Appendix A and that there may be a legitimate
dispute between the parties whether a legal action should be brought against a
THIRD PARTY which could effect HMRI's reserved rights under those patents and
NOVARTIS' sublicense rights under this Sublicense Agreement. In the event that
there is a dispute between NOVARTIS and HMRI regarding whether there is an
infringement of PATENTS by a THIRD PARTY and therefore whether a legal action
should be initiated, NOVARTIS and HMRI shall submit the issue to a
disinterested, competent and experienced patent attorney reasonably acceptable
to NOVARTIS and HMRI to determine whether or not there is an infringement and
legal actions should be taken. If NOVARTIS and HMRI cannot agree on the
selection of such a patent attorney, then NOVARTIS and HMRI shall each select a
patent attorney and those selected patent attorneys shall select a mutually
acceptable patent attorney. That selected patent attorney shall determine
whether or not there is an infringement and legal action should be taken and
then NOVARTIS and HMRI may decide whether or not to initiate a legal action as
described by this Article 8. The compensation to, and expenses of, such patent
attorney shall be borne by the losing party.
9. STATEMENTS AND REMITTANCES.
9.1 NOVARTIS shall keep, and require its AFFILIATES and
SUBLICENSEES to keep complete and accurate records of all NET SALES of PRODUCT
under the sublicenses granted herein. HMRI and TITAN shall have the right, at
their expense, through a certified public
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accountant or like independent person reasonably acceptable to NOVARTIS , and
following reasonable notice, to examine such records under conditions of
confidentiality during regular business hours during the period of time during
which royalties are due and payable hereunder and for two (2) years thereafter;
provided, however, that such examination shall not take place more often than
once a year and shall not cover such records for more than the preceding two (2)
years; and provided further, that such accountant shall report to HMRI and TITAN
only as to the accuracy of the NET SALES computation and royalty statements and
payments. It is agreed that if this Sublicense Agreement is terminated with
respect to a particular country(ies), then HMRI's and TITAN's examination rights
shall continue with respect to sales of PRODUCT in such country(ies) only for a
period of two (2) years after the termination of sublicense rights in that
country. Copies of all such accountant's reports shall be supplied to NOVARTIS .
9.2 Within forty-five (45) days after the close of each
calendar quarter, NOVARTIS shall deliver to TITAN a true accounting of all
PRODUCT sold by NOVARTIS , its AFFILIATES and SUBLICENSEES during such quarter
and shall at the same time pay all earned royalties due. Such accounting shall
show NET SALES of PRODUCT on a country-by-country and product-by-product basis
and such other particulars as are reasonably necessary for accounting of the
royalties payable hereunder.
9.3 Any tax paid or required to be withheld by NOVARTIS on
account of royalties payable by NOVARTIS under this Sublicense Agreement shall
be indicated on the accounting described in Section 9.2 hereof and deducted from
the amount of royalties otherwise due. NOVARTIS shall secure and send to TITAN
or HMRI, as the case may be, proof of any such taxes
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withheld and paid by NOVARTIS. Any withholding or other tax arising on or
following permitted assignment of this Sublicense Agreement by NOVARTIS or a
SUBLICENSEE shall be for the account of and paid by NOVARTIS .
9.4 Unless otherwise indicated herein, and subject to foreign
exchange regulations then prevailing, to the extent free conversion from local
currency to United States dollars is permitted, all payments and royalties
payable under this Sublicense Agreement shall be paid in cash in U.S. dollars by
wire transfer in accordance with Section 3.2 hereof. If governmental regulations
prevent remittances from a foreign country with respect to sales made in that
country, the obligation of NOVARTIS to pay royalties on sales in that country
shall be suspended until such remittances are possible, but such royalties shall
accrue as an accounts payable by NOVARTIS to TITAN or HMRI, as the case may be.
TITAN or HMRI, as the case may be, shall have the right, upon giving written
notice to NOVARTIS, to receive payment in that country in local currency.
9.5 Royalty payments and NET SALES shall be calculated on the
basis of NOVARTIS' quarterly standard account of internal sales which represents
the conversion of all local currency sales for a calendar quarter into Swiss
francs at the average exchange rate (as routinely derived via NOVARTIS' standard
methodology) for such calendar quarter in which the sales are recorded. The
exchange rate between the Swiss franc and the U.S. dollar for the quarterly
royalty payments to TITAN or HMRI (as the case may be) shall be the exchange
rates published in the Foreign Exchange column of The Wall Street Journal, New
York edition, or other qualified source mutually acceptable to the parties on
the last business day of the calendar quarter for which the royalties are being
paid. Notwithstanding the foregoing, if there is a difference between any amount
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that NOVARTIS pays to TITAN or HMRI (as the case may be) under Sections 3.3, 3.4
or 3.5, and the amount that TITAN is required to pay to HMRI under the License
Agreement (which difference arises as a result of using the method for
calculating royalties that are due and payable under this Section 9.5, and the
method for calculating such royalties under Section 9.5 of the License
Agreement), the shortfall or excess (as the case may be) in royalty payments
made by NOVARTIS under this Section 9.5 shall be paid by NOVARTIS to HMRI or
TITAN (as the case may be) in the case of a shortfall, and by TITAN to NOVARTIS
in the case of an excess payment by NOVARTIS to TITAN under Section 3.3 or 3.5.
10. TERM AND TERMINATION.
10.1 (a) NOVARTIS will have the right to terminate the
sublicense for the TERRITORY or on a country-by-country basis for major problems
associated with PRODUCT as reasonably determined by NOVARTIS . For this purpose
"major problems" are ones which would substantially negatively impact PRODUCT's
chances for successful development, registration and/or commercialization in the
TERRITORY or such country, as applicable; and would include, but not be limited
to, major safety issues, lack of efficacy, unacceptable pharmaceutical
properties or extraordinary unforeseen competitive developments which, in each
case, would have the substantial negative impact referred to above.
(b) In the event of termination in the entire
TERRITORY by NOVARTIS pursuant to this Section 10.1, NOVARTIS shall, within
thirty (30) days of such termination, return to TITAN any and all information
and data (including new information and data) relating to the COMPOUND and
PRODUCT, whether generated by or on behalf of TITAN, HMRI or
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NOVARTIS, and make no further use thereof. Additionally, in such event, this
Sublicense Agreement shall terminate in its entirety and the sublicense granted
hereunder shall revert back to TITAN. TITAN shall retain all upfront license
fees and milestone payments it had received up to the date of termination if,
and only if, termination was not due to any misrepresentations, omissions (of
information owned or controlled by HMRI or its AFFILIATES or TITAN or its
AFFILIATES as of the date hereof) or falsifications with respect to such
KNOW-HOW, information or data or fraud by HMRI or its AFFILIATES or TITAN or its
AFFILIATES, in which case, subject to the following sentence, TITAN shall repay
to NOVARTIS, within ninety-five (95) days of such termination, that portion of
the upfront license fee and milestone payments TITAN had received from NOVARTIS
up to the date of such termination (including in the form of NOVARTIS' purchase
of TITAN convertible preferred stock). In the case of misrepresentations,
omissions (of information owned or controlled by HMRI or its AFFILIATES as of
the date hereof) or falsifications with respect to such KNOW-HOW, information or
data or fraud only by HMRI or its AFFILIATES, and a termination of the License
Agreement pursuant to Section 10.1 of the License Agreement, TITAN shall be
obligated to make the foregoing repayments to NOVARTIS if, and only if, HMRI has
repaid the upfront license fee and milestone payments to TITAN under Section
10.1 of the License Agreement.
10.2 In the event the development of COMPOUND and PRODUCT is
terminated altogether by NOVARTIS by or before January 1, 1998, for reasons
other than those described in Section 10.1, then this Sublicense Agreement shall
terminate in its entirety and the sublicense granted hereunder shall revert back
to TITAN. TITAN shall retain all upfront license fees it had
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THE INFORMATION BELOW, MARKED BY * AND [ ], HAS BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED PORTION HAS BEEN SEPARATELY
FILED WITH THE COMMISSION.
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received up to the date of termination and NOVARTIS shall also pay a [ * ]
penalty payment to TITAN if, and only if, termination was not due to any
misrepresentations, omissions (of information owned or controlled by HMRI or its
AFFILIATES or TITAN or its AFFILIATES as of the date hereof) or falsifications
with respect to KNOW-HOW, information or data or fraud by HMRI or its AFFILIATES
or TITAN or its AFFILIATES, in which case, subject to the following sentence,
TITAN shall repay to NOVARTIS, within ninety-five (95) days of such termination,
that portion of the upfront license fee and milestone payments TITAN had
received from NOVARTIS up to the date of such termination (including in the form
of NOVARTIS' purchase of TITAN convertible preferred stock). In the case of
misrepresentations, omissions (of information owned or controlled by HMRI or its
AFFILIATES as of the date hereof) or falsifications with respect to KNOW-HOW,
information or data or fraud only by HMRI or its AFFILIATES, and a termination
of the License Agreement pursuant to Section 10.2 of the License Agreement,
TITAN shall be obligated to make the foregoing repayments to NOVARTIS if, and
only if, HMRI has repaid the upfront license fee and milestone payments to TITAN
under Section 10.2 of the License Agreement.
10.3 Unless otherwise terminated, this Sublicense Agreement
shall expire on a country-by-country basis upon the expiration of NOVARTIS'
obligation to pay royalties under this Sublicense Agreement in each such
country. Expiration of this Sublicense Agreement under this provision shall not
preclude NOVARTIS, its AFFILIATES and SUBLICENSEES from continuing directly or
indirectly to manufacture COMPOUND and market and sell PRODUCT and to use
KNOW-HOW without further royalty payments.
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10.4 In the event there is a change in the control of
NOVARTIS, NOVARTIS shall give TITAN thirty (30) days written notice of such
event and that the development and commercialization of COMPOUND and PRODUCT
will continue per the terms of this Sublicense Agreement.
10.5 (a) If either party materially defaults in its
performance of this Sublicense Agreement and if such default is not corrected or
if the party in default is not exercising reasonably diligent efforts to cure
such default within ninety (90) days after receiving written notice from the
other party with respect to such default, or if such default is not correctable
within ninety (90) days then such other party shall have the right to terminate
this Sublicense Agreement at the end of such period in its entirety by giving
written notice to the party in default. In the event NOVARTIS materially
defaults in its performance under this Sublicense Agreement with respect to a
particular country, then, subject to Section 11.4 hereof, TITAN's right to
terminate shall be limited to termination of the sublicense granted hereunder in
such country only.
(b) If TITAN materially defaults in its performance
of the License Agreement, then NOVARTIS shall have the right but not the
obligation to correct or cure such default in the place of TITAN at NOVARTIS'
own cost and expense within the ninety (90) day period provided for in Section
10.5 of the License Agreement without prejudice to any other rights NOVARTIS may
have under this Sublicense Agreement, provided that (i) NOVARTIS notifies TITAN
in writing of NOVARTIS' election to do so, and (ii) NOVARTIS' correction or cure
of such default does not increase TITAN's liability under the License Agreement.
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(c) It is agreed that a material default by TITAN
under the License Agreement shall be a material default by TITAN under this
Sublicense Agreement.
10.6 Subject to applicable bankruptcy laws, either party may
terminate this Sublicense Agreement if, at any time, the other party shall file
in any court pursuant to any statute of the United States or of any individual
state or foreign country, a voluntary petition in bankruptcy or insolvency or
for reorganization in bankruptcy or for an arrangement or for the appointment of
a receiver or trustee of the party or of its assets, or if the other party shall
be served with an involuntary petition against it, filed in any insolvency
proceeding, and such petition shall not be dismissed within ninety (90) days
after the filing thereof, or if the other party shall propose or be a party to
any dissolution, or if the other party shall make an assignment for the benefit
of creditors.
(a) Without limitation, NOVARTIS' rights under this
Sublicense Agreement shall include those rights afforded by 11 U.S.C. Section
365(n) of the United States Bankruptcy Code and any successor thereto (the
"Code"). If the bankruptcy trustee of TITAN as a debtor or debtor-in-possession
rejects this Sublicense Agreement under 11 U.S.C. Section 365(n) of the Code,
NOVARTIS may elect to retain its rights sublicensed from TITAN hereunder (and
any other supplementary agreements hereto) for the duration of this Sublicense
Agreement and avail itself of all rights and remedies to the full extent
contemplated by this Sublicense Agreement and 11 U.S.C. Section 365(n) of the
Code, and any other relevant sections of the Code and other relevant
non-bankruptcy law.
11. RIGHTS AND DUTIES UPON TERMINATION.
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11.1 Upon termination of this Sublicense Agreement, TITAN
shall have the right to retain any sums already paid by NOVARTIS hereunder, and
NOVARTIS shall pay all sums accrued hereunder which are then due except as
otherwise defined in this Sublicense Agreement.
11.2 Upon early termination of this Sublicense Agreement in
its entirety under Sections 10.1 or 11.6 or with respect to any country, or due
to a breach hereof by NOVARTIS, NOVARTIS shall notify TITAN of the amount of
PRODUCT that NOVARTIS, its AFFILIATES and SUBLICENSEES then have on hand for
sale in each country, the sale of which would, but for the termination, be
subject to royalty, and NOVARTIS , its AFFILIATES and SUBLICENSEES shall
thereupon be permitted to sell that amount of PRODUCT, provided that NOVARTIS
shall pay the royalty thereon to TITAN or HMRI, as the case may be, at the time
herein provided for.
11.3 Expiration or termination of this Sublicense Agreement or
termination on a country-by-country basis shall terminate all outstanding
obligations and liabilities between the parties arising from this Sublicense
Agreement except those described in Sections 6.2 (with sole respect to TITAN
confidentiality) 6.3, 6.4, 6.5, 6.6, 6.8, 9.1, 9.2, 10.1(b), 10.2, 10.3, 11.1,
11.2, 11.4, 11.5, 11.6, 12.5, 12.6, 12.7, 14.1 and 14.2, which sections shall
survive such termination. In addition, any other provision required to interpret
and enforce the parties' rights and obligations under this Sublicense Agreement
shall also survive, but only to the extent required for the full observation and
performance of the surviving obligations under this Sublicense Agreement.
11.4 Except as otherwise specifically provided for herein,
termination, in whole or in part, of the Sublicense Agreement in accordance with
the provisions hereof shall not limit remedies to the parties which may be
otherwise available in law or equity, including consequential,
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incidental or indirect damages (such as loss of sales, profits, or goodwill)
arising out of a party's performance or nonperformance under this Sublicense
Agreement.
11.5 Subject to Section 11.2 and other express provisions
hereof, upon early termination of this Sublicense Agreement in its entirety due
to breach hereof by NOVARTIS and pursuant to Sections 10.1, 10.2 or 11.6,
NOVARTIS' rights in COMPOUND and PRODUCT shall cease, NOVARTIS, its AFFILIATES
and SUBLICENSEES shall cease manufacture, development, marketing and sale of
COMPOUND and PRODUCT in the TERRITORY, and all originals and copies of KNOW-HOW,
data, results and other information collected and/or generated by NOVARTIS, its
AFFILIATES and SUBLICENSEES relating to COMPOUND or PRODUCT prior to termination
shall be delivered to TITAN within thirty (30) days thereafter, except for one
copy thereof which may be retained in NOVARTIS' legal or other appropriately
restricted files solely for the purpose of establishing the extent of its
obligations hereunder. Any IND or other regulatory filing effected prior to
termination shall be assigned by NOVARTIS to TITAN (or its designee(s), which
designee could be HMRI), at TITAN's request and expense, if not already assigned
to TITAN. NOVARTIS shall provide to TITAN, within thirty (30) days of TITAN 's
request, copies of all regulatory correspondence, including, but not limited to,
IND Information Amendments, IND Reports, IND Safety Reports, NDA submission, NDA
Postmarketing Reports, and reports of written/phone contacts to/from regulatory
agencies, as well as the safety database for PRODUCT.
11.6 If (a) NOVARTIS is precluded from selling PRODUCT in a
particular country(ies) in the TERRITORY by virtue of infringement of THIRD
PARTY patent rights, or (b) there is a holding of invalidity or unenforceability
of any PATENT, from which no further appeal
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can be taken, that materially affects NOVARTIS' ability to commercialize PRODUCT
in a particular country(ies) in the TERRITORY, NOVARTIS shall have the right
(but not the obligation) to terminate this Sublicense Agreement in such
country(ies). At NOVARTIS' option, this Sublicense Agreement may be terminated
in its entirety if the events described in subsection (a) or (b) of this Xxxxxxx
00.0 xxxxx xx xxx Xxxxxx Xxxxxx and/or, the EUROPEAN UNION. Within ninety-five
(95) days of any such termination, subject to the following sentence, TITAN
shall repay to NOVARTIS if the Sublicense Agreement has been terminated in its
entirety, that portion of the upfront license fee and milestone payments
(including in the form of NOVARTIS' purchase of TITAN convertible preferred
stock) it has received from NOVARTIS up to the date of termination. In the event
the License Agreement is terminated pursuant to Section 11.6 of the License
Agreement, TITAN shall be obligated to make the foregoing repayments to
NOVARTIS, but only to the extent HMRI has repaid the upfront license fee and
milestone payments to TITAN under Section 11.6 of the License Agreement. If this
Sublicense Agreement has been terminated only with respect to certain
country(ies), the parties shall negotiate in good faith what smaller portion of
the upfront license fee and milestone payments TITAN has received from NOVARTIS
up to such date shall be repaid to NOVARTIS; provided, however, if the License
Agreement has been terminated only with respect to such certain countries under
Section 11.6 of the License Agreement, TITAN shall be obligated to make such
repayments to NOVARTIS but only to the extent HMRI has repaid a portion of the
upfront license fee and milestone payments to TITAN under Section 11.6 of the
License Agreement. If the parties are unable to agree on such smaller portion
within ninety (90) days, the issue shall be submitted for determination by
arbitration in accordance with Section 14.2.
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12. WARRANTIES, INDEMNIFICATIONS AND REPRESENTATIONS.
12.1 TITAN represents and warrants that to the best of its
knowledge at the date of this Sublicense Agreement: (a) all currently issued or
pending patents and patent applications owned or controlled by HMRI or its
AFFILIATES claiming the COMPOUND or PRODUCT are listed in Appendix A, and (b)
HMRI or its AFFILIATES owns or controls the entire right, title and interest in
PATENTS and KNOW-HOW. If TITAN becomes aware of any patents or patent
applications owned or controlled by HMRI or its AFFILIATES claiming COMPOUND or
PRODUCT or manufacture, formulation or use thereof not listed in Appendix A and
is within the rights granted to NOVARTIS in this Sublicense Agreement, such
patents and patent applications shall be added to Appendix A at no cost to
NOVARTIS . TITAN further represents and warrants that to the best of its
knowledge as of the date of this Sublicense Agreement: (c) TITAN's written
contracts with CROs relating to COMPOUND or PRODUCT that are in effect as of the
effective date of this Sublicense Agreement (which contracts are identified in
Appendix E) are in full force and effect and neither TITAN nor any of the CROs
is in default of any of their obligations under such contracts, (d) the License
Agreement is in full force and effect and neither HMRI nor TITAN is in default
of any of their obligations thereunder, and (e) subject to obtaining HMRI's
prior written consent, TITAN has the legal power, right and authority to enter
into this Sublicense Agreement. NOVARTIS represents and warrants that it has the
legal power, right and authority to enter into this Sublicense Agreement. TITAN
will obtain all assignments or licenses from the patent holder of the PATENTS,
to the same extent as TITAN is entitled to receive such assignments or licenses
from HMRI under the License Agreement, to provide NOVARTIS with the same degree
of exclusivity
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in the TERRITORY under the PATENTS as TITAN is granted by HMRI under the License
Agreement.
12.2 Nothing in this Sublicense Agreement shall be construed
as a warranty that PATENTS are valid or enforceable or that their exercise does
not infringe any patent rights of THIRD PARTIES. TITAN hereby represents and
warrants that it has no present knowledge that (i) PATENTS are invalid or
unenforceable, (ii) the exercise of PATENTS infringes any patent rights of THIRD
PARTIES, and (iii) THIRD PARTY licenses are necessary for the development,
manufacture or commercialization of COMPOUND or PRODUCT. A holding of invalidity
or unenforceability of any PATENT, from which no further appeal is or can be
taken, shall not affect any obligation already accrued hereunder, but shall only
eliminate future royalties otherwise due under such PATENT from the date such
holding becomes final.
12.3 Each party represents to the other that it is not
currently debarred, suspended or otherwise excluded by any U.S. Government
agencies from receiving federal contracts.
12.4 NOVARTIS agrees that during the term of this Sublicense
Agreement, neither it or a SUBLICENSEE shall license, develop, have developed,
manufacture, have manufactured, sell or have sold any of the following compounds
or products classified as an atypical antipsychotic: (i.e. Olanzapine,
Sertindole, Seroquel, Ziprasadone, Risperidone); provided that such restriction
shall not apply within the EEA. In the event that NOVARTIS or a SUBLICENSEE
undertakes any of the foregoing actions within the EEA, then TITAN may not
terminate this Sublicense Agreement or seek damages or equitable remedies for
such actions, but may at its option by notice to NOVARTIS (i) terminate the
EXCLUSIVE nature of the licenses granted pursuant to Article 2
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hereof in the EEA, so that all use of PATENTS and KNOW-HOW in the EEA will
thereafter be on a nonexclusive basis at a reduced royalty rate to be negotiated
at such time of change in exclusivity; (ii) cease providing improvements to
NOVARTIS pursuant to Section 2.3; and/or (iii) require NOVARTIS to prove to
TITAN's reasonable satisfaction that the KNOW-HOW is not being used for such
activities.
Notwithstanding the foregoing, TITAN and NOVARTIS agree that
in the event NOVARTIS acquires rights to one or more of the five compounds or
products listed in the first paragraph of this Section 12.4 (the "Acquired
Compounds or Products") as part of a corporate transaction such as an
acquisition of assets or stock, a merger, or consolidation, TITAN shall use its
good faith efforts to cause HMRI to waive any rights that it may have against
NOVARTIS or TITAN under this Section 12.4 and Section 12.4 of the License
Agreement. To assist TITAN in obtaining such waiver from HMRI, NOVARTIS will
provide TITAN with arguments supporting how NOVARTIS intends to prevent PRODUCT
from being negatively impacted by the Acquired Compounds or Products. In the
event HMRI will not waive such rights and NOVARTIS does not agree to divest the
Acquired Compounds or Products or, alternatively, sublicense PRODUCT to a
mutually acceptable third party (which third party must also be acceptable to
HMRI), TITAN agrees that its sole and exclusive remedy against NOVARTIS shall be
to terminate the exclusive nature of the Sublicense Agreement in the EEA as
provided for in this Section 12.4, and to terminate this Sublicense Agreement
elsewhere in the TERRITORY.
12.5 NOVARTIS shall indemnify, defend and hold TITAN, HMRI and
their respective AFFILIATES harmless from and against any and all liabilities,
claims, demands,
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damages, costs, expenses, fines, penalties or money judgments including without
limitation court costs and reasonable attorney's fees (hereinafter referred to
as "Liabilities"), during the term of this Sublicense Agreement and after its
expiration or termination, incurred by or rendered against TITAN, HMRI and their
respective AFFILIATES which arise out of the clinical testing, use or labeling,
or the manufacture, processing, packaging, sale or distribution of COMPOUND or
PRODUCT (as the case may be) by NOVARTIS, its AFFILIATES and SUBLICENSEES, or
the breach of this Sublicense Agreement by NOVARTIS (including without
limitation any breach of NOVARTIS' representations and warranties under this
Sublicense Agreement) or any negligence or misconduct of NOVARTIS , except to
the extent that such Liabilities are directly attributable to the breach of this
Sublicense Agreement by TITAN or breach of the License Agreement by HMRI
(including without limitation any breach of TITAN's representations or
warranties under this Sublicense Agreement or any breach of HMRI's
representations or warranties under the License Agreement) or any negligence or
misconduct by TITAN or HMRI. NOVARTIS shall also indemnify, defend and hold
TITAN, HMRI and their respective AFFILIATES harmless from and against any and
all Liabilities incurred by or rendered against TITAN, HMRI and their respective
AFFILIATES which arise out of the COMPOUND or PRODUCT supplied by NOVARTIS to
HMRI and/or TITAN and for use pursuant to Section 2.3, or which arise out of any
contracts or arrangements with THIRD PARTIES (including CROs) relating to the
development and/or registration process for the COMPOUND or PRODUCT from and
after the effective date of this Sublicense Agreement, whether such contracts or
arrangements with THIRD PARTIES were entered into prior to or following the
effective date of this Sublicense Agreement, except to the extent that
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such Liabilities are directly attributable to the breach of this Sublicense
Agreement by TITAN or breach of the License Agreement by HMRI (including without
limitation any breach of TITAN's representations or warranties under this
Sublicense Agreement or any breach of HMRI's representations or warranties under
the License Agreement) or any negligence or misconduct by TITAN or HMRI.
12.6 TITAN shall indemnify, defend and hold NOVARTIS , its
AFFILIATES and SUBLICENSEES harmless from and against any and all Liabilities
(as defined in Section 12.5 hereof), incurred by or rendered against NOVARTIS,
its AFFILIATES and SUBLICENSEES, which arise out of the breach of this
Sublicense Agreement by TITAN (including without limitation any breach of
TITAN's representations or warranties under this Sublicense Agreement), or any
negligence or misconduct by TITAN, except to the extent that such Liabilities
are directly attributable to the breach of this Sublicense Agreement by NOVARTIS
(including without limitation any breach of NOVARTIS' representations and
warranties under this Sublicense Agreement), or any negligence or misconduct by
NOVARTIS. TITAN shall also indemnify, defend and hold NOVARTIS, its AFFILIATES
and SUBLICENSEES harmless from and against any and all Liabilities incurred by
or rendered against NOVARTIS, and its AFFILIATES and SUBLICENSEES which arise
out of the manufacture, use or sale of COMPOUND and PRODUCT that has been
manufactured or sold by or on behalf of TITAN and its AFFILIATES or SUBLICENSEES
in Japan or those countries where NOVARTIS' sublicense rights hereunder have
been terminated (including the clinical testing, use and labeling of PRODUCT and
the manufacture, processing, packaging, sale or distribution of PRODUCT by TITAN
and its AFFILIATES and SUBLICENSEES) or subject to
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Section 5.4(b), which arise out of the activities of any CRO which occurred
prior to the execution of this Sublicense Agreement and that were undertaken
pursuant to a written contract between TITAN and such CRO relating to COMPOUND
or PRODUCT.
12.7 Each party shall give the other prompt notice in writing
of any claim or demand referred to in Sections 12.5 or 12.6. In addition, the
obligations of any indemnifying party shall be subject to the indemnified party
fulfilling the following obligations:
(a) With respect to third party claims, indemnified
party shall fully cooperate with the indemnifying party in the defense of such
claim or demand which defense shall be controlled by the indemnifying party; and
(b) With respect to third party claims, indemnified
party shall not, except at its own cost, voluntarily make any payment or incur
any expense with respect to any claim, demand or suit (including without
limitation retaining its own counsel) without the prior written consent of the
indemnifying party, which such party shall not be required to give.
13. FORCE MAJEURE.
13.1 If the performance of any part of this Sublicense
Agreement by either party, or if any obligation under this Sublicense Agreement,
is prevented, restricted, interfered with or delayed by reason of any cause
beyond the reasonable control of the party required to perform, the party so
affected, upon giving written notice and written evidence of such force majeure
to the other party, shall be excused from such performance to the extent of such
prevention, restriction, interference or delay, provided that the affected party
shall use its reasonable commercial efforts to avoid or remove such causes of
nonperformance and shall continue performance with the utmost
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dispatch whenever the force majeure is removed. In the event of a force majeure,
the parties shall also discuss whether modification of the terms of this
Sublicense Agreement are necessary to alleviate the hardship or loss caused by
the force majeure.
14. GOVERNING LAW AND ARBITRATION.
14.1 This Sublicense Agreement shall be deemed to have been
made in the State of New York and its form, execution, validity, construction
and effect shall be determined in accordance with the laws of the State of New
York (without regard to New York's or any other jurisdiction's choice of law
principles).
14.2 In the event of any controversy or claim arising out of
or relating to any provision of this Sublicense Agreement, the parties shall try
to settle their differences amicably between themselves. Any unresolved disputes
arising between the parties relating to, arising out of or in any way connected
with this Sublicense Agreement or any term or condition hereof, or the
performance by either party of its obligations hereunder, whether before or
after termination of this Sublicense Agreement, shall be resolved by final and
binding arbitration. Whenever a party shall decide to institute arbitration
proceedings, it shall give written notice to that effect to the other party.
Except in the case of a determination to be made where payments are to be made
to by one party to the other, the party giving such notice shall refrain from
instituting the arbitration proceedings for a period of sixty (60) days
following such notice to allow the parties time to further attempt to come to an
amicable resolution of the dispute. Arbitration shall be held in New York City,
New York according to the commercial rules of the American Arbitration
Association ("AAA"). The arbitration will be conducted by a panel of three
arbitrators appointed in accordance with AAA
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rules; provided, however, that each party shall within thirty (30) days after
the institution of the arbitration proceedings appoint a party arbitrator, and
the party-arbitrators shall select a neutral arbitrator, to be chairman of the
arbitration panel, within thirty (30) days thereafter. If the party-arbitrators
are unable to select a neutral within such period, the neutral shall be
appointed in accordance with AAA rules. All arbitrator(s) eligible to conduct
the arbitration must agree to render their opinion(s) within thirty (30) days of
the final arbitration hearing. No arbitrator (nor the panel of arbitrators)
shall have the power to award punitive damages under this Sublicense Agreement
and such award is expressly prohibited. Decisions of the arbitrator(s) shall be
final and binding on all of the parties. Judgment on the award so rendered may
be entered in a court having jurisdiction thereof. In any arbitration pursuant
to this Sublicense Agreement, the arbitrators shall interpret the express terms
hereof and apply the laws of the State of New York. The losing party to the
arbitration as determined by the arbitrators shall pay the costs of arbitration.
15. SEPARABILITY.
15.1 In the event any portion of this Sublicense Agreement not
material to the remaining portions shall be held illegal, void or ineffective,
the remaining portions hereof shall remain in full force and effect.
15.2 If any of the terms or provisions of this Sublicense
Agreement are in conflict with any applicable statute or rule of law, then such
terms or provisions shall be deemed inoperative to the extent that they may
conflict therewith and shall be deemed to be modified to conform with such
statute or rule of law.
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15.3 In the event that the terms and conditions of this
Sublicense Agreement are materially altered as a result of Sections 15.1 or
15.2, the parties shall renegotiate the terms and conditions of this Sublicense
Agreement so as to accomplish as nearly as possible the original intentions of
the parties.
16. ENTIRE AGREEMENT.
16.1 This Sublicense Agreement and the Appendices attached
hereto, entered into as of the date written above, constitutes the entire
agreement between the parties relating to the subject matter hereof and
supersedes all previous writings and understandings, including without
limitation the Heads of Agreement between the parties dated October 21, 1997 and
the Confidentiality Agreement between the parties dated February 21, 1997 (it
being understood and agreed that all Confidential Information of HMRI and TITAN
disclosed to NOVARTIS prior to the effective date of this Sublicense Agreement
shall be subject to Sections 6.4, 6.6, 6.7 and 6.9 of this Sublicense
Agreement). No terms or provisions of this Sublicense Agreement shall be varied
or modified by any prior or subsequent statement, conduct or act of either of
the parties, except that the parties may amend this Sublicense Agreement by
written instruments specifically referring to and executed in the same manner as
this Sublicense Agreement.
17. NOTICES.
17.1 Any notice required or permitted under this Sublicense
Agreement shall be in writing and in English and shall be sent by airmail,
postage prepaid, or facsimile or courier to the following address of each party
or to such other address as may be designated in writing by the respective
parties:
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If to NOVARTIS : Novartis Pharma A.G.
Legal Services
Xxxxxxxxxxxx 00
XX 0000 Xxxxx
Xxxxxxxxxxx
Attention: General Counsel
With copies to: Business Development and Licensing
Novartis Pharma X.X.
Xxxxxxxxxxxx 00
XX 0000 Xxxxx
Switzerland
Attention: Head of Department
If to TITAN: Titan Pharmaceuticals, Inc.
000 Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxx Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, M.D.
President & CEO
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to: Titan Pharmaceuticals, Inc.
000 Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxx Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Executive V.P. & COO
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Xxxxxx Xxxxxx White & XxXxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxxx Xxxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
17.2 Any notice required or permitted to be given concerning
this Sublicense Agreement shall be effective upon receipt by the party to whom
it is addressed.
18. ASSIGNMENT.
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18.1 This Sublicense Agreement or any portions thereof and the
sublicenses herein granted shall be binding upon and inure to the benefit of the
successors in interest and assignees of the respective PARTIES.
18.2 NOVARTIS may assign this Sublicense Agreement to an
AFFILIATE without the prior written consent of TITAN, and in such event NOVARTIS
will continue to guarantee the obligations of such AFFILIATE hereunder. Subject
to the foregoing, NOVARTIS shall not have the right to assign this Sublicense
Agreement to any THIRD PARTY without the prior written consent of TITAN, not to
be unreasonably withheld.
18.3 In the event of a consolidation, merger or acquisition
which involves a change in the control of NOVARTIS, this Sublicense Agreement
shall remain in full force and effect, and NOVARTIS agrees to notify TITAN
pursuant to Section 10.4.
19. FAILURE TO ENFORCE.
19.1 The failure of either party to enforce at any time any
provisions hereof shall not be construed to be a waiver of such provision nor of
the right of such party thereafter to enforce each and every such provision.
20. NO AGENCY.
20.1 Except as expressly set forth in this Sublicense
Agreement, nothing in this Sublicense Agreement authorizes either party to act
as agent for the other or, as to any third party, to indicate or imply the
existence of any such agency relationship. The relationship between the parties
is that of independent contractors.
21. FURTHER ASSURANCES.
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21.1 Each party hereto agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Sublicense Agreement.
22. CAPTIONS.
22.1 Captions are inserted for convenience only and in no way
are to be construed to define, limit or affect the construction or
interpretation hereof.
23. MISCELLANEOUS.
23.1 Both parties agree to discuss matters arising during the
term of this Sublicense Agreement in the spirit of cooperation and good faith
and endeavor to resolve any differences by mutual agreement whenever possible.
If the parties fail to reach agreement, either party may submit the matter for
resolution pursuant to Section 14.2.
23.2 NOVARTIS covenants to TITAN that during the term of this
Sublicense Agreement, NOVARTIS, its AFFILIATES and SUBLICENSEES shall not
violate the Federal Foreign Corrupt Practices Act in the performance of its
negotiations or obligations hereunder.
23.3 NOVARTIS acknowledges that it has received and reviewed
the License Agreement (a copy of which is attached hereto as Appendix G), and
agrees that the terms and conditions of this Sublicense Agreement must be
consistent with the License Agreement.
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IN WITNESS WHEREOF, the parties, through their authorized officers,
have executed this Sublicense Agreement as of the date first written above.
NOVARTIS PHARMA A.G. TITAN PHARMACEUTICALS, INC.
By: By:
Name: Name:
Title: Title:
NOVARTIS PHARMA A.G.
By:
Name:
Title:
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APPENDIX A
PATENTS AND PATENT APPLICATIONS (PER SECTION 1.17)
PATENT FILING PATENT ISSUE EXPIRATION
COUNTRY APPL. NO. DATE TYPE STATUS NO. DATE DATE
------- --------- ---- ---- ------ --- ---- ----
US 07/354,411 5/19/89 abandoned
US 07/456,790 12/29/89 CIP+ abandoned
EP 90109208.0 05/16/90 granted 0 402 644 08/16/95 05/15/2010
Austria 90109208.0 05/16/90 national converted E 126512 08/16/95 05/15/2010
Belgium 90109208.0 05/16/90 national converted 0 402 644 08/16/95 05/15/2010
Denmark 90109208.0 05/16/90 national converted 0 402 644 08/16/95 05/15/2010
France 90109208.0 05/16/90 national converted 0 402 644 08/16/95 05/15/2010
Germany 90109208.0 05/16/90 national converted 69021645.9 08/16/95 05/15/2010
Great Britain 90109208.0 05/16/90 national converted 0 402 644 08/16/95 05/15/2010
Greece 90109208.0 05/16/90 national converted 3017447 08/16/95 05/15/2010
Israel 94425 05/17/90 issued P/94425 05/29/94 05/17/2010
Italy 90109208.0 05/16/90 national converted 52158/BE/95 08/16/95 05/15/2010
Luxembourg 90109208.0 05/16/90 national converted 0 402 644 08/16/95 05/15/2010
Netherlands 09109208.0 05/16/90 national converted 0 402 644 08/16/95 05/15/2010
Spain 09109208.0 05/16/90 national converted ES2076253T3 08/16/95 05/15/2010
Switzerland 0909208.0 05/16/90 national converted 0 402 644 08/16/95 05/15/2010
Sweden 0909208.0 05/16/90 national converted 0 402 644 08/16/95 05/15/2010
Australia 55770/90 05/22/90 issued 640,653 09/02/93 05/22/2010
Canada 2,017,193-6 05/18/90
China 90103721.4 05/19/90
Czech 2425-90 05/17/90
Republic
Finland 902449 05/17/90
Hungary 3090/90 05/18/90
Ireland 1809/90 05/18/90 issued 68431 05/23/96 05/18/2010
Israel 94425 05/17/90
Korea 90/7102 05/18/90
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PATENT FILING PATENT ISSUE EXPIRATION
COUNTRY APPL. NO. DATE TYPE STATUS NO. DATE DATE
------- --------- ---- ---- ------ --- ---- ----
Xxxxxx 00000 05/18/90
Xxx Xxxxxxx 000000 05/17/90 issued 233710
Norway P902214 05/18/90 177301 08/23/95 05/18/201
Philippines 40530 05/17/90
Poland P-285247 05/18/90 163965 12/09/93
Portugal 94084 05/18/90 issued 94084 09/18/96 05/18/201
Russia 4743876/04 05/18/90
South 90/2820 05/18/90 issued 90/38230 02/27/91 05/18/2010
Taiwan 79104996 06/19/90 issued 54190 01/11/92 06/19/2010
US 07/619,825 11/29/90 continuation abandoned
US 07/944,705 09/05/91 continuation abandoned
US 07/788,269 11/05/91 CIP abandoned
US 07/969,383 10/30/92 CIP issued 5,364,866 11/15/94 11/15/2011
PCT 92/09276 11/04/92 WO/93/09102
EP 92/924151.1 11/04/92 pending
EP (Portugal) 92118982.5 11/05/92 pending
Australia 30570/92 11/04/92
Belarus 1715 11/04/92
Canada 2,121,253 11/04/92
Czech PV 1102-94 11/04/92
Republic
Finland 942052 11/04/92
Xxxxxxx 000000 11/04/92
Hungary P9401316 11/04/92
Israel 103622 11/03/92
Korea 94-701524 11/04/92
Kazakhstan 941593.1 11/04/92
Mexico 926370 11/05/92
Norway 941647 11/04/92
New 245006 11/03/92 issued 245006 05/17/96 11/03/2012
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PATENT FILING PATENT ISSUE EXPIRATION
COUNTRY APPL. NO. DATE TYPE STATUS NO. DATE DATE
------- --------- ---- ---- ------ --- ---- ----
Philippines 45259 11/12/92
Poland P-303452 11/04/92
Romania 9400761 11/04/92
Russia 94028105.04 11/04/92
Slovak PV 0456-94 11/04/92
Republic
Taiwan 81108831 11/05/92
Uzbekistan 9500706.1 11/04/92
US 08/144,265 10/28/93 CIP abandoned
US 08/309,395 09/20/94 CIP** pending
US 08/329,000* 10/25/94 CIP** issued 5,658,911 08/19/97 08/19/2014
US 08/468,611 06/06/95 DIV** pending
PCT 94/12054 10/27/94 WO95/11680
EP 9590039.6 10/27/94 pending
Brazil PI 1101001.0 05/14/97 Pipeline
Canada 2175212 10/27/94
China 94194302 10/27/94
Xxxxx XX 0000-00 00/00/00
Xxxxxxxx
Xxxxxxx P/P 00576 06/29/95 granted 211,853 11/06/95 06/29/2015
Indonesia 951058 06/08/95
Israel 111,498 10/27/94
Korea 96-702162 10/27/94
Xxxxxx 00 0000 00/00/00
Xxxxxx p961686 10/27/94
New 275941 10/27/94
Zealand
Poland P314135 10/27/94
Romania 96-00888 10/27/94
Russia 96110214 10/27/94
Taiwan 83110396 11/10/94
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PATENT FILING PATENT ISSUE EXPIRATION
COUNTRY APPL. NO. DATE TYPE STATUS NO. DATE DATE
------- --------- ---- ---- ------ --- ---- ----
South 95/2653 10/28/94
Africa
* subject to a 60 way restriction requirement; 329,000 survived as one to the
60 divisionals
** pending as one of the 60 divisionals
+ CIP (Continuation-in-part)
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APPENDIX B
MAJOR METABOLITES (PER SECTION 1.6)
--------------------------------------------------------------------------------
Compound No. Name R1 R2 R3
--------------------------------------------------------------------------------
rP88 8991 4-[3-[4-(6-fluoro-1,2- H CH(OH)CH3 OCH
benzisoxazol-3-yl)-1- 3
piperidinyl]propoxy]-3-
methoxy-[alpha]-methyl-
benzenemethanol
P89 9124 1-[4-[3-[4-(6-fluoro-1,2- H C(O)CH3 OH
benzisoxazol-3-yl)-1-
piperidinyl]propoxy]-3-
hydroxyphenyl]-ethanone
P94 11840 1-[4-[3-[4-(6-fluoro-1,2- H C(O)CH2OH OCH
benzisoxazol-3-yl)-1- 3
piperidinyl]propoxy]-3-
methoxyphenyl]-2-
hydroxyethanone
P89 9430 4-[3-[4-(6-fluoro-1,2- H CH(OH)CH3 OH
benzisoxazol-3-yl)-1-
piperidinyl]propoxy]-3-
hydroxy-[alpha]-
methylbenzenemethanol
P94 11677 4-[3-[4-(6-fluoro-1,2- OH CH(OH)CH3 OCH
benzisoxazol-3-yl)-1- 3
piperidinyl]propoxy]-2-
hydroxy-5-methoxy-[alpha]-
methylbenzenemethanol
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--------------------------------------------------------------------------------
Compound No. Name R1 R2 R3
--------------------------------------------------------------------------------
P94 11679 1-[4-[3-[4-(6-fluoro-1,2- OH C(O)CH3 OCH
benzisoxazol-3-yl)-1- 3
piperidinyl]propoxy]-2-
hydroxy-5-
methoxyphenyl]ethanone
P94 11702 1-[4-[3-[4-(6-fluoro-1,2- OH C(O)CH3 OH
benzisoxazol-3-yl)-1-
piperidinyl]propoxy]-2,5-
dihydroxyphenyl]-ethanone
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APPENDIX D
Sample Invoice
TITAN PHARMACEUTICALS, INC.
[Date]
Novartis Pharma AG
Zentraler Faktureneingang
Attn: Xx. X. Xxxxx
BD&L Contract Administration
Xxxxxxxxxxx 00
XX 0000 Xxxxx
Xxxxxxxxxxx
Dear Xx. Xxxxx:
Re: Titan Pharmaceuticals, Inc./Sublicense Agreement - Iloperidone
This is an invoice requesting payment in connection with the above-captioned
agreement between Titan Pharmaceuticals, Inc. and Novartis Pharma AG.
Novartis Contract Code No.: [will be assigned by BD&L following execution]
Novartis Creditor No.: [will be assigned by BD&L following execution]
Reason for Payment: [please cite specific section or article in the
agreement]
Amount and Currency: [self-explanatory]
Bank Address and Account No.: [insert the name and address of the bank to
which the payment should be sent and the
account number to which it should be credited]
Sincerely yours,
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APPENDIX E
TITAN CONTRACTS WITH RESEARCH ORGANIZATIONS
IBAH, Inc. CLINICAL AND PHARMACEUTICS SERVICES MASTER
AGREEMENT AND ITS ENABLING EXHIBITS 1 THROUGH 8
EXHIBIT 1. ILOPERIDONE STUDY 300
EXHIBIT 2. ILOPERIDONE STUDY 302
EXHIBIT 3. ILOPERIDONE STUDY 306
EXHIBIT 4. RECEIPT AND STORAGE OF CLINICAL MATERIAL FOR
ILOPERIDONE CLINICAL STUDIES
EXHIBIT 5. ILOPERIDONE CLINICAL STABILITY PROGRAM
EXHIBIT 6. CLINICAL SUPPLY MATERIAL HANDLING OF ILOPERIDONE
EXHIBIT 7. ENCAPSULATION OF HALOPERIDOL TABLETS
EXHIBIT 8. ANALYTICAL TESTING TO EXTEND EXPIRATION DATES;
ANALYTICAL TESTING OF 40C/75RH SAMPLES; DESTRUCTION
OF RISPERIDONE, RESPERIDAL, AND HALOPERIDOL
SUPPLIES; DOCUMENTATION SUPPORT FOR IND FILING
(copies of exhibits will be provided by TITAN to NOVARTIS separately)
WIL RESEARCH LABORATORIES COMPLETION OF RODENT ONCOGENICITY
STUDIES
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A 24-MONTH ORAL ONCOGENICITY STUDY OF HP-873 IN MICE
A 24-MONTH ORAL ONCOGENICITY STUDY OF HP-873 IN RATS
(RESPONSIBILITY FOR THESE STUDIES WAS TRANSFERRED FROM HMRI TO TITAN)
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APPENDIX F
SPECIAL COUNTRIES IN TERRITORY REGARDING
HMRI'S PATENT PROTECTION (PER SECTION 8.2)
United States
PCT PCT (cont.)
Australia Estonia
Brazil Hungary
Bulgari Israel
Canada Mexico
China New Zealand
Czech Republic Norway
Kazakhstan Poland
EPO Russian
Austria Slovakia
Belgium South Korea
Denmark Non-PCT
Finland Argentina
France Chile
Germany Egypt
Great Britain Hong Kong
Greece India
Iceland Indonesia
Ireland Malaysia
Italy Philippines
Latvia Saudi Arabia
Lithuania South Africa
Luxembourg Taiwan
Monaco Thailand
Netherlands Venezuela
Portugal
Romania
Singapore
Slovenia
Spain
Sweden
Switzerland with Liechtenstein
Turkey
Ukraine
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