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Exhibit 10.20
DEVELOPMENT AND EXCLUSIVE LICENSE AGREEMENT
This DEVELOPMENT AND EXCLUSIVE LICENSE AGREEMENT, effective
this 10th day of December 1996 (hereinafter "Agreement"), is by and between
Chugai Pharmaceutical Co., Ltd., a Japanese corporation (hereinafter "Chugai"),
with its principal offices located at 0-0 Xxxxxxxx 0-Xxxxx, Xxxx-xx, Xxxxx,
Xxxxx 104, and Gliatech Inc., a Delaware corporation (hereinafter "Gliatech"),
with its principal offices located at 00000 Xxxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxxx
00000.
W I T N E S S E T H:
WHEREAS, Gliatech has developed certain products (hereinafter
"Products" as defined below) which utilize certain Gliatech proprietary
technology (hereinafter "Technology" as defined below):
WHEREAS, Chugai desires to license the Technology and the
Products from Gliatech for its field of use (hereinafter "Field of Use" as
defined below); and
WHEREAS, Gliatech desires to license the Technology and the
Products to Chugai for such Field of Use.
NOW THEREFORE, in consideration of the mutual covenants and
promises contained herein, and other good and valuable consideration, and
subject to the terms and conditions hereof, Chugai and Gliatech agree as
follows.
1. DEFINITIONS.
1.1 EFFECTIVE DATE. Effective Date shall mean December 10, 1996.
1.2. PRODUCTS. Products shall mean Gliatech's ADCON(R)-L and ADCON(R)-T/N
medical devices.
1.3 TECHNOLOGY. Technology shall mean any Patent Rights (as defined
below) and any other information and data which relate to the
development, design, manufacture, use or sale of the Products, which
Gliatech owns and has heretofore developed, created or acquired,
through license or otherwise, or which Gliatech develops, creates or
acquires after the Effective Date as improvements to the Technology
(that which is developed, created or acquired after the Effective
Date being hereinafter referred to as "Improvements"). The Technology
as of the Effective Date is listed on EXHIBIT A.
1.4 TERRITORY. Territory shall mean Japan.
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1.5 DEVELOPMENT PLAN. Development Plan shall mean a detailed outline
prepared by Chugai and agreed to by Gliatech, which shall include,
without limitation, target dates on which Chugai intends to file for
and receive the Importation Approval and any other government and
third party approvals, health or product registrations, licenses,
visas or other permits (hereinafter referred to as "Authorizations")
required to commercialize, sell, distribute, promote and handle,
including, without limitation, any import requirements relating to,
the Products in the Territory and/or to fulfill all its obligations
under this Agreement. The Development Plan, shall be reviewed and
updated periodically as needed, setting forth the development
activities (hereinafter "Development Activities") intended to be
undertaken by Chugai in order to fully develop and commercialize the
Products as expeditiously as possible.
1.6 FIELD OF USE. Field of Use shall mean any use of the Technology and
the Products for the inhibition of surgical adhesions in the fields
of neurologic, spinal or orthopedic surgical procedures.
1.7 IMPORTATION APPROVAL. Importation Approval shall mean any and all
necessary approvals for the importation of the Products as Medical
Devices that may be required to be issued by any parties, including,
without limitation, the Ministry of Health and Welfare of Japan, in
accordance with any applicable law, statute, ordinance, regulation or
other applicable authority, including, without limitation, the
Pharmaceutical Affairs Law (Yakuji-Hou) of Japan.
1.8 MEDICAL DEVICES. Medical Devices shall mean medical devices as
defined as "Iryo-Yogu" under the Pharmaceutical Affairs Law
(Yakuji-Hou) of Japan.
1.9 PATENT RIGHTS. Patent Rights shall mean any Japanese patents, patent
applications, utility models, and any claims thereof, and any rights
to file the same, and shall also mean any divisions, patents of
addition, continuations, continuations-in-part, extensions, reissues
and reexaminations of the same.
1.10 PERSON. Person shall mean any individual, corporation, partnership,
association or entity.
1.11 DEVELOPMENT ACTIVITIES. Development Activities shall mean those
activities set forth in the timetable on the Development Plan, as
established in accordance herewith, upon which the parties agreed
regarding the commercial marketing and sales of the Products within
the Field of Use. Development Activities shall not include marketing
and sales activities.
2. DEVELOPMENT EFFORTS; MARKETING AND SALES EFFORTS; AUTHORIZATIONS AND
REGULATORY EFFORTS; AND USE OF RESULTS.
2.1 DEVELOPMENT EFFORTS. (a) Gliatech shall disclose to Chugai
information and materials related to the Products and the Technology,
as listed on Exhibit A.
(b) Within ninety (90) days from the date of the disclosure
of information and materials related to the Products and the
Technology as set forth herein Section 2.1(a),
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Chugai shall deliver to Gliatech the Development Plan. Gliatech shall
then have thirty (30) days to review and approve the Development
Plan.
(c) Chugai shall complete the Development Activities so that
Chugai can commercially market and sell the Products within the Field
of Use. In this effort, Chugai shall concentrate and use its best
efforts to develop the Products and Chugai shall devote its utmost
corporate resources to accomplish the same under the Development
Plan.
(d) Gliatech shall consult with Chugai regarding any
Improvements to the Products and Gliatech shall periodically advise
and notify Chugai in writing of the existence and status of
subsequent development activities undertaken by Gliatech with respect
to any Improvements to the Products.
(e) Within ninety (90) days from the date of receipt of any
such notice specified in Section 2.1(d) from Gliatech requesting
modification to the Development Plan, Chugai shall deliver to
Gliatech a revised and amended Development Plan. Gliatech shall then
have thirty (30) days to review and approve the revised and amended
Development Plan.
2.2 MARKETING AND SALES EFFORTS. (a) Within ninety (90) days from the
date of disclosure related to the Products and the Technology set
forth in Section 2.1(a), Chugai shall provide Gliatech with an
initial five year annual forecast, substantially in the form of
EXHIBIT B attached hereto, commencing with the initial target receipt
date of all of the Authorizations, as set forth in the initial
Development Plan. It is acknowledged that such initial five year
annual forecast may be amended from time to time based on the mutual
agreement of the parties hereto.
(b) Chugai shall concentrate and use its best efforts to
promote, market and sell the Products that become available for
commercial sale in the Territory and Chugai shall devote its utmost
corporate resources to accomplish the same. As part of its best
efforts, Chugai agrees to make available, on an annual basis, to
Gliatech, for its review and comment, Chugai's strategic business
plan, operating plan, marketing plan and communications plan for the
Products licensed to Chugai under this Agreement, it being understood
that Chugai shall have the sole responsibility for the finalization
and implementation of the strategic business plan, operating plan,
marketing plan and communications plan for the Products.
2.3 AUTHORIZATIONS AND REGULATORY EFFORTS. (a) Chugai shall obtain and
maintain at its expense all necessary Authorizations required to
commercialize, sell, distribute, promote and handle, including,
without limitation, any import requirements relating to, the Products
in the Territory and/or to fulfill all its obligations under this
Agreement. Gliatech shall provide Chugai with the information set
forth on EXHIBIT A with respect to the Technology or the Products.
(b) Upon termination of this Agreement for any reason except
for termination by Chugai pursuant to Section 10.1 or Section 10.5(a)
hereof, Chugai shall cooperate fully
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with Gliatech and take all steps to transfer and assign, immediately
and gratuitously, without any expense to, or payment by, Gliatech,
other than reasonable filing fees and transfer fees of Chugai, which
shall be reimbursed by Gliatech, any Authorizations which may be held
in its name, except as provided for in this Section 2.3(b), to
Gliatech or its designee(s) to the extent permitted by law. Chugai
agrees further to cooperate in the case of nonassignable
Authorizations held in its name by not taking and not omitting any
action which may cause such Authorizations to lapse or be cancelled,
and shall cooperate with and assist Gliatech or its designee(s) in
obtaining an orderly transition and issuance of new Authorizations
for the Products on behalf of Gliatech or its designee(s) without
delay.
(c) Chugai will immediately notify Gliatech of any formal
contact with regulatory authorities with respect to material issues
relating to the Products. Chugai will provide copies of all
correspondence and other documents from regulatory authorities
involving the Products to Gliatech.
(d) Chugai shall implement and maintain, in accordance with
any and all governmental, regulatory or other requirements or
Authorizations, quality control systems (the "Quality System")
relating to the commercialization, promotion, marketing, distribution
or sale of the Products, which Quality System shall be subject to
prior review and approval by Gliatech. Chugai will permit regular
audits, at reasonable intervals and during business hours, of its
Quality System as they relate to Gliatech's Products. Such audits
will be conducted, upon reasonable prior notice to Chugai and at the
expense of Gliatech, by either Gliatech's staff or representative,
or, if required, other regulatory authorities. Chugai acknowledges
that failure to submit to such audit or a finding of major deviations
within their Quality System is a breach of this Agreement. Chugai
shall use its best efforts to perform any corrective actions related
to the Products that are identified in these audits in a timely
manner. Chugai accepts that failure to address such corrective
actions in a timely manner is a breach of this Agreement.
(e) Gliatech, on an annual basis, shall reasonably request
and Chugai shall furnish information regarding current customers, as
well as available information on prospective customers in order for
Gliatech to conduct and gather information for market research
relating to Product quality and Improvements; PROVIDED, that in the
event this Agreement is not terminated Gliatech shall not contact or
sell the Products to such current or prospective customers directly.
Except to the extent permitted by applicable law, Gliatech shall not
provide Chugai with written instructions with respect to selection of
customers.
2.4 USE OF RESULTS. The results of the Development Activities may be used
by the parties pursuant to the terms of this Agreement. Chugai and
Gliatech shall not use the results of the Development Activities
under the Development Plan for any purpose outside this Agreement,
except with the prior notice to and written approval from the other
party before proceeding with such use and except as required by law,
statute or a regulation or directive of a government agency and then
only with notice to the other party. This approval shall not be
unreasonably withheld; PROVIDED, HOWEVER, that the other party may be
entitled to some payment or other consideration from the requesting
party based upon
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the value of the results, the amount of which will be negotiated in
good faith by the parties at that time.
3. LICENSE AND RELATED RIGHTS.
3.1 GRANT OF LICENSE. Gliatech hereby grants to Chugai, and Chugai hereby
accepts, subject to the terms and conditions set forth herein, the
exclusive, non-transferable and royalty-free license to use and
practice the Technology in the Territory and to use and sell the
Products in the Field of Use, and the right to extend (or pass-on)
immunity from suit to Chugai's end use customers who shall purchase
the Products from Chugai for applications in the Field of Use.
3.2 SCOPE OF LICENSE. The license and rights granted to Chugai in this
Agreement also include and automatically cover the Improvements to
the Technology and the Products, subject to the Field of Use, which
Gliatech shall promptly communicate to Chugai in writing.
3.3 MARKETING. All Product-related packaging, labeling, advertising and
related materials shall identify Gliatech as the developer and
manufacturer of the Products to the extent permitted by law or
regulation. Chugai shall xxxx all labels, advertising materials,
product literature and packaging for the Products sold to customers
for use in the Field of Use with appropriate legends for any Patent
Rights that exist under the Technology and also with the appropriate
ADCON(R)-L or ADCON(R)-T/N trademark owned by Gliatech, unless a
substitute xxxx is adopted by Gliatech and approved in writing by
Gliatech. This requirement shall not prevent Chugai from also marking
any medical implant, device or system which it sells incorporating or
including the Products with its own patent legend or trademark used
by Chugai for that purpose. Any new advertising or marketing
materials, which is proposed by Chugai and which includes the
ADCON(R)-L or ADCON(R)-T/N trademark, as the case may be, shall be
submitted in advance to Gliatech for approval.
3.4 OWNERSHIP OF PROPRIETARY RIGHTS. Chugai and Gliatech agree that
Gliatech is and shall be the sole owner of the Technology (including
Patent Rights therein) and the Products in existence as of the
Effective Date and any Improvements thereto.
3.5 OTHER PRODUCTS. (a) Gliatech shall periodically advise Chugai in
writing of the existence and status of development activities by
Gliatech with respect to ADCON(R) products based on the Technology,
which are outside the definition of the Products, Technology or the
Field of Use as set forth in this Agreement. If Chugai desires to
explore obtaining a license or other rights with respect to this new
disclosure, Chugai shall notify Gliatech in writing within twenty
(20) days of receiving such notice, and Gliatech shall negotiate with
Chugai in good faith for an exclusive period of ninety (90) days
after Gliatech has disclosed the same to Chugai, during which time
Gliatech and Chugai shall discuss the terms of a possible license or
other agreement between them. Gliatech shall not negotiate with any
other Person during such ninety (90) day period.
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(b) Nothing in Section 3.5(a) shall require Chugai to
negotiate with Gliatech on any new disclosure or require Gliatech to
grant any additional license or other rights to Chugai with respect
to the same, or otherwise prevent Gliatech from licensing such other
rights outside this Agreement to any other Person; PROVIDED, HOWEVER,
that any such agreement Gliatech shall enter into with another Person
shall not conflict in any way with the exclusive license and rights
granted to Chugai in this Agreement.
3.6 LIMITATION OF RIGHTS TO CHUGAI AND RESERVATION BY GLIATECH. Chugai
and Gliatech agree that the license and rights granted to Chugai in
the Technology and the Products in the Field of Use are limited as
set forth in this Agreement.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF GLIATECH. Gliatech
represents, warrants and covenants to Chugai as follows:
4.1 POWER AND AUTHORITY. Gliatech has all requisite legal and corporate
power and authority to execute and deliver this Agreement, to license
the Technology and the Products to Chugai as done hereby, and to
carry out and perform its obligations under this Agreement. This
Agreement constitutes the valid and binding obligation of Gliatech,
specifically enforceable against Gliatech in accordance with its
terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or the laws of general application
relating to or affecting creditors' rights or as may be limited by
the availability of equitable remedies.
4.2 DISCLOSURE TO CHUGAI. No representation, warranty or covenant of
Gliatech contained in this Agreement knowingly contains any untrue
statement of a fact or omits to state a fact necessary in order to
make the statements, representations and warranties contained herein
not misleading in light of the circumstances under which they were
made.
4.3 NON-CONTRAVENTION; MATERIAL CONSENTS. Neither the execution and
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby will, with respect to Gliatech, violate any
provision of its Certificate of Incorporation or By-Laws or will
violate, breach or result in the acceleration of or entitle any
Person to accelerate (whether after the giving of notice or lapse of
time or both) any obligation under, or entitle any Person to
terminate any or all of the provisions of any agreement or contract
to which Gliatech is a party. All Authorizations, permits, consents,
waivers, orders, reissuance or approvals of, or filings with any
public body or authority or any third party, if any, which are
necessary to the license granted in this Agreement will have been
obtained prior to the Effective Date, except for Authorizations,
permits, consents, waivers, orders, reissuance, approvals or filings,
the failure of which to obtain will not prevent the grant of such
license.
4.4 PRODUCTS. Gliatech represents that the Products shall be free from
defect in materials and workmanship.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF CHUGAI.
Chugai represents, warrants and covenants to Gliatech as follows:
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5.1 POWER AND AUTHORITY. Chugai has all requisite legal and corporate
power and authority to execute and deliver this Agreement, to accept
the license of the Technology and the Products and such other rights
as done hereby, and to carry out and perform its obligations under
this Agreement. This Agreement constitutes the valid and binding
obligation of Chugai, specifically enforceable against Chugai in
accordance with its terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other laws of
general application relating to or affecting enforcement of
creditors' rights or as may be limited by the availability of
equitable remedies.
5.2 DISCLOSURE TO GLIATECH. No representation, warranty or covenant of
Chugai contained in this Agreement knowingly contains any untrue
statement of a fact or omits to state a fact necessary in order to
make the statements, representations and warranties contained herein
not misleading in light of the circumstances under which they were
made.
5.3 NON-CONTRAVENTION; MATERIAL CONSENTS. Neither the execution and
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will, with respect to Chugai, violate any
provision of its organizational documents, will violate, breach or
result in the acceleration of or entitle any Person to accelerate
(whether after the giving of notice or lapse of time or both) any
obligation under, or entitle any Person to terminate any or all of
the provisions of, any agreement or contract to which Chugai is a
party. All Authorizations, permits, consents, waivers, orders,
reissuance or approvals of, or filings with, any public body or
authority or any third party which are necessary to the license
granted in this Agreement will have been obtained prior to the
Effective Date, except for the Importation Approval and other
Authorizations, permits, consents, waivers, orders, reissuance,
approvals or filings, the failure of which to obtain will not prevent
the grant of such license.
5.4 FIELD OF USE LIMITATION. Chugai shall not knowingly use the Products
for or on behalf of any Person, or otherwise knowingly sell the
Products to any Person who is known by Chugai to use or intending to
use the same, for any purpose outside the Field of Use.
6. FEES AND PAYMENTS. (a) In consideration of the rights granted to
Chugai hereunder, Chugai shall pay Gliatech in accordance with the
following terms and conditions:
(1) In the event that Chugai has not filed for all
necessary Authorizations in accordance with the terms of the
initial Development Plan, which may be amended based on the
mutual agreement of the parties, then Chugai shall pay to
Gliatech a commitment fee of $100,000, payable in U.S.
dollars. In the event that the Ministry of Health and
Welfare does not grant Chugai all necessary Authorizations,
then Chugai shall not be obliged to pay the commitment fee
of $100,000; PROVIDED, THAT, Chugai has complied with the
terms of the initial Development Plan in seeking such
Authorizations.
(2) In the event that within thirty (30) days after
receipt of the Authorizations, Chugai has not submitted its
initial order for delivery of Products ninety (90) days
thereafter in accordance with the terms and conditions of
the
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Manufacturing Agreement, dated December 10, 1996, by and
between Gliatech and Chugai (the "Manufacturing Agreement),
then Chugai shall pay to Gliatech a commitment fee payable
in U.S. dollars equivalent to Chugai's forecasted purchases
for the corresponding year of sales as set forth on EXHIBIT
B attached hereto.
(3) Each year thereafter, if Gliatech has not
received a purchase order from Chugai by September 30, then
Chugai shall pay Gliatech a commitment fee, equivalent to
the forecasted purchases for the following twelve month
period as set forth on EXHIBIT B attached hereto.
(b) Chugai and Gliatech agree that as of the Effective Date,
the royalty-free nature of the license and rights granted to Chugai
in this Agreement is based on the intention of the parties that a
further relationship will exist as of the Effective Date under which
Gliatech or its designee will manufacture the Products and Chugai
will purchase the Products from Gliatech for resale to its customers
in accord with the Manufacturing Agreement by and between Chugai and
Gliatech.
7. PATENT RIGHTS: PROSECUTION, MAINTENANCE AND ENFORCEMENT.
7.1 PROSECUTION AND MAINTENANCE. (a) Chugai and Gliatech shall make all
reasonable and diligent efforts to protect all proprietary rights in
the Territory in the Technology and the Products licensed in this
Agreement. This shall include Chugai and Gliatech cooperating in
taking all reasonable steps to seek, prosecute and maintain all
available Patent Rights in the Technology and the Products. Gliatech
shall be primarily responsible for making decisions regarding scope,
content and prosecution of applications included in the Patent Rights
in the Technology, and Chugai shall have the full and adequate
opportunity to advise Gliatech with regard thereto. Gliatech shall
promptly advise Chugai as to all material developments with respect
to such applications and prosecution, and shall provide copies of all
papers received and filed in connection with such prosecution to
Chugai to enable Chugai to comment thereon, and shall otherwise give
Chugai access to the patent files and records and an opportunity to
participate. Gliatech's right of primary responsibility shall include
selection of counsel, though Chugai may, at its sole expense, retain
its own counsel in connection with its right to review and comment as
provided herein.
(b) Should Gliatech decide it is no longer interested in
prosecuting or maintaining any of the Patent Rights contemplated by
this Section, it shall timely notify Chugai in writing of such
decision. Within thirty (30) days after receipt of such notice,
Chugai may, at its option, determine to prosecute and maintain such
Patent Rights at its sole expense by so notifying Gliatech of its
election. Gliatech shall thereafter cooperate with Chugai as needed
and shall assign all rights in such Patent Rights to Chugai without
additional consideration required. The cost for recording any
assignment documents and for continuing the prosecution and
maintenance of the Patent Rights after such first notice, shall be
exclusively paid by the continuing party. Gliatech's election to
cease prosecuting or maintaining any Patent Rights shall not
constitute a waiver of its rights of
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primary responsibility with respect to any other Patent Rights for
which Gliatech does not and has not elected to cease prosecuting or
maintaining.
7.2 ENFORCEMENT AGAINST OR BY OTHER PERSONS. (a) Chugai and Gliatech
shall promptly notify each other in writing of any activity of a type
or nature which may be an infringement of or a challenge to the
Technology or the Products (including any Patent Rights in the same).
Upon such notification, Chugai and Gliatech shall discuss the
situation and shall cooperate with each other in all respects
concerning any legal or other action resulting from such infringement
or challenge.
(b) Chugai and Gliatech agree that Gliatech shall have the
initial right, but not the obligation, to prosecute or defend any
such infringement or challenge at its own expense and may join Chugai
as a co-party in any action that should ensue. If the action is
against a Person for infringement wholly or in part within the Field
of Use herein, Chugai shall be entitled to any recovery derived
therefrom attributable to the Field of Use as defined herein, but
only after reimbursement to Gliatech for its costs in the action.
Gliatech shall not enter into any voluntary disposition or settlement
of any such infringement or challenge without the prior advice to and
knowledge and consent of Chugai.
(c) If, within ninety (90) days after notice of such
infringement or challenge, Gliatech shall not have resolved the same
and shall not have brought or be defending an action on the same, or
if Gliatech shall have notified Chugai in writing of its intention
not to do so, then Chugai shall have the right, but not the
obligation, to prosecute or defend the infringement or challenge at
its own expense and may join Gliatech as a co-party in any action
that should ensue. Gliatech shall execute and deliver any
documentation that reasonably may be required to enable Chugai to
prosecute or defend the action in its own name. If the action is
against a Person for infringement wholly or in part within the Field
of Use herein, Chugai shall be entitled to any recovery derived
therefrom attributable to the Field of Use as defined herein, but
only after the same payment to Gliatech as set forth in Section
7.2(b). If any recovery is for infringement outside the Field of Use
herein, Gliatech shall be entitled to the recovery derived therefrom,
but only after Chugai is reimbursed for its costs in the action.
Chugai shall not enter into any voluntary disposition or settlement
of any such infringement or challenge without the prior knowledge and
consent of Gliatech.
(d) Whether Chugai or Gliatech pursue any such infringement
or challenge on its own or jointly, each party shall keep the other
informed of the progress in and status of the same, including any
action that results therefrom, and shall provide the other with
copies of all court and other documents upon request and if legally
permitted. Each party shall also have the absolute right to
participate in any such action brought by or against the other party,
and shall include the opportunity to confer with the other party and
the right to be represented by counsel of its own selection. A
party's exercise of this absolute right to participate shall be at
its own expense, and shall not be deductible from any recovery in any
such action unless the party actually joins or is joined as a party
defendant or party plaintiff in the same.
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8. LEGAL REQUIREMENTS.
If the laws of the Territory require that this Agreement or any
document relating to the subject matter hereof be legalized and/or
notarized, or be submitted, filed or registered with any government
agency or ministry of the Territory, Chugai and Gliatech will work
together in complying with those requirements with such costs so
incurred to be paid by Chugai.
9. TERM.
Unless sooner terminated as provided in Section 10, this Agreement
and the license and rights granted to Chugai herein shall begin as of
the Effective Date and shall continue in full force and effect until
the date on which the last Japanese patent issued with respect to the
Technology and the Products in this Agreement relating to the Field
of Use shall expire.
10. TERMINATION.
This Agreement shall continue in full force and effect during the
term set forth in Section 9, unless Chugai or Gliatech, in the
exercise of its discretion, earlier terminates this Agreement for any
one of the following causes:
10.1 BREACH, NOTICE AND CURE. If Chugai or Gliatech fails to perform any
of its respective obligations or covenants under this Agreement,
including, without limitation, the failure of Chugai or Gliatech to
have as an on-going strategic focus of the business of respectively,
Chugai or Gliatech, the sale of Products in the Field of Use, the
failure of Chugai to use its best efforts in any undertaking or
action in connection with or related to this Agreement or the failure
of Chugai to complete the mutually agreed upon initial Development
Activities, the non-failing party shall be entitled to notify the
failing party in writing specifying such failure and requiring cure
or remedy of the same. This notice shall be initially discussed by
Gliatech and Chugai, for a period of thirty (30) days after receipt
in an effort to resolve the same. If such failure is not cured or
remedied, or the non-failing party does not withdraw its notification
of such failure, within such thirty (30) day period, then the General
Manager of Chugai and the Chief Executive Officer of Gliatech shall
attempt to resolve the same for a period of thirty (30) days
thereafter. If such failure is not cured or remedied, or the
non-failing party does not withdraw its notification of such failure,
within this second thirty (30) day period, and if the failure is
material, then the non-failing party shall have the right to
terminate this Agreement by giving fifteen (15) days prior written
notice thereof to the failing party. Thereafter, the parties shall
proceed in accordance with Section 12.1 hereof.
10.2 FORCE MAJEURE. Chugai and Gliatech agree that it shall not be a
ground for seeking termination of this Agreement that any alleged
failure to perform an obligation herein results from "Force Majeure"
as provided in Section 12.5.
10.3 NON-WAIVER. The right of either party to seek termination of this
Agreement as provided herein shall not be in any way by its waiver of
or failure to take action with respect to any previous failure to
perform an obligation under this Agreement by the other party.
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10.4 ADDITIONAL GROUNDS FOR GLIATECH TO TERMINATE. In addition to the
rights of Gliatech to terminate under Section 10.1 above, Gliatech
may immediately terminate this Agreement on thirty (30) days prior
written notice to Chugai if Chugai shall institute or consent to the
filing of voluntary bankruptcy proceedings, or Chugai shall file a
petition or answer or consent seeking reorganization under any
applicable bankruptcy laws; or Chugai shall consent to the
appointment of a receiver or liquidator under any applicable
bankruptcy law; or upon the issuance or entry of a decree or order by
a court adjudging Chugai bankrupt or insolvent or approving a
petition seeking reorganization of Chugai under any applicable
bankruptcy law, appointing a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency for Chugai or of all or
substantially all of its property.
10.5 ADDITIONAL GROUNDS FOR CHUGAI TO TERMINATE. In addition to the rights
of Chugai to terminate under Section 10.1 above, Chugai may
immediately terminate this Agreement on thirty (30) days prior
written notice to Gliatech upon the occurrence of any of the
following events:
(a) Gliatech shall institute or consent to the filing of
voluntary bankruptcy proceedings, or Gliatech shall file a petition
or answer or consent seeking reorganization under any applicable
bankruptcy laws; or Gliatech shall consent to the appointment of a
receiver or liquidator under any applicable bankruptcy law; or upon
the issuance or entry of a decree or order by a court adjudging
Gliatech bankrupt or insolvent or approving a petition seeking
reorganization of Gliatech under any applicable bankruptcy law,
appointing a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency for Gliatech or of all or substantially all
of its property.
(b) The application by Chugai for the Importation Approval
shall have been dismissed or it is found in the reasonable opinion of
Chugai that the Importation Approval shall not be given by the
Ministry of Health and Welfare of Japan.
11. INDEMNIFICATION.
11.1 INDEMNIFICATION BY CHUGAI. Chugai shall indemnify, defend and hold
Gliatech harmless from and against any and all liabilities, claims,
demands, judgments, losses, damages, costs and expenses (including
court costs and reasonable attorneys' fees) (hereinafter "Losses")
incurred or suffered by Gliatech arising in any way out of or in
connection with or resulting from: (a) the use, without obtaining
proper Authorizations, or the sale by Chugai of the Products in the
Field of Use except in accordance with the Manufacturing Agreement,
(b) any advertising or other promotional activities undertaken by
Chugai alone with respect to the Products which have not previously
been submitted to or approved by Gliatech and Chugai or (c) a breach
by Chugai of any of its representations, warranties and covenants
contained in this Agreement; PROVIDED, HOWEVER, that this indemnity
shall not be applicable to the production, use or sale of the
Products by Gliatech or by any other Person not authorized by Chugai
or instructed in writing by Chugai to so act.
11.2 INDEMNIFICATION BY GLIATECH. Gliatech shall indemnify and hold
harmless Chugai from and against any and all Losses in respect of
claims made by third parties arising out of or
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relating to: (a) any material defect of the Products, which would
ordinarily cause death or injury of a person or any damage to
property or (b) a breach by Gliatech of any representations,
warranties and covenants contained in Section 4 above.
11.3 NOTICE. As a condition of the indemnifications in Section 11, the
party seeking indemnification shall give the other party written
notice within fifteen (15) days of the assertion of any such claim,
proceeding, action or suit; PROVIDED, HOWEVER, that the failure to
give such notice shall only waive or release the indemnification
obligation to the other party to the extent the other party is
actually prejudiced by such failure.
12. MISCELLANEOUS.
12.1 INTERPRETATION AND ENFORCEMENT OF AGREEMENT. All matters, questions
or disputes relating to the interpretation, form, validity,
performance and the parties' rights and obligations under this
Agreement shall be governed by and decided in accordance with the
laws of the United States. Any disputes or questions which the
parties cannot resolve after negotiation shall be settled by
arbitration instituted at the option of either party. The arbitration
will be conducted by a certified arbitration service under
regulations of the American Arbitration Association. An Arbitrator
will be selected by mutual agreement of the parties. Each party
hereby accepts and submits itself unconditionally to the exclusive
jurisdiction of the arbitrator.
12.2 SURVIVAL. The representations and warranties made by each party to
this Agreement shall survive beyond the Effective Date.
12.3 SUCCESSORS AND ASSIGNS. The provision of this Agreement shall inure
to the benefit of and shall be binding upon the successors of the
parties hereto. Chugai and Gliatech shall not assign this Agreement
or any of their rights or obligations to any Person without the prior
written consent of the other which shall not be unreasonably
withheld; PROVIDED, HOWEVER, that Chugai or Gliatech shall have the
right to assign this Agreement and their respective rights and
obligations to any successor who acquires or succeeds to
substantially all of Chugai's business or of Gliatech's business
(whether by way of recapitalization, reorganization, merger,
acquisition of assets, or otherwise), but only upon the prior written
assumption of all such rights and obligations of this Agreement by
such successor, which successor shall be specifically required to and
shall assume this Agreement according to its terms as a condition
precedent to such assignment.
12.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to
the subject hereof, and no party shall be liable or bound to any
other party in any manner by any representations, warranties or
covenants except as specifically set forth herein. Neither this
Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party
against whom enforcement of any such amendment, waiver, discharge or
termination is sought.
12.5 IMPOSSIBILITY OF PERFORMANCE. Neither party shall be liable to the
other due to the failure to perform any obligation or duty pursuant
to this Agreement where such failure has
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been directly occasioned by any act of God, fire, inevitable
accident, governmental action, court order or other cause beyond the
reasonable control of the party who had the duty to perform and
occurring without its fault or negligence. The party whose
performance has been so interrupted shall give the other party prompt
notice of the interruption and the cause thereof, and shall use every
reasonable means to resume full performance of this Agreement as soon
as practicable.
12.6 CONFIDENTIALITY. (a) Chugai and Gliatech agree that any financial,
legal, business or technical information disclosed between them in
connection with the Agreement and the Products, whether before or
after the Effective Date, shall be considered confidential and
proprietary (hereinafter "Information") and shall not be disclosed to
any Person other than their employees, consultants, agents and other
representatives who need to know such information for purposes of
this Agreement (hereinafter "Representatives"). Chugai and Gliatech
also agree that such Information shall be held in confidence and
shall not be used other than as permitted under, and during the term
of, this Agreement. Such Information shall include, without
limitation, marketing and sales information, commercialization plans
and strategies, research and development work plans, and technical
information such as patent applications, trade secrets, systems,
methods, apparatus, designs, tangible material, and products and
derivatives thereof, whether or not related to the Technology, the
Products or the Improvements as discussed herein. Each party shall
cause its respective Representatives to comply with the
confidentiality and non-use covenants and agreements in this Section
and shall be responsible for any breach thereof by its
Representatives.
(b) The obligations of confidentiality and non-use in this
Section 12.6 shall not be applicable to the party receiving the
disclosure to the extent that such Information is currently or
becomes general public knowledge through no fault of such party.
(c) The covenants and agreements of Chugai and Gliatech in
Section 12.6 shall survive any expiration or termination of this
Agreement except for that Information, or portions thereof, which (i)
are or become generally available to the public through no action by
Chugai or employees, consultants, agents or other representatives of
Chugai or (ii) are or become available to Chugai on a nonconfidential
basis from a source other than Gliatech that is not otherwise bound
by obligations of confidentiality relating to such Information.
(d) In the event that Chugai is required by law or court
order to disclose any Information of Gliatech, Chugai shall: (i)
notify Gliatech in writing as soon as possible, but in no event less
than thirty (30) calendar days prior to any such disclosure; (ii)
cooperate with Gliatech to preserve the confidentiality of such
Information consistent with applicable law; and (iii) use its best
efforts to limit any such disclosure to the minimum disclosure
necessary to comply with such law or court order.
(e) This Agreement supersedes that certain Confidential
Disclosure Agreement entered into by and between Gliatech and Chugai,
dated as of November 13, 1995. All confidential information exchanged
between the parties under that agreement shall be
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deemed Information hereunder and shall be subject to the
confidentiality provisions of this Section 12.6.
(f) Gliatech and Chugai agree that a breach or failure to
comply with any of the provisions of this Section 12.6 will
irreparably harm the business of Gliatech, and Gliatech will not have
an adequate remedy at law in the event of such breach or
non-compliance. Therefore, in the event that Chugai breaches or does
not comply with any of the provisions of this Section 12.6, Chugai
acknowledges that Gliatech shall be entitled to injunctive relief
and/or specific performance without the posting of bond or other
security, in addition to whatever other remedies Gliatech may have,
at law or in equity, in any court of competent jurisdiction against
any acts of such breach or non-compliance.
12.7 FURTHER ASSURANCES. Each of the parties hereto shall execute and
deliver any and all additional papers, documents and other
assurances, and shall do any and all acts and things reasonably
necessary in connection with the performance of its obligations
hereunder to carry out the rights and obligations of the parties
under this Agreement.
12.8 NOTICES. All notices and other communications required or permitted
in this Agreement shall be in writing and shall be by registered or
certified mail, postage prepaid, or otherwise delivered by hand, by
expedited delivery or courier service, or by messenger, addressed (a)
if to Chugai, at 0-0 Xxxxxxxx 0-Xxxxx, Xxxx-Xx, Xxxxx, Xxxxx 104, to
the attention of the General Manager, Medical Device Division, and
with a copy to the attention of the Secretary, Medical Device
Division, at the same address, or at such other address as Chugai
shall have furnished to Gliatech in writing, or (b) if to Gliatech,
at 00000 Xxxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxxx 00000, to the attention
of the President, or at such other address as Gliatech shall have
furnished to Chugai in writing. Each such notice or other
communication shall for all purposes of this Agreement be treated as
effective or having been given when delivered if delivered by hand,
expedited delivery service or courier service or by messenger, or if
sent by mail, at the earlier of its actual receipt of five (5) days
after the same has been deposited in a regularly maintained
receptacle for the deposit of the United States mail, addressed as
aforesaid.
12.9 DELAYS OR OMISSIONS. Any waiver, permit, consent or approval of any
kind on the part of a party of any breach or default under this
Agreement by the other party, or any waiver on the part of a party of
any provision or condition of this Agreement, shall be effective only
to the extent confirmed in writing to the other party. All remedies
under this Agreement, or by law or otherwise afforded to any party,
shall be cumulative and not alternative.
12.10 EXPENSES. Except as otherwise provided in this Agreement, Chugai and
Gliatech shall bear their own legal and other expenses in connection
with the transactions contemplated hereby.
12.11 PUBLICITY. Chugai and Gliatech agree that no press release or other
public announcement concerning the execution of this Agreement, any
of the provisions herein, or the
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transactions contemplated hereby shall be issued without prior
approval of the form and content of the same by the parties;
PROVIDED, HOWEVER, that no consent shall be required if the
disclosure is required by applicable law or the rules of the
Securities and Exchange Commission or any recognized stock exchange
or automated trading system on which the common stock of either party
is listed or quoted, but the disclosing party shall provide the other
party with the text of such disclosure not less than three (3)
business days prior to its release.
12.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties
actually executing such counterparts, and all of which together shall
constitute one and the same instrument.
12.13 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full
force and effect without said provision; PROVIDED, HOWEVER, that no
such severability shall be effective if it materially changes the
economic benefit of this Agreement to either party.
12.14 TITLES AND SUBTITLES. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in
construing or interpreting this Agreement or the right or obligations
of the parties herein.
IN WITNESS WHEREOF, Chugai and Gliatech have executed this
Agreement as of the Effective Date above.
CHUGAI PHARMACEUTICAL CO., LTD. GLIATECH INC.
By /s/ Xxxxxxxx Xxxxx, Ph.D. By /s/ Xxxxxx X. Xxxxxxxxxx, Ph.D.
------------------------- -------------------------------
Name: Xxxxxxxx Xxxxx, Ph.D. Name: Xxxxxx X. Xxxxxxxxxx, Ph.D.
Title: Senior Manager - Medical Title: President and Chief
Device Division Executive Officer
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