Exhibit 10.1
DEVELOPMENT, MARKETING AND COOPERATION AGREEMENT
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THIS AGREEMENT is made as of October 23, 1995, by and between MGI PHARMA, INC.
("MGI"), 300E Opus Center, 0000 Xxxx Xxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000-
9667, U.S.A. and DAINIPPON PHARMACEUTICAL CO., LTD. ("Dainippon"), 0-0
Xxxxxxxxxx, 0-Xxxxx, Xxxx-Xx, Xxxxx, 000 Xxxxx.
Recitals
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A. MGI acquires, develops and markets pharmaceuticals that it believes address
currently unmet medical needs or significantly improve upon current therapies.
B. Dainippon acquires, develops and markets ethical pharmaceutical products in
Japan and has established government-approved research and development
facilities and distribution channels throughout Japan for those purposes.
C. MGI has obtained an exclusive license from the University of California, as
hereinafter set forth, to certain patent rights to a family of compounds
referred to as Illudin Analogs, which includes among other patents, those
certain patent applications as follows: Japanese Patent Application entitled
"Method of Treating Tumors Using Illudin Analogs, No. 20-515522 (Filed October
2, 1990), U.S. Patent Application entitled "Method of Treating Tumors Using
Illudin Analogs, Xxx. Appl. No. 07/416,395 and U.S. PCT Application entitled
"Method of Treating Tumors Using Illudin Analogs (Chapter II National Stage
applications filed).
D. MGI and Dainippon have previously entered into that certain Option
Agreement dated April 13, 1995 (the "Option Agreement"), which expired on
October 10, 1995.
E. MGI desires to have this product developed, sold, promoted and distributed
as a pharmaceutical in Japan, and Dainippon desires to obtain rights to develop,
sell, promote and distribute this pharmaceutical in Japan, all upon the terms
and conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the Parties hereto have agreed as follows:
ARTICLE 1.0 INTRODUCTORY PROVISIONS
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1.1 Defined Terms. The following terms, when used in capitalized form in this
Agreement, shall have the meanings set forth below:
(a) "Adverse Experience Data" shall mean all data concerning any serious
or unexpected adverse effects, side-effects and contraindications of
any Product which may come to
the attention of either Party or of any permitted sublicensee of
either Party and which, in the reasonable judgment of such Party or a
permitted sublicensee of a Party, is of such a nature and magnitude
that it is required under the laws of the United States or Japan to be
collected, maintained and reported to a Competent Authority.
(b) "Affiliate" when used with reference to either Party shall mean any
entity controlling, controlled by or under common control with the
said Party. For purposes hereof, "control" shall mean ownership,
directly or indirectly, of more than fifty percent (50%) of the
securities having the right to vote for the election of directors, in
the case of a corporation, and more than fifty percent (50%) of the
beneficial interest in the capital, in the case of a business entity
other than a corporation.
(c) "Best Efforts" shall mean those efforts that would be made by a
reasonably prudent business person acting in good faith, in the
exercise of reasonable commercial judgment and in a manner consistent
with those efforts a Party devotes to a pharmaceutical product
resulting from its own research efforts and having a similar market
potential, profit potential or strategic value.
(d) "Bulk Drug Substance" shall mean an Illudin Analog released by MGI
from a current Good Manufacturing Practices facility.
(e) "Competent Authority" shall mean the FDA in the United States, the PAB
in Japan, or any other government agency responsible for the issuance
of Marketing Authorizations, Pricing Approvals and/or Reimbursement
Approvals for pharmaceutical products marketed in any other country in
the world.
(f) "Confidential Information" shall mean all proprietary information,
including Proprietary Product Information of a Party, including any
information on the markets, customers, suppliers, patents or patent
applications, inventions, products, procedures, designs, formulas,
business plans, financial projections, organizations, employees or
consultants or any other similar aspects of a Party's present or
future business, the secrecy of which confers a competitive advantage
upon that Party.
(g) "Dollar" or "$" shall mean the legal currency and tender of the United
States of America.
(h) "Drug Master File" shall mean a Type II Drug Master File for an
Illudin Analog created by MGI or its agent and on file with the FDA at
any time, any supplementary or successor drug master file in respect
of an Illudin
Analog that is submitted by MGI or its agent to the FDA, or any
corresponding drug master file or similar file in respect of an
Illudin Analog that may hereafter be submitted by MGI or its agent to
any Competent Authority.
(i) "Effective Date" shall mean the date first above written.
(j) "FDA" shall mean the United States Food and Drug Administration.
(k) "Good Clinical Practices" shall mean (i) with respect to the United
States, those procedures and practices approved by the FDA for the
purpose of conducting clinical trials, pursuant to the Code of Federal
Regulations, Title 21, and other administrative interpretations and
rulings in connection therewith and (ii) with respect to Japan, those
procedures and practices approved by the PAB in Notification No. 874
and other administrative interpretations and rulings in connection
therewith.
(l) "Good Manufacturing Practices" shall mean those practices in the
manufacture of medicinal products which are recognized as good
manufacturing practices within Japan pursuant to PAB guidelines and
other administrative interpretations and rulings in connection
therewith.
(m) "Health Registration Dossier" shall mean all documentation which is
now or shall hereafter be on file with the FDA or the PAB, which
comprises the information and data submitted to such agency in support
of an application made by either Party, or a permitted sublicensee of
either Party, to such Competent Authority for Marketing Authorization
for a Product to treat any Indication.
(n) "Illudin Analogs" shall mean illudofulvene, illudofulvene dimers, and
6-hydroxymethylilludofulvene; including derivatives thereof such as
those disclosed and claimed in U.S. Patent Application Number
08/276169, filed July 15, 1994.
(o) "Indication" shall mean any medical condition or set of symptoms for
the treatment of which a Product may be determined to be safe and
efficacious.
(p) "Know-How" shall mean all information and data, regardless of form,
which is necessary or useful to the manufacture of a Product or to the
development or manufacture of dose forms or means of delivery of a
Product, and which is owned, developed, acquired or otherwise
licensable by either Party or any permitted sublicensee of either
Party during the term of this Agreement.
(q) "Marketing Authorization" shall mean any governmental approval from a
Competent Authority which is legally required under applicable laws,
regulations or administrative decisions to put a pharmaceutical
product on the market in such country for use in the treatment of any
Indication.
(r) "MGI Patents" shall mean all patents that are owned or controlled by
MGI which MGI has a right to license to Dainippon or its permitted
sublicensees under the University of California License Agreement and
which are issued by any country that is at that time included within
the definition of the Territory.
(s) "Net Sales" shall mean the total of the gross invoice prices of
Products sold or transferred by Dainippon, its Affiliates, and its
permitted sublicensees less rebates and allowances given by Dainippon,
its Affiliates or permitted sublicensees and the sum of the following
actual and customary deductions included on the invoice and actually
paid: cash, trade, or quantity discounts; sales, use, tariff or other
excise taxes imposed upon particular sales; import/export duties; and
transportation charges. Sales among Dainippon, its Affiliates and its
permitted sublicensees for ultimate third party use shall be
disregarded for the purposes of computing Net Sales.
(t) "PAB" shall mean the Pharmaceutical Affairs Bureau of the Japanese
Ministry of Health and Welfare.
(u) "Party" shall mean either of the two parties to this Agreement and, to
the extent appropriate when required by the context, to any permitted
sublicensees of a Party.
(v) "Patents" shall mean any and all patents under the laws of any country
or countries which are owned, acquired or otherwise licensable by
either Party or its permitted sublicensees during the term of this
Agreement and which are necessary or useful (i) to the manufacture of
the Products, (ii) to the development or manufacture of dose forms or
means of delivery of the Products, or (iii) to the use of the Products
alone or in conjunction with other products.
(w) "Pivotal Trial" shall mean a human trial of a Product, conducted in
accordance with a written protocol, which is designed to develop
definitive, statistically analyzable, efficacy and safety data for
submission to the FDA in the United States or the PAB in Japan in
support of an application for Marketing Authorization for that
Product.
(x) "Pricing Approval" shall mean any governmental approval of the price
at which it is intended that a particular pharmaceutical product is to
be sold which is or shall hereafter be required under the laws,
regulations or administrative decisions in effect in Japan, as a
condition of the marketing of such product in that country.
(y) "Product Launch" shall mean the first commercial sale of the Products
for resale or use in the Territory.
(z) "Products" shall mean any pharmaceutical products having as an active
ingredient an Illudin Analog, either alone or in combination with
other substances, whether or not such products are known or in
existence on the Effective Date.
(aa) "Proprietary Product Information" shall mean (i) all information and
data now or hereafter contained in any Drug Master File or Health
Registration Dossier to which either Party, or any permitted
sublicensee of either Party, shall have the right under applicable
law, regulations and administrative decisions to refer, to authorize
third parties to refer and to prohibit third parties from referring,
for purposes of any application for Marketing Authorization for any
Product and (ii) all other information and data now or hereafter in
existence which relates to the development, testing, manufacture,
marketing or use of any Product which is incorporated in any
Supporting Data and/or Adverse Experience Data and which is not in the
public domain.
(bb) "Reimbursement Approval" shall mean a decision to include a particular
pharmaceutical product on a positive list of pharmaceutical products
covered by the national health insurance system in the Territory where
such inclusion is a condition to the reimbursement of patients for the
cost of such products as a part of the cost of medical treatment.
(cc) "Serious and Unexpected" shall mean that at least one of the following
serious adverse events is observed: fatal, life-threatening,
permanently disabling, requiring hospitalization, congenital anomaly,
cancer or overdose in conjunction with an unexpected adverse event
defined as follows: an experience not listed in the current labeling,
including an event that may be symptomatically and
pathophysiologically related to an event listed in the labeling, but
differs from the event because of greater severity or specificity.
(dd) "Supply Agreement" shall mean the separately negotiated supply
agreement for Bulk Drug Substance entered into by
the Parties of even date herewith, and attached hereto as Exhibit B
and made a part hereof.
(ee) "Supporting Data" shall mean all data and information in the
possession of either Party or any permitted sublicensee of a Party
relating to (i) the pharmacological or toxicological properties of a
Product, (ii) pre-clinical or clinical testing and experience in
relation to a Product which is not included in any Health Registration
Dossier and (iii) to the extent reasonably required for purposes of
any application for Marketing Authorization, the chemical composition,
manufacturing processes and quality control testing of a Product.
(ff) "Territory" shall mean Japan only.
(gg) "Trademark" shall mean any of the trademarks used to market any
Product in the Territory, whether or not such trademark is registered
or otherwise protected under the laws of Japan.
(hh) "University of California" shall mean The Regents of the University of
California.
(ii) "University of California License Agreement" shall mean that certain
agreement dated August 31, 1993 entered into between the University of
California and MGI entitled "Method of Treating Tumors Using
Acylfulvene (Illudin) Analogs, U.C. Case No. 88-196-1,-2,-3", a copy
of which is attached hereto as Exhibit A and made a part hereof.
(jj) "Yen" shall mean the legal currency and tender of Japan.
1.2 Other Rules of Interpretation. Unless the context clearly indicates
otherwise, the following rules shall govern the interpretation of this
Agreement:
(a) The definitions of all terms defined herein shall apply equally to the
singular, plural, and possessive forms of such terms;
(b) All references herein to "days" shall mean calendar days;
(c) All references to "quarters" shall mean calendar quarters; and
(d) All references to "Sections" shall mean the corresponding Sections of
this Agreement and all references to "Articles" shall mean the
corresponding Articles of this Agreement.
ARTICLE 2.0 WARRANTIES AND REPRESENTATIONS; LIMITATIONS
2.1 MGI Warranties. MGI represents and warrants to Dainippon that:
(a) it has the legal right and power to enter into this Agreement;
(b) it has taken all necessary corporate action to authorize and perform
this Agreement;
(c) it has not entered into any inconsistent prior obligations that would
impair the rights being licensed to Dainippon hereunder;
(d) it owns or has the right to license or sublicense all the rights
granted to Dainippon herein (subject to the limitations of the
University of California License Agreement), including, without
limitation, all information and data in any applicable Drug Master
Files and/or Health Registration Dossiers which MGI may provide to
Dainippon under this Agreement; and
(e) it knows of no third party claims that would challenge or impair the
license of the rights granted to Dainippon herein, including, without
limitation, any claims based upon patents, copyrights or trade secret
laws in the United States.
2.2 Dainippon Warranties. Dainippon represents and warrants to MGI that:
(a) it has the legal right and power to enter into this Agreement;
(b) it has taken all necessary corporate action to authorize and perform
this Agreement;
(c) it has not entered into any inconsistent prior obligations that would
impair the rights being licensed to MGI hereunder;
(d) it will own or have the right to license or sublicense all the rights
granted to MGI pursuant to Sections 3.2 and 3.3 and all the rights
granted to MGI pursuant to Sections 4.3, 4.7, 4.8 and 12.7(f); and
(e) it knows of no third party claims that would challenge or impair the
license of such rights granted to MGI herein, including, without
limitation, any claims based upon patents, copyrights or trade secret
laws in Japan.
2.3 LIMITATION OF LIABILITY. EXCEPT AS PROVIDED IN SECTIONS 2.1, 2.2, ARTICLE
9 OR IN THE EVENT OF A MATERIAL BREACH BY EITHER PARTY OF THE LIMITATIONS SET
FORTH IN ARTICLE 11.0 BELOW, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY
LOSS, EXPENSE OR DAMAGE ARISING OUT OF OR RESULTING FROM THIS AGREEMENT. IN ANY
EVENT, NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL LOSS OR DAMAGES. IN THE EVENT OF ANY CLAIM FOR SUCH LOSS OR
DAMAGES, THE SOLE AND EXCLUSIVE REMEDY FOR ANY LIABILITY UNDER THIS AGREEMENT
SHALL BE LIMITED TO A REFUND OF ANY SUMS PAID AND/OR THE TERMINATION OF ANY
RIGHTS GRANTED UNDER THIS AGREEMENT.
ARTICLE 3.0 RIGHTS IN INTELLECTUAL PROPERTY
3.1 License to Dainippon to Sell Products. Subject to the terms and conditions
of this Agreement, MGI hereby grants to Dainippon, and Dainippon hereby accepts
from MGI, an exclusive right and license to apply for Marketing Authorizations,
Pricing Approvals and Reimbursement Approvals for Products in the Territory and
to sell Products in the Territory for any Indications. The right and license
granted herein shall be further subject to the following terms and conditions:
(a) In connection with such license to apply for Marketing Authorizations,
Pricing Approvals and Reimbursement Approvals for, and to sell, the
Products in the Territory, Dainippon shall have access to, and the
right to practice under, the MGI Patents, MGI's Know-How and MGI's
Proprietary Product Information in order to sell the Products.
Dainippon's rights with respect to such MGI Patents shall include
without limitation the MGI Patents licensed to MGI pursuant to the
University of California License Agreement, subject to the
undertakings and commitments of Dainippon as set forth in Article 14.0
of this Agreement.
(b) In applications for Marketing Authorization for Products in the
Territory, Dainippon may refer to documentation incorporating
Proprietary Product Information as follows:
(i) Dainippon may refer to and/or otherwise use any Drug Master File
as well as any MGI Health Registration Dossier, provided that MGI
has the lawful right to share such information with a third party
and is not precluded from doing so under a confidentiality
agreement; and
(ii) Dainippon may refer to any Supporting Data from the MGI Pivotal
Trials in the United States for any and all Indications studied.
(c) Dainippon may use all Proprietary Product Information required to be
provided by MGI pursuant to this Article
3.0 for the purpose of importing, Finishing and Filling, marketing,
promoting and selling Products.
(d) Dainippon may grant sublicenses of its rights hereunder to non-
Affiliates subject to the following conditions but not otherwise:
(i) Each proposed sublicensee shall be subject to MGI's prior
written approval; and Dainippon shall furnish to MGI an accurate
summary of the terms of such sublicense, in English;
(ii) An authorized sublicense shall not grant any rights with respect
to the development, final finish and fill activities or
marketing of the Products in the Territory which exceed the
scope of the rights expressly granted to Dainippon hereunder;
(iii) Dainippon must have entered into a written sublicense agreement
with each such sublicensee in accordance with the obligations of
Dainippon under this Agreement, including but not limited to
Articles 7.0 and 14.0, which sublicense agreement shall include
substantially the same terms as disclosed to MGI pursuant to
Section 3.1(d)(i) and Dainippon shall furnish a copy of same to
MGI, with an English translation thereof, immediately upon
execution of such sublicense;
(iv) No sublicense granted pursuant hereto shall include the right to
grant further sublicenses;
(v) An MGI approval of a sublicense shall not relieve Dainippon of
its obligation to use its own Best Efforts to develop, market,
sell and promote the Products to the extent of its independent
capabilities within the Territory, to purchase from MGI the
requirements of Dainippon and its permitted sublicensees for
Bulk Drug Substance as provided in the Supply Agreement, or to
pay MGI any Milestone Payments or other payments due to MGI that
would otherwise be due to MGI from Dainippon under the
provisions of this Agreement;
(vi) Dainippon hereby guarantees all payments required under the
provisions of this Agreement by any permitted sublicensee of
Dainippon; and
(vii) To the extent that Dainippon would receive any noncash
compensation pursuant to the terms of any proposed sublicense
agreement, Dainippon shall disclose to MGI complete details
relating to the
noncash compensation anticipated under the terms of such
proposed sublicense.
(e) Nothing in this Agreement shall confer upon Dainippon the right to xxx
for patent infringement of any MGI Patents sublicensed to Dainippon
under the terms of this Agreement.
3.2 License of Grant-Back to MGI. Dainippon (and any of its permitted
sublicensees) hereby grants to MGI, and MGI accepts from Dainippon (and any of
its permitted sublicensees), an irrevocable, exclusive, royalty-free right and
license outside the Territory to:
(a) all Proprietary Product Information for any Indication developed by
Dainippon or its permitted sublicensees during the term of this
Agreement; and
(b) all Patents and Know-How conceived and reduced to practice by
Dainippon or its permitted sublicensees during the term of this
Agreement in connection with the development, use or sale of Products.
3.3 Additional Terms relating to Grant-Back License. The right and license to
MGI in Section 3.2 above is granted subject to the following terms and
conditions:
(a) Such right and license shall include the right to refer, in any
application for Marketing Authorization for the Products in respect of
any country outside the Territory, to any and all Health Registration
Dossiers which Dainippon may establish with any Competent Authority in
the Territory;
(b) Such right and license shall also include the right to sublicense
MGI's permitted sublicensees outside the Territory; and
(c) MGI shall use its Best Efforts to secure from any of its permitted
sublicensees the reciprocal royalty-free grant-back license for any of
such permitted sublicensees' Proprietary Product Information for the
benefit of Dainippon under this Agreement, as is afforded by Dainippon
under this Section 3.3 to MGI and its permitted sublicensees. MGI
further agrees that it shall not sublicense any rights granted to it
under this Section 3.3 to any permitted sublicensee who does not agree
to grant such a reciprocal royalty-free grant-back license.
3.4 MGI Health Registration Dossiers. MGI shall provide to Dainippon, if it
has not already done so during the term of the Option Agreement, a copy in
English of any documentation prepared for MGI's use in developing any
Indication, within thirty (30) days after the Effective Date. MGI shall
thereafter continue to provide
Dainippon with copies in English of any new documentation which is developed
after the Effective Date, within thirty (30) days after the date on which such
documentation is finalized (in the form of a final study report, publication or
similar document) or after MGI submits such documentation to the FDA or other
Competent Authority, subject to the provisions of Section 3.6(b). In addition,
if any information contained in a Drug Master File is required to be furnished
by Dainippon to any Competent Authority in the Territory, MGI shall also provide
such information to Dainippon or, at MGI's option, shall provide such
information directly to such Competent Authority with the appropriate right to
reference.
3.5 Dainippon Study Reports, Publications, Health Registration Dossiers and
Other Materials.
(a) Dainippon shall provide MGI with a summary of the results of the
preclinical and clinical studies conducted in connection with
development of Products hereunder, in English, within one hundred
twenty (120) days of the completion of each such study. In addition,
upon MGI's request, Dainippon shall use its Best Efforts to provide
MGI, within one (1) year of such request, with a complete copy in
English of the study reports or publications from such studies which
MGI considers necessary in good faith and based on its reasonable
business judgment for regulatory or other business purposes.
(b) Dainippon shall provide MGI with a complete copy of any Health
Registration Dossier prepared by Dainippon for any Indication, or any
amendment or supplement thereto, immediately upon filing of the Health
Registration Dossier with the PAB or other Competent Authority in the
Territory, in the language the Health Registration Dossier is written
in for filing.
(c) Within one hundred twenty (120) days after such submission of a Health
Registration Dossier under Section 3.5(b) (except if an earlier time
frame is provided in Section 3.6(b)), Dainippon shall provide MGI
with a copy in English of (i) the overall summary of such Health
Registration Dossier, (ii) the summary of each section of the Health
Registration Dossier and (iii) a list of sections which are contained
within the Health Registration Dossier, or amendment or supplement
thereto.
(d) Upon MGI's request, Dainippon shall translate into English such parts
of the Health Registration Dossier, or amendment or supplement
thereto, which MGI considers necessary in good faith and based on its
reasonable business judgment for regulatory or other business
purposes. Dainippon shall use its Best Efforts to provide MGI with a
copy of such English translation as soon as practicable, but in no
case, later than one (1) year after MGI's request. If MGI determines
at any time
that a particular section of such Health Registration Dossier, or
amendment or supplement thereto, is needed on an accelerated basis,
the Parties shall work together to revise the translation schedule to
accommodate MGI's needs as the Parties shall mutually agree.
3.6 Other Information and Data. In accordance with the following provisions,
each Party shall provide to the other Party complete and accurate copies of all
documentation containing Supporting Data and Adverse Experience Data relating to
any Product which is prepared or acquired by such Party or any of its respective
permitted sublicensees during the term of this Agreement:
(a) Copies of Supporting Data in English shall be forwarded by express
mail or other equivalent courier service as soon as practicable after
it has been prepared or acquired, but, in any case, Dainippon shall
provide a summary in English thereof no later than one hundred twenty
(120) days after such preparation or acquisition and the provisions
for translation set forth in Section 3.5 shall apply to information
provided herein; and
(b) Copies of Adverse Experience Data in English shall be forwarded by
facsimile with a duplicate by express mail or other equivalent courier
service as quickly as may be necessary to permit the recipient to
comply with any applicable legal requirements and in no event later
than the earlier of (i) in the case of Serious and Unexpected Adverse
Experience Data, fourteen (14) working days after such Adverse
Experience Data has been prepared or acquired or (ii) in the case of
Adverse Experience Data that is not Serious and Unexpected, the date
on which such Adverse Experience Data is provided to any Competent
Authority anywhere in the world, or within such other time frame as
may be mutually agreed to by the Parties in writing. The Parties
shall consult and agree on the form of such reporting of Adverse
Experience Data by each Party to the other.
3.7 Lead Illudin Analog and Future Illudin Analogs.
(a) The Parties acknowledge and agree that the Lead Illudin Analog that
Dainippon and MGI will develop hereunder is the 6-
hydroxymethylilludofulvene ("6-HMAF") included in the definition of
the Illudin Analogs. During the term of this Agreement, if the
Parties should jointly decide to stop development of 6-HMAF, the
Parties shall negotiate in good faith how to jointly develop an
alternative Lead Illudin Analog on terms consistent with the payment
terms set forth in this Agreement.
(b) MGI will proceed in good faith, subject to its reasonable business
judgment, to evaluate the pharmacology of
alternative Illudin Analog candidates which it obtains from the
University of California, or from any other source. MGI will
communicate in a timely manner the results of these evaluations.
Notwithstanding the rights granted under Section 3.1, prior to any
development by Dainippon of any additional Illudin Analog for the
Territory (beyond the Lead Illudin Analog), the Parties shall discuss
and negotiate in good faith the terms of such development and
marketing. Should Dainippon decline to participate in the development
and marketing of any additional Illudin Analog for the Territory, or
fail to reach agreement with MGI regarding mutually agreeable terms
for the development and marketing of such additional Illudin Analogs,
after six (6) months of negotiations, then Dainippon will assist MGI
in locating and securing a third party to develop and market such
additional Illudin Analogs in the Territory, either as an independent
licensee of MGI or as an additional partner with Dainippon and MGI.
ARTICLE 4.0 TRADEMARKS
4.1 MGI Marks. Dainippon will use every effort to use whatever Trademark or
Trademarks that MGI uses in the United States for marketing of the Products in
the Territory. If the Trademark or Trademarks selected by MGI is not available
or suitable for use in the Territory, the Parties shall promptly meet and confer
to select jointly one or more suitable Trademarks to be used by Dainippon under
this Agreement for purposes of marketing any Products in the Territory. Such
additional Trademarks may be either (a) new Trademarks to be registered in the
Territory or (b) existing Trademarks previously registered in the Territory by
Dainippon. As used herein the term "MGI Trademarks" shall mean the Trademarks
that MGI uses in the United States and the Trademarks that the Parties jointly
select to be registered in the Territory; and the term "Dainippon Trademarks"
shall mean the Trademarks previously registered in the Territory by Dainippon
that the Parties jointly select for marketing Products in the Territory.
4.2 Trademark Ownership and Registration. MGI shall be the sole and exclusive
owner of any such MGI Trademarks and shall control any such registration in the
Territory. In addition:
(a) MGI and Dainippon shall jointly and equally bear all costs and
expenses, including reasonable attorney's fees, in registering or
otherwise protecting such MGI Trademarks in the Territory;
(b) MGI may request Dainippon's reasonable assistance, at the expense of
MGI and Dainippon, in making any registration of an MGI Trademark in
the Territory;
(c) In the event a conflicting xxxx is discovered in the Territory, the
Parties shall consult with each other in
regard to an appropriate resolution. MGI and Dainippon shall jointly
and equally bear all costs and expenses incurred in resolving such
conflict, including reasonable attorney's fees; and
(d) MGI shall notify Dainippon at least thirty (30) days prior to
abandoning a trademark application for an MGI Trademark to allow
Dainippon to pursue such registration if it so chooses, subject to
such special arrangements as the Parties may agree.
4.3 Trademark License Grant. MGI hereby grants to Dainippon, and Dainippon
hereby accepts from MGI, an exclusive, royalty-free right and license, during
the term of this Agreement, to reproduce and use any MGI Trademark in connection
with the marketing, promotion, advertising and sale or other distribution of the
Products within the Territory and for no other purpose. Dainippon may
sublicense such right and license to use any MGI Trademark to any permitted
sublicensee if such sublicensee agrees in writing to be bound by the terms and
conditions of this Article 4.0. Immediately upon termination of this Agreement,
Dainippon shall cease and desist from use of any MGI Trademark in any manner,
other than to liquidate its then-existing inventory of Products within ninety
(90) days of such termination. Dainippon hereby grants to MGI, in the event of
such termination, full power of attorney, with the right of substitution, to
cancel, revoke or withdraw any governmental registration or authorization
permitting Dainippon to use any MGI Trademark in the Territory, and Dainippon
shall provide such further documentation and assistance as MGI may reasonably
request in connection therewith.
4.4 Quality Standards. Any MGI Trademark shall be used only on or in
connection with the sale of Products manufactured and sold in accordance with
this Agreement. Any Product sold under an MGI Trademark by Dainippon or a
permitted sublicensee shall be subject to the following restrictions:
(a) To the extent consistent with Section 4.9(a), MGI may establish
reasonable standards, after consultation with Dainippon and consistent
with the rules and regulations of the PAB, for the marking and
packaging of Products and use of an MGI Trademark, which standards
shall be provided to Dainippon in writing as soon as feasible and in
any event prior to the filing by Dainippon of the first application
for Marketing Authorization of such Product in the Territory. MGI may
also make reasonable changes, consistent with the rules and
regulations of the PAB, to such standards, provided that MGI shall
give at least sixty (60) days notice to Dainippon prior to the
implementation of such changes. MGI and Dainippon will mutually
discuss any proposed changes in MGI's quality standards under this
Section 4.4(a), and MGI will agree to such reasonable modifications to
such proposed changes, as Dainippon may suggest as being necessary in
connection with the marketing of a Product in the Territory;
(b) Upon request by MGI, Dainippon shall provide MGI with samples of any
brochures, professional literature, packaging and consumer
instructions which are created or intended for use by Dainippon or any
of its Affiliates or its permitted sublicensees in the advertising,
promotion, marketing or sale of a Product bearing an MGI Trademark to
verify compliance with MGI's trademark standards. Upon request by
MGI, Dainippon shall provide translations of representative samples of
such literature or materials on such schedule as the Partners shall
mutually agree. Dainippon shall also, prior to submitting product
labelling to the PAB, supply MGI with a translation in English of
drafts of such product labelling as well as packaging and consumer
instructions for the Products, for MGI's approval, which approval
shall not be unreasonably withheld, provided, however, Dainippon shall
be solely and exclusively responsible for any errors or omissions in
such non-English materials, notwithstanding any such review by MGI.
Dainippon shall also permit MGI, upon reasonable notice and at times
reasonably acceptable to Dainippon, to examine any stocks of Products
held by Dainippon or any permitted sublicensees to verify compliance
with MGI's trademark standards;
(c) If MGI notifies Dainippon in writing of any non-conformity with MGI's
standards in the use of an MGI Trademark, Dainippon shall promptly
take all reasonable steps or measures, at Dainippon's sole cost and
expense, necessary to ensure that such use complies with MGI's
standards; and
(d) Neither Dainippon nor its permitted sublicensees may use an MGI
Trademark in combination with any other trademark or trade name.
4.5 Reservation of Rights. Dainippon acknowledges MGI's proprietary rights in
and to any MGI Trademark, subject to the license and right granted in Section
4.3. Dainippon shall not adopt, use or register any words, phrases or symbols
which are identical to or confusingly similar to any MGI Trademark and shall not
use any MGI Trademark as part of its corporate or trade name or permit any third
party (including an Affiliate or a permitted sublicensee) to do so.
4.6 Infringements. Dainippon shall promptly notify MGI of any use in the
Territory by any third party of any MGI Trademark or of any similar xxxx which
may constitute an infringement or passing off of an MGI Trademark. Dainippon
shall have the exclusive right, at its option, to institute proceedings against
third-party infringers in respect of infringements occurring in the Territory.
If Dainippon elects not to institute such proceedings within a period of thirty
(30) days after notification of the alleged infringement, MGI shall have the
option to do so, and Dainippon shall thereafter refrain from doing so. MGI
shall have the exclusive right in its sole discretion to institute proceedings
against third-party infringers in respect of infringements occurring outside the
Territory. Each Party shall cooperate fully with the other Party in connection
with any such proceedings against third-party infringers of the MGI Trademarks
in the Territory provided that all expenses of such proceedings shall be borne
by the Party instituting same and all damages which may be awarded or agreed
upon in settlement of such action shall accrue to such Party.
4.7 Dainippon Trademarks. Dainippon shall bear all costs and expenses of
registering and protecting the Dainippon Trademarks in the Territory. MGI
acknowledges Dainippon's proprietary rights in and to any Dainippon Trademark,
subject to the license set forth in this Section 4.7. MGI shall not adopt, use
or register any words, phrases or symbols which are identical to or confusingly
similar to any Dainippon Trademark and shall not use any Dainippon Trademark as
part of its corporate or trade name or permit any third party (including an
Affiliate) to do so. Effective upon the termination of this Agreement,
Dainippon hereby grants to MGI, and MGI hereby accepts from Dainippon, an
exclusive right and license, with right of sublicense, to reproduce and use any
Dainippon Trademark in connection with the marketing, promotion, advertising and
sale or other distribution of the Products within the Territory and for no other
purpose. The Parties shall negotiate in good faith a nominal payment for the
use of such Dainippon Trademarks.
4.8 Additional Trademarks. In addition to the MGI or Dainippon Trademarks used
to market the Products in the Territory, the Parties acknowledge and agree that
the permitted sublicensees of Dainippon may market the Products in the Territory
under additional Trademarks which may be selected by Dainippon and such
permitted sublicensees. Dainippon or such permitted sublicensees shall bear all
costs and expenses of registering and protecting such additional Trademarks in
the Territory. MGI shall not adopt, use or register any words, phrases or
symbols which are identical to or confusingly similar to any such additional
Trademark and shall not use any such additional Trademark as part of its
corporate or trade name or permit any third party (including an Affiliate) to do
so. Any permitted sublicense shall provide for the grant to MGI, effective upon
termination of this Agreement, an exclusive right and license, with the right of
sublicense, to reproduce and use any such additional Trademark in connection
with the marketing, promotion, advertising and sale or other distribution of the
Products within the Territory and for no other purpose. The Parties shall
negotiate in good faith a nominal payment for the use of such additional
Trademarks.
4.9 Additional Product Marking Requirements. Any Product sold by Dainippon or
a permitted sublicensee shall be subject to the following restriction:
(a) The marking or packaging of any Product shall comply with all
applicable laws, regulations and governmental requirements of the
jurisdictions in which such Product is manufactured and sold; and
(b) Whenever legally permissible in the Territory, all packages in which a
Product is to be sold to consumers shall bear a prominent legend in a
form approved by MGI, stating that such Product is "Sold by [Dainippon
or permitted sublicensee] under license from MGI PHARMA, INC.,
Minneapolis, Minnesota, USA" (if such acknowledgment is not legally
permissible, Dainippon shall inform MGI and provide information
relating to the pertinent law).
ARTICLE 5.0 PRODUCT REGULATORY APPROVALS
5.1 Regulatory Approvals. Dainippon shall submit all applications and
Supporting Data and information to obtain Marketing Authorizations, Pricing
Approvals and Reimbursement Approvals required for the marketing, promotion and
sale of any Product in the Territory and shall use its Best Efforts, in
consultation with MGI, promptly to obtain such Marketing Authorizations, Pricing
Approvals and Reimbursement Approvals as are necessary and sufficient to
optimize Net Sales. Such responsibility shall include the conduct and
documentation of such testing and preclinical and clinical trials as are
required in connection with the submission of applications for Marketing
Authorization within the Territory.
5.2 Dainippon's Regulatory Responsibilities. In Dainippon's performance of its
duties under Section 5.1 above, the following terms and conditions shall apply:
(a) Dainippon shall use its Best Efforts to ensure that the first Health
Registration Dossier for a Product is submitted to the PAB in Japan
not later than March 31, 2002. Notwithstanding Dainippon's Best
Efforts, if the submission of such Health Registration Dossier in
Japan is delayed beyond such date, the Parties shall consult with one
another on modification of such date and, if the Parties deem
appropriate, shall jointly discuss with the University of California
an extension of such deadline. In the event that the submission of
such Health Registration Dossier in Japan is delayed more than twelve
(12) months beyond such date or such extended date, the Parties shall
confer and discuss in good faith the causes and potential solutions
for such failure.
(b) Dainippon shall use its Best Efforts to obtain Marketing Authorization
for the first Product in Japan at the earliest date possible, based
upon the following development schedule:
Completion of Preclinical trials December 31, 1997
Completion of Phase I trials March 31, 1999
Completion of Early Phase II trials August 31, 2000
Completion of Late Phase II trials November 30, 2001
Filing of Health Registration Dossier March 31, 2002
Dainippon shall prepare and submit to MGI, on a semi-annual basis
commencing six (6) months after the Effective Date of this Agreement,
progress reports containing all of the information with respect to
Dainippon's efforts in the Territory that MGI will require to prepare
the progress reports required under Section 7.2 of the University of
California License Agreement along with a statement of Dainippon's
belief, at the date of such report, of the achieveability of the
deadlines set forth in Section 5.2(b) of this Agreement.
(c) Dainippon shall use its Best Efforts to achieve the Product Launch of
a Product in Japan within six (6) months after Dainippon's receipt of
Marketing Authorization and any required Pricing Approval and/or
Reimbursement Authorization. Notwithstanding Dainippon's Best
Efforts, if Dainippon fails to achieve the Product Launch by that
date, the Parties shall confer and discuss in good faith the causes
and potential solutions for such failure and, notwithstanding the
foregoing, MGI may elect to terminate this Agreement pursuant to
Section 12.4(b).
(d) If Product Launch of the first Product in Japan does not occur before
October 1, 2005, Dainippon may elect to make the following quarterly
payments by wire transfer to MGI in order to maintain the rights
granted under this Agreement. Such payments shall commence on October
1, 2005 (or such extended date as set forth below) and continue until
Product Launch of the first Product occurs in Japan. For purposes of
this Section 5.2(d) only, Calendar Quarter 1 shall mean the calendar
quarter commencing on October 1, 2005 (or such extended date as set
forth below), and each such successive calendar quarter thereafter
shall be numbered consecutively thereafter.
Calendar Quarter Amount of Payment Per
Calendar Quarter
1 through 4 $100,000
5 through 8 $200,000
9 through 12 $300,000
13 and thereafter $350,000
The October 1, 2005 date for Product Launch set forth in this Section
5.2(d) may be extended as follows: (i) in the event that the deadline
for the submission of a
Health Registration Dossier, as set forth in Section 5.2(b), is
extended with the consent of the University of California pursuant to
the provisions of Section 5.2(a), then the October 1, 2005 date set
forth in this Section 5.2(d) shall be extended one (1) additional
month for each additional month in excess of the twelve (12) month
period that is set forth in Section 5.2(a) or (ii) in the event that
the Product Launch is delayed for any unforeseeable reason (except any
cause for which Dainippon is responsible) existing and/or occurring
after the filing of the Health Registration Dossier, the Parties shall
negotiate in good faith appropriate extensions to the deadline set
forth above for the Product Launch.
If Dainippon elects not to make any such quarterly payments, MGI
shall have the right to terminate this Agreement pursuant to Section
12.4(b).
(e) Dainippon shall bear all its own costs and expenses to register,
market and promote Products in the Territory in accordance with the
provisions herein.
(f) If Dainippon's development of the Products is delayed for any reason
except any cause for which Dainippon is responsible, the Parties shall
negotiate in good faith appropriate extensions to the development
schedule, and the Parties shall jointly negotiate with the University
of California for appropriate revisions to the University of
California License Agreement.
5.3 Mutual Assistance. Each Party shall use its Best Efforts to provide such
assistance as the other Party shall reasonably request for purposes of obtaining
Marketing Authorizations, Pricing Approvals and Reimbursement Approvals for the
Products, in accordance with the following provisions:
(a) Each Party shall use its Best Efforts to make its personnel available,
either in person or by telephone, for reasonable periods of time and
subject to the availability of such personnel, to advise the other
Party in connection with its applications for Marketing Authorization
for the Products. Where such assistance will require travel of the
Party requested to provide such assistance, the requesting Party shall
notify the other Party of such need at least thirty (30) days in
advance of the day on which it desires the assistance of such
personnel, unless unusual or emergency circumstances arise that make
such notice unfeasible, and will reimburse the other Party for out-of-
pocket travel-related expenses incurred in accord with the other
Party's travel policy; and
(b) Each Party shall collaborate with and assist the other Party in (i)
interpretation of any Health Registration Dossier or other Supporting
Data provided by either Party to the other, (ii) review of regulatory
documentation and submissions prepared by the other Party and (iii)
obtaining of cooperation from third parties as needed in connection
with the foregoing.
5.4 Co-Development. Subject to Section 3.1(d), Dainippon shall have the right
to engage third parties to develop the Products jointly with Dainippon in the
Territory. The Parties acknowledge that any permitted sublicensee that is
developing the Products jointly with Dainippon shall be entitled to file
separate applications to obtain Marketing Authorizations, Pricing Approvals and
Reimbursement Approvals required for the marketing, promotion and sale of any
Product in the Territory and that the Parties' obligations to provide mutual
assistance and access to regulatory filings shall extend to such permitted
sublicensees. Any permitted sublicense shall provide for the assignment to MGI
(or its designee), effective upon termination of this Agreement, of title and
possession of any and all Health Registration Dossiers, Marketing
Authorizations, Pricing Approvals and Reimbursement Approvals and any related
regulatory filings or Supporting Data.
5.5 Inspections. Dainippon and its permitted sublicensees shall cooperate with
any inspection by MGI of Dainippon's (and its permitted sublicensees')
development, packaging, distribution or storage facilities for the Products in
the Territory and, at the request of MGI and at no cost to MGI, shall furnish
(and shall cause Dainippon's permitted sublicensees to furnish) adequate and
representative samples of such Products from time to time to enable MGI to test
and verify that the Products are being sold in accordance with MGI's quality
standards (consistent with the requirements of the PAB) for such products. In
addition, Dainippon and its permitted sublicensees shall furnish copies of any
internal quality assurance or other related documentation, including, without
limitation, any documentation related to Good Manufacturing Practices or Good
Clinical Practices (related to the conduct of any clinical trials carried out in
connection with the development of a Product for Japan) that are reasonably
requested by MGI for such purposes. MGI shall cooperate with any inspection by
Dainippon of MGI's or its contracted manufacturing facilities for the Bulk Drug
Substance.
ARTICLE 6.0 MANUFACTURE AND SUPPLY
6.1 Purchase and Supply of Bulk Drug Substance. Dainippon covenants and agrees
to purchase, and MGI covenants and agrees to supply, Dainippon's (and its
permitted sublicensees') commercial requirements of Bulk Drug Substance pursuant
to the Supply Agreement. If MGI materially fails to supply Dainippon with such
requirements for Bulk Drug Substance as provided under the Supply Agreement, the
Parties shall confer and discuss in good faith the causes and potential
solutions for such failure to supply,
including the grant to Dainippon of a right to manufacture Bulk Drug Substance
for the Territory, on such terms and conditions as the Parties may then mutually
agree.
6.2 Fill and Finish of Products. Dainippon shall perform, at its own expense,
fill and finish on Bulk Drug Substance (including without limitation
sterilization and addition of excipients) provided by MGI to Dainippon pursuant
to the Supply Agreement, to produce the final form of the Products for sale in
the Territory ("Fill and Finish"). Dainippon shall have the right to engage
third parties to perform such Fill and Finish, subject to Section 3.1(d).
6.3 Preclinical and Clinical Supplies of Bulk Drug Substance. MGI shall use
its Best Efforts to supply all requirements of Dainippon and any permitted
sublicensee for the Bulk Drug Substance required for preclinical and clinical
supplies necessary to obtain Marketing Authorizations, Pricing Approvals and
Reimbursement Approvals for the Product in a timely manner and at a price and on
the conditions agreed upon by separate agreement of the Parties. In the event
that any delay or failure by MGI to supply the Bulk Drug Substance for the
purposes outlined in this Section occurs after timely notification and ordering
of material by Dainippon as separately agreed by the Parties, and such delay
and/or failure to supply Bulk Drug Substance delays Dainippon's preparation of a
Health Registration Dossier for submission to the PAB, then the deadlines set
forth in Sections 5.2(a) and (d) shall be extended to the extent of the
resulting delay in Dainippon's preparation of the Health Registration Dossier
for submission to the PAB.
ARTICLE 7.0 PROMOTION AND MARKETING
7.1 General Best Efforts Obligation. Dainippon shall commit adequate funding
and use its Best Efforts, comparable to those that it devotes to other products
with similar potential, to fund and support Product Launch and ongoing
promotion, marketing and sale of Products. Upon receipt of Marketing
Authorization for a Product in the Territory and thereafter, representatives of
Dainippon and MGI shall meet from time to time, at least on an annual basis, at
such place as the Parties shall mutually agree, to discuss Dainippon's and MGI's
respective promotional and marketing efforts relating to the Products in the
Territory and in the United States.
7.2 Co-Promotion and Co-Marketing. Subject to Section 3.1(d), Dainippon shall
have the right to engage third parties to assist in its promotion and marketing
of the Products in the Territory. Such third party arrangements may include
co-promotion or co-marketing of the Products.
7.3 Compliance with Law. Dainippon shall market, promote and sell the Products
in compliance with the conditions and requirements of all applicable Marketing
Authorizations, Pricing Approvals and Reimbursement Approvals and with all other
applicable legal and regulatory requirements in the Territory.
7.4 Trade Shows, Product Fairs, Etc. Dainippon shall attend any medical or
pharmaceutical conventions, trade shows, product fairs or other comparable
events in the Territory, to the extent that Dainippon judges them to be suitable
and rewarding for purposes of promoting Products and where it would be normal
and customary to display and promote ethical pharmaceuticals of the type and
nature of a Product, and shall feature the Products at such events in such
manner as it devotes to other Dainippon products with similar potential.
7.5 Advertising. In compliance with applicable laws or regulations, Dainippon
shall advertise the Products in such medical or pharmaceutical journals and
similar publications where it would be normal and customary to display and
promote ethical pharmaceuticals of the type and nature of a Product, and shall
feature the Products in such publications in such manner as it devotes to other
Dainippon products with similar potential.
ARTICLE 8.0 MILESTONE PAYMENTS AND LOAN
8.1 Initial Milestone Payment. Dainippon shall pay to MGI Two Million Three
Hundred Twenty-Five Thousand Dollars ($2,325,000), without reduction or credit,
as an initial milestone payment ("Initial Milestone Payment") for Dainippon's
exclusive right and license to sell Products in the Territory. The Initial
Milestone Payment shall be made to MGI by wire transfer (according to
instructions provided to Dainippon by MGI) immediately upon the Effective Date.
8.2 Continuing Milestone Payments. Dainippon shall pay to MGI continuing
milestone payments ("Continuing Milestone Payments") for Dainippon's exclusive
right and license to sell Products in the Territory. The Continuing Milestone
Payments shall be payable commencing with the calendar quarter in which the
Effective Date occurs and continuing until the earlier of the payment of the
Approval Milestone Payment pursuant to Section 8.3 or through a period ending
nineteen (19) calendar quarters after the Effective Date. The Continuing
Milestone Payment for the initial calendar quarter (hereinafter referred to as
Calendar Quarter 1 or the first Calendar Quarter) shall be payable by wire
transfer to MGI within ten (10) days of the Effective Date and the remaining
Continuing Milestone Payments shall be payable by wire transfer to MGI on the
first day of each ensuing calendar quarter. The amount of the Continuing
Milestone Payment for each of the nineteen (19) calendar quarters shall be as
follows:
CALENDAR QUARTER AMOUNT OF PAYMENT PER
CALENDAR QUARTER
1 through 4 $400,000 per quarter
5 through 8 $450,000 per quarter
9 through 12 $500,000 per quarter
13 through 18 $550,000 per quarter
19 $100,000
8.3 Approval Milestone Payment. Upon Marketing Authorization by the PAB of the
first Product in Japan, Dainippon shall, within 15 days of such Marketing
Authorization, pay by wire transfer to MGI an approval milestone payment
("Approval Milestone Payment") in the amount of One Million Dollars ($1,000,000)
as a final milestone payment to MGI.
8.4 Loan Amount and Repayment Terms.
(a) Unless and until Dainippon has received Marketing Authorization by the
PAB of the first Product in Japan, Dainippon shall pay to MGI the
following amounts which payments shall be considered to be the "Loan
Amount" and shall be repaid by MGI as provided hereunder (as used
herein calendar quarters shall be measured from the Effective Date):
CALENDAR QUARTER AMOUNT OF PAYMENT PER
CALENDAR QUARTER
19 $ 450,000
20 through 26 $ 550,000
----------
Total Loan Amount $4,300,000
Notwithstanding such loan schedule, MGI may request, and Dainippon may
in its sole discretion agree, that Dainippon accelerate advancement of
such Loan Amount on a schedule to be mutually agreed by the Parties.
(b) The Loan Amount shall not bear interest, but shall be repayable by MGI
(according to the terms specified in Section 8.4(c)) on the later of
(i) the first day of the calendar quarter immediately following the
disbursement of the full Loan Amount or (ii) receipt of Marketing
Approval for the first Indication in Japan. MGI shall repay such Loan
Amount, at Dainippon's sole option, in cash (the "Cash Option") or in
shares of MGI Common Stock (the "Stock Option"). Dainippon shall
notify MGI in writing of which option it chooses within thirty (30)
days of such date.
(c) If Dainippon elects the Cash Option, Dainippon may elect to receive
the Cash Option in (i) cash, payable in full six (6) months following
the date of notice of election of its option ("Notice Date"), or (ii)
all or any portion of the Loan Amount as a credit against orders by
Dainippon for Bulk Drug Substance under the Supply Agreement, with the
remainder payable in cash. If Dainippon elects to receive the
repayment of the Loan Amount in MGI Common Stock, MGI shall issue to
Dainippon within sixty (60) days after the Notice Date such number of
shares of Common Stock of MGI (the "Shares") whose aggregate fair
market value, as determined by the closing
sale price of MGI's Common Stock on the Nasdaq National Market (or
such other exchange as MGI's Common Stock may then be traded on) on
the Notice Date, equals the Loan Amount. Such Shares shall be issued
pursuant to Regulation S of the Securities Act of 1933, as amended, or
such equivalent regulation then in effect.
(d) Upon termination of this Agreement for any reason, any portion of the
Loan Amount which has not been repaid to Dainippon, in cash, stock or
as a credit against purchases of Bulk Drug Substance, shall be repaid
in cash by MGI to Dainippon. Such repayment of the remaining Loan
Amount shall be due and payable by MGI to Dainippon no later than (i)
six (6) months following receipt of notice of termination by the non-
terminating Party or (ii) the actual date of termination of the
Agreement, whichever is later.
8.5 Sublicensee Revenues. Subject to the provisions of Section 3.1(d)(vii),
Dainippon shall pay to MGI one-third (1/3) of all revenues received by
Dainippon from any permitted sublicensee of any of Dainippon rights hereunder,
other than royalties on such sublicensee's sales of Products, including, without
limitation, any milestone payments, funded research and development fees,
licensee fees paid by such sublicensee to Dainippon ("Sublicensee Revenues").
Sublicensee Revenues shall be payable by wire transfer to MGI within thirty (30)
days after the end of the calendar quarter in which such Sublicensee Revenues
are accrued or realized. Dainippon agrees to provide to MGI, simultaneously
with any such payment, a report which shows the basis for such payment,
including a good faith estimate of any savings realized by Dainippon by means of
such sublicense and the means for determining such estimate.
8.6 Reports. Dainippon shall provide to MGI, on a quarterly basis on or before
the forty-fifth (45th) day after the end of each calendar quarter during the
term of this Agreement, a report which shows the Net Sales of Products by
Dainippon and its permitted sublicensees for such quarter in Japanese Yen, by
Product. MGI understands that with respect to the second and fourth calendar
quarters for each calendar year, Net Sales shall be reported on the most
realistic provisional basis available to Dainippon at the time such report is
made, and any necessary adjustment between the provisional and actual amounts
later arrived at, will be reported by Dainippon to MGI at such time as the
actual amounts are determined. Such information shall be provided in a manner
and in such detail as may be sufficient for MGI to calculate its royalty
obligation for such calendar quarter under the University of California License
Agreement. The University of California License Agreement requires MGI to pay
royalties based upon sales or transfers at arms-length consideration between
unrelated third parties and Dainippon shall report Net Sales on that basis.
8.7 Books and Records. Dainippon shall keep adequate and complete books and
records showing all Products sold by Dainippon and its
permitted sublicensees for a period of no less than five (5) years following
completion of the fiscal year in which the sale of Products occurred. Such
books and records shall include all information necessary to verify the total
amount and computation of the Net Sales and Sublicensee Revenues hereunder, and
shall be open to inspection, audit and copying by MGI or its agents during
reasonable business hours and upon reasonable notice to the extent necessary to
verify the amount of such Net Sales and Sublicensee Revenues. Such inspection,
audit and copying may be conducted at the expense of MGI by an independent
Certified Public Accountant or other agent appointed by MGI and reasonably
acceptable to Dainippon, provided, however, Dainippon shall reimburse MGI for
MGI's reasonable expenses incurred in such inspection and audit if such audit
reveals any under reporting of Net Sales or any underpayment of Sublicensee
Revenues owed to MGI of more than Ten Thousand Dollars ($10,000) or five percent
(5%), whichever is greater, for any quarter covered by such inspection and
audit.
8.8 Withholding. If any payment to MGI hereunder (including, without
limitation, Sublicensee Revenues or interest paid pursuant to Section 8.10) is
subject to any income taxes in the Territory, including, without limitation,
Japanese income taxes under the U.S.-Japan Income Tax Treaty:
(a) MGI shall pay such income taxes and hereby authorizes Dainippon to
withhold such taxes from the applicable payments due to MGI under this
Agreement and to pay such withheld amounts to the relevant tax
authorities within the Territory;
(b) whenever Dainippon withholds and pays such income taxes from any
payments due to MGI under this Agreement, it shall furnish MGI with a
certificate of the relevant tax authorities within the Territory, in a
form issued by such tax authorities and reasonably acceptable to the
U.S. Internal Revenue Service, documenting payment of such taxes; and
(c) Dainippon shall be responsible for completing the proper
documentation to qualify for the reduced royalty withholding rate
under Article 14 of the U.S.--Japan Income Tax Treaty.
8.9 Net Payments. Except as expressly provided in Section 8.8, all payments
by Dainippon to MGI under this Agreement represent the net amounts that MGI is
entitled to receive and shall not be subject to any other withholding or
deduction for any reason whatsoever.
8.10 Interest. If any payment owed to MGI under this Agreement is overdue, in
whole or in part, interest shall accrue on such overdue amount at the rate of
eighteen percent (18%) per annum or the legal rate of interest, whichever is
lower.
8.11 Currency Controls. If Dainippon is precluded at any time from making any
payments due to MGI under the provisions of this Agreement because Dainippon
has failed, notwithstanding its Best Efforts, to obtain any governmental
approvals that may be required under the laws and regulations in the Territory
for such transfers of funds, then Dainippon shall:
(a) deposit, or cause its agent to deposit, such sums to an account
designated by MGI at a bank or other entity within the Territory;
(b) provide, or cause its agent to provide, to MGI documentary evidence of
such deposits; and
(c) remit such deposits to MGI immediately upon the subsequent receipt of
any required governmental approvals for such transfers.
Subject to any applicable regulatory requirements, Dainippon further agrees, and
shall cause any agent of Dainippon to agree, that the form of such depository
account shall permit MGI to withdraw the deposited amounts at will, but neither
Dainippon nor any agent of Dainippon shall withdraw the deposited amounts
otherwise than for the purpose of remitting such amounts to MGI pursuant to the
provisions of this Section.
ARTICLE 9.0 INDEMNIFICATION
9.1 Indemnification by Dainippon. Dainippon hereby indemnifies and holds
harmless MGI, its Affiliates and its permitted sublicensees (an "MGI Indemnified
Party") from and against all liabilities, damages, losses, costs and expenses
(including reasonable attorney's fees) arising out of claims, suits or
proceedings brought by a third party wherein it is alleged that personal injury
or death has resulted from use of any Product developed or marketed by Dainippon
in the Territory, including without limitation the following:
(a) claims, suits or proceedings based upon alleged or actual (i)
negligence, gross negligence or willful misconduct of Dainippon, any
Dainippon Affiliate or any permitted sublicensee in the conduct of any
pre-clinical or clinical testing of any Product in the Territory; (ii)
negligence, gross negligence or willful misconduct of or attributable
to Dainippon, any Dainippon Affiliate or any permitted sublicensee in
the Fill and Finishing, promotion, marketing, packaging, labeling or
sale of any Product; or (iii) failure of Dainippon, any Dainippon
Affiliate or any permitted sublicensee to comply with any applicable
laws, regulations and/or administrative decisions relating to the
Products.
(b) Whenever an MGI Indemnified Party becomes aware of a claim, suit or
proceeding as to which it believes it is
entitled to indemnification under this Article 9.0, such MGI
Indemnified Party shall give notice in writing to Dainippon, shall
permit Dainippon to assume exclusive control of the defense or
settlement of the matter, and shall provide, at the expense of
Dainippon, all authority, information and assistance which Dainippon
may reasonably request for purposes of such defense. If a single law
firm engaged by Dainippon would be subject to any material conflict of
interest in representing one or more of such Parties, Dainippon shall
not be required to waive such conflict and may, instead, request
separate representation by an independent law firm of the MGI
Indemnified Party at the expense of Dainippon. An MGI Indemnified
Party may engage its own counsel, at its own expense, to monitor the
defense of any such matter.
9.2 Indemnification by MGI. MGI hereby indemnifies and holds harmless
Dainippon, its Affiliates and its permitted sublicensees (a "Dainippon
Indemnified Party") from and against all liabilities, damages, losses, costs and
expenses (including reasonable attorney's fees) arising out of claims, suits or
proceedings brought by a third party wherein it is alleged that personal injury
or death has resulted from any failure to the Bulk Drug Substance to meet the
specifications therefor, including any such failure caused by the following:
(a) alleged or actual (i) negligence, gross negligence or willful
misconduct of or attributable to MGI or any MGI Affiliate in the
manufacture of any Bulk Drug Substance; or (ii) failure of MGI or any
MGI Affiliate to comply with any applicable laws, regulations and/or
administrative decisions relating to the Products.
(b) Whenever a Dainippon Indemnified Party becomes aware of a claim, suit
or proceeding as to which it believes it is entitled to
indemnification under this Article 9.0, it shall give notice in
writing to MGI, shall permit MGI to assume exclusive control of the
defense or settlement of the matter, and shall provide, at the expense
of MGI, all authority, information and assistance which MGI may
reasonably request for purposes of such defense. If a single law firm
engaged by MGI would be subject to any material conflict of interest
in representing one or more of such Parties, MGI shall not be required
to waive such representation by an independent law firm of the
Dainippon Indemnified Party at the expense of MGI. A Dainippon
Indemnified Party may engage its own counsel, at its own expense, to
monitor the defense of any such matter.
9.3 Further Indemnification. Notwithstanding any other provision hereof, each
Party (an "Indemnifying Party") hereby indemnifies and holds harmless the other
Party from and against any loss, liability, damage or expense (including
reasonable attorney's fees)
which the other Party may suffer or sustain as a direct and proximate result of:
(a) any gross negligence or willful misconduct on the part of employees or
agents of the Indemnifying Party, its Affiliates or any permitted
sublicensee,
(b) any breach of any covenant or agreement of the Indemnifying Party
contained in this Agreement, or
(c) any misrepresentation by the Indemnifying Party in or in connection
with this Agreement.
9.4 Subrogation. If a Party has indemnified the other Party under Section 9.1,
9.2 or 9.3, the Indemnifying Party shall be subrogated to the rights of the
Indemnified Party against any third party, and such Indemnified Party hereby
assigns to the Indemnifying Party all claims, causes of action and other rights
which the Indemnified Party may then have against any third party, including any
permitted sublicensees. Conversely, and without in any way limiting the
obligation of either Party to indemnify the other Party as herein provided, to
the extent that an Indemnifying Party fails to perform its indemnification
obligations under Section 9.1 or Section 9.2 above, the Indemnifying Party
hereby assigns to the Indemnified Party all claims, cause of action and other
rights which the Indemnifying Party may then have against any third party,
including any permitted sublicensees with respect to the claim, suit or
proceeding.
9.5 Survival. The obligations of indemnification, cooperation and subrogation
under this Article 9.0 shall survive the termination of this Agreement for any
reason.
ARTICLE 10.0 FORCE MAJEURE
10.1 Definition and Notice. "Force Majeure" shall mean any event, not existing
as of the Effective Date and not reasonably within the control of the Parties as
of such date, which, in whole or in material part, prevents or makes
commercially unreasonable one Party's performance of its obligations under this
Agreement. Force Majeure shall include, without limitation: fire, storm,
earthquake, flood, acts of State or other governmental action, war or civil
unrest, strikes, and prolonged shortage of energy or any other supplies. A
Party affected by an event of Force Majeure shall promptly provide the other
Party with written notice describing the event, its cause and foreseeable
duration, and its possible consequences upon performance under this Agreement.
10.2 Suspension of Performance. After an affected Party has given notice under
Section 10.1, that Party shall be relieved of any liability under this
Agreement, except for the obligation to pay amounts due and owing, but only to
the extent and only for so long as the Force Majeure prevents performance. The
other Party may likewise suspend the performance of all or part of its
obligations,
except for the obligation to pay any amounts due and owing, to the extent that
such suspension is commercially reasonable.
10.3 Negotiation. The Parties shall negotiate in good faith an appropriate
course of action if an event of Force Majeure continues for more than three (3)
months.
ARTICLE 11.0 CONFIDENTIALITY
11.1 Non-Use and Non-Disclosure. Each Party acknowledges and agrees that all
the other Party's Confidential Information is confidential and proprietary to
the disclosing Party. Each Party shall not use or disclose to any third party
the other Party's Confidential Information without the other Party's prior
written consent for any purpose other than as permitted or required hereunder.
Each Party shall take the same reasonable measures necessary to prevent any
disclosure by its employees, agents, contractors, permitted sublicensees, or
consultants of the other Party's Confidential Information as it applies to the
protection of its own Confidential Information.
11.2 Marking. To be entitled to protection as Confidential Information, all MGI
or Dainippon documents containing that Party's Confidential Information shall be
appropriately and clearly marked as "Proprietary," "Secret," "Confidential," or
other words to similar effect. If a disclosure of Confidential Information is
made orally, as in a meeting, the disclosing Party shall indicate the nature of
that information at the time of its disclosure and shall confirm such
designation in writing within ten (10) days of the date of such disclosure to
the receiving Party.
11.3 Exclusions. Information shall not be considered Confidential Information
hereunder if it:
(a) was already in the possession of the receiving Party prior to its
receipt from the disclosing Party, as shown by the receiving Party's
books and records;
(b) is, or becomes, part of the public knowledge or literature through no
fault, act or omission of the receiving Party, provided, Proprietary
Product Information shall not be deemed to have entered the public
domain by reason of its having been filed with any Competent
Authority;
(c) is, or becomes, available to the receiving Party from a source other
than the disclosing Party, which source has rightfully obtained the
same information and has no obligation of confidentiality to the
disclosing Party with respect to it;
(d) is made available on an unrestricted basis by the disclosing Party to
a third party unaffiliated with the disclosing Party; or
(e) is required to be revealed pursuant to law, provided, however, the
receiving Party which is under any such requirement of law shall give
reasonable notice (pursuant to the provisions of Section 15.5) to the
disclosing Party of such requirement and shall cooperate with the
disclosing Party in reasonable legal efforts to limit or mitigate any
such revelation so as to preserve the proprietary nature of any
Confidential Information contained therein.
11.4 Duration; Surviving Obligation. Each Party's obligations of non-use and
non-disclosure of the other Party's Confidential Information shall apply during
the term of this Agreement and shall also survive for a period of five (5) years
after its termination for any reason.
11.5 Prior Agreements. The non-disclosure and non-use provisions of this
Agreement hereby supersede the provisions of the Mutual Secrecy Agreement, dated
June 29, 1994 by and between the Parties and the provisions of Section 3.4 of
the Option Agreement, provided, however, this Article 11.0 shall be deemed
retroactive to the effective date of the Mutual Secrecy Agreement.
ARTICLE 12.0 TERM AND TERMINATION
12.1 Term. Unless earlier terminated in accordance with Section 12.4, 12.5 or
12.6, this Agreement shall be in effect for the longer of the term of the MGI
Patents in the Territory or ten (10) years from the date of Marketing
Authorization for the last Indication to be approved for marketing by the PAB
during the term of this Agreement in the Territory (the "Initial Term"). This
Agreement shall automatically renew for successive one (1) year periods
thereafter ("Renewal Term"), unless either Party notifies the other Party in
writing of its intention to terminate this Agreement at least one hundred and
twenty (120) days prior to the expiration of the Initial Term or any Renewal
Term.
12.2 Avoidance of Termination. It is the objective of the Parties to avoid or
resolve, by mutual cooperation, circumstances that may lead to or permit
termination hereunder. The Parties therefore agree that, notwithstanding
anything in this Agreement to the contrary, President Tomotake and Xx. Xxxxxxx
(or their respective successors in the roles of President of Dainippon and Chief
Executive Officer of MGI) agree to meet in person within thirty (30) days of
receiving any notice of termination or of other dispute to attempt to achieve an
amicable resolution of such circumstances; provided, however, that failure of
the Parties to meet within such thirty (30) day time frame shall in no way
affect the ability of either Party to terminate this Agreement under the terms
of this Article 12.0.
12.3 Negotiation with University of California. If the University of
California terminates the University of California License
Agreement with respect to the Territory, notwithstanding MGI's Best Efforts to
maintain such Agreement in effect, as provided in Section 14.2(c), the Parties
shall work jointly to negotiate with the University of California in order to
enable Dainippon to continue development and/or marketing of the Products in the
Territory.
12.4 Termination for Cause. Either Party may terminate this Agreement and the
Supply Agreement at any time by giving notice in writing to the other Party,
which shall be effective ninety (90) days after its date, in accordance with the
following provisions:
(a) if the other Party files a petition of any type as to its bankruptcy,
is declared bankrupt, becomes insolvent, makes an assignment for the
benefit of creditors, goes into liquidation or receivership, or
otherwise loses legal control of its business; or
(b) if the other Party is in material breach of this Agreement or the
Supply Agreement and has failed to cure such breach within sixty (60)
days of the receipt of written notice of breach from the non-breaching
Party (for purposes of this Section 12.4(b), "material breach" shall
include, but not be limited to failure to achieve Product Launch
within the time frames provided for in Section 5.2(c) and failure to
make payments owing pursuant to Section 5.2(d)).
12.5 Termination by Mutual Agreement. The Parties may agree in writing to
terminate this Agreement for their mutual convenience at any time and for any
reason, subject to such terms and conditions as they may adopt.
12.6 Termination by Dainippon.
(a) Dainippon may terminate this Agreement at any time prior to the
receipt of Marketing Authorization for the first Indication in the
Territory, for any reason, upon giving MGI six month's prior written
notice of termination. Until the effectiveness of such termination,
Dainippon shall continue to be subject to the terms and conditions of
this Agreement, including without limitation the obligations to use
its Best Efforts to develop the Products in the Territory and to pay
milestones hereunder.
(b) Dainippon may terminate this Agreement and the Supply Agreement at any
time after the receipt of Marketing Authorization for the first
Indication in the Territory, for competitive reasons only, upon giving
MGI one year's prior written notice of termination. As used herein,
the term "competitive reasons" shall mean that, given the market for
the Products and other oncology products in the Territory, the
reasonably anticipated profits from
marketing of the Products in the Territory will not justify the
efforts and expenditures such marketing will entail. Notwithstanding
such one year's notice period, until (i) such time as MGI shall have
entered into a license agreement with a third party for the Products
in the Territory or (ii) the end of such one (1) year period,
whichever is earlier, Dainippon shall (A) continue to be subject to
the terms and conditions of this Agreement, including without
limitation the obligations to use its Best Efforts to promote and
market the Products in the Territory and (B) use its Best Efforts to
assist MGI in negotiating such third party arrangement.
(c) If MGI terminates development of the Products in the United States, as
provided in Section 14.2(b), Dainippon shall have the right to
terminate this Agreement, upon giving MGI sixty (60) days prior
written notice.
(d) Upon receipt by MGI of notice of termination under this Section 12.6,
MGI shall have the immediate right to begin discussions with one or
more third parties relating to licensing the rights granted to
Dainippon hereunder for the Territory upon effectiveness of
termination under this Section. MGI shall also have the right to
enter into a license or sublicense agreement with a third party for
the period following such termination without violating any rights
granted to Dainippon under this Agreement.
12.7 Rights and Obligations on Termination. If this Agreement is terminated
for any reason, the Parties shall have the following rights and obligations:
(a) Termination of this Agreement shall not release either Party from the
obligation to make payment of all amounts then due and payable;
(b) Each Party's respective obligations of non-use and non-disclosure
under Article 11.0 shall survive as provided in Section 11.4;
(c) Each Party's respective obligations of indemnification under Article
9.0 (as provided in Section 9.4) and to settle all disputes,
controversies or claims under Article 13.0 (as provided in Section
13.6) shall survive such termination of this Agreement;
(d) The license granted under Section 3.2 shall survive termination of
this Agreement and such license shall extend to the whole world,
including the Territory and the licenses granted under Sections 4.7
and 4.8 shall survive termination of this Agreement, provided,
however, that the licenses granted under Sections 3.2, 4.7 and 4.8
insofar as they relate to the Territory shall not survive termination
in the event that this Agreement is terminated by Dainippon for cause
under the provisions of Section 12.4(b);
(e) Unless this Agreement has been terminated by Dainippon for cause as
provided under the provisions of Section 12.4(b) in which case this
Section shall not apply, Dainippon (and any permitted sublicensees)
shall, within ninety (90) days of the date of the termination of this
Agreement, return any documentation and all copies of documentation
(in any media) in its possession, custody or control that contain
Proprietary Product Information of either Party, MGI's Confidential
Information, including, without limitation, any Health Registration
Dossiers, the Drug Master File, and the Supporting Data, and shall
certify in writing that it has done so after a reasonable examination
of all its files where such documentation has been maintained;
(f) Unless this Agreement has been terminated by Dainippon for cause as
provided under the provisions of Section 12.4(b) in which case this
Section shall not apply, Dainippon (and any permitted sublicensees)
shall transfer title and possession of any and all Health Registration
Dossiers, Marketing Authorizations, Pricing Approvals and
Reimbursement Approvals and any related regulatory filings or
Supporting Data to MGI or MGI's designee immediately upon termination
of the Agreement and shall take any and all actions reasonably
necessary to enable MGI or its designee to begin marketing of or
attempting to gain permission to market Products in the Territory
immediately upon termination of this Agreement; and
(g) Unless this Agreement has been terminated by Dainippon for cause as
provided under the provisions of Section 12.4(b) in which case this
Section shall not apply, if Dainippon or any permitted sublicensee has
any remaining inventory of Products, there will be a sell-off period
of ninety (90) days after the effective date of termination in which
such residual inventory may be sold. After that date, and at the
option of MGI, Dainippon or its permitted sublicensees may sell and
MGI may buy any unsold remaining inventory at a price to be negotiated
between the Parties.
12.8 No Compensation. The Parties agree that, subject to the above provisions
of Section 12.7, and without prejudice to any other remedies at law or in equity
that either Party may have in respect of any breach of this Agreement, neither
Party shall be entitled to or claim that it is entitled to any compensation or
like payment as a result of or arising out of any termination in accordance with
this Article 12.0, whether claimed as loss of good will, foregone profits, lost
investments, or otherwise.
ARTICLE 13.0 DISPUTE RESOLUTION
13.1 Negotiation. The Parties recognize that disputes as to certain matters
may from time to time arise during the term of this Agreement or the Supply
Agreement which relate to either Party's rights or obligations hereunder or
thereunder. It is the objective of the Parties to establish procedures to
facilitate the resolution of disputes arising under this Agreement and the
Supply Agreement in an expedient manner by mutual cooperation and without resort
to litigation. The Parties agree to consult and negotiate in good faith to try
to resolve any dispute, controversy or claim that arises out of or relates to
this Agreement. The Parties agree that, except as provided in Section 13.2,
neither party will initiate formal dispute resolution under this Agreement
unless and until such Party has provided written notice of the potential claim
to the other Party and President Tomotake and Xx. Xxxxxxx (or their respective
successors in the roles of President of Dainippon and Chief Executive Officer of
MGI) shall have met in person to attempt to achieve such an amicable resolution
of such situation; provided, however, that in no event shall a Party be required
to delay initiation of formal dispute resolution hereunder for more than a
period of thirty (30) days following such notice.
13.2 Reservation for Litigation. Notwithstanding Sections 13.1 and 13.3, each
Party expressly reserves the right to seek judicial relief from a court of
competent jurisdiction if the other Party is or appears to be in violation of
such other Party's obligations of non-use and non-disclosure under Article 11.0
above, including, without limitation, any injunction or other preliminary
relief. Nothing in this Section 13.2 shall preclude a Party from seeking such
interim relief with respect to any disputes or claims arising under this
Agreement as may be available under the Rules of Conciliation and Arbitration as
provided in Section 13.3.
13.3 Arbitration. Subject to the reservation of the Parties under Section
13.2, all disputes, claims or controversies arising out of or in connection
with this Agreement shall be finally settled under the Rules of Conciliation and
Arbitration of the International Chamber of Commerce, as modified by Section
13.4 below. Judgment upon the award rendered by the arbitrators may be entered
in any court of competent jurisdiction. The place of arbitration shall be San
Francisco, California, United States of America. The arbitration shall be
conducted in the English language by three (3) neutral arbitrators selected by
mutual agreement of the Parties or, if that is not possible within thirty (30)
days of the initial demand for such arbitration, by the International Chamber of
Commerce. At least one (1) arbitrator shall have knowledge of and experience in
the ethical pharmaceutical industry, and at least one (1) arbitrator shall have
knowledge of and experience in international law and technology licensing.
13.4 Special Rules. Notwithstanding any provision to the contrary in the
Rules of Conciliation and Arbitration of the International Chamber of Commerce,
the Parties hereby stipulate that any arbitration hereunder shall be subject to
the following special rules:
(a) Each Party shall have the right to request from the arbitrators, and
the arbitrators shall order upon good cause shown, reasonable and
limited pre-hearing discovery, including (i) exchange of witness
lists, (ii) depositions under oath of named witnesses, (iii) written
interrogatories, and (iv) document requests;
(b) Upon conclusion of the pre-hearing discovery, the arbitrators shall
promptly hold a hearing upon the evidence to be presented by the
Parties and shall promptly render a written opinion and award;
(c) The arbitrators may not award or assess punitive damages against
either Party; and
(d) Each Party shall bear its own costs and expenses of the arbitration
and one-half (1/2) of the fees and costs of the arbitrators, subject
to the power of the arbitrators, in their sole discretion, to award
all such reasonable costs, expenses and fees to the prevailing Party.
13.5 Consolidation. The Parties hereby consent to the consolidation of any
arbitration arising under this Agreement with any arbitration arising under the
Supply Agreement.
13.6 Survival. The duty of the Parties to arbitrate any dispute, controversy
or claim under this Article 13.0 shall survive the termination of this Agreement
for any reason.
ARTICLE 14.0 ADDITIONAL COVENANTS OF DAINIPPON AND MGI
14.1 Dainippon Covenants.
(a) As required by the University of California License Agreement,
Dainippon hereby covenants, agrees and assumes, with respect to the
Territory all of the rights of and obligations due to the University
of California that are contained in the University of California
License Agreement (as specifically required by Section 3.1 of such
Agreement). Specifically, but not in way of limitation, Dainippon
covenants:
(i) Dainippon shall provide to MGI such reports as are required by
Section 7.1 of the University of California License Agreement, in
a time sufficient to permit MGI to include such reports in its
reports due to the University of California under such Section
7.1,
(ii) Dainippon shall reimburse MGI for fifty percent (50%) of the
costs of defending or prosecuting any claims of patent
infringement owed by MGI to the University of California under
the provisions of Sections 15.4 and 15.5 of the University of
California License Agreement, to the extent that such costs are
directly attributable to patents prosecuted in Japan or claims of
infringement of or by the MGI Patents in Japan,
(iii) Dainippon shall cooperate fully in any efforts taken under the
provisions of Article 17 of the University of California License
Agreement to deal with any actual, alleged or threatened
infringement of the MGI Patents in Japan,
(iv) Dainippon shall carry adequate Comprehensive or Commercial Form
General Liability Insurance to adequately insure Dainippon in
connection with carrying out the terms of this Agreement, as
contemplated in Article 18 of the University of California
License Agreement, and
(v) Dainippon represents and warrants that it will not knowingly or
intentionally take any actions that would give rise to a right by
the University of California to terminate the University of
California License Agreement.
(b) Dainippon covenants and agrees to provide to MGI a copy in English of
any proposed labeling or any proposed revision to existing labeling
for a Product prior to submission to any Competent Authority, in a
time frame sufficient to allow MGI to review and comment on such
proposed labeling or revision thereto.
14.2 MGI Covenants.
(a) During the term of this Agreement, MGI covenants and agrees that,
except as provided in Section 3.7, it shall not market, promote or
sell Products within the Territory or license, supply or otherwise
assist any third party to do so, and
(b) During the term of this Agreement, MGI shall use its Best Efforts to
develop the Products for sale in the United States. Such Best Efforts
obligation shall not require MGI to develop any Product which MGI
reasonably determines is not safe or efficacious, for its intended
Indication. If MGI terminates development of any of the
Products in the United States, the Parties shall jointly discuss the
causes for such termination.
(c) MGI represents and warrants that it will not terminate the University
of California License Agreement with respect to the Territory without
Dainippon's prior written approval, and that it will not knowingly or
intentionally take any actions that would give rise to a right by the
University of California to terminate the University of California
License Agreement with respect to the Territory. If an event occurs
that does give rise to such right of termination, MGI shall use its
Best Efforts to negotiate with the University of California to
maintain the University of California License Agreement in effect with
respect to the Territory.
ARTICLE 15.0 GENERAL PROVISIONS
15.1 Entire Agreement. This Agreement, together with all Exhibits hereto which
are incorporated herein by reference, constitutes the entire agreement of the
Parties with respect to the subject matter hereof and thereof and supersede all
the Parties' previous correspondence, term sheets, understandings, agreements
and representations, oral or written, including the Mutual Secrecy Agreement and
the Option Agreement. In the event of any conflict between the terms of this
Agreement and the Supply Agreement, the terms of this Agreement shall prevail.
15.2 Assignment. Neither Party shall assign or otherwise transfer its rights
or obligations under this Agreement except with the prior written consent of the
other Party; provided that no such consent for a transfer to an entity shall be
required and all rights and obligations arising hereunder shall inure to the
benefit of that entity if it is (a) an Affiliate of either Party, (b) the
successor in interest of one Party by reason of sale, merger or operation of
law, or (c) has acquired all or substantially all of the assets and business of
a Party.
15.3 Amendment. This Agreement may not be modified or amended, in whole or in
part, except by a written agreement signed by both Parties.
15.4 Severability. If one or more of the provisions of this Agreement is
subsequently declared invalid or unenforceable, this Agreement shall be treated
as though that provision were not in this Agreement, and this shall not affect
the validity or enforceability of the remaining provisions of this Agreement
(unless those provisions that are invalidated or unenforceable are clearly
material and inseparable from the other provisions). The Agreement as modified
shall be applied and construed to reflect substantially the good faith intent of
the Parties and to achieve the economic effects originally intended by the terms
hereof.
15.5 Notices; Language. Except as may be otherwise provided in this
Agreement, any notice, demand or request given, made or required to be made
shall be in writing and shall be effective, unless otherwise provided herein,
when received after delivery by (a) registered air mail, postage prepaid; (b)
facsimile with electronic confirmation of receipt; or (c) by express mail or a
reputable international courier at the addresses set forth on the first page of
this Agreement or to any other address that a Party specifies in writing. All
reports, notices and communications required or permitted hereunder shall be in
the English language.
15.6 Waiver. Either Party's failure or delay in exercising any remedy for
default shall not be deemed a waiver of that or any subsequent default of that
provision or of any other provision hereof.
15.7 Counterparts. This Agreement shall be executed in two (2) or more
counterparts in the English language, each of which shall be deemed an original.
In the event of any difference with the translation of this Agreement into any
other language, the original English version shall prevail.
15.8 Governing Law. Except as to patents, this Agreement shall be governed by,
and interpreted and construed in accordance with, the laws of the State of
Minnesota, excluding (a) its choice of law rules and (b) the United Nations
Convention on the International Sale of Goods and provided however that the
operation of the arbitration agreement contained in Section 13.3 hereof, and the
enforcement of any award rendered pursuant thereto, shall be governed by United
States federal law to the exclusion of any state law.
15.9 Relationship. The Parties are independent contractors and have only a
licensor-licensee relationship hereunder and shall not be deemed to have formed
any partnership, joint venture or other relationship. Neither Party shall make,
or represent to any other person that it has the power or authority to make, any
financial or other commitment on behalf of the other Party.
15.10 Governmental Approvals. If any governmental approval is required for
this Agreement to become effective, Dainippon shall undertake to obtain such
approval from any relevant agency of the Government of Japan, and MGI shall
undertake to obtain any such approval from any relevant agency of the Government
of the United States. Each Party shall use its Best Efforts to obtain such
approvals as rapidly as possible and shall keep the other Party reasonably
informed about any such applications for approval. Each
Party shall furnish the other Party with a copy of any such approval within ten
(10) days of its receipt.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
as of the date first above written.
MGI PHARMA, INC. DAINIPPON PHARMACEUTICAL CO., LTD.
By /s/ Xxxxxxx X. Xxxxxxx By /s/ Takeshi Tomotake
-------------------------- -------------------------
Xxxxxxx X. Xxxxxxx Xxxxxxx Tomotake
Chairman and President
Chief Executive Officer
Exhibit 10.1
Exhibit A
EXCLUSIVE LICENSE AGREEMENT
Between
THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
and
MGI PHARMA, INC.
for
METHOD OF TREATING TUMORS USING
ACYLFULVENE (ILLUDIN) ANALOGS
U.C. Case No.88-196-1,-2,-3
August 31, 1993
U.C. AGREEMENT
CONTROL NUMBER
93-04-0613
TABLE OF CONTENTS
BACKGROUND
1. DEFECTIONS
2. GRANT
3. SUBLICENSES
4. LICENSE ISSUE FEE, LICENSE MAINTENANCE FEES
AND MILESTONE PAYMENTS
5. ROYALTIES
6. DILIGENCE
7. PROGRESS AND ROYALTY REPORTS
8. BOOKS AND RECORDS
9. TERM OF THE AGREEMENT/RESEARCH AGREEMENT
10. TERMINATION BY THE REGENTS
11. TERMINATION BY LICENSEE
12. DISPOSITION UPON TERMINATION
13. USE OF NAMES AND TRADEMARKS
14. LIMITED WARRANTY
15. PATENT PROSECUTION AND MAINTENANCE
16. PATENT MARKING
17. PATENT INFRINGEMENT
18. INDEMNIFICATION
19. NOTICES
20. ASSIGNABILITY
21. LATE PAYMENTS
22. WAIVER
23. FAILURE TO PERFORM
24. GOVERNING LAWS
25. PREFERENCE FOR UNITED STATES INDUSTRY
26. FOREIGN GOVERNMENT APPROVAL OR REGISTRATION
27. EXPORT CONTROL LAWS
28. CONFIDENTIALITY
29. INFRINGEMENT UNDER DRUG PRICE COMPETITION ACT
30. MISCELLANEOUS
EXHIBIT A - DEVELOPMENT PLAN
EXHIBIT B - STOCK OPTION AGREEMENT
Exhibit 10.1
Exhibit A
EXCLUSIVE LICENSE AGREEMENT
---------------------------
THIS LICENSE AGREEMENT (the "Agreement") is made and is effective as
of the 31st day of August, 1993, by and between THE REGENTS OF THE UNIVERSITY OF
CALIFORNIA, a California corporation having its statewide administrative offices
at 000 Xxxxxxxx Xxxxx, 00xx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000-0000 (hereinafter
referred to as "The Regents"), and MGI Pharma, Inc., a Minnesota corporation
having a principal place of business at 000 X. Xxxx Xxxxxx, 0000 Xxxx Xxxx Xxxx,
Xxxxxxxxxxx, XX 00000-0000 (hereinafter referred to as "Licensee").
BACKGROUND
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Certain inventions disclosed under UC Case No. 88-196-1,-2,-3,
generally characterized as METHOD OF TREATING TUMORS USING ILLUDIN ANALOGS,
hereinafter collectively referred to as the "Invention," were made in the course
of research at the University of California, San Diego by Drs. Xxxxxxx X.
Xxxxxx, Xxxxxx X. XxXxxxxx and Xxxxxxx Xxxxxx (hereinafter, "Inventors").
Licensee entered into a Secrecy Agreement (U.C. Control No. 93-20-
0063) with The Regents effective January 25, 1993 and terminating on January 25,
1998 for the purpose of evaluating the Invention (hereinafter referred to as the
Secrecy Agreement").
The development of the Invention was sponsored in part by the United
States Department of Health and Human Services and as a consequence this license
is subject to overriding obligations to the Federal Government as set forth in
35 U.S.C. 200-212 and applicable governmental implementing regulations. Pursuant
to 35 U.S.C. 200-212, The Regents may elect to retain title to any invention
(including the Invention) made by it under U.S. Government funding. If The
Regents elects to retain title to the Invention, The Regents is required by law
to grant to the U.S. Government a nontransferable, paid up, non-exclusive,
irrevocable license to use the Invention by or on behalf of the U.S. Government
throughout the world. The Regents has elected to retain title and granted the
aforementioned licenses to the U.S. Government to the Invention.
Licensee is a "small business firm" as defined in 15 U.S.C. 632.
Licensee is desirous of obtaining certain rights from The Regents for
the commercial development, manufacture, use, and sale of the Invention, and The
Regents is willing to grant such rights on the terms and conditions set forth in
this Agreement.
Licensee's early access to Regents' Technology prior to the effective
date of this Agreement provides the consideration for Licensee's continuing
royalty obligation for use of Regents' Technology.
Both parties recognize and agree that royalties due hereunder will be
paid on both pending patent applications and issued patents as well as on
Regents' Technology (as hereinafter defined).
The Regents is desirous that the Invention be developed and utilized
to the fullest extent so that the benefits can be enjoyed by the general public.
The parties agree as follows:
1. DEFINITIONS
1.1 "Affiliate" means any corporation or other business entity which
directly or indirectly controls, is controlled by, or is under common control
with Licensee to the extent of, at least fifty percent (50%) of the outstanding
stock or other voting rights entitled to elect directors.
1.2 "Data" means all oral and written information received by
Licensee, its Affiliates or its sublicensees from The Regents, the Inventors, or
their agents or representatives regarding the Invention or Licensed Products,
including but not be limited to Regents' Technology, technical information,
patent applications, and prosecution documents and this Agreement.
1.3 "Improvements" means any improvements to the Invention or to
Regents' Patent Rights on which a patent application may be filed now or
hereafter owned by The Regents and developed under either or both of the
Research Agreements entered into pursuant to the terms of Article 9.3 of this
Agreement by or under the supervision of one or more of the Inventors and
relating to the development of Illudin Analogs.
1.4 "Licensed Method" means any process, method, or use which is
covered by Regents' Patent Rights or whose use or practice would constitute, but
for the license granted to Licensee pursuant to this Agreement, an infringement
of any issued or pending claim within Regents' Patent Rights.
1.5 "Licensed Product" means any material or product or kit, or any
service, process or procedure that either (1) is covered by Regents' Patent
Rights or whose manufacture, use, or sale would constitute, but for the license
granted to Licensee pursuant to this Agreement, an infringement of any claim
within Regents' Patent Rights or (2) is developed, made, used, sold, registered,
or practiced using Regents' Technology or Licensed Method or which may be used
to practice the Licensed Method, in whole or in part.
1.6 "Major Market Countries" shall mean Japan, Germany, France and the
United Kingdom.
1.7 "Net Sales" means the total of the gross invoice prices of
Licensed Products sold or transferred by Licensee, its Affiliates, and its
sublicensees plus rebates and allowances received by Licensee, its Affiliates or
sublicensees of amounts that have been deducted from gross sales less the sum of
the following actual and customary deductions included on the invoice and
actually paid: cash, trade, or quantity discounts; sales, use, tariff, or other
excise taxes imposed upon particular sales; import/export duties; and
transportation charges. Sales among Licensee, its Affiliates and its
sublicensees for ultimate third party use shall be disregarded for purposes of
computing royalties. Royalties shall be payable upon sales or transfers at arms-
length consideration between unrelated third parties.
1.8 "Regents' Patent Rights" means all pending or issued U.S. and
foreign patents and patent applications, owned by The Regents, including any
reissues, extensions, substitutions, continuations, divisions and continuations-
in-part (only to the extent, however, that claims in the continuations-in-part
are entitled to the priority filing date of the parent patent application or are
conceived and first actually reduced to practice under the Research Agreements
and which Licensee has elected to include under this Agreement) based on the
subject matter claimed in or covered by U.S. Patent Application Serial Numbers
416,395 filed October 3, 1989 (now abandoned), 606,511 filed October 31, 1990 or
015,179 filed February 9, 1993 and patent applications added to this Agreement
pursuant to the provisions of the Research Agreements.
1.9 "Regents' Technology" means all information and physical objects
related to the Invention or Licensed Product (other than Regents' Patent
Rights), including but not limited to formulations, data, drawings and sketches,
designs, testing and test results, regulatory information of a like nature,
whether patentable or not, owned or controlled by The Regents and which The
Regents have the right to disclose and license to third parties and which arose
in the Inventors' laboratories under the direction of one or more of the
Inventors prior to the effective date of this Agreement or under one or more of
the Research Agreements. Upon Licensee's written request within thirty (30) days
after receipt thereof, The Regents (subject to the availability of the
Inventors) shall, if applicable, certify that the specific information provided
by The Regents arose in the Inventors' laboratories under the direction of one
or more of the Inventors prior to the effective daty of this Agreement or under
one or more of the Research Agreements.
1.10 "Research Agreements" means the research agreements to be
executed between Licensee and The Regents through the San Diego campus's
Contract and Grant Office which contract will fund further research to be
performed on said campus by the Inventors in the field of Regents' Patent
Rights.
1.11 "Territory" shall mean all countries of the world.
2. GRANT
2.1 Subject to the limitations set forth in this Agreement, The
Regents hereby grants to Licensee, to the extent it has the legal right to do
so, an exclusive license under Regents' Patent Rights and Regents Technology to
make, have made, use, and sell Licensed Products and to practice Licensed Method
in the Territory during the term of this Agreement.
2.2 The license granted hereunder shall be subject to the overriding
obligations to the U.S. Government set forth in 35 U.S.C. 200-212 and applicable
governmental implementing regulations and to the licenses granted to the U.S.
Government which are referred to in the Background.
2.3 The Regents expressly reserves the right to use the Invention,
Regents' Patent Rights, Regents' Technology, Licensed Products, Licensed Methods
and associated information and technology for educational and research purposes
only and to
publish all or any part of the foregoing, and the results of use thereof.
2.4 The Regents, principally through the Inventors, has provided
Regents' Technology to Licensee. It is understood that at the time of disclosure
to the Licensee some of the Regents' Technology may have been made available to
the public without restrictions. Within thirty (30) days after the date of
execution hereof the parties shall jointly prepare in good faith a specific list
of existing Regents' Technology documentation to be delivered by The Regents to
Licensee hereunder, and The Regents shall deliver such documentation to Licensee
with six months thereafter.
3. SUBLICENSES
3.1 The Regents grants to Licensee the right to grant sublicenses to
third parties under the licenses granted in Article 2 provided Licensee has
current exclusive rights thereto (subject to the rights of the U.S. Government
and The Regents) under this Agreement. To the extent applicable, such
sublicenses shall include all of the rights of and obligations due to The
Regents (and, if applicable, to the United States Government) that are contained
in this Agreement.
3.2 Within thirty (30) days after execution thereof, Licensee shall
provide The Regents with a copy of each sublicense granted hereunder, and shall
thereafter collect and guarantee payment of all royalties due The Regents from
sublicensees and summarize and deliver all reports due The Regents from
sublicensees.
3.3 Upon termination of this Agreement for any reason, The Regents, at
its sole discretion, shall determine whether any or all sublicenses shall be
canceled or assigned to The Regents.
4. LICENSE-ISSUE FEE. LICENSE MAINTENANCE FEES
AND MILESTONE PAYMENTS
4.1 Within thirty (30) days after the execution of this Agreement, as
a License Issue Fee, Licensee shall pay to The Regents Seventy Five Thousand
U.S. Dollars ($75,000), issue to The Regents Ten Thousand (10,000) shares of the
common stock of Licensee, and grant to The Regents options to purchase Twenty
Two Thousand (22,000) shares of common stock of Licensee. Said License Issue Fee
is non-refundable and is not an advance against royalties except to the extent
that options granted under this Section 4.1 and under the Option Agreement
Attached hereto as Exhibit A may not vest and may not become exercisable under
the provisions of the Option Agreement.
4.2 Licensee shall pay to The Regents a License Maintenance Fee of
Fifty Thousand U.S. Dollars ($50,000), beginning on the first anniversary of
execution of this Agreement and continuing annually on each anniversary thereof
until the first NDA on a Licensed Product is submitted to the U.S. FDA. Said
License Maintenance Fee is non-refundable and is not an advance against
royalties.
4.3 Licensee shall pay to The Regents Milestone Payment Fees in
accordance with the following schedule (the total Milestone
Payment Fees due at any milestone shall not exceed the total of the United
States milestone due on such date):
EVENT AMOUNT
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US UK,FRANCE,GERMANY
& JAPAN
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(a) Upon filing an
application for an IND with
United States Food and
Drug Administration or its
equivalent in a Major
Market Country or July 15,
1996, whichever is earlier $ 50,000 $ 12,500 Each
(b) Upon submitting an
NDA with the United States
Food and Drug
Administration or its
equivalent in a Major
Market Country or March
31, 2000, whichever is
earlier $225,000 $ 56,250 Each
(c) Upon the first final
approval of an NDA by the
United States Food and
Drug Administration or its
equivalent in another
country of the Territory $750,000 $187,500 Each
Said Milestone Payment Fees shall be paid to The Regents within thirty (30) days
after the occurrence of the event set forth on said schedule and shall not be
refundable or creditable against royalties, except that up to Three Hundred and
Seventy Five Thousand Dollars ($375,000) of the Seven Hundred and Fifty Thousand
Dollars ($750,000) payable under Section 4.3 (c) shall be credited in
installments of up to One Hundred Thousand Dollars ($100,000) per year in each
calendar year that royalties payable to The Regents on Net Sales exceed Five
Hundred Thousand Dollars ($500,000). In each such year, up to the first One
Hundred Thousand Dollars ($100,000) of royalties payable in excess of Five
Hundred Thousand ($500,000) Dollars shall be withheld by Licensee as a credit,
until a cumulative amount of Three Hundred and Seventy Five Thousand Dollars
($375,000) has been so withheld. All amounts withheld shall be reported to The
Regents under Section 7.5.
4.4 The options referred to in Article 4.1 shall be granted, shall
vest and may be exercised in accordance with a separate agreement, the "Stock
Option Agreement for Purchase of Shares of Common Stock of MGI Pharma, Inc. ",
between the parties which is attached hereto as Exhibit B.
5. ROYALTIES
5.1 Except as otherwise required by law, Licensee shall pay to The Regents
a royalty on Net Sales during the term of this Agreement in accordance with the
following schedule:
ANNUAL NET SALES ROYALTY RATE
---------------- ------------
$ 0 - $20,000,000 7%
$20,000,000 - $70,000,000 9%
$70,000,000 and over 11%
Upon receipt by The Regents of cumulative royalties of $25 million, the royalty
rate shall be changed to eight percent (8%) of annual Net Sales up to $70
million and ten percent (10%) of annual Net Sales of $70 million and over. The
aforementioned royalty rates in this Section 5.1 shall be reduced to the
following in any country of the Territory where no Regents' Patent Rights exist:
ANNUAL NET SALES ROYALTY RATE
---------------- ------------
$ 0 - $45,000,000 5%
$45,000,000 and over 6%
Only one royalty shall be charged on each Licensed Product sold under this
Agreement.
5.2 Royalties payable to The Regents shall be paid to The Regents
quarterly on or before the following dates of each calendar year:
February 28
May 31
August 31
November 30
Each such payment will be for unpaid royalties which accrued within or prior to
the most recently completed calendar quarter.
5.3 Licensee shall pay to The Regents a minimum annual royalty equal
to the amount set forth on the following schedule:
Year of Commercial Marketing 1 2 3 4 & thereafter
- - - --------------
Minimum Royalty $50,000 100,000 200,000 400,000
for the term of this Agreement beginning with the date of first commercial sale
of Licensed Product. Such minimum annual royalty shall be paid to The Regents by
the last day of the second month of each Year of Commercial Marketing and shall
be credited against the earned royalty due and owing for the Year of Commercial
Marketing in which the minimum payment was made. Each "Year of Commercial
Marketing" shall commence on the first day of the calendar quarter
immediately following the date of first commercial sale of Licensed Product or
an anniversary thereof.
5.4 All amounts due The Regents shall be payable in United States Dollars
in San Francisco, California. When Licensed Products are sold for monies other
than United States Dollars, the earned royalties will first be determined in the
foreign currency of the country in which such Licensed Products were sold and
then converted into equivalent United States Dollars. The exchange rate will be
the United States Dollar exchange rate determined in accordance with Generally
Acceptable Accounting Principles and Licensee's normal accounting practices used
by Licensee to record revenues from such country for the period in question.
5.5 Royalties earned with respect to sales occurring in any country outside
the United States shall not be reduced by any taxes, fees, or other charges
imposed by the government of such
country on the remittance of royalty income. Licensee shall also be responsible
for all bank transfer charges.
5.6 If at any time legal restrictions prevent the acquisition or prompt
remittance of United States Dollars by Licensee with respect to any country
where a Licensed Product is sold, Licensee shall pay royalties due to The
Regents from Licensee's other sources of United States Dollars.
5.7 In the event that any patent or any claim thereof included with
Regents' Patent Rights shall be held invalid in a final decision by a court of
competent jurisdiction and last resort and from which no appeal has or can be
taken, all obligation to pay royalties based on such patent or claim or any
claim patentably indistinct therefrom shall cease as of the date of such final
decision. Licensee shall not, however, be relieved from paying any royalties
that accrued before such decision or that are based on another patent or claim
not involved in such decision, or that are based on Regents' Technology.
5.8 If a license to the Invention has been granted to the United States
Government, no royalties shall be payable hereunder on Licensed Products sold to
the U.S. Government. Licensee and its sublicensees shall reduce the amount
charged for Licensed Products sold to We United States Government by an amount
equal to the royalty for such Licensed Products otherwise due The Regents as
provided herein.
6. DILIGENCE
6.1 Licensee, upon execution of this Agreement, shall use all reasonable
efforts to develop, test, obtain regulatory approval, manufacture, and sell
Licensed Products in all countries of the Territory and shall use all reasonable
efforts to market Licensed Products in all such countries within a reasonable
time after execution of this Agreement and in quantities sufficient to meet the
market demands therefor. Licensee shall begin pharmacology and toxicology
testing of test material, which testing need not comply with good laboratory
practices, in several animal model systems within one hundred twenty (120) days
after receipt of such material (of a reasonably acceptable quality to Licensee)
from the Inventors in accordance with the Research Agreements. If such material
is not acceptable to Licensee, Licensee shall so notify The Regents in writing
within sixty (60) days after receipt of such material.
6.2 Licensee shall be entitled to exercise prudent and reasonable business
judgment in meeting its diligence obligations hereunder.
6.3 Licensee shall endeavor to obtain all necessary governmental approvals
for the manufacture, use, and sale of Licensed Products.
6.4 If Licensee fails to perform any of the following:
(6.4.1) proceed with development of Licensed Products substantially
in accordance with the plan set forth on Exhibit B hereto;
or
(6.4.2) submit an IND application on Licensed Product to the United
States Food and Drug Administration prior to July 15, 1996;
or
(6.4.3) submit an NDA application to the United States Food and Drug
Administration prior to March 31, 2000 and foreign
counterparts thereof to comparable agencies in Major Market
Countries other than Japan prior to March 31, 2001 and in
any other countries (including Japan) prior to March 31,
2002; or
(6.4.4) commence commercial marketing of Licensed Products in each
country of the Territory within the later of six (6) months
after receiving final marketing approval of such Licensed
Product in such country, or sixty (60) days after receiving
written notice from Licensor requiring commencement of
commercial marketing; or
(6.4.5) diligently fill the market demand for Licensed Products in
each country following commencement of marketing in such
country at all times during the exclusive period of this
Agreement;
(6.4.6) spend an aggregate of not less than $250,000 for the
development and marketing of Licensed Products during each
year of this Agreement commencing August 15, 1995 and ending
on the date of NDA submission and an aggregate of $300,000
during the first two (2) years of this Agreement;
(6.4.7) continue to support research under the Research Agreements
at the levels and for the term provided for in the Research
Agreements so long as the Research Agreements have not been
terminated due to breach by The Regents;
then The Regents shall have the right and option, upon sixty (60) days written
notice, either to terminate this Agreement or to reduce Licensee's exclusive
license to a nonexclusive license as to both Regents' Patent Rights and Regents'
Technology. If such termination or reduction is based on failure of diligence as
to a particular country (including but not limited to each Major Market
Country), such termination or reduction shall be effective only as to such
country or countries; in addition, at Licensee's request, The Regents shall
consider Licensee's reasons for failure of diligence and shall negotiate in good
faith during said sixty (60) day period for possible modification of royalty
rates and/or diligence obligations in lieu of termination. Should Licensee fail
to fulfill the diligence requirements or reach agreement with The Regents within
said sixty (60) day period, the notice shall be effective at the end of said
period. Funding paid under the Research Agreements may be counted in fulfilling
the obligations in Section 6.4.6.
(6.5) Upon Licensee's written request made within sixty (60) days after
completion of Licensee's initial Phase II Clinical Trials for Licensed Product
in the United States, and provided that such trials have been completed by
September 1, 1998, the parties agree to negotiate in good faith for the possible
revision of the submission dates as set forth in Section 6.4.3 for submitting
marketing applications for Licensed Product in countries other than the United
States. During such negotiations, the parties shall consider, among other
things, regulatory requirements for such countries (including any need for
additional or supplemental preclinical or clinical trials), standard industry
practice, the remaining term of Regents' Patent Rights in such countries and the
effect that revision of the submission dates would have on royalties due to The
Regents hereunder.
(6.6) In the event The Regents has terminated this Agreement under Section
6.4.3 as to a country other than the United States or a Major Market Country,
and The Regents wishes to grant a license for Licensed Products for such country
to another licensee, The Regents shall first offer to relicense Licensed
Products to Licensee on the more favorable (to The Regents) of (a) the terms and
conditions in this Agreement or (b) the terms and conditions offered by the
other potential licensee. Licensee shall have thirty (30) days after said offer
to accept such offer in writing. If such offer is accepted, Licensee shall also
pay to The Regents with such written acceptance a relicensing fee of Twenty
Thousand Dollars ($20,000) per country.
7. PROGRESS AND ROYALTY REPORTS
7.1 Beginning February 28, 1994 and semi-annually thereafter, Licensee
shall submit to The Regents, for the purpose only of allowing The Regents to
follow the progress of development, a brief progress report in a form reasonably
satisfactory to The Regents covering the activities of Licensee and its
sublicensees related to the development and testing of all Licensed Products and
the obtaining of the governmental approvals necessary for marketing. Such
progress reports shall be made for each Licensed Product in each country of the
Territory until the first commercial sale of such Licensed Product occurs in
such country and thereafter (no more often than annually) if reasonably
requested by The Regents.
7.2 The progress reports submitted under section 7.1 shall include
sufficient information to enable The Regents to determine Licensee's progress in
fulfilling its obligations under Article 6 including, but not be limited to, the
following topics:
- summary of work completed
- key scientific discoveries
- summary of work in progress
- current schedule of anticipated events or milestones
- market plans for introduction of Licensed Products in countries of the
Territory in which Licensed Product has not been introduced
- a summary of resources (dollar value) spent in the reporting period
for research, development and marketing of Licensed Product
- activities in obtaining sublicensees and activities of sublicensees
- progress under the Research Agreements
7.3 Licensee shall have a continuing responsibility to keep The Regents
informed of the large/ small entity status (as defined by the United States
Patent and Trademark Office) of itself and its sublicensees.
7.4 Licensee shall report to The Regents in its immediately subsequent
progress and royalty report the date of first commercial sale of a Licensed
Product in each country.
7.5 After the first commercial sale of a Licensed Product anywhere in the
world, Licensee shall make quarterly royalty reports to The Regents on or before
each February 28, May 31, August 31 and November 30 of each year. Each such
royalty report shall show (a) the units and gross sales and Net Sales through
the end of the most recent calendar quarter of each type of Licensed Products on
which royalties have not been paid; (b) the royalties, in U.S. dollars, payable
hereunder with respect to such sales; (c) the method used to calculate the
royalty; and (d) the exchange rates used, if any.
7.6 If no sales of Licensed Products have been made during any reporting
period, a statement to this effect shall be made by Licensee.
8. BOOKS AND RECORDS
8.1 Licensee shall keep books and records accurately showing all Licensed
Products manufactured, used, and/or sold under the terms of this Agreement. Such
books and records shall be preserved for at least (5) years from the date of the
royalty payment to which they pertain and shall be open to inspection by
representatives or agents of The Regents at reasonable times upon reasonable
notice. Licensee shall not be required to retain books and records showing
transactions required to calculate royalties for more than five (5) years.
8.2 The out of pocket costs incurred by The Regents in having its
representatives perform such an examination shall be borne by The Regents.
However, if an error in royalties of more than five percent (5%) of the total
royalties due for any year is discovered, then such out of pocket costs shall be
borne by Licensee.
9. TERM OF THE AGREEMENT/RESEARCH AGREEMENTS
9.1 Unless otherwise terminated by operation of law or by acts of the
parties in accordance with the provisions of this Agreement, this Agreement
shall be in force from the effective date recited on page one and shall remain
in effect in each country of the Territory until the longer of, (i) expiration
of the last-to-expire patent licensed under this Agreement in such country or,
(ii) ten years from the date of first commercial sale of Licensed Product in
such country. Upon expiration of this Agreement as to any country with respect
to which Licensee has performed all its obligations hereunder, Licensee shall
have a paid up license to Regents' Technology for such country.
9.2 Any expiration or termination of this Agreement shall not affect the
rights and obligations set forth in the following Articles:
Article 8 Books and Records
Article 12 Disposition Upon Termination
Article 13 Use of Names, Trademarks and Confidential Information
Article 18 Indemnification
Article 23 Failure to Perform
Article 28 Confidentiality
9.3 Licensee shall enter into agreements with The Regents concerning
Research Agreements and/or an alternative, reasonably satisfactory to The
Regents, within four (4) months of execution of this Agreement for at least
Three Hundred Thousand Dollars ($300,000), plus shall arrange to fund the
production of approximately one hundred (100) grams of at least one of the two
leading candidate illudin NCE's over the next forty two (42) months by the
Inventors, at a cost of approximately Seventy Five Thousand Dollars ($75,000).
Improvements to Regents' Patent Rights or Regents' Technology conceived and
first reduced to practice under the Research Agreements shall fall within the
scope of this Agreement. If any inventions other than Improvements are conceived
and first reduced to practice under the Research Agreements, Licensee shall have
the first right to negotiate a license thereto, as provided in the Research
Agreements. If any such inventions which are not Improvements are added to this
Agreement new License Issue Fees, License Maintenance Fees, Milestone Payment
Fees, royalties, minimum royalties and diligence provisions will be negotiated
by the parties in good faith on commercially reasonable terms.
10. TERMINATION BY THE REGENTS
10.1 If Licensee should breach or fail to perform any material provision of
this Agreement, then The Regents may give written notice of such default (Notice
of Default) to Licensee. If Licensee should fail to cure such default within
sixty (60) days of the effective date of such notice, The Regents shall have the
right to terminate this Agreement and the licenses herein by a second written
notice (Notice of Termination) to Licensee. If a Notice of Termination is sent
to Licensee, this Agreement shall automatically terminate on the effective date
of such notice. Such termination shall not relieve Licensee of its obligation to
pay all amounts due to The Regents as of the effective date of termination and
shall not impair any accrued rights of The Regents. Such Notices shall be
subject to Article 19 (Notices).
11. TERMINATION BY LICENSEE
11.1 Licensee shall have the right at any time to terminate this Agreement
in whole or as to any portion of Regents' Patent Rights by giving notice in
writing to The Regents. Such notice of termination shall be subject to Article
19 (Notices), and termination of this Agreement shall be effective ninety (90)
days from the effective date of such notice.
11.2 Any termination pursuant to the above paragraph shall not relieve the
Licensee of any obligation or liability accrued hereunder prior to such
termination or rescind anything done by Licensee or any payments made to The
Regents hereunder prior to the time such termination becomes effective, and such
termination
shall not affect in any manner any rights of The Regents arising under this
Agreement prior to such termination.
12. DISPOSITION OF LICENSED PRODUCTS ON HAND UPON TERMINATION
12.1 Upon termination of this Agreement by either party (i) Licensee
shall have the privilege of disposing of all previously made or partially made
Licensed Products, but no more, within a period of one hundred and twenty (120)
days, provided, however, that the sale of such Licensed Products shall be
subject to the terms of this Agreement including, but not limited to, the
payment of royalties at the rate and at the time provided herein and the
rendering of reports thereon; (ii) Licensee shall promptly return, and shall
cause its Affiliates and sublicensees to return to The Regents all Regents'
Technology and other property belonging to The Regents, if any, which has been
provided to Licensee or its Affiliates or sublicensees hereunder, and all copies
and facsimiles thereof and derivatives therefrom (except that Licensee may
retain one copy of written material for record purposes only, provided such
material is not used by Licensee for any other purpose and is not disclosed to
others); and (iii) upon election by The Regents and reimbursement of Licensee's
direct costs to acquire or develop such information, Licensee shall provide The
Regents with copies of all information relating to Licensed Product or Licensed
Method developed or acquired by Licensee or its Affiliates, and The Regents
shall have the worldwide non-exclusive right to use such information in
connection with its research and in connection with the relicensing of Regents'
Patent Rights and Regents' Technology, provided, however, that the provisions of
(iii) shall apply only if this Agreement is voluntarily terminated by Licensee
under the provisions of Section 11.1. or terminated for cause by The Regents
under the provisions of Section 6.4 or 10.1.
13. USE OF NAMES AND TRADEMARKS
13.1 Nothing contained in this Agreement shall be construed as conferring
any right on Licensee or its Affiliates to use in advertising, publicity, or
other promotional activities any name, trade name, trademark, or other
designation of The Regents (including contraction, abbreviation or simulation of
any of the foregoing). Unless required by law, the use by Licensee of the name,
"The Regents of the University of California" or the use by Licensee of the name
of "The University of California" or any campus of the University of California
is expressly prohibited and Licensee shall not use such names in any manner
without The Regents' prior written consent.
14. LIMITED WARRANTY
14.1 Except as otherwise provided in this Article and except for the
licenses to the United States Government under 35 U.S.C. 200 et seq., The
Regents warrants to Licensee that it has the lawful right to grant this license
and has not granted any previous express licenses on or to The Regents' Patent
Rights. To the best of the knowledge of The Regents' Manager of Health Care
Licensing, The Regents has granted no express or implied licenses to Regents'
Patent Rights or Regents' Technology.
14.2 This license and the associated Invention are provided WITHOUT
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER
WARRANTY, EXPRESS OR IMPLIED. THE REGENTS MAKES NO REPRESENTATION OR WARRANTY
THAT THE LICENSED PRODUCTS OR LICENSED METHODS OR REGENTS TECHNOLOGY WILL NOT
INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT.
14.3 IN NO EVENT XXXX xxx REGENTS BE LIABLE FOR ANY INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR THE
MANUFACTURE, SALE OR USE OF THE INVENTION OR LICENSED PRODUCTS OR LICENSED
METHODS OR REGENTS' TECHNOLOGY.
14.4 Nothing in this Agreement shall be construed as:
(14.4.1) a warranty or representation by The Regents as to the
validity or scope of any Regents' Patent Rights; or
(14.4.2) a warranty or representation that anything made, used, sold
or otherwise disposed of under any license granted in this
Agreement is or will be free from infringement of patents of
third parties; or
(14.4.3) an obligation to bring or prosecute actions or suits against
third parties for patent infringement except as provided in
Article 17; or
(14.4.4) conferring by implication, estoppel or otherwise any license
or rights under any patents or other property rights of The
Regents other than Regents' Patent Rights, Licensed Methods
and Regents' Technology as defined herein, regardless of
whether such patents are dominant or subordinate to Regents'
Patent Rights; or
(14.4.5) an obligation to furnish any information not provided in
Regents' Patent Rights or Regents' Technology (as delivered
to Licensee prior to the effective date of this Agreement or
under the Research Agreements or pursuant to Section 2.4 of
this Agreement).
15. PATENT PROSECUTION AND MAINTENANCE
15.1 The Regents shall diligently prosecute and maintain the United States
patents comprising Regents' Patent Rights using counsel of its choice. The
Regents' counsel shall take instructions only from The Regents. The Regents
shall provide Licensee with copies of all relevant documentation so that
Licensee may be informed and apprised of the continuing prosecution. Licensee
shall keep said documentation confidential in accordance with Article 28.
15.2 The Regents shall use reasonable efforts to amend any patent
application to include claims reasonably requested by Licensee to protect the
products contemplated to be sold under this Agreement.
15.3 The Regents shall cooperate with Licensee in applying for an extension
of the term of any patent included within Regents' Patent Rights if appropriate
under the Drug Price Competition and Patent Term Restoration Act of 1984.
Licensee shall prepare all such documents, and The Regents agrees to execute
such documents and to take such additional action as Licensee may reasonably
request in connection therewith.
15.4 All past, present, and future costs of preparing, filing, prosecuting,
defending and maintaining all United States patent applications and/or patents,
including interferences and opposition, and all corresponding foreign patent
applications and patents covered by Regents' Patent Rights shall be borne by
Licensee. Such costs include patent prosecution costs for this Invention
incurred by The Regents prior to the execution of this Agreement of
approximately $49,652.99 based on information currently available to The
Regents, which amount shall be due within thirty (30) days of the execution of
this Agreement. Current and future costs for patent prosecution and maintenance
shall be billed to Licensee by The Regents as incurred and shall be payable
within thirty (30) days of the billing date. The Regents shall use reasonable
efforts to deliver all xxxxxxxx to Licensee no later than five (5) days after
the start of such thirty (30) day period.
15.5 The Regents shall, at the request of Licensee, file, prosecute, and
maintain patent applications and patents covered by Regents' Patent Rights in
foreign countries if available. Licensee consents to the filing of all PCT and
foreign patent applications that have already been filed as of the effective
date of this Agreement. Licensee shall notify The Regents within seven (7)
months of the filing of the corresponding United States application of its
decision to obtain all other foreign patents. Such notice shall be in writing,
and shall identify the countries desired. The absence of such a notice from
Licensee shall be considered by The Regents to be an election not to request
foreign rights.
15.6 The preparation, filing and prosecuting of all foreign patent
applications filed at Licensee's request, as well as the defense and maintenance
of all resulting patents, shall be at the sole expense of Licensee. Such patents
shall be held in the name of The Regents and shall be obtained using counsel of
The Regents' choice.
15.7 Licensee's obligation to underwrite and to pay patent prosecution
costs shall continue for so long as this Agreement remains in effect, provided,
however, that Licensee may terminate its obligations with respect to any given
patent application or patent upon three (3) months written notice to The
Regents. The Regents shall use its best efforts to curtail patent cost when
such a notice is received from Licensee. Licensee shall promptly pay patent
costs which cannot be so curtailed. Commencing on the effective date of the
notice, The Regents may continue prosecution and/or maintenance of such
applications(s) or patent(s) at its sole discretion and expense, and Licensee
shall have no further rights or licenses thereunder.
15.8 The Regents shall have the right to file patent applications at its
own expense in any country or countries in which Licensee has not elected to
secure patent rights or in which Licensee's patent rights hereunder have
terminated, and such applications and resultant patents shall not be subject to
this Agreement and may be freely licensed by The Regents to others together with
Regents' Technology for such country or countries. In the event The Regents has
filed a patent application at its own expense in a country hereunder other than
a Major Market Country, a member of the European Economic Community or EFTA, or
the United States, and in the event The Regents wishes to grant a license for
Licensed Products for such country to another licensee, The Regents shall first
offer to relicense Licensed Products for each country to Licensee on the more
favorable (to The Regents) of (a) the terms and conditions of this Agreement, or
(b) the terms and conditions offered by the other potential licensee. Licensee
shall have thirty (30) days to accept such offer. If such offer is accepted,
Licensee shall pay to The Regents a relicensing fee of four (4) times its cost
of obtaining patent rights in such country or Twenty Thousand Dollars ($20,000)
whichever is greater.
16. PATENT MARKING
16.1 Licensee shall xxxx all-Licensed Products made, used or sold under the
terms of this Agreement, or their containers, in accordance with the applicable
patent marking laws.
17. PATENT INFRINGEMENT
17.1 In the event that Licensee shall learn of the substantial infringement
of any patent licensed under this Agreement, Licensee shall call The Regents'
attention thereto in writing and shall provide The Regents with reasonable
evidence of such infringement. Both parties to this Agreement agree that during
the period and in a jurisdiction where Licensee has exclusive rights under this
Agreement, neither will notify a third party of the infringement of any of
Regents' Patent Rights without first obtaining consent of the other party, which
consent shall not be unreasonably withheld. Both parties shall use reasonable
efforts in cooperation with each other to terminate such infringement
without litigation.
17.2 Licensee may request that The Regents take legal action against the
infringement of Regents' Patent Rights. Such request shall be made in writing
and shall include reasonable evidence of such infringement and damages to
Licensee. If the infringing activity has not been abated within ninety (90) days
following the effective date of such request, The Regents shall have the
right to:
a) commence suit on its own account; or
b) refuse to participate in such suit,
and The Regents shall give notice of its election in writing to Licensee by the
end of the one-hundredth (100th) day after receiving notice of such request from
Licensee. In the event The Regents elects to bring suit in accordance with this
paragraph, Licensee may thereafter join such suit at its own expense. Licensee
may thereafter bring suit for patent infringement if and only if The Regents
elects not to commence suit and if the infringement occurred during the period
and in a jurisdiction where Licensee had exclusive rights under this Agreement.
However, in the event Licensee elects to bring suit in accordance with this
paragraph, The Regents may thereafter join such suit at its own expense.
17.3 Such legal action as is decided upon shall be at the expense of
the party on account of when suit is brought and all recoveries recovered
thereby shall belong to such party, provided, however, that legal action brought
jointly by The Regents and Licensee and participated in by both shall be at the
joint expense of the parties and all recoveries shall be shared jointly by them
in proportion to the share of expense paid by each party.
17.4 Each party shall cooperate with the other in litigation
proceedings instituted hereunder but at the expense of the party on account of
whom suit is brought. Such litigation shall be controlled by the party bringing
the suit, except that either party may be represented by counsel of its choice
in any suit brought by the other party, at the expense of the party choosing
representation by separate counsel.
18. INDEMNIFICATION
18.1 Licensee shall (and shall require its sublicensees to) indemnify,
hold harmless and defend The Regents, its officers, employees, and agents, the
sponsors of the research that led to the Invention, and the Inventors against
any and all claims, suits, losses, liabilities, damages, costs, fees, and
expenses resulting from or arising out of exercise of this license or any
sublicense. This indemnification includes, but is not limited to, all product
liability.
18.2 Licensee, at its sole cost and expense, shall insure its
activities in connection with the work under this Agreement and obtain, keep in
force and maintain Comprehensive or Commercial Form General Liability Insurance
(contractual liability included), or an equivalent program of self insurance,
with limits as follows:
(a) Each Occurrence $1,000,000
(b) Products/Completed Operations Aggregate $5,000,000
(c) Personal and Advertising Injury $1,000,000
(d) General Aggregate (commercial form only $5,000,000
It is expressly understood, however, that the coverages and limits
referred to under the above shall not in any way limit the liability of
Licensee. Licensee shall furnish The Regents with certificates of insurance
evidencing compliance with all requirements. Such certificates shall:
(18.2.1) Provide for thirty (30) day advance written notice to The
Regents of a modification.
(18.2.2) Indicate that The Regents has been endorsed as an additional
insured under the coverages referred to under the above.
18.3 The Regents shall promptly notify Licensee in writing of any
claim or suit brought against The Regents in respect of which The Regents
intends to invoke the provisions of this Article 18. Licensee shall keep The
Regents informed on a current basis of its defense of any claims pursuant to
this Article 18.
19. NOTICES
19.1 Any notice or payment required to be given to either party shall
be deemed to have been properly given and to be effective (a) on the date of
delivery if delivered in person or (b) five (5) days after mailing if mailed by
first-class certified mail, postage paid, to the respective addresses given
below, or to such other address as it shall designate by written notice given to
the other party.
In the case of Licensee: MGI PHARMA, INC.
000 X Xxxx Xxxxxx
0000 Xxxx Xxxx Xxxx
Xxxxxxxxxxx, XX 00000-0000
Attention: Vice President - General Counsel
In the case of The Regents: THE REGENTS OF THE UNIVERSITY OF
CALIFORNIA
0000 Xxxxxx Xxx Xxxxxxx,
Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Assistant Director, Office of
--------- Technology Transfer
Referring to: XX Xxxx Xx. 00-000
00. ASSIGNABILITY
20.1 This Agreement is binding upon and shall inure to the benefit of The
Regents, its successors and assigns, but shall be personal to Licensee and
assignable by Licensee only with the written consent of The Regents, which
consent shall not be unreasonably withheld, or without the written consent of
The Regents to a purchaser of substantially all of the pharmaceutical business
of Licensee.
21. LATE PAYMENTS
21.1 In the event royally payments or fees or patent cost reimbursements are
not received by The Regents when due, Licensee shall pay to The Regents interest
charges at a rate of ten (10) percent compounded per annum. Such interest shall
be calculated from the date payment was due until actually received by The
Regents.
22. WAIVER
22.1 It is agreed that no waiver by either party hereto of any breach or
default of any of the covenants or agreements herein set forth shall be deemed a
waiver as to any subsequent and/or similar breach or default.
23. FAILURE TO PERFORM
23.1 In the even of a failure of performance due under the terms of this
Agreement and if it becomes necessary for either party to undertake legal action
against the other on account thereof, then the prevailing party shall be
entitled to reasonable attorney's fees in addition to costs and necessary
disbursements.
24. GOVERNING LAWS
24.1 THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF CALIFORNIA, but the scope and validity of any patent or
patent application shall be governed by the applicable laws of the country of
such patent or patent application.
25. PREFERENCE FOR UNITED STATES INDUSTRY
25.1 Because this Agreement grants the exclusive right to use or sell the
Invention in the United States, Licensee agrees that any products embodying this
Invention or product through the use thereof, which are intended to be used or
sold in the United States, will be manufactured substantially in the United
States.
26. FOREIGN GOVERNMENT APPROVAL AND REGISTRATION
26.1 If this Agreement or any associated transaction is required by the law
of any nation to be either approved or registered with any governmental agency,
Licensee shall assume all legal obligations to do so and the costs in connection
therewith.
27. EXPORT CONTROL LAWS
27.1 Licensee shall observe all applicable United States and foreign laws
with respect to the transfer of Licensed Products and related technical data to
foreign countries, including, without limitation, the International Traffic in
Arms Regulations (ITAR) and the Export Administration Regulations.
28. CONFIDENTIALITY
28.1 Licensee shall not use Data except for the sole purpose of performing
under the terms of this Agreement; shall safeguard Data against disclosure to
others with the same degree of care as it exercises with its own data of a
similar nature; and shall not disclose Data to others (except to its employees,
agents or consultants, Affiliates or sublicensees who are bound to Licensee by a
like obligation of confidentiality) without the express written permission of
The Regents, except that Licensee shall not be prevented from using or
disclosing any of the Data:
(28.1.1) which Licensee can demonstrate by written records was
previously known to it;
(28.1.2) which is now, or becomes in the future,
information generally available to the public in the form
supplied, other than through acts or omissions of Licensee;
(28.1.3) which is lawfully obtained by Licensee from sources
independent of The Regents; and
(28.1.4) whose use or disclosure is required by law (including
requirements of government regulatory authorities).
The obligations of Licensee under this Section 28.1 shall continue for a period
ending the later of (i) five (5) years from the early termination of this
Agreement in its entirety or (ii) the expiration date of this Agreement in its
entirety provided The Regents has not given written notice to Licensee within
ninety (90) days after such expiration that Licensee is in default of its
obligations under this Agreement.
29. INFRINGEMENT UNDER DRUG PRICE COMPETITION ACT
29.1 In the event either party receives notice pertaining to any patent
included within Regents' Patent Rights pursuant to the Drug Price Competition
and Patent Term Restoration Act of 1984, (Public Law 98-417, hereinafter, "the
Act") including but not necessarily limited to notices pursuant to Sections 101
and 103 of the Act from persons who have filed an Abbreviated New Drug
Application ("ANDA") or a "paper" New Drug Application, ("paper NDA"), or in the
case of an infringement of Regents' Patent Rights as defined in Section 271(e)
of Title 35 of the United States Code, such party shall notify the other party
promptly but in no event later than ten (10) days after receipt of such notice.
29.2 If Licensee wishes action to be taken against such infringement, as
provided in the Act, Licensee shall request such action by written notice to The
Regents. Within thirty (30) days of receiving said request, The Regents will
give written notice to Licensee of its election to:
(29.2.1) commence suit on its own account; or
(29.2.2) refuse to participate in such suit.
In the event The Regents elects to bring suit in accordance with this paragraph,
Licensee may thereafter join such suit at its own expense. Licensee may
thereafter bring suit for patent infringement as provided by the Act if and only
if The Regents elects not to commence suit and if the infringement occurred
during the period that Licensee had exclusive rights in the United States under
this Agreement. However, in the event Licensee elects to bring suit in
accordance with this paragraph, The Regents may thereafter join such suit at its
own expense.
29.3 The provisions of paragraphs 17.3 and 17.4 shall likewise apply to any
legal action brought under this Article 29.
29.4 The Regents hereby authorizes Licensee to include in any NDA for a
Licensed Product, a list of patents included within Regents' Patent Rights
identifying The Regents as patent owner.
30. MISCELLANEOUS
30.1 The headings of the several articles are inserted for convenience
of reference only and are not intended to a part of or to affect the meaning or
interpretation of this Agreement.
30.2 This Agreement shall not be binding upon the parties until it has
been signed below on behalf of each party, in which event, it shall be effective
as of the date recited on page one.
30.3 No amendment or modification hereof shall be valid or binding
upon the parties unless made in writing and signed on behalf of each party.
30.4 This Agreement and the option agreement referred to in Section
4.4 hereof and the Research Agreements referred to in Section 9.3 hereof embody
the entire understanding of the parties and shall supersede all previous
communications, representations or understandings, either oral or written,
between the parties relating to the subject matter hereof. The Secrecy Agreement
is hereby terminated. In the event of an inconsistency between this Agreement
and the Research Agreements, this Agreement shall prevail.
30.5 In case any of the provisions contained in this Agreement shall
be held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions hereof, but
this Agreement shall be construed as if such invalid or illegal or unenforceable
provisions had never been contained herein.
IN WITNESS WHEREOF, both The Regents and Licensee have executed this
Agreement (which includes Exhibits A and B attached hereto), in duplicate
originals, by their duly authorized representatives, on the day and year
hereinafter written.
MGI PHARMA, INC. THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA
By: /s/ Xxxxxxx X. Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxx
--------------------------- ---------------------
Name: Xxxxxxx X. Xxxxxxxxx Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President, Title: Associate Director
New Business Office of Technology
Transfer
Date: 8/23/93 Date: 8/31/93
---------- --------
U.C. AGREEMENT
CONTROL NUMBER
93-04-0613
Approval as to legal form: /s/ Xxxxx Xxxxxxx 8/20/93
---------------------------
P. Xxxxxx Xxxxxxx, Jr., Resident Counsel Date
Office of Technology Transfer
University of California
Exhibit 10.1
Exhibit A
EXHIBIT A
STOCK OPTION AGREEMENT
FOR THE PURCHASE OF
SHARES OF COMMON STOCK
OF
MGI PHARMA, INC.
This Agreement is made this 31st day of August, 1993, by and between
MGI PHARMA, INC., a Minnesota corporation (the "Company"), and THE REGENTS OF
THE UNIVERSITY OF CALIFORNIA ("Optionee").
WHEREAS, the Company and Optionee have entered into an Exclusive
License Agreement for Method of Treating Tumors Using Illudin Analogs (U.C. Case
No. 88-196-1,-2,-3) dated as of the date hereof (the "License Agreement"); and
WHEREAS, pursuant to the License Agreement, Optionee is entitled to
receive options to purchase shares of common stock, $.01 par value per share
(the "Common Stock"), of the Company upon the terms and conditions set forth in
this Agreement.
NOW, THEREFORE in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Grant of Option. The Company hereby grants Optionee the right and
option (the "Option") to purchase all or any part of an aggregate of 22,000
shares of Common Stock on the terms and conditions set forth in this Agreement.
2. Vesting of Exercise Rights. Subject to the terms and conditions of
this Agreement, the Option granted hereby shall become vested and exercisable at
option exercise prices, subject to adjustments as noted below (the "option
exercise price"), as follows:
(a) Options to purchase 2,000 shares of Common Stock will vest and
become immediately exercisable as of the date of this Agreement at an
option exercise price per share equal to the closing price of the Common
Stock as reported on the NASDAQ National Market System on the date of this
Agreement.
(b) Options to purchase 10,000 shares of Common Stock will vest and
become exercisable in installments of options to purchase 2,000 shares of
Common Stock, commencing on the first anniversary of the date of this
Agreement and continuing on each anniversary thereafter until all such
options have vested. Such options will be exercisable at the option
exercise price per share equal to the sum of (i) the
closing price of the Common Stock as reported on the NASDAQ National Market
System on the date of Agreement and (ii) $2.50.
(c) Except as otherwise set forth below, options to purchase 5,000
shares of Common Stock will vest and become exercisable upon the earlier of
(i) the date on which a new drug application is filed with the United
States Food and Drug Administration ("FDA") in accordance with the
provisions of the License Agreement or (ii) March 31, 2000. Such options
will be exercisable at an option exercise price per share equal to the
lesser of (i) $20 or (ii) the closing price of the Common Stock as reported
on the NASDAQ National Market System on the date which is three years after
the date of this Agreement.
(d) Except as otherwise set forth below, options to purchase 5,000
shares of Common Stock will vest and become exercisable upon the date of
receipt of final marketing approval in the United States (as determined in
accordance with the License Agreement). Such options will be exercisable at
an option exercise price per share equal to the lesser of (i) $30 or (ii)
the closing price of the Common Stock as reported on the NASDAQ National
Market System on the date which is five years after the date of this
Agreement.
Notwithstanding, the vesting schedule set forth in (c) and (d) above, in
the event that there are NDA equivalent submissions or final marketing approvals
in any Major Market Countries (as such terms are used in the License Agreement)
prior to an NDA submission or final marketing approval in the United States and
the Company is obligated to pay the Regents Milestone Payment Fees (as such term
is defined in the License Agreement) under the License Agreement, (i) the
options described in (c) above shall vest and become exercisable in installments
of options to purchase 1,250 shares of Common Stock upon the submission of an
NDA equivalent in each Major Market Country, and (ii) the options described in
(d) above shall vest and become exercisable in installments of options to
purchase 1,250 shares of Common Stock upon the receipt of final marketing
approvals in each Major Market Country; provided, however that if at any time
there is an NDA submission or receipt of final marketing approval in the United
States all options described in (c) and (d) above shall vest and become
exercisable in full as described in (c) and (d) above.
3. Termination of Vesting; Termination of Options.
(a) Notwithstanding the vesting provisions contained in Section 2 hereof,
none of the options described in such Section 2 shall continue to vest upon the
earlier of (i) termination of the License Agreement and (ii) fifteen (15) years
from the date of this Agreement.
(b) Upon vesting in full of the respective options described in Section 2
hereof (and subject to the provisions of Section 3(a) hereof Optionee agrees to
exercise such options no later than the date which is fifteen (15) years from
the date of this Agreement. If Optionee shall fail to exercise such options
within the time period set forth in this Section 3(b), such options shall
terminate and be of no further force and effect.
4. Method of Exercise of Option. Subject to the foregoing, the Option may
be exercised, in whole or in part, by written notice of exercise delivered to
the Company at least twenty (20) days prior to the intended date of exercise at
the principal office of the Company and upon payment to it by cash, certified
check or bank draft of the option exercise price for such shares. The shares so
purchased shall be deemed to be issued as of the later of (i) the close of
business on the date of exercise set forth in the notice of exercise or (ii) the
date of payment to the Company of the applicable option exercise price.
Certificates for the shares of stock so purchased, bearing the restrictive
legend set forth at the end of this Agreement, shall be delivered to the holder
within fifteen (15) days after options shall have been exercised.
5. Nonassessability/Reservation for Issuance. The Company covenants and
agrees that all shares that may be issued upon exercise of the Option shall,
upon issuance, be duly authorized and issued, fully paid and nonassessable
shares. The Company further covenants and agrees that the Company will at all
times have authorized, and reserved for the purpose of issue or transfer upon
exercise of the Option, a sufficient number of shares of its Common Stock.
6. Anti-Dilution Provisions. The option exercise price shall be subject to
adjustment from time to time as hereinafter provided in this Section 6.
(a) If the Company at any time divides the outstanding shares of its
Common Stock into a greater number of shares (whether pursuant to a stock
split, stock dividend or otherwise), and conversely, if the outstanding
shares of its Common Stock are combined into a smaller number of shares,
the option exercise price in effect immediately prior to such division or
combination shall be proportionately adjusted to reflect the reduction or
increase in the value of each such common share.
(b) If any capital reorganization or reclassification of the capital
stock of the Company, or consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of its assets
to another corporation shall be effected in such a way that holders of
Common Stock shall be entitled to receive stock, securities or assets with
respect to or in exchange for such common shares, then, as a condition of
such reorganization,
reclassification, consolidation, merger or sale, Optionee shall have the
right to purchase and receive upon the basis and upon the terms and
conditions specified in this Agreement and in lieu of the shares of the
Common Stock immediately theretofore purchasable and receivable upon the
exercise of the Option, such shares of stock, other securities or assets as
would have been issued or delivered to Optionee if it had exercised the
Option and had received such shares of Common Stock prior to such
reorganization, reclassification, consolidation, merger or sale. The
Company shall not effect any such consolidation, merger or sale, unless
prior to the consummation thereof the successor corporation (if other than
the Company) resulting from such consolidation or merger or the corporation
purchasing such assets shall assume by written instrument executed and
mailed to Optionee at the last address of Optionee appearing on the books
of the Company, the obligation to deliver to Optionee such shares of stock,
securities or assets as, in accordance with the foregoing provisions,
Optionee may be entitled to purchase.
(c) If the Company takes any other action, or if any other event
occurs, which does not come within the scope of the provisions of Section
6(a) or 6(b), but which should result in an adjustment in the option
exercise price and/or the number of shares subject to the Option in order
to fairly protect the rights of Optionee, an appropriate adjustment shall
be made by the Company.
(d) Upon each adjustment of the option exercise price, Optionee shall
thereafter be entitled to purchase, at the option exercise price resulting
from such adjustment, the number of shares obtained by multiplying the
option exercise price in effect immediately prior to such adjustment by the
number of shares purchasable pursuant hereto immediately prior to such
adjustment and dividing the product thereof by the option exercise price
resulting from such adjustment.
(e) Upon any adjustment of the option exercise price, the Company
shall give written notice thereof, by first class mail, postage prepaid,
addressed to Optionee at the last address of Optionee as shown on the books
of the Company, which notice shall state the option exercise price
resulting from such adjustment and the increase or decrease, if any, in the
number of shares purchasable at such price upon the exercise of the Option,
setting forth in reasonable detail the method of calculation and the facts
upon which such calculation is based.
7. No Rights as a Shareholder. Optionee shall have no rights as a
shareholder with respect to shares covered by the Option until the date of the
issuance of a stock certificate therefor following due and proper exercise of
such Option.
8. Restrictions on Transfer.
(a) Optionee, by acceptance hereof, agrees to give written notice to the
Company before transferring this Option or transferring any shares of the Common
Stock issuable or issued upon the exercise of this Option of Optionee's
intention to do so, describing briefly the manner of any proposed transfer of
the Option represented hereby or Optionee's intention as to the shares of Common
Stock issuable upon the exercise hereof or the intended disposition to be made
of shares of Common Stock upon such exercise. Promptly upon receiving such
written notice, the Company shall present copies thereof to counsel for the
Company. If, in the opinion of such counsel, the proposed transfer of the Option
represented hereby or disposition of shares may be effected without registration
or qualification (under any federal or state law) of the Option or the shares of
Common Stock issuable or issued upon the exercise hereof, the Company, as
promptly as practicable, shall notify Optionee of such opinion, whereupon
Optionee shall be entitled to transfer the Option, or to exercise the Option in
accordance with its terms and dispose of the shares received upon such exercise
or to dispose of shares of Common Stock received upon the previous exercise of
the Option, all in accordance with the terms of the notice delivered by Optionee
to the Company, provided that an appropriate legend in substantially the form
set forth at the end of this Agreement respecting the foregoing restrictions on
transfer and disposition may be endorsed on this Agreement or the certificates
for such shares.
(b) Subject to the provisions of Section 8(a), this Agreement and all
rights hereunder are transferable, in whole or in part, at the principal office
of the Company by Optionee in person or by duly authorized attorney, upon
surrender of this Agreement properly endorsed to any person or entity who
represents in writing that he/it is acquiring the Option represented hereby for
investment and without any view to the sale or other distribution thereof. Each
holder of the Option represented hereby, by taking or holding the same, consents
and agrees that the bearer of this Agreement, when endorsed, may be treated by
the Company and all other persons dealing with this Agreement as the absolute
owner hereof for any purpose and as the person entitled to exercise the Option,
or to the transfer hereof on the books of the Company, any notice to the
contrary notwithstanding; but until such transfer on such books, the Company may
treat the registered owner hereof as the owner for all purposes.
(c) Notwithstanding the provisions of Sections 8(a) and (b) hereof,
Optionee intends to transfer certain options granted hereunder to the Inventors
(as that term is defined under the License Agreement), in accordance with
Optionee's Patent Policy. The Company waives the requirements of Sections 8(a)
and (b) hereof only with respect to the transfer of options to the Inventors as
outlined in this Section 8(c).
(d) Shares of the Company's Common Stock are presently traded on the NASDAQ
National Market System, and, at the time of the signing of this Agreement, the
Company satisfies the requirements of Rule 144 ("Rule 144") of the Securities
Act of 1933, as amended (the "Securities Act"), so as to enable Common Stock of
the Company to be sold under the provisions of Rule 144. The Company agrees to
make all efforts to continue to meet the requirements of Rule 144 or any
successor or equivalent thereto promulgated by the Securities and Exchange
Commission (the Commission").
9. Registration Rights.
(a) If the Company receives a request signed by the holders, in the
aggregate, of at least 50% of the shares of Common Stock issued or issuable upon
exercise of the Option (all such persons making such request being hereinafter
referred to in this Section 9 as the "Requesting Holders") stating that such
Requesting Holders desire to have (i) a specified number of the shares of Common
Stock issued or issuable upon exercise of the Option and/or (ii) except as
otherwise provided below, the shares of the Common Stock (including, without
limitation, any greater number of shares of Common Stock issued pursuant to a
stock split, stock dividend or otherwise with respect to such shares) issued to
Optionee pursuant to the License Agreement (the "Restricted Shares" and together
with the shares issued or issuable upon exercise of the Option, the "Demand
Shares") registered under the Securities Act on Form S-3 or any successor or
equivalent thereto adopted under the Securities Act ("Form S-3"), the Company
shall, as soon as practicable (and in no event later than nine (9) months from
the date that the Company receives the request from the Requesting Holders), use
its best efforts to file a registration statement on Form S-3 under the
Securities Act covering such Demand Shares and the proposed sale or distribution
referred to in such notice and to cause such registration to become effective
under the Securities Act as soon as practicable after the filing thereof. If the
Company shall have begun the process of registering shares of its Common Stock
prior to receipt of the request of the Requesting Holders pursuant to this
Section 9, the Company, in its sole reasonable discretion, shall determine
whether such Demand Shares shall be included as a part of such offering. If the
Company determines that such Demand Shares shall not be included in such
offering, then the holders of such Demand Shares shall not be deemed to have
exercised the right to require the Company to register the Demand Shares
pursuant to this Section 9.
In the event the Company determines to include unissued shares in any
public offering pursuant to a registration statement initiated by Requesting
Holders and in the good faith judgment of the managing underwriter of such
public offering (if applicable), the inclusion of such securities would
interfere with the successful marketing of the Demand Shares or require the
exclusion of any portion of the Demand Shares to be registered,
the Company shall include first the securities of the Requesting Holders and
then any unissued shares. The Company shall be obligated to prepare and file no
more than one registration statement pursuant to this Section 9.
In the event that the holders of a majority of the Demand Shares for which
registration has been requested pursuant to this Section 9 determine for any
reason not to proceed with a public distribution or sale at any time before the
Form S-3 covering the Demand Shares to be sold publicly has been declared
effective by the Commission, and such Form S-3, if theretofore filed with the
Commission, is withdrawn with respect to the Demand Shares covered thereby, and
the holders of such Demand Shares agree to bear their own expenses incurred in
connection therewith and to reimburse the Company for the expenses incurred by
it attributable to the registration of such Demand Shares, then the holders of
such shares shall not be deemed to have exercised the right to require the
Company to register Demand Shares pursuant to this Section 9. If a registration
statement filed by the Company at the request of Requesting Holders pursuant to
this Section 9 is (i) withdrawn at the initiative of the Company or (ii) is not
declared effective by the Commission within three (3) months of the filing of
the registration statement with the Commission, then the holders of Demand
Shares shall not be deemed to have exercised the right to require the Company to
register Demand Shares pursuant to this Section 9. The right of the Requesting
Holders to request a registration of the Restricted Shares pursuant to this
Section 9 shall not apply provided that the Company shall deliver an opinion of
its counsel that all of the Restricted Shares which such Requesting Holders
proposes to sell may lawfully be sold or distributed publicly without
registration under Rule 144.
The managing underwriter, if any, of an offering registered pursuant to
this Section 9 shall be selected by the Company and shall be reasonably
acceptable to the Requesting Holders.
(b) In connection with any registration of Demand Shares under the
Securities Act pursuant to this Section 9, the Company will furnish each
Requesting Holder whose Demand Shares are registered thereunder with a copy of
the registration statement and all amendments thereto and will supply each such
Holder with copies of any prospectus included therein (including a preliminary
prospectus and all amendments and supplements thereto), in such quantities as
may be reasonably necessary for the purposes of the proposed sale or
distribution covered by such registration. In connection with any such
registration of Demand Shares, the Company will, at the request of the managing
underwriters with respect thereto (if applicable), use its best efforts to
qualify such registered shares for sale under the securities or "blue sky" laws
of such states as is reasonably required to permit the distribution of such
registered shares; provided, however, that the Company shall not be required in
connection therewith or as a condition thereof to qualify to do business in any
state where it is not then qualified or to take any action that would subject it
to tax or to the general service of process in any state where it is not then
subject.
If at any time during the effectiveness of the registration statement, the
Company determines, after consulting with its legal counsel, that the latest
prospectus provided to the Requesting Holders fails or may fail to comply with
the requirements of the Securities Act or any rule promulgated thereunder and
such non-compliance could result in liability to the Company or the Requesting
Holders, the Company shall notify the Holders who have not then sold all of
their shares included in the registration not to use the prospectus until such
time (not later than 30 days from the date of such notice) as the Company
prepares and delivers a prospectus that is not defective (or files any document
that is incorporated by reference in the existing prospectus). During such
period, the Company shall instruct its transfer agent to impose stop-transfer
notices on the Company's Common Stock transfer books.
(c) Except as otherwise required by state securities or "blue sky" laws or
the rules and regulations promulgated thereunder, all expenses, disbursements
and fees incurred by the Company in connection with carrying out its obligations
under this Section 9 shall be borne by the Company; provided however, that each
Requesting Holder shall pay (i) the filing fee required to be paid under the
Securities Act at the time of filing the registration statement with respect to
the Demand Shares (as of the date of this Agreement, such fee is equal to 1/32
of 1% of the maximum aggregate price at which the Demand Shares are proposed to
be offered), (ii) all costs and expenses of counsel for the Holder and (iii) all
underwriting discounts, commissions, as the case may be, and all transfer fees
with respect to the sale of the Demand Shares by the Requesting Holders.
10. Waiver. Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated orally but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
MGI PHARMA, INC.
By /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxx
its Chairman and Chief Executive
Officer
THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA
By /s/ X X Xxxxx
------------------------------
Approval as to legal form: /s/ Xxxxx Xxxxxxx 9/30/93
---------------------------
P. Xxxxxx Xxxxxxx, Jr., Resident Counsel Date
Office of Technology Transfer
University of California
RESTRICTION ON TRANSFER
The security evidenced hereby has not been registered under the Securities
Act of 1933 or any state securities laws and may not be sold, transferred,
assigned, offered, pledged or otherwise distributed for value unless there is an
effective registration statement under such act or laws covering such security
or the Company receives an opinion of counsel for the holder of this security
(concurred in by counsel for the Company) stating that such sale, transfer,
assignment, pledge or distribution is exempt from the registration and
prospectus delivery requirements of the Securities Act of 1933 and all
applicable state securities laws.
OPTION EXERCISE
---------------
(To be signed only upon exercise of Option)
The undersigned, the holder of the options represented by the foregoing
agreement, hereby irrevocably elects to exercise options to purchase ____ of the
shares of common stock of MGI PHARMA, INC., and herewith makes payment of
$______ therefor in cash or by check and requests that the certificates for such
shares be issued in the name of, and be delivered to __________, whose address
is set forth below the signature of the undersigned.
Dated:
-------------------
------------------------------
------------------------------
------------------------------
(Name and Address of Transferee)
OPTION ASSIGNMENT
-----------------
(To be signed only upon transfer of Option)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ____________________ the right represented by the foregoing Agreement to
purchase the shares of Common Stock of MGI PHARMA, INC., issuable upon the
exercise of the options to which the Agreement relates and appoints
____________________ attorney to transfer such right on the books of MGI PHARMA,
INC., with full power of substitution in the premises.
Dated:
----------------------
------------------------------
------------------------------
------------------------------
(Name and Address of Transferee)
Exhibit 10.1
Exhibit A
EXHIBIT B
(Graphic here for Exhibit B)
uses the following data:
APPROXIMATE DRUG DEVELOPMENT SCHEDULE FOR ILLUDIN ANALOGS
ACTIVITY DESCRIPTION TIMEFRAME
-------------------- ---------
Approval for Development Q3-1993
Syntheses and Initial Safety in Animals Q4-1993 - Q1-1996
Phase I-II Clinical Trials* Q4-1995 - X0-0000
Xxxxx XXX Xxxxxxxx Xxxxxx X0-0000 - X0-0000
Submit NDA to FDA Q4-1998 - Q1-2000
Exhibit 10.1
Exhibit B
SUPPLY AGREEMENT
THIS AGREEMENT is made as of October 23, 1995, by and between MGI PHARMA, INC.
("MGI"), 300E Opus Center, 0000 Xxxx Xxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000-0000, and DAINIPPON PHARMACEUTICAL CO., LTD. ("Dainippon"), 0-0
Xxxxxxxxxx, 0-Xxxxx, Xxxx-Xx, Xxxxx, 000 Xxxxx.
Recitals
--------
A. MGI and Dainippon have entered into a Development, Marketing and Cooperation
Agreement dated the date hereof pursuant to which MGI has granted to Dainippon
the exclusive right to sell, promote and distribute in Japan certain
pharmaceutical products and Dainippon has agreed to sell, promote and distribute
such products.
B. For the purposes and in furtherance of the said Development, Marketing and
Cooperation Agreement, MGI is willing to supply to Dainippon, and Dainippon is
willing to purchase from MGI, upon and subject to the terms and conditions of
this Agreement, bulk drug substance (as hereinafter defined) to be used as the
active ingredient in such pharmaceutical product.
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto have agreed as follows:
ARTICLE 1.0 INTRODUCTORY PROVISIONS
1.1 Defined Terms. The following terms, when used in capitalized form in this
Agreement, shall have the meanings set forth below:
(a) "Affiliate" when used with reference to either Party shall mean any
entity controlling, controlled by or under common control with the
said Party. For purposes hereof, "control" shall mean ownership,
directly or indirectly, of more than fifty percent (50%) of the
securities having the right to vote for election of directors, in the
case of a corporation, and more than fifty percent (50%) of the
beneficial interest in the capital, in the case of a business entity
other than a corporation.
(b) "Best Efforts" shall mean those efforts that would be made by a
reasonably prudent business person acting in good faith and in the
exercise of reasonable commercial judgment.
(c) "Bulk Drug Substance" shall mean an Illudin Analog released by MGI
from a current Good Manufacturing Practices facility.
(d) "Confidential Information" shall mean all proprietary information,
including Manufacturing Specifications, Product Release Specifications
and Proprietary Product Information of a Party, including any
information on the markets, customers, suppliers, patents or patent
applications, inventions, products, procedures, designs, formulas,
business plans, financial projections, organizations, employees or
consultants or any other similar aspects of a Party's present or
future business, the secrecy of which confers a competitive advantage
upon that Party.
(e) "Development, Marketing and Cooperation Agreement" shall mean that
certain Development, Marketing and Cooperation Agreement of even date
herewith between the Parties.
(f) "Dollars" or "$" shall mean the legal currency and tender of the
United States of America.
(g) "Effective Date" shall mean the date first above written.
(h) "FDA" shall mean the United States Food and Drug Administration.
(i) "Good Manufacturing Practices" shall mean those practices in the
manufacture of pharmaceutical products which are recognized as good
manufacturing practices within Japan pursuant to PAB guidelines and
other administrative interpretations and rulings in connection
therewith.
(j) "Illudin Analogs" shall mean illudofulvene, illudofulvene dimers, and
6-hydroxymethylilludofulvene; including derivatives thereof such as
those disclosed and claimed in U.S. Patent Application Number
08/276169, filed July 15, 1994.
(k) "Manufacturing Specification" shall mean the commercial specification
for the packaging and delivery of Bulk Drug Substance as established
by mutual agreement of the Parties from time to time.
(l) "PAB" shall mean the Pharmaceutical Affairs Bureau of the Japanese
Ministry of Health and Welfare.
(m) "Party" shall mean either of the two parties to this Agreement.
(n) "Products" shall mean any pharmaceutical products having as an active
ingredient an Illudin Analog either alone or in combination with other
substances, whether or not such products are known or in existence on
the Effective Date.
(o) "Product Release Specification" shall mean the pharmacological product
quality specification for the Bulk Drug Substance as established by
mutual agreement of the Parties from time to time.
(p) "Quarter" shall mean any three-month period beginning on the first day
of January, April, July or October of any year during the term of this
Agreement.
(q) "Territory" shall mean Japan only.
(r) "Yen" shall mean the legal currency and tender of Japan.
1.2 Other Rules of Interpretation. Unless the context clearly indicates
otherwise, the following rules shall govern the interpretation of this
Agreement:
(a) The definitions of all terms defined herein shall apply equally to the
singular, plural, and possessive forms of such terms;
(b) All references herein to "days" shall mean calendar days;
(c) All references to "Sections" shall mean the corresponding Sections of
this Agreement and all references to "Articles" shall mean the
corresponding Articles of this Agreement; and
(d) All capitalized terms not defined herein which are defined in the
Development, Marketing and Cooperation Agreement shall have the
meanings therein defined.
ARTICLE 2.0 WARRANTIES AND REPRESENTATIONS; LIMITATIONS
2.1 Limited Warranty. Each Party represents and warrants to the other Party
that:
(a) it has the legal right and power to enter into this Agreement; and
(b) it has taken all necessary corporate action to authorize and perform
this Agreement.
2.2 LIMITATION OF LIABILITY. EXCEPT AS PROVIDED IN SECTION 2.1 ABOVE, IN
ARTICLE 6.0 OR IN THE EVENT OF A MATERIAL BREACH BY
EITHER PARTY OF THE LIMITATIONS SET FORTH IN ARTICLE 8.0 BELOW, NEITHER PARTY
SHALL BE LIABLE TO THE OTHER FOR ANY LOSS, EXPENSE OR DAMAGE ARISING OUT OF OR
RESULTING FROM A BREACH OF THIS AGREEMENT. IN ANY EVENT, NEITHER PARTY SHALL BE
LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGES.
IN THE EVENT OF ANY CLAIM FOR SUCH LOSS OR DAMAGES, THE SOLE AND EXCLUSIVE
REMEDY FOR ANY LIABILITY UNDER THIS AGREEMENT SHALL BE LIMITED TO A REFUND OF
ANY SUMS PAID AND/OR THE TERMINATION OF ANY RIGHTS GRANTED UNDER THIS AGREEMENT.
ARTICLE 3.0 SUPPLY AND PURCHASE OF BULK DRUG SUBSTANCE
3.1 Supply of Bulk Drug Substance. MGI agrees to supply, upon and subject to
the terms and conditions set forth in this Agreement and during the term hereof,
all requirements of Dainippon for Bulk Drug Substance for sale in the Territory.
3.2 Manufacturing Specifications. Prior to the time at which Dainippon shall
place its first purchase order for Bulk Drug Substance hereunder, the Parties
shall agree upon the Manufacturing Specification.
3.3 Dainippon Obligations
3.3.1 Purchase of Bulk Drug Substance. During the term of this Agreement,
Dainippon shall purchase from MGI, upon and subject to the terms and conditions
set forth in this Agreement, its requirements of Bulk Drug Substance for final
manufacture (fill and finish) and resale within the Territory pursuant to the
Development, Marketing and Cooperation Agreement.
3.3.2 Forecasts. Dainippon shall provide to MGI forecasts of its requirements
for Bulk Drug Substance to be delivered in each Quarter during the term of this
Agreement, commencing with at least twelve (12) months prior to anticipated
Product Launch in the Territory. Such forecasts shall take the form of rolling
forecasts, to be provided at least thirty (30) days prior to the beginning of
each Quarter, which shall set forth the quantity of Bulk Drug Substance to be
delivered during each of the following four (4) Quarters. Each such rolling
forecast shall be accompanied by one or more non-cancelable purchase orders
which shall cover the total quantity forecast for the first Quarter and shall
provide a breakdown of the quantities ordered for delivery during each month of
that Quarter. The quantity forecast for the second Quarter shall be considered a
firm order which may not be reduced in the succeeding forecast but which may,
however, be increased by up to ten percent (10%) in that forecast and the
accompanying purchase order(s). Any orders for quantities in excess of those
forecast shall be subject to any surcharges imposed upon MGI by its suppliers,
provided that MGI shall have notified Dainippon in advance of the existence and
amount of such surcharges. Dainippon acknowledges that its forecasts will be
used for the purpose of enabling MGI to meet the lead times required by its
manufacturers, and in issuing each forecast
hereunder Dainippon shall be deemed to have represented to MGI that the forecast
is based on Dainippon's best commercial judgment arrived at in good faith.
3.3.3 Purchase Orders. All orders for Bulk Drug Substance shall be
submitted to MGI in the form of written purchase orders which shall set forth
the quantities ordered, the requested delivery dates, shipping instructions and
shipping addresses. Minimum order size shall be as established in the
Manufacturing Specification. Dainippon agrees that purchase orders delivered
to MGI pursuant to this Agreement shall not impose any terms not contained in
this Agreement or alter any of the terms contained in this Agreement. In the
event of any conflict between the terms of any purchase order delivered by
Dainippon hereunder and the terms of this Agreement, the Parties agree that the
terms of this Agreement shall control.
3.3.4 Minimum Purchase Requirements.
(a) As a condition of entering into this Agreement, Dainippon agrees to
purchase the following Dollar amounts of Bulk Drug Substance from MGI
in each calendar year during the term of this Agreement in amounts not
less than shown below for the indicated periods ("Annual Minimum
Purchase Amounts"):
CALENDAR YEAR ANNUAL MINIMUM PURCHASE AMOUNT
Year 1 $ 375,000
Year 2 $ 750,000
Year 3 $1,250,000
Year 4 $1,400,000
(b) The Parties agree that the Parties shall review the market situation
in Japan for the Products in Year 4 and thereafter from time to time
shall discuss and determine the appropriate Annual Minimum Purchase
Amount for Years subsequent to Year 4.
(c) "Year" for purposes of this Section 3.3.4 shall mean the calendar year
in which Dainippon's first sale of a Product occurs in the Territory
under the terms of the Development, Marketing and Cooperation
Agreement and each succeeding calendar year during the term of this
Agreement. The Annual Minimum Purchase Amount for Year 1 shall be
prorated based on the number of months remaining in the calendar year
following the first sale of a Product.
3.3.5 Inspection, Acceptance and Remedies. In connection with the purchase of
Bulk Drug Substance under the terms of this Agreement:
(a) Dainippon agrees to inspect and analyze a sample from each batch of
Bulk Drug Substance to be supplied by MGI prior to the release of the
Bulk Drug Substance from MGI or MGI's contract manufacturer. To
facilitate such testing, not less than twenty (20) days prior to the
scheduled delivery date, MGI shall cause to be delivered to Dainippon
at such place as Dainippon shall designate, sufficient samples of each
batch by courier or delivery service to allow Dainippon to conduct
such testing in accordance with applicable testing standards. Method,
quantity and other details of sampling shall be separately agreed upon
between the Parties. In addition, Dainippon will have the right to
have its representative obtain a sample from any batch of Bulk Drug
Substance from MGI's or MGI's contract manufacturer's facility for
testing by Dainippon. No batch of Bulk Drug Substance shall be
released for shipment to Dainippon until Dainippon notifies MGI that
such batch meets Product Release Specifications. MGI's delivery
obligations shall be suspended for such time as it takes Dainippon to
determine that such batch meets Product Release Specifications.
(b) MGI agrees to replace, at no cost to Dainippon, any Bulk Drug
Substance supplied by MGI hereunder which does not conform to the said
warranties following inspection and analysis by Dainippon pursuant to
the provisions of Section 3.3.5(a), provided that such nonconformity
is not due to any failure by Dainippon or its agents or
representatives to handle, maintain, or store Bulk Drug Substance as
directed in labels affixed to the containers or as required by the
Product Release Specifications therefor.
ARTICLE 4.0 DELIVERY TERMS
4.1 Place. MGI shall cause all orders of Bulk Drug Substance to be delivered
free on board at the place where the Bulk Drug Substance is manufactured.
4.2 Title. Title and risk of loss of Bulk Drug Substance shall pass to
Dainippon on delivery to the shipment point.
4.3 Insurance. Dainippon shall insure each shipment of Bulk Drug Substance
against loss or damage occurring after the time at which the Bulk Drug Substance
is delivered to the shipment point.
ARTICLE 5.0 PRICE
5.1 Purchase Price of Bulk Drug Substance.
(a) The transfer price for Bulk Drug Substance shall be calculated as
provided in Exhibit I, which exhibit is attached hereto and made a
part hereof ("Transfer
Price"). Dainippon shall pay to MGI the Transfer Price according to
the terms set forth in this Article 5.0.
(b) If (i) Dainippon's Standard Cost of Goods Sold exceeds forty
percent (40%) of the ANHI price for all Products in the Territory on
the Weighted Average Basis for a period of eighteen (18) consecutive
months at any time following Product Launch; (ii) MGI's Standard Cost
of Manufacture for Bulk Drug Substance exceeds the MAP (as defined in
Exhibit I) by more than twenty percent (20%) for a period of eighteen
(18) consecutive months at any time following Product Launch; or
(iii) generic competition for Products is introduced in the Territory
following expiration of the MGI Patents, then the Parties agree to
meet and to negotiate in good faith to reset the Transfer Price to
rebalance the profit opportunities for both Parties.
(c) If, at any time during the term of this Agreement, MGI is able to
negotiate or obtain reductions in the schedule of royalties payable to
the University of California under the University of California
License Agreement (as referred to in the Development, Marketing and
Cooperation Agreement), including the expiration of the MGI Patents in
Japan having the result that no royalties are payable with respect to
Japan to the University of California under the University of
California License Agreement, then those reductions shall be factored
into the calculation of the Transfer Price for future purchases, based
on an equal ("fifty-fifty") sharing between Dainippon and MGI of such
savings, to the extent such sales relate to Product sales in Japan.
(d) "Standard Cost of Goods Sold" for purposes of this Agreement shall
mean Dainippon's standard cost of goods sold for Products, determined
under generally accepted accounting principles recognized in Japan, as
applied by Dainippon on a consistent basis.
(e) "Standard Cost of Manufacture" for purposes of this Agreement
shall mean MGI's standard cost of manufacture for Bulk Drug Substance,
determined under generally accepted accounting principles recognized
in the United States, as applied by MGI on a consistent basis.
5.2 Determination of Transfer Price. At the time that Dainippon places its
initial order for Bulk Drug Substance for any Product hereunder, the Parties
shall agree to an estimated transfer price based on the formula set forth in
Section 5.1. Within thirty (30) days after receipt of Pricing Approval for the
applicable Product, the Parties shall revise the transfer price based on the
actual XXX Xxxxx and the actual ANHI Price (as defined in Exhibit I) for such
Product, and thereafter on an annual basis to reflect changes in the XXX Xxxxx
and the ANHI Price and in MGI's Standard Cost of Manufacture.
5.3 Other Costs. In addition to the purchase price agreed to in this
Agreement, MGI shall be entitled to invoice Dainippon separately for all costs
of packaging, transportation, insurance, taxes, licenses, permits, fees or
tariffs which may be levied upon MGI by any government or governmental agency in
the Territory by reason of the sale or transport of Bulk Drug Substance
hereunder, or measured by the value thereof, other than taxes imposed on net
income and taxes imposed by reason of any independent activity of MGI.
Dainippon shall pay such invoices in accordance with the provisions of Section
5.4 hereof.
5.4 Payment. The purchase price and other costs for Bulk Drug Substance
supplied hereunder, as set forth in Sections 5.1 and 5.3, shall be invoiced by
MGI upon shipment. All amounts shall be due and payable sixty (60) days after
date of invoice. All payments made hereunder shall be made in Dollars. If and
for so long as any amount owed to MGI by Dainippon under this Agreement shall be
overdue, interest at the rate of eighteen percent (18%) per annum, or the legal
rate of interest, whichever is lower, shall automatically become due on all
balances outstanding.
5.5 Currency Controls. If Dainippon is precluded at any time from making any
payments due to MGI under the provisions of this Agreement because Dainippon has
failed, notwithstanding its Best Efforts, to obtain any governmental approvals
that may be required under the laws and regulations in the Territory for such
transfers of funds, then Dainippon shall:
(a) deposit, or cause its agent to deposit, such sums to an account
designated by MGI at a bank or other entity within the Territory;
(b) provide, or cause its agent to provide, to MGI documentary evidence of
such deposits; and
(c) remit such deposits to MGI immediately upon the subsequent receipt of
any required governmental approvals for such transfers.
Subject to any applicable regulatory requirements, Dainippon further agrees, and
shall cause any agent of Dainippon to agree, that the form of such depository
account shall permit MGI to withdraw the deposited amounts at will, but neither
Dainippon nor any agent of Dainippon shall withdraw the deposited amounts
otherwise than for the purpose of remitting such amounts to MGI pursuant to the
provisions of this Section.
5.6 Exchange Rates. All payments due to MGI under this Agreement shall be paid
to MGI in U.S. Dollars. The currency
rate conversions from Japanese Yen to U.S. Dollars required in Exhibit I shall
be based on the average (arithmetic mean) of the exchange rates published for
Japanese Yen and U.S. Dollars in the Wall Street Journal for the preceding
ninety (90) day period. Dainippon shall bear all wire transfer or other
applicable bank charges for any payments hereunder.
5.7 Promotional Assistance. Dainippon may, from time to time, provide to MGI
written documentation reasonably satisfactory to MGI to demonstrate the number
and amount of sample Products distributed by Dainippon without charge in the
Territory (the "Samples"). Upon receipt of such documentation, MGI shall
provide to Dainippon a credit against future purchases of Bulk Drug Substance in
the amount equal to the difference between the amount paid by Dainippon for the
Sample (on a per milligram basis) and the Part A Price (as defined in Exhibit I)
for the Samples.
ARTICLE 6.0 WARRANTIES
6.1 Compliance with Good Manufacturing Practices. MGI warrants that the
manufacture of Bulk Drug Substance supplied hereunder shall be in strict
conformity with Good Manufacturing Practices, and in accordance with the
manufacturing information contained in the Health Registration Dossier for the
Product for which such Bulk Drug Substance is to be used, as filed with a
Competent Authority in the Territory under the terms of the Development,
Marketing and Cooperation Agreement.
6.2 Regulatory Requirements. MGI warrants that no Bulk Drug Substance
delivered by MGI under this Agreement will be adulterated or misbranded within
the meaning of the United States Food, Drug and Cosmetic Act or comparable
regulatory provisions in the Territory, or within the meaning of any other
applicable law in which the definition of adulteration or misbranding are
substantially the same as those contained in such Acts as such laws are
constituted and effective at the time of such shipment or delivery.
6.3 Product Release Specifications. MGI warrants that all Bulk Drug Substance
supplied by MGI shall be in strict compliance with the Manufacturing
Specifications and the Product Release Specifications, as the same shall
hereafter be modified by mutual agreement of the Parties.
6.4 DISCLAIMER. THE WARRANTIES SET FORTH IN THIS ARTICLE 6.0 ARE IN LIEU OF
ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WHICH ARE HEREBY DISCLAIMED AND
EXCLUDED BY MGI, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR USE. MGI'S SOLE LIABILITY FOR A BREACH OF
THE WARRANTIES SET FORTH HEREIN SHALL BE THE REPLACEMENT OF ANY DEFECTIVE BULK
DRUG SUBSTANCE.
ARTICLE 7.0 FAILURE TO SUPPLY
7.1 Notice. In the event that MGI shall determine that it will be unable for
any reason to supply any or all of any quantity of Bulk Drug Substance forecast
by Dainippon on the scheduled delivery date, it shall notify Dainippon of the
anticipated delivery problem and the reasons therefor.
7.2 Allocation. If, at any time, the production of Bulk Drug Substance shall
be insufficient to supply, on a scheduled delivery date, all quantities ordered
by Dainippon pursuant to Section 3.3.3, the available production shall be
allocated to Dainippon in the proportion that the aggregate sales of Bulk Drug
Substance in the Territory by Dainippon during the immediately preceding twelve
(12) consecutive months bears to the aggregate worldwide sales of Bulk Drug
Substance by MGI and its licensees and Dainippon for the same period.
7.3 Mutual Efforts at Resolution. In the event of any actual or anticipated
failure by MGI to supply any Bulk Drug Substance as and when ordered by
Dainippon on or before the scheduled delivery date therefor, the Parties shall
meet and confer, and each Party agrees to use Best Efforts to find a mutually
agreed upon resolution.
ARTICLE 8.0 CONFIDENTIALITY
8.1 The Parties hereby agree that the provisions of Article 11.0 of the
Development, Marketing and Cooperation Agreement shall apply equally to this
Agreement.
ARTICLE 9.0 TERM AND TERMINATION
9.1 Term of Entire Agreement. The term of this Agreement shall commence on
the Effective Date of the Development, Marketing and Cooperation Agreement and
all provisions of this Agreement shall continue in full force and effect until
termination of the Development, Marketing and Cooperation Agreement.
9.2 Rights and Obligations on Termination. If this Agreement is terminated,
the Parties shall have the following rights and obligations:
(a) Termination of this Agreement shall not release either Party from
the obligation to make payment of all amounts then or thereafter due
and payable;
(b) The provisions of Article 8.0 shall survive such termination of
this Agreement; and
(c) The provisions of Article 10.0 shall survive such termination of
this Agreement.
9.3 No Compensation. The Parties agree that, subject to the above provisions
of Section 9.2, and without prejudice to any other remedies at law or in equity
that either Party may have in respect of any breach of this Agreement, neither
Party shall be entitled to or claim that it is entitled to any compensation or
like payment as a result of or arising out of any termination in accordance with
this Article 9.0, whether claimed as loss of good will, foregone profits, lost
investments, or otherwise.
ARTICLE 10.0 DISPUTE RESOLUTION
10.1 The parties hereby agree that the provisions of Article 13.0 of the
Development, Marketing and Cooperation Agreement shall apply equally to this
Agreement.
ARTICLE 11.0 GENERAL PROVISIONS
11.1 Entire Agreement. This Agreement constitutes the entire agreement of the
Parties with respect to the subject matter hereof and thereof and supersede all
the Parties' previous correspondence, term sheets, understandings, agreements
and representations, oral or written, between the Parties; provided, however,
that this Agreement shall not supersede the agreements contained in the
Development, Marketing and Cooperation Agreement.
11.2 Relationship. The Parties are independent contractors and shall not be
deemed to have formed any partnership, joint venture or other relationship.
Neither Party shall make, or represent to any other person that it has the power
or authority to make, any financial or other commitment on behalf of the other
Party.
11.3 Assignment. Neither Party shall assign or otherwise transfer its rights
or obligations under this Agreement except with the prior written consent of the
other Party; provided that no such consent for a transfer to an entity shall be
required and all rights and obligations arising hereunder shall inure to the
benefit of that entity if it is (a) an Affiliate of either Party, (b) the
successor in interest of one Party by reason of sale, merger or operation of
law, or (c) has acquired all or substantially all of the assets and business of
a Party.
11.4 Amendment. This Agreement may not be modified or amended, in whole or in
part, except by a written agreement signed by both Parties.
11.5 Severability. If one or more of the provisions of this Agreement is
subsequently declared invalid or unenforceable, this Agreement shall be treated
as though that provision were not in this Agreement, and this shall not affect
the validity or enforceability of the remaining provisions of this Agreement
(unless those provisions that are invalidated or unenforceable are clearly
material and inseparable from the other provisions). The Agreement as modified
shall be applied and construed to
reflect substantially the good faith intent of the Parties and to achieve the
economic effects originally intended by the terms hereof.
11.6 Notices; Language. Except as may be otherwise provided in this Agreement,
any notice, demand or request given, made or required to be made shall be in
writing and shall be effective, unless otherwise provided herein, when received
after delivery by (a) registered air mail, postage prepaid; (b) facsimile with
electronic confirmation of receipt; or (c) by express mail or a reputable
international courier at the addresses set forth on the first page of this
Agreement or to any other address that a Party specifies in writing. All
reports, notices and communications required or permitted hereunder shall be in
the English language.
11.7 Waiver. Either Party's failure or delay in exercising any remedy for
default shall not be deemed a waiver of that or any subsequent default of that
provision or of any other provision hereof.
11.8 Counterparts. This Agreement shall be executed in two (2) or more
counterparts in the English language, each of which shall be deemed an original.
In the event of any difference with the translation of this Agreement into any
other language, the original English version shall prevail.
11.9 Governing Law. Except as to patents, this Agreement shall be governed by,
and interpreted and construed in accordance with, the laws of the State of
Minnesota, excluding (a) its choice of law rules and (b) the United Nations
Convention on the International Sale of Goods and provided however that the
operation of the arbitration agreement contained in Section 11.3 hereof, and the
enforcement of any award rendered pursuant thereto, shall be governed by United
States federal law to the exclusion of any state law.
11.10 Governmental Approvals. If any governmental approval is required for
this Agreement to become effective, Dainippon shall undertake to obtain such
approval from any relevant agency of the Government of Japan, and MGI shall
undertake to obtain any such approval from any relevant agency of the Government
of the United States. Each Party shall use its Best Efforts to obtain such
approvals as rapidly as possible and shall keep the other Party reasonably
informed about any such applications for approval. Each Party shall furnish the
other Party with a copy of any such approval within ten (10) days of its
receipt.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of
the date first above written.
DAINIPPON PHARMACEUTICAL CO., LTD. MGI PHARMA, INC.
By /s/ Takeshi Tomotake By /s/ Xxxxxxx X. Xxxxxxx
----------------------------- ---------------------------
Takeshi Tomotake Xxxxxxx X. Xxxxxxx
President Chairman and Chief
Executive Officer
Exhibit 10.1
Exhibit B
EXHIBIT I
The Transfer Price payable pursuant to Article 5.0 shall be based upon the
Weighted Average XXX Xxxxx ("Weighted Average XXX Xxxxx").
A. For purposes of this Exhibit I and this Agreement, the following
definitions shall apply:
(i) "NHI" shall mean the Japanese National Health Insurance Program;
(ii) "XXX Xxxxx" shall mean the NHI reimbursement price for a specified
vial of drug ( e.g., 5 mg vial, 10 mg vial, etc.);
(iii) "ANHI Price" shall mean the XXX xxxxx, adjusted to reduce the XXX
Xxxxx for the discount Dainippon provides to the wholesaler;
(iv) "Weighted Average" shall mean the average of either the NHI prices per
milligram (mg) or the ANHI Prices per milligram (mg), weighted to
reflect the volume of usage at each vial of dose;
(v) "MAP Price" shall mean $1.60 per mg of Bulk Drug Substance, based on
1995 values, adjusted for inflation on an annual basis during the
term of this Agreement;
(vi) "SAP Price" shall mean MGI's Standard Cost of Manufacture per mg of
Bulk Drug Substance;
(vii) "Part A" shall mean the lesser of (a) the MAP Price or (b) 1.2 times
the SAP Price;
(viii) "Part B" shall mean the greater of (a) 15% of the Weighted Average
ANHI Price on a per mg basis or (b) the Weighted Average ANHI Price
times the percentage derived by adding 15% plus the additional percent
calculated by multiplying .00005 (5/100,000) times the quantity equal
to the Weighted Average XXX Xxxxx less 1,000; and
(ix) "Part C" shall mean (a) .2 times the Weighted Average ANHI Price plus
(b) .005 times the Weighted Average XXX Xxxxx.
B. To calculate the Transfer Price, Formula 1 shall be used if the
Weighted Average XXX Xxxxx is less than or equal to (Yen)2,000 and Formula 2
shall be used if the Weighted Average XXX Xxxxx is greater than (Yen)2,000.
(i) Formula 1: the sum of Part A and Part B.
(ii) Formula 2: the sum of Part A and Part C.
C. Examples:
Formula 1 example:
Assume:
------
Weighted Average XXX Xxxxx = (Yen)1,500 per mg
Weighted Average ANHI Price = (Yen)1,050 (70% of NHI) per mg
MAP Price = $1.60 per mg
SAP Price = $1.20 per mg
1 U.S. Dollar = 100 Yen
Part A: Transfer Price
------ --------------
Lesser of:
MAP Price = $ 1.60
or
SAP Price x 1.2
$1.20 x 1.2 = $ 1.44 $1.44
plus Part B:
------
Greater of:
.15 x Weighted Average ANHI Price
.15 x (Yen)1,050 = (Yen)157.5
Translated to U.S Dollars = $1.575
or
Weighted Average ANHI Price [.15 + .00005 (Weighted Average
XXX Xxxxx - (Yen)1,000)]
(Yen)1,050 [.15 + .00005 ((Yen)1,500 - (Yen)1,000) = (Yen)183.75
Translated to U.S. Dollars = $1.8375 $1.8375
TRANSFER PRICE PER MG FOR FORMULA 1 $3.2775
Formula 2 example:
Assume:
------
Weighted Average XXX Xxxxx = (Yen)2,500 per mg
Weighted Average ANHI Price = (Yen)1,750 (70% of NHI) per mg
MAP Price = $1.60 per mg
SAP Price = $1.20 per mg
1 U.S. Dollar = 100 Yen
Part A: Transfer Price
------ --------------
Lesser of:
MAP Price = $1.60
or
SAP Price x 1.2
$1.20 x 1.2 = $1.44 $1.44
Part C:
------
(.2 x Weighted Average ANHI Price) + (.005 x Weighted Average XXX Xxxxx)
(.2 x (Yen)1,750) + (.005 x (Yen)2,500) = (Yen)362.5
Translated to U.S. Dollars = $3.625 $3.625
TRANSFER PRICE PER MG FOR FORMULA 2 $5.065
