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EXHIBIT 10.42
AGREEMENT
This Agreement made as of this 28th day of December, 2000 (hereinafter referred
to as "EFFECTIVE DATE"), between TANABE SEIYAKU CO., LTD., a Japanese
corporation having its principal office at 0-00 Xxxxx-xxxxx 0-xxxxx, Xxxx-xx,
Xxxxx, Xxxxx (hereinafter referred to as "TANABE") and VIVUS, INC., a
corporation having its principal office at 0000 Xxxxxx Xxxxxx, Xxxxxxxx Xxxx, XX
00000, XXX (hereinafter referred to as "VIVUS"). TANABE and VIVUS are sometimes
referred to herein individually as a "Party" or collectively as "Parties".
WITNESSETH:
WHEREAS, TANABE is the owner of all right, title and interest in certain patents
and know-how relating to a selective phosphodiesterase type-5 inhibitor compound
referred to by TANABE as "T-1790", and TANABE desires a collaborator to develop
and market such compound;
WHEREAS, VIVUS has extensive capabilities in the development, manufacture and
marketing of pharmaceutical products in the USA;
WHEREAS, TANABE and VIVUS have entered into the Secrecy Agreement effective as
of the 19th day of June, 2000 (hereinafter referred to as "SECRECY Agreement"),
under which TANABE has disclosed to VIVUS data and information relating to the
aforesaid compound;
WHEREAS, after reviewing and taking into consideration aforesaid information,
VIVUS desires to obtain the right to develop and to market the product
containing the aforesaid compound; and
WHEREAS, TANABE is willing to grant the desired right to VIVUS subject to the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the covenants and obligations expressed
herein, and intending to be legally bound, the Parties agree as follows:
1. Definitions.
1.1 "ADVERSE DRUG REACTION" means any adverse drug reaction as defined
in the then current edition of ICH Guidelines and any other relevant
regulatory guidelines, whether the ADVERSE DRUG REACTION occurs in
the conduct of clinical trials or is reported during post-marketing
surveillance or any other means.
1.2 "AFFILIATE" means any corporation or other business entity which
directly or
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indirectly controls, or is controlled by, or under common control
with a Party hereto. For the purpose of this definition, "control"
means that an entity owns or controls other entity by means of fifty
percent (50%) or more of the equity conferring voting rights, or
otherwise has the ability to direct the business affairs of other
entity.
1.3 "BULK DRUG TABLETS" means formulated tablets containing COMPOUND in
bulk form which if appropriately packaged and labeled would
constitute PRODUCT, and which shall be supplied by TANABE pursuant
to Section 7.1, and which excludes RAPIDLY DISINTEGRATED TABLET
unless otherwise agreed by the Parties.
1.4 "BULK DRUG SUBSTANCE" means COMPOUND in bulk form which, if
appropriately formulated and finished, would constitute PRODUCT, and
which shall be supplied by TANABE pursuant to Section 7.1.
1.5 "CALENDAR QUARTER" means the respective period of three (3)
consecutive calendar months as used by VIVUS for financial reporting
ending on or about March 31, June 30, September 30 and December 31.
1.6 "CALENDAR YEAR" means the respective period of about a year as used
by VIVUS for financial reporting commencing on January 1 and ending
on December 31.
1.7 "CLINICAL STUDIES" means PHASE I CLINICAL STUDIES, PHASE II CLINICAL
STUDIES and PHASE III CLINICAL STUDIES.
1.8 "COMPOUND" means all the compounds which are selective
phosphodiesterase type-5 inhibitor, which compounds are contained
within a claim of any unexpired TANABE PATENT no matter when filed
or in a claim of a pending application for a TANABE PATENT no matter
when filed which is being prosecuted in good faith by or on behalf
of TANABE or its AFFILIATE, including without limitation the
compound coded as T-1790 by TANABE, chemically known as (***).
1.9 "CONTROL" or "CONTROLLED" means the right to grant a license or
sublicense to intangible property rights (including patent rights,
know-how and trade secret INFORMATION), and the right to provide
access to or cross-reference to regulatory filings, in each case to
the extent not in violation of the terms of any pre-existing
agreement or other arrangement with any THIRD PARTY. "CONTROL"
expressly includes the right of ownership, in whole or in part.
1.10 "DATE OF FIRST SALE" means the date on which the PRODUCT is first
sold in a country in the TERRITORY by VIVUS to a THIRD PARTY (other
than
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VIVUS' SUBLICENSEES) in a commercial arms length transaction.
1.11 "DEVELOPMENT PLAN" means the plan for development of the COMPOUND
into a PRODUCT in the TERRITORY which is established pursuant to
Section 5.6.
1.12 "DEVELOPMENT WORK" means all activities relating to obtaining
REGULATORY APPROVAL, and activities relating to manufacture of the
BULK DRUG SUBSTANCE and PRODUCTS, including but not limited to
activities relating to preclinical test, toxicology,
pharmacokinetics, CLINICAL STUDIES, manufacturing process,
formulation, quality assurance, quality control and regulatory
affairs.
1.13 "DRUG APPROVAL APPLICATION" means an application for product license
approvals, health registrations, marketing authorizations,
regulatory submissions, notices of compliance and other licenses and
permits (NDA and the like) required to be approved before commercial
sale or use of a PRODUCT as a drug in a regulatory jurisdiction.
1.14 "EFFECTIVE DATE" means the date first written above.
1.15 "EMEA" means The European Agency for the Evaluation of Medicinal
Products or any successor entity.
1.16 "EUROPEAN UNION" means a part of or all of the countries which are
then current members of the European Union.
1.17 "FIELD" means treatment of male erectile dysfunction or female
sexual dysfunction in humans.
1.18 "FDA" means the United States Food and Drug Administration or any
successor entity.
1.19 "IND" means an Investigational New Drug Application filed with the
FDA or a corresponding application filed with a regulatory agency
with respect to development of a COMPOUND into a PRODUCT in the
FIELD applicable in any country in the TERRITORY.
1.20 "INFORMATION" means all information, techniques, data, inventions,
practices, methods, knowledge, know-how, skill, experience, patent
applications or test data, generally not known to the public,
relating to the FIELD, which is owned or CONTROLLED by a Party
relating to the COMPOUND or a PRODUCT which includes (but not
limited to), pharmacological, toxicological, preclinical and
clinical test data, analytical and quality control data, packaging,
marketing, pricing, distribution, sales and manufacturing data or
descriptions,
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compositions-of-matter of the COMPOUND, assays and biological
materials related thereto.
1.21 "MAJOR EUROPEAN COUNTRY" means the United Kingdom, Germany, France,
Italy and Spain.
1.22 "MANUFACTURING COST" shall mean the manufacturing cost of the BULK
DRUG SUBSTANCE, which is manufactured by or on behalf of TANABE (or
the PRODUCT manufactured and supplied by or on behalf of VIVUS under
Section 8.5), and which includes the following:
(a) Materials Cost, which means the price paid for raw material
components and finished goods which are purchased from outside
vendors as well as any freight and duty where applicable.
(b) Direct Labor Costs, which means the employment costs
attributable to manufacturing the BULK DRUG SUBSTANCE
including, without limitation, salary and employee benefits
within the relevant manufacturing operating unit.
(c) Overhead Costs, which means the cost of specific activities
attributable to manufacturing the BULK DRUG SUBSTANCE that are
provided by support functions and are performed at a frequency
which is in correlation with the production. Overhead Costs
includes, expenses associated with quality assurance testing,
batch review, equipment maintenance costs, manufacturing
utilities, waste removal, management and administrative
expenses, general facilities costs, environmental engineering,
property taxes and insurance.
(d) Equipment Depreciation, which means the amortization of the
costs of specific manufacturing facility, machinery or
equipment dedicated either solely or partly (on a pro rata
basis) to the production, calculated in accordance with the
applicable generally accepted accounting practices.
It is understood and agreed that the definition of MANUFACTURING
COST shall be consistently applied during the term of the Agreement.
1.23 "NDA" means a New Drug Application submitted to the FDA in the
United States for the PRODUCT.
1.24 "NET SALES" means:
(a) with respect to a PRODUCT, the amount invoiced by VIVUS, its
AFFILIATES and their SUBLICENSEES for sales of a PRODUCT to a
THIRD PARTY in the TERRITORY in a commercial arms length
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transaction, less estimates which will be adjusted to actual
on a periodic basis of: (i) discounts, including cash
discounts, rebates paid, credit accrued or actually taken, and
retroactive price reductions or allowances actually allowed or
granted from the billed amount, and commercially reasonable
and customary fees paid to distributors (other than to a
distributor that is an AFFILIATE of VIVUS), (ii) credits or
allowances actually granted upon claims, rejections or returns
of such sales of PRODUCT, including recalls, regardless of
VIVUS requesting such recalls, and (iii) taxes, duties or
other governmental charges levied on or measured by the
billing amount when included in billing, as adjusted for the
items of (i) and (ii) above.
(b) It is understood and agreed that sales or transfers of
PRODUCTS between VIVUS, its AFFILIATES and their SUBLICENSEES
shall not constitute a "NET SALES" unless such party is an
end-user of such product.
(c) For the avoidance of doubt, even if the NON-ORAL PRODUCT is
sold in combination with any other active ingredient than the
COMPOUND, full NET SALES for such combination NON-ORAL PRODUCT
shall be applicable for the calculation of supply price under
Section 11.
1.25 "NON-ORAL PRODUCT" means the PRODUCT other than the ORAL PRODUCT,
which NON-ORAL PRODUCT includes, without limitation, the
transurethral product and the topical product.
1.26 "ORAL PRODUCT" means the PRODUCT in oral formulation.
1.27 "PDE5 INHIBITOR" means a phosphodiesterase type-5 inhibitor.
1.28 "PHASE I CLINICAL STUDIES" means that portion of the clinical
DEVELOPMENT PLAN or DEVELOPMENT WORK which provides for the first
introduction into humans of a COMPOUND or PRODUCT including one or
more small scale clinical studies conducted in normal volunteers or
patients to get INFORMATION on PRODUCT safety, tolerability,
pharmacological activity or pharmacokinetics as more fully defined
in 21 C.F.R. 312.21(a).
1.29 "PHASE II CLINICAL STUDIES" means that portion of the clinical
DEVELOPMENT PLAN or DEVELOPMENT WORK, which provides for the
definitive, well controlled clinical trials of a COMPOUND or PRODUCT
in patients, including one or more clinical studies conducted in
patients and designed to indicate clinical efficacy and safety for a
PRODUCT for one or more indications, as well as to obtain an
indication of the dosage regimen required, as more fully defined in
21 C.F.R. 312.21(b).
1.30 "PHASE III CLINICAL STUDIES" means that portion of the clinical
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DEVELOPMENT PLAN or DEVELOPMENT WORK which provides for one or more
large scale clinical studies conducted in a sufficient number of
patients to establish a PRODUCT's clinical efficacy and safety for
one or more indications, as more fully defined in 21 C.F.R.
312.21(c).
1.31 "POST REGISTRATION STUDIES" means clinical studies which are
conducted in a particular country after the obtainment of REGULATORY
APPROVAL from the appropriate regulatory agency in that country,
which studies are conducted for the purpose of enhancing commercial
acceptability of a PRODUCT.
1.32 "PRODUCT" means any product which has been manufactured into a final
dosage form, packaged and labeled for use in the FIELD, and which
contains the COMPOUND as an active ingredient.
1.33 "RAPIDLY DISINTEGRATED TABLET" means the COMPOUND in bulk tablet
formulation which, if appropriately packaged and finished, would
constitute the PRODUCT, which has the feature of disintegrating in
the mouth and can be administered without the use of water.
1.34 "REGULATORY APPROVAL" means all official approvals by government,
pricing or health authorities in a country (or supra-national
organizations, such as the EMEA) which are required for first sale,
including, importation or manufacture of a PRODUCT in such country
where required.
1.35 "SPECIFICATIONS" means the specifications for the supply of the BULK
DRUG SUBSTANCE and BULK DRUG TABLETS to VIVUS, a draft of which is
attached hereto as Appendix-E, and which shall be amended from time
to time as agreed by the Parties and in accordance with the terms of
this Agreement.
1.36 "STEERING COMMITTEE" means representatives from TANABE and VIVUS who
are designated respectively by each Party to review the development
and marketing of the PRODUCT in the TERRITORY pursuant to Article 4.
1.37 "SUBLICENSEE" means, with respect to a particular PRODUCT, a THIRD
PARTY to whom VIVUS or TANABE has granted a license or sublicense
under any TANABE PATENTS, VIVUS PATENTS or INFORMATION to make and
sell such PRODUCT.
1.38 "TANABE KNOW-HOW" means all INFORMATION that TANABE discloses to
VIVUS under this Agreement and is within the CONTROL of TANABE. It
is understood and agreed that TANABE KNOW-HOW does not include
TANABE PATENTS.
1.39 "TANABE PATENT" means the patent which is attached hereto as
Appendix A,
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and any other valid U.S. and foreign patents relating thereto,
including without limitation, all substitutions, reissues, renewals,
reexaminations, patents of addition, extensions, registrations,
confirmations, and all pending patent applications, (including
provisional applications, continuations, divisionals and
continuation-in-part), which is owned or CONTROLLED by TANABE or its
AFFILIATES as of the EFFECTIVE DATE or during the term of this
Agreement. The "TANABE PATENT" shall include but not be limited to
patents directed to new uses of the compounds claimed within the
TANABE PATENT in the FIELD, and patents directed to manufacturing
and formulation of the compounds claimed within the TANABE PATENT in
the FIELD unless otherwise set forth herein. Notwithstanding
anything herein to the contrary, the "TANABE PATENT" shall expressly
exclude any claims within patents directed to formulations of the
RAPIDLY DISINTEGRATED TABLET whether made by or on behalf of TANABE
or its AFFILIATES before or after the EFFECTIVE DATE.
1.40 "TERRITORY" means all the countries in the world excluding Japan,
Democratic People's Republic of Korea (North Korea), Republic of
Korea (South Korea), People's Republic of China (PRC including Hong
Kong and Macao), Republic of China (Taiwan), Singapore, Indonesia,
Malaysia, Thailand, Vietnam and the Philippines.
1.41 "THIRD PARTY" means any entity other than TANABE or VIVUS or their
respective AFFILIATES.
1.42 "TRADEMARK" means the trademark which shall be used for the
marketing of the PRODUCT in the TERRITORY, which trademark may be
the same or different from the trademark used for the marketing of
the PRODUCT outside the TERRITORY.
1.43 "VIVUS KNOW-HOW" means all INFORMATION which VIVUS discloses to
TANABE under this Agreement and is within the CONTROL of VIVUS. It
is understood and agreed that VIVUS KNOW-HOW does not include VIVUS
PATENTS.
1.44 VIVUS PATENT" means valid U.S. and foreign patents, including
without limitation, all substitutions, reissues, renewals,
reexaminations, patents of addition, extensions, registrations,
confirmations, and all pending patent applications, (including
provisional applications, continuations, divisionals and
continuation-in-part), which, absent rights thereunder, would be
infringed by the research, development, manufacture, use,
importation, sale or offer for sale of a COMPOUND or a PRODUCT in
the FIELD, and is owned or CONTROLLED by VIVUS or its AFFILIATE as
of the EFFECTIVE DATE or during the term of this Agreement. The
"VIVUS PATENT" shall include but not limited to patents directed to
new uses of the COMPOUND or PRODUCT in the FIELD, and
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patents directed to formulating the PRODUCT in the FIELD.
2. Grant of Right.
2.1 Grant of License under TANABE PATENT and TANABE KNOW-HOW. TANABE
hereby grants to VIVUS, and VIVUS hereby accepts, an exclusive
license, with the right to grant and authorize sublicenses pursuant
to Section 2.3, to develop, manufacture, have manufactured, use,
import, sell, offer to sell, register and market the PRODUCT (or the
COMPOUND where applicable) in the FIELD in the TERRITORY under the
TANABE PATENT and the TANABE KNOW-HOW. However, it is expressly
understood between the Parties that VIVUS shall not have the right
to manufacture the BULK DRUG SUBSTANCE or BULK DRUG TABLETS unless
otherwise agreed.
2.2 Extension of the License to AFFILIATE. VIVUS shall have the right to
extend its rights under the license granted hereunder to one or more
of its AFFILIATES, provided, that VIVUS shall (i) notify TANABE the
names of such AFFILIATE reasonably prior to such extension, (ii)
retain control over that portion of DEVELOPMENT WORK which such
AFFILIATE is performing and (iii) remain responsible to TANABE for
such AFFILIATE's compliance with all obligations under this
Agreement which apply to such AFFILIATE.
2.3 Sublicense. VIVUS may grant sublicenses under the license granted
under Section 2.1 to one or more THIRD PARTIES; provided, VIVUS: (i)
notifies and consults with TANABE with respect to the selection of
SUBLICENSEES, (ii) uses its reasonable efforts to sublicense to a
THIRD PARTY that will maximize the sale of PRODUCTS, and (iii) uses
its best efforts to include in any such sublicense the obligation
that such SUBLICENSEE not develop or commercialize or in-license
another PDE5 INHIBITOR compound for a period of five (5) years
following the effective date of such sublicense agreement. VIVUS
shall (i) retain control over that portion of DEVELOPMENT WORK which
such SUBLICENSEE is performing, if any, and (ii) remain responsible
to TANABE for such SUBLICENSEE's compliance with all obligations
under this Agreement which apply to such SUBLICENSEE. In case of
sublicense to a THIRD PARTY, the performance of the obligations of
any such SUBLICENSEE shall be deemed guaranteed by VIVUS.
2.4 Tanabe's Co-Promotion Right. Notwithstanding the foregoing Section
2.1, TANABE shall have the option to obtain the right to co-promote
with VIVUS or its SUBLICENSEE up to (***) of the promotional efforts
in the TERRITORY for the ORAL PRODUCT, such option to be exercised
and negotiated within five (5) months following VIVUS' disclosure to
TANABE of the data and report for such ORAL PRODUCT following
completion of the first successful PHASE II CLINICAL STUDY for such
ORAL PRODUCT. The terms of such agreement shall be negotiated in
good faith and reasonably agreed by both parties. The promotional
efforts of each Party shall be determined by
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market potential as well as the marketing strength of each Party and
its AFFILIATES (or SUBLICENSEE in case of VIVUS) in that country or
region.
2.5 License under VIVUS PATENT and VIVUS KNOW-HOW to TANABE for PRODUCT.
VIVUS hereby grants to TANABE the following right under VIVUS PATENT
and VIVUS KNOW-HOW:
(a) for the term of this Agreement and thereafter, an exclusive
and royalty-free license to develop, make, have made, use,
import, sell, offer to sell, register and market any ORAL
PRODUCT being developed or sold hereunder by VIVUS, with a
right to sublicense, solely outside the TERRITORY in the
FIELD.
(b) during the term of this Agreement, an exclusive option to
obtain an exclusive license to develop, use, import, sell,
offer to sell, register and market any NON-ORAL PRODUCT being
developed or sold hereunder by VIVUS, with a right to
sublicense, outside the TERRITORY in the FIELD for the term of
this Agreement and thereafter. The terms and conditions of
such license shall be negotiated in good faith and shall be
based on reasonable terms common in the pharmaceutical
industry, including a reasonable royalty payable to VIVUS for
using the VIVUS PATENT and VIVUS KNOW-HOW relating to such
NON-ORAL PRODUCT.
(c) during the term of this Agreement and thereafter, a
semi-exclusive and royalty-free license to use, import, sell,
offer to sell, register and co-promote any COMPOUND or PRODUCT
being developed or sold hereunder by VIVUS in the TERRITORY,
solely to the extent that TANABE elects and is granted the
right to perform co-promotion of such PRODUCT pursuant to
Section 2.4.
Should royalties be due to a THIRD PARTY under any sublicense
granted to TANABE hereunder, TANABE shall be obligated to pay such
royalties and comply with all terms and conditions of such THIRD
PARTY license.
2.6 Non-compete. VIVUS agrees not to develop, market, in-license or
out-license any PDE5 INHIBITOR compounds other than the COMPOUNDS,
for use in the FIELD during the term of this Agreement. TANABE shall
have the right to in-license and/or conduct pre-clinical work on any
PDE5 INHIBITOR compounds, other than the COMPOUNDS, for use in the
FIELD (each a "Next Generation Compound"); provided, TANABE shall
grant to VIVUS an exclusive right of first refusal to conduct
clinical studies in order to develop and commercialize within the
TERRITORY such Next Generation Compounds owned or CONTROLLED by
TANABE. Such right may be exercised by VIVUS within four (4) years
after first commercial sale of a PRODUCT by VIVUS. The terms of such
agreement shall be negotiated in good faith and mutually agreeable
to both Parties; provided, in no event shall VIVUS be required to
pay any upfront licensing fee and any milestone fees for the rights
to such Next Generation
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Compound, which fees it has already paid under the terms of this
Agreement for the COMPOUND (e.g. if VIVUS elects to license in a
Next Generation Compound after it has already paid the PHASE II
CLINICAL STUDY milestone for a COMPOUND, then it shall have no
obligation to pay a milestone payment upon commencement of PHASE II
CLINICAL STUDIES for such Next Generation Compound). It is
understood and agreed that during such period (i.e. four (4) years
after first commercial sale of a PRODUCT by VIVUS), TANABE and its
AFFILIATES may not grant a THIRD PARTY the right to conduct clinical
studies on Next Generation Compounds in any country in the world;
provided, if VIVUS exercises its right of first refusal to a
particular Next Generation Compound pursuant to this Section, TANABE
shall have the right to grant a THIRD PARTY the right to conduct
clinical studies on such Next Generation Compound solely outside
TERRITORY.
3. Disclosure and Exchange of INFORMATION.
3.1 Disclosure of INFORMATION. Within forty five (45) days following the
EFFECTIVE DATE, TANABE shall disclose and make available to VIVUS
without charge, all preclinical, clinical or regulatory INFORMATION,
including copies of all preclinical and clinical reports, (i) which
is known by TANABE, (ii) which directly concerns the COMPOUND or the
PRODUCT and (iii) which TANABE in its commercially reasonable sole
discretion considers to be useful or necessary for VIVUS to exercise
the license granted under Article 2. Thereafter, during the term of
the Agreement, each Party shall disclose and make available to the
other Party without charge, all relevant INFORMATION, including
copies of all preclinical and clinical reports, known by such Party
which in its commercially reasonable sole discretion it considers to
be useful or necessary for the other Party to exercise the rights
and licenses expressly granted herein. The exchanges of INFORMATION
hereunder shall be undertaken in written or oral form as soon as
reasonably possible after the obtainment thereof, as necessary, and
through regular meetings. The initial disclosure and the exchanges
of INFORMATION hereunder shall be (i) made in English, (ii)
undertaken in written form as soon as reasonably possible after the
obtainment thereof, (iii) treated as confidential information of the
Party disclosing such INFORMATION subject to Article 18 and (iv)
made in the following manner:
(a) the Party disclosing the INFORMATION (hereinafter referred to
as the "Disclosing Party") shall provide to the other Party
(hereinafter referred to as the "Receiving Party") the list of
the INFORMATION in English.
(b) promptly upon the receipt of such list, the Receiving Party
shall indicate to the Disclosing Party, in writing, the items
in the list, of which it desires to receive the content from
the Disclosing Party, and
(c) promptly after the receipt of the notice indicating the items
from the Receiving Party, the Disclosing Party shall provide
to the Receiving Party
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the content of the items which were indicated pursuant to
foregoing Section 3.1(b).
Each Party agrees not to use INFORMATION disclosed by the other
Party, other than for the rights and licenses expressly granted
herein. Notwithstanding the foregoing, INFORMATION relating to the
manufacture of the BULK DRUG SUBSTANCE or BULK DRUG TABLETS need not
be disclosed by TANABE, except as required for regulatory filings,
submissions, approvals and/or audits.
3.2 TANABE INFORMATION Disclosure Prior to the EFFECTIVE DATE. TANABE
represents and warrants that it has produced or provided access to
VIVUS prior to the EFFECTIVE DATE all material INFORMATION relating
to the safety of the COMPOUND or the PRODUCT, including, but not
limited to, material INFORMATION concerning ADVERSE DRUG REACTION,
toxicity or sensitivity reactions and incidents and the severity
thereof with respect to any tests or studies conducted by TANABE or
its contractors relating to the COMPOUND or the PRODUCT. In
addition, TANABE represents and warrants that it has provided access
to VIVUS prior to the EFFECTIVE DATE, all material INFORMATION,
relating to the efficacy of the COMPOUND and the PRODUCT and
preclinical and clinical work and studies relating to the COMPOUND
and the PRODUCT.
3.3 Disclosure of INFORMATION from THIRD PARTY. In case either Party
hereto intends to have the research, development, manufacture, use
or marketing of the COMPOUND or the PRODUCT conducted by any THIRD
PARTY or otherwise license such right to any THIRD PARTY (to the
extent permitted under this Agreement), such Party shall include in
the agreement to be concluded with such THIRD PARTY a provision
allowing such Party to disclose to and have used by the other Party
any and all information, techniques, data, inventions, practices,
methods, knowledge, know-how, skill, experience or test data
relating to COMPOUND or PRODUCT for use in the FIELD which is
disclosed to such Party by such THIRD PARTY.
4. STEERING COMMITTEE.
The STEERING COMMITTEE shall have the primary role in ensuring the
success of the PRODUCT, during the development and marketing in the
TERRITORY. The STEERING COMMITTEE will operate in accordance with
the STEERING COMMITTEE Guidelines attached hereto as Appendix-C.
5. Development.
5.1 DEVELOPMENT WORK. VIVUS shall, at its own cost and expense, conduct
the DEVELOPMENT WORK to seek REGULATORY APPROVAL of the PRODUCTS in
the TERRITORY. VIVUS shall not, however, be responsible for
DEVELOPMENT WORK as it relates to seeking REGULATORY APPROVAL of the
PRODUCTS outside the TERRITORY or the manufacturing scale-up and
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production of validation batches of the BULK DRUG TABLETS (or the
BULK DRUG SUBSTANCE where applicable). Rather, such shall be
TANABE's responsibility at its own costs and expense. Such work as
the manufacturing scale-up, production of validation batches and the
manufacture of the BULK DRUG TABLETS and BULK DRUG SUBSTANCE shall
be carried out by TANABE using reasonable commercial efforts and in
a timely manner in accordance with the DEVELOPMENT PLAN so as not to
delay VIVUS' initiation of CLINICAL STUDIES, filing of DRUG APPROVAL
APPLICATIONS or launch of the PRODUCTS. It is understood and agreed
by the Parties that VIVUS may conduct its activities under this
Article 5 by itself or through its designees, subject to TANABE's
prior approval, such approval not to be unreasonably withheld.
TANABE agrees to act promptly in evaluating potential designees and
in no case shall take more than ten (10) business days to render its
decision.
5.2 CLINICAL STUDIES Protocols. VIVUS shall inform TANABE, in writing,
of the draft protocol for such CLINICAL STUDIES for TANABE's review
and consideration, before commencement of any CLINICAL STUDIES for
the COMPOUND or the PRODUCTS conducted by it in the TERRITORY. Once
so informed, TANABE will have ten (10) business days to review and
provide comments on the draft protocol. In addition, should TANABE
request any change or addition to such draft protocol for the
purpose of using the data generated under the DEVELOPMENT WORK in
the TERRITORY for TANABE's development outside the TERRITORY, then
TANABE shall promptly notify VIVUS to such effect, and VIVUS shall
accommodate such request to the extent such request is reasonably
acceptable by VIVUS. If such request causes additional costs to
VIVUS, TANABE shall reimburse such additional costs to VIVUS in
full.
5.3 DRUG APPROVAL APPLICATION and REGULATORY APPROVAL. VIVUS shall use
commercially reasonable efforts to undertake the compilation,
submission and prosecution, in timely manner, of all necessary data,
documents and DRUG APPROVAL APPLICATION in a format acceptable to
the applicable regulatory authorities in the TERRITORY, including
but not limited to the FDA and the EMEA, required to obtain
REGULATORY APPROVAL for the PRODUCTS for use in the FIELD. This
shall include obtaining all necessary labeling for the PRODUCTS. In
addition, VIVUS shall use commercially reasonable efforts to
maintain the REGULATORY APPROVAL obtained under this Section 5.3.
VIVUS shall solely own all such DRUG APPROVAL APPLICATION and
REGULATORY APPROVAL in the TERRITORY. VIVUS shall collaborate with
TANABE to the extent legally permitted, in order to enable TANABE to
prepare, if necessary, DRUG APPROVAL APPLICATION in the FIELD, and
obtain, if necessary, REGULATORY APPROVALS for the PRODUCTS outside
the TERRITORY.
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5.4 Costs and Expense. VIVUS shall be fully responsible for bearing all
costs and expense associated with undertaking and completing said
registration activities in the TERRITORY, including but not limited
to the costs of preparing and prosecuting DRUG APPROVAL APPLICATION
and fees payable to regulatory agencies in obtaining and maintaining
REGULATORY APPROVAL. TANABE shall be fully responsible for bearing
all costs and expense associated with undertaking and completing
said registration activities outside of the TERRITORY, including but
not limited to the costs of preparing and prosecuting DRUG APPROVAL
APPLICATION and fees payable to regulatory agencies in obtaining and
maintaining REGULATORY APPROVAL.
5.5 Diligence. VIVUS shall use such diligence as giving the first or top
priority to the development of the COMPOUND into the PRODUCT and the
obtainment of its REGULATORY APPROVAL, among those products which
are then developed by its clinical development team for urinary
diseases. If TANABE in its reasonable judgment concludes that VIVUS
has failed with respect to such diligence, it shall notify VIVUS in
writing and VIVUS shall have ninety (90) days to cure such failure.
If VIVUS has not cured such failure within such time, and if such
failure cannot be justified in a commercially reasonable manner
consistent with the pharmaceutical business and scientific judgment
(which cause includes but not limited to such case where the result
of the CLINICAL STUDIES negatively and drastically affects the
commercial potential of the PRODUCT), such failure may constitute a
breach of this Agreement and TANABE may terminate this Agreement
pursuant to the terms of Section 20.2. It is understood and agreed
that any dispute arising out of the interpretation or enforcement of
this Section shall be settled by arbitration pursuant to the
provisions of Article 28.
5.6 DEVELOPMENT PLAN. VIVUS shall prepare, in consultation with TANABE,
and provide to the STEERING COMMITTEE, within sixty (60) days after
the EFFECTIVE DATE , a reasonably detailed DEVELOPMENT PLAN proposal
pursuant to which the DEVELOPMENT WORK will be performed. The
STEERING COMMITTEE shall review such proposal and approve an initial
DEVELOPMENT PLAN, with such changes as the STEERING COMMITTEE agree
to the plan proposed by VIVUS, no later than thirty (30) days after
its submission by VIVUS, such initial DEVELOPMENT PLAN to be
attached hereto as Exhibit B. The STEERING COMMITTEE shall review
and update the DEVELOPMENT PLAN from time to time as necessary.
5.7 Development Milestone. If any of the following milestones is in
jeopardy of not being met in the United States or in any of the
MAJOR EUROPEAN COUNTRY, the STEERING COMMITTEE shall discuss and
determine the action plan to catch up with such milestone in
jeopardy.
Milestone Timing
--------- ------
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(a) Commencement of the first PHASE Date, which represents six (6) months
II CLINICAL STUDIES for any after the commencement of PHASE II
PRODUCT. CLINICAL STUDIES set forth in the
initial DEVELOPMENT PLAN, to be
provided once the DEVELOPMENT PLAN is
agreed upon pursuant to Section 5.6.
(b) Commencement of the first PHASE Date, which represents six (6) months
III CLINICAL STUDIES for any after the commencement of PHASE III
PRODUCT. CLINICAL STUDIES set forth in the
initial DEVELOPMENT PLAN, to be
provided once the DEVELOPMENT PLAN is
agreed upon pursuant to Section 5.6.
5.8 Submission of the Files relating to the REGULATORY APPROVAL. VIVUS
shall promptly furnish TANABE with copies of all the files submitted
to the competent authorities to apply for the REGULATORY APPROVAL,
copies of the certificates of the REGULATORY APPROVAL obtained, and
any communications received from or decisions made by the competent
authorities.
6. Marketing.
6.1 Marketing Efforts. VIVUS agrees to use (i) commercially reasonable
efforts consistent with its normal business practices to maximize
the market potential of the PRODUCT and (ii) at least the same
efforts in any and all aspects including without limitation, call
number, budget and promotional cost, as it uses to market its own
products. VIVUS agrees to use its best commercial efforts to market
the PRODUCT within six (6) months of REGULATORY APPROVAL for such
PRODUCT in each country in the TERRITORY.
With respect to any country in the TERRITORY, if VIVUS does not
launch a PRODUCT within three (3) years after the earliest DATE OF
FIRST SALE of such PRODUCT in the United States or any MAJOR
EUROPEAN COUNTRY, VIVUS agrees that the license granted hereunder in
such country for such PRODUCT shall revert to TANABE upon request by
TANABE, unless VIVUS can reasonably justify that, with respect to
such country in the TERRITORY, (i) the launch of such PRODUCT within
three (3) years would be detrimental to the global development and
commercial viability of such PRODUCT or (ii) the launch of the
PRODUCT within three (3) years has not been achieved due to the
REGULATORY APPROVAL not being obtained in spite of VIVUS' continuous
efforts pursuant to Section 5.5 and the foregoing provisions of the
first paragraph of this Section 6.1, or (iii) the launch of the
PRODUCT within three (3) years has not been achieved due to other
governmental constraints and/or controls.
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6.2 POST-REGISTRATION STUDIES. VIVUS shall have the right to conduct by
itself or through its designee POST-REGISTRATION STUDIES in the
TERRITORY for PRODUCTS sold by VIVUS, its AFFILIATES or its
SUBLICENSEES. If VIVUS decides to conduct POST-REGISTRATION STUDIES,
VIVUS shall inform TANABE and shall take TANABE's opinion into due
consideration in conducting such studies. The results of such
POST-REGISTRATION STUDIES will be fully shared with TANABE. ADVERSE
DRUG REACTIONS and all other safety INFORMATION occurring in
POST-REGISTRATION STUDIES will be reported as described in Article
19.
6.3 Pricing, Pricing Approvals and PRODUCT Distribution. To the extent
reasonably possible and beneficial for the marketability of the
PRODUCT, VIVUS shall use its reasonable efforts to obtain the
optimum pricing or reimbursement price for PRODUCTS. VIVUS shall set
all optimum prices for all PRODUCTS in the TERRITORY and shall be
responsible for distribution of each PRODUCT in the TERRITORY and
shall record all sales for PRODUCTS in the TERRITORY.
6.4 Product Recalls. If VIVUS believes that a recall of a PRODUCT sold
by it is necessary, VIVUS shall promptly undertake such recall
following notification to TANABE. The decision of VIVUS concerning
such recall shall be final. Likewise, if TANABE believes that a
recall of a PRODUCT sold by it outside of the TERRITORY is
necessary, TANABE may promptly undertake such recall following
notification to VIVUS. The decision of TANABE concerning such recall
shall be final.
6.5 Advertising and Promotion. With respect to printed promotional
materials (including advertisements appearing in journals or
internets), printed educational materials, PRODUCT labeling, and
documentary INFORMATION, TANABE's name shall appear on such
materials and reference to TANABE shall be in the form that
references TANABE as the licensor, provided such is permitted by the
applicable laws and regulations. All promotional and advertising
materials to be used by VIVUS for the PRODUCT to be sold by it which
includes but not limited to the materials mentioned above, shall be
prepared by VIVUS or its designee at their own costs and expense.
VIVUS shall send to TANABE copies of such materials for the PRODUCT
to be sold by it prior to its use.
6.6 Sales Forecast and Marketing Strategies. VIVUS shall inform TANABE,
six (6) months in advance, of a sales forecast as well as marketing
strategies for the PRODUCT for each CALENDAR YEAR. TANABE may give
VIVUS opinions and suggestions to assist VIVUS' activities for
marketing of the PRODUCT. Such forecasts may be adjusted quarterly
by VIVUS.
6.7 Reports on Marketing. VIVUS shall promptly render to TANABE the
following
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reports:
(a) Semi-annual reports on the sales of the PRODUCT sold by VIVUS
in terms of units and value,
(b) Semi-annual reports on the quantities of the BULK DRUG
SUBSTANCE and the PRODUCT held by VIVUS in their inventories,
and
(c) Reports, when requested by TANABE, outlining the situation of
competitors' products and other market information relating to
the PRODUCT in the TERRITORY.
7. Manufacture and Supply of the BULK DRUG TABLETS and BULK DRUG SUBSTANCE.
7.1 Manufacture and Supply of the BULK DRUG TABLETS and BULK DRUG
SUBSTANCE. TANABE shall use its commercially reasonable efforts to
manufacture and supply to VIVUS, either by itself or by a THIRD
PARTY manufacturer, BULK DRUG TABLETS for the ORAL PRODUCT and BULK
DRUG SUBSTANCE for the formulation and manufacturing of NON-ORAL
PRODUCTS. Detailed conditions for manufacture and supply of the BULK
DRUG TABLETS and BULK DRUG SUBSTANCE shall be set forth in
Appendix-D.
7.2 Supply during CLINICAL STUDIES. TANABE shall supply the BULK DRUG
SUBSTANCE reasonably needed by VIVUS for pre-clinical studies and
CLINICAL STUDIES. The BULK DRUG SUBSTANCE shall be supplied, (i)
free of charge, for all pre-clinical studies, PHASE I CLINICAL
STUDIES and PHASE II CLINICAL STUDIES, and (ii) at the price of
(***) per kilogram (***) (FCA place of manufacture, Incoterms 2000)
for all PHASE III CLINICAL STUDIES, or to the extent necessary,
validation for manufacture of the PRODUCTS.
7.3 Manufacture of the BULK DRUG SUBSTANCE and BULK DRUG TABLETS by a
THIRD PARTY. In the event TANABE fails to supply BULK DRUG SUBSTANCE
and/or BULK DRUG TABLETS to VIVUS (i) for conducting CLINICAL
STUDIES, or (ii) that meet the SPECIFICATIONS, or (iii) for
fulfilling market demand for the PRODUCTS, the Parties shall meet
and discuss in good faith a remedy for such failure. In the event
that TANABE is unable to cure such failure within a reasonable
period of time, VIVUS shall have the right to designate a THIRD
PARTY manufacturer, reasonably acceptable to TANABE, to manufacture
and supply the BULK DRUG SUBSTANCE and/or BULK DRUG TABLETS, as
applicable, to VIVUS. In such event, TANABE shall provide reasonable
assistance to VIVUS and such THIRD PARTY manufacturer to ensure that
supply of the BULK DRUG SUBSTANCE and/or BULK DRUG
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TABLETS to VIVUS is not unreasonably disrupted. TANABE shall
maintain a commercially reasonable quantity of BULK DRUG SUBSTANCE
and BULK DRUG TABLETS at two remote locations in order to ensure a
continuous adequate supply of each to VIVUS.
8. Manufacture of the PRODUCT.
8.1 Manufacture of the PRODUCT. VIVUS shall be responsible for
manufacturing the PRODUCT using the BULK DRUG SUBSTANCE and BULK DRUG
TABLETS supplied by TANABE pursuant to Article 7. It is understood and
agreed that VIVUS' manufacture of the PRODUCT using BULK DRUG TABLETS
shall be limited to packaging and labeling of such PRODUCTS.
8.2 Inspection of Samples by TANABE. TANABE shall have the right to be
provided with reasonable quantities of free of charge samples of the
PRODUCT in order to inspect the packaging of the PRODUCT, such
quantities to be mutually agreed by the Parties.
8.3 Manufacture of the PRODUCT by a THIRD PARTY. In case VIVUS wishes to
have manufactured the PRODUCT hereunder from the BULK DRUG SUBSTANCE
or BULK DRUG TABLETS by a THIRD PARTY manufacturer, VIVUS shall inform
TANABE of the name of such THIRD PARTY. TANABE shall have the right to
approve or reject within sixty (60) days after receipt of such written
notification indicating the name of such THIRD PARTY, such approval
not to be unreasonably withheld, provided that in the event VIVUS does
not receive a written answer from TANABE indicating its approval or
rejection of such THIRD PARTY within such sixty (60) days period,
TANABE shall be deemed to have approved the appointment of such THIRD
PARTY.
8.4 Inspection of the Plants. Each Party may upon reasonable notice to the
other Party inspect the plant and premises used by, and processes and
records of the packaging or storage employed by a Party (or THIRD
PARTY manufacturer where applicable) in connection with the BULK DRUG
SUBSTANCE, BULK DRUG TABLETS, or the PRODUCT, as applicable.
8.5 Supply of the NON-ORAL PRODUCT to TANABE. If TANABE wishes to purchase
the NON-ORAL PRODUCT manufactured by or on behalf of VIVUS pursuant to
Section 8.1 for use in its development, registration, use, sale or
marketing outside the TERRITORY and in the FIELD, VIVUS shall supply
TANABE, to the extent possible, with the NON-ORAL PRODUCT on terms to
be negotiated pursuant to Section 2.5(b) of this Agreement.
9. Down Payment upon Signing.
In consideration of the licenses granted by TANABE to VIVUS hereunder,
VIVUS shall make the following payments to TANABE:
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(a) a non-refundable and non-creditable signing down payment to
TANABE of (***), within one (1) week after the later effective
date of signature of this Agreement by both Parties; and
(b) a non-refundable and non-creditable payment to TANABE of
(***), by February 28, 2001, subject to VIVUS satisfaction of
the results of (i) its due diligence review of the INFORMATION
provided by TANABE and (ii) Dr. (***) experiments with T-1790
(VIVUS shall provide the results of Dr. (***) experiments with
T-1790 to TANABE). If VIVUS is not satisfied with such results
or fails to make such payment, this Agreement shall terminate.
10. Milestone Payments.
In further consideration of the licenses granted by TANABE to VIVUS
hereunder, VIVUS shall make the following non-refundable and
non-creditable milestone payments to TANABE as such milestones are
achieved:
(a) For the ORAL PRODUCT for male erectile dysfunction:
(1) (***), upon the enrollment of the first patient in the first
PHASE II CLINICAL STUDIES in the TERRITORY.
(2) (***), upon the enrollment of the first patient in the first
PHASE III CLINICAL STUDIES in the TERRITORY,
(3) (***), upon the first submission of a NDA (or any equivalent
license in the TERRITORY),
(4) (***), upon obtainment of REGULATORY APPROVAL in the United
States, and
(5) (***) upon obtainment of the first REGULATORY APPROVAL in any
MAJOR EUROPEAN COUNTRY.
(b) For the NON-ORAL PRODUCT for male erectile dysfunction:
(1) (***), upon the enrollment of the first patient in the first
PHASE II CLINICAL STUDIES in the TERRITORY,
(2) (***), upon the first submission of a NDA (or any equivalent
license in the TERRITORY), and
(3) (***), upon obtainment of REGULATORY APPROVAL in the United
States, and (***) upon obtainment of the first REGULATORY
APPROVAL in any MAJOR EUROPEAN COUNTRY.
(c) For the ORAL PRODUCT for female sexual dysfunction:
(1) (***), upon the first submission of a NDA (or any equivalent
license) in the TERRITORY, and
(2) (***) upon obtainment of REGULATORY APPROVAL in the United
States, and (***), upon obtainment of the first REGULATORY
APPROVAL in any MAJOR EUROPEAN COUNTRY.
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(d) For the NON-ORAL PRODUCT for female sexual dysfunction:
(1) (***), upon the enrollment of the first patient in the first
PHASE III CLINICAL STUDIES in the TERRITORY,
(2) (***), upon the first submission of a NDA (or any equivalent
license) in the TERRITORY, and
(3) (***) upon obtainment of REGULATORY APPROVAL in the United
States, and (***), upon obtainment of any REGULATORY APPROVAL
in any MAJOR EUROPEAN COUNTRY.
(e) (***), when the total NET SALES during any CALENDAR YEAR for the
ORAL PRODUCT sold by VIVUS, its AFFILIATES and its SUBLICENSEES
exceed (***), the amount of which shall be calculated using the
currency conversion method consistent with the method set forth in
Section 12.3.
VIVUS shall notify TANABE in writing within thirty (30) days upon
the achievement of each milestone, such notice to be accompanied by
the appropriate milestone payment. It is understood and agreed that
each milestone payment in Section 10 (a) through (e) above shall be
paid only once upon achievement of the particular milestone.
11. Supply Price.
11.1 Supply Price for ORAL PRODUCT. The supply price (FCA place of
manufacture, Incoterms 2000) to be paid to TANABE by VIVUS for its
commercial use of the BULK DRUG TABLETS for ORAL PRODUCT shall be
calculated based on a percentage of annual (CALENDAR YEAR basis)
total NET SALES in the TERRITORY according to the following:
Annual Total NET SALES in the TERRITORY Supply Price
--------------------------------------- ------------
For the portion up to (***) (***) of the NET SALES
For the portion in excess of (***) and (***) of the NET SALES
up to (***)
For the portion in excess of (***) (***) of the NET SALES
11.2 Supply Price for NON-ORAL PRODUCT. The supply price (FCA place of
manufacture, Incoterms 2000) to be paid to TANABE by VIVUS for its
commercial use of the BULK DRUG SUBSTANCE for the formulation and
manufacture of NON-ORAL PRODUCT shall be calculated based on a
percentage of annual (CALENDAR YEAR basis) total NET SALES in the
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TERRITORY according to the following:
Annual Total NET SALES in the TERRITORY Supply Price
--------------------------------------- ------------
For the portion up to (***) (***) of the NET SALES
For the portion in excess of (***) and (***) of the NET SALES
up to (***)
For the portion in excess of (***) (***) of the NET SALES
11.3 Revision of Supply Price. Notwithstanding the foregoing Section 11.1
and 11.2, in case either Party cannot obtain a reasonable profit
from the PRODUCT business, the Parties shall discuss in good faith
to revise the supply price, taking into consideration (i) their
MANUFACTURING COST, (ii) NET SALES per one (1) treatment and (iii)
the balance of the profit of the Parties, provided however that, in
no event TANABE shall be obliged to supply the BULK DRUG TABLETS or
the BULK DRUG SUBSTANCE at the price less than their MANUFACTURING
COST.
11.4 Retroactive Adjustment. The supply price shall be determined based
on the average NET SALES of the immediately preceding CALENDAR
QUARTER; provided, however, that if the actual amount of the NET
SALES is not available, an estimated NET SALES shall be used for the
calculation of the supply price and the necessary retroactive
adjustment shall be made immediately after the actual amount of the
NET SALES becomes available.
11.5 Cash Remittance. For all purchases of the BULK DRUG SUBSTANCE from
TANABE, VIVUS shall pay to TANABE by means of cash remittance (by
bank transfer) payable within sixty (60) days after the date of
TANABE's invoice.
12. Payment of the Down Payment, Milestone Payments and Supply Price Payments.
The following Sections 12.1 through 12.7 shall apply to the supply price
payments under Article 11, and the applicable parts of Sections 12.1
through 12.7 shall apply also to the down payment under Article 9 and
milestone payments under Article 10:
12.1 Report of Sales Amount. Within sixty (60) days from the end of each
CALENDAR QUARTER, VIVUS shall send TANABE the reports of such
CALENDAR QUARTER describing the invoiced sales amount of the PRODUCT
and the NET SALES in such CALENDAR QUARTER along with its
calculation. VIVUS shall keep accurate records in sufficient detail
to enable any payment payable hereunder to be determined.
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12.2 Payment Account. All payments including down payment, milestone
payments and supply price payment shall be made by wire transfer, if
possible, to an account designated by TANABE from time to time;
provided, however, that in the event TANABE fails to designate such
account, VIVUS may remit such payments to TANABE to the address
applicable for the receipt of notices hereunder; provided, further,
that any notice by TANABE of such account or change in such account,
shall not be effective until thirty (30) days after receipt thereof
by VIVUS, except for the initial down payment under Article 9 which
shall be notified to VIVUS reasonably prior to or upon the later
effective date of signature of this Agreement by both Parties;.
12.3 Currency. The supply price payment shall be made in United States
Dollars or any successor currency. The method of currency conversion
from local currency into United States Dollars shall be made by
using the exchange rate for the purchase of United States Dollars
reported by the Wall Street Journal on the last business day of the
CALENDAR QUARTER to which such payments relate.
12.4 Right to Audit. TANABE shall have the right, upon prior notice to
VIVUS, not more than once in any CALENDAR YEAR, through an
independent certified public accountant selected by TANABE and
acceptable to VIVUS, which acceptance shall not be unreasonably
refused, to have access during normal business hours to those
records of VIVUS as may be reasonably necessary to verify the
accuracy of the reports required to be furnished by VIVUS pursuant
to Section 12.1. If such independent certified public accountant's
report correctly shows any underpayment of supply price by VIVUS,
VIVUS shall remit to TANABE within thirty (30) days after VIVUS'
receipt of such report:
(a) the amount of such underpayment;
(b) interest on the underpayment which shall be calculated
pursuant to Section 12.5; and
(c) the reasonably necessary fees and expenses of such independent
certified public accountant performing the audit, if such
underpayment exceeds five (5%) percent of the total supply
price payment owed for the CALENDAR YEAR then being reviewed.
Otherwise, TANABE's accountant's fees and expenses shall be
borne by TANABE. Any overpayment of supply price payment shall
be fully creditable against future supply price payment
payable in any subsequent periods. Upon the expiration of
thirty-six (36) months following the end of any CALENDAR YEAR,
the calculation of supply price payment payable with respect
to such CALENDAR YEAR shall be binding and conclusive on
TANABE and VIVUS, unless an audit for such CALENDAR YEAR is
initiated before expiration of such thirty-six (36) months.
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Should VIVUS not agree with the report, VIVUS may submit its own
report within ninety (90) days of receiving TANABE's report. If the
two reports differ, the Parties shall meet and discuss how to
resolve the discrepancy. If the Parties fail to reach agreement, the
Parties will resolve the dispute as recited in Article 28.
12.5 Overdue Payment. In the event any payment due hereunder is not made
when due, the payment shall accrue interest (beginning on the date
such payment is due) calculated at the rate of one (1%) percent per
month and such payment when made shall be accompanied by all
interest so accrued.
12.6 Record of Sales. Notwithstanding anything herein to the contrary,
VIVUS shall keep, or cause to be kept, records of the sales of the
PRODUCT under this Agreement for a period of seven (7) years after
the expiration of each CALENDAR YEAR. Upon the request by TANABE,
VIVUS shall supply TANABE with such records which may be submitted
to the tax authority, and shall give TANABE any reasonable
assistance in relation thereto.
12.7 Taxes. TANABE shall pay any and all taxes levied on account of down
payment, milestone payments and supply price payments it receives
under this Agreement. If laws or regulations require that taxes be
withheld, VIVUS will (i) deduct those taxes from the otherwise
remittable payments, (ii) timely pay the taxes to the proper taxing
authority, and (iii) give TANABE any reasonable assistance, which
shall include the provision of such documentation as may be required
by the tax authority to enable TANABE to claim exemption from or
obtain a repayment of or reduction of tax.
13. Inventory.
VIVUS shall maintain commercially reasonable quantities of the BULK
DRUG SUBSTANCE and the PRODUCT. Such inventories shall be
commercially reasonably sufficient to meet the market requirements.
14. Maintenance and Abandonment of Patent.
Each Party shall use its reasonable efforts to prosecute and
maintain its respective patents worldwide (the TANABE PATENTS with
respect to TANABE and the VIVUS PATENTS with respect to VIVUS);
provided TANABE shall reimburse VIVUS' patent costs for prosecuting
and maintaining the VIVUS PATENTS outside the TERRITORY, such
reimbursement creditable against any payments due by TANABE under
any license obtained pursuant to Section 2.5(b). TANABE shall
promptly give notice to VIVUS of the grant, lapse, revocation,
surrender, invalidation or abandonment of any TANABE PATENT. VIVUS
shall promptly give notice to TANABE of the grant, lapse,
revocation, surrender, invalidation or abandonment of any VIVUS
PATENT. In the event that applicable law in any country of TERRITORY
provides for the
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extension of the term of any TANABE PATENT which TANABE is
prosecuting or maintaining, TANABE shall apply for and use its
reasonable efforts to obtain such an extension and VIVUS agrees to
cooperate with TANABE in obtaining such extension. In the event that
applicable law in any country of TERRITORY provides for the
extension of the term of any VIVUS PATENT which VIVUS is prosecuting
or maintaining, VIVUS shall apply for and use its reasonable efforts
to obtain such an extension and TANABE agrees to cooperate with
VIVUS in obtaining such extension.
15. Infringement
15.1 THIRD PARTY Infringement. If VIVUS or TANABE becomes aware of any
activity that it believes represents a substantial infringement of
the TANABE PATENT, the Party obtaining such knowledge shall promptly
advise the other of all relevant facts and circumstances pertaining
to the potential infringement. VIVUS and TANABE shall thereafter
consult and cooperate fully to determine a course of action,
including but not limited to, the commencement of legal action to
terminate any infringement of the TANABE PATENT. However, TANABE
shall have the first right to initiate and prosecute such legal
proceedings, at its own expense and in the name of TANABE, and to
control the defense of any declaratory judgment action relating to
the TANABE PATENT. VIVUS shall cooperate with TANABE in such effort,
including being joined as a party to such action if necessary.
15.2 VIVUS Right to Pursue THIRD PARTY Infringers. If TANABE does not
proceed, within sixty (60) days after receiving notice from VIVUS of
a potential infringement of TANABE PATENT or within sixty (60) days
after providing VIVUS with notice of such infringement, either (i)
in terminating such infringement or (ii) in instituting an action to
prevent continuation thereof, or if TANABE notifies VIVUS that it
does not plan to terminate the infringement of TANABE PATENT or to
institute any such action, then VIVUS shall have the right to do so.
TANABE shall cooperate with VIVUS in such effort, including being
joined as a party to such action if necessary.
15.3 Updating. Each Party shall keep informed of development in any
action or proceeding relating to the TANABE PATENT or VIVUS PATENT
including, to the extent permissible by law, the state of any
settlement negotiations and the terms of any offer related thereto.
15.4 Damage Award or Settlement Payments. Any damage award or settlement
payments made in connection with any action relating to infringement
of TANABE PATENT in the TERRITORY, whether obtained by judgment,
settlement or otherwise shall belong to the Party which instituted
the action in accordance with this Article 15; provided, where such
lawsuit or action was initiated by TANABE and VIVUS has joined and
actively participated thereto, any recovery from such lawsuit shall
be used to: (i) first reimburse TANABE for
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expenses actually incurred by TANABE in connection with such lawsuit
(including attorneys fees and professionals fees), (ii) then to
reimburse VIVUS for expenses actually incurred by VIVUS in
connection with such lawsuit (including attorneys fees and
professionals fees), and (iii) then the remainder, if any, shall be
allocated between TANABE and VIVUS on a (***) basis respectively.
15.5 Defense of THIRD PARTY Claims.
(a) If a THIRD PARTY asserts that a patent or other right owned by
it is infringed by the development, manufacture, use or sale
of any PRODUCT, VIVUS shall be solely responsible for
defending against, or at is option settling, any such
assertions at its cost and expense (so long as VIVUS has the
right to sell such PRODUCT hereunder), excluding any claims
subject to TANABE's defense obligations under the following
Section 15.5(b).
(b) If a THIRD PARTY asserts that a patent or other right owned by
it is infringed by (i) the manufacture of any BULK DRUG
SUBSTANCE or BULK DRUG TABLETS by or on behalf of TANABE, or
(ii) the sale of any PRODUCT sold or transferred by or on
behalf of TANABE outside the TERRITORY, TANABE shall be solely
responsible for defending against, or at is option settling,
any such assertions at its cost and expense, excluding any
claims subject to VIVUS' defense obligations under the
foregoing Section 15.5(a).
(c) With respect to any claim of infringement alleged under this
Section, the Parties shall meet and discuss the appropriate
action to take to address such claim, including without
limitation, (i) replacing or modifying the allegedly
infringing PRODUCT, BULK DRUG SUBSTANCE OR COMPOUND or parts
thereof, with other suitable and reasonably equivalent
technology or parts so that they become non-infringing (ii)
defending such action, or (iii) settling such action,
including obtaining a license from a THIRD PARTY to
manufacture, use or sell, as appropriate, such PRODUCT, BULK
DRUG SUBSTANCE, or COMPOUND.
16. Warranties and Indemnification.
16.1 Warranties of Each Party. Each Party hereto represents to the other
that it has the right to enter into this Agreement and to carry out
all of the provisions hereof.
16.2 Encumbrances. TANABE expressly warrants and represents that it has
no outstanding encumbrances or agreements, either written, oral, or
implied, in connection herewith, and that it has not granted and
will not grant during the term of this Agreement or any renewal
hereof, any rights, license, consent or privilege that conflict with
the rights granted herein. TANABE further represents and warrants,
to the best of its knowledge as of the EFFECTIVE DATE, that (i) the
TANABE PATENTS, TANABE KNOW-HOW and
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INFORMATION are not currently being infringed by a THIRD PARTY, and
(ii) that other than (***) and (***) and any corresponding patent
application claiming priority thereto (excluding any new matter
contained within such corresponding patent application), under which
the patent owners may allege infringement, the development,
manufacture, use and/or sale of the BULK DRUG SUBSTANCE, BULK DRUG
TABLETS, COMPOUND and/or PRODUCT do not infringe any property rights
of any THIRD PARTY.
16.3 Authorization. Each Party hereby warrants that the execution,
delivery and performance of this Agreement has been duly approved
and authorized by all necessary corporate or partnership actions of
itself; does not require any shareholder or partnership approval
which has not been obtained or the approval and consent of any
trustee or the holders of any indebtedness of itself; does not
contravene any law, regulation, rules or order binding on itself,
and does not contravene the provisions of or constitute a default
under any indenture, mortgage, contract or other agreement or
instrument to which it is a signatory.
16.4 No Liability for Consequential Damages and Limitation of Liability.
Neither Party shall be liable to the other for incidental or
consequential damages arising out of or related to the subject
matter of this Agreement.
16.5 Indemnification.
(a) Subject to compliance by TANABE or its AFFILIATES with its
obligations set forth in Section 16.6, VIVUS shall defend,
indemnify, and hold harmless TANABE, its AFFILIATES and their
respective directors, officers, employees and agents (each a
"TANABE Indemnitee"), from and against any and all THIRD PARTY
claims, demands, losses, liabilities, expenses, and damages
including reasonable attorneys' fees (collectively, the
"Liabilities") which such TANABE Indemnitee may suffer, pay,
or incur to the extent resulting from (i) any breach of a
representation, warranty, covenant or obligation of VIVUS
under this Agreement, (ii) any negligent or more culpable act
of VIVUS under this Agreement, or (iii) any and all personal
injury (including death) and property damage to the extent
caused by development, manufacture, use or marketing of BULK
DRUG TABLETS, BULK DRUG SUBSTANCE, COMPOUND, and/or PRODUCT by
VIVUS, its AFFILIATES or their SUBLICENSEES, excluding,
however, any Liabilities subject to TANABE's indemnification
obligation under the following Section 16.5(b). VIVUS'
obligations under this Section 16.5(a) shall survive the
expiration or termination of this Agreement for any reason.
(b) Subject to compliance by VIVUS with its obligations set forth
in Section 16.6, TANABE shall defend, indemnify and hold
harmless VIVUS, its AFFILIATES and their SUBLICENSEES and
their respective directors, officers, employees and agents
(each a "VIVUS Indemnitee"), from and
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against any and all Liabilities which such VIVUS Indemnitee
may suffer, pay or incur to the extent resulting from (i) any
breach of a representation, warranty, covenant or obligation
of TANABE under this Agreement, (ii) any negligent or more
culpable act of TANABE under this Agreement, or (iii) any and
all personal injury (including death) and property damage to
the extent caused by development, manufacture, use or
marketing of BULK DRUG TABLETS, BULK DRUG SUBSTANCE, COMPOUND
and/or PRODUCT by TANABE, its AFFILIATES or their
SUBLICENSEES, excluding, however, any Liabilities subject to
VIVUS' indemnification obligation under Section 16.5(a) above.
TANABE's obligations under this Section 16.5(b) shall survive
expiration or termination of this Agreement for any reason.
16.6 Indemnification Procedures. In the event a Party intends to claim
indemnification under Section 16.5 for itself or its indemnitee (the
"Indemnitee"), such Party shall promptly notify the other Party (the
"Indemnitor") in writing of any matter in respect of which the
Indemnitee intends to claim such indemnification. The Indemnitee
shall permit the Indemnitor, at its discretion, to settle any such
matter and agrees to the complete control of such defense or
settlement by the Indemnitor; provided, however, that such
settlement does not adversely (i) affect the Indemnitee's rights
under this Agreement or (ii) impose any material obligations on the
Indemnitee in addition to those set forth herein in order for
Indemnitee to exercise rights under this Agreement. No settlement of
any such matter which materially and adversely affect the
Indemnitee's rights under this Agreement or impose any material
obligations on the Indemnitee in addition to those set forth herein
in order for Indemnitee to exercise rights under this Agreement may
be made by the Indemnitor without the prior written consent of the
Indemnitee. The Indemnitee shall not be responsible for any legal
fees or other costs incurred other than as provided herein. The
Indemnitee and its directors, officers and employees shall cooperate
fully with the Indemnitor and its legal representatives in the
investigation and defense of any matter covered by the applicable
indemnification. The Indemnitee shall have the right, but not the
obligation, to be represented by counsel of its own selection and at
its own expenses in connection with any matter that is subject to
indemnification. It is understood that only a Party may claim
indemnity under this Section 16 (on its own behalf or on behalf of
its Indemnitee), and other TANABE Indemnitees and VIVUS Indemnitees
may not directly claim indemnity hereunder.
17. TRADEMARK.
VIVUS shall be responsible for the selection and registration of all
TRADEMARKS which it employs in connection with PRODUCT in the
TERRITORY. VIVUS shall obtain a written consent of TANABE prior to
the registration of TRADEMARK, which consent shall not be
unreasonably withheld or delayed. TANABE shall have the right to
register and use the same
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TRADEMARK exclusively and free of charge in connection with the
marketing of the ORAL PRODUCT outside the TERRITORY; provided, such
TRADEMARK shall be used by TANABE solely with the ORAL PRODUCT and
not with any other product. It is understood and agreed that
additional marks may be used with the PRODUCTS, including without
limitation the VIVUS xxxx, and that such additional marks shall not
be subject to the assignment provisions of Sections 21.1 or 21.2.
18. Confidentiality and Publication.
18.1 Confidentiality. Each Party hereto shall treat all the information
received from the other Party in connection with this Agreement
(including the information disclosed before the execution of this
Agreement) as confidential, not to be disclosed to any other person,
company or firm and not to be used for any other purpose than for
the purpose of this Agreement either before or after the expiration
or termination of this Agreement except the following information:
(a) information which at the time of the disclosure is part of the
public knowledge;
(b) information which, after the disclosure, becomes part of the
public knowledge by publication or otherwise, except through
acts or omissions of the receiving Party;
(d) information which the receiving Party can establish by
competent proof was in the receiving Party's possession at the
time of the disclosing Party's disclosure;
(e) information which was otherwise developed independently by the
receiving Party, as demonstrated by written records kept in
the ordinary course of business; and
(e) information which the receiving Party lawfully receives from a
THIRD PARTY; provided, however, that such information was not
obtained by said THIRD PARTY directly or indirectly from
disclosing Party under a confidential obligation.
Notwithstanding the foregoing, each Party, may disclose confidential
INFORMATION to the governmental or other regulatory authorities to
the extent that such disclosure (i) is necessary for the filing,
prosecution and enforcement of patents, or authorizations to conduct
preclinical studies, CLINICAL STUDIES or POST REGISTRATION STUDIES
to commercially market PRODUCT, provided such Party is then
otherwise entitled to engage in such activities in accordance with
the provisions of this Agreement, or (ii) is legally required.
18.2 Publication. Each Party shall submit to the other Party any proposed
scientific
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publication containing confidential INFORMATION of the other Party
at least thirty (30) days in advance of submission thereof for the
public disclosure to allow that Party to review such proposed
disclosure. The reviewing Party shall promptly review such proposed
scientific publication and make any objections that it may have to
the publication of the confidential INFORMATION contained therein.
Should the reviewing Party make an objection to the publication of
the confidential INFORMATION, then the Parties will discuss the
merits of publishing; provided, however, that in any case, no
publication of confidential INFORMATION shall take place under this
Section 18.2 without the disclosing Party's prior written approval
thereof or unless the obligations of confidentiality as to such
confidential INFORMATION shall be waived pursuant to Section 18.1 or
disclosure of confidential INFORMATION is authorized under Section
18.1. Parties agree that review of scientific abstracts will take
place on an expedited basis, with the reviewing Party having seven
(7) business days to submit comments and make objections.
18.3 Publicity. Each Party agrees that the other Party may issue a press
release concerning the entering into of this Agreement, with the
content of such releases to be approved by the non-issuing Party
(which consent shall not be unreasonably withheld or delayed). In
all other respects, except as required by law, neither Party shall
publicly use the name of the other Party or any logos or symbols
associated with the other Party without the prior written approval
of such other Party. Except as provided above, such as wherein VIVUS
is permitted to use TANABE's name and logo in connection with the
PRODUCT neither Party shall publicly disclose the terms of this
Agreement or issue any publicity release with regard thereto unless
expressly authorized to do so by the other Party. Once a particular
disclosure has been approved for disclosure, either Party may make
disclosures which do not differ materially therefrom without any
need for further consents.
19. Reports on ADVERSE DRUG REACTION
Within one-hundred and eighty (180) days after the EFFECTIVE DATE,
the STEERING COMMITTEE shall meet and prepare a plan for sharing and
submitting INFORMATION and filing reports to various governmental
agencies on PRODUCT under CLINICAL STUDIES and marketed PRODUCT,
including without limitation safety related information and ADVERSE
DRUG REACTION information.
20. Term and Termination
20.1 Term. On a country-by-country and on a PRODUCT-by-PRODUCT basis, the
term of this Agreement shall continue until the later of (i) ten
years after the DATE OF FIRST SALE for a particular PRODUCT, or (ii)
expiration of the last to expire patents within the TANABE PATENTS
covering such PRODUCT in such country.
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20.2 Termination due to Breach. Without prejudice to any remedy or claims
it may have against the other Party for material breach of this
Agreement, either Party shall be entitled to terminate this
Agreement by giving the other Party at least thirty (30) days' prior
notice in writing if the other Party should materially breach any of
the provisions or conditions of this Agreement and if after having
been given a written warning the other Party should fail to
discontinue or should fail to make good such material breach within
ninety (90) days after receipt of the warning.
20.3 Termination due to Insolvency or Bankruptcy. In the event of
insolvency or bankruptcy of either Party or appointment of a trustee
or receiver for either Party, it shall immediately notify the other
Party to that effect. In any such event, the Party so notified shall
have the right to terminate this Agreement at any time.
20.4 Permissive Termination. In the event that a PRODUCT is deemed to be
(i) insufficiently effective or insufficiently safe relative to
other PDE5 INHIBITOR compounds based on published information, or
(ii) not economically feasible to develop due to unforeseen
regulatory hurdles or costs as measured by standards common in the
pharmaceutical industry for this type of product, VIVUS shall have
the right to terminate this Agreement with respect to such PRODUCT.
21. Rights and Duties on Expiration and Termination
21.1 Rights and Duties on Expiration. Following Sections shall apply to
the case of expiration of this Agreement, pursuant to Section 20.1:
(a) VIVUS agrees to transfer to TANABE, free of charge, its
ownership of the TRADEMARK as VIVUS used for the ORAL PRODUCT,
provided, however, that the Parties shall, upon request of
VIVUS, execute a simple TRADEMARK license agreement under
which VIVUS continues to use on an exclusive basis said
TRADEMARK for the ORAL PRODUCT in the TERRITORY as long as
VIVUS continues the marketing of the ORAL PRODUCT in the
TERRITORY. Under such TRADEMARK license agreement, VIVUS shall
pay to TANABE a royalty equal to two percent (2%) of the NET
SALES of the ORAL PRODUCT marketed with such TRADEMARK for the
first three (3) years following expiration of this Agreement,
and a royalty equal to one percent (1%) of the NET SALES of
the ORAL PRODUCT marketed with such TRADEMARK for two
additional years thereafter. Thereafter, VIVUS shall be free
to use such TRADEMARK in conjunction with the marketing and
sale of ORAL PRODUCTS free of charge.
(b) Upon expiration of this Agreement in a particular country,
VIVUS shall have a perpetual, irrevocable, fully paid-up
license to practice the TANABE KNOW-HOW in such country.
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21.2 Rights and Duties on Termination. Following Sections shall apply to
the case of termination of this Agreement pursuant to Sections 20.2
and 20.3 due to VIVUS' breach or insolvency or to the case of
termination of this Agreement with respect to a particular PRODUCT
pursuant to Section 20.4 (except, the following Sections shall only
apply, as applicable, with respect to such particular PRODUCT and
not with respect to any other PRODUCT):
(a) VIVUS agrees to transfer to TANABE, free of charge, its
ownership of the TRADEMARK as VIVUS used for the PRODUCT, and
VIVUS shall immediately stop using such TRADEMARK. Thereafter,
VIVUS shall not use any trademark which is similar to or
confusing with the TRADEMARK.
(b) VIVUS shall, upon TANABE's request, if applicable, provide to
TANABE or its nominee, free of charge, all the DRUG APPROVAL
APPLICATION and REGULATORY APPROVAL for the PRODUCTS (in the
event VIVUS has not applied for DRUG APPROVAL APPLICATION or
REGULATORY APPROVAL for a particular PRODUCT in a particular
country, VIVUS shall provide to TANABE all the INFORMATION
VIVUS reasonably would have included in such application or
approval). TANABE shall only use the VIVUS INFORMATION
contained with such DRUG APPROVAL APPLICATION or REGULATORY
APPROVAL for applying for and obtaining regulatory approval
for the PRODUCTS, and not for any other use.
(c) TANABE or its nominee(s) shall have the optional rights to
take over all or any part of the remaining stocks of the BULK
DRUG SUBSTANCE and the PRODUCT in the warehouses and factories
of VIVUS at such prices as may be agreed between the Parties.
VIVUS shall not thereafter market or manufacture any PRODUCT
covered by this Agreement. In case TANABE or its nominee(s) do
not exercise the optional rights to take over the stocks of
the BULK DRUG SUBSTANCE and the PRODUCT pursuant to this
Section 21.2(c), VIVUS shall have the right to sell the
residual salable or usable stocks of the PRODUCT for the term
of six (6) months after the termination of this Agreement,
provided that the payment defined in this Agreement for such
remaining stocks shall be made accordingly.
21.3 Rights and Duties on Expiration and Termination. The following
Sections shall apply to the case of expiration under Section 20.1
and termination under Sections 20.2, 20.3, and 20.4 of this
Agreement:
(a) Neither Party shall be entitled to claim from the other Party
any sum in respect of compensation whether for loss of profits
or otherwise for the cessation of the benefits of this
Agreement, and either Party expressly waives all rights (if
any) which it may have to any such compensation.
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(b) Termination of this Agreement for any reason shall not release
any Party hereto from any liability which, at the time of such
termination, has already accrued to the other Party or which
is attributable to a period prior to such termination nor
preclude either Party from pursuing any rights and remedies it
may have hereunder or at law or in equity with respect to any
breach of, or default under, this Agreement. It is understood
and agreed that monetary damages may not be a sufficient
remedy for any breach of this Agreement and that the
non-breaching Party may be entitled to injunctive relief as a
remedy for any such breach..
(c) Except as required to exercise their respective surviving
rights as set forth in Sections 20.4 or 21.3(d), each Party
shall surrender to other Party all written INFORMATION of the
other Party, except those which have to be retained by such
Party according to the laws or regulations, and shall not
thereafter use or disclose any confidential INFORMATION of the
other Party.
(d) Sections 2.5, 12.1, 12.4, 12.5, 12.6, 16.5, and 20.1, and
Articles 1, 18, 19, 21, 24, 26, 27, 28, 29, 30, 31, 32 and 33
and such provisions hereof as are required for the
interpretation or enforcement of those Articles and Sections,
shall survive and remain valid thereafter. Except as provided
in this Section 21.3 (d) all other provisions of this
Agreement shall terminate upon the expiration or termination
of this Agreement.
22. TANABE Change in Control.
In the event TANABE Change in Control occurs during the term of this
Agreement, VIVUS shall have the right, exercisable upon written
notice to TANABE delivered at any time within sixty (60) days after
the effective date of such TANABE Change in Control, to eliminate
from this Agreement, TANABE's right to co-promote the PRODUCT in the
TERRITORY as provided in Section 2.4. For purposes of this
Agreement, "TANABE Change in Control" shall mean any transaction or
series of related transactions by which a THIRD PARTY pharmaceutical
company acquires or becomes the beneficial owner of (i) fifty
percent (50%) or more of the outstanding voting securities of TANABE
or the surviving entity, whether by merger, consolidation,
reorganization, tender offer or other similar means, or (ii) all or
substantially all of the assets of TANABE.
23. VIVUS Change in Control
In the event VIVUS Change in Control occurs during the term of this
Agreement and the policy, strategy or priority of VIVUS relating to
the DEVELOPMENT WORK or the marketing of the PRODUCT has been or is
reasonably expected to materially fail to meet its obligations as
provided in Article 5 and 6, TANABE shall have the right,
exercisable upon written notice to VIVUS delivered at any time
within four (4) months after the effective date of such VIVUS Change
in Control, to terminate this Agreement. For purposes of this
Agreement, "VIVUS
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Change in Control" shall mean any transaction or series of related
transactions by which a THIRD PARTY pharmaceutical company acquires
or becomes the beneficial owner of (i) fifty percent (50%) or more
of the outstanding voting securities of VIVUS or the surviving
entity, whether by merger, consolidation, reorganization, tender
offer or other similar means, or (ii) all or substantially all of
the assets of VIVUS.
24. Assignment and Transfer
24.1 Either Party may, at its sole discretion, but with reasonable prior
notice to the other Party, designate and cause its AFFILIATE to
perform all or part of its obligations under this Agreement or to
have the benefit of all or part of its rights under this Agreement.
In any such event, the name "TANABE" or "VIVUS" appearing herein
shall be deemed to be the name of such AFFILIATE to the extent
necessary to carry out the intent of this Section 24.1, and the
performance of the obligations of such AFFILIATE shall be deemed
guaranteed by the Party which has made such designation. In addition
to the foregoing, either Party may assign this Agreement, without
the consent of the other Party to a party that acquires all or
substantially all of its business or assets, whether by merger,
acquisition, sale or otherwise.
24.2 This Agreement shall be binding upon and inure to the benefit of
TANABE and VIVUS and their successors or assignees, provided that
any such successor or assignee shall have acquired all or
substantially all of the stock or assets of the predecessor by
merger, purchase, or otherwise. Otherwise, the rights and
obligations set forth in this Agreement shall be not assignable
(except to the limited extent provided in the foregoing Section
24.1) without the prior consent in writing of the other Party
hereto, such consent not to be unreasonably withheld.
Any acquiring entity shall provide to the non-assigning party, a
written commitment that it will use the same efforts, commensurate
with the assigning party's efforts, to fully perform under this
Agreement, including without limitation, to adhere to the current
DEVELOPMENT PLAN (timing, budget and milestones) then in effect.
25. Force Majeure.
Neither Party shall be responsible for a failure or delay in
performance of any of its obligations hereunder due to force majeure
such as war, insurrection, strikes, acts of God, governmental
action, or any other contingency beyond its control. However, the
Party which is affected by any force majeure shall contact the other
Party for discussion of possible emergency measures.
26. Notice.
Any and all notices required to be given under this Agreement shall
be made by registered airmail and shall be addressed to the Parties
at their respective offices
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first above referred to, except that either Party may change such
office by notice in accordance with this Article 26.
27. Governing Law.
This Agreement and any dispute, including without limitation any
arbitration, arising from performance or breach hereof shall be
governed by and construed and enforced in accordance with the
following: (i) if a dispute is filed in court or in arbitration by
VIVUS, the laws of Japan shall govern such dispute, and (ii) if a
dispute is filed in court or in arbitration by TANABE, the laws of
the state of California shall govern such dispute, in each case
without reference to conflicts of law principles.
28. Arbitration.
All disputes, controversies, or differences which may arise between
the Parties, out of or in relation to or in connection with this
Agreement or the breach thereof, shall be finally settled by
arbitration pursuant to the then obtaining Rule of Arbitration of
the International Chamber of Commerce, by which each Party hereto
agrees to be bound. Such arbitration shall be held in Osaka, Japan,
if initiated by VIVUS, and in Palo Alto, California if initiated by
TANABE. The Parties shall, however, attempt in good faith to
amicably settle the disputes, controversies or differences by
negotiations before having recourse to the arbitration procedure. It
is understood and agreed that the filing by a Party of an action
that is subject to this Section, whether in court or in arbitration,
shall constitute an "initiation" of arbitration. Each Party agrees
that any such action filed in court shall be stayed pending the
outcome of the related arbitration.
Notwithstanding the then obtaining Rule of Arbitration of the
International Chamber of Commerce, any arbitration shall be
conducted by a panel of three arbitrators (the "Panel"). Each Party
shall have the right to appoint one (1) member to the Panel, with
the third member of the Panel to be mutually agreed to by the two
Panel members appointed by the Parties. All Panel members shall be
selected from a pool of independent arbitrators. Each Party shall
make its appointment within thirty (30) days of receipt of a written
request by a Party to initiate arbitration, and the third Panel
member shall be selected by the two Panel members with thirty (30)
days of the selection of the first two Panel members. All
arbitration proceedings, including without limitation the filing of
any documents, papers, and/or motions relating thereto, shall be
made in the English language. In the event of any dispute concerning
the construction or meaning of such documents, papers and/or
motions, reference shall be made only to such documents, papers
and/or motions as written in English and not to any translation into
any other language.
29. Authentic Text.
This Agreement is entered into in the English language. In the event
of any dispute concerning the construction or meaning of this
Agreement, reference
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shall be made only to this Agreement as written in English and not
to any translation into any other language.
30. Interpretation.
Unless expressly set forth, the use of the singular form of terms
herein shall include the plural and the use of the plural form of
terms herein shall include the singular. Headings are for reference
only and shall not be used to interpret this Agreement.
31. No Waiver.
The failure of either Party to enforce any provision of this
Agreement at any time shall not be construed as a present or future
waiver of such or any other provision of this Agreement. The express
waiver by either Party of any provision or requirement hereunder
shall neither be deemed nor operate as a future waiver of such or
any other provision or requirement.
32. Entire Agreement.
This Agreement represents the entire agreement and understanding, as
of the EFFECTIVE DATE, between the Parties with respect to the
subject matter hereof and shall supersede all prior agreements,
negotiations, understanding, representations, statements, and
writings between the Parties relating thereto. No modification,
alteration, waiver or change in any term or provision of this
Agreement shall be valid or binding upon the Parties unless made in
writing and duly executed by each of the Parties.
33. Severability.
Any provision of this Agreement which is invalid or unenforceable
shall be invalid or unenforceable only to the extent of such
invalidity or unenforceability, and the validity or enforceability
of any other provision of this Agreement shall not be affected. The
Parties shall replace such invalidated or unenforceable provision by
valid and enforceable provision which will achieve, to the extent
possible, the economic, business and other purposes of the replaced
provision.
34. Injunctive Relief.
Each Party acknowledges and agrees that without resorting to prior
mediation or arbitration, either Party, in addition to any other
remedies that may be available in law, in equity or otherwise, shall
be entitled to seek temporary and permanent injunctive relief in
order to enforce its rights under this Agreement, without the
necessity of proving actual damages or the posting of any bond.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
by their respective officers as of the EFFECTIVE DATE.
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TANABE SEIYAKU CO., LTD. VIVUS, INC.
/s/ Xxxxxx Xxxxxx /s/ Xxxxxx X. Xxxxxx
-------------------------------------- -------------------------------------
By: Xxxxxx Xxxxxx By: Xxxxxx X. Xxxxxx
Title: President and Chief Title: President and Chief Executive
Executive Officer Officer
Representative Director
Date: January 21, 2001 Date: January 21, 2001
Attachment:
Appendix-A = List of the TANABE PATENT which covers the COMPOUND as of the
EFFECTIVE DATE
Appendix-B = DEVELOPMENT PLAN
Appendix-C = STEERING COMMITTEE Guidelines
Appendix-D = Manufacture of the BULK DRUG SUBSTANCE
Appendix-E = Draft SPECIFICATIONS
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APPENDIX-A
LIST OF THE TANABE PATENT
WHICH COVERS THE COMPOUND AS OF THE EFFECTIVE DATE
(***)
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APPENDIX-B
DEVELOPMENT PLAN
[TO BE ATTACHED HERE]
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APPENDIX-C
STEERING COMMITTEE GUIDELINES
STEERING COMMITTEE shall be responsible for managing all aspects of the
relationship between the Parties to the extent not set forth in this Agreement,
including but not limited to: (i) reviewing study protocols and making decisions
on any proposed changes to the agreed DEVELOPMENT PLAN; (ii) monitoring and
assisting progress of DEVELOPMENT WORK according to the agreed DEVELOPMENT PLAN;
(iii) assessing the results of the CLINICAL STUDIES and non-clinical studies,
(iv) discussing and resolving any drug supply and regulatory issue and (v)
monitoring and supervising marketing, publications and publicity strategies and
plans, in the TERRITORY. The STEERING COMMITTEE may adopt and revise policies
under which VIVUS shall manage the agreed DEVELOPMENT PLAN.
1. Composition.
Within one (1) month of the EFFECTIVE DATE, each Party shall, by notice
hereunder to the other, appoint one (1) chief representative and one (1) project
manager to serve on the STEERING COMMITTEE to the extent it has not already done
so. Each chief representative shall represent each Party and be responsible for
performing the objectives of the STEERING COMMITTEE. Each project manager shall
maintain regular communications between the Parties, serving as each Party's
liaison and shall be responsible for organizing a development sub-committee and
a marketing sub-committee (collectively, "Sub-Committees"). Subject to the
requirements of the preceding sentence, at any time during the term of this
Agreement, either Party may, by notice hereunder to the other, change or replace
any of its chief representative or project manager on the STEERING COMMITTEE as
it sees fit. Each Party's Sub-Committees shall have that Party's scientific,
technical and regulatory expertise relating to the DEVELOPMENT WORK, and
marketing and business development expertise relating to the PRODUCT. In
addition, the STEERING COMMITTEE may invite either Party's or outside non-voting
experts as the need arises.
2. Meetings.
The STEERING COMMITTEE shall hold its first official meeting within one (1)
month of the EFFECTIVE DATE unless otherwise agreed by the Parties. At this
first (1st) meeting, the STEERING COMMITTEE shall decide the scheduling of
meetings. The STEERING COMMITTEE shall meet at least two (2) times per year, at
places and on dates selected by each Party in turn.
3. Voting.
Each Party shall have one (1) vote on the STEERING COMMITTEE. Upon unanimous
vote (except as provided in Section 4 below) all decisions of the STEERING
COMMITTEE shall be binding on the Parties.
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4. Dispute Resolution.
Both TANABE and VIVUS are mutually responsible for ensuring the success of this
Agreement in accordance herewith. Therefore, TANABE and VIVUS hereby agree to
frankly discuss and attempt to resolve in good faith any conflicts which arise
in ways which will promote the continuing goodwill between the Parties. If the
members of the STEERING COMMITTEE cannot resolve any disagreement after good
faith attempts to resolve such disagreement in a commercially reasonable
fashion, then either of the Parties may refer the disagreement to a personal
face-to-face meeting between the head of Research and Development of TANABE (or
nearest equivalent) and the head of Research and Development of VIVUS (or
nearest equivalent). If such persons cannot resolve the disagreement within one
(1) month after such personal face-to-face meeting, then VIVUS will cast the
deciding vote taking due consideration of TANABE's opinion.
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APPENDIX-D
MANUFACTURE AND SUPPLY OF THE
BULK DRUG SUBSTANCE AND BULK DRUG TABLETS
1. General Supply Terms.
The following terms are applicable to both supplies for development and
commercial use. It is understood and agreed that for this Appendix D, the
use of the term BULK DRUG SUBSTANCE shall mean the BULK DRUG SUBSTANCE
and/or BULK DRUG TABLETS, as applicable.:
1.1 Order Forecast. At least eight (8) months prior to the beginning of
each month, VIVUS shall provide to TANABE an order forecast for the
supply during such month of the BULK DRUG SUBSTANCE.
1.2 Firm Order. VIVUS shall place with TANABE a firm order at least
one-hundred and twenty (120) days before the desired shipping date.
Such firm order shall fall within the range from ninety percent
(90%) to one hundred and twenty percent (120%) of such order
forecast. TANABE shall accept all such orders.
1.3 Form of Order. VIVUS' orders shall be made in writing and shall
provide for shipment in accordance with reasonable delivery
schedules. No terms contained in any firm order, order
acknowledgment or similar standardized form shall be construed to
amend or modify the terms of this Agreement and in event of a
conflict, this Agreement shall control unless otherwise expressly
agreed in writing.
1.4 Delivery. TANABE agrees to ship quantities of the BULK DRUG
SUBSTANCE ordered in accordance with Paragraph 1.2 on or about (but
not later than seven (7) business days after the specified date) the
dates specified in VIVUS' firm orders. The BULK DRUG SUBSTANCE shall
be delivered to a carrier designated by VIVUS (FCA Place of
Manufacture, Incoterms 2000). The packaging for shipment shall be
sufficiently protective toward the BULK DRUG SUBSTANCE.
1.5 Invoice. TANABE shall send a single invoice upon delivery of each
lot of the BULK DRUG SUBSTANCE to VIVUS at the address to be
specified by it in writing on its firm order.
1.6 Duty. Any duty incurred, imposed or levied after the shipping point
of the BULK DRUG SUBSTANCE shall be borne solely by VIVUS. TANABE
shall use reasonable efforts to cooperate with VIVUS in eliminating
all duties.
1.7 Quality Control. In order to ensure the quality of the PRODUCTS,
including maximizing the PRODUCT shelf life, the Parties shall meet
and agree upon when BULK DRUG SUBSTANCE shall be delivered to VIVUS
after their manufacture by TANABE.
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1.8 Acceptance or Rejection of the BULK DRUG SUBSTANCE
(a) VIVUS shall examine each lot of the BULK DRUG SUBSTANCE for
compliance with SPECIFICATIONS and any damage, defects or
shortage, not later than thirty (30) days of receipt thereof.
If VIVUS believes that any of such lot does not comply with
the SPECIFICATIONS or is defective or damaged, VIVUS shall
promptly, but not later than said thirty (30) days after
receipt of such lot, notify TANABE and, if appropriate, send a
sample of such lot to TANABE. Failure of VIVUS to reject a lot
of the BULK DRUG SUBSTANCE in the manner set forth above shall
constitute acceptance thereof.
(b) Any claim notified by VIVUS pursuant to preceding Paragraph
1.8(a) shall be accompanied by a report of analysis, including
an adequate sample of such lot of the BULK DRUG SUBSTANCE
analyzed, and shall be handled as hereafter set forth in this
Paragraph 1.8.
(c) Should VIVUS reject any lot of the BULK DRUG SUBSTANCE under
Paragraph 1.8(a) and TANABE agrees that such rejection is
justified, TANABE shall promptly reimburse VIVUS for the
supply price payment invoiced and paid for such lot of the
BULK DRUG SUBSTANCE or cancel the invoice (if not yet paid)
and replace the shipment or remedy the deficiency promptly.
(d) Should VIVUS reject any lot pursuant to Paragraph 1.8(a), and
TANABE and VIVUS, after good faith negotiation, fail to agree
that such rejection is justified, the Parties shall mutually
agree on an independent THIRD PARTY to evaluate all
documentation relating to such lot of the BULK DRUG SUBSTANCE,
which include but not limited to, certificate of analysis,
certificate of compliance and report of analysis, and other
relevant INFORMATION developed by either or both of the
Parties relating thereto to ascertain whether the rejection is
justified. If the THIRD PARTY determines that VIVUS' rejection
is justified, TANABE shall pay for the costs of the
independent THIRD PARTY's review, and the rejected BULK DRUG
SUBSTANCE shall be handled as described in preceding Paragraph
1.8(c). If the THIRD PARTY determines that VIVUS' rejection is
not justified, VIVUS shall pay for the costs of the
independent THIRD PARTY's review, and the rejected BULK DRUG
SUBSTANCE shall be accepted by VIVUS.
1.9 Hidden Defect.
If a defect is found in any lot of the BULK DRUG SUBSTANCE shipped
by TANABE, which could not reasonably be expected to have been found
by diligent and adequate inspection by VIVUS pursuant to its
obligations under the Paragraph 1.8(a), such as stability, and if
such defect is claimed to TANABE within six (6) months from the date
of the receipt thereof, any such claim by VIVUS shall be
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handled pursuant to the Paragraphs 1.8(b), (c) and (d).
2. Manufacture.
2.1 SPECIFICATIONS. TANABE shall manufacture and package the BULK DRUG
SUBSTANCE which conform to the SPECIFICATIONS. A draft of
SPECIFICATIONS shall be attached to the Agreement as Appendix-E and
may be modified from time to time by prior written agreement between
TANABE and VIVUS.
2.2 CGMP Manufacture. TANABE shall carry out all manufacturing,
packaging and quality control operations in accordance with the
current requirements of United States and European Good
Manufacturing Practice (the "CGMP"). TANABE shall maintain an
appropriate manufacturing authorization and thus maintain adequate
premises, equipment, knowledge, and experienced and competent
personnel to perform the work in compliance with the CGMP applicable
to the particular country within the TERRITORY. TANABE shall refrain
from any activity which adversely affects the quality of the BULK
DRUG SUBSTANCE.
2.3 Manufacturing Records. TANABE shall keep full and complete records
of every production lot in accordance with generally accepted
industry practices including, but not limited to, the lot production
records for each lot supplied (hereinafter referred to as
"Records").
2.4 Audit. VIVUS may, at periodic intervals, audit the TANABE operation
to ensure that the principles of CGMP continue to be followed.
TANABE shall inform VIVUS from time to time and whenever requested
by VIVUS, of the location of the Records, and shall permit VIVUS'
representatives, for the purpose of quality audit, to have all
reasonable access to the Records, TANABE's manufacturing,
warehousing, packaging and laboratory areas, during normal business
hours, to the extent VIVUS notifies TANABE in writing reasonably
prior to the audit. Should VIVUS, after its audit, notify TANABE of
any deficiencies, TANABE shall provide VIVUS with a response with
proposed corrective actions within thirty (30) days of such notice
and then promptly thereafter rectify any deficiencies noted during
the course of audit by VIVUS, provided TANABE agrees with VIVUS'
comments, which agreement shall not be unreasonably withheld or
delayed. In addition, VIVUS shall have the right to audit TANABE's
Records and documentation as it relates to the manufacture of the
BULK DRUG SUBSTANCE, during normal business hours, to the extent
such audit is needed to comply with CGMP and any applicable
regulatory requirements.
2.5. THIRD PARTY Manufacture. TANABE may sub-contract any work relating
to the manufacture of the BULK DRUG SUBSTANCE, provided, however,
the manufacturing so sub-contracted shall be subject to the same
terms and conditions as recited herein including but not limited to
the right to audit the Records and inspect facilities. VIVUS shall
have the right to approve such sub-contractor prior
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to the selection, in case such sub-contracting is related to the
final stage of the manufacture of the BULK DRUG SUBSTANCE, which
approval shall not be unreasonably withheld or delayed.
2.6. Regulatory Inspections. In case TANABE receives advance notice of
any proposed inspection by regulatory agencies such as the FDA or
EMEA of its facility involving the BULK DRUG SUBSTANCE, TANABE shall
promptly notify VIVUS to that effect. In case the inspections
conducted by such regulatory agencies involve the BULK DRUG
SUBSTANCE, TANABE shall inform VIVUS of the summary of such results.
At VIVUS' request, TANABE shall cooperate in the investigation of
any query or complaint concerning the BULK DRUG SUBSTANCE, and
TANABE agrees to permit VIVUS to review and comment upon any
response to the inspection that TANABE shall submit prior to the
response to the regulatory agencies. VIVUS' review and comment shall
be made promptly upon the receipt of TANABE's informing the content
of the response.
2.7. Testing. TANABE shall test or cause to be tested each lot of the
BULK DRUG SUBSTANCE before delivery to VIVUS. Each test shall set
forth the items tested, SPECIFICATIONS and test results in a
certificate of analysis for each lot delivered to VIVUS under this
Agreement. TANABE shall send such certificate of analysis together
with a certificate of compliance along with the delivery of the BULK
DRUG SUBSTANCE. TANABE warrants that such tests are conducted
diligently, the level of which is no less strict than the standard
used for other goods or products which are manufactured and sold by
TANABE itself.
2.8. Packing and Marking. Each lot of the BULK DRUG SUBSTANCE shall be
shipped in accordance with TANABE's standard operating procedure and
in accordance with instructions and specifications provided by VIVUS
and accepted by TANABE which acceptance shall not be unreasonably
withheld or delayed. All shipments shall be accompanied by a packing
slip which describes the articles, states the order number and shows
the shipment destination. TANABE agrees to promptly forward the
original xxxx of lading or other shipping receipt for each shipment
of the BULK DRUG SUBSTANCE in accordance with VIVUS' instructions to
the extent such instructions are reasonable.
2.9. Qualification/Validation. TANABE shall be responsible for ensuring
that an appropriate qualification/validation data is generated for
any changes in processes, test methods and SPECIFICATIONS. TANABE
shall supply VIVUS with the proposed protocols for
qualification/validation, in advance of work conducted, for VIVUS'
approval which shall not be reasonably withheld or delayed. TANABE
shall supply VIVUS with a copy of the qualification/validation
report.
2.10. Compliance with Laws. TANABE shall observe and comply with all laws,
ordinances, codes and regulations of government agencies which are
applicable to the place where the manufacture of the BULK DRUG
SUBSTANCE is carried
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out. In no event, shall TANABE be forced to maintain its facility or
manufacture the BULK DRUG SUBSTANCE in a manner which violates the
applicable laws and regulations.
3. Representation and Warranties
3.1 Manufacturing Warranty. TANABE represents and warrants that the BULK
DRUG SUBSTANCE manufactured by TANABE for VIVUS pursuant to the
Agreement shall be manufactured in accordance with any applicable
regulations pertaining to the CGMP.
3.2 No Warranty by TANABE. Except for the express warranty set forth in
Paragraph 3.1 or otherwise set forth in the Agreement, TANABE grants
no other warranties, express or implied, by statute or otherwise,
regarding the BULK DRUG SUBSTANCE including their merchantability
and their fitness for any use, and VIVUS shall defend, indemnify and
hold harmless TANABE, its AFFILIATE's and their respective
directors, officers, employees and agents, from any THIRD PARTY
loss, claim, action, damage, expense or liability, including defense
costs and attorneys' fees arising out of or related to the handling,
possession or use of the BULK DRUG SUBSTANCE by VIVUS.
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APPENDIX-E
DRAFT SPECIFICATIONS
TENTATIVE SPECIFICATION AND TESTING METHODS OF BULK DRUG SUBSTANCE
(***)
TENTATIVE SPECIFICATION AND TESTING METHODS OF BULK DRUG TABLETS
(***)
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