EXHIBIT 99.1
LICENSE PURCHASE AGREEMENT
between
AVANIR PHARMACEUTICALS
and
DRUG ROYALTY USA, INC.
Dated as of November 22, 2002
TABLE OF CONTENTS
Article I. INTERPRETATION...................................................................................... 2
1.1 Definitions.................................................................................. 2
1.2 Headings..................................................................................... 5
1.3 Number and Gender............................................................................ 6
1.4 Entire Agreement............................................................................. 6
1.5 Applicable Law............................................................................... 6
1.6 Currency..................................................................................... 6
1.7 Exhibits and Schedules....................................................................... 6
Article II. PURCHASE........................................................................................... 7
2.1 Purchase of SB License....................................................................... 7
2.2 Termination of SB License Agreement.......................................................... 8
Article III. PAYMENTS.......................................................................................... 8
3.1 Payment of Purchase Price.................................................................... 8
3.2 Remittances of Royalties..................................................................... 8
3.3 Royalty Statements........................................................................... 9
Article IV. REPRESENTATIONS AND WARRANTIES OF AVANIR........................................................... 9
4.1 Corporate Matters............................................................................ 9
4.2 SB License Agreement......................................................................... 10
4.3 Absence of Conflicting Agreements............................................................ 10
4.4 Consents, Approvals, Etc..................................................................... 11
4.5 Compliance with Applicable Law............................................................... 11
4.6 Litigation................................................................................... 11
4.7 Capacity to Carry on Business................................................................ 12
4.8 Patents...................................................................................... 12
4.9 Docosanol Licenses........................................................................... 12
4.10 Trademarks................................................................................... 13
4.11 Disclosure................................................................................... 13
Article V. REPRESENTATIONS AND WARRANTIES OF DRC USA........................................................... 13
5.1 Corporate Matters............................................................................ 13
5.2 Financial Resources.......................................................................... 14
Article VI. CLOSING............................................................................................ 14
6.1 Closing...................................................................................... 14
6.2 Conditions to Closing........................................................................ 14
6.3 Deliveries at Closing........................................................................ 15
Article VII. INDEMNIFICATION................................................................................... 16
7.1 Third Party Claims........................................................................... 16
7.2 Limits on Indemnification.................................................................... 17
Article VIII. COVENANTS........................................................................................ 18
8.1 Cooperation.................................................................................. 18
8.2 Non-Interference............................................................................. 18
8.3 Access....................................................................................... 18
(i)
8.4 Other Information............................................................................ 18
8.5 Patents...................................................................................... 19
8.6 SB License Agreement......................................................................... 19
8.7 Patent Litigation............................................................................ 20
8.8 Books and Records............................................................................ 20
8.9 Notification................................................................................. 20
8.10 Further Licenses............................................................................. 20
8.11 Transfer of Patents.......................................................................... 21
Article IX. TERM AND TERMINATION............................................................................... 21
9.1 Term......................................................................................... 21
9.2 Termination.................................................................................. 21
9.3 Partial Termination of SB License Agreement.................................................. 21
9.4 Termination of SB License Agreement.......................................................... 22
9.5 Survival..................................................................................... 22
Article X. EVENTS OF DEFAULT................................................................................... 23
10.1 Events of Default............................................................................ 23
10.2 Remedies upon Event of Default............................................................... 23
10.3 Specific Performance......................................................................... 23
10.4 Partial Exercise of Rights................................................................... 23
Article XI. GENERAL............................................................................................ 24
11.1 Confidentiality.............................................................................. 24
11.2 Survival of Representations and Warranties................................................... 24
11.3 Amendment.................................................................................... 24
11.4 Waiver of Rights............................................................................. 24
11.5 Tender....................................................................................... 24
11.6 Performance on Holidays...................................................................... 25
11.7 Financial Reporting Standards................................................................ 25
11.8 Expenses..................................................................................... 25
11.9 Notices...................................................................................... 25
11.10 Assignment................................................................................... 27
11.11 Further Assurances........................................................................... 27
11.12 Independent Parties.......................................................................... 27
11.13 Public Announcements......................................................................... 27
11.14 Severability................................................................................. 28
11.15 Counterparts................................................................................. 28
11.16 Facsimile Execution.......................................................................... 28
(ii)
LICENSE PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 22 day of November, 0000
X X X X X X X:
AVANIR PHARMACEUTICALS,
a California corporation
- and -
DRUG ROYALTY USA, INC.,
a Nevada corporation
BACKGROUND:
Avanir Pharmaceuticals ("Avanir") is a biopharmaceutical drug discovery and
development company based in San Diego, California engaged in research,
discovery, development and licensing of innovative drug products.
Drug Royalty USA, Inc. ("DRC USA") provides liquidity to owners of healthcare
royalty interests, including life science companies.
Avanir is the owner of all right, title and interest in certain patents,
identified in Schedule A hereto, and know-how relating to a compound known as
docosanol.
Avanir has licensed the right to develop and commercialize docosanol in certain
countries of the world under the aforesaid patents and know-how.
Pursuant to a license agreement dated March 31, 2000, Avanir granted to SB
Pharmco Puerto Rico Inc. ("SB"), a wholly-owned subsidiary of GlaxoSmithKline
plc ("GSK"), with a right to grant sublicensees to affiliates and permitted
assigns, certain rights to develop and commercialize docosanol in the United
States and Canada under the aforesaid patents and know-how (the "SB License
Agreement").
In accordance with the SB License Agreement, SB manufactures, markets and
distributes the Product (as defined below) in the United States as an
over-the-counter ("OTC") product and has sought similar approval for marketing
in Canada.
DRC USA wishes to purchase from Avanir all of its right, title and interest in
the SB License Agreement with respect to the Product in the Field in the
Territory (each, as defined below).
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IN CONSIDERATION of the premises, the mutual covenants in this
Agreement and of other good and valuable consideration, the receipt and
sufficiency of which are acknowledged by each Party, the Parties agree as
follows:
ARTICLE I.
INTERPRETATION
1.1 Definitions
In this Agreement:
"Affiliate" means a Person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under common control
with, the Person specified;
"Agreement" means this agreement, the recitals, all attached schedules
and any agreement, exhibit or schedule supplementing or amending this agreement.
All uses of the words "hereto", "herein," "hereof," "hereby" and "hereunder" and
similar expressions refer to this Agreement and not to any particular section or
portion of it. References to an Article, Section, Subsection, Exhibit or
Schedule refer to the applicable article, section, subsection, exhibit or
schedule of this Agreement;
"Applicable Law" means, in respect of any Person, property, transaction
or event, any statute, law, ordinance, rule, regulation, regulatory policy,
order, judgment or decree applicable to that Person, property, transaction or
event;
"Avanir" means Avanir Pharmaceuticals, a California corporation;
"Business Day" means any day of the week other than a Saturday, Sunday
or statutory or civic holiday observed in the United States;
"Claims" has the meaning assigned thereto in Article VII;
"Closing", "Closing Date" and "Time of Closing" have the respective
meanings assigned thereto in Article VI;
"Closing Document" means any document, instrument, undertaking or
agreement made or delivered pursuant to or in connection with this Agreement;
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"Collateral" has the meaning assigned thereto in Section 1(d) of the
Security Agreement;
"Consent and Acknowledgment" has the meaning assigned thereto in
Section 6.2(a)(iii);
"DRC USA" means Drug Royalty USA, Inc., a Nevada corporation, and any
Affiliate;
"Encumbrance" has the meaning assigned thereto in Section 6.2(a)(iv);
"Event of Default" has the meaning assigned thereto in Section 10.1;
"Field" means the Non-Prescription Use of Product in humans for the
prevention or treatment of herpes labialis, also known as cold sores/fever
blisters;
"GAAP" means generally accepted accounting principles as established in
the United States;
"Governmental Agency" means any domestic or foreign government whether
federal, provincial or municipal and any governmental agency, governmental
authority, governmental tribunal or governmental commission of any kind
whatever;
"including," when used herein or in any Closing Document, means
"including without limitation" and shall not be construed to limit any general
statement which it follows to the specific or similar items or matters
immediately following it;
"Indemnified Party" has the meaning assigned thereto in Article VII;
"Indemnifying Party" has the meaning assigned thereto in Article VII;
"Indemnity Notice" has the meaning assigned thereto in Article VII;
"Know-How" means the technical information and know-how in the Field
which has already been communicated to SB under the SB License Agreement
including all biological, chemical, pharmacological, toxicological, clinical,
assay, control and manufacturing data and any other information relating to
Product and useful for the development and commercialization of Product;
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"Net Sales" means the gross receipts representing sales of the Product
in the Field in the Territory under the SB License Agreement by SB, its
Affiliates (as defined in the SB License Agreement) or its/their permitted
sublicensees to Third Parties (as defined in Paragraph 1.15 of the SB License
Agreement) in finished product form (i.e., packaged and labelled for sale to the
ultimate consumer) less deductions for: (i) transportation charges, including
insurance, for transporting Product, (ii) trade, quantity and cash discounts on
Product, (iii) allowances or credits to customers on account of rejection or
return of Product. Sales between SB, its Affiliates or its/their permitted
sublicensees shall be excluded from the computation of Net Sales and no
royalties will be payable on such sales;
"Non-Prescription Use" means that a prescription from a physician or
other health care professional is not required by the regulatory authorities in
a country in which Product is purchased to enable consumers to purchase Product;
"Notice" has the meaning assigned thereto in Section 11.9;
"Parties" means Avanir and DRC USA, collectively, and "Party" means one
of them;
"Patents" means all patents and patent applications in the Territory as
set forth on Schedule A attached hereto and all continuations,
continuations-in-part, divisions, patents of addition, reissues, renewals or
extensions thereof. Also included within the definition of Patents are any
patents or patent applications in the Territory which generically or
specifically claim an improvement to a medicinal product in the Field including
docosanol as an ingredient or an improvement to a process for preparing a
medicinal product in the Field including docosanol as an ingredient, which are
developed by Avanir, or which Avanir otherwise has the right to grant licenses,
now or in the future, during the term of the SB License Agreement;
"Patent Licenses" has the meaning set forth in Section 4.9(a);
"Person" includes an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization, or any other entity;
"Product" means a medicinal product in the Field including as an
ingredient the chemical compound known as docosanol, whose more specific
chemical formula is XX0 (XX0)00 - CH20H and other aliphatic saturated straight
chain monohydric alcohols of chain length C20 - C28, its prodrugs and
metabolites, and all esters, salts, hydrates, solvates, polymorphs and isomers
thereof, and shall include compositions comprising such compound, prodrug or
metabolites, or esters, salts, hydrates, solvates, polymorphs and isomers or any
product, the
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manufacture, use, sale or import of which, but for the license granted under the
SB License Agreement, infringes any Patent or employs any Know-How in the Field;
"Purchase Price" has the meaning set forth in Section 3.1;
"Royalty Revenues" has the meaning set forth in Section 2.1;
"SB License Agreement" has the meaning set forth in the recitals to
this Agreement;
"SB" means SB Pharmco Puerto Rico Inc., a wholly-owned subsidiary of
GSK;
"Security Agreement" has the meaning set forth in Section 6.2(a)(v);
"Territory" means Canada and the United States of America, including
all of its territories and possessions (including, but without limitation,
Puerto Rico);
"Third Party" means any Person other than Avanir or DRC USA or their
respective Affiliates;
"Trademarks" has the meaning set forth in Section 4.10(a);
"Transmission" means any electronic means of sending messages,
including facsimile transmission, which produces a paper record; and
"USPTO" means the United States Patent and Trademark Office.
1.2 Headings
The division of this Agreement into Articles, Sections, Subsections and
Schedules and the insertion of headings are for convenience of reference only
and shall not affect the construction or interpretation of this Agreement. The
Article, Section, Subsection and Schedule headings in this Agreement are not
intended to be full or precise descriptions of the text to which they refer and
are not to be considered part of this Agreement.
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1.3 Number and Gender
In this Agreement, words in the singular include the plural and
vice-versa and words in one gender include all genders.
1.4 Entire Agreement
This Agreement, together with the Closing Documents, constitutes the
entire agreement between the Parties pertaining to the subject matter hereof and
supersedes all prior agreements, negotiations, discussions and understandings,
written or oral including the letter of intent executed by the Parties, dated
September 10, 2002, as amended. There are no representations, warranties,
conditions, other agreements or acknowledgements, whether direct or collateral,
or express or implied, that form part of or affect this Agreement, or which
induced any Party to enter into this Agreement or on which reliance is placed by
any Party, except as specifically set forth in this Agreement or in the Closing
Documents.
1.5 Applicable Law
Unless otherwise specified in an Exhibit, this Agreement shall be
governed by, and interpreted and enforced in accordance with, the laws in force
in the State of New York, without giving effect to the principles of conflicts
of law thereof. The Parties irrevocably submit to the exclusive jurisdiction of
either state or federal court located in the City and County of New York with
respect to any matter arising hereunder or related hereto. The Parties hereto
hereby irrevocably waive any rights to trial by jury.
1.6 Currency
Unless specified otherwise in this Agreement, all statements of or
references to monetary amounts in this Agreement are to United States Dollars.
1.7 Exhibits and Schedules
The following Exhibits and Schedules form part of this Agreement:
Exhibit Description of Exhibit (Reference)
------- ----------------------------------
A SB License Agreement (Recitals, Definitions, Section 4.2)
B Consent and Acknowledgement (Section 6.2)
C Royalty Statements (Section 4.2)
D Security Agreement (Section 6.2)
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Schedule Description of Schedule (Reference)
-------- -----------------------------------
A Patents (Recitals, Section 4.8)
B Trademarks (Section 4.10)
C Litigation (Section 4.6)
D Patent Licenses (Section 4.9)
E Patent Matters (Section 4.8)
ARTICLE II.
PURCHASE
2.1 Purchase of SB License
Avanir agrees to sell, assign and transfer to DRC USA and DRC USA
agrees to purchase an undivided interest in all rights, title and interests of
Avanir in and to the SB License Agreement with respect to the Product in the
Field in the Territory to the extent set forth herein, including without
limitation:
(a) The right, for the period beginning October 1, 2002 through
the expiration or termination of this Agreement, to receive one hundred percent
(100%) of the annual Royalty Revenues (as defined below) calculated on the first
Sixty-Two Million Dollars ($62,000,000) of Net Sales during each calendar year
and fifty percent (50%) of the annual Royalty Revenues calculated on Net Sales
in excess of Sixty-Two Million Dollars ($62,000,000) during each calendar year.
For the purpose of this Agreement, "Royalty Revenues" means the percentage
royalties set forth in Paragraph 3.02 of the SB License Agreement with respect
to any Net Sales (as defined in this Agreement), subject to the provisions of
Paragraphs 3.03 through 3.08, 4.01 and 4.02 of the SB License Agreement.
(b) The right to be kept informed of the progress of SB's efforts
to develop and commercialize the Product as set forth in Paragraph 5.02(a) of
the SB License Agreement and to designate one (1) voting member in place of one
of Avanir's two (2) members on the Steering Committee as contemplated by
Paragraph 5.05 of the SB License Agreement.
(c) The right to exercise the audit rights accorded to Avanir
under Paragraph 9.01 of the SB License Agreement in respect of the Product in
the Field in the Territory. DRC USA agrees that it shall provide Avanir with the
results of any audit it conducts under the SB License Agreement. In addition,
DRC agrees that, in the event that Avanir requests an audit of SB under the SB
License Agreement and provides DRC USA with a reasonable basis for conducting
such audit, DRC USA shall conduct such audit under the SB License Agreement.
(d) The right to receive from SB, within thirty (30) days after
the close of each calendar quarter, a true accounting of all Product sold by SB
in the Field in the Territory in accordance with Paragraph 9.02 of the SB
License Agreement.
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2.2 Termination of SB License Agreement
In the event that the SB License Agreement is terminated in whole or in
part, (i) if Avanir undertakes distribution of the Product pursuant to Section
9.3 or 9.4, then Avanir shall pay DRC USA percentage royalties equal to those
set forth in Paragraph 3.02 of the SB License Agreement on Avanir's Direct Sales
(as defined below) for the remaining term of this Agreement in accordance with
Section 3.2(c) hereof, provided that 50% of royalties calculated on sales in
excess of $62,000,000 during each calendar year shall be retained by Avanir, or
(ii) if Avanir enters into a new license with any Third Party pursuant Section
9.3 or 9.4, such agreement shall provide that DRC USA shall be paid directly by
such Third Party the amount of all future royalty payments with respect to sales
of Product in the Field in the Territory for the remaining term of this
Agreement, provided that 50% of royalties calculated on sales in excess of
$62,000,000 during each calendar year shall be paid to Avanir. For purposes of
this Section 2.2, "Direct Sales" means the gross receipts representing sales of
the Product in the Field in the Territory by Avanir, its Affiliates or their
sublicensees to Third Parties in finished product form (i.e., packaged and
labeled for sale to the ultimate consumer) less deductions for: (i)
transportation charges, including insurance, for transporting Product, (ii)
trade, quantity and cash discounts on Product, (iii) allowances or credits to
customers on account of rejection or return of Product. Sales between Avanir,
its Affiliates or their sublicensees shall be excluded from the computation of
Direct Sales and no royalties will be payable on such sales.
ARTICLE III.
PAYMENTS
3.1 Payment of Purchase Price
(a) Subject to paragraph 3.1(b) hereof, in consideration for the
rights sold, assigned and transferred pursuant to Article II hereof, and other
provisions of this Agreement, DRC USA shall pay to Avanir Twenty Million Five
Hundred Thousand Dollars ($20,500,000) at the Closing (the "Purchase Price").
(b) Within five (5) Business Days of notice by Avanir to DRC USA
of Avanir's receipt from the USPTO of a grant of patent term extension of five
(5) years with respect to US Patent Number 4,874,794, DRC USA shall pay Avanir
(i) Three Million Six Hundred Twenty Thousand Seven Hundred Forty Eight Dollars
($3,620,748) or (ii) in the event that the period of such extension is less than
five (5) years, an amount equal to Seven Hundred Twenty Four Thousand One
Hundred Forty Nine Dollars and Sixty Cents ($724,149.60) for each year of the
extension granted, prorated for any partial year extension granted.
3.2 Remittances of Royalties
(a) Beginning with the payment that is required with respect to
the three (3) month period ended December 31, 2002 through the expiration or
termination of this Agreement, each payment of Royalty Revenues calculated on
the first Sixty-Two Million Dollars ($62,000,000) of
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Net Sales during each calendar year shall be made directly to DRC USA. Such
payments shall be made to DRC USA without any withholding or deduction there
from, except as required by Applicable Law, as set forth in Paragraph 9.04 of
the SB License Agreement, as amended by the Consent and Acknowledgment.
(b) Beginning with the payment that is required with respect to
the three (3) month period ended December 31, 2002 through the expiration or
termination of this Agreement: (1) 50% of each payment of Royalty Revenues
calculated on Net Sales in excess of Sixty Two Million Dollars ($62,000,000)
during each calendar year shall be made directly to DRC USA by SB, and (2) 50%
of each such payment shall be made directly to Avanir by SB.
(c) Payments to DRC USA pursuant to Section 2.2 hereof or this
Section 3.2 shall be made by wire transfer or federal funds or other funds
immediately available to DRC USA's bank: JPMorganChase Bank, New York, New York;
or such other account as DRC USA shall notify SB, GSK and Avanir.
(d) The accounting of Product sold by SB in the Field in the
Territory as required under Paragraph 9.02 of the SB License Agreement shall be
provided to each of Avanir and DRC USA.
3.3 Royalty Statements
In the event of a disagreement with the calculation of the payment of
Royalty Revenues in accordance with Paragraphs 3.02 to 3.08, 4.01 and 4.02 of
the SB License Agreement, DRC USA and/or Avanir shall provide a written notice
of its objection to the other party and SB and the parties notified shall meet
to discuss the matter and use reasonable efforts to address the concerns of DRC
USA and/or Avanir to the mutual satisfaction of DRC USA, Avanir and SB.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF AVANIR
Avanir represents and warrants to DRC USA as follows and acknowledges
that DRC USA is relying on such representations, warranties and covenants in
entering into this Agreement:
4.1 Corporate Matters
(a) Avanir is a corporation duly incorporated, organized and in
good standing under the laws of the State of California.
(b) Avanir has all the necessary power, right and authority to
carry on its business as it is presently conducted.
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(c) Avanir has all necessary power, right and authority to execute
and deliver, and to observe and perform its covenants and obligations under this
Agreement and the Closing Documents to which it is a party.
(d) Avanir has taken all corporate action necessary to authorize
the execution and delivery of, and the observance and performance of its
covenants and obligations under this Agreement and the Closing Documents to
which it is a party.
(e) This Agreement and each Closing Document to which Avanir is a
party has been or will be duly executed and delivered by Avanir, and this
Agreement and each Closing Document to which Avanir is a party, constitutes or
will constitute a legal, valid and binding obligation of Avanir enforceable
against it in accordance with its terms subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the enforcement
of creditors' rights or by general principles of equity.
(f) No proceedings have been taken or authorized by Avanir or, to
the knowledge of Avanir, by any other Person, with respect to the bankruptcy,
insolvency, liquidation, dissolution or winding up of Avanir.
4.2 SB License Agreement
(a) The SB License Agreement, attached as Exhibit A hereto, is in
full force and effect and is unaltered and unamended, except as provided in the
Consent and Acknowledgment. Except as set forth in Schedule C, Avanir has not
received any notice, and Avanir is not otherwise aware of, any actual or
potential defense or claim (including any claim of recoupment) of SB that could
be asserted against DRC USA as assignee.
(b) The royalty statements for the period January 1, 2001 through
September 30, 2002 describing the calculation of royalties and applicable
exchange rates provided by SB pursuant to Section 9.02 of the SB License
Agreement, attached as Exhibit C hereto, are up-to-date and, to the knowledge of
Avanir, complete and accurate in all material respects.
(c) Avanir has completed its obligations to obtain regulatory
approvals under the SB Agreement and has fully performed in all material
respects all obligations of Avanir under the SB License Agreement necessary for
sales of the Product in the Field in the Territory; provided that Avanir may
provide information and assistance to SB at SB's request.
4.3 Absence of Conflicting Agreements
Neither the execution and delivery of this Agreement or the Closing
Documents, nor the observance and performance by Avanir of any covenant or
obligation under this Agreement or any Closing Document to which it is a party,
or the consummation of any of the transactions contemplated thereby, contravenes
or results in, or will contravene or result in, a material
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violation of or a material default under (with or without the giving of notice
or lapse of time, or both) or in the acceleration of any obligation under:
(a) any Applicable Law;
(b) the articles of incorporation or by-laws of Avanir or any
directors' or shareholders' resolutions of Avanir; or
(c) any material instrument, contract, lease, license, patent or
other agreement to which Avanir is a party, or by which it or its business or
property is bound or affected.
4.4 Consents, Approvals, Etc.
Other than the Consent and Acknowledgement of SB and GSK in accordance
with Section 8.4 hereof, no consent, approval, license, order or authorization,
registration, declaration or filing with or of any Governmental Agency or other
Person is required by Avanir, in connection with:
(a) the execution and delivery by Avanir of this Agreement and the
Closing Documents to which it is a party;
(b) the observance and performance by Avanir of its obligations
under this Agreement and the Closing Documents to which it is a party; or
(c) the consummation of any of the transactions contemplated
thereby.
4.5 Compliance with Applicable Law
Avanir has conducted and is conducting its business in compliance with
all Applicable Laws, and not in breach of any Applicable Laws, except for
breaches which do not or will not (either individually or in the aggregate)
adversely affect Avanir's ability to perform its obligations under this
Agreement.
4.6 Litigation
Except as disclosed in Schedule C, there is no claim, demand, suit,
action, cause of action, dispute, proceeding, litigation, investigation,
grievance, arbitration, governmental proceeding or other proceeding, including
appeals and applications for review, in progress against, by or relating to
Avanir, which would question the validity of the Agreement or Avanir's ability
to carry out its obligations hereunder, nor to the knowledge of Avanir, are any
of the same pending or threatened. There is not presently outstanding against
Avanir or any of the Patents, any judgment, decree, injunction, order or award
of any court, Governmental Agency or arbitrator that has a material adverse
effect on Avanir or its business or property.
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4.7 Capacity to Carry on Business
Avanir is qualified to do business in all jurisdictions where the
nature, location or character of its business requires, except to the extent the
failure to be so qualified would not have a material adverse effect on Avanir's
ability to perform its obligations under this Agreement.
4.8 Patents
(a) Avanir owns the entire right, title and interest in the
Patents set forth in Schedule A; provided that Avanir is still in the process of
attending to formalities with respect to the recently filed PCT application
(PCT/US02/33019), including establishing title in Avanir's name. All inventors
are under a contractual obligation to assign rights in this invention to Avanir.
(b) Except as set forth on Schedule E, Avanir is not aware of any
infringement of, or other interference with the Patents by any Person.
(c) To Avanir's knowledge, as of the date hereof (i) each of the
Patents (excluding patent applications), and each claim therein is valid and
enforceable according to its terms and does not interfere with any patent of any
other Person; (ii) the Patents are the only patents issued or pending in respect
of the specific subject matter claimed in the Patents and the inventions claimed
in the Patent rights; (iii) the inventions claimed in the Patents are new,
useful and not obvious; (iv) the Patents and the inventions claimed in them have
not been dedicated to the public; (v) there has been no inequitable conduct or
abuse of the Patents; and (vi) no disclaimer, except any terminal disclaimer,
has been filed in respect of the Patent rights nor has there been made or
permitted any other voluntary reduction in the scope of the Patent rights.
(d) The Patents are free and clear of all liens, charges, security
interests, mortgages, options, privileges, pledges, trusts or deemed trusts
(whether contractual, statutory or otherwise) and any other encumbrance, right
or claim of any other person of any kind whatsoever, except with respect to the
license set forth on Schedule D.
4.9 Docosanol Licenses
(a) Schedule D sets forth a true and complete list of all licenses
granted by Avanir with respect to the Patents (the "Patent Licenses"). The
licenses are all in good standing in full force and effect with no amendments
except as disclosed on Schedule D, and to Avanir's knowledge, are valid and
binding obligations of the parties thereto enforceable in accordance with their
respective terms.
(b) To Avanir's knowledge, each party who is bound by the licenses
set forth on Schedule D has complied with all material terms thereof, has paid
all amounts due thereunder, has not waived any material rights thereunder and no
material default or breach exists in respect
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thereof on the part of any of the parties thereto and no event has occurred
which, after the giving of notice or the lapse of time or both, would constitute
such a material default or breach.
4.10 Trademarks
(a) Schedule B sets forth a true and complete list of all
trademarks, trademark applications and domain names assigned by Avanir to SB
pursuant to the SB License Agreement (the "Trademarks").
(b) As of the date hereof, Avanir is not aware of any infringement
of, passing-off related to, or other interference with the Trademarks by any
Person.
(c) To Avanir's knowledge, as of the date hereof, each of the
Trademarks do not interfere with any trademark of any other Person.
4.11 Disclosure
(a) The Agreement and the Closing Documents delivered by Avanir to
DRC USA in connection with this Agreement do not contain any untrue statement of
a material fact or omit any material fact necessary to make the statements
contained herein or therein in view of the circumstances under which they were
made not misleading.
(b) Avanir is not aware of any change, event or occurrence that
has taken place that has had a material adverse effect on the sales of the
Product or on the Patents or the SB License Agreement.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF DRC USA
DRC USA represents and warrants to Avanir as follows and acknowledges
that Avanir is relying on such representations and warranties in entering into
this Agreement:
5.1 Corporate Matters
(a) DRC USA is a corporation duly incorporated, organized and
validly existing under the laws of Nevada.
(b) DRC USA has all necessary power and capacity to execute and
deliver, and to observe and perform its covenants and obligations under this
Agreement and the Closing Documents to which it is a party.
(c) DRC USA has taken all corporate action necessary to authorize
the execution and delivery of, and the observance and performance of its
covenants and obligations under, this Agreement and the Closing Documents to
which it is a party.
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(d) This Agreement and each Closing Document to which DRC USA is a
party has been or will be duly executed and delivered by DRC USA, and this
Agreement and each Closing Document to which DRC USA is a party, constitutes or
will constitute a legal, valid and binding obligation of DRC USA enforceable
against it in accordance with its terms subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the enforcement
of creditors' rights or by general principles of equity.
5.2 Financial Resources
As of the Closing Date, DRC USA will have the financial resources to
pay the Purchase Price at the Closing in accordance with the terms of this
Agreement.
ARTICLE VI.
CLOSING
6.1 Closing
The Closing of the transactions contemplated by this Agreement (the
"Closing") shall take place on such date and at such time as the Parties may
agree (such time and date being herein referred to respectively as a "Time of
Closing" and the "Closing Date").
6.2 Conditions to Closing
(a) Conditions to the Obligations of DRC USA. The obligations of
DRC USA to consummate the transactions contemplated by this Agreement at the
Closing are, at its option, subject to the following conditions:
(i) Performance of Agreement. All covenants in this
Agreement to be performed by Avanir at or before the
Closing have been performed in all material respects.
(ii) Accuracy of Representations and Warranties. The
representations and warranties of Avanir set forth in
this Agreement shall be true and correct in all
material respects both on the date of this Agreement
and as of the Closing Date, except that the accuracy
of the representations and warranties that by their
terms speak as of a specified date will be determined
as of such date.
(iii) Consent and Acknowledgement. Avanir shall have
obtained from SB and GSK a Consent and
Acknowledgement to the transfer of an undivided
interest in the SB License Agreement with respect to
the Product in the Field in the Territory to the
extent set forth in this Agreement, substantially in
the form of Exhibit B hereto (the "Consent and
Acknowledgment").
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(iv) No Encumbrance. The rights transferred to DRC USA
pursuant to this Agreement shall be free and clear of
all liens, charges, security interest, mortgage,
option, privilege, pledge, trust or deemed trust
(whether contractual, statutory or otherwise) and any
other encumbrance, right or claim of any other person
of any kind whatsoever ("Encumbrance").
(v) Security Agreement. Avanir shall have entered into a
security agreement with respect to the Collateral
substantially in the form of Exhibit D (the "Security
Agreement").
(vi) Intellectual Property Assurances. DRC USA will have
obtained an opinion, or other assurances which are
commercially reasonable in the circumstances of the
transactions contemplated by this Agreement, with
respect to the Patents.
(b) Conditions to the Obligations of Avanir. The obligations of
Avanir to consummate the transactions contemplated by this Agreement at the
Closing are, at its option, subject to the following conditions:
(i) Performance of Agreement. All covenants in this
Agreement to be performed by DRC USA at or before the
Closing have been performed in all material respects.
(ii) Accuracy of Representations and Warranties. The
representations and warranties of DRC USA set forth
in this Agreement shall be true and correct in all
material respects both on the date of this Agreement
and as of the Closing Date, except that the accuracy
of the representations and warranties that by their
terms speak as of a specified date will be determined
as of such date.
(iii) Consent and Acknowledgment. Avanir shall have
obtained from SB and GSK the signed Consent and
Acknowledgment.
6.3 Deliveries at Closing
(a) Deliveries by DRC USA. DRC USA hereby agrees to deliver to
Avanir at the Closing:
(i) confirmation of the wire transfer to the following
Avanir bank account of an amount equal to the
Purchase Price:
Wachovia Securities, Inc.
Roanoke, Virginia,
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(ii) a certificate of the President and Chief Executive
Officer of DRC USA certifying that the conditions set
forth in Sections 6.2(b)(i) and (b)(ii) have been
satisfied; and
(iii) such other documents and instruments as Avanir may
reasonably require to give effect to and carry out
the transactions contemplated herein.
(b) Deliveries by Avanir. Avanir agrees to deliver to DRC USA at
the Closing:
(i) the Consent and Acknowledgement of SB and GSK to this
Agreement, contemplated by Section 6.2(a)(iii);
(ii) the Security Agreement contemplated by
Section 6.2(a)(v);
(iii) an opinion in a form satisfactory to DRC USA;
(iv) a certificate of the Secretary of Avanir attaching
(A) the articles of incorporation and bylaws of
Avanir and (B) the resolutions of the board of
directors approving the transactions contemplated
hereby;
(v) a certificate of the President and Chief Executive
Officer of Avanir certifying that the conditions set
forth in Sections 6.2(a)(i) and (a)(ii) have been
satisfied; and
(vi) such other documents and instruments as DRC USA may
reasonably require to give effect to and carry out
the transactions contemplated herein.
ARTICLE VII.
INDEMNIFICATION
7.1 Third Party Claims
(a) Avanir and DRC USA each agrees as the "Indemnifying Party" to
indemnify and save harmless the other (the "Indemnified Party"), effective as
and from the date hereof, from and against any claims, demands, actions, causes
of action, damage, loss (other than loss of profit unrelated to the Royalty
Revenues), cost, liability or expense ("Claims") which may be made or brought
against the Indemnified Party or which it may suffer or incur as a result of, in
respect of, or arising out of an action brought by a Third Party relating to (a)
any non-fulfillment of any covenant or agreement on the part of the Indemnifying
Party under this Agreement or any Closing Document, or (b) any material
incorrectness in or breach of any representation or
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warranty of the Indemnifying Party contained herein or in any Closing Document.
Any amount which an Indemnifying Party is required to pay to an Indemnified
Party pursuant to this Section is called an "Indemnified Loss".
(b) If a Claim is made against an Indemnified Party by a Third
Party for which the Indemnified Party may be entitled to indemnification under
Section 7.1, the Indemnified Party shall give notice (the "Indemnity Notice") to
the Indemnifying Party specifying the particulars of such claim within ten (10)
days after it receives notification of the Claim. Failure to give such notice
within such time period shall not prejudice the rights of an Indemnified Party,
except to the extent that the failure to give such notice materially adversely
affects the ability of the Indemnifying Party to defend the Claim or to cure the
breach or incorrectness of the representation, warranty, covenant or agreement
giving rise to the Claim. The Indemnifying Party shall have the right to
participate in any negotiations or proceedings with respect to a Claim at the
expense of the Indemnifying Party. The Indemnified Party shall not settle or
compromise any Claim without the prior written consent of the Indemnifying Party
(which consent will not be unreasonably withheld or delayed), unless the
Indemnifying Party has not, within ten (10) Business Days after the giving of
the Indemnity Notice, given notice to the Indemnified Party that it wishes to
dispute such Claim. If the Indemnifying Party does give such a notice, it shall
have the right, at its expense, to assume the defense of such Claim and to
defend the Claim in the name of the Indemnified Party. The Indemnified Party
shall provide to the Indemnifying Party all files, books, records and other
information in its possession or control which may be relevant to the defense of
such Claim. The Indemnified Party shall co-operate in all reasonable respects in
the defense of such Claim at the Indemnifying Party's expense. If the
Indemnifying Party fails, after assuming the defense of such Claim, diligently
and reasonably to defend such Claim throughout the period that such Claim
exists, its right to defend the Claim shall terminate and the Indemnified Party
may assume the defense of such Claim at the expense of the Indemnifying Party.
In such event, the Indemnified Party may compromise or settle such Claim without
the consent of the Indemnifying Party.
7.2 Limits on Indemnification
No Indemnified Party shall be entitled to indemnification under this
Article VII for any Indemnified Loss until the aggregate amount of Indemnified
Losses incurred by such Indemnified Party exceeds $250,000, in which event, such
Indemnified Party shall be entitled only to receive amounts of the Indemnified
Losses in excess of $250,000. Further, no Indemnifying Party shall be liable to
pay any amounts for Indemnified Losses under this Article VII in excess of an
aggregate of $2,000,000.
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ARTICLE VIII.
COVENANTS
The Parties covenant and agree as follows:
8.1 Cooperation
The Parties shall cooperate fully with each other in furnishing any
information and performing any action reasonably required by the other Party to
facilitate the prompt and successful consummation of the transactions
contemplated by this Agreement.
8.2 Non-Interference
During the term of this Agreement, Avanir shall not, either alone or in
partnership or jointly with any other Person, carry on or be engaged in any
activity that would adversely affect the sales of the Product in the Field in
the Territory or the rights of DRC USA to receive Royalty Revenues pursuant to
this Agreement.
8.3 Access
From the date hereof until Closing, DRC USA, its counsel and its other
authorized representatives shall have reasonable access during normal business
hours and upon reasonable notice to the books and records of Avanir that relate
to the SB License Agreement and the right to make copies of all such books and
records.
8.4 Other Information
(a) Avanir and DRC USA shall cooperate to ensure that each Party
has received copies of all notices and correspondence with respect to the SB
License Agreement.
(b) If requested by DRC USA, Avanir shall provide DRC USA a
complete status report of all Collateral. Upon request by DRC USA, Avanir shall
deliver to counsel for DRC USA copies of any such Collateral.
(c) Avanir shall notify DRC USA in writing at the address set
forth in Section 11.9 at least sixty days prior to any voluntary abandonment of
any Collateral (other than items of Collateral that are not useful or beneficial
to the business and operations of Avanir).
(d) Avanir shall make available to DRC USA upon reasonable notice
and during regular business hours the officers of Avanir who have information
regarding (i) the SB License Agreement, the Patents, the Trademarks, the
Know-How and (ii) any other license agreements
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related to the Patents or any other documents affecting the present or future
title or rights to use the Patents.
8.5 Patents
(a) During the term of this Agreement, in the event that Avanir
shall make, conceive or reduce to practice any invention or discovery with
respect to the Product in the Field in the Territory, Avanir shall promptly
provide written notice of such invention or discovery to DRC USA.
(b) Avanir shall provide DRC USA notice of the filing of any
patent application arising out of an invention or discovery under Section 8.5(a)
hereof.
8.6 SB License Agreement
(a) Each Party shall not, with respect to the SB License
Agreement, including its rights to receive certain Royalty Revenues, (i) purport
to forgive, release, or compromise any amount owed to the other Party under the
SB License Agreement with respect to the Product in the Field in the Territory
or (ii) purport to waive, cancel or otherwise relinquish any rights under the SB
License Agreement with respect to the Product in the Field in the Territory.
Avanir shall not fail to exercise any retained right or power under the SB
License Agreement, which in Avanir's reasonable business judgment would
adversely affect the Royalty Revenues transferred to DRC USA hereunder;
provided, however, that Avanir shall have no obligation to prosecute, maintain
or defend the Patents.
(b) Each Party acknowledges and agrees that the other Party has a
fundamental interest in the performance by SB of its obligations pursuant to the
SB License Agreement and that the material failure of SB to perform its duties
and responsibilities in accordance with the SB License Agreement may adversely
affect each Party's rights to receive Royalty Revenues hereunder. Accordingly,
if SB fails or neglects to perform covenants or provisions in any material
respect under the SB License Agreement, each Party shall notify the other Party
of such material failure or neglect within ten (10) Business Days and shall
consult with the other Party as to such material failure or neglect. Each such
notification shall contain full particulars of the material failure or neglect
described therein. Each Party agrees to cooperate with the other Party with
respect to any commercially reasonable action that the Parties agree shall be
taken in order to remedy such material failure or neglect. In the event that a
Party fails to so cooperate, the other Party shall have the right, but not the
obligation to pursue, enforce and defend any of the rights of such Party under
the SB License Agreement and such Party shall be deemed to have appointed and
authorized the other Party with full power and substitution, as its attorney in
fact, (such appointment coupled with an interest) to take or bring, in the name
of DRC USA or Avanir, as the case may be, all steps, actions, suits or
proceedings and execute all documents deemed necessary or desirable to enforce
the SB License Agreement pursuant to this Section 8.6(b) hereof. Insofar as
permissible under Applicable Law, this power of attorney shall survive the
bankruptcy, insolvency, dissolution or wind-up of a Party.
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(c) If, during the term of this Agreement, Avanir elects not to
prosecute, maintain or defend any of the Patents and SB does not elect to
undertake such prosecution, maintenance or defense pursuant to the terms of the
SB License Agreement, Avanir shall give DRC USA notice thereof, and DRC USA
shall thereafter have the right, at its sole expense, to prosecute, maintain or
defend such Patents. In the event that DRC USA undertakes such obligation,
Avanir shall be deemed to have appointed and authorized DRC USA with full power
and substitution, as its attorney in fact, (such appointment coupled with an
interest) to take or bring, in the name of Avanir, all steps, actions, suits or
proceedings and execute all documents deemed necessary or desirable to
prosecute, maintain or defend such Patents. Insofar as permissible under
Applicable Law, this power of attorney shall survive the bankruptcy, insolvency,
dissolution or wind-up of Avanir.
8.7 Patent Litigation
(a) In the event that Avanir becomes aware of (i) the institution
of any suit by a Third Party against Avanir, SB, any Affiliate of SB, or any
permitted sublicensee or distributor for patent infringement or other claims
involving the Product or the Patents anywhere in the Territory or (ii) actual or
threatened infringement of a Patent, Avanir shall promptly provide written
notice to DRC USA.
(b) To the extent Avanir has knowledge of the following, Avanir
shall provide DRC USA with notice of the material events regarding any
litigation or settlement concerning the Product or the Patents.
8.8 Books and Records
Avanir shall maintain at its usual place of business up-to-date
records, reports, accounts, books and files that shall accurately reflect all
particulars known to or under the control of Avanir which pertain to the
Product.
8.9 Notification
Avanir shall, subject to its obligations of confidentiality with Third
Parties, promptly notify DRC USA in writing of any Event of Default and each
such notification shall contain a summary of such Event of Default.
8.10 Further Licenses
Avanir shall provide written notice to DRC USA in the event that Avanir
shall enter into any additional license agreements with respect to the Patents
in the Field in the Territory. The written notice to DRC USA shall provide full
particulars, subject to any applicable confidentiality obligations of Avanir and
shall confirm that the licensee has notice of and consented to the rights of DRC
USA to the Patents.
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8.11 Transfer of Patents
As long as this Agreement remains in effect, Avanir shall not sell,
assign or otherwise transfer or encumber the Patents or any interest therein
(any such transaction being referred to in this Section 8.11 as a "Transfer"),
except in a transaction that is consistent with and preserves the undivided
interest conveyed to DRC USA under Section 2.1 and all of the related rights of
DRC USA under this Agreement and the Security Agreement (including DRC USA's
rights under this Section 8.11, which shall apply to any subsequent Transfer),
as determined by Avanir in good faith and in consultation with DRC USA. Avanir
shall not have any obligation to comply with the foregoing in the event (a) of a
merger or consolidation with another entity, or any transaction or series of
transactions that may result in a change of control of Avanir, or (b) Avanir
enters into any Permitted License in accordance with Section 2(b) of the
Security Agreement.
ARTICLE IX.
TERM AND TERMINATION
9.1 Term
This Agreement shall become effective as of the date first set forth
above and, unless earlier terminated in accordance with the provisions of
Section 9.2, shall expire on the later of (i) December 13, 2013, and (ii) the
date of expiration or invalidity of US Patent Number 4,874,794.
9.2 Termination
(a) This Agreement shall terminate on the expiration of the term
specified in Section 9.1, unless earlier terminated in accordance with this
Section 9.2.
(b) This Agreement may be terminated before the Closing and the
transactions contemplated hereunder shall thereupon be abandoned (i) by mutual
written consent of the Parties or (ii) by either Party upon written notice at
any time after December 6, 2002.
(c) After Closing, DRC USA may terminate this Agreement upon
written notice to Avanir of an Event of Default as set forth in Section 10.2.
9.3 Partial Termination of SB License Agreement
If GSK exercises its right to terminate the SB License Agreement on a
country-by-country basis pursuant to Paragraph 10.04 of that agreement, Avanir
shall first have the option to undertake for a period of one hundred and eighty
(180) days from the date of the termination reasonable efforts to conclude a new
license agreement on commercially reasonable terms to replace the SB License
Agreement, in relevant part. In the event that Avanir undertakes to conclude a
new license and such a license agreement is not concluded within the above
period, Avanir shall have the right to elect to undertake marketing and
distribution of the Product in the
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Field in Territory, with respect to that country or countries that shall have
been terminated by SB, for the term of the Agreement, by providing notice in
writing to DRC USA within fifteen (15) Business days of the end of the above
noted one hundred and eighty (180) day period. If Avanir (a) does not elect to
conclude a new license or (b) elects to conclude a new license, but is not
concluded within the above period and does not deliver to DRC USA the above
notice to undertake marketing and distribution of the Product in the Field in
the Territory, DRC USA shall be authorized to negotiate for and on behalf of
Avanir a new license agreement on commercially reasonable terms and conditions
acceptable to Avanir and DRC USA. Avanir agrees to execute and abide by any such
new license agreement.
9.4 Termination of SB License Agreement
If Avanir exercises its right to terminate the SB License Agreement in
its entirety under the provisions of Paragraphs 10.03 or 10.05 of that
agreement, or if SB exercises its right to terminate the SB License Agreement in
its entirety under the provisions of Paragraphs 10.03 or 10.04 of that
agreement, Avanir shall first have the option to undertake for a period of one
hundred and eighty (180) days from the date of the termination reasonable
efforts to conclude a new license agreement on commercially reasonable terms to
replace the SB License Agreement. In the event that Avanir undertakes to
conclude a new license and such a license agreement is not concluded within the
above period, Avanir shall have the right to elect to undertake marketing and
distribution of the Product in the Field in Territory for the term of the
Agreement, by providing notice in writing to DRC USA within fifteen (15)
Business days of the end of the above noted one hundred and eighty (180) day
period. If Avanir (a) does not elect to conclude a new license or (b) elects to
conclude a new license, but is not concluded within the above period and does
not deliver to DRC USA the above notice to undertake marketing and distribution
of the Product in the Field in the Territory, DRC USA shall be authorized to
negotiate for and on behalf of Avanir a new license agreement on commercially
reasonable terms and conditions acceptable to Avanir and DRC USA. Avanir agrees
to execute and abide by any such new license agreement
9.5 Survival
The provisions of Section 1, Article VII, Sections 9.5, 11.1, 11.8 and
11.9 shall survive and continue notwithstanding the termination or expiration of
this Agreement. Upon any termination of this Agreement, each Party shall
promptly return to the other Party all information received from such Party,
provided that each Party may keep one copy of such information for
record-keeping purposes.
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ARTICLE X.
EVENTS OF DEFAULT
10.1 Events of Default
Each of the following events shall constitute an event of default (an
"Event of Default") under this Agreement:
(a) if Avanir fails to observe or perform in any material respect
any of the agreements set forth in Sections 2.2, 8.11, 9.3 and 9.4 and does not
remedy such failure within thirty (30) days after receiving notice from DRC USA
specifying the failure and requiring that it be remedied (or if incapable of
remedy within thirty (30) days, then such longer period, not to exceed a further
fifteen (15) days as may be reasonable to remedy such failure provided Avanir
uses all commercially reasonable efforts throughout such period to remedy the
same);
(b) termination of the SB License Agreement by SB pursuant to the
provisions of Paragraph 10.05 thereof; or
(c) in the event of the entry of an order for relief with respect
to Avanir as a debtor in a proceeding under the U.S. Bankruptcy Code, and (i)
the rejection of the SB License Agreement by or on behalf of Avanir under
Section 365 of the U.S. Bankruptcy Code and (ii) SB fails to elect to retain its
rights under the SB License Agreement pursuant to Section 365(n) of the U.S.
Bankruptcy Code.
10.2 Remedies upon Event of Default
Upon the occurrence of any Event of Default that is continuing and not
waived by DRC USA then, DRC USA may, at its option, terminate this Agreement
and/or exercise its rights under the Security Agreement.
10.3 Specific Performance
Each of the Parties acknowledge that the other Party may have no
adequate remedy at law if it fails to perform its obligations under Sections
8.1, 8.2 and 8.4 to 8.10 of this Agreement. In such event, each of the Parties
agrees that the other Party shall have the right, in addition to any other
rights it may have at law or in equity, to specific performance of the
Agreement.
10.4 Partial Exercise of Rights
No single or partial exercise of rights by DRC USA under this Agreement
shall preclude any other or further exercise thereof or preclude any other right
or remedy at law or in equity.
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ARTICLE XI.
GENERAL
11.1 Confidentiality
During the term of this Agreement and for five (5) years thereafter,
each of DRC USA, its Affiliates and Avanir shall not use, reveal or disclose to
Third Parties any information received from the other Party in connection with
the Agreement (including any information or reports provided to DRC USA or its
Affiliates by SB or GSK), as well as the terms of this Agreement, without first
obtaining the written consent of the disclosing or other Party, except as may be
otherwise provided herein. This confidentiality obligation shall not apply to
information which (a) is or becomes a matter of public knowledge, (b) is already
in the possession of the receiving Party, (c) is disclosed to the receiving
Party by a Third Party having the right to do so, or (d) is required by
Applicable Law to be disclosed. The Parties shall take reasonable measures to
assure that no unauthorized use or disclosure is made.
11.2 Survival of Representations and Warranties
All representations and warranties made by either Party in this
Agreement or in any Closing Document shall survive the Closing for a period of
one year.
11.3 Amendment
This Agreement may be amended or supplemented only by a written
agreement signed by each Party.
11.4 Waiver of Rights
Any waiver of, or consent to depart from, the requirements of any
provision of this Agreement shall be effective only if it is in writing and
signed by the Party giving it, and only in the specific instance and for the
specific purpose for which it has been given. No failure on the part of any
Party to exercise, and no delay in exercising, any right under this Agreement
shall operate as a waiver of such right. No single or partial exercise of any
such right shall preclude any other or further exercise of such right or the
exercise of any other right.
11.5 Tender
Any tender of documents or money hereunder may be made upon the Parties
or their respective counsel and money shall be tendered by certified check, bank
draft or wire transfer, as mutually agreed by the Parties.
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11.6 Performance on Holidays
If any action is required to be taken pursuant to this Agreement on or
by a specified date which is not a Business Day, then such action shall be valid
if taken on or by the next succeeding Business Day.
11.7 Financial Reporting Standards
All accounting and financial terms used herein and the treatment of any
accounting matter contemplated herein, unless specifically provided to the
contrary, shall be interpreted and applied in accordance with GAAP.
11.8 Expenses
Each Party shall pay all expenses it incurs in authorizing, preparing,
executing and performing this Agreement and the transactions contemplated
hereunder, whether or not the Closing occurs, including all fees and expenses of
its legal counsel, brokers, accountants or other representatives or consultants.
11.9 Notices
Any notice, demand or other communication (in this Section, a "Notice")
required or permitted to be given or made hereunder shall be in writing and
shall be sufficiently given or made if:
(a) delivered in person during normal business hours of the
recipient on a Business Day and left with a receptionist or other responsible
employee of the recipient at the relevant address set forth below;
(b) except during any period of actual or imminent interruption of
postal services due to strike, lockout or other cause, sent by registered mail;
or
(c) sent by Transmission, charges prepaid and confirmed by
registered mail as provided in Subsection (b);
in the case of a notice to Avanir at:
Avanir Pharmaceuticals
00000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxx Xxxxxxxxxx 00000
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Attention: President and CEO
Fax No.: (000) 000-0000
with a copy to Xxxxxx Xxxxxx White & XxXxxxxxx LLP at:
Xxxxxx Xxxxxx White & XxXxxxxxx LLP
0000 Xx Xxxxx Xxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxx Xxxxxx, Esq.
Fax No.: (000) 000-0000
and in the case of a notice to DRC USA at:
Drug Royalty USA, Inc.
000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxx 000
P.O. Box 50401
Las Vegas, Nevada 89109 U.S.A
Attention: Xxxxxx Xxxxxxxxxxxx
Fax No.: (000) 000-0000
with a copy to Drug Royalty Corporation at:
Drug Royalty Corporation
Royal Bank Plaza, Ste: 3120
South Tower
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxxx Xxxxxxxxxxxx
Fax No.: (000) 000-0000
and with a copy to Xxxxxx Xxxxxx Gervais LLP at:
00 Xxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxxxx X. Xxxxxx
Fax No. (000) 000-0000
Any Notice so given shall be deemed to have been given and to have been
received (a) on the day of delivery, if so delivered, (b) on the fifth Business
Day (excluding each day during which there exists any interruption of postal
services due to strike, lockout or other cause)
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following the mailing thereof, if so mailed, and (c) on the day following the
day Notice was sent by Transmission, provided such day is a Business Day and if
not, on the first Business Day thereafter. Addresses for Notice may be changed
by giving notice in accordance with this Section.
11.10 Assignment
Upon notice in writing to Avanir, this Agreement and any or all of the
rights or obligations of DRC USA under this Agreement and under the SB License
Agreement shall be assignable. Neither this Agreement, nor any or all of the
rights or obligations hereunder shall be assignable by Avanir without the prior
written consent of DRC USA, which shall not be unreasonably withheld; provided
that such consent shall not be required in the event of a merger, reorganization
or acquisition of Avanir, or the sale by Avanir of all or substantially all of
its assets. Subject thereto, this Agreement shall inure to the benefit of and be
binding upon the Parties and their respective successors (including any
successor by reason of merger, reorganization, sale of assets or statutory
arrangement of any Party) and permitted assigns.
11.11 Further Assurances
Each Party shall do such acts and shall execute such further documents,
conveyances, deeds, assignments, transfers and the like, and will cause the
doing of such acts and will cause the execution of such further documents as are
within its power as any other Party may in writing at any time and from time to
time reasonably request be done and/or executed, in order to give full effect to
the provisions of this Agreement and the Closing Documents.
11.12 Independent Parties
Nothing contained in this Agreement shall in any way or for any purpose
constitute any Party a partner or agent or legal representative of any other
Party in the conduct of any business or otherwise or a member of a joint venture
or joint enterprise or create any fiduciary relationship among them. No Party
shall have any authority to act for or to assume any obligation or
responsibility on behalf of any other and no Party shall have any authority to
bind any other Party to act or to undertake any obligation or responsibility
whatsoever.
11.13 Public Announcements
The Parties agree to discuss and coordinate all public announcements
concerning the transactions contemplated herein, except as may be necessary, in
the opinion of counsel to the Party making such disclosure, to comply with the
requirements of any Applicable Law. If any such public statement or release is
so required, the Party making such disclosure shall consult with the other Party
prior to making such statement or release, and the Parties shall use
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reasonable efforts, acting in good faith, to agree upon a text for such
statement or release which is satisfactory to all Parties.
11.14 Severability
If any covenant, obligation or provision of this Agreement or the
application thereof to any Person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement or the application of
such covenant, obligation or agreement to Persons or circumstances, other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby and each covenant, obligation and provision of this Agreement shall be
separately valid and enforceable to the fullest extent permitted by law.
11.15 Counterparts
This Agreement may be executed in any number of counterparts and by
facsimile transmission. Each executed counterpart shall be deemed to be an
original. All executed counterparts taken together shall constitute one
agreement.
11.16 Facsimile Execution
To evidence the fact that it has executed this Agreement, a Party may
send a copy of its executed counterpart to the other Party by facsimile
transmission. That Party shall be deemed to have executed this Agreement on the
date it sent such facsimile transmission. In such event, such Party shall
forthwith deliver to the other Party the counterpart of this Agreement executed
by such Party.
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TO WITNESS THEIR AGREEMENT, the Parties have duly executed this
Agreement on the date first set forth above.
AVANIR PHARMACEUTICALS
By: /s/Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: President and Chief Executive Officer
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DRUG ROYALTY USA, INC.
By: /s/Xxxxxx Xxxxxxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxxxxxx
-------------------------------------
Title: President and Chief Executive Officer
-------------------------------------
SIGNATURE PAGE TO LICENSE PURCHASE AGREEMENT
