CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
EXHIBIT 10.18
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COLLABORATION, DEVELOPMENT AND LICENSE AGREEMENT
This Collaboration, Development and License Agreement ("Agreement") is made as
of this 28th day of October, 2004 by and between AlgoRx Pharmaceuticals, Inc.
("ALGORX"), with its principal place of business being located at 000 Xxxxx
Xxxxx, 0xx Xxxxx, Xxxxxxxx, Xxx Xxxxxx 00000, X.X.X. and BRIDGE PHARMA, Inc.
("BRIDGE"), with its primary place of business located at 000 Xxxxxxxx Xxxxxx,
Xxxxxxxx, XX 00000, X.X.X. (ALGORX and BRIDGE each a "Party" and together
"Parties").
WHEREAS, BRIDGE is the owner of certain proprietary technology relating to
analgesic and local anesthetic pharmaceutical agents based upon
*********************** and *********************** and derivatives, isomers,
metabolites and analogues thereof, including but not limited to those compounds
designated by BRIDGE as ****** and ******.
WHEREAS, ALGORX wishes to obtain a license from BRIDGE to BRIDGE's proprietary
technology for the rights to manufacture or have manufactured, use and sell
products worldwide for all analgesic and local anesthetic Indications, all on
the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration for the mutual promises and covenants contained
herein, the receipt and sufficiency of which is hereby acknowledged, the Parties
hereby agree as follows:
ARTICLE 1
DEFINITIONS
As used in this Agreement, the following terms, whether used in the singular
or the plural, shall have the following meanings:
"Affiliate" means any corporation or non-corporate business entity that
controls, is controlled by, or is under common control with a Party. For
purposes of this definition only, a corporation or non-corporate business entity
shall be regarded as in control of another corporation if it owns or directly or
indirectly controls at least fifty percent (50%) of the voting stock of the
other corporation, or such lesser maximum percentage permitted in those
jurisdictions where majority ownership by foreign entities is prohibited, or (a)
in the absence of the ownership of at least fifty percent (50%) of the voting
stock of a corporation, or (b) in the case of a non-corporate business entity,
if it possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of the corporation or noncorporate
business entity, as applicable, whether through the ownership or control of
voting securities, by contract or otherwise.
"ALGORX Know-How" means all data, information, methods, standard operating
procedures, trade secrets, formulas, techniques, assays, protocols, processes
and materials that (a) are developed by ALGORX pursuant to its development and
commercialization of Licensed Product during the term of this Agreement, (b) are
not, as of the Effective Date or at any time thereafter, in the public domain or
generally known or available to the public or disclosed in any ALGORX Patents,
and (c) are necessary or useful for the development, manufacture, use or
commercialization of a Compound or a Licensed Product.
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"ALGORX Patent Rights" means all (a) patents and patent applications owned
or Controlled by ALGORX claiming or covering any Invention conceived and reduced
to practice by ALGORX during the term of this Agreement necessary or useful for
the development, manufacture, use or commercialization of a Compound or a
Licensed Product; and (b) all current and future continuations,
continuations-in-part, divisions, patents of addition, reissues, renewals or
extensions, substitutions, supplementary protection certificates of the patents
and patent applications described in (a) above, and the foreign patents and
foreign patent applications to any of the foregoing, to the extent ALGORX's
rights in such Inventions were not assigned to BRIDGE, according to Article
8.3(a). ALGORX Patent Rights also include ALGORX's interest in any Joint Patent
Rights.
"ALGORX Technology" means the ALGORX Know-How and the ALGORX Patent
Rights.
"BRIDGE Know-How" means all data, information, methods, standard operating
procedures, trade secrets, formulas, techniques, assays, protocols, processes
and materials that (a) are owned or Controlled by BRIDGE as of the Effective
Date or at any time during the term of this Agreement, (b) are not, as of the
Effective Date or at any time thereafter, in the public domain or generally
known or available to the public or disclosed in any BRIDGE Patents, and (c) are
necessary or useful for the development, manufacture, use or commercialization
of a Compound or a Licensed Product.
"BRIDGE Patent Rights" means all (a) patents and patent applications owned
or Controlled by BRIDGE claiming or covering any Invention that is necessary or
useful for the development, manufacture, use or commercialization of a Compound
or a Licensed Product, including without limitation those listed on Appendix A;
and (b) all current and future continuations, continuations-in-part, divisions,
patents of addition, reissues, renewals or extensions, substitutions,
supplementary protection certificates of the patents and patent applications
described in (a) above, and the foreign patents and foreign patent applications
corresponding to any of the foregoing. BRIDGE Patent Rights also include any
patents or patent applications claiming Inventions conceived and reduced to
practice by ALGORX after the Effective Date that are assigned to BRIDGE pursuant
to Article 8.3(a), and BRIDGE's interest in any Joint Patent Rights.
"BRIDGE Technology" means the BRIDGE Know-How and the BRIDGE Patent
Rights.
"Controlled by" means ownership or possession of the ability to assign or
to grant access, a license or sublicense, without violating the terms of any
agreement or other arrangement with a Third Party; provided, however, that a
Party has exercised Diligent Efforts to obtain the rights to assign or grant
access, a license or sublicense from such Third Party.
"Commencement" means, with respect to a clinical trial complying with all
laws and regulations of the jurisdiction in which it is conducted, the date upon
which the first patient is enrolled in such clinical trial.
"Composition of Matter" means a specific chemical mixture or chemical
composition containing or comprising a Compound.
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"Compound" means (a) BRIDGE's proprietary compounds ****** and ****** and
(b) any other compounds owned or Controlled by BRIDGE prior to or during the
term of this Agreement utilizing or based upon *********************** and
*********************** and derivatives, isomers, metabolites and analogues
thereof.
"Conversion Country" means a country that has been subjected to a
"Conversion Event."
"Conversion Event" is an event as described in Article 12.4(a).
"Diligent Efforts" shall mean the carrying out of obligations or tasks in
a commercially reasonable manner consistent with the efforts a similarly
situated biopharmaceutical company would devote to the development and marketing
of its own compounds and products having comparable commercial potential, stage
of development, medical/scientific, technical and regulatory profile, and patent
protection.
"Dollars" or "$" means dollars in the currency of the United States.
"Effective Date" means the date indicated on the first page of this
Agreement and is the date when this Agreement goes into effect.
"EU" means all the countries that are member states, from time to time, of
the European Union.
"FDA" means the United States Food and Drug Administration, or any
successor entity thereto.
"Fair Asset Value" shall have the meaning set forth in Article
12.5(f)(ii).
"Field" means analgesia and/or local anesthesia in humans or animals via
any route of administration, including without limitation dermal, mucosal,
dental, ophthalmic or injection.
"IND" means an Investigational New Drug Application filed or to be filed
with the FDA in the United States or its equivalent outside of the USA.
"Indication" means (i) any of the following standard analgesic or local
anesthetic indications designated by the FDA: acute topical, chronic topical,
nerve block, infiltration, and ocular, and (ii) any future standard analgesic or
local anesthetic indication for which separate pivotal clinical trials are
required by the FDA for the marketing of a Licensed Product.
"Invention" means any patentable discovery, invention, improvement, idea,
concept, technique, method, process, formula or technology.
"Joint Invention" shall have the meaning set forth in Article 8.3(c).
"Joint Patent Rights" means (a) all patents and patent applications
claiming or covering any Joint Invention; and (b) all current and future
continuations, continuations-in-part, divisions, patents of addition, reissues,
renewals or extensions, substitutions, supplementary protection certificates of
the patents and
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patent applications described in (a) above, and the foreign patents and foreign
patent applications to any of the foregoing.
"Joint Product Steering Committee" or "JC" means such committee, as
described in Article 2.2.3.
"Licensed Product" means any product containing or comprising a Compound
and which is covered by a Valid Claim of the BRIDGE Patent Rights, or which
incorporates any BRIDGE Know-How.
"Management" means executive management of either of either Party, having
the right to make substantive decisions, such to include the president and the
chief executive officer thereof.
"Major Market Country" means the following countries: the United States,
China, Japan, the United Kingdom, France, Germany, Italy and Spain.
"Minimum Development Expenditure" shall mean ALGORX's minimum expenditure
commitment, either by itself or through its Affiliates and sublicensees, in the
aggregate and on a worldwide basis, to develop and commercialize Licensed
Products hereunder during each calendar year during the term hereof, commencing
January 1, 2005 and ending with the first commercial sale of a Licensed Product.
Such minimum commitment shall be One Million Dollars ($1,000,000) per
calendar year; provided, however, that in no event shall the Minimum Development
Expenditure, or ALGORX's meeting thereof, necessarily reflect the Parties'
understanding of Diligent Efforts or conclusively constitute ALGORX's exercise
of Diligent Efforts as required hereunder during any particular calendar year.
"NDA" means a New Drug Application filed with the FDA in the United States
or a corresponding filing outside of the USA filed with the appropriate
Regulatory Agency.
"NDA Approval" means the FDA's approval of an NDA filed by or on behalf of
a Party for marketing a Licensed Product for an Indication in the United States,
or a corresponding approval for such Licensed Product by the applicable
Regulatory Agency for any other country or regulatory jurisdiction, together
with any other authorizations by governmental authorities which are required for
the marketing, promotion, pricing and sale such Licensed Product, including all
manufacturing, pricing and reimbursement approvals.
"Net Sales" means the gross sales amount (however denominated, whether as
sales revenue, royalty, in-kind payment, or otherwise) for Licensed Product in
finished product form actually received by ALGORX, its Affiliates or
sublicensees from Third Parties, less the following deductions, without
duplication: (a) amounts, if any, actually repaid or credited by reason of
rejections or returns (including for spoiled, damaged, outdated, expired
Licensed Product sold, withdrawals and recalls); (b) taxes, excises, customs
duties or other governmental charges (excluding income taxes); (c)
transportation, delivery and insurance charges actually incurred in connection
with Licensed Products if included in the billed amount; (d) trade, cash and
quantity discounts, rebates and allowances, if any, actually given in the
ordinary course of business, including mandatory rebates to governmental
agencies with discounts; (e) retroactive price reductions actually imposed by
public authorities; and (f) royalty amounts, if any, paid to Third Parties in
connection with any Preferred Third Party Patent. "Net Sales" shall not be net
of
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any amounts paid or deductions made for commissions or fees paid to any person,
whether they be with independent sales agencies, regularly employed by a ALGORX
or its Affiliates, or under a sublicense or co-promotion arrangement, or for
discounts or rebates, if any, actually allowed, if any such discount or rebate
has been granted on any basis other than the purchase of Licensed Products. The
computation of Net Sales shall not include amounts received by ALGORX, its
Affiliates and sublicensees for the sale of Licensed Product among ALGORX, its
Affiliates and sublicensees, unless such intra-group sale in any particular
instance generates a higher Net Sales amount than the ultimate sale to a Third
Party. If a Licensed Product is sold in combination with one or more other
products, active ingredients or services that are sold separately by ALGORX, and
whose sale and use are not covered by a Valid Claim of a BRIDGE Patent Right in
the country for which the combination product is sold (such other products,
ingredients or services of ALGORX, the "Other Components"; such combined
product, the "Combined Offering"), the gross sales amount for such Combined
Offering attributable to the Licensed Product, for purposes of calculation of
Net Sales for the Licensed Product hereunder (the "Combined Offering
Allocation"), shall be calculated in accordance with the following formula: the
Combined Offering Allocation shall be the product of (x) the gross sales amount
received by ALGORX, its Affiliates or sublicensees, as applicable, for the
Combined Offering, less the deductions set forth in subsections (a) through (e)
above, and (y) a fraction, the numerator of which is the aggregate sales amount
ALGORX, its Affiliates or sublicensees receives for the Licensed Product
included within the Combined Offering when such Licensed Product is sold
independently in such country (or, if no such independent sales are made in such
country, the amount that would reasonably be received), and the denominator of
which is the aggregate sales amount ALGORX, its Affiliates or sublicensees would
reasonably receive for both the Licensed Product and all Other Component(s)
included within the Combined Offering if such Licensed Product and all Other
Component(s) were sold independently (or, if no such independent sales are made
in such country of one or more of the Other Components, the amount that would
reasonably be received). The Combined Offering Allocation formula shall be
recalculated at least on an annual basis and with greater frequency if
reasonably necessary due to significant changes in the market. "Net Sales" of
the Licensed Product in such circumstance shall be the Combined Offering
Allocation calculated in accordance with the above. For purposes of
clarification, the Parties acknowledge and agree that "Net Sales" shall in no
event be "doubly reduced" by both a Combined Offering Allocation and a deduction
under subsection (f) above for a Preferred Third Party Patent; that is, if a
Licensed Product is combined with one or more Other Components, "Net Sales" in
such circumstance shall be calculated either by using the Combined Offering
Allocation in connection with such Other Component or by making a Preferred
Third Party Patent royalty deduction under subsection (f) above in connection
with such Other Component, but not both. Any dispute regarding the calculation
of Licensed Product Net Sales in a Combined Offering shall be resolved by an
Industry Expert according to the procedures of Article 14.2 below.
"Party" means ALGORX or BRIDGE; "Parties" means ALGORX and BRIDGE.
"Phase I" means the first phase of human clinical trials using a limited
number of human subjects to gain evidence of the safety and tolerability of a
product or compound.
"Phase II" means the second phase of human clinical trials utilizing a
product or compound in human subjects (in conjunction with performance of a
therapeutic procedure) to gain evidence of the efficacy in one or more
Indications and expanded evidence of the safety of a product or compound, as
well as an indication of the dosage regimen required.
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"Phase III" means the third phase of human clinical trials of a product or
compound designed to demonstrate clinical efficacy and safety in a large number
of human subjects (in conjunction with performance of a therapeutic procedure)
pursuant to a clinical study agreed with the FDA at an end of Phase II meeting
(or other such meeting), which study FDA defines as a pivotal clinical trial
necessary for marketing approval of a product or compound for an Indication.
"Preferred Country" means the following countries: the United States,
China, Japan, the United Kingdom, France, Germany, Italy, Spain, Australia,
Canada, Belgium, Russia, South Africa, Mexico, Poland and Scandinavia (Sweden,
Norway, Denmark and Finland).
"Preferred Third Party Patent" means any patent owned by a Third Party
that claims or covers an Invention that in the good faith, reasonable agreement
of the Managements of both Parties is reasonably likely to provide greater Net
Sales of Licensed Products in the country covered by such patent than Licensed
Products sold in that country would generate in the absence of the use of such
Invention (including, for example and without limitation, a commercially
superior topical formulation). The following are not considered "Preferred Third
Party Patents": (a) a patent or technology that is Controlled by either ALGORX
or BRIDGE or their Affiliates on or before the Effective Date, or (b) a Required
Third Party Patent.
"Project Plan" means the written plan developed by the Parties pursuant to
Article 2.3.
"Purchase Notice" shall have the meaning set forth in Article 12.5(f)(i).
"Regulatory Filing" means all submissions and regulatory filings,
including, without limitation, all documents, data, and other information
forming a part thereof, made by or on behalf of a Party in order to gain
Regulatory Approval for any Compound or Licensed Product. "Regulatory Filing"
shall include any IND or NDA, and any orphan drug designation.
"Regulatory Approval" means any approvals by any Regulatory Agency in any
country or community or association of countries included in the Territory
(including, where applicable, price approvals that are required to be obtained
prior to marketing) as may be required before any Compound or Licensed Product
may be sold, including pricing approvals where applicable.
"Regulatory Agency" means, with respect to any particular country, the
governmental authority, body, commission, agency or other instrumentality of
such country (or the EMEA with respect to the EU), with the primary
responsibility for the evaluation or approval of pharmaceutical products before
a pharmaceutical product can be tested, marketed, promoted, distributed or sold
in such country, including such governmental bodies that have jurisdiction over
the pricing of such pharmaceutical product. The term Regulatory Agency includes
the FDA in the USA.
"Required Third Party Patent" means any patent owned by a Third Party that
blocks or is necessary for the development, testing, manufacture, sale or
commercialization of a Licensed Product, Compound or a method of administration
of a Licensed Product containing a Compound in that country. For purposes of
example only, Required Third Party Patents would include, without limitation,
patents claiming or covering (i) chemical substances or classes comprising a
Compound or Licensed Product,
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(ii) all commercially practical alternatives for a particular method of
administration of a Licensed Product (e.g., a patent covering all topical
formulations). A patent or technology that is Controlled by either ALGORX or
BRIDGE on or before the Effective Date is not considered as a "Required Third
Party Patent."
"Royalty Period" means a calendar quarter covered by a Royalty Report as
described in Article 6 of this Agreement
"Royalty Report" means a calendar quarter report as described in Article 6
of this Agreement
"Termination Assets" shall have the meaning set forth in Article 12.5(b).
"Territory" means entire world.
"Third Party" means any party other than BRIDGE, BRIDGE'S Affiliates,
ALGORX, or ALGORX's Affiliates or sublicensees.
"Trademark" means any product-specific name, trademark, logo and other
source-identifying material under which a Licensed Products is sold.
"Valid Claim" means a claim contained in an issued and unexpired patent
included within the BRIDGE Patent Rights or the Joint Patent Rights which has
not been held unenforceable, unpatentable or invalid by a decision of a court or
other governmental agency of competent jurisdiction, unappealable or unappealed
within the time allowed for appeal, and which has not been admitted to be
invalid or unenforceable through abandonment, reissue, disclaimer or otherwise.
ARTICLE 2
DEVELOPMENT AND COMMERCIALIZATION
2.1 Development in General. During the term of this Agreement, subject
to Article 12.4 below, ALGORX shall, at its expense, use Diligent Efforts
pursuant to the Project Plan to (a) develop and obtain Regulatory Approvals for
a Licensed Product for use in the Field, and to (b) commercially market and sell
one (1) or more Licensed Products in the Major Market Countries.
2.2 Funding. ALGORX agrees that it will bear all research, development
and commercialization costs it incurs, or is incurred by BRIDGE after written
authorization by ALGORX, whether pursuant to the Project Plan or otherwise
specifically authorized in writing on a case-by-case basis, in connection with
Licensed Products hereunder, including, but not limited to, costs for synthetic
and analytical chemistry, formulations, pre-clinical and clinical studies,
regulatory, patent and administrative costs, and costs for development and
validation of manufacturing processes and product commercialization. In
addition, ALGORX shall bear all costs it incurs in connection with any
Regulatory Filings it makes and Regulatory Approvals it obtains for
commercialization of Licensed Products in the Territory.
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2.3 Joint Product Steering Committee.
(a) Promptly after the Effective Date, the Parties shall form a
Joint Product Steering Committee (JC) the mandate of which shall be to (i)
establish and maintain a mutually agreeable Project Plan with assigned tasks
with respect to the development and commercialization of Licensed Products, and
(ii) serve as the vehicle to facilitate the exchange of ALGORX Know-How and
BRIDGE Know-How between the Parties. Tasks will be assigned by the JC to
individuals who have the competence and experience needed for such tasks. The
assignees of such tasks, may be members of the JC, employees of either of the
Parties or new or established consultants or contractors to either of the
Parties, and (iii) serve as a forum for the discussion of disputes between the
Parties before resorting to the dispute resolution procedures in Article 14 of
this Agreement, and (iv) serve as a forum for the tracking of progress and
exchange of all information regarding the status of development and
commercialization of Licensed Products in all Major Market Countries against the
timeline and objectives established in the Project Plan.
(b) Within thirty (30) days following the Effective Date, the
Parties shall each appoint representatives for membership on the JC, two (2)
from BRIDGE and three (3) from ALGORX. In addition, the JC may from time to time
invite the participation of additional ad-hoc participants or specialists on
specific issues.
(c) The Chairman of the JC shall be one of the ALGORX members of the
JC. The purpose of the initial meeting(s) shall be to review the current status
of the development of the Licensed Product and to agree on the Project Plan.
Thereafter, meetings shall be held at least once every two (2) months.
Face-to-face meetings are preferable, but telephonic meetings may be scheduled
by mutual consent. The Chairman shall determine the location of such meetings.
ALGORX shall reimburse BRIDGE employees who are JC members for reasonably
incurred travel expenses to attend JC meetings.
(d) The final decision of the JC with regard to the substance,
content, priorities and schedules in the Project Plan shall be made by consensus
by the members of the JC based on commercially reasonable business judgment;
provided, however, that if the JC is unable to reach consensus on any particular
issue, ALGORX shall have the right in its sole discretion to make the final
decisions, after considering suggestions and input from the JC. Notwithstanding
the foregoing, the Parties agree that the Project Plan, when finally approved,
shall reflect a commercially reasonable overall plan of Diligent Efforts to
develop and commercialize Licensed Products. The JC shall have no authority to
resolve any disputes concerning the validity, interpretation or construction of,
or the compliance with or breach of this Agreement, which disputes shall be
resolved pursuant to Article 14.
2.4 Regulatory Filings and Regulatory Approvals.
(a) Existing Regulatory Filings and Regulatory Approvals. BRIDGE
shall promptly transfer and assign to ALGORX any Regulatory Filings and
Regulatory Approvals (including any data or information contained or referenced
therein), including but not limited to any draft IND documents and IND filings,
and copies of all correspondence with Regulatory Authorities regarding any
Compound or any Licensed Product. BRIDGE agrees to perform within sixty (60)
days of the Effective Date all such acts, and execute such further instruments,
documents or certificates, as may be required to more effectively transfer the
Regulatory Filings to which reference is made above.
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(b) Subsequent Regulatory Filings and Regulatory Approvals. Except
as provided in Article 12.4(c)(ii) below (i) ALGORX shall be responsible, at its
sole cost and expense, for making Regulatory Filings and obtaining Regulatory
Approvals in its own name for Licensed Products in the Territory, and (ii)
BRIDGE shall not be entitled to engage in any regulatory activities or make any
Regulatory Filings with respect to any Compound or Licensed Product without the
prior written consent of ALGORX. BRIDGE shall, within the frame of its
competence and experience, provide all assistance reasonably requested by ALGORX
in complying with all requirements of applicable laws, rules, and regulations
related to Regulatory Filings and Regulatory Approval related to Licensed
Products in the Territory. Without limiting the foregoing, BRIDGE shall
cooperate with and assist ALGORX in the communication with any Regulatory
Authority and in the preparation and submission of any Regulatory Filing
relating to a Licensed Product, and will provide such information and data in
BRIDGE'S possession or control that is necessary to obtain Regulatory Approval.
If BRIDGE is required by applicable laws or regulations of a Regulatory
Authority having jurisdiction in the Territory to disclose information directly
to such Regulatory Authority relating to Product, BRIDGE shall notify ALGORX in
writing of the requirement and the particulars of the information required to be
disclosed, and BRIDGE shall coordinate with ALGORX in making any such
disclosure. Furthermore, with respect to any such required disclosures, ALGORX
shall have the right to be present and to participate at all face-to-face
meetings and scheduled conference calls between BRIDGE and such Regulatory
Authority with respect to Product and ALGORX shall have the right to lead any
such face-to-face meetings or scheduled conference calls.
2.5 BRIDGE Right to Sublicense. At any time during the term hereof, if
BRIDGE identifies a market opportunity for Licensed Products that is not
incorporated into the Project Plan or otherwise being pursued by ALGORX (i.e.,
for commercialization of an existing Licensed Product in a Preferred Country,
but excluding the use of an existing Licensed Product for a new Indication),
BRIDGE may request in writing that the JC address such market opportunity.
Within ninety (90) days after BRIDGE's request, the JC shall recommend to the
Management of ALGORX whether to address or sublicense such market opportunity.
In the event the decision is made to take no action in the Preferred Country,
then for a period of ninety (90) days BRIDGE shall have the right to negotiate
with ALGORX to become a sublicensee of ALGORX, with rights and authority to
pursue such market opportunity, upon terms and conditions to be reasonably
negotiated and mutually agreed upon in good faith by the Parties' Management.
Should the parties be unable to agree upon terms for the sublicense, the matter
may be submitted by BRIDGE to an Industry Expert pursuant to Article 14.2 for
determination of commercially fair, reasonable, sublicense terms that are in
accordance with industry standards.
ARTICLE 3
GRANT OF LICENSE
3.1 Grant by BRIDGE. BRIDGE hereby grants to ALGORX and its Affiliates
an exclusive (even as to BRIDGE), nontransferable (except as provided in Article
15.5) license, with a right to sublicense, under the BRIDGE Technology, to
research, develop, make, have made, use, sell, offer for sale, import and
otherwise commercialize the Compound and Licensed Products in the Field, within
the Territory.
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3.2 Negative Covenant. BRIDGE hereby covenants and agrees that for the
term of this Agreement, subject to its rights upon a Conversion Event in Article
12.4(c) below, BRIDGE shall not, nor shall it permit any of its Affiliates, to
manufacture, develop, test, sell, market or distribute, in any field of use, any
Compound (or any product containing or comprising such Compound) contained in
any Licensed Product that is being developed or commercialized by ALGORX, its
Affiliates or its sublicensees. BRIDGE may pursue the research, development,
manufacture and distribution of any Compound outside the Field, excluding those
Compounds designated by BRIDGE as ****** and ****** unless ALGORX provides
written permission for Bridge to do so.
3.3 No Retained Rights. Except as provided in Article 12.4(c) below,
nothing in this Agreement is intended or shall be deemed to diminish the scope
of the exclusive rights licensed by BRIDGE to ALGORX pursuant to this Article 3
or to suggest that, during the term of the exclusive licenses granted under this
Article 3, BRIDGE retains any rights to seek Regulatory Approval for,
manufacture, use or commercialize any Licensed Product in the Field, except to
the extent necessary for BRIDGE to perform its obligations in accordance with
the express provisions of this Agreement. For purposes of clarification, except
as specifically and expressly set forth herein, there are no other restrictions
on either Party's activities either during or after the term of this Agreement.
3.4 No Franchise. The Parties agree that this Agreement shall not
constitute a franchise agreement under Florida, New Jersey or any other law
within the Territory. If the Parties' relationship is deemed to be a franchise
by a court of law or other judicial body, the Parties hereto expressly agree to
waive all rights and remedies that either of them may have due to any status as
a franchiser or franchisee or pursuant to the application of any franchise laws,
rules or regulations.
3.5 Sublicenses and Third Party Agreements. ALGORX may sublicense to a
Third Party any of the rights under the BRIDGE Technology licensed to ALGORX
hereunder pursuant to a written agreement (a "Third Party Agreement"); provided
that any such agreement shall include provisions requiring (a) full compliance
by the Third Party with the terms and conditions of Articles 5, 6, 10, 13.2,
15.6 and 15.14 set forth in this Agreement, (b) that ALGORX provide BRIDGE a
minimum of ten (10) business days to provide input prior to entering into such
Third Party Agreement, and (c) that a copy of the true and complete Third Party
Agreement, and all amendments thereto, will be delivered to BRIDGE within ten
(10) business days of execution thereof.
ARTICLE 4
LICENSE FEES; MILESTONE PAYMENTS
4.1 License Fee. As partial consideration of the rights granted to ALGORX
by BRIDGE under this Agreement, ALGORX shall pay to BRIDGE a one-time,
non-refundable license fee of One Million Dollars ($1,000,000) in immediately
available funds upon the closing of this Agreement.
4.2 Milestone Payments. ALGORX shall pay to BRIDGE non-refundable
milestone payments in the amounts specified below (each a "Milestone Payment")
no later than thirty (30) days after the achievement of the corresponding event
designated below (except for Articles 4.2(h) and (i) below which contains their
own specific payment dates):
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(a) Upon the Commencement of a Phase I clinical trial of the first
Licensed Product, ALGORX shall pay to BRIDGE ******************** Dollars
($********); provided, however, that if the FDA or other applicable Regulatory
Agency allows ALGORX to proceed directly to a Phase II or Phase III clinical
trial for the first Licensed Product without a Phase I clinical trial, such
payment of *********** ******** Dollars ($*******) to BRIDGE described in this
Article 4.2(a) shall be due and owing upon the Commencement of such Phase II or
Phase III clinical trial, in addition to the payment of ************* ********
Dollars ($********) as stated in 4.2(b) or the payment of ************ ********
Dollars ($********) as stated in 4.2(c), as applicable;
(b) Upon the Commencement of a Phase II clinical trial for the first
Licensed Product ALGORX shall pay to BRIDGE the sum of ***** ******* ********
Dollars ($********); provided, however, that if the FDA or other applicable
Regulatory Agency allows ALGORX to proceed directly to a Phase III clinical
trial for the first Licensed Product without a Phase II clinical trial, such
payment of ************* ******** Dollars ($********) to BRIDGE described in
this Article 4.2(b) shall be due and owing upon the Commencement of such Phase
III clinical trial, in addition to the payment of ************ ******** Dollars
($********) as stated in 4.2(c);
(c) Upon the Commencement of a Phase III clinical trial of the first
Licensed Product, ALGORX shall pay to BRIDGE the sum of ************ ********
Dollars ($*******); provided, however, that if the FDA or other applicable
Regulatory Agency grants ALGORX Regulatory Approval for the first Licensed
Product after the completion of a Phase II clinical trial, ALGORX shall pay to
BRIDGE the additional sum of ************ ******** Dollars ($********) at the
time of such grant in lieu of the payment under this Article 4.2(c);
(d) Upon the first filing of an NDA, or its foreign equivalent, for
a Licensed Product in a Preferred Country, ALGORX shall pay to BRIDGE the sum of
**** ******* **** ******* ******* Dollars ($*******). If the first and any
subsequent NDA filings are made in any other country, then the sum due BRIDGE at
the time of such filing will be pro-rated by the ratio of the market for ethical
pharmaceutical products in the Field in such countries to that of the United
States, as reported by IMS or other mutually acceptable source of such data. The
remaining monies, up to $********, will be paid upon such filing in the first
Preferred Country. As a further clarification, the amount paid by ALGORX to
BRIDGE upon the filings of NDA documents in various countries will be
continually and cumulatively supplemented until either an NDA is filed in a
Preferred Country or the $******** threshold has been reached.
(e) Upon the first Regulatory Approval to market a Licensed Product
in a Preferred Country for an indication (the "First Indication"), ALGORX shall
pay to BRIDGE the sum of *********** **** ******* ******** Dollars
($**********). If the first Regulatory Approval for a Licensed Product for this
First Indication is in any country or countries other than a Preferred Country,
ALGORX shall pay to BRIDGE a portion of such amount equal to the ratio of the
Dollar volume of the market for ethical pharmaceutical products in the Field in
such country or countries to the market for such products in the United States
during the preceding calendar year, as reported by IMS or other mutually
acceptable source of such data. The balance of such payment shall be paid by
ALGORX to BRIDGE upon the first Regulatory Approval for such Licensed Product
for the First Indication in a Preferred Country. As a further clarification, the
amount paid by ALGORX to BRIDGE upon the first Regulatory Approvals for the
First Indication in various countries will be continually and cumulatively
supplemented until either a
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Regulatory Approval has been obtained for the First Indication in a Preferred
Country or the $********* threshold has been reached.
(f) Upon the first Regulatory Approval to market a Licensed Product
in a Preferred Country for a second Indication that is not the First Indication
(the "Second Indication"), ALGORX shall pay to BRIDGE the sum of *** ******
Dollars ($*********). If the first Regulatory Approval for a Licensed Product
for this Second Indication is in any country other than a Preferred Country,
ALGORAX shall pay to BRIDGE a portion of such amount equal to the ratio of the
market for ethical pharmaceutical product in the Field in such country to the
market for such products in the United States during the preceding calendar
year, as reported by IMS or other mutually acceptable source of such data. The
balance of such payment shall be paid by ALGORX to BRIDGE upon the first
Regulatory Approval for such Licensed Product for the Second Indication in the
first Preferred Country. As a further clarification, the amount paid by ALGORX
to BRIDGE upon the first Regulatory Approvals for the Second Indication in
various countries will be continually and cumulatively supplemented until either
a Regulatory Approval has been obtained for the Second Indication in a Preferred
Country or the $********* threshold has been reached.
(g) Upon the first Regulatory Approval to market a Licensed Product
in a Preferred Country for a third Indication that is not the First Indication
or the Second Indication (the "Third Indication"), ALGORX shall pay to BRIDGE
the sum of ************ ******** Dollars ($********). If the first Regulatory
Approval of a Licensed Product for this Third Indication is in any country other
than a Preferred Country, ALGORX shall pay to BRIDGE a portion of such amount
equal to the ratio of the market for ethical pharmaceutical products in the
Field in such country to the market for such products in the United States
during the preceding calendar year, as reported by IMS or other mutually
acceptable source of such data. The balance of such payment shall be paid by
ALGORX to BRIDGE upon the first NDA Approval for such Licensed Product for the
Third Indication in a Preferred Country. As a further clarification, the amount
paid by ALGORX to BRIDGE upon the first Regulatory Approvals for the Third
Indication in various countries will be continually and cumulatively
supplemented until either a regulatory Approval has been obtained for the Third
Indication in a Preferred Country or the $******* threshold has been reached.
(h) ALGORX shall pay to BRIDGE the non-refundable sum of Ten Million
Dollars ($10,000,000) if and when the cumulative ********* Net Sales of Licensed
Products have exceeded ************ ******* Dollars ($***********) for the first
time (it being understood and agreed that such payment shall be made no more
than one time), with such payment to be made to BRIDGE by no later than March
31st of the calendar year subsequent to the calendar year in which the
$*********** Net Sales threshold is reached; and
(i) ALGORX shall pay to BRIDGE the non-refundable sum of *****
******* Dollars ($*********) if and when the cumulative ********* Net Sales of
Licensed Products have exceeded *********** Dollars ($**********) for the first
time (it being understood and agreed that such payment shall be made no more
than one time, but shall be in addition to any amount paid pursuant to Article
4.2(h) above), with such payment to be made to BRIDGE by no later than March
31st of the calendar year subsequent to the calendar year in which the
$*********** Net Sales threshold is reached.
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4.3 No Multiple Payments. In no event shall any of the milestone payments
described in each of Articles 4.2(a) through (i) be paid more than once,
irrespective of the number of Licensed Products (or respective Indications for
which they are approved) marketed or sold by or on behalf of ALGORX, its
Affiliates or their sublicensees.
4.4 Equity. In partial consideration for the license rights granted
herein, ALGORX shall, within thirty (30) days after the Effective Date, issue to
BRIDGE, and free of any charge to BRIDGE, a total of one million six hundred
thousand (1,600,000) restricted shares of ALGORX common stock, subject to
BRIDGE'S execution of ALGORX's standard common stock purchase agreement
("Shares"), said Shares being non-refundable. The restriction on the sale or
transfer of these Shares by BRIDGE as provided in the common stock purchase
agreement will be the same as those imposed upon ALGORX's other common stock
shareholders, such restrictive covenants being substantially similar to those
contained in Appendix B hereof.
ARTICLE 5
ROYALTIES
5.1 Royalties in General. (a) In consideration of the exclusive worldwide
license granted to ALGORX hereunder, ALGORX shall pay or cause to be paid to
BRIDGE a running royalty based on Net Sales of all Licensed Products in all
countries at a royalty rate as provided below: All payments due to BRIDGE that
are not paid when due shall bear interest from the due date at the prime rate,
as reported by The Wall Street Journal on the due date for such payment, plus
****** percent (**%) (or such lesser amount as may be the maximum permitted by
law).
(B) Applicable Royalty
(A) Applicable Royalty Rate in countries
Rate in countries with a outside the United
Valid Claim of States where no Valid
BRIDGE Patent Rights Claim of BRIDGE
********* Annual Net or Joint Patent Rights Patent Rights or Joint
Sales of Licensed covering such Licensed Patent Rights covers
Products Product such Licensed Product
------------------------ ------------------------- ---------------------
Up to and including **% **%
$***********
Over $*********** and **% **.*%
up to and including
$***********
Over $*********** and **% **.*%
up to and including
$***********
Over $*** million **% **.*%
(b) The obligation of ALGORX to pay royalties on Net Sales of
Licensed Products in any country of the Territory in which there is a Valid
Claim shall continue, on a country by country
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basis, until January 1 of the calendar year following the calendar year in which
all Valid Claims in such country have expired, ALGORX shall pay royalties on Net
Sales of Licensed Products at the royalty rate specified in column B in the
table above, after which time ALGORX shall have a perpetual, royalty-free and
fully paid up non-exclusive license under the BRIDGE Know-How in such country to
research, develop, make, have made, develop, use, sell, offer for sale, import
and otherwise commercialize the Compound and Licensed Products in the Field.
(c) The obligation of ALGORX to pay royalties on Net Sales of
Licensed Products in countries of the Territory in which there is no Valid Claim
(and in which at no time has there been a Valid Claim) shall continue on a
country by country basis until the later to occur of (i) the first calendar year
in which the ***** sales of Third Party product containing or comprising a
Compound constitute ********** percent (**%) or more of ALGORX's gross sales of
Licensed Products containing or comprising such Compound in such country, or
(ii) *** (**) years after the Effective Date of this Agreement; provided,
however, that in no event shall royalties be owing in such country after the
********* (****) anniversary of the Effective Date. After the royalty payments
have been discontinued according to the terms of this Article 5.1(c), ALGORX
shall have a perpetual, royalty-free and fully paid up non-exclusive license
under the BRIDGE Know-How in such country to research, develop, make, have made,
develop, use, sell, offer for sale, import and otherwise commercialize the
Compound and Licensed Products in the Field.
5.2 Accrual of Royalties. No running royalty shall be payable on a
Licensed Product distributed free of charge for test or development purposes, or
distributed as free samples and for which no payment is received by ALGORX, or
its Affiliates or sublicensees. No multiple royalty shall be payable under this
Agreement because the manufacture, use or sale of a Licensed Product is covered
by more than one Valid Claim of a BRIDGE Patent Right or a Joint Patent Right or
is covered by both BRIDGE Know - How and a Valid Claim of a BRIDGE Patent Right.
For purposes of determining whether the manufacture, use or sale of a Licensed
Product sold by ALGORX, its Affiliates or sublicensees in a country would
infringe, if not for the licenses granted herein, one or more Valid Claims of a
BRIDGE Patent Right, any Licensed Product manufactured outside of such country
shall be deemed to have been manufactured in that country.
5.3 Third Party Royalties, Payments and Costs. In the event that ALGORX is
licensed under, or is required to pay royalties to a Third Party under a
Required Third Party Patent in any particular country in which Licensed Products
are being sold, ALGORX may deduct up to ***** percent (**%) of any royalties due
with respect to such Required Third Party Patent (or such amounts expended in
settlement of such claim, or for securing such rights) from the running
royalties otherwise due to BRIDGE with respect to Net Sales of Licensed Products
in such country; provided, however, that in no event will the running royalty
owing to BRIDGE for Net Sales of Licensed Products in such country be reduced to
less than ***** percent (**%) of the running royalty that would otherwise be due
BRIDGE for Net Sales of Licensed Products in such country. Any dispute between
the Parties regarding whether a Third Party patent is a Required Third Party
Patent shall be resolved according to the procedures of Article 14.2 below. It
is the Parties' further intent that any and all consideration paid to or
incurred by any joint venture, third-party co-promoter or other person or form
of entity that is selling Licensed Products hereunder shall be at the sole cost
and expense of ALGORX or such co-promoter, as the case may be, and, unless
specifically designated as deductible in the definition of "Net Sales," shall
not result in any reduction of the royalty due to BRIDGE.
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5.4 Compulsory Licenses. Should a compulsory license be granted to a Third
Party under the applicable laws of any country in the Territory under the BRIDGE
Patent Rights licensed hereunder to ALGORX, the running royalty rate payable
hereunder for sales of Licensed Products in such country shall be adjusted to
match any lower royalty rate granted to such Third Party for such country, with
respect to the sales of such Licensed Products, and during such periods, for
which such Third Parties sell under the compulsory license material quantities
of articles that compete with the Compound or Licensed Products then marketed
and sold by ALGORX in that country. In the event that both Articles 5.3 and this
Article 5.4 should come to apply to the adjustment of the royalty rate in any
given jurisdiction, ALGORX shall be entitled to the benefit of the greater of
such reductions, but not both; provided, however, that in no event will the
running royalty to BRIDGE for such Licensed Products be reduced to less than
***** percent (**%) of the royalty that would otherwise be due BRIDGE in
accordance with this Article 5 absent such reductions.
ARTICLE 6
ROYALTY REPORTS AND ACCOUNTING
6.1 Royalty Reports; Records.
(a) Royalty Report. During the term of this Agreement after the
first sale to a Third Party of the first Licensed Product, ALGORX shall furnish
or cause to be furnished to BRIDGE on a quarterly basis a written report or
reports (the "Royalty Report") covering each calendar quarter (a "Royalty
Period") showing (i) gross sales and Net Sales of all Licensed Products in each
country of the Territory during the Royalty Period; and (ii) the royalties,
payable in Dollars, which shall have accrued hereunder with respect to such Net
Sales. Royalty Reports and any royalties owed BRIDGE shall be due sixty (60)
days after the end of the Royalty Period to which they pertain. In the event
that there are no royalties due in a Royalty Period, the Royalty Report shall so
state.
(b) Payment. All payments due under this Agreement shall be made in
United States Dollars via wire transfer of immediately available funds, or by
such other commercially reasonable means as may be designated by BRIDGE. Royalty
payments due on Net Sales in countries in the Territory outside the United
States shall be made in United States Dollars, after being converted by ALGORX
at the average rate of exchange for such country's currency as published in the
Wall Street Journal (New York Edition) for the last business day of each month
in the applicable Royalty Period. If, by law, regulations or fiscal policies,
remittance of royalties in United States Dollars is prohibited or restricted,
ALGORX will so notify BRIDGE in writing and payment of the royalty obligation
shall be made by deposit thereof in local currency to the credit of BRIDGE in a
recognized banking institution designated by BRIDGE. If in any country or
jurisdiction, the law, regulations or fiscal policies prohibit both the
transmittal and deposit of royalties on sales in such country, royalty payments
shall be suspended for as long as such prohibition is in effect, and as soon as
such prohibition ceases, all royalties that ALGORX would have otherwise been
under an obligation to transmit or deposit but for the prohibition shall
forthwith be deposited or transmitted to the extent allowable. All payments due
to BRIDGE that are not paid when due shall bear interest from the due date at
the prime rate, as reported by The Wall Street
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Journal on the due date for such payment, plus five percent (5%) until such
time as full payment has been received in BRIDGE'S account.
6.2 Payment Due Dates. Royalties shown to have accrued by each Royalty
Report provided for under Article 6 of this Agreement shall be due and payable
on the date such Royalty Report is due. Payment of royalties in whole or in part
may be made in advance of such due date. All royalty and other payments due to
BRIDGE hereunder, shall be made in U.S. Dollars and delivered to the account
specified below or to any other banking institution as may from time to time
specified in writing by BRIDGE.
Wire Transfer Information
[Bank] *****
[account number] *****
[ABA Routing number] *****
[FBO] *****
[address] *****
*****
*****
[telephone] *****
*) For wire from foreign country, include the swift code *****
6.3 Audit Right.
(a) Upon written request and at least fifteen (15) days prior notice
from BRIDGE, at BRIDGE'S expense and not more than once in each twelve (12)
month period, BRIDGE may engage an independent public accounting or auditing
firm (the "Auditor") selected by BRIDGE, but which has not provided auditing or
other services to BRIDGE during the previous five (5) years (other than previous
auditing services pursuant to this Agreement or other similar BRIDGE license,
development or collaboration agreements) and which is reasonably acceptable to
ALGORX. The Auditor may perform on behalf of BRIDGE an audit of the books and
records of ALGORX and those Affiliates and sublicensee(s) that have reported Net
Sales of Licensed Product(s) during the relevant time period. The Auditor shall
conduct the audit during the normal business hours of ALGORX, its Affiliates or
sublicensee(s) as may be reasonably necessary to verify the accuracy of the
Royalty Reports furnished by ALGORX hereunder in respect of any annual fiscal
period ending not more than thirty-six (36) months prior to the date of such
request. BRIDGE acknowledges that the Auditor(s) shall conduct the audit in such
a manner so as to not unreasonably interfere with the business of ALGORX and
those Affiliates and sublicensee(s) described above. BRIDGE's right to request
audit shall survive any termination of this Agreement for thirty-six (36) months
after the date of said termination. ALGORX acknowledges and agrees that ALGORX,
its Affiliates and sublicensees shall reasonably cooperate with the Auditor in
connection with any such audit.
(b) Upon the expiration of thirty-six (36) months following the end
of any Royalty Period, the calculation of royalties payable with respect to such
Royalty Period shall be binding and conclusive upon BRIDGE except with respect
to any audit then requested or underway, and except for fraud or
misrepresentation, ALGORX and its Affiliates shall be released from any
liability or accountability with respect to royalties for such fiscal year.
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(c) The written report prepared by the Auditor(s), shall disclose
only the summary of results of the audit and the conclusions of the Auditor(s)
regarding the audit and the amount of any underpayment or overpayment of
royalties, if any, without disclosure of or reference to supporting
documentation. The Auditor's report shall be the final determination of royalty
underpayments or overpayments, if any. A copy of such report shall be sent or
otherwise provided to ALGORX by the Auditor(s) at the same time it is sent or
otherwise provided to BRIDGE.
(d) If the written report by the Auditor(s) shows any underpayment
of royalties, ALGORX shall remit, or shall cause its Affiliates, co-promoters,
co-marketer(s) and or sublicensees to remit, to BRIDGE the amount of such
underpayment within thirty (30) days after the Parties' receipt of the Auditor's
report. Underpayment shall bear interest from the due date at the prime rate, as
reported by The Wall Street Journal on the due date for such payment, plus ****
percent (*%), per annum (or such lesser amount as shall be the maximum permitted
by law). In the event that the amount of any underpayment of royalties is in
excess of **** percent (*%) of the total royalties due to BRIDGE with respect to
the period covered by the Auditor's report, ALGORX shall reimburse BRIDGE for
the cost of the audit in which the underpayment was discovered. Any overpayment
of royalties shall be fully creditable against future royalties payable in
subsequent Royalty Periods. In the event this Agreement is terminated or expires
before such overpayment is fully credited, BRIDGE shall pay ALGORX the portion
of such overpayment not credited within thirty (30) days after such termination
or expiration hereof, less any payment due BRIDGE hereunder. In the event this
Agreement is terminated or expires before an underpayment has been fully
remitted, ALGORX shall pay BRIDGE the portion of such underpayment not paid
within thirty (30) days after such termination or expiration hereof.
6.4 Records of Sales and Records of Payments. ALGORX and BRIDGE shall keep
and cause their Affiliates and sublicensee(s) to keep true and accurate records
and books of account containing data of Net Sales and of payments to BRIDGE and
information showing the computation of Net Sales and royalties, as well as all
verifications thereof, all such data shall be made available to the Auditor(s)
if and when the other Party exercises its Audit Rights under this Article 6.
6.5 Confidentiality of Records. The Parties agree that all information
subject to review under this Article 6 is confidential and that the Parties and
the Auditor(s) shall retain all such information in confidence. The Parties
acknowledge and agree that the Auditor(s) shall execute confidentiality
agreements with both Parties before the commencement of the audit.
ARTICLE 7
REPRESENTATIONS, WARRANTIES AND COVENANTS
7.1 Mutual Representations and Warranties. Each Party hereby represents,
warrants and covenants (as applicable) to the other Party as follows:
(a) Corporate Existence and Power. It is a company or corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated, and has full corporate power and
authority and the legal right to own and operate its property and assets and to
carry
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on its business as it is now being conducted and as contemplated in this
Agreement, including, without limitation, the right to transfer and license the
rights granted hereunder.
(b) Authority and Binding Agreement. As of the Effective Date, (i)
it has the corporate power and authority and the legal right to enter into this
Agreement and perform its obligations hereunder; (ii) it has taken all necessary
corporate action on its part required to authorize the execution and delivery of
the Agreement and the performance of its obligations hereunder; and (iii) the
Agreement has been duly executed and delivered on behalf of such Party, and
constitutes a legal, valid and binding obligation of such Party that is
enforceable against it in accordance with its terms.
(c) No Conflict. It has not entered, and shall not enter, into any
agreement with any Third Party that is in conflict with the rights granted to
the other Party under this Agreement, and has not taken and shall not take any
action that would in any way prevent it from granting the rights granted to the
other Party under this Agreement, or that would otherwise materially conflict
with or adversely affect the rights granted to the other Party under this
Agreement. Its performance and execution of this Agreement does not and will not
result in a breach of any other contract to which it is a party.
7.2 BRIDGE Representations and Warranties. BRIDGE hereby represents,
warrants and covenants (as applicable) as follows:
(a) BRIDGE is the exclusive owner of all right, title and interest
in the BRIDGE Patent Rights and BRIDGE Know-How, and attached hereto as Appendix
A is a complete and accurate list of all patents and patent applications
included in the BRIDGE Patent Rights as of the Effective Date. BRIDGE has taken
and, at the expense of ALGORX pursuant to Article 2.2, will take, all steps
reasonably necessary to maintain or perfect its exclusive ownership interest in
the BRIDGE Patent Rights (subject to ALGORX's obligation to prosecute and
maintain patents pursuant to Article 8.1(a)) and BRIDGE Know-How, including
without limitation making any filings or elections with any government agencies
or third parties with respect thereto.
(b) Prior to the Effective Date, BRIDGE has taken reasonable
measures to protect the confidentiality of the BRIDGE Know-How that is material
to the manufacture, development, testing or use of the Compound ("Material
Know-How"). On occasions where BRIDGE has granted access to Third Parties with
respect to the Material Know-How or to otherwise material confidential
information concerning the Compound, such access has been granted pursuant to
enforceable, but time-limited confidentiality agreements.
(c) The practice, use or other exploitation of the BRIDGE Technology
by ALGORX as contemplated by this Agreement does not, to the best of BRIDGE's
knowledge, infringe upon any Third Party's patents or constitutes a
misappropriation of a Third Party's trade secrets or other intellectual property
rights, and there is no interference action or litigation pending or any
communication which threatens interference action, or other litigation before
any patent and trademark office, court, or any other governmental entity in any
jurisdiction in regard thereto. To the best knowledge of BRIDGE, there is no
Third Party using, infringing or misappropriating any of the BRIDGE Technology
in derogation of the rights granted to ALGORX in this Agreement.
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(d) BRIDGE has furnished, or will furnish within thirty (30) days
after the Effective Date (in accordance with the terms of this Agreement) to
ALGORX tangible manifestations of the BRIDGE Know-How and any Regulatory Filings
made by BRIDGE.
(e) BRIDGE, prior to and at the time of execution of this Agreement,
is unaware of any fact which would indicate the existence of any material side
effect, toxicity, mutagenicity, teratogenicity, immunogenicity, carcinogenicity,
adverse effect or any instances of deleterious physical effects or reactions
resulting from, or alleged to result from, the Compound, which are not
identified in the BRIDGE Know-How delivered to ALGORX, or which has not been
otherwise disclosed in writing to ALGORX by BRIDGE.
7.3 ALGORX Representations and Warranties. ALGORX has been given the
opportunity by BRIDGE to obtain information regarding the BRIDGE Technology and
to ask any questions concerning the BRIDGE Technology licensed hereunder. There
is no problem, issue, fact or circumstance known to ALGORX relating to the
BRIDGE Technology that would or reasonably should deter ALGORX from consummating
the transaction hereby contemplated.
7.4 Covenant Not To Xxx by BRIDGE. BRIDGE hereby covenants and agrees
that, during the period of the grant of exclusive license rights to ALGORX
pursuant to Article 3.1, BRIDGE and its Affiliates and each of their licensees
shall not (nor shall any successors or assignees of any of them) assert or cause
to be asserted against ALGORX or its Affiliates, their successors or assigns, or
any sublicensees of any of them a claim for infringement of any patent claiming
or disclosing any invention relating to a Compound or a Licensed Product or a
method of making, having made, using, selling or importing a Compound or a
Licensed Product in the Field within the Territory on account of acts undertaken
in compliance with this Agreement.
7.5 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS
ARTICLE 7, NEITHER PARTY OR ITS EMPLOYEES OR ITS AFFILIATES MAKE ANY
REPRESENTATION OR WARRANTY OF ANY KIND, AND EACH PARTY HEREBY DISCLAIMS ALL SUCH
OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION
ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OF THE
COMPOUNDS, THE LICENSED PRODUCTS OR THEIR RESPECTIVE PATENT RIGHTS OR KNOW-HOW.
ARTICLE 8
PATENT RIGHTS
8.1 Patent Prosecution and Maintenance.
(a) ALGORX shall, at its expense, prosecute any and all patent
applications claiming or disclosing any Invention conceived and/or reduced to
practice by BRIDGE or ALGORX that are within the BRIDGE Patent Rights, the
ALGORX Patent Rights and the Joint Patent Rights, or any Inventions described in
Articles 8.3(a) and (b), to obtain patents thereon and to maintain all patents
included therein. ALGORX shall use patent counsel of its choice (except as to
patents and patent applications claiming or covering Inventions conceived and
reduced to practice by BRIDGE or jointly by BRIDGE
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and ALGORX, for which ALGORX shall use the services of BRIDGE patent counsel
Nields & Lemack, Westborough, MA, who shall consult regularly with patent
counsel of ALGORX's choice). Interferences, nullification proceedings and
oppositions before the Patent and Trademark Office shall be considered a part of
the prosecution and maintenance of the BRIDGE Patent Rights.
(b) Within thirty (30) days of the Effective Date, BRIDGE shall
disclose to ALGORX the complete texts of all pending patent applications
encompassed by the BRIDGE Patent Rights, as well as all correspondence
concerning the prosecution thereof and any information or correspondence
received by BRIDGE concerning the institution of any interference, opposition,
re-examination, reissue, revocation, nullification or any official proceeding
involving the BRIDGE Patent Rights anywhere in the Territory. In the future,
both Parties shall have the right to review all pending patent applications and
other proceedings, and to make suggestions regarding the prosecution of such
patent applications, provided that ALGORX shall have the final authority and
discretion with respect to the content of all patent filings and all prosecution
strategy regarding such patents and patent applications. Patent issues,
including patent strategies will be discussed by the JC and the JC shall be kept
informed of the progress of and the strategy used in the prosecution of each
patent application. All disclosures and exchanges of information described in
this Article 8.1(b) shall be completed in a manner designed at all times to
maintain confidentiality, any and all attorney-client privilege, and other
evidentiary privileges.
8.2 Discontinuance/Abandonment/Election not to File. Notwithstanding
Article 8.1, ALGORX may elect not to prosecute, to discontinue the maintenance
or prosecution of, or to abandon any patent or patent application encompassed
within the BRIDGE Patent Rights. If during the term of this Agreement ALGORX so
elects with respect to any such patent or patent application (the "Abandoned
Patent Right"), the rights to such Abandoned Patent Right shall revert to
BRIDGE, and BRIDGE shall be entitled to prosecute and/or maintain such Abandoned
Patent Right; provided, however, that ALGORX shall retain a non-exclusive
license under that Abandoned Patent Right to research, develop, make, have made,
use, sell, offer for sale, import and otherwise commercialize the Compound and
Licensed Products in the Field, within the Territory. ALGORX shall inform BRIDGE
of its election under this Article 8.2 at least forty five (45) days prior to
any filing deadline applicable to an Abandoned Patent Right.
8.3 Ownership of Future Inventions.
(a) Inventions by ALGORX. Any Invention made by ALGORX during the
term of this Agreement shall be owned by ALGORX; provided, however, that, if
(and only if) such Invention (including any Joint Inventions described in
Article 8.3(c)) is a composition containing a chemical entity related to
BRIDGE's proprietary compounds ****** or ****** or any other compounds utilizing
or based upon ******************** and ******************** and
derivatives, isomers, metabolites and analogues thereof, made by ALGORX, or
jointly by the Parties, during the term of this Agreement, then such Invention
shall unconditionally be assigned to and owned by BRIDGE. For the avoidance of
doubt, an Invention by ALGORX (or jointly by the Parties) that is a (i)
formulation (e.g., a cream, lotion or gel) that contains a Compound, (ii)
modification to the physical form of a Compound as prepared in a formulation
(e.g., changing particle shape or size, salt or complex form, solid solution,
emulsion and the like), or (iii) a method of manufacture, use of, or treatment
using, a Compound or any Invention described in (i) or (ii) above, shall not be
subject to assignment by ALGORX to BRIDGE, if invented solely by ALGORX
demonstrably without utilization of BRIDGE Know-How. ALGORX's
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obligations to assign Invention under this 8.3(a) is expressly subject to, and
conditioned upon, BRIDGE'S grant of a license to ALGORX under such Inventions as
set forth in Section 3.1 hereof.
(b) Inventions by BRIDGE. Any Invention made by BRIDGE during the
term of this Agreement shall be owned by BRIDGE and, to the extent included in
the BRIDGE Technology, will be included within the license granted to ALGORX
under Article 3.
(c) Joint Inventions. Subject to Article 8.3(a) above, each Party
shall own a fifty percent (50%) undivided interest in any Inventions made by
ALGORX personnel or consultants in conjunction with BRIDGE personnel or
consultants (a "Joint Invention"). Each Party shall reasonably cooperate with
the other Party with respect to any protection or enforcement of any Joint
Patent Right. Except with respect to Joint Inventions assigned to BRIDGE
pursuant to Article 8.3(a), upon termination or expiration of this Agreement,
each Party hereby grants to the other Party a perpetual, irrevocable, non
exclusive license to practice any Joint Invention to make, use and sell products
utilizing any such Joint Invention.
(d) Inventorship. Inventorship of all Inventions and in all
countries of the Territory shall be determined in accordance with U.S. patent
law.
8.4 Trademarks. ALGORX shall be responsible for the selection of any
Trademarks under which Licensed Products will be sold. ALGORX shall own all
Trademarks and shall have the right to apply in its own name for state and/or
federal registration of such within the Territory. BRIDGE and BRIDGE licensees
outside the Territory and outside the Field and in Conversion Countries shall
not be obligated to use the ALGORX Trademarks but, in order to maximize market
penetration of the ALGORX Trademarks, BRIDGE shall have the right to do so and
in such case, terms will be negotiated between the Parties and reflected in a
separate written agreement.
8.5 Patent Term Restoration and Regulatory Data Exclusivity. The Parties
shall cooperate with each other during the term of this Agreement in obtaining
patent term restoration or extension, supplementary protection certificates, or
their equivalents, with respect to BRIDGE Patent Rights, ALGORX Patent Rights,
and Joint Patent Rights, and regulatory data exclusivity and the like, with
respect to Licensed Products in the Field.
8.6 Scientific Publications. No scientific publication relating to any
Compound, Licensed Product, BRIDGE Technology or ALGORX Technology by BRIDGE
will take place without prior written permission from ALGORX. ALGORX will be
take into reasonable consideration "first-to-publish" requests from BRIDGE
employees, provided that such publications shall refer only to scientific
achievements prior to the Effective Date.
ARTICLE 9
INFRINGEMENT
9.1 Applicability. The provisions of this Article 9 shall govern the
Parties' rights and obligations, as between themselves, with respect to actions
against Third Parties for infringement of the BRIDGE Patent Rights or BRIDGE
Know-How licensed under this Agreement.
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9.2 Third Party Infringement.
(a) In the event that either ALGORX or BRIDGE becomes aware of any
product made, used, imported, offered for sale or sold in the Territory in the
Field which it believes to infringe a BRIDGE Patent Right or constitute a
misappropriation of BRIDGE Know-How in the Field, such Party (the "Notifying
Party") shall promptly advise the other Party of all the relevant facts and
circumstances known by the Notifying Party in connection with the infringement
or misappropriation.
(b) The Parties agree that ALGORX shall have the first right, at its
own expense, but not the obligation, to enforce any BRIDGE Patent Rights or
BRIDGE Know-How against such infringement or misappropriation. BRIDGE shall
fully cooperate with ALGORX with respect to the investigation and prosecution of
such alleged infringement or misappropriation including consenting to the
joining of BRIDGE, at ALGORX expense, as a party to such action, as ALGORX deems
necessary or appropriate.
(c) BRIDGE shall have the right (at its own expense), but not the
obligation, to enforce, and ALGORX does hereby grant to BRIDGE the right to
enforce, any BRIDGE Patent Rights or BRIDGE Know-How against such infringement
or misappropriation, and ALGORX shall fully cooperate with BRIDGE with respect
to the investigation and prosecution of such alleged infringement or
misappropriation including consenting to the joining of BRIDGE, at BRIDGE
expense, as a Party to such action, if necessary. BRIDGE may, in its sole
discretion, exercise this right if:
(i) ALGORX shall fail, within six (6) months after notifying
BRIDGE or receiving notice from BRIDGE of the infringement, to institute an
action or take other substantial measures to xxxxx such alleged infringement, or
(ii) ALGORX earlier notifies BRIDGE in writing that ALGORX
does not plan to terminate such infringement or institute such action.
(d) The Party prosecuting such infringement action shall have the
right to control such litigation and shall bear all legal expenses (including
court costs and legal fees and expenses), including settlement thereof;
provided, however that no settlement or consent judgment or other voluntary
final disposition of any infringement action brought by a Party pursuant to this
Article 9.2 may be entered into without the prior written consent of the other
Party if such settlement would require the other Party to be subject to an
injunction or to make a monetary payment or would restrict the claims in or
admit any invalidity of any of the BRIDGE Patent Rights.
(e) Any damages or costs recovered by a Party in connection with any
action filed by it as permitted hereunder shall be allocated as follows: (i)
first, to reimburse the prosecuting Party for its own costs and expenses
incurred in prosecuting such action (including reasonable attorneys' fees), (ii)
second, to reimburse the other Party for its out-of-pocket costs and expenses
reasonably incurred (including reasonable attorneys' fees) by it in assisting
such Party in that action, and then (iii) sharing the remainder as follows: (1)
if ALGORX is prosecuting the action, BRIDGE shall be entitled to a royalty on
the defendant's infringing sales under BRIDGE's patent rights, as specified in
column A of the table in Article 5.1 (or, if the claim is for misappropriation
of BRIDGE Know-How, the royalty specified in column B of that table), and ALGORX
shall retain the balance; and (2) if BRIDGE is
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prosecuting the action, ALGORX shall be entitled to that portion allocable to
its lost profits or defendant's profits, whichever is less, from the defendant's
infringing sales and Bridge shall retain the balance. In the event that the
Parties agree to prosecute such infringement jointly, the Parties will split all
damages or costs recovered equally, after first reimbursing each Party pari
passu for any out-of-pocket expenses hereunder.
ARTICLE 10
CONFIDENTIALITY
10.1 Treatment of Confidential Information. Except as otherwise provided
in this Article 10, during the term of this Agreement ALGORX and its Affiliates
will retain in confidence and use only for purposes of this Agreement any
information, data, and materials supplied by BRIDGE or on behalf of BRIDGE to
ALGORX and its Affiliates under this Agreement, and BRIDGE will retain in
confidence and use only for purposes of this Agreement any information, data,
and materials supplied by ALGORX or on behalf of ALGORX to BRIDGE under this
Agreement. For purposes of this Agreement, all such information and data that a
Party is obligated to retain in confidence shall be designated as "Confidential"
or "Confidential Information."
10.2 Right to Disclose. To the extent it is reasonably necessary or
appropriate to fulfill its obligations or exercise its rights under this
Agreement or any rights which survive termination or expiration hereof, ALGORX
and BRIDGE may disclose Confidential Information to their respective Affiliates,
sublicensees, consultants, outside contractors, clinical investigators or other
Third Parties on condition that such entities or persons agree in writing (a) to
keep the Confidential Information confidential for the same time periods and to
the same extent as ALGORX and BRIDGE are required to keep the Confidential
Information confidential and (b) to use the Confidential Information only for
such purposes as ALGORX and BRIDGE are entitled to use the Confidential
Information. Each Party or its Affiliates or sublicensees may disclose such
Confidential Information to government or other regulatory authorities to the
extent that such disclosure (i) is reasonably necessary to obtain patents or
authorizations to conduct clinical trials with and to market commercially the
Licensed Products provided such Party is otherwise entitled to engage in such
activities under this Agreement; (ii) is otherwise legally required; or (iii) is
in facilitation of a Party's relationship with its existing or prospective
investors. Any other disclosure of the financial terms of this Agreement shall
be subject to the prior written agreement of the other Party.
10.3 Release From Restrictions. The foregoing obligations with respect to
disclosure and use of Confidential Information shall not apply to any part of
such Confidential Information that the non-disclosing Party, or its Affiliates
(all collectively referred to as the "Receiving Party") can demonstrate by
contemporaneously prepared competent evidence:
(a) is or becomes part of the public domain other than by acts
of the Receiving Party in contravention of this Agreement;
(b) is disclosed to the Receiving Party or its Affiliates or
sublicensees by a Third Party who had the right to disclose such Confidential
Information to the Receiving Party;
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(c) prior to disclosure under this Agreement, was already in
the possession of the Receiving Party or its Affiliates or sublicensees,
provided such Confidential Information was not obtained, directly or indirectly,
from the other Party under this Agreement; or
(d) was independently discovered or developed by the Receiving
Party without resort to such Confidential Information.
10.4 Confidentiality of Agreement. Except as otherwise required by law or
the terms of this Agreement or mutually agreed upon by the Parties hereto, each
Party shall treat as confidential the terms, and conditions of this Agreement,
except that BRIDGE and ALGORX may disclose such terms and conditions of this
Agreement to its Affiliates and sublicensees, counsel and other advisors, and
current and potential investors. Furthermore, each Party may, in connection with
any efforts to become a public company, disclose the terms to the extent
required by the federal securities laws, and provided, that such Party shall
seek confidential treatment of key business terms contained in this Agreement,
including but not limited to the royalty rates, the License Fee and the
Milestone Payments, and shall duly consider suggestions, advice and input from
the other Party with respect to seeking confidential treatment of key business
terms contained in the Agreement.
10.5 Return of Confidential Information. Upon termination of this
Agreement by either Party, each Party hereto and its Affiliates shall return all
Confidential Information of the other Party, in their possession along with a
certification that they no longer possess any such Confidential Information of
the other Party; provided, however, that each Party may retain a single archival
copy of the other Party's Confidential Information solely for the purpose of
determining the extent of disclosure of Confidential Information hereunder and
assuring compliance with the surviving provisions of this Agreement.
ARTICLE 11
TRANSFERS AND ACCESS
11.1 Transfer of BRIDGE Know-How. Within thirty (30) days following the
Effective Date and to the extent it has not already done so, BRIDGE shall
provide ALGORX with all Know-How which exists as of the Effective Date and is
licensed hereunder, and shall transfer to ALGORX copies of all documents
containing such Know-How which exists as of the Effective Date. BRIDGE shall
also promptly transfer to ALGORX the results, information and resulting
materials which are related to, derived from, or that is a product of, any
BRIDGE activities related to the Compound or Licensed Product. ALGORX will
acknowledge receipt in writing of the items transmitted.
11.2 Transfer of Material. Within thirty (30) days following the Effective
Date, BRIDGE shall transfer to ALGORX, or its designee, all available
GMP-quality quantities of ****** and ****** in its possession and in the
possession of the manufacturer of the GMP-material without further consideration
by ALGORX; provided, however, that BRIDGE shall be permitted to retain such
quantities of the Compound as is necessary to allow BRIDGE to discharge its
obligations hereunder. ALGORX will acknowledge receipt in writing.
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ARTICLE 12
TERM; TERMINATION; CONVERSION OF RIGHTS
12.1 Term. This Agreement shall become binding and close upon the date
first above written and shall continue thereafter in full force and effect,
unless terminated sooner pursuant to Articles 12.2 or 12.3 below, and shall
expire upon the date that ALGORX's obligation to pay royalties to BRIDGE
hereunder expires. The Parties acknowledge and agree that ALGORX shall pay to
BRIDGE royalties according to Article 5 and make milestone payments to BRIDGE
that are due according to Article 4 and that ALGORX shall have no obligation to
pay BRIDGE any royalties after the expiration of the applicable periods referred
to in Article 5.1 hereof for Net Sales accruing after such periods.
12.2 Termination Without Cause. ALGORX shall have the right to terminate
this Agreement at any time, without cause, upon sixty (60) days' prior written
notice to BRIDGE.
12.3 Termination For Cause.
(a) By ALGORX. ALGORX may terminate this Agreement for Cause. For
purposes of this paragraph, "Cause" shall mean any material breach of any
material provisions of this Agreement by BRIDGE that is not cured within sixty
(60) days after receipt by BRIDGE of written notice thereof from ALGORX.
(b) By BRIDGE. BRIDGE may terminate this Agreement for Cause. For
purposes of this paragraph, "Cause" shall mean any material breach of any
material provision of this Agreement by ALGORX that is not cured within sixty
(60) days after receipt by ALGORX of written notice thereof from BRIDGE. For
purposes of clarification, the following shall constitute "Cause" hereunder: (i)
if ALGORX fails to meet the Minimum Development Expenditure in any given
calendar year following the Effective Date or (ii) if ALGORX fails to use
Diligent Efforts in any Major Market Country as required hereunder (provided,
however, that, if ALGORX is using Diligent Efforts in one or more Major Market
Countries but not in all Major Market Countries, BRIDGE's remedy in that case
shall be limited to the procedures set forth in Article 12.4, if applicable
pursuant to such provision).
(c) Termination for Insolvency or Bankruptcy. Either Party may, by
written notice, terminate this Agreement with immediate effect if the other
Party:
(i) makes a general assignment for the benefit of creditors;
(ii) files an insolvency petition in bankruptcy;
(iii) petitions for or acquiesces in the appointment of any
receiver, trustee or similar officer to liquidate or conserve its business or
any substantial part of its assets;
(iv) commences under the laws of any jurisdiction any
proceeding involving its insolvency, bankruptcy, reorganization, adjustment of
debt, dissolution, liquidation or any other similar proceeding for the release
of financially distressed debtors; or
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(v) becomes a party to any proceeding or action of the type
described above in (iii) or (iv), and such proceeding or action remains
undismissed or unstayed for a period of more than ninety (90) days.
12.4 Conversion of Commercialization Rights in a Major Market Country.
(a) A "Conversion Event" with respect to a Major Market Country
shall be deemed to have occurred if:
(i) ALGORX provides written notice to BRIDGE that ALGORX is
ceasing its commercialization of, or intends to cease its commercialization of
all Licensed Products in that particular Major Market Country; or does not
intend to initialize commercialization of at least one Licensed Product in that
particular Major Market Country; or
(ii) ALGORX fails to use Diligent Efforts to commercialize at
least one Licensed Product in a particular Major Market Country pursuant to the
Project Plan (the Parties acknowledge that the Project Plan will call for a
sequence of activities in the Major Market Countries and not simultaneous
activity in all Major Market Countries), as determined in accordance with the
following: If BRIDGE believes that ALGORX is failing to use Diligent Efforts to
commercialize at least one Licensed Product in a particular Major Market Country
pursuant to the Project Plan, BRIDGE shall provide notice of same to ALGORX
along with a statement of the basis for BRIDGE's assertion and a description of
steps necessary to remedy such situation in such Major Market Country. ALGORX
shall then have sixty (60) days to, as applicable, either (A) remedy the basis
for BRIDGE's assertion of ALGORX's failure to use Diligent Efforts pursuant to
the Project Plan or (B) demonstrate that ALGORX has used Diligent Efforts to
develop a Licensed Product in such Major Market Country pursuant to the Project
Plan. In the event of any dispute as to whether a Conversion Event has occurred
under this Article 12.4(a)(ii), the Parties will immediately submit such
dispute, issue or disagreement for resolution by an Industry Expert pursuant to
Article 14.2, and if the same is resolved in favor of BRIDGE, there will be
deemed to be a Conversion Event as of the date of written determination thereof.
(b) BRIDGE's sole rights and ALGORX's sole obligations upon and
after the occurrence of a Conversion Event shall be that BRIDGE shall have the
following rights with respect to the relevant Major Market Country (the
"Conversion Country"):
(i) ALGORX will grant to BRIDGE an exclusive (even as to
ALGORX), nontransferable (except as provided in Article 15.5) license, with a
right to sublicense, under all ALGORX Technology, to research, make, have made,
develop, use, sell, offer for sale, import and otherwise commercialize the
Compound and Licensed Products in the Field, solely within the Conversion
Country and BRIDGE will have the full right to use BRIDGE Technology free of any
payments to ALGORX in said Conversion Country.
(ii) Within sixty (60) days after a Conversion Event, ALGORX
shall deliver to BRIDGE (1) a 100-gram GMP-quality sample of the Compound (to
the extent available to ALGORX at no additional substantial expense and, if not,
then at BRIDGE's expense), (2) tangible manifestations of the ALGORX Know-How
necessary or desirable for BRIDGE to continue development and commercialization
of Licensed Products in the Conversion Country, and (3) copies of all data,
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information submitted by ALGORX in connection with any Regulatory Filing made in
the Conversion Country (each, an "ALGORX Regulatory Filing"), all solely for the
purpose of allowing BRIDGE to research, make, have made, develop, use, sell,
offer for sale, import and otherwise commercialize the Compound and Licensed
Products in the Field, solely within the Conversion Country. In consideration
for provision of the foregoing, BRIDGE shall pay to ALGORX, upon submission in
any Regulatory Filing made by or on behalf of BRIDGE or its Affiliates or
sublicensees that contains or references any data or information contained in or
submitted in an ALGORX Regulatory Filing, a fraction of all of ALGORX's costs to
generate the ALGORX Regulatory Filing (including without limitation the costs
paid by ALGORX for preclinical or clinical studies, consultants, filing costs
and fees, copying costs and reasonable attorneys' fees). Such fraction will be
calculated by dividing the annual sales of all local anesthetic products in such
Conversion Country during the preceding calendar year by the sales of all local
anesthetic products worldwide for such time period, as such sales data are
reported by IMS or any other mutually agreed source of such data. BRIDGE will
reimburse ALGORX such amounts by paying ALGORX **** ****** percent (**%) of
BRIDGE's Net Sales (using the same definition of "Net Sales" as set forth in
Article 1, but with reference to sales of Licensed Products by BRIDGE and its
Affiliates and sublicensees rather than ALGORX and its Affiliates and
sublicensees) of Licensed Products from such Conversion Country on a quarterly
basis, until such time as full recovery has been made. In such event, BRIDGE
shall be obligated to provide a report describing revenues of Licensed Products
in the Conversion Country in the same fashion as ALGORX is obligated under
Article 6.1, and ALGORX shall have the right to audit BRIDGE's books and records
to the same extent that BRIDGE is entitled to under Article 6.3. If no
Regulatory Filings have been made in the Conversion Country, ALGORX shall
provide BRIDGE with copies of Regulatory Filings and associated data and
information in other Major Market Countries sufficient to allow BRIDGE to
prepare Regulatory Filings for the Conversion Country.
12.5 Effect of Termination.
(a) Expiration pursuant to Article 12.1. Upon any expiration of this
Agreement pursuant to Article 12.1 hereof, the licenses granted to ALGORX under
Article 3 shall survive such termination but shall convert to non-exclusive,
fully paid up, irrevocable and perpetual licenses.
(b) Termination by ALGORX pursuant to Article 12.2. Upon termination
of this Agreement by ALGORX pursuant to Article 12.2: (i) ALGORX's license
rights to BRIDGE Technology and all other rights of ALGORX hereunder, except as
specifically otherwise set forth herein, shall terminate; (ii) BRIDGE's rights
under Article 12.4(c) shall survive such termination and remain in full force
and effect with Article 6 and Article 12.6 continuing to be fully applicable
thereto; (iii) BRIDGE shall be granted a further non-exclusive license, with
right of sublicense, under all ALGORX Technology, to research, make, have made,
develop, use, sell, offer for sale, import, and otherwise commercialize the
Compound and Licensed Products in the Field; and (iv) BRIDGE shall have the
right to purchase, and have assigned to it, all of ALGORX's rights in the
Trademarks, if any, the Regulatory Filings, if any, and the Regulatory
Approvals, if any, for the Licensed Products, as well as any and all sublicense
agreements and other business assets related to the Licensed Products (other
than inventory, which is addressed below) that are necessary or appropriate for
BRIDGE's continuation of the business of development and commercialization of
the Licensed Products (such Trademarks, Regulatory Filings, Regulatory
Approvals, sublicense agreements, and other assets in existence upon the
effective date of termination, the "Termination Assets") from ALGORX (or its
Affiliates as applicable) in accordance with the terms of Article 12.5(f). If
upon the effectiveness of a termination pursuant to Article 12.2, ALGORX or its
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Affiliates continue to possess inventory of Licensed Products, BRIDGE shall have
the right to purchase all such inventory at cost. Should BRIDGE elect not to
purchase such inventory, ALGORX shall have the right to sell the inventory in
the Territory for a period of six (6) months from the effective date of
termination, subject to the payment of royalties to BRIDGE pursuant to Article 5
hereof and provided that ALGORX at all times during such disposal period
maintains consistent pricing and market positioning for such inventory as in
effect prior to such termination.
(c) Termination by ALGORX pursuant to Article 12.3. Upon termination
of this Agreement by ALGORX pursuant to Article 12.3: (i) ALGORX's license
rights in Articles 3, 5.1 and 8.2 shall survive such termination and remain in
full force and effect with Articles 4 through 6 continuing to be fully
applicable thereto (provided, however, that if the breach giving rise to
ALGORX's termination under Article 12.3 was a willful material breach by BRIDGE
of Articles 3.2 or 3.3, or a willful material breach by BRIDGE of the
exclusivity of the licenses granted to ALGORX under Article 3.1, ALGORX, in
addition to any other rights hereunder or at law or equity, shall be entitled to
injunctive and equitable relief against BRIDGE to cause such activities to
cease, to actual and consequential damages resulting from such breach, and to
reimbursement of its attorneys' fees and costs in obtaining such relief), (ii)
BRIDGE's rights under Articles 8.1 (with respect to use of its designated patent
counsel), 8.3 (with respect to assignment of Composition of Matter and related
Inventions to Bridge), 8.4, 8.5, 9 and 12.4 (except for BRIDGE's rights with
respect to any Conversion Country in which Bridge was licensed under Article
12.4(c)(i) as of the date of termination, with Article 6, Article 12.4 and 12.6
continuing to be fully applicable thereto)) shall terminate immediately; and
(iii) ALGORX shall be entitled to set off any damages arising from BRIDGE's
breach against any payments owing under Articles 4 or 5 hereof.
(d) Termination by BRIDGE pursuant to Article 12.3. Upon termination
of this Agreement by BRIDGE pursuant to Article 12.3: (i) ALGORX's license
rights to BRIDGE Technology and all other rights of ALGORX hereunder, except as
specifically otherwise set forth herein, shall terminate; (ii) BRIDGE's rights
under Article 12.4(c) shall survive such termination and remain in full force
and effect with Article 6 and Article 12.6 continuing to be fully applicable
thereto; (iii) BRIDGE shall be granted a further non-exclusive license, with
right of sublicense, under all ALGORX Technology, to research, make, have made,
develop, use, sell, offer for sale, import, and otherwise commercialize the
Compound and Licensed Products in the Field; and (iv) BRIDGE shall have the
right to purchase, and have assigned to it, the Termination Assets from ALGORX
(or its Affiliates or sublicensees, as applicable) in accordance with the terms
of Article 12.5(f). If upon the effectiveness of a termination pursuant to
Article 12.2, ALGORX or its Affiliates or sublicensees continue to possess
inventory of Licensed Products, BRIDGE shall have the right to purchase all such
inventory at cost. Should BRIDGE elect not to purchase such inventory, ALGORX
shall have the right to sell the inventory in the Territory for a period of six
(6) months from the effective date of termination, subject to the payment of
royalties to BRIDGE pursuant to Article 5 hereof and provided that ALGORX at all
times during such disposal period maintains consistent pricing and market
positioning for such inventory as in effect prior to such termination. The
foregoing shall be in addition to any other rights of BRIDGE against ALGORX
pursuant to this Agreement or applicable law.
(e) In the event this Agreement is terminated due to the rejection
of this Agreement by or on behalf of a Party under Article 365 of the United
States Bankruptcy Code (the "Code"), and the equivalent provisions, if any, of
the bankruptcy laws of other countries in which ALGORX exercises the license
granted hereunder, all licenses and rights to licenses granted under or pursuant
to this Agreement
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by one Party to the other are, and shall otherwise be deemed to be, for purposes
of Article 365(n) of the Code, and any such equivalent law, licenses of rights
to "intellectual property" as defined under Article 101(35A) of the Code. The
Parties agree that the licensed Party, as a licensee of such rights under this
Agreement, shall retain and may fully exercise all of its rights and elections
under the Code, and any such equivalent law, and that upon commencement of a
bankruptcy proceeding by or against a Party under the Code, the other Party
shall be entitled to a complete duplicate of or complete access to, any such
intellectual property and all embodiments of such intellectual property. Such
intellectual property and all embodiments thereof shall be promptly delivered to
the other Party (i) upon any such commencement of a bankruptcy proceeding upon
written request therefore by a Party, unless the Party elects to continue to
perform all of its obligations under this Agreement or (ii) if not delivered
under (i) above, upon the rejection of this Agreement by or on behalf of the
Party upon written request therefore. The foregoing is without prejudice to any
rights either Party may have arising under the Code or other applicable law.
(f) If upon termination of this Agreement by ALGORX pursuant to
Article 12.2 or by BRIDGE pursuant to Article 12.3, BRIDGE elects to purchase
any Termination Assets from ALGORX or its Affiliates pursuant to Article 12.5(b)
or 12.5(d), such purchase shall be accomplished in accordance with the
following:
(i) BRIDGE shall provide notice to ALGORX of such election (a
"Purchase Notice") within ninety (90) days after the effective date of
termination of this Agreement, which notice shall specify the Termination Assets
to be purchased by BRIDGE and state a proposed Fair Asset Value (as defined
below) for such Termination Assets.
(ii) The Termination Assets shall, if purchased by BRIDGE, be
purchased for the fair market value of such Termination Assets (assuming an all
cash sale, not under duress, to a willing buyer) net of liabilities at the time
of termination (the "Fair Asset Value"). BRIDGE shall initially propose the Fair
Asset Value in its Purchase Notice. Thereafter, if ALGORX disagrees with such
proposal, the Management shall negotiate for a period of thirty (30) days to
attempt to reach agreement on the Fair Asset Value of the Termination Assets
proposed to be purchased. If the Parties are unable to so agree, such Fair Asset
Value shall be determined by an Industry Expert in accordance with Article 14.2
below. Absent manifest error, such Fair Asset Value shall be conclusive,
binding, and non-appealable by the Parties.
(iii) The Fair Asset Value of the Termination Assets purchased
by BRIDGE shall be paid to ALGORX via BRIDGE's payment to ALGORX of ************
percent (**%) of gross revenues received by BRIDGE from or in connection with
sales of Licensed Products by BRIDGE, its Affiliates, subsequent BRIDGE
licensees, to be reported and paid on a quarterly basis, until such time as such
amount has been fully paid by BRIDGE. In such event, ALGORX shall have the right
to audit BRIDGE's books and records to the same extent that BRIDGE is entitled
to under Article 6.3.
(iv) ALGORX shall include in its sublicense agreements with
sublicensees the right for ALGORX to assign each such agreement to BRIDGE in the
event this Agreement is terminated by ALGORX under Article 12.2 or by BRIDGE
under Article 12.3 and BRIDGE elects to purchase such agreement as a Termination
Asset per Article 12.5(b) or Article 12.5(d).
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(g) Termination of this Agreement shall not relieve either Party of
any obligation of such Party accruing prior to such termination. Any termination
of this Agreement shall be without prejudice to the rights of either Party
against the other accrued or accruing under this Agreement prior to termination.
12.6 Surviving Obligations. Except as otherwise expressly set forth in
Article 12.5 above, the rights and obligations of the Parties under Articles 7,
8.3(c), 10, 12, 13, 14 and 15 shall survive any expiration or termination of
this Agreement.
ARTICLE 13
INDEMNIFICATION
13.1 Indemnification by BRIDGE. Subject to Article 13.3 hereof, BRIDGE
hereby agrees to defend, indemnify and hold harmless ALGORX and its Affiliates,
directors, officers, employees, agents and licensees from and against any
liabilities, losses, fines, penalties, damages, expenses (including reasonable
attorney's fees and expenses and expenses incurred in connection with the
enforcement of this provision), actions, claims brought or threatened after the
Effective Date of this Agreement and which arise out of claims against ALGORX
brought by Third Parties after the Effective Date of this Agreement, including
but not limited to, any actions in contract (including breach of warranty) tort
(including negligence, strict liability or commercial torts) which arise, result
from, or relate to: (i) any breach of any of the representations, warranties or
covenants of BRIDGE contained in Article 7 hereof, (ii) any use, storage,
handling, sale, distribution, manufacturing, marketing, exporting or importing
of the Compound or the Licensed Products by or on behalf of BRIDGE, its
Affiliates, sublicensees and distributors, or (iii) any patent infringement
proceeding or trade secret misappropriation suit with respect to the BRIDGE
Patent Rights asserted by a Third Party against ALGORX, where BRIDGE has
breached its non-infringement/no-misappropriation representation and warranty in
Article 7.2(c) (any of the foregoing hereinafter collectively referred to as a
"ALGORX Loss"). BRIDGE shall have no indemnification obligations under this
Article 13.1 to the extent that such ALGORX Loss arises out of the negligence or
willful misconduct of ALGORX or its employees, or any breach of this Agreement
by ALGORX.
13.2 Indemnification by ALGORX. Subject to Article 13.3 hereof, ALGORX
hereby agrees to indemnify and hold harmless BRIDGE and its Affiliates,
sublicensees, directors, officers, employees and agents from and against any
liabilities, losses, fines, penalties, damages, expenses (including reasonable
attorney's fees and expenses and expenses incurred in connection with the
enforcement of this provision), actions, or claims brought or threatened after
the Effective Date of this Agreement and which arise out of claims against
BRIDGE brought by Third Parties after the Effective Date of this Agreement,
including but not limited to, any actions in contract (including breach of
warranty), tort including negligence, strict liability or commercial torts)
which arise, result from, or relate to (i) any breach of any of the
representations, warranties and covenants of ALGORX contained in Article 7
hereof, (ii) any use, storage, handling, sale, distribution, manufacturing,
marketing, exporting or importing of the Compound or the Licensed Products by or
on behalf of ALGORX, its Affiliates, sublicensees and distributors, including,
without limitation, claims based upon product liability with respect to Licensed
Products, (iii) the violation of any applicable law or regulation in any
jurisdiction by ALGORX, its Affiliates or sublicensees including, without
limitation, in connection with preparation or
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filing of Regulatory Filings, or (iv) any patent infringement proceeding or
trade secret misappropriation suit with respect to the ALGORX Technology
asserted by a Third Party against BRIDGE (any of the foregoing hereinafter
referred to as a "BRIDGE Loss"). ALGORX shall have no indemnification
obligations under this Article 13.2 to the extent that such BRIDGE Loss arises
out of the negligence or willful misconduct of BRIDGE or its employees, or any
breach of this Agreement by BRIDGE.
13.3 Indemnification Procedures With Respect to Third Party Claims. A
Party that intends to seek indemnification under this Article 13 (such Party
hereinafter referred to as the "Indemnitee") in respect to a liability, loss,
fine, penalty, damage, expense, action, or claim brought against such Indemnitee
by a Third Party (such claim hereinafter referred to as a "Third Party Claim"),
shall promptly give written notice thereof to the party from whom
indemnification is sought (such other party hereinafter referred to as the
"Indemnitor") within a reasonable period of time after the assertion of such
Third Party Claim by such Third Party; provided, however, that the failure to
provide written notice of such Third Party Claim within a reasonable period of
time shall not relieve the Indemnitor of any of its obligations hereunder,
except to the extent that the Indemnitor is prejudiced by such failure. The
Indemnitor shall have the right to assume the complete control of the defense,
compromise or settlement of any Third Party Claim (provided that no settlement
of any Third Party Claim shall include any admission of wrongdoing on the part
of an Indemnitee, without the prior written consent of such Indemnitee, which
such consent shall not be unreasonably withheld). The Indemnitee shall have the
right to participate, at its own expense and with counsel of its choice, in the
defense of any claim or suit that has been assumed by the Indemnitor. If the
Parties cannot agree as to the application of Articles 13.1 and 13.2 to any
particular Third Party Claim, the Parties may conduct separate defenses of such
Third Party Claim. Each Party reserves the right to claim indemnity from the
other in accordance with Articles 13.1 and 13.2 above upon resolution of the
underlying claim, notwithstanding the provisions of this Article 13.3 requiring
the Indemnitee to tender to the Indemnitor the exclusive ability to defend such
claim or suit.
ARTICLE 14
DISPUTE RESOLUTION
14.1 Dispute Resolution. The Parties recognize that disputes as to certain
matters may arise from time to time during the term of this Agreement that
relate to either Party's rights and/or obligations hereunder. It is the
objective of the Parties to establish procedures to facilitate the resolution of
disputes arising under this Agreement in an expedient manner by mutual
cooperation and without resort to litigation. To accomplish this objective, the
Parties agree to follow the procedures set forth in this Article 14 if and when
a dispute arises under this Agreement. All disputes arising under this Agreement
shall be discussed first by the JC. Either Party may, by written notice to the
other Party, have any dispute between the Parties remaining unresolved after
thirty (30) days referred to their respective Chief Executive Officers for
attempted resolution by good faith negotiations within thirty (30) days after
such notice is received. If the designated officers are still not able to
resolve such dispute within such thirty (30) day period, either Party may at any
time thereafter pursue any legal or equitable remedy available to it as provided
below in this Article 14.
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14.2 Neutral Determination by Expert. All disputes arising under the
definition of Net Sales (as to Licensed Product Net Sales in a Combined
Offering), Article 2.5 (as to sublicense terms), Article 5.3 (as to whether a
patent is a Required Third Party Patent), Article 12.4 (as to whether a
Conversion Event has occurred), or Article 12.5(f) (as to the Fair Asset Value
of Termination Assets) shall be resolved pursuant to this Article 14.2. In the
event of any such dispute, either Party may provide notice to the other Party of
such dispute and commence the procedures set forth in this Article 14.2. Within
ten (10) days after such notice, each Party shall propose a list of three (3)
individuals, each of whom has had at least ten (10) years of (a) experience
prosecuting biopharmaceutical patents at a nationally recognized law firm (with
respect to whether a patent falls within the definition of a Required Third
Party Patent), or (b) at least ten (10) years of significant management
experience in the biopharmaceutical industry (with respect to determining
sublicense terms or whether a Conversion Event has occurred), or (c) at least
ten (10) years of significant financial experience in the biopharmaceutical
industry (with respect to disputes over Net Sales allocation in a Combined
Offering or disagreement as to the Fair Asset Value of Termination Assets) and,
in any case, none of whom is affiliated with either Party or with either Party's
Affiliates, sublicensees or business partners, or otherwise has any interest in
the resolution of the issue to be submitted by the Parties for resolution (the
foregoing requirements, the "Requirements"). Within five (5) days after the
Parties exchange such lists, the Parties shall either agree upon one of such
proposed individuals to resolve the disputed matter, or if the Parties do not so
select one such individual within such period of time, each Party shall select
one (1) such individual from the list proposed by the other Party, and the two
(2) selected individuals shall select a third individual who otherwise meets the
Requirements to resolve the disputed matter (the selected individual, the
"Industry Expert"). Each Party shall submit written materials to the other Party
and to the Industry Expert relating to the matters in issue within thirty (30)
days after the Industry Expert is selected. Each Party shall then have fifteen
(15) days to submit a written rebuttal to the other Party's submission to the
other Party and to the Industry Expert. The Industry Expert shall have the
discretion to interview the Parties' officers and employees to obtain further
information relating to the matters in issue and to hear oral argument. Each
Party shall cooperate with the Industry Expert. The Industry Expert's
determination shall be dispositive of all issues properly presented to him or
her and such determination shall be given retroactive effect. Until such
determination is delivered to the Parties, the Parties shall continue to perform
their obligations under this Agreement in good faith and make any applicable
payments accordingly. The Parties shall bear all expenses incurred pursuant to
this Article 14.2 equally.
14.3 Arbitration. Any dispute, controversy or claim arising out of or
relating to the validity, construction, enforceability or performance of this
Agreement that is not resolved pursuant to Article 14.1 and is not required to
be resolved under Article 14.2 above may be submitted by either Party for final
and binding arbitration in accordance with the terms of this Agreement by an
independent arbitration firm acceptable to both Parties such as JAMS (Judicial
Arbitration & Mediation Services). The arbitration will be conducted in New
York, New York under the rules then in effect for the selected arbitration firm,
except as provided herein. The Parties consent to the personal jurisdiction of
the United States federal courts, for any case arising out of or otherwise
related to this arbitration, its conduct and its enforcement. This Article 14.3
shall not apply to any dispute, controversy or claim that concerns the validity,
enforceability or infringement of a patent, trademark or copyright.
(a) Arbitrator. Subject to Article 14.3(b), the arbitrator shall be one
(1) neutral, independent and impartial arbitrator selected from a pool of
retired federal judges to be presented to the Parties by the selected
arbitration firm. Failing the agreement of the Parties as to the selection of
the arbitrator within
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thirty (30) days, the arbitrator shall be appointed by the selected arbitration
firm within the subsequent thirty (30) days. Upon the written request of either
Party prior to the commencement of the arbitrator's duties pursuant to this
Article 14.3, there shall be three (3) arbitrators rather than one (1). If such
request is made prior to the selection of an arbitrator pursuant to Article
14.3(a), then within thirty (30) days of such request each Party shall select
one (1) neutral, independent and impartial arbitrator from the pool of retired
federal judges presented to the Parties by the selected arbitration firm and
within thirty (30) days thereafter those two (2) arbitrators shall select the
third arbitrator from such pool. If such request is made after the selection of
an arbitrator pursuant to Article 14.3(a), then within thirty (30) days of such
request each Party shall select one (1) additional arbitrator from the pool from
which the first arbitrator was selected.
(b) Governing Law. Resolution of all disputes arising out of or related to
this Agreement or the performance, enforcement, breach or termination of this
Agreement and any remedies relating thereto, shall be governed by and construed
under the substantive laws of the state of New York, exclusive of its choice of
law rules.
(c) Rules of Procedure and Evidence. The Parties shall be entitled to
discovery as provided in the Federal Rules of Civil Procedure and the local
rules of the Federal District Court in New York, New York, provided, however,
that all discovery shall be conducted expeditiously within the time limit set by
the arbitrator selected pursuant to Article 14.3. At the hearing, the Parties
may present testimony (either by live witness or deposition) and documentary
evidence. Each Party shall have the right to be represented by counsel. The
Federal Rules of Evidence shall apply to any and all matters submitted to final
and binding arbitration under this Agreement.
(d) Decision. The power of the arbitrator to fashion procedures and
remedies within the scope of this Agreement is recognized by the Parties as
essential to the success of the arbitration process. The arbitrator shall not
have the authority to fashion remedies, unless the remedy would be available to
a federal judge hearing the same dispute. The arbitrator is encouraged to
operate on this premise in an effort to reach a fair and just decision but shall
fashion such rules and procedures to best approximate Federal rules and
procedures except with respect to procedural time limits and delays (which shall
be set by the arbitrator pursuant to Article 14.3(e)). Reasons for the
arbitrator's decisions should be complete and explicit. A full transcript and
record of the proceedings as well as written decisions including all
determinations of law and fact shall be provided for the appellate process. The
written reasons should also include the basis for any damages awarded and a
statement of how the damages were calculated. Such a written decision shall be
rendered by the arbitrator following a full comprehensive hearing, no later than
six (6) months following the selection of the arbitrator as provided for in
Article 14.3. If as to any issue the arbitrator should determine under the
applicable law that the position taken by a Party is frivolous or otherwise
irresponsible or that any wrongdoing they find is in callous disregard of law
and equity or the rights of the other Party, the arbitrator shall also award an
appropriate allocation of the adversary attorney's reasonable fees, costs and
expenses to be paid by the offending Party, the precise sums to be determined
after a xxxx of attorney fees, expenses and costs consistent with such award has
been presented following the award on the merits.
(e) Each Party agrees to abide by the award rendered in any decision
rendered by a neutral pursuant to Article 14.2, or pursuant to an arbitration
conducted pursuant to this Article 14.3, and agrees that a judgment of any state
of federal court having jurisdiction may be entered upon the final award and
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that other courts may award full faith and credit to such judgment in order to
enforce such award. If applicable, the award shall include interest from the
date of any damages incurred for breach of the Agreement, and from the date of
the award until paid in full, at a rate fixed by the arbitrator. With respect to
money damages, nothing contained herein shall be construed to permit the
arbitrator(s) or any court or any other forum to award punitive or exemplary
damages. By entering into this agreement to arbitrate, the Parties expressly
waive any claim for punitive or exemplary damages. The only damages recoverable
under this Agreement are compensatory damages (including, without limitation,
consequential damages, as limited by Article 15.14 hereof).
(f) Costs. Except as set forth in this Article 14.3(i), each Party shall
bear its own legal fees. The arbitrator shall assess his or her costs, fees and
expenses against the Party losing the arbitration unless he or she believes that
neither Party is the clear loser, in which case the arbitrator shall divide his
or her fees, costs and expenses according to his or her sole discretion.
(g) Injunctive Relief. Provided a Party has made a sufficient showing
under the rules and standards set forth in the Federal Rules of Civil Procedure
and applicable case law, the arbitrator shall have the freedom to invoke, and
the Parties agree to abide by, injunctive measures after either Party submits in
writing for arbitration claims requiring immediate relief.
(h) Confidentiality. The arbitration proceeding shall be confidential and
the arbitrator shall issue appropriate protective orders to safeguard each
Party's Confidential Information. Except as required by law, no Party shall make
(or instruct the arbitrator to make) any public announcement with respect to the
proceedings or decision of the arbitrator without prior written consent of each
other Party. The existence of any dispute submitted to arbitration, and the
award, shall be kept in confidence by the Parties and the arbitrator, except as
required in connection with the enforcement of such award or as otherwise
required by applicable law.
(i) Survivability. Any duty to arbitrate under this Agreement shall remain
in effect and be enforceable after termination of the contract for any reason.
ARTICLE 15
GENERAL PROVISIONS
15.1 Force Majeure. Neither Party shall be held liable or responsible to
the other Party nor be deemed to have defaulted under or breached this Agreement
for failure or delay in fulfilling or performing any term of this Agreement,
other than an obligation to make payments hereunder, when such failure or delay
is caused by or results from fire, floods, embargoes, government regulations,
prohibitions or interventions, war, acts of war (whether war be declared or
not), insurrections, riots, civil commotions, strikes, lockouts, acts of God or
any other cause beyond the reasonable control of the affected Party to
anticipate, prevent, avoid or mitigate (a "Force Majeure Event"); provided,
however, that any failure or delay in fulfilling a term of this Agreement shall
not be considered a result of a Force Majeure Event if it arises from a failure
of ALGORX or BRIDGE to comply with applicable laws and regulations and further
provided, however, that if a Force Majeure Event causes a delay of greater than
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six (6) months in ALGORX's Diligent Efforts required under this Agreement,
BRIDGE shall have the right to deem same as giving rise to its ability to
terminate for Cause pursuant to Article 12.3(b).
15.2 Further Assurances. Each Party hereto agrees to perform such acts,
execute such further instruments, documents or certificates, and provide such
cooperation in proceedings and actions as may be reasonably requested by the
other Party in order to carry out the intent and purposed of this Agreement,
including without limitation the registration or recordation of the rights
granted hereunder.
15.3 Severability. Both Parties hereby expressly acknowledge and agree
that it is the intention of neither Party to violate any public policy,
statutory or common law, rules, regulations, treaty or decision of any
government agency or executive body thereof of any country or community or
association of countries and specifically agree that if any word, sentence,
paragraph, clause or combination thereof in this Agreement is found by a court
or executive body with judicial powers having jurisdiction over this Agreement
or any of the Parties hereto in a final unappealed order, to be in violation of
any such provisions in any country or community or association of countries,
then in such event such words, sentences, paragraphs, clauses or combination
shall be inoperative in such country or community or association of countries
and the remainder of this Agreement shall remain binding upon the Parties
hereto.
15.4 Notices. Any notice required or permitted to be given hereunder shall
be in writing and shall be deemed to have been properly given if delivered in
person, or if mailed by registered or certified mail (return receipt requested)
postage prepaid, or by a nationally recognized overnight courier, or by
facsimile (and promptly confirmed by registered, certified mail or overnight
courier), to the addresses given below or such other addresses as may be
designated in writing by the Parties from time to time during the term of this
Agreement. Any notice sent by registered, certified mail or overnight courier as
aforesaid shall be deemed to have been given when mailed.
In the case of BRIDGE: BRIDGE PHARMA, INC.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a required copy to: Seyfarth Xxxx LLP
0000 Xxxxxxxxx Xxxxxx, X.X, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx III, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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In the case of ALGORX: AlgoRx Pharmaceuticals, Inc.
000 Xxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
Attention: President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a required copy to: Xxxxxx Xxxxxx White & XxXxxxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
15.5 Assignment. This Agreement may not be assigned or otherwise
transferred by either Party without the written consent of the other Party;
provided, however, that no consent shall be required for any assignment pursuant
to any merger, acquisition or transfer of all or substantially all of the stock,
assets or business to which this Agreement relates. Any purported assignment in
violation of the preceding sentence shall be void. Any permitted assignee shall
assume all obligations of its assignor under this Agreement, and shall confirm
such assumption in writing to the other Party within thirty (30) days after
receipt of any request to so confirm by the other Party.
15.6 Publicity. Except for the details in the release described in
Appendix C, and as required by law, stock exchange or regulatory authority,
neither Party, nor any of its Affiliates, shall originate any publicity, news
release or other public announcement, written or oral, relating to the
confidential terms or conditions contained in this Agreement without the prior
written approval of the other Party.
15.7 Amendment. The Parties hereto may amend, modify or alter any of the
provisions of this Agreement, but only by a written instrument that explicitly
refers to this Agreement and is approved and duly executed by both Parties
hereto. For purposes of clarification, the JC shall have no power to amend,
modify or waive compliance with any provision of this Agreement.
15.8 Entire Agreement. This Agreement contains the entire understanding of
the Parties with respect to the subject matter hereof. All express or implied
agreements and understandings, either oral or written, heretofore made are
expressly merged in and made a part of this Agreement.
15.9 Waiver. The failure of a Party to enforce at any time for any period
any of the provisions hereof shall not be construed as a waiver of such
provisions or of the rights of such Party thereafter to enforce each such
provisions.
15.10 No Implied Licenses. Except as expressly and specifically provided
under this Agreement, the Parties agree that neither Party is granted any
implied rights to or under any of the other Party's current or future patents,
trade secrets, copyrights, moral rights, trade or service marks, trade dress, or
any other intellectual property rights outside the Field.
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15.11 Injunctions. The Parties agree that any breach or threatened breach
by one Party of the confidentiality provisions contained in this Agreement may
cause substantial harm to the other Party that cannot be remedied by monetary
damages, and therefore each Party agrees that either Party shall be have the
right to seek equitable remedies including injunctions and repossession of
Confidential Information, to xxxxx actual or threatened breaches of this
Agreement.
15.12 Independent Contractors. The Parties agree that the relationship of
BRIDGE and ALGORX established by this Agreement is that of independent licensee
and licensor. Furthermore, the Parties agree that this Agreement does not, is
not intended to, and shall not be construed to, establish a partnership or joint
venture, and nor shall this Agreement create or establish an employment, agency
or any other relationship. Except as may me specifically provided herein,
neither Party shall have any right, power or authority, nor shall they represent
themselves as having any authority to assume, create or incur any expense,
liability or obligation, express or implied, on behalf of the other Party, or
otherwise act as an agent for the other Party for any purpose.
15.13 No Third Party Beneficiaries. All rights, benefits and remedies
under this Agreement are solely intended for the benefit of BRIDGE and ALGORX,
and no Third Party shall have any rights whatsoever to (i) enforce any
obligation contained in this Agreement (ii) seek a benefit or remedy for any
breach of this Agreement, or (iii) take any other action relating to this
Agreement under any legal theory, including but not limited to, actions in
contract, tort (including but not limited to negligence, gross negligence and
strict liability), or as a defense, setoff or counterclaim to any action or
claim brought or made by the Parties.
15.14 Limitation of Liability. EXCEPT FOR EACH PARTY'S INDEMNIFICATION
OBLIGATIONS, OR ITS BREACH OF ARTICLE 7 HEREOF, IN NO EVENT SHALL EITHER PARTY
BE LIABLE TO THE OTHER PARTY FOR ANY LOSS OF PROFITS, LOSS OF BUSINESS OR
INTERRUPTION OF BUSINESS, OR FOR ANY OTHER INDIRECT, SPECIAL, INCIDENTAL,
CONSEQUENTIAL, OR PUNITIVE DAMAGES OF ANY KIND, EVEN IF SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGES.
15.15 Insurance. Each Party shall procure and maintain at its own cost
such type and amounts of liability insurance covering such development,
manufacture, supply, use or sales (as applicable) of its Licensed Products as is
normal and customary in the pharmaceutical industry. Such insurance will be on
an occurrence form or on a claims made form. This insurance shall also include
contractual liability. Upon request, each Party shall provide the other Party
with a written certificate evidencing such insurance. Notwithstanding the
foregoing, upon the earlier of (a) the Commencement of Phase I clinical trials
for the first Licensed Product, or (b) commencing supply of Licensed Products to
any Third Party for use in humans, ALGORX shall have the sole obligation to
procure and maintain, at its own cost, policies of product liability insurance
in such scope and coverage consistent with commercially reasonable practices
normally exercised under similar circumstances consistent with good business
judgment, to cover the activities of ALGORX, BRIDGE, and its and their
Affiliates and sublicensees. ALGORX shall provide BRIDGE with written notice
immediately upon receipt by ALGORX of notice of any pending cancellation,
non-renewal or material change in such insurance, and ALGORX shall obtain
replacement insurance providing comparable coverage prior to any such
cancellation, non-renewal or material change. ALGORX shall maintain such product
liability insurance beyond the expiration or termination of this Agreement
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during the period that any Licensed Product is being tested, distributed or
sold by ALGORX or by any Affiliate, or sublicensee of ALGORX and for a
reasonable period thereafter.
15.16 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, exclusive of its
choice-of-law rules.
15.17 Headings. The article, and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
15.18 Counterparts. This Agreement may be executed by means of facsimile
signature and in any number of counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same document.
[signature page follows]
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IN WITNESS HEREOF, the Parties have executed this Agreement as of the
Effective Date.
BRIDGE PHARMA, INC. ALGORX PHARMACEUTICALS, INC.
By: /s/ XXXXXX XXXXX By: /s/ XXXX XXXXXXX
------------------------------------ ----------------------------------
Printed Printed
Name: XXXXXX XXXXX Name: XXXX XXXXXXX
-------------------------------- ------------------------------
Title: CEO, BRIDGE PHARMA Title: PRESIDENT & COO
--------------------------------- -------------------------------
Date: OCTOBER 28, 2004 Date: 10/28/2004
---------------------------------- --------------------------------
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APPENDIX A
Patent Applications and Patents
Patent or
Patent Application
Number Title Status Filing date
------------------- ----- ------ -----------
*** ******* ********* ****** ****** ********
********* *******
* *** *********** *** ***** ** ********. *** ******** ***** *** **** *******.
********* ****** ********** ****** ******* ********
*****
****** ****** ********** ****** ******* ********
*********
***** ****** ********** ****** ******* ********
**********
****** (**) *)) ****** ********** ****** ******* ********
** *** *****
***** ****** ********** ****** ******* ********
***/****,*****/***
********* ****** ********** ****** ******* ********
*-** **** *****
****** ****** ********** ****** ******* ********
******
***** ****** ********** ****** ******* ********
****-******
******** ****** ********** ****** ******* ********
** ********
****** ****** ********** ****** ******* ********
**/*/****/******
*** ******* ****** ********** ****** ****** ********
*/* *******
****** ****** ********** ****** ******* ********
*********
********* ****** ********** ****** ****** ********
*********** *******
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Patent Applications filed 09/27/04
*** ************ ** ************* *** *** *** ******* ********
****** *** ******* ** ***** *********** *** ** **********
*** ******* **** *****
*** *** ******** ** ********************** ******* ********
****** *** **************************** ** ***
********* ** **** *****
*** ************************************ ****** ******* ********
****** *** ********** ** *** ********* ** **** *****
*** ******* *** *********** ** ******************* ******* ********
****** *** ******************************* *****
*** *** ********* ********* *** ******** ** *** ** ****** ************ **
******** ** ******** ** *** ** ************************** ** ******* ** ********
** ******** ** ****** ** ******** ** ******* ** ****** ******** ** ******* **
******** ** ****** ** ********** ** ******* ** ************ ** ********* **
******* ******* ** ******** ** ** ********** *******
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APPENDIX B
Restrictions on AlgoRx Stock
42
The Shares shall be subject to Article XIV of ALGORX's amended and restated
by-laws which are attached to this Appendix B as Exhibit A to Appendix B.
In addition, BRIDGE agrees to the following:
SECTION 1. RESTRICTIONS ON TRANSFER.
1.1 Restrictions on Transfer
(a) BRIDGE agrees not to made any disposition of all or any
portion of the Shares unless and until:
(i) There is then in effect a registration statement under the
Securities Act of 1933, as Amended, (the "Securities Act") covering such
proposed disposition and such disposition is made in accordance with such
registration statement; or
(ii) (A) The transferee has agreed in writing to be bound by
the terms of this agreement, (B) BRIDGE shall have notified ALGORX of the
proposed disposition and shall have furnished ALGORX with a detailed statement
of the circumstances surrounding the proposed disposition, and (C) if
reasonably requested by ALGORX, BRIDGE shall have furnished ALGORX with an
opinion of counsel, reasonably satisfactory to ALGORX, that such disposition
will not require registration of such shares under the Securities Act. It is
agreed that ALGORX will not require opinions of counsel for transactions made
pursuant to Rule 144, except in unusual circumstances. After its initial public
offering, ALGORX will not require the transferee to be bound by the terms of
this agreement.
(iii) Each certificate representing Shares shall be stamped or
otherwise imprinted with a legend substantially similar to the following (in
addition to any legend required under applicable state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT")
AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL
REGISTERED UNDER THE ACT OR UNLESS ALGORX HAS RECEIVED
AN OPINION OF COUNSEL SATISFACTORY TO ALGORX AD ITS
COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.
1.2 "Market Stand-Off" Agreement. BRIDGE hereby agrees that it shall not
sell, transfer, make any short sale of, grant any option for the purchase of,
or enter into any hedging or similar transaction with the same economic effect
as a sale, any Common Stock (or other securities) of ALGORX held by BRIDGE
(other than those included in the registration) for a period specified by the
representative of the underwriters of ALGORX's Common Stock (or other
securities) not to exceed two hundred twenty (220) days following the effective
date of a registration statement of ALGORX filed under the Securities Act;
provided that such agreement shall apply only to ALGORX's initial public
offering.
EXHIBIT A
ARTICLE XIV
RIGHT OF FIRST REFUSAL
SECTION 46. Right of First Refusal. No stockholder shall sell, assign,
pledge, or in any manner transfer any of the shares of Common Stock of the
corporation, whether voluntarily or by operation of law, or by gift or
otherwise, except by a transfer which meets the requirements hereinafter set
forth in this bylaw:
(a) If the stockholder desires to sell or otherwise transfer any of his
shares of Common Stock, then the stockholder shall first give written notice
thereof to the corporation. The notice shall name the proposed transferee and
state the number of shares to be transferred, the proposed consideration, and
all other terms and conditions of the proposed transfer.
(b) For thirty (30) days following receipt of such notice, the corporation
shall have the option to purchase all (but not less than all) of the shares
specified in the notice at the price and upon the terms set forth in such
notice; provided, however, that, with the consent of the stockholder, the
corporation shall have the option to purchase a lesser portion of the shares
specified in said notice at the price and upon the terms set forth therein. In
the event of a gift, property settlement or other transfer in which the proposed
transferee is not paying the full price for the shares, and that is not
otherwise exempted from the provisions of this Section 46, the price shall be
deemed to be the fair market value of the Common Stock at such time as
determined in good faith by the Board of Directors. In the event the corporation
elects to purchase all of the shares or, with consent of the stockholder, a
lesser portion of the shares, it shall give written notice to the transferring
stockholder of its election and settlement for said shares shall be made as
provided below in paragraph (d).
(c) the corporation may assign its rights hereunder.
(d) In the event the corporation and/or its assignee(s) elect to acquire
any of the shares of the transferring stockholder as specified in said
transferring stockholder's notice, the Secretary of the corporation shall so
notify the transferring stockholder and settlement thereof shall be made in cash
within thirty (30) days after the Secretary of the corporation receives said
transferring stockholder's notice; provided that if the terms of payment set
forth in said transferring stockholder's notice were other than cash against
delivery, the corporation and/or its assignee(s) shall pay for said shares on
the same terms and conditions set forth in said transferring stockholder's
notice.
(e) In the event the corporation and/or its assignees(s) do not
elect to acquire all of the shares specified in the transferring stockholder's
notice, said transferring stockholder may, within the sixty-day period
following the expiration of the option rights granted to the corporation and/or
its assignees(s) herein, transfer the shares specified in said transferring
stockholder's notice which were not acquired by the corporation and/or its
assignees(s) as specified in said transferring stockholder's notice. All shares
so sold by said transferring stockholder shall continue to be subject to the
provisions of this bylaw in the same manner as before said transfer.
(f) Anything to the contrary contained herein notwithstanding, the
following transactions shall be exempt from the provisions of this bylaw:
(i) A stockholder's transfer of any or all shares held either
during such stockholder's lifetime or on death by will or intestacy to such
stockholder's immediate family or to any custodian or trustee for the account
of such stockholder or such stockholder's immediate family or to any limited
partnership of which the stockholder, members of such stockholder's immediate
family or any trust for the account of such stockholder or such stockholder's
immediate family will be the general of limited partner(s) of such partnership.
"Immediate family" as used herein shall mean spouse, lineal descendant, father,
mother, brother, or sister of the stockholder making such transfer.
(ii) A stockholder's bona fide pledge or mortgage of any shares
with a commercial lending institution, provided that any subsequent transfer of
said shares by said institution shall be conducted in the manner set forth in
this bylaw.
(iii) A stockholders' transfer of any or all of such
stockholder's shares to the corporation or to any other stockholder of the
corporation.
(iv) A stockholder's transfer of any or all of such
stockholder's shares to a person who, at the time of such transfer, is an
officer or director of the corporation.
(v) A corporate stockholder's transfer of any or all of its
shares pursuant to and in accordance with the terms of any merger,
consolidation, reclassification of shares of capital reorganization of the
corporate stockholder, or pursuant to a sale of all or substantially all of the
stock or assets of a corporate stockholder.
(vi) A transfer by a stockholder which is a limited or general
partnership or a limited liability company to any or all of its partners or
former partners or a transfer by a limited liability company to any or all of
its member or former members.
In any such case, the transferee, assignee, or other recipient shall
receive and hold such Common Stock subject to the provisions of this bylaw, and
there shall be no further transfer of such Common Stock except in accord with
this bylaw.
(g) The provisions of this bylaw may be waived with respect to any
transfer either by the corporation, upon duly authorized action of its Board of
Directors, or by the stockholders, upon the express written consent of the
owners of a majority of the voting power of the corporation (excluding the votes
represented by those shares to be transferred by the transferring stockholder).
This bylaw may be amended or repealed either by a duly authorized action of the
Board of Directors or by the stockholders, upon the express written consent of
the owners of a majority of the voting power of the corporation.
(h) Any sale or transfer, or purported sale or transfer, of
securities of the corporation shall be null and void unless the terms,
conditions, and provisions of this bylaw are strictly observed and followed.
(i) The foregoing right of first refusal shall terminate on either of
the following dates, whichever shall first occur:
(i) On March 1, 2011; or
(ii) Upon the date securities of the corporation are first
offered to the public pursuant to a registration statement filed with, and
declared effective by, the United States Securities and Exchange Commission
under the Securities Act of 1933, as amended.
(j) The certificates representing shares of Common Stock of the
corporation shall bear on their face the following legend so long as the
foregoing right of first refusal remains in effect:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST
REFUSAL OPTION IN FAVOR OF THE CORPORATION AND/OR ITS ASSIGNEE(S), AS
PROVIDED IN THE BYLAWS OF THE CORPORATION."
