Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
SHAREHOLDER AGREEMENT
AMONG
BIOTRANSPLANT INCORPORATED,
NOVARTIS PHARMA AG, AND
LOXO AG
dated as of September 24, 2000
TABLE OF CONTENTS
PAGE
1. DEFINITIONS..................................................................................................1
1.1 "AFFILIATE".........................................................................................1
1.2 "BTI LICENSE AGREEMENT".............................................................................1
1.3 "DELAWARE CO".......................................................................................2
1.4 "EFFECTIVE DATE"....................................................................................2
1.5 "FIELD".............................................................................................2
1.6 "LICENSE AGREEMENT(S)"..............................................................................2
1.7 "NPAG LICENSE AGREEMENT"............................................................................2
1.8 "PARTY(IES)"........................................................................................2
1.9 "RESEARCH PROGRAM"..................................................................................2
1.10 "SHARES"............................................................................................2
1.11 "LOXO LICENSE AGREEMENT"............................................................................2
1.12 "THIRD PARTY".......................................................................................2
1.13 "XENOGRAFT PRODUCT(S)"..............................................................................2
2. OVERVIEW.....................................................................................................2
2.1 Objectives..........................................................................................2
2.2 Powers..............................................................................................3
3. FINANCIAL ARRANGEMENTS.......................................................................................3
3.1 Allocations.........................................................................................3
3.2 Records and Reporting...............................................................................3
4. COVENANTS REGARDING OPERATIONS...............................................................................3
4.1 Affirmative Covenants...............................................................................3
4.2 Negative Covenants..................................................................................4
5. BOARD COMPOSITION............................................................................................5
5.1 LOXO Board of Directors.............................................................................5
5.2 DELAWARE CO Board of Directors......................................................................6
5.3 General.............................................................................................7
6. RESTRICTIONS ON TRANSFER OF SHARES; LEGENDS..................................................................7
6.1 Restrictions on Transfer............................................................................7
6.2 Right of First Refusal..............................................................................7
6.3 Legends.............................................................................................8
7. TERM AND TERMINATION.........................................................................................8
7.1 Term................................................................................................8
7.2 Termination.........................................................................................8
7.3 Survival of Rights and Duties.......................................................................8
8. DISSOLUTION..................................................................................................8
8.1 Dissolution Plan....................................................................................8
8.2 Survival of Obligations.............................................................................9
9. CONFIDENTIALITY AND PUBLIC INFORMATION.......................................................................9
9.1 Confidentiality.....................................................................................9
9.2 Public Disclosures.................................................................................10
i
9.3 Other Parties......................................................................................11
10. REPRESENTATIONS AND WARRANTIES..............................................................................11
10.1 Representations of Authority.......................................................................11
10.2 Absence of Litigation..............................................................................11
10.3 No Conflict........................................................................................11
10.4 No Warranties......................................................................................11
11. GENERAL.....................................................................................................12
11.1 Severability.......................................................................................12
11.2 No Third Party Beneficiary.........................................................................12
11.3 Further Assurances.................................................................................12
11.4 Affiliates.........................................................................................12
11.5 Expenses...........................................................................................12
11.6 Exchange Controls..................................................................................12
11.7 Withholding Taxes..................................................................................12
11.8 Force Majeure......................................................................................12
11.9 Assignment.........................................................................................13
11.10 Specific Performance...............................................................................13
11.11 Governing Law......................................................................................13
11.12 Arbitration........................................................................................13
11.13 Notices............................................................................................13
11.14 Complete Agreement.................................................................................14
11.15 Binding Effect.....................................................................................14
11.16 Amendments and Waivers.............................................................................14
11.17 Pronouns...........................................................................................14
11.18 Counterparts; Facsimile Signatures.................................................................14
11.19 Section Headings...................................................................................15
ii
SHAREHOLDER AGREEMENT
This Shareholder Agreement dated as of September 24, 2000 is entered
into by and among LOXO AG, a Swiss corporation ("LOXO"), BioTransplant
Incorporated, a Delaware corporation ("BTI") and Novartis Pharma AG, a Swiss
corporation ("NPAG").
BACKGROUND
A. BTI is currently conducting research and development into potential
pharmaceutical products and systems to enable the xenotransplantation of organs
from swine into humans and, in the course of such research and development, has
made discoveries and inventions and owns, or controls by license, certain
patents and patent applications relating thereto.
B. NPAG is the leading supplier of transplantation therapeutics and is
conducting research and development, in collaboration with others, into
potential pharmaceutical products and systems to enable the xenotransplantation
of organs from swine into humans and in the course of such research and
development, has made discoveries and inventions and owns, or controls by
license, certain patents and patent applications relating thereto.
C. LOXO has been organized by BTI and NPAG to independently research
xenotransplantation products using the intellectual property rights owned by or
licensed to BTI and NPAG.
D. The Parties hereto desire to have NPAG develop, market and sell on a
worldwide basis any xenotransplantation products that result from LOXO's
research program.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the Parties hereto agree as follows:
1. DEFINITIONS
In addition to terms defined elsewhere in this Agreement, the
following terms shall have the following meanings:
1.1 "AFFILIATE" with respect to a Party shall mean any
corporation or other entity which controls, is controlled by, or is under common
control with such Party. A corporation or other entity shall be regarded as in
control of another corporation or entity if it owns or directly controls more
than fifty percent (50%) of the voting stock or other ownership interest of the
other corporation or entity, or if it possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of the
corporation or other entity or the power to elect or appoint fifty percent (50%)
or more of the members of the governing body of the corporation or other entity.
For the purposes of this Agreement no Party is an Affiliate of any other Party.
1.2 "BTI LICENSE AGREEMENT" means the License Agreement dated
September 24, 2000 between BTI and LOXO, a copy of which is attached hereto as
Exhibit A, pursuant to which BTI has licensed certain rights and technology to
LOXO.
1.3 "DELAWARE CO" means DELAWARE CO, a Delaware corporation
and a wholly-owned subsidiary of LOXO, to be established by LOXO promptly
following the Effective Date and in any event prior to January 1, 2001.
1.4 "EFFECTIVE DATE" shall mean the date appearing on the
cover page of this Agreement.
1.5 "FIELD" means human xenotransplantation.
1.6 "LICENSE AGREEMENT(S)" means, collectively, the BTI
License Agreement, the NPAG License Agreement and the LOXO License Agreement.
1.7 "NPAG LICENSE AGREEMENT" means the License Agreement dated
September 24, 2000 between NPAG and LOXO, a copy of which is attached hereto as
Exhibit B, pursuant to which NPAG has licensed certain rights and technology to
LOXO.
1.8 "PARTY(IES)" means BTI, NPAG and/or LOXO, as the case
may be.
1.9 "RESEARCH PROGRAM" means the preclinical research program,
to be carried out by LOXO and its Affiliates and subcontractors to develop
Xenograft Products for use in the Field.
1.10 "RESEARCH AGREEMENT" means the contract research
agreement referred to in Article 2.1 hereinafter.
1.11 "SHARES" shall mean and include any and all shares of
capital stock of LOXO or DELAWARE CO, as applicable, by whatever name called,
which carry voting rights (including voting rights which arise by reason of
default) and shall include any such shares now owned or subsequently acquired by
BTI, NPAG or LOXO, as applicable, however acquired.
1.12 "LOXO LICENSE AGREEMENT" means the License Agreement
dated September 24, 2000 between LOXO and NPAG, a copy of which is attached
hereto as Exhibit C, pursuant to which LOXO has licensed certain rights and
technology and the results of the Research Program to NPAG.
1.13 "THIRD PARTY" means any entity other than BTI, NPAG or
LOXO, or any of their Affiliates.
1.14 "XENOGRAFT PRODUCT(S)" means products, processes,
articles, apparatus, substances, chemicals, materials, biological materials,
including organs, cells and tissues, or services, used prior to, during or after
a human xenotransplantation procedure.
2. OVERVIEW
2.1 OBJECTIVES. The primary objective of the Research Program
to be conducted by LOXO and its Affiliates and subcontractors shall be to
research Xenograft Products in the Field, which NPAG shall have the exclusive
right to develop, manufacture and commercialize on a worldwide basis pursuant to
the LOXO License Agreement. The research
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obligations of LOXO are to be contracted to DELAWARE CO by LOXO under a contract
research agreement to be concluded between LOXO and DELAWARE CO, promptly
following establishment of DELAWARE CO and, in any event, prior to January 1,
2001.
2.2 POWERS. Except as specifically limited herein, LOXO shall
have all the powers necessary or convenient to the conduct, promotion and
attainment of its business or objectives, including without limitation, all of
the powers conferred on corporations by law, statute and its documents of
organization. To this end, the Parties hereto agree and acknowledge that except
as expressly limited by this Agreement, it is the intention of the Parties that
LOXO shall have complete autonomy with respect to the conduct of the Research
Program and the carrying out of its day to day operations.
3. FINANCIAL ARRANGEMENTS
3.1 Share Capital. On formation, LOXO shall issue to NPAG
sufficient shares so that NPAG shall hold two-thirds (2/3) of the issued and
outstanding shares of LOXO against a payment of CHF 67,000 and further LOXO
shall issue to BTI sufficient shares so that BTI shall hold one-third (1/3) of
the issued and outstanding shares of LOXO against a payment of CHF 33,000.
3.2 ALLOCATIONS. Except as otherwise required by any law,
regulation or order, or as specified in the License Agreements (including the
payment to any Party of any required royalties thereunder), all income, gain,
profit, loss, deduction and credit for any fiscal year of LOXO on a consolidated
basis will be allocated among BTI and NPAG pro rata in accordance with their
equity percentage ownership of LOXO in effect for the period during which such
items accrue. Profits, if any, shall be calculated for each calendar quarter in
which realized and shall be reported to each of BTI and NPAG within forty-five
(45) days following the end of each such quarter. Distributions of profits, if
any, will be made semi-annually to each of BTI and NPAG. All distributions to
BTI and NPAG will be accompanied by a report setting forth the basis for such
distribution. In principle, it is the intent of the parties that the maximum
amount permitted by law shall be distributed out of the profits of LOXO to its
shareholders.
3.3 RECORDS AND REPORTING. LOXO shall, and shall cause
DELAWARE CO to, maintain proper and complete records and books of their
respective accounts that accurately and fairly reflect all costs incurred by or
on behalf of each of them in connection with the Research Program. In that
connection, LOXO shall, and shall cause DELAWARE CO to, establish cost and
financial accounting and bookkeeping system(s) with a view toward ensuring
maximum transparency and accuracy.
4. COVENANTS REGARDING OPERATIONS
4.1 AFFIRMATIVE COVENANTS. LOXO covenants and agrees to:
(a) permit each of BTI and NPAG, or any authorized
representative thereof, to visit and inspect its properties and those of
DELAWARE CO, including their respective corporate and financial records, and to
discuss their respective business and finances with their officers, during
normal business hours following reasonable notice and as often as may be
reasonably requested;
-3-
(b) deliver to each of BTI and NPAG within 60 days
after the end of each fiscal year, in respect of itself and DELAWARE CO, an
audited consolidated balance sheet as at the end of such year and audited
consolidated statements of income and of cash flows for such year, certified by
certified public accountants of established national reputation selected by it,
and prepared in accordance with GAAP on a consolidated basis;
(c) deliver to each of BTI and NPAG within 30 days
after the end of each fiscal quarter (other than the fourth quarter), in respect
of itself and DELAWARE CO, an unaudited consolidated balance sheet as at the end
of such quarter, and unaudited consolidated statements of income and of cash
flows for such fiscal quarter and for the current fiscal year to the end of such
fiscal quarter, each on a consolidated basis;
(d) deliver to each of BTI and NPAG with reasonable
promptness, such other information and data as BTI and NPAG may from time to
time reasonably request or as may be specified pursuant to the terms of the
License Agreements;
(e) promptly notify BTI and NPAG of any material
adverse change in its business, prospects, assets or condition, financial or
otherwise; or those of DELAWARE CO;
(f) hold, and cause DELAWARE CO to hold, meetings of
the Board of Directors at least quarterly; and
(g) comply, and cause DELAWARE CO to comply, in all
material respects, with all applicable federal and state laws regarding
environmental protection and the conduct of research using laboratory animals.
4.2 NEGATIVE COVENANTS. LOXO shall not, and shall not
permit DELAWARE CO to, without the prior written consent of BTI and NPAG:
(a) merge with or into or consolidate with any other
corporation;
(b) sell, lease, license, or otherwise dispose of all
or substantially all of its properties or assets;
(c) acquire all or substantially all of the
properties, assets or stock of any other corporation or entity or enter into any
partnership, joint venture, license or other similar agreement;
(d) voluntarily liquidate or dissolve;
(e) issue and sell any shares of its capital stock to
any Third Party;
(f) amend any provision of, or add any provision to,
its documents of organization and corporate governance, which such amendments or
provisions would materially adversely affect BTI and/or NPAG, either
individually or as a whole;
-4-
(g) enter into any agreement with any stockholder,
officer or director, or any Affiliate of BTI or NPAG, without the consent of at
least a majority of the disinterested members of LOXO's or DELAWARE CO's Board
of Directors, as the case may be;
(h) so long as the LOXO License Agreement shall
remain in full force and effect, conduct any clinical trials of Xenograft
Products in humans; or
(i) amend or modify in any material respect any of
(A) the License Agreements, (B) the material terms of the Research Agreement, or
(C) any Sublease Agreement or Administrative Services Agreement that BTI and
DELAWARE CO may in the future enter into;
(j) transfer, sell, pledge, encumber, mortgage,
dispose of, assign, lease or license or convert any ownership or interest in, or
material rights relating to, any intellectual property outside of the Field;
(k) select or terminate key management (senior
science, operations and finance management);
(l) repurchase, redeem or otherwise acquire for value
any of its capital stock;
(m) relocate a material part of its business
operations;
(n) adopt or materially amend or modify an employee
incentivization program;
(o) increase or decrease the number of members of the
board of directors;
(p) institute or settle material legal proceedings;
or
(q) adopt or materially amend any written guidelines
or policies relating to ecology, safety, animal care
and quality assurance.
5. BOARD COMPOSITION
5.1 LOXO BOARD OF DIRECTORS.
(a) In any and all elections of directors of LOXO
(whether at a meeting or by written consent in lieu of a meeting), each of BTI
and NPAG shall vote or cause to be voted all Shares ( as defined below) owned by
it, or over which it has voting control, and otherwise use its respective best
efforts, so as to fix the number of directors of LOXO at four and to elect (i)
one member designated by BTI, (ii) one member designated by NPAG and (iii) two
additional members, one each designated by BTI and NPAG, neither of whom shall
be employed by any of the Parties or their respective Affiliates, and both of
whom shall be acknowledged experts in the Field and reasonably acceptable to the
persons designated pursuant to clauses (i) and (ii). The director(s) initially
designated by BTI and NPAG pursuant to clauses (i) and (ii) are Xxxxxx Xxxxxxxx
and Xxxxxxx Xxxxxx and the directors initially designated pursuant to clause
(iii)
-5-
are Xxxxx Xxxxx and a director to be designated by NPAG following the execution
of this Agreement. The parties hereto acknowledge that the Research Agreement
between LOXO and DELAWARE CO will contain a provision granting to a mutually
acceptable representative of DELAWARE CO observation rights with respect to
meetings of LOXO's Board of Directors. The organization documents of LOXO shall
provide that a quorum shall exist at any meeting of stockholders at which
directors are elected only if at least seventy five percent (75%) of all issued
and outstanding shares are represented at a meeting of the shareholders.
(b) LOXO shall provide BTI and NPAG with 30 days'
prior written notice of any intended mailing of a notice to stockholders for a
meeting at which directors are to be elected. BTI and NPAG shall give written
notice to all other Parties to this Agreement, no later than 20 days prior to
such mailing, of the person designated pursuant to Section 5.1(a) as a nominee
for election as a director. LOXO agrees to nominate and recommend for election
as directors only the individuals designated, or to be designated, pursuant to
subsection 5.1(a) above. If either BTI or NPAG shall fail to give notice to LOXO
as provided above, it shall be deemed that such Party's designee then serving as
a director shall be such Party's designee for reelection.
(c) Approval of decisions of the LOXO Board of
Directors shall require the presence of all four members of the Board of
Directors and the affirmative vote of at least three of the four Directors.
Notwithstanding anything herein to the contrary, as provided in Section 4.2
above, any actions of the kind enumerated in Section 4.2 shall require the
approval of the NPAG and BTI Directors.
5.2 DELAWARE CO BOARD OF DIRECTORS.
(a) In any and all elections of directors of DELAWARE
CO (whether at a meeting or by written consent in lieu of a meeting), LOXO shall
vote or cause to be voted all Shares owned by it, or over which it has voting
control, and otherwise use its best efforts, so as to elect the same Board of
Directors as the LOXO Board of Directors set forth in Article 5.1.(a) above.
(b) LOXO shall cause DELAWARE CO to provide LOXO, BTI
and NPAG with 30 days' prior written notice of any intended mailing of a notice
to stockholders for a meeting at which directors are to be elected. BTI and NPAG
shall each give written notice to all other Parties to this Agreement, no later
than 20 days prior to such mailing, of the person designated pursuant to Section
5.2(a) as nominees for election as directors. LOXO shall cause DELAWARE CO to
nominate and recommend for election as directors only the individuals
designated, or to be designated, pursuant to subsection 5.2(a). If either BTI or
NPAG shall fail to give notice to the other Parties to this Agreement as
provided above, it shall be deemed that such Party's designee then serving as a
director shall be such Party's designee for re-election.
(c) Approval of decisions of the DELAWARE CO Board of
Directors shall require the presence of all four members of the Board of
Directors and the affirmative vote of at least three of the four Directors.
-6-
5.3 GENERAL.
(a) The voting agreements contained herein are
coupled with an interest and may not be revoked, except by an amendment,
modification or termination effected in accordance with Section 11.6 hereof.
(b) The provisions of this Section 5 shall continue
in full force and effect until (i) in the case of LOXO, termination of this
Agreement pursuant to Section 7, and (ii) in the case of DELAWARE CO, the
earlier of (A) the tenth anniversary of the date of this Agreement or (B)
termination of this Agreement pursuant to Section 7.
6. RESTRICTIONS ON TRANSFER OF SHARES; LEGENDS
6.1 RESTRICTIONS ON TRANSFER. Neither BTI nor NPAG may
transfer, sell, assign, grant an option to or for, pledge, hypothecate,
mortgage, encumber or dispose of all or any of its Shares ("Transfer") without
first complying with the provisions of Section 6.2; PROVIDED THAT, the
provisions of Section 6.2 shall not apply (a) in the event that either Party
wishes to transfer its Shares to any Affiliate, or (b) in connection with the
transfer or sale of all or substantially all of a Party's business to which this
Agreement relates, or in the event of such Party's merger, consolidation or
change in control or similar transaction. Any permitted transferee of a Party's
Shares shall agree in writing with the other Parties hereto, as a further
condition precedent to such Transfer, to be bound by all of the provisions of
this Agreement. Any Transfer, whether voluntarily or by operation of law, other
than according to the terms of this Agreement, shall be void and transfer no
right, title, or interest in or to any of such Shares to the purported
transferee.
6.2 RIGHT OF FIRST REFUSAL
(a) In the event that either BTI or NPAG (the
"Selling Party") proposes to undertake a sale or transfer of any Shares, it
shall give the other Party (the "Non-Selling Party") written notice of its
intention, describing the number of Shares and the price and the general terms
upon which it proposes to transfer such Shares (a "Proposal Notice"). Each of
BTI and NPAG hereby agrees that it will give the other Party a right of first
refusal to purchase all of the Shares proposed to be transferred by it.
(b) The Non-Selling Party shall have the right to
purchase the Shares for the price and on the general terms specified in the
Proposal Notice by giving written notice to the Selling Party within forty five
(45) days of the date of receipt of the Proposal Notice (the "Notice Period")
and stating therein the number of Shares it desires to purchase. In the event
that the Non-Selling Party has not elected to purchase all of the Shares being
offered, the right of first refusal pursuant to this Section 6.2 shall terminate
with respect to such Shares being offered, subject to the provisions of Section
6.2 (d) below. In the event that the Non-Selling Party exercises the option to
purchase all of such Shares being offered, the purchase shall be consummated not
later than thirty (30) days after the expiration of the Notice Period.
(c) In the event the Non-Selling Party fails to fully
exercise the right of first refusal pursuant to this Section 6.2, the Selling
Party shall have sixty (60) days thereafter to sell or enter into an agreement
(pursuant to which the sale of the Shares covered thereby shall
-7-
be closed if at all, within forty give (45) days from the date of said
agreement) to sell the Shares being offered, at a price and upon general terms
no more favorable to the purchasers thereof then specified in the Proposal
Notice.
(d) In the event that (i) the Selling Party has not
entered into an agreement to sell or transfer the Shares being offered within
the sixty (60) day period provided for in subsection 6.2(c) above (or sold or
transferred by the Shares being offered in accordance with the foregoing within
forty five (45) days from the date of said agreement), or (ii) the Selling Party
wishes to sell, transfer or otherwise dispose of such Shares at a price per
Share more favorable then that set forth in the Proposal Notice, or upon terms
different from those previously offered to the Non-Selling Party, then the
Selling Party shall not thereafter sell or transfer any such Shares without
first offering such Shares in the manner provided above.
6.3 LEGENDS. All certificates representing Shares shall
have affixed thereto a legend in substantially the following form, as well as
any other legends required by law:
"The shares of stock represented by this certificate are
subject to certain agreements and restrictions on transfer set
forth in a Shareholders Agreement, as amended from time to
time, a copy of which is available for inspection at the
offices of the Secretary of the issuer of this certificate."
7. TERM AND TERMINATION
7.1 TERM. This Agreement shall commence on the date hereof and
shall continue until terminated pursuant to the provisions of this Section 7.
7.2 TERMINATION. This Agreement shall terminate upon the
dissolution or liquidation of LOXO, which dissolution or liquidation shall be
effected solely upon the prior written consent of BTI and NPAG in accordance
with Section 4.2(d) hereof.
7.3 SURVIVAL OF RIGHTS AND DUTIES. No termination of this
Agreement shall eliminate any rights or duties accrued prior to such
termination, including without limitation, the provisions of Section 1
(definitions), Section 9 (confidentiality), Section 11.11 (governing law), or
Section 11.12 (arbitration).
8. DISSOLUTION
8.1 DISSOLUTION PLAN. In the event that LOXO shall be
dissolved, its affairs shall be wound up as promptly as practicable in
accordance with applicable law and the Parties shall develop a mutually
agreeable dissolution plan (the "Dissolution Plan") to be administered by the
Board of Directors of LOXO. LOXO will be dissolved if the LOXO License Agreement
is terminated or, upon mutual agreement of NPAG and BTI. To the extent possible
and consistent with applicable law, the Dissolution Plan shall:
(i) provide that, immediately prior to the filing of
any certificates or documents necessary to effect the lawful
dissolution of LOXO, LOXO shall redeem all of the Shares then
held by BTI for consideration of (A) the termination
-8-
of the BTI License Agreement and the NPAG License Agreement,
(B) the assignment jointly to BTI and NPAG, of equal interests
in and to all of LOXO's right, title and interest in and to
any patents, patent applications, inventions, trade secrets,
data, materials or other intellectual property owned by LOXO
as of the date of such redemption and generated after the
Effective Date, and (C) a one-third interest in all of any
other assets then owned or controlled by LOXO.
(ii) with respect to any assets of LOXO, provide for
the distribution of such assets to BTI and NPAG in the manner
set forth in this Agreement or the liquidation of such assets
(any such liquidation to be effected as promptly as possible
in an orderly and businesslike manner, as the case may be, so
as to maximize the value of the assets to LOXO);
(iii) implement a structure liable to minimize any
adverse tax effect to the Parties of the dissolution and of
the transactions in connection therewith;
(iv) provide that immediately before the distribution
of assets LOXO shall allocate any net profits or net losses as
between BTI and NPAG through the date of distribution in
accordance with the allocation arrangement set forth in
Section 3.1. For purposes of calculating the net profits and
net losses in the previous sentence, any assets to be
distributed to BTI and NPAG in kind, shall be deemed to have
been sold at their fair market value (as determined by the
Board of Directors of LOXO) for cash, which cash will be
deemed distributed to BTI and NPAG pursuant to the Dissolution
Plan; and
(v) contain such other provisions as the Parties
shall mutually agree.
8.2 SURVIVAL OF OBLIGATIONS. Dissolution of LOXO for any
reason shall not release either BTI or NPAG from any liability (i) which at the
time of dissolution had already accrued to such Party or any Affiliate thereof
or to LOXO or (ii) which may thereafter accrue in respect to any act or omission
prior to completion of the winding up process. In addition, any provision which
by its terms is intended to survive termination of this Agreement, or of any
License Agreement shall survive such termination.
9. CONFIDENTIALITY AND PUBLIC INFORMATION
9.1 CONFIDENTIALITY.
(a) Disclosure or delivery of confidential and
proprietary information or material by any Party to any other Party may be made
in writing, or orally. Such confidential information or material provided by one
Party to another Party will be safeguarded by the recipient and will not be
disclosed to Third Parties and will be made available only to the receiving
Party's or its Affiliates employees or agents (including attorneys) who need to
know such information or have material for purposes permitted under this
Agreement and who have obligations of confidentiality and non-use similar to
those of this Agreement. Each Party shall hold as confidential such information
and material in the same manner and with the same protection as such party
maintains for its own confidential information and materials and agrees to use
such confidential information and materials only for the purpose of this
Agreement and as
-9-
permitted by this Agreement. A Party may disclose Confidential Information of
another to a Third Party for the purposes contemplated by this Agreement,
provided that the Third Party agrees to maintain the confidentiality thereof in
a manner consistent with the confidentiality provisions of this Agreement.
(b) The mutual obligations of confidentiality under
this Section 9 will not apply to any information to the extent that such
information:
(i) is or hereafter becomes part of the
public domain through no action of the recipient of
the information which constitutes a default under
this Agreement;
(ii) was already known to the recipient as
evidenced by prior written documents in its
possession which were not furnished by the other
party;
(iii) is disclosed to the recipient by a
Third Party who is not in default of any
confidentiality obligation to the disclosing Party
hereunder;
(iv) is disclosed to obtain regulatory
approval for Xenograft Products, provided that the
disclosing Party takes all reasonable steps to
restrict and maintain the confidentiality of the
disclosure;
(v) is required by law or bona fide legal
process to be disclosed, provided that the disclosing
Party takes all reasonable steps to restrict and
maintain confidentiality of such disclosure and
provides reasonable notice to the non-disclosing
Party; or
(vi) is approved for release by the Parties.
9.2 PUBLICITY AND PUBLIC DISCLOSURES. Each Party agrees not to
disclose any terms or conditions of this Agreement to any Third Party or to
issue any press release, advertisement or the like relating in any manner to,
among other things, the subject matter of this Agreement, the License
Agreements, the Research Agreement or any other aspects of the collaboration
among the Parties without the prior consent of the other Parties, except as
required by federal or state securities laws, any rule or regulation of a
nationally recognized securities exchange or any other applicable law, rule or
regulation; or in connection with a financing or offering statement or
memorandum, or to a potential sublicense, assignee or transferee of the business
of a party to which this Agreement relates; or to a licensor of a Party for the
purpose of granting a sublicense to such Party. In the event of a disclosure
required under this Section, the disclosing Party shall nonetheless provide the
non-disclosing Parties with notice of such disclosure prior to disclosure, and
will, to the extent reasonably possible, provide the non-disclosing Parties with
an opportunity to correct same. A Party shall not be required to provide the
other Parties with a disclosure which has been previously provided to a Party.
Each Party shall have the right to advise Third
Parties as to whether or not this Agreement covers any contemplated work or
collaboration with such Third Party.
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9.3 OTHER PARTIES. Notwithstanding anything to the contrary
contained in this Agreement, each of BTI, NPAG and LOXO shall use reasonable
efforts to each cause any of its Affiliates and any Third Party contractors,
scientists and other persons working with them who may have access to
Proprietary Information, to enter into one or more agreements with such persons
to cause them to be bound by the confidentiality restrictions of this Section 9.
10. REPRESENTATIONS AND WARRANTIES
10.1 REPRESENTATIONS OF AUTHORITY. Each of the Parties
represents and warrants to the others that it has full right, power and
authority to enter into this Agreement and to perform its respective obligations
under this Agreement. Each of the Parties represents and warrants that (a) the
execution, delivery and performance by it of this Agreement, and the
consummation by it of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action, and (b) this Agreement has been
duly executed and delivered by it and constitutes a valid and binding obligation
of it, enforceable in accordance with its terms, subject, however, to any
limitations with respect to enforcement which may be imposed in connection with
bankruptcy, insolvency, reorganization, moratorium or other laws affecting the
enforcement of creditors' rights generally, and except that no representation or
warranty is made as to the availability of any equitable remedy in connection
with the enforcement of any term hereof.
10.2 ABSENCE OF LITIGATION. Each of the Parties represents and
warrants that there is no action, suit, litigation, claim, governmental or other
proceeding or investigation pending or to the best knowledge of each Party
threatened against such Party which might materially affect the consummation of
the transactions contemplated by this Agreement.
10.3 NO CONFLICT. Each of the Parties represents and warrants
that the execution and delivery of this Agreement and the performance of such
Party's obligations hereunder (a) do not conflict with or violate any
requirement of applicable laws or regulations and (b) do not and shall not
conflict with, violate or breach or constitute a default (with or without the
giving of notice or lapse of time, or both) or require any consent or
authorization under, any contractual obligations of such Party or order,
judgment or decree, governmental rule, laws, orders, or otherwise to which such
Party or any of its assets are bound, except such consents or authorizations as
shall have been obtained prior to the date of this Agreement.
10.4 NO WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
HEREIN OR IN THE LICENSE AGREEMENTS, THE PARTIES MAKE NO REPRESENTATIONS AND
EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
THE NON-INFRINGEMENT OF ANY THIRD-PARTY PATENTS OR PROPRIETARY RIGHTS.
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11. GENERAL
11.1 SEVERABILITY. If any provision of this Agreement is
ultimately held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions hereof or thereof shall not in
any way be affected or impaired thereby, unless the absence of the invalidated
provision materially adversely affects the substantive rights of the Parties. To
the extent permitted by applicable law, each Party waives any provision of law
which renders any provision hereof invalid, illegal or unenforceable in any
respect. In the event that any provision of this Agreement shall be held to be
invalid, illegal or unenforceable, the Parties shall in such instance use their
best efforts to replace the invalidated provision by a valid, legal and
enforceable provision which, insofar as practical, implements the purposes
hereof or thereof.
11.2 NO THIRD PARTY BENEFICIARY. Except as otherwise provided
expressly herein or therein, (i) nothing in this Agreement is or shall be
intended to confer on any Person other than the Parties or their respective
successors or permitted assigns, any rights of obligations under or by reason of
this Agreement, and (ii) there are no Third Party beneficiaries to this
Agreement.
11.3 FURTHER ASSURANCES. Each Party shall give further
assurances and perform such further acts as are or may become necessary or
appropriate to effectuate and carry out the provisions of this Agreement.
11.4 AFFILIATES. Each Party shall cause its respective
Affiliates to comply fully with the provisions of this Agreement to the extent
such provisions specifically relate, or are intended to specifically relate, to
such Affiliates, as though such Affiliates were expressly named as joint
obligors hereunder.
11.5 EXPENSES. Except as otherwise expressly provided herein,
each Party shall bear the costs and expenses incurred by it in negotiating,
entering into and performing any of its obligations under this Agreements.
11.6 EXCHANGE CONTROLS. All payments due hereunder shall be
paid in United States dollars. If at any time legal restrictions prevent the
prompt remittance of part or all payments with respect to any country where a
Xenograft Product is sold, payment shall be made through such lawful means or
methods as the Parties may determine.
11.7 WITHHOLDING TAXES. If applicable laws or regulations
require that taxes be withheld from payments made hereunder, LOXO will (i)
deduct such taxes, (ii) timely pay such taxes to the proper authority, and (iii)
send written evidence of payment to the Party from whom such taxes were withheld
within a sixty (60) days after payment. Each Party will assist the other Parties
in claiming tax refunds, deductions or credits at such other Party's request and
will cooperate to minimize the withholding tax, if available, under various
treaties applicable to any payment made hereunder.
11.8 FORCE MAJEURE. No Party shall be held liable or
responsible to any 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 when such failure or delay is caused by or
-12-
results from causes beyond the reasonable control of the affected Party,
including but not limited to fire, floods, embargoes, war, acts of war (whether
war is declared or not), insurrections, riots, civil commotions, strikes,
lockouts or other labor disturbances, acts of God or acts, omissions or delays
in acting by any governmental authority or any other Party.
11.9 ASSIGNMENT. Except as may otherwise be provided herein,
the rights and obligations of the Parties under this Agreement may not be
assigned or transferred except by a writing executed by each Party; provided,
however, that either BTI and NPAG may, without such consent, assign this
Agreement and its rights and obligations hereunder to its Affiliates or in
connection with the transfer or sale of all or substantially all of its business
to which this Agreement relates, or in the event of its merger or consolidation
or change in control or similar transaction provided that the permitted assignee
shall assume all obligations of its assignor under this Agreement. A permitted
assignment of this Agreement by BTI or NPAG shall relieve such Party from its
obligations under this Agreement except in the case of a merger or consolidation
where the Party is not the surviving entity. Any purported assignment in
violation of the proceeding sentences shall be void.
11.10 SPECIFIC PERFORMANCE. In addition to any and all other
remedies that may be available at law in the event of any breach of this
Agreement, each Party shall be entitled to specific performance of the
agreements and obligations of the other Parties hereunder and to such other
injunctive or other equitable relief as may be granted by a court of competent
jurisdiction.
11.11 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of Switzerland.
11.12 ARBITRATION. Any dispute arising between or among the
Parties relating to, arising out of or in any way connected to this Agreement or
any term or condition hereof, or the performance by any Party of its obligations
hereunder, whether before or after termination of this Agreement, shall be
resolved in accordance with the binding arbitration provisions set forth on
Exhibit D hereto.
11.13 NOTICES. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be deemed
delivered (i) two business days after being sent by registered or certified
mail, return receipt requested, postage prepaid or (ii) one business day after
being sent via a reputable nationwide overnight courier service guaranteeing
next business day delivery, in each case to the intended recipient as set forth
below:
If to LOXO, at Xxxxx & Xxxxxx, Xxxxxxxxxxxxxxx 0, 0000, Xxxxx
Xxxxxxxxxxx, Attention: Xx. Xxxxxxx Xxxxxxx, or at such other address or
addresses as may have been furnished in writing by LOXO to BTI and NPAG; or
If to BTI, at Building 75, Third Avenue, Charlestown Navy Yard,
Charlestown, MA 02129, Attention: President, or at such other address or
addresses as may have been furnished to LOXO in writing by BTI, with a copy to
Xxxxxx X. Xxxxxx, Esq., Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, XX 00000.
-13-
If to NPAG, at Xxxxxxxxxxxx 00, XX-0000, Xxxxx, Xxxxxxxxxxx, Attention:
Head Legal, or at such other address or addresses as may have been furnished to
LOXO in writing by NPAG, with a copy to Xxxxxxxx Xxxxxxxxxxxxx XX, Xxxxxxxxxxxx
00, XX-0000, Xxxxx, Xxxxxxxxxxx, Attention: Head Legal.
Any Party may give any notice, request, consent or other communication
under this Agreement using any other means (including, without limitation,
personal delivery, messenger service, telecopy, first class mail or electronic
mail), but no such notice, request, consent or other communication shall be
deemed to have been duly given unless and until it is actually received by the
Party for whom it is intended. Any Party may change the address to which
notices, requests, consents or other communications hereunder are to be
delivered by giving the other Parties notice in the manner set forth in this
Section 11.13.
11.14 COMPLETE AGREEMENT. This Agreement, the License
Agreements and the Research Agreement constitute the entire agreement and
understanding of the Parties hereto with respect to the subject matter hereof
and supersede all prior agreements and understandings relating to such subject
matter and merge all prior discussions, negotiations and agreements between the
Parties hereto and none of the Parties shall be bound by any conditions,
definitions, warranties, understandings or representations with respect to such
subject matter other than as expressly provided herein or therein or as fully
set forth subsequent to the date hereof in a written instrument signed by a
proper and duly authorized officer or representative of the Party to be bound
thereby.
11.15 BINDING EFFECT. This Agreement shall inure to the
benefit of and be binding upon each of the Parties hereto upon such Party's
execution and delivery hereof, and upon its successors and permitted assigns.
11.16 AMENDMENTS AND WAIVERS. Any term of this Agreement may
be amended or terminated and the observance of any term of this Agreement may be
waived with respect to all Parties to this Agreement (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of all Parties to this Agreement. No waivers of or exceptions to
any term, condition or provision of this Agreement, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or provision.
11.17 PRONOUNS. Whenever the context may require, any pronouns
used in this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural, and vice versa.
11.18 COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may
be executed in any number of counterparts, each of which shall be deemed to be
an original, and all of which together shall constitute one and the same
document. This Agreement may be executed by facsimile signatures.
-14-
11.19 SECTION HEADINGS. The section headings are for the
convenience of the Parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the Parties.
Executed as of the date first written above.
LOXO AG:
By: /s/ XXXXXXX X. XXXXXXX
----------------------------------
Name: XXXXXXX X. XXXXXXX
-------------------------------
Title: PRESIDENT
-------------------------------
BIOTRANSPLANT INCORPORATED
By: /s/ XXXXXX XXXXXXXX
--------------------------------
Name: XXXXXX XXXXXXXX
------------------------------
Title: CEO
------------------------------
NOVARTIS PHARMA AG
By: /s/ X. XXXXXXX
--------------------------------
Name: X. XXXXXXX
------------------------------
Title: CEO
-----------------------------
-15-
EXHIBIT A
BTI LICENSE AGREEMENT
1
LICENSE AGREEMENT
THIS AGREEMENT, effective as of the ___ day of _____________, 2000 (the
"EFFECTIVE DATE") between BIOTRANSPLANT, INCORPORATED, a Delaware corporation
having a place of business at 3rd Avenue, Building 00 Xxxxxxxxxxx Xxxx Xxxx,
Xxxxxxxxxxx, XX 00000 ("BTI"), and LOXO AG, a Swiss corporation having a place
of business at c/o Xx. Xxxxxxx Xxxxxxx, Xxxxx and Xxxxxx, Xxxxxxxxxxxxxxx 0,
0000, Xxxxx Xxxxxxxxxxx ("LOXO").
WHEREAS BTI has certain rights to technology and patent rights in the
field of xenotransplantation;
WHEREAS LOXO desires to obtain licenses to such technology and patent
rights;
WHEREAS BTI desires to license such rights and technology to LOXO;
NOW THEREFORE, in consideration of the faithful performance of the
covenants herein contained, the parties hereto agree as follows:
SECTION 1.
DEFINITIONS
1.1. "AFFILIATE" with respect to a PARTY shall mean any corporation or
other entity which controls, is controlled by, or is under common control with
such PARTY. A corporation or other entity shall be regarded as in control of
another corporation or entity if it owns or directly or indirectly controls more
than fifty percent (50%) of the voting stock or other ownership interest of the
other corporation or entity, or if it possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of the
corporation or other entity or the power to elect or appoint fifty percent (50%)
or more of the members of the governing body of the corporation or other entity.
A corporation or entity which is under common control with BTI as a result of a
common venture capital entity is not an AFFILIATE of BTI. For the purposes of
this Agreement, LOXO and BTI are not AFFILIATES and NOVARTIS PHARMA, A.G. and
LOXO are not AFFILIATES.
1.2. "AGREEMENT YEAR" shall mean the twelve-month period beginning on
January 1, 2001 and each subsequent twelve-month period thereafter.
1.3. "BTI INFORMATION" means any and all data, information and know-how
that is useful in the FIELD that is (i) owned by BTI as of the EFFECTIVE DATE or
thereafter and/or (ii) licensed to BTI under a THIRD PARTY AGREEMENT.
1.4. "BTI MATERIAL" means any and all materials, substances, compounds,
animals, and biologics that is useful in the FIELD that is (i) owned by BTI as
of the EFFECTIVE DATE or thereafter and/or (ii) licensed to BTI under a THIRD
PARTY AGREEMENT.
2
Confidential Materials omitted and filed with the Securities and Exchange
Commission. Asterisks denote omissions.
1.5. "BTI PATENT" means any and all patents and patent applications (or
equivalent thereof such as supplementary protection certificates or patent
extensions) in the TERRITORY that is (i) owned by BTI as of the EFFECTIVE DATE
or thereafter and/or (ii) licensed to BTI under a THIRD PARTY AGREEMENT.
1.6. "EXCLUDED PRODUCT(S)" shall mean drugs or other therapeutic or
prophylactic active agents, including antibodies, other than those licensed to
LOXO hereunder. For the avoidance of doubt, EXCLUDED PRODUCTS does not include
organs, cells or tissues.
1.7. "FIELD" shall mean human xenotransplantation.
1.8. "LO-CD-2A ANTIBODY TECHNOLOGY" shall mean the antibody known as
LO-CD-2A and/or fragments, derivatives or analogs thereof; and compounds and
materials whether or not antibodies which are based on such antibody, as well as
all information, data, technology and patent rights directed thereto, which
exists as of April 1, 1993 or which may exist after April 1, 1993 and which is
owned by or licensed to BTI.
1.9. "MAJOR COUNTRY" means the United States of America, United
Kingdom, France, Italy, Germany, Japan and Canada.
1.10. "NET SALES" shall mean with respect to any ROYALTY BEARING
PRODUCT the invoiced sales price of such ROYALTY BEARING PRODUCT by LOXO, its
AFFILIATES or any of their licensees, distributors or co-marketers less (i)
[**]; (ii) [**] to the customer; (iii) [**] related to the [**]; (iv) [**] by
[**] of [**] of [**] and a [**]with respect to such ROYALTY BEARING PRODUCT; (v)
[**] in connection with the [**] of such ROYALTY BEARING PRODUCT, in final form
to the extent separately invoiced; (vi) [**] resulting from any [**], whether
[**]; and (vii) [**] to the [**].
In the event a sale is made between LOXO and its AFFILIATE or their
licensee distributor or co-marketer for resale, then NET SALES for determining a
payment under this Agreement shall be the [**] the AFFILIATE or licensee
distributor or co-marketer, as the case may be, calculated in the manner of NET
SALES [**] the AFFILIATE or licensee, distributor or co-marketer, as the case
may be.
1.11. "NOVARTIS" means NOVARTIS PHARMA, A.G.
1.12. "NOVARTIS AGREEMENT" means the License Agreement by which LOXO
grants a license to NOVARTIS in the FIELD.
1.13. "PARTY(IES)" shall mean LOXO and/or BTI, as the case may be.
1.14. "ROYALTY BEARING PRODUCT" shall mean all XENOGRAFT PRODUCTS other
than an EXCLUDED PRODUCT(S).
1.15. "TERRITORY" shall mean all countries of the world.
3
1.16. "THIRD PARTY AGREEMENT(S)" means the agreements under which BTI
has or obtains transferable rights in the FIELD that are accepted in writing by
LOXO for licensing to LOXO under this Agreement. When accepted by LOXO, an
Agreement shall be listed in Appendix A hereto.
1.17. "XENOGRAFT PRODUCT(S)" shall mean any product, process, article,
apparatus, substance, chemical, material, biological material, including organs,
cells or tissues, or service used prior to, during or after a human
xenotransplantation procedure.
1.18. "XENOGRAFT SYSTEM" means a combination of XENOGRAFT PRODUCTS
required for performance of a human xenograft procedure.
SECTION 2.
LICENSES AND RIGHTS AND COVENANTS
2.1. (a) BTI grants to LOXO a sole and exclusive royalty bearing
license in the TERRITORY under BTI PATENTS, BTI MATERIAL and BTI INFORMATION to
make, have made, use, sell, offer to sell and import XENOGRAFT PRODUCT, in each
case only for use in the FIELD. For the avoidance of any doubt, notwithstanding
the licenses granted hereunder, BTI and its AFFILIATES shall retain the right to
distribute mini-swine to third parties for research and development purposes.
(b) The rights and licenses granted under Section 2.1(a) are
subject to the terms and conditions of the Mini-Swine Transfer and Maintenance
Agreement of January 1, 1998 with Xxxxxxx River Laboratories.
2.2. LOXO agrees that LOXO and its AFFILIATES and licensees will use
BTI INFORMATION and BTI MATERIAL only for development, making, using and selling
of XENOGRAFT PRODUCT as to which LOXO retains a license under this Agreement and
only in those countries in which LOXO retains a license under this Agreement.
2.3. The PARTIES understand and agree that LOXO has no rights in and to
LO-CD-2A ANTIBODY TECHNOLOGY except if sold in combination with a XENOGRAFT
PRODUCT which does not incorporate LO-CD-2A ANTIBODY TECHNOLOGY.
2.4. LOXO shall have the right to grant sublicenses to a third party
under the license granted pursuant to Section 2.1 provided that: (i) LOXO shall
guarantee and be responsible for the making of all payments due, and the making
of reports under this Agreement, with respect to sales of any XENOGRAFT PRODUCT
by its sublicensees and their compliance with all applicable licensing terms of
this Agreement to the extent that they are applicable to a sublicensee; and (ii)
each sublicensee agrees in writing to comply with Sections 4.3, 8 & 9 of this
Agreement, with BTI being made a third party beneficiary thereof with the right
of enforcement.
(b) Any sublicense granted by LOXO to a third party shall include a
provision terminating the sublicense when the license to LOXO terminates.
4
2.5. (a) To the extent that LOXO is granted rights and licenses under a
THIRD PARTY AGREEMENT, LOXO acknowledges and agrees that such rights and
licenses are not greater than the rights and licenses that can be and have been
sublicensed thereunder and the rights and licenses thereunder are subject to the
terms, limitations and restrictions of such THIRD PARTY AGREEMENT.
(b) LOXO agrees that LOXO will comply with all of the terms,
obligations, limitations and restrictions of the THIRD PARTY AGREEMENTS
including but not limited to any confidentiality, insurance or indemnification
requirements under the THIRD PARTY AGREEMENTS and that LOXO will not perform any
act (or fail to perform an act) that will cause BTI to be in breach of any THIRD
PARTY AGREEMENT.
(c) LOXO will cooperate with BTI in furnishing all data and information
to enable BTI to meet its reporting obligations under THIRD PARTY AGREEMENTS.
(d) LOXO will comply with the research, development and
commercialization obligations of the THIRD PARTY AGREEMENTS as they relate to
the FIELD.
(e) LOXO shall pay for all of the research funding that is required by
the THIRD PARTY AGREEMENTS.
2.6. BTI shall provide to LOXO, at no cost, all BTI INFORMATION
licensed to LOXO under this Agreement and reasonably required by LOXO for the
development, manufacture, use or sale of a XENOGRAFT PRODUCT licensed to LOXO
under this Agreement. If so requested by LOXO and at the cost of LOXO,
representatives of BTI shall visit LOXO or its AFFILIATES or sublicensees in
order to assist in the transfer and implementation of such BTI INFORMATION.
2.7. At the expense of LOXO, BTI shall provide to LOXO or its
AFFILIATES or their licensees, as reasonably requested by LOXO and to the extent
available to BTI, any BTI MATERIAL licensed to LOXO under this Agreement, as
reasonably required by LOXO for the development, manufacture, use or sale of a
XENOGRAFT PRODUCT licensed to LOXO under this Agreement, provided, however, that
to the extent required by LOXO for research with respect to XENOGRAFT PRODUCT,
and if commercialized by BTI or if used by BTI with respect to research or
development performed by BTI, BTI shall provide BTI MATERIAL other than
mini-swine to LOXO at no cost.
SECTION 3.
DEVELOPMENT EFFORTS
3.1. Within sixty (60) days after the end of each calendar year, LOXO
shall provide BTI with a report of the research performed by LOXO with respect
to XENOGRAFT PRODUCT in such calendar year.
5
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
SECTION 4.
ROYALTIES
4.1.(a) LOXO shall pay a royalty of [**] percent ([**]%) of NET SALES
of ROYALTY BEARING PRODUCTS sold or distributed by LOXO or its AFFILIATES or any
of their licensees, distributors, or co-marketers.
(b) To the extent that royalties and milestones are [**] with respect
to a XENOGRAFT PRODUCT [**] or any of [**]s, LOXO [**] such royalties and
milestones [**]. The payments required by the Section 4.1(b) shall be made [**]
prior to the date on which royalties and milestones are due [**] and shall be
[**] that will enable [**] obligations [**].
(c) LOXO agrees that it will not artificially discount the price of
XENOGRAFT PRODUCTS for the purpose of promoting sales or increasing the
price of EXCLUDED PRODUCTS.
(d) In the event that ROYALTY BEARING PRODUCTS are sold in combination
with EXCLUDED PRODUCTS, for the purpose of calculating royalties due on ROYALTY
BEARING PRODUCTS, the PARTIES shall mutually agree to an allocation of the NET
SALES of the combination between ROYALTY BEARING PRODUCTS and EXCLUDED PRODUCTS.
If the PARTIES do not mutually agree, either PARTY may submit the issue to
binding arbitration in accordance with Appendix B.
4.2. LOXO obligation to pay royalties under Section 4.1 shall continue
on a country-for-country basis and ROYALTY BEARING PRODUCT by ROYALTY BEARING
PRODUCT basis beginning on the EFFECTIVE DATE of this Agreement and ending ten
(10) years after the first commercial sale of each ROYALTY BEARING PRODUCT in a
country when generally available in the country, provided, however, that if the
manufacture, use or sale of ROYALTY BEARING PRODUCT is covered by a granted BTI
PATENT after the expiration of such period, then the obligation to pay royalties
thereon shall continue until such ROYALTY BEARING PRODUCT is no longer covered
by such granted BTI PATENT.
4.3. LOXO shall keep, and shall cause each of its AFFILIATES and
licensees, distributors and co-marketers to keep, full and accurate books of
account containing all particulars that may be necessary for the purpose of
calculating all royalties payable to BTI. Such books of account shall be kept at
their principal places of business and, with all necessary supporting data,
shall, during normal business hours be open for inspection by an independent
certified accountant reasonably acceptable to LOXO upon reasonable notice and no
more than once a calendar year for the sole purpose of verifying and auditing
royalty statements or compliance with this Agreement. Such accountant shall
report to BTI only as to the accuracy of the royalty calculation and as to the
amount of any under- or over-payment. BTI shall be responsible for the costs of
any such verification and audit, except that LOXO shall be responsible for the
costs of any such audit in the event that as a result of such verification
and/or audit royalties due and payable to BTI are determined in any calendar
quarter to exceed by five
6
percent (5%) those actually paid by LOXO. If the report indicates an
underpayment, LOXO shall pay to BTI the amount of such underpayment within
thirty (30) days of receiving notice thereof.
4.4. With quarterly payments, LOXO shall deliver to BTI a full and
accurate accounting to include at least the following information:
(a) Quantity of each ROYALTY BEARING PRODUCT subject to
royalty sold (by country) by LOXO and its AFFILIATES and their licensees,
co-marketers and distributors:
(b) Total receipts for each ROYALTY BEARING PRODUCT subject to
royalty (by country);
(c) An accounting for amounts deductible, if any, against
total overall receipts in calculating total overall NET SALES; and
(d) Total royalties payable to BTI.
LOXO shall provide any other information reasonably requested by BTI to
determine the calculation and amount of royalties.
4.5. In each year the amount of royalty due shall be calculated
quarterly as of March 31, June 30, September 30 and December 31 and shall be
paid quarterly within the thirty (30) days next following such date, every such
payment shall be supported by the accounting prescribed in Section 4.4 and shall
be made in United States currency. Whenever for the purpose of calculating
royalties conversion from any foreign currency shall be required, all amounts
will first be calculated in the currency of sale and then converted United
States Dollars, using as the rate of exchange the exchange rate published in the
Wall Street Journal (Eastern Edition) on the last business day of the calendar
quarter to which the payment relates. In the case of a sublicense, the rate of
exchange may be calculated differently if approved in writing by BTI.
4.6. Any tax required to be withheld by LOXO under the laws of any
foreign country for the account of BTI, shall be promptly paid by LOXO for and
on behalf of BTI to the appropriate governmental authority, and LOXO shall
furnish BTI with proof of payment of such tax. Any such tax actually paid on
BTI's behalf shall be deducted from royalty payments due BTI.
4.7. In the event that LOXO is prohibited in any country by applicable
law from paying royalties for any portion of the term required by Section 4.2,
then LOXO shall not be obligated to pay such royalty for such portion provided
that the party receiving the royalty is notified in writing and that LOXO shall
negotiate an amendment so that BTI receives essentially the same economic
benefit as if the royalty was paid for the full term. If the PARTIES do not
reach agreement within ninety (90) days after such notification, either PARTY
may submit the issue to binding arbitration in accordance with Appendix B.
7
Confidential Materials omitted and filed with the Securities and Exchange
Commission. Asterisks denote omissions.
SECTION 5.
PATENTS
5.1. BTI shall own any inventions and patents based thereon made by BTI
employees.
5.2. LOXO shall own the inventions and patents based thereon made by
LOXO employees.
5.3. BTI and LOXO shall jointly own any inventions and patents based
thereon jointly made by employee(s) of BTI and employee(s) of LOXO.
5.4 (a) BTI or BTI licensors, in the case of BTI PATENTS licensed to
BTI, shall file, prosecute and maintain BTI PATENTS in the TERRITORY through
patent counsel selected by BTI or its licensors, and BTI shall consult with and
keep LOXO advised with respect thereto. BTI shall disclose to LOXO the complete
texts of all such patents and patent applications filed by BTI or its licensor,
as well as all information received concerning the institution or possible
institution of any interference, opposition, re-examination, reissue,
revocation, nullification or any official proceeding involving any patent
licensed herein anywhere in the TERRITORY. LOXO shall have the right to review
such pending applications and other proceedings and make recommendations to BTI
concerning them and their conduct.
In the event that BTI intends to finally abandon any BTI PATENT licensed to LOXO
under this Agreement without refiling thereof, it shall notify LOXO and shall
also notify LOXO in the event that any of BTI'S licensors intends to finally
abandon any BTI PATENT without refiling thereof. In the event LOXO reasonably
notifies BTI that it disagrees with the abandonment and BTI still intends to
abandon, LOXO shall have the right if it so wishes to have such BTI PATENT
assigned to LOXO at LOXO's expense. Following such assignment, LOXO shall have
no further obligation to BTI under such BTI PATENT.
5.5 In the event BTI or LOXO or BTI's licensors desire to file or
obtain a supplementary protection certificate or patent extension or the like
with respect to a BTI PATENT, BTI and LOXO shall cooperate with each other with
respect thereto including providing data and information reasonably required for
such filing.
5.6 In the event that LOXO elects to participate in a grant that was
submitted prior to [**] and transferred to LOXO by BTI or an employee or former
employee of BTI, then LOXO shall reimburse BTI for the cost of filing,
prosecuting and maintaining BTI PATENTS during the [**] AGREEMENT YEARS, but in
no event shall the reimbursement exceed the amount of total funding under such
grant.
5.7 Beginning after the end of the [**] AGREEMENT YEAR, LOXO shall pay
to BTI the cost and expense for filing, prosecuting and maintaining BTI PATENTS
licensed to LOXO hereunder, to the extent that cost and expense is reasonably
allocated to the Field
8
SECTION 6.
TERM AND TERMINATION
6.1. Except as otherwise specifically provided herein and unless sooner
terminated pursuant to Section 6.2, 6.4 or 6.6 of this Agreement, this Agreement
shall remain in full force and effect until LOXO has fully paid the royalties
due hereunder for the full royalty term hereunder as provided in Section 4.2. As
of such time that LOXO has paid royalties for the full royalty term under
Section 4.2 of this Agreement for a ROYALTY BEARING PRODUCT, LOXO shall have a
fully paid up non-exclusive license for such ROYALTY BEARING PRODUCT.
6.2. If either PARTY materially breaches this Agreement, the other
PARTY may terminate this Agreement by written notice to the breaching PARTY
specifying the breach and this Agreement shall be terminated thirty (30)
business days after such written notice if the material breach is a payment
breach, and sixty (60) business days thereafter for material breaches other than
a payment breach, unless prior to the expiration of such period such breach is
cured. In the event that a material breach other than a payment breach cannot be
cured within such sixty (60) day period and a PARTY has initiated steps to cure
such breach within such sixty (60) day period and notified the other PARTY in
writing thereof within such sixty (60) day period and in good faith continues to
work toward curing such breach as expeditiously as possible than this Agreement
shall not be terminated if such breach is in fact cured within six (6) months
after such notice. For the purposes of this Section 6.2, a breach of the
obligations of NOVARTIS to BTI as a third-party beneficiary under an agreement
between LOXO and NOVARTIS shall be a breach of this Agreement and, in case of
such breach by NOVARTIS, BTI shall have the right to terminate this Agreement.
6.3 Either PARTY may terminate this Agreement, if, at any time, the
other PARTY becomes insolvent or the other PARTY shall file in any court or
agency pursuant to any statute or regulation of a country in the TERRITORY a
petition of bankruptcy or insolvency or for reorganization or for an arrangement
or for the appointment of a receiver of trustee of the other PARTY or of its
assets or if the other PARTY proposes a written agreement of composition or
extension of its debts or if the other PARTY shall be served with an involuntary
petition against it, filed in any insolvency proceeding, and such petition shall
not be dismissed within sixty (60) days after filing thereof, or if the other
PARTY shall make an assignment for the benefit of its creditors. Notwithstanding
the bankruptcy of BTI or the impairment of performance of BTI of its obligations
under this section, LOXO shall be entitled to retain the licenses granted
herein, provided it continues to comply with its obligations to BTI hereunder.
6.4 Upon the termination of any rights granted hereunder, in whole or
in part in any country in the TERRITORY, for any reason other than a failure to
cure a material breach of this Agreement by LOXO, LOXO shall have the right to
dispose of all XENOGRAFT PRODUCT then on hand, and the royalties shall be paid
to BTI with respect to such XENOGRAFT PRODUCT as though such rights had not
terminated.
9
6.5 (a) Termination, relinquishment or expiration of this Agreement for
any reason shall be without prejudice to any rights which shall have accrued to
the benefit of either PARTY prior to such termination, relinquishment or
expiration. Such termination, relinquishment or expiration shall not relieve
either PARTY from obligations which are expressly indicated to survive
termination or expiration of this Agreement.
(b) Termination, relinquishment or expiration of this Agreement
shall not terminate LOXO obligation to pay all royalties and other payments that
shall have accrued prior to such termination. All of the PARTIES' rights and
obligations under Sections 2.2, 2.4, 2.5(b), 4.3, 5.1, 5.2, 5.3, 6.1, 6.5, 6.6,
8 and 9 shall survive termination, relinquishment or expiration hereof.
6.6 This Agreement shall automatically terminate upon termination of
the NOVARTIS AGREEMENT.
6.7 This Agreement may not be terminated by either PARTY except as
specifically provided in this Section 6.
SECTION 7.
INFRINGEMENT
7.1. (a) If a third party makes, uses or sells a XENOGRAFT PRODUCT that
infringes any of the BTI PATENTS under which LOXO is licensed, LOXO shall have
the right and option but not the obligation to bring an action for infringement,
at its sole expense, against such third party in the name of LOXO, and to join
the owner of the BTI PATENT as a party plaintiff if required. LOXO shall
promptly notify BTI of any such infringement and shall keep BTI informed as to
the prosecution of any action for such infringement and shall not institute any
infringement action without providing BTI with thirty (30) days prior written
notice. No settlement, consent judgment or other voluntary final disposition of
the suit may be entered into without the consent of BTI, which consent shall not
unreasonably be withheld. The rights granted under this Section 7.1 are subject
to the terms and conditions of the THIRD PARTY AGREEMENTS with respect to BTI
PATENTS licensed under THIRD PARTY AGREEMENTS.
Any recovery of damages by LOXO for any such suit shall be applied
first in satisfaction of obligations under THIRD PARTY AGREEMENTS. The balance,
if any, remaining from any such recovery shall be retained by LOXO.
7.2. In the event that LOXO elects not to pursue an action for
infringement pursuant to Section 7.1, or does not do so within sixty (60) days
after written notice by BTI that an unlicensed third party is an infringer of a
BTI PATENT licensed to LOXO, BTI or its licensor(s) shall have the right and
option, but not the obligation at its cost and expense to initiate infringement
litigation and to retain any recovered damages.
7.3. In any infringement suit either PARTY may institute to enforce the
BTI PATENTS pursuant to this Agreement, the other PARTY hereto shall, at the
request of the PARTY initiating such suit, cooperate in all respects and, to the
extent possible, have its
10
employees testify when requested and make available relevant records, papers,
information, samples, specimens, and the like. All reasonable out-of-pocket
costs of the other PARTY incurred in connection with rendering such cooperation
shall be paid by the requesting PARTY.
7.4 In the event of the institution of any suit by a third party
against LOXO, its AFFILIATES or their licensees involving the manufacture, use,
sale, distribution or marketing of any XENOGRAFT PRODUCT other than an EXCLUDED
PRODUCT in the TERRITORY, LOXO shall promptly notify BTI in writing of such
suit. During the pendency of such action, all royalties due hereunder shall
continue to be paid by LOXO. LOXO shall have full responsibility for the payment
of any award for damages, or any amount due pursuant to any settlement entered
into by LOXO with such third party.
7.5. In any infringement suit either PARTY may institute to enforce
patents pursuant to this Agreement, the other PARTY hereto shall, at the request
of the PARTY initiating such suit, cooperate in all respects and, to the extent
possible, have its employees testify when requested and make available relevant
records, papers, information, samples, specimens, and the like. All reasonable
out-of-pocket costs of the other PARTY incurred in connection with rendering
such cooperation shall be paid by the requesting PARTY. In addition, such PARTY
shall keep the other PARTY advised of any such litigation.
SECTION 8.
INDEMNIFICATION
8.1. LOXO shall defend, indemnify and hold harmless BTI, AFFILIATES of
BTI, licensors of BTI, and their respective directors, officers, shareholders,
agents and employees (each of them and "Indemnified Party"), from and against
any and all liability, loss, damages and expenses (including attorneys' fees) as
the result of claims, demands, costs or judgments which may be made or
instituted against any Indemnified Party arising out of the development,
manufacture, possession, distribution, use, testing, sale or other disposition
of XENOGRAFT PRODUCT by or through LOXO or its AFFILIATES or any of their
licensees, distributors, co-marketers and/or any person or entity that prepares
or manufactures XENOGRAFT PRODUCT for or on behalf of any of them and/or any
person or entity that receives or obtains (directly or indirectly) XENOGRAFT
PRODUCT from any of them. LOXO obligation to defend, indemnify and hold harmless
shall include claims, demands, costs or judgments, whether for money damages or
equitable relief by reason of alleged personal injury (including death) to any
person or alleged property damage, provided, however, the indemnity shall not
extend to any claims against an Indemnified Party which result solely from the
gross negligence or willful misconduct of such Indemnified Party. LOXO shall
have the exclusive right to control the defense of any action which is to be
indemnified in whole by LOXO hereunder including the right to select counsel
acceptable to the Indemnified Party to defend the Indemnified Party, and to
settle any claim, provided that, without the written consent of the Indemnified
Party (which shall not be unreasonably withheld or delayed), LOXO shall not
agree to settle any claim against the Indemnified Party to the extent such claim
has a material adverse effect on the Indemnified Party. The provisions of this
paragraph shall survive and remain in full force and effect after any
termination, expiration or cancellation of this Agreement and LOXO obligation
hereunder shall apply whether or not such claims are rightfully brought.
11
8.2. A person or entity that intends to claim indemnification under
this Article 8 (the "Indemnitee") shall promptly notify LOXO (the "Indemnitor")
of any loss, claim, damage, liability or action in respect of which the
Indemnitee intends to claim such indemnification, and the Indemnitor, shall
assume the defense thereof with counsel mutually satisfactory to the Indemnitor
and the Indemnitee(s); provided, however, that an Indemnitee shall have the
right to retain its own counsel, with the fees and expenses to be paid by the
Indemnitor if Indemnitor does not assume the defense; or, if representation of
such Indemnitee by the counsel retained by the Indemnitor would be inappropriate
due to actual or potential differing interests between such Indemnitee and any
other Indemnitee represented by such counsel in such proceedings. The indemnity
agreement in this Article 8 shall not apply to amounts paid in settlement of any
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Indemnitor, which consent shall not be withheld unreasonably.
The failure to deliver notice to the Indemnitor within a reasonable time after
the commencement of any such action, if prejudicial to its ability to defend
such action, shall relieve such Indemnitor of any liability to the Indemnitee
under this Article 8, but the omission so to deliver notice to the Indemnitor
will not relieve it of any liability that it may have to any Indemnitee
otherwise than under this Article 8. The Indemnitee under this Article 8, its
employees and agents, shall cooperate fully with the Indemnitor and its legal
representatives in the investigations of any action, claim or liability covered
by this indemnification. In the event that an Indemnitee brings an action to
cause Indemnitor to meet Indemnitor's indemnification obligations, and
Indemnitor is finally held liable, the Indemnitor shall additionally be liable
to pay the reasonable legal costs and attorneys' fees incurred by the Indemnitee
in establishing its claim for indemnity.
SECTION 9.
CONFIDENTIALITY
9.1. (a) Disclosure or delivery of confidential and proprietary
information or material by any PARTY to the other PARTY may be made in writing,
or orally. Such confidential information or material provided by one PARTY to
the other PARTY will be safeguarded by the recipient and will not be disclosed
to third parties and will be made available only to the receiving PARTY's or its
AFFILIATES employees or agents (including attorneys) who need to know such
information or have such material for purposes permitted under this Agreement
and who have obligations of confidentiality and non-use similar to those of this
Agreement. Each PARTY shall hold as confidential such confidential information
and material in the same manner and with the same protection as such party
maintains for its own confidential information and materials and agrees to use
such confidential information and materials only for the purpose of this
Agreement and as permitted by this Agreement. A PARTY may disclose Confidential
Information of another to a third party for the purposes contemplated by this
Agreement, provided that the third party agrees to maintain the confidentiality
thereof in a manner consistent with the confidentiality provisions of this
Agreement.
(b) The mutual obligations of confidentiality under this Section will
not apply to any information to the extent that such information:
(i) is or hereafter becomes part of the public domain through
no action of the recipient of the information which constitutes a default under
this Agreement;
12
Confidential Materials omitted and filed with the Securities and Exchange
Commission. Asterisks denote omissions.
(ii) was already known to the recipient as evidenced by prior
written documents in its possession which were not furnished by the other party;
(iii) is disclosed to the recipient by a third party who is
not in default of any confidentiality obligation to the disclosing PARTY
hereunder;
(iv) is disclosed to obtain a regulatory approval for
XENOGRAFT PRODUCT in the TERRITORY, provided that the disclosing PARTY takes all
reasonable steps to restrict and maintain the confidentiality of the disclosure;
(v) is required by law or bona fide legal process to be
disclosed, provided that the disclosing PARTY takes all reasonable steps to
restrict and maintain confidentiality of such disclosure and provides reasonable
notice to the non-disclosing PARTY; or
(vi) is approved for release by the PARTIES.
9.2. BTI and LOXO each agrees not to disclose any terms or conditions
of this Agreement to any third party without the prior consent of the other
PARTY, except as required by applicable law, rule or regulation; or in
connection with a financing or offering statement or memorandum, or to a
potential sublicensee, assignee or transferee of the business of a party to
which this Agreement relates; or to a licensor of a PARTY for the purpose of
granting a sublicense to the other PARTY. In the event of a disclosure required
under this Section, the disclosing PARTY shall nonetheless provide the
non-disclosing PARTY with notice of such disclosure prior to disclosure, and
will, to the extent reasonably possible, provide the non-disclosing PARTY with
an opportunity to correct same. A PARTY shall not be required to provide the
other PARTY with a disclosure which has been previously provided to a PARTY.
LOXO and BTI shall have the right to advise third parties as to whether
or not this Agreement covers any contemplated work or collaboration with such
third party.
9.3. LOXO agrees that, with respect to any miniswine which are provided
to LOXO or its AFFILIATES or any of their licensees by or on behalf of BTI as
well as all progeny, modifications thereto, [**] produced therefrom by or on
behalf of LOXO and/or AFFILIATES of LOXO and or any of their licensees shall be
owned by BTI, and LOXO shall not transfer same to a third party without the
consent of BTI and then only if such third party enters into a separate
agreement with BTI acknowledging BTI's rights therein, unless otherwise agreed
to by BTI. LOXO further acknowledges and understands that all such swine are
subject to the terms, conditions and obligations of BTI to Xxxxxxx River
Laboratories under the Mini-Swine Transfer and Maintenance Agreement of January
1, 1998 with Xxxxxxx River Laboratories.
13
SECTION 10.
FORCE MAJEURE
10.1. 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 a payment provision) when such failure or delay is caused by or results
from causes beyond the reasonable control of the affected PARTY including but
not limited to fire, floods, embargoes, war, acts of war (whether war be
declared or not), insurrections, riots, civil commotions, strikes, lockouts or
other labor disturbances, acts of God or acts, omissions or delays in acting by
any governmental authority or the other party.
SECTION 11.
ASSIGNMENT
11.1. This Agreement may not be assigned or otherwise transferred by
either PARTY without the consent of the other PARTY; provided, however, that
either PARTY may, without such consent, assign this Agreement and its rights and
obligations hereunder to its AFFILIATES or in connection with the transfer or
sale of all or substantially all of its business to which this Agreement
relates, or in the event of its merger or consolidation or change in control or
similar transaction provided that the permitted assignee shall assume all
obligations of its assignor under this Agreement. A permitted assignment of this
Agreement by a PARTY shall relieve such PARTY from its obligations under this
Agreement except in the case of a merger or consolidation where the PARTY is not
the surviving entity. Any purported assignment in violation of the preceding
sentences shall be void.
SECTION 12.
GENERAL PROVISIONS
12.1. The relationship between BTI and LOXO is that of independent
contractors. BTI and LOXO are not joint venturers, partners, principal and
agent, master and servant, employer or employee, and have no relationship other
than as independent contracting parties. BTI shall have no power to bind or
obligate LOXO in any manner.
12.2. This Agreement, including the Appendices, set forth the entire
agreement and understanding between the PARTIES with respect to the subject
matter thereof and supersedes all prior agreements in this respect. There shall
be no amendments or modifications to this Agreement, except by a written
document which is signed by both parties.
12.3. This Agreement shall be construed and enforced in accordance with
the laws of New York without reference to its choice of law principles.
12.4. The headings in this Agreement have been inserted for the
convenience of reference only and are not intended to limit or expand on the
meaning of the language contained in the particular article or section.
14
12.5. Any delay in enforcing a PARTY's rights under this Agreement or
any waiver as to a particular default or other matter shall not constitute a
waiver of a PARTY's right to the future enforcement of its rights under this
Agreement, excepting only as to an expressed written and signed waiver as to a
particular matter for a particular period of time.
12.6. Notices. Any notices given pursuant to this Agreement shall be in
writing and shall be deemed received upon the earlier of (i) when received at
the address set forth below (including telefax or personal delivery), or (ii)
three (3) business days after mailed by certified or registered mail in the
United States or Swiss mails, postage prepaid and properly addressed, with
return receipt requested. Notices shall be delivered to the respective parties
as indicated:
To BTI: 3rd Avenue, Building 00
Xxxxxxxxxxx Xxxx Xxxx
Xxxxxxxxxxx, XX 00000
Attention: CEO
To LOXO: c/o Xx. Xxxxxxx Xxxxxxx
XXXXX and XXXXXX
Xxxxxxxxxxxxxxx 0, 0000
Xxxxx, Xxxxxxxxxxx
12.7. If any provision(s) of this Agreement are or become invalid, are
ruled illegal by any court of competent jurisdiction or are deemed unenforceable
under then current applicable law from time to time in effect during the term
hereof, it is the intention of the PARTIES that the remainder of this Agreement
shall not be affected thereby provided that a PARTY's rights under this
Agreement are not materially affected. It is further the intention of the
parties that in lieu of each such provision which is invalid, illegal, or
unenforceable, there be substituted or added as part of this Agreement a
provision which shall be as similar as possible in economic and business
objectives as intended by the PARTIES to such invalid, illegal or unenforceable
provision, but shall be valid, legal and enforceable. In the event a party's
rights are materially affected as a result of a change in this Agreement under
this Section, such PARTY may terminate this Agreement.
12.8. The PARTIES agree throughout the duration of this Agreement to
notify each other immediately of any information concerning any serious or
unexpected side effect, injury, toxicity or sensitivity reaction or any
unexpected incidence and the severity thereof associated with the uses, studies,
field trials, investigations, tests and marketing of XENOGRAFT PRODUCT. The
PARTIES further agree to immediately notify each other of any information
received regarding any threatened or pending action which may affect the safety
or efficacy claims of XENOGRAFT PRODUCT or the continued marketing of XENOGRAFT
PRODUCT .
12.9. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
12.10. Each PARTY agrees to execute, acknowledge and deliver such
further instruments, and to do all such other acts, as may be necessary or
appropriate in order to carry out the purposes and intent of this Agreement.
15
12.11. Except as otherwise provided herein, neither PARTY shall have
any right, express or implied, to use in any manner the name or other
designation of the other PARTY or any other trade name or trademark of the other
PARTY for any purpose in connection with the performance of this Agreement.
12.12. LOXO agrees to comply with all applicable laws, rules and
regulations with respect to the import, export, manufacture, use and sale of
XENOGRAFT PRODUCT.
12.13. All the terms and provisions of this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the PARTIES hereto and their
respective permitted successors and assigns.
12.14. The descriptive headings of this Agreement are for convenience
only, and shall be of no force or effect in construing or interpreting any of
the provisions of this Agreement.
SECTION 13.
WARRANTIES
13.1. The PARTIES warrant and represent to each other that each has the
full right and authority to enter into this Agreement, that each is not aware of
any impediment which would inhibit its ability to perform the terms and
conditions imposed on it by this Agreement, and that there are no and will be no
outstanding agreements, licenses, assignments or encumbrances inconsistent with
the provisions of and the rights and licenses granted under this Agreement, or
which are inconsistent with or would prevent a PARTY from performing all of its
obligations under this Agreement.
13.2 BTI MAKES NO OTHER REPRESENTATION OR WARRANTY HEREUNDER AND
DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES, INCLUDING, BUT NOT LIMITED
TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR USE OR WITH RESPECT TO THE
VALIDITY, ENFORCEABILITY, OR PATENTABILITY OF BTI PATENTS OR THAT XENOGRAFT
PRODUCT WILL NOT INFRINGE PATENT RIGHTS OF A THIRD PARTY.
IN WITNESS WHEREOF, the parties intending to be bound have set their hands and
seals, effective as of the date first written above.
BIOTRANSPLANT, INCORPORATED LOXO, AG
By: /s/ XXXXXX XXXXXXXX By: /s/ XXXXXXX X. XXXXXXX
---------------------------- -------------------------
Title: PRESIDENT Title: PRESIDENT
------------------------- ----------------------
Date: SEPTEMBER 24, 2000 Date: SEPTEMBER 25, 2000
------------------------- ----------------------
16
APPENDIX A
THIRD PARTY AGREEMENTS
00
XXXXXXXX X
ARBITRATION PROVISION
In the event the PARTIES are unable to reach agreement with respect to
any matter which is to be subject to arbitration in accordance with the License
Agreement, as applicable, such will be determined through binding arbitration in
Boston, Massachusetts in accordance with the Commercial Rules of Arbitration of
the American Arbitration Association.
The arbitration panel shall be comprised of three (3) arbitrators. Each
Party shall be entitled to appoint one arbitrator. The PARTIES shall appoint
their respective arbitrators within thirty (30) days after submission for
arbitration. If either PARTY shall fail to make timely appointment of its
arbitrator, the arbitration shall be heard and decided by the sole arbitrator
duly appointed by the other PARTY. Where both PARTIES have timely appointed
their respective arbitrators, the two arbitrators so appointed shall agree on
the appointment of the third arbitrator from the list of arbitrators maintained
by the American Arbitration Association. If the PARTIES' appointed arbitrators
shall fail to agree. within thirty (30) days from the date both PARTIES'
arbitrators have been appointed, on the identity of the third arbitrator, then
such arbitrator shall be appointed by the appropriate administrative body of the
American Arbitration Association.
Within ten (10) days of appointment of the full arbitration panel, the
PARTIES shall exchange their final proposed positions with respect to the
matters to be arbitrated, which shall approximate as closely as possible the
closest positions of the parties previously taken in the negotiations. Within
thirty (30) days of appointment of the arbitration Panel, each PARTY shall
submit to the arbitrators a copy of the proposed position which it previously
delivered to the other PARTY, together with a brief or other written memorandum
supporting the merits of its proposed position. The arbitration panel shall
promptly convene a hearing, at which time each PARTY shall have one (1) hour to
argue in support of its proposed position. The PARTIES will not call any
witnesses in support of their arguments.
The arbitration panel shall select either of the PARTY's proposed
position on the issue as the binding final decision to be embodied as an
agreement between the PARTIES. In making their selection, the arbitrators shall
not modify the terms or conditions of either PARTY's proposed position; nor will
the arbitrators combine provisions from both proposed position. In making their
selection, the arbitrators shall consider the terms and conditions of this
Agreement, the relative merits of the proposed position and the written and oral
arguments of the PARTIES. In the event the arbitrators seek the guidance of the
law of any jurisdiction, the law of the State of New York shall govern.
The arbitrators shall make their decision known to the PARTIES as
quickly as possible by delivering written notice of their decision to both
PARTIES. Such written notice need not justify their decision. The PARTIES will
execute any and all papers necessary to obligate the parties to the position
selected by the arbitration Panel within five (5) days of receipt of notice of
such selection. The decision of the arbitrators shall be final and binding on
the PARTIES, and specific performance may be ordered by any court of competent
jurisdiction.
18
The PARTIES will bear their own costs in preparing for the arbitration.
The costs of the arbitrators will be equally divided between the PARTIES.
Notwithstanding anything to the contrary, prior to initiating
arbitration, the issues shall be submitted to the Chief Executive Officer of
each of the PARTIES in an attempt to resolve the issues by good faith, mediation
or negotiations by such Chief Executive Officers. If the issues have not been
resolved within sixty (60) days after submission to the Chief Executive
Officers, then either PARTY may initiate arbitration as set forth herein.
19
EXHIBIT B
NPAG LICENSE AGREEMENT
1
LICENSE AGREEMENT
THIS AGREEMENT, effective as of the ___ day of _____________, 2000 (the
"EFFECTIVE DATE") between NOVARTIS PHARMA, A.G., a Swiss corporation having a
place of business at Xxxxxxxxxxxx 00, XX-0000, Xxxxx, Xxxxxxxxxxx ("NOVARTIS"),
and LOXO AG, a Swiss Corporation having a place of business at c/o Xx. Xxxxxxx
Xxxxxxx, Xxxxx and Xxxxxx, Xxxxxxxxxxxxxxx 0, 0000, Xxxxx, Xxxxxxxxxxx ("LOXO").
WHEREAS NOVARTIS has certain rights to technology and patent rights in
the field of xenotransplantation;
WHEREAS LOXO desires to license such technology and patent rights;
WHEREAS NOVARTIS desires to license such patent rights and technology
to LOXO;
NOW THEREFORE, in consideration of the faithful performance of the
covenants herein contained, the parties hereto agree as follows:
SECTION 1.
DEFINITIONS
1.1. "AFFILIATE" with respect to a PARTY shall mean any corporation or
other entity which controls, is controlled by, or is under common control with
such PARTY. A corporation or other entity shall be regarded as in control of
another corporation or entity if it owns or directly or indirectly controls more
than fifty percent (50%) of the voting stock or other ownership interest of the
other corporation or entity, or if it possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of the
corporation or other entity or the power to elect or appoint fifty percent (50%)
or more of the members of the governing body of the corporation or other entity.
For the purposes of this Agreement LOXO and NOVARTIS are not AFFILIATES and
BioTransplant, Incorporated and LOXO are not AFFILIATES.
1.2. "AGREEMENT YEAR" shall mean the twelve-month period beginning on
January 1, 2001 and each subsequent twelve-month period thereafter.
1.3. "EXCLUDED PRODUCT(S)" shall mean drugs or other therapeutic or
prophylactic agents, including antibodies. now or hereafter owned or controlled
by NOVARTIS. For the avoidance of doubt, EXCLUDED PRODUCTS do not include
organs, cells or tissue.
1.4. "FIELD" shall mean human xenotransplantation.
1.5. "IMPROVEMENT PATENTS" means any patent application or patent
anywhere in the world now or hereafter owned by LOXO to the extent that it
claims the use of an EXCLUDED PRODUCT or a modification thereto.
2
1.6. "MAJOR COUNTRY" means the United States of America, United
Kingdom, France, Italy, Germany, Japan and Canada.
1.7. [OMITTED]
1.8 "NOVARTIS AGREEMENT" means the License Agreement by which LOXO
grants a license to NOVARTIS in the FIELD.
1.9 "NOVARTIS INFORMATION" means any and all data, information and
know-how that is useful in the FIELD that is (i) owned by NOVARTIS or its
AFFILIATES as of the EFFECTIVE DATE or thereafter and/or (ii) licensed to
NOVARTIS or its AFFILIATES under a THIRD PARTY AGREEMENT.
1.10. "NOVARTIS MATERIAL" means any and all materials, substances,
animals, compounds, and biologics that is useful in the FIELD that is (i) owned
by NOVARTIS or its AFFILIATES as of the EFFECTIVE DATE or thereafter and/or (ii)
licensed to NOVARTIS or its AFFILIATES under a THIRD PARTY AGREEMENT.
1.11. "NOVARTIS PATENT" means any and all patent applications and
patents (or equivalent thereof such as supplementary protection certificates or
patent extensions) in the TERRITORY that is (i) owned by NOVARTIS or its
AFFILIATES as of the EFFECTIVE DATE of thereafter and/or (ii) licensed to
NOVARTIS or its AFFILIATES under a THIRD PARTY AGREEMENT.
1.12. "PARTY(IES)" shall mean LOXO and/or NOVARTIS, as the case may be.
1.13. "ROYALTY BEARING PRODUCT" shall mean all XENOGRAFT PRODUCTS other
than an EXCLUDED PRODUCT(S).
1.14. "TERRITORY" shall mean all countries of the world.
1.15. "THIRD PARTY AGREEMENT(S)" means the agreements under which
NOVARTIS or its AFFILIATES have or obtains transferable rights which are useful
in the FIELD, that are accepted by LOXO in writing for licensing to LOXO under
this Agreement. When accepted by LOXO, an Agreement shall be listed in Appendix
A.
1.16. "XENOGRAFT PRODUCT(S) " shall mean any product, process, article,
apparatus, substance, chemical, material, biological material, including organs,
cells or tissues, or service used prior to, during or after a human
xenotransplantation procedure.
1.17. "XENOGRAFT SYSTEM" means a combination of XENOGRAFT PRODUCTS
required for performance of a human xenograft procedure.
3
Confidential Materials omitted and filed with the Securities and Exchange
Commission. Asterisks denote omissions.
SECTION 2.
LICENSES AND RIGHTS AND COVENANTS
2.1. NOVARTIS on behalf of itself and its AFFILIATES grants to LOXO a
sole and exclusive royalty bearing license in the TERRITORY under NOVARTIS
PATENTS, NOVARTIS MATERIAL and NOVARTIS INFORMATION (i) to make, have made, use,
sell, offer to sell and import ROYALTY BEARING PRODUCT, in each case only for
use in the FIELD and (ii) to perform research in the FIELD. For the avoidance of
any doubt, no license is granted to LOXO hereunder in respect of EXCLUDED
PRODUCTS except to the extent required for performing research in the Field. For
the avoidance of any further doubt, notwithstanding the licenses granted
hereunder, NOVARTIS and its AFFILIATES shall retain the right to distribute its
proprietary swine, including [**] third-parties for research and development
purposes.
2.2. LOXO agrees that LOXO and its AFFILIATES and licensees will use
NOVARTIS INFORMATION and NOVARTIS MATERIAL only for development, making, using
and selling of XENOGRAFT PRODUCT as to which LOXO retains a license under this
Agreement and only in those countries in which LOXO retains a license under this
Agreement.
2.3. LOXO shall have the right to grant sublicenses under the license
granted pursuant to Section 2.1 provided that: (i) LOXO shall guarantee and be
responsible for the making of all payments due, and the making of reports under
this Agreement, with respect to sales of any XENOGRAFT PRODUCT by its
sublicensees and their compliance with all applicable licensing terms of this
Agreement to the extent that they are applicable to a sublicensee; and (ii) each
sublicensee agrees in writing to comply with Sections 4.3, 8 & 9 of this
Agreement.
(b) Any sublicense granted by LOXO to a third party shall include a
provision terminating the sublicense when the license to LOXO terminates.
2.4. (a) To the extent that LOXO is granted rights and licenses under a
THIRD PARTY AGREEMENT, LOXO acknowledges and agrees that such rights and
licenses are not greater than the rights and licenses that can be and have been
sublicensed thereunder and the rights and licenses thereunder are subject to the
terms, limitations and restrictions of such THIRD PARTY AGREEMENT.
(b) LOXO agrees that LOXO will comply with all of the terms,
obligations, limitations and restrictions of the THIRD PARTY AGREEMENTS
including but not limited to any confidentiality, insurance or indemnification
requirements under the THIRD PARTY AGREEMENTS and that LOXO will not perform any
act (or fail to perform an act) that will cause NOVARTIS to be in breach of any
THIRD PARTY AGREEMENT.
(c) LOXO will cooperate with NOVARTIS in furnishing all data and
information to enable NOVARTIS to meet their reporting obligations under THIRD
PARTY AGREEMENTS.
4
(d) LOXO will comply with the research, development and
commercialization obligations of the THIRD PARTY AGREEMENTS as they relate to
the FIELD.
(e) LOXO shall pay for all of the research funding required by the
THIRD PARTY AGREEMENTS.
2.5. NOVARTIS shall provide to LOXO, at no cost, all NOVARTIS
INFORMATION licensed to LOXO under this Agreement and reasonably required by
LOXO for the development, manufacture, use or sale of a XENOGRAFT PRODUCT
licensed to LOXO under this Agreement. If so requested by LOXO and at the cost
of LOXO, representatives of NOVARTIS shall visit LOXO or its AFFILIATES or
sublicensees in order to assist in the transfer and implementation of such
NOVARTIS INFORMATION.
2.6. At the expense of LOXO, NOVARTIS shall provide to LOXO or its
AFFILIATES or their licensees, as reasonably requested by LOXO and to the extent
available to NOVARTIS, any NOVARTIS MATERIAL licensed to LOXO under this
Agreement, as reasonably required by LOXO for the development, manufacture, use
or sale of a XENOGRAFT PRODUCT licensed to LOXO under this Agreement, provided,
however, that to the extent required by LOXO for research with respect to
XENOGRAFT PRODUCT, and if commercialized by NOVARTIS or if used by NOVARTIS with
respect to research or development performed by NOVARTIS, NOVARTIS shall provide
NOVARTIS MATERIAL other than swine to LOXO at no cost.
2.7. LOXO hereby grants to NOVARTIS a royalty-free, fully-paid-up and
non-terminable, non-exclusive license in the TERRITORY under IMPROVEMENT PATENTS
to make, have made, use, sell, offer to sell and import any product.
SECTION 3.
DEVELOPMENT EFFORTS
3.1. Within sixty (60) days after the end of each calendar year, LOXO
shall provide NOVARTIS with a report of the research performed by LOXO with
respect to XENOGRAFT PRODUCT in such calendar year.
SECTION 4.
ROYALTIES
4.1. For the period that the NOVARTIS AGREEMENT is in effect, no
royalties shall be due from LOXO to NOVARTIS.
5
SECTION 5.
PATENTS
5.1. NOVARTIS shall own any inventions and patents based thereon made
by NOVARTIS employees.
5.2. LOXO shall own the inventions and patents based thereon made by
LOXO employees.
5.3. NOVARTIS and LOXO shall jointly own any inventions and patents
based thereon jointly made by employee(s) of NOVARTIS and employee(s) of LOXO.
5.4. (a) NOVARTIS or NOVARTIS licensors, in the case of NOVARTIS
PATENTS licensed to NOVARTIS, shall file, prosecute and maintain NOVARTIS
PATENTS in the TERRITORY through patent counsel selected by NOVARTIS or its
licensors, and NOVARTIS shall consult with and keep LOXO advised with respect
thereto. NOVARTIS shall disclose to LOXO the complete texts of all such patents
and patent applications filed by NOVARTIS or its licensor, as well as all
information received concerning the institution or possible institution of any
interference, opposition, re-examination, reissue, revocation, nullification or
any official proceeding involving any patent licensed herein anywhere in the
TERRITORY. LOXO shall have the right to review such pending applications and
other proceedings and make recommendations to NOVARTIS concerning them and their
conduct.
In the event that NOVARTIS intends to finally abandon any NOVARTIS PATENT
licensed to LOXO under this Agreement without refiling thereof, it shall notify
LOXO and shall also notify LOXO in the event that any of NOVARTIS' licensors
intends to finally abandon any NOVARTIS PATENT without refiling thereof. In the
event LOXO reasonably notifies NOVARTIS that it disagrees with the abandonment
and NOVARTIS still intends to abandon, LOXO shall have the right if it so wishes
to have such NOVARTIS PATENT. assigned to LOXO at LOXO's expense. Following
such assignment, LOXO shall have no further obligation to NOVARTIS under such
NOVARTIS PATENT.
5.5. In the event NOVARTIS or LOXO or NOVARTIS' licensors desire to
file or obtain a supplementary protection certificate or patent extension or the
like with respect to a NOVARTIS PATENT, NOVARTIS and LOXO shall cooperate with
each other with respect thereto including providing data and information
reasonably required for such filing.
SECTION 6.
TERM AND TERMINATION
6.1. This Agreement shall remain in full force and effect until
terminated under this Section 6.
6.2. If either PARTY materially breaches this Agreement, the other
PARTY may terminate this Agreement by written notice to the breaching PARTY
specifying the breach and this Agreement shall be terminated thirty (30)
business days after such written notice if the material breach is a payment
breach, and sixty (60) business days thereafter for material breaches
6
other than a payment breach, unless prior to the expiration of such period such
breach is cured. In the event that a material breach other than a payment breach
cannot be cured within such sixty (60) day period and a PARTY has initiated
steps to cure such breach within such sixty (60) day period and notified the
other PARTY in writing thereof within such sixty (60) day period and in good
faith continues to work toward curing such breach as expeditiously as possible
than this Agreement shall not be terminated if such breach is in fact cured
within six (6) months after such notice.
6.3. Either PARTY may terminate this Agreement, if, at any time, the
other PARTY becomes insolvent or the other PARTY shall file in any court or
agency pursuant to any statute or regulation of a country in the TERRITORY a
petition of bankruptcy or insolvency or for reorganization or for an arrangement
or for the appointment of a receiver of trustee of the other PARTY or of its
assets or if the other PARTY proposes a written agreement of composition or
extension of its debts or if the other PARTY shall be served with an involuntary
petition against it, filed in any insolvency proceeding, and such petition shall
not be dismissed within sixty (60) days after filing thereof, or if the other
PARTY shall make an assignment for the benefit of its creditors. Notwithstanding
the bankruptcy of NOVARTIS or the impairment of performance of NOVARTIS of its
obligations under this section, LOXO shall be entitled to retain the licenses
granted herein, provided it continues to comply with its obligations to NOVARTIS
hereunder.
6.4. Upon the termination of any rights granted hereunder, in whole or
in part in any country in the TERRITORY, for any reason other than a failure to
cure a material breach of this Agreement by LOXO, LOXO shall have the right to
dispose of all XENOGRAFT PRODUCT then on hand, and the royalties shall be paid
to NOVARTIS with respect to such XENOGRAFT PRODUCT as though such rights had not
terminated.
6.5. (a) Termination, relinquishment or expiration of this Agreement
for any reason shall be without prejudice to any rights which shall have accrued
to the benefit of either PARTY prior to such termination, relinquishment or
expiration. Such termination, relinquishment or expiration shall not relieve
either PARTY from obligations which are expressly indicated to survive
termination or expiration of this Agreement.
(b) Termination, relinquishment or expiration of this
Agreement shall not terminate LOXO obligation to pay all royalties and other
payments that shall have accrued prior to such termination. All of the PARTIES'
rights and obligations under Sections 2.2, 2.3, 2.4(b), 5.1, 5.2, 5.3, 6.5, 8 &
9 shall survive termination, relinquishment or expiration hereof.
6.6 This Agreement shall automatically terminate upon termination of
the NOVARTIS AGREEMENT.
6.7 This Agreement may not be terminated by either PARTY except as
specifically provided in this Section 6.
7
SECTION 7.
INFRINGEMENT
7.1. (a) If a third party makes, uses or sells a XENOGRAFT PRODUCT that
infringes any of the NOVARTIS PATENTS under which LOXO is licensed, LOXO shall
have the right and option but not the obligation to bring an action for
infringement, at its sole expense, against such third party in the name of LOXO,
and to join the owner of the NOVARTIS PATENT as a party plaintiff if required.
LOXO shall promptly notify NOVARTIS of any such infringement and shall keep
NOVARTIS informed as to the prosecution of any action for such infringement and
shall not institute any infringement action without providing NOVARTIS with
thirty (30) days prior written notice. No settlement, consent judgment or other
voluntary final disposition of the suit may be entered into without the consent
of NOVARTIS, which consent shall not unreasonably be withheld. The rights
granted under this Section 7.1 are subject to the terms and conditions of the
THIRD PARTY AGREEMENTS with respect to NOVARTIS PATENTS licensed under THIRD
PARTY AGREEMENTS.
Any recovery of damages by LOXO for any such suit shall be applied
first in satisfaction of obligations under THIRD PARTY AGREEMENTS. The balance,
if any, remaining from any such recovery shall be retained by LOXO.
7.2. In the event that LOXO elects not to pursue an action for
infringement pursuant to Section 7.1, or does not do so within sixty (60) days
after written notice by NOVARTIS that an unlicensed third party is an infringer
of a NOVARTIS PATENT licensed to LOXO, NOVARTIS or its licensor(s) shall have
the right and option, but not the obligation at its cost and expense to initiate
infringement litigation and to retain any recovered damages.
7.3. In any infringement suit either PARTY may institute to enforce the
NOVARTIS PATENTS pursuant to this Agreement, the other PARTY hereto shall, at
the request of the PARTY initiating such suit, cooperate in all respects and, to
the extent possible, have its employees testify when requested and make
available relevant records, papers, information, samples, specimens, and the
like. All reasonable out-of-pocket costs of the other PARTY incurred in
connection with rendering such cooperation shall be paid by the requesting
PARTY.
7.4. In the event of the institution of any suit by a third party
against LOXO, its AFFILIATES or their licensees involving the manufacture, use,
sale, distribution or marketing of any XENOGRAFT PRODUCT in the TERRITORY, LOXO
shall promptly notify NOVARTIS in writing of such suit. During the pendency of
such action, all royalties due hereunder shall continue to be paid by LOXO. LOXO
shall have full responsibility for the payment of any award for damages, or any
amount due pursuant to any settlement entered into by LOXO with such third
party.
7.5. In any infringement suit either PARTY may institute to enforce
patents pursuant to this Agreement, the other PARTY hereto shall, at the
request of the PARTY initiating such suit, cooperate in all respects and, to
the extent possible, have its employees testify when requested and make
available relevant records, papers, information, samples, specimens, and the
like. All reasonable out-of-pocket costs of the other PARTY incurred in
connection with rendering such cooperation shall be paid by the requesting
PARTY. In addition, such PARTY shall keep the other PARTY advised of any such
litigation.
8
SECTION 8.
INDEMNIFICATION
8.1. LOXO shall defend, indemnify and hold harmless NOVARTIS,
AFFILIATES of NOVARTIS, licensors of NOVARTIS, and their respective directors,
officers, shareholders, agents and employees (each of them an "Indemnified
Party"), from and against any and all liability, loss, damages and expenses
(including attorneys' fees) as the result of claims, demands, costs or judgments
which may be made or instituted against any Indemnified Party arising out of the
development, manufacture, possession, distribution, use, testing, sale or other
disposition of XENOGRAFT PRODUCT by or through LOXO or its AFFILIATES or any of
their licensees, distributors, co-marketers and/or any person or entity that
prepares or manufactures XENOGRAFT PRODUCT for or on behalf of any of them
and/or any person or entity that receives or obtains (directly or indirectly)
XENOGRAFT PRODUCT from any of them. LOXO obligation to defend, indemnify and
hold harmless shall include claims, demands, costs or judgments, whether for
money damages or equitable relief by reason of alleged personal injury
(including death) to any person or alleged property damage, provided, however,
the indemnity shall not extend to any claims against an Indemnified Party which
result solely from the gross negligence or willful misconduct of such
Indemnified Party. LOXO shall have the exclusive right to control the defense of
any action which is to be indemnified in whole by LOXO hereunder including the
right to select counsel acceptable to the Indemnified Party to defend the
Indemnified Party, and to settle any claim, provided that, without the written
consent of the Indemnified Party (which shall not be unreasonably withheld or
delayed), LOXO shall not agree to settle any claim against the Indemnified Party
to the extent such claim has a material adverse effect on the Indemnified Party.
The provisions of this paragraph shall survive and remain in full force and
effect after any termination, expiration or cancellation of this Agreement and
LOXO obligation hereunder shall apply whether or not such claims are rightfully
brought.
8.2. A person or entity that intends to claim indemnification under
this Article 8 (the "Indemnitee") shall promptly notify LOXO (the "Indemnitor")
of any loss, claim, damage, liability or action in respect of which the
Indemnitee intends to claim such indemnification, and the Indemnitor, shall
assume the defense thereof with counsel mutually satisfactory to the Indemnitor
and the Indemnitee(s); provided, however, that an Indemnitee shall have the
right to retain its own counsel, with the fees and expenses to be paid by the
Indemnitor if Indemnitor does not assume the defense; or, if representation of
such Indemnitee by the counsel retained by the Indemnitor would be inappropriate
due to actual or potential differing interests between such Indemnitee and any
other Indemnitee represented by such counsel in such proceedings. The indemnity
agreement in this Article 8 shall not apply to amounts paid in settlement of any
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Indemnitor, which consent shall not be withheld unreasonably.
The failure to deliver notice to the Indemnitor within a reasonable time after
the commencement of any such action, if prejudicial to its ability to defend
such action, shall relieve such Indemnitor of any liability to the Indemnitee
under this Article 8, but the omission so to deliver notice to the Indemnitor
will not relieve it of any liability that it may have to any Indemnitee
otherwise than under this Article 8. The Indemnitee under this Article 8, its
employees and agents, shall cooperate fully with the Indemnitor and its legal
representatives in the investigations of any action, claim or liability covered
by this indemnification. In the event that an Indemnitee brings an action to
cause Indemnitor to meet Indemnitor's indemnification obligations, and
Indemnitor is finally held liable, the
9
Indemnitor shall additionally be liable to pay the reasonable legal costs and
attorneys' fees incurred by the Indemnitee in establishing its claim for
indemnity.
8.3. In the event that NOVARTIS receives a sublicense under this
Agreement, LOXO's obligation to indemnify shall no longer be in force and
effect.
SECTION 9.
CONFIDENTIALITY
9.1. (a) Disclosure or delivery of confidential and proprietary
information or material by any PARTY to the other PARTY may be made in writing,
or orally. Such confidential information or material provided by one PARTY to
the other PARTY will be safeguarded by the recipient and will not be disclosed
to third parties and will be made available only to the receiving PARTY's or its
AFFILIATES employees or agents (including attorneys) who need to know such
information or have such material for purposes permitted under this Agreement
and who have obligations of confidentiality and non-use similar to those of this
Agreement. Each PARTY shall hold as confidential such confidential information
and material in the same manner and with the same protection as such party
maintains for its own confidential information and materials and agrees to use
such confidential information and materials only for the purpose of this
Agreement and as permitted by this Agreement. A PARTY may disclose Confidential
Information of another to a third party for the purposes contemplated by this
Agreement, provided that the third party agrees to maintain the confidentiality
thereof in a manner consistent with the confidentiality provisions of this
Agreement.
(b) The mutual obligations of confidentiality under this Section will
not apply to any information to the extent that such information:
(i) is or hereafter becomes part of the public domain through
no action of the recipient of the information which constitutes a default under
this Agreement;
(ii) was already known to the recipient as evidenced by prior
written documents in its possession which were not furnished by the other party;
(iii) is disclosed to the recipient by a third party who is
not in default of any confidentiality obligation to the disclosing PARTY
hereunder;
(iv) is disclosed to obtain a regulatory approval for
XENOGRAFT PRODUCT in the TERRITORY, provided that the disclosing PARTY takes all
reasonable steps to restrict and maintain the confidentiality of the disclosure;
(v) is required by law or bona fide legal process to be
disclosed, provided that the disclosing PARTY takes all reasonable steps to
restrict and maintain confidentiality of such disclosure and provides reasonable
notice to the non-disclosing PARTY; or
(vi) is approved for release by the PARTIES.
10
Confidential Materials omitted and filed with the Securities and Exchange
Commission. Asterisks denote omissions.
9.2. NOVARTIS and LOXO each agrees not to disclose any terms or
conditions of this Agreement to any third party without the prior consent of the
other PARTY, except as required by applicable law, rule or regulation; or in
connection with a financing or offering statement or memorandum, or to a
potential sublicensee, assignee or transferee of the business of a party to
which this Agreement relates; or to a licensor of a PARTY for the purpose of
granting a sublicense to the other PARTY. In the event of a disclosure required
under this Section, the disclosing PARTY shall nonetheless provide the
non-disclosing PARTY with notice of such disclosure prior to disclosure, and
will, to the extent reasonably possible, provide the non-disclosing PARTY with
an opportunity to correct same. A PARTY shall not be required to provide the
other PARTY with a disclosure which has been previously provided to a PARTY.
LOXO and NOVARTIS shall have the right to advise third parties as to whether or
not this Agreement covers any contemplated work or collaboration with such third
party.
9.3 LOXO agrees that, with respect to any proprietary swine, including
[**], which are provided to LOXO or its AFFILIATES, or any of their licensees by
or on behalf of NOVARTIS, as well as all progeny, modifications thereto, [**]
produced therefrom by or on behalf of LOXO or its AFFILIATES or any of their
licensees shall be owned by NOVARTIS, and LOXO shall not transfer same to a
third-party without the consent of NOVARTIS and then only if such third-party
enters into a separate agreement with NOVARTIS acknowledging NOVARTIS' rights
therein, unless otherwise agreed to by NOVARTIS.
SECTION 10.
FORCE MAJEURE
10.1. 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 a payment provision) when such failure or delay is caused by or results
from causes beyond the reasonable control of the affected PARTY including but
not limited to fire, floods, embargoes, war, acts of war (whether war be
declared or not), insurrections, riots, civil commotions, strikes, lockouts or
other labor disturbances, acts of God or acts, omissions or delays in acting by
any governmental authority or the other party.
SECTION 11.
ASSIGNMENT AND NOVARTIS AFFILIATES
11.1. This Agreement may not be assigned or otherwise transferred by
either PARTY without the consent of the other PARTY; provided, however, that
either PARTY may, without such consent, assign this Agreement and its rights and
obligations hereunder to its AFFILIATES or in connection with the transfer or
sale of all or substantially all of its business to which this Agreement
relates, or in the event of its merger or consolidation or change in control or
similar transaction provided that the permitted assignee shall assume all
obligations of its assignor under this Agreement. A permitted assignment of
this Agreement by a PARTY shall relieve such PARTY from its obligations under
this
11
Agreement except in the case of a merger or consolidation where the PARTY is
not the surviving entity. Any purported assignment in violation of the
preceding sentences shall be void.
11.2. NOVARTIS warrants that its AFFILIATES, including, but not limited
to, its United States AFFILIATE will comply with the terms, obligations and
conditions imposed on NOVARTIS under this Agreement as if they were signatories
to this Agreement and NOVARTIS assumes full liability for any breach of the
terms and conditions of this Agreement by an AFFILIATE of NOVARTIS.
SECTION 12.
GENERAL PROVISIONS
12.1. The relationship between NOVARTIS and LOXO is that of independent
contractors. NOVARTIS and LOXO are not joint venturers, partners, principal and
agent, master and servant, employer or employee, and have no relationship other
than as independent contracting parties. NOVARTIS shall have no power to bind or
obligate LOXO in any manner.
12.2. This Agreement, including the Appendices, set forth the entire
agreement and understanding between the PARTIES with respect to the subject
matter thereof and supersedes all prior agreements in this respect. There shall
be no amendments or modifications to this Agreement, except by a written
document which is signed by both parties.
12.3. This Agreement shall be construed and enforced in accordance with
the laws of New York without reference to its choice of law principles.
12.4. The headings in this Agreement have been inserted for the
convenience of reference only and are not intended to limit or expand on the
meaning of the language contained in the particular article or section.
12.5. Any delay in enforcing a PARTY's rights under this Agreement or
any waiver as to a particular default or other matter shall not constitute a
waiver of a PARTY's right to the future enforcement of its rights under this
Agreement, excepting only as to an expressed written and signed waiver as to a
particular matter for a particular period of time.
12.6. Notices. Any notices given pursuant to this Agreement shall be in
writing and shall be deemed received upon the earlier of (i) when received at
the address set forth below (including telefax or personal delivery), or (ii)
three (3) business days after mailed by certified or registered mail in the
United States or Swiss mails, postage prepaid and properly addressed, with
return receipt requested. Notices shall be delivered to the respective parties
as indicated:
To NOVARTIS: Xxxxxxxxxxxx 00
XX-0000
Xxxxx, Xxxxxxxxxxx
To LOXO: c/o Xx. Xxxxxxx Xxxxxxx
Xxxxx & Xxxxxx,
Xxxxxxxxxxxxxxxxx 0, 0000
Xxxxx, Xxxxxxxxxxx
12
12.7. If any provision(s) of this Agreement are or become invalid, are
ruled illegal by any court of competent jurisdiction or are deemed unenforceable
under then current applicable law from time to time in effect during the term
hereof, it is the intention of the PARTIES that the remainder of this Agreement
shall not be affected thereby provided that a PARTY's rights under this
Agreement are not materially affected. It is further the intention of the
parties that in lieu of each such provision which is invalid, illegal, or
unenforceable, there be substituted or added as part of this Agreement a
provision which shall be as similar as possible in economic and business
objectives as intended by the PARTIES to such invalid, illegal or unenforceable
provision, but shall be valid, legal and enforceable. In the event a party's
rights are materially affected as a result of a change in this Agreement under
this Section, such PARTY may terminate this Agreement.
12.8. The PARTIES agree throughout the duration of this Agreement to
notify each other immediately of any information concerning any serious or
unexpected side effect, injury, toxicity or sensitivity reaction or any
unexpected incidence and the severity thereof associated with the uses, studies,
field trials, investigations, tests and marketing of XENOGRAFT PRODUCT. The
PARTIES further agree to immediately notify each other of any information
received regarding any threatened or pending action which may affect the safety
or efficacy claims of XENOGRAFT PRODUCT or the continued marketing of XENOGRAFT
PRODUCT .
12.9. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
12.10. Each PARTY agrees to execute, acknowledge and deliver such
further instruments, and to do all such other acts, as may be necessary or
appropriate in order to carry out the purposes and intent of this Agreement.
12.11. Except as otherwise provided herein, neither PARTY shall have
any right, express or implied, to use in any manner the name or other
designation of the other PARTY or any other trade name or trademark of the other
PARTY for any purpose in connection with the performance of this Agreement.
12.12. LOXO agrees to comply with all applicable laws, rules and
regulations with respect to the import, export, manufacture, use and sale of
XENOGRAFT PRODUCT.
12.13. All the terms and provisions of this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the PARTIES hereto and their
respective permitted successors and assigns.
12.14. The descriptive headings of this Agreement are for convenience
only, and shall be of no force or effect in construing or interpreting any of
the provisions of this Agreement.
13
SECTION 13.
WARRANTIES
13.1. The PARTIES warrant and represent to each other that each has the
full right and authority to enter into this Agreement, that each is not aware of
any impediment which would inhibit its ability to perform the terms and
conditions imposed on it by this Agreement, and that there are no and will be no
outstanding agreements, licenses, assignments or encumbrances inconsistent with
the provisions of and the rights and licenses granted under this Agreement, or
which are inconsistent with or would prevent a PARTY from performing all of its
obligations under this Agreement.
13.2 NOVARTIS MAKES NO OTHER REPRESENTATION OR WARRANTY HEREUNDER AND
DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES, INCLUDING, BUT NOT LIMITED
TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR USE OR WITH RESPECT TO THE
VALIDITY, ENFORCEABILITY, OR PATENTABILITY OF NOVARTIS PATENTS OR THAT XENOGRAFT
PRODUCT WILL NOT INFRINGE PATENT RIGHTS OF A THIRD PARTY.
IN WITNESS WHEREOF, the parties intending to be bound have set their
hands and seals, effective as of the date first written above.
NOVARTIS PHARMA, A.G. LOXO AG
By: /s/ XXXXX XXXXXX By: /s/ XXXXXXX X. XXXXXXX
------------------------ -----------------------
Title: CEO Title: PRESIDENT
--------------------- --------------------
Date: SEPT. 25, 2000 - SEPT. 24, 2000 Date: SEPT. 25, 2000
------------------------------- --------------------
14
APPENDIX A
THIRD PARTY AGREEMENTS.
TITLE AND DATE OF AGREEMENT
15
APPENDIX B
ARBITRATION PROVISION
In the event the PARTIES are unable to reach agreement with respect to
any matter which is to be subject to arbitration in accordance with the License
Agreement, as applicable, such will be determined through binding arbitration in
Boston, Massachusetts in accordance with the Commercial Rules of Arbitration of
the American Arbitration Association.
The arbitration panel shall be comprised of three (3) arbitrators. Each
Party shall be entitled to appoint one arbitrator. The PARTIES shall appoint
their respective arbitrators within thirty (30) days after submission for
arbitration. If either PARTY shall fail to make timely appointment of its
arbitrator, the arbitration shall be heard and decided by the sole arbitrator
duly appointed by the other PARTY. Where both PARTIES have timely appointed
their respective arbitrators, the two arbitrators so appointed shall agree on
the appointment of the third arbitrator from the list of arbitrators maintained
by the American Arbitration Association. If the PARTIES' appointed arbitrators
shall fail to agree. within thirty (30) days from the date both PARTIES'
arbitrators have been appointed, on the identity of the third arbitrator, then
such arbitrator shall be appointed by the appropriate administrative body of the
American Arbitration Association.
Within ten (10) days of appointment of the full arbitration panel, the
PARTIES shall exchange their final proposed positions with respect to the
matters to be arbitrated, which shall approximate as closely as possible the
closest positions of the parties previously taken in the negotiations. Within
thirty (30) days of appointment of the arbitration Panel, each PARTY shall
submit to the arbitrators a copy of the proposed position which it previously
delivered to the other PARTY, together with a brief or other written memorandum
supporting the merits of its proposed position. The arbitration panel shall
promptly convene a hearing, at which time each PARTY shall have one (1) hour to
argue in support of its proposed position. The PARTIES will not call any
witnesses in support of their arguments.
The arbitration panel shall select either of the PARTY's proposed
position on the issue as the binding final decision to be embodied as an
agreement between the PARTIES. In making their selection, the arbitrators shall
not modify the terms or conditions of either PARTY's proposed position; nor will
the arbitrators combine provisions from both proposed position. In making their
selection, the arbitrators shall consider the terms and conditions of this
Agreement, the relative merits of the proposed position and the written and oral
arguments of the PARTIES. In the event the arbitrators seek the guidance of the
law of any jurisdiction, the law of the State of New York shall govern.
The arbitrators shall make their decision known to the PARTIES as
quickly as possible by delivering written notice of their decision to both
PARTIES. Such written notice need not justify their decision. The PARTIES will
execute any and all papers necessary to obligate the parties to the position
selected by the arbitration Panel within five (5) days of receipt of notice of
such selection. The decision of the arbitrators shall be final and binding on
the PARTIES, and specific performance may be ordered by any court of competent
jurisdiction.
16
The PARTIES will bear their own costs in preparing for the arbitration.
The costs of the arbitrators will be equally divided between the PARTIES.
Notwithstanding anything to the contrary, prior to initiating
arbitration, the issues shall be submitted to the Chief Executive Officer of
each of the PARTIES in an attempt to resolve the issues by good faith, mediation
or negotiations by such Chief Executive Officers. If the issues have not been
resolved within sixty (60) days after submission to the Chief Executive
Officers, then either PARTY may initiate arbitration as set forth herein.
17
EXHIBIT C
LOXO LICENSE AGREEMENT
1
LICENSE AGREEMENT
THIS AGREEMENT, effective as of the ___ day of _____________, 2000 (the
"EFFECTIVE DATE") between LOXO AG, a Swiss corporation having a place of
business at c/o Xx. Xxxxxxx Xxxxxxx, Xxxxx and Xxxxxx, Xxxxxxxxxxxxxxx 0, 0000,
Xxxxx Xxxxxxxxxxx ("LOXO"), and NOVARTIS PHARMA AG, a Swiss corporation having a
place of business at Xxxxxxxxxxxx 00, XX-0000 Xxxxx, Xxxxxxxxxxx ("NOVARTIS").
WHEREAS LOXO has certain rights to technology and patent rights in the
field of xenotransplantation and wishes to conduct, or have conducted, further
research in the field of xenotransplantation;
WHEREAS NOVARTIS desires to obtain licenses to such technology and
patent rights and to the results of such further research;
WHEREAS LOXO desires to license such rights and technology and the
results of such further research to NOVARTIS;
NOW THEREFORE, in consideration of the faithful performance of the
covenants herein contained, the parties hereto agree as follows:
SECTION 1.
DEFINITIONS
1.1. "AFFILIATE" with respect to a PARTY shall mean any corporation or
other entity which controls, is controlled by, or is under common control with
such PARTY. A corporation or other entity shall be regarded as in control of
another corporation or entity if it owns or directly or indirectly controls more
than fifty percent (50%) of the voting stock or other ownership interest of the
other corporation or entity, or if it possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of the
corporation or other entity or the power to elect or appoint fifty percent (50%)
or more of the members of the governing body of the corporation or other entity.
A corporation or entity which is under common control with LOXO as a result of a
common venture capital entity is not an AFFILIATE of LOXO. For the purposes of
this Agreement NOVARTIS is not an AFFILIATE of LOXO and BTI is not an AFFILIATE
of LOXO.
1.2. "AGREEMENT YEAR" shall mean the twelve-month period beginning on
January 1, 2001 and each subsequent twelve-month period thereafter.
1.3. "BTI" means Biotransplant, Incorporated, of 3rd Avenue, Building
75, Xxxxxxxxxxx Xxxx Xxxx, Xxxxxxxxxxx, XX 00000.
1.4. "BTI AGREEMENT" means the License Agreement between BTI and LOXO
effective as of _____.
2
Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
1.5. "EXCLUDED PRODUCT(S)" shall mean drugs or other therapeutic or
prophylactic active agents, including antibodies, other than those licensed to
LOXO under the BTI AGREEMENT and/or created by LOXO. For the avoidance of doubt,
EXCLUDED PRODUCTS do not include organs, cells or tissue..
1.6. "FIELD" shall mean human xenotransplantation.
1.7. "LO-CD-2A ANTIBODY TECHNOLOGY" shall mean the antibody known as
LO-CD-2A and/or fragments, derivatives or analogs thereof; and compounds and
materials whether or not antibodies which are based on such antibody, as well as
all information, data, technology and patent rights directed thereto, which
exists as of April 1, 1993 or which may exist after April 1, 1993 and which is
owned by or licensed to LOXO.
1.8. "MAJOR COUNTRY" means the United States of America, United
Kingdom, France, Italy, Germany, Japan and Canada.
1.9. "NET SALES" shall mean with respect to any ROYALTY BEARING PRODUCT
the invoiced sales price of such ROYALTY BEARING PRODUCT by LOXO, its AFFILIATES
or any of their licensees, distributors or co-marketers less (i) [**]; (ii) [**]
to the customer; (iii) [**] related to the [**]; (iv) [**] by [**] of [**] of
[**] and a [**]with respect to such ROYALTY BEARING PRODUCT; (v) [**] in
connection with the [**] of such ROYALTY BEARING PRODUCT, in final form to the
extent separately invoiced; (vi) [**] resulting from any [**], whether [**]; and
(vii) [**] to the [**].
In the event a sale is made between LOXO and its AFFILIATE or their
licensee distributor or co-marketer for resale, then NET SALES for determining a
payment under this Agreement shall be the [**] the AFFILIATE or licensee
distributor or co-marketer, as the case may be, calculated in the manner of NET
SALES [**] the AFFILIATE or licensee, distributor or co-marketer, as the case
may be.
1.10. "LOXO INFORMATION" means any and all data, information and
know-how that is useful in the FIELD that is (i) owned by LOXO as of the
EFFECTIVE DATE or thereafter and/or (ii) licensed to LOXO under a THIRD PARTY
AGREEMENT and/or the BTI AGREEMENT and/or the NOVARTIS AGREEMENT.
1.11. "LOXO MATERIAL" means any and all materials, substances,
compounds, animals, and biologics that is useful in the FIELD that is (i) owned
by LOXO as of the EFFECTIVE DATE or thereafter and/or (ii) licensed to LOXO
under a THIRD PARTY AGREEMENT and/or the BTI AGREEMENT and/or the NOVARTIS
AGREEMENT.
1.12. "LOXO PATENT(S)" means any and all patent applications or patents
(or equivalent thereof such as supplementary protection certificates or patent
extensions) in the TERRITORY that are (i) owned by LOXO as of the EFFECTIVE DATE
or thereafter and/or (ii) licensed to LOXO under a THIRD PARTY AGREEMENT and/or
the BTI AGREEMENT and/or the NOVARTIS AGREEMENT.
3
Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
1.13. "NOVARTIS AGREEMENT" means the License Agreement between NOVARTIS
and LOXO effective as of _____.
1.14. "PARTY(IES)" shall mean NOVARTIS and/or LOXO, as the case may be.
1.15. "PLAN" means the plan attached as Appendix A.
1.16. "ROYALTY BEARING PRODUCT" shall mean all XENOGRAFT PRODUCTS other
than an EXCLUDED PRODUCT(S).
1.17. "TERRITORY" shall mean all countries of the world.
1.18. "THIRD PARTY AGREEMENT(S)" means the agreements under which LOXO
has or obtains rights in the FIELD that are accepted in writing by NOVARTIS for
licensing to NOVARTIS under this Agreement. When accepted by NOVARTIS, an
Agreement shall be listed in Appendix B hereto.
1.19. "XENOGRAFT PRODUCT(S) " shall mean any product, process, article,
apparatus, substance, chemical, material, biological material, including organs,
cells and tissues, or service used prior to, during or after a human
xenotransplantation procedure.
1.20. "XENOGRAFT SYSTEM" means a combination of XENOGRAFT PRODUCTS
required for performance of a human xenograft procedure.
SECTION 2.
FUNDING
2.1. Subject to the termination provisions of Section 7.2(b), NOVARTIS
shall make the following payments to support LOXO research:
AGREEMENT YEAR PAYMENT
-------------- --------
1 $[**]
2 $[**]
3 $[**]
The payment in respect of the first AGREEMENT YEAR shall be due and
payable within five (5) days of the start of the first AGREEMENT YEAR. The
payments in respect of AGREEMENT YEARS 2 and 3 shall be due and payable by the
first day of the AGREEMENT YEAR in question.
2.2. The funds provided by NOVARTIS shall be used by LOXO as determined
by (the management committee or board of directors) of LOXO in accordance with
the general principles set forth in the PLAN.
4
2.3. By the end of the second AGREEMENT YEAR, NOVARTIS shall notify
LOXO as to whether or not NOVARTIS intends to provide funding to LOXO beyond the
THIRD AGREEMENT YEAR, and if NOVARTIS intends to provide additional funding,
LOXO and NOVARTIS shall promptly initiate good faith discussions with respect to
such funding.
2.4. Within sixty (60) days after the end of each AGREEMENT YEAR in
which NOVARTIS provides funding to LOXO under Section 2.1, LOXO shall provide
NOVARTIS with a financial report with respect to the use of such funds.
SECTION 3.
LICENSES AND RIGHTS AND COVENANTS
3.1. (a) LOXO grants to NOVARTIS a sole and exclusive royalty bearing
license in the TERRITORY under LOXO PATENTS, LOXO MATERIAL and LOXO INFORMATION
to make, have made, use, sell, offer to sell and import XENOGRAFT PRODUCT, in
each case only for use in the FIELD.
(b) The rights and licenses granted under Section 3.1(a) are
subject to the terms and conditions of the Mini-Swine Transfer and Maintenance
Agreement of January 1, 1998 with Xxxxxxx River Laboratories.
3.2. NOVARTIS agrees that NOVARTIS and its AFFILIATES and licensees
will use LOXO INFORMATION and LOXO MATERIAL only for development, making, using
and selling of XENOGRAFT PRODUCT as to which NOVARTIS retains a license under
this Agreement and only in those countries in which NOVARTIS retains a license
under this Agreement.
3.3. The PARTIES understand and agree that NOVARTIS has no rights in
and to LO-CD-2A ANTIBODY TECHNOLOGY except if sold in combination with a
XENOGRAFT PRODUCT which does not incorporate LO-CD-2A ANTIBODY TECHNOLOGY.
3.4. NOVARTIS shall have the right to grant sublicenses to a third
party under the license granted pursuant to Section 3.1 provided that: (i)
NOVARTIS shall guarantee and be responsible for the making of all payments due,
and the making of reports under this Agreement, with respect to sales of any
XENOGRAFT PRODUCT by its sublicensees and their compliance with all applicable
licensing terms of this Agreement to the extent that they are applicable to a
sublicensee; and (ii) each sublicensee agrees in writing to comply with Sections
5.3, 9 & 10 of this Agreement, with LOXO and BTI being made a third party
beneficiary thereof with the right of enforcement.
(b) Any sublicense granted by NOVARTIS to a third party shall include a
provision terminating the sublicense when the license to NOVARTIS hereunder
terminates.
3.5. (a) To the extent that NOVARTIS is granted rights and licenses
under a THIRD PARTY AGREEMENT, NOVARTIS acknowledges and agrees that such rights
and licenses are not greater than the rights and licenses that can be and have
been sublicensed thereunder and the rights and licenses thereunder are subject
to the terms, limitations and restrictions of such THIRD PARTY AGREEMENT.
5
(b) NOVARTIS agrees that NOVARTIS will comply with all of the
terms, obligations, limitations and restrictions of the THIRD PARTY AGREEMENTS
including but not limited to any confidentiality, insurance or indemnification
requirements under the THIRD PARTY AGREEMENTS and that NOVARTIS will not perform
any act (or fail to perform an act) that will cause BTI or LOXO to be in breach
of any THIRD PARTY AGREEMENT.
(c) NOVARTIS will cooperate with LOXO and BTI in furnishing
all data and information to enable LOXO and BTI to meet their reporting
obligations under THIRD PARTY AGREEMENTS.
(d) NOVARTIS will comply with the research, development and
commercialization obligations of the THIRD PARTY AGREEMENTS as they relate to
the FIELD.
3.6. LOXO shall provide to NOVARTIS, at no cost, all LOXO INFORMATION
licensed to NOVARTIS under this Agreement and reasonably required by NOVARTIS
for the development, manufacture, use or sale of a XENOGRAFT PRODUCT licensed to
NOVARTIS under this Agreement. If so requested by NOVARTIS and at the cost of
NOVARTIS, representatives of LOXO shall visit NOVARTIS or its AFFILIATES or
sublicensees in order to assist in the transfer and implementation of such LOXO
INFORMATION.
3.7. At the expense of NOVARTIS, LOXO shall provide to NOVARTIS or its
AFFILIATES or their sub-licensees as reasonably requested by NOVARTIS and to the
extent available to LOXO, any LOXO MATERIAL licensed to NOVARTIS under this
Agreement, as reasonably required by NOVARTIS for the development, manufacture,
use or sale of a XENOGRAFT PRODUCT licensed to NOVARTIS under this Agreement,
provided, however, that to the extent required by NOVARTIS for research with
respect to XENOGRAFT PRODUCT, and if used by LOXO with respect to research
performed by LOXO, LOXO shall provide LOXO MATERIAL other than swine to NOVARTIS
at no cost.
SECTION 4.
DEVELOPMENT EFFORTS
4.1. (a) After the end of the third AGREEMENT YEAR, NOVARTIS itself or
through its AFFILIATES or sublicensees, at its or their cost and expense will
use all reasonable efforts in each country of the TERRITORY (i) to complete as
expeditiously as possible and in good faith any necessary further research and
subsequent development of a XENOGRAFT SYSTEM as might be required to obtain a
saleable XENOGRAFT SYSTEM (ii) to obtain as expediently as possible the
regulatory approval which is required to market and sell a XENOGRAFT SYSTEM; and
(iii) to develop in good faith the market for a XENOGRAFT SYSTEM and (iv) to
market and to sell and to continue to market and sell in good faith a XENOGRAFT
SYSTEM. If desired by NOVARTIS and LOXO such research efforts may be met by
NOVARTIS funding research work at LOXO beyond the end of the third AGREEMENT
YEAR.
(b) In the event that at any time NOVARTIS does not have a
significant interest in developing, marketing and selling and/or in continuing,
developing, marketing and selling a XENOGRAFT SYSTEM in any nation(s) of the
TERRITORY, NOVARTIS shall promptly advise LOXO of such fact.
6
(c) After the third AGREEMENT YEAR, NOVARTIS shall provide
written reports to LOXO and BTI concerning the efforts being made in accordance
with this Section 4.1 and NOVARTIS shall provide LOXO and BTI with any
additional information reasonably requested by LOXO and BTI in this respect, all
to the extent not prohibited by confidentiality obligations to any third party.
(d) In the event that NOVARTIS fails to meet any of its
obligations under this Section 4.1 with respect to a XENOGRAFT SYSTEM in a MAJOR
COUNTRY, or NOVARTIS notifies LOXO that NOVARTIS does not have a significant
interest in continuing to develop a XENOGRAFT SYSTEM in a MAJOR COUNTRY, LOXO
shall have the right and option to terminate the rights and licenses granted to
NOVARTIS under this Agreement in such country(ies) by sixty (60) days' prior
written notice and such rights and licenses shall be terminated after such sixty
(60) days unless such failure is cured prior thereto or in the event such
failure cannot be cured within such sixty (60) day period, NOVARTIS has
initiated steps to cure such failure within such sixty (60) day period and in
good faith continues to work toward curing such failure as expeditiously as
possible and such failure is in fact cured within six (6) months after such
notice.
(e) In the event that (i) NOVARTIS fails to meet any of its
obligations under this Section 4.1 with respect to a XENOGRAFT SYSTEM in a MAJOR
COUNTRY, or (ii) its right are terminated in a MAJOR COUNTRY, or (iii) NOVARTIS
notifies LOXO that NOVARTIS does not have a significant interest in continuing
to develop a HUMAN XENOGRAFT SYSTEM in a country other than a MAJOR COUNTRY,
then LOXO shall also have the right and option to terminate the rights and
licenses granted to NOVARTIS under this Agreement in each country other than a
MAJOR COUNTRY for which NOVARTIS has not met its obligations under Section 4.1
by sixty (60) days' prior written notice and such rights and licenses shall be
terminated after such sixty (60) days unless such failure is cured prior thereto
or in the event such failure cannot be cured within such sixty (60) day period,
NOVARTIS has initiated steps to cure such failure within such sixty (60) day
period and in good faith continues to work toward curing such failure as
expeditiously as possible and such failure is in fact cured within six (6)
months after such notice.
(f) In the event NOVARTIS disagrees with a notice of termination for
failure to meet the obligations of NOVARTIS under Section 4, prior to the date
for such termination, NOVARTIS can submit to arbitration under Appendix C
whether or not NOVARTIS has met its obligations under Section 4. If arbitration
is requested, the rights and licenses of NOVARTIS shall terminate only if in
such arbitration there has been a determination that NOVARTIS has not met such
obligations. If NOVARTIS does not request arbitration as permitted by this
Section 4.1 then the noticed termination shall be conclusively and irrevocably
established as having been properly made and LOXO shall have no liability to
NOVARTIS for such termination.
7
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
SECTION 5.
ROYALTIES
5.1.(a) NOVARTIS shall pay a royalty on NET SALES of ROYALTY BEARING
PRODUCTS sold or distributed by NOVARTIS or its AFFILIATES or any of their
licensees, distributors, or co-marketers that is sufficient to pay LOXO's
royalty obligations to BTI and NOVARTIS, provided that the total royalty paid by
NOVARTIS to LOXO under this Section 5.1(a) and under Section 5.1(b) shall not
exceed [**] percent ([**]%) of such NET SALES of ROYALTY BEARING PRODUCT;
(b) To the extent that royalties and milestones are [**] with respect
to a XENOGRAFT PRODUCT [**] or any of [**]s, LOXO [**] such royalties and
milestones [**]. The payments required by the Section 4.1(b) shall be made [**]
prior to the date on which royalties and milestones are due [**] and shall be
[**] that will enable [**] obligations [**].
(c) NOVARTIS agrees that it will not artificially discount the price of
ROYALTY BEARING PRODUCTS for the purpose of promoting sales or increasing the
price of EXCLUDED PRODUCTS.
(d) In the event that ROYALTY BEARING PRODUCTS are sold in combination
with EXCLUDED PRODUCTS, for the purpose of calculating royalties due on ROYALTY
BEARING PRODUCTS, the PARTIES shall mutually agree to an allocation of the NET
SALES of the combination between ROYALTY BEARING PRODUCTS and EXCLUDED PRODUCTS.
If the PARTIES do not mutually agree, either PARTY may submit the issue to
binding arbitration in accordance with Appendix C.
5.2. NOVARTIS' obligation to pay royalties under Section 5.1 shall
continue on a country-for-country basis and ROYALTY BEARING PRODUCT by ROYALTY
BEARING PRODUCT basis beginning on the EFFECTIVE DATE of this Agreement and
ending ten (10) years after the first commercial sale of each ROYALTY BEARING
PRODUCT in a country when generally available in the country, provided, however,
that if the manufacture, use or sale of ROYALTY BEARING PRODUCT is covered by a
granted LOXO PATENT after the expiration of such period, then the obligation to
pay royalties thereon shall continue until such ROYALTY BEARING PRODUCT is no
longer covered by such granted LOXO PATENT.
5.3. NOVARTIS shall keep, and shall cause each of its AFFILIATES and
licensees distributors and co-marketers to keep, full and accurate books of
account containing all particulars that may be necessary for the purpose of
calculating all royalties payable to LOXO. Such books of account shall be kept
at their principal places of business and, with all necessary supporting data,
shall, during normal business hours be open for inspection by an independent
certified accountant reasonably acceptable to NOVARTIS upon reasonable notice
and no more than once a calendar year for the sole purpose of verifying and
auditing royalty statements or compliance with this Agreement. Such accountant
shall report to LOXO only as to the accuracy of the royalty calculation and as
to the amount of any under- or over-payment. LOXO shall be
8
responsible for the costs of any such verification and audit, except that
NOVARTIS shall be responsible for the costs of any such audit in the event that
as a result of such verification and/or audit royalties due and payable to LOXO
are determined in any calendar quarter to exceed by five percent (5%) those
actually paid by NOVARTIS. If the report indicates an underpayment, NOVARTIS
shall pay to LOXO the amount of such underpayment within thirty (30) days of
receiving notice thereof.
5.4. With quarterly payments, NOVARTIS shall deliver to LOXO a full and
accurate accounting to include at least the following information:
(a) Quantity of each ROYALTY BEARING PRODUCT subject to
royalty sold (by country) by NOVARTIS and its AFFILIATES and their licensees,
co-marketers and distributors:
(b) Total receipts for each ROYALTY BEARING PRODUCT subject to
royalty (by country);
(c) An accounting for amounts deductible, if any, against
total overall receipts in calculating total overall NET SALES; and
(d) Total royalties payable to LOXO.
NOVARTIS shall provide any other information reasonably requested by
LOXO to determine the calculation and amount of royalties.
5.5. In each year the amount of royalty due shall be calculated
quarterly as of March 31, June 30, September 30 and December 31 and shall be
paid quarterly within the thirty (30) days next following such date, every such
payment shall be supported by the accounting prescribed in Section 5.4 and shall
be made in Swiss Francs. Whenever for the purpose of calculating royalties
conversion from any foreign currency shall be required, all amounts will first
be calculated in the currency of sale and then converted into Swiss Francs using
as rates of exchange NOVARTIS exchange rates which are established by NOVARTIS
in the ordinary course of business monthly on the basis of an average of rates
during each month from external unaffiliated banks which will then, for those
royalties to be paid directly to BTI under paragraphs 5.1(b) above, be converted
into United States Dollars, using as the rate of exchange reported in the WALL
STREET JOURNAL, Eastern edition, on the last business day of the calendar
quarter to which the payment relates.
5.6. Any tax required to be withheld by NOVARTIS under the laws of any
foreign country for the account of LOXO, shall be promptly paid by NOVARTIS for
and on behalf of LOXO to the appropriate governmental authority, and NOVARTIS
shall furnish LOXO with proof of payment of such tax. Any such tax actually paid
on LOXO's behalf shall be deducted from royalty payments due LOXO.
5.7. In the event that NOVARTIS is prohibited in any country by
applicable law from paying royalties for any portion of the term required by
Section 5.2, then NOVARTIS shall not be obligated to pay such royalty for such
portion provided that the party receiving the royalty is notified in writing and
that NOVARTIS shall negotiate an amendment so that LOXO receives
9
essentially the same economic benefit as if the royalty was paid for the full
term. If the PARTIES do not reach agreement within ninety (90) days after such
notification, either PARTY may submit the issue to binding arbitration in
accordance with Appendix C.
SECTION 6.
PATENTS
6.1. LOXO shall own any inventions and patents based thereon made by
LOXO employees.
6.2. NOVARTIS shall own the inventions and patents based thereon made
by NOVARTIS employees.
6.3. LOXO and NOVARTIS shall jointly own any inventions and patents
based thereon jointly made by employee(s) of LOXO and employee(s) of NOVARTIS.
6.4 (a) LOXO or LOXO licensors, in the case of LOXO PATENTS licensed to
LOXO, shall file, prosecute and maintain LOXO PATENTS in the TERRITORY through
patent counsel selected by LOXO or its licensors, and LOXO shall consult with
and keep NOVARTIS advised with respect thereto. LOXO shall disclose to NOVARTIS
the complete texts of all such patents and patent applications filed by LOXO or
its licensor, as well as all information received concerning the institution or
possible institution of any interference, opposition, re-examination, reissue,
revocation, nullification or any official proceeding involving any patent
licensed herein anywhere in the TERRITORY. NOVARTIS shall have the right to
review such pending applications and other proceedings and make recommendations
to LOXO concerning them and their conduct.
In the event LOXO intends to finally abandon any LOXO Patents licensed to
NOVARTIS under this Agreement without refiling thereof, it shall notify NOVARTIS
and shall also notify NOVARTIS in the event that LOXO receives notice that any
of LOXO's licensors intends to finally abandon any LOXO PATENT without refiling
thereof. In the event NOVARTIS reasonably notifies LOXO that it disagrees with
the abandonment and LOXO still intends to abandon, NOVARTIS shall have the right
if it so wishes to have such LOXO PATENT assigned to it at NOVARTIS' expense.
Following such assignment, NOVARTIS shall have no further obligation to LOXO
under such LOXO PATENT.
6.5 NOVARTIS acknowledges that, beginning with the end of the third
AGREEMENT YEAR, LOXO is obligated to pay to BTI the cost and expense for filing,
prosecuting and maintaining patent applications and patents licensed to LOXO by
BTI to the extent that cost and expense is reasonably allocated to the Field
Novartis agrees to and hereby assumes LOXO's obligations to BTI in this respect
and agrees to pay directly to BTI such patent expenses to the extent that and
for as long as NOVARTIS maintains a license under this Agreement under the
patent rights involved..
6.6. In the event LOXO or BTI or NOVARTIS or any of their respective
licensors desire to file or obtain a supplementary protection certificate or
patent extension or the like with respect to a LOXO PATENT, LOXO and NOVARTIS
shall cooperate with each other with respect thereto including providing data
and information reasonably required for such filing.
10
SECTION 7.
TERM AND TERMINATION
7.1. Except as otherwise specifically provided herein and unless sooner
terminated pursuant to Section 7.2 or 7.4 of this Agreement, this Agreement
shall remain in full force and effect until NOVARTIS has fully paid the
royalties due hereunder for the full royalty term of Section 5.2. As of such
time that NOVARTIS has paid royalties for the full royalty term under Section
5.2 of this Agreement for a ROYALTY BEARING PRODUCT, NOVARTIS shall have a fully
paid up non-exclusive license for such ROYALTY BEARING PRODUCT.
7.2. (a) If either PARTY materially breaches this Agreement, the other
PARTY may terminate this Agreement by written notice to the breaching PARTY
specifying the breach and this Agreement shall be terminated thirty (30)
business days after such written notice if the material breach is a payment
breach, and sixty (60) business days thereafter for material breaches other than
a payment breach, unless prior to the expiration of such period such breach is
cured. In the event that a material breach other than a payment breach cannot be
cured within such sixty (60) day period and a PARTY has initiated steps to cure
such breach within such sixty (60) day period and notified the other PARTY in
writing thereof within such sixty (60) day period and in good faith continues to
work toward curing such breach as expeditiously as possible than this Agreement
shall not be terminated if such breach is in fact cured within six (6) months
after such notice.
(b) In the event that this Agreement is terminated by LOXO
under Section 7.2(a), the amounts which have not yet been paid by NOVARTIS under
Section 2.1 shall be immediately due and payable to LOXO, and the obligation to
make such payment shall survive termination of this Agreement.
7.3. Upon termination of this Agreement under Section 7.2 or 7.7 (other
than as a result of a breach of this Agreement by LOXO), or termination of the
rights and licenses of NOVARTIS in one or more countries under Section 4,
NOVARTIS shall promptly: (i) transfer free of charge, to LOXO or such other
entity as LOXO shall designate, any and all rights that NOVARTIS or its
AFFILIATES may have under any government registrations or authorizations,
including product registrations, with respect to XENOGRAFT PRODUCT other than
EXCLUDED PRODUCTS, and shall immediately cancel any such registrations or
authorizations, including product registrations, with respect thereto as may not
be transferable; (ii) provide to LOXO all data and other information in
NOVARTIS', or its AFFILIATES', possession or control relating to such product
registrations; and (iii) discontinue all distribution of XENOGRAFT PRODUCT other
than EXCLUDED PRODUCT and the use of the LOXO TECHNOLOGY and LOXO MATERIAL. All
rights of NOVARTIS granted hereunder shall revert to LOXO and the rights and
licenses granted to NOVARTIS shall terminate. In the event that rights are
terminated in only certain countries under Section 4.1, then this Section 7.3
shall only be applicable to such countries.
7.4 Either PARTY may terminate this Agreement, if, at any time, the
other PARTY becomes insolvent or the other PARTY shall file in any court or
agency pursuant to any statute or regulation of a country in the TERRITORY a
petition of bankruptcy or insolvency or for reorganization or for an arrangement
or for the appointment of a receiver of trustee of the other PARTY or of its
assets or if the other PARTY proposes a written agreement of composition or
11
extension of its debts or if the other PARTY shall be served with an involuntary
petition against it, filed in any insolvency proceeding, and such petition shall
not be dismissed within sixty (60) days after filing thereof, or if the other
PARTY shall make an assignment for the benefit of its creditors. Notwithstanding
the bankruptcy of LOXO or the impairment of performance of LOXO of its
obligations under this section, NOVARTIS shall be entitled to retain the
licenses granted herein, provided it continues to comply with its obligations to
LOXO hereunder.
7.5 Upon the termination of any rights granted hereunder, in whole or
in part in any country in the TERRITORY, for any reason other than a failure to
cure a material breach of this Agreement by NOVARTIS, NOVARTIS shall have the
right to dispose of all XENOGRAFT PRODUCT then on hand, and the royalties shall
be paid to LOXO with respect to such XENOGRAFT PRODUCT as though such rights had
not terminated.
7.6 (a) Termination, relinquishment or expiration of this Agreement for
any reason shall be without prejudice to any rights which shall have accrued to
the benefit of either PARTY prior to such termination, relinquishment or
expiration. Such termination, relinquishment or expiration shall not relieve
either PARTY from obligations which are expressly indicated to survive
termination or expiration of this Agreement.
(b) Termination, relinquishment or expiration of this
Agreement shall not terminate NOVARTIS' obligation to pay all royalties and
other payments that shall have accrued prior to such termination. All of the
PARTIES' rights and obligations under Sections 3.2, 3.4, 3.5(b), 5.3, 6.1, 6.2,
6.3, 7.1, 7.5, 9, 10, and 15,2 shall survive termination, relinquishment or
expiration hereof.
7.7 With earliest effect from the end of the third AGREEMENT YEAR,
NOVARTIS shall have the right to terminate this Agreement by thirty (30) days'
prior written notice.
7.8 This Agreement may not be terminated by either PARTY except as
specifically provided in this Section 7.
SECTION 8.
INFRINGEMENT
8.1. (a) If a third party makes, uses or sells a XENOGRAFT PRODUCT that
infringes any of the LOXO PATENTS under which NOVARTIS is licensed, NOVARTIS
shall have the right and option but not the obligation to bring an action for
infringement, at its sole expense, against such third party in the name of
NOVARTIS, and to join the owner of the LOXO PATENT as a party plaintiff if
required. NOVARTIS shall promptly notify LOXO of any such infringement and shall
keep LOXO informed as to the prosecution of any action for such infringement and
shall not institute any infringement action without providing LOXO with thirty
(30) days prior written notice. No settlement, consent judgment or other
voluntary final disposition of the suit may be entered into without the consent
of LOXO, which consent shall not unreasonably be withheld. The rights granted
under this Section are subject to the terms and conditions of the THIRD PARTY
AGREEMENTS and with respect, to LOXO PATENTS licensed under THIRD PARTY
AGREEMENTS , only as permitted thereunder.
12
Any recovery of damages by NOVARTIS for any such suit shall be applied first in
satisfaction of obligations under THIRD PARTY AGREEMENTS. The balance, if any,
remaining from any such recovery shall be retained by NOVARTIS and treated as
NET SALES upon which royalties are to be paid to LOXO.
8.2. In the event that NOVARTIS elects not to pursue an action for
infringement pursuant to Section 8.1, or does not do so within sixty (60) days
after written notice by LOXO that an unlicensed third party is an infringer of a
LOXO PATENT RIGHT licensed to NOVARTIS, LOXO or its licensor(s) shall have the
right and option, but not the obligation at its cost and expense to initiate
infringement litigation and to retain any recovered damages.
8.3. In any infringement suit either PARTY may institute to enforce the
LOXO PATENTS pursuant to this Agreement, the other PARTY hereto shall, at the
request of the PARTY initiating such suit, cooperate in all respects and, to the
extent possible, have its employees testify when requested and make available
relevant records, papers, information, samples, specimens, and the like. All
reasonable out-of-pocket costs of the other PARTY incurred in connection with
rendering such cooperation shall be paid by the requesting PARTY.
8.4 In the event of the institution of any suit by a third party
against NOVARTIS, its AFFILIATES or its licensees involving the manufacture,
use, sale, distribution or marketing of any XENOGRAFT PRODUCT other than an
EXCLUDED PRODUCT in the TERRITORY, NOVARTIS shall promptly notify LOXO in
writing of such suit. During the pendency of such action, all royalties due
hereunder shall continue to be paid by NOVARTIS. NOVARTIS shall have full
responsibility for the payment of any award for damages, or any amount due
pursuant to any settlement entered into by NOVARTIS with such third party.
SECTION 9.
INDEMNIFICATION
9.1. NOVARTIS shall defend, indemnify and hold harmless LOXO,
AFFILIATES of LOXO, licensors of LOXO, and their respective directors, officers,
shareholders, agents and employees (each of them and "Indemnified Party"), from
and against any and all liability, loss, damages and expenses (including
attorneys' fees) as the result of claims, demands, costs or judgments which may
be made or instituted against any Indemnified Party arising out of the
development, manufacture, possession, distribution, use, testing, sale or other
disposition of XENOGRAFT PRODUCT by or through NOVARTIS or its AFFILIATES or any
of their licensees, distributors, co-marketers and/or any person or entity that
prepares or manufactures XENOGRAFT PRODUCT for or on behalf of any of them
and/or any person or entity that receives or obtains (directly or indirectly)
XENOGRAFT PRODUCT from any of them. NOVARTIS' obligation to defend, indemnify
and hold harmless shall include claims, demands, costs or judgments, whether for
money damages or equitable relief by reason of alleged personal injury
(including death) to any person or alleged property damage, provided, however,
the indemnity shall not extend to any claims against an Indemnified Party which
result solely from the gross negligence or willful misconduct of such
Indemnified Party. NOVARTIS shall have the exclusive right to control the
defense of any action which is to be indemnified in whole by NOVARTIS hereunder
including the right to select counsel acceptable to the Indemnified Party
13
to defend the Indemnified Party, and to settle any claim, provided that, without
the written consent of the Indemnified Party (which shall not be unreasonably
withheld or delayed), NOVARTIS shall not agree to settle any claim against the
Indemnified Party to the extent such claim has a material adverse effect on the
Indemnified Party. The provisions of this paragraph shall survive and remain in
full force and effect after any termination, expiration or cancellation of this
Agreement and NOVARTIS' obligation hereunder shall apply whether or not such
claims are rightfully brought.
9.2. A person or entity that intends to claim indemnification under
this Article 9 (the "Indemnitee") shall promptly notify NOVARTIS (the
"Indemnitor") of any loss, claim, damage, liability or action in respect of
which the Indemnitee intends to claim such indemnification, and the Indemnitor,
shall assume the defense thereof with counsel mutually satisfactory to the
Indemnitor and the Indemnitee(s); provided, however, that an Indemnitee shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the Indemnitor if Indemnitor does not assume the defense; or, if
representation of such Indemnitee by the counsel retained by the Indemnitor
would be inappropriate due to actual or potential differing interests between
such Indemnitee and any other Indemnitee represented by such counsel in such
proceedings. The indemnity agreement in this Article 9 shall not apply to
amounts paid in settlement of any loss, claim, damage, liability or action if
such settlement is effected without the consent of the Indemnitor, which consent
shall not be withheld unreasonably. The failure to deliver notice to the
Indemnitor within a reasonable time after the commencement of any such action,
if prejudicial to its ability to defend such action, shall relieve such
Indemnitor of any liability to the Indemnitee under this Article 9, but the
omission so to deliver notice to the Indemnitor will not relieve it of any
liability that it may have to any Indemnitee otherwise than under this Article
9. The Indemnitee under this Article 9, its employees and agents, shall
cooperate fully with the Indemnitor and its legal representatives in the
investigations of any action, claim or liability covered by this
indemnification. In the event that an Indemnitee brings an action to cause
Indemnitor to meet Indemnitor's indemnification obligations, and Indemnitor is
finally held liable, the Indemnitor shall additionally be liable to pay the
reasonable legal costs and attorneys' fees incurred by the Indemnitee in
establishing its claim for indemnity.
SECTION 10.
CONFIDENTIALITY
10.1. (a) Disclosure or delivery of confidential and proprietary
information or material by any PARTY to the other PARTY may be made in writing,
or orally. Such confidential information or material provided by one PARTY to
the other PARTY will be safeguarded by the recipient and will not be disclosed
to third parties and will be made available only to the receiving PARTY's or its
AFFILIATES employees or agents (including attorneys) who need to know such
information or have such material for purposes permitted under this Agreement
and who have obligations of confidentiality and non-use similar to those of this
Agreement. Each PARTY shall hold as confidential such confidential information
and material in the same manner and with the same protection as such party
maintains for its own confidential information and materials and agrees to use
such confidential information and materials only for the purpose of this
Agreement and as permitted by this Agreement. A PARTY may disclose Confidential
Information of another to a third party for the purposes contemplated by this
Agreement,
14
provided that the third party agrees to maintain the confidentiality thereof in
a manner consistent with the confidentiality provisions of this Agreement.
(b) The mutual obligations of confidentiality under this Section will
not apply to any information to the extent that such information:
(i) is or hereafter becomes part of the public domain through
no action of the recipient of the information which constitutes a default under
this Agreement;
(ii) was already known to the recipient as evidenced by prior
written documents in its possession which were not furnished by the other party;
(iii) is disclosed to the recipient by a third party who is
not in default of any confidentiality obligation to the disclosing PARTY
hereunder;
(iv) is disclosed to obtain a regulatory approval for
XENOGRAFT PRODUCT in the TERRITORY, provided that the disclosing PARTY takes all
reasonable steps to restrict and maintain the confidentiality of the disclosure;
(v) is required by law or bona fide legal process to be
disclosed, provided that the disclosing PARTY takes all reasonable steps to
restrict and maintain confidentiality of such disclosure and provides reasonable
notice to the non-disclosing PARTY; or
(vi) is approved for release by the PARTIES.
10.2. (a) LOXO and NOVARTIS each agrees not to disclose any terms or
conditions of this Agreement to any third party without the prior consent of the
other PARTY, except as required by applicable law, rule or regulation; or in
connection with a financing or offering statement or memorandum, or to a
potential sublicensee, assignee or transferee of the business of a party to
which this Agreement relates; or to a licensor of a PARTY for the purpose of
granting a sublicense to the other PARTY. In the event of a disclosure required
under this Section, the disclosing PARTY shall nonetheless provide the
non-disclosing PARTY with notice of such disclosure prior to disclosure, and
will, to the extent reasonably possible, provide the non-disclosing PARTY with
an opportunity to correct same. A PARTY shall not be required to provide the
other PARTY with a disclosure which has been previously provided to a PARTY.
NOVARTIS and LOXO shall have the right to advise third parties as to
whether or not this Agreement covers any contemplated work or collaboration with
such third party.
(b) NOVARTIS agrees that BTI also has the right to disclose the terms
and conditions of this Agreement under the circumstances, terms and conditions
of Section 10.2(a).
10.3. NOVARTIS acknowledges that under this Agreement NOVARTIS will
receive materials and information that originates from BTI and licensors of BTI
and NOVARTIS agrees that the confidentiality obligations of this Section 10 are
also applicable to materials and information that originates from BTI and its
licensors.
15
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
10.4. NOVARTIS agrees that, with respect to any miniswine which are
provided to NOVARTIS by or on behalf of LOXO and/or BTI as well as all progeny,
modifications thereto, genetic variants thereof and [**] produced therefrom by
or on behalf of NOVARTIS and/or AFFILIATES of NOVARTIS and/or any of their
licensees shall be owned by BTI, and NOVARTIS shall not transfer same to a third
party without the consent of BTI and then only if such third party enters into a
separate agreement with BTI acknowledging BTI's rights therein, unless otherwise
agreed to by BTI. NOVARTIS further acknowledges and understands that all such
swine are subject to the terms, conditions and obligations of LOXO to Xxxxxxx
River Laboratories under the Mini-Swine Transfer and Maintenance Agreement of
January 1, 1998 with Xxxxxxx River Laboratories.
SECTION 11.
FORCE MAJEURE
11.1. 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 a payment provision) when such failure or delay is caused by or results
from causes beyond the reasonable control of the affected PARTY including but
not limited to fire, floods, embargoes, war, acts of war (whether war be
declared or not), insurrections, riots, civil commotions, strikes, lockouts or
other labor disturbances, acts of God or acts, omissions or delays in acting by
any governmental authority or the other party.
SECTION 12.
ASSIGNMENT AND NOVARTIS AFFILIATES
12.1. This Agreement may not be assigned or otherwise transferred by
either PARTY without the consent of the other PARTY; provided, however, that
either PARTY may, without such consent, assign this Agreement and its rights and
obligations hereunder to its AFFILIATES or in connection with the transfer or
sale of all or substantially all of its business to which this Agreement
relates, or in the event of its merger or consolidation or change in control or
similar transaction provided that the permitted assignee shall assume all
obligations of its assignor under this Agreement. A permitted assignment of this
Agreement by a PARTY shall relieve such PARTY from its obligations under this
Agreement except in the case of a merger or consolidation where the PARTY is not
the surviving entity. Any purported assignment in violation of the preceding
sentences shall be void.
12.2. NOVARTIS warrants that its AFFILIATES, including, but not limited
to, its United States AFFILIATE will comply with the terms, obligations and
conditions imposed on NOVARTIS under this Agreement as if they were signatories
to this Agreement and NOVARTIS assumes full liability for any breach of the
terms and conditions of this Agreement by an AFFILIATE of NOVARTIS.
16
SECTION 13.
GENERAL PROVISIONS
13.1. The relationship between LOXO and NOVARTIS is that of independent
contractors. LOXO and NOVARTIS are not joint venturers, partners, principal and
agent, master and servant, employer or employee, and have no relationship other
than as independent contracting parties. LOXO shall have no power to bind or
obligate NOVARTIS in any manner.
13.2. This Agreement, including the Appendices, set forth the entire
agreement and understanding between the PARTIES with respect to the subject
matter thereof and supersedes all prior agreements in this respect. There shall
be no amendments or modifications to this Agreement, except by a written
document which is signed by both parties.
13.3. This Agreement shall be construed and enforced in accordance with
the laws of New York without reference to its choice of law principles.
13.4. The headings in this Agreement have been inserted for the
convenience of reference only and are not intended to limit or expand on the
meaning of the language contained in the particular article or section.
13.5. Any delay in enforcing a PARTY's rights under this Agreement or
any waiver as to a particular default or other matter shall not constitute a
waiver of a PARTY's right to the future enforcement of its rights under this
Agreement, excepting only as to an expressed written and signed waiver as to a
particular matter for a particular period of time.
13.6. Notices. Any notices given pursuant to this Agreement shall be in
writing and shall be deemed received upon the earlier of (i) when received at
the address set forth below (including telefax or personal delivery), or (ii)
three (3) business days after mailed by certified or registered mail in the
United States or Swiss mails, postage prepaid and properly addressed, with
return receipt requested. Notices shall be delivered to the respective parties
as indicated:
To LOXO: c/o Xx. Xxxxxxx Xxxxxxx
Xxxxx and Xxxxxx
Aeschenvorstadt 4,4051
Basel, Switzerland
To NOVARTIS: Novartis Pharma Xx.
Xxxxxxxxxxxx 00
Xx-0000
Xxxxx, Xxxxxxxxxxx
Attn: Legal Department
Telecopy No. 00-00-000-0000
13.7. If any provision(s) of this Agreement are or become invalid, are
ruled illegal by any court of competent jurisdiction or are deemed unenforceable
under then current applicable law from time to time in effect during the term
hereof, it is the intention of the PARTIES that the remainder of this Agreement
shall not be affected thereby provided that a PARTY's rights under
17
this Agreement are not materially affected. It is further the intention of the
parties that in lieu of each such provision which is invalid, illegal, or
unenforceable, there be substituted or added as part of this Agreement a
provision which shall be as similar as possible in economic and business
objectives as intended by the PARTIES to such invalid, illegal or unenforceable
provision, but shall be valid, legal and enforceable. In the event a party's
rights are materially affected as a result of a change in this Agreement under
this Section, such PARTY may terminate this Agreement.
13.8. The PARTIES agree throughout the duration of this Agreement to
notify each other immediately of any information concerning any serious or
unexpected side effect, injury, toxicity or sensitivity reaction or any
unexpected incidence and the severity thereof associated with the uses, studies,
field trials, investigations, tests and marketing of XENOGRAFT PRODUCT. The
PARTIES further agree to immediately notify each other of any information
received regarding any threatened or pending action which may affect the safety
or efficacy claims of XENOGRAFT PRODUCT or the continued marketing of XENOGRAFT
PRODUCT.
13.9. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
13.10. Each PARTY agrees to execute, acknowledge and deliver such
further instruments, and to do all such other acts, as may be necessary or
appropriate in order to carry out the purposes and intent of this Agreement.
13.11. Except as otherwise provided herein, neither PARTY shall have
any right, express or implied, to use in any manner the name or other
designation of the other PARTY or any other trade name or trademark of the other
PARTY for any purpose in connection with the performance of this Agreement.
13.12. NOVARTIS agrees to comply with all applicable laws, rules and
regulations with respect to the import, export, manufacture, use and sale of
XENOGRAFT PRODUCT.
13.13. All the terms and provisions of this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the PARTIES hereto and their
respective permitted successors and assigns.
13.14. The descriptive headings of this Agreement are for convenience
only, and shall be of no force or effect in construing or interpreting any of
the provisions of this Agreement.
SECTION 14.
WARRANTIES
14.1. The PARTIES warrant and represent to each other that each has the
full right and authority to enter into this Agreement, that each is not aware of
any impediment which would inhibit its ability to perform the terms and
conditions imposed on it by this Agreement, and that there are no and will be no
outstanding agreements, licenses, assignments or encumbrances inconsistent with
the provisions of and the rights and licenses granted under this Agreement, or
which are inconsistent with or would prevent a PARTY from performing all of its
obligations under this Agreement.
18
14.2 LOXO MAKES NO OTHER REPRESENTATION OR WARRANTY HEREUNDER AND
DISCLAIMS ALL OTHER REPRESENTATIONS AND WARRANTIES, INCLUDING, BUT NOT LIMITED
TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR USE OR WITH RESPECT TO THE
VALIDITY, ENFORCEABILITY, OR PATENTABILITY OF LOXO PATENTS OR THAT XENOGRAFT
PRODUCT WILL NOT INFRINGE PATENT RIGHTS OF A THIRD PARTY.
SECTION 15.
THIRD PARTY BENEFICIARY
15.1. LOXO and NOVARTIS hereby agree that Sections 3.2, 3.3, 3.4, 3.5,
4.1, 5.1(b), 5.1(c), 5.2, 5.3, 5.4, 5.5, 6.5, 9.1, 9.2, 10.3, 10.4 and 12.2
shall not be amended or changed without the written consent of BTI.
15.2. BTI is made a third party beneficiary of Sections 3.2, 3.3, 3.4,
3.5, 4.1, 5.1(b), 5.1(c), 5.2, 5.3, 5.4, 5.5, 6.5, 9.1, 9.2, 10.3, 10.4, 12.2,
and 15.1 and BTI is expressly granted the right to enforce the obligations of
such sections and to xxx for damages for the breach thereof, in each case, to
the extent that such sections affect BTI or rights owned or licensed to BTI.
IN WITNESS WHEREOF, the parties intending to be bound have set their
hands and seals, effective as of the date first written above.
LOXO AG NOVARTIS PHARMA AG
By: /s/ XXXXXXX X. XXXXXXX By: /s/ XXXXX XXXXXX
--------------------------- ------------------------------------
TITLE: PRESIDENT Title: HEAD OF PATIENTS, PHARMA GENERICS
------------------------ ----------------------------------
Date: SEPTEMBER 25, 2000 Date: SEPTEMBER 25, 2000
------------------------- -----------------------------------
19
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
APPENDIX A
PLAN
o Application of selected best technologies [**] to obtain proof of principle of
xenograft tolerance.
o Improve safety profile of pig xenografts
00
XXXXXXXX X
THIRD PARTY AGREEMENTS
21
APPENDIX C
ARBITRATION PROVISION
In the event the PARTIES are unable to reach agreement with respect to
any matter which is to be subject to arbitration in accordance with the License
Agreement, as applicable, such will be determined through binding arbitration in
Boston, Massachusetts in accordance with the Commercial Rules of Arbitration of
the American Arbitration Association.
The arbitration panel shall be comprised of three (3) arbitrators. Each
PARTY shall be entitled to appoint one arbitrator. The PARTIES shall appoint
their respective arbitrators within thirty (30) days after submission for
arbitration. If either PARTY shall fail to make timely appointment of its
arbitrator, the arbitration shall be heard and decided by the sole arbitrator
duly appointed by the other PARTY. Where both PARTIES have timely appointed
their respective arbitrators, the two arbitrators so appointed shall agree on
the appointment of the third arbitrator from the list of arbitrators maintained
by the American Arbitration Association. If the PARTIES' appointed arbitrators
shall fail to agree. within thirty (30) days from the date both PARTIES'
arbitrators have been appointed, on the identity of the third arbitrator, then
such arbitrator shall be appointed by the appropriate administrative body of the
American Arbitration Association.
Within ten (10) days of appointment of the full arbitration panel, the
PARTIES shall exchange their final proposed positions with respect to the
matters to be arbitrated, which shall approximate as closely as possible the
closest positions of the parties previously taken in the negotiations. Within
thirty (30) days of appointment of the arbitration Panel, each PARTY shall
submit to the arbitrators a copy of the proposed position which it previously
delivered to the other PARTY, together with a brief or other written memorandum
supporting the merits of its proposed position. The arbitration panel shall
promptly convene a hearing, at which time each PARTY shall have one (1) hour to
argue in support of its proposed position. The PARTIES will not call any
witnesses in support of their arguments.
The arbitration panel shall select either of the PARTY's proposed
position on the issue as the binding final decision to be embodied as an
agreement between the PARTIES. In making their selection, the arbitrators shall
not modify the terms or conditions of either PARTY's proposed position; nor will
the arbitrators combine provisions from both proposed position. In making their
selection, the arbitrators shall consider the terms and conditions of this
Agreement, the relative merits of the proposed position and the written and oral
arguments of the PARTIES. In the event the arbitrators seek the guidance of the
law of any jurisdiction, the law of the State of New York shall govern.
The arbitrators shall make their decision known to the PARTIES as
quickly as possible by delivering written notice of their decision to both
PARTIES. Such written notice need not justify their decision. The PARTIES will
execute any and all papers necessary to obligate the parties to the position
selected by the arbitration Panel within five (5) days of receipt of notice of
such selection. The decision of the arbitrators shall be final and binding on
the PARTIES, and specific performance may be ordered by any court of competent
jurisdiction.
22
The PARTIES will bear their own costs in preparing for the arbitration.
The costs of the arbitrators will be equally divided between the PARTIES.
Notwithstanding anything to the contrary, prior to initiating
arbitration, the issues shall be submitted to the Chief Executive Officer of
each of the PARTIES in an attempt to resolve the issues by good faith, mediation
or negotiations by such Chief Executive Officers. If the issues have not been
resolved within sixty (60) days after submission to the Chief Executive
Officers, then either PARTY may initiate arbitration as set forth herein.
23
APPENDIX D
ARBITRATION PROVISION
In the event the Parties are unable to reach agreement with respect to
any matter which is to be subject to arbitration in accordance with the
Shareholders Agreement, as applicable, such will be determined through binding
arbitration in New York, New York in accordance with the Commercial Rules of
Arbitration of the American Arbitration Association.
The arbitration panel shall be comprised of three (3) arbitrators. Each
Party shall be entitled to appoint one arbitrator. The Parties shall appoint
their respective arbitrators within thirty (30) days after submission for
arbitration. If either Party shall fail to make timely appointment of its
arbitrator, the arbitration shall be heard and decided by the sole arbitrator
duly appointed by the other Party. Where both Parties have timely appointed
their respective arbitrators, the two arbitrators so appointed shall agree on
the appointment of the third arbitrator from the list of arbitrators maintained
by the American Arbitrator Association. If the Parties' appointed arbitrators
shall fail to agree, within thirty (30) days from the date both Parties'
arbitrators have been appointed, on the identity of the third arbitrator, then
such arbitrator shall be appointed by the appropriate administrative body of the
American Arbitration Association.
Within ten (10) days of appointment of the full arbitration panel, the
Parties shall exchange their final proposed positions with respect to the
matters to be arbitrated, which shall approximate as closely as possible the
closest positions of the parties previously taken in the negotiations. Within
thirty (30) days of appointment of the arbitration Panel, each Party shall
submit to the arbitrators a copy of the proposed position which it previously
delivered to the other Party, together with a brief or other written memorandum
supporting the merits of its proposed position. The arbitration panel shall
promptly convene a hearing, at which time each Party shall have one (1) hour to
argue in support of its proposed position. The Parties will not call any
witnesses in support of their arguments.
The arbitration panel shall select either the Party's proposed position
on the issue as the binding final decision to be embodied as an agreement
between the Parties. In making their selection, the arbitrators shall not modify
the terms or conditions of either Party's proposed position; nor will the
arbitrators combine provisions from both proposed position. In making their
selection, the arbitrators shall consider the terms and conditions of this
Agreement, the relative merits of the proposed position and the written and oral
arguments of the Parties. In the event the arbitrators seek the guidance of the
law of any jurisdiction, the law of the State of New York shall govern.
The arbitrators shall make their decision known to the Parties as
quickly as possible by delivering written notice of their decision to both
Parties. Such written notice need not justify their decision. The Parties will
execute any and all papers necessary to obligate the parties to the position
selected by the arbitration panel within five (5) days of receipt of notice of
such selection. The decision of the arbitrators shall be final and binding on
the Parties, and specific performance may be ordered by any court of competent
jurisdiction.
1
The Parties will bear their own costs in preparing for the arbitration.
The costs of the arbitrators will be equally divided between the Parties.
Notwithstanding anything to the contrary, prior to initiating
arbitration, the issues shall be submitted to the Chief Executive Officer of
each of the Parties in an attempt to resolve the issues by good faith, mediation
or negotiations by such Chief Executive Officers. If the issues have not been
resolved within sixty (60) days after submission to the Chief Executive
Officers, then either Party may initiate arbitration as set forth herein.
2
