THIS AGREEMENT CONTAINS CONFIDENTIAL TERMS WHICH HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
This Agreement is made the 14th day of April 1997
BY AND BETWEEN
DRUG DELIVERY SYSTEMS, INC.
A Corporation organized and existing under the laws of
the State of New York, having an office at 0000 Xxxxx
Xxxxx, Xxxxxxxxxxx, Xxxxxxx 00000,
Xxxxxx Xxxxxx of America
AND
IOMED, Inc.
A Corporation organized and existing under the laws of the
State of Utah, having an office at 3385 West 0000 Xxxxx
Xxxx Xxxx Xxxx, XX 00000,
Xxxxxx Xxxxxx of America
WHEREAS:
DDS is beneficially entitled to the use of various patents, including
the DDS IONTOPHORETIC PATENT RIGHTS, which have been granted or are pending
under the International Convention in relation to the development and production
of iontophoretic transdermal devices and drug specific dosage forms for
pharmaceutical devices, products and processes, and
IOMED is desirous of entering into a licensing agreement with DDS to
further develop, manufacture and have manufactured in accordance with the terms
of this Agreement and to market, sell and distribute the PRODUCTS in the
TERRITORY without infringing any of the DDS IONTOPHORETIC PATENT RIGHTS held by
DDS, and
DDS is prepared to license the DDS IONTOPHORETIC PATENT RIGHTS in the
TERRITORY to IOMED, and
NOW IT IS HEREBY AGREED AS FOLLOWS:
ARTICLE I. DEFINITIONS
1.1. In the present Agreement and any further agreements based thereon
between the Parties hereto, the following definitions shall prevail:
1. ADDITIONAL TERM shall have the meaning set forth in Article
VIII, Paragraph 2.
2. AFFILIATE shall mean any corporation or entity
controlling, controlled by or under the common
control of DDS or IOMED as the case may be. For the
purpose of this paragraph, "control" shall mean the
direct or indirect ownership of at least fifty
percent (50%) of the outstanding shares or other
voting rights of the subject entity to elect
directors, or if not meeting the preceding criterion
any entity owned or controlled by or owning or
controlling at the maximum control or ownership right
permitted in the country where such entity exists.
3. Agreement shall mean this agreement.
4. cGCP, cGLP and cGNO shall mean current Good Clinical
Practices, current Good Laboratory Practices and
current Good Manufacturing Practices respectively.
5. CONFIDENTLAL INFORMATION shall mean information,
material or data relating to the FIELD not generally
known to the public. CONFIDENTIAL INFORMATION in
tangible form disclosed hereunder shall be marked as
"Confidential" at the time it is delivered to the
receiving Party. CONFIDENTIAL INFORMATION disclosed
orally shall be identified as confidential or
proprietary when disclosed and such disclosure of
CONFIDENTIAL INFORMATION shall be confirmed in
writing within thirty (30) days by the disclosing
Party.
6. DDS shall mean Drug Delivery Systems, Inc. and any of
its AFFILIATES.
7. DDS IONTOPHORETIC PATENT RIGHTS shall mean all
granted patents and pending patent applications owned
by, or licensed by DDS, the current status of which
is set forth in Appendix C. DDS IONTOPHORETIC PATENT
RIGHTS shall also include all conditions,
continuations-in-part, divisionals, re-issues and
re-examinations of such patents and patent
applications and any patents issuing thereon and
extensions of any patents licensed hereunder and all
foreign counterparts thereto.
8 EFFECTIVE DATE shall mean the 14th day of April 1997.
9. ELAN shall mean Elan Corporation plc and any of its
AFFILIATES.
10. ELAN AGREEMENT shall mean the license agreement
entered into between IOMED and ELAN on the EFFECTIVE
DATE.
11. ELAN IONTOPHORETIC KNOW-HOW shall have the meaning as
defined in Article I of the ELAN AGREEMENT.
12. ELAN IONTOPHORETIC PATENT RIGHTS shall have the
meaning as defined in Article I of the ELAN
AGREEMENT.
13. FDA shall mean the United States Food and Drug
Administration or any other successor agency, whose
approval is necessary to market the PRODUCTS in the
United States of America and its foreign equivalents
in such other countries of the TERRITORY where IOMED
intends to obtain regulatory approval.
14. FIELD shall mean ****.
15. IOMED shall mean IOMED, Inc. and any of its
AFFILIATES, including DERMION Inc.
16. IOMED KNOW-HOW shall mean all scientific or technical
knowledge, information or expertise developed,
produced, created or acquired by or an behalf of
IOMED which is not generally known to the public, or
developed by or on behalf of IOMED during the term of
this Agreement, relating to the PRODUCTS, excluding
ELAN IONTOPHORETIC KNOW-HOW, whether or not covered
by any patent copyright, design, trademark or other
industrial or intellectual property rights.
17. IOMED PATENT RIGHTS shall mean all granted patents
and pending patent applications owned or licensed by
IOMED relating to the FIELD, excluding ELAN
IONTOPHORETIC PATENT RIGHTS and DDS IONTOPHORETIC
PATENT RIGHTS. IOMED PATENT RIGHTS shall also include
all continuations, continuations-in-part,
divisionals, re-issues and re-examinations of such
patents and patent applications and any patents
issuing thereon and extensions thereof and all
foreign counterparts thereto. IOMED PATENT RIGHTS
shall further include any patents or patent
application covering any improved methods of making
or using the PRODUCTS invented or acquired by IOMED
during the term of this Agreement.
18. IND shall mean one or more investigational new drug
applications filed by ELAN or to be filed by IOMED
with the FDA-
19. NET REVENUES shall mean:
19.1. ****:
19.1.1 ****, or
19.1.2. ****, or
19.1.3. ****; and
19.2. ****
19.2.1. ****;
19.2.2. ****;
19.2.3. ****;
19.2.4. ****; and
19.2.5. ****.
****.
****.
****.
****.
20. NDA shall mean one or more of the New Drug
Applications which IOMED shall file, including any
supplements or amendments thereto and 510(k)s which
IOMED may file, for the PRODUCTS with the FDA.
21. OFFERING PARTY shall mean ****.
22. Party shall mean IOMED or DDS, as the case may be.
"Parties" shall mean IOMED and DDS.
23. PRODUCT(S) shall mean all devices or any parts
thereof developed, manufactured or sold by or on
behalf of IOMED within the FIELD, ****.
24. TERM shall have the meaning set forth in Article VIII
Paragraph 1.
25. TERRITORY means ****.
26. $ shall mean United States Dollars.
1.2 In this Agreement
1.2.1 the singular includes the plural and vice versa, the
masculine includes the feminine and vice versa and
references to natural persons include corporate
bodies, partnerships and vice verse.
1.2.2 any reference to a Article or Appendix shall, unless
otherwise specifically provided, be to an Article or
Appendix of this Agreement.
1.2.3 the headings of this Agreement are for ease of
reference only and shall not affect its construction
or interpretation.
ARTICLE II. THE LICENSE
1.1. DDS shall remain Proprietor of all the DDS IONTOPHORETIC
PATENT RIGHTS but hereby grants to IOMED for the term of the
Agreement an exclusive (including as to DDS) license in the
TERRITORY, with the right to grant sublicenses pursuant to and
in accordance with the provisions of Article II Paragraph 2,
to research, develop, manufacture, have manufactured for IOMED
(or its permitted sublicensees), use, sell and otherwise
commercialize the DDS IONTOPHORETIC PATENT RIGHTS and the
PRODUCTS in the FIELD under the terms and conditions set out
herein.
1.2. ****.
2.1. IOMED may sublicense rights which incorporate the DDS
IONTOPHORETIC PATENT RIGHTS ****, without the prior written
consent of DDS .
2.2. Any sublicense other than permitted by Paragraph 2. 1. above,
****, shall require the prior written consent of DDS, which
may be withheld in the sole discretion of DDS.
2.3. NO sublicense granted by IOMED pursuant to Article II
Paragraph 2 shall authorize or permit the sublicensee to grant
further sublicenses ****, IOMED shall use its reasonable
endeavors to ensure that DDS shall have the same rights of
audit and inspection vis a vis the sublicensee as DDS has
pursuant to this Agreement concerning IOMED.
2.4. Insofar as the obligations owed by IOMED to DDS are concerned,
IOMED shall remain responsible for all acts and omissions of
any sublicensee as if such acts and omissions were by IOMED;
provided that no such acts or omissions of such sublicensee
will constitute a material breach by IOMED for the purposes of
Article VIII Paragraph 3. In the event that DDS terminates the
Agreement pursuant to the provisions of Article VIII Paragraph
3, due to the default of IOMED, then DDS shall, with IOMED's
consent and assistance, notify each sublicensee appointed
pursuant to Article II Paragraphs 2.1 and 2.2 of its
termination. If any sublicensee elects to notify DDS that it
requires the continuation of the licenses granted to IOMED
pursuant to this Agreement, DDS shall promptly enter into good
faith negotiations with such sublicensee to establish a direct
contractual nexus between DDS and such sublicensee. Such
contractual nexus shall subject to DDS's reasonable discretion
be on commercially reasonable terms and shall to the extent
practicable be on terms no less favorable to the to the
sublicensee than the terms of such sublicensees' agreement
with IOMED, and shall provide that the sublicensee shall take
over the applicable obligations owed by IOMED to DDS pursuant
to this Agreement. Sales of PRODUCTS and other consideration
payable to such a sublicensee in relation to the products
shall constitute NET REVENUES for the purpose of calculating
the sums payable by the sublicensee to DDS. ****.
3. It is contemplated that the furnishing of copies of relevant
patent documentation regarding the DDS IONTOPHORETIC PATENT
RIGHTS shall be completed within six months of the EFFECTIVE
DATE.
4. LEFT DELIBERATELY BLANK
5. IOMED shall xxxx or have marked the patent number on all
PRODUCTS, or otherwise reasonably communicate to the trade
concerning the existence of any DDS IONTOPHORETIC PATENT
RIGHTS for the countries within the TERRITORY in such a manner
as to ensure compliance with, and enforceability under,
applicable laws.
Performance by IOMED
6. IOMED shall use commercially reasonable efforts consistent
with its financial resources and capital constraints, to
research, develop, register, market and promote the PRODUCTS
and to exploit the DDS IONTOPHORETIC PATENT RIGHTS in the
major markets of the TERRITORY.
7. **** IOMED shall report on the ongoing sales performance of
the PRODUCTS, and the exploitation of the DDS IONTOPHORETIC
PATENT RIGHTS in the TERRITORY, ****. For the avoidance of
doubt, the Parties agree that all information furnished to DDS
pursuant to this Paragraph shall constitute CONFIDENTIAL
INFORMATION for the purpose of this Agreement.
8 LEFT DELIBERATELY BLANK
9. LEFT DELIBERATELY BLANK
10. LEFT DELIBERATELY BLANK
11. LEFT DELIBERATELY BLANK
12. LEFT DELIBERATELY BLANK
13. IOMED hereby confirms that it intends to manufacture or
procure the manufacture of the PRODUCTS in a manner which
fully complies with all applicable statutes, ordinances, and
regulations of the United States of America and other
countries with respect to the manufacture of the PRODUCTS
including, but not limited to, the U.S. Federal Food, Drug and
Cosmetic Act and regulations thereunder, cGLP, cGCP and cGMP.
ARTICLE III. DEVELOPMENT OF THE PRODUCT
1. IOMED shall be responsible for the cost of the further
development, registration, manufacture and marketing of the
PRODUCTS.
ARTICLE IV. FINANCIAL PROVISIONS
1. License Royalties
1. In consideration of the rights and license granted to
IOMED to the DDS IONTOPHORETIC PATENT RIGHTS by
virtue of this Agreement, IOMED shall pay to DDS, the
sum of **** United States Dollars **** in cash by
wire transfer due upon execution of this Agreement
and payable within two business days of the EFFECTIVE
DATE.
2. Royalty on NET REVENUES
2.1. In consideration of the license of the DDS
IONTOPHORETIC PATENT RIGHTS to IOMED, and subject to
the provisions of Article IV paragraphs 2.2. and 2.3,
the royalty payable by IOMED to DDS shall be ****
percent (****%) on NET REVENUES generated on or after
the EFFECTIVE DATE.
2.2. ****.
IOMED shall not be required to pay a royalty to DDS
in excess of one percent (1%) of NET REVENUES on
commercialization of the products listed in Appendix
D hereto which, the Parties acknowledge, are
presently-marketed products of IOMED. In the event of
any dispute relating to the foregoing provisions of
this Paragraph, the Parties shall cause such dispute
to be arbitrated before an experienced patent
attorney. In such event the procedure set forth in
Article VIII Paragraph 14 shall to the extent
practicable apply to the conduct of such arbitration.
2.3. LEFT DELIBERATELY BLANK
2.4. IOMED shall not discriminate in its commercialization
strategy and pricing policy as between the PRODUCTS
referred to in Article IV Paragraphs 2. 1. and 2.2.
2.5. ****.
Royalty Payments, Reports and Records
3.1. Within forty five (45) days of the end of each
quarter, IOMED shall notify DDS of the NET REVENUES
of- each of the PRODUCTS and arising from the
exploitation of the DDS IONTOPHORETIC PATENT RIGHTS
and/or the IOMED PATENT RIGHTS and/or the IOMED
KNOW-HOW, for that preceding quarter. Payments shown
by each calendar quarter report to have accrued shall
be due on the date such report is due. All payments
due hereunder shall be made to the designated bank
account of DDS in accordance with such timely written
instructions as DDS shall from time to time provide.
3.2. IOMED shall keep and shall cause its AFFILIATES and
sublicensees to keep true and accurate records of
sales of PRODUCTS, other transactions giving rise to
NET REVENUES, and the royalties payable to DDS under
Article IV hereof and shall deliver to DDS a written
statement thereof within forty five (45) days
following the end of each calendar quarter (or any
part thereof in the first or last calendar quarter of
this Agreement) for such calendar quarter.
Said written statements shall set forth (1) for each
PRODUCT ****, the calculation of NET REVENUES from
gross revenues during that calendar quarter, the
applicable percentage royalty rates, and a
computation of such royalties due and (II) such
details of the transactions arising from the
exploitation of the DDS IONTOPHORETIC PATENT RIGHTS
and/or the IOMED KNOW-HOW as are relevant to the
calculation of NET REVENUES (the "Royalty
Statement").
3.3 All payments due hereunder shall be made in United
States Dollars. Payments due on NET REVENUES received
in a currency other than United States Dollars shall
first be calculated in the foreign currency and then
converted to United States Dollars on the basis of
the average of the exchange rates in effect for the
purchase of United States Dollars with such foreign
currency quoted in the Wall Street Journal (or
comparable publication if not quoted in the Wall
Street Journal) with respect to the currency of the
country or origin of such payment for the last
business day of each mouth for which the payment is
being made.
3.4. DDS shall have the right to have access, on
reasonable notice, to IOMED's or IOMED's
sublicensees' financial documentation and records
during reasonable business hours for the purpose of
verifying the royalties payable as provided in this
Agreement for the two preceding years. This right may
not be exercised more than once in any calendar year,
and once a calendar year is audited it may not be
reaudited. For the avoidance of doubt, the Parties
agree that all information furnished to DDS pursuant
to this Paragraph shall constitute CONFIDENTIAL
INFORMATION for the purposes of this Agreement.
Any adjustment required by such inspection shall be
made within thirty (30) days of the agreement of the
Parties or, if not agreed, upon the determination of
an arbitrator to whom any dispute under this
Paragraph shall be submitted to arbitration pursuant
to Article IX Paragraph 14. If the adjustment payable
to DDS is greater than ****, then the cost to DDS for
the inspection and if applicable the arbitration
shall be paid by IOMED. In addition, IOMED shall pay
interest to DDS at **** (applicable as of the date on
which payment should have been made pursuant to
Article IV Paragraph 3.3.), from the date on which
payment should have been made pursuant to Article IV
Paragraph 3.3. until the date of payment.
ARTICLE V. REGISTRATION OF THE PRODUCTS
1. During the TERM and the ADDITIONAL TERM, IOMED shall be
responsible for filing and prosecuting all NDAs and other
applications for regulatory approvals. IOMED or its
sublicensees shall file the NDAs with the FDA and will use its
reasonable efforts in prosecuting said NDA to approval. IOMED
shall thereafter maintain at its own cost the NDAs with the
FDA for the term-of this Agreement. Subject to IOMED'S
reasonable discretion IOMED hereby agrees to provide to DDS at
DDS's own cost access to such NDAs as DDS reasonably requests.
****. For the avoidance of doubt, the Parties agree that all
information furnished to DDS pursuant to this Paragraph shall
constitute CONFIDENTIAL INFORMATION for the purposes of this
Agreement.
2. It is hereby acknowledged that there are inherent
uncertainties involved in the development and registration of
pharmaceutical products with the FDA or any other regulatory
body in the TERRITORY insofar as obtaining approval is
concerned and such uncertainties form part of the business
risk involved in undertaking the form of commercial
collaboration as set forth in this Agreement.
ARTICLE VI. REPRESENTATIONS, WARRANTIES
1. DDS represents to IOMED the following:
1. 1. DDS is duly and validly existing in good standing
in the jurisdiction of its incorporation and each
other jurisdiction in which the conduct of its
business requires such qualification, and is in
compliance with all applicable laws, rules,
regulations or orders relating to its business and
assets;
1.2. DDS has full corporate authority to execute and
deliver this Agreement and to consummate the
transactions contemplated hereby; this Agreement has
been duly executed and delivered by DDS and
constitutes the legal and valid obligations of DDS
and is enforceable against DDS in accordance with its
terms and the execution, delivery and performance of
this Agreement and the transactions contemplated
hereby and will not violate or result in a default
under or creation of lien or encumbrance under DDS's
certificate of incorporation, by-laws or other
organic documents, any material agreement or
instrument binding upon or affecting DDS or its
properties or assets or any applicable laws, rules,
regulations or orders affecting DDS or its properties
or assets;
1.3. DDS is not in material default of its charter or
by-laws, any applicable material laws or regulations
or any material contract or agreement binding upon or
affecting it or its properties or assets and the
execution, delivery and performance of this Agreement
and the transactions contemplated hereby will not
result in any such violation; and
1.4. ****.
2. IOMED represents to DDS the following:
2.1. IOMED is duly and validly existing in good standing
in the jurisdiction of its incorporation and each
other jurisdiction in which the conduct of its
business requires such qualification, and IOMED is in
compliance with all applicable laws, rules,
regulations or orders relating to its business and
assets;
2.2. IOMED has full corporate authority to execute and
deliver this Agreement and to consummate the
transactions contemplated hereby; this Agreement has
been duly executed and delivered and constitutes the
legal and valid obligations of IOMED and is
enforceable against IOMED in accordance with its
terms; and the execution, delivery and performance of
this Agreement and the transactions contemplated
hereby will not violate or result in a default under
or creation of lien or encumbrance under IOMED's
certificate of incorporation, by-laws or other
organic documents any material agreement or
instrument binding upon or affecting IOMED or its
properties or assets or any applicable laws, rules,
regulations or orders affecting IOMED or its
properties or assets;
2.3. IOMED is not in default of its charter or by-laws,
any applicable laws or regulations or any material
contract or agreement binding upon or affecting it or
its properties or assets and the execution, delivery
and performance of this letter agreement and the
transactions contemplated hereby will not result in
any such violation;
2.4. IOMED represents and warrants that it has not granted
any option, license, right or interest to any third
party which would conflict with the terms of this
Agreement.
2.5. ****.
ARTICLE VII. PATENTS
1. ****.
2. The Parties agree that the following provisions of Article VII
Paragraph 2, shall apply as regards the filing, prosecution
and maintenance of the DDS IONTOPHORETIC PATENT RIGHTS:
2.1. ****.
2.2. ****.
****.
2.3. ****.
2.4. ****.
3. ****.
4. ****.
ARTICLE VIII. TERM AND TERMINATION
1. This Agreement is concluded for a period commencing as of the
date of this Agreement and shall expire ****.
2. In addition, for a period of **** commencing upon the
expiration of the TERM ("the ADDITIONAL TERM"), the licenses
granted by DDS pursuant to Article II shall continue;
provided, that the royalties payable during the ADDITIONAL
TERM to DDS referred to in Article IV shall be ****.
3. In addition to the rights of early or premature termination
provided for elsewhere in this Agreement, in the event that
any of the terms or provisions hereof are incurably breached
by either Party, the non-breaching Party may immediately
terminate this Agreement by written notice. An incurable
breach shall be committed when either Party is dissolved,
liquidated, discontinued, becomes insolvent, or when any
proceeding is filed or commenced by either Party under
bankruptcy, insolvency or debtor relief laws (and not
dismissed within ninety (90) days). Subject to the other
provisions of this Agreement, in the event of any other
material breach, the non-breaching Party may terminate this
Agreement by the giving of written notice to the breaching
Party that this Agreement will terminate on the ninetieth
(90th) day from notice unless cure is sooner effected.
If the breaching Party has proposed a course of action to
rectify the breach and is acting in good faith to rectify same
but has not cured the breach by the ninetieth (90th) day, the
said period shall be extended by such period as is reasonably
necessary to permit the breach to be rectified. In the event
that a Party is entitled to terminate this Agreement, such
Party shall also be entitled to terminate the ELAN AGREEMENT.
Furthermore in the event that a Party is entitled to terminate
the ELAN AGREEMENT, such Party shall also be entitled to
terminate this Agreement. In the event that the breaching
Party disputes the validity of the right of the non-breaching
Party to terminate the Agreement pursuant to this Paragraph,
either Party may refer the dispute to an arbitrator pursuant
to the provisions of Article IX Paragraph 14. Pending the
determination of the arbitrator, neither Party may regard the
Agreement as having been terminated an in particular shall not
allege or claim to any third party that the Agreement has been
terminated pursuant to this Paragraph.
4. In the event that IOMED elects to proceed against DDS for
damages in circumstances where IOMED would have been entitled
to terminate the Agreement pursuant to Article IX Paragraph 3
and IOMED obtains a final order for damages from a court of
competent jurisdiction which is not subject of further appeal,
IOMED may offset the said order for damages against sums other
due to DDS pursuant to Article IV until recovery of the said
judgment.
5. Upon termination of the Agreement:
5.1. any sums that were due from IOMED to DDS prior to the
exercise of the right to terminate this Agreement,
shall be paid in full within sixty (60) days of
terminate of this Agreement.
5.2. all confidentiality provisions (other than the
obligations set out in Article IX Paragraph 1.1. as
they affect DDS in the event of termination of this
Agreement by DDS pursuant to Article VIII Paragraph 3
due to the breach by IOMED) set out in this Agreement
shall remain in full force and effect for a period of
****;
5.3. all responsibilities and warranties shall insofar are
appropriate remain in full force and effect;
5.4. the rights of inspection and audit shall continue in
force for the period referred to in the relevant
provisions of this Agreement;
5.5. termination of this Agreement for any reason shall
not release any Party hereto from any liability
which, at the time of such termination, has already
accrued to the other Party or which is attributable
to a period prior to such termination nor preclude
either Party from pursuing all rights and remedies it
may have hereunder or at law or in equity with
respect to any breach of this Agreement;
5.6. in the event of termination of this Agreement by DDS
or IOMED pursuant to Article VIII Paragraph 3. IOMED
and DDS shall promptly return to the other Party all
CONFIDENTIAL INFORMATION received from the other
Party (except one copy of which may be retained for
archival purposes);
5.7. in the event this Agreement is terminated by DDS or
IOMED pursuant to Article VIII Paragraph 3, IOMED and
its sublicensees shall have the right for a period of
**** from termination to sell or otherwise dispose of
the stock of any PRODUCTS then on hand, which such
sale shall be subject to Article IV and the other
applicable terms of this Agreement. The foregoing
provisions of this Paragraph shall be subject to the
provisions of such agreement or agreements as DDS and
one or more sublicensees conclude pursuant to Article
II Paragraph 2.4;
5.8 In the event this Agreement is terminated by DDS or
IOMED pursuant to Article VIII Paragraph 3, the
licenses granted by DDS to IOMED shall terminate and
DDS shall thenceforth be entitled to exploit the DDS
IONTOPHORETIC PATENT RIGHTS together with any
improvements made by IOMED to the DDS IONTOPHORETIC
PATENT RIGHTS; provided that the foregoing provision
shall be subject to the provisions of Article II
Paragraph 2.4 and any agreements entered into
pursuant to the said Paragraph; and
5.9. Article I, Article II Paragraph 2.4, Article VI,
Article VII Paragraph 1, Article VIII and Article IX
(other than Paragraph 3 thereof) shall survive the
termination or expiration of this Agreement for any
reason.
ARTICLE IX. SUNDRY CLAUSES
1. Secrecy
1.1. Each of the Parties agrees, during the TERM and the
ADDITIONAL TERM to hold in confidence and not
disclose to any third parties, including any of the
OFFERING PARTIES, except to the extent required by
applicable law or administrative or judicial process,
the DDS IONTOPHORETIC PATENT RIGHTS or the contents
or nature. thereof provided that the foregoing
covenant shall not be applicable to DDS in the event
that IOMED (i) abandons or (ii) ceases to develop or
commercialize (and provides notice thereof to DDS)
any such DDS IONTOPHORETIC PATENT RIGHTS and DDS
determines subsequently to develop products or
technologies based an such DDS IONTOPHORETIC PATENT
RIGHTS, irrespective of whether it is reduced to
patent. Each law may make such disclosure to its
directors, officers and agents and, in the case of
IOMED, its potential and actual sublicensees and
other parties to whom such disclosure is appropriate
to enable IOMED to conduct its regular business (each
of whom shall be bound by IOMED's customary
confidential disclosure agreements), who shall be
informed of such confidentiality obligation and for
whose breach the disclosing party shall be
responsible.
1.2. Subject to the provisions of Paragraph 1.1., any
information, whether written or oral (oral
information shall be reduced to writing within one
month by the Party giving the oral information and
the written form shall be furnished to the other
Party) pertaining to the DDS IONTOPHORETIC PATENT
RIGHTS or the PRODUCTS that has been or will be
communicated or delivered by DDS to IOMED, and any
information from time to time communicated or
delivered by IOMED to DDS, including, without
limitation, trade secrets, business methods, and
cost, supplier, manufacturing and customer
information, shall be treated by IOMED and DDS,
respectively, as CONFIDENTIAL INFORMATION, and shall
not be disclosed or revealed to any third party
whatsoever or used in any manner except as expressly
provided for herein; provided, however, that such
CONFIDENTIAL, INFORMATION shall not be subject to the
restrictions and prohibitions set forth in this
section to the extent that such CONFIDENTIAL
INFORMATION:
1.2.1. is available to the public in public
literature or otherwise, or after disclosure
by one Party to the other becomes public
knowledge through no default of the Party
receiving such information; or
1.2.2. was known to the Party receiving such
information prior to the receipt of such
information by such Party, whether received
before or after the date of this Agreement;
or
1.2.3. is obtained by the Party receiving such
information from a third party not subject
to a requirement of confidentiality with
respect to such information; or
1.2.4. is required to be disclosed pursuant to: (A)
any order of a court having jurisdiction and
power to order such information to be
released or made public; or (B) other
requirement of law, provided that if the
receiving Party becomes legally required to
disclose any CONFIDENTIAL INFORMATION, the
receiving Party shall give the disclosing
Party prompt notice of such fact so that the
disclosing Party may obtain a protective
order or other appropriate remedy concerning
any such disclosure. The receiving Party
shall fully cooperate with the disclosing
Party in connection with the disclosing
Party's efforts to obtain any such order or
other remedy. If any such order or other
remedy does not fully preclude disclosure,
the receiving Party shall make such
disclosure only to the extent that such
disclosure is legally required; or
1.2.5. is independently developed by or for the
Party by persons not having access to the
CONFIDENTIAL INFORMATION of the other Party.
1.3. Each Party shall take all such precautions as it
normally takes with its own CONFIDENTIAL INFORMATION
to prevent any improper disclosure of such
CONFIDENTIAL INFORMATION to any third party,
provided, however, that such CONFIDENTIAL INFORMATION
may be disclosed within the limits required to obtain
any authorization from the FDA or any other United
States of America or foreign governmental or
regulatory agency or, with the prior written consent
of the other Party, which shall not be unreasonably
withheld, or as may otherwise be required in
connection with the purposes of this Agreement.
1.4. IOMED agrees that it will not use, directly or
indirectly, any DDS IONTOPHORETIC PATENT RIGHTS, or
other CONFIDENTIAL INFORMATION disclosed to IOMED or
obtained from DDS pursuant to this Agreement, other
than as expressly provided herein. DDS agrees that it
will not use, directly or indirectly, any IOMED
KNOW-HOW, IOMED PATENT RIGHTS or other CONFIDENTIAL
INFORMATION disclosed to DDS or obtained from IOMED
pursuant to this Agreement, other than as expressly
provided herein.
1.5. IOMED and DDS will not publicize the existence of
this Agreement in any way without the prior written
consent of the other subject to the disclosure
requirements of applicable laws and regulations. In
the went that either Party wishes to make an
announcement concerning the Agreement, that Party
will seek the consent of the other Party, The terms
of any such announcement be agreed in good faith.
2. Assignments/Subcontracting
IOMED may not assign (other than by operation of law in the
event of an acquisition of IOMED. or a merger or similar
transaction subject to the provisions as set forth in Article
IX Paragraph 3) the rights licensed by DDS under Article II
without the prior written consent of DDS , which may be
withheld in DDS's sole discretion. DDS shall be entitled to
assign its rights and obligations to an AFFILIATE. DDS may not
assign to an unaffiliated third party (other than by operation
of law in the event of an acquisition of DDS, or a merger or
similar transaction) its rights under this Agreement without
the prior written consent of IOMED, which may be withheld in
IOMED's sole discretion.
3. Certain Changes of Control.
****.
****.
4. Parties bound
This Agreement shall be binding upon and enure for the benefit
of Parties hereto, their successors and permitted assigns.
5. Severability
If any provision in this Agreement is agreed by the Parties to
be, or is deemed to be, or becomes invalid, illegal, void or
unenforceable under any law that is applicable hereto, (i)
such provision will be deemed amended to conform to applicable
laws so as to be valid and enforceable or, if it cannot be so
amended without materially altering the intention of the
Parties, it will be deleted, with effect from the date of such
agreement or such earlier date as the Parties may agree, and
(ii) the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be impaired
or affected in any way.
6. Force Majeure
Neither Party to this Agreement shall be liable for delay in
the performance of any of its obligations hereunder if such
delay results from causes beyond its reasonable control,
including, without limitation, acts of God, fires, strikes,
acts of war, or intervention of a Government Authority, non
availability of raw materials, but any such delay or failure
shall be remedied by such Party as soon as practicable.
7. Relationship of the Parties
Nothing contained in this Agreement is intended or is to be
construed to constitute DDS and IOMED as partners or joint
venturers or either Party as an employee of the other. Neither
Party hereto shall have any express or implied right or
authority to assume or create any obligations on behalf of or
in the name of the other Party or to bind the other Party to
any contact, agreement or undertaking with any third party.
8. Amendments
No amendment, modification or addition hereto shall be
effective or binding an either Party unless set forth in
writing and executed by a duly authorized representative of
both Parties.
9. Waiver
No waiver of any right under this Agreement shall be deemed
effective unless contained in a written document signed by the
Party charged with such waiver, and no waiver of any breach or
failure to perform shall be deemed to be a waiver of any
future breach or failure to perform or of any other right
arising under this Agreement.
10. Headings
The section headings contained in this Agreement are included
for convenience only and form no part of the agreement between
the Parties. Save as otherwise provided herein, references to
articles, paragraphs, clauses and appendices are to those
contained in this Agreement.
11. No effect on other agreements
No provision of this Agreement shall be construed so as to
negate, modify or affect in any way the provisions of any
other agreement between the Parties unless specifically
referred to, and solely to the extent provided, in any such
other agreement.
12. Applicable Law
This Agreement (a) shall be governed by and construed in
accordance with the internal laws of the State of New York,
without regard to principles of conflicts of laws, and subject
to those provisions where the Parties have expressly earned to
submit a dispute to arbitration, each party consents to the
exclusive jurisdiction of any Federal or state court sitting
in the County, City and State of New York over any dispute
arising from this Agreement.
13. Notice
13.1. Any notice to be given under this Agreement shall be
sent in writing in English by registered airmail or
telefaxed to:
DDS at
Drug Delivery Systems, Inc.
0000 Xxxxx Xxxxx,
Xxxxxxxxxxx,
Xxxxxxx 00000
Xxxxxx Xxxxxx of America
Attention: President
Telephone: 000 000 0000
Telefax:000 000 0000
IOMED at
IOMED, Inc.
0000 Xxxx 0000 Xxxxx,
Xxxx Xxxx Xxxx, XX 00000,
Xxxxxx Xxxxxx of America
Attention: President and Chief
Executive Officer
Telephone: 000 000 0000
Telefax:000 000 0000
or to such other address(es) and telefax numbers as
may from time -to time be notified by either Party to
the other hereunder.
13.2. Any notice sent by mail shall be deemed to have been
delivered within seven (7) working days after
dispatch and any notice sent by telefax shall be
deemed to have been delivered within twenty four (24)
hours of the time of the dispatch. Notice of change
of address shall be effective upon receipt; provided
that such date of receipt must be a business day for
the Party to whom the notice is delivered.
14. Arbitration
Any dispute under this Agreement which is not settled by
mutual consent and which is the subject of an arbitration
clause shall be finally settled by binding arbitration,
conducted in accordance with the Commercial Arbitration Rules
of the American Arbitration Association by an arbitrator
appointed in accordance with said rules. The arbitration shall
be held in New York, New York and the arbitrator shall be to
the extent practicable experienced as to the subject matter of
the dispute such as an independent expert in pharmaceutical
product development and marketing (including clinical
development and regulatory affairs) or an independent patent
attorney as the case may be. The arbitrator shall determine
what discovery will be permitted, consistent with the goal of
limiting the cost and time which the Parties must expend for
discovery, provided the arbitrator shall permit such discovery
as he deems necessary to permit an equitable resolution of the
dispute. Any written evidence originally in a language other
than English shall be submitted in English translation
accompanied by the original or a true copy thereof. The costs
of the arbitration, including administrative and arbitrator's
fees, shall be shared equally by the Parties and each Party
shall bear its own costs and attorney's and witness' fees
incurred in connection with the arbitration; provided that the
prevailing party may be awarded the reasonable costs and fees
incurred in connection with the arbitration at the discretion
of the arbitrator. A disputed performance or suspended
performances pending the resolution of the arbitration must be
completed within thirty (30) days following the final decision
of the arbitrators or such other reasonable period as the
arbitrators determine in a written opinion. Any arbitration
subject to this Paragraph 14 shall be completed within one (1)
year from the filing of notice of a request for such
arbitration. The arbitration proceedings and the decision
shall not be made public without the joint consent of the
Parties and each Party shall maintain the confidentiality of
such proceedings and decision unless (a) otherwise permitted
by the other Party or (b) otherwise required by the applicable
law in which case the Provisions of Article IX Paragraph
1.2.4. shall be applicable. ****.
15. Withholding
Any income or other taxes which IOMED is required by law to
pay or withhold on behalf of DDS with respect to royalties and
any other moneys payable to DDS under this Agreement shall be
deducted from the amount of such royalties and moneys due.
IOMED shall furnish DDS with proof of such payments. Any such
tax required to be paid or withheld shall be an expense of and
borne solely by DDS. IOMED shall promptly provide DDS with a
certificate or other documentary evidence to enable DDS to
support a claim for a refund or a foreign tax credit with
respect to any such tax so withheld or deducted by IOMED. Both
Parties will reasonably cooperate in completing and filing
documents required under the provisions of any applicable tax
treaty or under any other applicable law, in order to enable
IOMED to make such payments to DDS without any deduction or
withholding.
16. Indemnity
16.1. DDS shall indemnify, defend and hold harmless IOMED
from all actions, losses, claims, demands, damages,
costs and liabilities (including reasonable
attorneys' fees) to which IOMED is or may become
subject insofar as they arise out of or are alleged
or claimed to arise out of any breach by DDS of any
of its obligations under this Agreement or warranties
of DDS.
16.2. ****.
16.3. ****:
16.3.1. ****;
16.3.2. ****;
16.3.3. ****;
16.3.4. ****;
and
16.3.5. ****.
16.4. Notwithstanding anything to the contrary in this
Agreement, DDS and IOMED shall not be liable to the
other by reason of any representation or warranty,
condition or other term or any duty of common law, or
under the express terms of this Agreement, for any
consequential or incidental loss or damage (whether
for loss of profit or otherwise) and whether
occasioned by the negligence of the respective
Parties, their employees or agents or otherwise.
17. Entire Agreement
17.1. This Agreement including its Appendices, together
with **** and the further documents referred to
therein, each of which are being executed of even
date herewith, set forth the entire agreement and
understanding of the Parties with respect to the
subject matter hereof, and supersedes all prior
discussions, agreements and writings in relating
thereto, including ****.
17.2. The Parties agree that the obligations of IOMED to
provide access to the NDAs pursuant to Article V
Paragraph 1 to DDS shall be discharged if such access
is provided to ELAN pursuant to the equivalent
provisions of the ELAN AGREEMENT.
17.3. The Parties agree that the obligations of IOMED to
furnish the documentation and information to DDS
pursuant to the provisions of Article II Paragraph 7,
shall be discharged by furnishing such documentation
to ELAN pursuant to the equivalent provisions of the
ELAN AGREEMENT.
17.4. The Parties agree that the obligations of IOMED to
obtain the prior written consent of IOMED pursuant to
Article II Paragraphs 2.1. or 2.2. shall be satisfied
by obtaining the consent of ELAN pursuant to the
equivalent provisions of the ELAN AGREEMENT.
17.5. The Parties agree that DDS's right of access and
audit in any particular calendar year pursuant to
Article IV Paragraph 3.4.shall be exhausted if such
rights are exercised by ELAN pursuant to the
equivalent provisions of the ELAN AGREEMENT; provided
that nothing in this Paragraph shall limit or
restrict DDS's rights to seek an adjustment to the
royalties payable, whether by agreement between the
Parties or pursuant to arbitration.
17.6. The Parties agree that the obligations of IOMED to
obtain the prior written consent of DDS pursuant to
Article IX Paragraph 3 shall be satisfied by
obtaining the consent of ELAN pursuant to the
equivalent provisions of the ELAN AGREEMENT. In
addition the Parties agree that the right of DDS to
exercise its rights to conduct appropriate due
diligence and to make an offer as envisaged by
Article IX Paragraph 3 shall be discharged by the
exercise of such rights by ELAN pursuant to the
equivalent provisions of the ELAN AGREEMENT. In the
event that an OFFERING PARTY consummates a Control
Transaction (as defined in Article IX Paragraph 3)
without the consent of the IOMED's Board of Directors
(as such Board is comprised at the time such
transaction is first publicly announced or commenced)
(including without limitation, in connection with a
tender offer or offers or proxy solicitation), and in
the event that ELAN determines at its sole discretion
that it shall not terminate the licenses granted by
ELAN pursuant to the ELAN AGREEMENT, DDS shall be
deemed to have elected not to have terminated the
licenses granted by DDS pursuant to this Agreement.
18. Counterparts
This Agreement may be executed in two counterparts, each of
which shall be deemed an original and which together shall
constitute one instrument.
IN WITNESS WHEREOF the Parties hereto have executed this Agreement in duplicate.
Signed by IOMED on _____ April, 1997.
By: /s/ Xxx X. Xxxxxxxxxxx
Name: Xxx X. Xxxxxxxxxxx
Title: President & CEO
Executed by DDS ______ April, 1997.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Director
