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LICENSE AGREEMENT
THIS license agreement (hereinafter "License") is made between THE DOW CHEMICAL
COMPANY (hereinafter "DOW"), a corporation duly formed and existing under the
laws of the State of Delaware, having a place of business at 0000 Xxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, Xxxxxx Xxxxxx of America, and Access Pharmaceuticals,
Inc. (hereinafter "API"), a corporation duly formed and existing under the laws
of the State of Delaware, having a place of business at 0000 Xxxxxxxx Xxxxxxx,
Xxxxx 000, Xxxxxx, XX 00000-0000;
WITNESSETH:
WHEREAS, DOW is engaged in certain research and development involving certain
chelating agents and complexes used for conjugation to bioactive moieties; and
WHEREAS, DOW has proprietary rights in technology relating to said agents,
including: patent rights, know-how, health registration files and drug master
files, and other industrial property rights; and
WHEREAS, API desires to undertake the further development and commercial
exploitation of said agents; and
WHEREAS, API possess certain intellectual properties which it desires to
possibly combine with the DOW agents; and
WHEREAS, API desires to obtain an exclusive, global license; and
WHEREAS, DOW is willing to grant said license to API; and
WHEREAS, DOW and API have signed a Letter of Intent, effective January 23, 1997,
which terms are included in and superseded by this License.
NOW, THEREFORE, DOW and API, in consideration of the mutual covenants contained
herein, the sufficiency thereof is accepted and acknowledged, agree as follows:
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ARTICLE 1 - DEFINITIONS
When used in this License, the following terms shall have the meanings set out
below, unless the context requires otherwise. The singular shall be
interpreted as including the plural and vice versa, unless the context clearly
indicates otherwise.
1.1 "AFFILIATE" means a corporation or any other entity that at any time during
the term of this License, directly or indirectly through one or more
intermediaries, is CONTROLLED by the designated Party, but only for so long as
the relationship exists. A corporation or other entity shall no longer be an
AFFILIATE when through loss, divestment, dilution or other reduction of a
Party's ownership, the Party losses CONTROL of such corporation or other
entity.
1.2 "AGENT" means DOW's chelation agents, including ligands, complexes and
bifunctional chelants, which must be electrostatically or covalently bound to a
POLYMER.
1.3 "APPROVAL" means final approval by a REGULATROY AUTHORITY in any country
where applicable in the TERRITORY, for commercial marketing of PRODUCT,
including for example approval of final labeling and price approval.
1.4 "CDA" means the confidential disclosure agreement, signed between the
Parties, effective May 21, 1996.
1.5 "CONFIDENTIAL INFORMATION" means any information of either Party regarding
TECHNOLOGY, PATENTS, any samples of AGENT or PRODUCT, financial terms of this
License, and business development plans for the PRODUCT, and does not include
information excluded under Article 7.2.
1.6 "CONTROL" or "CONTROLLED" shall mean, in the case of a corporation,
ownership or control, directly or indirectly, of more than fifty percent (50%)
of the shares of stock entitled to vote for the election of directors and, in
the case of an entity other than a corporation, ownership or control, directly
or
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1.7 indirectly, of more than 50% of the assets or the ability to direct the
management and affairs of such entity.
1.7 "DMF" means DOW's drug master file and supporting documentation for the
preparation of an AGENT on file at the FDA.
1.8 "DOE" means the United States Department of Energy and corresponding
agencies of other countries in the TERRITORY.
1.9 "EFFECTIVE DATE" means the date of the last signature of the Parties to
this License.
1.10 "FAIR MARKET VALUE" means the stock price calculated on the twenty day
trailing average closing price of the stock on the NASDAQ, NASD Bulletin Board,
or a US exchange where the stock is primarly traded.
1.11 "FDA" means the United States Food and Drug Administration or any
successor U.S. governmental agency performing similar functions.
1.12 "FIELD" means the use in humans of PRODUCT as magnetic resonance imaging
(MRI) contrast agents, radiopharmaceutical diagnostic agents and
radiopharmaceutical therapeutic agents; and expressly excludes any use
specifically and primarily intended:
(i) as a non-radiopharmaceutical diagnostic agent other than MRI;
(ii) as a non-radiopharmaceutical therapeutic agent, including as a
combination therapy; and
(iii) as a veterinary agent.
1.13 "GMPs" means the Good Manufacturing Practices as defined from time to
time in the United States Food, Drug and Cosmetics Act and related regulations
or any successor laws or regulations governing the manufacture of the PRODUCT
in the United States.
1.14 "IND" means an investigator's new drug application as filed with the FDA
for a PRODUCT in FILED.
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1.15 "JOINT PATENTS" means any patent filed for the FIELD where at least one
employee of both API (or its AFFILIATES) and DOW (or its AFFILATES) are named
as inventors.
1.16 "LETTER OF INTENT" means a letter signed by both Parties expressing their
intent for this License, effective January 23, 1997.
1.17 "MANUFACTURE" means TECHNOLOGY or PATENTS to make PRODUCT, AGENT as a
component for PRODUCT, or instructions for preparing PRODUCT for use in the
FIELD, which DOW owns as of the EFFECTIVE DATE or is otherwise lawfully in the
possession or control of DOW during the RESEARCH PERIOD, and which DOW has the
lawful right to disclose and license to unrelated third parties
1.18 "METAL ION" means*.
1.19 "NET SALES" shall mean the amount invoiced and actually received on sales
of PRODUCT by API, its AFFILIATES and its sublicensees to a THIRD PARTY, less
the following deductions to the extent included in the amounts invoiced:
(i) trade, cash or quantity discounts actually allowed, granted from the
invoiced amount and taken; and
(ii) amounts repaid or credited by reason of rejections, defects or returns or
because of retroactive price reductions or other similar explained
reasons; and
(iii) insurance, shipping and handling, if included in the amount invoiced,
pre-paid or actually allowed; and
(iv) rebates paid pursuant to government regulations; and
(v) taxes, governmental charges for export/import fees or radioactive waste
disposal fees by governmental authorities in the TERRITORY on the sales
of PRODUCT to said THIRD PARTY, if included in said invoiced amount or
actually paid, whether denominated as value added taxes, sales taxes, or
excise taxes, to the extent included in said invoiced amount or proof
receipt of payment.
* - Confidential portions have been omitted and are on file separately with
the Commission
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NET SALES shall not include sales between or among API and its AFFILIATES.
1.20 "NRC" means the United States Nuclear Regulatory Commission, and
corresponding agencies of any foreign government in the TERRITORY.
1.21 "PATENTS" means all patent applications and patents (US and foreign),
together with any continuations, divisions, reissues and extensions of the
foregoing which claims cover the MANUFACTURE, use or sale of AGENT or PRODUCT
in the FIELD in the TERRITORY which are owned, licensed or controlled by DOW
on the EFFECTIVE DATE or, if they are JOINT PATENTS between API and DOW, which
become owned, licensed or controlled by DOW during the life of this License.
The PATENTS existing which claims cover the FIELD in the TERRITORY for the
MANUFACTURE, use or sale of AGENT or PRODUCT on the EFFECTIVE DATE are listed
in Appendix A. Appendix A shall be amended from time to time, at API's
request, but no more frequently than once yearly, unless required to provide
information to compute the payments due under this License.
1.22 "POLYMER" means any dermatan sulfate, other carbohydrate or synthetic
polymer (meaning a linear main chain of polymer or block copolymer of molecular
weight range 10-40kD containing one or more of hydroxypropyl-methacrylate,
acrylate, amidoamine, orthoester, lactide-glycolide or ethylene glycol
monomers, but excluding dendrimers), except that the polymer must not itself
be available to the public or owned by other companies; unless API has patents
protecting the polymer or the polymer in conjunction with a metal ion, or has
rights from others to their patents protecting those polymers or the polymers
in conjunction with a metal ion.
1.23 "PRODUCT" means a conjugated system which has an AGENT, METAL ION and
POLYMER present and the AGENT is electrostatically or covalently bound to
POLYMER, in either the form of its conjugate or its finished dosage form.
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1.24 "RESEARCH PERIOD" means the time from the LETTER OF INTENT until March
31, 1998, which period may be extended under terms acceptable to the Parties;
during which time DOW performs research on AGENT and/or PRODUCT for API.
1.25 "REGULATORY AUTHORITY" means the agency corresponding to the FDA of each
country in the TERRITORY.
1.26 "TECHNOLOGY" means information, know-how, trade secrets, and data,
relating to PRODUCT or its MANUFACTURE or use in the FIELD which DOW owns as of
the EFFECTIVE DATE or is otherwise lawfully in the possession of DOW at any
time during the term of this License, and which DOW has the lawful right to
disclose and license to unrelated third parties. Such TECHNOLOGY expressly
excludes MANUFACTURE of AGENT.
1.27 "THIRD PARTY" means anyone, other than API, DOW and their AFFILIATES and
sublicensees. Thus THIRD PARTY includes, without limitation, physicians,
hospitals, clinics, hospice facilities, patients, distributors, and
radiopharmacies.
1.28 "TERRITORY" means the world.
ARTICLE 2 - GRANT OF LICENSE
2.1 Grant of License - DOW hereby grants to API, and API hereby accepts:
(a) an exclusive license to use the TECHNOLOGY to make, have made, use,
develop, modify, sell and have sold PRODUCT in the TERRITORY in the FIELD, and
an exclusive license under the PATENTS listed in Appendix A (as amended at the
annual revision), to make, have made, use, develop, sell and have sold PRODUCT
in the TERRITORY in the FIELD. This License shall be fully exclusive, to the
exclusion of DOW and its AFFILIATES; and
(b) a non-exclusive license to use the MANUFACTURE to make or have made AGENT
in the TERRITORY, but only for use in PRODUCT in the
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FIELD in the TERRITORY, but subject to Article 2.5, and only for so long
as this License is in effect.
2.2 Sublicensing - The exclusive license under Article 2.1(a) to API includes
the right to sublicense third parties, whether or not AFFILIATES of API,
including the right to enter into distributor contracts or co-development
agreements. API will make and will be responsible for all payments to DOW as a
result of all activities by such a sublicensee, AFFILIATE, distributor or co-
developer for sales of PRODUCT in the FIELD in the TERRITORY. API will also
use its commercially reasonable efforts to cause all sublicenses and AFFILIATES
to observe the covenants in this License (i.e., regarding confidentiality,
maintenance of records and reporting of NET SALES and royalty payments). If an
API sublicensee or AFFILIATE behaves in a manner outside the scope of the
License, then API and DOW shall discuss the best approach to settle these
issues using their commercially reasonable efforts. All such sublicenses
shall be in writing.
2.3 Reservations - DOW reserves the following rights.
2.3.1 DOW reserves the right to make, have made, and use AGENT or PRODUCT in
the FIELD in the TERRITORY for the purposes of:
(i) research requested by API during the RESEARCH TERM; and
(ii) basic research and development of AGENT; and
(iii) supply to API under such supply agreements as may be agreed upon in
writing between the Parties; and
(iv) publication of data on AGENT, after filing any appropriate patents,
including MANUFACTURE.
2.3.2 DOW reserves the right for DOW to proceed, solely at its option and
expense, to research, develop, make, have made, use, sell ,have sold and
license, in the TERRITORY outside the FIELD:
(i) AGENT; and
(ii) complexes of AGENT with any metal, including METAL ION.
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2.4 Right of First Refusal to API - A right of first refusal is hereby
granted to API for: (a) any reserved DOW technology or patents under Article
2.3.1(ii) which could be used in a PRODUCT, or (b) a metal ion, other than
METAL ION, for use with an AGENT and a POLYMER in the FIELD, or (c) a
polymer available to the public for use with an AGENT and metal ion. No
rights are hereby conveyed to API for any DOW technology or patents
reserved in Article 2.3.2 or not otherwise explicitly granted
herein, nor are any uses for PRODUCT or AGENT granted which are
outside the FIELD. API must make a written request for specific rights it
desires to exercise to DOW within five (5) years from the EFFECTIVE DATE and
DOW must have legally available such rights available to grant.
2.5 Supply of AGENT by DOW
2.5.1 DOW right of First Refusal - DOW is hereby granted a right of first
refusal to make commercial quantities of AGENT for API. If a contract
manufacturing partner is desired by API for PRODUCT, then API shall contact DOW
to determine if DOW would be willing to make PRODUCT for API. API must notify
DOW in writing of API's desire to have an AGENT or PRODUCT MANUFACTURED and
provide the customary commercial information (e.g., quantity, quality, identity
of AGENT or PRODUCT, market projections for amount) for DOW to determine
whether such MANUFACTURE of AGENT or PRODUCT is desired by DOW. DOW shall
notify API within ninety (90) days whether DOW
is interested in supplying such AGENT. DOW and API may enter
into a separate commercial supply agreement under which DOW
will supply API's requirements of AGENT or PRODUCT on mutually agreed terms and
conditions. This Article 2.5 shall not imply an obligation on either Party to
enter into a commercial supply agreement.
2.5.2 API MANUFACTURE - If DOW fails to exercise its rights under Article 2.5.1
and API desires to subcontract the MANUFACTURE for AGENT or PRODUCT in accord
with its grant under Article 2.1(b), then API may proceed to permit such
MANUFACTURE but must notify DOW it is subcontracting such MANUFACTURE, the
party's identity, and continue to pay DOW any amounts otherwise due according to
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Article 6. A separate agreement for licensing that subcontractor under any DOW
patents shall be negotiated in good faith between all three parties with
payment to DOW in accord with Article 6. Should this License be terminated,
API shall immediately terminate their subcontractor(s) hereunder. API shall
cooperate with DOW to assist in any action to cause the subcontractor(s) to
cease any infringement of MANUFACTURE, PATENTS, PRODUCT or AGENT.
API shall make and use any AGENT for the FIELD under this License in accord
with the quality specifications and formulations, if any are supplied by DOW
or its designee.
If API's subcontractor is also their sublicensee for the TERRITORY, then the
sublicense agreement must also be terminated by API.
ARTICLE 3 - TECHNOLOGY TRANSFER AND RESEARCH
3.1 Initial TECHNOLOGY Transfer - Part of the TECHNOLOGY has been transferred
to API regarding AGENT in FIELD under the CDA or confidentiality provisions in
the LETTER OF INTENT, (copy of each provided as Appendix B) which shall be
superseded by this License as of its EFFECTIVE DATE. All TECHNOLOGY heretofore
disclosed by either Party regarding AGENT, METAL ION or PRODUCT (regardless of
field of use) shall be deemed to have been disclosed pursuant to this License
and shall be subject to the provisions of this License (including, but not
limited to, Article 7 hereof). TECHNOLOGY transfer may be carried out by oral,
written or electronic means. It is contemplated that TECHNOLOGY on AGENT and
PRODUCT in the FIELD existing on the EFFECTIVE DATE or generated during the
course of TECHNOLOGY transfer hereunder will have been completely transferred
within the RESEARCH PERIOD.
3.1.1 The Parties may arrange for meetings of their research and development
personnel from time to time during the RESEARCH PERIOD to facilitate the
transfer regarding PRODUCT, AGENT and
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TECHNOLOGY. If API desires that any sublicensee participate or receive
TECHNOLOGY, API shall be responsible for any required governmental export
license.
3.1.2 The Parties may arrange for meetings of their respective legal personnel
regarding the PATENTS listed in Appendix A and/or any agreements required to be
licensed or obtained for PRODUCT or AGENT during the RESEARCH PERIOD.
3.2 Research Plan
DOW shall make good faith efforts to carry out the research requested by API
within the RESEARCH PERIOD in accordance with the Research Plan attached hereto
as Appendix D. This Research Plan may be modified by mutual, written consent
by both Parties.
3.3 Research Costs - DOW agrees to develop technology concerned for AGENT
and/or PRODUCT under this License during the RESEARCH PERIOD. API agrees to
pay DOW * for this research for the RESEARCH PERIOD as follows:
* * of API common stock paid within ten (10) days of the
EFFECTIVE DATE in fully registerable common stock with the number of shares
owned computed as one (1) share equals * and providing that at *
after the EFFECTIVE DATE the FAIR MARKET VALUE of the stock is at least *
per share calculated on the twenty day trailing average the closing price of
the stock on the NASDAQ, NASD Bulletin Board, or a US exchange where the stock
is primarily traded just prior to that * , then the number of
shares owed DOW has been paid in full for this Article 3.3. However, if at
* after the EFFECTIVE DATE the FAIR MARKET VALUE of the API stock is
less than * per share, then the number of shares owed DOW will be adjusted
to a FAIR MARKET VALUE of * by the issuance of
additional API registerable common stock up to a maximum of *
additional shares to pay DOW in full under
* - Confidential portions have been omitted and are on file separately with
the Commission
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Article 3.3. All of these API common stock prices and share amounts are prior
to any splits, reverse splits, stock dividends and recapitalizations. Such
stock shall be registerable on demand by DOW with piggy back registration
rights with all costs for such registration paid by API, in a manner similar
to Article 6.1. * .
* ten days after the EFFECTIVE DATE, on July
1, and on October 1, 1997, in cash, by wire transfer to:
*
*
*
*
*
*
*
If the Parties desire to extend the RESEARCH PERIOD for another year, they may
do so by mutual written consent and it shall be provided in the License.
3.4 Adverse Drug Experience Reporting -
3.4.1 During the RESEARCH PERIOD each Party agrees to report to the other
Party, according to Article 16.1, any serious adverse reactions or any side
effects which occur or other adverse events with PRODUCT as promptly as
possible. Any such reactions or side effects must be reported (in full detail
if requested) irrespective of whether there is a causal connection with the
PRODUCT being administered or whether the causal connection is unclear or
presumed to be not likely. Reports shall be in English or accompanied by an
English translation.
For purposes of this reporting covenant, a serious adverse event is a reaction
which meets one or more of the following criteria:
* - Confidential portions have been omitted and are on file separately with
the Commission
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* a reaction which is life threatening or fatal;
* a reaction which resulted in hospitalization, or if the patient was already
hospitalized, a reaction which prolonged hospitalization;
* a reaction which resulted in severe or permanent disability;
* a reaction which involved congenital anomaly or overdose, or cancer which was
not already present at the beginning of treatment with PRODUCT; or
* a reaction which is considered to be important, significant or otherwise
medically serious.
3.4.2 The Parties also agree to report to each other in writing on a mutually
agreed periodic basis during the RESEARCH PERIOD for PRODUCT any and all other
adverse reactions or side effects (in full detail if requested) regardless of
seriousness or frequency of occurrence and irrespective of whether there is a
causal connection with the PRODUCT being administered or whether the causal
connection is unclear or presumed to be not likely.
3.4.3 After the RESEARCH PERIOD and during the life of this License, API
shall make all reports required under Article 3.4.1 to the appropriate
REGULATORY AUTHORITIES in the TERRITORY.
3.5 Restricted Information - Neither Party shall be obligated to disclose to
the other any information that it is contractually or legally prohibited from
disclosing to the other. In the event such a restriction applies, the affected
Party will notify the other Party, and the Parties will use their good faith
efforts, including obtaining necessary consents or permits, to accomplish
disclosure of such information by consent or lawful means.
3.6 DOW's Assistance to API - After submission of an NDA file to any REGULARORY
AUTHORITY in the TERRITORY, API may ask for DOW's expertise to answer questions
from the REGULATORY AUTHORITY, even after the end of the RESEARCH PERIOD. If
reasonably possible, DOW shall provide such reasonable assistance, at the
expense of API.
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3.7 Future Research - Upon the EFFECTIVE DATE, API agrees that any research
conducted by DOW on AGENT or PRODUCT at API's request during the RESEARCH
PERIOD shall be paid by API. Any research conducted by DOW on AGENT or
PRODUCT after the RESEARCH PERIOD shall be in accord with Article 2.3. Any
resulting patents shall be treated in accord with Article 5.1.
3.8 Contact Persons - No later than thirty (30) days following the EFFECTIVE
DATE, API and DOW will each advise the other in accord with Article 16.2 of
their associates responsible for handling the research in as smooth and
efficient a manner as possible. It is understood and acceptable that the
scientific personnel of API and DOW began such interaction as of the LETTER OF
INTENT. The terms of this License shall control those activities as well as
all activities under this License until its termination, unless specified
otherwise in this License.
ARTICLE 4 - API DEVELOPMENT AND DILIGENCE
4.1 Development and Marketing Efforts for PRODUCT - API shall use
commercially reasonable efforts to carry out remaining developmental
work on PRODUCT as it believes necessary and to file applications
with the REGULATORY AUTHORITIES as API deems necessary. For
purposes of this License, "commercially reasonable
efforts" shall mean efforts reasonably consistent with those efforts used by
API with regard to its developmental work and commercial activities for its
own products deemed to have similar commercial potential, consistent with its
business, research and development practices, and applicable legal and
regulatory requirements. For API to have been deemed by DOW to have used their
commercially reasonable efforts, DOW expects that in the TERRITORY API should:
4.1.1 Provide DOW with significant development information for the
commercialization of at least one PRODUCT within eighteen (18) months from the
EFFECTIVE DATE;
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4.1.2 Provide a marketing plan to DOW for the selected PRODUCT within three
(3) years from the EFFECTIVE DATE;
4.1.3 Assume all liability (indemnification) for any Clinical Trials on
PRODUCT in the TERRITORY which are done under API's direction after the
EFFECTIVE DATE and begin clinical trials on at least one PRODUCT within three
(3) years from the EFFECTIVE DATE;
4.1.4 File an NDA with a REGULATORY AUTHORITY as promptly as possible, no
later than one (1) year after completion of the clinical trials relating to
such NDA; 4.1.5 Begin marketing PRODUCT within six (6) months after APPROVAL;
and 4.1.6 Expand the number of countries for marketing the APPROVED PRODUCT
by marketing in at least one additional country within one year after the first
sales occur under Article 4.1.5.
API will promptly notify DOW of the occurrence of all of the preceding events
under Article 4.1 and supply DOW with proper justification and certification of
the occurrence of the diligence events set forth in Article 4.1.
Because DOW is aware that despite API's commercially reasonable efforts, these
dates under Article 4.1 may not be met, and upon API's discussion with DOW of
the reasons for the delay and DOW's consent, these dates may be extended by a
writing signed by both Parties while retaining all the other terms of this
License. However, API shall take all reasonable steps to bring the PRODUCT to
commercialization as promptly as possible.
4.2 Development Progress Reports - API will provide DOW with quarterly
progress reports (reports to be verbal with one written annual report per year)
of its development and registration activity, including submission(s) to
REGULATORY AUTHORITIES and APPROVAL(s) in the TERRITORY, until the PRODUCT is
commercially launched for the FIELD throughout the TERRITORY.
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4.3 Failure to Attain APPROVAL -
4.3.1 If API fails to meet any of the dates specified in Article 4.1 and the
reason for the failure was reasonably deemed by DOW to be beyond API's control,
e.g. delays by REGULATORY AUTHORITIES, then the force majeure terms of Article
14 apply to Article 4.1 and an extension in time equal to the force majeure
event shall automatically occur or API may terminate this License under Article
13.
4.3.2 If API fails to meet any performance times specified in Article 4.1 for
each PRODUCT and the reason for the failure was reasonably deemed by DOW to be
within API's control, then, subject to Article 4.3.3, DOW shall either extend
the date with a written copy of the new date provided under Article 16.1
* for each PRODUCT in Article 6.2 or terminate this License under
Article 13. API may determine which of such options shall apply and notify DOW
in accord with Article 16.1. If this failure occurs more than once for reasons
within API's control, then the choice of above option resides with DOW.
4.3.3 The provisions of Article 4.3 shall be subject to the dispute resolutions
available under Article 17.
4.4 Clinical and Preclinical Studies - API shall carry out such further
studies of AGENT and PRODUCT as it deems necessary or advisable to develop the
PRODUCT and in order to file such forms for APPROVAL with the REGULATORY
AUTHORITIES for commercialization in the TERRITORY.
4.5 API Responsibility - API shall be solely responsible for the planning,
design and execution of all its developmental work and commercialization with
PRODUCT for the TERRITORY after the EFFECTIVE DATE using TECHNOLOGY and
PATENTS.
4.6 Regulatory Costs - All regulatory costs for APPROVALS in the TERRITORY
shall be borne by API after the EFFECTIVE DATE.
* - Confidential portions have been omitted and are on file separately with
the Commission
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ARTICLE 5 - PATENT RIGHTS
5.1 DOW to Maintain PATENTS - DOW shall be responsible at its own cost and
expense for prosecuting the patent applications in PATENTS and for maintaining
and extending the PATENTS listed on Appendix X. XXX shall use good faith
efforts to prosecute, issue and maintain all PATENTS in Appendix A. Should DOW
elect not to prosecute a pending application or pursue the invention contained
therein for reasons other than prior art, then where legally possible DOW shall
notify API that it may assume such prosecution at its expense.
If JOINT PATENTS between API and DOW result from research conducted during the
RESEARCH PERIOD, then API and DOW shall mutually determine, using their good
faith efforts, whether DOW or API shall file and prosecute the applications and
pay the annuities. All inventors shall assign their inventions to their
respective employer. The JOINT PATENTS shall be included on Appendix A.
5.2 API to Assist DOW in extension or restoration of PATENTS - Although DOW
shall be responsible for extension or restoration of PATENTS listed on Appendix
A, API agrees to provide DOW with reasonably requested records, information and
assistance to achieve the extension or restoration of any PATENTS in the
TERRITORY, if possible.
5.3 Notice of Patent Lapse - DOW shall advise API of the grant, lapse,
nullification, revocation, surrender, or invalidation of any of the PATENTS at
the annual update of the Appendix A.
5.4 Validity, Non-Infringement -
5.4.1 DOW does not warrant that the manufacture, use and sale of the AGENT or
PRODUCT do not fall within the scope of third party patents or the industrial
property rights of a third party. However, to the best of DOW's knowledge,
information and belief, as of the EFFECTIVE DATE the manufacture, use and sale
of AGENT for the
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FIELD does not fall within the scope of third party patents which are not owned
or licensed by DOW.
5.4.2 DOW represents that, under the terms of DOW's agreement(s) with various
THIRD PARTIES that DOW has entire right, title and interest in, to and under
the invention described and claimed in PATENTS or is exclusively licensed
for the FIELD where required for PATENTS on Appendix X. XXX shall use its
good faith efforts to fulfill it's obligations, including payment of
royalties, under its agreement with any THIRD PARTY to avoid being in breach
thereof, at least for as long as this License remains in effect. No payment
to any THIRD PARTIES by API under this License is required.
5.5 Disclaimer of Warranties as to PATENTS - Other than as stated in Article
5.4, DOW makes no representation that the inventions covered in any PATENTS are
patentable or that the PATENTS are or will be valid or enforceable, nor does
DOW warrant or represent that the exercise of the rights licensed hereunder
is free of infringement of patent rights of third parties. Should any
infringement or damages be alleged, suit brought or damages collected
therefore, no damages are permitted to be collected from DOW, except to the
extent DOW breached its representations in Article 5.4.2.
ARTICLE 6 - PAYMENTS AND ROYALTIES
6.1 Initial Payment - API will pay to DOW an initial payment of *
paid in fully registerable API common stock with the number of shares
owed computed as one (1) share equals * and providing that at
* after the EFFECTIVE DATE the FAIR MARKET VALUE of the stock is at least
* per share just prior to that * date, then the number of shares
owed DOW has been paid in full for this Article 6.1. However, if at *
after the EFFECTIVE DATE the FAIR MARKET VALUE of the API stock is less than
* per share just prior to that * date,
* - Confidential portions have been omitted and are on file separately with
the Commission
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then the number of shares owed DOW will be adjusted to a value of * by
the issuance of additional API registerable common stock up to a maximum of
* to pay DOW in full for Article 6.1. All of these API common stock
prices are prior to any splits, reverse splits, stock dividends or
recapitalizations. Such stock shall be registerable on demand by DOW with
piggy back registration rights with all costs for such registration paid by
API.
6.1.1 Upon DOW's request, API will (as long as it is a public reporting
company), as promptly as reasonably possible, exercise its best efforts to
cause the registration under the Securities Act of 1933, as amended (the
"Securities Act"), of the shares of common stock delivered to DOW hereunder
for disposition in accordance with DOW's intended method of disposition stated
in DOW's request; provided, however, that API shall not be required to
register any Shares that are eligible for sale under Rule 144
at the time of the request or at the time of the effectiveness of
any registration statement requested by DOW (the "Registrable Shares").
DOW may request, and API shall undertake, a maximum of
two registrations pursuant to this Article 6.1.1.
6.1.2 If API at any time within 6 years after the EFFECTIVE DATE proposes to
register any of its securities under the Securities Act for the purpose of an
underwritten public offering by API of its common stock for cash, it will at
each such time give written notice to DOW of its intention to do so, if DOW at
such time holds any Registrable Shares. Upon DOW's request, given within 20
days after receipt of such notice, if API does in fact register any of its
securities, API will use its best efforts to cause the Registrable Shares which
API has been requested to register by DOW to be included in such registration
for the purpose of sale by DOW in such public offering of the Registrable
Shares so registered. The foregoing obligations of API pursuant to this
Article 6.1.2 shall be subject to the reasonable restrictions and requirements
imposed by the underwriters in their sole discretion solely for the purposes
of ensuring the success of the public offering.
* - Confidential portions have been omitted and are on file separately with
the Commission
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6.1.3 If and whenever API is obligated or required to use its best efforts by
the provisions of Article 6.1.1, to effect registration of any Registrable
Shares under the Securities Act, as expeditiously as possible API will use its
best efforts to:
(1) prepare and file with the Securities and Exchange Commission (the
"Commission")a registration statement with respect to such Registrable Shares
and cause such registration statement to become and remain effective, provided,
that API shall not be required to keep such registration statement effective,
or to prepare and file any amendments or supplements thereto, later than 180
days after the date on which such registration statement becomes effective
under the Securities Act or at any time after such Registrable Shares are
eligible for sale under Rule 144; and
(2) prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective and to comply
with the provision of the Securities Act with respect to the disposition of all
Registrable Shares covered by such registration statement, subject, however, to
the proviso contained in the immediately preceding Article 6.1.3, clause (1).
6.1.4 If and whenever API is obligated to use its best efforts under Article
6.1.1 or 6.1.2 to effect registration of any Registrable Shares under the
Securities Act, API will use its best efforts to:
(1) furnish to DOW such numbers of copies of a prospectus, including, if
applicable, a preliminary prospectus, in conformity with the requirements of
the Securities Act as DOW may reasonably request in order to facilitate the
disposition of such Registrable Shares; and
(2) register or qualify the Registrable Shares covered by such registration
statement under such other securities or blue sky laws of such jurisdictions in
the United States as DOW shall reasonably request to enable DOW to consummate
the disposition in such jurisdictions in the
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United States of such Registrable Shares, provided however that API shall not
be required to register or qualify the Registrable Shares in any jurisdiction
which such registration or qualification would require API to qualify as a
foreign corporation or file any general consent to service of process; and
(3) furnish to DOW at the time of the disposition of Shares by DOW a Blue Sky
Memorandum prepared by counsel to API (or, as applicable, counsel to the
underwriters) to the effect that the applicable provisions of the securities or
blue sky law of each state in which API shall be required, pursuant to clause
(4) of Article 6.1.3 to register or qualify such Registrable Shares, have been
complied with or that compliance therewith is not necessary by virtue of US
federal law.
6.1.5 For any registration of Registrable Shares under the Securities Act
pursuant to this Article 6.1, API shall pay all expenses incurred by it in
complying with this Article 6.1 and DOW in connection therewith (including
without limitation all registration and filing fees, printing expenses,
fees and disbursements of counsel for API and expenses of any
special audits incident to or required by any such registration),
but excluding underwriting discounts and commissions, if any,
associated with the Registrable Shares sold by DOW and fees and
disbursements of counsel to DOW. In connection with any underwritten public
offering of API's common stock, if requested by API or an underwriter of such
offering, DOW will agree not to sell or otherwise transfer or dispose of any
common stock or other securities of API (other than such securities included on
DOW's behalf in such offering) for a period of up to 180 days following the
effective date of the registration statement related to such offering (the
"Lock-up"), provided that API and all other shareholders of API owning 10% or
more of API common stock agree to Lock-up agreements identical to that to which
DOW agrees. In addition, DOW agrees not to sell that API stock received as the
initial payment of stock made by API within ten business days of the EFFECTIVE
DATE for six months from the date of receipt of any such stock (the "Stand
Still"). However, notwithstanding this Lock-up and Stand Still, if API is
merged with or acquired by another entity such that
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the control (50% or more) of the management of API is no longer solely that of
API, then DOW may sell or tender this stock at any time in accord with
applicable securities laws.
6.1.6 In the event of any registration under the Securities Act of any
Registrable Shares pursuant to this Article 6.1, to the extent permitted by
law, API hereby agrees to indemnify and hold harmless DOW and each other
person, if any, who controls DOW within the meaning of the Securities Act and
each underwriter and any controlling person of any such underwriter against any
losses, claims, damages, or liabilities, joint or several, to which DOW or any
underwriter or such controlling person may become subject under the Securities
Act or otherwise, in so far as such losses, claims, damages or, liabilities (or
proceedings in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained, on the
effective date thereof, in any registration statement under which such
Registrable Shares were registered under the Securities Act, in any preliminary
prospectus or final prospectus contained therein, or in any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of such prospectus, in
the light of circumstances under which they were made) not misleading, and will
reimburse DOW and each underwriter and each such controlling person for any
legal or any other expenses reasonably incurred by DOW or any such underwriter
or any such controlling person in connection with investigating or defending
any such loss, claim, damage, liability or proceeding, provided, API will not
be liable in any such case to the extent that any such loss, claim, damage, or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
said preliminary or final prospectus or said amendment or supplement in
reliance upon and in conformity with written information furnished to API by
DOW, such underwriter or such controlling or participating person, as the case
may be, specifically for use in the preparation of such registration
statement; provided, however, that the indemnity
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agreement contained in this Article 6.1.6 shall not apply to amounts paid in
settlement of any such loss, clam, damage or liability if such settlement is
effected without the consent of API, which consent shall not be unreasonably
withheld.
6.1.7 In the event of any registration under the Securities Act of any
Registrable Shares pursuant to this Article 6.1, to the extent permitted by
law, DOW agrees to indemnify and hold harmless API and each other
person, if any, who controls API within the meaning of the
Securities Act and each underwriter and any controlling person
of any such underwriter against any losses, claims,
damages, or liabilities, joint or several, to which API or controlling person
thereof or such underwriter or controlling person thereof may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or proceedings in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained, on the effective date thereof, in any registration statement under
which such Shares were registered under the Securities Act, in any preliminary
prospectus or final prospectus contained therein, or in any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of any such prospectus,
in light of the circumstances under which they were made) not misleading, and
will reimburse API and each controlling person thereof and any underwriter and
any controlling person thereof for any legal or any other expenses reasonably
incurred by API or any controlling person thereof or any underwriter and any
controlling person thereof in connection with investigating or defending any
such loss, claim, damage, liability or proceeding; provided, however, that
DOW's obligation with respect to such indemnification (and hold harmless
undertaking) will exist only to the extent any such misstatement or omission
occurs in reliance upon and in conformity with written information furnished
by DOW expressly for use in connection with such registration; and provided
further that the indemnity agreement contained in this Article 6.1.7 shall not
apply to amounts paid in
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settlement of any such loss, claim, damage or liability if such settlement is
effected without the consent of DOW, which consent shall not be unreasonably
withheld.
6.1.8 Promptly after receipt by an indemnified party under this Section 6.1 of
notice of the commencement of any action which may give rise to a claim for
indemnification hereunder such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 6.1,
notify the indemnifying party in writing of the commencement thereof and
generally summarize such action. The indemnifying party shall have the right
to participate in and to assume the defense of such claim, and shall be
entitled to select counsel for the defense of such claim with the approval
of any parties entitled to indemnification (which approval shall not
be unreasonably withheld and satisfactory to the indemnifying party)
to participate in the defense thereof, but the fees and expenses of
such counsel shall be the expense of such
indemnified parties unless the named parties to such action or proceedings
include both the indemnifying party and the indemnified parties and the
indemnifying party or such indemnified parties shall have been advised by
counsel that there are one or more legal defenses available to the indemnified
parties which are different from or additional to those available to the
indemnifying party (in which case, if the indemnified parties notify the
indemnifying party in writing that they elect to employ separate counsel at the
reasonable expense of the indemnifying party, the indemnifying party shall not
have the right to assume the defense of such action or proceeding on behalf of
the indemnified parties, it being understood, however, that the indemnifying
party shall not, in connection with any such action or proceeding or separate
or substantially similar or related circumstances, be liable for the reasonable
fees and expenses of more than one separate counsel at any time for all
indemnified parties.
6.1.9 Upon the effectiveness of any registration statement filed pursuant to
this Article 6.1, API will, in good faith, cooperate with DOW in connection
with the disposition by DOW of the Registrable Shares by providing instructions
to API's counsel and API's transfer agent promptly to take the necessary
actions within their control (e.g., in the case of counsel,
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24
delivering an opinion to the transfer agent regarding the registration and
transferability of the Registrable Shares) to permit DOW to dispose of the
Registrable Shares in accordance with DOW's intended disposition thereof.
Further, to the extent consistent with this Agreement applicable law and
regulation, upon demand of DOW and DOW's delivery to API of the certificate or
certificates representing the Registrable Shares, API will cause its transfer
agent to deliver to DOW a new certificate or certificates representing the
Registrable Shares, but not bearing any restrictive legend.
6.1.10 Information furnished by DOW . DOW shall furnish to API in writing
such information regarding DOW and the distribution proposed by DOW as API
may reasonably request for the purpose of preparation of a prospectus or
prospectus supplement or post-effective amendment.
6.1.11 Notwithstanding any other provision hereof, API may delay DOW's ability
to resell Registrable Shares pursuant to a registration statement if API
delivers a certificate in writing to DOW to the effect that a delay in such
sale is necessary because a sale pursuant to a registration statement would
require the public disclosure of information that would have a significant
adverse effect on API, is likely to materially adversely affect API or any
pending transaction or negotiations of API, or could constitute a violation of
the federal or state securities laws. In such an event, API shall notify DOW
promptly after it is determined that such circumstances no longer exist. API
shall not be entitled to delay DOW's ability to resell Registrable Securities
more than once in any 12-month period, and any period during which API may
delay the Purchasers' ability to resell Registrable Securities shall not exceed
45 days.
6.1.12 DOW hereby makes the representations and warrantees set forth in
Appendix E as attached hereto and made a part hereof.
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6.1.13 This payment shall not be creditable against any other payments and is
non-refundable.
6.2 Payments on APPROVALS - API will make additional fixed sum payments to
DOW, which payments will not be creditable against future royalty payments, in
the following amounts and events:
a) Common Stock of API with Fair Market Value equal to * paid in
fully registerable API common stock (registerable as set forth in Article 6.1)
within thirty (30) days after the first PRODUCT selection in the FIELD in
accord with Article 4.1.1 and for each PRODUCT thereafter submitted for an IND.
This payment is non-refundable and is for TECHNOLOGY and does not depend on
PATENTS; and
b) Common Stock of API with Fair Market Value equal to * paid in
fully registerable API common stock (registerable as set forth in Article 6.1)
within thirty (30) days after the first APPROVAL of each PRODUCT in the FIELD
in the US or Europe [i.e., France, Germany, the Netherlands, Italy, United
Kingdom, or the consolidated European system (CPS)]. This payment is
non-refundable and is for TECHNOLOGY and does not depend on PATENTS.
The APPROVAL payments under this Article 6.4 (b) shall be made upon first
commercial sale for each PRODUCT and are required even after expiration of
PATENTS so long as this License is in effect.
6.3 Earned Royalties for Patent License - API will pay DOW an earned royalty
of * of NET SALES of PRODUCT (other than MRI PRODUCT where there are
THIRD PARTY rights), the MANUFACTURE, use or sale of which would infringe a
valid, unexpired claim of one or more of the PATENTS under Appendix A. For MRI
PRODUCT API will pay DOW an earned royalty of * of NET SALES of PRODUCT,
the MANUFACTURE, use or sale of which would infringe a valid, unexpired claim
of one or more of the PATENTS under Appendix A in which there are THIRD PARTY
rights. In those instances where the PATENTS are JOINT PATENTS, then (i) if
DOW is providing the patent service for prosecution and expense, the royalty
remains as stated above in this paragraph; or (ii) if API is providing the
patent service
* - Confidential portions have been omitted and are on file separately with
the Commission
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for prosecution and expense, the royalty rate set forth above shall be one-half
of that stated for that PRODUCT. However, if other sole DOW PATENTS are also
practiced to make, use or sell the PRODUCT, then the full royalty is due.
If a given country has no PATENTS where PRODUCT is sold and API believes that
the price, including royalty, make API non-competitive, then DOW and API shall
agree to revise the royalty under this Article 6.3 for that country.
No royalties are due under this Article 6.3 under any claim of a PATENT which
is held invalid by a court of competent jurisdiction from which no appeal is
or can be taken.
No royalties are due under this Article 6.3 after the last to expire PATENT
on Appendix A expires and, if available, after any patent term restoration or
extension term ceases.
These payments are to be made in accord with Articles 6.7 and 6.9.
6.4 Minimum Annual Fee - In accord with diligence in Article 4.1, commercial
sale of the PRODUCT for the FIELD is expected in the TERRITORY. After the
first year upon receipt of the first APPROVAL for the FIELD by any REGULATORY
AUTHORITY in the US or Europe (as defined in Article 6.2) and for the whole
term where API would manufacture, use or sell a PRODUCT which would infringe
a valid, unexpired claim of one or more of the PATENTS listed in Appendix A,
then API shall pay DOW the following minimum annual fee, which may be paid as
earned royalty and/or cash:
Minimum Annual Fees
YEAR(a) US$
January 1
--------- --------
2 - 4 *
5 - on *
(a)The calendar year in which first APPROVAL is obtained is year zero.
* - Confidential portions have been omitted and are on file separately with
the Commission
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Minimum annual fees are due at the same time as any fourth quarter earned
royalty payments under Article 6.3 in accordance with Articles 6.7 and 6.9 and
are fully creditable against the royalties under Article 6.3.
6.5 Milestone Payments - Additional fixed sum payments are due in the
following amounts and in the year of the first occurrence of the events, if
total NET SALES of PRODUCTS which would infringe a valid, unexpired claim of
one or more of the PATENTS in Appendix A in the FIELD in the TERRITORY:
a) Exceed * at any time within a given calendar year, then a
* payment is due within thirty (30) days; and
b) Exceed * at any time within in a given calendar year, then a
* payment is due within thirty (30) days; and
c) Exceed * at any time within a given calendar year,
then a * payment is due within thirty (30) days.
Each such milestone payment is triggered only on the first occurrence of that
milestone. Thus the maximum payment that could be due is * .
If NET SALES attain one or more of these levels in any calendar year, then
payment is due even if the NET SALES subsequently fall below the level
requiring such payment.
These payments shall be made in cash or API common stock, registerable on
demand by DOW with piggy back registration rights with all costs for such
registration paid by API, at DOW's option. The stock price is determined
using FAIR MARKET VALUE in a manner similar to Article 6.1
The trigger is determined by the calendar quarter in which the milestone is
attained. The payment is due under the conditions of Articles 6.7 and 6.9.
6.6 Payments by sale of API's rights to PRODUCT - If API sells its rights under
this License to a THIRD PARTY in any country in the TERRITORY, then, in lieu of
royalty payments under Article 6.3, DOW shall be paid each year
* - Confidential portions have been omitted and are on file separately with
the Commission
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* of all payments received by or on behalf of API of any kind (e.g., up
front fees, milestones, royalty, diligence, and minimum fees) made in any form
(e.g., stock, cash, warrants) from such purchaser. All NET SALES of such THIRD
PARTY shall accrue into Article 6.5.
6.7 Payments and Report - A calendar quarterly report, including: the amount
of payment with the date the payment was made; an itemized payment listing; and
date of this License under which payment is being made and the number ______
(supplied by DOW after the EFFECTIVE DATE), shall be sent to:
The Dow Chemical Company
Royalty Accounting
0000 Xxx Xxxxxx
Xxxxxxx, XX 00000
XXX
with payment by wire transfer, to THE DOW CHEMICAL COMPANY and sent to:
*
*
*
*
*
*
*
6.8 THIRD PARTY Royalties - DOW shall pay any royalties due to any THIRD
PARTY; therefore a further copy of the royalty report and amount paid shall be
supplied to DOW under Article 16.1. Where necessary for DOW to discharge its
obligations to any THIRD PARTY under this Article 6.8, concerning the PATENTS
or TECHNOLOGY under agreements made by DOW, API will report reasonable
additional information, if needed, for DOW to fulfill its obligations.
6.9 Quarterly Royalty Reports and Payments - Within ninety (90) days after the
close of each calendar quarter, API shall submit a written report on the NET
SALES of PRODUCT in the FIELD for the TERRITORY in sufficient detail to enable
a calculation of the royalty due in accord with Article 6 and payment
* - Confidential portions have been omitted and are on file separately with
the Commission
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of the royalty (if any) due. Prior to commercialization one written annual
report and quarterly oral reports are due from the EFFECTIVE DATE at the close
of each calendar quarter. Once commercialization has begun, then there must be
quarterly written reports from the close of each calendar quarter.
6.10 Books of Account - API shall maintain true and complete books of account
containing an accurate record of all data necessary for the proper computation
of royalty payments due from it or on behalf of any AFFILIATE. Such records
shall be maintained for at least Five (5) years after the date of the pertinent
royalty payment.
6.11 Audit Right - DOW shall have the right, either through a certified public
accountant employed by DOW or through a firm of independent public accountants
to whom API has no reasonable objection, to examine the books of account of API
at reasonable times and upon reasonable advance notice within three (3) years
after the end of the calendar year to which they relate (but not more than once
in each calendar year) for the purpose of verifying the correctness of any
report concerning diligence or payment of royalties under Articles 4 and 6,
respectively. Such examination shall be made during normal business hours at
the place of business of API. The information furnished as a result of any
such examination shall be maintained in confidence on the terms specified in
Article 7. The fees and expenses of such an audit shall be borne by DOW.
If any such audit shows any underpayment or overcharge, a correcting
payment or refund shall be made within thirty (30) days of API's receipt
of the auditors' statement. If such error is material (meaning +/-5%),
then if API owes DOW from such material error, API shall be subject to a
penalty as if the payment were deemed late in accord with Article 6.13.
Should API fail to make any correcting payment within sixty (60)
days from receipt of the auditors' statement, then DOW shall have the
right to terminate this License under Article 13.5.
6.12 Withholding Tax Payments - If any taxes for DOW's account, withholding or
otherwise, are levied by any taxing authority in the TERRITORY in connection
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with the receipt by DOW of any amounts payable under Article 6 of this License
according to any tax treaty or agreement between the United States and a
country in the TERRITORY, then API shall have the right to pay such taxes to
the local tax authorities and the payment to DOW of the net amount due after
reduction by the amount of such taxes, together with
(i) evidence of payment of such taxes and a translation thereof into English,
(ii) indication of the amount of such tax paid, and
(iii) indication of the country in the TERRITORY and the authority to whom it
was paid, and
(iv) comply with API's royalty reporting obligations under this License.
However, if DOW still requires further information, the report due under
Article 6.9 may also be requested by DOW and API shall promptly provide that
information.
6.13 Late Payments - Any payments not remitted or deposited by the due date
shall bear interest at the current prime rate plus 2% established by a leading
New York bank, such as CitiBank, as published in The Wall Street Journal.
Should API fail to make any late payment within ninety (90) days from its due
date, then DOW shall have the right to terminate this License under Article
13.5 upon fifteen (15) days written notice to API to allow cure.
ARTICLE 7 - CONFIDENTIALITY
7.1 Each Party shall use good faith efforts to retain in confidence and not
disclose to any third party each other's Confidential Information (which
includes, but is not limited to, TECHNOLOGY, PATENTS, and any samples of AGENT,
POLYMER or PRODUCT) disclosed pursuant to the terms of this License. Such
"good faith efforts" shall mean the same degree of care, but no less than a
reasonable degree of care, as the receiving Party uses to protect its own
Confidential Information of a like nature. API and DOW shall use the same
good faith efforts with respect to the TECHNOLOGY, AGENT,
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POLYMER and PRODUCT already in its possession. This Article 7 supersedes the
CDA as of the EFFECTIVE DATE.
7.2 Excepted from the obligation of confidence under Article 7.1 is that
information which:
(a) is available, or becomes available, to the general public without fault
of the receiving Party; or
(b) is obtained by the receiving Party without an obligation of confidence
from a third party (other than a governmental agency or REGULATORY
AUTHORITY) who is rightfully in possession of such information and is
under no obligation of confidentiality to the disclosing Party concerning
such information; or
(c) is required by law or by court order to be disclosed by the receiving
Party in which cases the receiving Party will use its best efforts to
limit such disclosure to that required by law and to maintain the
confidentiality of the disclosed information to the extent possible; or
(d) must be necessarily disclosed to REGULATORY AUTHORITIES to permit API to
sell PRODUCT in the FIELD; or
(e) may be disclosed in accord with Article 2.3.1(iv), 2.3.2 or 3.3.3; or
(f) is released from confidentiality in writing by the disclosing Party.
For the purpose of Article 7.1, a specific item of TECHNOLOGY shall not be
deemed to be within the foregoing exceptions merely because it is embraced by
more general information in the public domain, or in the possession of the
receiving Party. In addition, any combination of features shall not be deemed
to be within the foregoing exceptions merely because individual features are in
the public domain or in the possession of the receiving Party, but only if the
combination itself and its principle of operation are in the public domain or
in the possession of the receiving Party.
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7.3 Notwithstanding the provisions of Article 7.1, if the receiving Party
becomes legally compelled to disclose any of the disclosing Party's TECHNOLOGY,
the receiving Party shall promptly advise the disclosing Party of such required
disclosure in order that the disclosing Party may seek a protective order or
such other remedy as the disclosing Party may consider appropriate in the
circumstances. The receiving Party shall disclose only that portion of the
TECHNOLOGY which it is legally required to disclose. Such a disclosure shall
not release the receiving Party with respect to the TECHNOLOGY so disclosed
except to the extent of permitting the required disclosure.
7.4 Disclosure to AFFILIATES, Contractors - API may disclose TECHNOLOGY to
its AFFILIATES, sublicensees, consultants and, when permitted herein,
its clinical investigators, contractors (parties under contract with API or
its AFFILIATES for the custom manufacturing or shipping of PRODUCT, conduct
of clinical studies or obtention of registration in the TERRITORY), as may be
necessary to exercise the rights granted hereunder and to register and prepare
for commercialization of PRODUCT, and to commercialize PRODUCT under this
License, under conditions of confidentiality at least as stringent as those
set out in Articles 7.1, 7.2 and 7.3.
7.5 Document Return - In the event of termination of this License under Article
13.2, 13.3 (if the breach is by API), 13.4 or 13.5 prior to its normal
expiration, API and DOW will cease their use of the other Party's TECHNOLOGY
and other Party's CONFIDENTIAL INFORMATION provided hereunder and, on request,
within sixty (60) days either return all such CONFIDENTIAL INFORMATION,
including any copies thereof, in accord with Article 13.6 or will promptly
destroy the same and certify such destruction to the disclosing Party; except
that such CONFIDENTIAL INFORMATION is or has become no longer subject to
confidentiality under Article 7.1 need not be returned or destroyed.
Notwithstanding the foregoing, API and DOW may retain such documents as are
necessary for them to discharge their surviving obligations hereunder and their
legal obligations to the governmental authorities for counterpart agencies to
DOE and NRC; and API may retain such copies of documents as may be necessary
for the defense of product liability or other litigation or similar
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33
proceedings relating to PRODUCT, and both Parties may retain one copy thereof
in its legal department as a record of what was transmitted.
7.6 Survival of Confidentiality - Termination of this License for any reason
shall not relieve the Parties of their obligations under Article 7. The
provisions of Article 7 shall survive termination of this License for twenty
(20) years.
ARTICLE 8 -THIRD PARTY INFRINGEMENT CLAIMS
8.1 Defense of Third Party Patent Claims - If a claim is brought by a third
party that manufacture, use or the sale of AGENT or PRODUCT sold under a PATENT
in the TERRITORY (regardless of use) infringes a patent of such third party,
API will give prompt written notice to DOW of such claim if it concerns a
PATENT or TECHNOLOGY. DOW shall have the sole discretion and right to seek
to dispose of said claim or to conduct the defense of any suit resulting from
such claim if outside the FIELD in the TERRITORY. API at its option and
expense may participate in any suit resulting from such claim that may
directly affect its market in the FIELD in the TERRITORY.
8.2 Mutual Decisions - From the EFFECTIVE DATE and using their good faith
efforts, API and DOW shall discuss any claim or suit brought by a third party
for patent infringement that such third party's patent is infringed by the
manufacture, use or sale of AGENT or PRODUCT by API or its AFFILIATES in the
FIELD in the TERRITORY. Specifically, API and DOW shall mutually try to agree
on:
(a) the strategy for such suit or claim, e.g. whether to negotiate a
settlement, xxx or withdraw from the country in the TERRITORY in which
infringement is claimed;
(b) the basis to be determined for sharing the costs of litigation, damages
awarded, and royalty to be paid to the third party;
(c) which Party should conduct the defense or if both API and DOW should
jointly defend; and
(d) the consequences of such decisions, such as amendment to this License with
regard to royalties due to DOW or termination of this License.
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If API and DOW cannot mutually agree with regard to one or more of (a)-(d)
above, the dispute shall be resolved in accord with Article 17.
8.3 Third Party License - The Parties shall use their good faith efforts
(either individually or together) to negotiate any necessary agreement for
royalty payment to third parties with a view to enabling the PRODUCT to be
commercialized in the FIELD in the TERRITORY. As of the EFFECTIVE DATE, DOW is
not aware of the need for any such third party license that is not already
obtained. If any agreement is required for AGENT that DOW does not obtain
after request and notification by API, then API, its AFFILIATE or sublicensee
may obtain such agreement and any expenses, including required royalties under
Article 6.3, may be taken as a credit against royalties under Article 6.3 until
recaptured, but no greater than fifty (50%) percent of the royalty due DOW in
any given quarter.
ARTICLE 9 - PATENT ENFORCEMENT AND LITIGATION
9.1 Prosecution by XXX - XXX, at its sole discretion, may take action on its
own behalf and expense to institute any action or proceeding by reason of
infringement of any of the PATENTS. If either Party learns of any infringement
of a PATENT or misappropriation of trade secrets for TECHNOLOGY by a third
party, it shall promptly notify the other Party.
DOW shall have the first right, at its own expense, to prosecute all litigation
against a third party infringer who may be infringing a PATENT. API shall
provide all reasonable cooperation, including any necessary use of its name,
required to prosecute such litigation. API shall be consulted concerning the
litigation. DOW will bear the costs and shall be entitled to any recovery
obtained from such litigation, settlement or compromise thereof until recovery
of all expenses for such litigation has been met. If DOW requests API to
participate, then DOW shall pay all of API's reasonable expenses, not including
counsel fees. Any further recovery above such expenses of the Parties shall be
mutually agreed upon based on the particular claim(s) in suit
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with an equitable division based on each Parties interest (e.g., AGENT, JOINT
PATENTS, PRODUCT).
9.2 Prosecution by API - If DOW does not prosecute such infringer or otherwise
xxxxx such infringement (which infringement must be of commercial significance
to API in DOW's reasonable business opinion if the suit concerns only AGENT)
within ninety (90) days after giving or receiving notification of such
infringement in the TERRITORY, unless an extension of the term is mutually
agreed upon by the Parties, then, API shall have the right to prosecute such
infringer at its own expense in the FIELD in the TERRITORY in accord with
Article 9.5 and shall be entitled to retain any recovery obtained from such
litigation, settlement or compromise thereof. API's cost of litigation in any
quarter may be credited against up to fifty (50%) percent of the royalties due
to DOW under Articles 6.3 and 6.6 in the following quarter until fully
recaptured. However, API shall place all royalties due to DOW in escrow from
the date of filing the suit until the action or proceeding is finally concluded
whereupon:
(i) if the PATENT in the country in the TERRITORY is held valid (whether
infringed or not), then the royalties in escrow (after deduction of API's cost
of litigation as referred to hereinabove) shall be paid to DOW; or
(ii) if the PATENT in the country in the TERRITORY is held invalid (whether
infringed or not), then (a) the royalties in escrow shall be paid to API and
(b) DOW shall reimburse API's cost of such litigation * in each
country in the TERRITORY where suit was determined for a PATENT. At API's
request, DOW shall cooperate with API in such litigation, including joining in
said litigation. DOW shall also cooperate, at API's expense, except for
counsel fees, by way of providing access to evidence and witnesses available
to DOW.
9.3 Prosecution by neither API or DOW - If the Parties mutually agree that
neither DOW nor API will defend a particular PATENT in the FIELD in the
particular country in the TERRITORY, then the royalty for that PATENT in that
country becomes zero (0%) percent upon that decision date.
* - Confidential portions have been omitted and are on file separately with
the Commission
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9.4 Invalidity - In the event that a PATENT in the TERRITORY is finally
declared invalid or unenforceable in a judicial or administrative proceeding
from which no appeal is or can be taken, then from and after that date no
royalties shall be paid on the basis of that PATENT in the relevant country of
the TERRITORY, subject to the provisions of Article 9.2, provided, however,
that royalties due for other PATENTS in the TERRITORY not so held invalid or
unenforceable shall not be affected. If as a result of the invalidation of a
PATENT, the competition for API in the TERRITORY significantly increases or
significant market share is lost by API, then in good faith API and DOW shall
discuss the relevant facts and determine whether an amendment to this License
is required or if termination under Article 13 should result.
9.5 Settlement - Any settlement of an infringement suit, whether brought by
DOW or by API, shall be subject to the consent of both Parties, which consent
shall not be unreasonably withheld.
9.6 Cooperation - Each Party shall cooperate with the other Party to the
extent reasonably requested in any legal action:
(i) brought by a third party against one Party or
(ii) brought by a third party against both of them or
(iii) taken against a third party by either Party
regarding PATENTS in the FIELD in the TERRITORY, and each Party shall have the
right to participate in any defense, compromise or settlement to the extent
that, in its judgment, it may be prejudiced thereby. In addition, API shall
not settle any claim or suit in any manner that shall adversely affect any
PATENTS, require any payment by DOW or reduce the royalty due to DOW hereunder
without the prior written consent of DOW, except as provided in Article 9.2.
ARTICLE 10 - U.S. EXPORT CONTROL AND GOVERNMENT LICENSES
10.1 Compliance - API agrees to comply with all necessary United States
governmental regulations with respect to export of TECHNOLOGY and any PRODUCT,
METAL ION, POLYMER or AGENT in the TERRITORY. API
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agrees to not export or re-export any TECHNOLOGY, PRODUCT, AGENT, METAL ION or
POLYMER received from DOW or the direct products of such TECHNOLOGY to any
prohibited country listed in the U.S. Export Administration Regulations unless
properly authorized by the U.S. Government. API shall be responsible for the
acts of its AFFILIATES, contractors, consultants and sublicensees. API
assumes all liability if it or its AFFILIATES or sublicensees fails to obtain
any of the necessary licenses or commits any violations of the United States
Export Laws or Regulations (15 C.F.R. paragraph 700 et seq.) or of the DOE or
NRC. API shall indemnify DOW for such acts and for any breach of compliance.
10.2 DOE, NRC Licenses - API agrees to obtain all necessary licenses and to
comply with all applicable regulations of agencies similar to DOE and NRC in
the TERRITORY with respect to METAL ION and PRODUCTS.
10.3 Clearances - API agrees to obtain all necessary clearances from
any government in the TERRITORY for import, export or re-export with respect to
the TECHNOLOGY or PRODUCT.
ARTICLE 11 - PRODUCT LIABILITY AND INDEMNIFICATION
11.1 Indemnity by XXX - XXX shall indemnify and hold API and its AFFILIATES
and their respective agents, directors, officers and employees harmless from
and against any and all liabilities, claims, demands, damages, costs, expenses
or money judgments (including reasonable attorneys' fees and expenses) incurred
by or rendered against any of them for personal injury, sickness, disease or
death or property damage which directly arise out of:
(a) the intentional misconduct or negligence of DOW; or
(b) the breach by DOW of its representations, warranties or covenants
contained in this License; or
(c) any activity carried out with AGENT or PRODUCT by DOW other than through
API and its AFFILIATES under this License or other written agreements
between the Parties;
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provided, however, that API shall give DOW notice in writing in accord with
Article 16 as soon as practicable of any such claim or lawsuit and shall permit
DOW to undertake the defense thereof at DOW's expense. However,
(i) API will cooperate in such defense by providing access to witnesses and
evidence available to it. API shall have the right to participate in any
defense to the extent that in its judgment, API may be prejudiced thereby; and
(ii) in any claim or suit in which API seeks indemnification by DOW, API shall
not settle, offer to settle or admit liability or damages in any such claim or
suit without the prior written consent of DOW.
11.2 Indemnity by API - API shall indemnify and hold DOW and its AFFILIATES,
and their respective agents, directors, officers, and employees harmless from
and against any and all liabilities, claims, demands, damages, costs, expenses
or money judgments (including reasonable attorneys' fees and expenses) incurred
by or rendered against any of them for personal injury, sickness, disease or
death or property damage which arise out of
(i) the manufacturing, testing, use, promotion, sale or distribution of
PRODUCT by API or its AFFILIATES, except for those instances provided in
Article 11.1 for which DOW is obligated to indemnify API; or
(ii) the breach by API of any of its representations, warranties or covenants
contained in this License or any agreement contemplated by the terms of this
License; and provided, however, that DOW shall give API notice in writing
accord with Article 16 as soon as practicable of any such claim or lawsuit and
shall permit API to undertake the defense thereof at API's expense. However,
(i) DOW will cooperate in such defense by providing access to witnesses and
evidence available to it. DOW shall have the right to participate in any
defense to the extent that in its judgment, DOW may be prejudiced thereby; and
(ii) In any claim or suit in which DOW seeks indemnification by API, DOW shall
not settle, offer to settle or admit liability or damages in any such claim or
suit without the prior written consent of API.
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ARTICLE 12 - REPRESENTATIONS AND WARRANTIES,
12.1 Belief of Accuracy -
12.1.1 DOW represents that the TECHNOLOGY and any other CONFIDENTIAL
INFORMATION, including DOW's performance under the Research Plan, transferred
or provided to API hereunder are believed to be accurate and complete as of
their current status at DOW at the EFFECTIVE DATE (or for the Research Plan
during the RESEARCH PERIOD) and that DOW's interpretations and conclusions
drawn therefrom were made in good faith and in the exercise of DOW's
scientific judgment as of the dates of the documents contained therein, and
that to the best of DOW's knowledge, data subject to regulations regarding
Good Laboratory Practices and Good Clinical Practices, GMP and other FDA
regulations, is in compliance with such regulations. However, DOW does
not warrant or represent that such information is or will be
sufficient to obtain APPROVAL to market PRODUCT or to
commercially produce AGENT or PRODUCT or to commercialize PRODUCT with
REGULATORY AUTHORITIES in the TERRITORY.
12.1.2 DOW represents that it has full power and authority to enter into this
License and grant the licenses granted hereunder.
12.1.3 DOW represents that it has not assigned or licensed the rights to the
PATENTS for the PRODUCT in the FIELD to a THIRD PARTY.
12.2.1 12.2 API Representations to DOW - API represents that it will be
solely relying on its own evaluation of the TECHNOLOGY and the other
CONFIDENTIAL INFORMATION transferred or provided to it hereunder and on its
own medical and scientific expertise in using the same in its development and
commercialization of AGENT and PRODUCT. API represents that it is solely
responsible for POLYMER and has no claim or suit or damages to DOW now or
under the term of this License for POLYMER used alone.
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12.2.2 API represents that it has the full power and authority to enter into
this License and to issue the API common stock required.
12.2 Insurance - API will obtain an insurance policy for their operations for
clinical trials and sales of PRODUCT prior to the beginning such clinical
trials or sale of PRODUCT in an amount typical in this industry to protect
DOW from liability under API's activities. Such insurance policy must be
maintained for the term of this License and a copy of the policy provided to
DOW and attached as Appendix C. Failure to obtain such insurance and supply
a copy of the policy to DOW shall be deem a breach under Article 13.3.
12.3 POLYMER - If requested in writing by DOW, API shall tell DOW the patent
information to support the fact that the POLYMER used in PRODUCT is patented,
licensed or owned by API as required by this License and agrees to aver in
writing that API has rights thereto for use of POLYMER in the PRODUCT.
ARTICLE 13 - TERM AND TERMINATION
13.1 Term - Unless terminated under the provisions of this Article 13, this
License shall continue in effect until the expiration of all PATENTS listed on
Appendix A, provided, however, that Articles 6.2, 6.5, 6.6, 7, 10, 11 and 17
contained in this License shall survive termination of this License.
When this License expires under this Article 13.1, the licenses granted under
this License shall be paid-up; however, any payments still remaining due under
Articles 6.2, 6.5 and 6.6 will continue until paid in full.
13.2 Failure to Use License - If API and its AFFILIATES shall have
(i) discontinued selling PRODUCT in commercial quantities using their
commercially reasonable efforts in accord with Article 4.1 to
commercialize; or
(ii) not commercialized PRODUCT in accord with Article 4.1; or
(iii) not paid the minimum annual fee required under Article 6.4,
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then either API or DOW shall have the right to terminate this License upon
three (3) months written notice.
If termination under this Article 13.2 results voluntarily by API, then API
shall promptly supply to DOW all registration information for REGULATORY
AUTHORITIES that is available to API or its AFFILIATES for use by DOW, its
AFFILIATES or sublicensees for a fair consideration to API.
If this License is terminated under Article 4.3 when within API's control, then
API shall promptly supply to DOW all registration information for REGULATORY
AUTHORITIES that is available to API or its AFFILIATES for use by DOW, its
AFFILIATES or sublicensees without compensation to API by DOW.
13.3 Termination for Breach - In the event of a material breach by either DOW
or API of any of the obligations contained in this License, the other Party
shall be entitled to terminate this License by notice in writing under Article
16.1 provided that such notice shall specify the breach or breaches complained
of. If the said breach or breaches are capable of remedy, the Party committing
such breach or breaches shall be entitled to a period of sixty (60) days from
the delivery of such notice in which to remedy or to undertake to remedy the
same. In the case the defaulting Party shall fail to remedy the breach or to
undertake to remedy the breach to the satisfaction of the injured Party, the
injured Party shall have the right to cancel this License in whole or only
terminate those rights and obligations relating to the particular breach by
simple notification to the Party in default. Failure of a Party to exercise
its rights under this Article 13.3 shall not be construed as a waiver as to
future breaches whether or not they are similar.
13.4 Termination by API - API may surrender and terminate this License on three
(3) months written notice to DOW. API will disclose to DOW its reasons for any
such termination.
13.5 Termination by XXX - XXX shall have the further right to terminate this
License immediately on written notice to API if:
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(a) API shall cease to carry on business or shall go into liquidation or a
receiver shall be appointed to API's assets; or
(b) API shall become bankrupt or insolvent or unable to meet any of its
financial obligations on their due dates; or
(c) API fails to meet any of its payments in accord with Article 6; or
(d) API breaches without cure any of the Export regulations of Article 10; or
(e) API fails to commercialize its first PRODUCT in a given country of the
TERRITORY after the first APPROVAL for the PRODUCT occurs in a TERRITORY within
five (5) years, then DOW may terminate this License with respect to that
country. If DOW requests that API provide copies of clinical data, IND files,
NDA files or other regulatory information submitted to a REGULATORY AUTHORITY,
then DOW shall pay the royalty under Article 6.3 to API.
Termination under Article 13.5 shall be the sole and exclusive remedy for DOW
under any of the circumstances set forth in Article 13.5 (a), (b), (c) and (e).
13.6 On Termination - API shall, upon termination of this License by DOW under
Articles 13.2, 13.3 or 13.5 or termination by API under Article 13.2, 13.3 or
13.4:
(a) return to DOW all copies of documents containing TECHNOLOGY and any
materials received from DOW under confidentiality and CONFIDENTIAL INFORMATION
concerning AGENT and PRODUCT in the FIELD;
(b) pay to DOW all payments and royalties due or accrued at the termination
date under Articles 6.2, 6.3, 6.4 and 6.6 within thirty (30) days after
termination, and pay to DOW all payments due under Article 6.5; and
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(c) make no further use of any kind of any and all TECHNOLOGY disclosed
hereunder by DOW, except to the extent such information has become public
knowledge other than through fault of API, and make no further use of the
surviving PATENTS; and
(d) take all steps necessary and execute any instruments required to assign
all the rights relative to any government health registrations of PRODUCT held
by API to DOW or to DOW's designee, and, if such new registrations are obtained
by DOW or its designee, API agrees to notify the REGULATORY AUTHORITIES to
cancel all those registrations of PRODUCTS which are in the name of API,
subject to reimbursement by DOW of API's out-of-pocket expenses of obtaining
such registrations (except in the case of termination for breach by API); and
(e) assign to DOW any distributorships, AGENT or PRODUCT manufacturing
agreements and sublicense agreements, to the extent they are specific to the
AGENT or PRODUCT and are assignable and to the extent such agreements were
previously agreed with DOW to survive termination of this License; or, at DOW's
option, terminate such agreements as are terminable unilaterally by API. DOW
makes no commitment to maintain any of API's sublicensee agreements upon
termination of this License.
13.7 Survival of Certain Obligations - On termination of this License: the
obligations of confidentiality set forth in Article 7 shall survive for the
time stated therein; adverse reaction reporting set forth in Article 3.3 shall
survive; payments accrued and due under Article 6 shall survive; Export Control
compliance set forth in Article 10 shall survive; and the indemnification
obligations set forth in Article 11 shall also survive as to all claims or
actions arising from events which occurred before termination.
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ARTICLE 14 - FORCE MAJEURE
14.1 Event of Force Majeure - In the event that performance under this
License, or any obligation hereunder, is hindered, delayed or prevented by
reason of acts of God, strikes, lockouts, labor troubles, intervention of any
governmental authority, fire, riots, insurrections, invasions, war or other
reason of similar nature beyond the reasonable control of the Party and are
without its fault or negligence, then performance of that act shall be excused
for the period of the delay and the period for the performance of that act
shall be extended for an equivalent period.
14.2 Notification. Upon occurrence of an event of force majeure, the affected
Party shall promptly notify the other Party in writing, setting forth the
nature of the occurrence, its expected duration and how that Party's
performance is affected. The affected Party shall resume the performance of
its obligations as soon as practicable after the force majeure event ceases.
ARTICLE 15 - CONSENTS
15.1 Commitments - DOW agrees to take reasonable efforts to maintain in full
force and effect the agreements or written commitments which DOW has made prior
to the EFFECTIVE DATE or during the RESEARCH PERIOD for AGENT or PRODUCT in the
FIELD in the TERRITORY.
15.2 Agreements - DOW expects to enter into other agreements for licensees for
AGENT outside the FIELD in the TERRITORY. After the EFFECTIVE DATE, API
consents to let DOW disclose to the other licensees for AGENT that API is DOW's
licensee for the FIELD in the TERRITORY.
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ARTICLE 16 - NOTICES
16.1 Official -Any notice, request or communication specifically provided for
or permitted to be given under this License must be in writing and may be
delivered by hand delivery, courier service, or electronic transmission such as
telex, facsimile or telegram, and shall be deemed effective as of the time of
actual delivery thereof to the addressee. For purposes of notice the addresses
of the Parties shall be as follows:
DOW:
The Dow Chemical Company
0000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
XXX
Attention: Xxxxxxx X. Xxxxx, PhD
Director
External Technology
Telephone: 000-000-0000
Facsimile: 517 - 636 - 8127
with a copy to:
The Dow Chemical Company
Patent Department
0000 Xxxxxxxx, Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, XX
Senior Counsel
Telephone: 000-000-0000
Facsimile: 517 - 638 - 9786
API:
Access Pharmaceuticals, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxx
President & CEO
Telephone: 000-000-0000
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Facsimile: 000-000-0000
with a copy to:
Xxxxxxx, Xxxx & Xxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxxxxx III
Telephone: 000-000-0000
Facsimile: 000-000-0000
16.2 Transition - For purposes of coordination during the RESEARCH PERIOD, the
addresses of the Parties shall be as follows:
DOW:
The Dow Chemical Company
Building B-1222
0000 Xxxxxxxxxx Xxxx.
Xxxxxxxx, XX 00000
Attention: Xxx Xxxxx, PhD
Associate Scientist
Telephone: 000-000-0000
Facsimile: 000-000-0000
API:
Access Pharmaceuticals, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxx, PhD
Vice President
Research and Development
Telephone: 000-000-0000
Facsimile: 000-000-0000
16.3 Each Party may change its address and its representative for notice by
the giving of notice thereof in the manner hereinabove provided.
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ARTICLE 17 - DISPUTE RESOLUTION
17.1 Choice of Law - This License shall be governed by the laws of the State
of Delaware, excepting its conflict of laws principles, in all respects of
validity, construction and performance, except that all questions concerning
the construction, validity, coverage or infringement of patents or PATENTS
shall be decided in accordance with the patent law of the country where the
patent was granted.
17.2 Disputes - Both Parties shall make good faith efforts to resolve any
questions concerning construction and performance under this License, excluding
validity or infringement of PATENTS, by:
17.2.1 Notice, contact and resolution, all proceedings and documents in
English, between the Parties listed under Article 17.1 within one hundred
twenty (120) days from the date of the notice by negotiation either by
telephone or by meeting in Detroit, Michigan; and
17.2.2 If unsuccessful under Article 17.2.1, then senior executive
management with settlement authority and counsel of DOW and API shall meet at a
mutually agreeable location within sixty (60) days from a date of notice that
Article 17.2.1 failed to resolve the issues. Counsel shall present the legal
and factual arguments to such executives in English, with supporting evidence
if necessary, and resolution by these executives is expected within ten (10)
days, which decision may be reduced to writing in English as an amendment to
this License; and
17.2.3 If such executives have not met or resolved the issues under Article
17.2.2, then within seventy five (75) days from the date of the notice under
Article 17.2.1, the Parties shall submit the issues to arbitration in Chicago,
Illinois, in English, in accordance with the Rules of the
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American Arbitration Association ("AAA"), which may be modified by the Parties,
or to mediation by rules mutually acceptable, and judgment shall not be
binding. The Parties agree that the following procedures shall be adhered to
even though they may, in part, not be in full conformance with said Rules:
(a) Three or one Arbitrators/Mediators shall be selected from a list of at
least 20 arbitrators/mediators selected by the AAA and Parties composed of
experts in the area(s) of the dispute (for example, for a patent issue, patent
counsel with chemistry or pharmaceutical expertise who are practicing or
retired partners in law firms or retired in-house corporate patent counsel not
affiliated with the Parties with at least 15 years of experience in patent law
and knowledge of the pertinent laws of any country and the subject area of the
dispute). If three Arbitrators/Mediators are desired, then each Party shall
select one and the two selected Arbitrators/Mediators shall select the third.
The arbitration/mediation proceedings and reports shall be in English. The
time from the beginning of submission for arbitration/mediation and conclusion
of any oral or written proceedings shall not exceed six (6) months; and
(b) Limited discovery is permitted, e.g., only to the extent that each Party
has a substantial, demonstrable need, and shall be conducted in the most
expeditious and cost-effective manner. The Arbitrators or Mediators shall
resolve any issues with regard to the discovery. Decision by the
Arbitrators/Mediators shall be given in writing within thirty (30) days from
the end of oral proceedings; and
(c) Although the decision by the Arbitrators/Mediators is non-binding, should
either Party then litigate in a Court of competent jurisdiction for the
Parties, either Party may introduce the decision reached by Arbitration or
Mediation with its supporting evidence.
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ARTICLE 18 - ASSIGNMENT
18.1 Assignment - Neither Party to this License shall assign any rights
hereunder without the prior written consent of the other Party, such consent
not to be unreasonably withheld. It being agreed, however, that without such
consent being required from DOW, API may assign to its AFFILIATES, but DOW must
be notified in writing.
18.2 Consolidation, Reorganization or Merger - Should API be consolidated,
reorganized or merged with another entity, this License may not be assigned to
the successor entity or the assignee of all or substantially all of API's
business and assets related to AGENT or PRODUCT without DOW's prior written
consent, which consent will not be unreasonably withheld. It being understood
for consent to be obtained that provisions for payments to DOW by such entity
must remain as in Article 6.
18.3 Effect on Successors and Assignees - This License shall inure to the
benefit of and be binding upon such successors and permitted assignees.
ARTICLE 19 - MISCELLANEOUS PROVISIONS
19.1 Amendments - This License may be amended only in writing executed by both
Parties.
19.2 Entirety of Agreement - This License sets forth the entire agreement and
understanding between the Parties hereto with respect to PRODUCT in the FIELD
for its commercialization in the TERRITORY. The Parties agree that this
License is in compliance with the LETTER OF INTENT and that the confidentiality
provisions contained in the CDA are in force until the EFFECTIVE DATE.
19.3 Severability - If any term or provision under this License is deemed
invalid under the laws of a particular country or jurisdiction, the invalidity
shall not
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invalidate the whole License but it shall be construed as if not containing
that particular term or provision and the rights and obligations of the Parties
shall be construed and enforced accordingly. The Parties shall negotiate in
good faith a substitute provision in compliance with the law to as nearly as
possible retain the Parties intent in legally valid language.
19.4 Waivers, Cumulative Remedies - A waiver by either Party of any term or
condition of this License in any one instance shall not be deemed construed to
be a waiver of such term or condition for any similar instance in the future or
of any subsequent breach hereof. All rights, remedies, undertakings,
obligations and agreements contained in this License shall be cumulative and
none of them shall be a limitation of any other remedy, right, undertaking,
obligation or agreement of either Party.
19.5 Headings - Headings in this License are included herein for ease of
reference and shall not affect the meaning of the provisions of this License,
nor shall they have any other legal effect.
19.6 Other Documents - Each Party agrees to execute, as reasonably required,
such additional papers or documents in customary legal form and to make such
governmental filings or applications as may be necessary or desirable to effect
the purposes of this License and carry out its provisions.
19.7 Cooperation - API and DOW shall use good faith efforts to cooperate with
respect to any issues that concern the development of the PRODUCT under this
License.
IN WITNESS WHEREOF, the Parties have duly executed duplicate originals of this
License by their appropriate authorized representative. Although the last
signature date below is after April 1, 1997 as specified by the LETTER OF
INTENT,
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the Parties agree that the extension of time to execute this License is
acceptable. However, this License shall be void if not signed by both Parties
prior to, June 30, 1997, unless extended by mutual written consent.
THE DOW CHEMICAL COMPANY ACCESS PHARMACEUTICALS, INC.
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxx
-------------------- -------------------
Name: Xxxx X. Xxxxxx Name: Xxxxx X. Xxxx
Title: Vice President Title: President & CEO
Research & Development
Date: June 20, 1997 Date: June 30, 1997
------------- -------------
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