LICENSE AGREEMENT
EXHIBIT
10.17
License
(this “Agreement”) made as of April 13, 2006, by and between Acuity
Pharmaceuticals, Inc., a
Delaware corporation, with its principal offices at 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxxxx, XX, 00000 (“Acuity”)
and
Pathogenics, Inc.,
a
Delaware Corporation with its principal offices at 00 Xxxxx Xxxxxx, Xxxxx 000,
Xxxxxxx, XX 00000 (“Pathogenics”).
(Acuity
and Pathogenics are sometimes referred to herein individually as a “Party”
and
collectively as the “Parties”).
BACKGROUND
WHEREAS,
Acuity is engaged in the research, development and commercialization of
ophthalmic pharmaceutical products;
WHEREAS,
Pathogenics is a biopharmaceutical company engaged in the acquisition,
development and commercialization of novel therapeutics that have potential
significant commercial viability and that target certain unmet market
needs;
WHEREAS,
Pathogenics has exclusively licensed rights to N-Chlorotaurine, a chemical
substance produced within the body by white blood cells during an inflammatory
reaction (“N-Chlorotaurine”),
initially developed by researchers at the University Hospital of Innsbruck
and
the Institute of Hygiene and Social Medicine, Leopold-Franzens-University of
Innsbruck, Austria (the “Institute”);
WHEREAS,
Acuity and Pathogenics believe that N-Chlorotaurine could be developed into
an
efficacious treatment for conjunctivitis and other related ocular
conditions;
WHEREAS,
researchers at the Institute are preparing to conduct clinical trials in Austria
(the “Austrian Clinical Trials”) to determine if N-Chlorotaurine can be used as
an efficacious treatment for conjunctivitis and other related ocular
conditions;
WHEREAS,
Acuity desires to obtain from Pathogenics, and Pathogenics desires to grant
to
Acuity, an exclusive worldwide license to all of Pathogenics’ rights in and to
N-Chlorotaurine for the development and commercialization of ophthalmic
pharmaceutical products for use in humans in accordance with the terms of this
Agreement.
NOW,
THEREFORE, in consideration of the mutual promises, covenants, agreements,
representations and warranties hereinafter set forth, and intending to be
legally bound, the Parties hereby agree as follows:
ARTICLE
I
DEFINITIONS
“Affiliate”
means
any entity that directly or indirectly Owns, is Owned by, or is under common
Ownership with a Party to this Agreement. “Owns” or “Ownership” means direct
or
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indirect
possession of more than fifty percent (50%) of the votes of holders of a
corporation’s voting securities or a comparable equity interest in any other
type of entity.
“Agency”
means
the FDA or any governmental regulatory authority responsible for granting
approvals for the sale of Licensed Products in the United States or any foreign
country.
“Agreement”
means
this Agreement, together with all exhibits and attachments.
“Clinical
Trials”
means
all trials and studies of the application of Licensed Products in humans or
clinical studies performed by Acuity for any purpose including without
limitation for purposes of obtaining regulatory approval in the United States
or
any foreign country and marketing Licensed Products in the United States or
any
foreign country.
“Commercially
Reasonable Efforts” means,
with respect to the efforts to be expended by a Party with respect to any
objective, diligent, good faith efforts to accomplish such objective as such
Party would normally use to accomplish a similar objective under similar
circumstances, it being understood and agreed that with respect to the
development and commercialization of Licensed Products, such efforts shall
be
substantially equivalent to those efforts and resources commonly used by a
bio-pharmaceutical company for a similar pharmaceutical product owned by it
or
to which it has rights, which product is at a similar stage in its development
or product life and is of similar market potential taking into account efficacy,
safety, approved labeling, the competitiveness of alternative products in the
marketplace, the patent and other proprietary position of the product, the
likelihood of regulatory approval given the regulatory structure involved,
the
profitability of the product, alternative products and other relevant
factors.
“Confidential
Information” has
the
meaning set forth in Section 6.1.
“Effective
Date”
means
the
day
and year first indicated above.
“EMEA”
means
the
European Medicines Evaluation Agency, or any successor thereto.
“FDA”
means
the United States Food and Drug Administration, or any successor
thereto.
“Field
of Use”
means
the
treatment of ophthalmic
diseases or infection, such as but not limited to, viral conjunctivitis,
bacterial conjuctivitis and herpetic keratitis.
“Fiscal
Quarter”
means
each period of three (3) months ending on March 31, June 30, September 30,
or
December 31.
“GAAP”
means
generally accepted accounting principles as in effect from time to time in
the
United States.
“IND”
means
an “investigational new drug application” as defined by the United States Food,
Drug, and Cosmetic Act, as amended (the “Act”), and applicable FDA rules and
regulations or a foreign equivalent.
“Licensed
Products”
means
products whose manufacture, use or sale would, but for the existence of this
Agreement, infringe a valid claim of the
Pathogenics Patent Rights.
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“MHW”
means
the
Ministry of Health and Welfare of Japan, or any successor thereto.
“NDA”
means a
“new drug application,” as defined in the Act and applicable FDA rules and
regulations, including an application of the type described in section 505(b)(2)
of the Act.
“Net
Sales”
means
the total gross proceeds to Acuity on sales to Third Parties representing sales
actually collected by Acuity and its Affiliates, less deductions for the
following to the extent actually paid or allowed with respect to the such
sales:
(a) sales
and
excise taxes and duties (including import duties) paid or allowed by a selling
party and any other governmental charges imposed upon the manufacture or sale,
after giving effect to any rebates or refunds relating to such taxes or duties
received by Acuity;
(b) rebates
and chargebacks (including rebates to social and welfare systems) actually
paid;
(c) allowances,
chargebacks, and credits to Third Parties on account of rejected, damaged,
outdated, returned, withdrawn, or recalled product or on account of retroactive
price reductions affecting such product; and
(d) amounts
paid to Third Parties on account of rebate payments, including Medicaid
rebates.
Taxes,
the legal incidence of which is on the purchaser and separately shown on
Acuity’s or its Affiliates’ invoices, and transportation, insurance and postage
charges, if prepaid by Acuity or its Affiliates and billed on Acuity’s or its
Affiliates’ invoices as a separate item, shall not be considered a component of
Net Sales. Components of Net Sales shall be determined in the ordinary course
of
business in accordance with Acuity’s historical practice and using the accrual
method of accounting in accordance with GAAP.
The
supply of a product as commercial samples or for use in clinical trials or
studies shall not be included within the computation of Net Sales.
Where
(i)
a product is sold by Acuity or an Affiliate as one of a number of items without
a separate price; or (ii) the consideration for a product shall include any
non-cash element; or (iii) the product is transferred by Acuity or an Affiliate
in any manner other than an invoiced sale, the Net Sales price applicable to
any
such transaction shall be deemed to be Acuity’s average Net Sales price for the
applicable quantity of a product to the relevant class of customers at that
time.
“Net
Sublicense Payments”
means
(a) cash payments made to Acuity in consideration of the sublicense; and (b)
the
fair market value of any non-cash consideration received by Acuity from a
sublicense in consideration of the sublicense other than; provided, however
that
the following shall not be included in the calculation of Net Sublicense
Payments (i) reasonable amounts received in exchange for equity investments
in
Acuity by a sublicensee, (ii) sponsored research funding paid to Acuity by
a
sublicensee in a bona fide transaction for future research to be performed
by
Acuity; (iii) payments for consulting services actually performed by Acuity
in a
bona fide transaction at arms length rates; and (iv) intellectual property
rights received by Acuity from a sublicensee, including, but not limited to,
licenses or sublicenses to intellectual property
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rights,
covenants not to compete against Acuity, or agreements not to assert claims
against Acuity.
“Patents”
means
all valid claims in all patent applications, and all foreign patents and patent
applications based thereon, including any continuations, divisionals,
continuations-in-part, extensions, reissues and re-examinations of any of the
foregoing and all patents issuing from any of the foregoing
applications.
“Pathogenics
Improvements”
means
any improvements to the Pathogenics Patent Rights and Pathogenics Know-how,
in
each case owned by Pathogenics as of the date hereof, that are conceived,
created, developed, and/or otherwise invented by Pathogenics, by
Acuity.
“Pathogenics
Intellectual Property” means
the
Pathogenics Patent Rights, Pathogenics Improvements, and the Pathogenics
Know-how.
“Pathogenics
Know-how”
means
Technical Information owned, developed, or controlled by Pathogenics as of
the
date of this Agreement or during the Term of this Agreement.
“Pathogenics
Patent Rights”
means
any valid claim of any Patent issued based on a patent application previously
or
hereafter filed by or on behalf of Pathogenics or previously or subsequently
assigned, licensed, or granted to, or acquired by, Pathogenics, including
without limitation Patents and patent applications based on Pathogenics
Improvements. Exhibit
A
lists
all the patents and patent applications giving rise to Pathogenics Patent Rights
as of the date of this Agreement.
“Technical
Information”
means
all techniques and data and other know-how and technical information, including
inventions (including patentable inventions), practices, methods, concepts,
know-how, trade secrets, documents, computer data, source code, apparatus,
clinical and regulatory strategies and data, test data, analytical and quality
control data, manufacturing data or descriptions, development information,
drawings, specifications, designs, plans, proposals and technical data and
manuals and all other proprietary information concerning the development,
manufacture, production, quality control, storage, distribution and sale of
N-Chlorotaruine or and any of its derivatives or analogs.
“Third
Party”
means
any entity other than Pathogenics or Acuity
or their
Affiliates.
ARTICLE
II
LICENSE
GRANT; Diligence Obligation
2.1.
License
Grants
to Acuity. Pathogenics
hereby grants to Acuity, and Acuity hereby accepts from Pathogenics, a sole
and
exclusive (even as to Pathogenics) irrevocable right and license, including
the
right to sublicense, under and to Pathogenics Intellectual Property to make,
have made, use, sell, offer for sale, import or otherwise commercialize
N-Chlorotaurine and Licensed Products in the Field of Use with any
territory.
2.2.
Technology
Transfer and Assistance.
Pathogenics shall provide reasonable assistance to Acuity to effect the orderly
transfer to Acuity of Pathogenics Know-How, including the transfer to Acuity
of
all Pathogenics Materials. Pathogenics will use
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reasonable
efforts to provide this assistance to Acuity as soon as practicable. Pathogenics
shall cooperate with Acuity in connection with efforts to develop and
commercialize N-Chlorotaurine in the Field of Use.
2.3.
No
Restrictions on Business.
Pathogenics agrees that Acuity is in the business of developing, and selling
ophthalmic pharmaceutical products and that, subject to Section 3.2, nothing
in
this Agreement shall be construed as restricting such business or imposing
on
Acuity the duty to develop, register, market, and/or to sell Licensed Products
hereunder to the exclusion of or in preference to any other product or otherwise
preclude Acuity from developing other pharmaceutical products. Correspondingly,
except as set forth herein, nothing herein shall be construed as restricting
the
business of Pathogenics.
2.4.
Diligence:
Development and Commercialization.
Acuity
shall use Commercially Reasonable Efforts to develop and commercialize the
Licensed Product. The obligations set forth in this Section 2.4 are expressly
conditioned upon the absence of any serious adverse conditions or event relating
to the safety or efficacy of the Technology or Product including the absence
of
any action by any regulatory authority limiting the development or
commercialization of the Technology or Product.
2.5.
Sublicenses.
Acuity
shall have the right to grant sublicenses to any Third Party to develop, make,
have made, use, import, offer for sale, market, commercialize, distribute and
sell and otherwise dispose of the Technology or Product for use in the
Field-of-Use and the Territory; provided, however that any such sublicense
shall
be consistent with the terms of this Agreement. In the event that Acuity
proposes to grant a sublicense to any Third Party, Acuity shall give Pathogenics
a written notice prior to entering into the sublicense describing the proposed
sublicense, including the specific rights proposed to be sublicensed and the
material commercial and professional terms of the proposed sublicense. Acuity
shall also provide Pathogenics with a copy of any sublicense agreements. Upon
any termination of this Agreement pursuant to Section 9.2, Pathogenics may
elect
to have any existing sublicense agreement(s) survive and be assigned by Acuity
to Pathogenics provided that (i) the sublicensee is not in breach of its
sublicense agreement at the time of such termination of this Agreement, and
(ii)
any sublicensee who desires its sublicense to survive shall promptly agree
in
writing to be bound by the applicable terms of and assume all obligations of
Acuity under this Agreement.
ARTICLE
III
AUSTRIA
DEVELOPMENT PROGRAM
3.1.
Austrian
Clinical Trials.
Acuity
will have non-exclusive rights to all data resulting from the Austrian Clinical
Trials. Pathogenics will use its best efforts to cause the researchers at the
Institute and any person participating in the Austrian Clinical Trials to
provide Acuity with all data resulting from such trials. Acuity shall treat
all
information disclosed to it under this Section 3.1 as Confidential Information
(as herein defined).
3.2.
Austrian
Trial Acceleration Funding.
(a) Upon
the
completion of a Phase I clinical trial in Austria to study N-Chlorotaurine
in
the Field of Use, Pathogenics will use its best efforts to cause the
researchers
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at
the
Institute and any person participating in the Austrian Clinical Trials to
prepare, or cause to be prepared, and deliver to Acuity a final report for
the
Phase I clinical trial (the “Final
Report”).
Acuity shall treat all information disclosed to it under this Section 3.2 as
Confidential Information (as herein defined).
(b) The
scope
and form of the Final Report shall be mutually agreed upon by Pathogenics and
Acuity prior to its delivery.
(c) Acuity
shall have thirty (30) days from the delivery of the Final Report to determine,
in Acuity’s sole reasonable discretion, if the Final Report justifies the
initiation of a Phase II clinical trial in Austria.
(d) If
Acuity
determines that the Final Report justifies the initiation of a Phase II clinical
trial in Austria:
(i) Acuity
shall make available to the Institute and or the Phase II clinical
investigators, up to $[*
Confidential material which has been omitted and filed separately with the
Securities and Exchange Commission.**]
to be
used to accelerate the Phase II clinical trial. Acuity, Pathogenics, and the
researchers Institute and or the Phase II clinical investigators will jointly
determine how this money will be utilized.
(ii) Acuity
shall use its Commercially Reasonable Efforts to initiate chemistry,
manufacturing and pre-clinical activities as are necessary to file an IND with
the FDA to initiate a phase I clinical trial in the United States using
N-Chlorotaurine as a treatment for an ophthalmic indication. Acuity shall own
all right, title, and interest in any data generated in the course of such
activities and all applications and data submitted to the any Agency. Acuity
will provide Pathogenics with any data generated in the course of such
activities and all applications and data submitted to any Agency, and
Pathogenics will have non-exclusive rights to this information for research
and
development activities outside the Field of Use. Pathogenics shall treat all
information disclosed to it under this Section 3.2 as Confidential Information
(as herein defined).
(e) If
Acuity
determines that the Final Report fails to justify the initiation of a Phase
II
clinical trial in Austria and Pathogenics reasonably disagrees with this
conclusion, Pathogenics shall have the right to terminate this Agreement upon
thirty (30) days notice to Acuity of this determination if Acuity fails to
reverse its determination during this thirty-day period.
ARTICLE
IV
MILESTONES,
FEES, AND ROYALTY PAYMENTS; ACCOUNTING
4.1.
Austrian
Phase I Clinical Trial Completion Fee.
In
consideration of the license grant provided by Pathogenics to Acuity, Acuity
agrees to pay to Pathogenics a one time $[***]
payment
upon the successful completion of the Austrian Phase I clinical
trial.
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4.2.
Milestone
Payments.
In
consideration of the license grant provided by Pathogenics to Acuity, and
conditioned upon Acuity having determined that the Final Report justifies the
initiation of a Phase II clinical trial in Austria, Acuity agrees to pay to
Pathogenics, the following milestone payments upon the successful completion
of
the milestones set forth below for the first Licensed Product
hereunder:
|
Payment
|
Sublicense
|
|||
|
US
Phase I Clinical Trial initiated
|
$[***]
|
[***]%
|
||
|
US
Phase II Clinical Trial initiated
|
$[***]
|
[***]%
|
||
|
US
Phase III Clinical Trial initiated
|
$[***]
|
[***]%
|
||
|
EMEA
Filing
|
$[***]
|
[***]%
|
||
|
US
NDA Filing
|
$[***]
|
[***]%
|
||
|
Japan
MHW Filing
|
$[***]
|
[***]%
|
||
|
EMEA
Approval
|
$[***]
|
[***]%
|
||
|
US
NDA Approval
|
$[***]
|
[***]%
|
||
|
Japan
MHW Approval
|
$[***]
|
[***]%
|
(a) Each
of
the foregoing payments shall be made only once. Thereafter, no additional
Milestone Payments shall be due or payable by Acuity to Pathogenics for License
Products.
4.3.
License
Fee.
In
consideration for the license granted to Acuity under Section 2.1 of this
Agreement, Acuity agrees to pay to Pathogenics a one time $[***]
license
fee (“License
Fee”)
within
2 business days of the execution of this Agreement.
4.4.
Royalty
Payments.
During
the Term, Acuity will pay to Pathogenics a royalty on all Net Sales of Licensed
Products sold by Acuity and its Affiliates equal to [***]
percent
([***]%)
of Net
Sales of Licensed Products.
4.5.
Sublicense
Fees. During
the Term, Acuity will pay to Pathogenics a sublicense fee in a decreasing range
as set forth above in Section 4.2 from a maximum of [***]
percent
([***]%)
to a
minimum of [***]
percent
([***]%)
of the
Net Sublicense Payments received by Acuity from sublicensees who sell Licensed
Products pursuant to a sublicense agreement with Acuity, the sublicense fee
depending upon what milestone stage has been successfully completed. Prior
to
the successful completion of the first milestone as set forth above in Section
4.2, any Third Party sublicensee shall be treated for the purpose of this
section as [***]
of
Acuity, and Acuity shall pay Pathogenics a [***]
royalty
on all Net Sales of Licensed Products sold by its [***]
equal
to
[***]
percent
([***]%)
of Net
Sales of Licensed Products as set forth above in Section 4.4.
|
***
|
Confidential
material which has been omitted and filed separately with the Securities
and Exchange
Commission.
|
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4.6.
Withholding
Taxes.
Acuity
shall be entitled to deduct from its payments to Pathogenics the amount of
any
withholding taxes, value-added taxes or other taxes, levies or charges with
respect to such amounts payable by Acuity, or any taxes in each case required
to
be withheld by Acuity to the extent Acuity pays the appropriate governmental
authority on behalf of Pathogenics such taxes, levies or charges. Acuity shall
deliver to Pathogenics, upon reasonable request, proof of payment of all such
taxes, levies and other charges and appropriate documentation which is necessary
to obtain a tax credit, to the extent such tax credit can be
obtained.
4.7.
Timing
of Payments
(a) Acuity
shall provide written notice to Pathogenics the satisfaction of such milestone
trigger.
(b) Acuity
will pay the applicable milestone payments within thirty (30) days of written
notice of the achievement of the applicable milestone.
(c) Royalties
and Sublicense Fees payable under Section 4.4 or Section 4.5 will be paid not
later than sixty (60) days following the end of each Fiscal Quarter, or not
later than sixty (60) days from the date that is as soon thereafter as may
be
practicable in order for Acuity to determine the royalty payable. All payments
shall be accompanied by a report in writing showing for the quarter for which
such royalty payment applies: (i) the Net Sales of Licensed Products for which
royalties are required pursuant to Section 4.4 (along with a reasonably detailed
description of the calculation thereof) in United States dollars; (ii) the
Sublicense Fees payable pursuant to Section 4.5 in United States dollars; and
(iii) the withholding taxes, if any, required by law to be deducted with respect
to such royalties and Sublicense Fees and the amounts paid to the appropriate
governmental authority with respect to such royalties and Sublicense
Fees.
4.8.
Minimum
Annual License Fee.
If
total payments (including any payments required pursuant to Section 3.2 or
Sections 4.1 through 4.5) required to paid to Pathogenics for the annual periods
set forth below are less than the minimum amount set forth below, Acuity shall
pay Pathogenics an amount (the “Annual Minimum Payment”) for that annual period
equal to the difference between the total payments required for such annual
period and the Annual Minimum Payment owing for that annual period. Such payment
shall be made within forty five days of the end of each applicable year of
this
Agreement. For the year ended December 31, 2007, the Annual Minimum Payment
shall be $[*
Confidential material which has been omitted and filed separately with the
Securities and Exchange Commission.**].
For the
years ended December 31, 2008, 2009 and 2010, the Annual Minimum Payment shall
be $[***].
For the
years ended December 31, 2011 and 2012, the Annual Minimum Payment shall be
$[***].
For the
year ended December 31, 2013, the Annual Minimum Payment shall be $[***].
4.9.
No
Other Payments.
Pathogenics acknowledges and agrees that other than the payments provided in
this Article IV and Section 3.2(d)(i) and all other payment, indemnity and
reimbursement obligations set forth in this Agreement, Pathogenics shall not
be
entitled to
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any
amounts received by Acuity or its Affiliates and sublicensees from the use,
commercialization, license or sale of its rights under this Agreement,
regardless of the form or manner of payment (including milestones, royalties
or
other amounts).
4.10.
Audit.
Acuity
shall maintain and shall require its Affiliates and sublicensees to maintain,
at
their respective offices accurate and complete books and records of the Net
Sales of Licensed Products, consistent with sound business and accounting
practices. Upon the written request Pathogenics, but not more than once in
any
calendar year, Acuity shall permit an independent certified public accounting
firm of nationally recognized standing, selected by Pathogenics and acceptable
to Acuity, to have access during normal business hours to such records of Acuity
as shall be necessary to verify the accuracy of the royalty reports provided
hereunder for any year ending not more than thirty-six (36) months prior to
the
date of such request. The accounting firm shall disclose to Pathogenics only
whether the records are accurate or not and the specific details concerning
any
discrepancies, and shall provide a copy of its report to Acuity. No other
information shall be shared. If the audit of royalties shows an underpayment
of
royalty payments by Acuity of more than the greater of (i) $25,000 or (ii)
ten
percent (10%), then the expenses of the audit of royalties shall be borne by
Acuity; otherwise the expenses of the audit of royalties shall be borne by
Pathogenics. If such accounting firm concludes that additional royalties were
owed or that royalties were overpaid during such period, then Acuity shall
pay
the additional royalties or Pathogenics shall credit or pay Acuity such
overpayment within thirty (30) days of the date that such accounting firm’s
written report is delivered to the parties.
4.11.
Confidential
Financial Information.
Each
Party shall treat all financial information of the other Party as Confidential
Information of the other Party, and shall retain and shall cause its employees
and agents to retain, all such financial information in confidence.
ARTICLE
V
CERTAIN
PROVISIONS REGARDING PATENTS
5.1.
Patent
Filings, Prosecution and Maintenance of Pathogenics Patent
Rights.
(a) Acuity
shall have the first right, using in-house or outside legal counsel selected
at
Acuity’s sole discretion, to prepare, file, prosecute, maintain and extend
patent applications and patents concerning all such Pathogenics Patent Rights
in
the United States and any foreign country that Pathogenics chooses in its sole
discretion, for which Acuity shall bear the costs relating to such activities.
If Pathogenics licenses any of the Pathogenics Patent Rights to a Third Party
for use outside the Field-of-Use, then Acuity shall be reimbursed or credited
a
pro-rata portion (i.e., in the event there is one other Third Party licensee
-
Acuity receives 50% reimbursement; two Third Party licensee’s - Acuity receives
67% reimbursement,
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etc.)
of
all patent prosecution and maintenance costs. Pathogenics patent attorney shall
be involved in the preparation and prosecution of patent applications concerning
Pathogenics Patent Rights. Acuity shall solicit Pathogenics’ advice and review
of the nature and text of any such patent applications in reasonably sufficient
time prior to filing thereof, and Pathogenics shall take into account Acuity’s
reasonable comments related thereto. Pathogenics and Acuity shall treat all
information disclosed to it under this Section 5.1 as Confidential Information
(as herein defined).
(b) If
Acuity
elects not to file, prosecute or maintain any Pathogenics Patent Rights or
any
ensuing Patents or claims encompassed by any Pathogenics Patent Rights in the
United States or any foreign country, Acuity shall give Pathogenics notice
thereof within a reasonable period prior to allowing such patent applications
or
Patents or such claims encompassed by such patent applications or Patents to
lapse or become abandoned or unenforceable, and Pathogenics shall thereafter
have the right, at its sole expense, to prepare, file, prosecute and maintain
patent applications and patents or divisional applications related to such
claims encompassed by such patent applications or patents concerning all such
inventions and discoveries in countries of its choice throughout the
world.
Thereafter, Acuity’s license grant per Section 2.1 and all other license rights
and royalty obligations under this Agreement related to that Pathogenics Patent
Right in such country (and only in such country) shall terminate and such patent
or patent application in such country shall no longer be deemed a part of this
Agreement. The termination of license grant or other license rights shall not
affect any other rights or obligations accrued by either Party prior to the
effective date of such termination.
5.2.
Enforcement
of Pathogenics Patent Rights.
(a) In
the
event that a Party learns that any Pathogenics Patent Rights necessary for
the
development, manufacture, use and/or sale of any Licensed Product are infringed
or misappropriated by activities of a Third Party in any country, or are subject
to a declaratory judgment action arising from such infringement in such country,
such Party shall promptly notify the other Party hereto.
(b) Pathogenics
shall have the initial right (but not the obligation) to enforce such
Pathogenics Patent Rights, or defend any declaratory judgment action with
respect thereto, at its expense.
(c) In
the
event that Pathogenics fails to initiate a suit to enforce such Pathogenics
Patent Rights against such a Third Party in any jurisdiction within sixty (60)
days after notification of such infringement or decides that does not desire
to
defend such declaratory judgment action, Acuity may initiate such suit in the
name of Pathogenics with regard to the applicable Pathogenics Patent Rights
against such infringement or assume the defense of the declaratory judgment
action, at the expense of Acuity. The Party involved in any such claim, suit
or
proceeding (the “Enforcing
Party”),
shall
keep the other Party hereto reasonably informed of the progress of any such
claim, suit or proceeding and shall allow the other Party to participate in
the
action at the other Party’s sole cost and expense. Pathogenics and Acuity shall
recover their respective actual out-of-pocket expenses, or equitable proportions
thereof, associated with any litigation or settlement thereof from any recovery
made by any Party. Any
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21
remaining
amounts shall be distributed between the Enforcing Party, with the Enforcing
Party receiving 75% of any such net recovery and the other Party
25%.
5.3.
Injunction
and/or Failure to Obtain Third Party License.
Without
limiting any other remedy that may be available to Acuity under this Agreement,
Acuity shall have the right to terminate this Agreement in its entirety or
only
as to the affected country, immediately upon written notice to Pathogenics
if at
any time during the term of this Agreement: (i) a permanent injunction is issued
by a court of competent jurisdiction enjoining Acuity’s sale of Licensed
Products in a country, or (ii) Acuity ceases the sale of Licensed Products
in a
country as a result of a failure of either Party to obtain, upon commercially
reasonable terms, a license (or immunity from suit) from a Third Party alleging
infringement in such country.
ARTICLE
VI
CONFIDENTIALITY
6.1.
Confidentiality
and Non-Use Obligations.
(a)
During the Term of this Agreement and for five (5) years thereafter without
regard to the means of termination, neither Acuity nor Pathogenics shall use,
for any purpose other than the purposes of this Agreement, reveal or disclose
to
any Third Party information and materials disclosed by the other Party (whether
prior to or during the Term of this Agreement), and marked as confidential
or
for which the receiving Party knows or has reason to know are or contain trade
secrets or other proprietary information of the other Party (the “Confidential
Information”) without first obtaining the written consent of the other
Party.
(b) The
Parties shall take all reasonable precautions to prevent the use or disclosure
of such Confidential Information without first obtaining the written consent
of
the other Party, except (i) as may be required for securing regulatory approval,
including pricing approval in the United States and any foreign country, or
as
may otherwise be required to be disclosed to an Agency in the United States
and
any foreign country; or (ii) as required in connection with any filings made
by
the Securities and Exchange Commission or similar non-U.S. regulatory
authorities or by the disclosure policies of a major stock exchange. Each Party
agrees that prior to the release or dissemination of the other Party’s
Confidential Information to any Affiliate or sublicensee, such Party shall
cause
the person to whom such Confidential Information is to be released to be bound
by a confidentiality agreement providing for a level of protection of such
Confidential Information at least equivalent to the terms of this Article
VI.
(c) These
restrictions upon disclosure and use of Confidential Information shall not
apply
to any specific portion of Confidential Information which:
(i) is
Confidential Information that can be demonstrated by the written records of
the
recipient to have already been in the possession of the recipient free of any
restrictions as to its use or disclosure at the time of disclosure by the other
Party;
(ii) is
or
later becomes available to the public, as evidenced by documents which were
generally published, other than by the fault of the recipient;
or
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(iii) is
received from a Third Party having legitimate possession thereof and the
independent legal right to make such disclosure and such Third Party does not
place any restriction as to the use or disclosure on the recipient.
(d) Any
patent applications and information therein filed or to be filed by either
Party
shall be deemed (i) to be Confidential Information of that Party subject to
the
provisions of this Article VI and (ii) to have been disclosed in confidence
to
the other Party.
(e) Notwithstanding
the foregoing, the recipient may disclose any Confidential Information to the
extent required by an order of any court or other governmental authority having
competent jurisdiction, but only after the other Party is (i) notified in
writing and provided with a copy of such order; and (ii) given an opportunity
to
prevent such disclosure or obtain reasonable protection for such Confidential
Information. In any such event, the recipient shall cooperate fully with other
Party in connection with obtaining any protective order or other appropriate
remedy to prevent disclosure of Confidential Information.
(f) Notwithstanding
the foregoing, the recipient may disclose any Confidential Information to any
Agency as may be required by law or in connection with any application to test,
sell or market a Licensed Product.
6.2.
Press
Releases and Public Announcements.
Neither
Party to this Agreement shall issue any press release or other publicity
materials, or make any public presentation with respect to the terms or
conditions of this Agreement without the prior written consent of the other
Party (such consent not to be unreasonably withheld or delayed). The
restrictions provided in this Section 6.2 shall not apply to disclosures deemed
by the Parties in their discretion to be required by law or regulation,
including as may be required in connection with any filings made with the
Securities and Exchange Commission or any similar non-U.S. regulatory authority,
or by the disclosure policies of the Nasdaq Stock Market, Inc.
ARTICLE
VII
REPRESENTATIONS
AND WARRANTIES
7.1.
Legal
and Governmental Compliance.
Each
Party shall comply with all laws, rules and regulations applicable to the
activities undertaken by such Party hereunder.
7.2.
Pathogenics
Representations and Warranties.
Pathogenics represents and warrants to Acuity that the following are true and
correct as of the date hereof:
(a) Pathogenics
is a Delaware corporation duly organized, validly existing, and in good standing
under the laws of Delaware and has full corporate power to own its properties
and conduct the business presently being conducted by it, and is duly qualified
to do business in, and is in good standing under, the laws of all jurisdictions
in which its activities or assets require such status, except in any case where
the failure to be so qualified and in good standing would not be
material.
(b) Pathogenics
has full corporate right, power and authority to perform its obligations
pursuant to this Agreement, and this Agreement and the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action
on
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the
part
of Pathogenics. This Agreement has been duly and validly executed by
Pathogenics. Upon execution and delivery of this Agreement, it will be the
valid
and binding obligation of Pathogenics, enforceable in accordance with its terms,
subject to equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditor’s right and
remedies generally.
(c) The
execution, delivery and performance of this Agreement does not, and the
consummation of the transactions herein contemplated will not violate any law,
rule, regulation, order, judgment or decree binding on Pathogenics, or result
in
a breach of any term of the certificate of incorporation or by-laws of
Pathogenics or any contract, agreement or other instrument to which Pathogenics
is a party, except in each case to an extent not material.
(d) Pathogenics
is the sole owner of the entire right, title and interest in and to the
Pathogenics Patent Rights and no other Person (including any government) has
any
license, claim or other right or interest in or to the Pathogenics Patent Rights
as of the Effective Date.
(e) To
Pathogenics’ actual knowledge, the use of the Pathogenics Intellectual Property
in the development, manufacture and sale of the License Products will not
infringe, misappropriate or otherwise conflict with any intellectual property
or
other rights of any Third Party as of the Effective Date.
(f) Pathogenics
is not aware of any infringement of the Pathogenics Patent Rights as of the
Effective Date.
(g) There
are
no judicial, arbitral, regulatory or administrative proceedings or
investigations, claims, actions or suits relating to the Pathogenics Patent
Rights pending against or, to Pathogenics’ knowledge, threatened against
Pathogenics or its Affiliates in any court or by or before any governmental
body
or agency in the United States or any foreign country.
7.3.
Representations
and Warranties of Acuity.
Acuity
represents and warrants to Pathogenics that the following are true and correct
as of the date hereof:
(a) Acuity
is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has full corporate power to own its properties
and conduct the business presently being conducted by it, and is duly qualified
to do business in, and is in good standing under, the laws of all states in
which its activities or assets require such status, except in any case where
the
failure to be so qualified and in good standing would not be
material.
(b) Acuity
has full corporate right, power and authority to perform its obligations
pursuant to this Agreement, and this Agreement and the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action
on the part of Acuity. This Agreement has been duly and validly executed by
Acuity. Upon execution and delivery of this Agreement, it will be the valid
and
binding obligation of Acuity enforceable in accordance with its terms, subject
to equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditor’s rights and remedies
generally.
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(c) The
execution, delivery and performance of this Agreement does not, and the
consummation of the transactions therein contemplated will not violate any
law,
rule, regulation, order, judgment or decree binding on Acuity or result in
a
breach of any term of the certificate of incorporation or by-laws of Acuity
or
any contract, agreement or other instrument to which Acuity is a party, except
in each case to an extent not material. No authorization is required by Acuity
for the execution, delivery, or performance of this Agreement by Acuity, except
in each case to an extent not material.
7.4.
Limitation
on Warranties.
Except
as expressly provided in this Agreement, neither Party makes any representation
or warranty to the other, whether express or implied, either in fact or by
operation of law, by statute or otherwise, and both Parties specifically
disclaim any and all implied or statutory warranties, including, without
limitation, any warranty of merchantability or warranty of fitness for a
particular purpose. In addition, each Party understands and agrees that neither
Party warrants or commits that Licensed Products will be successfully developed,
be submitted for applicable regulatory approval, receive applicable regulatory
approval or be successfully marketed or commercialized. Without limiting the
indemnity obligations set forth in Article XII for the items described therein,
neither Party shall have liability or responsibility to the other Party for
any
such failure in the research and development, Agency approval, manufacturing,
marketing or sales efforts, except to the extent such failure results from
the
Party’s willful misconduct or gross negligence.
ARTICLE
VIII
INDEMNIFICATION
8.1.
Indemnification.
(a) Acuity
Indemnification.
Acuity
agrees to indemnify and hold forever harmless Pathogenics and its Affiliates
and
each of their agents, directors, officers and employees from and against any
loss, damage, action, proceeding, expense, liability, physical or emotional
injury or death, or loss of service or consortium, including reasonable
attorney’s fees (“Loss”) arising from or in connection with (i) the research,
development, manufacture, use, offer for sale, sale or importation by Acuity
or
its Affiliates of Licensed, except
for any
Loss for which Pathogenics has agreed to indemnify Acuity pursuant to Section
9.1(b) below; (ii) the breach or inaccuracy of any representations, warranties
or covenants made by Acuity in this Agreement; and (iii) the gross negligence
or
willful misconduct of Acuity or its Affiliates or any of their agents, directors
officers or employees.
(b) Pathogenics
Indemnification.
Pathogenics agrees to indemnify and hold forever harmless Acuity and its
Affiliates and each of their agents, directors, officers, and employees from
and
against any Loss arising from or in connection with: (i) Pathogenics’ or its
Affiliates’ research and development activities in connection with any
pharmaceutical product or the activities of any Pathogenics personnel in
connection with the research, development, manufacture, use, sale, storage
or
handling of pharmaceutical products, except
for any
Loss for which Acuity has agreed to indemnify Pathogenics pursuant to Section
9.1(a) above;
and
(ii) the breach or inaccuracy of any representations, warranties or covenants
made by Pathogenics in this Agreement, (iii) the gross negligence or willful
misconduct of Pathogenics or its Affiliates or any of their agents, directors,
officers or employees.
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8.2.
Procedure.
A Party
seeking indemnity hereunder (an “Indemnified
Party”)
shall
promptly notify the other Party (the “Indemnifying
Party”)
upon
being notified or otherwise made aware of a suit, action or claim; provided
that
failure to provide such notice shall not affect the obligation of the
Indemnifying Party to indemnify except to the extent that the Indemnifying
Party
is materially prejudiced thereby. The Indemnifying Party shall defend and
control any proceedings, and the Indemnified Party shall be permitted to
participate at its own expense, unless there shall be a conflict of interest
which would prevent representation by joint counsel, in which event the
Indemnifying Party shall pay for the Indemnified Party’s separate counsel
pursuant to Section 11.1 above. The Indemnifying Party may not settle the suit
or otherwise consent to any judgment in such suit without the written consent
of
the Indemnified Party (such consent not to be unreasonably withheld or
delayed).
The
Parties shall cooperate in the defense of any Third Party claim.
8.3.
Limitation
of Liability.
NEITHER
PARTY SHALL BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL, INCIDENTAL OR INDIRECT
DAMAGES OR EXPENSES, INCLUDING DAMAGES FOR LOST PROFITS, LOSS OF OPPORTUNITY
OR
USE OF ANY KIND, SUFFERED BY THE OTHER PARTY, WHETHER IN CONTRACT, TORT OR
OTHERWISE.
ARTICLE
IX
TERM;
TERMINATION
9.1.
Term.
This
Agreement shall take effect as of the date hereof and upon the receipt of the
License Fee by Pathogenics and shall continue in effect for shorter of (a)
20
years, or (b) the last to expire of the Pathogenics Patent Rights, unless
earlier terminated in accordance with the provisions of this Article
IX
(such
date being referred to as the “Termination
Date”).
9.2.
Termination
of Agreement.
This
Agreement may be terminated:
(a) By
Acuity
at any for any reason whatsoever. Prior to exercising this termination right,
Acuity shall (i) cease making, having made, using and selling any Licensed
Products, (ii) revoke all sublicenses causing all sublicensees to cease making,
having made, using and selling Licensed Products; and (ii) give notice to
Pathogenics of such cessation and of Acuity’s election to terminate. Acuity will
be required to pay all payments provided in Article IV which have been earned
up
and though such date that Acuity provides notice of its
termination.
(b) By
mutual
written consent of each of Pathogenics and Acuity; or
(c) By
either
Acuity or Pathogenics, upon written notice to the other Party if (i) the other
Party shall have been dissolved, ceased active business operations or
liquidated, unless such dissolution, cessation or liquidation results from
reorganization, acquisition, merger or similar event, or (ii) bankruptcy or
insolvency proceedings, including any proceeding under Title 11 of the U.S.
Code, have been brought by or against the other Party and, in the event such
a
proceeding has been brought against the other Party, remains undismissed for
a
period of sixty (60) days, or an assignment has been made for the benefit of
such Party’s creditors or a receiver of such Party’s assets has been appointed
(a “Bankruptcy
Event”);
or
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(d) By
either
Acuity or Pathogenics, upon ninety (90) days prior written notice, if the other
Party is in material default, and fails to cure such breach within ninety (90)
days following receipt of written notice from the non-breaching Party specifying
the breach to be cured.
9.3.
Surviving
Rights.
Termination of this Agreement for any reason shall be without prejudice
to:
(a) The
rights and obligations of the parties provided in Articles VI and VIII hereof,
and the representations and warranties provided in Article VII, all of which
shall survive such termination;
(b) Any
other
rights, obligations or liabilities which shall have accrued to the benefit
of
either Party prior to such termination (including without limitation Acuity’s
obligation to pay all milestone and royalty payments which shall have accrued
hereunder up to and including the effective date of such termination), all
of
which shall survive such termination; and
(c) Any
other
rights of remedies provided at law or in equity which either party may otherwise
have against the other.
ARTICLE
X
MISCELLANEOUS
10.1.
Force
Majeure.
Neither
Party shall lose any rights hereunder or be liable to the other Party for
damages or loss on account of failure of performance by the defaulting Party
if
the failure is occasioned by government action, war, fire, explosion, flood,
strike, lockout, embargo, act of God, or any other similar cause beyond the
reasonable control of the defaulting Party, provided that the Party claiming
force majeure has exerted all reasonable efforts to avoid or remedy such force
majeure and given prompt notice to the other Party.
10.2.
Notices.
All
notices, requests, consents, and other communications under this Agreement
shall
be in writing and shall be delivered by hand, sent via overnight courier, sent
by facsimile, or mailed by first class certified or registered mail, return
receipt requested, postage prepaid:
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|
If
to Acuity: to
Acuity
Pharmaceuticals, Inc.
3700
Xxxxxx Xxxxxx
Xxxxxxxxxxxx,
XX, 00000
Xttn:
Xxxx X. Xxxxx, Ph.D.
|
With
a copy to:
Xxxxxx
Xxxxxxxx LLP
3000
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx,
XX 00000
Xttn:
Xxxx Xxxx
|
|
If
to Pathogenics: to
99
Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
Xttn:
Xxxxxxxx X. Xxxxx, Esq.
|
or
to
such other person or entity or at such other address as any party shall
designate by notice to the other in accordance herewith.
Notices
provided in accordance with this Section 10.2 shall be deemed delivered (i)
upon
personal delivery with signature required, (ii) one Business Day after they
have
been sent to the recipient by reputable overnight courier service (charges
prepaid and signature required) (iii) upon confirmation, answer back received,
of successful transmission of a facsimile message containing such notice if
sent
between 9:00 a.m. and 5:00 p.m., local time of the recipient, on any Business
Day, and as of 9:00 a.m. local time of the recipient on the next Business Day
if
sent at any other time, or (iv) three Business Days after deposit in the mail.
The term “Business Day” as used in this Section 10.2 shall mean any day other
than Saturday, Sunday or a day on which banking institutions are not required
to
be open in the State of Delaware.
10.3.
Governing
Law; Dispute Resolution.
(a) This
Agreement shall be governed by the laws of the State of Delaware, as such laws
are applied to contracts entered into and to be performed within such state,
as
though made and to be fully performed therein without regard to conflicts of
law
principles thereof. The Parties agree to submit to the personal jurisdiction
in
any Federal or State court of competent jurisdiction seated in the State of
Delaware, and waive any objection as to venue or inconvenience of
forum.
(b) The
Parties shall initially attempt in good faith to resolve any significant
controversy, claim, allegation of a Default or dispute arising out of or
relating to this Agreement (hereinafter collectively referred to as a “Dispute”)
through negotiations between senior executives of Acuity and Pathogenics. If
the
Dispute is not resolved within thirty (30) days (or such other period of time
mutually agreed upon by the Parties) of notice of the Dispute, then the Parties
agree to submit the Dispute to non-binding mediation on terms and procedures
to
be mutually agreed to for a period of ninety (90) days. Any mediation
proceedings shall be
treated as settlement discussions and therefore shall be
confidential, and no mediator
may testify for either Party in any later proceeding relating
to the
dispute. No recording or transcript shall be made of the mediation proceedings.
Each Party shall bear
its
own costs and expenses of mediation, and the Parties shall share equally the
fees and expenses of the mediator.
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(c) If
the
Dispute is not resolved through negotiations or mediation as set forth above,
then either Party may commence litigation; provided, that this Section 10.3
shall not be construed to prevent a Party from seeking injunctive relief without
observing the requirements of Section 10.3(b).
10.4.
Non-waiver
of Rights.
Except
as specifically provided for herein, the waiver from time to time by any of
the
Parties of any of their rights or their failure to exercise any remedy shall
not
operate or be construed as a continuing waiver of same or of any other of such
Party’s rights or remedies provided in this Agreement.
10.5.
No
Agency.
Neither
Party shall by virtue of this Agreement have any power to bind the other to
any
obligation nor shall this Agreement create any relationship of agency,
partnership or joint venture.
10.6.
Severability.
If any
term, covenant, or condition of this Agreement or the application thereof to
any
Party or circumstance shall, to any extent, be held to be invalid or
unenforceable, then (i) subject to clause (ii) of this Section 13.6 the
remainder of this Agreement, or the application of such term, covenant or
condition other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant, or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by
law
and (ii) the Parties hereto covenant and agree to renegotiate any such term,
covenant, or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant, or condition of this Agreement
or
the application thereof that is invalid or unenforceable.
10.7.
Entire
Agreement.
This
Agreement, including the exhibits and schedules hereto as in effect from time
to
time pursuant to the terms hereof, sets forth all the covenants, promises,
agreements, warranties, representations, conditions, and understandings between
the Parties hereto in the scope of the collaboration, and supersedes and
terminates all prior agreements and understanding between the parties under
this
Agreement. No subsequent alteration, amendment,
change,
or addition to this Agreement shall be binding upon the Parties hereto unless
reduced to writing and signed by the respective authorized officers of the
Parties.
10.8.
Assignment.
No
Party shall, without the prior written consent (not to be unreasonably withheld
or delayed) of the other Party having been obtained, assign or transfer this
Agreement to any Third Party, provided, however, that any Party may assign
or
transfer this Agreement to any Affiliate, provided that the assigning Party
shall guarantee the performance of that Affiliate, or to any successor by merger
of such Party, or to the Purchaser of all or substantially all of such assets
of
its business, without the prior written consent of the other Party hereto.
This
Agreement shall be binding upon and shall inure to the benefit of the Parties
and their successors and permitted assigns.
10.9.
Facsimile
Execution.
This
Agreement may be executed in facsimile counterparts each of which is hereby
agreed to have the legal binding effect of an original signature. The Parties
hereto agree to forward the original signatures by overnight mail to the other
Party upon execution.
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10.10.
License
Survival During Bankruptcy.
All
rights and licenses granted under or pursuant to this Agreement to the
Pathogenics Intellectual Property are, and shall otherwise be deemed to be,
for
purposes of Paragraph 365(n) of the U.S. Bankruptcy Code, licenses of rights
to
“Intellectual Property” as defined under Paragraph 101(35A) of the U.S.
Bankruptcy Code. The parties agree that Acuity, as a licensee of such rights
under this Agreement, shall retain and may fully exercise all of its rights
and
elections under the U.S. Bankruptcy Code, subject to performance by Acuity
of
its obligations under this Agreement. The parties further agree that, in the
event Pathogenics elects to terminate this Agreement because of a Bankruptcy
Event and Acuity elects to continue the licenses under this Agreement as
contemplated by the preceding sentence, then Acuity shall be entitled, upon
reasonable request, to have access, in confidence, to such of Pathogenics
Intellectual Property not already in Acuity’s possession, as shall be reasonably
necessary to make use of the license rights under this Agreement without
participation by Pathogenics.
****
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IN
WITNESS WHEREOF,
the
parties have caused this Agreement to be executed by their duly authorized
representatives as of the day and year first indicated above.
ACUITY
PHARMACEUTICALS, INC.
By:
/s/
Xxxx
X. Xxxxx
Name:
Xxxx X. Xxxxx
Title:
President and Chief Executive Officer
By:
/s/
Xxxxxxxx X. Xxxxx
Name:
Xxxxxxxx X. Xxxxx
Title:
President and Chief Executive Officer
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EXHIBIT
A
PATHOGENICS
PATENT RIGHTS
|
1
|
DE
102005023198.5; Filing Date: May 14, 2005; entitled “Aqueous solutions
containing chloramine which are free from di- and trichloroamine,
as well
as from ammonia.”
|
|
2
|
DE
102005038992.9; Filing Date: August, 16, 2005; entitled “Substance against
protozoa and its application.”
|
Page
21 of 21
