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EXCLUSIVE LICENSING AGREEMENT FOR "GLYLORIN(TM)"
BETWEEN
GLAXO WELLCOME INC.
AND
CELLEGY PHARMACEUTICALS, INC.
CONFIDENTIAL
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** Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been
omitted from this filing and have been filed separately with the Securities
and Exchange Commission.
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Table of Contents
ARTICLE 1 DEFINITIONS................................................................................... 1
1.1 "Affiliate".................................................................................. 1
1.2 "Agreement".................................................................................. 2
1.3 "Compound"................................................................................... 2
1.4 "Dollars" or "$"............................................................................. 2
1.5 "Effective Date"............................................................................. 2
1.6 "Europe"..................................................................................... 2
1.7 "Central America"............................................................................ 2
1.8 "North America".............................................................................. 2
1.9 "Asia"....................................................................................... 2
1.10 "Regions".................................................................................... 2
1.11 "FDA"........................................................................................ 2
1.12 "FD&C Act"................................................................................... 2
1.13 "Field"...................................................................................... 2
1.14 "IND"........................................................................................ 2
1.15 "Know-How"................................................................................... 2
1.16 "Licensed Product"........................................................................... 3
1.17 "n-CIE"...................................................................................... 3
1.18 "NDA"........................................................................................ 3
1.19 "Net Sales".................................................................................. 3
1.20 "Patent Rights".............................................................................. 3
1.21 "Proof of Principal Study"................................................................... 4
1.22 "Project No. 86530".......................................................................... 4
1.23 "Publication Study".......................................................................... 4
1.24 "Registration"............................................................................... 4
1.25 "Territory".................................................................................. 4
1.26 "Third Party"................................................................................ 4
1.27 "Trademark".................................................................................. 4
1.28 "Valid Claim"................................................................................ 4
1.29 "Royalty Rate"............................................................................... 5
1.30 "Sublicensee"................................................................................ 5
ARTICLE 2 REPRESENTATIONS AND WARRANTIES................................................................ 5
2.1 "Representations and Warranties of Cellegy".................................................. 5
2.2 "Representations and Warranties of GW"....................................................... 7
2.3 "Disclaimer of Warranties"................................................................... 7
ARTICLE 3 GRANT OF LICENSE.............................................................................. 8
3.1 "Grant"...................................................................................... 8
3.2 "Covenant Not To Xxx"........................................................................ 8
3.3 "Covenant Not To Compete".................................................................... 8
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3.4 "Notice"..................................................................................... 8
3.5 "Addition to the Territory".................................................................. 8
ARTICLE 4 LICENSE FEE AND MILESTONE PAYMENTS............................................................ 8
4.1 "License Fee"................................................................................ 8
4.2 "Product Development Payments"............................................................... 9
4.3 "Milestone Payments"......................................................................... 9
4.4 "Toxicity Approval Payment".................................................................. 10
4.5 "Annual Sales Based Milestone Payments"...................................................... 11
4.6 "Fee Conditions"............................................................................. 12
ARTICLE 5 ROYALTIES..................................................................................... 13
5.1 "Royalties in General"....................................................................... 13
5.2 "Accrual of Royalties"....................................................................... 13
5.3 "Third Party Royalties"...................................................................... 13
5.4 "Compulsory Licenses"........................................................................ 14
5.5 "Commercial Hardship"........................................................................ 14
5.6 "Reduction in Royalty Due to Competing Product".............................................. 14
5.7 "Reduction in Royalty Due with Respect to DiCarb Compounds".................................. 14
5.8 "Reduction in Royalties"..................................................................... 15
ARTICLE 6 ROYALTY REPORTS AND ACCOUNTING................................................................ 15
6.1 "Royalty Reports; Records"................................................................... 15
6.2 "Payment Due Dates".......................................................................... 16
6.3 "Right to Audit"............................................................................. 16
6.4 "Confidentiality of Records"................................................................. 17
ARTICLE 7 DEVELOPMENT AND MARKETING PROGRAM............................................................. 17
7.1 "Diligence Obligations"...................................................................... 17
7.2 "Development Program"........................................................................ 17
7.3 "Fulfillment"................................................................................ 17
7.4 "Progress Reports"........................................................................... 19
ARTICLE 8 PATENT RIGHTS................................................................................. 19
8.1 "Patent Prosecution and Maintenance"......................................................... 19
8.2 "Status of Patent Rights".................................................................... 20
8.3 "Ownership of Future Inventions"............................................................. 20
ARTICLE 9 INFRINGEMENT.................................................................................. 21
9.1 "Applicability".............................................................................. 21
9.2 "Third Party Infringement"................................................................... 21
9.3 "Reduction in Payments Due to Infringement".................................................. 22
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ARTICLE 10 CONFIDENTIALITY.............................................................................. 22
10.1 "Treatment of Confidential Information"...................................................... 22
10.2 "Right to Disclose".......................................................................... 22
10.3 "Release From Restrictions".................................................................. 23
10.4 "Confidentiality of Agreement"............................................................... 23
10.5 "Return of Confidential Information"......................................................... 24
ARTICLE 11 TRANSFERS AND ACCESS......................................................................... 24
11.1 "Transfer of Know-How"....................................................................... 24
11.2 "Transfer of IND"............................................................................ 24
11.3 "Transfer of Trademark"...................................................................... 24
11.4 "Tranfer of Clinical Trial Material"......................................................... 24
11.5 "Access to Key Individuals".................................................................. 25
ARTICLE 12 TERM; TERMINATION............................................................................ 25
12.1 "Term"....................................................................................... 25
12.2 "Bilateral Termination Rights"............................................................... 25
12.3 "Cellegy's Right to Terminate"............................................................... 25
12.4 "GW's Right to Terminate".................................................................... 26
12.5 "Rights Upon Termination or Expiration"...................................................... 26
ARTICLE 13 INDEMNIFICATION.............................................................................. 29
13.1 "Indemnification by GW"...................................................................... 29
13.2 "Indemnification by Cellegy"................................................................. 30
13.3 "Indemnification Procedures With Respect to Third Party Claims".............................. 30
ARTICLE 14 NOTIFICATION AND AUTHORIZATION UNDER DRUG PRICE COMPETITION AND PATENT TERM RESTORATION ACT.. 31
14.1 "Notices Relating to the Act"................................................................ 31
14.2 "Authorizations Relating to Patent Term Extension"........................................... 31
ARTICLE 15 REGISTRATION OF LICENSE...................................................................... 32
15.1 "Registration"............................................................................... 32
ARTICLE 16 GENERAL PROVISIONS........................................................................... 32
16.1 "Force Majeure".............................................................................. 32
16.2 "Further Assurances"......................................................................... 32
16.3 "Severability"............................................................................... 32
16.4 "Notices".................................................................................... 33
16.5 "Assignment"................................................................................. 33
16.6 "Amendment".................................................................................. 33
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16.7 "Entire Agreement"........................................................................... 33
16.8 "Waiver"..................................................................................... 34
16.9 "No Implied Licenses"........................................................................ 34
16.10 "Injunctions"................................................................................ 34
16.11 "Independent Contractors".................................................................... 34
16.12 "No Third Party Beneficiaries"............................................................... 34
16.13 "Governing Law".............................................................................. 34
16.14 "Headings"................................................................................... 34
16.15 "Counterparts"............................................................................... 35
SIGNATURES ............................................................................................. 35
EXHIBIT A PATENTS AND PATENT APPLICATIONS............................................................... A
EXHIBIT B-1 LIST OF GLYLORIN TRADEMARKS AND
TRADEMARK APPLICATIONS AND THEIR STATUS............................................................... B-1
EXHIBIT B-2 TRADEMARK ASSIGNMENT FOR THE UNITED STATES.................................................. B-2
EXHIBIT C ORPHAN DRUG DESIGNATION LETTER................................................................ C
EXHIBIT D THE DICARB COMPOUNDS.......................................................................... D
EXHIBIT E DEVELOPMENT COSTS............................................................................. E
EXHIBIT F INDEPENDENT REGIONS........................................................................... F
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CONFIDENTIAL
EXCLUSIVE LICENSE AGREEMENT
THIS AGREEMENT effective as of this 11th day of November, 1996, between
Glaxo Wellcome Inc., a corporation organized and existing under the laws of the
State of North Carolina, with its principal place of business at Five Xxxxx
Drive, Research Xxxxxxxx Xxxx, Xxxxx Xxxxxxxx 00000 (hereinafter, "GW") and
Cellegy Pharmaceuticals, Inc., a corporation organized and existing under the
laws of the State of California, with its principal office at 0000 Xxxx
Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx Xxxx, Xxxxxxxxxx, 00000 (hereinafter,
"Cellegy").
W I T N E S S E T H:
WHEREAS, Cellegy owns or possesses certain patent rights, potential
patent rights, know-how and regulatory filings with respect to the Compound (as
hereinafter defined);
WHEREAS, GW desires to obtain an exclusive license to certain rights to
the Compound under such patent rights and know-how;
WHEREAS, Cellegy owns or possesses certain rights pertaining to the
Trademark (as hereinafter defined), and GW desires to obtain all such rights;
and
WHEREAS, Cellegy is willing to grant an exclusive license to GW under
such patent rights and know-how, and is willing to assign the Trademark to GW,
all as more particularly described in, and subject to the terms and conditions
of, this Agreement.
NOW THEREFORE, in consideration of the foregoing and of the
mutual covenants hereinafter set forth and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties mutually
agree as follows:
ARTICLE 1
DEFINITIONS
As used in this Agreement, the following terms, whether used in the
singular or the plural, shall have the following meanings:
1.1 "Affiliate" means any corporation or non-corporate business entity
which controls, is controlled by, or is under common control with a party to
this Agreement. A corporation or non-corporate business entity shall be regarded
as in control of another corporation if it owns or directly or indirectly
controls at least forty percent (40%) of the voting stock of the other
corporation, or (a) in the absence of the ownership of at least forty percent
(40%) of the voting stock of a corporation, or (b) in the case of a
non-corporate business entity, if it possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of the
corporation or non-corporate business entity, as applicable, whether through the
ownership or control of voting securities, by contract or otherwise.
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1.2 "Agreement" means this Exclusive License Agreement.
1.3 "Compound" means the substances for which Valid Claims are made
under the Patent Rights (other than dicarboxylic acids, including, but not
limited to, azelaic acids), including but not limited to the monoglyceride ester
of lauric acid and other glycerol esters of carboxylic fatty acids, and the
pharmaceutically acceptable salts and esters thereof.
1.4 "Dollars" or "$" means United States dollars.
1.5 "Effective Date" means the date set forth at the beginning of
this Agreement.
1.6 "Europe" means all countries which are Member States, from
time to time, of the European Union.
1.7 "Central America" shall mean those countries which are south
of Mexico and north of Columbia.
1.8 "North America" shall mean the countries of the United States,
Canada, Mexico and all of the countries of the Caribbean.
1.9 "Asia" shall mean all of the countries generally included within
the continent of Asia, including but not limited to the countries of Japan,
Korea, India, Pakistan, Philippines, Turkey, Russia, China, and excluding (for
the avoidance of doubt) the countries of Australia, New Zealand or any country
in the territory generally known as the Middle East.
1.10 "Regions" shall mean those sections of the Territory as listed and
described in Exhibit F attached hereto.
1.11 "FDA" means the United States Food and Drug Administration, or
any successor entity thereto.
1.12 "FD&C Act" means the Federal Food, Drug and Cosmetic Act, as
amended.
1.13 "Field" means the topical treatment of dermatological diseases
and conditions in humans.
1.14 "IND" means an Investigational New Drug Application or its
equivalent.
1.15 "Know-How" means all data, information, methods, procedures,
processes and materials, which is or comes to be possessed, acquired, licensed
or owned by Cellegy as of the Effective Date of this Agreement and within the
one hundred and eighty (180) day period subsequent to the Effective Date of this
Agreement, to the extent that such data, information, methods, procedures,
processes and materials specifically relates to the manufacture, development,
testing or use of a Compound or a Licensed Product, including but not limited
to,
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biological, chemical, biochemical, toxicological, pharmacological, metabolic,
formulation, clinical, analytical and stability information and data (other than
such Know-How which is the subject of a patent or of a provisional or filed
patent application), and for which Cellegy has the right to license, disclose
or provide to GW.
1.16 "Licensed Product" means any finished pharmaceutical product
containing a Compound, in a form ready for therapeutic use, which is covered by
a Valid Claim or which incorporates Know-How.
1.17 "n-CIE" means non-bullous congenital ichthyosiform
erythroderma.
1.18 "NDA" means a New Drug Application or its equivalent, as
defined under Section 505 of the FD&C Act.
1.19 "Net Sales" with respect to any Licensed Product containing a
Compound as the sole active ingredient, means the gross sales of such Licensed
Product that is due, or otherwise received by, GW, or its Affiliates or its
Sublicensees from Third Party customers for such Licensed Product, less:
(i) reasonable credited allowances to such Third
Party customers for spoiled, damaged, rejected, recalled,
outdated and returned Licensed Product and for reasonable
retroactive price reductions,
(ii) the amounts of reasonable trade and cash
discounts actually allowed, to the extent such trade and cash
discounts are specifically allowed on account of the purchase
of such Licensed Product,
(iii) sales taxes, excise taxes, use taxes and
import/export duties actually due or incurred in connection
with the sales of the Licensed Product to any Third Party, and
(iv) reasonable allowances, adjustments,
reimbursements, discounts, chargebacks and rebates granted to
Third Parties, including, but not limited to, rebates given to
health care organizations or other Third Parties, and any bona
fide payment made in respect of any sales of Licensed Product
to any governmental or quasi-governmental body or agency,
whether during the actual royalty period or not.
The parties agree that should GW or its Affiliates or Sublicensees desire to
produce or market a Licensed Product which includes other active ingredients in
addition to the Compound, the parties shall negotiate in good faith appropriate
modifications to be made to the royalty rate, which such modifications shall be
mutually agreeable to each party.
1.20 "Patent Rights" means the rights under United States Patent No.
5,057,500, United States Patent No. 5,231,087 and United States Patent No.
4,885,282 (the "282 Patent"),
CONFIDENTIAL -3-
and related foreign patents and foreign patent applications, including any and
all current or future United States or foreign reissues, extensions,
substitutions, confirmations, registrations, revalidations, renewals,
supplementary protection certificates, additions, continuations,
continuations-in-part or divisions thereof; provided, however, that with respect
to the 282 Patent and foreign counterpart patents and patent applications
thereto, the term Patent Rights shall not include any use claimed in the 282
Patent, or any foreign patent or patent applications related thereto, for: (i)
dicarboxylic acids for the use as a treatment for wrinkling, or (ii) azelaic
acids. The currently existing United States and foreign patents and patent
applications containing claims within the Patent Rights are listed in Exhibit A
hereto.
1.21 "Proof of Principle Study" means a clinical study in human
subjects of the Compound carried out by or under the control of GW, with a
design and success criteria acceptable to both parties, which is intended to
allow preliminary evaluation of the possible efficacy of the Compound as a
treatment for dermatological conditions or indications covered by a Valid Claim.
The term "completion" of a Proof of Principle Study, shall mean the date on
which the final report with respect to such Proof of Principle Study is
completed in final form.
1.22 "Project No. 86530" means the toxicity study being conducted for
the purpose of investigating the potential toxicity of the Compound in mice
pursuant to dermal administration of the Compound for twenty-six (26) weeks.
1.23 "Publication Study" means a clinical study in human subjects of
the Compound carried out by or under the control of GW, which is intended to be
published in a peer-reviewed journal with the view towards allowing readers of
such journal to become aware of the possible efficacy of the Compound as a
treatment for dermatological conditions or indications covered by a Valid Claim.
The term "completion" of a Publication Study, shall mean the date on which the
final report with respect to such Publication Study is completed in final form.
1.24 "Registration" in relation to any Licensed Product means such
approvals by government authorities in a country of or community or association
of countries included in the Territory (including, where applicable, price
approvals) as may be legally required before such Licensed Product may be
commercialized in such country.
1.25 "Territory" means North America, Europe, Asia, Central America,
South Africa, Australia, Argentina, Brazil, Bolivia, Chile, Columbia, Ecuador,
Peru, Paraguay, Uruguay and Venezuela.
1.26 "Third Party" means any party other than Cellegy or GW, or GW's
Affiliates or Sublicensees.
1.27 "Trademark" means those trademarks and trademark applications
which are further described in Exhibit B-1, attached hereto.
1.28 "Valid Claim" means a claim contained in an issued and unexpired
patent included within the Patent Rights which has not been held unenforceable,
unpatentable or invalid
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by a decision of a court or other governmental agency of competent jurisdiction,
unappealable or unappealed within the time allowed for appeal, and which has not
been admitted to be invalid or unenforceable through abandonment, reissue,
disclaimer or otherwise.
1.29 "Royalty Rate" means the percentage as provided under Article
5.1(a), and may be modified in accordance with this Agreement, by which Net
Sales in a given country are to be multiplied to determine the amount of royalty
payment due Cellegy.
1.30 "Sublicensee" means (i) with respect to GW, any person to whom GW
sublicenses the rights, or any portion thereof, granted GW pursuant to Section
3.1 hereof, (ii) with respect to Cellegy, any person to whom Cellegy sublicenses
the rights, or any portion thereof, granted GW pursuant to Section 12.5(h)
hereof.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Cellegy. Cellegy hereby
represents and warrants to GW that:
(a) Cellegy is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of California, with
the corporate power and authority to enter into this Agreement and to perform
its obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all requisite corporate action on the part of Cellegy. This Agreement has
been duly executed and delivered by Cellegy and constitutes the valid, binding
and enforceable obligation of Cellegy, subject to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity.
(b) Cellegy is not subject to, or bound by, any provision of:
(i) any articles or certificates of incorporation or
by-laws;
(ii) any mortgage, deed of trust, lease, note,
shareholders' agreement, bond, indenture, license, permit,
trust, custodianship, or other instrument, agreement or
restriction; or
(iii) any judgment, order, writ, injunction or decree
of any court, governmental body, administrative agency or
arbitrator,
that would prevent, or be violated by, or under which there would be a default
as a result of, nor is the consent of any person required for, the execution,
delivery and performance by Cellegy of this Agreement and the obligations
contained herein, including without limitation, the grant to GW of the license
described in Article 3.1 hereof.
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(c) To the best of its knowledge, Cellegy is the exclusive
owner of all right, title and interest in the Patent Rights. To the best of
Cellegy's knowledge, the claims in the patents included in the Patent Rights are
valid and enforceable, and the patent applications included in the Patent Rights
have been duly filed. Attached hereto as Exhibit A is a complete and accurate
list of all patents and patent applications included in the Patent Rights as of
the Effective Date.
(d) To the best of its knowledge, Cellegy is the exclusive
owner of all right, title and interest in the Trademark in the territories in
which registration has been sought, and has taken those measures reasonably
necessary to secure its interests in the Trademark. Attached hereto as Exhibit
B-1 is a complete and accurate list of all trademarks and trademark applications
included in the Trademark, and their status, as of the Effective Date.
(e) To the best of its knowledge, Cellegy has taken reasonable
measures to protect the confidentiality of the Know-How. On occasions where
Cellegy has granted access to Third Parties with respect to material elements of
either the Know-How or the confidential information concerning the Compound, to
the best of Cellegy's knowledge, such access has been granted pursuant to an
enforceable confidentiality agreement containing restrictions on the use of such
information with a term of at least three (3) years.
(f) To the best of Cellegy's knowledge, as of the Effective
Date, neither the manufacture, use or sale of the Compound or the practice of
any of the inventions included in the Patent Rights nor the use of the Know-How
by GW as contemplated by this Agreement infringes upon any Third Party's
know-how, patent or other intellectual property rights in the Territory, other
than as disclosed in Exhibit B-1. Cellegy shall promptly notify GW upon learning
that the manufacture, use, sale of the Compound or the practice of any
inventions covered by one or more claims included in the Patent Rights or the
use of any Know-How licensed hereunder may infringe any rights of a Third Party.
(g) To the best of Cellegy's knowledge, other than as
disclosed in Exhibit B-1, there is no Third Party using or infringing any or all
of the Patent Rights or the Trademark in derogation of the rights granted to GW
in this Agreement or in the Trademark Assignment.
(h) To the best of its knowledge, Cellegy has obtained the
assignment of all interests and all rights of any and all Third Parties
(including, but not limited to Cellegy's employees) with respect to the Patent
Rights and, other than as disclosed in Exhibit B-1, to the Trademark. To the
best of Cellegy's knowledge, Cellegy has obtained all interests and all rights
of any and all Third Parties (including, but not limited to Cellegy's employees)
with respect to confidential or proprietary portions of the Know-How.
(i) To the best of Cellegy's knowledge, other than as
disclosed in Exhibit B-1, there is no interference or opposition actions or
litigations pending or any communication which threatens interference or
opposition actions, or other litigation before any patent and
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trademark office, court, or any other governmental entity in any jurisdiction in
regard to the Patent Rights or the Trademark.
(j) Cellegy represents and warrants that, to the best of its
knowledge, it has furnished or will furnish (in accordance with the terms of
this Agreement) to GW all of the Know-How which Cellegy owns or possesses.
(k) Attached hereto as Exhibit C, is a true and correct copy
of the letter from the FDA conferring Orphan Drug Designation with respect to
the Compound. Such Orphan Drug Designation has not been revoked, withdrawn or
modified by the FDA as of the Effective Date.
(l) Cellegy's total assets, as reflected in the balance sheet
dated September 30, 1996, which such balance sheet is the last regularly
prepared balance sheet of Cellegy, are less than Ten Million Dollars
($10,000,000).
(m) Nothing has come to the attention of Cellegy which would
indicate the existence of any material side effect, toxicity effect,
carcinogenicity effect, adverse effect or any instances of deleterious physical
effects or reactions resulting from, or alleged to result from, the Compound,
which are not identified in the Know-How delivered to GW under this Agreement,
or which has not been otherwise disclosed to GW by Cellegy.
2.2 Representations and Warranties of GW. (a) GW hereby represents and
warrants to Cellegy that GW is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of North Carolina, with the
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all requisite corporate action on the part of GW. This Agreement has been
duly executed and delivered by GW and constitutes the valid, binding and
enforceable obligation of GW, subject to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting creditors' rights generally from
time to time in effect and to general principles of equity.
(b) GW represents and warrants the compliance of its
Affiliates, and Sublicensees with this Agreement and obligations such Affiliates
and Sublicensees may have to Cellegy, including, but not limited to payment of
any fees or royalties.
2.3 Disclaimer of Warranties. CELLEGY MAKES NO REPRESENTATION OR
WARRANTY OTHER THAN THOSE EXPRESSLY PROVIDED HEREUNDER AND CELLEGY HEREBY
DISCLAIMS ALL SUCH OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION ANY WARRANTIES OF MERCHANTABILITY, OR THE FITNESS FOR A PARTICULAR
PURPOSE OF THE COMPOUNDS THE LICENSED PRODUCTS OR THE KNOW-HOW. CELLEGY MAKES NO
REPRESENTATION OR WARRANTY THAT THE COMPOUND OR ANY LICENSED PRODUCT ARE OR WILL
BE SHOWN TO BE SAFE OR EFFECTIVE FOR ANY INDICATION.
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ARTICLE 3
GRANT OF LICENSE
3.1 Grant. Cellegy hereby grants to GW an exclusive license, with a
right to sublicense, under the Patent Rights and Know-How to make, have made,
use and sell Licensed Products in the Field, within the Territory.
3.2 Covenant Not To Xxx. Cellegy hereby covenants and agrees that, for
the term of this Agreement, Cellegy shall not assert or cause to be asserted
against GW (or its Affiliates, Sublicensees or purchasers of Licensed Products)
a claim for infringement of any patent invented or owned by Cellegy which
specifically relates to the Compound, or a method of making or using the
Compound, due to any manufacture, use or sale of Licensed Products in accordance
with this Agreement within the Territory and Field, and which are the same, in
form and method of manufacture as the Licensed Product described in the NDA
first submitted to FDA, exclusive of any supplements or amendments thereto.
3.3 Covenant Not To Compete. Cellegy hereby covenants and agrees that,
for the term of this Agreement, Cellegy shall not, nor shall it permit any of
its officers, employees, or wholly owned subsidiaries, nor authorize any of its
Affiliates, directors, or Sublicensees to, individually or jointly with other
persons, manufacture, develop, test, sell, market or distribute any product
within the Territory which contains dicarboxylic acids (other than azelaic
acids) or pharmaceutically acceptable salts or esters thereof, for the treatment
of the diseases or conditions of Seborrheic Dermatitis, severe dry skin or any
form of Ichthyoses. During the term of this Agreement, Cellegy shall not use or
file applications for the Trademark in the countries within the Territory for
which GW's rights have not been terminated.
3.4 Notice. Cellegy hereby covenants and agrees to provide GW with
prompt written notice in the event that Cellegy executes a license agreement,
development agreement or other collaboration agreement with respect to the
development of the dicarboxylic acid compounds currently owned by Cellegy and
listed on Exhibit D hereto (the "DiCarb Compounds").
3.5 Addition to the Territory. Cellegy, with GW's consent, may add to
the Territory other countries and their respective territories and
principalities.
ARTICLE 4
LICENSE FEE AND MILESTONE PAYMENTS
4.1 License Fee. As partial consideration of the rights granted to GW
by Cellegy under Article 3 hereof, GW shall pay to Cellegy a license fee of [**]
within thirty (30) days after the execution of this Agreement by both parties.
** Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been
omitted from this filing and have been filed separately with the
Securities and Exchange Commission.
CONFIDENTIAL -8-
4.2 Product Development Payments. (a) Within thirty (30) days after the
execution of this Agreement by both parties, GW shall reimburse Cellegy for the
direct out-of-pocket costs of manufacture, development, regulatory affairs
support, professional fees, clinical studies and other testing of the Compound
incurred by Cellegy since August 1, 1996, in the amounts specified on Exhibit E
hereto (hereinafter, the "Development Costs"). GW will pay to Cellegy for 90% of
such costs estimated for October, in the amount of [**] as described in Exhibit
E. An adjusted final payment by GW, or refund by Cellegy, will be made by
December 1 based on the actual October development costs incurred by Cellegy. It
is understood and agreed that Development Costs shall not include any costs
incurred by Cellegy with respect to its employees, and furthermore, GW shall not
have any obligation to reimburse Cellegy for Development Costs to the extent
such amounts exceed the amounts stated in Exhibit E.
(b) GW will be responsible for all on-going and new
development costs of the Compound incurred on or after November 1, 1996. There
is currently anticipated to be a transition period after the Effective Date of
the agreement where Cellegy, at the direction of GW, may continue to coordinate
and pay for certain development costs. GW will reimburse Cellegy for the
reasonable out-of-pocket costs incurred by Cellegy in connection with such
payments made by Cellegy.
4.3 Milestone Payments. GW shall pay to Cellegy a milestone payment in
the particular amounts specified below (each a "Milestone Payment") no later
than thirty (30) days after the occurrence of the corresponding event designated
in Articles 4.3 (a) below, and no later than sixty (60) days after the
occurrence of the corresponding event designated in Articles 4.3 (b), (c), (d)
and (e) below:
(a) Upon the date of first commercial sale of a Licensed
Product in any country of the Territory, GW shall pay to Cellegy the sum of
[**], it being understood and agreed that such payment shall be made no more
than one time;
(b) Upon the completion (i) of a Proof of Principle Study (A)
in which the Compound is shown to have met the established success criteria for
the indication of Ichthyosis Vulgaris or (B) results in the continued
development of the Compound for such indication (as evidenced by the initiation
of Phase III clinical trials of the Compound for such indication) or (ii) of a
Publication Study for such indication; GW shall pay to Cellegy the sum of [**];
(c) Upon the completion (i) of a Proof of Principle Study (A)
in which the Compound is shown to have met the established success criteria for
the indication of Seborrheic Dermatitis or (B) results in the continued
development of the Compound for such indication (as evidenced by the initiation
of Phase III clinical trials of the Compound for such indication) or (ii) of a
Publication Study for such indication; GW shall pay to Cellegy the sum of [**];
** Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been
omitted from this filing and have been filed separately with the
Securities and Exchange Commission.
CONFIDENTIAL -9-
(d) Upon the completion (i) of a Proof of Principle Study (A)
in which the Compound is shown to have met the established success criteria for
the indication of Acquired Ichthyosis or (B) results in the continued
development of the Compound for such indication (as evidenced by the initiation
of Phase III clinical trials of the Compound for such indication) or (ii) of a
Publication Study for such indication; GW shall pay to Cellegy the sum of [**];
(e) Upon the completion (i) of a Proof of Principle Study (A)
in which the Compound is shown to have met the established success criteria for
any other indication GW selects to study or (B) results in the continued
development of the Compound for such indication (as evidenced by the initiation
of Phase III clinical trials of the Compound for such indication) or (ii) of a
Publication Study for such indication; GW shall pay to Cellegy the sum of [**]
for each such indication.
4.4 Toxicity Approval Payment. (a) If within the seventy (70) day
period following receipt by GW of the final report with respect to the
completion of Project No. 86530 (such period, hereinafter referred to as the
"Toxicity Review Period"), FDA does not indicate to either GW or Cellegy that
carcinogenicity studies or additional toxicity studies are required with respect
to obtaining the approval of the n-CIE indication for the Compound, GW shall pay
to Cellegy the sum of [**] (the "Toxicity Approval Payment"), provided, however,
that if within the Toxicity Review Period, FDA requires a carcinogenicity study,
the parties agree that GW shall not pay the Toxicity Approval Payment to Cellegy
unless and until such time as FDA finally agrees that no further carcinogenicity
studies are required with respect to obtaining the approval of the n-CIE
indication for the Compound.
(b) If, at any time, FDA requires a carcinogenicity study or
an additional toxicity study with respect to the Compound for the n-CIE
indication, the direct cost of such required study or studies shall be deducted
from the Toxicity Approval Payment paid to Cellegy, and in the event that GW has
paid the Toxicity Approval Payment to Cellegy, Cellegy shall reimburse GW for
the direct cost to GW of such study or studies; provided, however, that (i) the
amounts to be deducted or reimbursed, as the case may be, solely with respect to
additional toxicity studies shall be capped at [**] (the "Toxicity Cap"), (ii)
the amounts to be deducted or reimbursed, as the case may be, solely with
respect to carcinogenicity studies shall be capped at the [**], and (iii) the
total amount to be deducted or reimbursed, as the case may be, under this
provision in the aggregate shall be capped at the [**] (the "Aggregate Cap"). In
addition, the parties agree that the Toxicity Cap shall be (i) reduced to [**]
upon the earlier of September 30, 1997 or five days subsequent to the first
Pre-NDA meeting with FDA with respect to a Licensed Product; (ii) reduced to
[**] upon submission by GW of the first NDA to FDA with respect to a Licensed
Product; and (iii) reduced to [**] upon FDA's first approval of an NDA with
respect to a Licensed Product.
** Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been
omitted from this filing and have been filed separately with the
Securities and Exchange Commission.
CONFIDENTIAL -10-
(c) The parties agree that the direct costs to GW of
performing additional carcinogenicity studies required by FDA with respect to
the n-CIE indication (but not toxicity studies) which exceed the amount of the
Aggregate Cap (such amount hereinafter referred to as the "Excess Amount") shall
be borne equally by the parties; provided, however, that GW shall directly pay
all Excess Amounts, and Cellegy's portion of the Excess Amount shall be deducted
by GW from (i) the royalty payments otherwise due to Cellegy under this
Agreement, and (ii) the Annual Sales Based Milestone Payments (as defined
below); provided, further that the amount to be deducted by GW from any royalty
payment pursuant to this provision, shall be limited to fifty percent (50%) of
such royalty payment, and that the amount to be deducted by GW from any Annual
Sales Based Milestone Payment pursuant to this provision, shall be limited to
fifty percent (50%) of such Annual Sales Based Milestone Payment; provided,
further, that the aggregate amount to be paid or reimbursed by Cellegy, or
deducted by GW (including both the Aggregate Cap and Cellegy's share of the
Excess Amount), as the case may be, pursuant to this Article shall be limited to
[**].
4.5 Annual Sales Based Milestone Payments. GW shall pay to Cellegy a
milestone payment in the particular amounts specified below (each an "Annual
Sales Based Milestone Payment") upon the dates specified below.
(a) On or by February 28th of the calendar year subsequent to
the first calendar year in which annual Net Sales of the Licensed Products in
the United States of America exceed Five Million Dollars ($5,000,000), GW shall
pay to Cellegy the sum of [**], it being understood and agreed that such payment
shall be made no more than one time;
(b) On or by February 28th of the calendar year subsequent to
the first calendar year in which annual Net Sales of the Licensed Products in
the United States of America exceed Ten Million Dollars ($10,000,000), GW shall
pay to Cellegy the sum of [**], it being understood and agreed that such payment
shall be made no more than one time;
(c) On or by February 28th of the calendar year subsequent to
the first calendar year in which annual Net Sales of the Licensed Products in
the United States of America exceed Twenty Million Dollars ($20,000,000), GW
shall pay to Cellegy the sum of [**], it being understood and agreed that such
payment shall be made no more than one time;
(d) On or by February 28th of the calendar year subsequent to
the first calendar year in which annual Net Sales of the Licensed Products in
the United States of America exceed Thirty Million Dollars ($30,000,000), GW
shall pay to Cellegy the sum of [**], it being understood and agreed that such
payment shall be made no more than one time;
(e) On or by February 28th of the calendar year subsequent to
the first calendar year in which annual Net Sales of the Licensed Products in
the United States of America
** Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been
omitted from this filing and have been filed separately with the
Securities and Exchange Commission.
CONFIDENTIAL -11-
exceed Fifty Million Dollars ($50,000,000), GW shall pay to Cellegy the sum of
[**], it being understood and agreed that such payment shall be made no more
than one time;
(f) On or by February 28th of the calendar year subsequent to
the first calendar year in which annual Net Sales of the Licensed Products in
the United States of America exceed Seventy-Five Million Dollars ($75,000,000),
GW shall pay to Cellegy the sum of [**], it being understood and agreed that
such payment shall be made no more than one time;
(g) On or by February 28th of the calendar year subsequent to
the first calendar year in which annual Net Sales of the Licensed Products in
the United States of America exceed One Hundred Million Dollars ($100,000,000),
GW shall pay to Cellegy the sum of [**], it being understood and agreed that
such payment shall be made no more than one time;
(h) On or by March 31st of the calendar year subsequent to the
first calendar year in which annual Net Sales of the Licensed Products in all of
the countries of the Territory other than the United States of America exceed
Ten Million Dollars ($10,000,000), GW shall pay to Cellegy the sum of [**], it
being understood and agreed that such payment shall be made no more than one
time;
(i) On or by March 31st of the calendar year subsequent to the
first calendar year in which annual Net Sales of the Licensed Products in all of
the countries of the Territory other than the United States of America exceed
Twenty-Five Million Dollars ($25,000,000), GW shall pay to Cellegy the sum of
[**], it being understood and agreed that such payment shall be made no more
than one time;
(j) On or by March 31st of the calendar year subsequent to the
first calendar year in which annual Net Sales of the Licensed Products in all of
the countries of the Territory other than the United States of America exceed
Fifty Million Dollars ($50,000,000), GW shall pay to Cellegy the sum of [**], it
being understood and agreed that such payment shall be made no more than one
time;
(k) On or by March 31st of the calendar year subsequent to the
first calendar year in which annual Net Sales of the Licensed Products in all of
the countries of the Territory other than the United States of America exceed
One Hundred Million Dollars ($100,000,000), GW shall pay to Cellegy the sum of
[**], it being understood and agreed that such payment shall be made no more
than one time.
4.6 Fee Conditions. Except as provided in Article 4.4 hereof, each and
every License Fee, Milestone Payment, Annual Sales Based Milestone Payment, and
milestone extension payments made under Article 7.3(b) hereof, shall be
independent, cumulative, non-refundable, and shall not be considered an advance
or credit on any royalties or other obligation received or owed.
** Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been
omitted from this filing and have been filed separately with the Securities
and Exchange Commission.
CONFIDENTIAL -12-
ARTICLE 5
ROYALTIES
5.1 Royalties in General. (a) In consideration of the exclusive license
granted to GW hereunder, GW shall pay or cause to be paid to Cellegy a royalty
equal the following:
(i) [**] of the Net Sales of a Licensed Product in a
country of the Territory so long as the manufacture, sale or
use of such Licensed Product in such country would, but for
the license granted herein, infringe a Valid Claim; or
(ii) [**] of the Net Sales of Licensed Product in a
country of the Territory for sales or uses of such Licensed
Product other than those described in clause (i) of this
Article 5.1 for a period of ten (10) years commencing on the
date of first commercial sale of the first Licensed Product
sold in such country.
Notwithstanding the foregoing, with respect to Europe only, GW's obligation to
pay royalties payable on Net Sales of a given Licensed Product by virtue of
clause (ii) of Article 5.1 shall cease as of the date on which the Know-How
embodied in such Licensed Product becomes published or generally known to the
public through no fault on the part of GW or its Affiliates or Sublicensees.
(b) The parties acknowledge and agree that GW shall have no
obligation to pay Cellegy any royalties for Net Sales accruing after the
expiration of the applicable periods referred to in Article 5.1 hereof.
5.2 Accrual of Royalties. No royalty shall be payable on a Licensed
Product made or used for tests or development purposes or distributed as
samples, and for which no payment is received by GW, or its Affiliates or
Sublicensees. No royalties shall be payable on sales among GW, its Affiliates or
its Sublicensees, but royalties shall be payable on subsequent sales by GW, its
Affiliates or its Sublicensees to a Third Party. No multiple royalty shall be
payable under this Agreement because the manufacture, use or sale of a Licensed
Product is covered by more than one Valid Claim or is subject to both Know-How
and a Valid Claim.
5.3 Third Party Royalties. In the event that (i) a Licensed Product is
deemed by a court of applicable jurisdiction to infringe a valid claim of
another patent in any given country of the Territory, or (ii) GW, its Affiliates
or its Sublicensees determine, at their reasonable discretion, that it is
necessary to pay royalties or other fees to any Third Party to obtain a license
to practice any Third Parties rights in order to market or develop a Licensed
Product in any given country of the Territory, then in such event, GW may deduct
such royalties due to Third Parties (or such amounts expended in settlement of
such claim, or for securing such rights) from royalties thereafter due to
Cellegy with respect to Net Sales of such Licensed Product in such country, but
in no event shall the royalty rate be reduced by more than one-half of the
otherwise
** Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been
omitted from this filing and have been filed separately with the Securities
and Exchange Commission.
CONFIDENTIAL -13-
applicable royalty rate, and provided, that, that the right to reduce the amount
of royalties payable to Cellegy hereunder shall not exist unless the legally
enforceable property rights of such Third Party read on the Patents Rights
covering the Licensed Product in such country.
5.4 Compulsory Licenses. Should a compulsory license be granted to a
Third Party under the applicable laws of any country in the Territory under the
Patent Rights licensed hereunder to GW, the royalty rate payable hereunder for
sales of Licensed Products in such country shall be adjusted to match any lower
royalty rate granted to such Third Party for such country, with respect to the
sales of such Licensed Products, and during such periods, for which such Third
Parties sell under the compulsory license material quantities of articles that
compete with the Licensed Products then marketed and sold by GW, or is
Affiliates or Sublicensees, in that country.
5.5 Commercial Hardship. If in any country of the Territory GW can
demonstrate to Cellegy that for any reason beyond GW's, or its Affiliates' or
Sublicensees' control the royalty payable hereunder by GW causes or may cause GW
a significant reduction in its or their sales of Licensed Product in that
country, or otherwise causes or may cause hardship in the promotion or sale of
Licensed Product in a country, the parties shall meet and in good faith endeavor
to agree on a reduction in the royalty rate payable in that country. The
negotiated royalty rate will be one which places GW, or its Affiliates or
Sublicensees, in a position to market competitively the Licensed Product in such
country, but in no event shall the royalty rate be reduced by more than one-half
of the otherwise applicable royalty rate.
5.6 Reduction in Royalty Due to Competing Product. The parties agree
that during any period in which a Third Party engages in commercial sale in any
country or countries of the Territory of a product which contains the Compound
as its active ingredient and is sold as (i) a Therapeutic Cosmetic (as defined
below) or as (ii) a prescription pharmaceutical product which has been approved
for an indication in the Field, then in such event, the Royalty Rate applied
hereunder with respect to Net Sales for such country or countries shall be
reduced by an amount which is in proportion to the percentage of unit sales,
calculated on equivalent product gram unit basis held by such competing product
on the date of determination as compared to the unit sales for the total market
for the products described in clauses (i) and (ii) above, but in no event shall
the royalty rate be reduced to less than five percent (5%). For purposes of this
Article 5.6, the term "Therapeutic Cosmetic" shall mean any topical
dermatological cosmetic with greater than nine percent (9%) of its composition
being the Compound; provided, however that the reduction in the Royalty Rate
shall only apply to such Licensed Products, and during such periods, for which
such Third Parties unit sales exceed 5% of the total market for such articles
that compete with the Licensed Products then marketed and sold by GW, or its
Affiliates or Sublicensees, in that country.
5.7 Reduction in Royalty Due with respect to DiCarb Compounds. The
parties agree that during the period that a Cellegy Sublicensee engages in the
commercial sale in any country of the Territory of a product for use in the
Field which contains the DiCarb Compounds (other than azelaic acid) as its
active ingredient, then in such event, the royalty rate specified in Article
CONFIDENTIAL -14-
5.1(a)(i) hereunder with respect to such country shall be reduced to eight
percent (8%) for the annual Net Sales of Licensed Products in such country which
exceed [**]; provided, however, that no such royalty reduction shall be made
under this Article 5.7, unless the annual aggregate Net Sales of such competing
DiCarb Compounds (other than azelaic acid) exceed the greater of [**] or
twenty-five percent (25%) of the annual aggregate Net Sales of Licensed Products
in that country. Cellegy shall notify GW within 60 days of the end of any
calendar year for which Cellegy determines that the annual aggregate Net Sales
of all Sublicensees for DiCarb Compounds for use in the Field exceed the
threshold specified in this Article 5.7 for allowing such reductions to the
Royalty Rate. GW shall have the right to credit any overpayments shown to be
have been made under this Article 5.7 against future royalty payments due
Cellegy.
5.8 Reduction in Royalties. Notwithstanding anything to the contrary
herein, the royalty rate payable to Cellegy under this Agreement shall not be
reduced to less than one-half of the rate payable under Article 5.1(a)(i) for
any reason, regardless of whether reductions may be taken or allowed under one
or more provisions of this Agreement.
ARTICLE 6
ROYALTY REPORTS AND ACCOUNTING
6.1 Royalty Reports; Records. During the term of this Agreement after
commercial introduction of the first Licensed Product, GW shall furnish or cause
to be furnished to Cellegy on a quarterly basis a written report or reports (the
"Royalty Report") covering GW's fiscal quarter (currently ending on or about the
last day of March, June, September and December; each such fiscal quarter being
sometimes referred to herein as a "royalty period") showing:
(a) the Net Sales of all Licensed Products in each country of
the Territory during the royalty period;
(b) the royalties, payable in Dollars, which shall have
accrued hereunder in respect to such Net Sales;
(c) withholding taxes, if any, required by law to be deducted
in respect of such sales; and
(d) the exchange rates used in determining the amount of
Dollars.
With respect to sales of Licensed Products invoiced in Dollars, the Net Sales
and royalty payable shall be expressed in Dollars. With respect to sales of
Licensed Products invoiced in a currency other than Dollars, the Net Sales and
royalty payable shall be expressed in the domestic currency of the country where
such sale was made together with the Dollar equivalent of the royalty payable,
calculated using the exchange rates normally used by GW in its management and
financial reporting, provided, however, that the exchange rates used by GW in
preparation of the
** Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been
omitted from this filing and have been filed separately with the Securities
and Exchange Commission.
CONFIDENTIAL -19-
Royalty Report shall not be materially different from the exchange rates posted
in the Wall Street Journal published on the last day of such royalty period. GW,
or its Affiliates or Sublicensees shall furnish to Cellegy appropriate evidence
of payment of any withholding tax or other amount deducted from any royalty
payment. Royalty Reports shall be due on the forty-fifth (45th) day with respect
to the United States, and on the seventy-fifth (75th) day for the rest of the
Territory, following the close of each respective royalty period. GW, and its
Affiliates and Sublicensees shall keep contemporaneous, legible, verifiable and
accurate records in sufficient detail to enable the royalties payable hereunder
to be determined and substantiated. A final Royalty Report shall be due upon the
expiration or termination of this Agreement.
6.2 Payment Due Dates. Royalties shown to have accrued by each royalty
report provided for under Article 6 of this Agreement shall be due and payable
on the date such Royalty Report is due. Payment of royalties in whole or in part
may be made in advance of such due date. All royalty and other payments due to
Cellegy hereunder, shall be made in Dollars and delivered to the single account
specified by Cellegy from time to time.
6.3 Right to Audit. (a) Upon the written request of Cellegy, at
Cellegy's expense and not more than once in each GW fiscal year, GW and its
Affiliates shall permit an independent public accountants and auditors (the
"Auditor"), selected by Cellegy but not regularly employed by Cellegy and
reasonably acceptable to GW, to have access during normal business hours to
those records of GW and its Affiliates as may be reasonably necessary to verify
the accuracy of the Royalty Reports furnished by GW hereunder in respect of any
fiscal year ending not more than thirty-six (36) months prior to the date of
such request. Cellegy acknowledges that the Auditor shall conduct its audit in
such a manner so as to not unreasonably interfere with GW's or its Affiliates'
business.
(b) GW shall include in each written sublicense granted by it
pursuant to this Agreement a provision requiring the Sublicensee to keep and
maintain records of sales made pursuant to such Sublicense and to grant access
to such records by Cellegy's independent accountant subject to the same terms
and conditions as stated in Article 6.3(a) hereof.
(c) Upon the expiration of thirty-six (36) months following
the end of any GW fiscal year, the calculation of royalties payable with respect
to such year shall be binding and conclusive upon Cellegy, and except for fraud
or misrepresentation, GW and its Affiliates shall be released from any liability
or accountability with respect to royalties for such fiscal year.
(d) The report prepared by the Auditor, shall disclose only
the conclusions of the Auditor regarding the audit and the amount of any
underpayment or overpayment of royalties, if any, without disclosure of or
reference to supporting documentation. A copy of such report shall be sent or
otherwise provided to GW by the Auditor at the same time it is sent or otherwise
provided to Cellegy.
(e) If the Auditor's report shows any underpayment of
royalties, GW shall remit, or shall cause its Affiliates or Sublicensees to
remit, to Cellegy the amount of such underpayment within thirty (30) days after
Cellegy's receipt of the Auditor's report. In the event
CONFIDENTIAL -16-
that the amount of any underpayment of royalties is in excess of eight percent
(8%) of the total royalties due to Cellegy with respect to the period covered by
the Auditor's report, GW shall reimburse Cellegy for the cost of the audit in
which the underpayment was discovered. In addition, in the event that the amount
of any underpayment of royalties is in excess of twelve percent (12%) of the
total royalties due to Cellegy with respect to the period covered by the
Auditor's report, GW shall reimburse Cellegy for the cost of the next subsequent
audit. Any overpayment of royalties shall be fully creditable against future
royalties payable in subsequent royalty periods. In the event this Agreement is
terminated or expires before such overpayment is fully credited, Cellegy shall
pay GW the portion of such overpayment not credited within thirty (30) days
after such termination or expiration hereof, less any payment due Cellegy
hereunder.
6.4 Confidentiality of Records. Cellegy agrees that all information
subject to review under this Article 6 or under any sublicense agreement is
confidential and that Cellegy and the Auditor shall retain all such information
in confidence. Cellegy agrees that the Auditor shall sign a confidentiality
agreement, with terms reasonably acceptable to Cellegy, with GW before the
commencement of the audit.
ARTICLE 7
DEVELOPMENT AND MARKETING PROGRAM
7.1 Diligence Obligations. Subject to the provisions of Article 7.2
below and in complete fulfillment of its development and marketing obligations
hereunder and any such obligations implied by law, GW will undertake the
activities set forth in this Article 7.
7.2 Development Program. GW shall, at its expense, use its continuous
best efforts (a) to conduct a development program in the United States relating
to the use of a Licensed Product for treatment of at least one indication (the
"Development Program"); (b) if the results of the Development Program so
justify, to seek Registration for such Licensed Product in the United States,
and (c) to commercially market, sell and distribute Licensed Products throughout
the Territory. For purposes of this Article, "best efforts" shall mean that GW
shall use reasonable efforts no less than those efforts used by GW in its
development projects with its own compounds and products having comparable
commercial potential. The Development Program shall include such product
development work as GW may, in its sole discretion, consider necessary for
Registration of a Licensed Product.
7.3 Fulfillment. (a) GW's best efforts obligations set forth in this
Article 7 and implied by law shall be deemed to require fulfillment of the
following:
(i) submitting an NDA to FDA (and which is filed by FDA) for
registration of a Licensed Product in the United States by [**];
** Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been
omitted from this filing and have been filed separately with the Securities
and Exchange Commission.
CONFIDENTIAL -17-
(ii) commencing marketing such Licensed Product in
the United States within six (6) months following approval of
such NDA by the FDA (it being understood that receipt of an
"approvable letter" with respect to an NDA is not an
"approval" of that NDA);
(iii) completing one Proof of Principle Study or a
Publication Study with respect to any indication for the
Compound, within eighteen (18) months from the Effective Date;
(iv) submitting Registration application(s) for
European marketing of a Licensed Product within the earlier of
[**], or six (6) months of the first submission of an NDA, or
an NDA amendment or NDA supplement for an indication other
than n-CIE;
(v) commencing marketing of a Licensed Product in at
least three EU member states within six (6) months of first
obtaining approval of an application for Registration of a
Licensed Product for such EU member states.
(vi) completing one additional Proof of Principle
Study or a Publication Study with respect to any indication
for the Compound, within twenty-four (24) months from the
Effective Date; and
(vii) delivering to Cellegy, within twelve (12)
months of the Effective Date of the Agreement, a development
plan describing the events and timelines with respect to
development activities to be conducted by GW with respect to
the commercialization of Licensed Products in the Territory
with the exception of the United States.
(each of such events described above being hereinafter referred to as a
"Development Milestone").
(b) The time period specified in clause (i) of Article 7.3(a)
hereof, shall be subject to one (1) six (6) month extension at GW's election, by
payment to Cellegy of [**], while the time periods specified in clauses (ii)
through (vi) of Article 7.3(a) hereof, shall each be subject to up to two (2)
four (4) month extensions at GW's election, by payment to Cellegy of [**] for
each such extension, such payments to be made within thirty (30) days of
election of each such extension.
** Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been
omitted from this filing and have been filed separately with the Securities
and Exchange Commission.
CONFIDENTIAL -18-
(c) Notwithstanding the provisions of Articles 7.2, 7.3(a) and
7.3(b) above, in the event that FDA requires a carcinogenicity study or an
additional toxicology study, the time periods specified in Articles 7.3(i)
through (v), except for 7.3(iii) hereof, shall be tolled from the date that FDA
requires such carcinogenicity study or additional toxicity study until the date
of completion of the final report with respect to such study. The time periods
specified in Articles 7.3(i) through (v), except for 7.3(iii) shall also be
tolled to the extent that any delay in meeting such Development Milestones is
caused by the FDA's requirement, if any, for GW to take action to mitigate any
deficiency now known with respect to the Drug Master File for monolaurin or for
such actions by GW, if any, that may be required by FDA on account of the test
results for ethanol concentration in stability batch number 273-403,
manufactured December 06, 1994, of Licensed Products made and tested on behalf
of Cellegy.
7.4 Progress Reports. (a) During the term of this Agreement, GW will
provide annual progress reports to Cellegy (the "Progress Report"), summarizing
in reasonable detail GW's activities related to the development and
commercialization of Licensed Products throughout the Territory and the securing
of the requisite marketing approvals during the annual period covered by such
Progress Report, and the activities to be undertaken during the subsequent
period. Progress Reports shall be submitted to Cellegy by the end of the first
quarter of each calendar year, with the first Progress Report being due on March
31, 1998.
(b) With respect to the calendar year 1997, GW agrees to
schedule and attend one meeting or telephonic conference call per calendar
quarter, in which GW shall verbally update the person designated by Cellegy with
respect to the Development Program being conducted by GW and its Affiliates and
Sublicensees.
ARTICLE 8
PATENT RIGHTS
8.1 Patent Prosecution and Maintenance. (a) Cellegy shall use its best
efforts, subject to Article 8.1(b), to prosecute any patent applications within
the Patent Rights, to obtain patents thereon and to maintain all patents
included in the Patent Rights using patent counsel of its choice after due
consultation with GW.
(b) Cellegy shall use reasonable efforts to amend any patent
applications included in the Patent Rights to include claims or arguments
reasonably requested by GW. Cellegy shall keep GW fully informed of the progress
of the prosecution of each patent application included within the Patent Rights
and shall promptly provide GW with copies of all correspondence and filings
related thereto. Notwithstanding the foregoing, Cellegy shall have the right to
discontinue the prosecution of such patent application or to abandon any such
patent, or any claims therein. If Cellegy decides to abandon or allow to lapse
any patent application or patent within the Patent Rights in any country of the
Territory, Cellegy shall inform GW at least thirty (30) days prior to such
abandonment or lapse and GW shall be given the opportunity to prosecute such
patent application and/or maintain such patent at its expense.
CONFIDENTIAL -19-
(c) During the term of this Agreement, beginning on the Effective Date,
GW shall reimburse Cellegy for the reasonable out-of-pocket expenses (including
attorneys and expert fees) for the preparation, filing, prosecution and
maintenance costs associated with U.S. Patent No. 5,057,500 and U.S. Patent No.
5,231,087 (and excluding U.S. Patent No. 4,885,282), their respective foreign
counterpart applications and patents, and any reissues, reexaminations,
registrations, substitutions, renewals, additions, extensions and oppositions
thereof within the Territory. Such reimbursement shall be paid within ninety
(90) days of presentation to GW by Cellegy of an invoice for such fees and
expenses.
8.2 Status of Patent Rights. Within thirty (30) days after the
Effective Date and each anniversary thereof, Cellegy shall advise GW as to the
current status of any patent applications and patents included within the Patent
Rights and, to the extent it has not previously done so, shall provide GW with
relevant documentation relating to such patent applications and patents
including, but not limited to, copies thereof.
8.3 Ownership of Future Inventions. Patentable inventions conceived by
Cellegy personnel in direct connection with either their assisting with the
transfer of the Know-How or their providing services to GW under this Agreement,
either alone or in connection with GW personnel, shall be the sole property of
GW. Cellegy shall provide reasonable assistance in conferring assignment to GW
from Cellegy's representatives and provide reasonable assistance, at GW's
expense, in the preparation, filing and prosecution of any such patent
applications as may be desired by GW. Cellegy shall retain for the duration of
this Agreement a fully paid-up non-exclusive, worldwide right to practice such
inventions within the Field. Such non-exclusive license shall not include the
right to grant sublicenses. All other inventions made by Cellegy personnel shall
be the sole and exclusive property of Cellegy. In addition, during the term of
this Agreement, and to the extent that Cellegy is permitted to do so, GW shall
have a right of first refusal to negotiate a license with Cellegy on mutually
acceptable terms with respect to any invention made and owned by Cellegy, to the
extent that such invention specifically applies to the manufacture, use or sale
of a Licensed Product under this Agreement. Provided, however, that such right
of first refusal shall apply only to such inventions that Cellegy reasonably
believes in good faith to be specifically applicable to the sale, manufacture or
use of Licensed Product under this Agreement, in which case, Cellegy shall
provide GW with a written notice of the opportunity to license Cellegy's
invention upon Cellegy's filing of a patent application for such invention. GW's
right of first refusal shall expire 120 days from delivery of Cellegy's notice
("Negotiation Period"), unless GW earlier enters into a binding and mutually
acceptable agreement to license such invention or an option to obtain such
license. If the parties do not enter into such a license or option within the
Negotiation Period, Cellegy shall be free to seek other licenses for its
inventions; provided, however, that Cellegy shall not for six months following
the expiration of the Negotiation Period offer or accept an offer to license the
invention on terms which taken together are materially less favorable to Cellegy
than were last offered by GW during the Negotiation Period. However, GW shall
have the burden of demonstrating by clear and convincing evidence that the terms
of any such license taken together, are materially less favorable to Cellegy
than those terms last offered by GW. Cellegy shall provide GW with a summary of
the material terms of any Agreement subject to this Article 8.3 which is entered
into within six months following the expiration of the Negotiation Period.
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ARTICLE 9
INFRINGEMENT
9.1 Applicability. Except as otherwise provided in Article 14, the
provisions of this Article 9 shall govern the parties' rights and obligations,
as between themselves, with respect to actions against Third Parties for
infringement of the Patent Rights or Know-How licensed under this Agreement.
9.2 Third Party Infringement. (a) In the event that either GW or
Cellegy becomes aware of any product made, used, or sold in the Territory which
it believes to infringe a Valid Claim or misappropriation of Know-How, such
party (the "Notifying Party") shall promptly advise the other party of all the
relevant facts and circumstances known by the Notifying Party in connection with
the infringement or misappropriation.
(b) The parties agree that Cellegy shall have the right, at
its own expense, to enforce such Patent Rights against such infringement. GW and
its Affiliates shall fully cooperate with Cellegy with respect to the
investigation and prosecution of such alleged infringement or misappropriation
including the joining of GW and its Affiliates as parties to such action, as may
be required by the law of the particular forum where enforcement is being
sought.
(c) GW shall have the right (at its own expense) to enforce,
and Cellegy does hereby grant to GW the right to enforce, such Patent Rights
against such infringement, if:
(i) Cellegy shall fail, within sixty (60)
days after learning of such infringement, (a) to
terminate such infringement or (b) to take reasonable
action to investigate such alleged infringement and,
if such infringement is reasonably demonstrated, to
institute an action to xxxxx such alleged
infringement and, thereafter, to prosecute such
action diligently, or
(ii) Cellegy earlier notifies GW that
Cellegy does not plan to terminate the infringement
or institute such action, Cellegy shall fully
cooperate with GW in such effort including being
joined as a party to such action, if necessary.
Cellegy and its Affiliates shall fully cooperate with GW with respect to the
investigation and prosecution of such alleged infringement or misappropriation
including the joining of Cellegy and its Affiliates as a party to such action,
as may be required by the law of the particular forum where enforcement is being
sought.
(d) Cellegy shall be entitled to keep any damages or costs
recovered by Cellegy in connection with any action filed by Cellegy hereunder,
after first reimbursing GW for any out-of-pocket costs and expenses in assisting
Cellegy, at Cellegy's request, hereunder. GW shall be entitled to keep any
damages or costs recovered by GW in connection with any action
CONFIDENTIAL -21-
filed by GW hereunder, after first reimbursing Cellegy for any out-of-pocket
costs and expenses in assisting GW hereunder. In the event that the parties
agree to prosecute such infringement jointly, any damages, costs or settlement
proceeds received by the parties will be split between the parties in proportion
to the expenses incurred by each in prosecuting such infringement, after first
reimbursing each party for any such expenses. Such expenses shall include, but
not be limited to, the parties out of pocket expenses and internal costs
incurred in prosecuting such infringement.
9.3 Reduction in Payments Due to Infringement. Notwithstanding the
provisions of Article 5.1, in the event of any infringement by a Third Party and
notice by GW pursuant to Article 9.2, if such infringement is reasonably
demonstrated and (i) Cellegy shall fail within sixty (60) days either to
terminate such infringement or to institute reasonable legal actions to prevent
continuation thereof and thereafter to prosecute such action diligently, and
(ii) if unit sales of the product being sold by such Third Party, in the
aggregate, equal or exceed (A) five percent (5%) of the unit sales of the
Licensed Product by GW and its Affiliates (hereinafter, "GW Unit Sales") in such
country for any two (2) consecutive GW fiscal quarters, or (B) ten percent (10%)
of GW Unit Sales in such country for any one (1) GW fiscal quarter, then in such
event, the Royalty Rate applicable to the Net Sales in such country or countries
shall be reduced by twenty-five percent (25%) if the unit sales by such Third
Party is five percent (5%) to twenty-five percent (25%) of GW Unit Sales or the
Royalty Rate applicable to the Net Sales in such country or countries shall be
reduced by fifty percent (50%) if a unit sales by such Third Party is over
twenty-five percent (25%) of GW Unit Sales until the earlier of Cellegy's
initiation of such actions as are required under Article 9.2 or the termination
of such infringement; provided, however, that the Royalty Rate applicable to
such Net Sales shall not be reduced below five percent (5%). Upon Cellegy's
initiation of such actions as are required under Article 9.2 or the termination
of such infringement, the otherwise applicable Royalty Rate shall apply to all
Net Sales in such country or countries. GW shall not be obligated to repay
Cellegy for the reduction in royalty payments rightfully made under this Article
9.3; provided, however, that any such settlement or damages award received shall
be handled as provided by Article 9.2(d).
ARTICLE 10
CONFIDENTIALITY
10.1 Treatment of Confidential Information. Except as otherwise
provided in this Article 10, during the term of this Agreement and for a period
of five (5) years thereafter, GW and its Affiliates will retain in confidence
and use only for purposes of this Agreement any information, data, and materials
supplied by Cellegy or on behalf of Cellegy to GW and its Affiliates under this
Agreement, and Cellegy will retain in confidence and use only for purposes of
this Agreement any information, data, and materials supplied by GW or on behalf
of GW to Cellegy under this Agreement. For purposes of this Agreement, all such
information and data which a party is obligated to retain in confidence shall be
called "Confidential Information."
10.2 Right to Disclose. To the extent it is reasonably necessary or
appropriate to fulfill its obligations or exercise its rights under this
Agreement or any rights which survive termination or expiration hereof, GW may
disclose Confidential Information to its Affiliates, Sublicensees,
CONFIDENTIAL -22-
consultants, outside contractors, clinical investigators or other Third Parties
on condition that such entities or persons agree in writing (a) to keep the
Confidential Information confidential for the same time periods and to the same
extent as GW is required to keep the Confidential Information confidential and
(b) to use the Confidential Information only for such purposes as GW is entitled
to use the Confidential Information. Each party or its Affiliates or
Sublicensees may disclose such Confidential Information to government or other
regulatory authorities to the extent that such disclosure (i) is reasonably
necessary to obtain patents or authorizations to conduct clinical trials with
and to market commercially the Licensed Products provided such party is
otherwise entitled to engage in such activities under this Agreement; or (ii) is
otherwise legally required.
10.3 Release From Restrictions. The foregoing obligations in respect of
disclosure and use of Confidential Information shall not apply to any part of
such Confidential Information that the non-disclosing party, or its Affiliates
(all collectively referred to as the "Receiving Party") can demonstrate by
contemporaneously prepared written evidence:
(a) is or becomes part of the public domain other than by acts
of the Receiving Party in contravention of this Agreement;
(b) is disclosed to the Receiving Party or its Affiliates or
Sublicensees by a Third Party, provided such Confidential Information was not
obtained by such Third Party directly or indirectly from the other party under
this Agreement;
(c) prior to disclosure under this Agreement, was already in
the possession of the Receiving Party or its Affiliates or Sublicensees,
provided such Confidential Information was not obtained, directly or indirectly,
from the other party under this Agreement; or
(d) results from research and development by persons who have
not had access to the disclosures made to Receiving Party under this Agreement,
including any information obtained through the testing, manufacturing regulatory
approval, or distribution of the Compounds or Licensed Products, or other
activities undertaken in connection with this Agreement by the Receiving Party.
10.4 Confidentiality of Agreement. Except as otherwise required by law
or the terms of this Agreement or mutually agreed upon by the parties hereto,
each party shall treat as confidential the terms, conditions and existence of
this Agreement, except that Cellegy and GW may disclose such terms and
conditions and the existence of this Agreement to its Affiliates and
Sublicensees, and that Cellegy may disclose the terms to its shareholders to the
extent required by the federal securities laws, and provided, that Cellegy shall
seek confidential treatment of the key business terms contained in this
Agreement, including but not limited to the Royalty Rates, the License Fee, the
Milestone Payments, the Toxicity Approval Payments and the Annual Sales Based
Milestone Payments. Upon the execution of this Agreement, the parties shall
draft a joint press release, the text of such shall be mutually agreeable to
each party, announcing the execution of the Agreement.
CONFIDENTIAL -23-
10.5 Return of Confidential Information. Upon termination of this
Agreement with respect to the entire Territory by GW pursuant to Article 12.4
hereof, or upon termination of this Agreement with respect to the entire
Territory by Cellegy pursuant to Article or 12.2 or 12.3 hereof, GW and its
Affiliates shall return all Cellegy Confidential Information, in their
possession along with a certification that they no longer possess any such
Cellegy Confidential Information; provided, however, that GW may retain a single
archival copy of the Cellegy Confidential Information in its legal department
solely for the purpose of determining the extent of disclosure of Confidential
Information by Cellegy hereunder. In addition, in the event of any termination
of a country or Region within the Territory, GW shall promptly disclose and
provide to Cellegy all such Confidential Information, data and other information
disclosed or developed under this Agreement, but only to the extent necessary to
fulfill the obligations and rights under Article 12.5(h).
ARTICLE 11
TRANSFERS AND ACCESS
11.1 Transfer of Know-How. Within ninety (90) days following the
Effective Date and as far as it has not already done so, Cellegy shall provide
GW with all Know-How, and shall transfer to GW all documents containing
Know-How. In addition, Cellegy agrees to provide such technical assistance as GW
may reasonably request to enable it to utilize the Know-How and continue ongoing
work; provided, however, that GW shall at Cellegy's request reimburse Cellegy
for the reasonable out-of-pocket expenses incurred by Cellegy in providing such
assistance. Cellegy may retain a single archival copy of the documents
containing Know-How in its legal department solely for the purpose of
determining the extent of disclosure of Know-How hereunder.
11.2 Transfer of IND. Cellegy shall transfer to GW, all INDs and Orphan
Drug Designations related to the Compound, including but not limited to, IND #
41,553. Cellegy agrees to perform within sixty (60) days of the Effective Date
all such acts, and execute such further instruments, documents or certificates,
as may be required to more effectively transfer the INDs referred to above. Upon
such date that Cellegy transfers to GW each IND referred to above, GW agrees to
undertake all regulatory responsibilities related to such IND. Upon such date
that Cellegy transfers the Orphan Drug Designation related to the Compound, GW
agrees to undertake all regulatory responsibilities related to the Orphan Drug
Designation.
11.3 Transfer of Trademark. Concurrently with the execution of this
Agreement, Cellegy shall transfer its interests in the Trademark in the United
States to GW pursuant to the form(s) of Trademark Assignment attached hereto as
Exhibit B-2. After the execution of this Agreement, Cellegy agrees to execute
such other documents as may be reasonably necessary to transfer its interests in
the Trademark in Germany, France and the United Kingdom. Cellegy acknowledges
that after the Effective Date of this Agreement GW may file its own United
States application with respect to the Trademark.
11.4 Transfer of Clinical Trial Material. Within sixty (60) days
following the Effective Date, Cellegy shall transfer to GW, or its designee, all
quantities of the Compound and other materials related to the Compound without
further consideration by GW. GW agrees to
CONFIDENTIAL -24-
undertake all regulatory responsibilities related to the provision and handling
of the Compound, including but not limited to stability and GMP retention sample
handling and documentation.
11.5 Access to Key Individuals. Cellegy shall make reasonably available
to GW, its key employees, officers and directors (including but not limited to
Dr. Xxxxx Xxxxx and Xx. Xxxx Xxxxxxxxxx) for purposes of assisting GW in the
testing and commercialization of the Compound and the procuring of the
Registration of the Licensed Products; provided, however, that GW shall at
Cellegy's request reimburse Cellegy for the reasonable out-of-pocket expenses
incurred by Cellegy in providing such assistance.
ARTICLE 12
TERM; TERMINATION
12.1 Term. Unless terminated sooner pursuant to Articles 12.2, 12.3 or
12.4 below, this Agreement shall become effective as of the Effective Date and
shall continue in full force and effect until the expiration of GW's obligation
to pay royalties to Cellegy hereunder. The parties acknowledge and agree that GW
shall have no obligation to pay Cellegy any royalties after the expiration of
the applicable periods referred to in Article 5.1 hereof for Net Sales accruing
after such periods.
12.2 Bilateral Termination Rights. Either party may terminate this
Agreement upon the occurrence of any of the following:
(a) Upon or after the bankruptcy of the other party; or
(b) Upon or after the material breach of any provision of this
Agreement by the other party (other than an actual or claimed breach of Article
7 by GW, which shall instead be governed by the provisions of Article 12.3
hereof) if such material breach is not cured within ninety (90) days after
written notice thereof to the party in default.
12.3 Cellegy's Right to Terminate. (a) If GW, and its Affiliates and
Sublicensees, fail to fulfill or achieve a Development Milestone required under
Article 7 hereof in accordance with the applicable time period provided in
Article 7.3 hereof (including any extensions allowed in accordance with Article
7.3(b)), or use their best efforts to commercialize the Licensed Products
throughout the Territory except for the United States and such other countries
for which performance of Articles 7.3(a)(iv) & (v) are completed, (all
collectively referred to as "Development Obligation Breach") and subject to the
terms and conditions provided in Article 7.3 hereof, then in such event, Cellegy
may, in its sole discretion, waive or defer action on such Development
Obligation Breach, or alternatively Cellegy may give written notice to GW of the
Development Obligation Breach (such notice to be hereinafter referred to as a
"Development Obligation Breach Notice"). A Development Obligation Breach Notice
shall state with specificity the Development Obligation Breach asserted by
Cellegy. GW shall have ninety (90) days from the date of the Development
Obligation Breach Notice to cure such Development Obligation Breach which was
the subject of the Development Obligation Breach Notice, or provide Cellegy with
reasonable written assurance that GW will cure such Development
CONFIDENTIAL -25-
Obligation Breach within a reasonable period, such period not to exceed one
hundred eighty (180) days from the receipt of the Development Obligation Breach
Notice. In the event that GW fails to cure such Development Obligation Breach
which was the subject of the Development Obligation Breach Notice or provide
written assurance within such ninety (90) day period, Cellegy may, at its
option, waive the Development Obligation Breach or terminate this Agreement;
provided, that such termination shall be effective only with respect to those
Regions of the Territory containing countries to which the Development
Obligation Breach which was the subject of the Development Obligation Breach
Notice specifically relates. In lieu of the termination remedy provided above,
Cellegy may, at its sole discretion, by written notice to GW convert the
exclusive rights granted to GW hereunder to a non-exclusive license, but such
conversion shall be only with respect to those Regions of the Territory
containing countries to which the Development Obligation Breach which was the
subject of the Development Obligation Breach Notice specifically relates. Except
for the GW's willful commitment of a Development Obligation Breach, the
foregoing remedies shall be Cellegy's sole and exclusive remedy for GW's failure
to meet the diligence obligations specified in Article 7 hereof. It is
understood and agreed that Cellegy's exercise of its rights under this Article
12.3(a) with respect to a country or Region, or for any particular Development
Obligation Breach, shall not affect or be construed to be a waiver of Cellegy's
rights under this Article 12.3(a) with respect to any other country or Region or
any other Development Obligation Breach.
(b) If Cellegy demonstrates by clear and convincing evidence,
that GW, or its Affiliates or Sublicensees, has committed a material violation
of law with respect to the manufacturing, testing, marketing, distributing, or
selling of the Compounds or Licensed Products that materially impairs the value
of the Patent Rights, Know-How or Trademark licensed or assigned under this
Agreement, Cellegy shall have the right to terminate this Agreement, in
accordance with Article 12.3(a) with respect to the territory to which such
violation pertains or occurred.
12.4 GW's Right to Terminate. GW may terminate this Agreement at any
time upon at least ninety (90) days prior written notice to Cellegy. Such
termination may be made with respect to one or more Regions of the Territory
without affecting the rest of this Agreement or the licenses granted hereunder
in any other Region of the Territory.
12.5 Rights Upon Termination or Expiration. Upon expiration or
termination of this Agreement, the rights and obligations of the parties shall
cease, except as follows:
(a) Upon expiration or termination for any reason, the
obligations of confidentiality and use of Confidential Information under Article
10 shall survive for the period provided therein;
(b) Upon expiration or termination for any reason, Articles
12, 13, and 16 of this Agreement shall survive for the maximum duration
permitted by law;
(c) Articles 4, 5, 6.1 and 6.2 shall survive until all
outstanding payment obligations and reporting obligations of GW and its
Affiliates and Sublicensees have been
CONFIDENTIAL -26-
fulfilled, and Article 6.3 shall survive for three fiscal years following the
year in which such or expiration became effective;
(d) Upon expiration or termination for any reason other than a
termination by GW pursuant to Article 12.4 hereof, or upon a complete
termination of this Agreement by Cellegy pursuant to Article 12.2 or 12.3
hereof, the right of GW to continue to use the Know-How to which it is licensed
under this Agreement shall survive;
(e) Upon termination by GW pursuant to Article 12.2, all
license rights of GW shall survive, subject to the fulfillment of all of its
royalty and other obligations hereunder, if any;
(f) Expiration or termination of this Agreement shall not
relieve the parties of any other obligation accruing prior to such termination;
and
(g) Upon expiration of this agreement no royalties shall be
due on any Net Sales accruing after the date of expiration; provided, however
that such sales do not infringe upon or otherwise violate the patents, know-how,
trademarks or other intellectual property owned or licensed by Cellegy.
(h) Upon termination of this Agreement, either for the entire
Territory or any particular Region within the Territory, by GW pursuant to
Article 12.4 hereof, or by Cellegy pursuant to Article 12.2 or 12.3 hereof:
(ix) All rights licensed to GW pursuant to this
Agreement shall immediately cease with respect to the Region
or Regions so terminated; provided, however, that GW, it's
Affiliates, and Sublicensees shall be permitted to sell or
dispose of any finished goods inventory or work-in-process
inventory of the Compound or Licensed Product as of the date
of termination of the Region or Regions so terminated, subject
to the compliance with the terms of this Agreement, including
any payment of royalties or other payments that would be due
on account of the Net Sales of such finished or
work-in-process inventory but for such termination;
(x) Cellegy shall be granted an exclusive (with
respect to the Region or Regions so terminated), perpetual,
sublicensable right to reference or use any data or other
information contained in or referenced by any GW, or GW
Affiliates or Sublicensees, IND, NDA, Drug Master File, Orphan
Drug Designation or approval, any supplements or amendments
thereto, or other Registration documents relating to the n-CIE
indication for the Compound or Licensed Products which are
filed with a regulatory agency as of the date of such
termination, but only to the extent necessary to permit the
sale, use, marketing and distribution of Licensed Products for
the n-CIE indication in the Region or Regions so terminated;
CONFIDENTIAL -27-
(xi) Cellegy shall be granted an exclusive (with
respect to the Region or Regions so terminated), perpetual,
sublicensable right to reference or use any data or other
information contained in or referenced by any GW, or GW
Affiliates or Sublicensees, IND, NDA, Drug Master File, Orphan
Drug Designation or approval, any supplements or amendments
thereto, or other Registration documents relating to any
indication other than the n-CIE indication for the Compound or
Licensed Products which are filed with a regulatory agency as
of the date of such termination, but only to the extent
necessary to permit the sale, use, marketing and distribution
of Licensed Products in the Region or Regions so terminated.
If, however, Cellegy elects to exercise the right of reference
in this Section 12.5(h)(iii), then in such case, Cellegy shall
pay to GW a royalty equal to three percent (3%) of Net Sales
of any Licensed Product sold by Cellegy, its Affiliates or
Sublicensees in the countries so terminated and for which the
right to reference or use such data, or other information is
required, for a period of ten (10) years commencing on the
date of termination of the Region or Regions so terminated;
(xii) GW shall assign, or cause to be assigned, to
Cellegy all rights, if any, which GW, or its Affiliates or
Sublicensees, may own or possess with respect to the
Trademark, or its counterparts, in the Region or Regions so
terminated;
(xiii)If, as of the effective date of termination, a
Licensed Product is actually being sold by GW in a Region or
Regions so terminated under any trademark (other than the
Trademark or its counterparts) owned by GW, or its Affiliates
or Sublicensees, GW shall exclusively and perpetually license,
or cause to be licensed, such trademark to Cellegy with
respect to the Region or Regions so terminated, and in such
case, Cellegy shall pay to GW a royalty equal to one percent
(1%) of Net Sales of any Licensed Product sold by Cellegy, its
Affiliates or Sublicensees, in the countries of the Regions so
terminated and which are covered by such trademark for a
period of ten (10) years commencing on the date of termination
of Region containing such country;
(xiv) Cellegy shall be granted an exclusive (with
respect to the Region or Regions so terminated), perpetual,
license with respect to any issued patents or patent
applications (other than the Patent Rights) owned or licensed
by GW or its Affiliates or Sublicensees as of the date of such
termination, to the extent necessary to make, use and sell
Licensed Products for or in the Region or Regions so
terminated, and in such case, Cellegy shall pay to GW a
royalty equal to five percent (5%) of Net Sales of any
Licensed Product sold by Cellegy, its Affiliates or
Sublicensees, in the countries of the Region so terminated and
which are covered by valid claims in such issued patents, for
a period of ten (10) years commencing on the date of
termination of the Region or Regions containing such
terminated country, provided, however, that the obligation of
Cellegy to pay royalties under this Section 12.5(h)(vi) shall
not extend past the expiration of the last to expire patent so
licensed to Cellegy pursuant to this provision; and
CONFIDENTIAL -28-
(xv) GW shall provide to Cellegy (to the extent that
GW is permitted) a list of GW's suppliers with respect to the
manufacture and supply of the Licensed Product. Furthermore,
GW shall not interfere with the negotiation, execution or
delivery of agreements between Cellegy and a GW supplier for
the manufacture and supply of Licensed Product with respect to
the Region or Regions so terminated. In the event that GW, or
its Affiliates or Sublicensees, is the manufacturer of the
Licensed Products, GW and Cellegy shall, at Cellegy's
election, negotiate in good faith a supply agreement on
commercially reasonable terms for the Regions which are
terminated.
Notwithstanding anything in this subsection to the contrary herein, Cellegy
shall not be required to pay an aggregate royalty rate to GW pursuant to this
Section 12.5(h) which is greater than five percent (5%). Furthermore, it is
understood and agreed that, in the event of a termination of the Regions of
Argentina, Australia, Bolivia, Chile, Columbia, Ecuador, Peru, Paraguay, Uruguay
and Venezuela, Cellegy shall be entitled to all of the rights referred to above
in Section 12.5(h), without any obligation to pay GW a royalty with respect to
such Regions. In the event of an exercise of the rights and obligations
contained in this Section 12.5(h), the parties shall in good faith negotiate and
deliver such documents or instruments necessary to consummate more effectively
the transactions contemplated by such exercise.
ARTICLE 13
INDEMNIFICATION
13.1 Indemnification by GW. Subject to Article 13.3 hereof, GW hereby
agrees to defend, indemnify and hold harmless Cellegy and its Affiliates,
directors, officers and employees from and against any liabilities, losses,
fines, penalties, damages, expenses (including reasonable attorney's fees and
expenses incurred in connection with the enforcement of this provision),
actions, or claims brought or threatened after the Effective Date of this
Agreement and which arise out of injuries occurring after the Effective Date,
including but not limited to, any actions in contract (including breach of
warranty) or tort (including negligence, strict liability or commercial torts)
to the extent that such liabilities, losses, fines, penalties, damages, expenses
(including reasonable attorney's fees and expenses incurred in connection with
the enforcement of this provision), actions, or claims arise, result from, or
relate to:
(i) any breach of any of the representations or
warranties of GW contained in Article 2.2 hereof, or
(ii) any manufacture, use, sale, development,
testing, distribution, marketing or disposal of the Compound
or the Licensed Products by GW, its Affiliates or Sublicensees
Provided, however, that GW shall have no obligation to indemnify Cellegy to the
extent that such liabilities, losses, fines, penalties, damages or expenses are
caused by Cellegy's breach of Article 2.1(m).
CONFIDENTIAL -29-
13.2 Indemnification by Cellegy. Subject to Article 13.3 hereof,
Cellegy hereby agrees to indemnify and hold harmless GW and its Affiliates,
Sublicensees, directors, officers and employees from and against any
liabilities, losses, fines, penalties, damages, expenses (including reasonable
attorney's fees and expenses incurred in connection with the enforcement of this
provision), actions, claims brought or threatened, to the extent that they are
caused by any breach of any of the representations or warranties of Cellegy
contained in Article 2.1 hereof, or to the extent that they arise out of
injuries occurring before the Effective Date including but not limited to, any
actions in contract (including breach of warranty) or tort (including
negligence, strict liability or commercial torts).
13.3 Indemnification Procedures With Respect to Third Party Claims. A
party which intends to seek indemnification under this Article 13 (such party
hereinafter referred to as the "Indemnitee") in respect to a liability, loss,
fine, penalty, damage, expense, action, or claim brought against such Indemnitee
by a Third Party (such claim hereinafter referred to as a "Third Party Claim"),
shall promptly give written notice thereof to the party from whom
indemnification is sought (such other party hereinafter referred to as the
"Indemnitor") within a reasonable period of time after the assertion of such
Third Party Claim by such Third Party; provided, however, that the failure to
provide written notice of such Third Party Claim within a reasonable period of
time shall not relieve the Indemnitor of any of its obligations hereunder,
except to the extent that the Indemnitor is prejudiced by such failure. The
Indemnitor shall have the right to assume the complete control of the defense,
compromise or settlement of any Third Party Claim (provided that no settlement
of any Third Party Claim shall include any admission of wrongdoing on the part
of an Indemnitee, without the prior written consent of such Indemnitee, which
such consent shall not be unreasonably withheld), including, at its own expense,
employment of legal counsel, and at any time thereafter the Indemnitor shall be
entitled to exercise, on behalf of the Indemnitee, any rights which may mitigate
the extent or amount of such Third Party Claim; provided, however, that if the
Indemnitor shall have exercised its right to assume control of such Third Party
Claim, the Indemnitee (i) may, in its sole discretion and at its own expense,
employ legal counsel to represent it (in addition to the legal counsel employed
by the Indemnitor) in any such matter, and in such event legal counsel selected
by the Indemnitee shall be required to confer and cooperate with such counsel of
the Indemnitor in such defense, compromise or settlement for the purpose of
informing and sharing information with the Indemnitor; (ii) shall, at its own
expense, make available to Indemnitor those employees, officers and directors or
Indemnitee whose assistance, testimony or presence is necessary or appropriate
to assist the Indemnitor in evaluating and in defending any such Third Party
Claim; provided, however, that any such access shall be conducted in such a
manner as not to interfere unreasonably with the operations of the businesses of
Indemnitee; and (iii) shall otherwise fully cooperate with the Indemnitor and
its legal counsel in the investigation and defense of such Third Party Claim.
CONFIDENTIAL -30-
ARTICLE 14
NOTIFICATION AND AUTHORIZATION UNDER DRUG
PRICE COMPETITION AND PATENT TERM RESTORATION ACT
14.1 Notices Relating to the Act. Cellegy shall notify GW of (a) the
issuance of each U.S. patent and of each patent issued in a country of the
European Union included within the Patent Rights, giving the date of issue and
patent number for each such patent and (b) each notice pertaining to any patent
included within the Patent Rights which Cellegy receives as patent owner
pursuant to the Drug Price Competition and Patent Term Restoration Act of 1984
(hereinafter called the "Act"), including but not necessarily limited to,
notices pursuant to xx.xx. 101 and 103 of the Act from persons who have filed an
abbreviated NDA ("ANDA") under ss. 505(j) of the FD&C Act or a "Paper NDA" filed
under ss. 505(b)(2) of the FD&C Act. Such notices shall be given promptly, but
in any event within ten (10) days of each such patent's date of issue or receipt
of each such notice pursuant to the Act, whichever is applicable.
14.2 Authorizations Relating to Patent Term Extension. Cellegy hereby
authorizes GW:
(a) to include in any NDA for a Licensed Product, as GW may
deem appropriate under the Act, a list of patents included within the Patent
Rights that relate to such Licensed Product and such other information as GW in
its reasonable discretion believes is appropriate to be filed pursuant to the
Act;
(b) to commence suit according to the provisions of Article 9
for any infringement of the Patent Rights under ss. 271(e)(2) of Title 35 of the
United States Code occasioned by the submission by a Third Party of an ANDA or a
Paper NDA for a Licensed Product pursuant to xx.xx. 101 or 103 of the Act; and
(c) in consultation with Cellegy, to exercise any rights that
may be exercisable by Cellegy as patent owner under the Act to apply for an
extension of the term of any patent included within the Patent Rights, as GW in
its discretion deems appropriate.
In the event that applicable law in any other country of, or community or
associations of countries in, the Territory hereafter provides for the extension
of the term of any patent included in the Patent Rights in such country, upon
request by GW, Cellegy shall obtain such extension or, in lieu thereof,
authorize GW or, if requested by GW, its Sublicensees to apply for such
extension, in consultation with Cellegy. Cellegy agrees to cooperate with GW or
its Sublicensees, as applicable, in the exercise of the authorization granted
herein or which may be granted pursuant to this Article 14.2 and will execute
such documents and take such additional action as GW may reasonably request in
connection therewith, including, if necessary, permitting itself to be joined as
a proper party in any suit for infringement brought by GW under clause (b)
above. Legal counsel shall be selected by GW. In the event GW decides not to
commence suit for infringement under clause (b) above, GW will notify Cellegy of
its decision within thirty (30) days so that Cellegy may institute such
litigation itself, if it wishes, at its own cost and expense.
CONFIDENTIAL -31-
ARTICLE 15
REGISTRATION OF LICENSE
15.1 Registration. GW may, at its expense, register the exclusive
license granted under this Agreement in any country of, or community or
association of countries in, the Territory where the use, sale or manufacture of
a Licensed Product in such country would be covered by a Valid Claim and Cellegy
shall reasonably cooperate in such registration at GW's expense. Upon request by
GW, Cellegy agrees promptly to execute any "short form" licenses developed in a
form reasonably acceptable to both GW and Cellegy and reasonably submitted to it
by GW from time to time in order to effect the foregoing registration in such
country.
ARTICLE 16
GENERAL PROVISIONS
16.1 Force Majeure. Neither party shall be held liable or responsible
to the other party nor be deemed to have defaulted under or breached this
Agreement for failure or delay in fulfilling or performing any term of this
Agreement, other than an obligation to make payments hereunder, when such
failure or delay is caused by or results from fire, floods, embargoes,
government regulations, prohibitions or interventions, war, acts of war (whether
war be declared or not), insurrections, riots, civil commotions, strikes,
lockouts, acts of God or any other cause beyond the reasonable control of the
affected party to anticipate, prevent, avoid or mitigate (a "Force Majeure
Event"); provided, however, that any failure or delay in fulfilling a term of
this Agreement shall not be considered a result of a Force Majeure Event if it
arises from a failure of GW or Cellegy to comply with applicable laws and
regulations.
16.2 Further Assurances. Each party hereto agrees to perform such acts,
execute such further instruments, documents or certificates, and provide such
cooperation in proceedings and actions as may be reasonably requested by the
other party in order to carry out the intent and purpose of this Agreement,
including without limitation the registration or recordation of the rights
granted hereunder; provided, however that if any party hereto desires to notify
this Agreement under Article 85(3) of the Treaty of Rome establishing the
European Economic community, such party shall give the other party ninety (90)
days prior written notice of such notification and if during such period a party
shall reasonable object to such notification, the objecting party need not
cooperate in such notification and such notification shall not be implemented.
16.3 Severability. Both parties hereby expressly acknowledge and agree
that it is the intention of neither party to violate any public policy,
statutory or common law, rules, regulations, treaty or decision of any
government agency or executive body thereof of any country or community or
association of countries and specifically agree that if any word, sentence,
paragraph, clause or combination thereof in this Agreement is found by a court
or executive body with judicial powers having jurisdiction over this Agreement
or any of the parties hereto in a final unappealed order, to be in violation of
any such provisions in any country or community or association of countries,
then in such event such words, sentences, paragraphs, clauses or combination
shall be inoperative in such country or community or association of countries
and the remainder of this Agreement shall remain binding upon the parties
hereto.
CONFIDENTIAL -32-
16.4 Notices. Any notice required or permitted to be given hereunder
shall be in writing and shall be deemed to have been properly given if delivered
in person, or if mailed by registered or certified mail (return receipt
requested) postage prepaid, or by a nationally recognized overnight courier, or
by facsimile (and promptly confirmed by registered, certified mail or overnight
courier), to the addresses given below or such other addresses as may be
designated in writing by the parties from time to time during the term of this
Agreement. Any notice sent by registered, certified mail or overnight courier as
aforesaid shall be deemed to have been given when mailed.
In the case of Cellegy: With a required copy to:
Cellegy Pharmaceuticals, Inc. Fenwick & West LLP
0000 Xxxx Xxxxxxxxx Xxxxxxxxx, Xxxxx 000 Two Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxxxx 00000 Xxxx Xxxx, XX 00000
Attention: A. Xxxxxxx Xxxxxx Attention: Xxxxx Xxxxx, Esq.
Telephone No.: (000) 000-0000 Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
In the case of GW: With a required copy to:
Glaxo Wellcome Inc. Glaxo Wellcome Inc.
Five Xxxxx Drive Five Xxxxx Drive
Research Xxxxxxxx Xxxx, XX 00000 Research Xxxxxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx Attention: General Counsel
Vice President, Dermatology
Telephone No.: (000) 000-0000 Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000 Facsimile No.: (000) 000-0000
16.5 Assignment. This Agreement may not be assigned or otherwise
transferred by either party without the written consent of the other party;
provided, however, that either party may, without such consent, assign this
Agreement in connection with the transfer or sale of all or substantially all of
its business related to this Agreement or in the event of the merger or
consolidation of such party with another corporation, or in the case of GW, in
the event of a sale by GW of all or substantially all of the dermatology
business; and further provided that Cellegy may assign, transfer or pledge its
rights to receive any payments due Cellegy hereunder without GW's consent;
provided, however, that GW's consent shall be required for any payments due to
Cellegy under this Agreement that are to be divided among separate entities. Any
purported assignment in violation of the preceding sentence shall be void. Any
permitted assignee shall assume all obligations of its assignor under this
Agreement.
16.6 Amendment. The parties hereto may amend, modify or alter any of
the provisions of this Agreement, but only by a written instrument duly executed
by both parties hereto.
16.7 Entire Agreement. This Agreement (and the Trademark Assignment)
contains the entire understanding of the parties with respect to the subject
matter hereof. All express or implied agreements and understandings, either oral
or written, heretofore made are expressly merged in and made a part of this
Agreement.
CONFIDENTIAL -33-
16.8 Waiver. The failure of a party to enforce at any time for any
period any of the provisions hereof shall not be construed as a waiver of such
provisions or of the rights of such party thereafter to enforce each such
provisions.
16.9 No Implied Licenses. Except as expressly and specifically provided
under this Agreement (and the Trademark Assignment), the parties agree that
neither party is granted any implied rights to or under any of the other party's
current or future patents, trade secrets, copyrights, moral rights, trade or
service marks, trade dress, or any other intellectual property rights.
16.10 Injunctions. The parties agree that any breach or threatened
breach by one party of the confidentiality provisions contained in this
Agreement will cause substantial harm to the other party that cannot be remedied
by monetary damages, and therefore each party agrees that either party shall be
have the right to obtain equitable remedies, without bond, including injunctions
and repossession of Confidential Information, to xxxxx actual or threatened
breaches of this Agreement.
16.11 Independent Contractors. The parties agree that the relationship
of Cellegy and GW established by this Agreement (and the Trademark Assignment)
is that of independent licensee and licensor. Furthermore, the parties agree
that this Agreement (and the Trademark Assignment) does not, is not intended to,
and shall not be construed to, establish a partnership or joint venture, and nor
shall this Agreement (and the Trademark Assignment) create or establish an
employment, agency or any other relationship. Except as may be specifically
provided herein, neither party shall have any right, power or authority, nor
shall they represent themselves as having any authority to assume, create or
incur any expense, liability or obligation, express or implied, on behalf of the
other party, or otherwise act as an agent for the other party for any purpose.
16.12 No Third Party Beneficiaries. All rights, benefits and remedies
under this Agreement are solely intended for the benefit of Cellegy and GW, and
no Third Party shall have any rights whatsoever to (i) enforce any obligation
contained in this Agreement (ii) seek a benefit or remedy for any breach of this
Agreement, or (iii) take any other action relating to this Agreement under any
legal theory, including but not limited to, actions in contract, tort (including
but not limited to negligence, gross negligence and strict liability), or as a
defense, setoff or counterclaim to any action or claim brought or made by the
parties.
16.13 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of North Carolina, exclusive of its
choice-of-law rules, except that questions affecting the construction and effect
of any patent shall be determined by the laws of the country in which such
patent has been granted.
16.14 Headings. The Article and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
CONFIDENTIAL -34-
16.15 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same document.
IN WITNESS HEREOF, the parties have executed this Agreement as of the
Effective Date.
GLAXO WELLCOME INC. CELLEGY PHARMACEUTICALS, INC.
By: /s/ Xxxx X. Xxxxxxxx By: /s/ Xxxx X. Xxxxxxxxxx
------------------------------------------- ----------------------------------
Xxxx X. Xxxxxxxx Xxxx X. Xxxxxxxxxx, M.D.
Vice-President-- Chairman and CEO
Business Development and Planning,
General Manager--
Specialty Divisions
EXHIBIT A
PATENTS AND PATENT APPLICATIONS
=============== ============================== =======================================
U.S. Patent Status Grant Date (patents only)
=============== ============================== =======================================
4,885,282 Issued 05 Dec 1989
=============== ============================== =======================================
5,057,500 Issued 15 Oct 1991
=============== ============================== =======================================
5,231,087 Issued 27 July 1993
=============== ============================== =======================================
=============== =================================== ============= ===================== ================ ==================
U.S. Patent Current Foreign Counterpart Status App. No. or Patent Filing Date Grant Date
Patents and Patent Applications No. (Apps. Only) (patents only)
=============== =================================== ============= ===================== ================ ==================
4,885,282 Germany (thru EPO) Issued P3853558.0 12 Apr 95
----------------------------------- ------------- --------------------- ---------------- ==================
Germany (thru EPO) Issued P3855489.5 21 Aug 96
----------------------------------- ------------- --------------------- ---------------- ==================
France (thru EPO) Issued FR 0297436 12 Apr 95
----------------------------------- ------------- --------------------- ---------------- ==================
France (thru EPO) Issued FR 0588379 21 Aug 96
----------------------------------- ------------- --------------------- ---------------- ==================
U.K. (thru EPO) Issued GB 0297436 12 Apr 95
----------------------------------- ------------- --------------------- ---------------- ==================
U.K. (thru EPO) Issued GB 0588379 21 Aug 96
----------------------------------- ------------- --------------------- ---------------- ==================
Italy (thru EPO) Issued IT 0297436 12 Apr 95
----------------------------------- ------------- --------------------- ---------------- ==================
Italy (thru EPO) Issued 26747BE/96 21 Aug 96
----------------------------------- ------------- --------------------- ---------------- xxxxxxxxxxxxxxxxxx
Xxxxx Xxxxxxx 0-00000 25 Feb 94
----------------------------------- ------------- --------------------- ---------------- ==================
Japan Issued 2538516 8 July 96
--------------- ----------------------------------- ------------- --------------------- ---------------- ==================
5,057,500 Australia Issued 644552 16 May 94
----------------------------------- ------------- --------------------- ---------------- ==================
Canada Issued 2074493 3 Oct 95
----------------------------------- ------------- --------------------- ---------------- ==================
Europe (Austria, Belgium, Pending 91904824.9 11 Feb 00
Xxxxxxx, Xxxxxx, Xxxxxxx, Xxxxxx,
Italy, Netherlands, Spain,
Sweden, Switzerland, Luxembourg,
U.K.)
----------------------------------- ------------- --------------------- ---------------- ==================
Japan Pending 3-505562 11 Feb 91
----------------------------------- ------------- --------------------- ---------------- xxxxxxxxxxxxxxxxxx
Xxxxx Xxxxx Issued 99229 9 May 96
--------------- ----------------------------------- ------------- --------------------- ---------------- ==================
5,231,087 Australia Issued 641356 23 Mar 94
----------------------------------- ------------- --------------------- ---------------- ==================
Canada Issued 1317884 18 May 93
----------------------------------- ------------- --------------------- ---------------- ==================
Denmark Pending 1594/91 13 Mar 89
----------------------------------- ------------- --------------------- ---------------- ==================
Europe (Austria, Belgium, Pending 89905334.2 00 Xxx 00
Xxxxxxxxxxx, Xxxxxxx, Xxxxxx,
X.X., Xxxxx, Xxxxxxxxxx,
Xxxxxxxxxxx, Xxxxxx)
----------------------------------- ------------- --------------------- ---------------- ==================
Japan Issued 2513877 30 Apr 96
----------------------------------- ------------- --------------------- ---------------- xxxxxxxxxxxxxxxxxx
Xxxxx Xxxxx Pending 701107/91 13 Mar 89
----------------------------------- ------------- --------------------- ---------------- ==================
Mexico Issued 173667 22 Mar 94
--------------- ----------------------------------- ------------- --------------------- ---------------- ==================
CONFIDENTIAL - EXHIBIT A -
EXHIBIT B-1
LIST OF GLYLORIN TRADEMARKS AND
TRADEMARK APPLICATIONS AND THEIR STATUS
------------ ------------------ -------------------- -------------------------- ============================================
Country App/Reg No. App/Reg Date Goods Status
------------ ------------------ -------------------- -------------------------- ============================================
France Reg. No 93464430 Reg. Date Pharmaceutical Registered/Renewal due 4/16/03
10/01/93 preparations for
treatment of skin
diseases in Int'l Class 5
------------ ------------------ -------------------- -------------------------- --------------------------------------------
Germany App. No. C44 App. Date All goods in Class 5 Published 1/31/94 and opposed by Schering
953/5 Wz 04/13/93 AG on 4/25/94 on the basis of its
registration for GYNOVIN, German Reg. No.
974.849 for contraceptives & international
Reg. No. 444086. Priority Agreement
proposed as settlement on 6/20/96. No
agreement has been signed but German
Patent Office rejected Schering's
opposition on 6/13/96. Cellegy is still
considering the settlement to avoid future
problems.
------------ ------------------ -------------------- -------------------------- --------------------------------------------
United App. No. 1532505 App. Date Pharmaceutical Opposed by Bioglan Pharmaceuticals Ltd. on
Kingdom 04/14/93 preparations for 8/23/94 based on ownership of U.K. Reg.
treatment of skin No. 1380477 for the xxxx GLYTRIN. Bioglan
diseases in Int'l Class filed supporting Declaration on 1/30/96.
5. Cellegy applied for extension of time on
9/27/96 to file its counter evidence.
------------ ------------------ -------------------- -------------------------- --------------------------------------------
United App. No. App. Date. Pharmaceutical Intent to use Application published
States 75/044,863 01/18/96 preparations for 8/20/96.
treatment of skin mucous
membrane diseases in
Int'l Class 5.
------------ ------------------ -------------------- -------------------------- --------------------------------------------
CONFIDENTIAL - EXHIBIT B-1 -
EXHIBIT B-2
TRADEMARK ASSIGNMENT FOR THE UNITED STATES
THIS ASSIGNMENT is made and delivered by Cellegy Pharmaceuticals, Inc.,
a corporation organized and existing under the laws of the State of California,
with its principal place of business at 0000 Xxxx Xxxxxxxxx Xxxxxxxxx, Xxxxx
000, Xxxxxx Xxxx, Xxxxxxxxxx 00000 (herein, "Assignor"), in favor of Glaxo
Wellcome Inc., a corporation organized and existing under the laws of the State
of North Carolina, with its principal place of business at Five Xxxxx Drive,
Research Xxxxxxxx Xxxx, Xxxxx Xxxxxxxx 00000 (hereinafter, "Assignee").
WHEREAS, Assignor owns, and has applied for federal registration in the
United States of, the trademark GLYLORIN for pharmaceutical preparations for
treatment of skin and mucous membrane diseases in International Class 5
(hereinafter, "Trademark") on the Principal Register in the U.S. Patent &
Trademark Office under an application filed January 18, 1996, Serial No.
75/044,863 (hereinafter, "Application S.N. 75/044,863"); and
WHEREAS, Assignor wishes to assign, transfer, convey and deliver the
Trademark to Assignee;
NOW, THEREFORE, in the United States, for good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged,
Assignor does hereby assign, transfer, convey and deliver to Assignee, successor
to the portion of the business to which the Trademark pertains in the United
States, all rights, title and interest in and to the Trademark and to
Application S.N. 75/044,863, together with the goodwill symbolized by the
Trademark and that portion of the business which is ongoing and existing to
which the Trademark pertains.
Executed this 13th day of November, 1996.
CELLEGY PHARMACEUTICALS, INC.
By: /s/ Xxxx X. Thornfedlt
----------------------------
Name: Xxxx X. Xxxxxxxxxx, M.D.
Title: Chairman, CEO
Acknowledged by:
GLAXO WELLCOME INC.
By: /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President, General Manager
CONFIDENTIAL - B-2 -
EXHIBIT C
ORPHAN DRUG DESIGNATION LETTER
ATTACHED
CONFIDENTIAL - C -
EXHIBIT C
ORPHAN DRUG DESIGNATION LETTER
DEPARTMENT OF HEALTH & HUMAN SERVICES Public Health Services
--------------------------------------------------------------------------------
Office of Orphan Products Development (HF 35)
Food and Drug Administration
0000 Xxxxxxx Xxxx
Xxxxxxxxx, XX 00000
April 29, 1993
Cellegy Pharmaceuticals, Incorporated
Attention: Xx. Xxxx X. Xxxxxx
Vice President, Regulatory Affairs and Quality Assurance
000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Dear Xx. Xxxxxx:
Reference is made to your orphan drug application of November 10, 1992 submitted
pursuant to Section 526 of the Federal Food, Drug and Cosmetic Act for the
designation of Glylorin(TM) (monolaurin) as an orphan drug (application
#92-718). We also refer to your amendment submitted February 24, 1993.
We have completed the review of this application and have determined that
monolaurin qualifies for orphan designation for the treatment of congenital
primary ichthyosis. Please note that it is the active ingredient and not the
formulation that has received orphan designation.
Prior to marketing approval, sponsors of designated orphan products are
requested to submit written notification to this Office of their intention to
exercise orphan drug exclusivity if they are the first sponsor to obtain such
approval for the drug. This notification will assist FDA in assuring that
approval for the marketing of the same drug is not granted to another firm for
the statutory period of exclusivity. Also please be advised that if monolaurin
were approved for an indication broader than the orphan designation, your
product might not be entitled to exclusive marketing rights pursuant to Section
527 of the FFDCA. Therefore, prior to final marketing approval, sponsors of
designated orphan products are requested to compare the designated orphan
indication with the proposed marketing indication and to submit additional data
to amend their orphan designation prior to marketing approval if warranted.
In addition, please inform this office annually as to the status of the
development program, and at such time as a marketing application is submitted to
the FDA for the use of monolaurin as designated. If you need further assistance
in the development of your product for marketing, please feel free to contact
Xx. Xxxxxx Xxxxx at (000) 000-0000.
Please refer to this letter as official notification of designation and
congratulations on obtaining your orphan drug designation.
Sincerely yours,
/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx, M.D., M.P.H
Director
CONFIDENTIAL - C -
EXHIBIT D
THE DICARB COMPOUNDS
Azelaic Acid (nonanedioic acid) 1,7-heptane dicarboxylic acid
Suberic Acid (octanedioic acid) 1,6-hexane dicarboxylic acid
Sebacic Acid (decanedioic acid) 1,8-octane dicarboxylic acid
Pimelic Acid (heptanedioic acid) 1,5-pentane dicarboxylic acid
Esters of dicarboxylic acid Include:
Both monoesters and diesters
Preferred esters, particularly monoglycerides and sucrose monoesters
for the dicarboxylic acids
* As identified in Claims 39 thru 46 and Claims 55 through 58 of US Patent
Number: 4,885,282, and foreign counterpart patents and patent applications
thereof.
CONFIDENTIAL - D -
EXHIBIT E
DEVELOPMENT COSTS
14-Oct-96
[**]
** Confidential treatment has been requested with respect to the information
contained within the "[**]" markings. Such marked portions have been
omitted from this filing and have been filed separately with the Securities
and Exchange Commission.
CONFIDENTIAL - E -
EXHIBIT F
INDEPENDENT REGIONS
1. United States
2. Canada
3. Mexico
4. All Caribbean countries and other islands and Bermuda
5. Central America (as defined in Article 1.7 hereof)
6. Argentina
7. Brazil
8. Bolivia, Chile, Columbia, Ecuador, Peru, Paraguay, Uruguay and Venezuela.
9. Europe (as defined in Article 1.6 hereof)
10. South Africa
11. Japan
12. Korea
13. India
14. Pakistan
15. Philippines
16. Turkey
17. All Asia (as defined in Article 1.9 hereof),
other than Japan, Korea, India, Pakistan, Philippines, and Turkey
18. Australia
19. All other countries not included in a Region described above, but within
the Territory.
CONFIDENTIAL - F -
