1
Exhibit 10.10
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
Final
DEVELOPMENT AND LICENSE AGREEMENT
BETWEEN
TRANSCEND THERAPEUTICS, INC.
AND
BOEHRINGER INGELHEIM INTERNATIONAL GmbH
DATED AS OF FEBRUARY 28, 1997
2
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS ....................................... 6
1.1 "ADDITIONAL DEVELOPMENT PROGRAM" ................. 6
1.2. "ADMINISTRATION COSTS" ........................... 6
1.3. "AFFILIATE" ...................................... 7
1.4. "ARDS" ........................................... 7
1.5. "ARDS DEVELOPMENT PROGRAM" ....................... 7
1.6. "ARDS NDA FILING" ................................ 7
1.7. "ARDS PROGRAM PLAN" .............................. 7
1.8. "BI PATENT RIGHTS" ............................... 7
1.9. "BI TECHNOLOGY" .................................. 7
1.10. "CLINICAL NUTRITION .............................. 8
1.11. "COST OF GOODS SOLD" ............................. 8
1.12. "DEVELOPMENT EXPENSES" ........................... 8
1.13. "DEVELOPMENT PROGRAM" ............................ 8
1.14. "DIRECT COSTS" ................................... 8
1.15. "DISTRIBUTION COSTS" ............................. 8
1.16. "EFFECTIVE DATE" ................................. 9
1.17. "E.U." ........................................... 9
1.18. "FDA" ............................................ 9
1.19. "FIELD" .......................................... 9
1.20. "FIRST COMMERCIAL SALE" .......................... 9
1.21. "JOINT DEVELOPMENT TEAM" ......................... 9
1.22. "JOINT MARKETING TEAM" ........................... 9
1.23. "JOINT STEERING COMMITTEE" ....................... 9
1.24. "LICENSED PRODUCT" ............................... 9
1.25. "MAJOR MARKET COUNTRIES" ......................... 9
1.26. "MANUFACTURING COSTS" ............................ 9
1.27. "MARKETING EXCLUSIVITY" .......................... 10
1.28. "MEDICAL COSTS" .................................. 10
1.29. "MOD" ............................................ 10
1.30. "MOD DEVELOPMENT PROGRAM" ........................ 10
1.31. "MOD PIVOTAL TRIAL ............................... 10
1.32. "MOD PIVOTAL TRIAL MILESTONE EVENT" .............. 10
1.33. "MOD PROGRAM PLAN" ............................... 10
1.34. "NDA" ............................................ 11
1.35. "NET CONTRIBUTION" ............................... 11
1.36. "NET SALES" ...................................... 11
1.37. "NUTRITION" ...................................... 12
1.38. "OTHER INDICATION" ............................... 12
1.39. "OTHER INDICATION PROGRAM PLAN" .................. 12
1.40. "PARTY" .......................................... 12
1.41. "PROCYSTEINE" .................................... 12
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1.42. "PROCYSTEINE I.V." ............................... 13
1.43. "PRODUCT-RELATED COSTS" .......................... 13
1.44. "PROGRAM PATENT RIGHTS" .......................... 13
1.45. "PROGRAM PLAN" ................................... 13
1.46. "PROGRAM TECHNOLOGY" ............................. 13
1.47. "PROJECT TEAM" ................................... 13
1.48. "RECOGNIZED AGENT" ............................... 13
1.49. "SALES AND MARKETING COSTS" ...................... 13
1.50. "STOCK PURCHASE AGREEMENT" ...................... 14
1.51. "TERRITORY" ...................................... 14
1.52. "THIRD PARTY ..................................... 14
1.53. "TRANSCEND PATENT RIGHTS" ........................ 14
1.54. "TRANSCEND TECHNOLOGY" ........................... 14
1.55. "VALID PATENT CLAIM" ............................. 14
ARTICLE 2. SCOPE AND STRUCTURE OF THE COLLABORATION .......... 14
2.1. GENERAL .......................................... 14
ARTICLE 3. LICENSE GRANTS; RESERVED RIGHTS ................... 15
3.1. GRANT OF LICENSE RIGHTS BY TRANSCEND TO BI ........ 15
3.1.1 EXCLUSIVE LICENSE TO LICENSED PRODUCTS ... 15
3.1.2 RESERVATION OF RIGHTS ............................. 15
3.2. GRANT OF LICENSE RIGHTS BY BI TO TRANSCEND ........ 15
3.3. LIMITATIONS ON TRANSCEND RESERVED RIGHTS .......... 16
3.3.1. RESERVED RIGHTS ................................... 16
3.3.2. RIGHT OF FIRST NEGOTIATION ............... 16
3.3.3. RESTRICTIONS ............................. 16
3.4. PRESERVATION OF LICENSES IN BANKRUPTCY ............ 16
3.4.1. BANKRUPTCY FILING ........................ 17
3.4.2. INTELLECTUAL PROPERTY FOR PURPOSE OF
BANKRUPTCY CODE .......................... 17
ARTICLE 4. DEVELOPMENT OF LICENSED PRODUCTS .................. 17
4.1. ARDS DEVELOPMENT PROGRAM .......................... 17
4.1.1. TRANSCEND RESPONSIBILITIES ............... 17
4.1.2. BI RESPONSIBILITIES ...................... 17
4.1.3. PROGRAM FUNDING .......................... 18
4.1.4. FILING FOR ARDS APPROVAL IN UNITED STATES ......... 18
4.2. MOD DEVELOPMENT PROGRAM ........................... 19
4.2.1. GENERAL .................................. 19
4.2.2. JOINT DEVELOPMENT PROGRAM ................ 19
4.2.3. NON-JOINT DEVELOPMENT PROGRAM ............ 21
4.3. ADDITIONAL DEVELOPMENT PROGRAM0S .................. 25
4.3.1. GENERAL .................................. 25
4.3.2. NON-JOINT DEVELOPMENT .................... 25
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4
4.4. ATTENDANCE AT REGULATORY MEETINGS ................. 26
4.5. DEVELOPMENT EXPENSES .............................. 26
4.5.1. TRANSCEND FUNDING ........................ 26
4.5.2. SHARED DEVELOPMENT EXPENSES .............. 26
4.5.3. REIMBURSEMENT OF DEVELOPMENT EXPENSES .... 27
4.6. RECORDS ........................................... 27
4.7. PROGRESS REPORTS .................................. 27
4.8. AVAILABILITY OF EMPLOYEES ......................... 27
4.9. VISIT OF FACILITIES ............................... 28
4.10. DEVELOPMENT INFORMATION ........................... 28
4.11. CESSATION OF TRANSCEND BUSINESS ................... 28
ARTICLE 5. MANAGEMENT ........................................ 28
5.1 JOINT DEVELOPMENT TEAM ............................ 28
5.1.1. GENERAL .................................. 28
5.1.2. RESPONSIBILITIES ......................... 28
5.1.3. MEETINGS ................................. 30
5.1.4. REPRESENTATIVES .......................... 30
5.1.5. ACTIONS .................................. 30
5.2. JOINT MARKETING TEAM .............................. 30
5.2.1. GENERAL .................................. 30
5.2.2. MEETINGS ................................. 30
5.2.3. REPRESENTATIVES .......................... 30
5.2.4. ACTIONS .................................. 31
5.3. JOINT STEERING COMMITTEE .......................... 31
5.3.1. GENERAL .................................. 31
5.3.2. CHAIR .................................... 31
5.3.3. MEETINGS ................................. 31
5.3.4. DISAGREEMENTS ............................ 32
ARTICLE 6. MANUFACTURING AND MARKETING RIGHTS ................ 32
6.1. MANUFACTURING OF LICENSED PRODUCTS ................ 32
6.1.1. TRANSCEND'S EXCLUSIVE RIGHT TO MANUFACTURE 32
6.1.2. TRANSFER PRICE ........................... 32
6.1.3. MANUFACTURING PLANNING ................... 33
6.1.4. BI'S OPTION FOR MANUFACTURING LICENSE .... 33
6.2. MARKETING AND DISTRIBUTION RIGHTS AND OBLIGATIONS . 33
6.2.1. BI MARKETING RIGHT AND DILIGENCE
OBLIGATIONS .............................. 33
6.2.2. TRANSCEND CO-PROMOTION OPTION ............ 35
ARTICLE 7. PAYMENTS .......................................... 36
7.1. LICENSE FEE ....................................... 36
7.2 EQUITY INVESTMENT ................................. 36
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7.3 MILESTONE PAYMENTS ................................ 36
7.4. ROYALTIES ON NET SALES ............................ 39
7.4.1 NET SALES IN THE UNITED STATES ........... 39
7.4.2 NET SALES IN JAPAN ....................... 39
7.4.3 NET SALES OUTSIDE OF THE UNITED STATES AND
JAPAN .................................... 39
7.4.4 DURATION OF ROYALTY PAYMENTS ............. 39
7.4.5 SUBLICENSE ROYALTIES ..................... 39
7.4.6. ROYALTY RATE REDUCTION .................... 39
7.5. ROYALTY REPORTS, EXCHANGE RATES ................... 40
7.6. AUDITS ............................................ 41
7.7. ROYALTY PAYMENT TERMS ............................. 41
7.8. WITHHOLDING TAXES ................................. 41
7.9. APPLICATION FOR TAX EXEMPTION ..................... 42
7.10. INTEREST ON LATE PAYMENTS ......................... 42
ARTICLE 8. INTELLECTUAL PROPERTY RIGHTS ...................... 42
8.1. OWNERSHIP ......................................... 42
8.1.1. OWNERSHIP OF PROGRAM TECHNOLOGY AND
PROGRAM PATENT RIGHTS .................... 42
8.1.2 COOPERATION OF EMPLOYEES ................. 43
8.2. FILING, PROSECUTION AND MAINTENANCE OF PROGRAM
PATENT RIGHTS AND TRANSCEND PATENT RIGHTS ......... 43
8.2.1. FILINGS .................................. 43
8.2.2. PROSECUTION AND MAINTENANCE .............. 44
8.2.3. ABANDONMENT .............................. 44
8.3. COOPERATION ....................................... 44
8.4. NOTIFICATION OF PATENT TERM RESTORATION ........... 44
8.5. NO OTHER TECHNOLOGY RIGHTS ........................ 45
8.6. ENFORCEMENT OF PATENT RIGHTS ...................... 45
8.7. DEFENSE OF INDIVIDUAL INFRINGEMENT ACTIONS ........ 46
8.8. DEFENSE OF JOINT INFRINGEMENT ACTIONS ............. 46
8.9. CONTRIBUTION ...................................... 47
ARTICLE 9. CONFIDENTIALITY ................................... 47
9.1. NONDISCLOSURE OBLIGATIONS ......................... 47
9.1.1. GENERAL ................................... 47
9.1.2. LIMITATIONS ............................... 47
9.2. SAMPLES ........................................... 48
9.3 TERMS OF THIS AGREEMENT ........................... 48
9.4. PUBLICATIONS ...................................... 48
9.4.1. PROCEDURE ................................. 48
9.4.2. DELAY ..................................... 49
9.4.3. RESOLUTION ................................ 49
9.5. INJUNCTIVE RELIEF ................................. 49
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ARTICLE 10. REPRESENTATIONS AND WARRANTIES .................... 49
ARTICLE 11. INDEMNITY ......................................... 50
11.1. BI INDEMNITY OBLIGATIONS ........................... 50
11.2. TRANSCEND INDEMNITY OBLIGATIONS .................... 50
11.3. PROCEDURE .......................................... 51
11.4. INSURANCE .......................................... 51
ARTICLE 12. TERM AND TERMINATION .............................. 51
12.1. EXPIRATION ......................................... 51
12.2. TERMINATION ........................................ 52
12.2.1. MATERIAL BREACH .......................... 52
12.2.2. BY BI .................................... 52
12.3. EFFECT OF EXPIRATION OR TERMINATION GENERALLY ...... 52
12.3.1. EXISTING OBLIGATIONS ..................... 52
12.3.2. SURVIVAL ................................. 52
12.4. EFFECT OF TERMINATION BY TRANSCEND OR TERMINATION BY
BI PURSUANT TO SECTION 12.2.2 ...................... 52
12.4.1. TERMINATION OF LICENSES .................. 52
12.4.2. DISPOSITION OF INVENTORY OF LICENSED
PRODUCTS ................................. 53
12.4.3. ASSIGNMENT OF REGULATORY APPROVALS;
MANUFACTURING RIGHTS ..................... 53
12.5. BI OPTIONS FOLLOWING TRANSCEND BREACH .............. 53
12.5.1. TERMINATION FOR TRANSCEND BREACH ......... 53
12.5.2. BI'S RIGHT TO OFFSET ROYALTIES AND OTHER
PAYMENTS ................................. 53
ARTICLE 13. MISCELLANEOUS ..................................... 54
13.1. FORCE MAJEURE ...................................... 54
13.2. ASSIGNMENT ......................................... 54
13.3. SEVERABILITY ....................................... 55
13.4. NOTICES ............................................ 55
13.5. APPLICABLE LAW ..................................... 56
13.6. DISPUTE RESOLUTION; CHOICE OF FORUM ................ 56
13.7. ENTIRE AGREEMENT ................................... 56
13.8. HEADINGS ........................................... 56
13.9. INDEPENDENT CONTRACTORS ............................ 56
13.10. AGREEMENT NOT TO SOLICIT EMPLOYEES ................. 57
13.11. EXPORTS ............................................ 57
13.12. WAIVER ............................................. 57
13.13. COUNTERPARTS ....................................... 57
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Exhibit A - Program Plan for ARDS Development Program
Exhibit B - Transcend Patent Rights
Exhibit C - Stock Purchase Agreement
Exhibit D - Terms of Supply Agreement
8
DEVELOPMENT AND LICENSE AGREEMENT
---------------------------------
THIS DEVELOPMENT AND LICENSE AGREEMENT dated as of February 28, 1997 (the
"Agreement") is made between TRANSCEND THERAPEUTICS, INC., a Delaware
corporation having its principal place of business at 000 Xxxxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx 00000 X.X.X. ("Transcend"), and BOEHRINGER INGELHEIM
INTERNATIONAL GMBH, a limited liability company organized under the laws of the
Federal Republic of Germany having its principal place of business at X-00000
Xxxxxxxxx/Xxxxx Xxxxxxx ("BI").
R E C I T A L S
A. Transcend, an emerging pharmaceutical company with a particular
therapeutic focus on critical care, is developing Procysteine(R), a novel
intracellular glutathione-repleting agent for the treatment of diseases caused
by oxidative stress and resultant tissue damage.
B. BI is in the business of discovering, developing and marketing
pharmaceuticals and wishes to establish a collaboration with Transcend for the
worldwide development and marketing of intravenous formulations of Procysteine,
initially for the treatment of acute respiratory distress syndrome.
C. Transcend is willing to enter into a collaboration with BI for the
worldwide development and marketing of intravenous formulations of Procysteine
on the terms and conditions set forth below.
NOW THEREFORE, in consideration of the premises and of the covenants
herein contained, Transcend and BI mutually agree as follows:
ARTICLE 1. DEFINITIONS
For purposes of this Agreement, the Terms defined in this Article shall
have the meanings specified below.
1.1 "ADDITIONAL DEVELOPMENT PROGRAM" shall mean a development program
(which may encompass a complete development program, a clinical protocol or a
protocol outline) for the utilization of Procysteine I.V. for the treatment or
prevention of an Other Indication, as further specified in Section 4.3.
1.2. "ADMINISTRATION COSTS" shall mean, with respect to a Licensed Product
co-promoted in the United States by Transcend pursuant to Section 6.2.2,
allocable
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9
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
overhead costs and expenses (including without limitation such items as finance
and accounting costs, legal and tax department costs and other general
administration charges), PROVIDED THAT any allocation of costs and expenses
shall be in accordance with reasonable and customary cost allocation procedures
and shall not exceed ************** of Net Sales of such Licensed Product.
1.3 "AFFILIATE" shall mean any corporation or other entity which controls,
is controlled by, or is under common control with a Party. A corporation or
other entity shall be regarded as in control of another corporation or entity if
it owns or directly or indirectly controls at least fifty percent (50%) of the
voting stock or other ownership interest of the other corporation or entity, or
if it possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of the corporation or other entity or
the power to elect or appoint fifty percent (50%) or more of the members of the
governing body of the corporation or other entity.
1.4. "ARDS" shall mean acute respiratory distress syndrome.
1.5. "ARDS DEVELOPMENT PROGRAM" shall mean the development program for
obtaining regulatory approval for Procysteine I.V. for the treatment of ARDS in
the Territory, undertaken jointly by the Parties in accordance with the ARDS
Program Plan, as further specified in Section 4.1.
1.6. "ARDS NDA FILING" shall mean the filing of an NDA relating to
Procysteine I.V. for the treatment of ARDS.
1.7 "ARDS PROGRAM PLAN" shall mean the development plan for the ARDS
Development Program set forth as Exhibit A to this Agreement (as such plan may
be amended from time to time by the Joint Steering Committee or by mutual
agreement of the Parties).
1.8. "BI PATENT RIGHTS" shall mean any present and future patents, patent
applications, patent extensions, certificates of invention, or applications for
certificates of invention, together with any divisions, continuations or
continuations-in-part thereof, which are owned or controlled by, or licensed
(with the right to sublicense) to, BI that cover BI Technology.
1.9. "BI TECHNOLOGY" shall mean any present and future inventions, trade
secrets, copyrights, data, regulatory submissions and other intellectual
property of any kind (including any proprietary biological materials, compounds
or reagents) including all confidential technical information in the possession
of BI as of the Effective Date and/or during the term of this Agreement, which
are owned or
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controlled by, or licensed (with the right to sublicense) to, BI that (a) are
necessary or useful for the manufacture, use or sale of the Licensed Products,
and (b) BI has elected to disclose to Transcend in the course of, and for use
in, the Program, excluding without limitation any Program Technology owned or
controlled by BI.
1.10. "CLINICAL NUTRITION " shall mean the feeding under professional
supervision of patients requiring special food administration techniques and
devices or nutrients in relation to their medical condition and shall be deemed
to exclude the administration of any product in which Procysteine (i) exceeds
ten percent (10%) by dry weight of the total content of the amino acids, amino
acid precursors and amino acid substrates, or (ii) exceeds one percent (1%) by
weight volume of the product administered in liquid form to patients. Clinical
Nutrition comprises parenteral (intravenous and intraperitoneal) and enteral
(nasogastric, jejunal and oral) nutrition for patient needs in hospitals,
nursing homes, extended care facilities and, if taken under professional
supervision, private residences.
1.11. "COST OF GOODS SOLD" shall mean, with respect to a Licensed Product,
(a) the Manufacturing Costs for such Licensed Product and (b) any royalties or
other amounts payable by Transcend to Third Parties with respect to patents and
other intellectual property rights licensed in connection with the manufacture
or sale of such Licensed Product.
1.12. "DEVELOPMENT EXPENSES" shall mean the external costs and Direct Costs
incurred by BI and/or Transcend following the Effective Date, as applicable, in
connection with the Development Program, including costs relating to the conduct
of clinical trials and compliance with product-related regulatory approval
procedures.
1.13. "DEVELOPMENT PROGRAM" shall mean the ARDS Development Program, MOD
Development Program, if any, and any Additional Development Program.
1.14. "DIRECT COSTS" shall mean the following costs incurred by BI and/or
Transcend, as applicable, in connection with the Development Program: (a) Cost
of Goods Sold for Licensed Products used in the conduct of clinical trials; (b)
allocable compensation costs of personnel (including, research, development and
general and administrative personnel, but excluding manufacturing personnel)
included in the Project Team; and (c) allocable overhead expenses; PROVIDED THAT
any allocation of costs and expenses shall be in accordance with reasonable and
customary costs allocation procedures.
1.15. "DISTRIBUTION COSTS" shall mean, with respect to a Licensed Product
co-promoted in the United States by Transcend pursuant to Section 6.2.2,
allocable indirect distribution costs and expenses (including without limitation
such items as order processing costs, warehousing costs and general insurance
costs), PROVIDED, THAT
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
any allocation of costs and expenses shall be in accordance with reasonable and
customary cost allocation procedures and shall not exceed ************* of Net
Sales of such Licensed Product.
1.16. "EFFECTIVE DATE" shall mean the date first written above.
1.17. "E.U." means the countries included in the European Union as of the
Effective Date.
1.18. "FDA" shall mean the United States Food and Drug Administration.
1.19. "FIELD" shall mean the treatment or prevention of all disease
indications, provided, however, that Field shall not include Clinical Nutrition
and Nutrition.
1.20. "FIRST COMMERCIAL SALE" of a Licensed Product in each country shall
mean the first sale for use or consumption by the general public of such
Licensed Product in such country based on the required marketing and pricing
approval granted by the governing health authority of such country.
1.21. "JOINT DEVELOPMENT TEAM" shall mean the joint development team
composed of representatives of BI and Transcend, as more fully described in
Section 5.1 of this Agreement.
1.22. "JOINT MARKETING TEAM" shall mean the joint United States marketing
team composed of representatives of BI and Transcend, as more fully described in
Section 5.2 of this Agreement.
1.23. "JOINT STEERING COMMITTEE" shall mean the joint steering committee
composed of representatives of BI and Transcend, as more fully described in
Section 5.3 of this Agreement.
1.24. "LICENSED PRODUCT" shall mean a pharmaceutical product in finished
packaged form comprising Procysteine I.V.
1.25. "MAJOR MARKET COUNTRIES" shall mean the United States, Canada, the
United Kingdom, Germany, France, Italy, Spain and Japan.
1.26 "MANUFACTURING COSTS" shall mean, with respect to a Licensed Product,
the fully-allocated cost incurred by Transcend in manufacturing (or having
manufactured) and supplying such Licensed Product to BI, which cost shall
include without limitation material costs, allocable compensation costs of
manufacturing
-4-
12
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
personnel, manufacturing overhead (including without limitation such items as
rent, utility expenses, depreciation and amortization), but shall not include
any allocation of non-manufacturing managerial or non-manufacturing employee
overhead or of general and administrative expenses.
1.27. "MARKETING EXCLUSIVITY" shall mean the marketing exclusivity afforded
approved drug products pursuant to (a) the exclusivity provisions of the United
States "Drug Price Competition and Patent Term Restoration Act of 1984", or its
equivalent in a country other than the United States, or (b) the exclusivity
provisions of the United States "Orphan Drug Act", or its equivalent in a
country other than the United States.
1.28. "MEDICAL COSTS" shall mean, with respect to a Licensed Product
co-promoted in the United States by Transcend pursuant to Section 6.2.2,
allocable medical costs and expenses (including without limitation such items as
drug registration maintenance and re-registration costs, personnel and material
costs for drug safety and for medical support in the marketing of such Licensed
Product, and costs associated with post-approval clinical trials for such
Licensed Product), provided that any allocation of costs and expenses shall be
in accordance with reasonable and customary cost allocation procedures and
********************************* of Net Sales of such Licensed Product.
1.29. "MOD" shall mean multiple organ dysfunction.
1.30. "MOD DEVELOPMENT PROGRAM" shall mean a development program for
obtaining regulatory approval for Procysteine I.V. for the treatment or
prevention of MOD in the Territory, as further specified in Section 4.2.
1.31. "MOD PIVOTAL TRIAL " shall mean a clinical trial that is conducted as
a part of the MOD Development Program and is designed to obtain regulatory
approval in the United States or the E.U. of Procysteine I.V. for the treatment
or prevention of MOD.
1.32. "MOD PIVOTAL TRIAL MILESTONE EVENT" means (a) in the event that the
MOD Pivotal Trial is undertaken pursuant to Section 4.2.2, the commencement of
the MOD Pivotal Trial, and (b) in the event that the MOD Pivotal Trial is
undertaken pursuant to Section 4.2.3, the completion of the MOD Pivotal Trial.
1.33. "MOD PROGRAM PLAN" shall mean the development plan for the MOD
Development Program to be set forth as an addendum to this Agreement if and when
approved by the Joint Steering Committee pursuant to the provisions of Section
4.2.2 (as such plan may be amended from time to time by the Joint Steering
Committee or by mutual agreement of the Parties).
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
1.34. "NDA" shall mean a new drug application filed with the FDA to obtain
marketing approval for a Licensed Product in the United States and any
comparable application filed with the regulatory authorities of the E.U. to
obtain marketing approval for a Licensed Product in the E.U.
1.35. "NET CONTRIBUTION" shall mean, with respect to a Licensed Product,
the Net Sales of such Licensed Product ****************************************
************************* payable to Transcend pursuant to Section 7.4.1 below.
1.36. "NET SALES" shall mean the invoiced sales price charged by BI, its
Affiliates and/or sublicensees for the sale of Licensed Products to independent
Third Parties in the Territory, after deduction of (a) excises, sales taxes or
other taxes imposed upon and paid with respect to such sales (excluding
national, state or local taxes based on income), (b) charge back payments or
rebates granted to managed care organizations or federal, state and local
governments, their agencies, purchasers and reimbursers, and (c)***************
*******************************************************************************
*************************************************** to cover INTER ALIA all bona
fide cash and/or quantity discounts, credits for returns, handling and
transportation charges. With respect to Major Market Countries, should future
changes occur in any such country with regard to reimbursement to social
security or health maintenance organizations that are considerable, the parties
shall in good faith agree to a new definition of "Net Sales" for such country.
The transfer of the Licensed Products by BI or one of its Affiliates to (i)
another Affiliate of BI, or (ii) a permitted sublicensee of BI, or (iii) a
Recognized Agent for resale in a Major Market Country, shall not be considered a
sale; in such cases, Net Sales shall be determined based on the invoiced sales
price by the Affiliate, or permitted sublicensee of BI or any such Recognized
Agent to its customer, less the deductions allowed under this Section. Every
other commercial use or disposition of Licensed Products by BI or its
Affiliates, Recognized Agents (as provided above) or permitted sublicensees of
BI, other than reasonable quantities of promotional samples or bona fide sale to
a bona fide customer shall be considered a sale of the Licensed
Products at the weighted average Net Sales price then being invoiced by the
seller in arm's length transactions.
BI or its Affiliates shall be deemed to have sold a "Bundled Product"
if the Licensed Products are sold by BI or its Affiliates pursuant to an
agreement with an
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
independent customer specifying, for a combination of products or services, (i)
a single price, (ii) other terms of purchase not separately identifying either a
price per product or the effective deductions referred to above perproduct or
(iii) a price for units of the Licensed Products which is discounted below BI's
or its Affiliates' standard invoice price per unit of the Licensed Products by
at least ******** *************** more than the amount that any other product or
service in the Bundled Product is discounted below such other product's or
service's standard invoice price. In order to calculate the Net Sales of the
Licensed Products included in a Bundled Product (a) in the case of the foregoing
clauses (i) and (ii), the total Net Sales of the Bundled Product shall be
multiplied by a fraction, the numerator of which shall be the product of the
number of units of the Licensed Products sold multiplied by the standard invoice
price per unit of the Licensed Products, and the denominator of which shall be
the sum, for all products or services included in the Bundled Product, of the
products of the number of units sold for each product or service in the Bundled
Product multiplied by the standard invoice price per unit for each such product
or service and (b) in the case of the foregoing clause (iii), the Parties will
determine whether an adjustment to Net Sales is appropriate and, if so, a
mutually agreeable method of calculation.
1.37. "NUTRITION" shall mean the feeding of individuals and shall include
all products not having therapeutic claims and not included in the definition of
Clinical Nutrition that have as their principal purpose providing nutrients to
an individual.
1.38. "OTHER INDICATION" shall mean any disorder or disease in the Field,
other than ARDS or MOD.
1.39. "OTHER INDICATION PROGRAM PLAN" shall mean the development plan for
an Additional Development Program to be set forth as an addendum to this
Agreement when approved by the Joint Steering Committee pursuant to the
provisions of Section 4.3.1 (as such plan may be amended from time to time by
the Joint Steering Committee or by mutual agreement of the Parties).
1.40. "PARTY" shall mean Transcend or BI; "PARTIES" shall mean Transcend
and BI.
1.41. "PROCYSTEINE" shall mean the intracellular glutathione-repleting
agent, L-2-oxothiazolidine-4-carboxylic acid, that has been researched and
developed by Transcend under the registered trademark "Procysteine(R)".
1.42. "PROCYSTEINE I.V." shall mean formulations of Procysteine to be
administered intravenously.
-7-
15
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
1.43. "PRODUCT-RELATED COSTS" shall mean the sum of (a) Cost of Goods Sold,
(b) Sales and Marketing Costs, (c) Medical Costs, (d) Administration Costs and
(e) Distribution Costs.
1.44. "PROGRAM PATENT RIGHTS" shall mean those United States and foreign
patents and patent applications, including any division, continuation,
continuation-in-part, reissue, renewal or extension thereof, or substitute
therefor, and the letters patent that may be issued thereon, that cover the
Program Technology.
1.45. "PROGRAM PLAN" shall mean the ARDS Program Plan, MOD Program Plan
and/or Other Indication Program Plan(s).
1.46. "PROGRAM TECHNOLOGY" shall mean any inventions, discoveries, trade
secrets, copyrightable works, know-how, data, regulatory submissions and other
intellectual property of any kind (including any proprietary biological
materials, compounds or reagents) conceived or reduced to practice by either
Party, solely or jointly, during and as a part of the Development Program.
1.47. "PROJECT TEAM" shall mean those individuals who are employed by
Transcend or BI and who have been assigned responsibility for the development
and commercialization of Procysteine I.V.
1.48. "RECOGNIZED AGENT" shall mean an entity other than an Affiliate of BI
through which BI regularly distributes and sells its products in a particular
country or region.
1.49. "SALES AND MARKETING COSTS" shall mean, with respect to a Licensed
Product co-promoted in the United States by Transcend pursuant to Section 6.2.2,
allocable promotion and field sales force costs (including without limitation
costs associated with publications, mailings, medical symposia and promotional
films, advertising agency fees, field force commissions on sales, field force
management and administration costs, costs of sales offices and costs of
training of field sales force), PROVIDED THAT any allocation of costs and
expenses shall be in accordance with reasonable and customary cost allocation
procedures and (a) over a period commencing on the date of the First Commercial
Sale of such Licensed Product and ending on the ****************** of the date
of such First Commerical Sale (the "Product Launch Period"), shall not exceed an
average of ***************************** of Net Sales of such Licensed Product
per year and (b) following the Product Launch Period, shall not exceed
*************************** of Net Sales of such Licensed Product.
-8-
16
1.50. "STOCK PURCHASE AGREEMENT" shall mean the Stock Purchase Agreement
dated as of February 28, 1997 attached as EXHIBIT C to this Agreement.
1.51. "TERRITORY" shall mean all countries of the world.
1.52. "THIRD PARTY " shall mean any entity other than Transcend or BI,
their respective Affiliates and Recognized Agents.
1.53. "TRANSCEND PATENT RIGHTS" shall mean all present and future patents,
patent applications, patent extensions, certificates of invention, or
applications for certificates of invention, together with any divisions,
continuations or continuations-in-part thereof, which are owned or controlled
by, or licensed (with the right to sublicense) to, Transcend that cover
Transcend Technology. Transcend Patent Rights as of the Effective Date are
listed in EXHIBIT B hereto. Transcend agrees to update Exhibit B at least once
annually.
1.54. "TRANSCEND TECHNOLOGY" shall mean all present and future inventions,
trade secrets, copyrights, data, regulatory submissions and other intellectual
property of any kind (including any proprietary biological materials, compounds
or reagents) including all confidential technical information in the possession
of Transcend as of the Effective Date and during the term of this Agreement,
which are owned or controlled by, or licensed (with the right to sublicense) to,
Transcend that are necessary or useful for the manufacture, use or sale of the
Licensed Products, excluding without limitation any Program Technology owned or
controlled by Transcend.
1.55. "VALID PATENT CLAIM" shall mean either (a) a claim of an issued and
unexpired patent included within the Transcend Patent Rights and/or Program
Patent Rights, which has not been held permanently revoked, unenforceable or
invalid 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 reissue or
disclaimer or otherwise or (b) a claim of a pending patent application included
within the Transcend Patent Rights and/or Program Patent Rights, which claim was
filed in good faith and has not been abandoned or finally disallowed without the
possibility of appeal or refiling of said application.
ARTICLE 2. SCOPE AND STRUCTURE OF THE COLLABORATION
2.1 GENERAL. Transcend and BI wish to establish a collaborative alliance to
develop and market the Licensed Products, initially for the treatment of ARDS
and, subject to Section 4.2 and 4.3, the treatment or prevention of MOD and
Other Indications. During the course of this collaboration, Transcend and BI
shall communicate regularly and shall assume different rights and
responsibilities for the
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17
development and commercialization of the Licensed Products, based on the phase
of development and commercialization and the country in the Territory involved,
all as more specifically described below.
ARTICLE 3. LICENSE GRANTS; RESERVED RIGHTS
3.1. Grant of License Rights by Transcend to BI
------------------------------------------
3.1.1 EXCLUSIVE LICENSE TO LICENSED PRODUCTS. Transcend hereby grants
to BI, and BI hereby accepts, an exclusive (even as to Transcend, subject to the
Co-Promotion Option, as that term is defined in Section 6.2.2) royalty-bearing
license, under the Transcend Patent Rights and the Transcend Technology and
Transcend's rights in and to Program Patent Rights and the Program Technology,
to import, use, have used, offer to sell, sell and have sold the Licensed
Products in the Field within the Territory. Such license shall include the right
to grant sublicenses, under the Transcend Patent Rights and the Transcend
Technology and Transcend's rights in and to the Program Patent Rights and the
Program Technology, to Affiliates of BI and Recognized Agents and, with the
written consent of Transcend which shall not be unreasonably withheld, to Third
Parties. Transcend reserves the exclusive right to manufacture and have
manufactured the Licensed Products subject to Section 6.1 below.
3.1.2 RESERVATION OF RIGHTS. Notwithstanding the rights granted to BI
under this Article 3, Transcend at all times reserves the right, under the
Transcend Patent Rights and the Transcend Technology and Transcend's rights in
and to Program Patent Rights and the Program Technology, to make and use
reasonable quantities of the Licensed Products for its own research purposes and
development purposes. In the event BI obtains the Manufacturing License under
Section 6.1.4, BI will agree to supply Transcend with reasonable amounts of the
Licensed Products for such purposes at a price equal to the actual cost of
manufacture.
3.2. GRANT OF LICENSE RIGHTS BY BI TO TRANSCEND. BI hereby grants to
Transcend to the extent BI is legally entitled to do so, a worldwide,
non-exclusive, fully paid and royalty-free right and license, under the BI
Patent Rights and the BI Technology and BI's rights in and to the Program Patent
Rights and the Program Technology, to enable Transcend to comply with its
obligations under this Agreement.
3.3. Limitations on Transcend Reserved Rights.
----------------------------------------
3.3.1. RESERVED RIGHTS. Except for the licenses expressly granted by
Transcend to BI pursuant to Section 3.1, Transcend reserves all rights under the
Transcend Patent Rights, the Transcend Technology and Transcend's rights in and
to the Program Patent Rights and the Program Technology. The foregoing reserved
-10-
18
rights shall include, but not be limited to, the rights to develop, make, use,
sell and import oral formulations of Procysteine (and to sublicense Third
Parties to do so), PROVIDED THAT Transcend shall not grant a license to a Third
Party under Transcend Patent Rights, the Transcend Technology and Transcend's
rights in and to the Program Patent Rights and the Program Technology unless it
first complies with the provisions of Section 3.3.2, and any such license shall
be subject to the restrictions set forth in Section 3.3.3.
3.3.2. RIGHT OF FIRST NEGOTIATION. Transcend agrees that, at such time
as it has a bona fide interest in seeking to enter into a collaborative
development and commercialization arrangement with a Third Party for oral
formulations of Procysteine for use in the Field, it shall first notify BI of
such decision and, at BI's election, shall enter into negotiations with BI
relating to the development and commercialization of oral formulations of
Procysteine for use in the Field. Transcend shall not enter into negotiations
with any Third Party relating to the development and commercialization of oral
formulations of Procysteine for use in the Field for a period of ninety (90)
days following the date it notifies BI of its decision to seek to enter into
such an arrangement.
3.3.3. RESTRICTIONS. Notwithstanding the provisions of Section 3.3.1,
Transcend agrees not to market and sell, or license a third party to market or
sell, an oral formulation of Procysteine for the treatment or prevention of (a)
ARDS, in any country in which BI, at the time that Transcend commences clinical
development of such oral formulation for ARDS, is then developing, marketing or
selling a Licensed Product for the treatment or prevention of ARDS, (b) MOD, in
any country in which BI, at the time that Transcend commences clinical
development of such oral formulation for MOD, is then developing, marketing or
selling a Licensed Product for the treatment or prevention of MOD, and (c) any
Other Indication in any country in which BI, at the time that Transcend
commences clinical development of such oral formulation for such Other
Indication, is then developing, marketing or selling a Licensed Product for the
treatment or prevention of such Other Indication. BI acknowledges that, prior to
the Effective Date, Transcend has commenced clinical development of an oral
formulation of Procysteine for the treatment of amyotrophic lateral sclerosis
and the treatment of atherosclerotic cardiovascular disease, and, therefore,
such indications are excluded from the prohibition set forth in subsection (c)
of this Section 3.3.3.
3.4. Preservation of Licenses in Bankruptcy.
--------------------------------------
3.4.1. BANKRUPTCY FILING. If Transcend should file a petition under
bankruptcy laws, or if any involuntary petition shall be filed against
Transcend, BI shall be protected in the continued enjoyment of BI's rights as
licensee hereunder to the maximum feasible extent including, without limitation,
if it so elects, the protection conferred upon licensees under Section 365(n) of
Title 11 of the U.S. Code,
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19
or any similar provision of any applicable law. Transcend shall give BI
reasonable prior notice of the filing of any voluntary petition, and prompt
notice of the filing of any involuntary petition, under any bankruptcy laws.
3.4.2. INTELLECTUAL PROPERTY FOR PURPOSE OF BANKRUPTCY CODE. The
Transcend Technology, Transcend Patent Rights, Program Technology and Program
Patent Rights shall be deemed to be "intellectual property" as that term is
defined in 11 U.S.C. Section 101(56) or any successor provision.
ARTICLE 4. DEVELOPMENT OF LICENSED PRODUCTS
4.1. ARDS Development Program
------------------------
4.1.1. TRANSCEND RESPONSIBILITIES. Subject to oversight by the Joint
Development Team, Transcend shall have principal responsibility for, and shall
utilize reasonable diligence in connection with, (a) the conduct of the ARDS
Development Program in the Territory (excluding Japan), in accordance with the
ARDS Program Plan, (b) compliance with required product-related regulatory
approval procedures, and (c) seeking all applicable required regulatory
approvals necessary for the marketing of Licensed Products in the Territory
(excluding Japan) for the treatment or prevention of ARDS.
4.1.2. BI RESPONSIBILITIES. BI shall notify Transcend on or before
May 31, 1997 as to whether or not it intends to commence clinical development
of Procysteine I.V. for ARDS in Japan. In the event that BI notifies Transcend
on or before May 31, 1997 that it intends to commence such clinical
development, the Parties, acting through the Joint Development Team and the
Joint Steering Committee, shall amend the ARDS Program Plan to reflect the
agreed-upon development activities in Japan, and subject to oversight by the
Joint Development Team, BI shall have principal responsibility for (a) the
conduct of the ARDS Development Program in Japan, in accordance with the ARDS
Program Plan (as so amended), (b) compliance with required product-related
regulatory approval procedures, and (c) seeking all applicable required
regulatory approvals necessary for the marketing of Licensed Products in Japan.
In the event that BI fails to notify Transcend on or before May 31, 1997 that
it intends to commence such clinical development, then BI shall be obligated to
use commercially reasonable efforts to identify a sublicensee for Japan and
enter into a sublicense agreement, on or before December 31, 1997, to develop
and commercialize Procysteine I.V. for ARDS in Japan. Transcend agrees to
provide reasonable assistance to BI in identifying such potential sublicensees,
including providing BI with a list of potential sublicensees. Any such
sublicense shall require
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20
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
Transcend's prior written consent. In the event that a sublicense agreement is
not entered into on or before December 31, 1997, all rights relating to
Procysteine I.V. in Japan shall revert to Transcend, and the licenses granted
under Section 3.1 shall terminate with respect to Japan.
4.1.3. PROGRAM FUNDING. Transcend shall bear all Development Expenses
relating to the ARDS Development Program and regulatory activities undertaken
pursuant to Section 4.1.1, including, but not limited to, out-of-pocket expenses
incurred by BI in connection with such activities at the request of Transcend.
BI shall bear all Development Expenses relating to the ARDS Development Program
and regulatory activities undertaken pursuant to Section 4.1.2, including, but
not limited to, out-of-pocket expenses incurred by Transcend in connection with
such activities at the request of BI.
4.1.4. FILING FOR ARDS APPROVAL IN UNITED STATES Notwithstanding the
provisions of Section 4.1.1., it is contemplated that the decision to file an
NDA with the FDA for approval of Procysteine I.V. for ARDS will be made by
mutual agreement of the Parties, acting through the Joint Steering Committee. In
the event that BI does not agree that an NDA filing is appropriate and Transcend
wishes to make such a filing, Transcend shall have the right to make such filing
and shall provide written notice of such filing to BI (a "Notice of Transcend
ARDS Filing"). Within thirty (30) days after BI receives a Notice of Transcend
ARDS Filing, it shall elect either (a) to **************************************
********************************************* prior to the expiration of such
30-day period, or (b) ********************************************************
************************** as specified in Section 7.3, in which event all
rights to Procysteine I.V. for the treatment of ARDS shall revert to Transcend,
and the licenses granted under Section 3.1 shall terminate to the extent of such
reversion of rights, provided that BI shall not be required to make the
foregoing election UNLESS the **************************************************
****************** ******************************************* specified by
applicable regulatory authorities. In the event that (a) BI receives a
******************************* (b) BI is not required to make an election under
this subsection due to the proviso in the preceding sentence, and (c) Transcend
*************************************************************************
*********** then BI shall be obligated to pay to Transcend at the time of such
*********** the milestones associated with ************************************.
4.2. MOD DEVELOPMENT PROGRAM.
4.2.1. GENERAL. As of the Effective Date, Transcend and BI have not
agreed to commence a MOD Development Program. The Parties, acting through the
Joint Development Team, shall consider the establishment of a MOD Development
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21
Program and shall make a determination prior to June 30, 1997 as to whether the
joint conduct of a MOD Development Program is desirable.
4.2.2. JOINT DEVELOPMENT PROGRAM. In the event that the Joint
Development Team determines, on or before June 30, 1997, that the Parties should
jointly undertake a MOD Development Program, the Parties, acting through the
Joint Development Team and the Joint Steering Committee, shall agree upon a MOD
Program Plan to reflect the agreed-upon activities to be conducted pursuant to
the MOD Development Program, and shall append such MOD Program Plan to this
Agreement. In such event, and subject to oversight by the Joint Development
Team:
(a) Transcend shall have principal responsibility for, and
shall utilize reasonable diligence in connection with, (i)
the conduct of the MOD Development Program in the Territory
(excluding Japan), in accordance with the MOD Program Plan,
(ii) compliance with required product-related regulatory
approval procedures, and (iii) seeking all applicable
required regulatory approvals necessary for the marketing of
Licensed Products in the Territory (excluding Japan) for the
treatment or prevention of MOD.
(b) Unless in accordance with Section 4.1.2 BI has elected
not to develop Procysteine I.V. for ARDS in Japan and the
applicable rights have reverted to Transcend, BI shall have
principal responsibility for, and shall utilize reasonable
diligence in connection with, (i) the clinical development
of Procysteine I.V. for the treatment or prevention of MOD
in Japan in accordance with the MOD Program Plan, (ii)
compliance with all required product-related approval
procedures, and (iii) seeking applicable required regulatory
approvals necessary for the marketing of Licensed Products
in Japan for the treatment or prevention of MOD.
(c) All Development Expenses relating to the MOD Development
Program and regulatory activities undertaken pursuant to
Section 4.2.2(a), including, but not limited to,
out-of-pocket expenses incurred by a Party in connection
with such activities at the request of the other Party,
shall be borne fifty percent (50%) by each Party. BI shall
bear all Development Expenses relating to the MOD
Development Program and regulatory activities undertaken
pursuant to Section 4.2.2 (b),
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22
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
including, but not limited to, out-of-pocket expenses
incurred by Transcend in connection with such activities at
the request of BI.
(d) In the event that the Parties jointly undertake the MOD
Development Program but the Joint Development Team is unable
to reach agreement on whether to commence Phase III clinical
trials, either Party shall have the right to commence Phase
III clinical trials relating to the use of Procysteine I.V.
for the treatment or prevention of MOD and to seek
regulatory approval therefor in the Territory, and shall
provide written notice of its intent to commence such trials
to the Joint Steering Committee. The Party or Parties
commencing such Phase III clinical trials pursuant to this
subsection (d) is/are referred to as the "Commencing Party".
The Commencing Party shall, except as provided below, pay
***************************** of the Development Expenses
incurred in connection with the Phase III clinical trial or
trials and all regulatory activities in connection
therewith. If the Commencing Party files an NDA in the
United States or a Major Market Country of the E.U. based on
such Phase III clinical trials and receives regulatory
approval for the use of Procysteine I.V. in the treatment or
prevention of MOD, the other Party shall reimburse the
Commencing Party for ******************************* of the
Development Expenses incurred by the Commencing Party
pursuant to this subsection (d). In addition, if the
Commencing Party is Transcend and (i) BI wishes to retain
commercialization rights to Procysteine I.V. for the
treatment or prevention of MOD, BI shall, *****************
************************************ in the United States or
a Major Market Country of the E.U., pay to Transcend
*********************************** with respect to
************************************* (when applicable), the
filing for ************* and the receipt of ***********, as
specified in Section 7.3 below; or (ii) if BI does not wish
to retain commercialization rights to Procysteine I.V. for
the treatment or prevention of MOD, all rights relating to
Procysteine I.V. for the treatment or prevention of MOD in
the Territory shall revert to Transcend, and the licenses
granted under Section 3.1 shall terminate with respect to
Procysteine I.V. for the treatment or
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23
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
prevention of MOD in the Territory. BI shall indicate to
Transcend in writing *****************************
*************************************** of its election
concerning retention of commercialization rights, PROVIDED
THAT failure of BI to reimburse Transcend for Development
Expenses and to make *************************************
shall be deemed to be an election by BI under subsection
(d)(ii) above. If BI makes or is deemed to make an election
under subsection (d)(ii) above, Transcend shall have the
right to commercialize, alone or with a Third Party,
Procysteine I.V. in the Territory for the treatment or
prevention of MOD, PROVIDED THAT Transcend or any such Third
Party shall utilize a different product name for Procysteine
I.V. than is being utilized by BI for any Procysteine I.V.
product for ARDS.
4.2.3. Non-Joint Development Program. In the event that the
Joint Development Team does not determine, on or before *************
that the Parties should jointly undertake a MOD Development Program
(whether due to an affirmative decision not to jointly undertake such
a program or due to the inability of the Joint Development Team to
make a determination relating thereto), each Party shall have the
right, but not the obligation, to commence a MOD Development Program.
In the event that either Party decides to undertake such a MOD
Development Program, such Party shall notify the Joint Development
Team and, in consultation with the Joint Development Team, develop
clinical trial plans for such MOD Development Program, PROVIDED THAT
the Party undertaking such program shall have final authority over
such clinical trial plans. All Development Expenses relating to a MOD
Development Program shall be borne by the Party undertaking such
program, except that
(a) If Transcend undertakes a MOD
Development Program pursuantct to this
Section 4.2.3, Transcend shall bear all
Development Expenses of such MOD
Development Program except as follows:
(i) in the event that Transcend
undertakes a Phase II
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24
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
clinical study (which is not a MOD
Pivotal Trial) pursuant to the MOD
Development Program, BI shall have the
right (but not the obligation),
exercisable within thirty (30) days
after the occurrence of either (A)
receipt by BI of a full study report on
such Phase II clinical study, or (B) the
NDA Filing relating to Procysteine I.V.
for the treatment of ARDS, to make the
following payments to Transcend:
(x) reimbursement equal to
************************* of
the Development Expenses
incurred by Transcend in such
MOD Development Program prior
to the date of such exercise
made following the occurrence
of one (but not both) of the
events set forth in (A) and
(B) above, or **************
******* of such Development
Expenses if such exercise is
made following the occurrence
of both of the events set
forth in (A) and (B) above,
and
(y) ************************** of
all Development Expenses
incurred in such MOD
Development Program from and
after the date of such
exercise, including without
limitation a MOD Pivotal
Trial, and
(z) the milestone payments set
forth in Section 7.3 with
respect to the **************
**************** the filing
for ************ and the
***********************, when
applicable.
In the event that BI does not exercise
its right to provide such funding
pursuant to this subsection (i), the
provisions of subsection (iii) shall
apply.
(ii) In the event that Transcend undertakes a
Phase II/III clinical study pursuant to
the MOD Development Program, BI shall
have the right (but not the obligation),
exercisable within thirty (30)
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25
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
days after the NDA filing relating to
Procysteine I.V. for the treatment of
ARDS, to make the following payments to
Transcend:
(x) reimbursement equal to ******
******of the Development
Expenses incurred by Transcend
in such MOD Development
program prior to the date of
such exercise, and
(y) ******************* of all
Development Expenses incurred
by Transcend in such MOD
Development Program from and
after the date of such
exercise, including without
limitation a MOD Pivotal
Trial, and
(z) the milestone payments set
forth in Section 7.3 with
respect to the **************
**************** the ********
*************receipt of MOD
approval, when applicable.
In the event that BI does not exercise
its right to provide such funding
pursuant to this subsection (ii), the
provisions of subsection (iii) shall
apply.
(iii) In the event that Transcend undertakes a
Phase III clinical study (following a
Phase II clinical study) or a Phase
II/III clinical study pursuant to the
MOD Development Program and BI has not
exercised its funding right pursuant to
subsection (i) or (ii), as applicable,
BI shall have the right (but not the
obligation), exercisable within thirty
(30) days after receipt of regulatory
approval in the United States or a Major
Market Country of the E.U. for the use
of Procysteine I.V. for the treatment or
prevention of MOD, to make the following
payments to Transcend:
(x) reimbursement equal to ******
************** of the
Development Expenses
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26
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
incurred by Transcend in such
MOD Development Program prior
to the date of such exercise
(including Development
Expenses incurred in the Phase
II, Phase III and Phase II/III
clinical studies, as
applicable), and
(y) ********************of all
Development Expenses incurred
by Transcend in such MOD
Development Program from and
after the date of such
exercise, and after the date
of such exercise, and
(z) the milestone payments set
forth in Section 7.3 with
respect to the **************
**************** the ********
and the *************** when
applicable.
In the event that BI fails to exercise
the right to provide such funding within
such 30-day period and to make the
payments provided above, all rights
relating to Procysteine I.V. for the
treatment or prevention of MOD in the
Territory shall immediately revert to
Transcend, and the licenses granted
under Section 3.1 shall terminate with
respect to Procysteine I.V. for the
treatment or prevention of MOD in the
Territory (in which event Transcend
shall have the right to commercialize,
alone or with a Third Party, Procysteine
I.V. for the treatment or prevention of
MOD, PROVIDED THAT Transcend or any such
Third Party shall utilize a different
product name for Procysteine I.V. than
is being utilized by BI for any
Procysteine I.V. product for ARDs.
4.3. Additional Development Programs.
-------------------------------
4.3.1. GENERAL. Any plans or intentions of either Party with respect
to the development of Procysteine I.V. for Other Indications shall be proposed
by such Party to the Joint Development Team. Such plans or intentions include
any clinical
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27
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
trials conducted under an IND of such Party, or under an investigator IND. The
Joint Development Team shall consider any such proposal and, if it concurs in
such proposal, shall submit such proposal, together with a protocol, protocol
outline, or a complete development plan and a budget, to the Joint Steering
Committee for review. Upon approval by the Joint Steering Committee, the Parties
shall agree upon an Other Indication Program Plan, which shall (a) reflect the
agreed-upon activities to be conducted pursuant to the Additional Development
Program, (b) set forth the respective responsibilities of the Parties relating
to the Additional Development Program and (c) set forth the agreed-upon budget,
respective funding commitments and milestones, if any, relating to the
Additional Development Program. Such Other Indication Program Plan shall be
appended to this Agreement. In addition to the foregoing, each Party shall
advise the Joint Development Team concerning its plans or intentions with
respect to any preclinical use of Procysteine for Other Indications, and the
results of any such uses.
4.3.2. NON-JOINT DEVELOPMENT. In the event that (a) the Joint
Development Team does not reach agreement to approve a proposed Additional
Development Program, or (b) the Joint Steering Committee does not approve a
proposed Additional Development Program, or (c) the Parties are otherwise unable
to reach agreement to commence an Additional Development Program proposed by
either Party, then either Party shall have the right to conduct such Additional
Development Program, and shall provide written notice of its intent to commence
such Additional Development Program to the Joint Steering Committee. The Party
or Parties commencing such Additional Development Program pursuant to this
Section 4.3.2 is/are referred to as the "Developing Party." The Developing Party
shall, except as provided below, pay ************************* of the
Development Expenses incurred in connection with the Additional Development
Program and all regulatory activities in connection therewith. If the Developing
Party files an NDA in the United States or a Major Market Country of the E.U.
and receives regulatory approval for the use of Procysteine I.V. in the
treatment or prevention of the Other Indication specified for the Additional
Development Program, the other Party shall reimburse the Developing Party for
****************** of the Development Expenses incurred by the Developing Party
pursuant to this Section 4.3.2. In addition, if the Developing Party is
Transcend and (i) BI wishes to retain commercialization rights to Procysteine
I.V. for the treatment or prevention of the Other Indication specified for the
Additional Development Program, BI shall, within thirty (30) days after receipt
of regulatory approval in the United States, or a Major Market Country of the
E.U., pay to Transcend any agreed-upon milestone payments set forth in the Other
Indication Program Plan; or (ii) if BI does not wish to retain commercialization
rights to Procysteine I.V. for the treatment or prevention of the Other
Indication specified for the Additional Development Program, all rights relating
to Procysteine I.V. for the
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treatment or prevention of the Other Indication specified for the Additional
Development Program in the Territory shall revert to Transcend, and the licenses
granted under Section 3.1 shall terminate with respect to Procysteine I.V. for
the treatment or prevention of such Other Indication specified for the
Additional Development Program. BI shall indicate to Transcend in writing within
thirty (30) days after receipt of notice of regulatory approval of its election
concerning retention of commercialization rights, PROVIDED THAT failure of BI to
reimburse Transcend for Development Expenses and to make applicable milestone
payments within such 30-day period shall be deemed to be an election by BI under
subsection (ii) above. If BI makes or is deemed to make an election under
subsection (ii) above, Transcend shall have the right to commercialize, alone or
with a Third Party, Procysteine I.V. in the Territory for the treatment or
prevention of the Other Indication specified for the Additional Development
Program, PROVIDED THAT Transcend shall utilize a different product name for
Procysteine I.V. than is being utilized by BI for any Procysteine I.V. product
for ARDS.
4.4. ATTENDANCE AT REGULATORY MEETINGS. BI or Transcend, as the case may
be, will provide the other Party with reasonable prior notice of all meetings
between its representatives and regulatory authorities regarding marketing
approval of the Licensed Products. The recipient of such notice shall have the
right to have a representative present at all important meetings at such
recipient's sole expense; PROVIDED, HOWEVER, that the Party holding such meeting
with a regulatory authority may revoke this right with respect to any particular
meeting if, in its good faith reasonable judgment, the presence of any other
Party will be a detriment to the success of the meeting. Each of BI and
Transcend will furnish, at the other's request, a representative to attend
regulatory meetings of the other regarding marketing approval of the Licensed
Products.
4.5. DEVELOPMENT EXPENSES
4.5.1. TRANSCEND FUNDING. Transcend agrees to use the funds provided
by BI pursuant to Sections 7.1 and 7.2 below exclusively for the ARDS
Development Program, except as otherwise agreed by the Parties.
4.5.2. SHARED DEVELOPMENT EXPENSES. In the event that the Parties are
obligated to share Development Expenses pursuant to Sections 4.2.2(c), 4.2.3(a),
4.2.3(b) or 4.3.1, each Party incurring Development Expenses shall, within
thirty (30) days after the end of each calendar quarter, provide a written
report to the Joint Development Team and the other Party detailing the
Development Expenses incurred in the preceding quarter. Within fifteen (15) days
after the receipt of such report(s), payments shall be made by one Party to the
other Party so that the total Development Expenses incurred in such calendar
quarter shall be shared in the applicable agreed-upon percentages by the
Parties.
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4.5.3. REIMBURSEMENT OF DEVELOPMENT EXPENSES. In the event that one
Party (a "Reimbursing Party") is obligated to reimburse the Development Expenses
incurred by the other Party pursuant to Sections 4.2.2(d), 4.2.3(a) and 4.3.2,
the Party incurring such Development Expenses shall, within thirty (30) days
after the occurrence of the event giving rise to the reimbursement obligation,
provide a written report to the Joint Development Team and the Reimbursing Party
detailing the Development Expenses subject to the applicable reimbursement
obligation. Within fifteen (15) days after the receipt of such report, the
Reimbursing Party shall pay the required amount to the other Party.
4.6. RECORDS. Each Party shall keep complete and accurate records of its
expenditures in connection with the Development Program, which records each
Party shall retain for three (3) years after the end of the calendar year in
which expenses were incurred. The records shall conform to generally accepted
accounting principles consistently applied. Each Party shall have the right
during the Development Program and during the subsequent three (3) year period
to appoint, at its own expense, an independent public accountant reasonably
acceptable to the other Party to inspect said records. Upon reasonable notice
from the other Party (the "Requesting Party"), a Party (the "Reviewed Party")
shall make its records available during regular business hours for inspection by
the independent public accountant at the place or places where the Reviewed
Party customarily keeps such records, to the extent reasonably necessary to
verify the accuracy of the expenditures. The right of inspection shall not be
exercised by a Party more than once in any calendar year and not more than once
with respect to records covering any specific period of time. A Requesting Party
shall hold in strict confidence all information concerning such expenditures and
all information learned in the course of any audit or inspection, except to the
extent necessary for the Requesting Party to enforce any rights it may have
pursuant to this Agreement or if disclosure is required by law. The failure of
either Party to request verification of any expenditures during the period the
other Party is required to retain the records of any calendar year shall be
considered acceptance of the accuracy of the reports concerning such
expenditures.
4.7. PROGRESS REPORTS. Within fifteen (15) days after the end of each
calendar month during the pendency of the Development Program, each Party shall
provide to the Joint Development Team a written report summarizing the
activities undertaken by such Party during the previous calendar month in
connection with the Development Program.
4.8. AVAILABILITY OF EMPLOYEES. Each Party agrees to make its employees and
non-employee consultants reasonably available at their respective places of
employment to consult with the other Party on issues arising during the
Development Program and in connection with (a) any request from any regulatory
agency, including regulatory, scientific, technical and clinical testing issues
or (b) the commercialization of Licensed Products.
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4.9. VISIT OF FACILITIES. Representatives of Transcend and BI may, with the
other Party's prior approval, which approval shall not be unreasonably withheld,
visit the sites of any clinical trials or other experiments being conducted by
such other Party in connection with the Development Program and, subject to any
necessary approvals of the relevant Third Party, manufacturing sites used for
the Licensed Product. If requested by the other Party, Transcend and BI shall
cause appropriate individuals working on the Development Program to be available
for meetings at the location of the facilities where such individuals are
employed at times reasonably convenient to the Party responding to such request.
4.10. DEVELOPMENT INFORMATION. Each Party will (a) provide the other Party
with a copy of all submissions to be made by such Party to regulatory
authorities prior to the date of such submissions in sufficient time to enable
the other Party to comment on such submission, and (b) promptly provide the
other Party with the results of all toxicology and pharmacology studies and
clinical trials conducted by, or under the supervision of, such Party, with
respect to the Licensed Products.
4.11. CESSATION OF TRANSCEND BUSINESS. In the event that Transcend or any
successor to Transcend ceases to conduct business operations, BI shall have the
right, but not the obligation, to assume Transcend's development obligations
under this Agreement. In such event, Transcend or any successor to Transcend
shall provide BI with access to data and regulatory filings, as well as with a
right to cross-reference Transcend's or Transcend's successor's applicable
regulatory filings.
ARTICLE 5. MANAGEMENT
5.1 Joint Development Team.
----------------------
5.1.1. GENERAL. A Joint Development Team comprised of no more than
five (5) named representatives of each Party shall be appointed and shall meet
as needed. The Joint Development Team shall have a Project Leader designated by
mutual agreement of the Parties from time to time.
5.1.2. RESPONSIBILITIES. The Joint Development Team shall have
responsibility for the coordination and review of the Development Program,
including, but not limited to, (a) review of results of clinical trials and
related regulatory matters, (b) review on at least an annual basis of each
Program Plan and recommendation of any proposed changes therein to the Joint
Steering Committee, and (c) recommendations to the Joint Steering Committee
concerning the MOD Development Program and Additional Development Program(s)
pursuant to Sections 4.2.2 and 4.3.1, respectively.
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5.1.3. MEETINGS. Meetings of the Joint Development Team shall be at
times and places or in such form (e.g., in person, telephonic or video
conference) as the members of the Joint Development Team shall agree. The Joint
Development Team shall keep accurate minutes of its deliberations which record
all proposed decisions and all actions recommended or taken. All records of the
Joint Development Team shall be available to both Parties.
5.1.4. REPRESENTATIVES. A Party may change one or more of its
representatives to the Joint Development Team at any time. Members of the Joint
Development Team may be represented at any meeting by another member of the
Joint Development Team, or by a deputy.
5.1.5. ACTIONS. Any approval, determination or other action agreed to
by a majority of the members of the Joint Development Team or their deputies
present at the relevant Joint Development Team meeting shall be the approval,
determination or other action of the entire Joint Development Team. Although the
Parties shall seek to reach agreement on all matters by consensus, in the event
that any approval, determination, or action is not agreed to by a majority of
the members of the Joint Development Team, then such matter shall be referred to
the Joint Steering Committee for resolution pursuant to Section 5.3 of this
Agreement (including the provisions of Section 5.3.4). In addition, the Joint
Development Team may delegate to one Party or to a specific representative the
authority to make certain decisions.
5.2. Joint Marketing Team
--------------------
5.2.1. GENERAL. In the event that Transcend exercises the
Co-Promotion Option (as that term is defined in Section 6.2.2) in accordance
with Section 6.2.2, the Parties shall establish a Joint Marketing Team to
oversee commercialization activities in the United States. The Joint Marketing
Team shall be comprised of no more than three (3) named representatives of each
Party and shall meet as needed. The Joint Marketing Team shall have a Project
Leader designated by BI from time to time.
5.2.2. MEETINGS. Meetings of the Joint Marketing Team shall be at
times and places or in such form (e.g., in person, telephonic or video
conference) as the members of the Joint Marketing Team shall agree. At such
meetings, the Joint Marketing Team will, among other things, discuss and
coordinate the conduct of marketing, promotion, sales and distribution
activities in the United States. The Joint Marketing Team shall keep accurate
minutes of its deliberations which record all proposed decisions and all actions
recommended or taken. All records of the Joint Marketing Team shall be available
to both Parties.
5.2.3. REPRESENTATIVES. A Party may change one or more of its
representatives to the Joint Marketing Team at any time. Members of the Joint
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Marketing Team may be represented at any meeting by another member of the Joint
Marketing Team, or by a deputy.
5.2.4. ACTIONS. Any approval, determination or other action agreed to
by a majority of the members of the Joint Marketing Team or their deputies
present at the relevant Joint Marketing Team meeting shall be the approval,
determination or other action of the entire Joint Marketing Team. Although the
Parties shall seek to reach agreement on all matters by consensus, in the event
that any approval, determination or action is not agreed to by a majority of the
members of the Joint Marketing Team, then the members of the Joint Marketing
Team designated by BI shall make the final determination of such matter. In
addition, the Joint Marketing Team may delegate to one Party or to a specific
representative the authority to make certain decisions.
5.3. Joint Steering Committee.
------------------------
5.3.1. GENERAL. The Joint Steering Committee shall consist of two (2)
senior representatives of each of Transcend and BI. Such committee shall (a)
supervise the Joint Development Team, and, if applicable, the Joint Marketing
Team, including approval of all Program Plans and budgets and any material
amendments thereto, (b) make decisions concerning major development or
commercialization issues (such as the decision to commence or discontinue
clinical trials for any indication), (c) resolve of any disputes within the
Joint Development Team, or, if applicable, the Joint Marketing Team, and (d)
meet as needed. A Party may change one or more of its representatives to the
Joint Steering Committee at anytime.
5.3.2. CHAIR. The Joint Steering Committee shall initially be chaired
by a Transcend representative to the committee. The Transcend representative
shall serve as the Chair of the Joint Steering Committee from the Effective Date
through August 31, 1997. On September 1, 1997, a BI representative shall become
the Chair of the Joint Steering Committee through February 28, 1998. Thereafter,
the Chair of the Joint Steering Committee shall rotate between representatives
of Transcend and BI with each Chair serving for six (6) months.
5.3.3. MEETINGS. Meetings of the Joint Steering Committee shall be at
such times and places or in such form (e.g., in person, telephonic or video
conference) as the members of the Joint Steering Committee shall agree.
Representatives of both Parties shall be present at any meeting of the Joint
Steering Committee. Decisions of the Joint Steering Committee shall be made by
majority vote, except that such majority must include at least one
representative of each Party. The Joint Steering Committee shall keep accurate
minutes of its deliberations which record all proposed decisions and all actions
recommended or taken. All records of the Joint Steering Committee shall at all
times be available to both Parties.
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
5.3.4. DISAGREEMENTS. All disagreements within the Joint Steering
Committee shall be subject to the following:
(a) The representatives to the committee will negotiate in
good faith for a period of not less than thirty (30) days to attempt
to resolve the dispute;
(b) If the representatives of the committee are unable to
resolve the dispute by the end of such period, the committee shall
promptly present the disagreement to the Chief Executive Officer of
Transcend and the Member of the Corporate Board of BI responsible for
Pharmaceuticals or their respective designees; and
(c) Such executives shall meet or discuss in a telephone or
video conference each Party's view and explain the basis for such
disagreement and resolve the dispute.
ARTICLE 6. MANUFACTURING AND MARKETING RIGHTS
6.1. Manufacturing of Licensed Products.
----------------------------------
6.1.1. TRANSCEND'S EXCLUSIVE RIGHT TO MANUFACTURE. Subject to Section
6.1.4 below, Transcend shall be responsible for the manufacture and supply of
the Licensed Products in formulated and finished form at the required quality
and in quantities sufficient to conduct the Development Program and for
commercial sale. Transcend may fulfill such responsibility either, at
Transcend's election, by directly manufacturing Licensed Products, by
contracting with BI to do so, by contracting with one or more Third Parties to
do so, or by a combination thereof. Transcend will provide all documentation
regarding manufacture needed to register the Licensed Products and will arrange
for pre-approval inspections. BI shall have the right to inspect any proposed
Transcend or Third Party manufacturing site. For commercial sale, Transcend
shall supply the Licensed Products to BI pursuant to the terms and conditions of
a supply agreement to be negotiated within one hundred eighty (180) days
following the Effective Date (the "Supply Agreement"), which shall reflect the
terms and conditions set forth on EXHIBIT D.
6.1.2. TRANSFER PRICE. BI shall reimburse Transcend for the Cost of
Goods Sold relating to Licensed Products supplied by Transcend to BI and its
Affiliates or sublicensees for any purpose, including clinical trial and
commercial sale purposes, PROVIDED, HOWEVER, that in no event shall BI's
reimbursement payment to Transcend for the Cost of Goods Sold per unit of a
Licensed Product exceed *******************************************************
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
***************************************************************** PROVIDED,
FURTHER, that, subject to the relevant terms set forth in Exhibit D, BI's
reimbursement payment to Transcend for each unit of a Licensed Product shall not
be less than *** ********************************************************.
Transcend shall use commercially reasonable efforts to minimize such Cost of
Goods Sold. BI shall make all reimbursement payments due to Transcend pursuant
to this Section 6.1.2 within thirty (30) days after receipt of a reasonably
detailed invoice for Licensed Products previously supplied by Transcend.
6.1.3. MANUFACTURING PLANNING. In order to ensure either an orderly
transition of manufacturing responsibility from Transcend to BI pursuant to
Section 6.1.4 or the continuation of Transcend's manufacturing responsibility,
the Parties agree to engage in joint long-term manufacturing planning.
6.1.4. BI'S OPTION FOR MANUFACTURING LICENSE . Transcend hereby grants
to BI an option to obtain a worldwide right and license, under the Transcend
Patent Rights and the Transcend Technology and Transcend's rights in and to the
Program Patent Rights and the Program Technology, to make and have made the
Licensed Products (the "Manufacturing License"). This option is first
exercisable on the fifth (5th) anniversary of the Effective Date upon written
notice by BI to Transcend. Upon the effective date of the Manufacturing License,
the Supply Agreement will terminate and BI shall become responsible for (a) the
manufacture of the Licensed Products at the required quality and in quantities
sufficient for commercial sale, (b) providing documentation, other than that
provided by Transcend, regarding the manufacture of the Licensed Products for
commercial sale needed to register the Licensed Products and (c) arranging for
pre-approval inspections. Costs incurred by Transcend in connection with (i) the
transition of manufacturing responsibility for the Licensed Products to BI and
(ii) qualifying BI as the manufacturer for registration purposes shall be
reimbursed to Transcend by BI.
6.2. Marketing and Distribution Rights and Obligations.
-------------------------------------------------
6.2.1. BI Marketing Right and Diligence Obligations.
--------------------------------------------
(a) BI'S MARKETING RIGHTS AND OBLIGATIONS TO USE REASONABLE EFFORTS
Except as set forth in Section 6.2.2 below, BI shall have the exclusive right
and responsibility to market and distribute the Licensed Products throughout the
Territory, and shall have responsibility for all pre- and post-approval
marketing, sales and distribution activities. Upon receipt of approval to
commence commercial sale of the Licensed Products in each Major Market Country,
BI agrees, at its own expense, to use reasonable diligence to market the
Licensed Products in each such country
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
consistent with those efforts used for other BI products with similar commercial
potential, PROVIDED, HOWEVER, that *******************************
******************************where such election is advisable in BI's
reasonable determination and BI has discussed its decision with Transcend prior
to such election. BI also agrees to use reasonable diligence to market Licensed
Products in all other countries where BI sells other products, consistent with
those efforts used in marketing other BI products with similar commercial
potential. BI also agrees to permit at least one representative of Transcend to
attend periodic strategic marketing meetings conducted by BI relating to the
Licensed Product, which meetings shall occur no less frequently than
semiannually.
(b) TRANSCEND'S REMEDIES FOR BI'S FAILURE TO USE REASONABLE EFFORTS.
In the event of BI's failure to use reasonable efforts to (i) develop the
Licensed Products in any country other than a Major Market Country or (ii)
market the Licensed Products in any country as provided in Section 6.2.1, and BI
fails to remedy or take reasonable action to initiate a remedy of such default
within ninety (90) days after notice thereof by Transcend, Transcend shall have
the right to terminate the licenses and rights of BI under Sections 3.1.1, 3.1.2
and 6.2.1 in such country, but Transcend shall not have the right to terminate
this Agreement in its entirety. If Transcend exercises the said right,
(i) Transcend may continue development of the Licensed
Product for distribution, marketing or sale in
such country or region either itself or with a
Third Party,
(ii) if BI has exercised the option for the
Manufacturing License, (A) BI shall supply
Transcend with reasonable amounts of the Licensed
Products for the aforementioned purposes on terms
consistent with the terms set forth in Section
6.1.1 and the Supply Agreement for so long as BI
is manufacturing, to the specifications required
by Transcend, the Licensed Products for its own
sale or (B) if BI cannot supply Transcend with the
Licensed Products, Transcend shall have the right
to make or have made the Licensed Products for
such indication notwithstanding any license
granted to BI pursuant
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
consistent with those efforts used for other BI products with similar commercial
potential, PROVIDED, HOWEVER, that *******************************
******************************where such election is advisable in BI's
reasonable determination and BI has discussed its decision with Transcend prior
to such election. BI also agrees to use reasonable diligence to market Licensed
Products in all other countries where BI sells other products, consistent with
those efforts used in marketing other BI products with similar commercial
potential. BI also agrees to permit at least one representative of Transcend to
attend periodic strategic marketing meetings conducted by BI relating to the
Licensed Product, which meetings shall occur no less frequently than
semiannually.
(b) TRANSCEND'S REMEDIES FOR BI'S FAILURE TO USE REASONABLE EFFORTS.
In the event of BI's failure to use reasonable efforts to (i) develop the
Licensed Products in any country other than a Major Market Country or (ii)
market the Licensed Products in any country as provided in Section 6.2.1, and BI
fails to remedy or take reasonable action to initiate a remedy of such default
within **************** after notice thereof by Transcend, Transcend shall have
the right to terminate the licenses and rights of BI under Sections 3.1.1, 3.1.2
and 6.2.1 in such country, but Transcend shall not have the right to terminate
this Agreement in its entirety. If Transcend exercises the said right,
(i) Transcend may continue development of the Licensed
Product for distribution, marketing or sale in
such country or region either itself or with a
Third Party,
(ii) if BI has exercised the option for the
Manufacturing License, (A) BI shall supply
Transcend with reasonable amounts of the Licensed
Products for the aforementioned purposes on terms
consistent with the terms set forth in Section
6.1.1 and the Supply Agreement for so long as BI
is manufacturing, to the specifications required
by Transcend, the Licensed Products for its own
sale or (B) if BI cannot supply Transcend with the
Licensed Products, Transcend shall have the right
to make or have made the Licensed Products for
such indication notwithstanding any license
granted to BI pursuant to
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
Section 6.1.4 and BI shall grant Transcend a
worldwide, perpetual, non-exclusive, fully-paid
and royalty-free right and license to use in the
manufacture of the Licensed Products any
manufacturing know-how developed by BI since the
effective date of the Manufacturing License that
is necessary or useful in the manufacture of the
Licensed Products.
(iii) to the extent legally permissible, BI shall take
all additional action reasonably necessary to
assign all of its right, title and interest in and
transfer possession and control to Transcend of
the regulatory filings prepared by BI, and
regulatory approvals received by BI, to the extent
that such filings and approvals relate to the
Licensed Products in such country or countries and
(iv) Article 4 will be appropriately amended, but this
Agreement will otherwise remain in effect.
In the event that Transcend enters into an agreement with a Third Party pursuant
to clause (i), and such Third Party will use data generated by BI, then
Transcend shall provide in such agreement that such Third Party will reimburse
BI for the perceived value of such data in such country, such value to be
negotiated in good faith by BI and Transcend, taking into account the financial
contributions of both Parties to the generation of such data.
6.2.2. TRANSCEND CO-PROMOTION OPTION. Transcend shall have the right,
at its option, to co-promote the Licensed Products alongside BI or its United
States Affiliate in the United States (the "Co-Promotion Option"). If Transcend
intends to exercise the Co-Promotion Option, Transcend will so notify BI in
writing prior to the **********************************************************
*****. Failure by Transcend to provide such notice within the time period
described in the preceding sentence shall terminate Transcend's co-promotion
rights under this Section 6.2.2. If Transcend exercises the Co-Promotion Option
in accordance with the
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
second sentence of this Section 6.2.2, (a) Transcend shall be obligated to
provide ***********************************************************************
****************************************************************************
(the "Transcend Sales Force"), (b) Transcend and BI shall establish the Joint
Marketing Team pursuant to the provisions of Section 5.2, and (c) Transcend
shall be entitled to receive payments from BI pursuant to the provisions of
Section 7.4.1. Transcend shall bear all costs associated with the Transcend
Sales Force, including all sales and marketing costs. The activities of the
Transcend Sales Force shall be coordinated with BI's sales and marketing team.
Transcend may request that the Joint Marketing Team consider an increase in the
number of full-time equivalent sales specialists that Transcend is entitled to
utilize in co-promoting Licensed Products in the United States. In the event
that the number of full-time equivalent sales specialists utilized by Transcend
falls below ******** at any time, Transcend shall use reasonable efforts to
hire within *********** days sufficient personnel to maintain a Transcend Sales
Force with at least ******** full-time equivalent sales specialists.
ARTICLE 7. PAYMENTS
7.1. LICENSE FEE. BI shall pay to Transcend a non-refundable,
non-creditable license fee in the amount of five million dollars ($5,000,000)
within three (3) business days after the Effective Date.
7.2 EQUITY INVESTMENT. BI shall make a five million dollar ($5,000,000)
investment in Transcend's common stock and/or preferred stock on the terms and
subject to the conditions of the Stock Purchase Agreement.
7.3 MILESTONE PAYMENTS. BI shall make the following milestone payments to
Transcend upon the achievement of the applicable milestones:
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
Milestone Payment
--------- -------
1. **************************
**************************
PROVIDED, HOWEVER, that such
payment (a) shall be ********
**********************(with a
********************** made
for any portion of a month), up
to a ***************************
*********for the number of
months or portion thereof, if
any, after ************* that
************ an *************
*******************************
(the "Late Filing Period"),
PROVIDED FURTHER that,
in determining the Late Filing Period,
any ******************************
****************************************
*********************************
pursuant to Exhibit A shall be
********, and (b) shall be
**************************** (with a
************* made for any portion of
a month) for the number of months or
portion thereof, if any, in advance of
************* that **************an
********************* *****************
(the "Early Filing Period"), PROVIDED
FURTHER that in determining the Early
Filing Period, ***********************
************************************
************* of the ***************
pursuant to Exhibit A shall be *******
***********
2.***************************** ***********
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
3.*******************************
*******************************
**************************** ***********
4.******************************
*******************************
******* ***********
5.******************************
, PROVIDED that ***********
to make any ******************
*****************************
*********************************
****** ************
6.*********************************
****************************** ************
7.****************************** ************
8.*********************************
**************************************
*********** ************
9.**************************************
**************************************
********* ************
Within forty-five (45) days following the occurrence of each of the
milestones set forth above, BI shall pay to Transcend in United States dollars
by certified or bank check or wire transfer the payments set forth above.
Payments made to Transcend pursuant to this Section 7.3 are not refundable under
any circumstances and will not be credited against royalty payments due
Transcend under Section 7.4.
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
7.4. Royalties on Net Sales.
----------------------
7.4.1 NET SALES IN THE UNITED STATES. In consideration of the
licenses granted by Transcend to BI, BI shall pay to Transcend a royalty in the
amount equal to ************************** of Net Sales of a Licensed Product in
the United States. Notwithstanding the foregoing, in the event that Transcend
exercises the Co-Promotion Option, such royalty shall, for the duration of the
co-promotion period, be an amount equal to ******************* of the Net Sales
of Licensed Products in the United States for such indication, plus
**************** of the Net Contribution.
7.4.2 NET SALES IN JAPAN . In consideration of the licenses granted to
BI hereunder, BI shall pay to Transcend a royalty in the amount equal
to**************** ****** of Net Sales of the Licensed Products in Japan.
7.4.3 NET SALES OUTSIDE OF THE UNITED STATES AND JAPAN. In
consideration of the licenses granted to BI hereunder, BI shall pay to Transcend
a royalty in the amount equal to ************* of Net Sales of the Licensed
Products outside of the United States and Japan.
7.4.4 DURATION OF ROYALTY PAYMENTS. Royalties payable pursuant to
Sections 7.4.1, 7.4.2, and 7.4.3 shall be paid to Transcend on a
country-to-country basis from the date of the First Commercial Sale of a
Licensed Product in a country (a) until fifteen (15) years after such First
Commercial Sale or (b) for as long as such Licensed Product, or its manufacture,
use or sale, is covered by a Valid Patent Claim or (c) for as long as the
Licensed Product is afforded Marketing Exclusivity for the applicable indication
in the Field, whichever of (a) or (b) or (c) is longer. In no event shall more
than one royalty be due Transcend for the sale of any Licensed Product.
7.4.5 SUBLICENSE ROYALTIES. If BI grants a sublicense hereunder to
any Third Party to make, have made, use, distribute for sale or sell the
Licensed Products in any country, BI shall pay to Transcend royalties on Net
Sales of the Licensed Products sold by such Third Party in such country at the
royalty rate set forth in Section 7.4.1, 7.4.2 and/or 7.4.3 that would be
applicable had such sales been made by BI.
7.4.6. ROYALTY RATE REDUCTION. Notwithstanding the provisions of
Sections 7.4.1, 7.4.2 and 7.4.3, the royalty rates set forth therein (but not
the percentage of the Net Contribution set forth in Section 7.4.1) shall be
reduced by ************************** of the rates otherwise applicable under
Sections 7.4.1, 7.4.2 and 7.4.3, on a country-by-country basis, with respect to
any Licensed Product that is ****************************** (as defined below)
in a particular country. For purposes of
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
this Section, a Licensed Product is **************************************** in
a country if either (i) the manufacture, use or sale of such Licensed Product is
covered by a Valid Patent Claim, or (ii) if the Licensed Product is subject to
Marketing Exclusivity. In addition, the royalty rates set forth in Sections
7.4.1, 7.4.2 and 7.4.3 with respect to a Licensed Product shall be further
reduced on a country-by-country basis in the event that such Licensed Product is
(A) ********************* in a particular country and (B) is subject to a
************************************** (as defined below) in such country. For
purposes of this Section, ***************************** shall mean, with respect
to a Licensed Product in a specific country, a ***************************** of
such Licensed Product ******************************************** with respect
to the market for products with the same or a ********************
********************** as the Licensed Product of greater than ****************
************* in any calendar year over such Licensed Product's market share
during the immediately preceding calendar year (determined on the basis of
commercially available sources). The amount of the royalty reduction shall be
equal to ***************************** of the rates otherwise applicable under
Sections 7.4.1, 7.4.2 and 7.4.3 (e.g., a********************************** for a
Licensed Product that is ***************************** results in a ****
royalty reduction as a result of the absence of ****** *********** and an
additional ****** royalty reduction as a result of the **************
********************** (thus, the *********** royalty in Japan, for example,
would become ***** =royalty). If BI believes that a royalty reduction is
appropriate under this Section 7.4.6 in any country, it shall provide written
notice to Transcend of its proposed reduction, with supporting documentation
sufficient to enable Transcend to evaluate the proposed reduction. If Transcend
objects to such reduction and the Parties are unable to agree in good faith upon
appropriateness of the reduction or the amount thereof, if any, the matter shall
be resolved by arbitration under Section 13.6 hereof.
7.5. ROYALTY REPORTS, EXCHANGE RATES. During the term of this Agreement,
following the First Commercial Sale of the Licensed Products in any country, BI
shall within forty five (45) days after each calendar quarter furnish to
Transcend a written quarterly report showing, on a country by country basis: (a)
the gross sales of the Licensed Products sold by BI and its Affiliates,
Recognized Agents and its permitted sublicensees during the reporting period and
the calculation of Net Sales from such gross sales; (b) withholding taxes, if
any, required by law to be deducted in respect of such sales; (c) the specific
deductions permitted by the definition of "Net Sales" taken in connection with
the calculation of Net Sales; and (d) the exchange rates used in determining the
amount of United States dollars. All sales in currencies other than United
States dollars shall first be converted into German marks and then into United
States dollars using in both cases the average monthly exchange rates as
published regularly by Deutsche Bank in Frankfurt am Main, Germany, and as
customarily
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used by BI in its accounting system. If no royalty is due for any royalty period
hereunder, BI shall so report. BI shall keep complete and accurate records in
sufficient detail to properly reflect all gross sales and Net Sales and to
enable the royalties payable hereunder to be determined.
7.6. AUDITS. Upon the written request of Transcend, BI shall permit an
independent public accountant selected by Transcend and acceptable to BI, which
acceptance shall not be unreasonably withheld, to have access during normal
business hours to such records of BI as may be reasonably necessary to verify
the accuracy of the royalty reports described herein, in respect of any fiscal
year ending not more than thirty-six (36) months prior to the date of such
request. All such verifications shall be conducted at Transcend's expense and
not more than once in each calendar year. In the event such Transcend
representative concludes that additional royalties were owed to Transcend during
such period, the additional royalty shall be paid by BI within thirty (30) days
of the date Transcend delivers to BI such representative's written report so
concluding. The fees charged by such representative shall be paid by Transcend
unless the audit discloses that the royalties payable by BI for the audited
period are incorrect by more than five percent (5%), in which case BI shall pay
the reasonable fees and expenses charged by such representative. BI shall
include in each Third Party sublicense granted by it pursuant to this Agreement
a provision requiring the sublicensee to make reports to BI, to keep and
maintain records of sales made pursuant to such sublicense and to grant access
to such records by Transcend's representatives to the same extent required by BI
under this Agreement. Transcend agrees that all information subject to review
under this Section 7.6 or under any sublicense agreement is confidential and
that Transcend shall cause its representatives to retain all such information in
confidence.
7.7. ROYALTY PAYMENT TERMS. Royalties shown to have accrued by each
royalty report provided for under this Agreement shall be due forty five (45)
days after the end of each calendar quarter. Payment of royalties in whole or in
part may be made in advance of such due date. Royalties determined to be owing
with respect to any prior quarter shall be added, together with interest thereon
accruing under this Agreement from the date of the report for the quarter for
which such amounts are owing, to the next quarterly payment hereunder.
7.8. WITHHOLDING TAXES. BI shall deduct any withholding taxes from the
payments agreed upon under this Agreement and pay them to the proper tax
authorities required by the laws of the Federal Republic of Germany applicable
at the date of payment. BI shall not deduct any other withholding or any other
governmental charges from the payments agreed upon under this Agreement,
including but not limited to any such taxes or charges incurred as a result of
an assignment or sublicense by BI to any Affiliate or any Third Party, except as
noted above. BI shall maintain official receipts of payment of any withholding
taxes and forward these receipts to Transcend. The Parties will exercise their
best efforts to
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ensure that any withholding taxes imposed are reduced as far as
possible under the provisions of the current or any future double taxation
agreement between the United States and the Federal Republic of Germany.
According to existing German Law this reduction requires that the German
Bundesamt fur Finanzen issues a Certificate of Tax Exemption. In order to
achieve such reduction Transcend shall provide BI with the claim for a
certificate of tax exemption in respect of royalties performed on the official
form (Application for Tax Exemption) containing the statement of residence and
indication of the taxpayer's identification number as well as the Certificate of
Filing a Tax Return, in which Transcend confirms that it does not derive the
royalties through a permanent establishment maintained in Germany. BI shall
provide Transcend with the official form.
7.9. APPLICATION FOR TAX EXEMPTION. The payments set forth in the Article
7 (other than the equity investment set forth in Section 7.2) are not due until
Transcend provides BI with the Application for Tax Exemption fulfilling the
prerequisites set out in Section 7.8 of this Agreement. Payments (other than the
equity investment set forth in Section 7.2) arising after expiration of any
Certification of Tax Exemption are not due until the next Application for Tax
Exemption is filed with BI. Notwithstanding the preceding provisions of this
Section 7.9, in the event of any extended delay in approval or effectiveness of
the Application for Tax Exemption, Transcend may require payment of any amounts
due pursuant to this Agreement net of any applicable withholding taxes.
Transcend shall be notified by BI of any changes regarding the filing of
Applications for Tax Exemption.
7.10. INTEREST ON LATE PAYMENTS. Any payments by BI to Transcend that are
not paid on or before the date such payments are due under this Agreement shall
bear interest, to the extent permitted by applicable law, at two (2) percentage
points above the Prime Rate of interest declared from time to time by The First
National Bank of Boston in Boston, Massachusetts, calculated on the number of
days payment is delinquent.
ARTICLE 8. INTELLECTUAL PROPERTY RIGHTS
8.1. Ownership.
---------
8.1.1. OWNERSHIP OF PROGRAM TECHNOLOGY AND PROGRAM PATENT RIGHTS. All
right, title and interest in all Program Technology and Program Patent Rights
that are conceived and reduced to practice during and as a result of the Program
solely by employees of Transcend or others acting on behalf of Transcend shall
be owned by Transcend. All right, title and interest in all Program Technology
and Program Patent Rights that are conceived and reduced to practice during and
as a result of the Program solely by employees of BI or others acting on behalf
of BI shall be owned by BI. All right, title and interest in all Program
Technology and Program Patent Rights
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that are conceived or reduced to practice during and as a result of the Program
jointly by employees of Transcend and BI or others acting on their behalf shall
be jointly owned by Transcend and BI. Each Party shall promptly disclose to the
other Party the conception or reduction to practice of Program Technology and
Program Patent Rights by employees or others acting on behalf of such Party. The
Parties acknowledge that the ownership rights set forth above (a) shall not be
affected by the participation in the discovery or development of an invention by
the Joint Development Team and (b) are subject to the license grants set forth
in Article 3.
8.1.2 COOPERATION OF EMPLOYEES. Each Party represents and agrees that
its employees and consultants shall be obligated (under a binding written
agreement where such a written agreement is legally necessary to bind such
employees and consultants) to assign to such Party, or as such Party shall
direct, all Program Technology and Program Patent Rights conceived or reduced to
practice during and as a result of the Program by such employee or consultant.
In the case of non-employees working for other companies or institutions on
behalf of Transcend or BI, Transcend or BI, as applicable, shall use reasonable
efforts to obtain the right to license all inventions conceived or reduced to
practice by such non-employees on behalf of Transcend or BI, as applicable, in
accordance with the policies of the company or institution employing such
non-employee. Transcend and BI agree to undertake to enforce such agreements
with employees or others or such rights pertaining to non-employees (including,
where appropriate, by legal action) considering, among other things, the
commercial value of such inventions.
8.2. FILING, PROSECUTION AND MAINTENANCE OF PROGRAM PATENT RIGHTS AND
TRANSCEND PATENT RIGHTS .
8.2.1. FILINGS. When any Program Technology may reasonably be
considered to be patentable or when a determination is made that Transcend
Technology used in the Program may reasonably be considered to be patentable, a
patent application shall be filed as soon as reasonably possible. Transcend
shall be responsible for filing such application on Transcend Technology and on
Program Technology owned by it solely or jointly with BI. BI shall be
responsible for filing such application on Program Technology owned solely by
BI. No later than nine (9) months following the filing date of any of such
applications, the Parties shall consult together, through the Joint Development
Team or otherwise, and agree whether such application should be: abandoned with
replacement; abandoned and refiled; proceeded with in the country of filing
only; or used as the basis for a claim of priority under the Paris Convention
for corresponding applications in other countries. Each Party shall give the
other Party an opportunity to review the text of any application before filing
to the extent that the text of such application differs from the previously
agreed upon text, and each Party shall supply the other Party with a copy of the
application as filed, together with a note of its filing date and serial number.
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8.2.2. PROSECUTION AND MAINTENANCE. Transcend shall be responsible
for prosecution and maintenance of Transcend Patent Rights and Program Patent
Rights solely or jointly owned by Transcend. BI shall be responsible for
prosecution and maintenance of patents and patent applications covering Program
Patent Rights owned solely by BI. Each of the Parties hereto shall consult with
the other Party as to the prosecution and maintenance of such patent
applications and patents, shall furnish to the other Party copies of documents
relevant to any prosecution or maintenance sufficiently prior to filing such
document or making any payment due thereunder to allow for review and comment by
the other Party, and shall seriously consider all such comments.
Notwithstanding the foregoing, if either Transcend or BI elects not to
continue to seek or maintain patent protection on any patent or patent
application which makes up the Transcend Patent Rights or the Program Patent
Rights in any country (the "Discontinuing Party"), the other Party shall have
the right, at its option and expense, but on behalf of the Discontinuing Party
to file, prosecute (including oppositions) and maintain such patent applications
and patents; PROVIDED, HOWEVER, that the rights of the Parties as between each
other with respect to any such Transcend Patent Rights and Program Patent Rights
in all other respects shall be as described in this Agreement. The Discontinuing
Party will advise the other Party of all decisions taken with respect to any
such election in a timely manner in order to allow the other Party to protect
its rights under this Section 8.2.2.
8.2.3. ABANDONMENT. BI and Transcend each agree that it will not
abandon the prosecution of any patent applications included within the Transcend
Patent Rights or the Program Patent Rights nor shall it fail to make any payment
or fail to take any other action necessary to maintain a patent under the
Transcend Patent Rights or the Program Patent Rights unless it has notified the
other Party in sufficient time for the other Party to assume such prosecution or
make such payment on behalf of BI or Transcend, as the case may be.
8.3. COOPERATION. Each Party shall make available to the other Party (or to
the other Party's authorized attorneys, agents or representatives), its
employees, agents or consultants to the extent reasonably necessary or
appropriate to enable the appropriate Party to file, prosecute and maintain
patent applications and resulting patents with respect to inventions owned by a
Party and for periods of time reasonably sufficient for such Party to obtain the
assistance it needs from such personnel. Where appropriate, each Party shall
sign or cause to have signed all documents relating to said patent applications
or patents at no charge to the other Party.
8.4. NOTIFICATION OF PATENT TERM RESTORATION. Transcend shall notify BI of
(a) the issuance of each patent included within the Transcend Patent Rights and
the Program Patent Rights, giving the date of issue and patent number for each
such
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patent, and (b) each notice pertaining to any patent included within the
Transcend Patent Rights and the Program Patent Rights which it receives as
patent term restorations. The Parties shall cooperate with each other in
applying for patent term extensions (including Supplementary Protection
Certificates in European Community Countries and administrative/pipeline
protection) where applicable in any country. Transcend shall also notify BI of
each application filed for patent term extension, any allegations of failure to
show due diligence and all awards of patent term extensions with respect to the
Transcend Patent Rights and the Program Patent Rights. Such notices shall be
given promptly, but in any event within ten (10) business days after receipt of
each such notice pursuant to the Drug Price Competition and Patent Term
Restoration Act of 1984 (the "Act") (or comparable laws or regulations in
countries other than the United States). Transcend shall notify BI of each
filing for patent term restoration under the Act (or comparable laws or
regulations in countries other than the United States), any allegations of
failure to show due diligence and all awards of patent term restoration
(extensions) with respect to the Transcend Patent Rights and the Program Patents
Rights.
8.5. NO OTHER TECHNOLOGY RIGHTS. Except as otherwise expressly provided in
this Agreement, under no circumstances shall a Party hereto, as a result of this
Agreement, obtain any ownership interest in or other right to any technology,
know-how, patents, pending patent applications, products, or biological
materials of the other Party, including items owned, controlled or developed by
the other Party, or transferred by the other Party to said Party, at any time
pursuant to this Agreement.
8.6. ENFORCEMENT OF PATENT RIGHTS. Transcend and BI shall each promptly
notify the other in writing of any alleged or threatened infringement of patents
or patent applications included in the Transcend Patent Rights or the Program
Patent Rights of which they become aware. Transcend and BI shall then confer and
may agree jointly to prosecute any such infringement. The Party owning patents
or patent applications alleged or threatened to be infringed shall control the
joint litigation in the event of any dispute between the Parties with respect to
any aspect of the litigation. With respect to Program Patent Rights covering
Program Technology solely or jointly owned by Transcend, Transcend shall control
the litigation. If the Parties do not agree on whether or how to proceed with
enforcement activity within (a) ninety (90) days following the notice of alleged
infringement or (b) ten (10) business days before the time limit, if any, set
forth in the appropriate laws and regulations for the filing of such actions,
whichever comes first, then either Party may act in its own name to commence
litigation with respect to the alleged or threatened infringement. In the event
a Party brings an infringement action, the other Party shall cooperate fully,
including, if required to bring such action, the furnishing of a power of
attorney. Neither Party shall have the right to settle any patent infringement
litigation under this Section in a manner that diminishes the rights or
interests of the other Party without the express written consent of such other
Party.
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The costs of any joint litigation regarding infringement of a Transcend
Patent Right or a Program Patent Right and commenced pursuant to this Section,
including attorneys' fees and expenses, shall be borne by BI and Transcend in
the same ratio as the ratio of the profits received by BI in connection with
sales of the Licensed Products in such country to the royalties paid to
Transcend in connection with the sale of the Licensed Products in such country
added to, in the case of the United States, Transcend's share, if any, of the
Net Contribution. For purposes hereof, only out-of-pocket costs shall be
accounted for and reimbursed under this Section, without any allocation for
internal resources devoted to the litigation. Except as otherwise agreed to by
the Parties as part of a cost sharing arrangement, any recovery realized as a
result of such joint litigation shall be shared in the same manner as costs have
been allocated.
8.7. DEFENSE OF INDIVIDUAL INFRINGEMENT ACTIONS. If Transcend or BI, or
any BI Affiliate or sublicensee, shall be individually named as a defendant in a
legal proceeding by a Third Party for infringement of a patent because of the
manufacture, use or sale of the Licensed Products, the Party which has been sued
shall promptly notify the other Party in writing of the institution of such
suit. The Party which has been sued may, at its option and at its sole expense,
control and defend such suit. The controlling Party may not settle such suit or
otherwise consent to an adverse judgment in such suit that diminishes the rights
or interests of the non-controlling Party without the express written consent of
the non-controlling Party. The Party which has been sued shall keep the other
Party at all times reasonably informed as to the status of the suit. The Party
which is not controlling such legal proceedings shall have the right to be
represented by advisory counsel of its own selection (and such counsel's opinion
shall be reasonably considered by the controlling Party), at its own expense,
and shall cooperate fully in the defense of such suit and furnish to the Party
controlling such legal proceedings all evidence and assistance in its control.
8.8. DEFENSE OF JOINT INFRINGEMENT ACTIONS. If Transcend and BI, or any BI
Affiliate or sublicensee, shall be jointly named as defendants in a legal
proceeding by a Third Party or shall be joined in the same litigation for
infringement of a patent because of the manufacture, use or sale of the Licensed
Products, Transcend shall be entitled to control the defense of such suit, and
all expenses including costs, attorney fees, adverse judgments or settlement
amounts incurred on account of BI or Transcend or both shall be paid as set
forth under Section 8.9 below. BI shall have the right to be represented by
counsel of its own selection, but at its sole expense, and shall cooperate fully
in the defense of such suit and furnish to Transcend all evidence and assistance
in its control. Transcend shall, however, not be entitled to settle such suit or
otherwise consent to an adverse judgment in such suit without the express
written consent of BI if such settlement or adverse judgment diminishes any
right or interest of BI hereunder.
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8.9. CONTRIBUTION. With respect to any judgments, settlements or damages
payable with respect to legal proceedings covered by Section 8.7, and with
respect to all expenses (including costs and attorneys fees), judgments,
settlements or damages payable with respect to legal proceedings covered by
Section 8.8., the Parties shall contribute to the amount owed or expended in the
same ratio as the ratio of the profits received by BI in connection with sales
of the Licensed Products in such country to the royalties paid to Transcend in
connection with the sale of the Licensed Products in such country added to, in
the case of the United States, Transcend's share, if any, of the Net
Contribution.
ARTICLE 9. CONFIDENTIALITY
9.1. Nondisclosure Obligations.
9.1.1. GENERAL. Except as otherwise provided in this Article 9,
during the term of this Agreement and for a period of ten (10) years thereafter,
both Parties shall maintain in confidence and use only for purposes specifically
authorized under this Agreement (a) information and data received from the other
Party resulting from or related to the development of the Licensed Products and
(b) all information and data not described in clause (a) but supplied by the
other Party under this Agreement marked "Confidential." For purposes of this
Article 9, information and data described in clause (a) or (b) shall be referred
to as "Information."
9.1.2. LIMITATIONS. To the extent it is reasonably necessary or
appropriate to fulfill its obligations or exercise its rights under this
Agreement, a Party may disclose Information it is otherwise obligated under this
Section not to disclose to its Affiliates, sublicensees, consultants, outside
contractors and clinical investigators, on a need-to-know basis on condition
that such entities or persons agree to keep the Information confidential for the
same time periods and to the same extent as such Party is required to keep the
Information confidential; and a Party or its sublicensees may disclose such
Information to government or other regulatory authorities to the extent that
such disclosure is reasonably necessary to obtain patents or authorizations to
conduct clinical trials of, and to commercially market, the Licensed Products.
The obligation not to disclose Information shall not apply to any part of such
Information that: (a) is or becomes part of the public domain other than by
unauthorized acts of the Party obligated not to disclose such Information or its
Affiliates or sublicensees; (b) can be shown by written documents to have been
disclosed to the receiving Party or its Affiliates or sublicensees by a Third
Party, provided such Information was not obtained by such Third Party directly
or indirectly from the other Party pursuant to a confidentiality agreement; (c)
prior to disclosure under this Agreement, was already in the possession of the
receiving Party or its Affiliates or sublicensees, provided such Information was
not obtained directly or indirectly from the other Party pursuant to a
confidentiality agreement; (d) can be
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shown by written documents to have been independently developed by the receiving
Party or its Affiliates without breach of any of the provisions of this
Agreement; or (e) is disclosed by the receiving Party pursuant to
interrogatories, requests for information or documents, subpoena, civil
investigative demand issued by a court or governmental agency or as otherwise
required by law; PROVIDED THAT the receiving Party notifies the other Party
immediately upon receipt thereof (and PROVIDED THAT the disclosing Party
furnishes only that portion of the Information which it is advised by counsel is
legally required).
9.2. SAMPLES. Samples of compounds synthesized, purified or developed in
the course of the Development Program shall not be supplied or sent by either
Party to any Third Party, other than to regulatory agencies or for use in
clinical trials, unless protected by an appropriate materials transfer
agreement. Samples of compounds other than those described above provided by one
Party (the "supplying Party") to the other Party (the "receiving Party") in the
course of the Development Program shall not be supplied or sent by the receiving
Party to any Third Party, other than to regulatory agencies or for use in
clinical trials, without the written consent of the supplying Party.
9.3 TERMS OF THIS AGREEMENT. Transcend and BI each agree not to disclose
any terms or conditions of this Agreement to any Third Party without the prior
consent of the other Party, except as required by applicable law. If Transcend
determines that it is required to file with the Securities and Exchange
Commission or other governmental agency this Agreement for any reason, Transcend
shall request confidential treatment of such portions of this Agreement as it
and BI shall together determine. Notwithstanding the foregoing, prior to
execution of this Agreement, Transcend and BI shall agree upon the substance of
information that can be used as a routine reference in the usual course of
business to describe the terms of this transaction, and Transcend and BI may
disclose such information, as modified by mutual agreement from time to time,
without the other Party's consent.
9.4. Publications.
------------
9.4.1. PROCEDURE. Each Party recognizes the mutual interest in
obtaining valid patent protection. In the event that either Party, its employees
or consultants or any other Third Party under contract to such Party wishes to
make a publication (including any oral disclosure made without obligation of
confidentiality) relating to work performed as part of the Development Program
(the "Publishing Party"), such Party shall transmit to the other Party (the
"Reviewing Party") a copy of the proposed written publication at least
forty-five (45) days prior to submission for publication, or an abstract of such
oral disclosure at least thirty (30) days prior to submission of the abstract or
the oral disclosure, whichever is earlier. The Reviewing Party shall have the
right (a) to propose modifications to the publication for patent reasons, (b) to
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request a delay in publication or presentation in order to protect patentable
information, or (c) to request that the information be maintained as a trade
secret and, in such case, the Publishing Party shall not make such publication.
9.4.2. DELAY. If the Reviewing Party requests a delay as described in
subsection 9.4.1(b), the Publishing Party shall delay submission or presentation
of the publication for a period of ninety (90) days to enable patent
applications protecting each Party's rights in such information to be filed.
9.4.3. RESOLUTION. Upon the receipt of written approval of the
Reviewing Party, the Publishing Party may proceed with the written publication
or the oral presentation.
9.5. INJUNCTIVE RELIEF. The Parties hereto understand and agree that
remedies at law may be inadequate to protect against any breach of any of the
provisions of this Article 9 by either Party or their employees, agents,
officers or directors or any other person acting in concert with it or on its
behalf. Accordingly, each Party shall be entitled to the granting of injunctive
relief by a court of competent jurisdiction against any action that constitutes
any such breach of this Article 9.
ARTICLE 10. REPRESENTATIONS AND WARRANTIES
Each Party represents and warrants to the other that it has the legal right
and power to enter into this Agreement, to extend the rights and licenses
granted to the other in this Agreement, and that the performance of such
obligations will not conflict with its charter documents or any agreements,
contracts or other arrangements to which it is a party. BI further represents
and warrants to, and covenants with, Transcend that (a) BI is a limited
liability company duly organized, validly existing and in good standing under
applicable German law and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement and the Stock Purchase
Agreement, and (b) upon the execution and delivery of this Agreement and the
Stock Purchase Agreement, this Agreement and the Stock Purchase Agreement shall
each constitute a valid and binding obligation of BI enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
Transcend further represents and warrants to, and covenants with, BI that (i)
Transcend is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement and the
Stock Purchase Agreement, (ii) as of the Effective Date, Transcend has no
obligations to pay royalties to Third
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Parties for licenses to Transcend Patent Rights or Transcend Technology other
than to (A) Cornell Research Foundation, Inc. ("Cornell") pursuant to a license
agreement between Transcend and Cornell, effective as of April 6, 1994, and (B)
Clintec Nutrition Company ("Clintec") pursuant to a contribution agreement
between Transcend and Clintec, dated as of April 5, 1994, with respect to the
sales of Licensed Products approved by the FDA or another regulatory agency for
the treatment of patients with AIDS, and (iii) upon the execution and delivery
of this Agreement and the Stock Purchase Agreement, this Agreement and the Stock
Purchase Agreement shall each constitute a valid and binding obligation of
Transcend enforceable in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar law affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
ARTICLE 11. INDEMNITY
11.1. BI INDEMNITY OBLIGATIONS. In the absence of Transcend's
negligence or a breach of representation, warranty, covenant or agreement by
Transcend, BI agrees to defend, indemnify and hold Transcend, its Affiliates and
their respective employees and agents harmless from all claims, losses, damages
or expenses arising as a result of: (a) actual or asserted violations of any
applicable law or regulation by BI, its Affiliates or sublicensees by virtue of
which the Licensed Products manufactured, distributed or sold shall be alleged
or determined to be adulterated, misbranded, mislabeled or otherwise not in
compliance with any applicable law or regulation; (b) claims for bodily injury,
death or property damage attributable to the manufacture, distribution, sale or
use of the Licensed Products by BI, its Affiliates or sublicensees; or (c) any
recall of a Licensed Product ordered by a governmental agency or required by a
confirmed failure of a Licensed Product as reasonably determined by the Parties
hereto. Transcend, its Affiliates and their respective employees and agents
shall not be entitled to the indemnities set forth in this Section 11.1 where
the loss, damage or expense for which indemnification is sought was caused by a
failure by Transcend to manufacture (or have manufactured) a Licensed Product in
compliance with agreed-upon product specifications set forth in the Supply
Agreement (a "Manufacturing Failure").
11.2. TRANSCEND INDEMNITY OBLIGATIONS. Should BI be found responsible
for claims, losses or expenses caused by a Manufacturing Failure and not
attributable to other causes for which BI is responsible, BI shall be entitled
to indemnity from Transcend to the same extent as Transcend would be so entitled
from BI under Section 11.1 above.
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11.3. PROCEDURE. A Party or any of its Affiliates or their respective
employees or agents (the "Indemnitee") that intends to claim indemnification
under this Article 11 shall promptly notify the other Party (the "Indemnitor")
of any loss, claim, damage, liability or action in respect of which the
Indemnitee intends to claim such indemnification, and the Indemnitor shall
assume the defense thereof with counsel mutually satisfactory to the Parties;
PROVIDED, HOWEVER, that an Indemnitee shall have the right to retain its own
counsel, with the fees and expenses to be paid by the Indemnitor, if
representation of such Indemnitee by the counsel retained by the Indemnitor
would be inappropriate due to actual or potential differing interests between
such Indemnitee and any other party represented by such counsel in such
proceedings. The indemnity agreement in this Article 11 shall not apply to
amounts paid in settlement of any loss, claim, damage, liability or action if
such settlement is effected without the consent of the Indemnitor, which consent
shall not be withheld unreasonably. The failure to deliver notice to the
Indemnitor within a reasonable time after the commencement of any such action,
if prejudicial to its ability to defend such action, shall relieve such
Indemnitor of any liability to the Indemnitee under this Article 11, but the
omission so to deliver notice to the Indemnitor will not relieve it of any
liability that it may have to any Indemnitee otherwise than under this Article
11. The Indemnitee, its employees and agents, shall cooperate fully with the
Indemnitor and its legal representatives in the investigation of any action,
claim or liability covered by this indemnification. In the event that each Party
claims indemnity from the other and one Party is finally held liable to
indemnify the other, the Indemnitor shall additionally be liable to pay the
reasonable legal costs and attorneys' fees incurred by the Indemnitee in
establishing its claim for indemnity.
11.4. INSURANCE. BI and Transcend shall each maintain appropriate product
liability insurance with respect to development, manufacture and sales of the
Licensed Products by BI or Transcend, respectively, in such amount as BI or
Transcend, respectively, customarily maintains with respect to sales of its
other products. BI and Transcend, as applicable, shall each maintain such
insurance for so long as it continues to manufacture or sell the Licensed
Products, and thereafter for so long as BI or Transcend, as applicable,
maintains insurance for itself covering such manufacture or sales.
ARTICLE 12. TERM AND TERMINATION
12.1. Expiration . Unless terminated earlier pursuant to Section 12.2, this
Agreement shall expire and the licenses granted by Transcend to BI hereunder
shall become fully paid and exclusive, on a country by country basis, upon the
later of (i) fifteen (15) years after the First Commercial Sale of the Licensed
Products in such
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Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
country, (ii) the last to expire of any Valid Patent Claim in such country and
(iii) the expiration in such country of Marketing Exclusivity of Licensed
Products for any indication in the Field. Any Transcend right to co-promote
resulting from its exercise of the option under Section 6.2.2 shall expire upon
the expiration of this Agreement in the United States unless terminated earlier
under the terms of the co-promotion agreement.
12.2. TERMINATION. This Agreement may be terminated in the following
circumstances:
12.2.1. MATERIAL BREACH. By one Party upon written notice by reason
of a material breach by the other Party that the breaching Party fails to remedy
within ninety (90) days after written notice thereof by the non-breaching Party;
and
12.2.2. By BI . By BI (a) at any time within the six month period
following the completion of the first Phase III clinical trials included in the
ARDS Development Program, upon written notice by BI to Transcend, or (b) within
30 days of its receipt of a Notice of Transcend ARDS Filing.
12.3. Effect of Expiration or Termination Generally.
---------------------------------------------
12.3.1. EXISTING OBLIGATIONS. Expiration pursuant to Section 12.1 or
termination pursuant to Section 12.2 of this Agreement for any reason shall not
relieve the Parties of any obligation accruing prior to such expiration or
termination.
12.3.2. SURVIVAL. The provisions of Section 3.2 (with respect only to
licenses granted prior to the time of expiration or termination and subject to
the terms described below) and Article 7 (with respect only to expense
reimbursement payments and royalties accrued at the time of expiration or
termination but not yet paid), Article 8, Article 9, Article 11 and this Section
12.3 shall survive the expiration pursuant to Section 12.1 or termination
pursuant to Section 12.2 of this Agreement.
12.4. EFFECT OF TERMINATION BY TRANSCEND OR TERMINATION BY BI PURSUANT TO
SECTION 12.2.2. In the event that this Agreement is terminated by Transcend
pursuant to Section 12.2.1 or by BI pursuant to Section 12.2.2:
12.4.1. TERMINATION OF LICENSES. All licenses and rights granted to
BI hereunder shall terminate and, except as provided in Section 12.4.2 below, BI
will immediately cease to manufacture and sell the Licensed Products;
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12.4.2. DISPOSITION OF INVENTORY OF LICENSED PRODUCTS. (a) BI may
dispose of its inventory of Licensed Products on hand as of the effective date
of termination, and may fill any orders for Licensed Products accepted prior to
the effective date of termination, for a period of twelve (12) months after the
effective date of termination and (b) within thirty (30) days after disposition
of such inventory and fulfillment of such orders (and in any event within seven
(7) months after termination) BI will forward to Transcend a final report and
pay all royalties due for Net Sales in such period;
12.4.3. ASSIGNMENT OF REGULATORY APPROVALS; MANUFACTURING RIGHTS. BI
shall (a) to the extent legally permissible, take all additional action
reasonably necessary to assign all of its right, title and interest in and
transfer possession and control to Transcend of the regulatory filings prepared
by BI, and regulatory approvals received by BI, to the extent that such filings
and approvals relate to the Licensed Products and (b) if BI has exercised the
manufacturing option under Section 6.1.4, (i) grant Transcend a worldwide,
perpetual, exclusive, fully-paid and royalty free right and license to use in
the manufacture of the Licensed Products any manufacturing know-how developed by
BI since the effective date of the Manufacturing License that is necessary or
useful in the manufacture of the Licensed Products and (ii) agree to supply
Transcend with the Licensed Products on terms consistent with the terms set
forth in Section 6.1.1 and the Supply Agreement for a period of three (3) years.
12.5. BI Options Following Transcend Breach.
-------------------------------------
12.5.1. TERMINATION FOR TRANSCEND BREACH. In the event that BI is
entitled to terminate this Agreement pursuant to Section 12.2.1, BI may elect to
either (a) terminate this Agreement, in which case all licenses and rights
granted to BI shall terminate and BI will immediately cease to manufacture and
sell the Licensed Products except as provided in this Section 12.5.1 and BI
shall be entitled to claim from Transcend all damages which would otherwise be
due to BI under law and equity or (b) not terminate this Agreement and select
the remedy set forth in Section 12.5.2. If BI elects to terminate this Agreement
pursuant to clause (a) above, then (i) BI may dispose of its inventory of
Licensed Products on hand as of the effective date of termination, and may fill
any orders for Licensed Products accepted prior to the effective date of
termination, for a period of twelve (12) months after the effective date of
termination and (ii) within thirty (30) days after disposition of such inventory
and fulfillment of such orders (and in any event within seven (7) months after
termination) BI will forward to Transcend a final report and pay all royalties
due for Net Sales in such period.
12.5.2. BI'S RIGHT TO OFFSET ROYALTIES AND OTHER PAYMENTS. In the
event of a breach by Transcend of any of its obligations hereunder which would
entitle BI to terminate this Agreement pursuant to Section 12.2.1 and Transcend
fails to remedy
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or take reasonable action to initiate a remedy of such default within ninety
(90) days after notice thereof by BI, BI shall have the right and option, if it
has obtained a final judgment or award of monetary damages and/or costs against
Transcend based on such default, to offset the amount of such damages and/or
costs against any amounts otherwise due to Transcend under Article 7.
ARTICLE 13. MISCELLANEOUS
13.1. 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 when
such failure or delay is caused by or results from causes beyond the reasonable
control of the affected Party, including but not limited to fire, floods,
embargoes, war, acts of war (whether war is declared or not), insurrections,
riots, civil commotions, strikes, lockouts or other labor disturbances, acts of
God or acts, omissions or delays in acting by any governmental authority or the
other Party; PROVIDED, HOWEVER, that the Party so affected shall use reasonable
commercial efforts to avoid or remove such causes of nonperformance, and shall
continue performance hereunder with reasonable dispatch whenever such causes are
removed. Either Party shall provide the other Party with prompt written notice
of any delay or failure to perform that occurs by reason of force majeure. The
Parties shall mutually seek a resolution of the delay or the failure to perform
as noted above.
13.2. ASSIGNMENT. This Agreement may not be assigned or otherwise
transferred by either Party without the consent of the other Party; PROVIDED,
HOWEVER, that either Transcend or BI may, without such consent, assign its
rights and obligations under this Agreement (a) in connection with a corporate
reorganization, to any Affiliate, all or substantially all of the equity
interest of which is owned and controlled by such Party or its direct or
indirect parent corporation, or (b) in connection with a merger, consolidation
or sale of substantially all of such Party's assets to an unrelated Third Party;
PROVIDED, HOWEVER, that such Party's rights and obligations under this Agreement
shall be assumed by its successor in interest in any such transaction and shall
not be transferred separate from all or substantially all of its other business
assets, including those business assets that are the subject of this Agreement.
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.
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13.3. SEVERABILITY. Each Party hereby agrees that it does not intend to
violate any public policy, statutory or common laws, rules, regulations, treaty
or decision of any government agency or executive body thereof of any country or
community or association of countries. Should one or more provisions of this
Agreement be or become invalid, the Parties hereto shall substitute, by mutual
consent, valid provisions for such invalid provisions which valid provisions in
their economic effect are sufficiently similar to the invalid provisions that it
can be reasonably assumed that the Parties would have entered into this
Agreement with such valid provisions. In case such valid provisions cannot be
agreed upon, the invalidity of one or several provisions of this Agreement shall
not affect the validity of this Agreement as a whole, unless the invalid
provisions are of such essential importance to this Agreement that it is to be
reasonably assumed that the Parties would not have entered into this Agreement
without the invalid provisions.
13.4. NOTICES. Any consent, notice or report required or permitted to be
given or made under this Agreement by one of the Parties to the other shall be
in writing, delivered personally or by facsimile (and promptly confirmed by
telephone, personal delivery or courier) or courier, postage prepaid (where
applicable), addressed to such other Party at its address indicated below, or to
such other address as the addressee shall have last furnished in writing to the
addressor and shall be effective upon receipt by the addressee.
If to Transcend: Transcend Therapeutics, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to: Xxxx and Xxxx
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
If to BI: Boehringer Ingelheim International GmbH
Postbox 200
D-55216 Ingelheim, Rhein
Germany
Attention: Corporate Licensing
Telephone: 000 00 00 00 00 00 08
Telecopy: 011 49 61 32 77 35 83
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with a copy to: Boehringer Ingelheim International GmbH
Postbox 200
D-55216 Ingelheim, Rhein
Germany
Attention: Head of Legal Department
Telephone: 000 00 00 00 00 00 06
Telecopy: 011 49 61 32 77 35 83
13.5. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
13.6. DISPUTE RESOLUTION; CHOICE OF FORUM. Any disputes arising between
the Parties relating to, arising out of or in any way connected with this
Agreement or any term or condition hereof, or the performance by either Party of
its obligations hereunder, whether before or after the expiration pursuant to
Section 12.1 or termination pursuant to Section 12.2 of this Agreement, shall be
promptly presented to the Chief Executive Officer of Transcend and the Member of
the Corporate Board of BI responsible for Pharmaceuticals for resolution and if
they or their designees cannot promptly resolve such disputes, then either Party
shall have the right to bring an action to resolve such dispute before a court
of competent jurisdiction. The Parties hereby submit to the jurisdiction of the
federal or state courts located within the Commonwealth of Massachusetts for the
conduct of any suit, action or proceeding arising out of or relating to this
Agreement.
13.7. ENTIRE AGREEMENT. This Agreement, together with the appendices
hereto and the Stock Purchase Agreement, contains the entire understanding of
the Parties with respect to the subject matter hereof and supersedes the Letter
Agreement dated January 13, 1997, between Transcend and BI. All express or
implied agreements and understandings, either oral or written, heretofore made
are expressly merged in and made a part of this Agreement. This Agreement may be
amended, or any term hereof modified, only by a written instrument duly executed
by both Parties.
13.8. HEADINGS. The captions to the several Articles and Sections hereof
are not a part of this Agreement, but are merely guides or labels to assist in
locating and reading the several Articles and Sections hereof.
13.9. INDEPENDENT CONTRACTORS. It is expressly agreed that Transcend and
BI shall be independent contractors and that the relationship between the two
Parties shall not constitute a partnership, joint venture or agency. Neither
Transcend nor BI shall have the authority to make any statements,
representations or commitments of any kind, or to take any action, which shall
be binding on the other, without the prior consent of the other Party to do so.
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13.10. AGREEMENT NOT TO SOLICIT EMPLOYEES. During the term of this
Agreement and for a period of two (2) years following the expiration pursuant to
Section 12.1 or termination pursuant to Section 12.2 of this Agreement,
Transcend and BI agree not to seek to persuade or induce any employee of the
other company to discontinue his or her employment with that company in order to
become employed by or associated with any business, enterprise or effort that is
associated with its own business.
13.11. EXPORTS. The Parties acknowledge that the export of technical data,
materials or products is subject to the exporting Party receiving any necessary
export licenses and that the Parties cannot be responsible for any delays
attributable to export controls which are beyond the reasonable control of
either Party. Transcend and BI agree not to export or re-export, directly or
indirectly, any information, technical data, the direct product of such data,
samples or equipment received or generated under this Agreement in violation of
any governmental regulations which may be applicable, including, but not limited
to, the Export Administration Act of 1979, as amended, its rules and
regulations, including, but not limited to, Part 779 of the United States Export
Control Regulations, published by the United States Department of Commerce, and
other applicable export control laws. Transcend and BI agree to obtain similar
covenants from their licensees, sublicensees and contractors with respect to the
subject matter of this Section 13.11.
13.12. WAIVER. The waiver by either Party hereto of any right hereunder or
of the failure to perform or of a breach by the other Party shall not be deemed
a waiver of any other right hereunder or of any other breach or failure by said
other Party whether of a similar nature or otherwise.
13.13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first set forth above.
TRANSCEND THERAPEUTICS, INC.
By:/s/ Xxxxxx Xxxxx
-------------------------------------------
Xxxxxx Xxxxx
Title: President and Chief Executive Officer
-------------------------------------
BOEHRINGER INGELHEIM INTERNATIONAL GmbH
By: /s/ Xxxxxxxx By: /s/ Xxxxxx
--------------------------- --------------------------------
Xxxxxxxx Xxxxxx
Title: Director
------------------------- By: --------------------------------
Pharma Business Development Legal Department
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Pages 2 through 9 of Exhibit A
contain Confidential Materials which have been omitted
and filed separately with the Securities and Exchange Commission
EXHIBIT A
PROGRAM PLAN FOR
ARDS DEVELOPMENT PROGRAM
FEBRUARY 1997
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Pages 1 through 4 of Exhibit B
contain Confidential Materials which have been omitted
and filed separately with the Securities and Exchange Commission
EXHIBIT B
TRANSCEND PATENT RIGHTS
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63
EXHIBIT C
Stock Purchase Agreement
============================================
Stock Purchase Agreement omitted and
filed separately as Exhibit 10.16 to the
Registration Statement on Form S-1
============================================
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64
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
EXHIBIT D
---------
Terms of Supply Agreement
-------------------------
1. BI and Transcend shall both agree on the choice of any contract
manufacturer to be used by Transcend to supply BI with the Licensed
Product. BI shall retain the right to have direct contact with Transcend's
contract manufacturer.
2. Transcend will supply the Licensed Product to BI in accordance with agreed
testing and manufacturing specifications.
3. BI will purchase all supplies of the Licensed Product exclusively from
Transcend *******************.
4. BI shall provide Transcend with a monthly phased rolling fifteen (15) month
non-binding forecast (the "Forecast"). All firm binding orders will be
placed in writing by BI to provide Transcend with a four (4) month lead
time to supply the Product.
5. BI shall carry out, or have carried out, the quality control tests
specified, from time to time, by Transcend in writing.
6. BI shall reimburse Transcend for the cost of supplying BI with Licensed
Products in accordance with Section 6.1.2. Transcend acknowledges that it
has provided BI with a projection of the Manufacturing Costs of the
Licensed Product for the treatment of ARDS of ****************************
**********************************************************************
*********************************************************** Transcend and
BI shall, at the request of either Party, meet to discuss and review the
supply prices and conditions contained in this Exhibit to take account of
any increases in the cost of labor, materials, conforming to legislation,
increases in the retail price index or for any other reason that leads to
an increase in the cost of production of the Licensed Product. However,
without the prior written consent of BI, which consent shall not be
unreasonably withheld, Transcend shall not have the right to increase the
Manufacturing Costs of the Licensed Product for use in the treatment of
ARDS. In the event that the Licensed Product is developed and
commercialized by the Parties pursuant to this Agreement for the treatment
and/or prevention MOD or an Other Indication, the Parties shall agree in
good faith upon a projection of the Manufacturing Costs of such Licensed
Product for such other indication(s).
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7. Supply terms are F.O.B. Transcend or such other location as Transcend shall
notify BI in writing.
8. Product shall require the approval of BI.
9. Minimum order shall be determined through good faith negotiations between
the Parties.
10. If any payment becomes overdue, without prejudice to any other remedy that
Transcend shall have, it shall be entitled to charge interest in accordance
with Section 7.10 of the Agreement until receipt of the full amount whether
before or after judgment.
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