CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT.
CONFIDENTIAL PROVISIONS HAVE BEEN OBSCURED.
LICENSE AND DEVELOPMENT AGREEMENT
THIS LICENSE AND DEVELOPMENT AGREEMENT, (this "Agreement"), effective
as of July 23, 2004 (the "Effective Date"), is entered into by and between
IntelliPharmaCeutics Corporation, a Canadian corporation with offices at 000
Xxxxxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxx, Xxxxxx, X0X 0X0,
("IntelliPharmaCeutics"), and Larasan Pharmaceutical Corporation, a Florida
corporation offices at 0000 Xxxx Xxxxx Xxxx., Xxxxx 000, Xx. Xxxxxxxxxx,
Xxxxxxx, 00000, U.S.A., (hereinafter, "Larasan" or the "Company").
IntelliPharmaCeutics and Larasan each may be referred to herein individually as
a "Party," or collectively as the "Parties."
WHEREAS, Larasan is in the business of the development, marketing and
distribution of pharmaceutical products; and
WHEREAS, IntelliPharmaCeutics has certain proprietary rights, trade
secrets, know-how and other intellectual property (including certain patents)
with respect to the oral controlled delivery of pharmaceutical products (the
"Technology"); and
WHEREAS, Larasan desires to obtain from IntelliPharmaCeutics, and
IntelliPharmaCeutics desires to grant to Larasan, a license to develop and
commercialize one or more pharmaceutical products containing [ ] as an active
ingredient and other active ingredients as mutually agreed between the parties
during the term of this Agreement (the "Licensed Product(s)") that will be
formulated using at least some of the Technology, on the terms and conditions
set forth herein; and
WHEREAS, Larasan desires that IntelliPharmaCeutics provide, and
IntelliPharmaCeutics desires to provide, certain services in respect of the
development of such Licensed Products on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
promises and covenants of the Parties contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto, intending to be legally bound, do hereby agree
as follows:
ARTICLE 1
DEFINITIONS
For the purposes of this Agreement, the following words and phrases
shall have the following meanings, unless otherwise specifically provided
herein:
1.1 "AFFILIATE" shall mean, with respect to any Entity, any other
Entity that directly or indirectly through one or more intermediaries, controls,
is controlled by or is under common control with such Entity. For purposes of
this Section 1.1 only, "control" and, with correlative meanings, the terms
"controlled by" and "under common control with" shall mean (a) the possession,
directly or indirectly, of the power to direct the management or policies of an
Entity, whether through the ownership of voting securities, by contract or
otherwise, or (b) the ownership, directly or indirectly, of at least fifty
percent (50%) of the voting securities or other ownership interest of an Entity.
1.2 "APPLICABLE LAW" shall mean the applicable laws, rules,
regulations, guidelines and requirements of the Regulatory Authorities, in the
Territory.
1.3 "COMBINATION PRODUCT" shall mean a combination pharmaceutical
product containing one or more therapeutically active ingredients in addition to
a Designated Compound.
1.4 "COMMERCIALLY REASONABLE EFFORTS" shall mean, with respect to the
development or commercialization of a Licensed Product, efforts and resources
commonly used in the research-based pharmaceutical industry for a product of
similar commercial potential at a similar stage in its lifecycle, taking into
consideration its safety and efficacy, its cost to develop, the competitiveness
of alternative products, its proprietary position, the likelihood of regulatory
approval, its profitability, and all other relevant factors. Commercially
Reasonable Efforts shall be determined on a market-by-market basis for each
Licensed Product without regard to the particular circumstances of a Party,
including any other product opportunities of such Party.
1.5 "CONFIDENTIAL INFORMATION" shall have the meaning set forth in
Article 15.
1.6 "CONTROL" shall mean, with respect to any item of Information and
Inventions, Patents or other intellectual property right, possession of the
ability, whether directly or indirectly, and whether by ownership, license or
otherwise, to assign, or grant a license, sublicense or other right to or under,
such item, Patent or right as provided for herein without violating the terms of
any agreement or other arrangement with any Third Party.
1.7 "DESIGNATED COMPOUND" shall mean initially, [ ] and other
compounds as the parties may mutually agree to include as active ingredient(s)
in a Licensed Product during the term of the Agreement.
1.8 "DEVELOPMENT ACTIVITIES" shall mean the activities performed by the
Parties under the Development Plan pursuant to Article 3.
1.9 "DEVELOPMENT BUDGET" shall have the meaning set forth in Section
3.3.
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1.10 "DEVELOPMENT COMMITTEE" shall have the meaning set forth in
Section 3.4.1.
1.11 "DEVELOPMENT PLAN" shall have the meaning set forth in Section
3.3.
1.12 "EFFECTIVE DATE" shall have the meaning set forth in the preamble.
1.13 "ENTITY" shall mean any individual, sole proprietorship,
corporation, limited liability company, association, joint venture, partnership,
limited partnership, limited liability partnership, trust, university, business,
government or political subdivision thereof, including an agency, or any other
organization that possesses independent legal standing.
1.14 "EXPLOIT" shall mean to make, have made, import, use, sell, or
offer for sale, including to manufacture, have manufactured, store, have used,
export, transport, distribute, promote, market or have sold or otherwise dispose
of a licensed product or process.
1.15 "EXPLOITATION" shall mean the making, having made, importation,
use, sale, offering for sale of a licensed product or process, including the
manufacture, storage, optimization, import, export, transport, distribution,
promotion, marketing, sale or other disposition of a licensed product or
process.
1.16 "FDA" shall mean the United States Food and Drug Administration,
or any successor agency responsible for the evaluation and approval of
pharmaceutical products.
1.17 "FIRST COMMERCIAL SALE" shall mean the first sale for use or
consumption by the general public of the Licensed Product in a country after
Regulatory Approval (including pricing and reimbursement approval where
applicable) for the marketing and sale of the Licensed Product has been obtained
in such country.
1.18 "IMPROVEMENT" shall mean any modification, variation or revision
to an apparatus, method, product or technology, or any discovery, technology,
device, process or formulation related to an apparatus, method, product or
technology, whether or not patented or patentable by IntelliPharmaCeutics or
jointly by the parties, including any enhancement in the manufacture or steps or
processes thereof, ingredients, preparation, presentation, formulation, means of
delivery, packaging or dosage of an apparatus, method, product or technology,
any discovery or development of any new or expanded indications for an
apparatus, method, product or technology, or any discovery or development that
improves the stability, safety or efficacy of an apparatus, method, product or
technology.
1.19 "IND" shall mean an investigational new drug application filed
with the FDA for approval to commence human clinical trials, and its equivalent
in other countries or regulatory jurisdictions in the Territory.
1.20 "INDEMNIFICATION CLAIM NOTICE" shall have the meaning set forth in
Section 11.3.
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1.21 "INDEMNITOR or INDEMNITEE" shall have the meaning set forth in
Section 11.3.
1.22 "INFRINGEMENT SUIT" shall have the meaning set forth in Section
6.8.2.
1.23 "INFORMATION AND INVENTIONS" shall mean all technical, scientific
and other know-how and information, trade secrets, knowledge, technology, means,
methods, processes, practices, formulas, instructions, skills, techniques,
procedures, experiences, ideas, technical assistance, designs, drawings,
assembly procedures, computer programs, apparatuses, specifications, data,
results and other material, including pre-clinical and clinical trial results,
manufacturing procedures and test procedures and techniques, (for any or all of
which, whether or not confidential, proprietary, patented or patentable) in
written, electronic or any other form now known, or hereafter developed, and all
Improvements, whether to the foregoing or otherwise, and other discoveries,
developments, inventions, and other intellectual property (for any or all of
which, whether or not confidential, proprietary, patented or patentable).
1.24 "KNOWLEDGE" shall mean the good faith understanding of individual
parties or of the vice presidents, senior vice presidents, executive vice
presidents, president, chief financial officer, chief operating officer, chief
executive officer or chairman of the respective party of the facts and
information then in their possession without any duty to conduct any
investigation with respect to such facts and information.
1.25 "LICENSED PROCESS" shall mean the proprietary controlled delivery
technologies for the delivery of pharmaceutical compounds orally by means of
tablets or capsules, such as are actually used in the development of the
Licensed Product(s), that are under the Control of IntelliPharmaCeutics as of
the Effective Date and any Improvements thereto that are conceived and reduced
to practice by IntelliPharmaCeutics, in the course of performing the Development
Activities, and licensed herein only with respect to the Exploitation of the
Licensed Product(s).
1.26 "LICENSED PRODUCT(S)" shall mean any dosage of pharmaceutical
composition or preparation in finished form, labeled and packaged for sale by
prescription, over-the-counter or any other method for human applications that
contains a Designated Compound (initially, acetylsalicylic acid or ibuprofen),
formulated using, and delivered by means of, the Licensed Process.
1.27 "LICENSED TECHNOLOGY" shall mean the IntelliPharmaCeutics Patents,
the IntelliPharmaCeutics Know-How and the Drug Master File, collectively, but
licensed only with respect to the Exploitation of the Licensed Products
delivered by means of the Licensed Process.
1.28 "LICENSED TRADEMARKS" shall mean those Trademarks set forth on
Schedule 'A' attached hereto, as may be amended by from time to time, in
writing, and such other Trademarks as may be designated by IntelliPharmaCeutics
in writing from time to time, and any registrations of the foregoing and pending
applications relating thereto, but licensed only with respect to the
Exploitation of the Licensed Product(s) on a Territory by Territory basis,
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provided however, that during the Term of the Agreement Larasan may, in its sole
discretion, choose other trademarks (the "Larasan Trademarks") in addition to
those listed in Schedule "A" for use with Licensed Product(s) in the Territory.
1.29 "LARASAN" shall mean Larasan Pharmaceutical Corporation, a Florida
corporation.
1.30 "LOSSES" shall have the meaning set forth in Section 11.1.
1.31 "MAJOR MARKET COUNTRY" shall mean the United States of America,
the European Union, Japan and other countries to be mutually agreed upon by the
parties.
1.32 "NDA" shall mean a New Drug Application filed pursuant to the
requirements of the FDA, and any equivalent or comparable application required
by any Regulatory Authority for the marketing, sale or use of the Licensed
Product(s) in the Territory.
1.33 "NET SALES" shall mean, for any period, the gross amount invoiced
by Larasan and its Affiliates for the sale of Licensed Product(s) in the
ordinary course of commercialization of the Product(s) by Larasan or any of its
Affiliates to Third Parties, less deductions for: (a) normal and customary
trade, quantity and cash discounts and sales returns and allowances, including
(i) those granted on account of price adjustments, billing errors, rejected
goods, damaged goods, returns and rebates (ii) reimbursements and similar
payments to wholesalers and other distributors, buying groups, pharmacy benefit
management organizations, health care insurance carriers and other institutions,
(iii) allowances, rebates and fees paid to distributors and (iv) chargebacks (v)
bad debt write offs; (b) freight, postage, shipping and insurance expenses to
the extent that such items are included in the gross amount invoiced; (c)
customs and excise duties and other duties related to the sales to the extent
that such items are included in the gross amount invoiced; (d) rebates and
similar payments made with respect to sales paid for by any governmental or
regulatory authority such as, by way of illustration and not in limitation of
the Parties' rights hereunder, Federal or state Medicaid, Medicare or similar
state program or equivalent foreign governmental program; (e) sales and other
taxes and duties directly related to the sale or delivery of the Licensed
Product(s) (but not including taxes assessed against the income derived from
such sale); (f) distribution expenses to the extent that such items are included
in the gross amount invoiced; (g) any other similar and customary deductions
that are consistent with United States generally accepted accounting principles,
or in the case of non-United States sales, other applicable accounting
standards. Any of the deductions listed above that involves a payment by Larasan
or its Affiliates shall be taken as a deduction in the calendar quarter in which
the payment is accrued by such entity. For purposes of determining Net Sales, a
Licensed Product(s) shall be deemed to be sold when invoiced and a "sale" shall
not include transfers, uses or dispositions for charitable, promotional,
pre-clinical, clinical, regulatory or governmental purposes. For purposes of
calculating Net Sales, sales between or among Larasan or its Affiliates not in
the ordinary course of commercialization of the Product(s) shall be excluded
from the computation of Net Sales.
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1.35 "INTELLIPHARMACEUTICS" shall have the meaning set forth in the
preamble.
1.36 "INTELLIPHARMACEUTICS KNOW-HOW" shall mean all Information and
Inventions Controlled by IntelliPharmaCeutics or an Affiliate of
IntelliPharmaCeutics as of the Effective Date or, from time to time, during the
Term that (a) (i) are necessary for the use of the Licensed Process to Exploit
the Licensed Product or (ii) relate to Improvements to the Licensed Product that
are conceived and reduced to practice in the course of performing the
Development Activities, and (b) are not generally known, but excluding any
Information and Inventions to the extent claimed by any IntelliPharmaCeutics
Patents.
1.37 "INTELLIPHARMACEUTICS PATENTS" shall mean the Patents that
IntelliPharmaCeutics Controls
(a) as of the Effective Date; or
(b) from time to time during the Term that claim
(i) the Licensed Process,
(ii) the Licensed Products or any Improvements to the Licensed Products or
Process that is conceived and reduced to practice in the course of
performing the Development Activities,
(iii) any method utilized in the manufacture of the Licensed Product(s) or
the performance of the Licensed Process when used to deliver the Licensed
Product(s).
1.38 "JOINT TECHNOLOGY" shall have the meaning set forth in Section
6.3.
1.39 "PATENTS" shall include in its meaning (a) patents and patent
applications; (b) any substitutions, divisions, continuations,
continuations-in-part, reissues, renewals, registrations, confirmations,
re-examinations, extensions, supplementary protection certificates and the like,
and any provisional applications, of any such patents or patent applications;
and (c) any international equivalent of any of the foregoing to the extent that
they claim
(i) the Licensed Process,
(ii) the Licensed Products or any Improvements to the Licensed Products or
Process that is conceived and reduced to practice in the course of
performing the Development Activities,
(iii) any method utilized in the manufacture of the Licensed Product(s) or
the performance of the Licensed Process when used to deliver the Licensed
Product(s). including, without limitation, IntelliPharmaCeutics Patents and
Joint Patents.
1.40 "REGULATORY APPROVAL" shall mean any and all approvals (including
pricing and reimbursement approvals), licenses, registrations or authorizations
of any Regulatory Authority, necessary for the Exploitation of the Licensed
Product in a country in the Territory, including (a) any approval of any
Licensed Product (including any INDs, NDAs, and supplements or amendments
thereto); (b) pre- and post-approval marketing authorizations for a Licensed
Product (including any prerequisite manufacturing approval or authorization
6
related thereto); (c) labeling approval for a Licensed Product; and (d)
technical, medical and scientific licenses.
1.41 "REGULATORY AUTHORITY" shall mean any applicable supra-national,
federal, national, regional, state, provincial or local regulatory agencies,
departments, bureaus, commissions, councils or other government entities
regulating or otherwise exercising authority with respect to the Licensed
Technology or the Licensed Product in the Territory.
1.42 "REGULATORY DOCUMENTATION" shall mean all applications,
registrations, licenses, authorizations and approvals (including all Regulatory
Approvals), all correspondence submitted to or received from Regulatory
Authorities (including minutes and official contact reports relating to any
communications with any Regulatory Authority), all supporting documents and all
clinical studies and tests, relating to any Licensed Product, and all data
contained in any of the foregoing, including all regulatory drug lists,
advertising and promotion documents, adverse event files and complaint files.
1.43 "SECONDARY MARKET COUNTRIES" shall mean Canada, China, Southeast
Asia, India, Australia, South Africa and other countries as mutually agreed upon
by the parties.
1.44 "SUBLARASAN" shall mean any Third Party to which Larasan grants a
sublicense pursuant to Section 2.5 under the licenses granted to Larasan by
IntelliPharmaCeutics under Section 2.1.
1.45 "SUBLICENSING FEES" shall mean all non-royalty consideration of
any kind, including any fees, milestones or other payments (whether cash or
non-cash (which shall be valued at fair market value)), received by Larasan or
any of its Affiliates from any SubLarasan as a direct or indirect result of the
grant by Larasan or any of its Affiliates to any SubLarasan of a license under,
or the use by any such SubLarasan of, any of the Licensed Technology or Licensed
Trademarks, in addition to or excess of the payments to be paid pursuant to
sections 4.4 and 4.5.
1.46 "TECHNOLOGY" shall have the meaning set forth in the preamble.
1.47 "TERM" shall have the meaning set forth in Section 8.1.
1.48 "TERRITORY" shall mean the entire world.
1.49 "THIRD PARTY" shall mean any Entity other than
IntelliPharmaCeutics, Larasan and their respective Affiliates or sublicensees.
1.50 "THIRD PARTY CLAIM" shall have the meaning set forth in Section
11.1.
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1.51 "TRADEMARK" shall include any word, name, symbol, color,
designation or device or any combination thereof, including any trademark, trade
dress, brand xxxx, trade name, brand name, and logo or business symbol.
ARTICLE 2
GRANT OF RIGHTS
2.1 LICENSE GRANTS TO LARASAN.
2.1.1 Subject to Section 2.3 and the other terms and
conditions of this Agreement, IntelliPharmaCeutics hereby grants to Larasan and
Larasan accepts, a non-transferable (except as provided in Article 13),
sublicensable (only as provided in Section 2.4), royalty-bearing, worldwide,
exclusive right and license under the Licensed Technology to Exploit the
Licensed Product(s), in the Territory, to the full end of the Term for which the
Licensed Technology is licensed, unless sooner terminated as herein after
provided.
2.1.2 Subject to Section 2.3 and the other terms and
conditions of this Agreement, IntelliPharmaCeutics hereby grants to Larasan and
Larasan accepts, a non-transferable (except as provided in Article 13),
sublicensable (only as provided in Section 2.4), royalty-bearing, non-exclusive
right and license under Licensed Trademarks for the sole purpose of using such
Licensed Trademarks to market, distribute and sell the Licensed Product(s), and
no other product, licensed under Section 2.1.1 in the Territory, to the full end
of the Term for which the Licensed Product(s) are licensed, unless sooner
terminated as hereinafter provided.
2.2 LICENSE GRANT TO INTELLIPHARMACEUTICS. Larasan hereby grants to
IntelliPharmaCeutics a royalty-free, non-exclusive right and license in the
Territory in and to the Licensed Technology to the extent necessary to perform
its Development Activities under Article 3.
2.3 RETAINED RIGHTS. IntelliPharmaCeutics retains all right, title and
interest, including the right to grant licenses to Third Parties, in and to the
Licensed Technology (other than the rights granted Larasan to Exploit Designated
Compounds for Licensed Product(s) only as expressly provided in Section 2.1.1)
and the Licensed Trademarks (other than for the Exploitation of Licensed
Product(s) only as expressly provided in Section 2.1.2). Larasan shall have no
rights, express or implied, with respect to the Licensed Technology or the
Licensed Trademarks, except as expressly set forth in Section 2.1, and Larasan
covenants to IntelliPharmaCeutics that none of Larasan, its Affiliates or
SubLarasans shall use the Licensed Technology, directly or indirectly, for any
purpose other than in association with the Designated Compounds in connection
with the Exploitation of Licensed Product(s), or the Licensed Trademarks,
directly or indirectly, for any purpose other than the marketing, distribution
and sale of Licensed Product(s) hereunder. Larasan shall have no right to
develop any Combination Product, or any other product in any other form or
dosage range containing a
8
Designated Compound, under this Agreement, and Larasan hereby covenants that it
will not, during the term of this Agreement, either within or outside this
Agreement, develop, manufacture or sell, or directly or indirectly license or
otherwise co-operate in the development, manufacture or sale of any other
product, containing a Designated Compound as an ingredient, which competes with
a Licensed Product. Notwithstanding anything in this Agreement to the contrary,
IntelliPharmaCeutics does hereby retain the right to (a) enter into
collaborations or other agreements with, and to grant licenses and other rights
under the IntelliPharmaCeutics Patents and IntelliPharmaCeutics Know-How to
Third Parties to Exploit products containing compounds other than the Designated
Compounds and to use the Licensed Process in connection therewith, and (b)
independently Exploit products containing compounds other than the Designated
Compounds and to use the Licensed Process in connection therewith.
Notwithstanding any other provision contained in this Agreement,
IntelliPharmaCeutics retains an irrevocable, non-exclusive, royalty-free right
to use the Licensed Technology (including the Licensed Process) with respect to
the Designated Compounds, for its internal, non-commercial research and
development activities.
2.4 SUBLICENSES. Larasan shall have the right to grant sublicenses
under the grants in Section 2.1 to Third Parties pursuant to a separate written
agreement, subject to the following requirements and conditions:
2.4.1 Larasan must obtain IntelliPharmaCeutics's prior written
consent in respect of each such sublicense, such consent not to be unreasonably
withheld, and any sublicense agreement must be fully consistent with the terms
and conditions of this Agreement, including Articles 3.10, 5, 6, , 11, 12 14
,15, and 16, and provide that SubLarasan will indemnify IntelliPharmaCeutics and
its Affiliates to the extent provided in Article 11. In no event will a
SubLarasan have any right to grant any sublicense whatsoever.
2.4.2 Within fifteen (15) days after execution or receipt
thereof, as applicable, Larasan shall provide IntelliPharmaCeutics with a full
and complete copy of each sublicense granted hereunder and shall deliver to
IntelliPharmaCeutics copies of all reports (including relating to royalties and
other payments) received by Larasan from such SubLarasans.
2.4.3 Termination of this Agreement by IntelliPharmaCeutics
pursuant to Section 8.3 with respect to Larasan shall not terminate any
sublicense granted by Larasan pursuant to this Section 2.4 with respect to a
SubLarasan, provided that (a) such SubLarasan is not in breach of any provision
of this Agreement or the applicable sublicense agreement, (b) such SubLarasan
shall perform all obligations of Larasan under this Agreement, (c)
IntelliPharmaCeutics shall have all rights with respect to any and all
SubLarasans as it had hereunder with respect to Larasan prior to termination of
this Agreement with respect to Larasan, (d) Larasan shall include in any
sublicense a provision in which said SubLarasan acknowledges its obligations to
IntelliPharmaCeutics in the event of termination of this Agreement with respect
to Larasan hereunder and the rights of IntelliPharmaCeutics to terminate this
Agreement with respect to any SubLarasan for breaches of this Agreement by such
SubLarasan, (e) Larasan shall include in any sublicense provisions whereby, upon
the termination of Larasan as a licensee for the territory in issue, such
SubLarasan shall have 30 days to execute a license agreement directly with
IntelliPharmaCeutics on terms substantially the same, mutatis mutandis, as those
of the original
9
sublicense from Larasan to said SubLarasan, failing which the said sublicense to
the said SubLarasan will terminate automatically. The failure of Larasan to
include in a sublicense the provisions referenced in clause (d) or (e) shall
render the affected sublicense void ab initio.
ARTICLE 3
DEVELOPMENT AND COMMERCIALIZATION ACTIVITIES
3.1 DEVELOPMENT AND COMMERCIALIZATION. Larasan shall have the exclusive
right and obligation to Exploit the Licensed Product in the Territory.
IntelliPharmaCeutics shall perform, or cause to be performed, on behalf of
Larasan, certain Development Activities in accordance with this Article 3.
Except as set forth herein, Larasan shall be solely responsible for all costs
and expenses in connection with all development and commercialization
activities, including the Development Activities performed by
IntelliPharmaCeutics on behalf or at the request of Larasan.
3.2 DEVELOPMENT ACTIVITIES. IntelliPharmaCeutics shall not be required
to commence any Development Activities until Larasan has paid the initial
technology access fee as described in Section 4.4.1 provided, however,
IntelliPharmaCeutics shall commence such Development Activities in a timely
manner upon receipt of technology access fees.
3.2.1 GENERAL. Under the direction and supervision of the
Development Committee (described in Section 3.4 hereunder) composed of
representatives of the parties, IntelliPharmaCeutics and Larasan each shall
perform, or cause to be performed, its respective Development Activities in
accordance with the Development Plan and Development Budget. Notwithstanding the
foregoing, the Parties acknowledge and agree that there can be no assurances
that the objectives of the Development Activities can be achieved, or that they
can be achieved in the manner or in the time set forth in the Development Plan,
and neither Party shall be deemed to warrant or guaranty any Development result.
Although outcomes cannot be warranted or guaranteed, each Party shall use
Commercially Reasonable Efforts to perform or cause to be performed its
respective Development Activities in good scientific manner, and in material
compliance with Applicable Law.
3.2.2 REPORTS. Within thirty (30) days after the end of each
calendar quarter in which Development Activities are performed, each Party shall
provide to the Development Committee a written progress report, not requiring
the disclosure of any proprietary or Confidential Information, which shall
describe the Development Activities it has performed, or caused to be performed,
during such calendar quarter, evaluate the work performed in relation to the
goals of the Development Plan and in relation to the Development Budget, and
provide such other information as may be required by the Development Plan or
reasonably requested by the Development Committee with respect to the
Development Activities.
3.3 DEVELOPMENT PLAN AND BUDGET. The development plan (the "Development
Plan") and the development budget (the "Development Budget") for the
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Development Activities relating to acetylsalicylic acid (the initial Designated
Compound) are attached hereto as Schedule B and Schedule C, respectively. The
Development Committee shall review the Development Plans and the Development
Budgets at least quarterly and shall have the right to make such modifications
or updates to the Development Plans or Development Budgets that it deems
appropriate. The Parties acknowledge and agree that the amounts set forth in the
Development Budgets are estimates and, given the unpredictability of the
Development Activities, there can be no assurances that the Development
Activities can be completed within the Development Budgets, provided, however,
that the Parties agree to use their Commercially Reasonable Efforts to adhere to
the Development Budgets. In no event shall a party spend an amount which exceeds
the agreed budget for a Development Activity by five Percent (5%) without the
prior approval of the Development Committee.
3.4 DEVELOPMENT COMMITTEE.
3.4.1 FORMATION AND AUTHORITY OF DEVELOPMENT COMMITTEE.
IntelliPharmaCeutics and Larasan shall establish a development committee (the
"Development Committee"), which shall oversee the Development Activities
performed by the Parties, review and approve the Development Budget and approve
any changes to the Development Plan and Development Budget. Each Party shall
appoint an equal number of representatives with the requisite experience and
seniority to enable them to make decisions on behalf of the Parties with respect
to the Development Activities. From time to time, each Party may substitute its
representatives on written notice to the other Party.
3.4.2 PROCEDURAL RULES OF DEVELOPMENT COMMITTEE. The
Development Committee shall meet quarterly, or as otherwise agreed to by the
Parties. The Development Committee shall adopt such standing rules as shall be
necessary for its work. A quorum of the Development Committee shall exist
whenever there is present at a meeting at least one representative appointed by
each Party. Members of the Development Committee may attend a meeting either in
person or by telephone, video conference or similar means in which each
participant can hear what is said by the other participants. Representation by
proxy shall not be allowed. The Development Committee shall take action by
unanimous consent of IntelliPharmaCeutics and Larasan, with each such Party
having a single vote, irrespective of the number of representatives actually in
attendance at a meeting, or by a written resolution signed by the designated
representatives of each of IntelliPharmaCeutics and Larasan.
3.4.3 DISPUTE RESOLUTION. If the Development Committee cannot,
or does not, reach agreement on an issue, then either Party shall have the right
to refer such issue to the Chief Executive Officers of the Parties who shall
confer on the resolution of the issue. Any final decision mutually agreed to by
the Chief Executive Officers of the Parties shall be in writing and shall be
conclusive and binding on the Parties. If such officers are not able to agree on
the resolution of an issue within twenty (20) days after such issue was first
referred to them, either Party shall have the right to refer such dispute to
arbitration pursuant to Article 10.
3.4.4 LIMITATIONS ON AUTHORITY OF DEVELOPMENT COMMITTEE. Each
Party to this Agreement shall retain the rights, powers, and discretion granted
to it under
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this Agreement, and no such rights, powers, or discretion shall be delegated to
or vested in the Development Committee unless such delegation or vesting of
rights is expressly provided for in this Agreement or the Parties expressly so
agree in writing. The Development Committee shall not have the power to amend or
modify this Agreement, which may only be amended or modified as provided in
Section 17.4.
3.5 REGULATORY APPROVALS. All INDs, NDAs and other filings,
applications or requests pursuant to or in connection with the Regulatory
Approvals required under the Development Plan shall be made in the name of
IntelliPharmaCeutics or its designee, unless Applicable Law requires that a
Regulatory Approval be solely or jointly in the name of Larasan or its
Affiliates. Immediately upon Regulatory Approval, such rights and title to
Regulatory Documentation shall be transferred to Larasan, or its designee as
approved by IntelliPharmaCeutics, by the submission of a change of ownership
amendment signed by IntelliPharmaCeutics or its Affiliates, as applicable, to
the appropriate Regulatory Authority. Such change of ownership amendment shall,
in the case of INDs and NDAs, be the irrevocable change of ownership letter
under 21 CFR 314.72 to FDA signed by IntelliPharmaCeutics or its Affiliates, a
copy of which is contained in Schedule "D" hereto and the original of which is
to be held in escrow by an escrow agent agreed between the parties and submitted
by such agent to the appropriate Regulatory Authority upon such Regulatory
Approval.
After Regulatory Approval and during the Term of this Agreement all
rights and title in INDs, NDAs and other filings, applications related to
Licensed Product(s) or requests pursuant to or in connection with the Regulatory
Approvals, i.e., the Regulatory Documentation, required under the Development
Plan shall vest in Larasan and its Affiliates, provided however, in the event
that this Agreement is terminated, in whole or in part, by Larasan, or by
IntelliPharmaCeutics due to default or material breach by Larasan, such rights
and title to Regulatory Documentation shall be transferred to
IntelliPharmaCeutics, or its designee, by the submission of a change of
ownership amendment signed by Larasan or its Affiliates, as applicable, to the
appropriate Regulatory Authority. Such change of ownership amendment shall, in
the case of INDs and NDAs, be the irrevocable change of ownership letter under
21 CFR 314.72 to FDA signed by Larasan or its Affiliates, a copy of which is
contained in Schedule "E" hereto and the original of which is to be held in
escrow by an escrow agent agreed between the parties and submitted by such agent
to the appropriate Regulatory Authority upon the effective date of the
termination of the Agreement. As Licensed Product(s) are approved by Regulatory
Authority for marketing in the Territory by Larasan, it's Affiliates or
SubLarasan such additional irrevocable change of ownership amendments to
Regulatory Documentation shall become part of Schedule "E" and the original held
in escrow.
Notwithstanding the foregoing, IntelliPharmaCeutics shall have during
the Term of this Agreement a perpetual, irrevocable, worldwide right to use and
reference the Regulatory Documentation with respect to the Licensed Product and
any data included or referenced therein for purposes that do not conflict with
the terms and conditions of this Agreement. Larasan (with the assistance and
advice of IntelliPharmaCeutics) shall have the sole right to communicate with
the Regulatory Authorities with regard to the Development Activities provided
however, Larasan agrees that the Drug Master File ("DMF") shall be owned by
IntelliPharmaCeutics, and IntelliPharmaCeutics shall request that the DMF be
treated as
12
confidential. IntelliPharmaCeutics agrees that cross references to the DMF
required for NDA and other Regulatory Approvals shall remain in effect during
the Term of this Agreement and may not be withdrawn except for termination for
material breach or default by Larasan. The parties agree to keep each other
reasonably informed as to the communications, if any, between Larasan and the
Regulatory Authorities.
3.6 REGULATORY RECORDS. IntelliPharmaCeutics and Larasan each shall
maintain, or cause to be maintained, records of its respective Development
Activities in sufficient detail and in good scientific manner appropriate for
patent and regulatory purposes, which shall be complete and accurate and shall
fully and properly reflect all work done and results achieved in the performance
of its respective Development Activities, and which shall be retained by such
Party for at least five (5) years after the termination of this Agreement, or
for such longer period as may be required by Applicable Law. At any time after
the successful completion of Phase I studies and Manufacturing Scale-up in
respect of a Licensed Product, each Party shall have the right to request and
receive copies of such records as pertain to the scaled-up Licensed Product.
3.7 DEVELOPMENT EXPENSES.
3.7.1 LARASAN'S OBLIGATION. In consideration of
IntelliPharmaCeutics's performance of its Development Activities, Larasan shall
reimburse IntelliPharmaCeutics, monthly in advance, for the reasonable costs and
expenses to be incurred by IntelliPharmaCeutics in performing such activities in
accordance with the Development Budget (as may be amended in accordance with
Section 3.3). Larasan shall bear all costs and expenses incurred by or on behalf
of Larasan in connection with the performance of its Development Activities.
3.7.2 INVOICES AND PAYMENTS. IntelliPharmaCeutics shall
invoice Larasan monthly, fifteen (15) days in advance of the first day of each
month, based upon the reasonable estimated cost of Development Activities or
development commitments to be made or incurred for such month, and Larasan shall
pay such invoice before the first day of such month. Within fifteen (15) days
after the end of each month in which Development Activities are performed,
IntelliPharmaCeutics shall provide a final, corrected invoice to Larasan for any
actual costs and expenses incurred by IntelliPharmaCeutics or its Affiliates in
such month, and Larasan shall pay any shortfall before the first day of the
following month, or shall receive credit for any overpayment against any sum
then due for the following month or months.
3.7.3 BOOKS AND RECORDS. Each party shall maintain complete
and accurate books, records and accounts that, in reasonable detail, fairly
reflect any reimbursable costs and expenses incurred by it or its Affiliates in
performance of the Development Activities in conformity with Generally Accepted
Accounting Principles ("GAAP"). Each party shall retain such books, records and
accounts until the later of (a) three (3) years after the end of the period to
which such books, records and accounts pertain, and (b) the expiration of the
applicable tax statute of limitations (or any extensions thereof), or for such
longer period as may be required by Applicable Law. Each party shall have the
right to have its certified public
13
accountant, or equivalent, who shall be reasonably acceptable to the other
Party, audit the books and financial records of the other Party and their
respective Affiliates relating to its Development Activities during one or more
calendar quarters; provided, however, that either party shall not have the right
to audit a calendar quarter more than two (2) years after the end of such
quarter, to conduct more than one such audit in any twelve-month period, or to
audit any calendar quarter more than once; and provided further that each Party
shall bear the cost of such audit unless the audit reveals a variance of more
than five percent (5%) from the reported results, in which case audited Party
shall bear the cost of the audit. The results of such accounting firm shall be
final, absent manifest error.
3.8 COOPERATION. Each Party shall cooperate with any and all reasonable
requests for assistance from the other Party with respect to the Development
Activities, including by making its employees, consultants and other scientific
staff available upon reasonable notice during normal business hours at their
respective places of employment to consult with such other Party on issues
arising in connection with the performance of such Development Activities.
3.9 DEVELOPMENT AND USE OF TRADEMARKS. Larasan shall have the sole
right to determine the Trademarks to be used with respect to the Exploitation of
the Licensed Product on a worldwide basis. As may be permitted under Applicable
Law product labeling and promotional materials shall disclose, in wording as
exemplified in Schedule "A", that the Licensed Product(s) are manufactured for
Larasan by or under license from IntelliPharmaCeutics in accordance with a
licensed Technology as designated by a Licensed Trademark.
3.10 DILIGENCE OBLIGATIONS. In accordance with a proposed schedule and
timing for Development of Licensed Products as set out in the Development Plan,
Larasan and IntelliPharmaCeutics shall use Commercially Reasonable Efforts to
develop and Larasan shall use Commercially Reasonable Efforts to commercialize
the Licensed Product in the entire Territory in accordance with the terms and
conditions of this Agreement; (b) Larasan shall bear the costs of Regulatory
Approval(s) with respect to the Licensed Product in the Territory; and (c)
thereafter Larasan shall diligently and aggressively Exploit the Licensed
Product in the Territory to maximize sales. Larasan shall ensure that any
Sublicense be terminable at the option of Larasan in the event that a SubLarasan
fails to maintain active, diligent marketing efforts for Licensed Product.
3.11 MANUFACTURING.
3.11.1 Subject to section 3.11.4, IntelliPharmaCeutics shall
manufacture and supply Larasan with Licensed Product on commercially reasonable
terms for clinical development of the Licensed Product pursuant to the
manufacturing agreement referred to in section 3.11.2 (the "Manufacturing
Agreement") to be entered into following execution of this Agreement.
3.11.2 Subject to section 3.11.4, following receipt of
Regulatory Approval, IntelliPharmaCeutics shall manufacture and supply Larasan
with Licensed Product on commercially reasonable terms pursuant to the
Manufacturing Agreement.
14
3.11.3 IntelliPharmaCeutics agrees that, during the
performance of the Development Activities, whenever and wherever necessary in
accordance with applicable local laws and regulations, it will act in accordance
with GLP or GMP as may thereby be required.
3.11.4 The Manufacturing Agreement will provide, among other
things, that in the event that Larasan enters into a Sublicense for a Licensed
Product and such SubLarasan desires to obtain rights to manufacture such
Licensed Product, then IntelliPharmaCeutics will not unreasonably withhold its
consent to transfer the manufacturing rights up to two such SubLarasans, unless
otherwise mutually agreed, subject to reasonable compensation to
IntelliPharmaCeutics for expenditures actually incurred in setting up to
manufacture and/or manufacturing Licensed Products to that time (actual costs
plus 30% for technology transfer), provided that secure measures can reasonably
be, and are, incorporated into the sublicensing agreement to continue to
safeguard the confidentiality of IntelliPharmaCeutics Know-how and Technology
with respect to the Licensed Product as set forth in section 3.11.5. It will be
reasonable for IntelliPharmaCeutics to so withhold its consent if the Know-how
and Technology can not be secured to the satisfaction of IntelliPharmaCeutics.
3.11.5 It is the intent of the Parties that
IntelliPharmaCeutics be the exclusive manufacturer of the Licensed Product
pursuant to the terms of the Manufacturing Agreement; provided, however, that in
the event that IntelliPharmaCeutics is unable or unwilling to provide clinical
or commercial supply of Licensed Product within a reasonable period of time upon
commercially reasonable terms including specifically, at reasonably competitive
costs, then Larasan shall be entitled to seek an alternate manufacturing source.
In such event, Larasan shall use commercially reasonable efforts to ensure that
any such alternate manufacturing source agree (a) to maintain in strictest
confidence all information relating to the manufacture of the Licensed Product
and the Licensed Technology, (b) not to claim ownership of or file applications
for any intellectual property protection relating to patentable inventions that
may arise from the manufacture of the Licensed Product and Licensed Technology,
and (c) that any patentable invention that does arise out of the manufacture of
the Licensed Product and Licensed Technology belongs to IntelliPharmaCeutics
from the moment of its creation.
ARTICLE 4
ROYALTIES AND OTHER CONSIDERATION
[ 4.1 ROYALTIES. As partial consideration for the rights, privileges
and licenses granted hereunder Larasan shall make the following payments to
IntelliPharmaCeutics (all amounts expressed in U.S. Dollars):
4.1.1 Larasan shall pay to IntelliPharmaCeutics royalties
based on Net Sales of Products as follows:
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4.1.2 Larasan shall pay to IntelliPharmaCeutics (1) [ ]
of all Sublicensing Fees received by Larasan.
4.2 ROYALTY TERM. Larasan's payment obligations under Section 4.1 shall
continue, on a country-by-country basis, with respect to each Licensed Product,
for so long as such Licensed Product is on sale in such country, whether by
Larasan or by an Affiliate or by a SubLarasan. Upon termination of the sales of
Licensed Product(s) in any country for a period in excess of 90 days, the
license granted to Larasan in Section 2.1 shall be terminated for such country,
and the sole and exclusive right to Exploit the Licensed Product(s) in such
country shall revert to IntelliPharmaCeutics in accordance with Section 3.5
above.
4.3 ROYALTY PAYMENT SCHEDULE. Payments under Section 4.1 shall be
payable to IntelliPharmaCeutics on a quarterly basis, within thirty (30) days
after the end of each calendar quarter; provided, however, at the end of a
calendar year, Larasan shall determine the actual amounts owed to
IntelliPharmaCeutics under Section 4.1 and any additional amounts owed to
IntelliPharmaCeutics for the first three calendar quarters of such calendar year
shall be paid with the payment for the last calendar quarter of such calendar
year, and provided further in the event that Larasan's payments for such
calendar quarters exceed the actual amounts owed for such calendar quarters,
Larasan shall have the right to offset such excess payments against the payment
for the last calendar quarter of such calendar year. Only one payment will be
due on Net Sales of the Licensed Product, even though the manufacture, sale or
use of such Licensed Product may be covered by more than one intellectual
property right in a country.
4.4 LARASAN TECHNOLOGY ACCESS FEE. Larasan shall pay to
IntelliPharmaCeutics up-front technology access fees, over and above
IntelliPharmaCeutics' reimbursable costs for Development Activities, for the
Designated Compound, payable in cash as follows:
4.4.1 the sum of $[ ] forthwith upon execution of this
Agreement and $[ ] within forty-five days after the Effective Date; and
4.4.2 within 10 Business Days of any date on which Larasan,
has received funding through an institutional equity financing, in respect of
the Development of the Licensed Product(s), an amount equal to [ ] of any
net proceeds, up to [ ], and received by Larasan;
4.5 MILESTONE PAYMENTS. Larasan shall also pay to IntelliPharmaCeutics
the following Milestone Payments, over and above IntelliPharmaCeutics'
reimbursable costs, in respect of Development leading to FDA filing:
16
4.5.1 [ ]
4.5.2 [ ]
4.5.3 [ ]
4.5.4 [ ]
4.5.5 [ ]
4.5A MILESTONE PAYMENTS. Larasan shall also pay to IntelliPharmaCeutics
the Milestone Payments set out in this Section 4.5A, over and above
IntelliPharmaCeutics' reimbursable costs, in respect of Development leading to
filing in other jurisdictions in which the Parties agree to Exploit the Licensed
Products. For countries in the Territory in which Larasan and
IntelliPharmaCeutics do not wish to Exploit the Licensed Products,
IntelliPharmaCeutics retains all right to Exploit the Licensed Products in such
countries in the Territory at its sole incremental cost and for its sole and
exclusive benefit.
4.5A.1 [ ]
4.5A.2 [ ]
4.5A.3 [ ]
4.5A.4 [ ]
4.6 MODE OF PAYMENT. All payments to IntelliPharmaCeutics under this
Agreement shall be paid in United States Dollars to a bank account as
IntelliPharmaCeutics may reasonably designate. Any withholding taxes which
Larasan, its Affiliates or any SubLarasan shall be required by applicable law to
withhold on remittance of the payments shall be deducted from such payment to
IntelliPharmaCeutics and remitted to the appropriate Regulatory Authority.
Larasan shall furnish IntelliPharmaCeutics with the original copies of all
official receipts for such taxes. If any currency conversion shall be required
in connection with the payments hereunder, such conversion shall be made by
using the average of the exchange rates prevailing at Citibank in New York, New
York on the first business day of each month in the reporting period to which
such payments relate.
4.7 NON-REFUNDABLE, NON-CREDITABLE. The Technology Access Fee when
paid, the Milestone Payments when earned, and the accounted for Development
Costs when invoiced in arrears, all paid or payable to IntelliPharmaCeutics
under this Agreement, shall be deemed partial consideration for rights licensed
hereunder and Development Activities undertaken and performed, and are
non-refundable and non-creditable against any other amounts due
IntelliPharmaCeutics under this Agreement.
17
ARTICLE 5
REPORTS AND RECORDS
5.1 RECORD RETENTION. Larasan shall maintain (and shall ensure that its
Affiliates and SubLarasans shall maintain) complete and accurate books, records
and accounts that fairly reflect their respective Net Sales, Technology Access
Fees, Milestones and Sublicense Fees payable with respect to Licensed Product in
sufficient detail to confirm the accuracy of any payments required hereunder and
in accordance with GAAP, which books, records and accounts shall be retained by
Larasan until the later of (a) three (3) years after the end of the period to
which such books, records and accounts pertain, and (b) the expiration of the
applicable tax statute of limitations (or any extensions thereof), or for such
longer period as may be required by Applicable Law.
5.2 AUDIT. During the Term of this Agreement, and for a period of 6
months after its termination, IntelliPharmaCeutics shall have the right to have
an independent certified public accounting firm of nationally recognized
standing, reasonably acceptable to Larasan, to have access during normal
business hours, and upon reasonable prior written notice, to such of the records
of Larasan (and its Affiliates and SubLarasans) as may be reasonably necessary
to verify the accuracy of such Royalties on Net Sales, Technology Access Fees,
Milestones and Sublicense Fees for any calendar quarter ending not more than
thirty-six (36) months prior to the date of such request; provided, however,
that IntelliPharmaCeutics shall not have the right to conduct more than one such
audit in any twelve (12)-month period. The accounting firm shall disclose to
each Party only as to whether such Royalties on Net Sales, Technology Access
Fees, Milestones and Sublicense Fees are correct or incorrect and the specific
amounts and details concerning any discrepancies. IntelliPharmaCeutics shall
bear the cost of such audit unless the audit reveals an under-reporting or
underpayment in excess of the greater of [ ] payable for such period, in
which case Larasan shall bear the cost of the audit, rectify such underpayment
and pay IntelliPharmaCeutics applicable interest as required by Section 5.5. All
payments required under this Section 5.2 shall be due within thirty (30) days of
the date IntelliPharmaCeutics provides Larasan notice of the payment due. The
results of such accounting firm shall be final, absent manifest error.
5.3 REPORTS. Within thirty (30) days of the end of each quarter of each
calendar year, Larasan shall deliver to IntelliPharmaCeutics complete and
accurate reports, giving such particulars of the business conducted by Larasan
during the preceding quarter under this Agreement as shall be pertinent to an
accounting for Royalties on Net Sales, Technology Access Fees, Milestones and
Sublicense Fees hereunder. These shall include at least the following:
5.3.1 All Licensed Product distributed or sold, by or
for Larasan or its Affiliates.
5.3.2 Total amounts invoiced for Licensed Product
distributed or sold, by or for Larasan or its Affiliates.
18
5.3.3 Deductions applicable in computed "Net Sales" as
defined in Section 1.33.
5.3.4 Total Milestone payments due based on achievement
of milestones.
5.3.5 Total Sublicensing Fees owed by Larasan from its
SubLarasans.
5.3.6 Total Royalties due based on Net Sales by or for
Larasan or its Affiliates and Sublicensing Fees owed by its SubLarasans,
including any adjustments pursuant to Section 4.3.
5.3.7 Names and addresses of all SubLarasans and
Affiliates of Larasan.
5.4 FINANCIAL STATEMENTS. Within one hundred twenty (120) days of the
end of each fiscal year of Larasan, Larasan shall provide IntelliPharmaCeutics
with such portions of Larasan's financial statements relating to Licensed
Products, audited, if available, for such year to IntelliPharmaCeutics.
5.5 INTEREST. Amounts which are not paid when due and which are not the
subject of a bona fide dispute shall accrue interest from the due date until
paid, at a rate equal to the then prevailing prime rate of Citibank, N.A., plus
[ ] but in no event exceeding the amount permitted by applicable law.
5.6 CONFIDENTIALITY. Each report received by IntelliPharmaCeutics shall
be treated by IntelliPharmaCeutics as if it were "Confidential Information"
subject to the terms of Article 16.
ARTICLE 6
PATENT AND TRADEMARK
PROSECUTION AND MAINTENANCE
6.1 OWNERSHIP OF INFORMATION AND INVENTIONS. Subject to Section 6.2 and
the license grants under Article 2, as between the Parties, each Party shall own
and retain all right, title and interest in and to any and all:
(a) Information and Inventions that are conceived, discovered, developed or
otherwise made by or on behalf of such Party (or its Affiliates or its sub
licensees (other than the other Party and its Affiliates)), whether or not
patented or patentable, and any and all Patent and other intellectual property
rights with respect thereto; and
19
(b) other Information and Inventions, and Patent and other intellectual property
rights that are Controlled (other than pursuant to the license grants set forth
in Article 2) by such Party, its Affiliates or sub licensees (other than the
other Party and its Affiliates). Subject to the license grants to Larasan under
Article 2, as between the Parties, IntelliPharmaCeutics shall own and retain all
right, title and interest in and to all Licensed Technology.
6.2 OWNERSHIP OF THE LICENSED PROCESS. Subject to the license grants to
Larasan under Article 2, as between the Parties, IntelliPharmaCeutics shall own
and retain all right, title and interest in and to the Licensed Process,
including any and all Information and Inventions with respect to the Licensed
Process (including any Improvements thereto) that are conceived, discovered,
developed or otherwise made, by or on behalf of Larasan, its Affiliates or
SubLarasans (other than IntelliPharmaCeutics and its Affiliates), whether or not
patented or patentable, and any and all Patent and other intellectual property
rights with respect thereto. Larasan acknowledges and agrees that
(a) the licenses granted to it pursuant to Section 2.1 permit Larasan to use the
Licensed Process solely for the Exploitation of Licensed Product as provided in
this Agreement,
(b) Larasan has no right to use the Licensed Process or to discover, develop or
otherwise make Improvements with respect to the Licensed Process under such
grants, and
(c) neither it, nor any of its Affiliates or SubLarasans, will engage, directly
or indirectly, in activities designed to, or otherwise undertake or attempt,
either on behalf of itself or another, to discover, develop or make any
Information and Inventions that relate to the Licensed Process.
Accordingly, Larasan shall promptly disclose to IntelliPharmaCeutics in writing,
the conception or reduction to practice, or the discovery, development or making
of any such Information and Inventions that relate to the Licensed Process and
shall, and does hereby, assign, and shall cause its Affiliates and SubLarasans
to so assign, to IntelliPharmaCeutics, without additional compensation, all of
their respective rights, titles and interests in and to any such Information and
Inventions.
6.3 OWNERSHIP OF JOINT TECHNOLOGY. Subject to Section 6.2 and the
license grants under Article 2, the Parties shall each own an equal, undivided
interest in and to any and all
(a) Information and Inventions, conceived, discovered, developed or otherwise
made, jointly by or on behalf of IntelliPharmaCeutics (or its Affiliates) on the
one hand, and Larasan (or its Affiliates or SubLarasans), on the other hand, in
connection with the work conducted under or in connection with this Agreement,
whether or not patented or patentable; and
(b) such patents and other intellectual property rights with respect thereto,
provided, in the case of patents for invention, that the joint contribution of
the Party or Parties was inventive (collectively, the "Joint Technology").
20
Each Party shall promptly disclose to the other Party in writing, and shall
cause its Affiliates, licensees and sublicensees to so disclose, the
development, making, conception or reduction to practice of any Joint
Technology.
6.4 OWNERSHIP OF LICENSED TRADEMARKS. Subject to the license grants
under Article 2, as between the Parties, IntelliPharmaCeutics shall own and
retain all right, title and interest in and to the Licensed Trademarks (Schedule
"A"). Larasan hereby acknowledges and affirms that
(a) to the best of its knowledge, the Licensed Trademarks and any registrations
thereof are valid and
(b) that IntelliPharmaCeutics or its Affiliates, as the case may be, are the
owners of all right and title to and interest in the Licensed Trademarks and the
registrations thereof, including any form or embodiment thereof, and the
goodwill now and hereafter associated with the Licensed Trademarks.
Larasan (on its own behalf and on behalf of its Affiliates) expressly disclaims
any right or title to or interest in the Licensed Trademarks and the
registrations thereof, except for the license granted in Section 2.1.2. Larasan
hereby agrees and undertakes that it will not, and it will cause its Affiliates
not to, contest or dispute the validity of, or the rights of
IntelliPharmaCeutics and its Affiliates, as the case may be, in and to, the
Licensed Trademarks, or any part thereof, or the registrations thereof, nor
knowingly impair or endanger the validity of any of the foregoing.
Larasan acknowledges that all use of the Licensed Trademarks by or on behalf of
Larasan or its Affiliates shall inure to the benefit of IntelliPharmaCeutics and
its Affiliates. Upon termination of the license granted in Section 2.1.2,
Larasan and its Affiliates shall not be entitled to any compensation for any
increase in the value of the Licensed Trademarks or for any goodwill associated
therewith. If so requested, Larasan shall, and shall cause its Affiliates to,
assist IntelliPharmaCeutics and its Affiliates to safeguard their full right,
title and interest in and to the Licensed Trademarks and the registrations
thereof. Notwithstanding the foregoing, Larasan shall continue to own all right,
title and interest in Larasan Trademarks.
6.5 UNITED STATES LAW. The determination of whether Information and
Inventions are conceived, discovered, developed or otherwise made by a Party for
the purpose of allocating proprietary rights (including Patent, copyright or
other intellectual property rights) therein, shall, for purposes of this
Agreement, be made in accordance with applicable United States law.
6.6 PROSECUTION OF PATENTS AND TRADEMARKS.
6.6.1 PROSECUTION OF INTELLIPHARMACEUTICS PATENTS AND
TRADEMARKS. As between the Parties, IntelliPharmaCeutics shall have the sole
right, at its cost and expense, to obtain, prosecute and maintain throughout the
world the
21
IntelliPharmaCeutics Patents and Licensed Trademarks; provided, however, that
Larasan shall reimburse IntelliPharmaCeutics for one hundred percent (100%) of
the reasonable out-of-pocket costs incurred by IntelliPharmaCeutics for filing,
prosecuting and maintaining such IntelliPharmaCeutics Patents to the extent that
they claim or cover solely the Exploitation of the Licensed Product. Larasan
shall, and shall cause its Affiliates and SubLarasans, as applicable, to,
cooperate fully with IntelliPharmaCeutics in the preparation, filing,
prosecution, and maintenance of IntelliPharmaCeutics's Patents. Such cooperation
includes (a) promptly executing all papers and instruments and requiring
employees to execute such papers and instruments as reasonable and appropriate
so as to enable IntelliPharmaCeutics to file, prosecute, and maintain its
Patents in any country; and (b) promptly informing IntelliPharmaCeutics of
matters that may affect the preparation, filing, prosecution, or maintenance of
any such Patents. IntelliPharmaCeutics shall provide Larasan with drafts of all
patent applications and other material submissions to and correspondence with
any patent authorities to the extent such applications or submissions relate to
the Licensed Technology (other than the Licensed Process), in sufficient time,
but in any event not less than thirty (30) days prior to the date a reply is
required by the relevant patent authorities, to allow for review and comment by
Larasan. In addition, IntelliPharmaCeutics shall provide Larasan with an
opportunity to consult with IntelliPharmaCeutics regarding the filing and
contents of any such application, submission or correspondence. If Larasan
provides to IntelliPharmaCeutics comments with respect to any such application,
submission or correspondence, to the extent such comments relate to any Licensed
Technology (other than the Licensed Process), IntelliPharmaCeutics agrees to
reasonably consider such comments, it being understood that IntelliPharmaCeutics
retains the right to determine whether to comply with or incorporate such
comments, if at all. If (a) IntelliPharmaCeutics elects not to pursue the
filing, prosecution or maintenance of a IntelliPharmaCeutics Patent in a
particular country, or to take any other action with respect to a
IntelliPharmaCeutics Patent in a particular country that is necessary or useful
to establish or preserve rights with respect to the Licensed Product, and (b)
such Patent does not claim or cover the Licensed Process, then
IntelliPharmaCeutics shall so notify Larasan promptly in writing and in good
time to enable Larasan to meet any deadlines by which an action must be taken to
establish or preserve any such rights in such IntelliPharmaCeutics Patent in
such country. Upon receipt of any such notice by IntelliPharmaCeutics or if, at
any time, IntelliPharmaCeutics fails to initiate any such action within thirty
(30) days after a request by Larasan that it do so (and thereafter diligently
pursue such action), Larasan shall have the right, but not the obligation, to
pursue the filing or registration, or support the continued prosecution or
maintenance, of such IntelliPharmaCeutics Patent at its expense in such country.
If Larasan elects to pursue such filing or registration, as the case may be, or
continue such support, then Larasan shall notify IntelliPharmaCeutics of such
election and IntelliPharmaCeutics shall, and shall cause its Affiliates to, (a)
reasonably cooperate with Larasan in this regard, and (b) promptly grant to
Larasan, without additional consideration, an exclusive, perpetual, irrevocable,
royalty-free license in such country under such IntelliPharmaCeutics Patent.
6.6.2 JOINT PATENTS. The Parties shall cooperate, and shall
cause their respective Affiliates and sublicensees, as applicable, to cooperate,
with one another with respect to the filing, prosecution and maintenance of all
Joint Patents, including by
22
selecting outside counsel, reasonably acceptable to the Parties, to handle such
filing, prosecution and maintenance. The Parties shall share equally in the
expenses associated with the filing, prosecution (including any interferences,
reissue proceedings and reexaminations) and maintenance of all Joint Patents. If
a Party elects not to pursue the filing, prosecution or maintenance of a Joint
Patent in a particular country, or to take any other action with respect to
Joint Technology in a particular country that is necessary or reasonably useful
to establish or preserve rights thereto, then in each such case such Party shall
so notify the other Party promptly in writing and in good time to enable such
other Party to meet any deadlines by which an action must be taken to establish
or preserve any such rights in such Joint Technology in such country. Upon
receipt of each such notice by such other Party or if, at any time, such Party
fails to initiate any such action within thirty (30) days after a request by
such other Party that it do so (or thereafter diligently pursue such action),
such other Party shall have the right, but not the obligation, to pursue the
filing or registration, or support the continued prosecution or maintenance, of
such Patent at its expense in such country. If such other Party elects to pursue
such filing or registration, as the case may be, or continue such support, then
such other Party shall notify such Party of such election and such Party shall,
and shall cause its Affiliates, licensees and sublicensees, as applicable, to,
(a) reasonably cooperate with such other Party in this regard, and (b) promptly
release or assign to such other Party, without compensation, all right, title
and interest in and to such Patent in such country.
6.7 ENFORCEMENT OF PATENTS AND TRADEMARKS.
6.7.1 TECHNOLOGY AND TRADEMARKS OF INTELLIPHARMACEUTICS. If
either Party determines that any Technology or Trademark of IntelliPharmaCeutics
or any Joint Technology is being infringed by a Third Party's activities and
that such infringement could affect the exercise by the Parties of their
respective rights and obligations under this Agreement, it shall promptly notify
such other Party in writing and provide such other Party with any evidence of
such infringement that is reasonably available. Promptly after the receipt of
such written notice, the Parties shall meet and discuss in good faith the
removal of such infringement. IntelliPharmaCeutics shall consider in good faith
any comments from Larasan and shall keep Larasan reasonably informed of any
steps taken to remove such infringement. IntelliPharmaCeutics shall have the
first right, but not the obligation, to remove such infringement at its sole
cost and expense; provided, however, that Larasan shall reimburse
IntelliPharmaCeutics for one hundred percent (100%) of the reasonable
out-of-pocket costs incurred by IntelliPharmaCeutics with respect to the removal
of any such infringement when undertaken solely at the request of Larasan. In
the event that IntelliPharmaCeutics fails, within ninety (90) days following
notice of such infringement, to take commercially appropriate steps to remove
any infringement of any IntelliPharmaCeutics Patent, Joint Patent or Licensed
Trademark that is likely to have a material adverse effect on the sale of a
Licensed Product, or earlier notifies Larasan in writing that it will not take
such steps, Larasan shall have the right, but not the obligation, to do so at
Larasan's expense; provided, however, that if IntelliPharmaCeutics has commenced
negotiations with an alleged infringer for discontinuance of such infringement
within such ninety (90) day period, IntelliPharmaCeutics shall have an
additional ninety (90) days to conclude its negotiations before Larasan may
bring suit for such infringement, and provided further that Larasan
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shall not enter into any settlement or compromise with respect to any
IntelliPharmaCeutics Patent, Joint Patent or Licensed Trademark without
IntelliPharmaCeutics's prior consent, which consent shall not be unreasonably
withheld. Each Party shall provide reasonable assistance to the other Party,
including providing access to relevant documents and other evidence, making its
employees available at reasonable business hours, and joining the action to the
extent necessary to allow the enforcing Party to maintain the action. Any
amounts recovered by a Party pursuant to this Section, whether by settlement or
judgment, shall be used to reimburse the Parties for their reasonable costs and
expenses in making such recovery (which amounts shall be allocated pro rata if
insufficient to cover the totality of such expenses), with any remainder being
retained by the Party that brought the enforcement action; provided, however,
that to the extent that any award is attributable to the loss of sales of
Licensed Product, such amount shall be paid to Larasan and shall be treated as
Net Sales on which royalties shall be due under Article 4.
6.8 POTENTIAL THIRD PARTY RIGHTS.
6.8.1 THIRD-PARTY LICENSES. If (a) in the opinion of outside
patent counsel to Larasan, Larasan, or any of its Affiliates or SubLarasans,
cannot Exploit a Licensed Product in a country in the Territory without
infringing one or more Patents that have issued to a Third Party in such
country, or (b) as a result of any claim made against a Party, or any of its
Affiliates or sublicensees, alleging that the Exploitation of a Licensed Product
infringes or misappropriates any Patent or any other intellectual property right
of a Third Party in a country in the Territory, a judgment is entered by a court
of competent jurisdiction from which no appeal is taken within the time
permitted for appeal, such that Larasan cannot Exploit such Licensed Product in
such country without infringing the Patent or other proprietary rights of such
Third Party, then, in either case, Larasan shall have the first right, but not
the obligation to negotiate and to obtain a license from such Third Party as
necessary for the Exploitation of any Licensed Product hereunder in such
country; provided, however, that IntelliPharmaCeutics shall have the sole right
to seek any such license with respect to the Licensed Process and shall use
commercially reasonable efforts to obtain such a license in its own name from
such Third Party in such country, under which IntelliPharmaCeutics shall, to the
extent permissible under such license, grant a sublicense to Larasan as
necessary for Larasan, and any of its Affiliates and SubLarasans, to Exploit the
Licensed Product as provided hereunder in such country. Larasan shall be solely
responsible for one hundred percent (100%) of all royalty and other obligations
with respect to the Exploitation of the Licensed Product; provided, however,
that Larasan shall have the right to credit fifty percent (50%) of any royalties
paid by Larasan, its Affiliates or SubLarasans under such license with respect
to such country against the royalty payments to be paid by Larasan to
IntelliPharmaCeutics with respect to the sale of the Licensed Product(s) under
Section 4.1; provided, however, that no royalty payment when due, regardless of
the amount or number of credits available to Larasan in accordance with this
Agreement, shall be reduced by more than fifty percent (50%) of the amounts
otherwise owed pursuant to Section 4.1 in any calendar quarter. Credits not
exhausted in any calendar quarter may be carried into future calendar quarters.
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6.8.2 THIRD PARTY LITIGATION. In the event that a Third Party
institutes a patent, trademark or other infringement suit (including any suit
alleging the invalidity or unenforceability of the Patents of a Party or its
Affiliates, or claiming confusion, deception or dilution of a Trademark) against
either Party or its respective Affiliates, licensees or sublicensees during the
Term, alleging use of the Licensed Technology, Licensed Trademarks or any other
activities hereunder, infringes one or more patent, trademark or other
intellectual property rights held by such Third Party (an "Infringement Suit"),
the Parties shall cooperate with one another in defending such suit.
IntelliPharmaCeutics shall have the first right, at its sole expense, to direct
and control any Infringement Suit to the extent that it relates to the use of
the Licensed Technology, the Licensed Trademarks or the Licensed Process;
provided that Larasan shall bear one hundred percent (100%) of the costs and
expenses associated with any such Infringement Suit to the extent that it
relates solely to the Exploitation of the Licensed Product.
7. LICENSED TRADEMARKS AND LICENSED TRADEMARK INFRINGEMENT.
7.1 OWNERSHIP OF LICENSED TRADEMARKS. Larasan acknowledges the validity
of all United States and foreign Licensed Trademark registrations and agrees
that Licensed Trademarks are the sole property of IntelliPharmaCeutics and shall
not at any time claim any right, title or interest in or to the Licensed
Trademarks. Larasan shall not at any time question the validity of the Licensed
Trademarks and shall take no action that in any way derogates from, or adversely
affects the validity of, the Licensed Trademarks or the ownership of the
Licensed Trademarks by IntelliPharmaCeutics. Larasan shall adhere to all the
directives of IntelliPharmaCeutics and instructions pertaining to the use of the
Licensed Trademarks. Larasan shall take no action with respect to such Licensed
Trademarks, including but not limited to, applying for Licensed Trademarks which
are the same as or similar to the Licensed Trademarks in its own name or in the
name of any Affiliate.
7.2 LICENSED TRADEMARK INFRINGEMENT DEFENSE. In the event that Larasan
is sued by a third party for infringement of a third party's Licensed Trademark
because of the Larasan's use or Licensed Trademarks in the Territory, Larasan
shall promptly notify IntelliPharmaCeutics in writing of the institution of such
suit. IntelliPharmaCeutics shall have the right, in its sole discretion, to
control the defense of such suit at its own expense, in which event Larasan
shall have the right to be represented by advisory counsel of its own selection,
at its own expense, and shall cooperate in the defense of such suit and furnish
to reasonable assistance.
7.3 RIGHT TO DEFEND. If IntelliPharmaCeutics does not elect within
thirty (30) days after receipt of such notice to undertake defense of Licensed
Trademarks which is/are the subject of such suit, Larasan may elect to undertake
such defense at its own expense, and IntelliPharmaCeutics shall then have the
right to be represented by advisory counsel of its own selection and at its own
expense, and IntelliPharmaCeutics shall cooperate fully in the defense of such
suit and furnish to reasonable assistance.
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7.4 In the event that a Third Party sues Larasan, its Affiliates or
SubLarasans alleging Trademark infringement by reason of the use of the Licensed
Trademarks, IntelliPharmaCeutics, at IntelliPharmaCeutics' cost shall promptly
undertake to defend Licensed Trademark and Larasan's exclusive rights in
Licensed Trademark granted hereunder.
ARTICLE 8
TERM OF THE AGREEMENT
8.1 TERM. Unless otherwise terminated pursuant to Article 8, this
Agreement shall enter into effect on the Effective Date and shall remain in full
force and effect on a country-by-country basis until the Licensed Product(s) is
no longer sold by Larasan or an Affiliate or a SubLarasan in the country, and at
the time of such termination all rights granted by IntelliPharmaCeutics under
this Agreement for that country automatically revert unimpaired to
IntelliPharmaCeutics.
ARTICLE 9
TERMINATION
9.1 TERMINATION UPON INSOLVENCY. If Larasan shall become bankrupt, or
shall file a petition in bankruptcy or insolvency or for reorganization or for
an arrangement or for the appointment of a receiver or trustee or of its assets,
or if an involuntary petition for any of the foregoing shall be filed with
respect to Larasan and not dismissed within sixty (60) days, or if the business
of Larasan shall be placed in the hands of a receiver, assignee or trustee for
the benefit of creditors, whether by the voluntary act of Larasan or otherwise,
this Agreement shall automatically terminate.
9.2 TERMINATION FOR PAYMENT DEFAULT. Should Larasan fail to make
payment to IntelliPharmaCeutics of royalties or other amounts due in accordance
with the terms of this Agreement, IntelliPharmaCeutics shall have the right to
terminate this Agreement within thirty (30) days after giving said notice of
termination unless Larasan shall pay to IntelliPharmaCeutics, within the 30-day
period, all such amounts due and payable. Upon the expiration of the 30-day
period, if Larasan shall not have paid all such amounts due and payable, the
rights, privileges and licenses granted hereunder shall, at the option of
IntelliPharmaCeutics, immediately terminate. In the event a payment is the
subject of a bona fide dispute between IntelliPharmaCeutics and Larasan that is
being pursued by a Party pursuant to the dispute resolution mechanism in Article
10, then Larasan shall deposit such disputed payment into an escrow account
agreed by the Parties, but shall provide IntelliPharmaCeutics with written
notice to IntelliPharmaCeutics that such funds are being deposited subject to
the outcome of dispute resolution procedure. In the event such dispute is
finally and conclusively resolved in favor of Larasan, such funds held in escrow
shall be promptly returned to Larasan with interest calculated pursuant to
Article 5.5 from the date of such deposit. In the event that such dispute is
finally and conclusively resolved in favor of
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IntelliPharmaCeutics such funds held in escrow shall be promptly paid to
IntelliPharmaCeutics with interest calculated pursuant to Article 5.5 from the
date of such deposit.
9.3 TERMINATION FOR MATERIAL BREACH. Upon any material breach or
default of this Agreement by either Party, other than as set forth in Sections
8.1 or 8.2 above, and subject to Section 2.4.3, the other Party shall have the
right to terminate this Agreement and the rights, privileges and licenses
granted hereunder upon giving thirty (30) days notice to the breaching Party.
Such termination shall become effective upon the expiration of such thirty
(30)-day period unless the breaching Party shall have cured any such breach or
default prior to the expiration of such thirty (30) day period. Upon any such
termination by either Party, all rights granted by IntelliPharmaCeutics under
this Agreement revert unimpaired to IntelliPharmaCeutics.
9.4 FAILURE TO OBTAIN FINANCING. Notwithstanding anything to the
contrary herein, should Larasan fail to obtain firm commitments for interim
financing in the amount of [ ] on or before [ ], or such other
sums as may otherwise be agreed from time to time, in writing between the
Parties (the "Minimum Financing"), IntelliPharmaCeutics shall have the right,
which right shall continue until such time as Larasan obtains the Minimum
Financing, but not the obligation, to immediately terminate this Agreement upon
written notice to Larasan.
9.5 TERMINATION BY LARASAN. Larasan shall have the right at any time to
terminate this Agreement in whole or as to any Licensed Product or any country
by giving 90 days notice thereof in writing to IntelliPharmaCeutics. No such
termination can act in any way to diminish or extinguish any rights of payment
by Larasan to IntelliPharmaCeutics of any monies paid or payable pursuant to the
terms of this Agreement.
9.6 SURVIVAL. Any expiration or termination of this Agreement shall not
affect the rights and obligations of the Parties accrued prior to such
expiration or termination. Without limiting the foregoing, Articles 4, 5, 6, 9,
10, 11, 14, 15 and 16 and Sections 9.7, 9.8, 16.1, 16.7 and this 8.6 shall
survive the termination or expiration of this Agreement for any reason.
9.7 WORK-IN-PROGRESS. Larasan and/or any SubLarasan thereof may,
however, after the effective date of such termination and continuing for a
period not to exceed six (6) months thereafter, sell all completed Licensed
Product, and any Licensed Product in the process of manufacture at the time of
such termination, and sell the same, provided that Larasan shall pay or cause to
be paid to IntelliPharmaCeutics the Royalties thereon as required by Article 4
of this Agreement and shall submit the reports required by Article 5 hereof on
the sales of Licensed Product.
9.8 RETURN OF INFORMATION; ASSIGNMENT AND LICENSE.
9.8.1 Upon termination of this Agreement, Larasan shall, and
shall cause its Affiliates and SubLarasans, as applicable, to return to
IntelliPharmaCeutics any and all data, files, records and other materials in its
possession or control that relate to the Licensed Technology
27
or contain or comprise IntelliPharmaCeutics's Information and Inventions or
other Confidential Information (except one copy of each that may be retained for
archival purposes).
9.8.2 Upon the termination of this Agreement, Larasan (a)
shall, and shall cause its Affiliates and, subject to Section 8.8.3, SubLarasans
to, promptly disclose to IntelliPharmaCeutics, in whatever form
IntelliPharmaCeutics may request, all Regulatory Documentation and all other
Information and Inventions in the possession or control of Larasan, its
Affiliates or SubLarasans that relate to the Exploitation of such Licensed
Product, (b) shall, and does hereby, assign, and shall cause its Affiliates and,
subject to Section 8.8.3, SubLarasans to assign, to IntelliPharmaCeutics,
without additional compensation, all of their respective rights, titles and
interests in and to any and all (i) patent, trademark, copyright or other
intellectual property rights, (ii) Regulatory Documentation per Section 3.5 and
all data included or referenced therein, and (iii) other Information and
Inventions in the possession or Control of Larasan, its Affiliates or
SubLarasans, in each case that relate to the Exploitation of such Licensed
Product (the "Agreement-Related Assets") and are permitted to be assigned, and
(c) to the extent that the Agreement-Related Assets may not be assigned, shall,
and does hereby, grant, and shall cause its Affiliates and, subject to Section
8.8.3, SubLarasans to grant, to IntelliPharmaCeutics, without additional
compensation, a perpetual, irrevocable, royalty-free, exclusive, sublicenseable
through multiple tiers of sublicensees, right and license to Exploit such
Licensed Product in the Territory.
9.8.3 Notwithstanding anything contained in Section 9.8.1 or
9.8.2, in the event that any sublicense granted by Larasan survives pursuant to
Section 2.4.3, the SubLarasan may retain (a) the information and materials
identified in Section 9.8.1 that are rightfully in its possession and (b)
Agreement-Related Assets, in each case until the termination of such sublicense,
whereupon such SubLarasan shall return such materials to IntelliPharmaCeutics.
9.9 CUMULATIVE REMEDIES. The rights and remedies set forth in this
Article 9 are cumulative and in addition to any other rights that may be
available to the Parties.
ARTICLE 10
ARBITRATION
10.1 PROCEDURES. Any dispute arising from or relating to this Agreement
shall be determined before a tribunal of three arbitrators in New York, New York
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association (the "AAA"). One arbitrator shall be selected by
IntelliPharmaCeutics, one arbitrator shall be selected by Larasan and the third
arbitrator shall be selected by mutual agreement of the first two arbitrators or
by the AAA, if the arbitrators appointed by the Parties are unable to select a
third arbitrator within thirty (30) days.
10.2 PATENT DISPUTES. Any claim, dispute, or controversy concerning the
validity, enforceability, or infringement of any patent contained in the
IntelliPharmaCeutics
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Patents licensed hereunder shall be resolved in any court having jurisdiction
thereof. In the event that, in any arbitration proceeding, any issue shall arise
concerning the validity, enforceability, or infringement of any patent contained
in the IntelliPharmaCeutics Patents licensed hereunder, the arbitrators shall,
to the extent possible, resolve all issues other than validity, enforceability,
and infringement; in any event, the arbitrators shall not delay the arbitration
proceeding for the purpose of obtaining or permitting either Party to obtain
judicial resolution of such issues, unless an order staying the arbitration
proceeding shall be entered by a court of competent jurisdiction. Neither Party
shall raise any issue concerning the validity, enforceability, or infringement
of any patent contained in the IntelliPharmaCeutics Patents licensed hereunder,
in any proceeding to enforce any arbitration award hereunder, or in any
proceeding otherwise arising out of any such arbitration award.
10.3 COSTS. The costs of such arbitration shall be borne proportionate
to the finding of fault as determined by the arbitration panel. Judgment on the
arbitration award may be entered by any court of competent jurisdiction.
ARTICLE 11
INDEMNIFICATION AND INSURANCE
11.1 INDEMNIFICATION OF INTELLIPHARMACEUTICS. Larasan shall defend,
indemnify and hold IntelliPharmaCeutics, its Affiliates, and their respective
directors, officers, employees and agents harmless from and against all
liability, demands, damages, including expenses or losses including death,
personal injury, illness or property damage (collectively, "Losses") arising
directly or indirectly out of any: (a) breach of this Agreement by Larasan, its
Affiliates, SubLarasans or permitted assigns or transferees; (b) actual or
asserted violations of Applicable Law by Larasan, its Affiliates, SubLarasans or
permitted assignees or transferees; (c) use by Larasan, its Affiliates,
SubLarasans or permitted assignees or transferees of the Licensed Technology or
(d) Exploitation of the Licensed Product by Larasan, its Affiliates, SubLarasans
or permitted assignees or transferees, except for those Losses for which
IntelliPharmaCeutics has an obligation to indemnify Larasan and its Affiliates
pursuant to Section 11.2, as to which Losses each Party shall indemnify the
other to the extent of their respective liability for the Losses and other than
as a result of IntelliPharmaCeutics' gross negligence, recklessness or willful
misconduct.
11.2 INDEMNIFICATION OF LARASAN. IntelliPharmaCeutics shall defend,
indemnify and hold Larasan, its Affiliates, and their respective directors,
officers, employees and agents harmless from and against all Losses arising
directly or indirectly out of any: (a) breach of this Agreement by
IntelliPharmaCeutics or its Affiliates; or (b) actual or asserted violations of
Applicable Law by IntelliPharmaCeutics or its Affiliates, except for those
Losses for which Larasan has an obligation to indemnify IntelliPharmaCeutics and
its Affiliates pursuant to Section 11.1, as to which Losses each Party shall
indemnify the other to the extent of their respective liability for the Losses.
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11.3 INDEMNIFICATION PROCEDURE.
11.3.1 NOTICE OF CLAIM. The indemnified Party shall give the
indemnifying Party prompt written notice (an "Indemnification Claim Notice") of
any Losses or discovery of fact upon which such indemnified Party intends to
base a request for indemnification under Section 10.1 or Section 10.2, but in no
event shall the indemnifying Party be liable for any Losses that result from any
delay in providing such notice. Each Indemnification Claim Notice must contain a
description of the claim and the nature and amount of such Loss (to the extent
that the nature and amount of such Loss is known at such time). The indemnified
Party shall furnish promptly to the indemnifying Party copies of all papers and
official documents received in respect of any Losses. All indemnification claims
in respect of a Party, its Affiliates or their respective directors, officers,
employees and agents shall be made solely by such Party to this Agreement (the
"Indemnified Party").
11.3.2 THIRD PARTY CLAIMS. The obligations of an indemnifying
Party under this Article 11 with respect to Losses arising from claims of any
Third Party that are subject to indemnification as provided for in Sections 11.1
or 11.2 (a "Third Party Claim") shall be governed by and be contingent upon the
following additional terms and conditions:
(A) CONTROL OF DEFENSE. At its option, the indemnifying
Party may assume the defense of any Third Party Claim by giving written notice
to the Indemnified Party within thirty (30) days after the indemnifying Party's
receipt of an Indemnification Claim Notice. The assumption of the defense of a
Third Party Claim by the indemnifying Party shall not be construed as an
acknowledgment that the indemnifying Party is liable to indemnify any
indemnified Party in respect of the Third Party Claim, nor shall it constitute a
waiver by the indemnifying Party of any defenses it may assert against any
indemnified Party's claim for indemnification. Upon assuming the defense of a
Third Party Claim, the indemnifying Party may appoint as lead counsel in the
defense of the Third Party Claim any legal counsel selected by the indemnifying
Party. In the event the indemnifying Party assumes the defense of a Third Party
Claim, the Indemnified Party shall immediately deliver to the indemnifying Party
all original notices and documents (including court papers) received by any
indemnified Party in connection with the Third Party Claim. Should the
indemnifying Party assume the defense of a Third Party Claim, the indemnifying
Party shall not be liable to the Indemnified Party or any other indemnified
Party for any legal expenses subsequently incurred by such indemnified Party in
connection with the analysis, defense or settlement of the Third Party Claim. In
the event that it is ultimately determined that the indemnifying Party is not
obligated to indemnify, defend or hold harmless an Indemnified Party from and
against the Third Party Claim, the Indemnified Party shall reimburse the
indemnifying Party for any and all costs and expenses (including attorneys' fees
and costs of suit) and any Losses incurred by the indemnifying Party in its
defense of the Third Party Claim with respect to such Indemnified Party.
(B) RIGHT TO PARTICIPATE IN DEFENSE. Without limiting
Section 11.3.2(a), any Indemnified Party shall be entitled to participate in,
but not control, the defense of such Third Party Claim and to employ counsel of
its choice for such purpose;
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provided, however, that such employment shall be at the Indemnified Party's own
expense unless (i) the employment thereof has been specifically authorized by
the indemnifying Party in writing or (ii) the indemnifying Party has failed to
assume the defense and employ counsel in accordance with Section 11.3.2(a) (in
which case the Indemnified Party shall control the defense).
(C) SETTLEMENT. With respect to any Losses relating
solely to the payment of money damages in connection with a Third Party Claim
and that will not result in the Indemnified Party's becoming subject to
injunctive or other relief or otherwise adversely affect the business of the
Indemnified Party in any manner, and as to which the indemnifying Party shall
have acknowledged in writing the obligation to indemnify the Indemnified Party
hereunder, the indemnifying Party shall have the sole right to consent to the
entry of any judgment, enter into any settlement or otherwise dispose of such
Loss, on such terms as the indemnifying Party, in its sole discretion, shall
deem appropriate. With respect to all other Losses in connection with Third
Party Claims, where the indemnifying Party has assumed the defense of the Third
Party Claim in accordance with Section 11.3.2(a), the indemnifying Party shall
have authority to consent to the entry of any judgment, enter into any
settlement or otherwise dispose of such Loss provided it obtains the prior
written consent of the Indemnified Party (which consent shall not be
unreasonably withheld or delayed). The indemnifying Party shall not be liable
for any settlement or other disposition of a Loss by an indemnified Party that
is reached without the written consent of the indemnifying Party. Regardless of
whether the indemnifying Party chooses to defend or prosecute any Third Party
Claim, no indemnified Party shall admit any liability with respect to, or
settle, compromise or discharge, any Third Party Claim without the prior written
consent of the indemnifying Party.
(D) COOPERATION. Regardless of whether the indemnifying
Party chooses to defend or prosecute any Third Party Claim, the Indemnified
Party shall, and shall cause each other indemnified Party to, cooperate in the
defense or prosecution thereof and shall furnish such records, information and
testimony, provide such witnesses and attend such conferences, discovery
proceedings, hearings, trials and appeals as may be reasonably requested in
connection therewith. Such cooperation shall include access during normal
business hours afforded to indemnifying Party to, and reasonable retention by
the Indemnified Party of, records and information that are reasonably relevant
to such Third Party Claim, and making indemnified Parties and other employees
and agents available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder, and the
indemnifying Party shall reimburse the Indemnified Party for all its reasonable
out-of-pocket expenses in connection therewith.
(E) EXPENSES. Except as provided above, the costs and
expenses, including fees and disbursements of counsel, incurred by the
Indemnified Party in connection with any claim shall be reimbursed on a calendar
quarter basis by the indemnifying Party, without prejudice to the indemnifying
Party's right to contest the Indemnified Party's right to indemnification and
subject to refund in the event the indemnifying Party is ultimately held not to
be obligated to indemnify the Indemnified Party.
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11.4 INSURANCE.
11.4.1 Prior to entering human clinical trials and/or
commercial sales, Larasan shall have and maintain such type and amounts of
liability insurance covering the manufacture, supply, use and sale of the
Licensed Product as is normal and customary in the pharmaceutical industry
generally for parties similarly situated, and shall upon request provide each
other with a copy of its policies of insurance in that regard, along with any
amendments and revisions thereto.
11.4.2 At all times during the Development Activities,
IntelliPharmaCeutics shall have and maintain such type and amounts of liability
insurance covering the manufacture, supply, use and sale of the Licensed Product
for research and development purposes as is normal and customary in the
pharmaceutical industry generally for parties similarly situated, and shall upon
request provide the Larasan with a copy of its policies of insurance in that
regard, along with any amendments and revisions thereto.
ARTICLE 12
REPRESENTATIONS AND WARRANTIES;
LIMITATION OF LIABILITY
12.1 INTELLIPHARMACEUTICS
12.1.1 It is a corporation duly organized and, validly
existing and in good standing under the laws of Canada.
12.1.2 When executed and delivered, this Agreement will become
valid and binding on IntelliPharmaCeutics and enforceable against
IntelliPharmaCeutics in accordance with its terms.
12.1.3 It is not a party to any agreement, indenture or other
instrument and has no provision in its certificate of formation and knows of no
law or regulation which would prohibit it from entering into this Agreement,
performing the agreements contemplated hereunder or granting the licenses
granted hereunder; and
12.1.4 It has not previously granted and will not grant any
rights in conflict with the rights and licenses granted to Larasan herein, and
itself or through Affiliates, is the owner or licensee of the certain
intellectual property rights that comprise the Technology, with the right to
license the Technology to Larasan.
12.1.5 To its knowledge and information it is not aware of any
claim or other legal action brought by a third party involving the
IntelliPharmaCeutics Patents or the Technology.
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12.2 LARASAN
12.2.1 It is a corporation duly organized and, validly
existing and in good standing under the laws of the state of Florida.
12.2.2 When executed and delivered, this Agreement will become
valid and binding on Larasan and enforceable against Larasan in accordance with
its terms.
12.2.3 It is not a party to any agreement, indenture or other
instrument and has no provision in its certificate of formation and knows of no
law or regulation which would prohibit it from entering into this Agreement,
performing the agreements contemplated hereunder or receiving the licenses
granted hereunder; and
12.3 Disclaimer of Warranties.
INTELLIPHARMACEUTICS MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OR
CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE PATENT
RIGHTS AND KNOW-HOW, OR LICENSED PRODUCTS INCLUDING. BUT NOT LIMITED TO,
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND TIIE
VALIDITY OR SCOPE OF ANY PATENT OR OF COMMERCIAL UTILITY OF ANY PATENT OR
KNOW-HOW. INTELLIPHARMACEUTICS MAKES NO REPRESENTATION OR WARRANTY THAT THE
LICENSED PRODUCTS CAN BE DEVELOPED SUCCESSFULLY, OR THAT THE FDA OR ANY OTHER
REGULATORY AUTHORITY WILL GRANT APPROVALS IN RESPECT OF ANY APPLICATIONS TO SUCH
AUTHORITY FOR APPROVAL TO SELL THE LICENSED PRODUCT IN A JURISDICTION.
INTELLIPHARMACEUTICS MAKES NO REPRESENTATION OR WARRANTY THAT THE LICENSED
PRODUCTS WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT OF ANY THIRD
PARTY. INTELLIPHARMACEUTICS SHALL NOT BE LIABLE TO LARASAN, ITS AFFILIATES OR
SUBLARASANS SUCCESSORS OR ASSIGNS OR ANY THIRD PARTY FOR ANY LOSS OF PROFITS,
ACTUAL OR ANTICIPATED, LOSS OF BUSINESS, INTERRUPTION OF BUSINESS, NOR FOR
INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY KIND ARISING FROM OR IN
CONNECTION WITH TIIE USE OF TIIE INTELLIPHARMACEUTICS TECHNOLOGY OR THE
PROPRIETARY INFORMATION SUPPLIED HEREUNDER OR TIIE MANUFACTURE, IMPORT, USE,
OFFER FOR SALE, SALE OR OTHER DISPOSITION OF LICENSED PRODUCTS.
ARTICLE 13
ASSIGNMENT
This Agreement and the rights and duties appertaining hereto may not be
assigned by either party without first obtaining the written consent of the
other party, which consent shall not be unreasonably withheld. Any such
purported assignment, without the written consent of the other party, shall be
null and of no effect. Notwithstanding the foregoing, either party may assign
this Agreement (i) to a purchaser, merging or consolidating corporation, or
acquiror of substantially all of the Company's assets or business and/or
pursuant to any reorganization, or (ii) to an Affiliate of the Company subject
to the consent of the other party to this agreement which consent shall not be
unreasonably withheld. Larasan may not assign this agreement to any party in
direct competition to IntelliPharmaCeutics. IntelliPharmaCeutics may license or
assign
33
rights such as those to which this Agreement pertains for any country or
territory not covered, or which may revert to IntelliPharmaCeutics, from time to
time by the terms of this Agreement.
ARTICLE 14
USE OF NAMES AND PUBLICATION
14.1 USE OF NAME. Nothing contained in this Agreement shall be
construed as granting any right to Larasan, its Affiliates or SubLarasans to use
in advertising, publicity, or other promotional activities the name of
IntelliPharmaCeutics or any of its units (including contraction, abbreviation or
simulation of any of the foregoing) without the prior, written consent of
IntelliPharmaCeutics; provided, however, that IntelliPharmaCeutics acknowledges
and agrees that Larasan may use the names of IntelliPharmaCeutics in various
documents used by Larasan for raising capital and financing without such prior
written consent to the limited extent that such use may be required by law, and
provided further that all such uses shall be factually accurate and not
misleading, and Larasan indemnifies and insures IntelliPharmaCeutics against any
and all loss or damage arising from any factually inaccurate or misleading
usage.
14.2 RELATIONSHIP OF THE PARTIES. Nothing herein shall be deemed to
establish a relationship of principal and agent between IntelliPharmaCeutics and
Larasan, nor any of their agents or employees for any purpose whatsoever. This
Agreement shall not be construed as creating a partnership between
IntelliPharmaCeutics and Larasan, or as creating any other form of legal
association or arrangement which would impose liability upon one Party for the
act or failure to act of the other Party.
14.3 PUBLICATIONS. In the event that either party desires to publish or
disclose, by written, oral or other presentation, Licensed Technology or any
material information related thereto, then such party shall notify the other in
writing of its intention at least sixty (60) days prior to any speech, lecture
or other oral presentation and at least sixty (60) days before any written or
other publication or disclosure, and shall include with such notice a
description of any proposed oral presentation or, with respect to any proposed
written or other disclosure, a current draft of such proposed disclosure or
abstract. IntelliPharmaCeutics may request that Larasan, no later than thirty
(30) days following the receipt of such notice, delay such presentation,
publication or disclosure in order to enable IntelliPharmaCeutics to file, or
have filed on its behalf or jointly, as applicable, a patent application,
copyright or other appropriate form of intellectual property protection related
to the information to be disclosed or request that Larasan do so. Upon receipt
of such request to delay such presentation, publication or disclosure, Larasan
shall arrange for a delay of such presentation, publication or disclosure until
such time as Larasan or IntelliPharmaCeutics has filed, or had filed on its
behalf, such patent application, copyright or other appropriate form of
intellectual property protection in form and in substance reasonably
satisfactory to IntelliPharmaCeutics. If Larasan does not receive any such
request from IntelliPharmaCeutics to delay such presentation, publication or
disclosure, Larasan may submit such material for presentation, publication or
other form of disclosure. Notwithstanding the foregoing, in no event shall
Larasan have any right to publish or disclose the Licensed Process or any
information or data related thereto without the
34
prior written consent of IntelliPharmaCeutics, which consent
IntelliPharmaCeutics may unreasonably withhold in its sole discretion.
ARTICLE 15
PAYMENTS, NOTICES AND OTHER COMMUNICATIONS
All notices or other communications that are required or permitted
hereunder shall be in writing and delivered personally, sent by telecopier (and
promptly confirmed by personal delivery, registered or certified mail or
overnight courier as provided herein), sent by nationally-recognized overnight
courier or sent by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
If to IntelliPharmaCeutics to:
IntelliPharmaCeutics Corporation
000 Xxxxxxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: President
000-000-0000 (fax copy of mailed originals)
If to Larasan to:
Larasan Pharmaceutical Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx, 00000
Attention: President
000- 000-0000 (fax copy of mailed originals)
or to such other address as the Party to whom notice is to be given may have
furnished to the other Party in writing in accordance herewith. Any such
communication shall be deemed to have been given (a) when delivered, if
personally delivered or sent by telecopier on a business day, (b) on the
business day after dispatch, if sent by nationally-recognized overnight courier,
and (c) on the third business day following the date of mailing, if sent by
mail. It is understood and agreed that this Article 16 is not intended to govern
the day-to-day business communications necessary between the Parties in
performing their duties, in due course, under the terms of this Agreement.
35
ARTICLE 16
CONFIDENTIALITY
16.1 DEFINITION. "Confidential Information" of a Party shall mean all
information and know-how and any tangible embodiments thereof provided by or on
behalf of such Party to the other Party either in connection with the
discussions and negotiations pertaining to, or in the course of performing, this
Agreement, including the terms of this Agreement; the Designated Compounds;
data; knowledge; practices; processes; ideas; research plans; engineering
designs and drawings; research data; manufacturing processes and techniques;
scientific, manufacturing, marketing and business plans; and financial and
personnel matters relating to the disclosing Party or to its present or future
products, sales, suppliers, customers, employees, investors or business. For
purposes of this Agreement, notwithstanding the Party that disclosed such
information or know-how, all Know-How and all Information and Inventions with
respect to the Licensed Process shall be Confidential Information of
IntelliPharmaCeutics.
16.2 EXCLUSIONS. Notwithstanding the foregoing, information or know-how
of a Party shall not be deemed Confidential Information with respect to a
receiving Party for purposes of this Agreement if such receiving party can
affirmatively demonstrate through the production of written documentation that
such information or know-how:
16.2.1 was already known to the receiving Party or its
Affiliates, other than under an obligation of confidentiality or non-use, at the
time of disclosure to such receiving Party;
16.2.2 was generally available or known to parties reasonably
skilled in the field to which such information or know-how pertains, or was
otherwise part of the public domain, at the time of its disclosure to such
receiving Party;
16.2.3 became generally available or known to parties
reasonably skilled in the field to which such information or know-how pertains,
or otherwise became part of the public domain, after its disclosure to such
receiving Party through no fault of a Party other than the Party that Controls
such information and know-how;
16.2.4 was disclosed to such receiving Party or its
Affiliates, other than under an obligation of confidentiality or non-use, by a
Third Party who had no obligation to the Party that Controls such information
and know-how not to disclose such information or know-how to others; or
16.2.5 was independently discovered or developed by such
receiving Party or its Affiliates, as evidenced by their written records,
without the use of Confidential Information belonging to the Party that Controls
such information and know-how, except with respect to the IntelliPharmaCeutics
Know-How with respect to the Licensed Process, which shall be and remain
Confidential Information of IntelliPharmaCeutics.
Specific aspects or details of Confidential Information shall not be deemed to
be within the public domain or in the possession of a Party merely because the
Confidential Information is
36
embraced by more general information in the public domain or in the possession
of such Party. Further, any combination of Confidential Information shall not be
considered in the public domain or in the possession of a Party merely because
individual elements of such Confidential Information are in the public domain or
in the possession of such Party unless the combination and its principles are in
the public domain or in the possession of such Party.
16.3 DISCLOSURE AND USE RESTRICTION. Except as expressly provided
herein, the Parties agree that during the Term of this Agreement, and for ten
(10) years thereafter, each Party and its Affiliates and sublicensees shall keep
completely confidential and shall not publish or otherwise disclose and shall
not use for any purpose except for the purposes contemplated by this Agreement
any Confidential Information of the other Party, its Affiliates or sublicensees.
16.4 AUTHORIZED DISCLOSURE. Each Party may disclose Confidential
Information of the other Party to the extent that such disclosure is:
16.4.1 REQUIRED BY GOVERNMENTAL ORDER. Made in response to a
valid order of a court of competent jurisdiction or other supra-national,
federal, national, regional, state, provincial or local governmental or
regulatory body of competent jurisdiction; provided, however, that such Party
shall first have given notice to such other Party and given such other Party a
reasonable opportunity to quash such order and to obtain a protective order
requiring that the Confidential Information and documents that are the subject
of such order be held in confidence by such court or agency or, if disclosed, be
used only for the purposes for which the order was issued; and provided further
that if a disclosure order is not quashed or a protective order is not obtained,
the Confidential Information disclosed in response to such court or governmental
order shall be limited to that information which is legally required to be
disclosed in response to such court or governmental order;
16.4.2 REQUIRED BY LAW. Otherwise required by law; provided,
however, that the disclosing Party shall (a) provide the other Party with
reasonable advance notice of and an opportunity to comment on any such required
disclosure, (b) if requested by such other Party, seek confidential treatment
with respect to any such disclosure to the extent available, and (c) use good
faith efforts to incorporate the comments of such other Party in any such
disclosure or request for confidential treatment;
16.4.3 REQUIRED BY REGULATORY AUTHORITY. Made by such Party to
the Regulatory Authorities as required in connection with any filing,
application or request for Regulatory Approval; provided, however, that
reasonable measures shall be taken to assure confidential treatment of such
information; or
16.4.4 REQUIRED BY AGREEMENT. Made by such Party, in
connection with the performance of this Agreement, to Affiliates, Sublicensees,
research parties, employees, consultants, representatives or agents, each of
whom prior to disclosure must be bound by obligations of confidentiality and
non-use at least equivalent in scope to those set forth in this Article 16.
37
16.5 PRESS RELEASES. Press releases or other similar public
communication by either Party relating to this Agreement, shall be approved in
advance by the other Party, which approval shall not be unreasonably withheld or
delayed, except for those communications required by Applicable Law (which shall
be provided to the other Party as soon as practicable after the release or
communication thereof), disclosures of information for which consent has
previously been obtained, and information of a similar nature to that which has
been previously disclosed publicly with respect to this Agreement, each of which
shall not require advance approval.
ARTICLE 17
MISCELLANEOUS PROVISIONS
17.1 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of
Ontario and Canada, excluding any conflicts or
choice of law rule or principle that might otherwise refer construction or
interpretation of this Agreement to the substantive law of another jurisdiction.
17.2 REGISTRATION. If this Agreement or any associated transaction is
required by the law of any nation to be either approved or registered with any
governmental agency, Licensee shall assume all legal obligations to do so and
the costs in connection therewith.
17.3 TRADE REGULATIONS. Licensee shall observe all applicable United
States and foreign laws with respect to the transfer of Licensed Product and
related technical data to foreign countries, including the International Traffic
in Arms Regulations (ITAR) and the Export Administration Regulations.
17.4 ENTIRE AGREEMENT. The Parties hereto acknowledge that this
Agreement, including the Appendices and documents incorporated by reference,
sets forth the entire agreement and understanding of the Parties hereto as to
the subject matter hereof, and shall not be subject to any change of
modification except by the execution of a written instrument subscribed to by
the Parties hereto. This Agreement shall supersede all previous communications,
representations or understandings, either oral or written, between the Parties
relating to the subject matter hereof.
17.5 SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of either Party under this Agreement will not be
materially and adversely affected thereby, (a) such provision shall be fully
severable, (b) this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance here from, and (d) in lieu of such illegal,
invalid or unenforceable provision, there shall be added automatically
38
as a part of this Agreement a legal, valid and enforceable provision as similar
in terms to such illegal, invalid or unenforceable provision as may be possible
and reasonably acceptable to the Parties herein. To the fullest extent permitted
by applicable law, each Party hereby waives any provision of law that would
render any provision prohibited or unenforceable in any respect.
17.6 WAIVER. The failure of either Party to assert a right hereunder or
to insist upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other Party.
17.7 EQUITABLE RELIEF. Each Party acknowledges and agrees that the
restrictions set forth in Articles 6 and 16 of this Agreement are reasonable and
necessary to protect the legitimate interests of the other Party and that such
other Party would not have entered into this Agreement in the absence of such
restrictions, and that any violation or threatened violation of any provision of
Article 6 and 16 may result in irreparable injury to such other Party. Each
Party also acknowledges and agrees that in the event of a violation or
threatened violation of any provision of Article 6 and 16, the other Party shall
be entitled to seek preliminary and permanent injunctive relief, without the
necessity of having to post a bond, as well as to an equitable accounting of all
earnings, profits and other benefits arising from any such violation. The rights
provided in the immediately preceding sentence shall be cumulative and in
addition to any other rights or remedies that may be available to such other
Party. Nothing in this Section 16.7 is intended, or should be construed, to
limit such other Party's right to preliminary and permanent injunctive relief or
any other remedy for breach of any other provision of this Agreement.
17.8 FORCE MAJEURE. Neither Party shall be held liable or responsible
to the other Party or 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 non-performing Party, including fires, floods,
earthquakes, embargoes, shortages, epidemics, quarantines, war, acts of war
(whether war be declared or not), acts of terrorism, insurrections, riots, civil
commotion, strikes, lockouts or other labor disturbances, acts of God or acts,
omissions or delays in acting by any governmental authority. The non-performing
Party shall notify the other Party of such force majeure within ten (10) days
after such occurrence by giving written notice to the other Party stating the
nature of the event, its anticipated duration, and any action being taken to
avoid or minimize its effect. The suspension of performance shall be of no
greater scope and no longer duration than is necessary and the non-performing
Party shall use commercially reasonable efforts to remedy its inability to
perform; provided, however, that in the event the suspension of performance
continues for one-hundred and eighty (180) days after the date of the
occurrence, and such failure to perform would constitute a material breach of
this Agreement in the absence of such force majeure, the non-performing Party
may terminate this Agreement pursuant by written notice to the other Party.
17.9 CONSTRUCTION. Except where the context otherwise requires,
wherever used, the singular shall include the plural, the plural the singular,
the use of any
39
gender shall be applicable to all genders and the word "or" is used in the
inclusive sense (and/or). The captions of this Agreement are for convenience of
reference only and in no way define, describe, extend or limit the scope or
intent of this Agreement or the intent of any provision contained in this
Agreement. The term "including" as used herein shall mean including, without
limiting the generality of any description preceding such term. The language of
this Agreement shall be deemed to be the language mutually chosen by the Parties
and no rule of strict construction shall be applied against either Party hereto.
17.10 FURTHER ASSURANCE. Each Party shall duly execute and deliver, or
cause to be duly executed and delivered, such further instruments and do and
cause to be done such further acts and things, including the filing of such
assignments, agreements, documents and instruments, as may be necessary or as
the other Party may reasonably request in connection with this Agreement or to
carry out more effectively the provisions and purposes, or to better assure and
confirm unto such other Party its rights and remedies under this Agreement.
17.11 EXPENSES. Except as otherwise specifically set out herein, each
of Larasan and IntelliPharmaCeutics shall be responsible for their own expenses
relating to the negotiation, execution and performance of this Agreement.
17.12 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.
17.13 BINDING. This Agreement shall not be binding upon the Parties
until it has been signed below on behalf of each Party, in which event, it shall
be effective as of the Effective Date.
(SIGNATURES ON NEXT PAGE)
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IN WITNESS WHEREOF, the duly authorized officers of the Parties have executed
this Agreement as of the dates set forth below their respective signatures.
Date: July 23, 2004 Date: July 23, 2004
INTELLIPHARMACEUTICS CORP. LARASAN PHARMACEUTICAL CORPORATION
Per: Per:
___________________________________ ______________________________________
Name & Title:______________________ Name & Title: ________________________
41
Schedule A
Trademarks
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
42
Schedule B
Development Plan
It is anticipated that an FDA filing can be made within [ ] months after the
FDA approves the proposed clinical program. There is no warranty of this or any
other timing.
43
Schedule C
Development Budget
44
Schedule "D"
Copy of Letter to FDA signed by IntelliPharmaCeutics transferring all right,
title and interest in to Regulatory Documents to Larasan. (Original held by
Escrow Agent). Copy of Letter signed by Larasan acknowledging transfer of all
right, title and interest in Regulatory Documents and accepting legal
responsibility thereunder.
45
Schedule "E"
Copy of Letter signed by Larasan transferring all right, title and interest in
Regulatory Documents to IntelliPharmaCeutics in the event of termination of
Agreement (Original held by Escrow Agent). Copy of a Letter signed by
IntelliPharmaCeutics acknowledging transfer of all right, title and interest in
Regulatory Documents and accepting legal responsibility thereunder.
46
Schedule F
Initial Specification of Licensed Product
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
47
