EXHIBIT 10.13(b)
10/30/00
GABITRIL PRODUCT AGREEMENT
This Gabitril Product Agreement (this "Agreement") dated as of this 31st
day of October, 2000 by and between Xxxxxx Laboratories, an Illinois corporation
("Abbott") and Cephalon, Inc., a Delaware corporation ("Cephalon").
WITNESSETH:
WHEREAS, Abbott and Novo Industri A/S, a Danish corporation ("Novo") have
entered into a License Agreement dated as of March 23, 1990, as amended by an
Amendment dated December, 1999 (the "Novo License Agreement") pursuant to which
Novo granted Abbott an exclusive license to make, have made, use and sell the
pharmaceutical product N-(4, 4-di (3-methyl-2-thienyl) but-3-en-1-yl) nipecotic
acid, which is marketed and sold in the United States as Gabitril(R);
WHEREAS, Abbott and Cephalon have entered into a Marketing and Development
Collaboration Agreement dated June 10, 1999 (the "Marketing and Development
Agreement") pursuant to which Abbott granted Cephalon the right to collaborate
with Abbott on the marketing and clinical development of Gabitril in the United
States;
WHEREAS, Abbott and Cephalon desire to enter into a new relationship
whereby Cephalon will be granted by Abbott a sublicense under the Novo License
Agreement and will assume sole and exclusive responsibility for the further
development of Gabitril and for marketing, selling and distributing Gabitril in
the United States;
WHEREAS, Cephalon and Abbott shall enter into a Toll Manufacturing and
Packaging Agreement of even date herewith under which Abbott shall manufacture
and deliver Gabitril to Cephalon; and
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
WHEREAS, upon the effectiveness of this Agreement, Abbott and Cephalon
desire to terminate the Marketing and Development Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
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The following definitions will control the construction of each of the
following terms wherever they appear in this Agreement.
1.1 "Abbott Affiliate", "Cephalon Affiliate" or "Novo Affiliate" shall
mean any company, joint venture, partnership or other business entity which
controls, is controlled by, or is under common control with, Abbott, Cephalon or
Novo, as the case may be. A business entity shall be deemed to control another
business entity if it possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of such other business
entity, whether through the ownership of voting securities, by contract or
otherwise.
1.2 "Abbott Improvement" shall mean any Improvement which was developed by
Abbott and/or an Abbott Affiliate.
1.3 "Abbott Technology" shall mean all of the following proprietary rights
covering the Compound, its formulation, its delivery as a pharmaceutical
compound, its uses in the Field, its methods of manufacture in the Territory,
that are owned by or licensed (with a right to sublicense) to Abbott as of the
date hereof or in the future: (i) Abbott Improvements; (ii) patent applications
and patents, including without limitation, divisions, continuations, and
continuations-in-part of such patent applications and renewals, extensions,
re-examinations and reissues of such patents; and (iii) technical data,
information, materials, trade secrets and other
2
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
know-how; provided, however, that Abbott Technology shall not include any
proprietary rights that are included within the scope of Licensed Patent Rights
and/or Technical Information and Know-How. Exhibit 1.3 sets forth a list of the
existing patent and patent applications included within the Abbott Technology.
1.4 "Cephalon Extended Release Improvement" shall mean any Improvement
arising from the research activities of Cephalon relating to an extended release
formulation of the Compound.
1.5 "Composition Patent" shall mean United States Patent Number 5,010,090
as it relates to the Compound, which was issued on April 23, 1991 and, is
currently scheduled to expire on April 23, 2008 and for which a patent term
extension has been petitioned for to extend the expiration until September 30,
2011.
1.6 "Compound" shall mean mean N-(4, 4-di(3-methyl-2-thienyl)
but-3-en-l-yl) nipecotic acid, otherwise referred to as Tiagabine, and sold and
marketed in the Territory under the Trademark Gabitril(R) and any other forms
thereof, including, but not limited to, its salts, esters, amides, complexes,
chelates, hydrates, isomers, crystalline and amorphous forms.
1.7 "Dollar" or "$" shall mean lawful money of the United States in
immediately available funds.
1.8 "Effective Date" shall have the meaning given in Section 11.3.
1.9 "Exclusive License" shall mean a license granted by Abbott, and
"Exclusive Sublicense" shall mean a sublicense granted by Abbott under the Novo
License Agreement whereby Cephalon's rights are sole and entire and operate to
exclude all others, including Novo and Abbott, subject only to (i) Abbott or
Novo being compelled by any governmental authority
3
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
to grant a compulsory license in the Territory and (ii) the rights reserved by
Abbott pursuant to Section 2.2.
1.10 "Execution Date" shall mean the date set forth in the introductory
paragraph of this Agreement.
1.11 "Field" shall mean all human pharmaceutical uses of the Compound as a
therapeutically active ingredient with or without other therapeutically active
ingredients.
1.12 "HSR Act" shall have the meaning given in Section 5.1(c).
1.13 "Improvement" shall an "Improvement" as defined in the 1999 Amendment
to the Novo License Agreement.
1.14 "IND" shall mean investigational new drug application number 36,579
(epilepsy) and number 60,917 (neuropathic pain).
1.15 "Licensed Product" shall mean any bulk or drug formulation containing
the Compound in the Field.
1.16 "Licensed Patent Rights" shall mean rights to the patent applications
and patents covering the Compound, its formulations, its delivery as a
pharmaceutical compound, its uses in the Field, its methods of manufacture in
the Territory which are licensed to Abbott under the Novo License Agreement
including, without limitation, divisions, continuations, and
continuations-in-part of such patent applications and renewals, extensions, or
reissues of such patents; provided, however, Licensed Patent Rights shall
exclude any Novo Improvements unless and until Cephalon exercises its option
under Section 2.3. Exhibit 1.16 sets forth a list of the existing Licensed
Patent Rights.
1.17 "Net Sales" shall mean as to sales in the Territory:
4
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
(a) in the case of a Licensed Product which is not a Combination Product
(as hereinafter defined), the gross invoice price of such Licensed
Product actually billed in the Territory by Cephalon, a Cephalon
Affiliate or a Cephalon sublicensee to independent third party
customers less: (i) any direct or indirect credits and allowances or
adjustments granted to customers including, without limitation,
credits and allowances on account of price adjustments or on account
of rejection or return of Licensed Products previously sold; (ii)
any trade and cash discounts, rebates and distributor fees; (iii)
any sales, excise, turnover or similar taxes and any duties and
other governmental charges imposed upon the production, importation,
use or sale of the Licensed Product; and (iv) applicable
transportation, insurance and handling charges.
(b) in the case of a Licensed Product which contains preventive or
therapeutic active ingredients other than the Compound (a
"Combination Product"), the lesser of: (i) the Net Sales of such
Licensed Product, or (ii) whichever of the following applies: (x)
the product of Cephalon's (or its Affiliate's or sublicensee's, as
the case may be) per gram wholesale selling price in the Territory
of the Compound as sold alone in the presentation containing the
most nearly comparable amount (by weight) of Compound as is
contained in such Combination Product times the number of grams of
Compound contained in such Combination Product; or (y) in the event
that none of Cephalon, its Affiliate or sublicensee sells a Licensed
Product containing only the Compound as a preventive or therapeutic
active ingredient, the Net Sales of such Combination Product
determined in accordance with Subsection (a), above, multiplied by a
fraction, the numerator of which is the
5
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
cost of the Compound contained therein, and the denominator of which
is the sum of the numerator and the cost of all other preventive or
therapeutic active ingredients contained therein, with cost in each
case to be determined in accordance with Cephalon's (or its
Affiliate's or sublicensee's, as the case may be) standard
accounting procedures.
1.18 "1999 Amendment" shall mean the December, 1999 Amendment to the Novo
License Agreement".
1.19 "NDA" shall mean new drug application 20-646 for the Licensed
Product and any supplements thereto.
1.20 "Novo Improvement" shall mean an Improvement which was developed by
Novo and/or a Novo Affiliate.
1.21 "Novo Improvement Royalties" shall have the meaning given in Section
2.3.
1.22 "Novo License Agreement" shall have the meaning given in the first
WHEREAS clause of this Agreement.
1.23 "Novo Royalties" shall have the meaning given in Section 3.4.
1.24 "Royalty" and "Royalties" shall collectively refer to the Novo
Royalties and the Novo Improvement Royalties.
1.25 "Technical Information and Know-How" shall mean any and all technical
data, information, materials and other know-how concerning the Compound or its
manufacture, which is either owned by Abbott or licensed to Abbott by Novo under
the Novo License Agreement and which:
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**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
(a) includes, without limitation, all chemical data, toxicological and
pharmacological data and techniques, clinical data, medical uses,
product dosage forms and product formulations and specifications;
(b) relates to processes and techniques for the manufacture of drug
formulations or drug delivery systems including, without limitation,
preparation, recovery and purification processes and techniques,
control assays and specifications; or
(c) relates to metabolic precursors and prodrugs of the Compound;
provided, however, that Technical Information shall exclude any Novo
Improvements unless and until Cephalon exercises its option under Section 2.3.
1.26 "Territory" shall mean the United States of America (including Puerto
Rico and the territories and possessions of the U.S.A.).
1.27 "Trademark" shall mean "Gabitril(R)" which has been registered as a
trademark by Abbott under U.S. Reg. No. 2,155,299 and any other trademarks
solely and specifically used in connection with the Licensed Product in the
Territory.
1.28 "Transfer Date" shall mean such date after the Effective Date on
which Abbott shall transfer responsibility for the sales and distribution of the
Licensed Product to Cephalon pursuant to Section 4.1 of this Agreement. If the
Effective Date occurs on or prior to December 22, 2000, the Transfer Date shall
be December 23, 2000. If the Effective Date occurs after December 23, 2000, the
Transfer Date shall be the Effective Date.
1.29 "Transferred Assets" shall have the meaning given in Section 2.6.
1.30 "Transition Period" shall have the meaning given in Section 4.4.
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**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
1.31 "Valid Claim" shall mean any patent claim of an unexpired patent
included within the Licensed Patent Rights which has not been determined to be
invalid or unenforceable by the unappealed or unappealable final decision of a
court or other authority of competent jurisdiction.
ARTICLE II
GRANT OF SUBLICENSE AND OPTION
2.1 Abbott hereby grants to Cephalon, and Cephalon hereby accepts from
Abbott, an Exclusive Sublicense, under the Licensed Patent Rights and Technical
Information and Know-How and an Exclusive License under the Abbott Technology,
to make, have made, use and sell Licensed Products throughout the Territory.
Such Exclusive Sublicense and Exclusive License includes the right to grant
sublicenses to Cephalon Affiliates or, subject to Section 2.5, to third parties.
Cephalon agrees that it and its Affiliates or sublicensees will not sell any
Licensed Products outside of the Territory.
2.2 Abbott hereby retains from the Exclusive Sublicense granted to
Cephalon under Section 2.1, the right to manufacture the Compound and Licensed
Product solely for the purpose of supplying Affiliates or sublicenses of Abbott
with the Compound and Licensed Product for sale, distribution and use outside
the Territory.
2.3 Abbott hereby grants to Cephalon an option to exclusively sublicense
from Abbott any and all Novo Improvements. If Abbott becomes aware of the
existence of any Novo Improvement, Abbott shall notify Cephalon. Cephalon may
exercise its option, at any time after receipt of such notice, upon providing
written notice to Abbott. If Cephalon elects to exercise its option to the Novo
Improvements, Cephalon shall be responsible for the additional royalties payable
to Novo pursuant to Section 2.02(b) of the 1999 Amendment. Such royalties are
hereinafter referred to as the "Novo Improvement Royalties". If Abbott is paying
the Novo
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**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Royalties to Novo, Cephalon shall account for and pay the Novo Improvement
Royalties to Abbott, and Abbott shall pay such Novo Improvement Royalties to
Novo. If Cephalon is paying the Novo Royalties to Novo, it shall also account
and pay for the Novo Improvement Royalties directly to Novo.
2.4 Cephalon is obligated under the terms of the Novo License Agreement to
provide Novo (and its Affiliates) with royalty free access to any and all
Cephalon's Extended Release Improvements outside the Territory in connection
with the use, offer to sell, sale, import, co-promotion, and/or co-marketing of
Compound-containing products. In the event that Novo sublicenses to third
parties any Cephalon Extended Release Formulations, Novo shall owe certain
financial obligations to Cephalon as specified in Section 2.02(c) of the 1999
Amendment. Other than as expressly stated above, Cephalon is under no
contractual obligation to license any other Improvements to Novo and its
Affiliates.
2.5 Cephalon shall not have the right to grant sublicenses to any
non-affiliated third parties without the prior written consent of Abbott (which
consent will not be unreasonably withheld) and the prior written approval of
Novo. In the event that Abbott consents to any proposed sublicense, Abbott shall
reasonably cooperate with Cephalon to obtain approval of any such sublicense
from Novo.
2.6 Subject to the terms and conditions of this Agreement, upon the
Effective Date, Abbott shall sell, convey, assign, transfer and deliver to
Cephalon, and Cephalon shall purchase, acquire and accept from Abbott all of the
following assets (the "Transferred Assets"):
(a) NDA number 20-646 for the Licensed Product and investigational
new drug applications, number 36,579 (epilepsy) and number 60,917
(neuropathic pain) and all regulatory information relating to the Licensed
Product and any correspondence with
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**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
the U.S. Food and Drug Administration (the "FDA") or other government
agencies to the Licensed Product, including relating to the promotion of
the Licensed Product;
(b) Xxxxxx'x inventory of promotional materials and sales aids
including internal Abbott sales training documents, presentations and
slides;
(c) all customer lists, sales data, marketing plans, and historical
and current reimbursement and pricing information;
(d) the U.S. registration for the trademark GABITRIL and any other
trademark registrations solely and specifically used in connection with
the Licensed Product in the Territory;
(e) all databases containing clinical data relating to the Licensed
Product and all documentation from ongoing clinical trials and clinical
investigator information;
(f) all clinical supplies and matching placebo;
(g) all USAN correspondence or other agreements relating to the
generic product name of the Licensed Product;
(h) the database of standard medical affairs letters relating to the
Licensed Product;
(i) any copyrights used in the Territory on package inserts,
promotional materials and other materials associated with the Licensed
Product in the Territory;
(j) the xxxxxxxx.xxx domain name in the Territory and any other
domain names solely and specifically used in connection with the Licensed
Product in the Territory;
10
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
(k) copies of all correspondence, filings, and notices of action
sent to or received from the U.S. Patent and Trademark Office concerning
the Transferred Assets, the Licensed Patent Rights and the Abbott
Technology; and
(l) all other documentation and information related to the
manufacturing, marketing, sales, distribution and development of the
Licensed Product in the Territory.
The foregoing assets shall be strictly limited to Gabitril and shall not contain
any information or data relating to any of Xxxxxx'x other products, including
Depakote(R). Cephalon shall discontinue the distribution or use of any
promotional material, sales aids or other document containing Xxxxxx'x name or
logo within six (6) months of the Effective Date.
2.7 Except as specifically provided herein, Cephalon shall not assume, nor
take subject to, and shall not be liable for, any liabilities or obligations of
any kind or nature, including without limitation relating to:
(i) any contracts to which Abbott or any Abbott Affiliate is a
party;
(ii) any former, current or prospective employees of Abbott;
(iii) any obligations of Abbott to any Abbott Affiliate; and
(iv) Xxxxxx'x continued marketing, distribution and sale of the
Licensed Product outside the Territory.
2.8 As of the Effective Date, Abbott shall assign, and Cephalon shall
accept assignment of, and assume full liability and responsibility for all
future development work related to the Licensed Product (such as Phase IV
studies, new formulations and new indications) and the following clinical
studies (with such clinical studies being hereinafter referred to as the
"Clinical Studies"):
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
(a) Phase IV Use/Comparator study (ECLIPSE), including an agreement
dated January 28, 2000 with Ingenix Pharmaceutical Services; and
(b) Phase II study for Neuropathic Pain.
In consideration of Xxxxxx'x commitment to fund portions of the costs and
expenses associated with the conduct of the Clinical Studies, Abbott shall
reimburse Cephalon for one-half of the costs and expenses incurred by Cephalon
on the Clinical Studies during 2001; provided, however, in no event shall
Xxxxxx'x share of such costs and expenses exceed [**]. Cephalon shall invoice
Abbott for its share of such costs and expenses, and Abbott shall pay such
invoice within thirty (30) days.
ARTICLE III
PAYMENTS AND NOVO ROYALTIES
3.1 For and in consideration of the rights granted to Cephalon under this
Agreement, Cephalon shall make the following payments to Abbott on the dates
specified:
(i) [**] on the Effective date;
(ii) [**] on the first anniversary of the Effective Date;
(iii) [**] on the second anniversary of the Effective Date;
(iv) [**] on the third anniversary of the Effective Date; and
(v) [**] on the fourth anniversary of the Effective Date.
3.2 For and in consideration of the rights granted under this Agreement,
Cephalon, if applicable, shall make the following contingent payments to Abbott:
(i) At such time during the first calendar year, beginning with
2001, that Cephalon has Net Sales of Licensed Product in the amount of
[**] in the Territory, Cephalon shall pay [**] to Abbott; and
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**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
(ii) In the event that the Composition Patent is extended from its
current expiration date of April 23, 2008, whether through an
extension under 35 U.S.C. 155 or otherwise for a period of
[**], Cephalon shall pay [**] to Abbott; provided, however,
that if the Composition Patent is extended for a period of
[**] then the [**] payment shall be paid to Abbott on a
prorated basis by multiplying [**] by a fraction, the
numerator of which shall be the number of days that the
Composition Patent is extended beyond its current expiration
date and the denominator of which shall be [**].
3.3 Cephalon shall notify Abbott within five (5) business days after it
first achieves [**] of Net Sales of Licensed Products in the Territory during
any calendar year beginning with 2001 and shall make the payment required by
clause (i) above on the date of such notice. Abbott shall notify Cephalon in the
event that the expiration date of the Composition Patent is extended and
Cephalon shall make the payment required by clause (ii) above within seven (7)
business days of such notice.
3.4 For and in consideration of the rights and licenses granted to
Cephalon hereunder, Cephalon shall pay or cause to be paid a royalty equal to
[**] of the Net Sales in the Territory of all Licensed Products sold by
Cephalon, Cephalon Affiliates, or Cephalon sublicensees, the manufacture, use or
sale of which would, but for the sublicense granted herein, infringe one or more
Valid Claims of an unexpired patent included in the Licensed Patent Rights in
the Territory. Such royalty being hereinafter referred to as the "Novo
Royalties". Cephalon shall pay the Novo Royalties to Abbott, and Abbott shall be
responsible for paying the Novo Royalties to Novo under the Novo License
Agreement.
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**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
3.5 Cephalon, Cephalon Affiliates, and Cephalon sublicensees shall be
entitled to a credit against the Novo Royalties in the amount and under the
circumstances set forth in Sections 8.2 and 9.2.
ARTICLE IV
TRANSFER OF PRODUCT
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4.1 Subject to its covenant to conduct business relating to the Licensed
Product in the ordinary course pursuant to the terms of Section 5.3 hereof,
prior to the Transfer Date Abbott shall be responsible for all sales, marketing
and distribution activities relating to the Licensed Product (including risk of
loss), and all accruable expenses incurred and sales revenue earned prior to the
Transfer Date shall be allocated to Abbott. On and after the Transfer Date,
Cephalon shall be responsible for all sales, marketing and distribution
activities relating to the Licensed Product (including risk of loss), and all
accruable expenses incurred and sales revenue earned on or after the Transfer
Date shall be allocated to Cephalon. Notwithstanding the above, Abbott also
shall be entitled to sell and distribute that quantity of Licensed Product
necessary to satisfy only those purchase orders for Licensed Product received
electronically or in writing by Abbott prior to the Transfer Date; with respect
to any purchase orders received by Abbott on or after the Transfer Date, Abbott
shall refer those customers placing such orders to Cephalon. For purposes of
clarification, except as otherwise provided herein, Cephalon shall assume all
legal and financial responsibility for the Licensed Product in the Territory as
of the Transfer Date, including billing, shipping, invoicing, customer and
professional services, returns and rebates, and all other operational and
financial activities related to the Licensed Product. In order to facilitate the
assumption by Cephalon of all such activities as of the Transfer Date, and the
proper resolution by Abbott of any matters related to sales occurring prior to
the Transfer Date,
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
the parties agree to promptly refer to the other party any and all misdirected
inquiries, payments and requests received after said Transfer Date.
4.2 Upon the Transfer Date, Cephalon shall mail the letter in a form
reasonably agreed upon by the parties to all of the customers who have purchased
the Licensed Product within the last twelve (12) months.
4.3 Promptly after the Effective Date, Abbott shall disclose and furnish
to Cephalon all Technical Information and Know-How and all Abbott Technology,
which is or subsequently comes into Xxxxxx'x possession during the term of this
Agreement. Upon disclosure, such Technical Information and Know-How shall
automatically be included under the Exclusive Sublicense granted under this
Agreement without payment of any additional consideration and such Abbott
Technology shall automatically be included in the Exclusive License granted
under this Agreement without payment of any additional consideration.
4.4 Unless expressly provided otherwise by this Agreement, during the
period beginning on the Execution Date and ending on the effective date of
transfer of all applicable regulatory filings and approvals (including, without
limitation the NDA and the IND's) in the Territory (the "Transition Period"),
the parties will use their respective reasonable commercial efforts to
facilitate the orderly transfer of the Licensed Product and the Transferred
Assets in a manner that minimizes disruption in the marketing, promotion, sale,
distribution and development of the Licensed Product in the Territory. In order
to coordinate and facilitate these activities, the parties each will appoint
three persons to comprise a transition team (the "Transition Team"), which
members will be set forth on Exhibit 4.4 hereto. The parties shall cause their
respective members of the Transition Team to make themselves available as
reasonably necessary to complete all such matters.
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
(a) Abbott shall xxxxx Cephalon full access to documents, meetings
and any other communications (both internal and with any third parties)
regarding clinical trials, registration efforts, and marketing, sales and
distribution activities, each with respect to the Licensed Product. Such
assistance will include, for example, promptly supplying Cephalon with
copies of marketing and sales records, reports, plans and other
information that is related to the Licensed Product and that is in
Xxxxxx'x possession or control. Abbott shall deliver such information in
electronic or hard copy versions, as Cephalon may reasonably request.
(b) Immediately following the Effective Date, the parties shall file
with the FDA the information required pursuant to 21 C.F.R. ss.314.72 for
the transfer of the NDA and the INDs for the Licensed Product from Abbott
to Cephalon. Abbott shall file the information required of a former owner,
and Cephalon shall file the information required of a new owner. Abbott
may retain an archival copy of such NDA and INDs, including information
required to be kept under applicable regulations.
(c) On or before the Effective Date, the parties will agree upon
procedures to ensure a smooth transition from Abbott to Cephalon of the
activities required to be undertaken by the holder of the NDA for the
Licensed Product, including, without limitation, adverse experience
reporting, quarterly and annual FDA reports, complaint and sample
tracking, Licensed Product recalls and communication with health care
professionals and customers. Notwithstanding the above, Abbott agrees to
prepare and file all quarterly and annual FDA reports due to the FDA on or
before December 31, 2000.
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
(d) During the Transition Period, Abbott shall give Cephalon
reasonable prior written notice and the right to attend any meeting
between Abbott and the FDA relating to the Licensed Product and provide
Cephalon with a true and complete copy of each communication that will be
made during the Transition Period between Abbott and the FDA that relates
to the Licensed Product, and the right to review and participate in any
response to any such communication. Abbott and Cephalon shall promptly
provide the other with notes from any meetings or discussions with the FDA
related to the Licensed Product at which the other is not present. If, for
any reason, the FDA does not approve the transfer of the NDA and/or IND's
to Cephalon, then Abbott will continue to maintain the NDA and IND's
consistent with the terms of this Section 4.4. Upon transfer of the NDA
for the Licensed Product to Cephalon, Cephalon shall assume all
responsibility for communication with the FDA that relates to the Licensed
Product.
(e) Following the end of the Transition Period, Abbott will continue
to provide to Cephalon (i) such information in its possession as may be
reasonably requested by Cephalon necessary to maintain regulatory approval
to market and sell the Licensed Product in Territory; and (ii) all
material written customer complaints, adverse reaction information or
notifications, and medical inquiries with respect to the use of the
Licensed Product that may come to its attention.
4.5 Abbott shall account for, report and pay the Medicaid rebate required
under the Social Security Act which is due and owing with respect to all
Licensed Product sold under Xxxxxx'x NDC number. Up through [**], Xxxxxx shall
bear the cost of such Medicaid rebates; provided, however, that if after the
Transfer Date Cephalon pricing practices increase the size of such rebates above
the base level of fifteen point one percent (15.1%) (i.e., because of a best
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
price or CPI adjustment), Cephalon shall be responsible for the amount of any
such increase above the base level of 15.1%. Abbott represents and warrants that
as of the Transfer Date, the rebates on Gabitril do not exceed the base level of
15.1%. After [**], Cephalon shall bear the full cost of such Medicaid rebates.
Within twenty (20) days after the end of each calendar quarter in which Cephalon
sells Licensed Product under Xxxxxx'x NDC number, Cephalon shall provide to
Xxxxxx such pricing information (e.g., AMP, best price, price increases, etc.)
as is necessary for Abbott to calculate and report the Medicaid rebates to the
Health Care Financing Administration. If all or any portion of the Medicaid
rebates are to be paid by Cephalon, Abbott shall provide Cephalon with a copy of
such report (limited to that portion dealing with the Licensed Product, but
broken out by NDC Code, State, units used, rebate requested, rebate paid, units
paid, number of scripts and the reimbursement amount (the amount paid by the
State to pharmacies for the Licensed Product) and invoice Cephalon for the
amounts due from Cephalon. Cephalon shall pay such invoice in full within thirty
(30) days. Cephalon shall be fully and solely responsible for any and all
Medicaid rebates payable with respect to all Licensed Product sold after the
Transfer Date under Cephalon's NDC number.
4.6 Under the Veterans Health Care of 1992, Abbott is required to sell
Licensed Product at no more than the Federal Ceiling Price ("FCP") for each
dosage strength of Licensed Product. The FCP for Licensed Product during 2000 is
set forth in Exhibit 4.6, and for 2001 it is still being negotiated. The FCP for
Licensed Product in 2001 will be no lower than required by law. The Department
of Veterans Affairs has taken the position that such FCP's will be binding on
Cephalon through December 31, 2001. Cephalon covenants that it shall honor such
FCP's for all sales of Licensed Products to those government entities whose
purchase are controlled by the Veterans Health Care Act of 1992.
18
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
4.7 Novo has also licensed the Compound in Europe to Sanofi Synthelabo
S.A. ("Sanofi"). Abbott and Sanofi have entered into an Adverse Event Reporting
Agreement for Tiagabine dated December 14, 1999. From and after the end of the
Transition Period, Cephalon hereby agrees to fulfill Xxxxxx'x obligation under
the Adverse Event Reporting Agreement with respect to the Territory.
4.8 Xxxxxx and its Affiliates and Cephalon and its Affiliates will
maintain complete and accurate books and records in sufficient detail to enable
verification of the sales revenue allocated to each party under this Agreement.
Upon reasonable prior notice, each party (or its independent public accountants)
shall have access to the relevant books and records of the other party to
conduct a review or audit thereof. Such access shall be available during normal
business hours for a period of two (2) years after the Effective Date.
ARTICLE V
WARRANTIES AND REPRESENTATIONS
------------------------------
5.1 Cephalon hereby represents and warrants to Abbott, as of the date
hereof, the following:
(a) Cephalon is a corporation duly organized and validly existing in
good standing under the laws of its state of incorporation, with all
requisite corporate power and authority to own, lease and operate its
properties and assets and to carry on its business as presently conducted
and as proposed to be conducted;
(b) Cephalon has all requisite corporate right, power and authority
to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by
Cephalon and the consummation by Cephalon of the transactions contemplated
hereby have been duly authorized by all
19
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
necessary corporate action on Cephalon's behalf. This Agreement
constitutes legal, valid and binding obligations of Cephalon enforceable
against Cephalon in accordance with the terms hereof and thereof;
(c) subject to compliance with Xxxx-Xxxxx-Xxxxxx Antitrust
Improvement Act (the "HSR Act"), the execution, delivery and performance
by Cephalon of this Agreement and Cephalon's compliance with the terms and
provisions hereof and thereof will not, result in any violation of, or
default under (with or without notice or lapse of time, or both), or give
rise to a right of termination, cancellation or acceleration of any
obligation pursuant to, or a loss of benefits under, any provision of
Cephalon's Articles of Incorporation or By-laws, or any mortgage,
indenture, lease or other agreement or instrument, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
Cephalon, its properties or assets; and
(d) no consent, approval or authorization of, or designation,
declaration or filing with any governmental authority is required (other
than the transfer of the NDA and IND filings on file with the FDA) in
connection with the valid execution, delivery or performance of this
Agreement by Cephalon or the consummation by Cephalon of the transactions
contemplated hereby, except the filing of such forms with the United
States Department of Justice and the Federal Trade Commission as shall be
required by the HSR Act and the expiration or termination of any waiting
periods thereunder. Upon its execution and delivery, and assuming the
valid execution thereof by Abbott, this Agreement will constitute valid
and binding obligations of Cephalon enforceable in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting
20
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or
at law) and except to the extent that the indemnification agreements of in
Article XXV hereof may be legally unenforceable.
5.2 Abbott hereby represents and warrants to Cephalon, as of the date
hereof, the following:
(a) Abbott is a corporation duly organized and validly existing in
good standing under the laws of its state of incorporation, with all
requisite corporate power and authority to own, lease and operate its
properties and assets and to carry on its business as presently conducted
and as proposed to be conducted;
(b) Subject to obtaining the approval of the Abbott Board of
Directors, Abbott has all requisite corporate right, power and authority
to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by
Abbott and the consummation by Xxxxxx of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on
Xxxxxx'x behalf. This Agreement constitutes legal, valid and binding
obligations of Xxxxxx, enforceable against Xxxxxx in accordance with the
terms hereof and thereof;
(c) subject to (i) obtaining the approval of the Abbott Board of
Directors; (ii) compliance with the HSR Act; and (iii) receipt of approval
of this Agreement by Novo required pursuant to the Novo License Agreement,
the execution, delivery and performance by Xxxxxx of this Agreement and
Xxxxxx'x compliance with the terms and provisions hereof and thereof will
not, result in any violation of, or default under (with or without notice
or lapse of time, or both), or give rise to a right of termination,
21
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
cancellation or acceleration of any obligation pursuant to, or a loss of
benefits under, any provision of its Articles of Incorporation or By-laws,
or any mortgage, indenture lease or other agreement or instrument,
license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Xxxxxx or Xxxxxx'x properties or assets;
(d) no consent, approval or authorization of, or designation,
declaration or filing with any governmental authority (other than the
transfer of the NDA and IND filings on file with the FDA) is required in
connection with the valid execution, delivery or performance of this
Agreement by Abbott or the consummation by Abbott of the transactions
contemplated hereby, except the filing of such forms with the United
States Department of Justice and the Federal Trade Commission as shall be
required by the HSR Act and the expiration or termination of any waiting
periods thereunder. Subject to obtaining the approval of the Abbott Board
of Directors, upon its execution and delivery, and assuming the valid
execution thereof by Cephalon, this Agreement will constitute valid and
binding obligations of Abbott, enforceable in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' and contracting parties' rights generally and except
as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding
in equity or at law) and except to the extent that the indemnification
agreements of in Article XXV hereof may be legally unenforceable;
(e)(i) to Xxxxxx'x knowledge and information, there are no patents,
trademarks or other proprietary rights which are valid and
which would be infringed by making, having made, using,
selling, offering for sale or importing
22
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Licensed Product in the Territory in accordance with the terms
of this Agreement.
(ii) Abbott is not aware of sales of any products containing the
Compound that would constitute an infringement by a third
party of the Licensed Patent Rights in the Territory;
(iii) to Xxxxxx'x knowledge, the Composition Patent and the
Trademark registration are valid in the Territory;
(iv) Xxxxxx is aware of no pending interference or opposition
proceeding or litigation or any communication which threatens
an interference or opposition proceeding or litigation before
any patent and trademark office, court, or any other
governmental entity or court in the Territory in regard to the
Licensed Patent Rights; and
(v) there are no suits, claims or proceedings pending against
Abbott or any Abbott Affiliates in any court or by or before
any governmental body including the FDA or agency with respect
to the Licensed Product or the Licensed Patent Right or the
Trademark or Xxxxxx'x exclusive license to the Licensed Patent
Rights in the Territory, and to the best of Xxxxxx'x
knowledge, no such actions, suits or claims have been
threatened against it in the Territory.
(f) Xxxxxx has provided to Cephalon a complete and accurate copy of
the Novo License Agreement and the Novo License Agreement is in full force
and effect, and Abbott is not aware of any facts or circumstances that
could give rise to its termination.
23
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
(g) Since July 1, 2000, Abbott has conducted its sales, marketing
and promotional activities in accordance with the ordinary course of
business with respect to the Licensed Product.
(h) To the best of Xxxxxx'x knowledge, Xxxxxx (i) is in compliance
with, and has not received any notices of violations under, any law,
regulation and order applicable to the manufacture and sale of the
Licensed Product in the Territory, and (ii) has all licenses, permits,
consents, authorizations and approvals necessary for the manufacture and
sale of the Licensed Product in the Territory except in each case, as
would not individually or in the aggregate, have a material adverse effect
on this Agreement, the transactions contemplated hereby, or the future
sale of the Licensed Products by Cephalon. Abbott has no knowledge of any
action, pending or threatened, to cancel, modify or fail to renew any such
license, permits, consents, authorizations and approvals as a result of
the transactions contemplated by this Agreement or otherwise.
(i) Abbott has good and marketable title to all of the assets, the
title to which is being transferred to Cephalon under this Agreement.
There are no mortgages, liens, pledges, charges or encumbrances which
could, individually or in the aggregate, impair the utility, value or
marketability of the assets transferred hereunder.
(j) Prior to the Effective Date, Xxxxxx shall deliver to Cephalon
Exhibit 5.2(j) which shall set forth, to the best of Xxxxxx'x knowledge, a
list relating to the Licensed Product in the Territory of all recalls; all
warning letters, all Form 483 reports; and all notices of adverse findings
or other correspondence suggesting a violation of the laws or the rules
and regulations of the FDA or any similar governmental authority. Abbott
has made available or, prior to the Effective Date will make available, to
Cephalon, the
24
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
integrated summary of efficacy from the original NDA submission for the
Licensed Product, the integrated summary of safety from the original NDA
submission for the Licensed Product and the final comprehensive safety
update prior to approval of the NDA, and all periodic postmarketing ADE
reports since approval of the NDA. Aside from any claims, complaints,
regulatory letters, warning letters, adverse drug experiences, Licensed
Product failures, recalls or regulatory actions disclosed to Cephalon or
to be disclosed above, Abbott is not aware of any other pending or
threatened claims, complaints, regulatory letters, warning letters,
adverse drug experiences, Licensed Product failures, recalls or regulatory
actions with respect to the use, manufacture, advertising, promotion, sale
or distribution of the Licensed Product; except in each case, as would not
individually or in the aggregate, have a material adverse effect on this
Agreement, the transactions contemplated hereby, or the future sale of the
Licensed Products.
(k) No representations or warranty of Abbott stated herein knowingly
contains any untrue statement of a material fact or omits to state any
material fact necessary to make any statement herein in light of the
circumstances in which it is made, not misleading. Abbott has not failed
to disclose any material information relating to the Licensed Product or
to provide or disclose any material documents which if disclosed or
provided, would be deemed material to this Agreement or the transactions
contemplated herein.
5.3 Abbott covenants that it shall use all reasonable commercial efforts
to:
(a) obtain Novo's approval to enter into and perform this Agreement.
Such approval shall be in the form of Exhibit 5.3(a);
25
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
(b) maintain the Novo License Agreement in full force and effect and
fulfill all of its obligations under the Novo License Agreement,
including, but not limited to, any royalty, or other monetary obligations
set forth therein, except for any obligations which Cephalon or its
Affiliates assumes hereunder as an Abbott sublicensee;
(c) within seven (7) business days after the execution of this
Agreement, prepare and file with the Federal Trade Commission and the
Department of Justice a Xxxx-Xxxxx-Xxxxxx Premerger Notification and shall
seek to obtain the expiration or early termination of the waiting period
under the HSR Act;
(d) market, sell and promote the Licensed Product in accordance with
its ordinary course of business, maintain its same policies and practices
in supplying wholesalers and other customers with Licensed Product,
maintain its current level of promotional activity with respect to
Licensed Product, and not offer any special rebates, discounts, terms,
deals, incentives, or wholesaler buying opportunities; and
(e) not mortgage, pledge, subject to any lien, claim, license or
charge or otherwise encumber any of the Transferred Assets or in any way
create or consent to the creation of any title condition adversely
affecting the Transferred Assets.
5.4 Cephalon covenants that it shall use all reasonable commercial efforts
to:
(i) abide, and cause its Affiliates and sublicensees to abide, by
all of the applicable terms and conditions of the Novo License
Agreement which apply to it in its capacity as a sublicensee
under the Novo License Agreement; and
(ii) process all communications with Novo through an Abbott
representative to be identified by Abbott after the Effective
Date; and
26
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
(iii) within seven (7) business days after the execution of this
Agreement, prepare and file with the Federal Trade Commission
and the Department of Justice a Xxxx-Xxxxx-Xxxxxx Premerger
Notification and shall seek to obtain expiration or early
termination of the waiting period under the HSR Act.
5.5 Cephalon hereby covenants and agrees that to the extent that there is
a conflict between this Agreement and the Novo License Agreement, the terms and
provisions of the Novo License Agreement shall control. Cephalon shall use
reasonable commercial efforts to market, promote, sell and develop the Licensed
Product in the Territory.
5.6 EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, EACH PARTY
MAKES NO OTHER WARRANTIES OR REPRESENTATIONS, INCLUDING FITNESS FOR INTENDED
PURPOSE OR MERCHANTABILITY, WHETHER EXPRESSED OR IMPLIED.
ARTICLE VI
REPORTS; RECORDKEEPING; AND PAYMENT
6.1 Within [**] after the close of each calendar quarter of each calendar
year during the term of this Agreement (including the last day of any such
calendar quarter following the expiration date of this Agreement) Cephalon shall
report to Abbott, on behalf of itself and any Cephalon Affiliates or Cephalon
sublicensees selling Licensed Products, all Royalties actually accruing under
this Agreement during such calendar quarter. Such quarterly reports shall
indicate for such calendar quarter all sales of Licensed Products sold by
Cephalon, the Cephalon Affiliates, and Cephalon sublicensees with respect to
which Royalties are due, the Net Sales, and
27
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
the amount of such Royalties. In case no Royalties are due for any such period,
Cephalon shall so report.
6.2 For a period of [**] following any Royalties reporting period
hereunder, Cephalon shall keep, and shall cause Cephalon Affiliates and Cephalon
sublicensees selling Licensed Products to keep, accurate records in sufficient
detail to enable the Royalties due under this Agreement to be determined. Upon
the request of Novo or Abbott, Cephalon, Cephalon Affiliates or Cephalon
sublicensees selling Licensed Products shall permit an independent certified
public accountant selected by Novo or Abbott (except one to whom there shall be
some reasonable objection by Cephalon, the Cephalon Affiliate or Cephalon
sublicensee in question) to have access, not more than [**] in each calendar
year during regular business hours and upon reasonable notice to Cephalon, the
Cephalon Affiliate or Cephalon sublicensee, to such of the records of Cephalon,
the Cephalon Affiliate or Cephalon sublicensee as may be necessary to verify the
accuracy of the reports made during the previous calendar year, but said
accountant shall not disclose to Novo or Abbott any information except that
which should properly have been contained in such reports to enable the
determination of Royalties due hereunder.
6.3 Royalties shown to have accrued by each of the quarterly reports
provided for under this Article VI shall be due and payable on the date such
report is due.
6.4 Royalties due on sales by Cephalon, Cephalon Affiliates or other
Cephalon sublicenses to third party customers in the United States of America
shall be calculated and paid in United States Dollars. Cephalon may deduct or
withhold from such payments and pay to the proper authority all taxes or fees
required by applicable law or regulations to be deducted or withheld with
respect to such payments (which shall be deducted from the Royalty payment
otherwise due hereunder); provided, however, that in regard to any such
deduction or
28
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
withholding, Cephalon shall give Novo and Abbott such assistance as may be
reasonably be necessary to enable Novo and Xxxxxx, as the case may be, to claim
exemption therefrom and shall upon Novo's or Xxxxxx'x request give proper
evidence from time to time as to the payment of such tax, and proof of payment
shall be secured by Cephalon and sent to Abbott and/or Novo as evidence of such
payment.
6.5 The obligation to pay Royalties under this Agreement is to be imposed
only once with respect to the same unit of Licensed Product regardless of the
number of Valid Claims of Licensed Patent Rights covering the same unit.
6.6 Nothing contained in this Agreement shall be construed to require
Cephalon to pay any Royalties under this Agreement with respect to the sale of
the Licensed Products by Cephalon, a Cephalon Affiliate or any other Cephalon
sublicensees in the Territory after the expiration of the last-to-expire patent
included in the Licensed Patent Rights in the Territory.
6.7 There shall be no obligation to pay any Royalties under this Agreement
on sales of Licensed Products between Cephalon and a Cephalon Affiliate or any
Cephalon sublicensee, but in such instances, the obligation to pay Royalties
shall arise upon the sale by Cephalon, such Cephalon Affiliate or Cephalon
sublicensee to an independent third party customer.
6.8 It is understood and agreed that the payment of any Royalties under
this Agreement may be made on behalf of Cephalon by any Cephalon Affiliate or
Cephalon sublicensee.
6.9 The obligation to pay any Royalties under this Agreement shall be
deemed to accrue when the relevant Licensed Products are shipped or billed,
whichever event shall first occur.
29
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
ARTICLE VII
PATENTS
-------
Under the Novo License Agreement, Novo is responsible for:
(a) paying all expenses, including attorneys' fees, incurred in
connection with the filing, prosecution, recording and maintenance
of and the petitioning for extensions for any and all patent
applications or patents under the Licensed Patent Rights in Novo's
name in the Territory;
(b) filing and prosecuting all such patent applications and maintain and
file for extensions for all such patents;
(c) advising Abbott within 45 days of filing when new patent
applications falling within the Licensed Patent Rights have been
filed, and within 45 days of issuance when pending patent
applications have issued as patents, and upon receiving any such
notice from Novo, regarding the Territory, Abbott shall forward a
copy to Cephalon; and
(d) providing copies of all correspondence, filings, and notices of
action sent to or received from the U.S. Patent and Trademark Office
concerning the Licensed Patent Rights within 45 days of sending or
receipt, as applicable. Upon receiving any such materials from Novo
regarding the Territory, Abbott shall forward a copy to Cephalon.
Cephalon agrees that it will provide all reasonable non-monetary
cooperation to Novo in connection with the prosecution of patent
applications, the enforcement of issued patents, and petitioning for
extensions for patents included in the Licensed Patent Rights within
the Territory.
30
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
ARTICLE VIII
INFRINGEMENT OF RIGHTS OF THIRD PARTIES; INDEMNIFICATION
---------------------------------------------------------
8.1 In the event that a third party asserts any patent infringement,
misappropriation of trade secret, breach of confidentiality relationship or any
other action based on or in relation to Cephalon's, a Cephalon Affiliate's or a
Cephalon sublicensee's manufacture, use or sale of any Licensed Product in the
Territory, Novo is obligated, pursuant to the terms of the Novo License
Agreement, at Novo's sole expense, to defend, indemnify and hold Cephalon or
such Cephalon Affiliate or Cephalon sublicensee harmless against all such
claims. In no event shall Abbott be liable to or have any obligation to defend
Cephalon regarding any such claims.
8.2 In the event that, in its sole discretion, Cephalon, such Cephalon
Affiliate or Cephalon sublicensee pays a royalty to such third party in order to
continue the marketing of the Licensed Product, Novo has agreed in the Novo
License Agreement that Cephalon shall be entitled to credit against the Novo
Royalties in the amount that such royalties are actually paid to such a third
party.
ARTICLE IX
INFRINGEMENT OF LICENSED PATENT RIGHTS
--------------------------------------
9.1 Cephalon shall notify Abbott and Novo promptly in writing of any
infringement of issued patents under Licensed Patent Rights which becomes known
to Cephalon, a Cephalon Affiliate or Cephalon sublicensee.
9.2 If, after [**] from the date of a notice from Cephalon to Novo under
Section 9.1, the infringement of Licensed Patent Rights specified in Cephalon's
notice has not been eliminated, Cephalon's obligation to pay the Novo Royalties
shall be suspended until such time as the infringement has in fact been
terminated and Novo notifies Abbott or Cephalon in writing of the termination of
such infringement, whereupon such obligation, if otherwise in effect hereunder,
31
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
shall resume with respect to sales made after receipt of such notice. If Novo
sends such notice to Xxxxxx, Xxxxxx shall immediately forward a copy to
Cephalon.
9.3 If Novo elects not to initiate an infringement suit, Abbott shall
permit Cephalon to bring such suit on its own behalf and at its own expense. In
such event and at the written request of Cephalon, Abbott shall cooperate with
Cephalon in conducting the suit and shall use reasonable commercial efforts to
seek the cooperation of Novo in regard to such suit. Abbott shall be reimbursed
by Cephalon for any out-of-pocket expenses incurred by Abbott at the request of
Cephalon. Any recovery received as a result of such suit shall be shared as
follows: [**] to Novo (as required by the Novo License Agreement) and [**] to
Cephalon.
ARTICLE X
LIABILITIES AND COSTS
---------------------
10.1 Abbott shall be fully responsible and be liable for all obligations,
commitments, and liabilities, including any product liability, arising out of or
relating to any acts, omissions, events, occurrences, circumstances, conditions
or transactions relating to Xxxxxx'x business activities related to the Licensed
Product prior to or on the Transfer Date, regardless of when such claims are
asserted; provided, however, nothing in the foregoing is intended to change,
modify or release Cephalon from any liability, covenant, or obligation,
including the obligation to indemnify Abbott pursuant to the terms of the
Marketing and Development Agreement.
10.2 Cephalon shall be fully responsible and be liable for all
obligations, commitments and liabilities, including any product liability,
arising out of or relating to any acts, omissions, events, occurrences,
circumstances, conditions, or transactions relating to Cephalon's business
activities related to the Licensed Product after the Transfer Date, regardless
of when such claims are asserted; provided, however, that nothing in the
foregoing is intended to change, modify or
32
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
release Abbott from any liability, covenant or obligation, including its duty to
indemnify Cephalon, pursuant to the terms of this Agreement and the Marketing
and Development Agreement.
10.3 Each party hereto shall be responsible for any cost and expenses
incurred by such party with respect to the negotiation, preparation and
execution of this Agreement including fees and expenses of such party's counsel,
accountants, investment bankers, brokers, finders and other experts.
10.4 All applicable excise, sales, use, transfer, gains, documentary,
filing, recordation, stamp ,or other similar taxes attributable to this
sublicense or the transfer of any rights or assets pursuant to this Agreement
shall be paid by Cephalon.
10.5 Any fees required by the filing of the Pre-Notification Form under
the HSR Act shall be shared equally by the parties. Cephalon shall pay the full
amount of such fees with its filing and invoice Abbott for one half of the
amount of such fee. Abbott shall pay such invoice within ten (10) business days.
ARTICLE XI
EFFECTIVE DATE AND TERM
-----------------------
11.1 This Agreement will become effective on the Effective Date pursuant
to Section 11.3, and will remain in effect until and expire in the Territory
upon the later of (i) the date of expiration of Cephalon's Royalties obligation
under this Agreement and (ii) final payment of the amounts due pursuant to
Section 3.1 or 3.2. Upon such expiration, Cephalon shall automatically acquire a
fully-paid and perpetual sublicense with respect to the Licensed Products under
the Licensed Patent Rights and Technical Information and Know-How in the
Territory and a
33
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
fully-paid and perpetual license with respect to the Licensed Products under the
Abbott Technology in the Territory.
11.2 Conditions to Effectiveness
(a) The following shall be conditions precedent to the effectiveness of
this Agreement and the obligations of the parties:
(i) All filings under the HSR Act shall have been made by the
parties and any required waiting period under such law shall
have expired or been earlier terminated;
(ii) Novo shall have provided its approval to the sublicense
contemplated by this Agreement in the form set forth in
Exhibit 5.3(a) hereof; and
(iii) all representations and warranties by the parties hereunder
shall be true and correct as of the Effective Date (or waived
by the party to whom the representation and warranty was
given).
(b) The non-fulfillment of any of the conditions described in Section
11.2(a) shall not result in any liability to any party unless such
non-fulfillment is a result of a breech of this Agreement by such
party.
(c) If the Effective Date has not occurred within one hundred eighty
(180) days from the execution date hereof (other than through the
failure of the party seeking to terminate this Agreement to comply
fully with its obligations under this Agreement) or such later date
as the parties may agree, either party may terminate this Agreement
by written notice to the other party.
11.3 As soon as practicable after the parties have determined that all
conditions precedent to the effectiveness of this Agreement have been satisfied,
they shall each provide
34
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
notice to the other of such satisfaction, and shall agree promptly thereafter on
the date on which the closing of this transaction shall occur, which date shall
be not less than two (2) nor more than five (5) business days after the date of
notice of closing. On the date of said closing (the "Effective Date"), Cephalon
shall make the initial payment established in Section 3.1(i), and Abbott shall
deliver to Cephalon the following documents: (i) a fully executed copy of the
consent of Novo to the sublicense granted to Cephalon hereunder; (ii) an
executed xxxx of sale or other written evidence of assignment, conveyance or
transfer of title to all Transferred Assets; and (iii) an executed form of
letter from Abbott to the FDA concerning the transfer of the NDA and the INDs.
ARTICLE XII
TERMINATION
-----------
12.1 Failure by Cephalon or Abbott to comply with any of the obligations
and conditions contained in this Agreement shall entitle the other party to give
notice to the party in default requiring the defaulting party to make good such
default. If such default is not made good within 90 days after the receipt of
such notice, the notifying party shall be entitled (without prejudice to any of
its other rights conferred on it by this Agreement) to terminate this Agreement
by giving notice to take effect immediately. The right of either party to
terminate this Agreement, as hereinabove provided, shall not be affected in any
way by its waiver of, or failure to take action with respect to, any previous
default.
12.2 In the event that this Agreement is terminated by Abbott due to
Cephalon's default in making the payments set forth in Sections 3.1(i) or (ii)
or Section 3.2(i), Cephalon agrees to return to Abbott good and marketable title
to all of the assets transferred to Cephalon pursuant to this Agreement,
including all of the assets listed in Section 2.6.
35
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
ARTICLE XIII
RIGHTS AND OBLIGATIONS UPON AND FOLLOWING TERMINATION
-----------------------------------------------------
Except as where otherwise specifically provided herein, termination of
this Agreement, by expiration or otherwise shall be without prejudice to any
other remedies which either party may then have hereunder.
36
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
ARTICLE XIV
FORCE MAJEURE
-------------
The parties hereto shall not be liable in any manner for failure or delay
in fulfillment of all or part of this Agreement, directly or indirectly owing to
acts of God, governmental orders or restrictions, war, war-like conditions,
revolution, riot, looting, strike, lockout, fire, flood or other causes or
circumstances beyond the parties' control.
ARTICLE XV
ASSIGNMENT
----------
This Agreement shall not be assignable by either party without the prior
written consent of the other party, which consent may not be unreasonably
withheld. Any assignment of this Agreement by Cephalon shall also require the
consent of Novo. It is expressly understood and agreed, however, that any
permitted assignor of any rights hereunder shall remain bound by the obligations
hereof.
ARTICLE XVI
CONTRACT WITH CEPHALON
----------------------
Upon written request by Cephalon, Abbott shall request Novo to contract
directly with Cephalon, a Cephalon Affiliate or Cephalon sublicensee for any
purpose deemed necessary by Cephalon to preserve its and such person's rights
and licenses under this Agreement or to enable Abbott to perform its obligations
under this Agreement. Such purposes may include, without limitation, to
establish the deductibility of royalty payments as expenses for income tax
purposes, or to protect the status of Cephalon or a Cephalon Affiliate or
Cephalon sublicensee as a user of property rights granted pursuant to his
Agreement. The terms and conditions of any such contract
37
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
shall be substantially the same as those contained herein and shall conform to
the requirements of local law and regulations.
ARTICLE XVII
CONFIDENTIALITY
---------------
17.1 During the term of this Agreement and for a period of [**]
thereafter, each party agrees that all information obtained or developed as a
result of this Agreement or received in writing from the other party or Novo
shall be maintained as confidential ("Confidential Information") and that any
party receiving such Confidential Information from the other party or Novo or
developing such Confidential Information hereunder shall not, without the prior
written approval of the other party and/or Novo, as the case may be, disclose to
any third party or use, except as provided under this Agreement, any such
Confidential Information; provided, however, that the foregoing restrictions on
use and disclosure shall not apply to any such information which is not deemed
Confidential Information under the Novo License Agreement.
17.2 All confidentiality or other provisions which by their terms are to
be performed or complied with subsequent to the expiration or other termination
of this Agreement, shall survive such expiration or other termination.
ARTICLE XVIII
MANUFACTURING
-------------
At the Effective Date, Abbott and Cephalon shall enter into a Toll
Manufacturing and Packaging Agreement in the form attached as Exhibit 18.
38
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
ARTICLE XIX
TRANSFER
--------
At such time as the payments required by Sections 3.1 and 3.2 have been
made in full, the parties shall both use reasonable commercial efforts to
negotiate and execute a direct license agreement between Cephalon and Novo for
the Territory. If unsuccessful, Abbott shall authorize Cephalon to directly
account for and pay the Novo Royalties and any Novo Improvement Royalty directly
to Novo. In the event that the Novo License Agreement terminates for any reason
other than its expiration or due to a default by Cephalon of any of its
obligations under this Agreement, Abbott shall use all reasonable efforts and
diligence to facilitate the execution of a direct license between Novo and
Cephalon.
ARTICLE XX
ENTIRE AGREEMENT AND AMENDMENT
------------------------------
This Agreement, including the Exhibits hereto, contains the entire
understanding of the parties with respect to the matters contained herein. In
case one or more amendments, modifications or alterations of this Agreement
become necessary, the parties shall negotiate in good faith on such amendments,
modifications or alterations. This Agreement may be amended, modified or altered
only by an instrument in writing duly executed by the parties hereto.
ARTICLE XXI
NOTICES
-------
Any notice required to be given pursuant to this Agreement shall be made
by telex or certified air mail, return receipt requested, and shall be deemed
given on the fifth day after having been so deposited, postage prepaid, in the
mails of the country of dispatch and addressed as follows:
39
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
If to Novo:
Novo Industri A/S
Novo Alle
XX-0000 Xxxxxxxxx, Xxxxxxx
Attention: Vice President Pharmaceuticals,
Research and Development
With a copy to:
Legal Department
If to Xxxxxx:
Xxxxxx Laboratories
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, XX 00000-0000
Attention: Vice President, Pharmaceutical Products
With a copy to:
Office of General Counsel
If to Cephalon:
Cephalon, Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxx Xxxxxxx, XX 00000
Attention: Sr. Vice President and General Counsel
ARTICLE XXII
SEVERABILITY
------------
In the event that any one or more of the provisions of this Agreement
should for any reason be held by any court or authority having jurisdiction over
this Agreement, or over any of the parties hereto to be invalid, illegal or
unenforceable, such provision or provisions shall be reformed to approximate as
nearly as possible the intent of the parties, and if unreformable, shall be
divisible and deleted in such jurisdiction; elsewhere, this Agreement shall not
be affected.
40
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
ARTICLE XXIII
GOVERNING LAW; INTERPRETATION
-----------------------------
This Agreement shall be deemed to be a contract made under and construed
in accordance with the laws of the Kingdom of Denmark, without regard to
principles of conflict of laws.
ARTICLE XXIV
ARBITRATION
-----------
All disputes arising in connection with this License Agreement shall be
finally settled under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce by one or more arbitrators appointed in
accordance with the Rules, all proceedings to be conducted in Chicago, Illinois
in the English language.
ARTICLE XXV
INDEMNIFICATION
---------------
25.1 Cephalon shall indemnify and hold Novo and Abbott harmless from and
against all claims, lawsuits, demands, causes of action, judgments, losses,
damages, expenses, including reasonable attorney's fees, and from all liability
and damages of whatsoever nature, kind, or description arising out of (i) the
manufacture, use, or sale of Licensed Products by Cephalon, any Cephalon
Affiliate, or any Cephalon sublicensee after the Transfer Date regardless of
when such claim is asserted unless such liability results from a breach of
Xxxxxx'x representations and warranties set forth in this Agreement or Abbott
was responsible for such liability under the Marketing and Development
Agreement; (ii) any inaccuracy of any representation or warranty on the part of
Cephalon; or (iii) any liabilities or expenses for which Cephalon is responsible
pursuant to Article X.
41
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
25.2 Abbott shall indemnify and hold Cephalon and Novo harmless, from and
against all claims, lawsuits, demands, expenses, including reasonable attorneys'
fees and from all liability and damages of whatsoever nature, kind or
description arising out of (i) the manufacture, use or sale of Licensed Products
by Abbott, any Abbott Affiliate or any Abbott sublicensee on or prior to the
Transfer Date regardless of when such claims are asserted, unless Cephalon was
responsible for such liability under the Marketing and Development Agreement and
(ii) any inaccuracy of any representation or warranty on the part of Abbott; or
(iii) any liabilities or expenses for which Abbott is responsible pursuant to
Article X.
ARTICLE XXVI
NON SOLICITATION
----------------
For a period of [**] after the Effective Date, neither party shall target or
recruit the other party's employees without the other party's prior written
consent. The parties agree that this provision shall not apply to situations
where a party's employee is hired by the other party as a result of such
employee responding to an advertisement to the general public that was placed by
the hiring party.
ARTICLE XXVII
TERMINATION OF MARKETING AND DEVELOPMENT AGREEMENT
--------------------------------------------------
Upon the Transfer Date, the Marketing and Development Agreement shall be
terminated between the parties. Termination of the Marketing and Development
Agreement shall not relieve the parties thereto of any liability which accrued
thereunder prior to the effective date of such termination. The only provisions
of the Marketing and Development Agreement that shall survive its termination
are Section 11.1, Article 13, Article 14, Section 18.7 and Section 18.9.
42
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
ARTICLE XXVIII
PUBLICITY
---------
28.1 Except as other wise provided herein, each party shall maintain the
confidentiality of all provisions of this Agreement and this Agreement itself
and, without the prior written consent of both parties, neither party shall make
any press release or other public announcement of or otherwise disclose to any
third party this Agreement or any of its provisions (i) except disclosure to
those of its directors, officers, employees, accountants, attorneys, advisers
and agents whose duties reasonably require them to have access to the Agreement
and, in the case of Abbott disclosure to Novo, provided that such officers,
employees, accountants, attorneys, advisers, agents and licensors are required
to maintain the confidentiality of the Agreement to the same extent as if they
were Parties hereto; and (ii) except for disclosures as may be required by law,
in which case the disclosing party shall provide the nondisclosing party with
prompt advance notice of such disclosure so that the nondisclosing party shall
have the opportunity if it so desires to seek a protective order or other
appropriate remedy and, in connection with any disclosure to the Securities and
Exchange Commission, the disclosing party shall use reasonable efforts to obtain
confidential treatment for such disclosure.
28.2 Promptly following the execution of this Agreement, the parties shall
issue a press release in the form presented in Exhibit 28.2.
ARTICLE XXIX
ASSURANCES
----------
After the Effective Date, Abbott shall perform, or cause to be performed,
all such other actions and shall execute, acknowledge and deliver, or cause to
be executed, acknowledged and delivered, all such assignments, transfers,
consents and other documents prepared by Cephalon or
43
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
its counsel as Cephalon may reasonably request to vest in Cephalon, and protect
Cephalon's right, title and interest in, and enjoyment of the Transferred
Assets. Cephalon shall similarly perform, or cause to be performed, all such
other actions, and shall execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered such other documents as Abbott or its
counsel may reasonably request to perfect and protect Xxxxxx'x rights under this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their duly authorized representatives.
CEPHALON, INC.
By /s/ Xxxxx Xxxxxxx, Xx.
------------------------------------
Title Chairman and Chief
Executive Officer
---------------------------------
Date October 31, 2000
----------------------------------
XXXXXX LABORATORIES
By /s/ Xxxxxx X. Xxxxxxx, Xx.
------------------------------------
Title Senior Vice President
Pharmaceutical Operations
---------------------------------
Date October 31, 2000
----------------------------------
44
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
EXHIBIT 1.3
PATENT AND PATENT APPLICATIONS
------------------------------
INCLUDED WITHIN ABBOTT TECHNOLOGY
U.S. Serial No. 235,540
"Extended Release Tiagabine Formulations with reduced side effects"
Pending
Filed: January 22, 1999 (priority application: 60/072,130 filed January 22,
1998)
NOTE: Abbott is preparing a patent application to be filed in 1 - 2 weeks;
recommend updating list after we receive serial number and filing date.
45
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
EXHIBIT 1.16
LICENSED PATENT RIGHTS
----------------------
U.S. Patent No. 5,010,090
"N-(butenyl substituted) azaheterocyclic carboxylic acids"
Issued: April 23, 1991
Expires: April 23, 2008
Extended Expiration (pending): September 30, 2011
U.S. Patent No. 5,354,760
"Crystalline Tiagabine monohydrate, its preparation and use"
Issued: October 11, 1994
Expires: March 24, 2012
46
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
EXHIBIT 4.4
TRANSITION TEAM
---------------
ABBOTT
X. Xxxxxxx Manufacturing
X. Xxxxx Marketing
X. Xxxxx Regulatory
CEPHALON
X. Xxxxxx Marketing
X. Xxxxxxx Clinical
R. Urban Manufacturing
47
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
EXHIBIT 4.6
2000 FEDERAL CEILING PRICES
---------------------------
2 mg 100 count bottle $69.52
4 mg. 100 count bottle $60.39
12 mg. 100 count bottle $74.08
16 mg. 100 count bottle $108.35
48
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
EXHIBIT 5.2(j)
LIST OF CERTAIN ACTIONS
-----------------------
To be provided by the Effective Date
49
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
EXHIBIT 5.3 (a)
NOVO CONSENT FORM
ATTACHED
--------
50
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
EXHIBIT 18
TOLL MANUFACTURING AGREEMENT
----------------------------
ATTACHED
51
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
EXHIBIT 28.2
PRESS RELEASE
-------------
ATTACHED
52
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
