EXHIBIT 10.3
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as **. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
LICENSE AGREEMENT
-----------------
THIS AGREEMENT is made and is effective this 5/th/ day of November
1997 (the "Effective Date") by and between:
ADOLOR CORPORATION, a Delaware corporation, having its principal place
of business at 000 Xxxxxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxx ("ADOLOR") and
XXXXX XXXX PHARMACEUTICAL COMPANY, LTD., a Korean corporation, having
its principal office at 000-00, Xxxx-xxxx, Xxxx-xx, Xxxxx, Xxxxx Xxxxx ("X XXXX
XXXX").
RECITALS
--------
1. XXXXX XXXX is engaged, inter alia, in the development,
manufacture and sale of pharmaceuticals in the Republic of South Korea.
2. ADOLOR is engaged, inter alia, in the research, development, and
sale of pharmaceuticals directed to pain management.
3. ADOLOR has received an exclusive license for certain patents and
patent applications related to ADL 2-1294 from the Regents of the University of
California.
4. ADOLOR has certain intellectual property related to ADL 2-1294
and its topical use as an anti-hyperalgesic.
5. The parties wish to enter into this Agreement to provide license
of ADOLOR's topical anti-hyperalgesic ADL 2-1294 to XXXXX XXXX.
NOW THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth the parties agree to be legally bound as
follows:
ARTICLE I DEFINITIONS
-----------
Section 1.1. "FDA" shall mean the United States Food and Drug Administration
or such other agency or instrumentality of the United States to
which the responsibilities and authority of the FDA are given or
delegated from time to time, and the foreign equivalents thereof.
Section 1.2. "Field" shall mean topical use on skin in humans for anti-
hyperalgesia, alone or in combination with other topical
products. The Field shall not include the use for dental,
ophthalmic, mucosal, parental, injectable, vaginal, and oral
administration.
Section 1.3. "Formulation" shall mean the topical formulation of ADL 2-1294
for use in the Field provided by ADOLOR which is the subject of
FDA submissions.
Section 1.4. "Know-How" shall mean Technology, patented or not, discovered or
developed by ADOLOR prior to or during the term of this
Agreement, which is pertinent to the manufacture, sale, or use of
the Licensed Product and anti-hyperalgesics.
Section 1.5. "Licensed Patent" shall mean International Patent Application
PCT/US96/14727, filed September 12, 1996, and corresponding
patent applications and patents in the Territory.
Section 1.6. "Licensed Product" shall mean a composition containing ADL 2-1294
adapted for use in the Field. Licensed Product shall be deemed to
embody Know-How.
Section 1.7. "Net Sales" shall mean total gross sales of Licensed Products
sold by XXXXX XXXX to unrelated third parties less, on a Licensed
Product by Licensed Product basis: quantity or cash discount
allowed or paid by XXXXX XXXX; credits or allowances given or
made on account of returns or rejections of previously delivered
Licensed Products; rebates; insurance premium on sales and sales
or excise taxes.
Section 1.8. "NDA shall mean a new drug application as filed with the FDA or
the foreign equivalent thereof.
Section 1.9. "Technology" shall mean ADOLOR's confidential know-how,
processes, instruments, machines, materials, compositions, test
procedures, manufacturing procedures, techniques, formulations,
methodologies, data and information.
Section 1.10. "Territory" shall mean Republic of South Korea, People's Republic
of North Korea, or any subsequent unification of those countries.
ARTICLE II LICENSES AND RIGHTS
-------------------
Section 2.1. Licenses and Rights.
-------------------
(a) ADOLOR grants to XXXXX XXXX an exclusive license under Licensed Patents to
use and sell Licensed Product in the Territory in the Field, without the
right to sublicense outside of the Territory.
(b) ADOLOR grants. to XXXXX XXXX an exclusive license under this Agreement for
Know-How and Licensed Patent for the manufacture of Licensed Product in the
Republic of South Korea for sale or use in the Territory. XXXXX XXXX shall
not manufacture Licensed Product in any country or territory other than the
Territory. XXXXX XXXX shall not directly or indirectly export, sell, or
offer for sale Licensed Product outside the Territory.
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(c) During the term of this Agreement, XXXXX XXXX shall not work with any party
other than ADOLOR on the development or use of topical anti-hyperalgesic
products or any composition which contains ADL 2-1294.
(d) XXXXX XXXX may sublicense the right to sell Licensed Product only in the
Territory, provided however, that Adolor shall have the right to approve
the sublicense, such approval shall not be unreasonably withheld or
delayed. Any sublicensee shall comply with all provisions of this
Agreement.
(e) Other routes of administration for Licensed Product in dental, ophthalmic,
mucosal, parenteral, injectable, vaginal and oral forms are presently not
available. Should ADOLOR develop new routes of administration, ADOLOR shall
offer XXXXX XXXX the right of first refusal to acquire a license under
ADOLOR's intellectual property for the new route of administration in the
Territory. If ADOLOR develops a new route of administration, ADOLOR will
notify XXXXX XXXX in writing and XXXXX XXXX shall have thirty (30) days
from the receipt of written notice to provide ADOLOR with written
notification of XXXXX XXXX'x interest in obtaining the license for the new
field. ADOLOR and XXXXX XXXX shall negotiate in good faith for sixty (60)
days to reach an agreement on the terms of the license. If ADOLOR and XXXXX
XXXX are unable to reach an agreement, ADOLOR may enter into an agreement
with a third party, provided the terms offered by the third party are more
favorable to ADOLOR than the terms offered by XXXXX XXXX.
ARTICLE III INITIATION AND INFORMATION TRANSFER
-----------------------------------
Section 3.1. Technology Transfer
-------------------
(a) Following the Effective Date, the parties shall meet at ADOLOR's offices,
and ADOLOR shall provide detailed data and information related to the
Formulation including copies of ADOLOR's FDA filings. All data and
information shall be provided in English.
(b) ADOLOR shall supply copies of all its patents and patent applications which
are related to the Licensed Product.
(c) At XXXXX XXXX'x request, ADOLOR shall make it's scientists and technical
personnel available at the offices of XXXXX XXXX not to exceed two times
each year of this Agreement not to exceed ten (10) man days in total at no
cost to XXXXX XXXX. If XXXXX XXXX requires additional assistance, ADOLOR
will use reasonable efforts to provide it provided that such request is
reasonable in ADOLOR's opinion.
ARTICLE IV PRODUCT DEVELOPMENT
-------------------
Section 4.1. Overview.
--------
During the term of this Agreement, XXXXX XXXX shall use its best efforts to
obtain regulatory approval and to commercialize the Licensed Product in the
Field in the Territory. XXXXX XXXX is solely responsible for the
expeditious development of the
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Licensed Product in the Territory. There will be quarterly meetings
alternating between ADOLOR's offices and XXXXX XXXX'x offices to exchange
data. ADOLOR will review XXXXX XXXX'x clinical development program
including any necessary clinical protocols and agree to recommend
modifications or improvements; however, XXXXX XXXX shall be solely
responsible for the design of its clinical development program.
Section 4.2. Communication.
-------------
From time to time, but at least within 45 days after the end of each
quarter, XXXXX XXXX shall provide ADOLOR with a detailed written report of
XXXXX XXXX'x progress in commercially developing the Licensed Product.
Such reports shall include, among other information, details of XXXXX XXXX'
s Formulations of Licensed Product, all test results and clinical results,
and documentation of any adverse reactions. All adverse reactions which are
reportable to the FDA shall be provided to ADOLOR within 24 hours. Prior to
the approval of Licensed Product by the U.S. FDA, ADOLOR agrees to provide
quarterly progress reports to XXXXX XXXX on the progress of its clinical
development program for Licensed Product
Section 4.3. Filing Requirements
-------------------
XXXXX XXXX has the responsibility for and shall bear the expense of
obtaining all approvals of the relevant governmental agencies in the
Territory including the Republic of Koreas Ministry of Health and Welfare
("MOHW") in order to implement the provisions of this Agreement. Following
approval of an NDA for Licensed Product in United States or another major
market such as United Kingdom, Germany or Japan, XXXXX XXXX will use its
best efforts to file the Korean equivalent of an NDA with MOHW.
ARTICLE V MANUFACTURE AND SUPPLY
----------------------
Section 5.1. Formulation Supply
------------------
(a) During the development of the Licensed Product ADOLOR shall supply XXXXX
XXXX with reasonable amounts of Formulation within ADOLOR's ability to
produce at ADOLOR's fully allocated cost, but with no profit; provided,
---------
however, that XXXXX XXXX shall use such Formulation solely for obtaining
-------
regulatory approval and shall not sell the Formulation.
(b) ADOLOR agrees to provide three (3) percent of the quantity of bulk
Formulation sold by XXXXX XXXX in the Territory in the first year
immediately following the first commercial sale of Licensed Product at no
cost to XXXXX XXXX.
Section 5.2. ADL2-1294 Supply
----------------
During the term of this Agreement XXXXX XXXX shall purchase the bulk
Formulation of ADL2-1294 or Licensed Product from ADOLOR or ADOLOR's
designee provided that the price, quality and service are competitive. The
supply of ADL2-1294 shall be the
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subject of a separate agreement in accordance with this Section 5.2. In the
event XXXXX XXXX can demonstrate that Formulation from ADOLOR or ADOLOR's
designee is not competitive, then XXXXX XXXX shall under this Agreement
have the right to manufacture Licensed Product in the Republic of South
Korea for use in the Territory. However, the parties agree that ADOLOR or
ADOLOR's designee will manufacture the Licensed Product or a portion
thereof, and will negotiate in good faith a separate supply agreement.
Section 5.3. Non-transfer
------------
XXXXX XXXX shall not transfer or disclose to any third parties Know How or
Technology directed to or related to the manufacture or preparation of
Licensed Product including the Formulation.
ARTICLE VI SALES
-----
Section 6.1. Sales Efforts.
-------------
(a) XXXXX XXXX agrees to launch the marketing and sales of the Licensed Product
in the Territory within three (3) months of obtaining government regulatory
approval for the reimbursement pricing for Licensed Product.
(b) XXXXX XXXX shall use its best efforts to market and sell the Licensed
Product in the Territory.
Section 6.2. Termination of License.
----------------------
Notwithstanding any other provision of this Agreement, if XXXXX XXXX has
not made a commercial sale of a Licensed Product within three (3) years of
FDA approval, ADOLOR shall have the right to terminate this Agreement if
the cause of such delay is not directly attributable to ADOLOR'S failure to
perform its obligations under this Agreement.
ARTICLE VII PAYMENTS AND ROYALTIES; REPORTS; RECORDS
----------------------------------------
Section 7.1. Milestones and Payments.
-----------------------
As partial consideration for the license granted in this Agreement, certain
payments shall be made by XXXXX XXXX upon reaching identified milestones,
provided, that such payment shall be made after the execution of this
Agreement:
(i) within thirty (30) days following XXXXX XXXX'x receipt of a written
notice that ADOLOR has successfully completed the Phase II clinical
trials in a major pharmaceutical market, XXXXX XXXX shall pay ADOLOR
U.S.$400,000; provided, however, that such milestone payment shall
-----------------
be reduced by five percent (5%) if Phase II completion occurs after
July 17th, 1999 and on or before October
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16th, 1999; or by 10% if Phase II completion occurs after October
16th, 1999 and on or before April 15, 2000; or by twenty percent
(20%) in the event Phase II completion occurs after April 15, 2000.
(ii) within thirty (30) days following receipt of a written notice that
the U.S. FDA or its counterpart in any other major pharmaceutical
market approved the sale of Licensed Product, XXXXX XXXX shall pay
ADOLOR U.S. $400,000; provided, however, that such milestone payment
-----------------
shall be reduced by ten percent (10%) in the event such NDA approval
is granted after September 30, 2001 and on or before December 31,
2001; or by twenty percent (20%) in the event such NDA approval is
granted after December 31, 2001 and on or before June 30, 2002; or
by forty percent (40%) in the event such NDA approval is granted
after June 30, 2002.
(iii) Notwithstanding the provision of Section 7.1(i), in the event an NDA
is approved in any major pharmaceutical market on or before June 30,
2001 and the milestone payment pursuant to Section 7.1 (i) above was
---
reduced, then, the amount of any such reduction or reductions shall
be paid to ADOLOR concurrent with the milestone payment due under
Section 7.1 (ii).
Section 7.2. Royalties.
---------
(a) XXXXX XXXX shall pay to ADOLOR a running royalty, in the Territory, with
respect to the sale of the Licensed Products whose composition, manufacture
or use is covered by a Licensed Patent, for a term that shall continue
until the expiration of the last to expire licensed patent covering ADL 2-
1294, equal to:
(i) ** percent (**) of the annual Net Sales of the
first ** Won except that such royalty rate shall be ** percent (**%) and **
percent (**%) in the first and second consecutive twelve month periods following
the first commercial sales of Licensed product by XXXXX XXXX respectively under
this Agreement;
(ii) ** percent (**%) of the annual Net Sales of greater than ** Won up
to ** Won; and
(iii) ** percent (**%) of the annual Net Sales greater than **
Won.
(b) ADOLOR's right to royalties accrues upon the sale of Licensed Products by
XXXXX XXXX. Licensed Products shall be deemed sold when invoiced or
shipped, whichever occurs earlier.
Section 7.3. Reports.
-------
Within forty-five (45) days after the end of each calendar quarter (whether
or not, a royalty payment is due for that period), XXXXX XXXX shall provide
ADOLOR with a written statement with respect to such period specifying the
gross sales of Licensed Product in the Territory, the calculation of Net
Sales, the Net Sales of Licensed Product
**=Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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during the period; and the amount of any royalty due, if any. XXXXX XXXX.
shall provide the basis for its calculations of Net Sales.
Section 7.4. Records.
-------
(a) XXXXX XXXX shall keep complete and accurate records pertaining to the
formulation, manufacture, use and sale of Licensed Products appropriate to
determine royalties payable under Section 7.2 of this Agreement.
(b) At the request and expense of ADOLOR, upon XXXXX XXXX'x prior written
approval, which shall not be unreasonably withheld or delayed, an
independent certified accountant selected by ADOLOR shall have access, at
XXXXX XXXX'x principal place of business in Seoul, South Korea during
ordinary business hours, to such records maintained by XXXXX XXXX in
relation to the sale or sales of Licensed Products or Formulations pursuant
to this Agreement as may be necessary to:
(i) Determine with respect to any of the three (3) preceding years the
correctness of any report or payment made under this Agreement; or
(ii) Obtain information as to the royalty payable in the case of XXXXX
XXXX'x failure to report or pay pursuant to this Agreement. The
accountant shall not disclose to ADOLOR or any third parties any
information relating to the business of XXXXX XXXX other than
information relating solely to the accuracy of the reports and
payments under this Agreement. If the accountant determines that
XXXXX XXXX has under-reported the royalties due ADOLOR, then the
additional royalties due shall within ten (10) days be paid by XXXXX
XXXX to ADOLOR along with liquidated damages of one and one-half
percent (1.5%) per month for the under-reported amount. In the event
the under-reported amount for any calendar year exceeds five percent
(5%), then XXXXX XXXX shall reimburse ADOLOR for the professional
fees and expenses of the accountant.
Section 7.5. Payment of Royalty.
------------------
(a) XXXXX XXXX shall make quarterly royalty payments due under Section 7.2 for
sales of the Licensed Product. Within forty-five (45) days following the
end of a fiscal quarter XXXXX XXXX shall submit the quarterly report due
under Section 7.3.
(b) Any royalty due hereunder shall be paid in United States funds collectible
at par in New York, New York, USA. For the purposes of computing the
royalty on Net Sales of Licensed Product hereunder, royalty shall first be
determined in the foreign funds in which sold (herein called "Selling
Funds") and then converted into its equivalent of the United States funds
at the selling rate as it appears in the "Currency Rates in New York"
section of the Asian Wall Street Journal for the last day of each calendar
month with report due to U.S. in under Section 7.3 with a Letter of Credit
for the amount of the royalty payment due. The Letter of Credit shall be
irrevocable, payable in 120 days from the end of the quarter on
demand/sight to ADOLOR.
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(c) Any sum required under the laws of any governmental authority to be
withheld by XXXXX XXXX from payment for the account of ADOLOR including
payments under Section 7.1 and royalties under Section 7.2 shall be
promptly paid by XXXXX XXXX for and on behalf of ADOLOR to the appropriate
tax or other governmental authorities and XXXXX XXXX. shall furnish ADOLOR
with copies of the official tax receipts or other appropriate evidence
issued by the appropriate tax or other government authorities to enable
ADOLOR to support a claim for tax or other credit or refund in respect of
any sum so withheld.
ARTICLE VIII TECHNICAL ASSISTANCE
--------------------
Section 8.1. Overview.
--------
ADOLOR shall give XXXXX XXXX, at XXXXX XXXX'x request, such advice and
assistance as ADOLOR shall be aware of for the manufacture or use of the
Licensed Product.
Section 8.2. Additional Work.
---------------
During the term of this Agreement, ADOLOR shall endeavor from time to time
inform XXXXX XXXX of new information which may be useful to XXXXX XXXX in
the formulation, use and sale of Licensed Product.
ARTICLE IX PRODUCT LIABILITY
-----------------
Section 9.1. Product Liability.
-----------------
(a) XXXXX XXXX shall indemnify and hold ADOLOR harmless against all claims,
losses, expenses and damages awarded by a court of competent jurisdiction
and reimburse ADOLOR for all reasonable legal fees and costs incurred by
ADOLOR in defense of such claims, arising from the manufacture, use or sale
of Licensed Product by XXXXX XXXX. ADOLOR shall have no liability or
responsibility for the manufacture, product specifications or end-uses of
Licensed Product.
(b) ADOLOR shall give XXXXX XXXX prompt written notice of any. claim against
ADOLOR for which ADOLOR may or does seek indemnification under this
Section, and XXXXX XXXX shall be solely responsible for the defense and
financial settlement of such claim.
(c) ADOLOR shall use its commercial best efforts to cause any supplier of
Licensed Product to XXXXX XXXX arranged by ADOLOR to make XXXXX XXXX the
beneficiary of any warranty or indemnity provided by such supplier in
connection with the manufacture of the Licensed Product being so supplied
(or, in lieu thereof, to pass through without additional liability on the
part of ADOLOR any benefit of any such warranty or indemnity actually
received by ADOLOR from such supplier).
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ARTICLE X CONFIDENTIALITY
---------------
Section 10.1. Nondisclosure and Non-use.
-------------------------
XXXXX XXXX and ADOLOR shall each retain in confidence information obtained
from the other under this Agreement and shall not disclose such information
to any third parties except as provided for in Section 10.2 of this
Article. Any confidential information disclosed under any other agreement
entered into between the two parties shall be deemed to have been disclosed
under the provisions of this Article X and shall be governed by the terms
of this Article X.
Section 10.2. Exceptions.
----------
(a) The obligations of nondisclosure and nonuse of this Article X shall not
apply to information which:
(i) is known to either party as evidence by written records maintained
by the receiving party, or to the public, prior to its disclosure
under this Agreement;
(ii) is hereafter lawfully disclosed to the receiving party by a third
party not under an obligation of confidence to the other party; or
(iii) subsequently becomes known to the public by some means other than a
breach of this Agreement.
(b) ADOLOR and XXXXX XXXX shall each retain in confidence information obtained
from the other under this Agreement and shall not disclose such information
to any third party except:
(i) consultants who are obligated to maintain in confidence pursuant to
written agreements which incorporate by reference the terms of this
Article;
(ii) as necessary to obtain approval from a governmental agency in order
to market the product;
(iii) as reasonably may be required in a patent application covering
subject matter which is encompassed within this Agreement; or
(iv) as otherwise may be required by law, regulation or judicial order,
and shall not use such information for any purposes other than those
contemplated by this Agreement. Each party shall take all reasonable
precautions to safeguard the confidentiality of the information.
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Section 10.3. Purpose of Article.
------------------
Each party acknowledges that the restrictions contained in this Article X
are necessary and reasonable to protect the legitimate interests of the
other party and. a violation of this Article may result in irreparable harm
to the injured party.
Section 10.4. Term.
----
The provisions of this Article X shall survive the expiration or
termination of this Agreement and continue for twelve (12) years
thereafter.
ARTICLE XI INVENTIONS AND PATENTS
----------------------
Section 11.1. Results and Data.
----------------
The data and test results of research and development conducted as a result
of this Agreement are confidential, proprietary and of great value to the
parties. The data and test results are subject to the terms of Article X of
this Agreement which are not inconsistent with this Section 11.1. XXXXX
XXXX shall not use or disclose the data or test results for any purpose
other than in accordance with the terms of this Agreement. The data and
test results shall be deemed to embody Technology. The data and test
results shall be owned solely by ADOLOR, and ADOLOR shall be free to use
the data and test results for any purpose, including but not limited to
disclosure to a third party.
Section 11.2. Ownership and Patent Applications.
---------------------------------
(a) All inventions, and resulting patent applications and patents, directed to
or relating to ADL-2- 1294, its composition, formulation, manufacture or
use, shall be owned solely by ADOLOR.
(b) All other inventions, other than those of Section 11.2(a), shall belong to
the party making the invention. All resulting patent applications and
patents shall belong to the party owning the claimed inventions. For
jointly made other inventions, ADOLOR and XXXXX XXXX shall have joint
rights to such intellectual property and any resulting patents shall be
jointly owned. XXXXX XXXX'x improvements shall be cross-licensed to ADOLOR.
Any right for one party to sublicense shall require the prior written
approval of the other party.
(c) Neither ADOLOR nor XXXXX XXXX shall have any right with respect to the
others Technology, including Know-How and patents, which are not otherwise
specifically provided for in this Agreement.
(d) The parties shall agree on a plan to cause Licensed Patent to be marked on
some conspicuous part of a durable label firmly attached to the Licensed
Product or to the package for the Licensed Product made or sold under this
Agreement, in a manner which is easily seen and read and not easily
defaceable, either:
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(i) if a patent shall have been granted, the patent number applicable to
such Licensed Patent; or
(ii) if a patent shall not have been granted, words indicating that
letters patent have been applied for, if applicable.
Section 11. 3. Infringement of Third Party's Patent.
------------------------------------
(a) Each party shall notify the other party promptly if, to its knowledge, a
third party:
(i) shall have obtained a patent which discloses or claims the same as a
Licensed Patent in any country; or
(ii) is manufacturing a product based on either a Licensed Patent or the
same as claimed by a Licensed Patent.
(b) ADOLOR and XXXXX XXXX shall notify each, other promptly of any claim of, or
action for, infringement of any patents belonging to third parties which
shall have been threatened, or shall have been brought against either party
by reason of the manufacture, use or sale of the Licensed Product.
(c) In the event that an action for infringement with regard to the Licensed
Product shall have been brought, XXXXX XXXX shall defend such actions at
its own expense in the Territory. Any action which names ADOLOR shall be
subject to the indemnification provisions of Section 9 (Product Liability).
(d) Notwithstanding anything to the contrary in this Agreement, XXXXX XXXX
shall not interpose a Licensed Patent as a counterclaim in any legal
proceeding with a third party.
(e) ADOLOR shall consult and cooperate with XXXXX XXXX and provide such other
nonmonetary assistance as may reasonably be requested.
Section 11.4. Third-Party Infringement.
------------------------
(a) If either ADOLOR or XXXXX XXXX learns of an infringement or threatened
infringement of a Licensed Patent, such party shall notify the other party
promptly.
(b) The parties shall promptly meet to decide on the course of action to take.
ADOLOR may, at its own expense, take steps to prevent or terminate such
infringement, and XXXXX XXXX may join in such steps at its own expense. If
ADOLOR chooses to bring an action at its own expense, XXXXX XXXX may join
in such action at its own expense.
(c) ADOLOR shall retain for itself all recovery from any action commenced to
prevent or terminate the infringement, unless XXXXX XXXX shall have joined
in the action at its own expense as set forth below. XXXXX XXXX agrees to
cooperate with ADOLOR and provide such nonmonetary assistance as ADOLOR may
reasonably request in connection with such action. XXXXX XXXX may join
ADOLOR in any such action to
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prevent or terminate the infringement in which case any recoveries shall be
divided between ADOLOR and XXXXX XXXX after deduction of litigation
expenses in proportion to the financial contributions each party makes to
the total cost of the action.
(d) Should ADOLOR not pursue action to prevent or terminate an alleged
infringement per Section 11.4(b), XXXXX XXXX may then, at its sole expense,
pursue action to prevent or terminate the infringement, and retain any
recoveries which it shall obtain for such infringement. ADOLOR agrees to
cooperate with XXXXX XXXX and provide such nonmonetary assistance as XXXXX
XXXX may reasonably request in connection with any such action.
Section 11.5. Patent Costs.
------------
XXXXX XXXX acknowledges that the Licensed Patents are the property of
ADOLOR and XXXXX XXXX shall not challenge or contest ADOLOR's intellectual
property rights including that of Licensed Patents. ADOLOR shall control
the patent prosecution procedure and be responsible for the costs incurred
in doing so.
Section 11.6. ADOLOR's Work.
-------------
The results of all work undertaken by ADOLOR in the development and
commercialization of the Licensed Product shall be sole property of ADOLOR
and XXXXX XXXX shall have no right, title or interest thereto except as
provided under this Agreement.
Section 11.7. Accuracy and Ownership of Information Disclosed.
-----------------------------------------------
Information disclosed by each party to the other shall be accurate to the
best of the disclosing party's knowledge, but neither party expressly or
implicitly warrants as to the accuracy of such information. Neither party
represents that the use of the information disclosed to the other party
pursuant to this Agreement, or the manufacture, sale, or use of Licensed
Products does not infringe upon the rights of a third party. All
information furnished by a party pursuant to this Agreement shall remain
the sole and exclusive property of the disclosing party. Either party may
refuse to disclose and defer disclosure of information to the other party
to the extent such information is either unnecessary for the purposes of
this Agreement or not subject to disclosure under this Agreement.-
ARTICLE XII - EXPIRATION AND TERMINATION
--------------------------
Section 12.1. Expiration of Patent.
--------------------
(a) Unless terminated earlier under other provisions of this Agreement, this
Agreement will expire upon the expiration of the last obligation to pay
royalties under Section 7.2.
(b) In the event a product containing the same pharmaceutically active
substance and formulation for the treatment of the same therapeutic
indication as Licensed Product is
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approved for sale and is actively sold in commercial quantities in the
Territory, ADOLOR and XXXXX XXXX shall meet and discuss the impact of such
"approved me too product" on the royalty due to ADOLOR.
Section 12.2. Termination without Cause.
-------------------------
XXXXX XXXX shall be free to terminate this AGREEMENT at any time prior to
commercial launch of Licensed Product upon ninety (90) days prior written
notice, and at any time after commercial launch of Licensed Product, upon
one (1) year's prior written notice. Any monies owed to ADOLOR prior to the
termination shall be promptly paid to ADOLOR upon the effective date of
termination.
Section 12.3. Material Defaults.
-----------------
(a) Either party may terminate this Agreement upon sixty (60) days' prior
written notice in the event of the other party's breach of any other
material provision of this Agreement, if such default or breach is not
remedied within thirty (30) days from the date of such notice.
(b) A material default includes, but is not limited to:
(i) sale or export by XXXXX XXXX of Formulation or Licensed Product
outside the Territory;
(ii) sale by XXXXX XXXX of Formulation or Licensed Product to a third
party who sells or exports the formulation or Licensed Product
outside the Territory;
(iii) failure to make any payments or reports due under this Agreement;
(iv) sublicensing by XXXXX XXXX of the license under this Agreement
except as provided under Section 2.1 (d); or
(v) failure by XXXXX XXXX to use its best efforts to pursue regulatory
approval of Licensed Product; or
(vi) failure by XXXXX XXXX to use its best effort to maximize sales of
Licensed Product in the Territory following regulatory approval.
(c) Any failure to terminate shall not be construed as a waiver by the
aggrieved party of its rights to terminate for future defaults or breaches.
Section 12.4. Bankruptcy.
----------
If, during the term of this Agreement, XXXXX XXXX makes an assignment for
the benefit of creditors, or shall go into liquidation, or a receiver or
trustee shall be appointed for its property, or if proceedings for
voluntary bankruptcy are instituted or XXXXX XXXX is declared bankrupt or
insolvent, by a court of competent jurisdiction, ADOLOR
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may terminate this Agreement immediately upon delivery of written notice to
XXXXX XXXX.
Section 12.5. Surviving Rights.
----------------
The provisions of Sections 7.5, 12.6, 13.2 and Articles IX, X, and XI of
this Agreement shall survive the expiration or termination of this
Agreement.
Section 12.6. Effects of Termination.
----------------------
(a) Upon termination of this Agreement, each party shall, upon request, return
all books, records, documents and data which was received from the other
party pursuant to this Agreement, provided that this provision shall not be
applied in case this Agreement is terminated by either party pursuant to
Section 12.3 and 12.4.
(b) Termination of this Agreement by either party shall not prejudice the right
of ADOLOR to recover any royalty or other payments due at the time of
termination and shall not prejudice any cause of claim of action of either
party accruing under this Agreement.
(c) Upon termination of this Agreement ADOLOR shall be free to enter into
agreements with third parties for the use of ADOLOR's technical information
to develop, make, use, or sell products containing ADL 2-1294 in the
Territory subject to the terms of Article X of this Agreement.
ARTICLE XIII MISCELLANEOUS PROVISIONS
------------------------
Section 13.1. Entire Understanding.
--------------------
This Agreement sets forth the entire understanding between ADOLOR and XXXXX
XXXX pertaining to its subject matter and supersedes and replaces all prior
oral or written agreements between ADOLOR and XXXXX XXXX pertaining to such
subject matter, including but not limited to, the Letter of Intent of May
22, 1997.
Section 13.2. Amendments.
----------
This Agreement may not be amended, supplemented or otherwise modified
except by an instrument in writing signed by both parties.
Section 13.3. Assignment.
----------
XXXXX XXXX shall not assign this Agreement. ADOLOR shall be free to assign
this Agreement following prior written notice to XXXXX XXXX in connection
with the sale or transfer of ADOLOR's business, or the sale or merger of
ADOLOR and this Agreement shall survive in the event of such change.
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Section 13.4. Waiver.
------
No provision of this Agreement shall be waived by any act, omission, or
knowledge of a party or its agents or employees, except by an instrument in
writing expressly waiving such provision and signed by the waiving party.
Section 13.5. Governing Law.
-------------
This Agreement shall be governed by and interpreted under the laws of the
State of Pennsylvania, without regard to conflicts of law. Venue shall be
in Philadelphia, Pennsylvania.
Section 13.6. Restriction of Distribution of this Agreement.
---------------------------------------------
This Agreement shall not be distributed to persons other than those
personnel of ADOLOR and XXXXX XXXX and ADOLOR's affiliates and sublicensees
who have a need to know its contents and those whose knowledge of the
contents will facilitate the performance of the obligations of the parties
under this Agreement, and others as may be required by law, regulation or
judicial order.
Section 13.7. Consents not Unreasonably Withheld or Delayed.
---------------------------------------------
Whenever provision is made in this Agreement for either party to secure the
consent or approval of the other, such consent or approval shall not be
unreasonably withheld or delayed.
Section 13.8. Construction.
------------
The captions appearing in this Agreement are for reference purposes only
and shall not be considered for the purposes of interpreting or construing
this Agreement. The plural shall be substituted for singular numbers in any
place in which the context may require such substitution.
Section 13.9. Invalidity of Particular Provisions.
-----------------------------------
If any provision of this Agreement is invalid or unenforceable by reason of
any rule or law, administrative order or judicial decision, all other
provisions of this Agreement shall remain in full force and effect. The
parties shall reform such provisions to most closely reach the desired end
of the provision while overcoming the invalidity or unenforceability.
Section 13.10. Currency.
--------
All amounts preceded by a dollar sign shall mean United States dollars
unless otherwise stated. All amounts in Won shall be in Republic of South
Korea currency.
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Section 13.11. Publicity.
---------
Subject to Article X, either party shall be free to publicize the existence
and purpose of this Agreement; However, each party shall provide a copy of
proposed press releases related to matters pursuant to this Agreement to
the other party for comment prior to the issuance of such press release.
Section 13.12. Notices.
-------
Any notice or report required or permitted hereunder shall be given in
writing by personal delivery or by registered or certified mail, return
receipt requested, postage prepaid, and, if sent by mail, shall be
effective upon delivery to the following addresses:
ADOLOR CORPORATION
000 Xxxxxxxxxxxx Xxxx
Xxxxxxx XX 00000
Attention: President
XXXXX XXXX PHARMACEUTICAL COMPANY, LTD.
000-00, Xxxx-Xxxx
Xxxx-xx
Xxxxx, Xxxxx Xxxxx
Attention: President
or such address as a party may designate by prior written notice to the
other party.
Section 13.13. Wire Transfer
All payments to ADOLOR shall be made by wire transfer in immediately good
and transferable funds. ADOLOR shall provide XXXXX XXXX with standing wire
transfer instructions.
Section 13.14. Language
This Agreement is executed in two original English counterparts, each of
which shall be deemed an original. The English text of the Agreement shall
prevail over any translation thereof.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in
duplicate by their duly authorized representative.
ATTEST: ADOLOR CORPORATION
Name: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxx
---------------------- ---------------------------------------------
Title: President and Chief Executive Officer
------------------------------------------
Date: November 5, 1997
-------------------------------------------
ATTEST: XXXXX XXXX PHARMACEUTICAL
COMPANY, LTD.
Name: /s/ illegible By: /s/ Soo Boo Xxxx
---------------------- ---------------------------------------------
Title:
Date: November 5
-------------------------------------------
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