Exhibit 10.7
Portions herein identified by [***] have been omitted pursuant
to a request for confidential treatment and have been filed separately with
the Commission pursuant to Rule 406 of the Securities Act of 1933
LICENSE AND DEVELOPMENT AGREEMENT
THIS LICENSE AND DEVELOPMENT AGREEMENT (this "Agreement"), effective as of
October 26, 2004 (the "Effective Date"), is entered into by and between NOVADEL
PHARMA, INC., a Delaware corporation ("NovaDel"), and HANA BIOSCIENCES, INC., a
Delaware corporation (the "Licensee"). NovaDel and Licensee each may be referred
to herein individually as a "Party," or collectively as the "Parties."
WHEREAS, NovaDel has certain proprietary rights and intellectual property
(including to certain patents) with respect to lingual sprays for the metered
delivery of pharmaceutical products to humans (the "Technology"); and
WHEREAS, Licensee desires to obtain from NovaDel, and NovaDel desires to
grant to Licensee, a license to develop and commercialize a pharmaceutical
product containing ondansetron as an active ingredient that will be administered
to humans using the Technology on the terms and conditions set forth herein; and
WHEREAS, Licensee desires that NovaDel provide, and NovaDel desires to
provide, certain services in respect of the development of such pharmaceutical
product containing ondansetron as active ingredient on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
promises and covenants of the Parties contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto, intending to be legally bound, do hereby agree
as follows:
ARTICLE 1
DEFINITIONS
For the purposes of this Agreement, the following words and phrases shall
have the following meanings, unless otherwise specifically provided herein:
1.1 "Affiliate" shall mean, with respect to any Entity, any other Entity
that directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such Entity. For purposes of this
Section 1.1 only, "control" and, with correlative meanings, the terms
"controlled by" and "under common control with" shall mean (a) the possession,
directly or indirectly, of the power to direct the management or policies of an
Entity, whether through the ownership of voting securities, by contract or
otherwise, or (b) the ownership, directly or indirectly, of at least fifty
percent (50%) of the voting securities or other ownership interest of an Entity.
Page 1 of 36
1.2 "Applicable Law" shall mean the applicable laws, rules, regulations,
guidelines and requirements of the Regulatory Authorities, in the Territory.
1.3 "Combination Product" shall mean a combination pharmaceutical product
containing one or more therapeutically active ingredients in addition to a
Designated Compound.
1.4 "Commercially Reasonable Efforts" shall mean, with respect to the
development or commercialization of a Licensed Product, efforts and resources
commonly used in the research-based pharmaceutical industry for a product of
similar commercial potential at a similar stage in its lifecycle, taking into
consideration its safety and efficacy, its cost to develop, the competitiveness
of alternative products, its proprietary position, the likelihood of regulatory
approval, its profitability, and all other relevant factors. Commercially
Reasonable Efforts shall be determined on a market-by-market basis for each
Licensed Product without regard to the particular circumstances of a Party,
including any other product opportunities of such Party.
1.5 "Confidential Information" shall have the meaning set forth in Article
15.
1.6 "Common Technical Document" shall have the meaning set forth in the
International Conference on Harmonization of the Technical Requirements for
Registration of Pharmaceuticals for Human Use (ICH) Guideline M4, Organization
of the Common Technical Document, as revised on January 13, 2004.
1.7 "Control" shall mean, with respect to any item of Information and
Inventions, Patents or other intellectual property right, possession of the
ability, whether directly or indirectly, and whether by ownership, license or
otherwise, to assign, or grant a license, sublicense or other right to or under,
such item, Patent or right as provided for herein without violating the terms of
any agreement or other arrangement with any Third Party.
1.8 "Designated Compound" shall mean ondansetron.
1.9 "Development Activities" shall mean the activities performed by the
Parties under the Development Plan pursuant to Article 3.
1.10 "Development Budget" shall have the meaning set forth in Section 3.3.
1.11 "Development Committee" shall have the meaning set forth in Section
3.4.1.
1.12 "Development Plan" shall have the meaning set forth in Section 3.3.
1.13 "Effective Date" shall have the meaning set forth in the preamble.
1.14 "Entity" shall mean any individual, sole proprietorship, corporation,
limited liability company, association, joint venture, partnership, limited
partnership, limited liability partnership, trust, university, business,
government or political subdivision thereof, including an agency, or any other
organization that possesses independent legal standing.
Page 2 of 36
1.15 "Exploit" shall mean to make, have made, import, use, sell, or offer
for sale, including to research, develop, register, modify, improve,
manufacture, have manufactured, store, have used, export, transport, distribute,
promote, market or have sold or otherwise dispose of a licensed product or
process.
1.16 "Exploitation" shall mean the making, having made, importation, use,
sale, offering for sale of a licensed product or process, including the
research, development, registration, modification, improvement, manufacture,
storage, optimization, import, export, transport, distribution, promotion,
marketing, sale or other disposition of a licensed product or process.
1.17 "FDA" shall mean the United States Food and Drug Administration, or
any successor agency responsible for the evaluation and approval of
pharmaceutical products.
1.18 "First Commercial Sale" shall mean the first sale for use or
consumption by the general public of the Licensed Product in a country after
Regulatory Approval (including pricing and reimbursement approval where
applicable) for the marketing and sale of the Licensed Product has been obtained
in such country.
1.19 "Improvement" shall mean any modification, variation or revision to
an apparatus, method, product or technology, or any discovery, technology,
device, process or formulation related to an apparatus, method, product or
technology, whether or not patented or patentable, including any enhancement in
the manufacture or steps or processes thereof, ingredients, preparation,
presentation, formulation, means of delivery, packaging or dosage of an
apparatus, method, product or technology, any discovery or development of any
new or expanded indications for an apparatus, method, product or technology, or
any discovery or development that improves the stability, safety or efficacy of
an apparatus, method, product or technology.
1.20 "IND" shall mean an investigational new drug application filed with
the FDA for approval to commence human clinical trials, and its equivalent in
other countries or regulatory jurisdictions in the Territory.
1.21 "Indemnification Claim Notice" shall have the meaning set forth in
Section 10.3.1.
1.22 "Indemnified Party" shall have the meaning set forth in Section
10.3.1.
1.23 "Indeterminate PK Outcome" is defined as detectable levels of
ondansetron with at least one lingual spray dose tested [***].
1.24 "Infringement Suit" shall have the meaning set forth in Section
6.8.2.
1.25 "Information and Inventions" shall mean all technical, scientific and
other know-how and information, trade secrets, knowledge, technology, means,
methods, processes, practices, formulas, instructions, skills, techniques,
procedures, experiences, ideas, technical assistance, designs, drawings,
assembly procedures, computer programs, apparatuses, specifications, data,
results and other material, including pre-clinical and clinical trial results,
manufacturing procedures and test procedures and techniques, (whether or not
confidential, proprietary, patented or patentable) in written, electronic or any
other form now known or hereafter developed, and all Improvements, whether to
the foregoing or otherwise, and other discoveries, developments, inventions, and
other intellectual property (whether or not confidential, proprietary, patented
or patentable).
Page 3 of 36
1.26 "Knowledge" shall mean the good faith understanding of the vice
presidents, senior vice presidents, executive vice presidents, president or
chief executive officer of the respective party of the facts and information
then in their possession without any duty to conduct any investigation with
respect to such facts and information.
1.27 "Licensed Process" shall mean the proprietary lingual spray
technology for the delivery of pharmaceutical compounds through the mucosal
membrane of the mouth in humans using an aerosol or pump spray device that is
under the Control of NovaDel as of the Effective Date and any Improvements
thereto that are conceived and reduced to practice by NovaDel in the course of
performing the Development Activities.
1.28 "Licensed Product(s)" shall mean any dosage of pharmaceutical
composition or preparation in finished form labeled and packaged for sale by
prescription, over-the-counter or any other method for human application only
that contains ondansetron delivered by means of the Licensed Process.
1.29 "Licensed Technology" shall mean the NovaDel Patents, the NovaDel
Know-How and the Drug Master File, collectively, but only with respect to the
Exploitation of the Licensed Product.
1.30 "Licensed Trademark" shall mean those Trademarks set forth on Exhibit
A attached hereto and such other Trademarks as may be designated by NovaDel in
writing from time to time, and any registrations of the foregoing and pending
applications relating thereto.
1.31 "Licensee" shall mean Hana Biosciences, Inc., a Delaware corporation.
1.32 "Losses" shall have the meaning set forth in Section 10.1.
1.33 "NDA" shall mean a New Drug Application filed pursuant to the
requirements of the FDA, as more fully defined in 21 C.F.R. ss. 314.5 et seq.,
and any equivalent application required by any Regulatory Authority for the
marketing, sale or use of the Licensed Product in the Territory for human
application.
1.34 "Negative PK Outcome" is defined as [***].
1.35 "Net Sales" shall mean, for any period, the gross amount invoiced by
Licensee and its Affiliates for the sale of Licensed Product by Licensee or any
of its Affiliates to Third Parties, less deductions for chargebacks, billing
errors, rejected goods, damaged goods and returns. Any of the deductions listed
above that involves a payment by Licensee or its Affiliates shall be taken as a
deduction in the calendar quarter in which the payment is accrued by such
entity. For purposes of determining Net Sales, a Licensed Product shall be
deemed to be sold when invoiced and a "sale" shall not include transfers, uses
or dispositions for promotional, pre-clinical, clinical, regulatory or
governmental purposes. For purposes of calculating Net Sales, sales between or
among Licensee or its Affiliates shall be excluded from the computation of Net
Sales, but sales by Licensee or its Affiliates to Third Parties shall be
included in the computation of Net Sales.
Page 4 of 36
1.36 "New Designated Compound" shall mean a compound other than
ondansetron that (i) belongs to the antiemetic therapeutic class and (ii) has
not been licensed to a Third Party.
1.37 "NovaDel" shall have the meaning set forth in the preamble.
1.38 "NovaDel Know-How" shall mean all Information and Inventions
Controlled by NovaDel or an Affiliate of NovaDel as of the Effective Date or,
from time to time, during the Term that (a) (i) are necessary for the use of the
Licensed Process to Exploit the Licensed Product or (ii) relate to Improvements
to the Licensed Product that are conceived and reduced to practice in the course
of performing the Development Activities, and (b) are not generally known, but
excluding any Information and Inventions to the extent claimed by any NovaDel
Patents.
1.39 "NovaDel Patents" shall mean the Patents that NovaDel Controls (a) as
of the Effective Date that are listed on Exhibit A hereto and (b) from time to
time during the Term that claim (i) the Licensed Process, or (b) any
Improvements to the Licensed Product that are conceived and reduced to practice
in the course of performing the Development Activities.
1.40 "Patents" shall mean (a) all patents and patent applications; (b) any
substitutions, divisions, continuations, continuations-in-part, reissues,
renewals, registrations, confirmations, re-examinations, extensions,
supplementary protection certificates and the like, and any provisional
applications, of any such patents or patent applications; and (c) any
international equivalent of any of the foregoing.
1.41 "Positive PK Outcome" is defined as [***].
1.42 "Regulatory Approval" shall mean any and all approvals (including
pricing and reimbursement approvals), licenses, registrations or authorizations
of any Regulatory Authority, necessary for the Exploitation of the Licensed
Product in a country in the Territory, including (a) any approval of any
Licensed Product (including any INDs, NDAs, and supplements or amendments
thereto); (b) pre- and post-approval marketing authorizations for a Licensed
Product (including any prerequisite manufacturing approval or authorization
related thereto); (c) labeling approval for a Licensed Product; and (d)
technical, medical and scientific licenses.
1.43 "Regulatory Authority" shall mean any applicable supra-national,
federal, national, regional, state, provincial or local regulatory agencies,
departments, bureaus, commissions, councils or other government entities
regulating or otherwise exercising authority with respect to the Licensed
Technology or the Licensed Product in the Territory.
1.44 "Regulatory Documentation" shall mean all applications,
registrations, licenses, authorizations and approvals (including all Regulatory
Approvals), all correspondence submitted to or received from Regulatory
Authorities (including minutes and official contact reports relating to any
communications with any Regulatory Authority), all supporting documents and all
clinical studies and tests, relating to any Licensed Product, and all data
contained in any of the foregoing, including all regulatory drug lists,
advertising and promotion documents, adverse event files and complaint files.
Page 5 of 36
1.45 "Sublicensee" shall mean any Third Party to which Licensee grants a
sublicense pursuant to Section 2.4 under the licenses granted to Licensee by
NovaDel under Section 2.1.
1.46 "Sublicensing Fees" shall mean all non-royalty consideration of any
kind, including any fees, milestones or other payments (whether cash or non-cash
(which shall be valued at fair market value)), received by Licensee or any of
its Affiliates from any Sublicensee as a direct or indirect result of the grant
by Licensee or any of its Affiliates to any Sublicensee of a license under, or
the use by any such Sublicensee of, any of the Licensed Technology or Licensed
Trademarks, in excess of the payments to be paid pursuant to Sections 4.4 and
4.5.
1.47 "Technology" shall have the meaning set forth in the preamble.
1.48 "Term" shall have the meaning set forth in Section 7.1.
1.49 "Territory" shall mean the United States of America and Canada.
1.50 "Third Party" shall mean any Entity other than NovaDel, Licensee and
their respective Affiliates.
1.51 "Third Party Claim" shall have the meaning set forth in Section
10.3.2.
1.52 "Trademark" shall include any word, name, symbol, color, designation
or device or any combination thereof, including any trademark, trade dress,
brand xxxx, trade name, brand name, logo or business symbol.
1.53 "Valid Claim" shall mean, with respect to a particular country, a
claim of a Patent in such country that (a) has not been revoked or held
unenforceable or invalid by a decision of a court or governmental agency of
competent jurisdiction from which no appeal can be taken or has been taken
within the time allowed for appeal, and (b) has not been abandoned, disclaimed,
denied or admitted to be invalid or unenforceable through reissue or disclaimer
or otherwise in such country, except if a claim, or the subject matter thereof,
of a pending patent application shall not have issued within 4 years after the
filing date from which such claim, or subject matter thereof, takes priority,
such claim shall not constitute a valid claim for purposes of this agreement
unless and until such claims shall issue.
ARTICLE 2
GRANT OF RIGHTS
2.1 License Grants to Licensee.
Page 6 of 36
2.1.1 Subject to Section 2.3 and the other terms and conditions of
this Agreement, NovaDel hereby grants to Licensee and Licensee accepts, a
non-transferable (except as provided in Article 12), sublicenseable (only as
provided in Section 2.4), royalty-bearing, exclusive right and license under the
Licensed Technology to Exploit the Licensed Product in the Territory, to the
full end of the Term for which the Licensed Technology is licensed, unless
sooner terminated as herein after provided.
2.1.2 Subject to Section 2.3 and the other terms and conditions of
this Agreement, NovaDel hereby grants to Licensee and Licensee accepts, a
non-transferable (except as provided in Article 13), sublicenseable (only as
provided in Section 2.4), royalty-bearing, non-exclusive right and license under
the Licensed Trademarks for the sole purpose of using such Licensed Trademarks
to market, distribute and sell the Licensed Product licensed under Section 2.1.1
in the Territory, to the full end of the Term for which the Licensed Product are
licensed, unless sooner terminated as hereinafter provided.
2.1.3 Subject to 2.3 and the terms and conditions of this Agreement,
NovaDel herby grants to Licensee a right to develop Combination Products under
mutually agreeable terms.
2.2 License Grant to NovaDel. Licensee hereby grants to NovaDel a limited,
royalty-free, non-exclusive right and license in the Territory in and to the
Licensed Technology to the extent necessary to perform its Development
Activities under Article 3.
2.3 Retained Rights. NovaDel retains all right, title and interest,
including the right to grant licenses to Third Parties, in and to the Licensed
Technology (other than for delivery of the Designated Compounds only as
expressly provided in Section 2.1.1) and the Licensed Trademarks (other than for
the Exploitation of Licensed Product only as expressly provided in Section
2.1.2). Licensee shall have no rights, express or implied, with respect to the
Licensed Technology or the Licensed Trademarks, except as expressly set forth in
Section 2.1, and Licensee covenants to NovaDel that none of Licensee, its
Affiliates or Sublicenses shall use the Licensed Technology, directly or
indirectly, for any purpose other than for administration of the Designated
Compounds in connection with the Exploitation of Licensed Product, or the
Licensed Trademarks, directly or indirectly, for any purpose other than the
marketing, distribution and sale of Licensed Product hereunder. Notwithstanding
anything in this Agreement to the contrary, NovaDel does hereby retain the right
to (a) enter into collaborations or other agreements with, and to grant licenses
and other rights under the NovaDel Patents and NovaDel Know-How to Third Parties
to Exploit products containing compounds other than the Designated Compounds and
to use the Licensed Process in connection therewith, and (b) independently
Exploit products containing compounds other than the Designated Compounds and to
use the Licensed Process in connection therewith. Notwithstanding any other
provision contained in this Agreement, NovaDel retains an irrevocable,
non-exclusive, royalty-free right to use the Licensed Technology (including the
Licensed Process) with respect to the Designated Compounds, for its internal,
non-commercial research and development activities and NovaDel retains the
rights for all other territories other than the Territory as defined in Section
1.47 and non-human uses of the Designated Compounds.
Page 7 of 36
2.4 Sublicenses. Licensee shall have the right to grant sublicenses under
the grants in Section 2.1 to Third Parties pursuant to a separate written
agreement, subject to the following requirements and conditions:
2.4.1 Licensee must obtain NovaDel's prior written consent in
respect of each such sublicense, such consent not to be unreasonably withheld
but in no case will exceed 30 days, and any sublicense agreement must be fully
consistent with the terms and conditions of this Agreement, including Articles
3.10, 5, 6, 10, 11, 13 and 16, and provide that Sublicensee will indemnify
NovaDel and its Affiliates to the extent provided in Article 10.
2.4.2 Within five (5) days after execution or receipt thereof, as
applicable, Licensee shall provide NovaDel with a full and complete copy of each
sublicense agreement granted hereunder and shall deliver copies of all reports
(including relating to royalties and other payments) received by Licensee from
such Sublicensees.
2.4.3 Termination of this Agreement by NovaDel pursuant to Section
8.3 with respect to Licensee shall not terminate any sublicense granted by
Licensee pursuant to this Section 2.4 with respect to a Sublicensee, provided
that (a) such Sublicensee is not in breach of any provision of this Agreement or
the applicable sublicense agreement, (b) such Sublicensee shall perform all
obligations of Licensee under this Agreement, (c) NovaDel shall have all rights
with respect to any and all Sublicensees as it had hereunder with respect to
Licensee prior to termination of this Agreement with respect to Licensee, (d)
Licensee shall include in any sublicense a provision in which said Sublicensee
acknowledges its obligations to NovaDel hereunder and the rights of NovaDel to
terminate this Agreement with respect to any Sublicensee for breaches of this
Agreement by such Sublicensee. The failure of Licensee to include in a
sublicense the provisions referenced in clause (d) shall render the affected
sublicense void.
ARTICLE 3
DEVELOPMENT AND COMMERCIALIZATION ACTIVITIES
3.1 Development and Commercialization. Licensee shall have the sole right
and obligation to develop and commercialize the Licensed Product in the
Territory. NovaDel shall perform or cause to be performed, on behalf of
Licensee, certain Development Activities in accordance with this Article 3.
Except as set forth herein, Licensee shall be solely responsible for all costs
and expenses in connection with all development and commercialization
activities, including the Development Activities performed by NovaDel on behalf
of Licensee.
3.2 Development Activities. NovaDel shall not be required to commence any
Development Activities until Licensee has executed 100% of the non-refundable
License Fee & Equity transaction described in Section 4.4.
3.2.1 General. Under the direction and supervision of the
Development Committee, NovaDel and Licensee each shall perform, or cause to be
performed, its respective Development Activities in accordance with the
Development Plan and Development Budget. Notwithstanding the foregoing, the
Parties acknowledge and agree that there can be no assurances that the
objectives of the Development Activities can be achieved, or that they can be
achieved in the manner or in the time set forth in the Development Plan.
Although outcomes cannot be guaranteed, each Party shall use Commercially
Reasonable Efforts to perform or cause to be performed its respective
Development Activities in good scientific manner, and in material compliance
with Applicable Law.
Page 8 of 36
3.2.2 Outcome of Pilot PK Study. Following completion of the pilot
PK study, there are three possible outcomes with responsibilities for the
Parties specified as follows:
(a) Positive PK Outcome - development of the Licensed Product
continues according to the Development Plan and terms and conditions of this
Agreement. If more than 120% relative bioavailability is achieved by direct
comparison of areas-under-the-curve to that of the reference tablet for lowest
dose lingual spray tested [***].
(b) Indeterminate PK Outcome - NovaDel will reformulate
Licensed Product [***] with express purpose of achieving Positive PK Outcome.
[***] If any further formulation work is not desired by Licensee, NovaDel and
Licensee will follow the provisions of the Negative PK Outcome in Section
3.2.2(c).
(c) Negative PK Outcome - Licensee has option to identify a
New Designated Compound. [***] Should Licensee exercise its right to this
option, all data and rights for ondansetron will revert back to NovaDel.
3.2.3 Reports. Within thirty (30) days after the end of each
calendar quarter in which Development Activities are performed, each Party shall
provide to the Development Committee a written progress report, which shall
describe the Development Activities it has performed, or cause to be performed,
during such calendar quarter, evaluate the work performed in relation to the
goals of the Development Plan and in relation to the Development Budget, and
provide such other information as may be required by the Development Plan or
reasonably requested by the Development Committee with respect to the
Development Activities. Minutes from periodic project team meetings or other
meetings between the parties can serve as a substitute for the required progress
reports outlined in this Section 3.2.2.
3.3 Development Plan and Budget. The development plan (the "Development
Plan") and the development budget (the "Development Budget") for the Development
Activities relating to ondansetron are attached hereto as Exhibit B and Exhibit
C, respectively. The Development Committee shall review the Development Plans
and the Development Budgets at least monthly and shall have the right to make
such modifications or updates to the Development Plans or Development Budgets
that it deems appropriate. The Parties acknowledge and agree that the amounts
set forth in the Development Budgets are estimates and, given the
unpredictability of the Development Activities, there can be no assurances that
the Development Activities can be completed within the Development Budgets,
provided, however, that the Parties agree to use their Commercially Reasonable
Efforts to adhere to the Development Budgets not to exceed the amounts set forth
in Exhibit C without written approval of the Development Committee.
Page 9 of 36
3.4 Development Committee
3.4.1 Formation and Authority of Development Committee. NovaDel and
Licensee shall establish a development committee (the "Development Committee"),
which shall oversee the Development Activities performed by the Parties, review
and approve the Development Budget and approve any changes to the Development
Plan and Development Budget. Each Party shall appoint an equal number of
representatives with the requisite experience and seniority to enable them to
make decisions on behalf of the Parties with respect to the Development
Activities. From time to time, each Party may substitute its representatives on
written notice to the other Party.
3.4.2 Procedural Rules of Development Committee. The Development
Committee shall meet monthly, or as otherwise agreed to by the Parties. The
Development Committee shall adopt such standing rules as shall be necessary for
its work. A quorum of the Development Committee shall exist whenever there is
present at a meeting at least one representative appointed by each Party.
Members of the Development Committee may attend a meeting either in person or by
telephone, video conference or similar means in which each participant can hear
what is said by the other participants. Representation by proxy shall not be
allowed. The Development Committee shall take action by unanimous consent of
NovaDel and Licensee, with each such Party having a single vote, irrespective of
the number of representatives actually in attendance at a meeting, or by a
written resolution signed by the designated representatives of each of NovaDel
and Licensee.
3.4.3 Dispute Resolution. If the Development Committee cannot, or
does not, reach agreement on an issue, then either Party shall have the right to
refer such issue to the Chief Executive Officers of the Parties who shall confer
on the resolution of the issue. Any final decision mutually agreed to by the
Chief Executive Officers of the Parties shall be in writing and shall be
conclusive and binding on the Parties. If such officers are not able to agree on
the resolution of an issue within twenty (20) days after such issue was first
referred to them, either Party shall have the right to refer such dispute to
arbitration pursuant to Article 9.
3.4.4 Limitations on Authority of Development Committee. Each Party
to this Agreement shall retain the rights, powers, and discretion granted to it
under this Agreement, and no such rights, powers, or discretion shall be
delegated to or vested in the Development Committee unless such delegation or
vesting of rights is expressly provided for in this Agreement or the Parties
expressly so agree in writing. The Development Committee shall not have the
power to amend or modify this Agreement, which may only be amended or modified
as provided in Section 16.4.
3.5 Regulatory Approvals. All INDs, NDAs and other filings, applications
or requests pursuant to or in connection with the Regulatory Approvals required
under the Development Plan shall be made in the name of [***]. [***] shall have
a perpetual, irrevocable, worldwide right to use and reference the Regulatory
Documentation with respect to the Licensed Product and any data included or
referenced therein for all purposes. [***] agrees to utilize the Common
Technical Document format for its marketing applications in order to facilitate
any subsequent submissions filed by [***] outside of the Territory. [***] agrees
to prepare Modules 2.3 and 3 of [***] marketing applications. If a Drug Master
File ("DMF") is utilized, the DMF shall be owned by [***], provided that [***]
shall have unlimited access to the DMF for purposes of any Regulatory Filings
relating to each Licensed Product. [***] agrees to request that the DMF be
treated as confidential. [***] agrees to keep [***] reasonably informed as to
the communications, if any, between [***] and the Regulatory Authorities.
Page 10 of 36
3.6 Regulatory Records. NovaDel and Licensee each shall maintain, or cause
to be maintained, records of its respective Development Activities in sufficient
detail and in good scientific manner appropriate for patent and regulatory
purposes, which shall be complete and accurate and shall fully and properly
reflect all work done and results achieved in the performance of its respective
Development Activities, and which shall be retained by such Party for at least
five (5) years after the termination of this Agreement, or for such longer
period as may be required by Applicable Law. Each Party shall have the right,
during normal business hours and upon reasonable notice, to inspect and copy any
such records.
3.7 Development Expenses.
3.7.1 NovaDel's Obligation. Novadel shall bear all costs and
expenses incurred in providing [***].
3.7.2 Licensee's Obligation. In consideration of NovaDel's
performance of its Development Activities, Licensee shall reimburse NovaDel for
the reasonable and documented costs and expenses incurred by NovaDel in
performing [***].
3.7.3 Invoices and Payments. Within thirty (30) days after the end
of each month in which Development Activities are performed, NovaDel shall
invoice Licensee for any costs and expenses incurred by NovaDel or its
Affiliates in such month. Each invoice shall be payable to NovaDel within thirty
(30) days after invoice date.
3.7.4 Books and Records. Each party shall maintain complete and
accurate books, records and accounts that, in reasonable detail, fairly reflect
any reimbursable costs and expenses incurred by it or its Affiliates in
performance of the Development Activities in conformity with Generally Accepted
Accounting Principles ("GAAP"). Each party shall retain such books, records and
accounts until the later of (a) three (3) years after the end of the period to
which such books, records and accounts pertain, and (b) the expiration of the
applicable tax statute of limitations (or any extensions thereof), or for such
longer period as may be required by Applicable Law. Each party shall have the
right to have its certified public accountant, who shall be reasonably
acceptable to NovaDel and Licensee, as applicable, audit the books and financial
records of the other party and their respective Affiliates relating to its
Development Activities during one or more calendar quarters; provided, however,
that Licensee shall not have the right to audit a calendar quarter more than two
(2) years after the end of such quarter, to conduct more than one such audit in
any twelve-month period, or to audit any calendar quarter more than once; and
provided further that each party shall bear the cost of such audit unless the
audit reveals a variance of more than five percent (5%) from the reported
results, in which case audited party shall bear the cost of the audit. The
results of such accounting firm shall be final, absent manifest error.
Page 11 of 36
3.8 Cooperation. Each Party shall cooperate with any and all reasonable
requests for assistance from the other Party with respect to the Development
Activities, including by making its employees, consultants and other scientific
staff available upon reasonable notice during normal business hours at their
respective places of employment to consult with such other Party on issues
arising in connection with the performance of such Development Activities.
3.9 Development and Use of Trademarks. Licensee shall have the sole right
to determine the Trademarks to be used with respect to the Exploitation of the
Licensed Product in the Territory, provided that the product labeling and
promotional materials disclose that the Licensed Product are delivered using the
Licensed Process and include the Licensed Trademarks.
3.10 Diligence Obligations. Licensee shall use Commercially Reasonable
Efforts to (a) develop and commercialize the Licensed Product in the entire
Territory in accordance with the terms and conditions of this Agreement; (b)
obtain Regulatory Approval(s) with respect to the Licensed Product in the
Territory; and (c) thereafter diligently and aggressively Exploit the Licensed
Product in the Territory to maximize sales. Licensee shall ensure that any
Sublicense be terminable at the option of the Licensee in the event that a
Sublicensee fails to maintain active, diligent marketing efforts for Licensed
Product.
3.11 Manufacturing.
3.11.1 Subject to Section 3.11.5, NovaDel, or its designee, shall
manufacture and supply Licensee with Licensed Product on commercially reasonable
terms for clinical development of the Licensed Product pursuant to a
manufacturing agreement (the "Manufacturing Agreement") to be entered into
following execution of this Agreement.
3.11.2 Subject to Section 3.11.5, following receipt of Regulatory
Approval, NovaDel, or its designee, shall manufacture and supply Licensee with
Licensed Product on commercially reasonable terms pursuant to the Manufacturing
Agreement.
3.11.3 NovaDel agrees that, at all times during the performance of
the Development Activities, it, or its designee, will act in accordance with GMP
and all applicable laws, rules and regulations.
3.11.4 The manufacturing agreement will stipulate among other things
that (i) Licensee will purchase Licensed Product from NovaDel at actual Cost of
Goods Sold (COGS) for commercial supply will not exceed actual manufactured
costs as defined by Generally Acceptable Accounting Principles (GAAP) in each
calendar year plus 10% or Licensee will acquire Licensed Product from NovaDel
designated third party manufacturer directly and (ii) in the event that Licensee
enters into a Sublicense for a Licensed Product and such Sublicensee desires to
obtain rights to manufacture such Licensed Product, then NovaDel will not
unreasonably withhold its consent to transfer the manufacturing rights to such
Sublicensee, provided that measures are incorporated into the sublicensing
agreement to continue to safeguard the confidentiality of NovaDel Know-how and
technology with respect to the Licensed Product as set forth in Section 3.11.5
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3.11.5 It is the intent of the Parties that NovaDel, or its
designee, be the exclusive manufacturer of the Licensed Product pursuant to the
terms of the Manufacturing Agreement; provided, however, that in the event that
NovaDel, or its designee, is unable or unwilling to provide clinical or
commercial supply of Licensed Product within a reasonable period of time of 90
days from receipt of purchase order preceded by a twelve (12) month rolling
forecast upon commercially reasonable terms, then Licensee shall be entitled to
seek alternate manufacturing source. In such event, Licensee shall use
commercially reasonable efforts to ensure that any such alternate manufacturing
source agree (a) to maintain in strictest confidence all information relating to
the manufacture of the Licensed Product and the Licensed Technology, (b) not to
file any intellectual property protection relating to inventions that may arise
from the manufacture of the Licensed Product and Licensed Technology, and (c)
that any intellectual property that does arise out of the manufacture of the
Licensed Product and Licensed Technology belong to NovaDel. In such event,
Novadel agrees to transfer all NovaDel Know-How to enable the manufacturer to
meet Licensee's requirements for a stable and consistent commercial supply of
the Licensed Product.
ARTICLE 4
ROYALTIES AND OTHER CONSIDERATION
4.1 Royalties. As partial consideration for the rights, privileges and
licenses granted hereunder and the Development Activities performed by Licensor
pursuant to Article 3, Licensee shall make the following payments to NovaDel:
4.1.1 Licensee shall pay to NovaDel royalties as follows: (i) [***]
percent ([***]%) of up to the first $[***] of Net Sales by Licensee or any
Affiliate or Sublicensee of Licensee of the Licensed Product during each
calendar year in the Territory plus (ii) [***] percent ([***]%) of Net Sales
greater than $[***] and up to $[***] by Licensee or any Affiliate or Sublicensee
of Licensee of the Licensed Product during each calendar year in the Territory
plus (iii) [***] percent ([***]%) of Net Sales greater than $[***] by Licensee
or any Affiliate or Sublicensee of Licensee of the Licensed Product during each
calendar year in the Territory. See Exhibit D for schedule of royalty
calculation.
4.1.2 The conversion rate for payments under section 4.1.1, as it
pertains to sales in Canada, shall be calculated by using the conversion rate on
the last day of the calendar quarter for which the sales apply. The conversion
rate to be used will be taken from the currency converter at xxx.xxxxx.xxx.
Canadian dollar sales will be converted into U.S. dollars and then the royalty
rates outlined in section 4.1.1 will apply.
4.2 Royalty Term. Licensee's royalty obligations under Section 4.1 shall
terminate, on a country-by-country basis, with respect to the Licensed Product
upon the expiration date in such country of the last to expire of any issued
NovaDel Patent that includes at least one Valid Claim covering the sale of such
Licensed Product in such country. Upon termination of the royalty obligations
under Section 4.1 in a country, the license grants to Licensee in Section 2.1
shall be reduced in accordance with terms in Section 4.6.
4.3 Royalty Payments. Royalties under Section 4.1.1 shall be payable to
NovaDel on a calendar quarterly basis, within thirty (30) days after the end of
each calendar quarter. Royalty payments to NovaDel will be reduced by [***]
percent ([***]%) from the schedule in Section 4.1.1 up until the time at which
the Licensee has recovered through a) sales of the Licensed Product and/or
through b) license fees, milestone payments, or development funding received by
Licensee from a Sublicensee of the Licensed Product, [***] percent ([***]%) of
the total pharmaceutical development and clinical costs incurred by the License
during the development of the Licensed Product. Once the Licensee has recovered
[***] percent ([***]%) of the total pharmaceutical development and clinical
costs, royalties will be paid to NovaDel as per the schedule in Section 4.1.1.
The Licensee will submit to NovaDel documentation to support the total amount of
funds spent by the Licensee on pharmaceutical development and clinical studies
for the Licensed Product. The Licensee will submit along with payment to
NovaDel, a quarterly royalty statement in a format mutually agreed by both
parties. Along with the statement will be all supporting documentation
comprising of a statement of net sales for the period and copies of actual paid
invoices covering clinical supplies, consultants, clinical studies, investigator
fees, document preparation, regulatory fees and other direct fees related to
development of the Licensed Product,
Page 13 of 36
4.4 Licensee Fee & Equity. Simultaneously with the execution of this
Agreement, Licensee shall purchase 400,000 shares of newly issued common stock
in NovaDel at a set price of $2.50 per share. Licensee shall also issue to
NovaDel shares of its common stock totaling a value of $500,000. The amount of
shares of Licensee's common stock issued to NovaDel will be determined by
dividing $500,000 by the average price of the Licensee's common stock during the
ten (10) business days prior to the Effective Date of this Agreement. Both
NovaDel and Licensee represent that they are acquiring the common stock of the
other Party for investment purposes only, and will not sell their shares of the
other Party's common stock for a period of at least two (2) years from the
Effective Date.
4.5 Milestone Payments. Licensee shall also pay to NovaDel the following
Milestone Payments:
4.5.1 $[***] within ten (10) Business Days from the date on which
the final report of the pilot pharmacokinetic study (as per the Development
Plan) is issued provided, however, Licensee chooses to proceed with further
development.
4.5.2 $[***] within ten (10) Business Days from the date on which
the IND is filed with the FDA.
4.5.3 $[***] within ten (10) Business Days from the date on which
the Company's NDA is accepted for review by the FDA and the pharmacokinetic
profile of the Licensed Product is superior to the reference product
(ondansetron 8mg tablet). Superiority will be achieved if the Tmax of the
Licensed Product reflects a [***]% reduction in the Tmax of the reference
product ([***] ondansetron tablet) used in the pharmacokinetic study as per the
Development Plan. This milestone payment in this Section 4.5.3 will be reduced
to $[***] if superiority is not achieved in the pharmacokinetic profile of the
Licensed Product over the reference product.
4.5.4 $[***] within ten (10) Business Days from the date on which
the Company's NDA for the Licensed Product is approved by the FDA and the
pharmacokinetic profile of the Licensed Product is superior to the reference
product (ondansetron [***] tablet). Superiority will be achieved if the Tmax of
the Licensed Product reflects a [***]% reduction in the Tmax of the reference
product ([***] ondansetron tablet) used in the pharmacokinetic study as per the
Development Plan. This milestone payment in this Section 4.5.4 will be reduced
to $[***] if superiority is not achieved in the pharmacokinetic profile of the
Licensed Product over the reference product.
Page 14 of 36
4.6 Reduction of Payments. In the event that, or from and after the date
on which, (a) no Valid Claim of a NovaDel Patent covering the Licensed Product
exists in a country and (b) no regulatory exclusivity with respect to such
Licensed Product exists in such country (whether as a result of expiration of
the exclusivity period or otherwise), the royalty payments set forth in Section
4.1 with respect to the Licensed Product in such country shall be reduced by
[***] percent ([***]%). In the event a NovaDel patent is deemed invalid,
reduction in payments will begin when an appellate court rules that no valid
claim, from a NovaDel patent, covers the Licensed Product in the country.
4.7 Mode of Payment. All payments to NovaDel under this Agreement shall be
paid in United States Dollars to a bank account in the United States as NovaDel
may reasonably designate.
4.8 Non-Refundable, Non-Creditable. The amounts paid or payable under this
Article 4 shall be non-refundable and non-creditable against any other amounts
due NovaDel under this Agreement.
ARTICLE 5
REPORTS AND RECORDS
5.1 Record Retention. Licensee shall maintain (and shall ensure that its
Affiliates and Sublicensees shall maintain) complete and accurate books, records
and accounts that fairly reflect their respective Net Sales, other income and
any milestones payable with respect to Licensed Product in sufficient detail to
confirm the accuracy of any payments required hereunder and in accordance with
GAAP, which books, records and accounts shall be retained by Licensee until the
later of (a) three (3) years after the end of the period to which such books,
records and accounts pertain, and (b) the expiration of the applicable tax
statute of limitations (or any extensions thereof), or for such longer period as
may be required by Applicable Law.
5.2 Audit. NovaDel shall have the right to have an independent certified
public accounting firm of nationally recognized standing, reasonably acceptable
to Licensee, to have access during normal business hours, and upon reasonable
prior written notice, to such of the records of Licensee (and its Affiliates and
Sublicensees) as may be reasonably necessary to verify the accuracy of such Net
Sales, Milestone Payments or Sublicensing Fees for any calendar quarter ending
not more than thirty-six (36) months prior to the date of such request;
provided, however, that NovaDel shall not have the right to conduct more than
one such audit in any twelve (12)-month period. The accounting firm shall
disclose to each Party whether such Net Sales, Other Income or milestone
payments are correct or incorrect and the specific details concerning any
discrepancies. NovaDel shall bear the cost of such audit unless the audit
reveals an under-reporting or underpayment in excess of the greater of one
hundred thousand dollars ($100,000) or two percent (2%) of royalties, Milestone
Payments or Sublicense Income payable for such period, in which case Licensee
shall bear the cost of the audit, rectify such underpayment and pay NovaDel
applicable interest as required by Section 5.5. All payments required under this
Section 5.2 shall be due within thirty (30) days of the date NovaDel provides
Licensee notice of the payment due. The results of such accounting firm shall be
final, absent manifest error.
Page 15 of 36
5.3 Reports. Within thirty (30) days of the end of each quarter of each
calendar year, Licensee shall deliver to NovaDel complete and accurate reports,
giving such particulars of the business conducted by Licensee during the
preceding quarter under this Agreement as shall be pertinent to an accounting
for royalties, milestone payments and Other Income hereunder. These shall
include at least the following:
5.3.1 All Licensed Product used, leased or sold, by or for Licensee
or its Affiliates.
5.3.2 Total amounts invoiced for Licensed Product used, leased or
sold, by or for Licensee or its Affiliates.
5.3.3 Deductions applicable in computed "Net Sales" as defined in
Section 1.33.
5.3.4 Total milestone payments due based on achievement of
milestones.
5.3.5 Total Sublicensing Income owed by License from its
Sublicensees.
5.3.6 Total royalties due based on Net Sales by or for Licensee or
its Affiliates and Sublicensing Income owed by its Sublicensees, including any
adjustments pursuant to Section 4.1.
5.3.7 Names and addresses of all Sublicensees and Affiliates of
Licensee.
5.4 Financial Statements. Within one hundred twenty (120) days of the end
of each fiscal year of Licensee, Licensee shall provide NovaDel with a copy of
Licensee's audited financial statements for such year to NovaDel.
5.5 Interest. Amounts which are not paid when due and which are not the
subject of a bona fide dispute shall accrue interest from the due date until
paid, at a rate equal to the then prevailing prime rate of Citibank, N.A., plus
six percent (6%), but in no event exceeding the amount permitted by applicable
law.
5.6 Confidentiality. Each report received by NovaDel shall be treated by
NovaDel as if it were "Confidential Information" subject to the terms of Article
16.
Page 16 of 36
ARTICLE 6
PATENT AND TRADEMARK
PROSECUTION AND MAINTENANCE
6.1 Ownership of Information and Inventions. Subject to Section 6.2 and
the license grants under Article 2, as between the Parties, NovaDel shall own
and retain all right, title and interest in and to any and all: (a) Information
and Inventions that are conceived, discovered, developed or otherwise made by or
on behalf of either Party (or its Affiliates or its Sublicensees), whether or
not patented or patentable, and any and all Patent and other intellectual
property rights with respect thereto; and (b) other Information and Inventions,
and Patent and other intellectual property rights that are Controlled (other
than pursuant to the license grants set forth in Article 2) by either Party, its
Affiliates or Sublicensees ). Subject to the license grants to Licensee under
Article 2, as between the Parties, NovaDel shall own and retain all right, title
and interest in and to all Licensed Technology.
6.2 Ownership of the Licensed Process. Subject to the license grants to
Licensee under Article 2, as between the Parties, NovaDel shall own and retain
all right, title and interest in and to the Licensed Process, including any and
all Information and Inventions with respect to the Licensed Process (including
any Improvements thereto) that are conceived, discovered, developed or otherwise
made, by or on behalf of Licensee, its Affiliates or Sublicensees (other than
NovaDel and its Affiliates), whether or not patented or patentable, and any and
all Patent and other intellectual property rights with respect thereto. Licensee
acknowledges and agrees that (a) the licenses granted to it pursuant to Section
2.1 permit Licensee to use the Licensed Process solely for the Exploitation of
Licensed Product as provided in this Agreement, (b) Licensee has no right to use
the Licensed Process or to discover, develop or otherwise make Improvements with
respect to the Licensed Process under such grants, and (c) neither it, nor any
of its Affiliates or Sublicensees, will engage, directly or indirectly, in
activities designed to, or otherwise undertake or attempt, either on behalf of
itself or another, to discover, develop or make any Information and Inventions
that relate to the Licensed Process. Accordingly, Licensee shall promptly
disclose to NovaDel in writing, the conception or reduction to practice, or the
discovery, development or making of any such Information and Inventions that
relate to the Licensed Process and shall, and does hereby, assign, and shall
cause its Affiliates and Sublicensees to so assign, to NovaDel, without
additional compensation, all of their respective rights, titles and interests in
and to any such Information and Inventions.
6.3 Ownership of Licensed Trademarks. Subject to the license grants under
Article 2, as between the Parties, NovaDel shall own and retain all right, title
and interest in and to the Licensed Trademarks. Licensee hereby acknowledges and
affirms (a) that to the best of its knowledge, the Licensed Trademarks and the
registrations thereof are valid and (b) that NovaDel or its Affiliates, as the
case may be, are the owners of all right and title to and interest in the
Licensed Trademarks and the registrations thereof, including any form or
embodiment thereof, and the goodwill now and hereafter associated with the
Licensed Trademarks. Licensee (on its own behalf and on behalf of its
Affiliates) expressly disclaims any right or title to or interest in the
Licensed Trademarks and the registrations thereof, except for the license
granted in Section 2.1.2. Licensee hereby agrees and undertakes that it will
not, and it will cause its Affiliates not to, contest or dispute the validity
of, or the rights of NovaDel and its Affiliates, as the case may be, in and to,
the Licensed Trademarks, or any part thereof, or the registrations thereof, nor
knowingly impair or endanger the validity of any of the foregoing. Licensee
Page 17 of 36
acknowledges that all use of the Licensed Trademarks by or on behalf of Licensee
or its Affiliates shall inure to the benefit of NovaDel and its Affiliates. Upon
termination of the license granted in Section 2.1.2, Licensee and its Affiliates
shall not be entitled to any compensation for any increase in the value of the
Licensed Trademarks or for any goodwill associated therewith. If so requested,
Licensee shall, and shall cause its Affiliates to, assist NovaDel and its
Affiliates to safeguard their full right, title and interest in and to the
Licensed Trademarks and the registrations thereof.
6.4 United States Law. The determination of whether Information and
Inventions are conceived, discovered, developed or otherwise made by a Party for
the purpose of allocating proprietary rights (including Patent, copyright or
other intellectual property rights) therein, shall, for purposes of this
Agreement, be made in accordance with applicable United States law.
6.5 Prosecution of Patents and Trademarks.
6.5.1 Prosecution of NovaDel Patents and Trademarks. As between the
Parties, NovaDel shall have the sole right, at its cost and expense, to obtain,
prosecute and maintain throughout the world the NovaDel Patents and Licensed
Trademarks; provided, however, that Licensee shall reimburse NovaDel for one
hundred percent (100%) of the reasonable out-of-pocket costs incurred by
NovaDel, as of the Effective Date, for filing, prosecuting and maintaining such
NovaDel Patents to the extent that they claim or cover solely the Exploitation
of the Licensed Product in the Territory. Licensee shall, and shall cause its
Affiliates and Sublicensees, as applicable, to, cooperate fully with NovaDel in
the preparation, filing, prosecution, and maintenance of NovaDel's Patents. Such
cooperation includes (a) promptly executing all papers and instruments and
requiring employees to execute such papers and instruments as reasonable and
appropriate so as to enable NovaDel to file, prosecute, and maintain its Patents
in any country; and (b) promptly informing NovaDel of matters that may affect
the preparation, filing, prosecution, or maintenance of any such Patents.
NovaDel shall provide Licensee with drafts of all patent applications and other
material submissions to and correspondence with any patent authorities to the
extent such applications or submissions relate to the Licensed Technology (other
than the Licensed Process), in sufficient time, but in any event not less than
thirty (30) days prior to the date a reply is required by the relevant patent
authorities, to allow for review and comment by Licensee. In addition, NovaDel
shall provide Licensee with an opportunity to consult with NovaDel regarding the
filing and contents of any such application, submission or correspondence. If
Licensee provides to NovaDel comments with respect to any such application,
submission or correspondence, to the extent such comments relate to any Licensed
Technology (other than the Licensed Process), NovaDel agrees to reasonably
consider such comments, it being understood that NovaDel retains the right to
determine whether to comply with or incorporate such comments, if at all. If (x)
NovaDel elects not to pursue the filing, prosecution or maintenance of a NovaDel
Patent in a particular country, or to take any other action with respect to a
NovaDel Patent in a particular country that is necessary or useful to establish
or preserve rights with respect to the Licensed Product, and (y) such Patent
does not claim or cover the Licensed Process, then NovaDel shall so notify
Licensee promptly in writing and in good time to enable Licensee to meet any
Page 18 of 36
deadlines by which an action must be taken to establish or preserve any such
rights in such NovaDel Patent in such country. Upon receipt of any such notice
by NovaDel or if, at any time, NovaDel fails to initiate any such action within
thirty (30) days after a request by Licensee that it do so (and thereafter
diligently pursue such action), Licensee shall have the right, but not the
obligation, to pursue the filing or registration, or support the continued
prosecution or maintenance, of such NovaDel Patent at its expense in such
country. If Licensee elects to pursue such filing or registration, as the case
may be, or continue such support, then Licensee shall notify NovaDel of such
election and NovaDel shall, and shall cause its Affiliates to, (x) reasonably
cooperate with Licensee in this regard, and (y) promptly grant to Licensee,
without additional consideration, an exclusive, perpetual, irrevocable,
royalty-free license in such country under such NovaDel Patent.
6.6 Enforcement of Patents and Trademarks.
6.6.1 Technology and Trademarks of NovaDel. If either Party
determines that any Technology or Trademark of NovaDel or any Joint Technology
is being infringed by a Third Party's activities and that such infringement
could affect the exercise by the Parties of their respective rights and
obligations under this Agreement, it shall promptly notify such other Party in
writing and provide such other Party with any evidence of such infringement that
is reasonably available. Promptly after the receipt of such written notice, the
Parties shall meet and discuss in good faith the removal of such infringement.
NovaDel shall consider in good faith any comments from Licensee and shall keep
Licensee reasonably informed of any steps taken to remove such infringement.
NovaDel shall have the first right, but not the obligation, to remove such
infringement at its sole cost and expense; provided, however, that Licensee
shall reimburse NovaDel for [***] of the reasonable out-of-pocket costs incurred
by NovaDel with respect to the removal of any such infringement to the extent
that such infringement adversely affects the Exploitation of the Licensed
Product in the Territory. In the event that NovaDel fails within ninety (90)
days following notice of such infringement, or earlier notifies Licensee in
writing of its intent not, to take commercially appropriate steps to remove any
infringement of any NovaDel Patent or Licensed Trademark that is likely to have
a material adverse effect on the sale of a Licensed Product, Licensee shall have
the right to do so at Licensee's expense; provided, however, that if NovaDel has
commenced negotiations with an alleged infringer for discontinuance of such
infringement within such ninety (90) day period, NovaDel shall have an
additional ninety (90) days to conclude its negotiations before Licensee may
bring suit for such infringement, and provided further that Licensee shall not
enter into any settlement or compromise with respect to any NovaDel Patent or
Licensed Trademark without NovaDel's prior consent, which consent shall not be
unreasonably withheld. Each Party shall provide reasonable assistance to the
other Party, including providing access to relevant documents and other
evidence, making its employees available at reasonable business hours, and
joining the action to the extent necessary to allow the enforcing Party to
maintain the action. Any amounts recovered by a Party pursuant to this Section,
whether by settlement or judgment, shall be used to reimburse the Parties for
their reasonable costs and expenses in making such recovery (which amounts shall
be allocated pro rata if insufficient to cover the totality of such expenses),
with any remainder being retained by the Party that brought the enforcement
action; provided, however, that to the extent that any award is attributable to
the loss of sales of Licensed Product, such amount shall be paid to Licensee and
shall be treated as Net Sales on which royalties shall be due under Article 4.
6.7 Potential Third Party Rights.
Page 19 of 36
6.7.1 Third-Party Licenses. If (a) in the opinion of outside patent
counsel to Licensee, Licensee, or any of its Affiliates or Sublicensees, cannot
Exploit a Licensed Product in a country in the Territory without infringing one
or more Patents that have issued to a Third Party in such country, or (b) as a
result of any claim made against a Party, or any of its Affiliates or
Sublicensees, alleging that the Exploitation of a Licensed Product infringes or
misappropriates any Patent or any other intellectual property right of a Third
Party in a country in the Territory, a judgment is entered by a court of
competent jurisdiction from which no appeal is taken within the time permitted
for appeal, such that Licensee cannot Exploit such Licensed Product in such
country without infringing the Patent or other proprietary rights of such Third
Party, then, in either case, Licensee shall have the first right, but not the
obligation to negotiate and to obtain a license from such Third Party as
necessary for the Exploitation of any Licensed Product hereunder in such
country; provided, however, that NovaDel shall have the sole right to seek any
such license with respect to the Licensed Process and shall use commercially
reasonable efforts to obtain such a license in its own name from such Third
Party in such country, under which NovaDel shall, to the extent permissible
under such license, grant a sublicense to Licensee as necessary for Licensee,
and any of its Affiliates and Sublicensees, to Exploit the Licensed Product as
provided hereunder in such country. Licensee shall be solely responsible for
[***] royalty and other obligations with respect to the Exploitation of the
Licensed Product; provided, however, that Licensee shall have the right to
credit [***] any royalties paid by Licensee, its Affiliates or Sublicensees
under such license with respect to such country against the royalty payments to
be paid by Licensee to NovaDel with respect to the sale of the Licensed
Product(s) under Section 4.1; provided, however, that no royalty payment when
due, regardless of the amount or number of credits available to Licensee in
accordance with this Agreement, shall be reduced by [***] of the amounts
otherwise owed pursuant to Section 4.1 in any calendar quarter. Credits not
exhausted in any calendar quarter may be carried into future calendar quarters.
6.7.2 Third Party Litigation. In the event that a Third Party
institutes a patent, trademark or other infringement suit (including any suit
alleging the invalidity or unenforceability of the Patents of a Party or its
Affiliates, or claiming confusion, deception or dilution of a Trademark) against
either Party or its respective Affiliates, licensees or Sublicensees during the
Term, alleging use of the Licensed Technology, Licensed Trademarks or any other
activities hereunder, infringes one or more patent, trademark or other
intellectual property rights held by such Third Party (an "Infringement Suit"),
the Parties shall cooperate with one another in defending such suit. NovaDel
shall have the first right to direct and control any Infringement Suit to the
extent that it relates to the use of the Licensed Technology, the Licensed
Trademarks or the Licensed Process; provided that Licensee shall bear [***] of
the costs and expenses associated with any such Infringement Suit to the extent
that it relates to the Exploitation of the Licensed Product.
6.7.3 Retained Rights. Nothing in this Section 6.7 shall prevent
Licensee, at its own expense, from obtaining any license or other rights from
Third Parties it deems appropriate in order to permit the full and unhindered
exercise of its rights under this Agreement.
Page 20 of 36
ARTICLE 7
TERM OF THE AGREEMENT
7.1 Term. Unless otherwise terminated pursuant to Article 8, this
Agreement shall enter into effect on the Effective Date and shall remain in full
force and effect on a country-by-country basis until the later of (a) expiration
date of the last to expire of any issued NovaDel patent that includes at least
one Valid Claim and (b) the twentieth (20th) anniversary of the Effective Date.
ARTICLE 8
TERMINATION
8.1 Termination Upon Insolvency. If Licensee shall become bankrupt, or
shall file a petition in bankruptcy or insolvency or for reorganization or for
an arrangement or for the appointment of a receiver or trustee or of its assets,
or if an involuntary petition for any of the foregoing shall be filed with
respect to Licensee and not dismissed within sixty (60) days, or if the business
of Licensee shall be placed in the hands of a receiver, assignee or trustee for
the benefit of creditors, whether by the voluntary act of Licensee or otherwise,
this Agreement shall automatically terminate.
8.2 Termination for Payment Default. Should Licensee fail to make payment
to NovaDel of royalties or other amounts due in accordance with the terms of
this Agreement, NovaDel shall have the right to terminate this Agreement within
ten (10) days after giving said notice of termination unless Licensee shall pay
to NovaDel, within the 10-day period, all such amounts due and payable. Upon the
expiration of the 10-day period, if Licensee shall not have paid all such
amounts due and payable, the rights, privileges and licenses granted hereunder
shall, at the option of NovaDel, immediately terminate. In the event a payment
is the subject of a bona fide dispute between NovaDel and Licensee that is being
pursued by a Party pursuant to the dispute resolution mechanism in Article 9,
then Licensee shall make such payment, but shall provide NovaDel with written
notice that such payment is being made subject to the outcome of such pending
dispute resolution procedure and in the event such dispute is finally and
conclusively resolved in favor of Licensee, NovaDel shall refund such payment to
Licensee with interest calculated pursuant to Section 5.5 from the date of such
payment.
8.3 Termination for Material Breach. Upon any material breach or default
of this Agreement by either Party, other than as set forth in Sections 8.1 or
8.2 above, and subject to Section 2.4.3, the other Party shall have the right to
terminate this Agreement and the rights, privileges and licenses granted
hereunder upon giving thirty (30) days notice to the breaching Party. Such
termination shall become effective upon the expiration of such thirty (30)-day
period unless the breaching Party shall have cured any such breach or default
prior to the expiration of such thirty (30) day period.
8.4 Termination By The Licensee. The Licensee shall have the right at any
time to terminate this Agreement in whole or as to any Licensed Product (i) by
giving 90 days notice thereof in writing to NovaDel or (ii) if Licensee elects
not to effect Milestone Payments which are due and payable in Article 4.5.
Page 21 of 36
8.5 Survival. Any expiration or termination of this Agreement shall not
affect the rights and obligations of the Parties accrued prior to such
expiration or termination. Without limiting the foregoing, Articles 4, 5, 6, 9,
10, 11, 14, 15 and 16 and Sections 8.6, 8.7, 16.1, 16.7 and this Section 8.5
shall survive the termination or expiration of this Agreement for any reason.
8.6 Work-in-Progress. Licensee and/or any Sublicensee thereof may,
however, after the effective date of such termination and continuing for a
period not to exceed six (6) months thereafter, sell all completed Licensed
Product, and any Licensed Product in the process of manufacture at the time of
such termination, and sell the same, provided that Licensee shall pay or cause
to be paid to NovaDel the royalties thereon as required by Article 4 of this
Agreement and shall submit the reports required by Article 5 hereof on the sales
of Licensed Product.
8.7 Return of Information; Assignment and License.
8.7.1 Upon termination of this Agreement, Licensee shall, and shall
cause its Affiliates and Sublicensees, as applicable, to return to NovaDel any
and all data, files, records and other materials in its possession or control
that relate to the Licensed Technology or contain or comprise NovaDel's
Information and Inventions or other Confidential Information (except one copy of
each that may be retained for archival purposes).
8.7.2 Upon the termination of this Agreement, Licensee (a) shall,
and shall cause its Affiliates and, subject to Section 8.7.3, Sublicensees to,
promptly disclose to NovaDel, in whatever form NovaDel may request, all
Regulatory Documentation and all other Information and Inventions in the
possession or Control of Licensee, its Affiliates or Sublicensees that relate to
the Exploitation of such Licensed Product, (b) shall, and does hereby, assign,
and shall cause its Affiliates and, subject to Section 8.7.3, Sublicensees to
assign, to NovaDel, without additional compensation, all of their respective
rights, titles and interests in and to any and all (i) patent, trademark,
copyright or other intellectual property rights, (ii) Regulatory Documentation
and all data included or referenced therein, and (iii) other Information and
Inventions in the possession or Control of Licensee, its Affiliates or
Sublicensees, in each case that relate to the Exploitation of such Licensed
Product (the "Agreement-Related Assets") and are permitted to be assigned, and
(c) to the extent that the Agreement-Related Assets may not be assigned, shall,
and does hereby, grant, and shall cause its Affiliates and, subject to Section
8.7.3, Sublicensees to grant, to NovaDel, without additional compensation, a
perpetual, irrevocable, royalty-free, exclusive, sublicenseable through multiple
tiers of sublicensees, right and license to Exploit such Licensed Product in the
Territory.
8.7.3 Notwithstanding anything contained in Sections 8.7.1 and
8.7.2, in the event that any sublicense granted by Licensee survives pursuant to
Section 2.4.3, the Sublicensee may retain (a) the information and materials
identified in Section 8.7.1 that are rightfully in its possession and (b)
Agreement-Related Assets, in each case until the termination of such sublicense,
whereupon such Sublicensee shall return such materials to NovaDel,.
8.8 Cumulative Remedies. The rights and remedies set forth in this Article
8 are cumulative and in addition to any other rights that may be available to
the Parties.
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8.9 Non-Refundability of Milestones and Development Costs. Any and all
Milestone Payments made to NovaDel by Licensee under Article 4 of this Agreement
shall be non-refundable in the event of termination of this Agreement by either
party under any of the provisions of Article 8.
ARTICLE 9
ARBITRATION
9.1 Procedures. Any dispute arising from or relating to this Agreement
shall be determined before a tribunal of three arbitrators in New York, New York
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association (the "AAA"). One arbitrator shall be selected by NovaDel, one
arbitrator shall be selected by Licensee and the third arbitrator shall be
selected by mutual agreement of the first two arbitrators or by the AAA, if the
arbitrators appointed by the Parties are unable to select a third arbitrator
within thirty (30) days.
9.2 Patent Disputes. Any claim, dispute, or controversy concerning the
validity, enforceability, or infringement of any patent contained in the NovaDel
Patents licensed hereunder shall be resolved in any court having jurisdiction
thereof. In the event that, in any arbitration proceeding, any issue shall arise
concerning the validity, enforceability, or infringement of any patent contained
in the NovaDel Patents licensed hereunder, the arbitrators shall, to the extent
possible, resolve all issues other than validity, enforceability, and
infringement; in any event, the arbitrators shall not delay the arbitration
proceeding for the purpose of obtaining or permitting either Party to obtain
judicial resolution of such issues, unless an order staying the arbitration
proceeding shall be entered by a court of competent jurisdiction. Neither Party
shall raise any issue concerning the validity, enforceability, or infringement
of any patent contained in the NovaDel Patents licensed hereunder, in any
proceeding to enforce any arbitration award hereunder, or in any proceeding
otherwise arising out of any such arbitration award.
9.3 Costs. The costs of such arbitration shall be borne proportionate to
the finding of fault as determined by the arbitration panel. Judgment on the
arbitration award may be entered by any court of competent jurisdiction.
ARTICLE 10
INDEMNIFICATION AND INSURANCE
10.1 Indemnification of NovaDel. Licensee shall defend, indemnify and hold
NovaDel, its Affiliates, and their respective directors, officers, employees and
agents harmless from and against all liability, demands, damages, including
expenses or losses including death, personal injury, illness or property damage
(collectively, "Losses") arising directly or indirectly out of any: (a) breach
of this Agreement by Licensee, its Affiliates, Sublicensees or permitted assigns
or transferees; (b) actual or asserted violations of Applicable Law by Licensee,
its Affiliates, Sublicensees or permitted assignees or transferees; (c) use by
Licensee, its Affiliates, Sublicensees or permitted assignees or transferees of
the Licensed Technology or (d) Exploitation of the Licensed Product by Licensee,
its Affiliates, Sublicensees or permitted assignees or transferees, except for
those Losses for which NovaDel has an obligation to indemnify Licensee and its
Affiliates pursuant to Section 10.2, as to which Losses each Party shall
indemnify the other to the extent of their respective liability for the Losses
and other than as a result of NovaDel's gross negligence, recklessness or
willful misconduct.
Page 23 of 36
10.2 Indemnification of Licensee. NovaDel shall defend, indemnify and hold
Licensee, its Affiliates, and their respective directors, officers, employees
and agents harmless from and against all Losses arising directly or indirectly
out of any: (a) breach of this Agreement by NovaDel or its Affiliates; or (b)
actual or asserted violations of Applicable Law by NovaDel or its Affiliates,
except for those Losses for which Licensee has an obligation to indemnify
NovaDel and its Affiliates pursuant to Section 10.1, as to which Losses each
Party shall indemnify the other to the extent of their respective liability for
the Losses.
10.3 Indemnification Procedure.
10.3.1 Notice of Claim. The indemnified Party shall give the
indemnifying Party prompt written notice (an "Indemnification Claim Notice") of
any Losses or discovery of fact upon which such indemnified Party intends to
base a request for indemnification under Section 10.1 or Section 10.2, but in no
event shall the indemnifying Party be liable for any Losses that result from any
delay in providing such notice. Each Indemnification Claim Notice must contain a
description of the claim and the nature and amount of such Loss (to the extent
that the nature and amount of such Loss is known at such time). The indemnified
Party shall furnish promptly to the indemnifying Party copies of all papers and
official documents received in respect of any Losses. All indemnification claims
in respect of a Party, its Affiliates or their respective directors, officers,
employees and agents shall be made solely by such Party to this Agreement (the
"Indemnified Party").
10.3.2 Third Party Claims. The obligations of an indemnifying Party
under this Article 10 with respect to Losses arising from claims of any Third
Party that are subject to indemnification as provided for in Sections 10.1 or
10.2 (a "Third Party Claim") shall be governed by and be contingent upon the
following additional terms and conditions:
(a) Control of Defense. At its option, the indemnifying Party
may assume the defense of any Third Party Claim by giving written notice to the
Indemnified Party within thirty (30) days after the indemnifying Party's receipt
of an Indemnification Claim Notice. The assumption of the defense of a Third
Party Claim by the indemnifying Party shall not be construed as an
acknowledgment that the indemnifying Party is liable to indemnify any
indemnified Party in respect of the Third Party Claim, nor shall it constitute a
waiver by the indemnifying Party of any defenses it may assert against any
indemnified Party's claim for indemnification. Upon assuming the defense of a
Third Party Claim, the indemnifying Party may appoint as lead counsel in the
defense of the Third Party Claim any legal counsel selected by the indemnifying
Party. In the event the indemnifying Party assumes the defense of a Third Party
Claim, the Indemnified Party shall immediately deliver to the indemnifying Party
all original notices and documents (including court papers) received by any
indemnified Party in connection with the Third Party Claim. Should the
indemnifying Party assume the defense of a Third Party Claim, the indemnifying
Page 24 of 36
Party shall not be liable to the Indemnified Party or any other indemnified
Party for any legal expenses subsequently incurred by such indemnified Party in
connection with the analysis, defense or settlement of the Third Party Claim. In
the event that it is ultimately determined that the indemnifying Party is not
obligated to indemnify, defend or hold harmless an Indemnified Party from and
against the Third Party Claim, the Indemnified Party shall reimburse the
indemnifying Party for any and all costs and expenses (including attorneys' fees
and costs of suit) and any Losses incurred by the indemnifying Party in its
defense of the Third Party Claim with respect to such Indemnified Party.
(b) Right to Participate in Defense. Without limiting Section
10.3.2(a), any Indemnified Party shall be entitled to participate in, but not
control, the defense of such Third Party Claim and to employ counsel of its
choice for such purpose; provided, however, that such employment shall be at the
Indemnified Party's own expense unless (i) the employment thereof has been
specifically authorized by the indemnifying Party in writing or (ii) the
indemnifying Party has failed to assume the defense and employ counsel in
accordance with Section 10.3.2(a) (in which case the Indemnified Party shall
control the defense).
(c) Settlement. With respect to any Losses relating solely to
the payment of money damages in connection with a Third Party Claim and that
will not result in the Indemnified Party's becoming subject to injunctive or
other relief or otherwise adversely affect the business of the Indemnified Party
in any manner, and as to which the indemnifying Party shall have acknowledged in
writing the obligation to indemnify the Indemnified Party hereunder, the
indemnifying Party shall have the sole right to consent to the entry of any
judgment, enter into any settlement or otherwise dispose of such Loss, on such
terms as the indemnifying Party, in its sole discretion, shall deem appropriate.
With respect to all other Losses in connection with Third Party Claims, where
the indemnifying Party has assumed the defense of the Third Party Claim in
accordance with Section 10.3.2(a), the indemnifying Party shall have authority
to consent to the entry of any judgment, enter into any settlement or otherwise
dispose of such Loss provided it obtains the prior written consent of the
Indemnified Party (which consent shall not be unreasonably withheld or delayed).
The indemnifying Party shall not be liable for any settlement or other
disposition of a Loss by an indemnified Party that is reached without the
written consent of the indemnifying Party. Regardless of whether the
indemnifying Party chooses to defend or prosecute any Third Party Claim, no
indemnified Party shall admit any liability with respect to, or settle,
compromise or discharge, any Third Party Claim without the prior written consent
of the indemnifying Party.
(d) Cooperation. Regardless of whether the indemnifying Party
chooses to defend or prosecute any Third Party Claim, the Indemnified Party
shall, and shall cause each other indemnified Party to, cooperate in the defense
or prosecution thereof and shall furnish such records, information and
testimony, provide such witnesses and attend such conferences, discovery
proceedings, hearings, trials and appeals as may be reasonably requested in
connection therewith. Such cooperation shall include access during normal
business hours afforded to indemnifying Party to, and reasonable retention by
the Indemnified Party of, records and information that are reasonably relevant
to such Third Party Claim, and making indemnified Parties and other employees
and agents available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder, and the
indemnifying Party shall reimburse the Indemnified Party for all its reasonable
out-of-pocket expenses in connection therewith.
Page 25 of 36
(e) Expenses. Except as provided above, the costs and
expenses, including fees and disbursements of counsel, incurred by the
Indemnified Party in connection with any claim shall be reimbursed on a calendar
quarter basis by the indemnifying Party, without prejudice to the indemnifying
Party's right to contest the Indemnified Party's right to indemnification and
subject to refund in the event the indemnifying Party is ultimately held not to
be obligated to indemnify the Indemnified Party.
10.4 Insurance.
10.4.1 Prior to entering human clinical trials, Licensee shall have
and maintain such type and amounts of liability insurance covering the
manufacture, supply, use and sale of the Licensed Product as is normal and
customary in the pharmaceutical industry generally for parties similarly
situated, and shall upon request provide NovaDel with a copy of its policies of
insurance in that regard, along with any amendments and revisions thereto.
10.4.2 At all times during the Development Activities, NovaDel shall
have and maintain such type and amounts of liability insurance covering the
manufacture, supply, use and sale of the Licensed Product as is normal and
customary in the pharmaceutical industry generally for parties similarly
situated, and shall upon request provide the Licensee with a copy of its
policies of insurance in that regard, along with any amendments and revisions
thereto.
10.4.3 Each of Licensee and NovaDel shall, starting 6 months prior
to anticipated receipt of NDA approval of Licensed Product and extending through
the remaining term of this Agreement and for a period of not less than 36 months
following the termination of this Agreement, carry liability insurance
(including blanket contractual liability) in an amount of not less than
$10,000,000 combined single limit, which insurance will be written on a
"claims-made" policy basis with an insurance carrier reasonably acceptable to
the other party. Each party shall provide the other party with evidence of
coverage contemplated hereby, in the form of certificates of insurance, as
reasonably requested. Such certificates shall be provided by written notice to
the other party 15 days prior to any material change, cancellation or
non-renewal of the policy. The said amount can vary if mutually agreed by both
parties.
ARTICLE 11
REPRESENTATIONS AND WARRANTIES;
LIMITATION OF LIABILITY
11.1 Representations, Warranties and Covenants. Each Party hereby
represents and warrants to the other Party as of the Effective Date as follows:
11.1.1 Duly Organized. Such Party is a corporation duly organized,
validly existing and in good standing under the laws of the state in which it is
incorporated, and has full corporate power and authority and the legal right to
own and operate its property and assets and to carry on its business as it is
now being conducted and as is contemplated to be conducted by this Agreement.
Page 26 of 36
11.1.2 Corporate Authority. Such Party (a) has the power and
authority and the legal right to enter into this Agreement and perform its
obligations hereunder, and (b) has taken all necessary action on its part
required to authorize the execution and delivery of this Agreement and the
performance of its obligations hereunder. The Agreement has been duly executed
and delivered on behalf of such Party and is enforceable against it in
accordance with its terms, subject to the effects of bankruptcy, insolvency or
other laws of general application affecting the enforcement of creditor rights
and judicial principles affecting the availability of specific performance and
general principles of equity, whether enforceability is considered in a
proceeding at law or in equity.
11.1.3 Litigation. Such Party is not aware of any pending or
threatened litigation (and has not received any communication) that alleges that
such Party's activities related to this Agreement have violated, or that by
conducting the activities as contemplated herein such Party would violate, any
of the intellectual property rights of any other Person.
11.1.4 Consents, Approvals, etc. All necessary consents, approvals
and authorizations of all regulatory and governmental authorities and other
Persons required to be obtained by such Party in connection with the execution
and delivery of this Agreement and the performance of its obligations hereunder
have been obtained.
11.1.5 Conflicts. The execution and delivery of this Agreement and
the performance of such Party's obligations hereunder (a) do not conflict with
or violate any requirement of applicable law or regulation or any provision of
the articles of incorporation, bylaws, or any similar constitutive document of
such Party, as applicable, in any material way, and (b) do not conflict with,
violate, or breach or constitute a default or require any consent under, any
contractual obligation or court or administrative order by which such Party is
bound.
11.2 Additional Representations and Warranties of NovaDel.
11.2.1 NovaDel represents and warrants to Licensee that, to its
Knowledge, as of the Effective Date, NovaDel is the owner or (sub)licensee (with
the right to grant sublicenses to Licensee as contemplated under this Agreement)
of the NovaDel Patents, and has all right, title, and interest in and to the
NovaDel Patents, including exclusive, absolute, irrevocable right, title and
interest thereto, free and clear of all liens, charges, encumbrances or other
restrictions or limitations of any kind whatsoever and to the NovaDel's
knowledge and belief there are no licenses, options, restrictions, liens, rights
of third parties, disputes, royalty obligations, proceedings or claims relating
to, affecting, or limiting its rights or the rights of the Licensee under this
Agreement with respect to, or which may lead to a claim of infringement or
invalidity regarding, any part or all of the Licensed Technology and their use
as contemplated in the underlying patent applications as presently drafted. The
NovaDel Patents have not, as of the Effective Date, been held by a court of
competent jurisdiction to be invalid or unenforceable, in whole or in part.
11.2.2 To NovaDel's knowledge and belief there is no claim, pending
or threatened, of infringement, interference or invalidity regarding, any part
or all of the Licensed Technology and their use as contemplated in the
underlying patent applications as presently drafted.
Page 27 of 36
11.3 Additional Covenants of Licensee. Licensee on behalf of itself and
its Affiliates agrees and covenants to the extent permitted by applicable law,
never, in any country, region or jurisdiction in the Territory, to institute or
prosecute any claim, action or suit at law or in equity seeking to have any
claim in a NovaDel Patent declared invalid or unenforceable; provided, however,
that nothing contained herein shall prohibit Licensee and its Affiliates and
Sublicensees from either (a) asserting any and all defenses available to it,
including assertions relating to the validity or enforceability of the NovaDel
Patents, in any suit or proceeding brought against them alleging the
infringement of any of the NovaDel Patents, or (b) asserting any and all
defenses, evidence and arguments, including lack of patentability of the subject
matter of a count or claim and lack of support for a count or claim, in any
interference involving a patent or patent application owned by Licensee or its
Affiliates or Sublicensees and a patent or patent application included within
the definition of the NovaDel Patents. In its agreements with each of its
Sublicensees, Licensee shall include provisions requiring a covenant, materially
identical to that Licensee is making in this Section 11.3, on the part of the
Sublicensee, and shall provide that NovaDel shall have march-in right to seek
termination of such agreement in the event the Sublicensee breaches the
covenant. NovaDel's right to seek termination of such agreement with the
Sublicensee shall be subject to notice, cure and dispute resolutions provisions
materially identical to the provision set forth in Section 7.2. Licensee and its
Affiliates will take all reasonable action (including signing required
documents) and offer full cooperation to allow NovaDel to exercise the march-in
rights provided herein, to the extent permitted by law.
11.4 DISCLAIMER OF WARRANTY. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH
IN SECTIONS 11.1 AND 11.2, NOVADEL MAKES NO REPRESENTATIONS AND GRANTS NO
WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY
STATUTE OR OTHERWISE, UNDER THIS AGREEMENT, AND NOVADEL SPECIFICALLY DISCLAIMS
ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING
ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR
PURPOSE OR ANY WARRANTY AS TO THE VALIDITY OF ANY PATENTS OR THE
NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES UNDER THIS
AGREEMENT.
11.5 LIMITATION OF LIABILITY. NONE OF NOVADEL OR ANY OF ITS AFFILIATES
SHALL BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES
(INCLUDING FOR LOST PROFITS), WHETHER IN CONTRACT, WARRANTY, NEGLIGENCE, TORT,
STRICT LIABILITY OR OTHERWISE, ARISING OUT OF (A) THE USE OF THE LICENSED
TECHNOLOGY OR LICENSED TRADEMARKS OR (B) ANY BREACH OF OR FAILURE TO PERFORM ANY
OF THE PROVISIONS OF THIS AGREEMENT.
Page 28 of 36
ARTICLE 12
ASSIGNMENT
This Agreement and the rights and duties appertaining hereto may not be
assigned by either party without first obtaining the written consent of the
other which consent shall not be unreasonably withheld. Any such purported
assignment, without the written consent of the other party, shall be null and of
no effect. Notwithstanding the foregoing, the Company may assign this Agreement
(i) to a purchaser, merging or consolidating corporation, or acquiror of
substantially all of the Company's assets or business and/or pursuant to any
reorganization qualifying under section 368 of the Internal Revenue Code of 1986
as amended, as may be in effect at such time, or (ii) to an Affiliate of the
Company subject to the consent of the Licensors which consent shall not be
unreasonably withheld. ARTICLE 13 USE OF NAMES AND PUBLICATION
13.1 Use of Name. Nothing contained in this Agreement shall be construed
as granting any right to Licensee, its Affiliates or Sublicensees to use in
advertising, publicity, or other promotional activities the name of NovaDel or
any of its units (including contraction, abbreviation or simulation of any of
the foregoing) without the prior, written consent of NovaDel; provided, however,
that NovaDel acknowledges and agrees that Licensee may use the names of NovaDel
in various documents used by Licensee for capital raising and financing without
such prior written consent to the limited extent that such use may be required
by law, and provided further that all such uses shall be factually accurate and
not misleading.
13.2 Relationship of the Parties. Nothing herein shall be deemed to
establish a relationship of principal and agent between NovaDel and Licensee,
nor any of their agents or employees for any purpose whatsoever. This Agreement
shall not be construed as creating a partnership between NovaDel and Licensee,
or as creating any other form of legal association or arrangement which would
impose liability upon one Party for the act or failure to act of the other
Party.
13.3 Publications. In the event that either party desires to publish or
disclose, by written, oral or other presentation, Licensed Technology or any
material information related thereto, then such party shall notify the other in
writing of its intention at least sixty (60) days prior to any speech, lecture
or other oral presentation and at least sixty (60) days before any written or
other publication or disclosure, and shall include with such notice a
description of any proposed oral presentation or, with respect to any proposed
written or other disclosure, a current draft of such proposed disclosure or
abstract. NovaDel may request that Licensee, no later than thirty (30) days
following the receipt of such notice, delay such presentation, publication or
disclosure in order to enable NovaDel to file, or have filed on its behalf or
jointly, as applicable, a patent application, copyright or other appropriate
form of intellectual property protection related to the information to be
disclosed or request that Licensee do so. Upon receipt of such request to delay
such presentation, publication or disclosure, Licensee shall arrange for a delay
of such presentation, publication or disclosure until such time as Licensee or
NovaDel has filed, or had filed on its behalf, such patent application,
copyright or other appropriate form of intellectual property protection in form
and in substance reasonably satisfactory to NovaDel. If Licensee does not
receive any such request from NovaDel to delay such presentation, publication or
disclosure, Licensee may submit such material for presentation, publication or
other form of disclosure. Notwithstanding the foregoing, in no event shall
Licensee have any right to publish or disclose the Licensed Process or any
information or data related thereto without the prior written consent of
NovaDel, which consent NovaDel may withhold in its sole discretion.
Page 29 of 36
ARTICLE 14
PAYMENTS, NOTICES AND OTHER COMMUNICATIONS
All notices or other communications that are required or permitted
hereunder shall be in writing and delivered personally, sent by telecopier (and
promptly confirmed by personal delivery, registered or certified mail or
overnight courier as provided herein), sent by nationally-recognized overnight
courier or sent by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
If to NovaDel to:
NovaDel Pharma Inc.
00 Xxxxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: President
000.000.0000 (fax)
with a copy (not constituting notice) to:
If to Licensee to:
Hana Biosciences
000 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: President
000.000.0000 (fax)
with a copy (not constituting notice) to:
or to such other address as the Party to whom notice is to be given may have
furnished to the other Party in writing in accordance herewith. Any such
communication shall be deemed to have been given (a) when delivered, if
personally delivered or sent by telecopier on a business day, (b) on the
business day after dispatch, if sent by nationally-recognized overnight courier,
and (c) on the third business day following the date of mailing, if sent by
mail. It is understood and agreed that this Article 14 is not intended to govern
the day-to-day business communications necessary between the Parties in
performing their duties, in due course, under the terms of this Agreement.
Page 30 of 36
ARTICLE 15
CONFIDENTIALITY
15.1 Definition. "Confidential Information" of a Party shall mean all
information and know-how and any tangible embodiments thereof provided by or on
behalf of such Party to the other Party either in connection with the
discussions and negotiations pertaining to, or in the course of performing, this
Agreement, including the terms of this Agreement; the Designated Compounds;
data; knowledge; practices; processes; ideas; research plans; engineering
designs and drawings; research data; manufacturing processes and techniques;
scientific, manufacturing, marketing and business plans; and financial and
personnel matters relating to the disclosing Party or to its present or future
products, sales, suppliers, customers, employees, investors or business. For
purposes of this Agreement, notwithstanding the Party that disclosed such
information or know-how, all NovaDel Know-How and all Information and Inventions
with respect to the Licensed Process shall be Confidential Information of
NovaDel.
15.2 Exclusions. Notwithstanding the foregoing, information or know-how of
a Party shall not be deemed Confidential Information with respect to a receiving
Party for purposes of this Agreement if such receiving party can affirmatively
demonstrate through the production of written documentation that such
information or know-how:
15.2.1 was already known to the receiving Party or its Affiliates,
other than under an obligation of confidentiality or non-use, at the time of
disclosure to such receiving Party;
15.2.2 was generally available or known to parties reasonably
skilled in the field to which such information or know-how pertains, or was
otherwise part of the public domain, at the time of its disclosure to such
receiving Party;
15.2.3 became generally available or known to parties reasonably
skilled in the field to which such information or know-how pertains, or
otherwise became part of the public domain, after its disclosure to such
receiving Party through no fault of a Party other than the Party that Controls
such information and know-how;
15.2.4 was disclosed to such receiving Party or its Affiliates,
other than under an obligation of confidentiality or non-use, by a Third Party
who had no obligation to the Party that Controls such information and know-how
not to disclose such information or know-how to others; or
15.2.5 was independently discovered or developed by such receiving
Party or its Affiliates, as evidenced by their written records, without the use
of Confidential Information belonging to the Party that Controls such
information and know-how, except with respect to the NovaDel Know-How with
respect to the Licensed Process, which shall be and remain Confidential
Information of NovaDel.
Page 31 of 36
Specific aspects or details of Confidential Information shall not be deemed to
be within the public domain or in the possession of a Party merely because the
Confidential Information is embraced by more general information in the public
domain or in the possession of such Party. Further, any combination of
Confidential Information shall not be considered in the public domain or in the
possession of a Party merely because individual elements of such Confidential
Information are in the public domain or in the possession of such Party unless
the combination and its principles are in the public domain or in the possession
of such Party.
15.3 Disclosure and Use Restriction. Except as expressly provided herein,
the Parties agree that during the Term of this Agreement, and for five (5) years
thereafter, each Party and its Affiliates and sublicensees shall keep completely
confidential and shall not publish or otherwise disclose and shall not use for
any purpose except for the purposes contemplated by this Agreement any
Confidential Information of the other Party, its Affiliates or Sublicensees.
15.4 Authorized Disclosure. Each Party may disclose Confidential
Information of the other Party to the extent that such disclosure is:
15.4.1 Required by Governmental Order. Made in response to a valid
order of a court of competent jurisdiction or other supra-national, federal,
national, regional, state, provincial or local governmental or regulatory body
of competent jurisdiction; provided, however, that such Party shall first have
given notice to such other Party and given such other Party a reasonable
opportunity to quash such order and to obtain a protective order requiring that
the Confidential Information and documents that are the subject of such order be
held in confidence by such court or agency or, if disclosed, be used only for
the purposes for which the order was issued; and provided further that if a
disclosure order is not quashed or a protective order is not obtained, the
Confidential Information disclosed in response to such court or governmental
order shall be limited to that information which is legally required to be
disclosed in response to such court or governmental order;
15.4.2 Required by Law. Otherwise required by law; provided,
however, that the disclosing Party shall (a) provide the other Party with
reasonable advance notice of and an opportunity to comment on any such required
disclosure, (b) if requested by such other Party, seek confidential treatment
with respect to any such disclosure to the extent available, and (c) use good
faith efforts to incorporate the comments of such other Party in any such
disclosure or request for confidential treatment;
15.4.3 Required by Regulatory Authority. Made by such Party to the
Regulatory Authorities as required in connection with any filing, application or
request for Regulatory Approval; provided, however, that reasonable measures
shall be taken to assure confidential treatment of such information; or
15.4.4 Required by Agreement. Made by such Party, in connection with
the performance of this Agreement, to Affiliates, Sublicensees, research
parties, employees, consultants, representatives or agents, each of whom prior
to disclosure must be bound by obligations of confidentiality and non-use at
least equivalent in scope to those set forth in this Article 15.
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15.5 Press Releases. Press releases or other similar public communication
by either Party relating to this Agreement, shall be approved in advance by the
other Party, which approval shall not be unreasonably withheld or delayed,
except for those communications required by Applicable Law (which shall be
provided to the other Party as soon as practicable after the release or
communication thereof), disclosures of information for which consent has
previously been obtained, and information of a similar nature to that which has
been previously disclosed publicly with respect to this Agreement, each of which
shall not require advance approval.
ARTICLE 16
MISCELLANEOUS PROVISIONS
16.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey, excluding any conflicts or
choice of law rule or principle that might otherwise refer construction or
interpretation of this Agreement to the substantive law of another jurisdiction.
16.2 Registration. If this Agreement or any associated transaction is
required by the law of any nation to be either approved or registered with any
governmental agency, Licensee shall assume all legal obligations to do so and
the costs in connection therewith.
16.3 Trade Regulations. Licensee shall observe all applicable United
States and foreign laws with respect to the transfer of Licensed Product and
related technical data to foreign countries, including the International Traffic
in Arms Regulations (ITAR) and the Export Administration Regulations.
16.4 Entire Agreement. The Parties hereto acknowledge that this Agreement,
including the Appendices and documents incorporated by reference, sets forth the
entire agreement and understanding of the Parties hereto as to the subject
matter hereof, and shall not be subject to any change of modification except by
the execution of a written instrument subscribed to by the Parties hereto. This
Agreement shall supersede all previous communications, representations or
understandings, either oral or written, between the Parties relating to the
subject matter hereof.
16.5 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of either Party under this Agreement will not be
materially and adversely affected thereby, (a) such provision shall be fully
severable, (b) this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom, and (d) in lieu of such illegal, invalid
or unenforceable provision, there shall be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible and reasonably
acceptable to the Parties herein. To the fullest extent permitted by applicable
law, each Party hereby waives any provision of law that would render any
provision prohibited or unenforceable in any respect.
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16.6 Waiver. The failure of either Party to assert a right hereunder or to
insist upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other Party.
16.7 Equitable Relief. Each Party acknowledges and agrees that the
restrictions set forth in Articles 6 and 16 of this Agreement are reasonable and
necessary to protect the legitimate interests of the other Party and that such
other Party would not have entered into this Agreement in the absence of such
restrictions, and that any violation or threatened violation of any provision of
Article 6 and 16 may result in irreparable injury to such other Party. Each
Party also acknowledges and agrees that in the event of a violation or
threatened violation of any provision of Article 6 and 16, the other Party shall
be entitled to seek preliminary and permanent injunctive relief, without the
necessity of having to post a bond, as well as to an equitable accounting of all
earnings, profits and other benefits arising from any such violation. The rights
provided in the immediately preceding sentence shall be cumulative and in
addition to any other rights or remedies that may be available to such other
Party. Nothing in this Section 16.7 is intended, or should be construed, to
limit such other Party's right to preliminary and permanent injunctive relief or
any other remedy for breach of any other provision of this Agreement.
16.8 Force Majeure. Neither Party shall be held liable or responsible to
the other Party or be deemed to have defaulted under or breached this Agreement
for failure or delay in fulfilling or performing any term of this Agreement when
such failure or delay is caused by or results from causes beyond the reasonable
control of the non-performing Party, including fires, floods, earthquakes,
embargoes, shortages, epidemics, quarantines, war, acts of war (whether war be
declared or not), acts of terrorism, insurrections, riots, civil commotion,
strikes, lockouts or other labor disturbances, acts of God or acts, omissions or
delays in acting by any governmental authority. The non-performing Party shall
notify the other Party of such force majeure within ten (10) days after such
occurrence by giving written notice to the other Party stating the nature of the
event, its anticipated duration, and any action being taken to avoid or minimize
its effect. The suspension of performance shall be of no greater scope and no
longer duration than is necessary and the non-performing Party shall use
commercially reasonable efforts to remedy its inability to perform; provided,
however, that in the event the suspension of performance continues for
one-hundred and eighty (180) days after the date of the occurrence, and such
failure to perform would constitute a material breach of this Agreement in the
absence of such force majeure, the non-performing Party may terminate this
Agreement pursuant by written notice to the other Party.
16.9 Construction. Except where the context otherwise requires, wherever
used, the singular shall include the plural, the plural the singular, the use of
any gender shall be applicable to all genders and the word "or" is used in the
inclusive sense (and/or). The captions of this Agreement are for convenience of
reference only and in no way define, describe, extend or limit the scope or
intent of this Agreement or the intent of any provision contained in this
Agreement. The term "including" as used herein shall mean including, without
limiting the generality of any description preceding such term. The language of
this Agreement shall be deemed to be the language mutually chosen by the Parties
and no rule of strict construction shall be applied against either Party hereto.
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16.10 Further Assurance. Each Party shall duly execute and deliver, or
cause to be duly executed and delivered, such further instruments and do and
cause to be done such further acts and things, including the filing of such
assignments, agreements, documents and instruments, as may be necessary or as
the other Party may reasonably request in connection with this Agreement or to
carry out more effectively the provisions and purposes, or to better assure and
confirm unto such other Party its rights and remedies under this Agreement.
16.11 Expenses. Each of Licensee and NovaDel shall be responsible for
their own expenses relating to the negotiation, execution and performance of
this Agreement.
16.12 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
16.13 Binding. This Agreement shall not be binding upon the Parties until
it has been signed below on behalf of each Party, in which event, it shall be
effective as of the Effective Date.
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IN WITNESS WHEREOF, the duly authorized officers of the Parties have
executed this Agreement as of the dates set forth below their respective
signatures.
NOVADEL PHARMA INC. HANA BIOSCIENCES, INC.
By: _______________________ By: ________________________
Name: _____________________ Name: ______________________
Title: ____________________ Title: _____________________
Date: _____________________ Date: ______________________
List of Exhibits:
A - Patents and Trademarks
B - Development Plan
C - Development Budget
D - Royalty Rate Structure
[Exhibits have been omitted. The Registrant will provide copies of such exhibits
upon request from the Commission.]
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