AMENDED AND RESTATED LICENSE AGREEMENT by and between DISCOVERY LABORATORIES, INC. (a Delaware corporation) and PHILIP MORRIS USA INC., d/b/a CHRYSALIS TECHNOLOGIES (a Virginia corporation) March 28, 2008
Exhibit
10.4
|
Confidential
Treatment Requested
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Execution
Version
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AMENDED
AND RESTATED
by
and between
DISCOVERY
LABORATORIES, INC.
(a
Delaware corporation)
and
XXXXXX
XXXXXX USA INC., d/b/a CHRYSALIS TECHNOLOGIES
(a
Virginia corporation)
March
28, 2008
Table of Contents
Page
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ARTICLE
1 DEFINITIONS
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1
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ARTICLE
2 TECHNOLOGY TRANSFER
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9
|
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2.1
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Technology
Transfer
|
9
|
2.2
|
Transfer
of Regulatory Files, Data and Filings
|
9
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ARTICLE
3 LICENSE
|
10
|
|
3.1
|
License
|
10
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3.2
|
Limitations
|
10
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3.3
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Sublicensing
Rights
|
10
|
3.4
|
Retained
Rights
|
10
|
ARTICLE
4 PRODUCT DEVELOPMENT
|
10
|
|
4.1
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Licensed
Product Development
|
10
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4.2
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Notice
of Development of Licensed Products
|
11
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4.3
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Development
Effort
|
11
|
4.4
|
Costs
|
11
|
4.5
|
Development
Support by Chrysalis
|
11
|
4.6
|
Design
Configurations
|
11
|
4.7
|
Status
Updates
|
11
|
ARTICLE
5 COMMERCIALIZATION
|
12
|
|
5.1
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Exclusive
Right to Sell the Licensed Products
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12
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5.2
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Responsibility
For Commercialization Matters
|
12
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5.3
|
Commercialization
|
12
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5.4
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Status
Updates
|
12
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ARTICLE
6 REGULATORY MATTERS
|
12
|
|
6.1
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Responsibility
and Consultation
|
12
|
6.2
|
Regulatory
Updates and Communications
|
13
|
6.3
|
Records
|
13
|
6.4
|
Product
Liability Litigation
|
13
|
ARTICLE
7 FINANCIAL PROVISIONS
|
13
|
|
7.1
|
Transition
Assistance Fees
|
13
|
7.2
|
Royalties
with Respect to Licensed Products and Substitute Products
|
13
|
7.3
|
Minimum
Royalties
|
14
|
7.4
|
Prohibition
on Bundling
|
14
|
7.5
|
Fixed
Consideration
|
14
|
7.6
|
Treatment
of Partial Product Sales
|
15
|
7.7
|
Royalty
Reports
|
15
|
7.8
|
Payment
of Estimated and Actual Amounts
|
15
|
7.9
|
Pass-Through
Royalties
|
16
|
7.10
|
Records
and Audits
|
16
|
7.11
|
Foreign
Exchange
|
16
|
7.12
|
Manner
of Payments
|
17
|
7.13
|
Late
Payments
|
17
|
7.14
|
Tax
Withholding
|
17
|
i
ARTICLE
8 INTELLECTUAL PROPERTY
|
17
|
|
8.1
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Ownership
|
17
|
8.2
|
Disclosure,
Assignment, License and Exploitation
|
18
|
8.3
|
Agreement
with Personnel
|
19
|
8.4
|
Prosecution
of Patents
|
19
|
8.5
|
Patent
Term Extensions
|
19
|
8.6
|
Third
Party Infringement
|
19
|
8.7
|
Infringement
of Third Party Rights
|
21
|
ARTICLE
9 CONFIDENTIAL INFORMATION
|
22
|
|
9.1
|
Use
of Confidential Information
|
22
|
9.2
|
Permitted
Disclosure and Use
|
22
|
9.3
|
Disclosure
for SEC Filings
|
23
|
9.4
|
Publications
|
23
|
9.5
|
Public
Announcements
|
24
|
9.6
|
Survival
|
24
|
|
||
ARTICLE
10 REPRESENTATIONS, WARRANTIES AND COVENANTS
|
24
|
|
10.1
|
Mutual
Representations and Warranties
|
24
|
10.2
|
Intellectual
Property
|
25
|
10.3
|
No
Adverse Effects
|
26
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ARTICLE
11 ADDITIONAL COVENANTS
|
26
|
|
11.1
|
Compliance
with Laws
|
26
|
11.2
|
Cooperation
|
27
|
11.3
|
Sharing
of Information
|
27
|
ARTICLE
12 DISCLAIMERS AND LIMITATION OF LIABILITY
|
27
|
|
12.1
|
Disclaimer
of Warranties
|
27
|
12.2
|
Limitation
of Liability
|
27
|
ARTICLE
13 INDEMNIFICATION; INSURANCE
|
28
|
|
13.1
|
Indemnification
|
28
|
13.2
|
Indemnification
Procedures
|
29
|
13.3
|
Insurance
|
30
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ARTICLE
14 TERM
|
30
|
|
ARTICLE
15 TERMINATION
|
31
|
|
15.1
|
Termination
by Discovery On or Before the First Anniversary
|
31
|
15.2
|
Termination
by Discovery After the First Anniversary
|
31
|
15.3
|
Termination
Due to Failure to Meet Minimum Royalties
|
31
|
15.4
|
Termination
for Material Breach
|
31
|
15.5
|
Termination
Due to Certain Events
|
32
|
15.6
|
Effects
of Termination Generally
|
32
|
ARTICLE
16 STANDSTILL AGREEMENT
|
32
|
|
16.1
|
General
Standstill
|
32
|
16.2
|
Certain
Exceptions
|
33
|
16.3
|
Exception
for an Acquisition Transaction
|
33
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ARTICLE
17 DISPUTE RESOLUTION
|
33
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|
17.1
|
Dispute
Resolution
|
33
|
17.2
|
Executive
Negotiation
|
34
|
ii
17.3
|
Mediation
|
34
|
17.4
|
Arbitration
|
34
|
17.5
|
Right
to Injunctive and Other Relief
|
35
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ARTICLE
18 MISCELLANEOUS
|
35
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|
18.1
|
Original
Agreement
|
35
|
18.2
|
Choice
of Law
|
35
|
18.3
|
Severability
|
36
|
18.4
|
Relationship
of the Parties
|
36
|
18.5
|
Parties
in Interest
|
36
|
18.6
|
Enforcement
of Certain Agreements
|
36
|
18.7
|
Use
of Affiliates, Subcontractors, Sublicensees and
Distributors
|
36
|
18.8
|
Assignment
|
37
|
18.9
|
Further
Assurances and Actions
|
37
|
18.10
|
Waiver
|
37
|
18.11
|
Section
365(n) of the Bankruptcy Code
|
37
|
18.12
|
Notices
|
38
|
18.13
|
Construction
|
38
|
18.14
|
Registration
and Filing of this Agreement
|
39
|
8.15
|
Force
Majeure
|
39
|
18.16
|
Entire
Agreement
|
39
|
18.17
|
Third
Party Beneficiaries
|
39
|
18.18
|
Execution
in Counterparts; Facsimile Signatures
|
39
|
iii
AMENDED
AND RESTATED LICENSE AGREEMENT
THIS
AMENDED AND RESTATED LICENSE AGREEMENT effective as of March 28, 2008 (the
“Amended
and Restated Effective Date”)
by and
between DISCOVERY LABORATORIES, INC., a Delaware corporation (“Discovery”),
and XXXXXX
XXXXXX USA INC., d/b/a CHRYSALIS TECHNOLOGIES, a Virginia corporation
(“Chrysalis”)
amends
and restates the Strategic Alliance Agreement effective as of December 9, 2005
(the “Original
Effective Date”),
by
and between Discovery and Chrysalis (the “Original
Agreement”).
Discovery and Chrysalis shall be referred to herein individually as a
“Party”
and
collectively as the “Parties”.
WHEREAS,
Chrysalis has assigned to Xxxxxx Xxxxxx Products S.A. (“PMPSA”)
all
rights outside of the United States in and to its capillary aerosol generation
technology (the “Assigned Rights”);
WHEREAS,
Discovery and PMPSA are entering into a license agreement as of the Amended
and
Restated Effective Date pursuant to which PMPSA will grant to Discovery a
license under the Assigned Rights (the “PMPSA/Discovery
Agreement”);
and
ARTICLE
1
DEFINITIONS
In
addition to terms defined elsewhere in this Agreement, the following terms
used
in this Agreement are defined below:
“AAA”
means
the American Arbitration Association.
“Actual
Amount”
has
the
meaning set forth in Section 7.8.2.
[***]
“Aerosol
Device”
means
a
device to aerosolize a pharmaceutical compound for administration to humans.
It
is contemplated that the Aerosol Device shall consist of (i) permanent
(e.g.,
nondisposable) components that control power and electronics (e.g.,
control unit) and (ii) a physical mechanism (e.g.,
pump)
to provide a means for dispensing the Drug Product from the container closure
system.
“Aerosol
Technology”
means
any technology related to the aerosolization of a liquid form of a
pharmaceutical compound. Aerosol Technology does not include technology that
is
related to the delivery of aerosols as dry powders.
“Affiliates”
means
with respect to any Party, any Person, directly or indirectly, controlling,
controlled by or under common control with such Party. For purposes of this
Section, “control” means (i) in the case of a Person that is a corporate entity,
direct or indirect ownership of more than fifty percent (50%) of the stock
or
shares having the right to vote (or such lesser percentage which is the maximum
allowed to be owned by a foreign corporation in a particular jurisdiction)
for
the election of directors of such Person or (ii) in the case of a Person that
is
an entity, but is not a corporate entity, the possession, directly or
indirectly, of (A) more than fifty percent (50%) of the economic or partnership
interest in the income or capital of such Person or (B) the power to direct,
or
cause the direction of, the management or policies of such Person, whether
through the ownership of voting securities, by contract or otherwise; and the
terms “controlling,” “controlled by” or “under common control” shall have the
meanings correlative to the foregoing. For the purposes of this Amended and
Restated License Agreement, Chrysalis and PMPSA shall not be considered
Affiliates with respect to each other.
“Agreement”
means
this Amended and Restated License Agreement, including the Schedules attached
hereto.
“Breaching
Party”
has
the
meaning set forth in Section 15.4.1.
“Business
Day”
means
a
day other than a Saturday, Sunday, or other day on which commercial banks in
New
York, New York are authorized or required by Law to close.
“Chrysalis”
has
the
meaning set forth in the Preamble hereto.
“Chrysalis
Intellectual Property”
has
the
meaning set forth in Section 8.1.1.
“Chrysalis
Patents”
means
all Patents owned by Chrysalis in the Territory or to which Chrysalis otherwise
has rights in the Territory, as of June 30, 2008, that claim or are directed
to
the Chrysalis Technology.
“Chrysalis
Technology”
means
(a) Chrysalis’ proprietary Aerosol Technology owned or controlled by Chrysalis
in the Territory as of June 30, 2008 (including without limitation the
technologies, devices, processes, equipment, materials and know-how relating
to
the aerosolization of liquid forms of drug products and the Aerosol Devices
and
Disposable Dose Packs therefor) and (b) all Intellectual Property owned by
or
licensed to Chrysalis in the Territory as of June 30, 2008 relating to such
Aerosol Technology, including, without limitation, the Chrysalis
Patents.
Information
marked by [***]
has been
omitted pursuant to a request for confidential treatment. The omitted portion
has been separately filed with the Securities and Exchange
Commission.
2
“Chrysalis
Technology Improvements”
means
any rights in the Territory in and to any Inventions created or reduced to
practice [***]
in the
performance of the Agreement or exercise of the license granted pursuant to
this
Agreement, or [***]
under
the PMPSA/Discovery Agreement or exercise of the license granted pursuant to
the
PMPSA/Discovery Agreement, in each case which Inventions relate primarily to
the
Chrysalis Technology.
“Clinical
Trials”
means
Phase I, II, III and, if required, Phase IV clinical trials and such other
tests
and studies in human subjects or patients that are required to obtain, maintain,
or sustain Regulatory Approval in a country in the Territory.
“Confidential
Information”
means
all information received by either Party or its Affiliates from or on behalf
of
the other Party or its Affiliates relating to this Agreement that the disclosing
Party treats as confidential, including, without limitation: (i) copies of
any
nonpublic information regarding a Party’s Patents; (ii) techniques, technology,
practices, trade secrets, inventions (whether or not patentable), designs,
methods, manufacturing processes, formulae, formulations, specifications,
documents, knowledge, know-how, skill, experience, test data, and results,
(including that related to pharmacology, toxicology, preclinical testing,
clinical testing, expression data, Chemistry, Manufacturing and Control (CMC)
data, batch records, trials, and studies, safety and efficacy, analytical,
and
quality control); (iii) devices and related components, compounds, polypeptides,
proteins, formulations, compositions of matter, cells, cell lines, markers,
assays, and physical, biological, or chemical material; (iv) marketing
information, market research data, medical/physicians advisory boards, and
consultant input, including clinical studies designed to support promotional
efforts; (v) the terms of this Agreement, and (vi) other proprietary business
information such as business plans, financial or personnel matters, present
or
future products, research, process and technology development programs, sales,
suppliers, customers, employees, investors, or other business information,
whether in oral, written, graphic, or electronic form.
“Contract
Month”
means
each month during any Contract Year.
“Contract
Quarter”
means
each three (3) month period ending on March 31, June 30, September 30 and
December 31 during any Contract Year.
“Contract
Year”
means
a
twelve (12) month period ending on December 31.
The
initial Contract Year will be deemed to begin on the Amended and Restated
Effective Date and end on December
31 of
that
Contract Year in which it falls.
Information
marked by [***]
has been
omitted pursuant to a request for confidential treatment. The omitted portion
has been separately filed with the Securities and Exchange
Commission.
3
“Diligent
Commercialization Efforts”
means
efforts and resources reasonably comparable to those commonly used in the
research-based pharmaceutical industry for a medical device, pharmaceutical
product or pharmaceutical compound at a similar stage in its commercialization
or product life of similar market potential, taking into account safety and
efficacy, the competitiveness of alternative products in the marketplace, the
patent and other proprietary position of the product, the likelihood of
regulatory approval given the regulatory structure involved, the potential
profitability of the product and alternative products and other relevant factors
relating to the commercialization of a Licensed Product, including, without
limitation, the potential cost, risk, timing and reward, provided,
however,
that
the fact that the Parties are required to share revenues with respect to the
Licensed Products shall not be a factor taken into account in determining
whether Diligent Commercialization Efforts were satisfied. Diligent
Commercialization Efforts shall be determined on a market by market basis for
a
particular Licensed Product, and it is anticipated that the level of effort
will
change over time reflecting changes in the status of the Licensed Product and
the market involved.
“Diligent
Development Efforts”
means
efforts and resources reasonably comparable to those commonly used in the
research-based pharmaceutical industry for a medical device, pharmaceutical
product or pharmaceutical compound at a similar stage in its development of
similar market potential, taking into account safety and efficacy, product
profile, difficulty in developing the product, competitiveness of alternative
products in the marketplace, the patent and other proprietary position of the
product, the likelihood of regulatory approval given the regulatory structure
involved, the potential profitability of the product and alternative products
and other relevant factors affecting the cost, risk and timing of development
and total potential reward to be obtained if a Licensed Product is
commercialized, provided,
however,
that
the fact that the Parties are required to share revenues with respect to the
Licensed Products shall not be a factor taken into account in determining
whether Diligent Development Efforts were satisfied.
“Discovery”
has
the
meaning set forth in the Preamble hereto.
“Discovery
Intellectual Property”
has
the
meaning set forth in Section 8.1.2.
“Discovery
Patents”
means
all Patents owned by Discovery or to which Discovery otherwise has rights that
claim or are directed to any Discovery Intellectual Property.
“Discovery
Technology”
means
(a) Discovery’s proprietary Pulmonary Surfactant technology (including without
limitation the technologies, formulations, processes, equipment, materials
and
know-how relating to the manufacture and use of Pulmonary Surfactants for
treatment of respiratory conditions), and (b) all Intellectual Property owned
by
or licensed to Discovery relating to such Pulmonary Surfactant technology,
including, without limitation, the Discovery Patents.
“Discovery
Technology Improvements”
means
any Inventions created or reduced to practice [***]
in the
performance of the Agreement or exercise of the license granted pursuant to
this
Agreement, which Inventions relate primarily to Pulmonary Surfactants (alone
or
in combination with [***]).
Information
marked by [***]
has been
omitted pursuant to a request for confidential treatment. The omitted portion
has been separately filed with the Securities and Exchange
Commission.
4
“Disposable
Dose Packet”
consists of: (i) Drug Product within a container (comprising the drug
formulation containing the drug substance and the container closure system
in
which it is packaged), (ii) aerosolization capillary (heatable capillary through
which the formulation is pumped to produce an aerosol), (iii) patient interface
(components through which the aerosol produced by the capillary travels in
order
to reach the patient), and (iv) all ancillary tubing, connectors and fittings
related thereto.
“Dispute”
has
the
meaning set forth in Section 17.1.
“Dollars”
and
“$”
means,
unless otherwise specified, United States Dollars.
“Drug
Product”
means
a
pharmacological agent(s), including Pulmonary Surfactants, together with any
excipients or inactive ingredients, formulated for use in connection with an
Aerosol Device or Disposable Dose Packet.
“Estimated
Amount”
has
the
meaning set forth in Section 7.8.1.
[***]
“Exchange
Act”
has
the
meaning set forth in Section 16.1.
“Exclusive
Field”
means
(i) the therapeutic or preventative use in humans of Aerosol Technology to
deliver Pulmonary Surfactants (alone or in combination with any other
pharmaceutical compound(s)) as an active ingredient for the prevention or
treatment of Respiratory Indications, and (ii) the therapeutic or preventative
use in humans of Aerosol Technology to deliver [***]
as an
active ingredient.
“FDA”
shall
mean the United States Food and Drug Administration, and any successor
agency.
“First
Commercial Sale”
means
the first arms-length commercial sale of a Licensed Product to a Third Party
by
Discovery or its Affiliates or sublicensees, as the case may be, in any country
in the Territory after receipt of Marketing Authorization in such country which
results in an exchange for cash or some equivalent to which value can be
assigned for the purpose of determining Net Sales.
“Force
Majeure Event”
means
an event or occurrence that materially interferes with the ability of a Party
to
perform its obligations or duties hereunder which is not within the reasonable
control of the Party affected or any of its Affiliates, not due to malfeasance
by such Party or its Affiliates, and which could not with the exercise of due
diligence have been avoided, including without limitation fire, earthquake,
acts
of God, acts of war, labor strikes or lockouts, riots, civil disturbances,
actions or inactions of governmental authorities (except actions in response
to
a breach of applicable Law by such Party).
Information
marked by [***]
has been
omitted pursuant to a request for confidential treatment. The omitted portion
has been separately filed with the Securities and Exchange
Commission.
5
“GAAP”
means
generally accepted accounting principles in the United States of America.
“Hospital
Setting”
means
a
(i) hospital-setting in the delivery room, NICU, PICU, CCU, emergency
department, surgical care unit and/or intermediate care unit, (ii) emergency
and
specialized medical treatment centers, such as birthing centers, treatment
centers for chronic diseases, trauma centers and other similar facilities,
and
(iii) an institution setting which is used to provide long-term care for people
with chronic illness or disability, including hospice settings and nursing
homes.
“Indemnitee”
has
the
meaning set forth in Section 13.2.1.
“Indemnitor”
has
the
meaning set forth in Section 13.2.1.
“Infringement
Notice”
has
the
meaning set forth in Section 8.6.1.
“Intellectual
Property”
means
all know how, Inventions, Patents, copyrights, trademarks, trade secrets and
any
other intellectual property rights in the Territory that may be secured in
any
place under laws now or hereafter in effect.
“Invention”
means
any new or improved apparatus, process, information, product, invention,
discovery, idea, suggestion, material, data, equipment, design, circuit
component, drawing, tooling, prototype, report, computer software, documentation
or other intellectual property or know-how (whether or not patentable)
discovered, produced, conceived, created or reduced to practice by either or
both Parties (or their Affiliates, sublicensees, subcontractors, successors
or
assigns).
“Law”
means
any applicable statute, law, ordinance, regulation, order, or rule of any
federal, state, local, foreign, or other governmental agency or body or of
any
other type of regulatory body (including common law) or securities exchange
or
automated quotation system.
“Licensed
Product”
means
a
combination drug-device product using or otherwise practicing the Chrysalis
Technology and delivering Pulmonary Surfactants or [***]
(each
alone or in combination with [***]).
“Losses”
has
the
meaning set forth in Section 13.1.1.
“Marketing
Authorization”
means,
with respect to each country in the Territory, the principal
Regulatory Approval required to market the Licensed Product in such country
(e.g., the NDA), including satisfactory pricing and reimbursement approval,
when
applicable.
Information
marked by [***]
has been
omitted pursuant to a request for confidential treatment. The omitted portion
has been separately filed with the Securities and Exchange
Commission.
6
“NDA”
shall
mean a new drug application, biologics
license application, pre-market
approval application, or a pre-market clearance under FDCA Section 510k that
may
be filed with the FDA in the United States or any
comparable application that may be filed with any equivalent Regulatory
Authority in the Territory.
“Net
Sales”
means,
with respect to Licensed Products and Substitute Products, as applicable, sold
by Discovery, its Affiliates and sublicensees in the Territory, the [***]
amount
[***]
for
Licensed Products or Substitute Products, as applicable, by Discovery, its
Affiliates, and any sublicensees of Discovery in arms-length, commercial
transactions in the Territory with customers that are Third Parties, less the
following deductions to the extent included in such [***]
amount:
[***]
Any
discretionary rebates, discounts or other adjustments to the [***]
amount
shall be commercially reasonable and consistent with standard industry
practices. Net Sales (including each applicable deduction from the [***]
amount)
shall be determined from the books and records of Discovery maintained in
accordance with GAAP consistently applied.
“Non-Breaching
Party”
has
the
meaning set forth in Section 15.4.1.
“Original
Effective Date”
has
the
meaning set forth in the Preamble hereto.
“Party”
and
“Parties”
have
the meanings set forth in the Preamble hereto.
“Patents”
means
all patents and patent applications, and all patents issuing thereon (including
utility, model and design patents and certificates of invention), together
with
all reissue patents, patents of addition, divisions, renewals, continuations,
continuations-in-part, substitutions, additions, extensions (including
supplemental protection certificates), registrations, confirmations,
re-examinations, and foreign counterparts of any of the foregoing in the
Territory.
“Person”
means
any natural person, corporation, company, partnership, limited liability
company, proprietorship, trust or estate, joint venture, association, or other
legal entity.
“Pulmonary
Surfactant”
means
surface active agents designed for deposition in the lungs in order to exert
a
physiological or pharmacological affect to prevent or treat Respiratory
Indications.
“Regulatory
Approval”
means
any approvals (including, where necessary for the marketing, use, or other
distribution of a drug, medical device, or combination drug and medical device
in a regulatory jurisdiction, pricing, and reimbursement approvals), licenses,
registrations, or authorizations or equivalents necessary for the manufacture,
use, storage, import, export, clinical testing, transport, marketing, sale,
and
distribution of the Drug Product or Aerosol Device and any Licensed Product
in a
regulatory jurisdiction anywhere in the Territory, including Marketing
Authorizations.
Information
marked by [***]
has been
omitted pursuant to a request for confidential treatment. The omitted portion
has been separately filed with the Securities and Exchange
Commission.
7
“Regulatory
Authority”
means
any federal, national, multinational, state, provincial, or local regulatory
agency, department, bureau, or other governmental entity with authority to
regulate the marketing and sale of a pharmaceutical product, delivery system
or
device in the Territory, including the FDA in the United States.
“Regulatory
Data”
means
any and all research data, pharmacology data, chemistry, manufacturing, and
control data, preclinical data, clinical data and/or all other documentation
submitted, or required to be submitted, to Regulatory Authorities in association
with an Investigational New Drug Application or NDA for Licensed Products
(including any Drug Master Files, Device Master Files, Chemistry, Manufacturing
and Control (CMC) data, or similar documentation).
“Respiratory
Indications”
means
all respiratory dysfunctions, failures, syndromes, diseases, disorders, or
conditions.
“Royalty
Credit”
has
the
meaning set forth in Section7.8.2.
“Royalty
Report”
means
the reports to be delivered by Discovery to Chrysalis pursuant to Section 7.7
with respect to each Contract Month and pursuant to Section 7.8 with respect
to
each Contract Quarter, which reports shall give such particulars of each of
the
Licensed Products and Substitute Products sold by Discovery and its Affiliates
and sublicensees during the preceding Contract Month in the Territory in the
case of Section 7.7 and during the preceding Contract Quarter in the case of
Section 7.8 as are reasonably pertinent to perform an accounting of royalties
under this Agreement.
“SEC”
has
the
meaning set forth in Section 9.3.
“Substitute
Product”
means
any Aerosol Device, Disposable Dose Packet or Drug Product (other than a
Licensed Product) sold by Discovery, its Affiliates and sublicensees for use
within the Exclusive Field.
“Target
Indications”
means
the following Respiratory Indications: [***].
“Target
Populations”
means
human patients [***]
receiving
forms of treatment for the applicable Respiratory Indication that are typically
and principally provided [***].
“Taxes”
has
the
meaning set forth in Section 7.14.
“Term”
has
the
meaning set forth in Article 14.
Information
marked by [***]
has been
omitted pursuant to a request for confidential treatment. The omitted portion
has been separately filed with the Securities and Exchange
Commission.
8
“Territory”
means
the United States of America and its territories and possessions, including
the
Commonwealth of Puerto Rico, Guam, U.S. Virgin Islands, American Samoa, and
Northern Mariana Islands.
“Third
Party”
means
any Person other than Chrysalis or Discovery or their respective
Affiliates.
“Third
Party Claim”
has
the
meaning set forth in Section 13.1.1.
“Valid
Claim”
means
a
claim of an issued and unexpired patent, which claim has not been held
unpatentable, invalid, or unenforceable by a court or other government agency
of
competent jurisdiction from which no appeal can be or has been taken and has
not
been held or admitted to be invalid or unenforceable through re-examination
or
disclaimer, opposition procedure, nullity suit or otherwise, which claim, but
for the licenses granted herein, would be infringed by the sale of a Licensed
Product.
ARTICLE
2
TECHNOLOGY
TRANSFER
2.1 Technology
Transfer.
Prior
to June 30, 2008, Chrysalis shall provide Discovery with a technology transfer
reasonable in scope to enable Discovery to practice the Chrysalis Technology
for
purposes of exercising the license rights granted to Discovery hereunder.
Chrysalis shall have satisfied its obligations pursuant to this Section 2.1
in
the event Chrysalis complies with the specific obligations set forth in Exhibit
A.
2.2 Transfer
of Regulatory Files, Data and Filings.
In connection with the technology transfer contemplated pursuant to Section
2.1,
Chrysalis shall provide
to
Discovery or its designee, a copy of all governmental or regulatory
correspondence, conversation logs, filings, and approvals relating to the
development, manufacture or commercialization of the Licensed Product (including
study protocols, study results, analytical methodologies, validation
documentation, and regulatory documentation) that are reasonably necessary
for
the continued development and sale of the Licensed Product, including without
limitation those materials that are reasonably necessary for inclusion in a
new
drug application or equivalent filing with the FDA or other regulatory bodies.
Chrysalis shall also provide to Discovery copies of, and permit Discovery to
reference in connection with any Licensed Products, all Regulatory Data relating
to Licensed Products reasonably necessary to continue the development, marketing
and sale of the Licensed Products. From and after such time, all such Regulatory
Data and information provided to Discovery shall remain Confidential Information
of Chrysalis; provided, however, that Discovery may use all such Regulatory
Data
and information solely for the purposes of continuing to pursue the development
and commercialization of Licensed Products. Chrysalis shall execute all
documents and take all such further actions as may be reasonably requested
by
Discovery and required in order to give
effect
to the foregoing.
9
ARTICLE
3
LICENSE
3.1 License.
Subject
to the terms, conditions, and limitations of this Agreement, Chrysalis hereby
grants to Discovery an exclusive right and royalty-bearing license or
sublicense, as applicable, in the Territory, with the right to grant sublicenses
solely as set forth in Section 3.3, under the Chrysalis Technology and
Chrysalis Technology Improvements to make and have made, to use and have used,
to develop and have developed, to sell and have sold, to offer for sale and
have
offered for sale, to import and export and have imported and exported Licensed
Products in the Exclusive Field in the Territory during the Term.
3.2 Limitations.
The
license granted pursuant to Section 3.1 shall be exclusive only to the extent
that Chrysalis has the right to grant an exclusive license with respect to
the
Licensed Product in question. No right or license outside of the Exclusive
Field
is granted and all such rights are expressly reserved by Chrysalis. No right
or
license is or shall be granted under this Agreement by implication. All such
rights or licenses are or shall be granted only as expressly provided in this
Agreement. Discovery shall not practice the Chrysalis Technology in the
Territory except as expressly licensed herein. Nothing herein shall limit the
ability of Chrysalis to perform any research or development work on or using
the
Chrysalis Technology. Notwithstanding any other provision of this Agreement,
no
rights with respect to any trademarks, trade names, service marks or logos
of
Chrysalis are granted pursuant to this Agreement.
3.3 Sublicensing
Rights.
The
license granted to Discovery pursuant to Section 3.1 by Chrysalis shall include
the right of Discovery to grant sublicenses, subject to terms and conditions
set
forth in Section 18.7. Discovery shall provide Chrysalis with prompt written
notice of any sublicenses granted hereunder.
3.4 Retained
Rights.
Any
rights of each Party not expressly granted to the other Party under the
provisions of this Agreement shall be retained by each Party, and, subject
to
any applicable terms, conditions, and limitations of this Agreement, each Party
shall retain the right to: (a) exploit such Party’s own Intellectual Property
relating to Licensed Products to develop, manufacture, and commercialize
products outside the Exclusive Field; (b) exploit such Party’s own Intellectual
Property relating to Licensed Products for other purposes outside the Exclusive
Field unrelated to the Licensed Products; and (c) perform its obligations and
exercise its rights under this Agreement.
ARTICLE
4
PRODUCT
DEVELOPMENT
4.1 Licensed
Product Development.
Discovery shall be solely responsible for the development of Licensed Products
and Chrysalis shall have no obligations with respect to the development of
Licensed Products unless Chrysalis agrees otherwise in writing. Chrysalis
acknowledges and agrees that Discovery may partner with third parties with
respect to the development of Licensed Products.
10
4.2 Notice
of Development of Licensed Products.
Discovery shall provide Chrysalis with written notification of its intention
to
proceed with Phase II Clinical Trials for a Licensed Product. Such written
notification shall include sufficient detail for Chrysalis to understand the
nature of such Licensed Product to be developed by Discovery.
4.3 Development
Effort.
Discovery
shall use Diligent Development Efforts to
develop
at least one Licensed Product and to otherwise carry out its responsibilities
under this Agreement relating to such Licensed Product promptly and
expeditiously in accordance with all Laws. Notwithstanding the foregoing, the
Parties acknowledge that the development of pharmaceutical products is
inherently speculative and there is no guarantee that the Discovery will be
successful in developing any commercially viable Licensed Products, or that
the
development of any Licensed Products will proceed as anticipated.
4.4 Costs.
Discovery shall be solely responsible for all costs incurred by Discovery in
connection with the development of Licensed Products hereunder.
4.5 Development
Support by Chrysalis.
Chrysalis shall use commercially reasonable efforts to perform, in consultation
with Discovery, the development activities mutually agreed upon by the Parties
in writing on a mutually agreed upon schedule set forth in writing; provided,
however, that (if the technology transfer provided for in Article 2 shall have
been completed in accordance therewith) in no event shall Chrysalis have any
obligation to perform any development activities or otherwise provide any
support to Discovery after June 30, 2008. Discovery acknowledges and agrees
that
Chrysalis is transitioning out of the aerosol device business and that Chrysalis
makes no commitment that Chrysalis will have or retain the personnel or
resources necessary to perform any specific development activities hereunder.
Chrysalis’ obligation to perform the development activities set forth in this
Section 4.5 is subject to Chrysalis having qualified personnel to perform such
development activities. Chrysalis shall be solely responsible for all costs
incurred by Chrysalis in connection with the development activities performed
by
Chrysalis pursuant to this Section.
4.6 Design
Configurations.
The
Parties agree that any Aerosol Device and Disposable Dose Packet configuration
developed for use outside the Exclusive Field shall be distinct in appearance
from those for use with the Licensed Products and shall not be interchangeable
with the Aerosol Device or Disposable Dose Packet of the Licensed Products.
Without limiting the generality of the foregoing, Chrysalis shall not offer
for
sale or sell, nor authorize any Third Party to offer for sale or sell, any
pharmaceutical product (i) in packaging similar in appearance to the Disposable
Dose Packet for a Licensed Product, or (ii) in packaging that is interchangeable
with the Disposable Dose Packet of a Licensed Product for purposes of use in
an
Aerosol Device.
4.7 Status
Updates.
Upon the
reasonable request of Chrysalis, Discovery shall provide Chrysalis with an
update on the status of the development of Licensed Products hereunder; provided
that in no event shall Discovery be required to provide an update more often
than once a Contract Quarter.
11
ARTICLE
5
COMMERCIALIZATION
5.1 Exclusive
Right to Sell the Licensed Products.
The
Parties agree that during the Term, Discovery shall have the exclusive right
to
market and have marketed, sell and have sold, and offer for sale or have offered
for sale any Licensed Products in the Territory.
5.2 Responsibility
For Commercialization Matters.
Discovery shall have the sole responsibility for all activities associated
with
the commercialization of the Licensed Products in the Territory, including,
without limitation, (a) preparing, submitting and seeking Marketing
Authorizations for the Licensed Products, (b) sales, advertising and marketing
of the Licensed Product, (c) scientific and medical affairs, (d) customer
service and distribution related services, such as order taking, shipping,
billing, accounts receivable, returns, allowance activities and product support;
(e) Phase IV Clinical Trials, (f) commercial manufacture of the Licensed
Product; and (g) branding of the Licensed Products.
5.3 Commercialization.
5.3.1 Diligent
Commercialization Efforts.
Discovery shall use Diligent Commercialization Efforts to bring the Licensed
Products to market and to market and sell the Licensed Products in the
Territory. Discovery shall promptly notify Chrysalis of the receipt of any
Marketing Authorization for a Licensed Product in the Territory.
5.3.2 Commercialization
Initiation.
With
respect to each Licensed Product, the First Commercial Sale in the Territory
shall occur within [***]
of
receipt of the relevant Marketing Authorization for the Territory for such
Licensed Product. Should Discovery materially fail to achieve any such
commercialization initiation within [***]
of
having received written notice of such failure from Chrysalis [***].
5.4 Status
Updates.
Upon
Chrysalis’ reasonable request, Discovery shall provide Chrysalis with an update
on the status of the commercialization of Licensed Products in the Territory
hereunder; provided that in no event shall Discovery be required to provide
an
update more often than once a Contract Quarter.
ARTICLE
6
REGULATORY
MATTERS
6.1 Responsibility
and Consultation.
Discovery shall be responsible for preparing, submitting, seeking and
maintaining all Regulatory Approvals for the Licensed Products in the Territory,
including without limitation Marketing Authorizations.
Information
marked by [***]
has been
omitted pursuant to a request for confidential treatment. The omitted portion
has been separately filed with the Securities and Exchange
Commission.
12
6.2 Regulatory
Updates and Communications.
Within
thirty (30) days after the end of each Contract Quarter, Discovery shall provide
Chrysalis with a written update on the status of the Regulatory Approvals for
the Licensed Products in the Territory. In addition, Discovery shall provide
Chrysalis with a copy of any medical device reports relating to the use of
Licensed Products in the Territory and a copy (if in writing) or a description
(if oral) of any significant contact or communication from any Regulatory
Authority relating to a material safety issue with the Chrysalis Technology,
in
each case, promptly after Discovery’s receipt of the same.
6.3 Records.
Except
to the extent otherwise required by law, the Parties acknowledge and agree
that
Chrysalis shall have no obligation to maintain any records relating to the
Chrysalis Technology or the Licensed Product.
6.4 Product
Liability Litigation.
Discovery shall promptly inform Chrysalis of the initiation of any (i) recalls,
corrections or removals of Licensed Products, and (ii) litigation or
investigations
in the Territory relating to the Licensed Product involving a claim of death
or
bodily injury (or allegations thereof) to an individual and shall provide
Chrysalis with regular written updates with respect thereto. If any such
recalls, corrections, removals, litigation or investigations relate to the
Chrysalis Technology, then Chrysalis shall have the right to audit the books,
records and facilities relating to such Licensed Products (solely to the degree
that Discovery has the right to grant any such access and solely to the degree
such books, records and facilities relate to such litigation and investigation),
and Discovery shall reasonably cooperate with Chrysalis in connection therewith.
ARTICLE
7
FINANCIAL
PROVISIONS
7.1 Transition
Assistance Fees.
Chrysalis shall pay to Discovery the following fixed fees in accordance with
the
following schedule:
7.1.1 Within
[***] days
after the Amended and Restated Effective Date, a fixed fee of two million
dollars ($2,000,000); and
7.1.2 Within
[***]
days
after the Parties mutually agree in writing that [***],
a fixed
fee of two million five hundred thousand dollars ($2,500,000);
provided,
however, that Chrysalis shall have no obligation to pay Discovery any amounts
pursuant to this Section 7.1 if Discovery is in material breach of any material
provision of this Agreement.
7.2
Royalties with Respect to Licensed Products and Substitute
Products.
In
consideration of the significant investments made by Chrysalis in developing
the
Chrysalis Technology and the rights granted and payments made to Discovery
herein, Discovery shall pay royalties to Chrysalis on Net Sales of Licensed
Products and Substitute Products in the Territory in an amount equal to
[***]
of the
Net Sales for such Licensed Products and Substitute Products.
Information
marked by [***]
has been
omitted pursuant to a request for confidential treatment. The omitted portion
has been separately filed with the Securities and Exchange
Commission.
13
7.3 Minimum
Royalties.
Commencing [***]
and
continuing thereafter throughout the Term, if the royalties paid by Discovery
to
Chrysalis hereunder are not equal to or greater than the following for each
Contract Quarter of the applicable Contract Year:
[***]
(the
“Minimum
Royalty”),
then
Chrysalis shall have the right to terminate this Agreement pursuant to Section
15.3; provided, that Discovery can cure any such royalty shortfall by paying
Chrysalis [***]
after
the end of the applicable Contract Quarter the difference between the Minimum
Royalty due for the applicable Contract Quarter and the actual royalties paid
by
Discovery hereunder for such Contract Quarter (the “Royalty
Shortfall”).
The
royalty payments required to be paid in any given Contract Quarter pursuant
to
Section 7.2 shall be subject to an offsetting reduction by Discovery in an
amount equal to the Royalty Shortfall; provided, however, that (i) no such
offset shall be applied until the royalty payments for such Contract Quarter
exceed the Minimum Royalties for such Contract Quarter, and (ii) such offset
may
be made only to the extent such Royalty Shortfall has not previously been
subject to offset pursuant to this Section.
7.4 Prohibition
on Bundling.
Notwithstanding any other provision of this Agreement to the contrary, Discovery
hereby covenants that it will not include or bundle any Licensed Products and
Substitute Products or components thereof as part of a multiple product offering
with any other products or services if it would result in the price of the
Licensed Product or Substitute Product or any components thereof being
discounted from the then-applicable sale price in such jurisdiction, nor shall
Discovery permit its Affiliates or sublicensees to do so, except with the prior
written consent of Chrysalis. In the event any such bundled sales occur, the
Net
Sales with respect to such bundled transactions shall be deemed to be the-then
current average Net Sales for the Licensed Product or Substitute Product in
such
jurisdiction in arms length transactions or in the event there are no unbundled
transactions, the fair market value of such Net Sales.
7.5 Fixed
Consideration.
In the
event that Discovery receives any fixed payment, fee or other consideration
from
a Third Party (i) in consideration of any discount, credit or similar allowance
granted to such Third Party in connection with the purchase of any Licensed
Product(s) or Substitute Product(s) or (ii) in lieu of any royalties with
respect to any Licensed Product(s) or Substitute Product(s), then Discovery
shall pay to Chrysalis a royalty equal to the product of (a) such consideration
multiplied by (b) the royalty rate set forth in Section 7.2. Discovery shall
report on the amount of any such consideration, and the royalty payable thereon
in U.S. Dollars, in the Royalty Report. For the avoidance of doubt, this Section
7.5 shall not apply with respect to any fixed payment, fee or other
consideration from a Third Party in respect of development fees, milestone
payments or other similar payments in transactions that incorporate a
market-rate royalty structure.
Information
marked by [***]
has been
omitted pursuant to a request for confidential treatment. The omitted portion
has been separately filed with the Securities and Exchange
Commission.
14
7.6 Treatment
of Partial Product Sales.
In the
event that portions of a Licensed Product or Substitute Product are sold
separately, (e.g., Aerosol Device, Disposable Dose Packet, Drug Product) the
royalties payable pursuant to this Article 7 shall be paid [***].
7.7 Royalty
Reports.
Within
[***]
days
after the end of each Contract Month (beginning with [***]
Licensed
Product or Substitute Product, as the case may be), Discovery shall deliver
to
Chrysalis a preliminary Royalty Report. [***]
The
Royalty Report shall include at least the following items, separately stated
as
to each of the Licensed Products and Substitute Products, as applicable:
(i) the
quantity of each of the Licensed Products and Substitute Products (delineated
as
Aerosol Devices and Disposable Dose Packets) invoiced by Discovery and its
Affiliates and sublicensees during such Contract Month and the [***]
amount
therefor;
(ii) the
allowable deductions therefrom and an itemization of each specific deduction
[***];
(iii) the
calculation of royalties, if any, thereon in a manner consistent with the
amounts set forth in the Royalty Report prepared in accordance with this Section
7.7.
7.8 Payment
of Estimated and Actual Amounts.
7.8.1 Payment
of Estimated Amounts.
Simultaneous with the issuance of the preliminary Royalty Report, Discovery
shall make payment of estimated amounts due to Chrysalis hereunder with respect
to such Contract Month (the “Estimated
Amount”).
7.8.2 Quarterly
Reconciliation and True-Up.
Within
[***]
days
following each Contract Quarter, Discovery shall calculate the actual amount
due
to Chrysalis hereunder with respect to the immediately preceding Contract
Quarter (the “Actual
Amount”)
and
provide to Chrysalis a true and accurate Royalty Report for such Contract
Quarter, setting forth the corrected calculations for such Contract Quarter.
If
the Estimated Amounts paid to Chrysalis pursuant to Section 7.8.1 for the three
Contract Months comprising the immediately preceding Contract Quarter exceeds
the Actual Amount for such Contract Quarter, Discovery shall notify Chrysalis
and such excess amount (the “Royalty
Credit”)
shall,
at the discretion of Discovery, be available to offset future royalties payable
to Chrysalis by Discovery. If such Actual Amount exceeds such Estimated Amount,
Discovery shall promptly pay such excess amount to Chrysalis. [***]
Information
marked by [***]
has been
omitted pursuant to a request for confidential treatment. The omitted portion
has been separately filed with the Securities and Exchange
Commission.
15
7.9 Pass-Through
Royalties.
Each
Party shall be solely responsible for paying any royalties which may be due
to
Third Parties with respect to such Party’s Intellectual Property.
7.10 Records
and Audits.
7.10.1 Records.
Discovery shall keep, and shall require its Affiliates and sublicensees to
keep,
such records as are necessary to determine accurately the sums due to each
other
under this Agreement. Such records shall be retained by Discovery for the Term
and for three (3) years thereafter.
7.10.2 Audit.
At the
written request of Chrysalis, with reasonable advance notice, Discovery shall
make available for inspection, review, and audit, by an internationally
recognized independent certified public accounting firm appointed by Chrysalis
and reasonably acceptable to Discovery, such records of Discovery as may be
reasonably necessary to verify Discovery’s accounting reports and payments made
or to be made pursuant to this Agreement; provided, however, that such audits
may not be performed by Chrysalis more than once per Contract Year in the
absence of a reasonable basis for concern regarding compliance with the
Agreement or any applicable Laws. If such accountants identify a discrepancy,
then the appropriate Party shall pay the other Party the amount of the
discrepancy within thirty (30) days of the date of receiving such accountant’s
written report, or as otherwise agreed upon by the Parties, plus, in the event
of any underpayment, interest calculated in accordance with Section 7.13.
7.10.3 Audit
Confidentiality.
Chrysalis shall cause any accountants selected by it to enter into a
confidentiality agreement acceptable to Discovery obligating such accountants
to
retain all such information in confidence pursuant to such confidentiality
agreement. Such accountants shall not reveal to Chrysalis the details of its
review, except for such information as is required to be disclosed under this
Agreement, and such details shall be treated as Confidential Information. Each
Party agrees to hold in strict confidence all information concerning payments
and reports, and all information learned in the course of any audit or
inspection (and not to make copies of such reports and information), except
to
the extent necessary for such Party to reveal such information in order to
enforce its rights under this Agreement or if disclosure is required by Law,
regulation or judicial order.
7.10.4 Costs
of Audits.
Chrysalis shall pay for such inspections, except that in the event the
adjustment shown by such inspection is greater than [***]
percent
([***]%)
of the
original royalty amounts in question, Discovery shall pay for such
inspection.
7.11 Foreign
Exchange.
For the
purpose of computing the Net Sales for Licensed Products and Substitute Products
sold in a currency other than Dollars, such amounts shall be converted into
Dollars each Contract Month in the then standard manner used by Discovery in
the
preparation of its audited financial statements, consistently applied. Such
method of currency conversion used by Discovery shall be a commercially
reasonable method consistent with industry standards, and Discovery shall
disclose to Chrysalis [***]
prior to
First Commercial Sale of a Licensed Product or Substitute Product in a country
such method of currency conversion. Notwithstanding anything herein to the
contrary, at Chrysalis’ option, with respect to any particular country in the
Territory, Discovery shall pay royalties for Licensed Products and Substitute
Products sold in such country in such country’s local currency. Discovery shall
not change such method of currency conversion disclosed to Chrysalis pursuant
to
this Section 7.11 without obtaining Chrysalis’ prior written consent, such
consent not to be unreasonably withheld.
Information
marked by [***]
has been
omitted pursuant to a request for confidential treatment. The omitted portion
has been separately filed with the Securities and Exchange
Commission.
16
7.12 Manner
of Payments.
All
sums due to Chrysalis under this Agreement shall be payable by electronic funds
transfer in immediately available funds to such bank account(s) as Chrysalis
shall designate at least two (2) Business Days in advance.
7.13 Late
Payments.
Any
amounts not paid when due under this Agreement shall be subject to interest
from
and including the date payment is due through and including the date upon which
Chrysalis has collected immediately available funds in an account designated
by
Chrysalis at an annual rate equal to the sum of [***]
percent
([***]%)
plus
the annual prime rate of interest quoted in the Money Rates section of the
East
Coast edition of the Wall
Street Journal
calculated daily on the basis of a 365-day year, or similar reputable data
source, or, if lower, the highest rate permitted under applicable law.
Notwithstanding the foregoing, any payment of amounts by Discovery representing
the excess of Actual Amount over Estimated Amount, calculated in accordance
with
Section 7.8, shall not be subject to this Section 7.13.
7.14 Tax
Withholding.
Any
taxes, levies, or other duties (“Taxes”)
paid
or required to be withheld under the appropriate local tax Laws by Discovery
on
account of monies payable to Chrysalis under this Agreement shall be deducted
from the amount of monies otherwise payable to Chrysalis under this Agreement
and paid by Discovery to the proper taxing authority. Discovery shall secure
and
send to Chrysalis within a reasonable period of time proof of any such Taxes
paid or required to be withheld by Discovery for the benefit of Chrysalis.
The
Parties shall cooperate reasonably with each other to (i) ensure that any
amounts required to be withheld by Discovery are reduced in amount to the
fullest extent permitted by Law and (ii) to resolve such other Party’s taxation
concerns.
ARTICLE
8
INTELLECTUAL
PROPERTY
8.1 Ownership.
8.1.1 Chrysalis
Intellectual Property.
Chrysalis shall own (i) all Intellectual Property owned or controlled by
Chrysalis relating to the Chrysalis Technology or Licensed Products that was
existing or conceived prior to the Amended and Restated Effective Date, (ii)
all
Intellectual Property relating to the Chrysalis Technology or the Licensed
Products developed by Chrysalis outside of the performance of this Agreement
or
to which Chrysalis otherwise obtains rights from a Third Party; (iii) all
Inventions conceived, created and reduced to practice solely by or on behalf
of
Chrysalis in the course of the performance of this Agreement, except Discovery
Technology Improvements; and (iv) all Chrysalis Technology Improvements
(collectively, “Chrysalis
Intellectual Property”).
Information
marked by [***]
has been
omitted pursuant to a request for confidential treatment. The omitted portion
has been separately filed with the Securities and Exchange
Commission.
17
8.1.2 Discovery
Intellectual Property.
Discovery shall own (i) all Intellectual Property owned or controlled by
Discovery relating to Discovery Technology or the Licensed Products that was
existing or conceived prior to the Amended and Restated Effective Date or is
developed by Discovery outside of the performance of this Agreement, (ii) all
Intellectual Property relating to Discovery Technology or the Licensed Products
developed by Discovery outside of the performance of this Agreement or exercise
of the license granted hereunder or to which Discovery otherwise obtains rights
from a Third Party, and (iii) all Inventions conceived, created and reduced
to
practice solely by or on behalf of Discovery in the course of the performance
of
this Agreement or exercise of the license granted hereunder, except Chrysalis
Technology Improvements; (iv) all Inventions conceived, created and reduced
to
practice jointly by or on behalf of the Parties in the course of the performance
of this Agreement or exercise of the license granted hereunder, except Chrysalis
Technology Improvements; and (v) all Discovery Technology Improvements
(collectively “Discovery
Intellectual Property”).
8.2 Disclosure,
Assignment, License and Exploitation.
8.2.1 Disclosure.
Each
Party shall cause all personnel conducting work or exercising rights on its
behalf under the Agreement to, promptly disclose to the other Party all
Intellectual Property in which the other Party has an ownership interest
pursuant to Section 8.1, and to assign any and all right, title and
interest in all such Inventions and Intellectual Property in accordance with
this Agreement. Each Party shall maintain records in sufficient detail and
in
good scientific manner appropriate for patent prosecution purposes to properly
reflect all work done and results achieved in conducting its work hereunder,
and
shall respond to reasonable requests of the other Party for information
regarding Intellectual Property in which the other Party has an ownership
interest.
8.2.2 Assignment
and License.
In the
event Chrysalis conceives, creates or reduces to practice any Discovery
Technology Improvements, Chrysalis shall promptly notify Discovery and Chrysalis
shall assign all right, title and interest in and to such Discovery Technology
Improvements to Discovery. In the event Discovery conceives, creates or reduces
to practice any Chrysalis Technology Improvements, Discovery shall promptly
notify Chrysalis and Discovery shall assign all right, title and interest in
and
to such Chrysalis Technology Improvements to Chrysalis, however, such Chrysalis
Technology Improvements are included in the Intellectual Property licensed
to
Discovery pursuant to Section 3.1.
8.2.3 Exploitation
of Intellectual Property.
To the
extent permitted by Law, Chrysalis agrees not to exploit the Chrysalis
Intellectual Property in the Exclusive Field in any country in the world;
provided, however, that in the event Discovery terminates this Agreement
pursuant to Article 15 with respect to [***],
this
Section 8.2.3 shall no longer apply to Chrysalis with respect to such
[***]
and
Chrysalis shall have the right to exploit the Chrysalis Intellectual Property
in
the Exclusive Field in the Territory with respect to such [***].
Information
marked by [***]
has been
omitted pursuant to a request for confidential treatment. The omitted portion
has been separately filed with the Securities and Exchange
Commission.
18
8.3 Agreement
with Personnel.
Each
Party shall have valid and enforceable written agreements with all personnel
conducting work on its behalf under the Agreement containing a nondisclosure
obligation comparable in scope to Article 9 and giving the other Party all
rights and authority necessary to effectuate the provisions of this Article
8.
Each Party shall provide copies of these agreements to the other Party upon
the
other Party’s request as allowed by each Party’s internal personnel
policies.
8.4 Prosecution
of Patents.
8.4.1 Discovery
and Chrysalis Patent Filings.
Discovery and Chrysalis each shall use commercially reasonable efforts to
diligently prosecute and
maintain their
respective Chrysalis Patents and Discovery Patents in the Territory; provided
that solely for the purposes of this Section 8.4.1 Discovery Patents shall
mean
those Discovery Patents that claim or are directed to Discovery Technology.
Within forty-five (45) days of a Party’s receipt of an allowance or grant of a
Patent, the Party prosecuting the Patent shall inform the other Party of such
allowance or grant, and provide the other Party with a copy of the allowed
or
granted Patent claims thereof.
8.4.2 Patent
Prosecution Costs.
Each
Party shall bear its own costs to file, prosecute and maintain its Patents
in
the Territory (including, without limitation, patent term
extension).
8.4.3 Abandonment
of Prosecution or Maintenance.
Each
Party shall notify the other Party in the event it is unable for any reason
to
meet its obligations under this Article 8 with respect to any Patents that
are
subject to Section 8.4.1. Such notification shall be given within a reasonable
period prior to the date on which such Patents will lapse or become abandoned.
The Party receiving any notification hereunder shall then have the option,
exercisable upon written notification to the Party that delivered such
notification, to assume full responsibility, at its discretion and its sole
cost
and expense, for prosecution or maintenance of the affected Patents in such
country or countries in the Territory.
8.5 Patent
Term Extensions.
Each
Party shall have the right to request that the other Party file all applications
and take all actions necessary to obtain patent extension pursuant to 35 U.S.C.
§ 156 or like foreign statutes for the respective Parties’ Patents in the
Territory. If the filing Party declines to pursue such patent term extensions,
then as permitted by law, the other Party shall have the right (at its cost
and
expense) on behalf of the filing Party to file, or direct the filing of, all
such applications and take all such actions necessary to obtain such patent
term
extensions. Each Party agrees to sign such further documents and take such
further actions as may be requested by the other Party in this
regard.
8.6 Third
Party Infringement.
Information
marked by [***]
has been
omitted pursuant to a request for confidential treatment. The omitted portion
has been separately filed with the Securities and Exchange
Commission.
19
8.6.1 Suits
for Infringement.
If
Discovery or Chrysalis becomes aware of infringement of any Patent included
in
the Discovery Patents or the Chrysalis Patents by a Third Party in the
Territory, such Party shall promptly notify the other Party in writing to that
effect and provide a summary of the relevant facts and circumstances known
to
such Party relating to such infringement (“Infringement
Notice”).
Each
Party shall have the right, at its sole discretion and expense, on its own
behalf, to institute, prosecute, and control any action or proceeding to
restrain infringement of any of its Patents. A Party instituting suit shall
have
control of such suit and all negotiations for its settlement or compromise;
provided however, that the instituting Party shall not settle or compromise
any
such suit or enter into any consent order for the settlement or compromise
thereof which would materially adversely affect the Intellectual Property rights
with respect to a Licensed Product without the prior written consent of the
other Party, which consent shall not be unreasonably withheld, conditioned,
or
delayed.
8.6.2 Step-in
Right.
If,
prior to the expiration of three (3) months from said Infringement Notice,
the
Party whose Patents are alleged to be infringed has not obtained a
discontinuance of an alleged infringement by a Third Party or brought an
infringement action or proceeding or otherwise taken appropriate action to
xxxxx
such infringement, such Party shall notify the other Party at any time prior
thereto of its intention not to bring suit against an alleged infringer. Upon
such notice and if such infringement is reasonably likely to materially
adversely affect a Licensed Product in the Territory, then, and in those events
only, the other Party shall have the right, but not the obligation, at its
sole
expense to institute, prosecute, and control any action or proceeding to
restrain such infringement. Each Party agrees to be joined as a party if
necessary to prosecute the action or proceeding and shall provide all reasonable
cooperation, including any necessary use of its name, required to prosecute
such
litigation. The other Party shall have control of any such suit and all
negotiations for its settlement or compromise; provided, however, that the
other
Party shall not settle or compromise any such suit or enter into any consent
order for the settlement or compromise thereof without the prior written consent
of the patentee Party, which consent shall not be unreasonably withheld,
conditioned, or delayed.
8.6.3 Allocation
of Recovery.
All
damages, settlements and rewards made or obtained in connection with any suit
or
other legal proceeding under this Section 8.6 shall be shared among the parties
as follows:
(i)
[***]
(ii)
[***]
8.6.4 Declaratory
Actions and Counterclaims.
In the
event that an action alleging invalidity or non-infringement of any of the
Discovery Patents or Chrysalis Patents is brought against Discovery or Chrysalis
in the Territory, the Party defending such action or counterclaim, at its sole
discretion, shall have the right, within thirty (30) days after the commencement
of such action, to take or regain control of the action at its own expense.
If
the defending Party determines not to exercise this right, the other Party
may
take over or remain as lead counsel for the action at that Party’s sole
discretion. Any recovery obtained from such litigation, proceeding or settlement
shall be shared in accordance with Section 8.6.3.
Information
marked by [***]
has been
omitted pursuant to a request for confidential treatment. The omitted portion
has been separately filed with the Securities and Exchange
Commission.
20
8.7 Infringement
of Third Party Rights.
8.7.1 Infringement
Claims.
With
respect to any and all claims instituted by Third Parties for patent
infringement involving the manufacture, use, offer for sale, or sale of a
Licensed Product in the Territory during the Term, the Party named as defendant
shall promptly notify the other Party of such claim, and the defending Party
shall have the right, at its sole discretion and expense, to defend and control
any action or proceeding with respect to such claim. The other Party agrees
to
be joined as a Party if necessary to defend the action or proceeding and shall
provide reasonable cooperation, including any necessary use of its name,
required to defend such litigation. The defending Party shall have sole control
of any such suit and all negotiations for its settlement or compromise;
provided, however, that the defending Party shall not settle or compromise
any
such suit or enter into any consent order for the settlement or compromise
thereof without the prior written consent of the other Party if such settlement
would materially adversely affect the other Party’s rights or impose any
obligation on the other Party, which consent shall not be unreasonably withheld,
conditioned, or delayed.
8.7.2 Step-in
Right.
If,
prior to the expiration of three (3) months from said claim being brought,
or
such sooner period as may be necessary to appropriately respond to said claim,
the defending Party has not elected to defend such action or proceeding, or
if
the defending Party shall notify the other Party at any time prior thereto
of
its intention not to defend such action or proceeding, then, and in those events
only, the other Party shall have the right, but not be obligated, at its own
expense to defend and control any action or proceeding. Such other Party shall
have sole control of any such suit and all negotiations for its settlement
or
compromise; provided, however, that the other Party shall not settle or
compromise any such suit or enter into any consent order for the settlement
or
compromise thereof without the prior written consent of the original defending
Party, which consent shall not be unreasonably withheld, conditioned, or
delayed.
8.7.3 Notice
of Certification.
Discovery and Chrysalis each shall immediately give notice to the other of
any
certification filed under the U.S. “Drug Price Competition and Patent Term
Restoration Act of 1984” claiming that Discovery Patents or Chrysalis Patents
are invalid or that any infringement will not arise from the manufacture, use,
or sale of any Licensed Product by a Third Party. If a Party decides not to
bring infringement proceedings against the entity making such a certification,
that Party shall give notice to the other Party of its decision not to bring
suit within twenty-one (21) days after receipt of notice of such certification.
The other Party may then, but is not required to, bring suit against the party
that filed the certification. Any suit by Discovery or Chrysalis shall either
be
in the name of Discovery or in the name of Chrysalis, or jointly in the name
of
Discovery and Chrysalis, as may be required by Law. For this purpose, the Party
not bringing suit shall execute such legal papers necessary for the prosecution
of such suit as may be reasonably requested by the Party bringing suit.
21
ARTICLE
9
CONFIDENTIAL
INFORMATION
9.1 Use
of
Confidential Information.
A Party
receiving Confidential Information (the “Receiving
Party”)
from
the other Party (the “Disclosing
Party”)
shall
keep all such Confidential Information with the same degree of care it maintains
the confidentiality of its own confidential information, but in no event less
than a reasonable degree of care. Neither Party shall use such Confidential
Information for any purpose other than in performance of this Agreement, and
shall not disclose the same to any Person other than to its Affiliates and
such
of its and their employees or agents who have a need to know such Confidential
Information to implement the terms of this Agreement, and who are subject to
a
nondisclosure obligation comparable in scope to this Article 9. Each Party
shall
advise any employee or agent who receives such Confidential Information of
the
confidential nature thereof and of the obligations contained in this Agreement
relating thereto, and such Party shall ensure that all such employees and agents
comply with such obligations as if they had been a Party hereto. Upon
termination of this Agreement, each Party shall use commercially reasonable
efforts to return or destroy all documents, tapes or other media containing
Confidential Information of the Disclosing Party that remains in such Party’s or
its agents’ or employees’ possession, except that each Party may keep one (1)
copy of the Confidential Information solely for archival purposes. Such archival
copy shall be deemed to be the property of the Disclosing Party, and shall
continue to be subject to the provisions of this Article 9. Notwithstanding
anything to the contrary in this Agreement, Confidential Information shall
not
include any information or materials that the Receiving Party can demonstrate
by
documentary evidence:
(i) were
already known to the Receiving Party (other than under an obligation of
confidentiality), at the time of disclosure by the Disclosing
Party;
(ii) were
generally available to the public or otherwise part of the public domain at
the
time of its disclosure to the Receiving Party;
(iii) became
generally available to the public or otherwise part of the public domain after
its disclosure or development, as the case may be, and other than through any
act or omission of a Party in breach of such Party’s confidentiality obligations
under this Agreement;
(iv) were
disclosed to a Party, other than under an obligation of confidentiality, by
a
Third Party who had no obligation to the Disclosing Party not to disclose such
information to others; or
(v) were
independently discovered or developed by or on behalf of the Receiving Party
without the use of the Confidential Information belonging to the other Party.
9.2 Permitted
Disclosure and Use.
Notwithstanding anything to the contrary in this Agreement, in the event that
the Receiving Party or any of its directors, officers, employees, agents and
advisors and their representatives deems it necessary or are requested or
required (by oral questions, deposition, interrogatories, requests for
information or documents, subpoena, civil investigative demand or other legal
process by a court or other governmental authority, or by any Regulatory
Authority to obtain Regulatory Approval of a Licensed Product) to disclose
all
or any part of any Confidential Information, the Receiving Party will provide
the Disclosing Party with prompt notice of such request or requirement (which
notice shall be reasonably in advance of such requested or required disclosure),
as well as notice of the terms and circumstances surrounding such request or
requirement, so that the Disclosing Party may seek an appropriate protective
order or waive compliance with the provisions of this Agreement. In such case,
the Receiving Party shall consult with the Disclosing Party with respect to
the
advisability of pursuing any such order or other legal action or available
steps
to resist or narrow such request or requirement. If, failing the entry of a
protective order or the receipt of a waiver hereunder, the Receiving Party
is,
in the opinion of counsel satisfactory to the Disclosing Party and its counsel,
legally compelled to disclose any Confidential Information, the Receiving Party
may disclose that portion of the Confidential Information which its counsel
advises the Receiving Party that the Receiving Party is legally compelled to
disclose. In any event, the Receiving Party will use reasonable efforts to
obtain and will not oppose action by the Disclosing Party to obtain, an
appropriate protective order or other reliable assurance that confidential
treatment will be afforded the disclosure of such Confidential Information.
The
Receiving Party will use best efforts to cause its directors, officers,
employees, affiliates, agents and advisors and their representatives to comply
with the terms of this Section. A Receiving Party may disclose Confidential
Information belonging to a Disclosing Party to the extent such disclosure is
reasonably necessary to enforce the provisions of this Agreement.
22
9.3 Disclosure
for SEC Filings.
Notwithstanding anything to the contrary in this Agreement, the Parties
expressly acknowledge that Discovery may file a copy of this Agreement with
the
Securities and Exchange Commission (the “SEC”)
in any
of its SEC reports and filings, as well as incorporate them by reference into
other SEC filings. Discovery shall request confidential treatment of sensitive
terms hereof to the extent such confidential treatment is reasonably available
to Discovery under the prevailing circumstances. Discovery shall coordinate
in
advance with Chrysalis with regard to the terms of this Agreement, for which
Discovery shall seek to be redacted in any such SEC filings, and Discovery
shall
use reasonable efforts to seek confidential treatment for such mutually agreed
terms and terms reasonably requested by Chrysalis; provided, however, that
each
Party shall retain ultimate control and responsibility for their respective
disclosures to the SEC and the public generally. To the extent permitted by
Law,
Discovery shall use reasonable efforts to provide Chrysalis reasonable advance
notice of any SEC filing related to this Agreement which differs materially
from
prior filings.
9.4 Publications.
Subject
to any Third Party rights existing as of the Original Effective Date, each
Party
shall submit to the other Party for review and approval all proposed academic,
scientific and medical publications and public presentations relating to a
Licensed Product or any research or development activities conducted as part
of
the Agreement for review in connection with preservation of Patents, and trade
secrets and/or to determine whether Confidential Information should be modified
or deleted from the proposed publication or public presentation. Written copies
of such proposed publications and presentations shall be submitted to the
non-publishing Party no later than sixty (60) days before submission for
publication or presentation and the non-publishing Party shall provide its
comments with respect to such publications and presentations within ten (10)
Business Days of its receipt of such written copy. The review period may be
extended for an additional thirty (30) days if the non-publishing Party can
demonstrate a reasonable need for such extension including the preparation
and
filing of patent applications. By written agreement, this period may be further
extended. The Parties will each comply with standard academic practice regarding
authorship of scientific publications and recognition of contribution of other
Persons in any publications relating to a Licensed Product or any research
or
development activities under this Agreement.
23
9.5 Public
Announcements.
Subject
to Section 9.2 and Section 9.3, (i) neither Party will make any public
announcement of any information regarding this Agreement, the Licensed Products
or any research or development activities under this Agreement without the
prior
written approval of the other Party, and (ii) Discovery shall not make any
public statements regarding its activities with Chrysalis (including without
limitation any other division of Xxxxxx Xxxxxx USA Inc.), its relationship
with
Chrysalis (including without limitation any other division of Xxxxxx Xxxxxx
USA
Inc.) or any other public statements regarding Chrysalis (including without
limitation any other division of Xxxxxx Xxxxxx USA Inc.) without the prior
written approval of Chrysalis, provided however that each Party may disclose
(a)
the general stage of development, commercialization and manufacturing at any
given time during the course of the Agreement, except to the extent that any
such information constitutes Confidential Information, (b) any information
required by Law, and (c) any other information that has been previously approved
for disclosure by the other Party, without further approval from the other
Party
hereunder. The Parties agree and acknowledge that Discovery may, at its sole
discretion, subject to its compliance with this Article 9, file a Current Report
on Form 8-K with the SEC to announce the filing of the press release and file
it
as an exhibit thereto, as well as to incorporate it by reference into other
SEC
filings. Without
limiting the generality of the foregoing and without any inference with respect
to any other requirement of this Section 9.5, the Parties hereby acknowledge
and
agree that any breach of this Section 9.5 in the form of any public statement
related to this Amended and Restated License Agreement or the Original Agreement
(including without limitation, the performance or non-performance of any
obligation by Chrysalis under the Amended and Restated License Agreement or
Original Agreement and Chrysalis ceasing active involvement in the development
of Licensed Products under the Amended and Restated License Agreement and the
Original Agreement) that disparages Chrysalis (including without limitation
any
other division of Xxxxxx Xxxxxx USA Inc.) (x) by an officer or executive of
Discovery or any other individual holding a senior level management position
at
Discovery, or (y) any other personnel or agent of Discovery, but, in the case
of
this Section 9.5(y), only if Discovery does not take immediate action to
publicly repudiate such statement, in the case of both (x) and (y) shall
constitute a material breach of a material provision of this
Agreement.
9.6 Survival.
The
obligations and prohibitions contained in this Article 9 shall survive the
expiration or termination of this Agreement.
ARTICLE
10
REPRESENTATIONS,
WARRANTIES AND COVENANTS
10.1 Mutual
Representations and Warranties.
Each
Party hereby represents, warrants and covenants to the other Party that as
of
the Amended and Restated Effective Date:
24
10.1.1 Organization;
Authority.
It is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has full right, corporate power and authority
to enter into this Agreement, to perform its obligations under this Agreement,
to grant the licenses granted by such Party pursuant to this Agreement and
to
carry out the provisions hereof.
10.1.2 Consents.
Except
for any Regulatory Approvals necessary for the development, manufacture, or
commercialization of a Licensed Product, all necessary consents, approvals,
orders, permits and authorizations of all government authorities and Regulatory
Authorities and other Persons or Third Parties required to be obtained by it
as
of the Amended and Restated Effective Date in connection with the execution,
delivery, and performance of this Agreement have been obtained.
10.1.3 No
Conflict.
The
execution and delivery of this Agreement by such Party, the performance of
such
Party’s obligations hereunder, and the rights, licenses and sublicenses to be
granted by such Party pursuant to this Agreement, (i) do not conflict with,
violate or constitute a breach or default under any requirement of Laws or
regulations existing as of the Amended and Restated Effective Date and
applicable to such Party or under any instrument, judgment, order, writ, decree,
contract of such Party or any of its Affiliates existing as of the Amended
and
Restated Effective Date; (ii) do not give rise to any event that results in
the
creation of any lien, charge or encumbrance upon any assets of such Party or
the
suspension, revocation, impairment, forfeiture or non-renewal of any material
permit, license, authorization or approval that applies to such Party, its
business or operations or any of its assets or properties; or (iii) conflict
with any rights granted by such Party to any Third Party or breach any
obligation that such Party has to any Third Party.
10.1.4 Enforceability.
This
Agreement is a legal and valid obligation binding upon it and is enforceable
against it in accordance with its terms, subject
to and limited by: (i) applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws generally applicable to creditors’ rights; and (ii)
judicial discretion in the availability of equitable relief.
10.1.5 Regulatory.
There
are no investigations, inquiries, actions or other proceedings pending before
or, to such Party’s knowledge, threatened, by any Regulatory Authority or other
government agency with respect to any Licensed Products (or components thereof)
or any facility where such Licensed Products (or components thereof) are
manufactured, and such Party has not received written notice threatening any
such investigation.
10.2 Intellectual
Property.
Discovery represents, warrants, and covenants to Chrysalis that as of the
Amended and Restated Effective Date with respect to the Discovery Intellectual
Property and, except with regard to Chrysalis’ intellectual property rights in
the name “Aria,” Chrysalis represents, warrants, and covenants to Discovery that
as of the Amended and Restated Effective Date with respect to the Chrysalis
Intellectual Property:
(i) It
(a)
holds good title to and is the legal and beneficial owner of, or (b) is the
licensee of, such Intellectual Property in the Territory free and clear of
any
lien, mortgage, security interest, license, right, pledge, restriction on
transferability, defect of title or other claim, charge, or encumbrance of
any
nature whatsoever on or affecting any property or property interest and no
Third
Party has any right, title, or interest in or to such Intellectual Property
in
the Territory.
25
(ii) To
its
knowledge, the Patents included in such Intellectual Property are valid and
enforceable in the Territory and there have been no, and such Party has no
reason to believe that there will be any, inventorship challenges with respect
to any of such Patents in the Territory.
(iii) There
are
no infringement proceedings, actions, suits or complaints pending against nor
any outstanding injunctions, judgments, orders, decrees, rulings or other
charges against such Party relating to such Intellectual Property in the
Territory.
(iv) It
has
not received any form of notice from a third party of infringement of Third
Party Patent rights that may affect the making, using or selling of Licensed
Products in the Territory; and to its knowledge (a) the manufacture, development
and commercialization of the Licensed Products in the Territory will not
infringe the Patents of any Third Party in the Territory and (b) there are
no
Third Party patent applications in the Territory pending which, if issued,
would
materially adversely affect the ability to make, use or sell the Licensed
Products in the Territory.
(v) It
has
not granted any third party any license, covenant not to xxx, options, or other
right with respect to such Intellectual Property in the Territory that would
impact its ability to enforce such Intellectual Property in the Territory.
There
are no existing agreements, options, commitments, or rights with, of, or to
any
Person to acquire or obtain any rights with respect to the Intellectual Property
in the Territory that are inconsistent with the rights granted
herein.
(vi) Each
agreement pursuant to which a Third Party has granted, assigned or otherwise
transferred rights with respect to such Intellectual Property in the Territory
are in full force and effect, and no Party to such agreements is in breach
or
default thereunder, and the execution and performance of this Agreement will
not
result in a breach or default thereunder. It has provided a true and complete
copy of each such Third Party agreement to which it is a party to the other
Party.
10.3 No
Adverse Effects.
Discovery represents, warrants and covenants to Chrysalis that as of the Amended
and Restated Effective Date, the studies of Pulmonary Surfactants conducted
by
Discovery prior to the Amended and Restated Effective Date have not shown any
adverse effects or toxicity of the Pulmonary Surfactant in humans that could
reasonably be anticipated to frustrate the purposes of this Agreement, and
as of
the Amended and Restated Effective Date, Discovery has not been informed of
any
such adverse effects or toxicity.
ARTICLE
11
ADDITIONAL
COVENANTS
11.1 Compliance
with Laws.
Each
Party
shall perform its responsibilities in a good scientific manner in accordance
with the terms of this Agreement and in compliance in all material respects
with
the requirements of Laws.
26
11.2 Cooperation.
The
Parties agree that maintaining effective and open communication between the
Parties on matters relating to the Agreement is important to the success of
the
Agreement.
11.3 Sharing
of Information.
Subject
to applicable Law and privileges and obligations of confidentiality, the Parties
agree to provide the other Party, upon such other Party’s reasonable request,
copies or access to all data, documentation and work products, including
Clinical Trials, relating to any Licensed Product.
ARTICLE
12
DISCLAIMERS
AND LIMITATION OF LIABILITY
12.1 Disclaimer
of Warranties.
EXCEPT
AS OTHERWISE SPECIFICALLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE,
CONCERNING THE DEVELOPMENT, COMMERCIALIZATION, MARKETING, OR SALE OF ANY PRODUCT
INCLUDING THE SUCCESS OR POTENTIAL SUCCESS THEREOF. EXCEPT AS EXPRESSLY SET
FORTH HEREIN, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL REPRESENTATIONS,
WARRANTIES AND AGREEMENTS OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING THE
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
THE
PARTIES UNDERSTAND THAT THE LICENSED PRODUCTS ARE THE SUBJECT OF ONGOING
CLINICAL RESEARCH AND DEVELOPMENT AND THAT NEITHER PARTY CAN ASSURE THE SAFETY
OR USEFULNESS OF LICENSED PRODUCTS. NEITHER PARTY MAKES ANY REPRESENTATION
OR
WARRANTY EXCEPT AS SET FORTH IN THIS ARTICLE 12 CONCERNING ITS PATENT RIGHTS
OR
KNOW-HOW, INCLUDING THE VALIDITY OR SCOPE OF ITS PATENT RIGHTS OR THAT THE
MANUFACTURE, USE OR SALE OF ANY LICENSED PRODUCT WILL NOT INFRINGE THE PATENT
RIGHTS OF THIRD PARTIES.
12.2 Limitation
of Liability.
IN NO
EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY OF ITS PERSONNEL
FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR EXEMPLARY
DAMAGES (INCLUDING, LOST PROFITS, BUSINESS, OR GOODWILL) SUFFERED OR INCURRED
BY
SUCH OTHER PARTY OR ITS AFFILIATES AND THEIR RESPECTIVE PERSONNEL IN CONNECTION
WITH A BREACH OR ALLEGED BREACH OF THIS AGREEMENT EXCEPT WHERE ATTRIBUTABLE
TO A
WILLFUL OR INTENTIONAL BREACH OF THIS AGREEMENT. NOTHING IN THIS SECTION 12.2
IS
INTENDED TO, NOR SHALL, LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR
OBLIGATIONS OF EITHER PARTY WITH RESPECT TO THIRD PARTY CLAIMS UNDER THIS
ARTICLE 12, OR ANY REMEDIES OR DAMAGES AVAILABLE FOR BREACHES OF CONFIDENTIALITY
OBLIGATIONS IN ARTICLE 9.
27
ARTICLE
13
INDEMNIFICATION;
INSURANCE
13.1 Indemnification.
13.1.1 Obligations
of the Parties.
Each of
the Parties shall defend, indemnify and hold harmless the other Party, its
Affiliates and its and their respective directors, officers, employees,
consultants, contractors, representatives and agents (collectively, the
“Indemnified
Parties”)
from
and against any and all losses, costs, damages, fees, liabilities, or expenses
(including reasonable attorneys’ fees and expenses) (collectively, “Losses”)
incurred in connection with any Third Party claim, action or proceeding (a
“Third
Party Claim”)
arising out of or related to:
(i) any
material breach by the indemnifying Party of any of its representations,
warranties, covenants or obligations pursuant to this Agreement;
and
(ii) any
negligence, recklessness, willful misconduct or wrongful intentional acts or
omissions of the indemnifying Party, its Affiliates, or their officers,
directors, employees, contractors, consultants, agents, representatives, or
sublicensees in the exercise of any of the indemnifying Party’s rights or the
performance of any of the indemnifying Party’s obligations under this Agreement.
13.1.2 Additional
Indemnification by Chrysalis.
In
addition to the indemnity set forth in Section 13.1.1 above, Chrysalis shall
defend, indemnify and hold harmless Discovery, its Affiliates and its and their
respective directors, officers, employees, consultants, contractors,
representatives and agents from and against any and all Losses incurred in
connection with any Third Party Claim that the Chrysalis Technology infringes
or
misappropriates such Third Party intellectual property in the Territory to
the
extent such Losses are directly attributable to actual infringement or
misappropriation of such Third Party’s intellectual property by the Chrysalis
Technology, except to the extent such infringement and misappropriation is
attributable to further development, modifications or enhancements of the
Chrysalis Technology by Discovery or due to the combination by Discovery
(directly or indirectly) of the Chrysalis Technology with any other technology
and provided that Discovery uses all reasonable efforts to minimize any such
Losses.
13.1.3 Additional
Indemnification by Discovery.
In
addition to the indemnity set forth in Section 13.1.1 above, Discovery shall
defend, indemnify and hold harmless Chrysalis, its Affiliates and its and their
respective directors, officers, employees, consultants, contractors,
representatives and agents from and against any and all Losses incurred in
connection with any Third Party Claim arising out of or related to any
intellectual property infringement and trade secret misappropriation liability
relating to the development, manufacture, or commercialization of any Licensed
Product, except to the extent such Losses are due to matters for which Chrysalis
is required to provide indemnification pursuant to Section 13.1.2.
13.1.4 Certain
Product Liability Claims.
Notwithstanding Sections 13.1.1, 13.1.2, and 13.1.3, Discovery shall defend,
indemnify and hold harmless Chrysalis, its Affiliates and its and their
respective directors, officers, employees, consultants, contractors,
representatives and agents from and against any and all Losses incurred in
connection with any Third Party Claims arising out of or relating to the
commercialization, marketing, sale, use, handling, manufacture and/or storage
of
any Licensed Product, including any claims that involve death or bodily injury
(or allegations thereof) to any individual.
28
13.1.5 Complete
Indemnification.
As the
Parties intend complete indemnification, all direct out of pocket costs and
expenses reasonably incurred by an Indemnitee in connection with enforcement
of
Section 13.1 shall also be reimbursed by the Indemnitor.
13.2 Indemnification
Procedures.
13.2.1 Notification.
In the
case of a Third Party Claim as to which a Party may be obligated to provide
indemnification pursuant to this Agreement (the “Indemnitor”),
such
Indemnified Party seeking indemnification hereunder (“Indemnitee”)
will
notify the Indemnitor in writing of the Third Party Claim (and specifying in
reasonable detail the factual basis for the Third Party Claim and to the extent
known, the amount of the Third Party Claim) reasonably promptly after becoming
aware of such Third Party Claim; provided, however, that failure to give such
notification will not affect the indemnification provided hereunder except
to
the extent the Indemnitor shall have been actually prejudiced as a result of
such failure.
13.2.2 Assumption
of Defense.
If a
Third Party Claim is made against an Indemnitee, the Indemnitor will be
entitled, within one hundred twenty (120) days after receipt of written notice
from the Indemnitee of the commencement or assertion of any such Third Party
Claim, to assume the defense thereof (at the expense of the Indemnitor) with
counsel selected by the Indemnitor and reasonably satisfactory to the
Indemnitee, for so long as the Indemnitor is conducting a good faith and
diligent defense. Should the Indemnitor so elect to assume the defense of a
Third Party Claim, the Indemnitor will not be liable to the Indemnitee for
any
legal or other expenses subsequently incurred by the Indemnitee in connection
with the defense thereof; provided, however, that if in the opinion of counsel,
such counsel and opinion being satisfactory to Indemnitor and its counsel,
a
conflict of interest exists between the Indemnitor and an Indemnitee in respect
of such claim, such Indemnitee shall have the right to employ separate counsel
(which shall be reasonably satisfactory to the Indemnitor) to represent such
Indemnitee with respect to the matters as to which a conflict of interest exists
and in that event, the reasonable fees and expenses of such separate counsel
shall be paid by such Indemnitor; provided further, that the Indemnitor shall
only be responsible for the reasonable fees and expenses of one (1) separate
counsel for such Indemnitee. If the Indemnitor assumes the defense of any Third
Party Claim, the Indemnitee shall have the right to participate in the defense
thereof and to employ counsel, at its own expense, separate from the counsel
employed by the Indemnitor. If the Indemnitor assumes the defense of any Third
Party Claim, the Indemnitor will promptly supply to the Indemnitee copies of
all
correspondence and documents relating to or in connection with such Third Party
Claim and keep the Indemnitee informed of developments relating to or in
connection with such Third Party Claim, as may be reasonably requested by the
Indemnitee (including providing to the Indemnitee on reasonable request updates
and summaries as to the status thereof). If the Indemnitor chooses to defend
a
Third Party Claim, all Indemnitees shall reasonably cooperate with the
Indemnitor in the defense thereof (such cooperation to be at the expense,
including reasonable legal fees and expenses, of the Indemnitor). If the
Indemnitor does not elect to assume control of the defense of any Third Party
Claim, within the one hundred twenty (120) day period set forth above, or if
such good faith and diligent defense is not being or ceases to be conducted
by
the Indemnitor, the Indemnitee shall have the right, at the expense of the
Indemnitor, after three (3) Business Days notice to the Indemnitor of its intent
to do so, to undertake the defense of the Third Party Claim for the account
of
the Indemnitor (with counsel selected by the Indemnitee), and to compromise
or
settle such Third Party Claim, exercising reasonable business
judgment.
29
13.2.3 Settlements.
The
Indemnitee may agree to any settlement, compromise, or discharge of such Third
Party Claim that the Indemnitor may recommend that by its terms obligates the
Indemnitor to pay the full amount of Losses (whether through settlement or
otherwise) in connection with such Third Party Claim and unconditionally and
irrevocably releases the Indemnitee completely from all liability in connection
with such Third Party Claim; provided, however, that, without the Indemnitee’s
prior written consent, the Indemnitor shall not consent to any settlement,
compromise, or discharge (including the consent to entry of any judgment),
and
the Indemnitee may refuse in good faith to agree to any such settlement,
compromise, or discharge, that provides for injunctive or other nonmonetary
relief affecting the Indemnitee. The Indemnitee shall not (unless required
by
Law) admit any liability with respect to, or settle, compromise, or discharge,
such Third Party Claim without the Indemnitor’s prior written consent (which
consent shall not be unreasonably withheld, conditioned, or delayed).
13.3 Insurance.
Discovery agrees to obtain and maintain commercial general liability insurance
and/or self-insurance, including prior to the date a Licensed Product is first
administered in humans, commercial general liability insurance and/or
self-insurance for Clinical Trials and products liability, with reputable and
financially secure insurance carriers, in such amounts and subject to such
deductibles as are reasonable and customary in the pharmaceutical industry
for
companies of comparable size and activities. Discovery shall maintain such
insurance for so long as Licensed Products in the Territory continue to be
developed, manufactured, or commercialized and thereafter for so long as is
necessary to cover any and all Third Party Claims required to be indemnified
by
Discovery which Third Party Claims may arise from the development, manufacture,
and/or commercialization of a Licensed Product in the Territory. Upon reasonable
request by Chrysalis, Discovery shall produce evidence that such insurance
policies are valid, kept up to date, and in full force and effect. The insurance
obligations set forth in this Section 13.3 may be satisfied by commercially
reasonable self-insurance or a commercially reasonable combination of insurance
and self-insurance.
ARTICLE
14
TERM
This
Agreement shall become effective on the Amended and Restated Effective Date,
and
unless terminated earlier in accordance with the provisions of Article 15
shall expire as follows as to each Licensed Product in each country in the
Territory, on a country-by-country basis, upon the latest of: (a) the
10th
anniversary of the date of the First Commercial Sale of the Licensed Product;
(b) the date on which the sale of such Licensed Product ceases to be covered
by
a Valid Claim in such country, or (c) in consideration of the performance by
Chrysalis of development services
without charge, the date a generic form of the product is introduced in such
country (the “Term”).
30
ARTICLE
15
TERMINATION
15.1 Termination
by Discovery On or Before [***].
At any
time on or before [***]
from
the
Amended and Restated Effective Date, Discovery may terminate this Agreement
in
its entirety upon written notice to Chrysalis, provided that Discovery pays
Chrysalis [***].
Upon
Chrysalis’ receipt of such notice and such payment, this Agreement shall
terminate.
15.2 Termination
by Discovery After [***].
After
[***]
from the
Amended and Restated Effective Date, Discovery may terminate this Agreement
for
any reason, in its entirety, [***],
upon
[***]
days
written notice to Chrysalis.
15.3 Termination
Due to Failure to Meet Minimum Royalties.
Chrysalis may terminate this Agreement upon [***]
days’
prior written notice to Discovery, if commencing [***]
and
continuing [***],
Discovery does not pay Chrysalis each Contract Quarter the Minimum Royalties
due
pursuant to Section 7.3, and Discovery does not cure such shortfall as provided
for in Section 7.3; provided, however, that Chrysalis shall not have a right
to
terminate the Agreement pursuant to this Section 15.3 for any time period in
which Discovery is disputing in good faith amounts due under this Agreement.
15.4 Termination
for Material Breach.
15.4.1 Right
to Terminate Agreement.
If a
Party (the “Breaching
Party”)
commits a material breach of this Agreement and fails to cure such breach within
the applicable Cure Period (as provided in 15.4.2 below), the other Party (the
“Non-Breaching
Party”)
may, by
written notice of termination within thirty (30) days after the expiration
of
the applicable Cure Period, elect to terminate the Agreement. Without limiting
the generality of the foregoing, and notwithstanding the Cure Period set forth
in Section 15.4.2, the practice by Discovery of the Chrysalis Technology outside
the scope of the licenses and sublicenses granted herein, which practice does
not cease within thirty (30) days after the receipt of written notice of such
breach from Chrysalis, shall constitute a material breach.
15.4.2 Applicable
Cure Periods.
Upon
receipt of written notice of a material breach pursuant to Section 15.4.1,
and
except as otherwise provided for in Section 15.4.1, the allegedly Breaching
Party shall have sixty (60) days to cure such material breach (the “Cure
Period”),
provided, however, that in
the case of any material breach that cannot be reasonably cured within the
sixty
(60) day cure period, should the Breaching Party deliver to the Non-Breaching
Party a plan for curing such material
breach
which is reasonably sufficient to effect a cure and uses commercially reasonable
efforts to pursue such plan and effect a cure, the Cure Period shall be extended
for an additional sixty (60) days.
Information
marked by [***]
has been
omitted pursuant to a request for confidential treatment. The omitted portion
has been separately filed with the Securities and Exchange
Commission.
31
15.5 Termination
Due to Certain Events.
Without
prejudice to any other remedies available to it at Law or in equity, either
Party may, subject to the provisions set forth herein, terminate this Agreement
immediately upon written notice to the other Party if, at any time, the other
Party shall (i) file in any court pursuant to any statute a petition for
bankruptcy or insolvency, or for reorganization
in
bankruptcy, or for an arrangement or for the appointment of a receiver, trustee
or administrator of such Party or of its assets, (ii) be served with an
involuntary petition against it, filed in any insolvency proceeding, and such
petition shall not be dismissed within sixty (60) days after the filing thereof,
(iii) propose or be a party to any dissolution, (iv) make an assignment for
the
benefit of its creditors; or (v) ceases to do business in the ordinary course.
15.6 Effects
of Termination Generally.
15.6.1 Accrued
Obligations; Survival.
Upon
expiration or termination of this Agreement, all
of the Parties’ rights and obligations under this Agreement including the
exclusive license in Section 3.1, shall terminate immediately except: (a)
any
rights that shall have accrued to the benefit of any Party prior to such
termination or expiration, including the right of Chrysalis to receive royalties
as provided in Article 7; and (b) any rights and obligations of the Parties
which are expressly indicated to survive termination or expiration of this
Agreement. All
of the Parties’ rights and obligations under, and the provisions contained in
[***]
shall
survive termination or expiration of this Agreement. [***]
15.6.2 Outstanding
Payments.
All
payments of amounts owing to either Party under this Agreement as of its
expiration or termination shall be due and payable within the later of (i)
to
the extent such amounts can be calculated and a fixed sum determined at the
time
of expiration or termination of this Agreement, sixty (60) days after the date
of such expiration or termination, and (ii) ten (10) days after the date in
which such amounts can be calculated and a fixed sum determined.
ARTICLE
16
STANDSTILL
AGREEMENT
16.1 General
Standstill.
Except
as set forth in this Section 16.1, Chrysalis hereby agrees that, without the
written consent of Discovery, during the Term and for a [***] period
beginning on the date of termination of this Agreement for any reason, neither
Chrysalis nor any of its Affiliates will (nor assist or encourage others to),
directly or indirectly, without the written consent of Discovery: (i) acquire,
or agree to acquire, directly or indirectly, alone or in concert with others,
by
purchase, gift, or otherwise, any direct or indirect beneficial ownership
(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934,
as
amended (the “Exchange
Act”),
or
interest in any securities or direct or indirect rights, warrants, or options
to
acquire, or securities convertible into or exchangeable for, any securities
of
Discovery; (ii) directly or indirectly effect or seek, initiate, offer, or
propose or participate in any (A) tender or exchange offer, merger,
consolidation, or other business combination involving Discovery, or (B) any
recapitalization, restructuring, liquidation, dissolution, sale of all or
substantially all the assets, or other extraordinary transaction with respect
to
Discovery; (iii) make, or in any way participate in, directly or indirectly,
alone or in concert with others, any “solicitation” of “proxies” to vote (as
such terms are used in the proxy rules of the SEC promulgated pursuant to
Section 14 of the Exchange Act); (iv) form or become a member of a “group” (as
defined under the Exchange Act) with respect to any voting securities of
Discovery (including by depositing any securities of Discovery in a voting
trust
or by subjecting any securities of Discovery to any other arrangement or
agreement with respect to the voting of such securities); or (v) enter into
any
agreements, discussions, or arrangements with any Third Party with respect
to
any of the foregoing.
Information
marked by [***]
has been
omitted pursuant to a request for confidential treatment. The omitted portion
has been separately filed with the Securities and Exchange
Commission.
32
16.2 Certain
Exceptions.
Nothing
in this Article 16 shall prohibit Chrysalis’ or its Affiliates’ employees from
purchasing securities of Discovery pursuant to (i) a pension plan established
for the benefit of Chrysalis’ or its Affiliates’ employees, (ii) any employee
benefit plan of Chrysalis or its Affiliates, (iii) any stock portfolios not
controlled by Chrysalis or any of its Affiliates that invest in Discovery among
other companies, or (iv) de
minimis
passive
investments not to exceed five percent (5%) of Discovery’s outstanding voting
securities.
16.3 Exception
for an Acquisition Transaction.
This
Article 16 shall terminate (subject to revival as provided below) and Chrysalis
and its Affiliates shall have the right to acquire any securities of Discovery
without regard to the limitations set forth in this Article 16 in the event
that
Discovery publicly announces a transaction, an intention or desire to effect
any
transaction, or the receipt of any offer, which would result in (a) the sale
of
all or substantially all of the assets of Discovery within the meaning of
Section 271 of the Delaware General Corporation Law, or (b) Discovery common
shareholders immediately prior to such transaction owning less than fifty
percent (50%) of the outstanding common stock of the acquiring entity or, in
the
case of a merger transaction, the surviving corporation (an “Acquisition
Transaction”).
If
the proposed Acquisition Transaction has not been consummated within six (6)
months following Discovery’s public announcement in respect thereof, the
provisions of this Article 16 shall be revived and have full force and effect
until such time as Discovery makes a subsequent public announcement regarding
an
Acquisition Transaction, at which time the provisions of this Article 16 shall
once again apply.
ARTICLE
17
DISPUTE
RESOLUTION
17.1 Dispute
Resolution.
Except
as expressly otherwise provided in this Agreement, any material dispute,
difference, claim, action, demand, request, investigation, controversy, threat
or other question arising out of or relating to the interpretation of any
provisions of this Agreement or the failure of any Party to perform or comply
with any obligations or conditions applicable to such Party pursuant to this
Agreement (a “Dispute”)
shall
be settled in accordance with the provisions of this Article 17. If a Party
intends to initiate executive negotiation, mediation or arbitration (as set
forth below) to resolve a Dispute, such Party shall provide written notice
to
the other Party informing such other Party of such intention and the issues
to
be resolved.
33
17.2 Executive
Negotiation.
Promptly upon a Party’s receipt of a notice by the other Party as provided in
Section 17.1 with respect to a Dispute, and in any event within thirty (30)
days
of such receipt, the senior executives of each Party shall meet for attempted
resolution of such Dispute by good faith negotiations.
17.3 Mediation.
If the
senior executives referenced in Section 17.2 are unable to resolve any such
Dispute within ten (10) Business Days, either Party may, upon written notice
to
the other Party, refer such Dispute to mediation. Upon such written notice,
the
Parties shall mutually agree on a mediator to assist in the negotiations. If
the
Parties fail to mutually agree on a mediator within one week of the written
notice, a mediator shall be appointed by the AAA. The Party responsible for
referring the Dispute to mediation shall bear the costs of such mediation.
Any
settlement reached by mediation shall be resolved in writing, signed by the
Parties, and shall be binding on them.
17.4 Arbitration.
17.4.1 Referral
to Arbitration.
In the
event that a Dispute is not resolved during mediation within thirty (30) days
of
the selection of a mediator, either Party may refer such Dispute to final and
binding arbitration by sending written notice of such election to the other
Party clearly marked “Arbitration Demand,” whereupon such Dispute shall be
arbitrated in accordance with this Section 17.4.
17.4.2 Rules
and Procedures.
Except
as expressly otherwise provided in this Agreement, any Dispute shall be finally
settled by arbitration under the then-current expedited procedures applicable
to
the then-current Commercial Arbitration Rules of the AAA in accordance with
the
terms set forth in this Section 17.4. The arbitration of any Dispute shall
be
kept confidential and shall be filed with the office of the AAA located in
Washington, D.C. or such other AAA office as the Parties may agree. Such
arbitration shall be conducted by three arbitrators, one appointed by each
of
Chrysalis and Discovery and the third selected by the first two appointed
arbitrators. Each arbitrator shall be a person with relevant experience in
the
pharmaceutical industry. Chrysalis and Discovery must make their respective
arbitrator appointments within ten (10) Business Days of notice being given
to a
Party by the other Party of its intention to resolve such Dispute through
arbitration. Such appointed arbitrators shall select the third arbitrator within
ten (10) Business Days of the last to occur of their respective appointments.
Chrysalis and Discovery shall instruct such arbitrators to render a
determination of any such Dispute within sixty (60) days after the appointment
of the third arbitrator. All
Disputes shall be resolved by submission of documents unless the arbitration
panel determines that an oral hearing is necessary.
17.4.3 Awards.
The
decision of the arbitrators with respect to any Dispute shall be in writing
and
state the findings, facts and conclusions of law upon which the decision is
based. Any such decision and award rendered by the arbitrators shall be final
and binding upon the Parties. Judgment upon any award rendered may be entered
in
any court having jurisdiction, or application may be made to such court for
a
judicial acceptance of the award and an order of enforcement, as the case may
be. Each Party submits itself to the jurisdiction of any such court for the
entry and enforcement to judgment with respect to the decision of the
arbitrators hereunder. The arbitrators shall have the power to grant all legal
and equitable remedies except specific performance and award compensatory
damages provided by applicable law, but shall not have the power or authority
to
award punitive damages. No Party shall seek punitive damages or specific
performance in relation to any matter under, arising out of, or in connection
with or relating to this Agreement in any other forum, provided however, that
the foregoing does not preclude suits or limit damages associated with
infringement.
34
17.4.4 Costs.
Each
Party shall pay its own expenses of arbitration, and the expenses of the
arbitrators shall be equally shared between Chrysalis and Discovery unless
the
arbitrators assess as part of their award all or any part of the arbitration
expenses of a Party or Parties (including reasonable attorneys’ fees) against
the other Party or Parties, as the case may be.
17.4.5 No
Other Forum.
Except
as provided in Section 17.5, the provisions of this Section 17.4 shall be a
complete defense to any suit, action or proceeding instituted in any federal,
state or local court or before any administrative tribunal with respect to
any
Dispute arising under this Agreement. Any Party commencing a lawsuit in
violation of this Section 17.4 shall pay the costs of the other Party,
including, without limitation, reasonable attorney’s fees and defense
costs.
17.5 Right
to Injunctive and Other Relief.
Nothing in this Agreement, shall prohibit
either Party from seeking injunctive relief from a court of competent
jurisdiction in the event of a breach or prospective breach of this Agreement
by
the other Party which would cause irreparable harm to the first Party. Nothing
in this Agreement shall prevent a Party from seeking any remedies available
at
law or in equity in any court of competent jurisdiction in the event of the
practice of such Party’s Intellectual Property outside the scope of the rights
granted herein.
ARTICLE
18
MISCELLANEOUS
18.1 Original
Agreement.
The
rights and obligations of the Parties prior to the Amended and Restated
Effective Date are governed by the Original Agreement. As of the Amended and
Restated Effective Date, the Original Agreement is terminated and the rights
and
obligations of the Parties are as set forth herein.
18.2 Choice
of Law.
This
Agreement shall be governed by and interpreted under, and any action or
proceeding shall apply, the Laws of the State of New York excluding (i) its
conflicts of Laws principles, other than Section 5-1401 of the New York General
Obligations Law (ii), the United Nations Conventions on Contracts for the
International Sale of Goods and (iii) the 1974 Convention on the Limitation
Period in the International Sale of Goods and any Protocols thereto, done at
Vienna, April 11, 1980.
35
18.3 Severability.
If,
under Law, any provision of this Agreement is invalid or unenforceable, or
otherwise directly or indirectly affects the validity of any other material
provision(s) of this Agreement, this Agreement shall endure except for such
provision. The Parties shall consult one another and use their best efforts
to
agree upon a valid and enforceable provision that is a reasonable substitute
for
such invalid or unenforceable provision in view of the intent of this
Agreement.
18.4 Relationship
of the Parties.
Each
Party shall bear its own fees, expenses, and disbursements, including the fees
and expenses of their respective counsel, accountants, bankers, and other
experts, in connection with the subject matter of this Agreement and costs
incurred in the performance of its obligations hereunder without charge or
expense to the other except as expressly provided in this Agreement. Neither
Party shall have any responsibility for the hiring, termination or compensation
of the other Party’s employees or for any employee benefits of such employee. No
employee or representative of a Party shall have any authority to bind or
obligate the other Party to this Agreement for any sum or in any manner
whatsoever, or to create or impose any contractual or other liability on the
other Party without said Party’s approval. For all purposes, and notwithstanding
any other provision of this Agreement to the contrary, the Parties’ legal
relationship under this Agreement shall be that of independent contractors.
This
Agreement is not a partnership agreement and nothing in this Agreement shall
be
construed to establish a partnership, joint venture,
agency, or employer-employee relationship between
the Parties.
18.5 Parties
in Interest.
This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective legal representatives, successors, and permitted assigns
of
the Parties hereto. Nothing in this Agreement, express or implied, is intended
to confer on any Person other than the Parties hereto, or their respective
successors and assigns, any rights, remedies, obligations, or liabilities under
or by reason of this Agreement.
18.6 Enforcement
of Certain Agreements.
Each
Party shall use commercially reasonable efforts at its expense to enforce the
provisions of any confidentiality agreements and agreements with respect to
noncompetition existing as of the Original Effective Date and the Amended and
Restated Effective Date with any of its present or former employees, agents,
consultants or independent contractors of Discovery that relate to any Licensed
Product; provided, however, that the obligation with respect to any agreement
related to this Section 18.6 shall terminate as of the date on which such
agreement and the obligations regarding noncompetition have terminated or
expired in accordance with its terms.
18.7 Use
of
Affiliates, Subcontractors, Sublicensees and Distributors.
Each
Party shall have the right to use Affiliates, subcontractors, sublicensees
and
distributors in exercising its rights and carrying out its obligations under
this Agreement, provided, however, that (i) such entities agree in writing
to be
bound by the provisions of Article 9, (ii) the use of such entities does not
in
any way materially diminish the other Party’s rights or otherwise modify the
other Party’s rights or obligations hereunder without such other Party’s prior
written consent, (iii) Discovery may not delegate, sublicense, assign, or
otherwise transfer any of its rights or obligations hereunder to any entity
(including any Affiliate) that competes with any tobacco product of Chrysalis
or
its Affiliates without Chrysalis’ prior written consent, (iv) Chrysalis may not
delegate, assign or otherwise transfer any of its rights or obligations
hereunder to a company engaged in pulmonary critical care medicine, without
Discovery’s prior written consent and (v) except with respect to rights,
benefits and obligations assigned as permitted pursuant to Section 18.8, each
Party shall be liable for any actions or omissions of its Affiliates,
subcontractors, sublicensees and distributors in connection with this Agreement
and the Intellectual Property and Confidential Information of the other Party
to
the same extent as if such actions or omissions were conducted by the Party
itself.
36
18.8 Assignment.
Chrysalis may assign or otherwise transfer this Agreement or any or all right,
benefit or obligation hereunder (whether by operation of Law or otherwise)
to
any Affiliate of Chrysalis without the prior written consent of Discovery
subject only to the limitations set forth in Section 18.7 (iv) above. Discovery
may assign or otherwise transfer this Agreement or any or all right, benefit
or
obligation hereunder (whether by operation of Law or otherwise) to any Affiliate
of Discovery without the prior written consent of Chrysalis, subject only to
the
limitations set forth in Section 18.7 (iii) above, provided, however,
notwithstanding such an assignment, Discovery shall remain responsible for
the
performance of the indemnification obligations set forth herein. No Party may
assign or otherwise transfer this Agreement or any or all right, benefit or
obligation hereunder (whether by operation of Law or otherwise) to any other
Person other than an Affiliate without the prior written consent of the other
Party, which consent shall not be unreasonably withheld, conditioned, or
delayed; except that, subject to the limitations set forth in Section 18.7
(iii)
and (iv) above, either Party may assign or otherwise transfer any or all of
its
rights and interests hereunder in connection with the sale of all or
substantially all of its assets or business to which this Agreement relates,
whether by way of merger, sale of stock, sale of assets or other similar
transaction, provided that the assignee or transferee expressly agrees to assume
all of the obligations hereunder.
18.9 Further
Assurances and Actions.
From
time to time after the Original Effective Date, Discovery and Chrysalis shall
execute, acknowledge and deliver to each other any further documents,
assurances, and other matters, and will take any other action consistent with
the terms and conditions of this Agreement, that may reasonably be requested
by
a Party and necessary or desirable to carry out the purpose and intent of this
Agreement. Chrysalis and Discovery shall cooperate and use all reasonable
efforts to make all other registrations, filings, and applications, to give
all
notices, and to obtain as soon as practicable all governmental or other
consents, transfers, approvals, orders, qualifications, authorizations, permits,
and waivers, if any, and to do all other things necessary or desirable for
the
consummation of this Agreement.
18.10 Waiver.
Any
term or condition of this Agreement may be waived at any time by the Party
that
is entitled to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the Party
waiving such term or condition. No waiver by any Party of any term or condition
of this Agreement, in any one or more instances, shall be deemed to be or
construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion. Except as expressly set forth in this
Agreement, all rights and remedies available to a Party, whether under this
Agreement or afforded by Law or otherwise, will be cumulative and not in the
alternative to any other rights or remedies that may be available to such
Party.
18.11 Section
365(n) of the Bankruptcy Code.
All
rights and licenses granted under or pursuant to any section of this Agreement
are, and shall otherwise be deemed to be, for purposes of Section 365(n) of
the
Bankruptcy Reform Act of 1978, 11 U.S.C. §§ 101 et
seq.,
as
amended (the “Bankruptcy
Code”),
licenses of rights to “intellectual property” as defined under
Section 101(35A) of the Bankruptcy Code. The Parties shall retain and may
fully exercise all of their respective rights and elections under Section 365(n)
of the Bankruptcy Code.
37
18.12 Notices.
All
notices that are required or permitted hereunder shall be in writing and shall
be sufficient if personally delivered or sent by mail or Federal Express or
other delivery service. Any notices shall be deemed given upon the earlier
of
the date when received at, or the third day after the date when sent by
registered or certified mail or the day after the date when sent by Federal
Express to, the address set forth below, unless such address is changed by
notice to the other Parties hereto:
If
to
Chrysalis:
Chrysalis
Technologies
000
Xxxxx
Xxxxxx
Xxxxxxxx,
XX 00000
Attention:
Xxxxxxx Xxxxx
If
to
Discovery:
Discovery
Laboratories, Inc.
0000
Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx,
XX 00000
Attention
: Xxxxx X. Xxxxx, Esq., CPA
with
a
copy to:
Xxxxxxxxx
Xxxxxxx LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxx X. Xxxxx, Esq.
18.13 Construction.
Unless
the context of this Agreement clearly requires otherwise, (i) references to
any
gender include all genders, (ii) “or” has the inclusive meaning frequently
identified with the phrase “and/or,” (iii) “including” has the inclusive meaning
frequently identified with the phrase “including but not limited to” or
“including without limitation”, and (iv) references to “hereunder” or “herein”
relate to this Agreement and (v) all terms defined in the singular shall have
the same meaning in the plural and vice versa. The section and other headings
contained in this Agreement are for reference purposes only and shall not
control or affect the construction of this Agreement or the interpretation
thereof in any respect. Section, subsection, Schedule and Exhibit references
are
to this Agreement unless otherwise specified. Each accounting term used herein
that is not specifically defined herein shall have the meaning given to it
under
GAAP.
38
18.14 Registration
and Filing of this Agreement.
To the
extent, if any, that either Party concludes in good faith that it or the other
Party is required to file or register this Agreement or a notification thereof
with any Regulatory Authority, including the SEC or the U.S. Federal Trade
Commission, in accordance with Law, such Party shall inform the other Party
thereof. Should both Parties jointly agree that either of them is required
to
submit or obtain any such filing, registration or notification, they shall
cooperate, each at its own expense, in such filing, registration or notification
and shall execute all documents reasonably required in connection therewith.
In
such filing, registration or notification, the Parties shall request
confidential treatment of sensitive provisions of this Agreement, to the extent
permitted by Law. The Parties shall promptly inform each other as to the
activities or inquiries of any such Regulatory Authority relating to this
Agreement, and shall reasonably cooperate to respond to any request for further
information therefrom on a timely basis.
18.15 Force
Majeure.
No
Party shall be held liable or responsible to the other Party nor be deemed
to be
in default under, or in breach of any provision of, this Agreement for failure
or delay in fulfilling or performing any obligation of this Agreement when
such
failure or delay is due to Force Majeure, and without the fault or negligence
of
the Party so failing or delaying. For purposes of this Agreement, Force Majeure
is defined as causes beyond the control of the Party, including, without
limitation, acts of God; acts, regulations, or laws of any government; war;
civil commotion; destruction of production facilities or materials by fire,
flood, earthquake, explosion or storm; labor disturbances; epidemic; and failure
of public utilities or common carriers. In such event Discovery or Chrysalis,
as
the case may be, shall immediately notify the other Party of such inability
and
of the period for which such inability is expected to continue. The Party giving
such notice shall thereupon be excused from such of its obligations under this
Agreement as it is thereby disabled from performing for so long as it is so
disabled and the thirty (30) days thereafter. To the extent possible, each
Party
shall use reasonable efforts to minimize the duration of any Force Majeure.
18.16 Entire
Agreement.
This
Agreement constitutes the entire agreement between the Parties with respect
to
the subject matter and supersedes all previous agreements and understandings
between the Parties, whether written or oral. This Agreement may be altered,
amended or changed only by a writing making specific reference to this Agreement
and signed by duly authorized representatives of Discovery and
Chrysalis.
18.17 Third
Party Beneficiaries.
Except
for any Third Party Indemnities under Article 13, none of the provisions of
this
Agreement shall be for the benefit of or enforceable by any Third Party,
including any creditor of either Party hereto, and no such Third Party (except
for such Indemnitees, as such) shall obtain any right under any provision of
this Agreement or shall by reasons of any such provision make any claim in
respect of any debt, liability or obligation (or otherwise) against either
Party
hereto.
18.18 Execution
in Counterparts; Facsimile Signatures.
This
Agreement may be executed in counterparts, each of which counterparts, when
so
executed and delivered, shall be deemed to be an original, and both of which
counterparts, taken together, shall constitute one and the same instrument
even
if both Parties have not executed the same counterpart. Signatures provided
by
facsimile transmission shall be deemed to be original signatures.
39
XXXXXX
XXXXXX USA INC.,
d/b/a
CHRYSALIS TECHNOLOGIES
|
||
|
|
|
By: | /s/ Dr. Xxx Podrecz | |
Name:
Dr. Xxx Podrecz
Title:
VP RD & E Administration &
Compliance
|
||
DISCOVERY LABORATORIES, INC. | ||
|
|
|
By: | /s/ Xxxxxx X. Xxxxxxxx, Ph.D. | |
Name:
Xxxxxx
X. Xxxxxxxx, Ph.D.
Title:
President
and Chief Executive Officer
|
||
40
[***]
Information
marked by [***]
has been
omitted pursuant to a request for confidential treatment. The omitted portion
has been separately filed with the Securities and Exchange
Commission.
41