EXHIBIT 10(f)
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MARKETING AND SUPPLY AGREEMENT
THIS AGREEMENT, effective as of January 1, 1999, is between
VascA, Inc., a Delaware corporation located at 0 Xxxxxxxx Xxxxx,
Xxxxxxxxx, XX 00000 (hereinafter referred to as "VascA") and
United-Guardian, Inc., a Delaware corporation located at 000 Xxxxxx
Xxxx., Xxxxxxxxx, XX 00000 (hereinafter referred to as "UGI").
WHEREAS, UGI is the co-owner of certain patents and the
exclusive owner of certain other proprietary technical information
relating to the pharmaceutical product known as Clorpactin and related
technologies;
WHEREAS, VascA is developing implantable valves and other
products designed for vascular access and other applications;
WHEREAS, VascA is desirous of obtaining from UGI exclusive,
worldwide marketing and distribution rights to Clorpactin and related
technologies under UGI's patents and technical information in accordance
with the terms and conditions hereof; and
WHEREAS, UGI is willing to grant such rights to VascA upon the
terms and conditions hereof;
NOW, THEREFORE, the parties hereto have mutually agreed as
follows:
1. Definitions.
The following definitions will control the construction of each of the
following terms wherever they appear in this Agreement:
"Affiliate" shall mean, as to a Party hereto, any person, corporation,
company, partnership, joint venture, firm and/or other entity (a
"Person") which controls, is controlled by or is under common control
with such Party. For these purposes, "control" shall refer to the
possession, directly or indirectly, of the power to direct, or cause the
direction of, the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Cost of Goods" shall mean fully-allocated cost of goods according to
U.S. generally accepted accounting principles, and shall include without
limitation material costs, allocable compensation costs of manufacturing
personnel, manufacturing overhead (including without limitation such
items as rent, utility expenses, depreciation and amortization) and
royalties and other amounts payable to third parties in respect of
patents and other intellectual property rights licensed in connection
with the manufacture or sale of Licensed Products, but shall not include
any allocation of non-manufacturing managerial or non-manufacturing
employee overhead or of selling or general and administrative expenses.
"Current Uses" shall mean all uses for which Clorpactin is currently
being marketed as more fully described on Exhibit A attached hereto.
"EPA" shall mean the United States Environmental Protection Agency.
"Event of Interruption" shall mean any of the following:
(a) the failure by UGI to ship any order for the Licensed
Product within three (3) months following receipt of a purchase order; or
(b) the filing by UGI of any petition for bankruptcy pursuant to
the United States Bankruptcy Code; or
(c) the filing against UGI of any petition or assignment in
bankruptcy pursuant to the United States Bankruptcy Code, if such
petition or assignment is consented to by UGI or is not vacated or
dismissed within sixty (60) days of the date of filing; or
(d) the initiation or consent or failure to defend any
proceeding by or against UGI which is intended to lead to its final
liquidation, or the entering of any judgment against UGI the consequence
of which will be UGI's final liquidation.
"FDA" shall mean the United States Food and Drug Administration.
"Improvements" shall mean any invention, enhancement, improvement, next
generation product, discovery or other development, whether patentable or
not, developed or discovered by UGI or licensed to UGI and applicable or
related to a Licensed Product or any component thereof.
"Licensed Products" shall mean Clorpactin and any other product, whether
currently sold or under development, relating to, derived from or based
in whole or in part on the Technology.
"Net Sales" shall mean, with respect to a Licensed Product and a
specified period, the gross revenues collected by a Party, its Affiliates
or its sublicensees from or on account of sales of such Licensed Product
during that period to third parties, less deduction for (a) credits or
allowances, if any, actually granted on account of price adjustments,
rejection or return of items previously sold, whether during the specific
period or not, rebates and discounts, (b) excises, sales taxes, duties or
other taxes imposed upon and paid with respect to such sales (excluding
income or other taxes levied with respect to gross receipts), and (c)
separately itemized insurance and transportation costs incurred in
shipping products to third parties.
"New Uses" shall mean all medical applications other than Current Uses,
including but not limited application of the product as a site care
treatment with VascA's implantable valve products.
"Party" shall mean either UGI or VascA, as the context may require.
"Patents" shall mean all present and future domestic and foreign patents,
patent applications, provisional patent applications, patent extensions,
certificates of invention, or applications for certificates of invention,
together with any divisions, continuations or continuations-in-part and
renewals thereof, or substitutions therefor, and all reissues,
reexaminations or extensions thereof, which are owned or controlled by or
licensed to, UGI, and which are necessary or useful for the development,
manufacture, use or sale of Licensed Products, including without
limitation the patents and patent applications listed on Exhibit B
hereto.
"Registrations" shall mean (1) in the United States, approval from the
FDA, the EPA and/or other governmental authorities, as necessary, for the
manufacturing, marketing, promotion and sale of the Licensed Products,
and (2) outside of the United States, analogous orders by the relevant
governmental agencies which require regulatory approval prior to
marketing, promotion and sale of the Licensed Products in such non-U.S.
country.
"Steering Committee" shall have the meaning set forth in Section 6.5 below
"Technology" shall mean all present and future inventions, trade secrets,
trademarks, copyrights, data, regulatory submissions and other
intellectual property of any kind, including all confidential technical
information in the possession of UGI as of the date hereof and during the
term of this Agreement (and any renewal thereof), which are owned or
controlled by, or licensed to, UGI, and which are necessary or useful for
the development, manufacture, use or sale of the Licensed Products.
"Territory" shall mean worldwide.
"Valid Claim" shall mean a claim of an unexpired or pending Patent which
(a) shall not have been withdrawn, cancelled or disclaimed or held
invalid by a court of competent jurisdiction in an unappealed or
unappealable decision or revoked by opposition proceedings where there is
no further right to appeal or the time period for appeal has elapsed, and
(b) in the case of a patent application, (i) has not been on file with
the relevant patent office for more than five years without having been
allowed or issued, and (ii) is not a claim as to which UGI's outside
patent counsel has advised in writing clearly will not be allowed or
issued.
The singular shall include the plural and vice versa as may be
required by the context of this Agreement.
2. License Grant.
2.1 UGI hereby grants to VascA an exclusive, royalty-free
license, including the right to grant sublicenses, under the Patents and
the Technology, to develop, use, market, distribute and sell Licensed
Products in the Territory for New Uses.
2.2 UGI hereby grants to VascA a non-exclusive, royalty-free
license, including the right to grant sublicenses, under the Patents and
the Technology, to use, market, distribute and sell Licensed Products in
the Territory for Current Uses. The non-exclusive license granted in this
Section 2.2 shall, at VascA's election, become exclusive at such time as
the number of units of Licensed Product purchased by VascA in any
contract year under this Agreement is greater than sixty percent (60%) of
UGI's total unit sales, whether direct or indirect, of Licensed Product
for such contract year. During the term of this Agreement and any renewal
thereof, UGI shall not grant licenses under the Patents and Technology to
distribute, market or sell Licensed Products to any third party, nor
directly sell any Licensed Products to any party that is not a customer
of UGI as of the date hereof and identified on Exhibit C hereto, with the
exception of new drug wholesalers, without VascA's prior written consent,
which consent shall not be unreasonably withheld, unless UGI reasonably
believes that the sale is for a drug (and not a device) use that is not
covered under the definition of "New Uses" and provides notice thereof to
VascA prior to effecting such sale. In the event UGI cannot determine
with a reasonable degree of certainty that the intended use is a drug use
that would not be covered under the definition of "New Uses," then it
will not make the direct sale to that customer and will instead refer the
customer to VascA or, with VascA's approval, to a drug wholesaler. VascA
agrees to sell Licensed Products to new customers referred to VascA by
UGI (or to current customers of UGI in the event that such customers are
unable to obtain product from drug wholesalers) on comparable pricing,
terms and other conditions as it sells to other customers at similar
levels of distribution.
2.3 UGI hereby grants to VascA an exclusive, royalty-free
license, including the right to grant sublicenses, under the Patents and
the Technology, to make and have made Licensed Products for New Uses;
provided, however, that VascA agrees that it may not exercise such
license with respect to any Licensed Product unless UGI fails to fulfill
its supply obligations with respect to such Licensed Product as set forth
in Section 3.1.
2.4 In the event other marketers of implantable valve products
similar to, or competitive with, VascA's device ("Competitors") desire to
purchase Licensed Products, VascA agrees to sell them Licensed Products
provided they comply with the following requirements:
(a) VascA must be given the opportunity to review any
regulatory submissions or marketing and training materials related to the
use of Licensed Products by Competitors, prior to submission, to assure
that they are consistent with the filings being made by VascA. This will
not include any proprietary information not relevant to VascA's use of
the Licensed Products. VascA will have no obligation to sell to
Competitors if it finds that the information being submitted, or which
has been submitted, to regulatory agencies by those Competitors is
incorrect or inconsistent with VascA's submissions.
(b) VascA's price of Licensed Products to Competitors
shall be consistent with the prices it charges to other customers for
Licensed Products at the same level of distribution.
2.5 In the event VascA takes over the exclusive distribution of
Licensed Product for Current Uses in accordance with Section 2.2, VascA
agrees that it will continue to sell Licensed Products to UGI's customer
base on the same pricing, terms, and conditions, for the same level of
distribution, as they were getting from UGI, subject to reasonable price
increases that will be mutually agreed upon by VascA and UGI. If, at some
point in the future, VascA decides to distribute Licensed Products
directly to customers instead of through the full line drug wholesalers
currently used by UGI, such decision shall only be made with the approval
of UGI, and such approval may be withheld by UGI only in circumstances in
which UGI demonstrates, to VascA's reasonable satisfaction, that such
approval would have a material adverse effect on UGI's business.
2.6 UGI represents and warrants to VascA that there are no
restrictions on UGI's rights to grant the licenses contemplated hereunder
with respect to any of the Licensed Products, except that UGI's rights in
regard to the use of Clorpactin to treat animal mastitis are owned
jointly with the Diversey Corporation and, therefore, are specifically
excluded from this Agreement unless otherwise agreed at a later time by
the parties hereto.
2.7 VascA shall have the right to sublicense the licenses
granted hereunder so long as each sublicensee agrees to be bound mutatis
mutandis by all of the terms and conditions of this Agreement.
3. Supply of Licensed Products; Security of Supply; Samples; Orders.
3.1 (a) Except as otherwise permitted by Section 2.3, each of
the Licensed Products shall be supplied by UGI in accordance with the
procedure specified in Section 3.2 to VascA, VascA Affiliates or VascA
sublicensees as VascA may designate, and VascA, VascA Affiliates and
VascA sublicensees shall each purchase its requirements for each of the
Licensed Products exclusively from UGI. UGI shall be responsible as
provided in this Agreement for all Licensed Products supplied by it even
if such Licensed Products are manufactured, in whole or in part, for UGI
by third parties.
(b) The parties acknowledge the importance of VascA
having a continuing source of supply of Licensed Products and wish to
provide for VascA to be able to source or manufacture Licensed Products
in situations where UGI becomes or is likely to become unable to supply
the Licensed Products to VascA in quantities sufficient to meet VascA's
requirements. VascA will use reasonable efforts to maintain at all times,
under refrigeration, a stock of Licensed Product equal to three (3)
months of sales volume, based on the annual projections provided to UGI.
UGI will cause a full and complete copy of the most current formula and
manufacturing instructions for the Licensed Product in form and scope
sufficient to enable VascA to manufacture the Licensed Product without
further assistance (the "Formula"), to be kept by an officer of UGI at a
secure location other than UGI's manufacturing site in Hauppauge, New
York. Upon the occurrence of any Event of Interruption (as defined in
Section 1), VascA will have the right to require UGI to deliver the
Formula to VascA for its use in manufacturing the Licensed Product, or
having the Licensed Product manufactured, during the Event of
Interruption. VascA will use the Formula and manufacturing instructions
to source or manufacture the Licensed Product only for the purposes
specified herein, and only during the Event of Interruption. Upon the
correction or termination of an Event of Interruption, VascA will
promptly return the Formula and manufacturing instructions to UGI without
keeping any copies, and will certify to UGI that it has done so and will
resume purchasing the Licensed Product from UGI.
(c) VascA will pay UGI a royalty, at the rate of 50% of
VascA's gross profit VascA's Net Sales less VascA's Cost of Goods, on all
Licensed Product sourced or produced by VascA, rather than purchased from
UGI, and sold by VascA during any Event of Interruption.
(d) Any quantities of Licensed Products sourced or
manufactured by VascA during any Event of Interruption shall be counted
toward VascA's Minimum Purchase Requirement for the applicable contract
year as more fully described in Section 10 below.
(e) VascA's rights hereunder are in addition to, and
not in substitution for, its rights under Section 14 hereof. In addition,
if an Event of Interruption continues for more than twelve (12) months,
UGI shall deliver to VascA all of UGI's right, title and interest in the
Registrations referred to in Section 6.1 below and VascA shall be
entitled to the rights of a licensee under Section 14 hereof, in addition
to such other legal and equitable rights and remedies as may be
available. In such event, VascA shall pay to UGI a royalty of 10% of
VascA's Net Sales of Licensed Products during such time as VascA is
manufacturing and selling Licensed Products in accordance with this
Section.
3.2 The Licensed Products will in VascA's discretion be shipped
to VascA in powder form in 2-gram bottles packed five to a box, or in
such form and packaging as may be specified by VascA; provided, however,
that UGI shall not be obligated to make any changes in the specifications
of the bottle or cap in which any Licensed Product is sold as of the date
hereof.
3.3 UGI hereby warrants that the Licensed Products supplied by
it hereunder shall comply in all material respects with all applicable
laws, rules, regulations and registrations. VascA hereby acknowledges
that the regulatory status of Clorpactin is not clear due to the age of
the product, and that it will be VascA's responsibility to determine
whether the marketing of the product for any particular use or uses would
be considered acceptable by the FDA. UGI warrants that each shipment or
other delivery of each Licensed Product, when supplied by UGI to VascA,
VascA Affiliates and VascA sublicensees hereunder and through the product
expiration date thereafter, shall (i) be or merchantable quality, fit for
the purpose intended by this Agreement and free from defects, (ii) meet
in all material respects the product specifications of UGI therefor and
(iii) be produced, packaged and labeled in accordance with approved
standards of the FDA and the EPA, and in compliance with all applicable
rules and regulations of all other relevant regulatory authorities,
including compliance with good manufacturing practices. UGI's only
liability for breach of its obligations under this Section 3.3 shall be
to replace the defective Licensed Product as provided in Section 3.4.
EXCEPT FOR THE CONTRACTUAL PROVISIONS EXPRESSLY SET FORTH IN THIS
AGREEMENT, UGI DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, WRITTEN OR
ORAL, WITH RESPECT TO LICENSED PRODUCTS. Except as stated in Section 7.1
(Product Liability Indemnity) and Section 7.4 (Infringement Indemnity),
UGI's liability to VascA for damages arising out of the manufacture, use
or sale of a Licensed Product shall not exceed the actual purchase price
paid by VascA for such Licensed Product. In no event shall UGI be liable
to VascA for special, incidental or consequential damages arising out of
the manufacture, use or sale of any Licensed Product. Nothing in this
Section 3.3 shall be construed to limit UGI's obligations under Sections
7.1 and 7.4.
3.4 Claims relating to quality defects in the Licensed Products
supplied by UGI shall be submitted to UGI within a reasonable time, not
to exceed 90 days, after VascA, the VascA Affiliate or the VascA
sublicensee hereunder has received delivery of the Licensed Product. UGI
shall replace free of charge the defective quantities. Nothing in this
Section 3.4 shall be construed to limit UGI's obligations under Sections
7.1 and 7.2.
3.5 As to each Licensed Product, VascA shall provide UGI with a
written forecast (the "Forecast") of the requirements of VascA, its
Affiliates and sublicensees for such Licensed Product at least 90 days
prior to each 12-month period during the term of the Agreement, except
that VascA shall provide UGI with the Forecast of its requirements for
the first contract year within thirty days of the execution of this
Agreement. VascA, its Affiliates and sublicensees shall provide UGI with
at least 90 days' notice of each requested delivery date of any Licensed
Product.
4. VascA's Marketing Efforts.
VascA, VascA Affiliates and VascA sublicensees each shall use
its reasonable efforts, subject to governmental laws, regulations and
requirements and the terms and provisions of this Agreement(TM), to
identify Licensed Products (a) as a recommended site care treatment for
use with its LifeSite product in the Territory, and (b) for such other
New Uses as VascA shall determine to be commercially viable from time to
time. VascA will also use its reasonable efforts to pursue any necessary
registration and pricing approval of each Licensed Product in the
Territory. VascA may market and sell Licensed Products under it own label
and packaging and under its own trademarks; provided, however, that such
label or packaging shall include the name Clorpactin and shall indicate
that such Licensed Product has been manufactured by UGI.
5. Prices; Payments.
5.1 The price at which UGI shall supply any unit of Licensed
Product to VascA and its Affiliates and sublicensees hereunder shall be
the lowest price at which UGI sells units from time to time to any of its
distributors or licensees; provided, however, that VascA may elect to
procure, directly or indirectly, packaging materials and labels for
Licensed Products and to deduct from the purchase price payable to UGI
hereunder the cost of such materials up to an amount not in excess of
UGI's cost for such materials as long as the substitute packaging
materials and labels are of comparable quality and size to UGI's current
packaging materials and labels and can be accommodated on UGI's current
filling and labeling equipment without modification. In the event
modifications are required in order to accommodate VascA's packaging
materials or labels, such modifications shall be made at VascA's expense.
In the event new packaging and/or labeling equipment is required it will
be purchased by VascA, will be maintained at VascA's expense, and will
remain the property of VascA. UGI will obtain VascA's written
authorization prior to making any modifications to existing equipment or
purchasing new equipment in accordance with this paragraph. All shipments
will be made with carriers approved by VascA, which approval shall not be
unreasonably withheld or delayed. All amounts payable under this Section
5 shall be paid in full within 30 days after the date of delivery of the
Licensed Products.
5.2 In consideration of VascA's marketing and other obligations
hereunder, UGI shall pay to VascA an amount equal to 10% of the amount by
which UGI's Net Sales of Licensed Products (excluding, for this purpose,
sales to VascA under this Agreement) exceeds $280,000 during each
contract year of this Agreement (the "Base Amount"). The Base Amount will
remain the same each contract year unless UGI puts through a price
increase, in which case the Base Amount will be increased by the same
percentage as the price increase, prorated for the year. In the event UGI
begins to sell Licensed Product in other types of units, the increase in
the Base Amount will be calculated by applying the percentage increase
only to the percentage of sales in the prior year attributable to the
current unit size (one box of five 2-gram bottles).
5.3 In the event that UGI enters into an agreement with a third
party for a purpose similar to this Agreement, and the provisions of such
third party agreement are more favorable to such third party than the
corresponding provisions of this Agreement, then UGI will agree to offer
VascA such more favorable terms and amend this Agreement accordingly.
6. Development of Products; Technical Information; Research Program.
6.1 VascA will be responsible for the administrative handling of
Registrations in all countries of the Territory in which VascA deems
obtaining such Registrations to be necessary or appropriate. VascA will
pay all fees and expenses related thereto. VascA shall keep UGI informed
on an ongoing and timely basis and seek UGI's consent as to all material
matters relating to the Registrations of Licensed Products, which consent
shall not be unreasonably withheld or delayed. In the event it is
necessary for UGI to submit proprietary information in support of a
Registration, VascA will arrange for such information to be submitted
directly to the regulatory agencies involved. UGI will be obligated to
provide information in support of VascA's Registrations only to the
extent such information is in the possession of UGI. UGI will only be
responsible for the accuracy of the information that it has provided, and
shall not be responsible in the event such information is not sufficient
for the Registration to be granted. VascA shall be the sole holder of the
Registrations and will, at its own expense, be responsible for all
administrative matters necessary to compile and submit the Registrations
for each Licensed Product in each country of the Territory. VascA shall
also be responsible for maintaining the Registrations and will bear the
registration renewal fees for the Registrations of Licensed Products in
each country of the Territory. Subject to compliance with applicable laws
and regulations, VascA shall promptly report to UGI any adverse drug
reactions associated with the use of any Licensed Product in the
Territory.
6.2 Any changes of the Licensed Products shall only be made by
UGI or VascA after (i) prior written approval of the other Party, which
approval shall not be unreasonably withheld or delayed, and (ii) if
required, the authorization of the relevant authorities.
6.3 UGI shall provide VascA, on a regular and continuing basis,
with all technical information, sales and marketing materials and other
information that is reasonably necessary for VascA to have hereunder,
including but not limited to Improvements, in order for VascA to be able
to follow the developmental progress of each of the Licensed Products
that is under development by UGI and to otherwise perform under this
Agreement.
6.4 During the initial term of this Agreement, VascA and UGI
shall collaborate on a research program to examine, among other things,
the shelf life, product stability, toxicology and formulation
improvements for Clorpactin and other Licensed Products (the "Research
Program"). The Research Program and related budget, objectives, resource
commitments and timetable shall be as more fully set forth on Exhibit D
attached hereto. VascA agrees to provide funding for the Research Program
in an amount not less than $50,000 for the first contract year and
$75,000 for each of the second and third contract years. Activities under
the Research Program shall be conducted by UGI personnel or third party
contractors, in each case, reasonably satisfactory to VascA. All right,
title and interest in any Improvements or other inventions ("Research
Program Inventions"), and patent rights thereon, that are discovered,
made or conceived during the term of the Research Program shall be
jointly owned by UGI and VascA; provided, however, that neither party
shall have the right to make use of such Research Program Inventions,
other than in connection with the performance of its rights and
obligations under this Agreement, without the approval of the other
party.
6.5 The Research Program shall be directed, managed and
administered by a steering committee consisting of one representative of
UGI and one representative of VascA (the "Steering Committee"). The
Steering Committee shall initially consist of Xxxx Xxxxxxx and Xxx
Xxxxxx. The Steering Committee shall meet not less than once every six
months during the term hereof or at such other times, either in person or
by telephone conference, as may be agreed upon by members of the
Committee. The specific tasks of the Research Program may be reduced,
modified or supplemented from time to time by unanimous consent of the
Steering Committee. During the term of the Research Program, UGI shall
provide the Steering Committee with quarterly written reports of the
status of the Research Program, including a summary of results to date.
Members of the Steering Committee or their designees shall have
reasonable access to the facilities of each party where Research Program
activities are in progress, but only during normal business hours and
with reasonable prior notice. Any disputes among members of the Steering
Committee shall be resolved by referring the matter for resolution to the
Chief Executive Officers of the respective companies (or, if either Chief
Executive Officer is then a member of the Steering Committee, to the
Chairman of the Board). If, after 30 days, the dispute remains
unresolved, it shall be referred to arbitration in accordance with
Section 23 below.
7. Liability and Indemnification.
7.1 UGI shall indemnify, defend and hold harmless VascA, its
Affiliates and sublicensees and all officers, directors, employees and
agents thereof (collectively, "VascA Indemnitees") from all damages,
losses, claims, judgements, liabilities, cost and expenses, including
without limitation, reasonable attorneys' fees and expenses
(collectively, "Costs"), whether the foregoing are based in contract,
tort, negligence or product liability, incurred by or assessed against
any VascA Indemnitees that arise out of or incident to injury or death of
persons or damage to or destruction of any property caused or alleged to
be caused by any Licensed Product supplied by UGI. In the event of any
such claim against or Costs incurred by any of the VascA Indemnitees,
VascA shall promptly notify UGI of such claim or Costs. UGI shall manage
and control, at its sole expense, the defense and/or settlement of any
such claim against a VascA Indemnitee. The VascA Indemnitees shall
cooperate with UGI and may, at their option and expense, be represented
in (but not control) any such action or proceeding. UGI shall not be
liable for any settlement entered into or cost or expense incurred by the
VascA Indemnitees in relation to any such action or proceeding without
UGI's written authorization (unless UGI shall have failed to assume
management and control of the defense and settlement of the matter as
provided above in this Section 7.1).
7.2 VascA shall indemnify, defend and hold harmless UGI, its
Affiliates and sublicensees and all officers, directors, employees and
agents thereof (collectively, "UGI Indemnitees") from all Costs, whether
the foregoing are based in contract, tort, negligence or product
liability, incurred by or assessed against any UGI Indemnitees that arise
out of or incident to injury or death of persons or damage to or
destruction of property caused or alleged to be caused by any Licensed
Product manufactured by VascA, VascA Affiliates or VascA sublicensees
pursuant to the license grant set forth in Section 2.2. In the event of
any such claim against or Costs incurred by any of the UGI Indemnitees,
UGI shall promptly notify VascA of such claim or Costs. VascA shall
manage and control, at its sole expense, the defense and/or settlement of
any such claim against a UGI Indemnitee. The UGI Indemnitees shall
cooperate with VascA and may, at their option and expense, be represented
in (but not control) any such action or proceeding. VascA shall not be
liable for any settlement entered into or cost or expense incurred by the
UGI Indemnitees in relation to any such action or proceeding without
VascA's written authorization (unless VascA shall have failed to assume
management and control of the defense and settlement of the matter as
provided above in this Section 7.2).
7.3 During the term of this Agreement and for four (4) years
thereafter, each of the Parties shall maintain an insurance policy, to
the extent available on commercially reasonable terms and subject to
customary deductibles, issued by a reputable insurance company, naming
the other Party as an additional insured, which policy shall insure
against any and all claims, liabilities, costs and expenses in connection
with the obligations of the insured Party under Section 7.1 or 7.2, as
applicable, in an amount of at least $2,000,000 per claim.
7.4 UGI shall indemnify, defend and hold harmless the VascA
Indemnitees from all Costs incurred by or assessed against any VascA
Indeninitees that arise out of or incident to any intellectual property
infringement claim made by any third party with respect to any Licensed
Products, whether manufactured by UGI or by or under authority of VascA
pursuant to Section 3.1, provided that the VascA Indemnitees shall not
have modified the relevant Licensed Product. In the event of any such
claim against or Costs incurred by any of the VascA Indemnitees, VascA
shall promptly notify UGI of such claim or Costs. UGI shall manage and
control, at its sole expense, the defense and/or settlement of any such
claim against a VascA Indemnitee. The VascA Indemnitees shall cooperate
with UGI and may, at their option and expense, be represented in (but not
control) any such action or proceeding. UGI shall not be liable for any
settlement entered into or cost or expense incurred by the VascA
Indemnitees in relation to any such action or proceeding without UGI's
written authorization (unless UGI shall have failed to assume management
and control of the defense and settlement of the matter as provided above
in this Section 7.4). Without waiving any rights it may have against UGI
in respect of this obligation to indemnify the VascA Indemnitees
hereunder, VascA shall have the continuing right to deduct from and
offset against amounts otherwise payable to UGI under Section 3 any Costs
not paid or reimbursed by UGI as required by this Section 7.4, including,
without limitation, any royalty or other compensation that VascA and/or
its Affiliates and sublicensees are required to pay to a third party in
settlement in order to continue to exercise VascA's license rights as set
forth in this Agreement.
8. Third Party Infringement/Misappropriation.
8.1 If either Party becomes aware of any infringement of Patents
or misappropriation of Technology by a third party in the Territory for
New Uses, such Party shall promptly give notice thereof to the other
Party and shall provide the other Party with any evidence or other
information in its possession relating to such infringement or
misappropriation. The Parties shall thereupon consult together as to the
action to be taken.
8.2 UGI shall have the first right, but not the obligation, to
commence legal proceedings against any infringer of any Patent or
misappropriator of Technology in the Territory for New Uses and in this
case (subject to the provisions of the next two sentences) any damages
recovered shall belong to UGI. In the event UGI commences such legal
proceedings, VascA may join in such proceedings within 60 days after its
receipt of notice from UGI of the commencement of such proceedings if
VascA agrees to pay an amount equal to 50% of the cost of such
proceedings. In such event, any damages, settlement fees or other
consideration for past infringement received as a result of such
proceedings shall be shared by UGI and VascA equally. If UGI is not
willing to undertake legal proceedings against the infringer or
misappropriator in the Territory for New Uses, VascA may at its own cost
and expense in its own name commence such legal proceedings and in such
case any damages recovered shall belong to VascA. In such event, (a)
VascA shall be free to settle the dispute on an amicable basis, (b) UGI
shall cooperate with VascA as reasonably requested by VascA and at
VascA's expense, and (c) with respect to any legal proceedings brought by
VascA, UGI shall agree to be named as a party thereto, provided that
VascA agrees to indemnify, defend and hold harmless UGI from all Costs
incurred by or assessed against UGI in connection with any actions or
counterclaims relating to such legal proceedings, except for costs
incurred by or assessed against UGI as a result of UGI's negligence or
willful misconduct directly related to such proceedings.
9. Representations and Warranties.
9.1 UGI warrants and represents that it is the owner of the
entire right, title and interest in and to the Technology (or holds
requisite rights as licensee thereof) and that it has the right to grant
licenses and distribution rights under the Technology of the scope set
forth herein.
9.2 UGI warrants and represents that to the best of its
knowledge (i) there are no patent rights owned by third parties relevant
and material to an evaluation of VascA's freedom to operate with respect
to the use of rights licensed hereunder, and (2) each patent included
within the Patents was not fraudulently procured from the relevant
governmental patent granting authority.
9.3 Each Party hereto represents and warrants to the other that
its execution and delivery hereof has been duly authorized by all
necessary corporate action and that the terms and conditions of this
Agreement, and its obligations hereunder, do not conflict with or violate
any terms or conditions of any other agreement or commitment to which it
is a signatory or by which it is bound.
10. Minimum Purchase Requirements.
UGI may, by sixty (60) days' advance notice to VascA, convert to
non-exclusive the license granted to VascA under Section 2.1 hereof as
set forth below at the end of any contract year if VascA does not
purchase from UGI in any contract year a quantity of Licensed Products
equal to the following (the "Minimum Purchase Requirement"):
Year 1: 50,000 grams
Year 2: 70,000 grams
Year 3 85,000 grams
Years 4 through 6: 7% above the average annual purchases during the
preceding two contract years, but in no event less than 102,000 grams in
Year 4, 130,000 grams in Year 5 and 150,000 grams in Year 6. Year 7 and
all subsequent contract years: 5% above the average annual purchase
during the preceding two contract years but in no event less than 170,000
grams.
If VascA fails to satisfy the Minimum Purchase Requirement in
any contract year, VascA's rights under this Agreement shall become
non-exclusive and UGI shall be obligated to continue supplying VascA's
requirements for Licensed Products.
11. Effective Date and Term.
This Agreement will be effective as of the day and year first
above written and will remain in effect until and expire upon the third
anniversary of the date hereof. Following the initial term hereof, the
Agreement will be automatically renewed for successive three (3) year
terms unless terminated by either Party upon delivery of notice to the
other Party within six (6) months prior to the end of the initial term or
any subsequent term.
12. Termination.
12.1 Failure by UGI or VascA to comply with any of the
obligations and conditions contained in this Agreement shall entitle the
other Party to give notice to the Party in default requiring the
defaulting Party to cure such default. If such default is not cured
within thirty (30) days in the case of payment defaults involving amounts
in excess of $25,000 or within forty-five (45) days in the case of all
other defaults, after the receipt of such notice, the notifying Party
shall be entitled (without prejudice to any of its other rights conferred
on it by this Agreement) to terminate this Agreement by giving notice to
take effect immediately. The right of either Party to terminate this
Agreement, as hereinabove provided, shall not be affected in any way by
its waiver of, or failure to take action with respect to, any previous
default.
12.2 VascA shall have the right to terminate this Agreement at
any time upon not less than six (6) months prior written notice to UGI.
In the event of termination by VascA pursuant to this Section 12.2, VascA
shall reimburse UGI the Cost of Goods for all Licensed Products then in
UGI's inventory and allocated for delivery to VascA, up to an amount of
inventory not to exceed 20% of the Forecast furnished to UGI under
Section 3.5 hereof for the relevant period, except in the case of
inventory packaged or labeled specifically for VascA that is different
from the packaging or labeling of UGI's regular Clorpactin, in which case
VascA shall be responsible for paying for all such existing inventory.
12.3 Notwithstanding anything else in this Agreement to the
contrary, the Parties agree that Sections 3.3, 7.1, 7.2, 7.3, 7.4, 13.1,
13.2 and 14 shall survive the termination or expiration of this
Agreement, as the case may be, to the extent required thereby for the
full observation and performance by either or both of the Parties hereto.
12.4 In the event a Party breaches or defaults on any of its
obligations hereunder, the non-breaching Party's remedies shall be
limited to any or all of the following: (a) collecting any and all
amounts then due and payable from the breaching Party pursuant to this
Agreement; (b) seeking injunctive or similar equitable relief to compel
the breaching Party to comply with its obligations and other terms and
conditions of this Agreement; and (c) initiating procedures for
termination of this Agreement pursuant to Section 12.1 hereof. In the
event of any termination of this Agreement by UGI pursuant to Section 10
or 12.1 hereof or by VascA pursuant to Section 12.2 hereof, VascA, VascA
Affiliates and VascA sublicensees shall, upon the request of UGI, (i)
transfer and assign to UGI all clinical and other data in their
possession that relate to any Licensed Products, and all regulatory
filings relating thereto, (ii) cooperate with UGI in the transfer of all
Registrations of Licensed Products to UGI and execute and deliver any and
all instruments required to effect such transfers, and (iii) until such
time as such Registrations have been transferred to UGI, take all actions
reasonably requested by UGI to enable UGI to market the Licensed Products
under the Registrations therefor held by VascA, including executing and
filing any necessary amendments, supplements or other documents with the
relevant regulatory agencies. UGI shall reimburse VascA for VascA's
documented out-of-pocket costs reasonably incurred in connection with
VascA's compliance with the immediately preceding sentence.
13. Rights and Obligations During, Upon and Following Termination;
Confidentiality.
13.1 Termination of this Agreement, by expiration or for any
other reason, shall be without prejudice to (a) UGI's rights to receive
all payments due and accrued hereunder and unpaid on the effective date
of such termination, and (b) any other remedies which either Party may
then have hereunder. Except as provided in the previous sentence, VascA
shall upon termination or expiration of this Agreement have no obligation
to make any further payments to UGI.
13.2 During the term of this Agreement and for a period of five
(5) years from any termination or expiration hereof, the Parties agree to
keep in confidence and not to disclose to any third party, or use for any
purpose, except pursuant to, and in order to carry out, the terms and
objectives of this Agreement, any Confidential Information. As used
herein, "Confidential Information" shall mean all trade secrets or
confidential or proprietary information designated as such in writing by
the disclosing Party, whether by letter or by the use of an appropriate
stamp or legend, prior to or at the time any such trade secret or
confidential or proprietary information is disclosed by the disclosing
Party to the receiving Party. Notwithstanding the foregoing, information
which is orally or visually disclosed to the receiving Party by the
disclosing Party, or is disclosed in writing without an appropriate
letter, stamp or legend, shall constitute Confidential Information if the
disclosing Party, within 30 days after such disclosure, delivers to the
receiving Party a written document or documents describing such
information and referencing the place and date of such oral, visual or
written disclosure and the names of the employees or officers of the
receiving Party to whom such disclosure was made. The restrictions on the
disclosure and use of Confidential Information set forth in the first
sentences of this Section 13.2 shall not apply to any Confidential
Information which (a) was known by the receiving Party (as evidenced by
the receiving Party's written records) prior to disclosure by the
disclosing Party hereunder; (b) is or becomes part of the public domain
through no fault of the receiving Party; (c) is disclosed to the
receiving Party by a third party having a legal right to make such a
disclosure; or (d) is required to be disclosed by law or legal process
(provided that the other Party has received prior notice of such intended
disclosure if practicable under the circumstances). This Agreement shall
supersede any prior agreements as to the protection of confidential
information.
13.3 In order to enable VascA to exercise its rights to market
the Licensed Products, UGI hereby grants VascA a royalty-free license
throughout the Territory to use any trademark which UGI applied to the
Licensed Products at any time prior to the date hereof (the "Licensed
Trademarks").
14. Bankruptcy.
All rights and licenses granted under or pursuant to this
Agreement are, and shall otherwise be, deemed to be, for purposes of
Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to
"intellectual property" as defined under Section 101(52) of the U.S.
Bankruptcy Code. The parties to this Agreement shall retain and may fully
exercise all of their respective rights and elections under the U.S.
Bankruptcy Code. The parties further agree that, in the event of the
commencement of a bankruptcy proceeding by or against a party licensor
under the U.S. Bankruptcy Code, the licensee shall be entitled to a
complete duplicate of (or complete access to, as appropriate) any such
intellectual property and, to the extent necessary for the exercise of
the applicable license rights, all embodiments of such intellectual
property, and same, if not already in its possession, shall be promptly
delivered to the licensee (a) upon any such commencement of a bankruptcy
proceeding upon written request therefor by the licensee, unless the
licensor elects to continue to perform all its obligations under this
Agreement, or (b) if not delivered under (a) above, upon the rejection of
this Agreement by or on behalf of the licensor upon written request
therefor by the licensee; provided, however, that upon the licensor's (or
its successor's) written notification to the licensee that it is again
willing and able to perform all its obligations under this Agreement, the
licensee shall promptly return all such tangible materials to the
licensor.
15. Force Majeure.
Neither Party shall be considered in default or be liable to the
other Party for any delay in performance or non-performance caused by
circumstances beyond the reasonable control of such Party, including but
not limited to acts of God, explosion, fire, flood, war, whether declared
or not, accident, labor strike, sabotage order or decrees or any court or
action of governmental authority.
16. Succession and Assignment.
This Agreement may not be assigned or otherwise transferred by
either Party, whether voluntarily or by operation of law, without the
prior written consent of the other Party, which shall not be unreasonably
withheld or delayed; provided, that VascA may assign this Agreement or
any of its rights hereunder to any of its Affiliates (although, in such
event, VascA shall remain primarily responsible for all of its
obligations and agreements set forth herein, notwithstanding such
assignment). Any purported assignment in violation of the preceding
sentence shall be void. Any permitted assignee shall assume all
obligations of its assignor under this Agreement. No assignment shall
relieve either Party of responsibility for the performance of any accrued
obligation which such Party then has hereunder.
17. Notices.
Any notice or report required or permitted to be given or made
under this Agreement by one of the Parties to the other shall be in
writing and shall be deemed to have been delivered upon personal delivery
or (a) in the case of notices provided between Parties in the continental
United States, 48 hours after deposit in the mail or noon on the business
day next following deposit with a reputable overnight courier, or (b) in
the case of notices provided by telecopy (which notice shall be followed
immediately by an additional notice pursuant to clause (a) or (b) above
if the notice is of a default hereunder), upon completion of
transmissions to the addressee's telecopier, as follows (or at such other
addresses or facsimile numbers as may have been furnished in writing by
one of the Parties to the other as provided in this Section 17):
If to UGI: United-Guardian, Inc.
000 Xxxxxx Xxxx.
X.X. Xxx 00000
Xxxxxxxxx, XX 00000
Attention: Xxx Xxxxxx, President
Facsimile No.: (000) 000-0000
If to VascA: VascA, Inc.
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx, Vice President
Facsimile No.: (000) 000-0000
With a copy to: Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
18. Affiliates.
To the extent that any obligations or agreements are imposed
upon Affiliates of a Party under this Agreement, such Party shall cause
such Affiliates to fulfill such obligations and agreements.
19. Waiver.
Failure of either Party to require, in one or more instances,
performance by the other Party in strict accordance with the terms and
conditions of this Agreement shall not be deemed a waiver or
relinquishment of the future performance of any such terms and conditions
or of any other term and condition of this Agreement.
20. Entire Agreement and Amendment; Titles.
20.1 This Agreement constitutes the entire agreement between the
Parties with respect to the subject matter hereof. It cancels and
supersedes all prior written and oral agreements, understandings and
declarations between the Parties in respect of the subject matter of this
Agreement.
20.2 The titles of the Sections of this Agreement are for
general reference and convenience only and this Agreement shall not be
construed and interpreted by reference to such titles.
21. Severability.
In case one or several provisions of this Agreement should be
declared ineffective or void by any court of competent jurisdiction or a
government agency having jurisdiction, such declaration shall not affect
the remainder of this Agreement which will remain in full force and
effect. The provisions ineffective or void shall be replaced by new
effective ones which shall be in their sense and regarding the intentions
of the Parties in respect of this Agreement as similar as possible to the
provisions ineffective or void.
22. No Agency.
Nothing herein shall be deemed to constitute either Party as the
agent or representative of the other Party, or both Parties as joint
venturers or partners for any purpose. Except as set forth herein,
neither Party shall be responsible for the acts or omissions of the other
Party, and neither Party will have authority to act on behalf of,
represent or obligate the other Party in any way without prior written
authority from the other Party.
23. Governing Law; Dispute Resolution.
23.1 This Agreement is governed by, and construed in accordance
with, the laws of the State of Delaware without reference to choice of
law principles.
23.2 This Agreement is made on the basis of mutual confidence,
and it is understood that the differences, if any, during the duration of
this Agreement should freely be discussed between the two Parties. Any
dispute, controversy or claim arising out of, or relating to, this
Agreement, or the breach, termination or invalidity thereof, shall be
settled by arbitration conducted in New York, New York in accordance with
the rules of the American Arbitration Association. Notwithstanding the
foregoing, nothing in this Section 23.2 shall be construed as limiting in
any way the right of a Party to seek injunctive relief with respect to
any actual or threatened breach of this Agreement, which breach would
cause irreparable harm to the Party seeking such relief, from a court of
competent jurisdiction.
24. Modifications.
Any modification or addition to this Agreement shall be valid
only if it is confirmed in writing by the duly authorized officers of
both Parties.
IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be executed in duplicate by their duly authorized
representatives as of the date first above written.
UNITED-GUARDIAN, INC.
By:/s/ Xxxxxxx X. Globus
--------------------
Xxxxxxx X. Globus
Title: President
Date: December 4, 1998
VASCA, INC.
By:/s/ Xxxxxxx Xxxxxxx
-------------------
Xxxxxxx Xxxxxxx
Title: Vice President
Date: December 7, 1998
