THIS AGREEMENT CONTAINS CONFIDENTIAL TERMS WHICH HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
AGREEMENT
Agreement made this 28th day of July 1993, by and between ALZA
Corporation, a Delaware corporation ("ALZA"), and Iomed, Inc., a Utah
corporation ("IOMED").
R E C I T A L S
ALZA owns and has licensed certain patents and patent applications
pertaining to products which transport compounds across a biological membrane,
such as the skin, nails or mucosal surfaces, for local or systemic therapy,
under the influence of an electric potential gradient across such membrane.
IOMED also owns and has licensed certain patents and patent applications
pertaining to products which transport compounds across a biological membrane,
such as the skin, nails or mucosal surfaces, for local or systemic therapy,
under the influence of an electric potential gradient across such membrane. Each
party is desirous of acquiring certain rights under the other party's patents
and patent applications.
NOW THEREFORE, the parties agree as follows:
1. Definitions.
1.1 "Affiliate" shall mean a corporation or any other business
entity that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with, the designated
party. "Control" shall mean ownership of at least 50% of the shares of stock
entitled to vote for the election of directors in the case of a corporation and
at least 50% of the interests in profits in the case of a business entity other
than a corporation.
1.2 "ALZA Client" shall mean any individual or organization
which has heretofore entered, or which hereafter enters, into a development
agreement with ALZA or its Affiliate for the development of an ALZA Product
which is covered -by a valid claim of at least one issued patent in the IOMED
Patents.
1.3 "ALZA Patents" shall mean ****; any United States or
foreign patents that may issue based on any of the above patents or applications
or any continuation, division, re-issue, reexamination or substitution
applications based on any of the above applications, and any patents that may
issue based on any foreign applications that have been or may be filed
corresponding to any of the above patents or patent applications. A patent shall
be considered "Expired" upon its expiration, abandonment, cancellation,
disclaimer, or declaration of invalidity or unenforceability by a court or other
authority of competent jurisdiction from which no further appeal has or can be
taken. An "Unexpired" patent means a patent which has not Expired.
1.4 "ALZA Product" shall mean any product made or sold by
ALZA, by an Affiliate of ALZA and/or by an ALZA Client which product, but for
the license set forth in Section 2, would infringe one or more claims of at
least one issued unexpired patent
1.5 "Excluded Companies" shall mean **** as any affiliate
thereof or any successor in interest thereto, and any other entity which ****.
1.6 "Field" shall mean the transport of compounds across a
biological membrane, such as skin, under the influence of an electric potential
gradient across such membrane, solely for the purpose of inducing body sweat.
Field shall not mean the transport of compounds across a biological membrane,
such as skin, under the influence of an electric potential gradient across such
membrane for the primary purpose of achieving a therapeutic effect and wherein
inducing body sweat is incidental to said therapeutic effect.
1.7 "IOMED Client" shall mean any individual or organization
which has heretofore entered, or which hereafter enters, into a development
agreement with IOMED or its Affiliate for the development of an IOMED Product
which is covered by a valid claim of at least one patent of the ALZA Patents.
1.8 "IOMED Patents" shall mean ****; any United States or
foreign patents that may issue based on any of the above patents or on any
continuation, division, reissue, reexamination or substitution applications
based on any of the above, and any patents that may issue based on any foreign
applications that have been or may be filed corresponding to any of the above
patents or patent applications. A patent shall be considered "Expired"-upon its
expiration, abandonment, cancellation, disclaimer, or declaration of invalidity
or unenforceability by a court or other authority of competent jurisdiction from
which no further appeal has or can be taken. An "Unexpired" patent means a
patent which has not Expired.
1.9 "IOMED Product" shall mean any product made or sold by
IOMED, by an Affiliate of IOMED and/or by an IOMED Client which product, but for
the license set forth in Section 3, would infringe one or more claims of at
least one issued unexpired patent in the ALZA Patents or the **** Patent.
1.10 "Net Sales" shall mean the amount received from
commercial sales of an IOMED Product by IOMED, by an IOMED Affiliate and/or by
an IOMED Client to independent, unrelated parties in bona fide arm's-length
transactions, ****.
1.11 "Payment Computation Period" shall mean each three month
period, or any portion thereof, ending March 31, June 30, September 30, or
December 31 of each year during that portion of the term of this Agreement
during which payments under Sections 4.1(a) are owed to ALZA.
1.12 "**** Patent" shall mean **** and/or any reissued or
reexamined patent based thereon. The **** Patent is licensed to ALZA outside the
Field pursuant to a license agreement with ****.
2. License to ALZA.
2.1 IOMED hereby grants to ALZA a royalty-free nonexclusive
right and license under the IOMED Patents to manufacture, have others
manufacture, use, and sell any ALZA Product. The license granted hereunder shall
be for the life of the IOMED Patents and shall include the right to sublicense
ALZA Affiliates and ALZA Clients.
2.2 ALZA shall not grant any sublicense under the IOMED
PATENTS to an Excluded Company.
3. License to IOMED.
3.1 ALZA hereby grants to IOMED a royalty-free nonexclusive
right and license under the ALZA Patents to manufacture, have others
manufacture, use, and sell any IOMED Product which utilizes **** which contains,
or which is composed of, ****. The license granted hereunder shall be for the
life of the ALZA Patents and shall include the right to sublicense IOMED
Affiliates and IOMED Clients.
3.2 ALZA hereby grants to IOMED a royalty bearing nonexclusive
right and sublicense under the **** Patent to manufacture, have others
manufacture, use, and sell any IOMED Product for use outside the Field. The
license granted hereunder shall be for the life of the **** Patent and shall
include the right to sublicense IOMED Affiliates and IOMED Clients outside the
Field.
3.3 IOMED shall not grant any sublicense under the ALZA
Patents and/or the **** Patent to an Excluded Company.
3.4 Notwithstanding the provisions of Sections 1.5 and 3.3
concerning ****, Iomed shall have the right to sublicense **** under the ALZA
Patents but only for the purpose of marketing of ****, which **** are (i) made
by IOMED or an Affiliate of IOMED, and (ii) used for **** administration of
****, optionally with co-administration of a ****, in a clinical setting.
3.5 Notwithstanding the provisions of Sections 1.5 and 3.3,
either party upon receiving written consent of the other party, which written
consent shall be given or withheld in the other party's absolute discretion, may
grant to an Excluded Company a sublicense to a patent licensed hereunder for an
explicitly identified purpose.
4. Royalties and Other Payments.
4.1 Payments.
(a) In consideration of the license to IOMED under
the **** Patent as provided for in Section 3.2, IOMED shall pay to ALZA:
A royalty payment of **** of Net Sales greater than **** per year of IOMED
Product sold by IOMED, by an IOMED Client and/or by an Affiliate of IOMED under
the license granted to IOMED under Section 3.2.
(b) ALZA shall pay to **** of all payments received
by ALZA under Section 4.1(a).
(c) Within 30 days of receipt by ALZA, ALZA shall
refund to IOMED the remaining **** of said payments made under Section 4.1(a).
(d) All payments by one party to the other under
Sections 4.1(a) and 4.1(c) shall be made in accordance with Sections 5 and 6.
5. Accounting.
5.1 Within 90 days after the end of each Payment
Computation Period IOMED shall render an accounting to ALZA with respect to all
payments due for such Payment Computation Period. Such report shall indicate for
such Payment Computation Period the dollar amount of (i) Net Sales of IOMED
Product, and (ii) the royalty payments calculated under Section 4.1(a) due and
payable to ALZA; provided, however, that if IOMED shall not have received from
any sublicensee or distributor a report of its sales, then such sales may be
included in the next quarterly report. IOMED shall keep accurate records in
sufficient detail to enable the payments due hereunder to be determined.
5.2 At ALZA's request, IOMED shall permit an
independent certified public accountant selected by ALZA to have access and
examine, once in each calendar year during regular business hours and upon
reasonable notice to IOMED, to such of the records of IOMED as may be necessary
to verify the accuracy of the reports and payments made under this Agreement,
but said accountant shall not disclose to ALZA any information except that which
should properly have been contained in such reports. The parties agree that
information furnished as a result of any such examination shall be limited to a
written statement by such certified public accountant to the effect that they
have reviewed the books of account of IOMED and either (i) that the amounts of
the payments due or charges made under this Agreement are in conformity with
such books of account and the applicable provisions of this Agreement or (ii)
setting forth any required adjustments. The fees and expenses of the accountant
performing such verification shall be borne by ALZA. If any such audit shows any
underpayment or overcharge, a correcting payment or refund shall be made within
30 days after receipt of the written statement described above. The right of
review of each quarterly account shall terminate two years after ALZA's receipt
thereof.
6. Times and Currencies of Payment.
6.1 All payments required to be made hereunder shall be made
in U.S. dollars. Payments shown by each report submitted pursuant to Section 5.1
to be due and payable by IOMED to ALZA shall accompany each such report. Any and
all taxes due or payable by or on behalf of ALZA on such payments or with
respect to the remittance thereof and required to be paid by IOMED shall be
deducted from such payments and shall be paid by IOMED to the proper taxing
authorities, and proof of payment shall be secured and sent to ALZA as evidence
of such payment.
6.2 Late Payments. All payments not made when due hereunder
shall bear interest at the ****.
7. Reexamination and Interference Regarding an ALZA Patent and/or
an IOMED Patent.
The parties shall pursue the following course of action with
respect to any Reexamination proceeding concerning either an ALZA Patent or an
IOMED Patent, any suit brought under 35 USC ss.145 concerning either an ALZA
Patent or an IOMED Patent, and/or any interference between an IOMED Patent and
an ALZA Patent. ALZA, in the case of an IOMED Patent, and IOMED, in the case of
an ALZA Patent, shall not in any way assist the US Patent Office in any such
Reexamination or any suit brought under 35 USC ss.145, unless ordered by a court
to do so. The parties agree to promptly negotiate in good faith to settle any
such interference between an ALZA Patent and an IOMED Patent, if and when an
interference is declared, in a manner consistent with the spirit and scope of
this agreement.
8. Commercialization.
8.1 Neither party shall be under any obligation to use
diligence or otherwise be under any obligation to develop, manufacture, use
or-sell any product in the United States or any foreign country.
9. Notice of Patents.
9.1 ALZA (in the case of a patent in the ALZA Patents) and
IOMED (in the case of a patent in the IOMED Patents) shall each promptly notify
the other party of the reissue, reexamination, lapse, revocation, surrender,
invalidation or abandonment of any such patent; provided, however, that neither
party shall revoke, surrender, abandon or permit to lapse any such patent
without 60 days prior written notice to the other party of its intention to do
so. In the event of such notice, the other party shall have the right to
continue the prosecution or maintenance of the patent at its own expense.
10. Effective Date and Term.
10.1 This Agreement will become effective on the day and year
written in the first paragraph of this Agreement and, unless terminated in
accordance with any of the provisions hereof, shall remain in full force and
effect for the life of the ALZA Patents, the **** Patent and IOMED Patents.
11. Termination.
11.1 Either party may, in its discretion, terminate this
Agreement in the event that the other party:
(a) breaches any material obligation hereunder and
such breach continues for a period of 60 days after written notice thereof; or
(b) enters into any proceeding, whether voluntary or
otherwise, in bankruptcy, reorganization or arrangement for the appointment of a
receiver or trustee to take possession of its assets or any other proceedings
under any law for the relief of creditors or makes an assignment for the benefit
of its creditors.
11.2 Termination of this Agreement for any reason shall be
without prejudice to:
(i) ALZA's right to receive all payments accrued
under Section 4.1(a) prior to the effective date of such termination; and
(ii) any other remedies which either party may then
or thereafter have hereunder or otherwise.
12. Assignment.
12.1 Either party may assign its rights under this Agreement
to any Affiliate or any third party with which the party is merged or
consolidated or by which the party is acquired or which purchases, directly or
indirectly, all or substantially all of its assets; provided, however, that (1)
neither party may assign its rights under this agreement to an Excluded Company
without first receiving written consent from the other party, which written
consent shall be given or withheld in the other party's absolute discretion, and
(2) any successor shall execute an agreement, in form reasonably satisfactory to
said other party assuming each of the assigning party's obligations hereunder.
ALZA (in the case of a patent within the ALZA Patents) and IOMED (in the case of
a patent within the IOMED Patents) may not otherwise assign the right, title and
interest in any such patent to a third party. This Agreement shall not otherwise
be assignable by either party without the prior written consent of the other
party.
13. Arbitration.
13.1 Disputes; Service. In case any dispute arises out of this
Agreement, the parties will endeavor to settle such dispute amicably. If the
parties fail to agree, any such dispute shall be finally settled by arbitration
conducted in San Francisco, California in accordance with the then existing
rules of the American Arbitration Association, and judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof. The parties hereby agree that service of any notices in the course of
such arbitration at their respective addresses as provided in Section 16 of this
Agreement shall be valid and sufficient.
13.2 Arbitrators. In any arbitration pursuant to Section 13.1,
the award shall be rendered by a majority of the members of a board of
arbitration consisting of three members, all of whom will be appointed by the
parties jointly or, if the parties cannot agree as to three arbitrators within
30 days after commencement of the arbitration proceeding, one arbitrator shall
be appointed by each party within 45 days after the commencement of the
arbitration proceeding, and the third shall be appointed by mutual agreement of
the two appointed arbitrators. In the event of failure of said two arbitrators
to agree upon the third arbitrator within 75 days after commencement of the
arbitration proceeding, the third arbitrator shall be appointed by the American
Arbitration Association in accordance with its then existing rules.
Notwithstanding the forgoing, if any party shall fail to appoint an arbitrator
within the specified time period, such arbitrator as well as the third
arbitrator shall be appointed by the American Arbitration Association in
accordance with its then existing rules. For the purposes of this Section 12.2,
the "commencement of arbitration proceeding" shall be deemed to be the date upon
which a written demand for arbitration is received by one party from the other.
13.3 Costs and Attorneys Fees. In any arbitration pursuant to
Section 13, the party receiving the award shall be reimbursed for all reasonable
arbitration costs, including attorneys fees if any, by the other party.
14. Representations and Warranties.
14.1 Neither ALZA, in the case of any of the ALZA Patents and
the **** Patent, nor IOMED, in the case of any of the IOMED Patents, makes (i)
a warranty or representation as to the validity or scope of any of said patents;
or (ii) a warranty or representation that anything made, used, sold, or
otherwise disposed of under any license granted in this Agreement is or will be
free from infringement of a patent of a third party.
14.2 Neither ALZA, in the case of an IOMED Product, nor IOMED,
in the case of an ALZA Product, assumes any responsibility with respect to the
other party's use, sale or other disposition of any said product.
15. Patent Markings.
15.1 ALZA, in the case of an ALZA Product which is made and
sold by ALZA or an Affiliate of ALZA, agrees to xxxx said ALZA Product with the
word "Patent" or "Patents" and the number or numbers of the IOMED Patents
applicable thereto.
15.2 ALZA, in the case of an ALZA Product which is made or
sold by an ALZA Client or its Affiliate, agrees to advise said ALZA Client to
xxxx said ALZA Product with the word "Patent" or "Patents" and the number or
numbers of the IOMED Patents applicable thereto.
15.3 IOMED, in the case of an IOMED Product which is made or
sold by IOMED or an Affiliate of IOMED, agrees to xxxx said IOMED Product with
the word "Patent" or "Patents" and the number or numbers of the ALZA Patents and
the **** Patent applicable thereto.
15.4 IOMED in the case of an IOMED Product which is made or
sold by an IOMED Client or its Affiliate, agrees to advise said IOMED Client to
xxxx said IOMED Product with the word "Patent" or "Patents" and the number or
numbers of the ALZA Patents and the **** Patent applicable thereto.
16. Notices.
16.1 Any notice or other communication required or permitted
to be given to either party under this Agreement shall be in writing and shall
be delivered by hand or registered mail, postage prepaid and return receipt
requested, addressed to each party at the following addresses or such other
addresses as may be designated by notice pursuant to this Section 16:
If to IOMED: IOMED, Inc.
0000 Xxxx 0000 Xxxxx
Xxxx Xxxx Xxxx, XX 00000
Attention: President
If to ALZA: ALZA CORPORATION
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Vice-President, Legal
Any notice or communication given in conformity with this Section 16
shall be deemed to be effective when received by the addressee, if delivered by
hand, and five days after mailing, if mailed.
17. Counterparts.
17.1 This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an-original
and all of which when taken together shall constitute this Agreement.
18. Governing Law.
18.1 This Agreement shall be governed by and construed in
accordance with the laws of the State of California as applied between residents
of that state entering into contracts wholly to be performed in that state.
19. Severability.
19.1 If any provision of this Agreement shall be held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless,, continue in full force without being
impaired or invalidated in any way.
20. Amendments.
20.1 No amendment, modification or addition hereto shall be
effective or binding on either party unless 17 set forth in writing and executed
by a duly authorized representative of the party to be charged.
21. Waiver.
21.1 No waiver-of any right under this Agreement shall be
deemed effective unless contained in a writing signed by the party charged with
such a waiver, and no waiver of any breach or failure to perform shall be deemed
to be a waiver of any future breach or failure to perform or of any other right
arising under this Agreement.
22. Headings.
22.1 The section headings contained in this Agreement are
included for convenience only and form no part of the agreement between the
parties.
23. Entire Agreement.
23.1 This Agreement constitutes the entire agreement between
the parties as to the subject matter hereof and supersedes and replaces all
other agreements, understandings or arrangements, whether oral or in writing,
between the parties relating to the subject matter hereof.
IN WITNESS WHEREOF, the parties have executed thisAgreement on the date
first set forth above. IOMED, Inc.
By: /s/ Xxx X. Xxxxxxxxxxx
Xxx X. Xxxxxxxxxxx
President and
Chief Executive Officer
ALZA Corporation
By: /s/ Xxxx X. Xxxx
Xxxx X. Xxxx
President
