AMENDED AND RESTATED STRATEGIC COLLABORATION AGREEMENT AMONG EPIX MEDICAL, INC. MALLINCKRODT INC. (a Delaware corporation) AND MALLINCKRODT INC. (a New York corporation) DATED AS OF JUNE 9, 2000
Exhibit 10.6
[CERTAIN INFORMATION CONTAINED HEREIN HAS BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER RULE 24B-2 OF THE SECURITIES AND EXCHANGE ACT OF
1934. THE REDACTED MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION.]
AMENDED AND RESTATED
AMONG
EPIX MEDICAL, INC.
MALLINCKRODT INC.
(a Delaware corporation)
AND
MALLINCKRODT INC.
(a New York corporation)
DATED AS OF JUNE 9, 2000
[EXHIBITS AND OTHER SCHEDULES REFERENCED HEREIN HAVE BEEN OMITTED AND WILL BE
FURNISHED SUPPLEMENTALLY TO THE COMMISSION UPON REQUEST.]
AMENDED AND RESTATED
THIS AMENDED AND RESTATED STRATEGIC COLLABORATION AGREEMENT dated as of
June 9, 2000 (the “Agreement”) is made by and among EPIX MEDICAL, INC. (formerly
known as Metasyn, Inc.), a Delaware corporation having its principal place of
business at 00 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000 X.X.X.
(“EPIX”), MALLINCKRODT INC. (formerly known as Mallinckrodt Medical, Inc.), a
Delaware corporation having its principal place of business at 000 XxXxxxxxx
Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 and MALLLNCKRODT INC. (formerly known as
Mallinckrodt Group Inc.), a New York corporation having its principal place of
business at 000 XxXxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (both
MALLINCKRODT entities referred to collectively herein as “MKG”), and amends and
restates, from and after the date hereof, the Strategic Collaboration Agreement
dated as of August 30, 1996 (as twice amended on September 10, 1998 and July 9,
1999) between MKG and METASYN (the predecessor in interest of EPIX).
WHEREAS, EPIX and MKG wish to modify their existing relationship and
the existing collaboration agreement (as heretofore amended) between them (i) to
permit EPIX to enter into that certain Strategic Collaboration Agreement of even
date herewith (the “Collaboration Agreement”) by and between EPIX and Schering
Aktiengesellschaft, a German corporation having its principal place of business
at 00000, Xxxxxx, Xxxxxxx (“Schering”); and (ii) to permit MKG to enter into
that certain Manufacturing and Supply Agreement of even date herewith by and
between MKG and Schering (the “Manufacturing Agreement”); and
WHEREAS, MKG has provided to EPIX all necessary written consents so as
to permit EPIX to enter into the Collaboration Agreement and the Manufacturing
Agreement, and EPIX and MKG therefore desire to enter into this Amended and
Restated Strategic Collaboration Agreement.
For purposes of this Agreement, the terms defined in this Article shall
have the meanings specified below:
1.1. “AFFILIATE” shall mean any corporation or other entity which
directly or indirectly controls, is controlled by or is under common control
with a Party to this Agreement. A corporation or other entity shall be regarded
as in control of another corporation or entity if it owns or directly or
indirectly controls more than fifty percent (50%) of the voting stock or other
ownership interest of the other corporation or entity, or if it possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of the corporation or other entity or the power to elect
or appoint fifty percent (50%) or more of the members of the governing body of
the corporation or other entity.
1.2. “BLOOD POOL MAGNETIC RESONANCE CONTRAST AGENTS” shall mean agents
injected in the cardiovascular system which satisfy both of the following two
criteria: (i) with respect to any Region: (a) the agent has an approved
indication for magnetic resonance angiography; or (b) [ * ]. The types of agents
include, but are not limited to, albumin-binding agents, iron particles, or
polymeric/cascade molecules with attached chelates.
1.3. “CMC COSTS” shall mean external Costs and direct and indirect
internal Costs associated with meeting the chemistry manufacturing and control
requirements of the FDA and corresponding requirements in the EU and other
countries of the world.
1.4. “COLLABORATION AGREEMENT” shall have the meaning set forth in the
recitals. A true and accurate copy of the Collaboration Agreement is attached
hereto as EXHIBIT A.
1.5. “COMPOUND MS-325” means EPIX’s proprietary Blood Pool Magnetic
Contrast Agent, having the following chemical name: Trisodium — [(2-(R) — [(4,4
- diphenylcyclonexyl) phosphonooxymethyl] — diethylenetriaminepentacetato)
(aquo), gadolinium (III)], together with any fragments, sub-units,
modifications, formulations or derivatives thereof.
1.6. “COST” or “COSTS” shall mean expenses incurred by the Parties,
determined in a reasonable manner in accordance with GAAP. The Parties recognize
that financial records of Schering are and shall continue to be maintained in
accordance with international accounting standards rather than GAAP. The
Collaboration Agreement provides that Schering will use reasonable commercial
efforts to identify for EPIX material differences in the recognition of expenses
under GAAP and international accounting standards, and in cases where there are
material differences to use the GAAP method of recognition. The Collaboration
Agreement does not require Schering to produce financial reports in accordance
with GAAP if Schering does not keep such reports in accordance with GAAP as part
of its normal accounting and financial reporting practices.
| * | Confidential information omitted and filed with the Commission. |
2
1.7. “COSTS OF GOODS SOLD” shall mean the aggregate of the following,
determined in a reasonable manner in accordance with GAAP: (i) Costs incurred by
Schering and EPIX relating to Compound MS-325 and Licensed Products for
commercial distribution under the Manufacturing Agreement, and (ii) all direct
and indirect manufacturing, packaging and labeling Costs incurred by Schering
and EPIX, not included in (i) above, but specifically allowable to the
production of Licensed Products including overhead Costs directly related to the
manufacturing, packaging and labeling functions, and (iii) manufacturing
variances attributable to charges of MKG only as more fully described below, but
not including General and Administrative Expenses or any Costs related to idle
capacity. Costs of Goods Sold shall not include royalties payable to MGH and
other Third Parties in connection with Licensed Products or CMC Costs.
The Collaboration Agreement provides that Schering’s Costs of Goods
Sold shall be based on Schering’s Planned Costs calculated on a per unit basis,
once per year. Schering’s “Planned Costs” is defined in the Collaboration
Agreement to mean the standard Costs established by Schering for its internal
accounting system which is intended to materially comply with GAAP, consistently
applied. The Collaboration Agreement provides that such Planned Costs shall be
provided to EPIX at least thirty(30) days before the beginning of the calendar
year in sufficient detail so as to enable EPIX to reasonably review them. The
Collaboration Agreement also provides that except for Costs attributable to
charges of MKG under the Manufacturing Agreement, Planned Costs shall not be
reconciled with and adjusted to actual Costs, and any such variances from plan,
shall be considered by Schering in setting the Planned Costs for the next
calendar year.
The Collaboration Agreement also provides that Schering shall reconcile
and adjust Planned Costs to actual Costs for Costs of Goods Sold attributable
only to charges of MKG under the Manufacturing Agreement as of the end of each
calendar year, with the resulting variance being applied to the first Profit
Payment and Royalty Payment due after the end of first quarter of the calendar
year following the completion of the applicable calendar year. For the purpose
of calculating Profit Payments pursuant to Section 7.6 of the Collaboration
Agreement and Royalty Payments under Sections 7.7 and 7.8 of the Collaboration
Agreement, reconciliation of Cost variances attributable to charges of MKG shall
be allocated to the United States, EU, Japan, and elsewhere based on the number
of units of the applicable Licensed Product sold in each respective portion of
the Territory.
The Collaboration Agreement further provides that in the event that
Schering or an Affiliate of Schering becomes the manufacturer of Compound MS-325
and Licensed Products, EPIX and Schering shall negotiate in good faith Costs of
Goods Sold allowable under a new manufacturing agreement between EPIX and
Schering. EPIX and Schering have further agreed pursuant to the Collaboration
Agreement that: (i) Schering will not manufacture Compound MS-325 and Licensed
Products on terms less favorable than those provided by MKG; PROVIDED, THAT, if
Schering becomes the manufacturer of Compound MS-325 and Licensed Products
because MKG is unwilling or unable to manufacture Compound MS-325 and Licensed
Products under the terms of the Manufacturing Agreement and Schering’s Costs of
manufacturing are higher than those of MKG, then the price to be charged by
Schering shall reflect such higher Costs; and (ii) that the terms of the new
agreement will take into consideration any CMC Costs paid or required to be paid
by EPIX.
3
The Collaboration Agreement also provides that CMC Costs incurred by
Schering or a Schering Affiliate shall not be included in Costs of Goods Sold or
Development Costs, and shall be borne solely by Schering or such Schering
Affiliate, unless, to the extent permitted under the Manufacturing Agreement,
Schering or such Schering Affiliate takes over manufacturing responsibilities
due to the inability or unwillingness of MKG to manufacture all or part of the
requirements of Schering of Compound MS-325 and related Licensed Products, in
which case: (x) pursuant to the Collaboration Agreement, Schering has agreed to
pursue all available legal remedies against MKG as a result of MKG’s inability
or unwillingness to perform under the Manufacturing Agreement; and (y) CMC Costs
incurred by Schering or a Schering Affiliate shall be included in Development
Costs (net of any recovery relating to CMC Costs from MKG pursuant to the
Manufacturing Agreement).
1.8. “DAIICHI RADIOISOTOPE LABORATORIES, LTD.” or “DRL” means the
Japanese corporation having its principal place of business at 00-00, Xxxxxxxx
0-xxxxx Xxxx-Xx, Xxxxx, 000 Xxxxx.
1.9. “DEVELOPMENT COSTS” shall mean all internal (direct and indirect)
and Third Party expenses incurred by EPIX and Schering in the United States and
the EU in connection with the Development Program, determined in a reasonable
manner in accordance with GAAP. Such expenses include, but are not limited to
(i) direct labor (salaries, wages, incentive program Costs, awards and employee
benefits but excluding any employee benefits associated with equity incentive
plans); (ii) materials and supplies; (iii) allocated Costs for building space
directly dedicated to the development of the Licensed Products (including rent,
depreciation, amortization and maintenance) but excluding expenses relating to
unused capacity, development of other products, and amortization of property,
plant and equipment not directly related to development of Licensed Products in
accordance with the Development Plan; (iv) Third Party contracts and consulting
expenses incurred for services in connection with the Development Program; (v)
allocated Costs for information technology directly dedicated to the development
of the Licensed Products and (vi) travel and entertainment, telephone,
recruiting, training (both internal and external), clinical trial insurance,
software, personal computer equipment and support Costs and freight and delivery
expenses. Such Costs shall not include General and Administrative Expenses or
expenses incurred from departments that are not directly engaged in the
development of the Licensed Products, including but not limited to, finance and
procurement, corporate administration, legal (both external and internal
expenses), human resources, business development and licensing, Sales and
Marketing (as hereinafter defined in Section 1.38) except for Costs of
pre-launch marketing activities incurred prior to the Launch Preparation Date as
more fully described in Section 5.1.2 of the Collaboration Agreement, and
investor relations.
Development activities for which Development Costs are incurred include
but are not limited to pre-clinical and clinical work (Phase I-IV trials (such
Phase IV trials to be intended to support approval of an NDA, MAA or a
supplement or amendment thereto, required as a condition of approval of an NDA,
MAA or a supplement or amendment thereto, or required to support continued
approval of an NDA, MAA or a supplement or amendment thereto)),
4
regulatory filings, Cost of compound for pre-clinical and clinical work (Phase
I-IV trials, as described above in this sentence), Costs of pre-launch marketing
activities incurred prior to the Launch Preparation Date, and all Costs of
Compound MS-325 related to regulatory filings in the United States and the EU.
Development Costs shall not include CMC Costs unless EPIX or Schering is forced
to take over such function from MKG at which time such Costs will be included by
EPIX or Schering, as the case may be, in Development Costs. In the event that
Schering or a Schering Affiliate becomes the manufacturer of Compound MS-325 and
Licensed Products, CMC Costs incurred by Schering or a Schering Affiliate
relating to Compound MS-325 and Licensed Products for use in the Development
Program shall not be included in Development Costs, and shall be borne by
Schering or such Schering Affiliate, unless Schering or such Schering Affiliate,
in accordance with the terms of the Manufacturing Agreement, takes over
manufacturing responsibilities due to the inability or unwillingness of MKG to
manufacture all or part of the requirements of Schering of Compound MS-325 and
Licensed Products, in which case: (x) pursuant to the Collaboration Agreement
Schering has agreed to pursue all available legal remedies against MKG as a
result of MKG’s inability or unwillingness to perform under the Manufacturing
Agreement; and (y) CMC Costs of Schering or a Schering Affiliate relating to
Compound MS-325 and Licensed Products for use in the Development Program shall
be included in Development Costs (net of any recovery from MKG relating to CMC
Costs).
1.10. “DEVELOPMENT PHASE” shall have the meaning set forth in the
Collaboration Agreement.
1.11. “DEVELOPMENT PROGRAM” shall have the meaning set forth in the
Collaboration Agreement.
1.12. “EFFECTIVE DATE” shall mean the date first written above.
1.13. “EPIX PATENT RIGHTS” shall have the meaning set forth in the
Collaboration Agreement.
1.14. “EPIX TECHNOLOGY” shall have the meaning set forth in the
Collaboration Agreement.
1.15. “EU” shall mean the European Union, as it may be constituted from
time to time.
1.16. “EUROPE” shall mean the EU, all countries located wholly or
partly on the continent of Europe that are not member states of the EU,
Australia, New Zealand, South Africa, and Turkey.
1.17. “FDA” shall mean the United States Food and Drug Administration.
1.18. “FIELD” shall mean all indications comprehended by the definition
of the term “Blood Pool Magnetic Resonance Contrast Agents” and magnetic
resonance imaging.
1.19. “FIRST COMMERCIAL SALE” of any Licensed Product shall mean the
first sale for use or consumption by the general public of such Licensed Product
in a country when such sale has
5
been made with the required marketing and pricing approval granted by the
governing health authority of such country.
1.20. “GAAP” shall mean United States Generally Accepted Accounting
Principles.
1.21. “GENERAL AND ADMINISTRATIVE EXPENSES” shall mean all direct and
indirect expenses incurred by Schering and EPIX in connection with departmental
units that are not directly engaged in the development, manufacturing, or sales
and marketing of Compound MS-325 and Licensed Products. General and
Administrative Expenses shall include, but not be limited to, charges falling
within the following groups, to the extent such charges are not related to the
determination of Costs of Goods Sold based on the historical accounting
practices of the party (i.e., either EPIX or Schering) seeking to claim the
charge, consistently applied: finance, procurement, order entry, corporate
administration, legal (both external and internal expenses), human resources,
business development and licensing and investor relations. General and
Administrative Expenses shall exclude the following groups of charges: clinical
trial insurance Costs, facilities and information technology. Such expenses
shall be determined in accordance with GAAP, consistently applied.
1.22. “GROSS PROFITS” with respect to any Licensed Product shall mean
Net Sales minus Costs of Goods Sold.
1.23. “IND” shall mean an investigational new drug application or its
equivalent filed with the FDA and necessary for beginning clinical trials in
humans, or any comparable application filed with the regulatory authorities of a
country other than the United States prior to beginning clinical trials in
humans in such country, with respect to the Licensed Products.
1.24. “INDEMNITEE” shall have the meaning set forth in Section 7.5.
1.25. “INDEMNITOR” shall have the meaning set forth in Section 7.5.
1.26. “LICENSED PRODUCT” shall mean any product comprising Compound
MS-325.
1.27. “MAA” shall mean a marketing approval application filed with the
appropriate regulatory authority in a country other than the United States,
after completion of human clinical trials to obtain marketing approval for a
Licensed Product in such country.
1.28. “MAGNEVISt” shall mean the extracellular magnetic resonance
product gadopentatate dimeglumine sold by Schering, for the United States market
pursuant to NDA # NDA # 19-596.
1.29. “MANUFACTURING AGREEMENT” shall have the meaning set forth in the
recitals. A true and accurate copy of the Manufacturing Agreement is attached
hereto as EXHIBIT B.
1.30. “MGH LICENSE” shall have the meaning set forth in the recitals.
1.31. “MGH PATENT RIGHTS” shall have the meaning set forth in the
Collaboration Agreement.
6
1.32. “MKG PATENT RIGHTS” shall mean any patent rights of MKG
identified in EXHIBIT C, and such other patent rights of MKG that the Parties
may mutually agree from time to time are necessary for or useful in the making,
using or selling of Licensed Products in the Territory.
1.33. “NDA” shall mean a new drug application filed with the FDA to
obtain marketing approval for a Licensed Product in the United States.
1.34. “NET SALE” shall mean the invoiced sales price per unit for each
of the Licensed Products billed by a EPIX or Schering or their respective
Affiliates, or any distributor of either who is not an Affiliate, or, to the
extent permitted in Section 3.1.2 of the Collaboration Agreement, by permitted
sublicensees of Schering to independent customers, less actual (a) credited
allowances to such independent customers for such Licensed Products which were
spoiled, damaged, out-dated or returned; (b) freight and insurance Costs charged
to such customers; (c) quantity and promotional discounts actually allowed and
taken; (d) sales, use, value added, and other taxes or governmental charges
(such as customs duties) incurred in connection with the sale, exportation or
importation of the Licensed Products in finished packaged form; (e) charge back
payments and/or rebates or other fees provided to distributors, wholesalers, or
other purchasers and managed health care organizations or federal, state and
local governments, their agencies, purchasers and reimbursers, including
reimbursements to social security organizations; and (f) volume-related customer
program Costs which are required by the customer and which are independent of
Schering marketing initiatives. The transfer of any Licensed Product by Schering
or EPIX or one of their respective Affiliates to another of their respective
Affiliates shall not be considered a sale; in such cases, Net Sales shall be
determined based on the invoiced sales price by the Affiliate to its customer,
less the deductions allowed under this Section.
EPIX and MKG recognize that (a) Schering’s customers may include
persons in the chain of commerce who enter into agreements with Schering as to
price even though title to the Licensed Product does not pass directly from
Schering to such customers, and even though payment for such Licensed Product is
not made by such customers directly to Schering; and (b) in such cases, the
Collaboration Agreement provides that chargebacks paid by Schering to or through
a Third Party (such as a wholesaler) can be deducted by Schering from gross
revenue in order to calculate Net Sales. Any deductions listed above which
involve a payment by Schering shall be taken as a deduction against aggregate
sales for the quarter in which the payment is made.
The Collaboration Agreement provides that Net Sales will be accounted
for in accordance with international accounting standards consistently applied.
Pursuant to the Collaboration Agreement, Schering has agreed that in any
instance where the calculation of Net Sales according to international
accounting standards differs materially from GAAP such that the result of such
calculation under international accounting standards would cause EPIX to
improperly account for such revenue under GAAP, Schering will provide EPIX with
any and all information requested by EPIX regarding the calculation of Net Sales
to enable EPIX to comply with GAAP in recognizing revenue from such Net Sales.
7
The Collaboration Agreement provides that, without obtaining the prior
approval of EPIX (which approval shall not be unreasonably withheld), Schering
will not sell a combination of products and/or services which include one or
more Licensed Products, (i) for a single price, or (ii) on other terms of
purchase not separately identifying a price per product. Schering has also
agreed, under the Collaboration Agreement, that records of the deductions
referred to above for each Licensed Product shall be maintained in a manner that
allows audit of such deductions pursuant to Section 7.11 of the Collaboration
Agreement.
The Collaboration Agreement also provides that Schering will not offer
customers discounted prices for any Licensed Product (i) for the purpose of
inducing the customer to purchase other products or services of Schering without
obtaining the prior approval of EPIX (such approval not to be unreasonably
withheld) as to the fair apportionment of sales value to Licensed Product and
any related Costs; or (ii) for reasons other than the good faith sale of a
Licensed Product at a reasonable, mutually beneficial profit margin in view of
the circumstances applicable to the relevant market.
1.35. “OPERATING MARGIN” shall mean for a particular quarter, the
aggregate Net Sales of, and any other revenues relating to, Licensed Products
for such quarter including, without limitation, royalties and any other payments
from sublicensees, less (i) Costs of Goods Sold, and (ii) Sales and Marketing
Costs.
1.36. “PARTY” shall mean EPIX or MKG.
1.37. “PATENT RIGHTS” shall mean MGH Patent Rights and EPIX Patent
Rights, collectively.
1.38. “PROGRAM” shall mean the collaboration between EPIX and MKG
contemplated by this Agreement.
1.39. “PROFIT PAYMENT” shall have the meaning set forth in Section
3.5.1(a).
1.40. “PROMISSORY NOTE” shall have the meaning set forth in Section
2.7.
1.41. “REGION” shall mean any one of the United States, Europe (as
defined herein), Japan (if applicable) and the Rest of World.
1.42. “REST OF WORLD” shall mean all countries of the world other than
the United States, Europe (as defined herein) and Japan (if applicable).
1.43. “ROYALTY PAYMENT” shall have the meaning set forth in Section
3.6.1.
1.44. “SALES AND MARKETING COSTS” shall mean all direct and indirect
Costs incurred by Schering and EPIX in connection with the sale and marketing of
the Licensed Products, including but not limited to Costs charged to detailing
and selling, advertising, and marketing and distribution, reasonably determined
in accordance with GAAP. Such expenses include, but are not limited to: (i)
direct labor (salaries, wages, commissions, incentive program Costs,
8
awards and employee benefits but excluding any employee benefits associated with
equity incentive plans); (ii) materials and supplies; (iii) allocated Costs for
building space directly dedicated to the sales and marketing of the Licensed
Products (including rent, depreciation, amortization and maintenance) but
excluding expenses relating to unused capacity, sales and marketing of other
products, and amortization of property, plant and equipment not directly related
to sales and marketing of Licensed Products in accordance with the Annual
Marketing Plan; (iv) allocated Costs for information technology directly
dedicated to the sales and marketing of the Licensed Products; (v) Third Party
consulting and contract service Costs, (vi) advertising, promotion, physician
training Costs and Cost of grants, use taxes associated with distribution of
samples and marketing materials; (vii) Costs of Phase IV trials not included in
Development Costs (including product Costs), (viii) professional education
programs and meeting Costs (POA, national sales meetings, etc.), (ix) samples of
Licensed Products, travel and entertainment, fleet vehicle Costs, telephone,
recruiting, training (both internal and external Costs), rental fieldforce
Costs, software, personal computer equipment and support Costs, freight and
delivery expenses, Costs of inventory management , billing (as included in
distribution), drug safety, drug regulatory affairs, and inventory and accounts
receivable carrying Costs specifically related to Licensed Products, provided,
that, when the calculation of such carrying Costs (as more fully described in
EXHIBIT E of the Collaboration Agreement) results in EPIX incurring the net
carrying Costs Schering shall apply such net credit as a deduction from Sales
and Marketing Costs; and (x) actual bad debts written off in connection with
sales of each Licensed Product (net of any recoveries of amounts previously
written off as bad debts for such Licensed Product). Such Costs shall not
include General and Administrative Expenses or expenses incurred from
departments that are not directly engaged in or supporting the efforts of the
sales and marketing of the Licensed Products including but not limited to
finance and procurement (including order entry), corporate administration, legal
(both external and internal expenses), human resources, business development and
licensing, research and development, and investor relations.
Sales and Marketing Costs shall include the Costs of pre-launch
promotional and educational programs expended after the Launch Preparation Date
as described in Section 5.1.2 of the Collaboration Agreement, which shall be
deducted from Operating Margin for the first calendar quarter following First
Commercial Sale of the relevant Licensed Product. Sales and Marketing Costs
chargeable by either Schering or EPIX shall be in accordance with the Annual
Marketing Plan as more fully described in Section 5.1 of the Collaboration
Agreement.
Notwithstanding the above, pursuant to the Collaboration Agreement,
Schering has agreed that with respect to charges directly related to sales
volume (including but not limited to freight, billing, shipping and warehousing
charges), the ratio of total Sales and Marketing Costs derived from such charges
allowable under the Collaboration Agreement to Net Sales of Licensed Products by
Schering shall not exceed the ratio of such Sales and Marketing Costs derived
from such charges to Net Sales (when calculated using the definitions for Net
Sales and Marketing Costs herein as applied to the Magnevist product) for
Schering’s Magnevist product. The relevant cost driver of each cost component
(i.e. per unit Costs) will be used when considering this comparison, and may
vary by Cost type. The Collaboration Agreement further provides that when Costs
comparisons of Licensed Products are not equivalent to or less than
9
those for Schering’s Magnevist product for bona fide business reasons, EPIX and
Schering shall agree on the proper ratio to be used.
1.45. “SCHERING” shall have the meaning set forth in the recitals.
1.46. [ * ] shall mean that certain [ * ]dated as of [ * ] between MKG
and [ * ].
1.47. “TERRITORY” shall mean the United States, Europe, and the Rest of
World, but shall exclude Japan (subject to Section 2.2).
1.48. “THIRD PARTY” shall mean any entity other than EPIX or Schering
and their respective Affiliates.
2.1. GRANT OF LICENSE RIGHTS BY EPIX TO MKG.
2.1.1 LICENSE GRANTS. EPIX hereby grants MKG a non-exclusive,
worldwide, fully paid-up right and license under the Patent Rights and EPIX
Technology for the sole purpose of permitting MKG to manufacture and supply
Compound MS-325 and corresponding Licensed Products in accordance with the terms
and conditions of the Manufacturing Agreement.
2.1.2. SUBLICENSES. MKG shall have the right to grant
sublicenses under the licenses set forth in Section 2.1.1 hereof to Affiliates
of MKG or, with the prior approval of EPIX (which shall not be unreasonably
withheld), to such third party manufacturers as are fully qualified, have been
approved by Schering and whose services are necessary for the performance by MKG
of its obligations under the terms of the Manufacturing Agreement.
| * | Confidential information omitted and filed separately with the Commission. |
10
pursuant to Section 2.1.1 and 2.1.2 above, and MKG’s rights under and pursuant
to the Manufacturing Agreement.
2.1.5. THIRD PARTY PATENT RIGHTS. In the event that MKG or
EPIX, with MKG’s consent (such consent not to be unreasonably withheld or
delayed), determines that a license under a Third Party patent or other
intellectual property right is necessary for the manufacture of Compound MS-325
by MKG as contemplated by this Agreement and the Manufacturing Agreement, and
provided that EPIX is not in breach of any of its representations and warranties
set forth in Section 6.1, the costs of obtaining such license will be the sole
responsibility of MKG.
2.3 MKG THIRD PARTY AGREEMENT STEP-IN RIGHTS. The license granted under
Section 2.1.1 includes sublicenses of MGH technology existing on the Effective
Date and licensed to EPIX under the MGH License. Any royalties payable to MGH
pertaining to such MGH technology shall be paid by EPIX, and, if not so paid,
may be paid by MKG and offset or deducted from any payments due (if any) from
MKG to EPIX pursuant to this Agreement. If EPIX is notified of a breach or
default under the MGH License that if uncured would enable MGH to render
non-exclusive or terminate the license granted to EPIX under the MGH License,
EPIX shall (i) give reasonable written notice thereof to MKG, (ii) shall
immediately cure such default or breach within the cure period set forth in the
MGH License and shall provide MKG with written confirmation thereof, and (iii)
if EPIX is unable to cure such breach or default within the relevant cure period
shall provide MKG with prompt written notice thereof and an opportunity to cure
such default or breach within the relevant cure period. Any out-of-pocket sums
expended by MKG in the exercise of its rights under this Section 2.3 may be
deducted by MKG from any future sums due (if any) from MKG to EPIX pursuant to
this Agreement.
2.4. MANUFACTURING AND SUPPLY OF COMPOUND MS-325 AND LICENSED PRODUCTS.
| * | Confidential information omitted and filed with the Commission. |
11
2.4.2. ASSISTANCE BY EPIX TO MKG FOR MANUFACTURING LICENSE.
EPIX shall disclose to MKG, free of charge, all information related to the
manufacture of any Licensed Products, and EPIX will cooperate with MKG to
provide such technical assistance and characterization work as may be necessary
in connection with the manufacture and production of any Licensed Products.
2.7. MKG CONSENT TO GRANT OF RIGHTS. MKG hereby acknowledges that the
Collaboration Agreement is being executed and delivered on the date hereof and,
in accordance with the terms of that certain letter agreement dated January 31,
2000 between EPIX and MKG, hereby consents to the terms and conditions of the
Collaboration Agreement, and in particular, consents to the grant by EPIX to
Schering of the rights in the intellectual property assets owned, controlled by
or licensed to EPIX and described in the Collaboration Agreement for any and all
purposes, including for purposes of the promissory note executed by EPIX in
favor of MKG (the “Promissory Note”) and that certain Security Agreement between
EPIX and MKG, both dated October 31, 1999. MKG agrees to execute and deliver
such additional agreements and documents, and to take such further actions as
may be reasonably requested by EPIX to effect the foregoing consent.
12
of the Collaboration Agreement or take any other voluntary action that prevents
MKG from receiving the foregoing fee when such fee otherwise would have been
received hereunder.
3.3. DEVELOPMENT COSTS FOR THE PERIOD JANUARY 1, 2000 THROUGH
EFFECTIVE DATE.
3.3.1. PROMISSORY NOTE. EPIX shall prepay to MKG that portion
of the outstanding Promissory Note that is equal to the increase in the
Promissory Note attributable to EPIX’s share of the Development Costs (as
defined in this Agreement prior to its amendment and restatement) incurred on or
after January 1, 2000 except that any costs included in the Promissory Note
attributable to CMC Costs and other manufacturing costs incurred after January
1, 2000 shall be deducted from such prepayment and forgiven by MKG. MKG will
submit to EPIX, within thirty (30) days of the Effective Date an accounting with
all supporting detail of such CMC Costs and other manufacturing costs incurred
after January 1, 2000 necessary to enable EPIX to accurately calculate the
amount of prepayment and forgiveness of the Promissory Note. Such prepayment
shall be due and payable within thirty (30) days after EPIX’s receipt of such
detailed accounting, subject to review and verification by EPIX. MKG also agrees
that, notwithstanding anything to the contrary contained in Section 5(a) of the
Note, or any other provision set forth herein, the outstanding principal balance
and accrued interest under the Note shall be due and payable on October 1, 2002,
and the Promissory Note shall remain enforceable otherwise in accordance with
its existing terms and conditions.
3.3.2. MKG SHARE OF DEVELOPMENT COSTS. EPIX shall pay to MKG
MKG’s share of development costs (as defined in this Agreement prior to its
amendment and restatement) incurred by MKG between January 1, 2000 and the
effective date of this Agreement, except that MKG’s share of such development
costs shall exclude all CMC Costs and all Costs incurred by MKG for other
manufacturing activities. Within thirty (30) days of the Effective Date, MKG
will provide EPIX an accounting with all supporting detail of such development
costs incurred necessary to enable EPIX to submit such development costs to
Schering for reimbursement under the Collaboration Agreement. Such amounts shall
be due and payable by EPIX within thirty (30) days of EPIX’s receipt from MKG of
such detailed development cost information, subject to review and verification
by EPIX of such development costs.
3.4. DEVELOPMENT COSTS INCURRED BY MKG AFTER THE EFFECTIVE DATE.
Pursuant to Section 2.5, MKG and EPIX shall agree on the activities to be
performed by MKG during the transition period to EPIX of the clinical
development responsibilities for Compound MS-325. MKG will provide EPIX with a
detailed budget for such activities as agreed to by the parties
| * | Confidential information omitted and filed separately with the Commission. |
13
within thirty (30) days of the Effective Date of this Agreement. Within thirty
(30) days after the end of each month that MKG continues to incur development
expenses pursuant to the transition period, MKG will submit an invoice to EPIX
for such costs incurred during the prior month. Each invoice shall include all
detailed support for the charges included on the invoice, including but not
limited to copies of Third Party invoices paid by MKG and the respective MKG
checks, time records and other documents supporting the costs incurred by MKG.
EPIX will pay such invoices within thirty (30) days of receipt of invoices with
complete supporting documentation, subject to review and verification by EPIX of
such invoices.
(a) Commencing upon the First Commercial Sale of a Licensed
Product in the United States and continuing until the expiration or
termination of Schering’s payment obligations under the Collaboration
Agreement with respect to Licensed Products (or, if the Collaboration
Agreement is terminated and EPIX enters into a strategic collaboration
agreement with a Third Party for the commercialization of the Licensed
Product, then upon the expiration or termination of such Third Party’s
payment obligations), EPIX agrees to pay MKG [ * ] of the Operating
Margin derived from sales of Licensed Product in the United States. It
is also the intent of EPIX and MKG that, should there be no
distributable Operating Margin in any given quarter but instead losses
for that quarter, no amounts shall be paid to MKG for such quarter. The
payments to MKG by EPIX (each such payment hereinafter referred to as a
“Profit Payment”) shall be payable quarterly in United States dollars
upon the later of: (i) thirty (30) days after the close of each
calendar quarter, or (ii) fifteen (15) days from EPIX’s receipt from
Schering of the Operating Margin distribution, for payment to MKG,
pursuant to Section 7.6.1 of the Collaboration Agreement. Such Profit
Payment shall be made on the basis of actual results for the first two
months of such calendar quarter and forecasted results for the third
month of such calendar quarter, subject to adjustment in accordance
with the reconciliation and audit provisions set forth below.
(b) At the time of the Profit Payment, EPIX shall provide MKG
with a report containing the following information (as provided to EPIX
by Schering under Section 7.6.1 of the Collaboration Agreement), on a
monthly basis, for the applicable quarter for the United States: (i)
Net Sales and units of Licensed Products sold; (ii) any other revenues
relating to the Licensed Products in the United States, including but
not limited to royalties and any other payments from sublicensees;
(iii) the Costs of Goods Sold for the reporting period for sales of
Licensed Products relating to the United States; (iv) the Sales and
Marketing Costs for the United States for the reporting period; and (v)
the Profit Payment payable for such period. EPIX shall make adjustments
in Profit Payments previously made resulting from variations between
forecasted results and actual results
| * | Confidential information omitted and filed with the Commission. |
14
for the third month of such quarter (as calculated by Schering and
reported to EPIX under the Collaboration Agreement) as part of the
determination of the Profit Payment due to EPIX for the subsequent
quarter. Under the Collaboration Agreement, Schering has agreed to
keep complete and accurate records in sufficient detail to properly
reflect all Net Sales, Costs of Goods Sold and Sales and Marketing
Costs (as set forth in Section 7.6.1 of the Collaboration Agreement),
and to enable the Profit Payments payable hereunder to be determined
by EPIX. EPIX shall keep such records as they relate to the
determination of Profit Payments that it receives from Schering
(pursuant to Section 7.6.1 of the Collaboration Agreement), and,
except for Sales and Marketing Costs incurred by EPIX and included in
the determination of Profit Payments, EPIX shall not be responsible
for maintaining any other records that relate to such Profit Payments
payable to MKG hereunder.
3.6.1 Commencing upon the First Commercial Sale of a Licensed Product
in any country of the Territory other than the United States and continuing
until the expiration or termination of Schering’s payment obligations under the
Collaboration Agreement with respect to Licensed Products (or, if the
Collaboration Agreement is terminated and EPIX enters into a strategic
collaboration agreement with a Third Party for the commercialization of the
Licensed Product, then upon the expiration or termination of such Third Party’s
payment obligations), EPIX agrees to pay MKG [ * ] of the royalties on annual
Gross Profits received by EPIX from Schering pursuant to Sections 7.7 and 7.8 of
the Collaboration Agreement (each such payment hereinafter referred to as a
“Royalty Payment”).
3.6.2 Upon the later of: (i) seventy-five (75) days after the close of
each calendar quarter, or (ii) fifteen (15) days from EPIX’s receipt from
Schering of the royalty on annual Gross Profits pursuant to Sections 7.7 and 7.8
of the Collaboration Agreement, EPIX shall pay to MKG the Royalty Payment. At
the time of the Royalty Payment, EPIX shall provide MKG with a report containing
the following information (as provided to EPIX by Schering under Sections 7.7.3
and 7.8.1 of the Collaboration Agreement), on a monthly basis, for the
applicable quarter: (i) Net Sales and units of Licensed Products sold; (ii) the
Costs of Goods Sold for the reporting period for sales of Licensed Products;
(iii) the applicable royalty rate; and (iv) the Royalty Payment payable for such
period. Pursuant to the Collaboration Agreement, Schering has agreed to keep
complete and accurate records in sufficient detail to enable the Royalty
Payments payable hereunder to be determined by EPIX pursuant to Sections 7.7.3
and 7.8.1 of the Collaboration Agreement. EPIX shall keep such records as they
relate to the determination of
| * | Confidential information omitted and filed with the Commission. |
15
Royalty Payments that it receives from Schering (pursuant to Sections 7.7.3 and
7.8.1 of the Collaboration Agreement), and shall not be responsible for
maintaining any other records that relate to such Royalty Payments payable to
MKG hereunder. Upon the reasonable request of MKG during the term of this
Agreement, EPIX shall provide MKG with forecasts of sales of Licensed Product
outside the United States as provided to EPIX by Schering, in accordance with
Schering’s routine budget and forecasting schedule.
3.7.1. Payments by EPIX to MKG under this Agreement shall be
made in United States dollars.
3.7.2. Currency conversion for payments from Schering to EPIX
under the Collaboration Agreement shall be conducted as provided in this Section
3.7.2. The calculation of payments which refer to Net Sales in countries other
than United States shall be based upon EURO and converted into United States
dollars. Therefore, where payments are based upon Net Sales in countries other
than the United States and the member states of the European Currency Union, the
amount of such Net Sales expressed in the currency of such country shall be
converted into EURO at the exchange rate in effect on the last business day of
the applicable calendar quarter. The applicable exchange rate shall be the EURO
Foreign Exchange Reference Rate published by the Xxxxxxxx Xxxxxxx Xxxx,
Xxxxxxxxx / Xxxx. If no EURO Foreign Exchange Reference Rate is determined for
the relevant currency, the Parties shall agree upon another reference rate.
Finally, the payable EURO amount shall be converted into US dollars at the EURO
Foreign Exchange Reference Rate published by the European Central Bank,
Frankfurt / Main, on the last business day of the applicable calendar quarter.
3.8.1. RECORDS OF REVENUES AND EXPENSES; AUDIT RIGHTS.
(a) Pursuant to Section 7.11.1 of the Collaboration
Agreement, Schering has agreed to maintain complete and
accurate records which are relevant to revenues, costs,
expenses and payments on a country-by-country basis, and such
records shall be open during reasonable business hours for a
period of two (2) years from creation of individual records
for examination by EPIX, as further described in the
Collaboration Agreement. EPIX agrees, that upon the reasonable
request of MKG, EPIX will exercise its right to audit
Schering’s records in accordance with and subject to the terms
and conditions of the Collaboration Agreement. In the event
that the Collaboration Agreement is terminated and EPIX enters
into a strategic collaboration agreement with a Third Party
for the commercialization of the Licensed Product, EPIX agrees
to use reasonable commercial efforts to negotiate audit rights
with such third party which are substantially similar to the
audit rights described herein.
(b) Upon the written request of MKG, EPIX shall
permit an independent public accountant selected by MKG and
acceptable to EPIX, which
16
acceptance shall not be unreasonably withheld or delayed, to
have access during normal business hours to such records of
EPIX as may be reasonably necessary to verify EPIX’s
compliance with the requirements of Sections 3.5 and 3.6
hereof in respect of any calendar year ending not more than
twelve (12) months prior to the date of such request. In that
regard, EPIX shall obtain and make available for inspection by
such independent public accountant such records of EPIX
(including those records provided by Schering pursuant to the
Collaboration Agreement) as may be reasonably necessary to
determine that EPIX is making the proper Profit Payment and/or
Royalty Payment to MKG pursuant to Sections 3.5 and 3.6
hereof. All such verifications shall be conducted at MKG’s
expense and not more than once in each calendar year. In the
event that the independent public accountant concludes that
adjustments should be made in MKG’s favor with respect to such
period, then any appropriate payments shall be paid by EPIX
within thirty (30) days of the date MKG delivers to EPIX the
written conclusions of such independent public account so
concluding, unless EPIX shall provide written notice to MKG
within such thirty (30) day period of the nature of its
disagreement with such written report. The fees charged by
such independent accountant shall be paid by MKG unless the
audit discloses that adjustments for the period are greater
than ten percent (10%) in which case EPIX shall pay the
reasonable fees and expenses charged by such representative.
(c) MKG agrees that all information subject to review
under this Section 3.8.1 is confidential and that it shall
cause its employees and representatives and the independent
public accountant to retain all such information in confidence
in accordance with the requirements of Article 5 below.
17
4.1. FILING, PROSECUTION AND MAINTENANCE OF MGH PATENT RIGHTS.
4.2. FILING, PROSECUTION AND MAINTENANCE OF EPIX PATENT RIGHTS.
18
against either Party, the Party against which such action is brought shall
notify the other Party. In any declaratory judgment action described in this
Section 4.4, MKG and EPIX shall cooperate in all respects at the request of the
other Party and, to the extent possible, have its employees testify when
requested and make available relevant records, papers, information, samples and
the like.
4.5. FILING, PROSECUTION AND MAINTENANCE OF THE MKG PATENT RIGHTS.
4.5.1. MAINTENANCE OF MKG PATENT RIGHTS. MKG shall be
responsible for maintenance of the MKG Patent Rights at its own
expense, keeping EPIX informed.
* Confidential information omitted and filed with the Commission.
19
into by
either of the Parties without the consent of the other Party, such consent not to be unreasonably withheld or delayed.
20
possession of the receiving Party or its Affiliates or sublicensees, provided
such Information was not obtained directly or indirectly from the other Party
under this Agreement pursuant to a confidentiality agreement; (iv) can be shown
by written documents to have been independently developed by the receiving Party
or its Affiliates without breach of any of the provisions of this Agreement; or
(v) is disclosed by the receiving Party pursuant to interrogatories, requests
for information or documents, subpoena, civil investigative demand issued by a
court or governmental agency or as otherwise required by law, provided that the
receiving Party notifies the other Party immediately upon receipt thereof so
that such other Party (with the cooperation of the receiving Party) can seek a
protective order or other order limiting or preventing disclosure and provided
further that the disclosing Party furnishes only that portion of the Information
which it is advised by counsel is legally required under the circumstances.
21
6.1 EPIX represents and warrants to MKG that:
(i) as of the Effective Date the MGH License is in full force
and effect; prior to the Effective Date EPIX has provided MKG with an
accurate and complete copy of the MGH License, including all amendments
thereto and documents incorporated therein by reference;
(ii) as of the Effective Date, EPIX has not received any
notice from MGH that EPIX is in breach of the MGH License;
(iii) during the term of the Agreement, EPIX will not amend
the MGH License in a manner that materially and adversely affects MKG’s
rights or obligations under this Agreement without the prior written
consent of MKG, such consent not to be unreasonably withheld or
delayed;
(iv) during the term of this Agreement, EPIX will make all
payments and perform all obligations required by the MGH License when
due;
due;
(v) nothing in this Agreement shall be construed as a warranty
or representation by EPIX as to the validity or scope of any EPIX
Technology or Patent Rights or that the exercise of the Patent Rights
will not infringe upon the rights of any Third Party;
(vi) EXHIBITS B and D of the Collaboration Agreement list all
Patent Rights owned or controlled by EPIX which are relevant to the
manufacture of Compound MS-325
manufacture of Compound MS-325
22
and its corresponding Licensed Products in the Territory as of the
Effective Date. To EPIX’s actual knowledge, each of the Patent Rights
set forth on EXHIBIT B and D of the Collaboration Agreement is properly
issued and is not invalid for reasons of fraud or inequitable conduct
and EPIX is not aware of any facts or circumstances that would form the
basis for a determination that any of such patents are invalid due to
obviousness, overbreadth or for any other reason;
(vii) to its actual knowledge, EPIX has all Third Party
licenses or other rights to patents or intellectual property that are
required to perform its obligations as contemplated hereunder;
required to perform its obligations as contemplated hereunder;
(viii) as of the Effective Date, EPIX has not received any
notices of infringement of Third Party patent rights by the
manufacture, use or sale of Compound MS-325 or its corresponding
Licensed Products;
(ix) as of the Effective Date, EPIX has made available to MKG
all information in EPIX’s possession, under EPIX’s control, or of which
it is aware, concerning safety, efficacy, side effects, or toxicity of
Compound MS-325 and its corresponding Licensed Products, associated
with any clinical use, studies, investigations, or tests of Compound
MS-325 and its corresponding Licensed Products (animal or human),
whether or not determined to be attributable to Compound MS-325 or its
corresponding Licensed Products;
(x) EPIX has conducted or has caused its contractors or
consultants to conduct and will in the future conduct, the preclinical
and clinical studies of Compound MS-325 and its corresponding Licensed
Products, in all material respects in accordance with applicable United
States law, published standards of the FDA and EMEA, and regulatory
standards applicable to the conduct of studies in the United States and
the EU, including without limitation, for the United States, good
laboratories practices regulations, good manufacturing practices
regulations, and good clinical practices guidelines; and
(xi) EPIX has not employed (and, to its actual knowledge, has
not used a contractor or consultant that has employed) and in the
future, to its actual knowledge, will not employ (or, to the best of
its knowledge, use any contractor or consultant that employs) any
individual or entity debarred by the FDA (or subject to a similar
sanction of EMEA), or, to the actual knowledge of EPIX, any individual
who or entity which is the subject of an FDA debarment investigation or
proceeding (or similar proceeding of EMEA), in the conduct of the
preclinical or clinical studies of Compound MS-325 or its corresponding
Licensed Products.
6.2. MKG represents and warrants to EPIX that:
23
(i) The [ * ] is in full force and effect as of the effective
date of this Agreement and, to its actual knowledge and not based on
any investigation or inquiry, the [ * ] is valid and enforceable;
any investigation or inquiry, the [ * ] is valid and enforceable;
(ii) EXHIBIT C lists all of the MKG Patent Rights owned or
controlled by MKG which are relevant to the manufacture, use and sale
of Compound MS-325 and its corresponding Licensed Products in the
Territory as of the Effective Date. To MKG’s actual knowledge, each of
the MKG Patent Rights set forth on EXHIBIT C is properly issued and is
not invalid for reasons of fraud or inequitable conduct and MKG is not
aware of any facts or circumstances that would form the basis for a
determination that any of such patents are invalid due to obviousness,
overbreadth or for any other reason; and
(iii) to its actual knowledge, MKG has all Third Party
licenses or other rights to patents or intellectual property that are
required to perform its obligations under the Manufacturing Agreement.
required to perform its obligations under the Manufacturing Agreement.
* Confidential information omitted and filed with the Commission.
24
not in compliance with such applicable law or regulation; (b) claims for bodily
injury, death or property damage attributable to a recall ordered by a
governmental agency, or required by a confirmed failure, or Licensed Products to
the extent caused by any act or omission to act by EPIX or its Affiliates,
licensees, sublicensees, Third Party manufacturers or agents in connection with
the manufacture, distribution or sale of Licensed Products, or (c) any negligent
or willful or intentional act or omission to act by EPIX, its Affiliates,
licensees, sublicensees, Third Party manufacturers or agents in any manner in
connection with performance hereunder.
25
differing interests between such Indemnitee and any other Party represented by
such counsel in such proceedings. An Indemnitee shall not be entitled to
indemnification under this Article 7 if any settlement or compromise of a claim
is effected by the Indemnitee without the consent of the Indenmitor, which
consent shall not be unreasonably withheld or delayed. The failure to deliver
notice to the Indenmitor within a reasonable time after the commencement of any
such action, if prejudicial to its ability to defend such action, shall relieve
such Indemnitor of any liability to the Indemnitee under this Article 7. The
Indemnitee under this Article 7, its employees and agents, shall cooperate fully
with the Indemnitor and its legal representatives in the investigation of any
action, claim or liability covered by this indemnification. Any Costs paid by an
Indemnitor shall be without prejudice to the Indemnitor’s right to contest the
Indemnitee’s right to be indemnified, and subject to refund in the event that
the Indemnitor is ultimately held not to be obligated to indemnify the
Indemnitee.
8.1.1. TERMINATION OF THE RESEARCH PHASE AND THE DEVELOPMENT
PHASE. As of the Effective Date of this Agreement, as between MKG and EPIX, the
Research Phase and the Development Phase (each as defined in the Strategic
Collaboration Agreement prior to its amendment and restatement) are terminated.
The notice dated February 28, 2000 and provided to MKG pursuant to Section 2.2.
of the Strategic Collaboration Agreement (prior to its amendment and
restatement) is void and of no further effect.
26
8.4. EFFECT OF EXPIRATION OR TERMINATION OF THIS AGREEMENT.
8.4.1. EXISTING OBLIGATIONS. The expiration or termination of
this Agreement for any reason shall not relieve the Parties of any
obligation that accrued prior to such expiration or termination.
8.4.2. EFFECT OF TERMINATION BY EPIX. Upon the termination of
this Agreement by EPIX pursuant to Section 8.3.1 or pursuant to Section 8.3.2
above (i) all licenses and rights granted to MKG hereunder shall terminate, but
all licenses granted or deemed to be granted to EPIX hereunder shall survive and
(ii) except as otherwise expressly provided in the Manufacturing Agreement, MKG
will immediately cease to manufacture Compound MS-325 and/or any corresponding
Licensed Products.
8.4.3. EFFECT OF TERMINATION BY MKG. Upon the termination of
this Agreement by MKG pursuant to Section 8.3.1 above, all licenses and rights
granted to EPIX hereunder shall terminate, but the licenses granted hereunder to
MKG shall survive.
27
any delay or failure to perform that occurs by reason of force majeure. The
Parties shall mutually seek a resolution of the delay or the failure to perform
as noted above.
If to EPIX:
|
EPIX Medical, Inc. | |
| 00 Xxxxxx Xxxxxx | ||
| Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000 | ||
| Attention: President | ||
| Telephone: 0-000-000-0000 | ||
| Facsimile: 0-000-000-0000 | ||
with a copy to:
|
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C. |
28
| One Financial Center | ||
| Xxxxxx, Xxxxxxxxxxxxx 00000 | ||
| Attention: Xxxxxxx X. Xxxxxx, Esq. | ||
| Telephone: 0-000-000-0000 | ||
| Facsimile: 1-617-542-2241 | ||
If to MKG:
|
Mallinckrodt Inc. | |
| 000 XxXxxxxxx Xxxxxxxxx | ||
| Xxxxxxxxx, Xxxxxxxx 00000 | ||
| Attention: President, Imaging Group | ||
| Telephone: 0-000-000-0000 | ||
| Facsimile: 0-000-000-0000 | ||
with a copy to:
|
Mallinckrodt Inc. | |
| 000 XxXxxxxxx Xxxxxxxxx | ||
| Xxxxxxxxx, Xxxxxxxx 00000 | ||
| Attention: Vice President and General Counsel | ||
| Telephone: 0-000-000-0000 | ||
| Facsimile: 0-000-000-0000 |
9.5. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without giving
effect to the choice of laws provisions thereof.
9.6.1. The Parties hereby agree that they will attempt in good
faith to resolve any controversy or claim arising out of or relating to this
Agreement promptly by negotiations. If a controversy or claim should arise
hereunder, the representatives of the Parties will confer at least once and will
attempt to resolve the matter. Except as provided in Sections 3.8.2, 5.5 and
9.6.2 hereof, if the matter has not been resolved within fourteen (14) days of
their first meeting, the representatives shall refer the matter to the Chief
Executive Officer of EPIX and the President of MKG’s Imaging Group. If the
matter has not been resolved within thirty (30) days of the first meeting of the
Chief Executive Officer of EPIX and the President of MKG’s Imaging Group (which
period may be extended by mutual agreement), subject to rights to injunctive
relief and specific performance, and unless otherwise specifically provided for
herein, any controversy or claim arising out of or relating to this Agreement,
or the breach thereof, will be settled as set forth in Section 9.6.2.
9.6.2. All disputes, controversies or differences which may
arise between the Parties out of or in relation to this Agreement or any default
or breach thereof may be resolved by arbitration in accordance with the American
Arbitration Association by one or more arbitrators appointed in accordance with
the said Rules. The arbitration shall take place in Chicago, Illinois. Any
decision or award resulting from the arbitration provided for herein shall be
final and binding on the Parties hereto. Notwithstanding the above, without
resort to arbitration in the first instance, either Party has the
right to bring suit in a court of
29
competent jurisdiction against the other Party for (i) any breach of such other
Party’s duties of confidentiality pursuant to Article 5 of this Agreement and
(ii) any infringement of its own proprietary rights by the other Party. Judgment
upon the arbitrator’s award may be entered in any court of competent
jurisdiction. The award of the arbitrator may include compensatory damages
against either Party, but under no circumstances will the arbitrator be
authorized to, nor shall he, award punitive damages or multiple damages against
either Party. The Parties agree not to institute any litigation or proceedings
against each other in connection with this Agreement unless they have complied
with the provisions of this Section 9.6.2, as they may be applicable, unless
otherwise provided herein.
30
hereunder
or of any other breach or failure by said other Party whether of a similar nature or otherwise.
[Remainder of page intentionally left blank.]
31
| EPIX MEDICAL, INC. | ||||
By:
|
/s/ Xxxxxxx X. Xxxx | |||
Name:
|
Xxxxxxx X. Xxxx | |||
Title:
|
Chief Executive Officer | |||
| MALLINCKRODT INC. | ||||
By:
|
/s/ Xxxxxxx X. Xxxxxx | |||
Name:
|
Xxxxxxx X. Xxxxxx | |||
Title:
|
President, Medical Imaging Group | |||
| MALLINCKRODT INC. | ||||
By:
|
/s/ Xxxxxxx X. Xxxxxxx | |||
Name:
|
Xxxxxxx X. Xxxxxxx | |||
Title:
|
Vice President Strategic Development | |||
32