LICENSE AND SUPPLY AGREEMENT BETWEEN ACERUS PHARMACEUTICALS SRL and AYTU BIOSCIENCE, INC. Dated as of April 22, 2016 LICENSE AND SUPPLY AGREEMENT
Exhibit 10.1
EXECUTION VERSION
BETWEEN
ACERUS PHARMACEUTICALS SRL
and
Dated as of April 22, 2016
This LICENSE AND SUPPLY AGREEMENT (this “Agreement”) is made and effective as of April 22, 2016 (the “Effective Date”) by and among Acerus Pharmaceuticals SRL, a society with restricted liability, having its principal office at Suite B, Durants Business Center, Durants, Xxxxxx Church, Barbados (“Acerus”) and Aytu Bioscience, Inc., a Delaware corporation, having its principal office at 000 Xxxxxxxxx Xxxxxxx, Xxxxx 000 Xxxxxxxxx, XX 00000 (“Aytu”) (each of Acerus and Aytu being a “Party,” and collectively, the “Parties”).
ARTICLE 1
The following terms, whether used in the singular or the plural, shall have the meanings designated to them under this Article unless otherwise specifically indicated.
1.1 “Acerus” has the meaning set forth in the preamble.
1.2 “Acerus’ COGS” shall mean all of Acerus’ costs to produce or procure supplies of the Product to the extent that such Costs would ordinarily be included as a cost of goods sold under International Financial Reporting Standards, as applied across all of Acerus’ products.
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1.3 “Acerus Confidential Information” has the meaning set forth in Section 10.1.
1.4 “Acerus Indemnitees” has the meaning set forth in Section13.1.
1.5 “Acerus Intellectual Property” means the Acerus Patents and Acerus Know-How.
1.6 “Acerus Know-How” means any and all Know-How Controlled by Acerus at the Effective Date that is reasonably necessary to make, use, sell, offer for sale, import, market, promote, develop or commercialize the Product together with any Developed Technology in which Acerus has an ownership interest pursuant to Section 9.2), but, in each case excluding the Acerus Patents.
1.7 “Acerus Manufacturing Defect” has the meaning set forth in Section 13.3(a).
1.8 “Acerus Patent” means any patent or patent application (including, without limitation, any Developed Technology in which Acerus has an ownership interest pursuant to Section 9.2) in the Territory that is Controlled by Acerus at any time during the Term and that claims or would otherwise be infringed by the Product or any formulation or line extension thereof, or the Manufacture or use of Product or any such product or any formulation or line extension thereof, and any provisional, continuation, divisional, continuation in part application, substitution, reissue, renewal, reexamination, protection certificate, extension, registration and confirmation of any such patent or patent application. The Acerus Patents as at the Effective Date include those listed in Schedule 1.8.
1.9 “Acerus Trademarks” means the “Natesto™” trademark including United States Trademark Registration No. 4761006 and any other trademark related to the Acerus Intellectual Property or the Product that is owned or Controlled by Acerus as of or following the Effective Date.
1.10 “Accounting Standards” means the current accounting standards applicable to Aytu or Acerus, as applicable, for the relevant time period. As of the Effective Date, the Accounting Standards are U.S. GAAP for Aytu and International Financial Reporting Standards for Acerus, but in the event Aytu or Acerus, as applicable, adopts a different accounting standard, such as the International Financial Reporting Standards (in the case of Aytu), then such accounting standard shall become the Accounting Standards as of the effective date of its adoption, as applicable.
1.11 “Active Ingredient” means testosterone.
1.12 “Active Ingredient Specifications” means the specifications for the Active Ingredient to be used in Product, attached hereto as Schedule 1.12, as such specifications may be amended from time to time by mutual agreement of the Parties.
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1.13 “Affiliate” means any company or entity controlled by, controlling, or under common control with a Party. For purposes of the definition of “Affiliate,” “control” and, with corresponding meanings, the terms “controlled by,” “controlling,” and “under common control with” means (a) the ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities, participating profit interest, or other ownership interests of a legal entity, or (b) the possession, directly or indirectly, of the power to direct the management or policies of a legal entity, whether through the ownership of voting securities or by contract relating to voting rights or corporate governance.
1.14 “Agreement” has the meaning set forth in the Preamble.
1.15 “ANDA” means an Abbreviated New Drug Application as defined in the FD&C Act and applicable regulations promulgated thereunder by the FDA.
1.16 “Annual Net Sales” means Net Sales of the Product in any fiscal year beginning on July 1 and ending on June 30.
1.17 “Applicable Senior Officers” means the Chief Executive Officer and/or Chief Operating Officer of Aytu or his or her designee, and the Vice President, Finance of Acerus or his or her designee.
1.18 “Arbitration” has the meaning set forth in Section 15.11(c).
1.19 “Arbitration Request” has the meaning set forth in Section 15.11(d).
1.20 “Arbitrators” has the meaning set forth in Section 15.11(e)(i).
1.21 “Audited Party” has the meaning set forth in Section 7.8(b).
1.22 “Aytu” has the meaning set forth in the Preamble.
1.23 “Aytu Confidential Information” has the meaning set forth in Section 10.1.
1.24 “Aytu Indemnitees” has the meaning set forth in Section 13.2.
1.25 “Aytu Intellectual Property” means any Developed Technology that is owned solely by Aytu pursuant to Section 9.2.
1.26 “Aytu Share” has the meaning set forth in Section 7.5.
1.27 “Bankruptcy Laws” means Title 11 of the United States Code, 11 U.S.C. §§ 101 1330, as it may be amended from time to time, any successor statute or any applicable state or foreign laws relating to bankruptcy, dissolution, liquidation, winding up or reorganization.
1.28 “Batch” means batches of Product for commercial resale or supply or stability testing purposes in the sizes (“Standard Batch Size”) set forth in Schedule 1.28 hereto.
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1.29 “BID Trial” means any clinical trial or study undertaken to obtain Regulatory Approval for twice-per-day dosing for the Product to be included on the approved Product label in the Territory, together with any related clinical development activities.
1.30 “Business Day” means any day except (a) Saturday, (b) Sunday (c) a day that is a federal legal holiday in the U.S. or (d) a day that is a legal holiday in Barbados.
1.31 “Cardiovascular PMR” means the postmarketing obligations applicable to the Product pursuant to Sections 505(o)(3) and 505(o)(4) of the FD&C Act, as more particularly described in the letter from the FDA to Endo (in its capacity as holder of the NDA for the Product on the applicable date) dated September 2, 2015 (and all such additional correspondence relating to such subject matter since such time, as applicable), a copy of which has been provided to Aytu prior to the Effective Date.
1.32 “Claims” has the meaning set forth in Section 13.1.
1.33 “Clinical Trial” means any clinical testing of Product in human subjects.
1.34 “Clinical Trial Material” means Product and placebo for administration to humans in Clinical Trials.
1.35 “CMC” means data, information, or procedures (as applicable) relating to the composition, Manufacture, or control of Product, which may be requested or required by a Regulatory Authority for Regulatory Approval, including but not limited to data, information, and procedures relating to structure, Manufacturing process, validation, characterization, container closure systems, stability, quality, and purity.
1.36 “Commercially Reasonable Efforts” means, with respect to a Party’s obligations under this Agreement, the carrying out of such obligations with a level of effort and resources consistent with the commercially reasonable practices of a similarly situated company in the pharmaceutical industry that would be applied to the development or commercialization of a pharmaceutical product comparable to the Product at a similar stage of development or commercialization (but explicitly ignoring the royalty, milestone and other payments due Acerus under this Agreement).
1.38 “Competing Product” means a pharmaceutical product that has as an approved indication, the treatment of primary or secondary hypogonadism in males.
1.39 “Confidential Information” has the meaning set forth in Section 10.1.
1.40 “Controlled” means, with respect to any item of Know-How or any intellectual property right, that a Party owns or has a license to such item or right and has the ability to grant to the other Party a license or sublicense under such item or right as provided for in this Agreement without violating the terms of any agreement or other arrangement with any Third Party in existence, as applicable.
1.41 “Credit Amount” has the meaning set forth in Section 7.3(c)(iv).
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1.42 “Damages” has the meaning set forth in Section 13.1.
1.43 “Defending Party” has the meaning set forth in Section 13.3.
1.44 “Delivery Date” means the date for the delivery of Product to the delivery destination as stated in the applicable Purchase Order for such shipment, subject to the terms and conditions of this Agreement.
1.45 “Delivery Deposit” has the meaning set forth in Section 7.3(c)(i).
1.46 “Detail” means a face-to-face contact by a Representative of Aytu with a target prescriber in an individual or group practice setting, and during which the indicated uses, safety, effectiveness, contraindications, side effects, warnings and other relevant characteristics of the Product are described by the Representative in a fair and balanced manner consistent with the FD&C Act and all applicable laws. When used as a verb, “Detail” shall mean to engage in a Detail.
1.47 “Developed Technology” means Know-How conceived and reduced to practice or originally authored by or on behalf of one or both Parties pursuant to this Agreement and any intellectual property rights appurtenant thereto (including any patents and patent applications claiming such Know-How).
1.47 [RESERVED]
1.49 “Disclosing Party” has the meaning set forth in Section 10.1.
1.50 “Effective Date” has the meaning set forth in the Preamble.
1.51 “Endo” has the meaning set forth in the Preamble.
1.52 “Endo Agreement” has the meaning set forth in the Preamble.
1.53 “Existing CDA” has the meaning set forth in Section 15.2.
1.54 “FD&C Act” means the U.S. Federal Food, Drug, and Cosmetics Act (21 U.S.C. Section 301 et seq.), as amended.
1.55 “FDA” means the U.S. Food and Drug Administration.
1.56 “Field” means the treatment of hypogonadism in men.
1.57 “Finished Goods” means Product that is completely manufactured and packaged and released in a manner for sale or use, including trade or sample use, by an end user of such Product, in each case in accordance with Applicable Law and the Product Specifications.
1.59 “First Milestone” has the meaning set forth in Section 7.2.
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1.60 “Full Time Basis” means, in the case of a Representative employed or otherwise engaged by Aytu to Detail the Product, the provision of not less than 37.5 hours of service to Aytu per week in connection with the Detailing of the Product and other Aytu products (provided, however, that for purposes of this Agreement, a Representative shall only be determined to be completing Primary Details of the Product on a Full Time Basis if not less than 66 2/3% of the Representative’s time is devoted to Primary Detailing of the Product).
1.61 “GAAP” means generally accepted accounting principles, consistently applied.
1.62 “Generic Product” means a product automatically substitutable (AB rated) for the Product at the retail pharmacy level within the Territory.
1.63 “IND” means an Investigational New Drug Application as defined in the FD&C Act and applicable regulations promulgated thereunder by the FDA, the filing of which is necessary to commence a Clinical Trial.
1.64 “Indemnitee” has the meaning set forth in Section 13.3.
1.65 “Indemnitor” has the meaning set forth in Section 13.3.
1.66 “Initial Detailing Stage” has the meaning set forth in Section 6.4(a)
1.67 “Initial Term” has the meaning set forth in Section 14.1.
1.68 “Initiating Party” has the meaning set forth in Section 9.4(c).
1.69 “Invoiced Amount per Unit” has the meaning set forth in Section 7.3(c)(i).
1.70 “JCC” has the meaning set forth in Section 2.1.
1.71 “Know-How” means and includes conceptions, ideas, reductions-to-practice, innovations, inventions, processes, machines, equipment, compositions of matter, compounds, formulations, products, genetic material, improvements, enhancements, modifications, technological developments, know-how, methods, treatments, techniques, systems, designs, artwork, drawings, plans, specifications, blueprints, works, mask works, software, documentation, data and information (irrespective of whether in human or machine-readable form), works of authorship, and products, in each case whether or not patentable, copyrightable, or susceptible to any other form of legal protection.
1.72 “Long Term Inability to Supply” means, with respect to Product, Acerus’ failure to supply Aytu with at least fifty percent (50%) over any three (3) consecutive month period, in each case of the quantities of Product that Acerus is obligated to supply in accordance with the terms of this Agreement, for any reason other than force majeure, as such term is defined in Section 15.4.
1.73 “Manufacture” has the meaning given to such term in Section 5.1(a)(i).
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1.74 “Materials” shall mean the components and materials used in the Manufacture of the Product, including raw materials (active and inert), API, and subassemblies (e.g., multi-dose dispensers of the Product and the components thereof) including packaging and labeling materials used to produce Finished Goods.
1.75 “Maximum Capacity” has the meaning set forth in Section 5.1(b)(i).
1.76 “NDA” means a New Drug Application as defined in the FD&C Act and applicable regulations promulgated thereunder by the FDA.
1.77 “Net Sales” means the gross amount invoiced by Aytu, its Affiliates, or sublicensees for the sale of Product to Third Parties, less deductions, determined in accordance with Aytu’s standard accounting methods as generally and consistently applied by Aytu, for: (i) normal and customary trade, cash and quantity discounts actually allowed and properly taken, credits, price adjustments or allowances for damaged Products, returns, defects, recalls or rejections of Products or retroactive price reductions specifically identifiable to the Product; (ii) chargebacks and rebates (or the equivalent thereof, inclusive of patient co-pay coupons, cards or other co-pay assistance program deductions through point-of-care discounting or physical rebate couponing) granted to group purchasing organizations, managed health care organizations or to federal, state/provincial, local and other governments, including their agencies, or to trade customers and other amounts paid on sale or dispensing of the Product or to wholesalers for inventory management programs; (iii) freight, shipping insurance and other transportation expenses directly related to the sale (but not sampling) of Product (if actually borne by Aytu, its Affiliates, or sublicensees without reimbursement from any Third Party); (iv) required distribution commissions/fees (such as fees related to services provided pursuant to distribution service agreements with major wholesalers) payable to any Third Party providing distribution services to Aytu so long as the such commissions/fees are consistent with the distribution commissions/fees payable in respect to other branded prescription products commercialized by Aytu; (v) sales, value-added, excise taxes, tariffs and duties, and other taxes and government charges directly related to the sale, to the extent such items are included in the gross invoice price and actually borne by Aytu, its Affiliates, or sublicensees without reimbursement from any Third Party (but not including taxes assessed against the income derived from such sales) and (vi) amounts repaid or credited or provisions made for uncollectible amounts on previously sold Product.
“Net Sales,” as set forth in the above definition, shall be calculated in accordance with Aytu’s usual and customary accounting methods, which shall be in accordance with the Accounting Standards. Sales from Aytu to its Affiliates or sublicensees shall be disregarded for purposes of calculating Net Sales.
Notwithstanding anything to the contrary, to the extent Aytu, any Affiliate, or any sublicensee grants discounts (including, without limitation, trade, cash, and quantity discounts), retroactive price reductions, charge-back payments, credits, rebates, and similar payments or adjustments to managed health care organizations, pharmacy benefit management companies, health care insurance carriers, federal, state or local governments, their agencies, purchasers, reimbursers, or trade customers, including but not limited to wholesalers or other distributors, or any adjustments arising from consumer discount programs (any of the foregoing, a “Discount”), then, when any such Discount is based on sales of a bundled set of products in which a Product is included, or otherwise as an incentive or consideration for a Third Party to buy other products from Aytu, an Affiliate thereof, or any sublicensee, the Discount shall, for purposes of calculating Net Sales hereunder, be allocated to such Product on a pro rata basis based on the undiscounted sales value (i.e., the unit average undiscounted selling price multiplied by the unit volume, if available) of the Product relative to the sales value contributed by the other constituent products in the bundled set.
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1.78 “NGDD Technology” means Acerus’ proprietary Nasal Gel Drug Delivery Technology, a technology, when combined with a drug compound, active ingredient, drug substance or active pharmaceutical ingredient, which results in a proprietary bioadhesive drug/gel combination or drug product designed to adhere to the interior lateral wall of the nasal cavity.
1.79 “Non-Binding Commitment” has the meaning set forth in Section 5.1(b)(i).
1.80 “Non-Defending Party” has the meaning set forth in Section 13.3..
1.81 “Non-Platform Improvement” has the meaning set forth in Section 9.2.
1.82 “OTC Version” shall mean any version of Product for use in the Field that has been approved by the FDA for sale to customers or patients in the Territory without a prescription.
1.83 “Packaging Specifications” means the packaging and labeling specifications for Product, attached hereto as Schedule 1.83, as such specifications may be amended from time to time by mutual agreement of the Parties.
1.84 “Party” or “Parties” has the meaning set forth in the Preamble.
1.85 “Person” means any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization or government or political subdivision thereof.
1.86 “Plant” means the premises that currently house the Manufacturing operations or such other FDA-approved facility for the purpose of Manufacturing hereunder.
1.87 “Platform Improvement” has the meaning set forth in Section 9.2.
1.88 “PMR Trial” means any clinical trial or study required to be undertaken with respect to the Product in order to comply with the terms and conditions of the C PMR.
1.89 “PMR Sponsor Group” has the meaning set forth in Section 3.3.
1.90 “Post-Approval Regulatory Submissions” has the meaning set forth in Section 4.2(a).
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1.91 “Primary Detail” means a Detail during which the Product is the most prominent item presented during the applicable interaction and activities directly relating to the Product comprises, at a minimum, 66.66% of the time of the Detail.
1.92 “Product” means a drug product for use in men containing testosterone as its sole active pharmaceutical ingredient prepared using nasal gel drug delivery technology to treat hypogonadism in males, in any formulation and any dosage strength under development by Acerus and/or Aytu at any time before or during the Term, including NATESTO®, an authorized generic version thereof or ANDA therefor and any OTC Versions.
1.93 “Product Specifications” means the specifications for Product attached hereto as Schedule 1.93, including process specifications and analytical methods, as such specifications may be amended from time to time by the mutual agreement of the Parties, including, without limitation, such amendments as may be required to obtain or maintain Regulatory Approval for Product.
1.94 “Purchase Order” has the meaning given to such term in Section 5.1(b)(i).
1.95 [RESERVED]
1.96 “Quality Agreement” means the agreement to be entered into between the Parties no later than the Transition Date (which is assumed to be July 1, 2016 or earlier) concerning quality assurance, quality control, and validation related to the Manufacture of Product.
1.97 “Raw Materials” means, in relation to Product, the starting materials, Active Ingredient, excipients and packaging materials used in the Manufacture thereof.
1.99 "Raw Material Specifications” means the specifications relating to the handling, warehousing, and storage of Raw Materials attached hereto as Schedule 1.99 as such specifications may be amended from time to time by mutual agreement of the Parties.
1.100 “Receiving Party” has the meaning set forth in Section 10.1.
1.101 “Regulatory Approval” means, for Product, all permissions, approvals, licenses, registrations, authorizations, or clearances of any Regulatory Authority related to NDA #205488 that are necessary for the sale of such Product in any country in the Territory.
1.102 “Regulatory Authority” means the FDA and the authority(ies) that have responsibility for granting any FDA approval for the Manufacture, use and sale of Product in the Territory.
1.103 “Regulatory Requirements” means (a) all specifications, methods of Manufacture, and other information in NDA #205488 and thereafter related in any way to Product, and (b) all laws, rules, regulations, applicable regulatory guidance documents, and other requirements of any Regulatory Authority that govern Product, including its Manufacture, including but not limited to the requirements set forth in the FD&C Act, the quality system regulation (“QSR”) rules set forth in 21 Code of Federal Regulation (“C.F.R.”) Part 820, and the current good manufacturing practices regulations set forth in 21 C.F.R. Section 210 et seq. and 21 C.F.R. Sections 600-610 and the World Health Organization’s cGMP Guidelines (collectively, “cGMP”), and in each case, the foreign equivalents thereof, as any of the foregoing may be amended from time to time.
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1.104 “Regulatory Submissions” means all applications, filings, dossiers and the like submitted to the FDA and associated with NDA #205488 (except for the existing IND associated with the BID Trial as at the date hereof).
1.105 “Renewal Term” has the meaning set forth in Section 14.1.
1.106 “Representative” means a sales representative employed by Aytu or subcontractor thereof to Detail the Product in accordance with the terms and conditions thereof.
1.107 “Requesting Party” has the meaning set forth in Section 7.8(b).
1.108 “sNDA” means a Supplemental New Drug Application as defined in the FD&C Act and applicable regulations promulgated thereunder by the FDA.
1.109 “Safety Agreement” has the meaning set forth in Section 4.3(c).
1.110 “Specification” means each of the following as they relate to the Active Ingredient, Raw Materials and/or Product, as appropriate:
(a) the Product Specifications,
(b) the Raw Material Specifications,
(c) the Packaging Specifications or
(d) the Active Ingredient Specifications,
each as set forth in the schedules hereto and as may be amended, restated or otherwise modified from time to time by the Parties.
1.111 “Subcontractors” has the meaning set forth in Section8.4.
1.112 “Supply Price” has the meaning set forth in Section 7.3(a).
1.113 “Term” has the meaning set forth in Section 14.1.
1.114 “Territory” means the U.S.
1.115 “Third Party” means any Person other than Acerus, Aytu and their respective Affiliates.
1.116 “Threshold 1 Arbitrator” has the meaning set forth in Section 15.11(e)(i).
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1.117 “Transition Date” has the meaning set forth in the Preamble.
1.118 “Unit” means a unit of Product comprised of one multi-dose dispenser filled with drug product in accordance with the Product Specifications.
1.119 “U.S.” means the United States of America and all territories thereof.
1.120 “Withholding Taxes” has the meaning set forth in Section 7.5.
ARTICLE 2
(c) Responsibilities. The JCC shall:
(i) Coordinate and monitor the planning and implementation of the commercialization of the Product, such monitoring and review to include a comprehensive review of the detailing efforts completed for the Product (Aytu to provide such information prior to the applicable JCC meeting);
(ii) Review and approve the marketing plan for the Product on an annual basis (such marketing plan to be prepared and submitted to the JCC by Aytu sufficiently advance of the applicable JCC to permit review by Acerus), such marketing plan to include relevant details relating to the proposed commercialization strategy and tactics for the coming year, including, without limitation, proposed targeting methodology and lists, resourcing, Representative incentive compensation proposals, call plans and key marketing messages for the Product;
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(iii) Review results and progress of any BID Trial, PMR Trial or any other clinical trial undertaken in connection with the Product and discuss and prepare proposed amendments or modifications when such changes appear to be advisable to achieve the Parties’ Product development goals with respect to such matters;
(iv) Facilitate the exchange of regulatory documents and other regulatory information between the Parties pursuant to ARTICLE 4;
(v) Discuss the state of the markets for Product in the Territory and opportunities and issues concerning the commercialization of Product, including consideration of marketing and promotional strategy, marketing research plans, labeling, Product positioning and Product profile issues;
(vi) Coordinate and monitor post-Regulatory Approval activities;
(vii) Have authority to establish one or more other committees that report to the JCC and assist the JCC. Any committees formed beyond the JCC shall be subordinate to the JCC, shall have such membership and responsibilities as the JCC shall determine (provided that at least one representative from each Party shall be included on any such committee), and may be disbanded by the JCC at any time;
(viii) Resolve, or attempt to resolve any disputes not resolved by any subordinate committee created by the JCC; and
(ix) Perform such other functions as appropriate to further the purposes of this Agreement and as allocated to it in writing by the Parties.
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(a) The JCC and its subordinate committees have no authority beyond the specific responsibilities set forth in this Agreement with respect thereto. Any subordinate committee created by the JCC shall have such duties and responsibilities delegated to such committee by the JCC, as applicable, so long as such duties and responsibilities do not exceed the power and authority assigned to the JCC hereunder. In particular, and without limiting the generality of the foregoing, neither the JCC nor any subordinate committee thereof may amend or modify the terms or provisions of this Agreement.
(b) Each Party shall ensure that its representatives to the JCC or any subcommittee thereof to have appropriate expertise and authority to serve as members of such committee. With the consent of the representatives of each Party serving on a particular committee, other representatives of each Party may attend meetings of that committee as observers. A meeting of the JCC or a subordinate committee thereof may be held by audio or video teleconference with the consent of each Party. Meetings of a committee shall be effective only if at least one representative of each Party is present or participating. Each Party shall be responsible for all of its own expenses of participating in committee meetings. Each Party shall use good faith and cooperative efforts to facilitate and assist the efforts of the committees.
(c) Each committee shall continue to exist until the Parties mutually agreeing to dissolve it, and upon dissolution, the Parties shall discuss the assignment and assumption of the powers and duties of such committee.
(d) The Parties may form any other committees as they shall mutually agree.
ARTICLE 3
Post marketing trials and obligations
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3.2 BID Trial.
At its sole and complete discretion, Aytu may elect to, at its cost, conduct and complete a BID Trial (and submit the applicable Regulatory Submission to the applicable Regulatory Authorities) with respect to the Product with a view to obtaining an approved dosing protocol providing for twice-daily (“BID”) usage of the Product. Any such BID Trial (and associated Regulatory Submission) shall be completed at Aytu’s expense, provided that such trial shall be required to be conducted in accordance with the draft protocol developed therefor by Acerus (subject to such changes as Acerus may make in its discretion, acting reasonably), and Acerus shall be engaged and retained to manage and coordinate any such trial, including oversight of any Third Parties required to be engaged by Aytu in connection with the conduct of such trial. Acerus shall not be entitled to any compensation or reimbursement in connection with any such BID Trial (except for any direct third party pass-through costs invoiced and actually paid by Acerus in connection with its management and coordination pursuant to this Section 3.2, which are preapproved by Aytu in writing).
(a) As holder of the NDA for the Product following the Transition Date, Aytu acknowledges and agrees that the terms and conditions of the Cardiovascular PMR shall apply to it with respect to the Product, and Aytu agrees to undertake all necessary steps to comply with the terms and conditions of the Cardiovascular PMR, including cooperation and coordination with the other Third Parties subject to the Cardiovascular PMR (such Third Parties, the “PMR Sponsor Group”) in connection with the conduct and funding of any PMR Trial approved by the FDA (including, for greater certainty, entering into any agreement with the PMR Sponsor Group with respect to the conduct of any PMR Trial); provided, however, that Aytu shall not, without the consent of Acerus (not to be unreasonably withheld) be permitted to consent, compromise or agree to any matter with the FDA or the PMR Sponsor Group to the extent any such consent, compromise or agreement may increase the amount for which Acerus shall be responsible for in connection with the Cardiovascular PMR or PMR Trial in accordance with this Section 3.3. Aytu agrees to use all commercially reasonable efforts to ensure that Acerus is permitted to directly participate in any meetings or communications between Aytu, on the one hand, and the PMR Sponsor Group or the FDA, on the other hand, such that Acerus is permitted to provide its input in connection with the design, implementation or financial responsibilities associated with any PMR Trial or other obligations arising under the Cardiovascular PMR, and Aytu shall not conduct or consent to the conduct of any PMR Trial relating to the Product without the consent of Acerus, not to be unreasonably withheld.
(b) Upon presentation of evidence detailing the amounts paid by Aytu to the PMR Sponsor Group or to any Third Party engaged to perform the PMR Trial in connection with the conduct of a PMR Trial for the Product, Acerus shall reimburse Aytu for any such amounts actually paid by Aytu or Aytu has the right to offset any such payment against Aytu’s future payment obligations under this Agreement as described below. In the event that Acerus fails to pay any undisputed amount owing under this Section 3.3(b), Aytu shall be entitled to set off any such amount (together with interest accruing at a rate equal to LIBOR (as published in The Wall Street Journal, New York edition) plus two percent (2%)) against any amounts owing (or that become owing in the future) by Aytu to Acerus under this Agreement (except for any Delivery Deposit associated with any delivery of Product either before or after the applicable non-payment by Acerus, which shall remain payable in all circumstances notwithstanding any amounts owing by Acerus to Aytu pursuant to this Section 3.4)).
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ARTICLE 4
4.1 Transfer of the Product NDA and Related FDA Regulatory Submissions.
(a) Promptly after the Transition Date, the Parties shall submit (or cause the necessary Third Party to submit) to the FDA executed letters in the form set forth in Schedule 4.1(a) in order to transfer legal and record ownership of the FDA Regulatory Submissions for the Product, including any INDs (other than the IND existing as at the date hereof for the BID Trial), the Product NDA and all supplemental submissions to Aytu. Aytu shall not transfer any such Regulatory Submissions for the Product, including any INDs and the Product NDA, to any other Person, without the express written consent of Acerus, except in connection with any permitted assignment of this Agreement in accordance with Section 15.3.
(b) Pursuant to CFR Article 5, Section 314.72, Change in Ownership of an Application, the Parties shall fulfill the following requirements:
(i) Acerus shall submit a letter or other document that states that all rights to the application have been transferred to Aytu;
(ii) Aytu shall submit an application form and a letter containing the following:
(1) Aytu’s commitment to agreements, promises, and conditions made by Acerus of which it has been informed and which in contained in NDA #205488;
(2) The date that the change in ownership is effective; and
(3) Either a statement that Aytu has a complete copy of the approved NDA, including supplements and records that are required to be kept under 314.81, or a request for a copy of the application from FDA’s files. In the event Aytu is required to make such a request from the FDA, Acerus shall be responsible for all related user fees under 20.45 of FDA’s public information regulations.
(A) Aytu shall advise FDA about any change in the conditions in NDA #205488 under 314.70, except Aytu may advise FDA in the next annual report about a change in the Product’s label or labeling to change the Product’s brand or the name of its manufacturer, packer, or distributor.
(c) Not later than five (5) Business Days after the Transition Date, Acerus shall transfer to Aytu (and cause any Third Party in possession thereof to transfer to Aytu) all other Regulatory Submissions for the Product in the Territory, and upon such transfer, Aytu shall be the legal and beneficial owner of such Pre-Approval Regulatory Submissions. Effective upon such transfer, Aytu shall, subject to the terms and conditions of this Agreement, have primary responsibility for dealings with the applicable Regulatory Authority with respect to the Product.
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(d) Acerus shall have a right of reference to all Regulatory Submissions for the Product made prior to the Effective Date or by or on behalf of Aytu or any sublicensee or Affiliate thereof in the Territory in connection with Acerus’ Regulatory Submissions for Product outside the Territory.
4.2 Post-Approval Regulatory Submissions.
(a) As between the Parties, subject to the terms and conditions of this Agreement, Aytu shall have sole responsibility, at its own expense, for preparing, filing and maintaining all Regulatory Submissions for Product in the Territory after the date on which the Regulatory Submissions are transferred to Aytu pursuant to Section 4.1 collectively, “Post-Approval Regulatory Submissions”). Aytu shall use Commercially Reasonable Efforts to compile, submit and prosecute all Post-Approval Regulatory Submissions, in a format acceptable to the applicable Regulatory Authorities in the Territory. All Post-Approval Regulatory Submissions for Product in the Territory shall be filed in the name of Aytu. Aytu shall be responsible for all communications and other dealings with the Regulatory Authorities relating to the Post-Approval Regulatory Submissions and Aytu shall be the legal and beneficial owner of all Post-Approval Regulatory Submissions; provided, however, that no Post-Approval Regulatory Submission relating to the BID Trial, Cardiovascular PMR or any PMR Trial may be submitted by Aytu without the consent of Acerus.
(b) Aytu shall promptly notify Acerus of all Post-Approval Regulatory Submissions that it submits, and shall promptly provide Acerus with a copy (which may be wholly or partly in electronic form) of such Post-Approval Regulatory Submissions. Aytu also shall promptly furnish Acerus with summaries of all material correspondence or material meetings with any Regulatory Authority relating to the Post-Approval Regulatory Submissions, and Aytu shall promptly furnish Acerus with copies of such correspondence or copies of minutes of such meetings.
(a) Acerus shall submit copies of reports of adverse events to Aytu simultaneously with submission to the applicable Regulatory Authorities, and, following, transfer of Product Regulatory Submissions to Aytu pursuant to Section 4.1(c), Aytu shall submit copies of adverse events to Acerus simultaneously with submission to the applicable Regulatory Authorities in the Territory. Aytu shall be responsible for complying with all Regulatory Requirements and other legal requirements governing adverse events in the Territory that occur after the Transition Date. Each Party shall notify the other in a timely manner and in any event within twenty-four (24) hours of receiving any notice from a Regulatory Authority, independent review committee, data safety monitoring board or another similar clinical trial or post-marketing monitoring body alleging concern regarding a patient safety issue or other material information relevant to the safety or efficacy of Product.
(b) Acerus shall be responsible for establishing and maintaining a global safety database for the Product. Not later than the Transition Date, the JCC (or a subordinate committee thereof) shall meet and establish procedures and guidelines for the operation of such database that are reasonably acceptable to Aytu, and the Parties agrees that it will abide by such procedures and guidelines.
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(c) As promptly as practicable following the Effective Date, but in no event later than the Transition Date, Aytu and Acerus will develop and agree upon safety data exchange procedures in a separate and detailed safety agreement (the “Safety Agreement”). Such agreement will describe the coordination of collection, investigation, reporting, and exchange of information concerning adverse events or any other safety problem of any significance, and product quality and product complaints involving adverse events, sufficient to permit each Party, its Affiliates, licensees or sublicensees to comply with its legal obligations. The safety data exchange procedures will be promptly updated if required by changes in legal requirements. In the event of any conflict or inconsistency between this Agreement and the Safety Agreement with respect to: (i) safety-related matters, the Safety Agreement shall prevail; and (ii) any other matter, this Agreement shall prevail.
4.4 Regulatory Correspondence.
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(c) Regulatory Correspondence Requiring an Aytu Response. In the event that Aytu receives any material regulatory letter or comments from any Regulatory Authority relating to the development or Manufacture of Product, Acerus (as applicable) will promptly provide Aytu with any data or information required by Aytu in preparing any response relating to Acerus’ development or Manufacture of Product, and will cooperate fully with Aytu in preparing such response. To the extent reasonably practicable (subject to the time a response is mandated), Aytu shall provide Acerus with a copy of each such response for Acerus’ review and comment at least two (2) Business Days prior to Aytu’s submission of the response. Aytu shall give good faith consideration to any Acerus comments to each such proposed Aytu response and shall incorporate such comments to the extent Aytu deems necessary or appropriate. Acerus shall have the final decision with respect to any responses or actions required by such letter or comments which relate to Manufacturing of Product and those matters relating to the BID Trial, Cardiovascular PMR and PMR Trial pursuant to Section 3.3, and Aytu shall otherwise have the final decision with respect to any responses or actions required by such letter or comments, including as may relate to Post-Approval Development Activities or the commercialization or regulatory aspects of Product.
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ARTICLE 5
MANUFACTURE AND SUPPLY OF PRODUCT
5.1 Supply and Purchase of Product.
(a) Manufacture and Supply of Product and Raw Materials.
(i) Acerus shall be responsible for the production, manufacture, testing, packaging and all related activities, including, without limitation, warehousing and storage of the Product prior to delivery to Aytu in accordance with Section 5.1(c) below and supplying final packaged materials (collectively, the “Manufacture”), of and with respect to Clinical Trial Materials and Product in accordance with this Section 5, and carrying out quality assurance in accordance with the Quality Agreement. Subject to Section 5.2, during the Term, Aytu, its Affiliates and sublicensees shall purchase all of its requirements of Product from Acerus. Clinical Trial Materials, placebo dispensers and Product shall be supplied in accordance with the following provisions. In consideration for Acerus’ supply of Product, Aytu will pay Acerus the Supply Price and other consideration payable under this Agreement.
(1) Subject to the provisions of this Article 5, Acerus shall Manufacture Clinical Trial Materials and Product in accordance with the quantity requirements of Aytu, its Affiliates, licensees and sublicensees, and shall not Manufacture, supply or sell Clinical Trial Materials or Product for or to any Third Party for use in the Territory.
(2) All Clinical Trial Materials and Product shall be Manufactured by Acerus at the Plant in accordance with the terms of this Agreement, the Regulatory Approval, Regulatory Requirements, all other applicable laws and regulations, the Product Specifications, cGMP and the Quality Agreement using Acerus Intellectual Property and, where appropriate, in accordance with and using Aytu Intellectual Property.
(3) Acerus shall have additional responsibilities for Clinical Trial Materials and Product as set forth in the Quality Agreement. In the event of any conflict or inconsistency between this Agreement and the Quality Agreement this Agreement shall prevail. Acerus shall have sole responsibility for disposing of all wastes arising from Manufacture in accordance with all applicable laws, rules and Regulatory Requirements.
(4) Acerus shall supply Aytu with reasonable quantities of placebo dispensers as requested by Aytu in writing from time to time, and shall provide such placebo dispensers in finished form. Placebo dispensers shall be supplied within ninety (90) days after any such request (provided, however, that any such request shall be made in even multiples of the standard batch size for such items set out in Schedule 1.28 and provided further that placebo dispensers shall be included in the Master Production Plans submitted by Aytu in accordance with Section 5.1(b)) and at a cost equal to 100% Acerus’ out of pocket third-party expenses applicable at the date of delivery of such items (to be paid in full within forty-five (45) days of the applicable delivery in accordance with Section 5.1(c)(ii)).
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(5) Acerus will supply the Clinical Trial Materials and Product in finished form, labeled and packaged in bulk containers. Acerus shall be responsible for purchasing all raw materials from sources pre-approved in writing by Aytu and Acerus shall only use such pre-approved raw materials for the manufacture of the Products. Acerus shall not directly or indirectly develop, manufacture, bulk package, label, test, market or sell the Product to any party in the Territory other than Aytu.
(i) On or before the last working day of each calendar month during the Term, Aytu shall furnish to Acerus a written twenty-four (24) month forecast of the quantities of Product (including Clinical Trial Materials) and placebo dispensers that Aytu intends to order from Acerus during such period (the “Master Production Plan”). The first three months of each Master Production Plan shall, subject to Section 5.1(b)(iii), be deemed to be a binding, non-cancellable purchase order and shall be accompanied by any other information required under Section 5.1(c) (the “Purchase Order”). The following twenty-one (21) months of the Master Production Plan shall be Aytu’s non-binding, good faith estimate of such requirements based on forecasted demand (“Non-Binding Commitment”). Schedule 5.1(b)(i)-A sets out the maximum annualized and quarterly volumes of Product able to be manufactured by Acerus as at the date hereof (such maximum volumes to be reviewed on an annual basis by Acerus and Aytu and increased (but for avoidance of doubt, without the consent of Aytu, not decreased) as may be warranted by market conditions and reasonably practicable from time to time) (the “Maximum Capacity”).
(ii) Each Master Production Plan and included binding Purchase Order shall be deemed to be automatically accepted, and shall be binding on Acerus and Acerus will be required to supply the Product and Clinical Trial Materials set forth in a Purchase Order, unless the Purchase Order terms violate the requirements set forth in this Section 5. In the event of any conflict or inconsistency between this Agreement and any Purchase Order, this Agreement shall prevail.
(iii) Should: (A) any new Purchase Order include volume of Product in a given month that exceeds one hundred fifty percent (150%) of amount set forth in the most recent Non-Binding Commitment provided by Aytu to Acerus pursuant to Section 5.1(b)(i) in respect of such month, (B) any Purchase Order include volume of Product that, when added with volumes included in the twelve (12) month period or three (3) month period, as applicable, prior to the date of the applicable Purchase Order, is in excess of the Maximum Capacity for such period, or (C) Aytu desires to increase the amount of Product to be Manufactured pursuant to any already submitted Purchase Order, then Acerus shall use Commercially Reasonable efforts to comply with such requested changes.
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(c) Purchase of Product; Deliveries.
(i) Except to the extent the Parties may otherwise agree with respect to a particular shipment, unless the Parties otherwise agree in writing, all orders for Product placed hereunder shall be submitted to Acerus according to the procedures described in Section 5.1 of this Agreement. Each Purchase Order for Product shall specify: (A) the type of Product being ordered (i.e., whether the Product is intended for trade, samples or Clinical Trial Materials); (B) the amount of such Product being requested (which shall be in accordance with this Section 5.1 and be in even multiples of the Standard Batch Size unless otherwise agreed by Acerus); (C) the requested Delivery Dates, such Delivery Date to be not less than ninety (90) days following submission of the Purchase Order to Acerus in accordance with Section 5.1(b)(ii); and (D) the aggregate Delivery Deposit payable in connection with the ordered Product (calculated in accordance with Section 7.3). Acerus shall supply Product in such quantities on the Delivery Dates set forth in the Purchase Order.
(1) Acerus shall furnish to Aytu with each shipment of Product ordered by Aytu hereunder, (i) a certificate of analysis reflecting that such Product and any Raw Materials used conform to the relevant Specifications and (ii) all documentation required by law, Regulatory Requirements or any Regulatory Authority having jurisdiction over such shipment to be provided by a manufacturer of the Product.
(2) Aytu shall not be required to take receipt of a Batch of Product with less than twenty four (24) months of remaining shelf life, provided that Aytu and Acerus may nonetheless negotiate in good faith for Aytu to purchase any Batch not meeting the foregoing remaining shelf-life requirement.
(ii) Property in, title to, and risk of loss of or damage to, all Raw Materials and Product shall remain with Acerus and pass to Aytu only upon delivery to Aytu on an EXW-Plant (Incoterms 2010) basis. Acerus shall provide all reasonably requested documentation in connection with any shipment of Product, and Aytu shall provide Acerus with copies of any shipping-related documentation required by Acerus in order to comply with applicable laws or regulations.
(iii) In the event that Product shall fail to strictly conform with the Specifications, Aytu shall reject such Product by giving written notice to Acerus within (1) thirty (30) days after receipt by Aytu (in the case of patent defects) or (2) twenty five (25) days from the date when Aytu learned of such defects (in the case of latent defects) in such Product. Any notice given hereunder shall specify the manner in which Product fails to conform to the Purchase Order or fails to meet the Specifications.
(iv) Aytu acknowledges and agrees that Acerus shall be entitled to deliver a quantity of Product that is not more than 10% less or greater than the amount set out in any accepted Purchase Order, and that such delivery shall not entitle Aytu to reject the applicable Product despite the failure of the delivered quantity to strictly conform to the amount set out in the applicable Purchase Order.
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(1) If it is determined by agreement of the Parties (or in the absence of agreement of the Parties, by a mutually acceptable independent laboratory or consultant whose fees shall be paid by the non-prevailing Party) that the non-conformity is due to damage to Product (i) caused by Aytu or its agents or (ii) which occurs subsequent to delivery of such Product to Aytu in accordance with Section 5.1(c)(ii), Acerus shall have no liability to Aytu with respect thereto. If the non-conformity is caused by any other reason than those set forth in the immediately preceding sentence, Aytu shall be entitled to reduce the amount of any Supply Price or other amounts due by an amount equal to the price for such non-conforming Product. If payment for non-conforming Product has previously been made by Aytu, at Aytu’s option, (i) Acerus shall pay Aytu the amount of such credit, (ii) Aytu may offset the amount thereof against other amounts then due to Acerus hereunder or (iii) Acerus shall replace such non-conforming Product with conforming Product at no additional cost or expense to Aytu.
(2) In any case where Aytu rejects non-conforming Product, Aytu shall await written instructions from Acerus as to further disposition of the non-conforming Product. If Acerus does not provide such instructions within ninety (90) days of receipt of Aytu’s rejection notice, Aytu shall dispose of Product and invoice Acerus for the costs of disposal. In any event, Aytu may retain samples of non-conforming Product for the purpose of determining any dispute.
(3) The rights, remedies and obligations set forth in this Section 5.1(c) shall be the sole rights, remedies and obligations that either Party may otherwise have with respect to non-conforming Product.
5.2 Notwithstanding the foregoing Section 5.1, in the event that Acerus determines in its sole discretion that it would like Aytu to assume responsibility for obtaining supply of Products or Clinical Trial Materials from Acerus’ third-party manufacturer thereof or another supplier, the Parties shall negotiate in good faith to enter into a new agreement mutually acceptable to the Parties to provide for an Aytu technology transfer and royalty-bearing license to make and have made Products on economic terms, including a royalty rate that provides for substantially the same net profit to Acerus as provided by the Supply Price hereunder and milestone payments on substantially the same terms as those set forth hereunder, in all cases taking into account any changes to the Parties’ relative economic risks of the new agreement compared to this Agreement.
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5.3 In the event that a Long Term Inability to Supply with respect to the Product has occurred and is continuing, Aytu shall have the right to purchase Product from one or more alternative Third Party suppliers and require Acerus to transfer to Aytu and such Third Party supplier all of the technology necessary for such Third Party supplier to carry out its supply obligations. Upon any transfer contemplated in this Section 5.3, the Parties shall negotiate in good faith to enter into a new agreement mutually acceptable to the Parties to provide for a royalty-bearing license including a royalty rate that provides for substantially the same net profit to Acerus as provided by the Supply Price hereunder and milestone payments on substantially the same terms as those set forth hereunder, in all cases taking into account any changes to the Parties’ relative economic risks of the new agreement compared to this Agreement
ARTICLE 6
6.1 Commercialization. Subject to the terms and conditions of this Agreement, Aytu shall have sole responsibility and decision-making authority for commercialization of Product in the U.S.. Aytu will use Commercially Reasonable Efforts in commercializing the Product. Aytu shall be solely responsible for all costs and expenses associated with its commercialization of Product in the Territory.
(a) For the period commencing on September 30, 2016 and expiring on the second anniversary date of the Transition Date (the “Initial Detailing Stage”) Aytu shall maintain a sales force of not less than the number of Representatives set out in Schedule 6.4 completing Primary Details of the Product on a Full Time Basis (and not completing any Primary Details for any other product) for the period.
(b) After expiry of the two (2) year period referred to in Section 6.4(a), Aytu shall, for each period commencing on each anniversary date of the Transition Date until the subsequent anniversary date of the Transition Date maintain a sales force of Representatives completing Primary Details of the Product on a Full Time Basis (and not completing any Primary Details for any other product) of not less than the number set out in Schedule 6.4.
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(c) On a semi-annual basis after the Transition Date (i.e. on the date that six (6) months after the Transition Date and each anniversary date of the Transition Date, and on each anniversary date of the Transition Date), Aytu shall deliver a report to Acerus certifying that, during the applicable preceding six (6) month period, it has been in compliance with the applicable representative requirements pursuant to Section 6.4(a) and 6.4(b), as applicable, such report to set out, inter alia, the number of representatives engaged by or on behalf Aytu on a Full Time basis throughout the applicable period. Notwithstanding the foregoing, the Parties agree that if in any report delivered pursuant to this Section 6.4(c) in respect of a given semi-annual period, Aytu has not complied with the applicable representative requirements in Section 6.4(a) and 6.4(b), as applicable, but has maintained at least 90% of the number of representatives required throughout the six-month period, it will not be in breach of its obligations pursuant to Section 6.4(a) and 6.4(b), as applicable, if, and only if, the next subsequent semi-annual report due pursuant to this Section 6.4(c) demonstrates that Aytu has been in compliance with the applicable representative requirements pursuant to Section 6.4(a) and 6.4(b), as applicable for the six month period covered by such subsequent report.
(d) The Parties agree that any breach of this ARTICLE 6 by Aytu shall constitute a material breach of this Agreement.
(e) Aytu acknowledges and agrees that Acerus is in discussions with Endo with respect to a transition services agreement (“TSA”) relating to, inter alia, the treatment of certain reporting and payment obligations associated with the sale and distribution of the Product by Endo prior to the Transition Date. The Parties agree to negotiate in good faith an arrangement whereby either: (a) Aytu is directly party to the TSA with Endo and Acerus (or is assigned the rights and obligations of Acerus thereunder); or (b) Aytu and Acers shall enter into such separate agreements, arrangements or understandings as are necessary to provide for Aytu performing, on Acerus’ behalf, those responsibilities set out in the TSA with Endo relating to the ongoing commercialization of the Product including, without limitation, ongoing reporting obligations, obligations with respect to Medicaid and Medicare Product listing and return processing following the Transition Date (it being understood that Aytu may be required to process and issue certain payments for any returned goods sold prior to the Transition Date, pending reimbursement by Endo in accordance with the terms and conditions of the TSA).
ARTICLE 7
(a) On each of the following dates, Aytu shall pay Acerus a non-refundable, non-creditable payment of the stated amount:
(i) two Million Dollars ($2,000,000) on the Effective Date;
(ii) two Million Dollars ($2,000,000) on September 5, 2016; and
(iii) four Million Dollars ($4,000,000) on January 1, 2017,
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in each case, in consideration of the development (including clinical trials), regulatory activities and establishment of manufacturing methodologies and capabilities with respect to the Product undertaken by Acerus prior to the Effective Date.
(b) Aytu agrees that upon any termination of this Agreement prior to the date on which any of the amounts payable pursuant to Section 7.1(a)(ii) or 7.1(a)(iii) are owing (except any termination of this Agreement by Aytu: (i) as a result of a material breach by Acerus in accordance with Section 14.2(c); (ii) pursuant to Section 14.2(d); or (iii) pursuant to Section 14.2(e)), the obligations in Section 7.1(a)(ii) and 7.1(a)(iii) shall survive and such obligations shall, notwithstanding any such termination, remain payable on the dates set forth therein.
(a) Aytu shall make the following one-time nonrefundable, non-creditable (except as related to any exercise of Aytu’s rights of set-off pursuant to Section 3.3(b) in connection with any PMR Trial) payments to Acerus within forty-five (45) days after the first achievement of the corresponding event set forth below for Product (for the purpose of clarity: (i) a payment set forth below, if payable, will only be paid once, so that the maximum payable by Aytu under all of the milestones would be $37,500,000; and (ii) in the event that one or more milestone events occur simultaneously, the payments associated with each such milestone event shall be payable):
| Milestone Event | Payment | |
| Net Sales during any four (4) consecutive calendar quarter period equal or exceed twenty-five million dollars ($25,000,000) in the aggregate | two million, five hundred thousand dollars ($2,500,000) (the “First Milestone”) | |
| Net Sales during any four (4) consecutive calendar quarter period equal or exceed fifty million dollars ($50,000,000) in the aggregate | five million dollars ($5,000,000) | |
| Net Sales during any four (4) consecutive calendar quarter period equal or exceed seventy-five million dollars ($75,000,000) in the aggregate | seven million, five hundred thousand dollars ($7,500,000) | |
| Net Sales during any four (4) consecutive calendar quarter period equal or exceed one-hundred million dollars ($100,000,000) in the aggregate | ten million dollars ($10,000,000) | |
| Net Sales during any four (4) consecutive calendar quarter period equal or exceed one-hundred twenty five million dollars ($125,000,000) in the aggregate | twelve million, five hundred thousand dollars ($12,500,000) |
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For the avoidance of doubt, any four (4) consecutive calendar quarter period described in the table above may span over two (2) calendar years.
(b) Aytu agrees that upon any termination of this Agreement prior to the date on which the First Milestone is otherwise payable pursuant to Section 7.2(a) (except any termination of this Agreement by Aytu: (i) as a result of a material breach by Acerus in accordance with Section 14.2(c); (ii) pursuant to Section 14.2(d); or (iii) pursuant to Section 14.2(e))), the First Milestone shall be immediately payable on the effective date of termination of this Agreement.
(a) Supply Price. The price for Product (except for supply of Clinical Trial Materials and placebo dispensers, which shall be supplied in accordance with Section 5.1(a)(i)(4)) (the “Supply Price”) to be paid by Aytu shall be the greater of (i) one-hundred fifteen percent (115%) of Acerus’ COGS for the Product (calculated in United States Dollars using the applicable daily rate of exchange on the date of the invoice delivered in accordance with Section 7.3(c) upon delivery of applicable Product, as published in The Wall Street Journal, New York edition), or (ii) the amount calculated below:
| Period | Applicable Percentage of Net Sales Payable as Supply Price |
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| First twelve (12) months following Transition Date | 10 | % | |
| Subsequent twelve (12) month period | 16 | % | |
| Remainder of Term | 25 | % |
(b) Step Down. Upon the expiration or invalidation of the last-to-expire (or be invalidated) Acerus Patent, the Supply Price shall be reduced to an amount equal to the sum of (A) one hundred fifteen percent (115%) of Acerus’ COGS at such time and (B) fifty percent (50%) of the difference between the Supply Price and one hundred fifteen percent (115%) of Acerus’ COGS at such time; provided that no reduction of Supply Price pursuant to this Section shall reduce the Supply Price to an amount lower than one-hundred fifteen percent (115%) of Acerus’ COGS in effect from time to time.
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(i) Acerus shall invoice Aytu for all Product delivered to Aytu in accordance with Section 5.1(c)(ii) an amount equal to one hundred fifteen percent (115%) of the United States dollar equivalent of Acerus’ COGS for such Product (calculated in United States dollars using the applicable daily rate of exchange on the date of the invoice delivered in accordance with Section 7.3(c), as published in The Wall Street Journal, New York edition) (on a per Unit basis, the “Invoiced Amount per Unit”). Aytu shall pay any undisputed amount of such invoice (but without obligation to pay such amount for any Product delivered that is rejected in accordance with Section 5.1(c)(iii)) not later than thirty (30) days following Aytu’s receipt of such invoice (such payment being the “Delivery Deposit”).
(ii) Not later than twenty-one (21) days following the end of each calendar quarter during the Term, Aytu shall provide Acerus with a report detailing Aytu’s reasonable estimate as of the date of such report for the Supply Price applicable to the Products supplied hereunder during the immediately preceding calendar quarter.
(iii) Within forty five (45) days after the end of each applicable calendar quarter, Aytu shall deliver a report setting out the number of Units sold during the applicable calendar quarter, the Supply Price payable and the aggregate Delivery Deposits previously paid in respect of Units sold in the applicable calendar quarter and shall pay to Acerus the Supply Price less the aggregate Delivery Deposits paid in respect of Units of Product sold in such calendar quarter and any Credit Amount in existence as of such date.
(iv) If the Supply Price based on Net Sales in a given quarter is less than the aggregate Delivery Deposits paid in respect of Units of Product sold during such calendar quarter, then no additional amount shall be payable to Acerus in respect of such quarter pursuant to Section 7.3(c)(iii), and the difference between the aggregate Delivery Deposits paid in respect of Units of Product sold during such calendar quarter and the Supply price calculation for such quarter (a “Credit Amount”) shall be credited against any amount otherwise payable to Acerus pursuant to Section 7.3(c)(iii) in respect of future quarters in that Aytu fiscal year (and not, for greater certainty, in respect of any future quarters in any other calendar year).
(v) Not later than forty-five (45) days after the end of each fiscalYear beginning with the fiscal year beginning on July 1, 2016 and ending on June 30, 2017 (so that the first report under this Section 7.3(c)(v)shall occur during the first forty-five (45) days after June 30, 0000), Xxxxxx shall notify Aytu in a report in reasonable detail of the Acerus’ COGS for the Product during the preceding calendar year, which United States dollar equivalent to the Acerus’ COGS (calculated in United States Dollars using the applicable daily rate of exchange on the date of the invoice delivered in respect of the applicable Product in accordance with Section 7.3(c), as published in The Wall Street Journal, New York edition) shall be applicable to Supply Price determination for the calendar year in which such notification is made. From the Effective Date until the date of delivery of the first report to be delivered in accordance with this Section 7.3(c)(v), the Acerus’ COGs for the Product shall be as set out in Schedule 7.3(c)(v).
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7.6 Interest. If either Party fails to make any payment due under this Agreement within thirty (30) days of the date upon which such payment is due, then interest shall accrue on such payment on a daily basis from the date such payment was originally due at a rate equal to LIBOR (as published in The Wall Street Journal, New York edition) plus two percent (2%), or at the maximum rate permitted by applicable law, whichever is the lower, and such interest shall be paid when such payment is made.
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(c) Underpayment or Overpayment. If, as a result of any audit pursuant to Section 7.8(b), it is shown that the Audited Party’s payments to the Requesting Party under this Agreement with respect to the period of time audited were less than the amount that should have been paid pursuant to this Agreement, then the Audited Party shall, within thirty (30) days after the Requesting Party’s demand therefor, either pay the Requesting Party the amount of such shortfall, or proceed to the dispute resolution mechanism set forth in Section 7.8(d) below. If, as a result of any audit pursuant to Section 7.8(b), it is shown that the Audited Party’s payments to the Requesting Party under this Agreement with respect to the period of time audited exceeded the amount that should have been paid pursuant to this Agreement, then the Requesting Party shall, within thirty (30) days after the Audited Party’s demand therefor, either pay the Audited Party the amount of such excess, or proceed to the dispute resolution mechanism set forth in Section 7.8(d) below.
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ARTICLE 8
LICENSE RIGHTS AND LIMITATIONS, RESTRICTIONS AND OWNERSHIP
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(i) ensure that the Acerus Trademarks are accompanied by words accurately describing the nature of the goods or services to which it relates and that the Acerus Trademarks are displayed in accordance with such branding guidelines as Acerus may provide from time to time;
(ii) to the extent reasonably practicable after receipt of a written request from Acerus, comply with the reasonable requirements of Acerus as to the form, manner, scale and context of use of the Acerus Trademarks;
(iii) display the proper form of trademark and service xxxx notice associated with the Acerus Trademark in accordance with instructions received from Acerus;
(iv) include, on any item which bears the Acerus Trademarks, a statement identifying Acerus as the owner of the Acerus Trademark and stating that Aytu is an authorized user of the Acerus Trademark;
(v) not conduct, without the written consent of Acerus, the whole or any part of its business under a business name or trading style which incorporates any of the Acerus Trademarks; and
(vi) neither use nor display any of the Acerus Trademarks in such relation to any other xxxx or marks owned by any Third Party, Aytu or an Affiliate of Aytu as to suggest that the multiple marks constitute a single or composite trademark, service xxxx, or are under the same proprietorship.
(a) Aytu hereby covenants that it shall not use or practice, nor shall it cause or permit any of its Affiliates, licensees or sublicensees to use or practice, directly or indirectly, any Acerus Intellectual Property or Acerus Trademarks for any other purposes other than those expressly permitted by this Agreement.
(b) Acerus hereby covenants that it shall not use or practice, nor shall it cause or permit any of its Affiliates, licensees or sublicensees to use or practice, directly or indirectly, any Aytu Intellectual Property for any other purposes other than those expressly permitted by this Agreement.
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8.4 Sublicensing; Subcontracting.
(a) Aytu shall have the right to grant sublicenses under the rights and licenses granted to it under this Article 8, including sublicenses in connection with the development, manufacture, and distribution of a Generic Product by a Third Party, only with the consent of Acerus, not to be unreasonably withheld. Aytu shall at all times remain responsible for the activities of its licensees or sublicensees. Notwithstanding the foregoing, Aytu shall have the right to sublicense the rights and licenses granted to it under this Agreement without the consent of Acerus in connection with promotional support for the Product, and for Aytu to develop, manufacture, and distribute a Generic Product itself.
(b) Each of Aytu and Acerus shall have the right to subcontract to Affiliates and Third Parties (“Subcontractors”) its responsibilities under this Agreement, without obtaining the consent of the other Party, provided that the applicable party shall at all times remain responsible for the activities of its Subcontractors.
(c) Each Party shall enter into agreements with its Subcontractors that contain confidentiality terms at least as strict as those set forth in Article 10 hereof.
8.5 Neither Party grants (or agrees to grant) to the other Party any right or license to use any of its intellectual property, know-how or other proprietary information, materials or technology, or to practice any of its patent, trademark, or trade dress rights, except as expressly set forth in this Agreement.
ARTICLE 9
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9.3 Patent Prosecution and Maintenance.
(a) Except as provided below and in Section 9.4, Acerus shall have the sole right and obligation to prosecute and maintain the Acerus Patents in the Territory, to the extent it has the rights to do so. On the reasonable request of Acerus, Aytu shall cooperate, in all reasonable ways, in connection with the prosecution of the Acerus Patents. Should Acerus decide that it is no longer interested in maintaining or prosecuting a particular Acerus Patent in the Territory in respect of which it has the rights to so maintain and prosecute, Aytu may assume such prosecution and maintenance in the Territory at its sole expense. If Aytu assumes prosecution or maintenance of any Acerus Patent in respect of which Acerus has the right to prosecute or maintain pursuant to the immediately preceding sentence, then : (a) Acerus shall not so abandon or fail to prosecute or maintain such Patent if Aytu advises Acerus within ten (10) Business Days of notice of Acerus’ intention to abandon or not prosecute or maintain the applicable Acerus Patent, that Aytu desires to assume prosecution or maintenance of the applicable Acerus Patent in Acerus’ name at Aytu’s expense, in which case Aytu shall have the right, but not the obligation to do so (and, for greater certainty, Acerus shall be under no obligation to assign the applicable Acerus Patent to Aytu), (b) to the extent that Aytu so assumes prosecution or maintenance of such Patent and to the extent required or useful for Aytu to initiate or maintain a lawsuit or dispute with respect thereto, Acerus agrees (at Aytu’s cost and expense for Acerus’ reasonable out of pocket costs and expenses agreed to in advance by Aytu) to (i) be named as a party to any lawsuit or other dispute with any Person regarding such Patent, (ii) exercise on behalf of Aytu Acerus’ rights under any applicable agreement regarding the applicable Patent, and (c) it shall not exercise any rights in relation to (including any rights to assert or defend) such Patent without Aytu’s prior written consent, such consent to be granted or withheld in Aytu’s sole discretion. Aytu shall list Acerus Patents applicable to Product on the packaging therefor, subject in all respects to all applicable laws and Regulatory Requirements.
(b) Except as provided below and in Section 9.4, Aytu shall have the sole right but not the obligation to prosecute and maintain any patents or patent applications comprising a part of the Aytu Intellectual Property in the Territory.
(c) Within six months of the Effective Date (or such other time as the Parties may agree), for each patent and patent application that is part of the Acerus Patents, Acerus shall execute and record at the United States Patent and Trademark Office or use commercially reasonable efforts to cause its affiliates or licensors to execute and record as required, all assignments and other documents relating to ownership and use interests such as license agreements, to evidence the complete change of title from the inventors to the current assignee and Acerus’ exclusive rights licensed from the current assignee. For avoidance of doubt, Acerus shall ensure, at a minimum, that assignments of all patents listed in the Orange Book for NATESTO® and all patents and patent applications listed in Schedule 1.8, including those that are continuations-in-part of the Patent Application No. 10/772,964, are executed and recorded at the United States Patent and Trademark Office.
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9.4 Infringement by Third Parties.
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ARTICLE 10
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(a) at the time of disclosure, is known publicly or thereafter becomes known publicly through no fault of the Receiving Party, its Affiliates or agents;
(b) is disclosed to the Receiving Party on a non-confidential basis by a Third Party that is not subject to any confidentiality obligations to the Disclosing Party with respect to such information;
(c) was developed by the Receiving Party independently of information obtained from the Disclosing Party, as shown by the Receiving Party’s prior written records;
(d) was already known to the Receiving Party before receipt from the Disclosing Party, as shown by the Receiving Party’s prior written records; or
(e) is released with the prior written consent of the Disclosing Party (subject to the terms and conditions, if any, set out in the applicable consent).
(a) Notwithstanding the foregoing, each Receiving Party may disclose the Disclosing Party’s Confidential Information (i) to the Receiving Party’s employees, consultants (including, for greater certainty, financial advisors), Affiliates, agents, contractors, licensees or sublicensees who are bound by obligations relating to confidentiality at least as restrictive of those contained herein and who have a need to know such information in connection with the Receiving Party’s performance of its obligations or practice of its rights under this Agreement, (ii) to Regulatory Authorities in connection with any Regulatory Submissions required for development of Product or in compliance with Regulatory Requirements, including, without limitation, any requirements under or pursuant to the Food and Drug Administration Amendments Act of 2007, or (c) pursuant to Sections 10.5 and 10.6.
(b) Notwithstanding anything to the contrary in this Agreement, Aytu acknowledges and agrees that Acerus may, with the consent of Aytu, not to be unreasonably withheld, participate in and produce scientific presentations or publish scientific publications in the Territory with respect to pre-clinical and clinical development of the Product (including results and observations observed during any such pre-clinical and clinical development, and including any such development work associated with the twice-daily dosing of the Product). Prior to any such proposed presentation or publication, Acerus shall, as soon as reasonably practicable prior to the presentation or publication date, as the case may be, provide Aytu with the text of the applicable presentation or publication, and Acerus shall modify such presentation or publication in accordance with any reasonable comments received from Aytu.
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ARTICLE 11
PUBLIC ANNOUNCEMENTS; USE OF NAMES; PUBLICATIONS
ARTICLE 12
REPRESENTATIONS, WARRANTIES AND COVENANTS
(a) It is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, as applicable. It has the requisite corporate power and authority to conduct its business as presently being conducted and as proposed to be conducted by it.
(b) It has the requisite corporate power and authority to enter into this Agreement and to perform the services contemplated hereunder. All corporate actions on its part, necessary for (i) the authorization, execution, delivery and performance by it of this Agreement, and (ii) the consummation of the transactions contemplated hereby, have been duly taken.
(c) Assuming the due authorization, execution and delivery by the other Party, this Agreement is its legally valid and binding obligation, enforceable against it in accordance with its terms (except in all cases as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and except that the availability of the equitable remedy of specific performance or injunctive relief is subject to the discretion of the court or other tribunal before which any proceeding may be brought).
(d) There is no contractual restriction or obligation binding on either Party which would be materially contravened by execution and delivery of this Agreement or by the performance or observance of its terms.
(e) Each Party has and will continue to have written contracts with all Third Parties (including employees and Subcontractors) performing services on its behalf under this Agreement where such services are intended to create inventions that assign to such Party all inventions and rights therein.
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(f) To each Party’s knowledge, no representation or warranty made by it in this Agreement, nor any statement contained in any schedule hereto furnished by it, contains any untrue statement of a material fact or omits any material fact necessary to make the statements contained herein or therein not misleading.
(a) Acerus shall be the sole and exclusive owner of, or shall have exclusive rights to, all of the Acerus Intellectual Property in existence on the Transition Date, and the Acerus Patents are in full force and effect and have been maintained to date. Acerus has the exclusive right to grant the rights granted under this Agreement commencing on the Transition Date. Acerus has not received any claims or notice of any challenges from any Third Party disputing the validity and enforceability of the issued Acerus Patents in existence on the Effective Date, nor does Acerus have any reason to believe that any of the issued Acerus Patents in existence on the Effective Date are, or are likely to be held, invalid or unenforceable.
(b) There is no pending or, to the knowledge of Acerus, threatened claim, interference, opposition or demand of any Third Party challenging the ownership, validity or scope of any Acerus Intellectual Property or Acerus Trademarks in existence as of the Effective Date, and Acerus is not aware of any facts from which it could reasonably conclude that any of the Acerus Patents is invalid or that the exercise thereof would infringe patent rights of Third Parties. To the knowledge of Acerus, (i) the Manufacture, use or sale of Product (as now formulated) as contemplated under this Agreement will not infringe any existing issued patent (or any pending published patent application), (ii) the use of the Acerus Intellectual Property or Acerus Trademarks as contemplated under this Agreement will not constitute the misappropriation of any trade secret or any other proprietary rights of any Third Party.
(c) Acerus has not been served with any action or proceeding nor, to the knowledge of Acerus, is there any threat of an action or proceeding nor, so far as Acerus is aware, is there any event or state of facts, in each case that could materially and adversely affect the rights granted to Aytu herein.
(d) Except as set forth on Schedule 12.2(d), Acerus has not granted to any Third Party any rights with respect to the Acerus Trademarks. The Acerus Trademarks are in full force and effect, are subsisting and valid, and have been maintained to date, and are not subject to any opposition proceedings. Its use or its Affiliates’ use of the Acerus Trademarks does not infringe, misappropriate, or otherwise violate any rights of any person and, to the knowledge of Acerus, no person is infringing, misappropriating or otherwise violating the Acerus Trademarks.
(e) Acerus and its Affiliates have and will comply with all Specifications, applicable laws, permits, governmental licenses, registrations, approvals, concessions, authorizations, orders, injunctions and decrees with respect to the development, manufacture, transport, disposal, and supply of the Product and all other Acerus obligations under this Agreement.
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(f) Acerus has not received any Form 483 observations, warning letters or other communications from a Regulatory Authority which would reasonably be expected to adversely impact the Manufacture or the marketing of Product.
(g) Product supplied to Aytu will conform to the Specifications and will be Manufactured in compliance with the Specifications, cGMP and all other provisions of this Agreement, the Quality Agreement and all applicable federal, state and local laws, rules and regulations, including, without limitation, all Regulatory Requirements and environmental laws, in force at the time of Manufacture.
(h) Product subject to the provisions of the FD&C Act, will not, when shipped by Acerus and received by Aytu, be adulterated or misbranded within the meaning of the FD&C Act or of any applicable state law or law of any foreign country in which the definitions of adulteration and misbranding are substantially the same as those contained in the FD&C Act, or an article which may not, under the provisions of the FD&C Act, be introduced into interstate commerce.
(i) All Product components shall be free of any material that would cause such Product to be adulterated, tainted or contaminated or not labeled or packaged as required under the Food and Drugs Act or the Food and Drug Regulations.
(j) Upon delivery of the Product to Aytu and receipt of payment thereof from Aytu, Acerus shall have conveyed good title to all Product so delivered, without any liens or encumbrances.
(k) Acerus now has in effect and shall maintain in good standing for the period set forth in Section 13.5 the insurance described in Section 13.5.
(l) Acerus is not debarred and has not and shall not knowingly and intentionally use in any capacity the services of any third person debarred under subsections 306(a) or (b) of the Generic Drug Enforcement Act of 1992.
(m) No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority, or any Third Party, on the part of Acerus or any Affiliate thereof is required in connection with the execution, delivery and performance of this Agreement.
(n) No research or development of the Acerus Intellectual Property, manufacture of Products or research leading to the inventions covered by the Acerus Intellectual Property was supported in whole or part by funding or grants by any governmental agency or philanthropic or charitable organization.
(o) Except as set out in Schedule 12.2(d), the Acerus Intellectual Property and Acerus Trademarks are wholly owned by or licensed to Acerus, free and clear of all mortgages, pledges, charges, liens, equities, security interests, or other encumbrances or similar agreements, or any other obligation as at the Effective Date.
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(p) Acerus and its Affiliates have taken all reasonable actions necessary or appropriate to preserve the confidentiality of all trade secrets, proprietary and other confidential information material to Products and Acerus Intellectual Property.
(q) Neither Acerus nor any Affiliate thereof is aware of any Third Party activities which would constitute misappropriation or infringement of any Acerus Intellectual Property.
(r) Product manufactured prior to the Effective Date was manufactured in accordance with cGMP and all applicable federal, state and local laws, rules and regulations, including, without limitation, all Regulatory Requirements and environmental laws, in force at the time of manufacture, and all human clinical studies of Products performed by or on behalf of Acerus or its Affiliates prior to the Effective Date were performed in accordance with the protocols established therefor.
(a) as long as Aytu is in compliance with this Section 12.4, Acerus shall not, itself or through any Affiliate, Subcontractor, licensee or sublicensee, develop, offer for sale, sell, market or promote any Competing Product in the Territory (including any product that is substitutable at the retail pharmacy level for the Product); and
(b) as long as Acerus is in compliance with this Section 12.4, Aytu shall not, itself or through any Affiliate, Subcontractor, licensee or sublicensee, develop, offer for sale, sell, market or promote any Competing Product in the Territory (including any product that is substitutable at the retail pharmacy level for the Product).
The Parties hereby acknowledge and agree that any material breach of this Section 12.4 shall constitute a material breach of this Agreement, entitling the non-breaching party to terminate the Agreement in accordance with Section 14.2(c), subject to any cure period set forth therein.
12.5 Right of First Negotiation. In the event that Acerus makes a decision to sell, transfer, assign, exclusively license, or otherwise dispose of the Acerus Intellectual Property, the Acerus Trademarks, or any other property licensed to Aytu under this Agreement in any territory in the world (other than Brazil or the countries of the European Union)(such decision being a “Triggering Event”), Acerus agrees to notify Aytu of the occurrence of a Triggering Event, and Acerus shall negotiate exclusively with Aytu for a period of sixty (60) days after Aytu’s receipt of such notice with respect to the terms and conditions for an agreement for such a purchase, assignment, transfer or license to Aytu of the property in question. If the foregoing negotiations between the Parties do not result in an agreement, despite the good faith efforts of both Parties, Acerus shall thereafter be free to enter into negotiations with any Third Party with respect to such property.
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ARTICLE 13
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(a) [intentionally deleted]
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ARTICLE 14
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(d) If either Party shall (a) become bankrupt or insolvent, (b) file for a petition therefor, (c) make an assignment for the benefit of creditors, or (d) have a receiver appointed for its assets, which appointment shall not be vacated within sixty (60) days after the filing, then the other Party shall be entitled to terminate this Agreement forthwith by written notice to such Party.
14.3 Consequences of Termination.
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ARTICLE 15
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| For Acerus: | Acerus Pharmaceuticals SRL |
| Suite B, Durants Business Center | |
| Durants, Xxxxxx Church | |
| Barbados BB17097 | |
| Attention: Vice President, Finance | |
| FAX: 000-000-0000 | |
| With a copy to: | Acerus Pharmaceuticals Corporation |
| 0000 Xxxxxx Xxxxx | |
| Xxxxxxxxxxx, Xxxxxxx | |
| X0X 0X0 | |
| Attention: President and Chief Executive Officer | |
| FAX: 000.000.0000 | |
| For Aytu: | Aytu BioScience, Inc. |
| 000 Xxxxxxxxx Xxxxxxx, Xxxxx 000 | |
| Xxxxxxxxx, XX 00000 XXX | |
| Attn: Chief Executive Officer | |
| With copies to: | Wyrick, Robbins, Xxxxx, & Pontin, LLP |
| 0000 Xxxx Xxxxx Xxxxx, Xxxxx 000 | |
| Xxxxxxx, XX 00000 XXX | |
| Attn: W. Xxxxx Mannheim, Esq. |
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15.10 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, United States of America (without giving effect to principles of conflicts of laws that would require the application of any other law) and the federal laws of the U.S., in each case without reference to choice of law rules.
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(d) If a Party intends to begin an Arbitration to resolve a dispute, such Party shall provide written notice (the “Arbitration Request”) to the other Party informing such other Party of such intention and the issues to be resolved. Within ten (10) Business Days after the receipt of the Arbitration Request, the other Party may, by written notice to the Party initiating Arbitration, add additional issues to be resolved.
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(ii) Proceedings. The time periods set forth in the applicable JAMS rules shall be followed, unless a Party can demonstrate to the Arbitrators that the complexity of the issues or other reasons warrant the extension of one or more of the time tables. Notwithstanding the foregoing, the Arbitrators shall render a written opinion setting forth findings of fact and conclusions of law with the reason therefor stated within no later than six (6) months from the date on which the Arbitrators were appointed to the dispute. A transcript of the evidence adduced at the hearing shall be made and, upon request, shall be made available to each Party. The Arbitrators shall, in rendering their decision, apply the substantive law of the State of New York and the federal law of the U.S., in each case without regard to conflict of laws provisions, except that the interpretation of and enforcement of this Section 15.11 shall be governed by the Federal Arbitration Act. The Arbitrator shall apply the Federal Rules of Evidence to the hearing. The proceeding shall take place in New York, New York, or such other location as the Parties may agree. The fees of the Arbitrators and JAMS shall be paid by the losing Party, which shall be designated by the Arbitrator. If the Arbitrator is unable to designate a losing Party, it shall so state and the fees shall be split equally between the Parties.
(iii) Award. Subject to Section 15.12, the Arbitrator is empowered to award any remedy allowed by law, including money damages, prejudgment interest and attorneys’ fees, and to grant final, complete, interim, or interlocutory relief, including injunctive relief.
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15.14 Waiver of Jury Trial. EACH PARTY HERETO WAIVES ITS RIGHT TO TRIAL OF ANY ISSUE BY JURY.
[SIGNATURES FOLLOW ON NEXT PAGE]
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| ACERUS PHARMACEUTICALS SRL | ||
| By: | ||
| Name: | ||
| Title: | ||
| AYTU BIOSCIENCE, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page to License and Supply Agreement]
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