EXHIBIT 10.4
SETTLEMENT AND
EXCLUSIVE LICENSE AGREEMENT
FOR DAPD
AMONG
SHIRE BIOCHEM INC.
AND
SHIRE PHARMACEUTICALS GROUP PLC
AND
EMORY UNIVERSITY
AND
UNIVERSITY OF GEORGIA RESEARCH FOUNDATION, INC.
AND
TRIANGLE PHARMACEUTICALS, INC.
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS............................................................................................2
ARTICLE 2. GRANT OF LICENSE.......................................................................................8
ARTICLE 3. ROYALTIES.............................................................................................10
ARTICLE 4. REPORTS AND ACCOUNTING................................................................................14
ARTICLE 5. PAYMENTS..............................................................................................16
ARTICLE 6. COVENANT NOT TO ▇▇▇; SETTLEMENT OF CLAIMS; WITHDRAWAL OF PENDING CLAIMS...............................18
ARTICLE 7. PATENT PROSECUTION....................................................................................25
ARTICLE 8. INFRINGEMENT..........................................................................................26
ARTICLE 9. WARRANTIES; EXCLUSION OF WARRANTIES; AND INDEMNIFICATION..............................................29
ARTICLE 10. CONFIDENTIALITY; PRESS RELEASES, DISCLOSURES AND PUBLIC ANNOUNCEMENTS................................33
ARTICLE 11. TERM AND TERMINATION.................................................................................36
ARTICLE 12. ASSIGNMENT; NO SEPARATE ACTION; JOINT LIABILITY.....................................................40
ARTICLE 13. REGISTRATION OF LICENSE..............................................................................41
ARTICLE 14. NOTIFICATION AND AUTHORIZATION UNDER DRUG PRICE COMPETITION AND PATENT TERM RESTORATION ACT..........42
ARTICLE 15. MISCELLANEOUS........................................................................................43
ARTICLE 16. SUBSTITUTION OF SUBLICENSEE..........................................................................48
ARTICLE 17. NOTICES..............................................................................................50
SETTLEMENT AND EXCLUSIVE LICENSE AGREEMENT
THIS
SETTLEMENT AND EXCLUSIVE LICENSE AGREEMENT is made and entered into as
of this 30th day of August, 2002 ("EFFECTIVE DATE"), by and among SHIRE BIOCHEM
INC. ("SHIRE BIOCHEM"), a corporation organized and existing under the laws of
Canada and having its principal offices at ▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇; SHIRE PHARMACEUTICALS GROUP plc, a corporation organized
and existing under the laws of England and Wales, and having its principal place
of business in Basingstoke, England ("SHIRE PHARMACEUTICALS GROUP") (SHIRE
BIOCHEM and SHIRE PHARMACEUTICALS GROUP hereinafter collectively referred to as
"SHIRE"); EMORY UNIVERSITY, a nonprofit corporation organized and existing under
the laws of Georgia, USA with offices at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, ▇▇▇ ("EMORY"); the UNIVERSITY OF GEORGIA RESEARCH FOUNDATION, INC., a
nonprofit corporation organized and existing under the laws of Georgia, USA,
with offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, ▇▇▇
("UGARF") (EMORY and UGARF shall be collectively referred to herein as
"UNIVERSITY" and treated herein and referred to collectively herein as a single
"Party," except where otherwise specifically indicated by reference to either
EMORY or UGARF or both); and TRIANGLE PHARMACEUTICALS, INC., a for-profit
corporation organized and existing under the laws of Delaware, USA with
principal offices located at ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ ▇▇▇ ("TRIANGLE"). In this Agreement, any reference to a "PARTY" shall
mean UNIVERSITY, SHIRE or TRIANGLE, as applicable, and any reference to the
"PARTIES" shall mean UNIVERSITY, SHIRE and TRIANGLE.
WITNESSETH
WHEREAS, SHIRE and its Affiliates own or control certain patents and
pending patent applications relating to the development, manufacture,
composition and use of the Licensed Compound;
WHEREAS, UNIVERSITY owns or controls certain patents and pending patent
applications relating to the development, manufacture, composition and use of
the Licensed Compound and has licensed such patents and patent applications to
TRIANGLE pursuant to the License Agreement between EMORY, UGARF and TRIANGLE
dated as of March 31, 1996 (as amended);
WHEREAS, TRIANGLE owns or controls certain patents and pending patent
applications relating to the development, manufacture, composition and use of
the Licensed Compound;
WHEREAS, EMORY and UGARF and their respective Affiliates, on one hand, and
SHIRE and its Affiliates, on the other hand, are engaged in legal proceedings
relating to patent rights concerning the Licensed Compound, and desire to
amicably resolve those legal proceedings;
WHEREAS, in settlement of those legal proceedings, (i) SHIRE and its
Affiliates have agreed to grant, and UNIVERSITY to acquire, an exclusive license
under the SHIRE Patents to sublicense to TRIANGLE the exclusive right to make,
have made, use, import, offer for sale and sell the Licensed Compound and the
Licensed Products in the Field of Use in the Licensed Territory, and (ii)
TRIANGLE has agreed to make certain royalty payments to SHIRE and its
Affiliates, on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants and the
promises herein contained, the Parties, intending to be legally bound, hereby
agree as follows.
ARTICLE 1. DEFINITIONS
The following terms as used herein shall have the following meaning:
1.1 "AFFILIATE" shall mean any corporation or non-corporate business
entity which controls, is controlled by, or is under common control with another
corporation or non-corporate business entity. A corporation or non-corporate
business entity shall be regarded as in control of another corporation if it
owns, or directly or indirectly controls, at least fifty percent (50%) of the
voting stock of the other corporation, or (a) in the absence of the ownership of
at least fifty percent (50%) of the voting stock of a corporation, or (b) in the
case of a non-corporate business entity, or nonprofit corporation, if it
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of such non-corporate business entity, or non-profit
corporation, as applicable.
1.2 "AGREEMENT" shall mean this
Settlement and Exclusive License
Agreement, including all exhibits and appendices attached to this Agreement.
1.3 "AUTHORIZED THIRD PARTY" shall mean a Third Party designated by
TRIANGLE to market or co-market Licensed Product(s) and shall not include
distributors, wholesalers, pharmacies or pharmacy chains, managed care
organizations, group purchasers or others to whom TRIANGLE or such marketer or
co-marketer sells Licensed Product(s) as a result of arms-length transactions.
1.4 "BCH-13520" shall mean the compound described on EXHIBIT C attached
hereto.
1.5 "BCH-13520 AGREEMENT" shall mean that certain
settlement and
exclusive license agreement between SHIRE, UNIVERSITY and TRIANGLE pursuant to
which UNIVERSITY and TRIANGLE grant to SHIRE and its Affiliates a license under
their respective rights to
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certain patents and patent applications owned or controlled by UNIVERSITY or
TRIANGLE, dated as of the date hereof.
1.6 "BCH-13520 PATENTS" shall have the meaning given to that term in
SECTION 1.4 of the BCH-13520 Agreement.
1.7 "DAPD PATENTS" shall mean all patents and patent applications owned
or controlled by UNIVERSITY and/or TRIANGLE as of the Effective Date that
contain, whether as of the Effective Date or in the future, claims to the
Licensed Compound as a compound, to processes or intermediates for producing the
Licensed Compound, to pharmaceutical compositions containing the Licensed
Compound as an active ingredient, or to the use of the Licensed Compound for any
purpose, and any and all patents and patent applications claiming, deriving or
entitled to their priority, directly or indirectly, in whole or in part, from
any such patents or patent applications. It is the Parties' intention that
EXHIBIT A-2 identify all DAPD Patents; however, the omission of a particular
patent or patent application from EXHIBIT A-2 for any reason shall not affect
the scope of the definition of "DAPD Patents".
1.8 "DOLLARS" shall mean United States dollars.
1.9 "FDA" shall mean the United States Food and Drug Administration or
any successor entity.
1.10 "FIELD OF USE" shall mean the prevention and/or treatment of
infections and/or diseases associated with human immunodeficiency virus (HIV)
and hepatitis B virus (HBV).
1.11 "IND" shall mean an Investigational New Drug application or its
equivalent.
1.12 "INDEMNITEES" shall mean (a) in the case of the indemnity set forth
in SECTION 9.5(a), SHIRE, its licensees and their respective Affiliates, and
each of their respective trustees,
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directors, officers and employees and each of their heirs, successors,
executors, administrators and legal representatives; (b) in the case of the
indemnity set forth in SECTION 9.5(b), each Party, its Affiliates and licensees
and each of their respective trustees, directors, officers and employees, and
each of their heirs, successors, executors, administrators, and legal
representatives; and (c) in the case of the Indemnitees referenced in
SECTION 9.6, the Parties identified in SECTION 1.12(a) or (b), as applicable.
1.13 "LICENSED COMPOUND" shall mean beta-Dioxolanyl purines encompassed by
the chemical formula and description set forth in EXHIBIT B, but specifically
excluding the compound *** as described on EXHIBIT C attached hereto.
1.14 "LICENSED PRODUCT(S)" shall mean the Licensed Compound or any
pharmaceutical product containing the Licensed Compound as the active
ingredient, alone or in combination with other active ingredients, within the
Field of Use.
1.15 "LICENSED TERRITORY" shall mean the world.
1.16 "NDA" shall mean a New Drug Application or its equivalent.
1.17 "NET SELLING PRICE" of Licensed Products which contain as their
active ingredient only the Licensed Compound shall mean the gross selling price
paid by a purchaser of such Licensed Product to TRIANGLE, its Sublicensees and
Authorized Third Parties or any of their respective Affiliates (each a "SELLER")
plus, if applicable, the value of all properties and services received in
consideration of a Sale of a Licensed Product, less only (a) discounts, rebates,
sales, use, or other similar taxes; (b) transportation and handling charges and
allowances; (c) payments
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to state or federal authorities required for patient reimbursement under
Medicaid or similar programs; (d) payments to pharmacy buying managers,
purchasing managers or agents of managed care organizations made for the purpose
of securing or facilitating Sales to such organizations; and (e) returns which
are accepted by the Seller from independent customers in accordance with the
Seller's normal practice and for which the Seller gives credit to such
purchasers or retroactive price reductions in lieu of returns, whether during
the specific royalty period or not. Where a Sale is deemed consummated by a
gift, use, or other disposition of Licensed Products, for other than a selling
price stated in cash, the term "NET SELLING PRICE" shall mean the average gross
selling price billed by the Seller in consideration of the cash Sales of
comparable Licensed Products during the then-current royalty period, less only
reductions permitted in subsections (a) and (b) above and such other reductions,
if any, as SHIRE may agree in writing are appropriate, which agreement will not
be unreasonably withheld or delayed.
1.18 "NET SELLING PRICE" of Licensed Products which contain as their
active ingredients both the Licensed Compound and, subject to SECTION 2.3,
compounds other than Licensed Compound (a "COMBINATION PRODUCT") shall be
negotiated in good faith by the Parties with the intention of agreeing upon a
fair and equitable formula; PROVIDED, HOWEVER, THAT if the Parties are unable to
agree upon such formula within a reasonable period of time, the Net Selling
Price with respect to such Combination Product shall mean the gross sales price
of such Combination Product billed to independent customers, less all the
allowances, adjustments, reductions, discounts, taxes, duties, payments, rebates
or other charges referred to in SECTION 1.17 multiplied by a fraction, the
numerator of which shall be the average invoice price per gram of the Licensed
Compound contained in the most comparable stock keeping unit of any product
having the Licensed Compound as the sole active ingredient during the applicable
royalty period in the
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applicable country of the Licensed Territory, when such comparable product is
sold for the same indication as such Combination Product and the denominator of
which shall be the average invoice price per gram of the Licensed Compound sold
alone as described immediately above plus the average invoice price(s) per gram
of the other active ingredient(s) contained in such Combination Product in such
country during the applicable royalty period when such active ingredients are
sold alone for the same indication as such Combination Product. If there is no
average invoice price per gram in a given country for one or more of the active
ingredients comprising a Combination Product, the Net Selling Price with respect
to such Combination Product shall be deemed to be the gross sales of such
Combination Product billed to independent customers, less all the allowances,
adjustments, reductions, discounts, taxes, duties, payments, rebates or other
charges referred to in SECTION 1.17, times a fraction, the numerator of which is
the amount of Licensed Compound in such Combination Product and the denominator
of which is the amount of all active ingredients in such Combination Product.
1.19 "REGISTRATION" shall mean, in relation to any Licensed Product, such
approvals by the regulatory authorities in a given country within the Licensed
Territory (including pricing approvals) as may be legally required before such
Licensed Product may be commercialized or Sold in such country.
1.20 "SALE" or "SOLD" shall mean the sale, transfer, exchange, or other
disposition of Licensed Products, whether by gift or otherwise, subsequent to
Registration in a given country (if such Registration is required) by TRIANGLE
or any Sublicensee or Authorized Third Party or any of their respective
Affiliates. Sales of Licensed Products shall be deemed consummated upon the
first to occur of: (a) receipt of payment from the purchaser; (b) delivery of
Licensed Products to the purchaser or a common carrier; (c) release of Licensed
Products from
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consignment; or (d) if otherwise transferred, exchanged, or disposed of, whether
by gift or otherwise, when such transfer, exchange, gift, or other disposition
occurs. Notwithstanding the foregoing definition of "SALE" or "SOLD," to the
extent TRIANGLE, its Sublicensee or Authorized Third Party or any of their
respective Affiliates distribute any Licensed Product under a treatment IND or
other expanded access program at a sales price which exceeds its fully absorbed
cost therefor, such excess shall be deemed to be a Sale for which royalties are
payable in accordance with the other terms hereof; PROVIDED, HOWEVER, THAT such
distribution shall not be deemed to be Registration of such Licensed Product.
1.21 "SHIRE PATENTS" shall mean all patents and patent applications owned
or controlled by SHIRE and its Affiliates as of the Effective Date that contain,
whether as of the Effective Date or in the future, one or more claims to the
Licensed Compound as a compound, to processes or intermediates for producing the
Licensed Compound, to pharmaceutical compositions containing the Licensed
Compound as an active ingredient, or to the use of the Licensed Compound for any
purpose, and any and all patents and patent applications claiming, deriving or
entitled to their priority, directly or indirectly, in whole or in part, from
any such patents or patent applications. It is the Parties' intention that
EXHIBIT A-1 identify all SHIRE Patents; however, the omission of a particular
patent or patent application from EXHIBIT A-1 for any reason shall not affect
the scope of the definition of "SHIRE Patents."
1.22 "SUBLICENSEE" shall mean TRIANGLE's sublicensees under the rights
granted by UNIVERSITY to TRIANGLE pursuant to ARTICLE 2.
1.23 "THIRD PARTY" shall mean an individual, corporation or non-corporate
business entity other than UNIVERSITY, TRIANGLE or SHIRE, or any of their
respective Affiliates.
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1.24 "TRIANGLE PATENTS" shall have the meaning given to such term in
SECTION 1.22 of the BCH-13520 Agreement.
1.25 "UNIVERSITY PATENTS" shall have the meaning given to such term in
SECTION 1.24 of the BCH-13520 Agreement.
1.26 "UNLICENSED COMPOUND" shall have the meaning set forth in
SECTION 6.4(c).
1.27 "1996 TRIANGLE AGREEMENT" shall mean the License Agreement between
EMORY, UGARF and TRIANGLE dated as of March 31, 1996, as amended by the 2002
Amendment and any further amendment of which SHIRE is notified by UNIVERSITY and
TRIANGLE pursuant to SECTION 2.1.
1.28 "2002 AMENDMENT" shall mean the amendment to the 1996 TRIANGLE
Agreement pursuant to which UNIVERSITY sublicenses to TRIANGLE its rights under
the SHIRE Patents, dated as of the Effective Date.
ARTICLE 2. GRANT OF LICENSE
2.1 LICENSE. SHIRE and its Affiliates hereby grant to UNIVERSITY the
exclusive right and license, which is non-transferable except as otherwise
provided herein, under the SHIRE Patents to sublicense to TRIANGLE the exclusive
right to make, have made, use, import, offer for sale and sell the Licensed
Products alone or in combination within the Field of Use in the Licensed
Territory during the term of this Agreement and subject to the terms and
conditions set forth herein. Except to the extent permitted under
SECTIONS 11.2 (a), (b) AND (c), if TRIANGLE defaults on its obligations under
this Agreement, UNIVERSITY shall not itself commercialize or otherwise exploit,
the rights granted hereunder without the prior written agreement of SHIRE
concerning the terms for such commercialization or other exploitation, which
prior written
8
agreement of SHIRE shall not alter the respective rights and obligations of
UNIVERSITY and TRIANGLE set forth in the 1996 TRIANGLE Agreement. In the event
that UNIVERSITY and TRIANGLE amend the 1996 TRIANGLE Agreement after the
Effective Date, UNIVERSITY and TRIANGLE shall provide prompt written notice to
SHIRE of any such amendment and shall include in such notice the effective date
of any such amendment and a general description of the terms of such amendment.
For the avoidance of doubt, the Parties agree that UNIVERSITY's and TRIANGLE's
obligation to notify SHIRE of any amendment to the 1996 TRIANGLE Agreement shall
not be construed as conferring upon SHIRE or its Affiliates any rights as a
third party beneficiary to the 1996 TRIANGLE Agreement.
2.2 SUBLICENSES. TRIANGLE may grant sublicenses under all or part of the
rights sublicensed to it by UNIVERSITY pursuant to SECTION 2.1 and the 1996
TRIANGLE Agreement in accordance with the terms and conditions of this
Agreement. TRIANGLE shall promptly notify UNIVERSITY and SHIRE of any such
sublicense(s). TRIANGLE (and, if and as applicable, UNIVERSITY) shall include in
any such sublicense agreements the provisions in favor of SHIRE and its
Affiliates as provided in or required by SECTIONS 2.3, 2.4, 4.1, 4.2, 6.5, 9.3,
9.4, 11.7(b)(ii), 15.4 AND 15.5 and ARTICLE 10 of this Agreement.
2.3 RESTRICTIONS ON LICENSE GRANT. Notwithstanding anything contained in
this ARTICLE 2, no license is granted to UNIVERSITY (or TRIANGLE) under the
SHIRE Patents to make, have made, use, import, offer for sale or sell a product
in which a single unit dosage form contains the Licensed Compound together with:
(a) the compound *** ; (b) the compound *** (as such compound is defined in the
Settlement and Exclusive License Agreement dated May 31,
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2002 by and among EMORY, SHIRE, SmithKline-▇▇▇▇▇▇▇ Corp., Glaxo Group Ltd., and
GlaxoSmithKline Inc.); (c) the compound *** ; or (d) any compound that is sold
by SHIRE or its Affiliates and/or licensees or sublicensees or is covered by any
patent(s) or patent application(s) owned or controlled by, or licensed to, SHIRE
or its Affiliates.
2.4 NO IMPLIED LICENSE. Except to the extent provided in SECTION 6.1
below, the license and rights granted in this Agreement shall not be construed
to confer any rights upon UNIVERSITY or TRIANGLE by implication, estoppel, or
otherwise as to any intellectual property not specifically identified in this
Agreement.
ARTICLE 3. ROYALTIES
3.1 RUNNING ROYALTIES. In consideration for the rights and licenses
granted by SHIRE and its Affiliates to UNIVERSITY and TRIANGLE pursuant to
ARTICLE 2 and in consideration for the grant of the covenant not to ▇▇▇ and
withdrawal, release and settlement of claims set forth in ARTICLE 6, each of
which are granted and agreed to by SHIRE and its Affiliates in connection with
the settlement of legal proceedings between the Parties relating to patent
rights concerning the Licensed Compound, the Parties have agreed to the
following payment provisions for their mutual convenience:
(a) During the term of this Agreement, subject to SECTION 3.1(b),
TRIANGLE shall pay to SHIRE and its Affiliates a royalty on the Net Selling
Price of all Licensed Products Sold by TRIANGLE, its Sublicensees, Authorized
Third Parties or any of their respective Affiliates in each country of the
Licensed Territory commencing on the date of the first
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commercial Sale of a Licensed Product in any country in the Licensed Territory
until the expiration of *** from the date of the *** , whichever first occurs:
(i) On that portion of the annual Net Selling Price of the
Licensed Products up to *** , *** percent (***%) of the Net Selling Price of all
Licensed Products Sold in the Licensed Territory;
(ii) On that portion of the annual Net Selling Price of the
Licensed Products at or above ***, *** percent (***%) of the Net Selling Price
of all Licensed Products Sold in the Licensed Territory.
(b) UNIVERSITY shall make royalty payments to SHIRE and its
Affiliates on any Sales of Licensed Products in any country of the Licensed
Territory if: (i) UNIVERSITY assumes TRIANGLE's obligations under this Agreement
pursuant to SECTIONS 11.2(a), (b) OR (c), upon the occurrence of any event
specified in such Sections, unless and until TRIANGLE resumes performance of its
obligations under this Agreement upon the resolution of any such event; or (ii)
the 1996 TRIANGLE Agreement is terminated, unless and until UNIVERSITY enters
into an agreement with a successor sublicensee to TRIANGLE in accordance with
ARTICLE 16.
3.2 ACCRUAL OF ROYALTIES. Notwithstanding the definitions of "Net Selling
Price," "Sale" and "Sold" in SECTIONS 1.17, 1.18 AND 1.20 above, no royalty
shall be payable on a Licensed Product made, Sold, or used for tests or
development purposes or distributed as samples. No royalties shall be payable
on: (a) Sales among Sublicensees or Authorized Third Parties and each of their
respective Affiliates, but royalties shall be payable on subsequent Sales by
such
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Sublicensees, Authorized Third Parties and their respective Affiliates, to
further Third Parties; and (b) Sales of Licensed Products for which TRIANGLE,
its Sublicensees, Authorized Third Parties or any of their respective Affiliates
do not receive any consideration of any kind.
3.3 THIRD PARTY ROYALTIES. If UNIVERSITY or TRIANGLE determine after
consultation with SHIRE, but at UNIVERSITY's or TRIANGLE's discretion, that it
or they are required to pay royalties or other fees to any Third Party because
the manufacture, use, offer for sale, importation, or sale of a Licensed Product
infringes any patent or other intellectual property rights of such Third Party
in a given country, and as a result of such Third Party royalty payments or any
other fees paid to such Third Party, the total royalties payable by TRIANGLE to
SHIRE and its Affiliates and such Third Parties exceeds *** percent (***%) of
TRIANGLE's, its Sublicensee's or Authorized Third Party's or any of their
respective Affiliates' Net Selling Price for such Licensed Product during any
royalty period (such excess being referred to as "EXCESS ROYALTIES"), TRIANGLE
may deduct from running royalties thereafter due to SHIRE and its Affiliates
(pursuant to SECTION 3.1 of this Agreement) with respect to the Net Selling
Price of such Licensed Product in such country up to *** percent (***%) of the
Excess Royalties. In no event shall the royalties due on such Sales of such
Licensed Product in such country on account of any reduction pursuant to this
SECTION 3.3 thereby be reduced to less than *** percent (***%) of the royalties
which would have been due thereunder on such Sales of such Licensed Product in
such country. For the avoidance of doubt, this SECTION 3.3 shall not apply to
any royalties or other fees payable by TRIANGLE to UNIVERSITY pursuant to the
1996 TRIANGLE Agreement.
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3.4 COMPULSORY LICENSES. Should a compulsory license be granted to any
Third Party in any country of the Licensed Territory to make, have made, use,
import, offer for sale or sell Licensed Products, the royalty rate payable
thereunder for Sales of the Licensed Products by TRIANGLE or any Sublicensee or
Authorized Third Party or any of their respective Affiliates in such country
shall be adjusted to match any lower royalty rate granted to such Third Party
for such country. UNIVERSITY and/or TRIANGLE, as they shall agree, shall provide
SHIRE with prompt written notice of any governmental or judicial procedures
initiated in any country to impose a compulsory license. UNIVERSITY or TRIANGLE,
as they shall agree, shall take, or cause to be taken, all reasonable and legal
steps as UNIVERSITY or TRIANGLE, as applicable, deems appropriate which are
available to oppose such compulsory license and SHIRE and its Affiliates shall,
at UNIVERSITY's or TRIANGLE's request, reasonably cooperate with UNIVERSITY or
TRIANGLE in any legal or other administrative action which UNIVERSITY or
TRIANGLE may take or cause to be taken, to oppose such compulsory license. Any
such action shall be at UNIVERSITY's or TRIANGLE's, as applicable, sole expense
and may not be taken by UNIVERSITY or TRIANGLE, as applicable, if such action
would materially jeopardize the validity of any SHIRE Patents in such country.
If UNIVERSITY and/or TRIANGLE notify SHIRE that neither of them intends to take
any such action, then UNIVERSITY and/or TRIANGLE shall, at SHIRE's request,
cooperate reasonably with SHIRE and its Affiliates in any legal action which
SHIRE and its Affiliates may wish to take to oppose such compulsory license. Any
such action shall be at the sole expense of SHIRE and its Affiliates and may not
be taken by SHIRE and its Affiliates if such action would materially jeopardize
the validity of any of the SHIRE Patents in such country.
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3.5 GENERIC COMPETITION. If a generic equivalent of a Licensed Product
Sold by TRIANGLE, its Sublicensee or Authorized Third Party or any of their
respective Affiliates is sold in a country of the Licensed Territory and no
action is or can be taken by any Party under any patent or patent application
filed in such country included in the SHIRE Patents, then the royalties
otherwise payable by TRIANGLE on Sales of the Licensed Products in such country
pursuant to SECTION 3.1 shall be reduced by *** percent (***%) for so long as
the sale of such generic equivalent in such country is more than a DE MINIMIS
amount.
ARTICLE 4. REPORTS AND ACCOUNTING
4.1 ROYALTY REPORTS AND RECORDS. Following the first Sale of a Licensed
Product, TRIANGLE shall furnish, or cause to be furnished to SHIRE, written
royalty reports for each calendar quarter during the term of this Agreement
showing:
(a) the gross selling price of all Licensed Products Sold by
TRIANGLE, its Sublicensees, Authorized Third Parties and any of their respective
Affiliates in each country of the Licensed Territory during the reporting
period, together with the calculations of Net Selling Price in accordance with
SECTIONS 1.17 AND 1.18;
(b) the royalties payable in Dollars, which shall have accrued
hereunder in respect to such Sales and the calculation thereof;
(c) the exchange rates used, if any, in determining the amount of
royalties payable in Dollars; and
(d) any deductions from royalty payments taken pursuant to
SECTIONS 3.3, 3.4, 3.5 AND/OR 8.3, including documentation of any royalties or
other fees paid to Third Parties.
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Reports shall be due within sixty (60) days of the close of every calendar
quarter. If no payments are due to SHIRE and its Affiliates for any reporting
period following the first Sale of a Licensed Product in any country in the
Licensed Territory, the royalty report shall so state. TRIANGLE shall require
its Affiliates, Sublicensees and Authorized Third Parties to keep, accurate
records for a period of at least five (5) years in sufficient detail to enable
royalties and other payments payable hereunder to be determined and verified.
TRIANGLE shall be responsible to SHIRE and its Affiliates for all royalties and
late payments that are due to SHIRE and its Affiliates that have not been paid
by any Sublicensee or Authorized Third Party or any of their respective
Affiliates.
4.2 RIGHT TO AUDIT. SHIRE shall have the right, upon prior notice to
UNIVERSITY and TRIANGLE, not more than once in each calendar year, through an
independent certified public accountant selected by SHIRE and acceptable to
TRIANGLE and UNIVERSITY, which acceptance shall not be unreasonably refused, to
have access during normal business hours to those records of TRIANGLE as may be
reasonably necessary to verify the accuracy of the royalty reports required to
be furnished by TRIANGLE pursuant to SECTION 4.1 of this Agreement. TRIANGLE
shall require its Affiliates, Sublicensees and Authorized Third Parties to keep
and maintain records of Sales made by such Affiliates, Sublicensees or
Authorized Third Parties and to grant SHIRE's independent certified public
accountant access to such Affiliate's, Sublicensee's or Authorized Third Party's
records. Following the completion of any such audit by SHIRE's independent
certified public accountant, the independent certified public accountant shall
provide a written report to SHIRE, UNIVERSITY and TRIANGLE. If any such report
shows any underpayment of royalties by TRIANGLE, within thirty (30) days after
15
UNIVERSITY's and TRIANGLE's receipt of any such report, TRIANGLE shall remit to
SHIRE and its Affiliates:
(a) the amount of such underpayment; and
(b) if such underpayment exceeds *** percent (***%) of the total
royalties owed for the calendar year then being reviewed, the reasonably
necessary fees and expenses of such independent certified public accountant
performing the audit. Otherwise, SHIRE's independent certified public
accountant's fees and expenses shall be borne by SHIRE. Any overpayment of
royalties shall be immediately refunded. Upon the expiration of *** months
following the end of any calendar year, the calculation of royalties payable
with respect to such calendar year shall be binding and conclusive on SHIRE and
its Affiliates and TRIANGLE and UNIVERSITY, unless an audit is initiated before
expiration of such *** months.
4.3 CONFIDENTIALITY OF RECORDS. All information subject to review under
this ARTICLE 4 shall be confidential. Except where provided by law, SHIRE, its
Affiliates and SHIRE's independent certified public accountant shall retain all
such information in confidence.
ARTICLE 5. PAYMENTS
5.1 PAYMENTS AND DUE DATES. Except as otherwise provided herein,
royalties payable to SHIRE and its Affiliates as a result of activities
occurring during the period covered by each royalty report provided for under
ARTICLE 4 of this Agreement shall be due and payable on the date such royalty
report is due. Payments of royalties in whole or in part may be made in advance
of such due date. All payments shall be made by wire transfer to an account or
accounts
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16
of SHIRE, or SHIRE's designated Affiliate or agent, elected by SHIRE from time
to time upon notice to UNIVERSITY and TRIANGLE; PROVIDED, HOWEVER, THAT in the
event that SHIRE fails to designate such account, TRIANGLE may remit payment to
SHIRE and its Affiliates at the address specified in ARTICLE 17 for the receipt
of notices hereunder; PROVIDED, FURTHER, THAT any notice by SHIRE of such
account or change in such account, shall not be effective until fifteen (15)
days after receipt thereof by TRIANGLE.
5.2 CURRENCY RESTRICTIONS; EXCHANGE RATE. Except as hereafter provided in
this SECTION 5.2, all royalties shall be paid in Dollars. Sales outside of the
United States shall be first determined in the currency in which they are earned
and shall then be converted into an amount in Dollars using the daily rate of
exchange for the last business day of the calendar quarter for which such
payment is being determined as published in the WALL STREET JOURNAL. If, at any
time, legal restrictions prevent the prompt remittance of part of or all
royalties due hereunder with respect to any country in the Licensed Territory
where Licensed Products are Sold, TRIANGLE shall have the right and option to
make such payments by depositing the amount thereof in local currency to
SHIRE's, or its designated Affiliate's or agent's, account in a bank or
depository in such country.
5.3 INTEREST. Royalties required to be paid by TRIANGLE pursuant to this
Agreement shall, if overdue, bear interest at *** , for the last day of each
applicable calendar quarter *** , until paid. The payment of such interest shall
not foreclose SHIRE and its Affiliates from exercising any other rights it may
have because any payment is overdue.
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17
5.4 TAXES. TRIANGLE shall be entitled to deduct from its payments to
SHIRE and its Affiliates the amount of any withholding taxes required to be
withheld by TRIANGLE or its Sublicensees or Authorized Third Parties or any of
their respective Affiliates to the extent TRIANGLE or its Sublicensees or
Authorized Third Parties or any of their respective Affiliates pay to the
appropriate governmental authority on behalf of SHIRE and its Affiliates such
taxes. TRIANGLE shall deliver to SHIRE, upon SHIRE's request, proof of payment
of all such taxes. Each Party shall provide assistance to the other Party in
seeking any benefits available to such Party with respect to government tax
withholdings by any relevant law or double tax treaty.
ARTICLE 6. COVENANT NOT TO ▇▇▇;
SETTLEMENT OF CLAIMS; WITHDRAWAL OF PENDING CLAIMS
6.1 COVENANT NOT TO ▇▇▇.
(a) SHIRE covenants that neither it nor any of its Affiliates will
challenge, object to or ▇▇▇ or induce, assist or direct any Third Party to
challenge, object to or ▇▇▇ UNIVERSITY or TRIANGLE or any of their respective
licensees, Sublicensees, contract manufacturers or Authorized Third Parties or
any of their respective Affiliates or assignees, or any of their respective past
or present trustees, directors, officers, employees, agents, representatives or
licensees, or any of their customers, alleging that the manufacture, use, sale,
offer for sale, import or export of the Licensed Compound or the Licensed
Product(s), or that any metabolite resulting from human ingestion and/or
metabolism of the Licensed Compound, infringes any of the patents included in
the SHIRE Patents or BCH-13520 Patents.
(b) In the event that SHIRE or its relevant Affiliates grant to any
Third Party any rights under the SHIRE Patents and/or BCH-13520 Patents, SHIRE
or its relevant Affiliates shall obtain from any such Third Party a covenant
pursuant to which such Third Party covenants
18
that neither it, nor any of its Affiliates will challenge, object to or ▇▇▇ or
induce, assist or direct any Third Party to challenge, object to or ▇▇▇
UNIVERSITY or TRIANGLE or any of their respective licensees, Sublicensees,
contract manufacturers or Authorized Third Parties or any of their respective
Affiliates or assignees, or any of their respective past or present trustees,
directors, officers, employees, agents, representatives, licensees, or any of
their customers, alleging that the manufacture, use, sale or offer for sale,
import or export of the Licensed Compound or the Licensed Product(s), or that
any metabolite resulting from human ingestion and/or metabolism of the Licensed
Compound, infringes any of the patents included in the SHIRE Patents or the
BCH-13520 Patents. SHIRE or its relevant Affiliates shall further require any
such Third Party to obtain from any of its sublicensees under the SHIRE Patents
and/or the BCH-13520 Patents a covenant not to ▇▇▇ in favor of each of
UNIVERSITY and TRIANGLE, and each of their respective licensees, Sublicensees,
contract manufacturers and Authorized Third Parties and any of their respective
Affiliates on the same terms.
6.2 SETTLEMENT OF CLAIMS.
(a) Effective upon execution of this Agreement, SHIRE, for itself,
its Affiliates, and each of their respective successors and assigns, hereby
releases and forever discharges each of UNIVERSITY and TRIANGLE, and each of
their respective past and present Affiliates, and each of their respective
trustees, directors, officers, employees, agents and representatives and,
subject to SECTION 6.5, licensees, and any of their customers, from any and all
causes of action, actions, claims, and demands whatsoever in law or in equity
with or against such parties involving the SHIRE Patents and/or the BCH-13520
Patents relating to the Licensed Products, the Licensed Compound and/or any
metabolite resulting therefrom, including any and all causes of action, actions,
claims, and demands in the proceedings set forth on EXHIBIT D, and
19
any liabilities, losses, costs and expenses related thereto which they ever had
or now have based on occurrences up to and including the Effective Date.
(b) SHIRE and its Affiliates shall cause each of their licensees (if
any) under the SHIRE Patents and/or the BCH-13520 Patents to execute a release
in favor of UNIVERSITY, TRIANGLE and each of their respective past and present
Affiliates and each of their respective trustees, directors, officers, employees
agents and representatives, and licensees and any of their customers, on the
same terms as the release granted by SHIRE and its Affiliates in SECTION 6.2(a)
(and SHIRE and its Affiliates shall not sublicense any of their respective
rights pursuant to the BCH-13520 Agreement to any Third Party until they have
obtained such a release). SHIRE and its Affiliates shall further require all
such licensees to obtain from any of their sublicensees under the SHIRE Patents
and/or the BCH-13520 Patents a release on the same terms.
6.3 WITHDRAWAL OF EXISTING CLAIMS BY SHIRE.
(a) Within thirty (30) days of execution of this Agreement: SHIRE
agrees, for itself and for each of its Affiliates and assigns, to withdraw any
interference, opposition, revocation or other proceeding challenging the
validity, enforceability or patentability of any patent or pending patent
application, or any claims included in any patent or pending patent application,
or any appeals arising from any order made in connection with any such
proceeding involving the DAPD Patents in any court or tribunal of competent
jurisdiction located in, or any patent office of, any country or territory,
including those proceedings set forth on EXHIBIT D. SHIRE, for itself, and each
of its Affiliates and assigns, hereby releases and forever discharges UNIVERSITY
and TRIANGLE, each of their respective past and present Affiliates, and each of
their respective trustees, directors, officers, employees, agents,
representatives and licensees and
20
any of their customers, from any and all causes of action, actions, claims, and
demands whatsoever, in law or in equity with respect to the DAPD Patents and any
liabilities, losses, costs and expenses related thereto.
(b) SHIRE further agrees that, during the term of this Agreement
(and, if and as provided in SECTION 15.8, thereafter) to the extent permitted by
applicable law, neither SHIRE, nor any of its Affiliates, or their respective
successors or assigns or licensees, shall initiate any interference, opposition,
revocation or other proceeding, or induce, assist or direct any Third Party in
challenging the validity, enforceability or patentability of any patent or
pending patent application, or any claims included in any patent or pending
patent application, included in the DAPD Patents, or any appeals arising from
any order made in connection with any such proceeding, in any court or tribunal
of competent jurisdiction located in, or any patent office of, any country or
territory. In the event that, during the term of this Agreement, an interference
proceeding is declared by the patent office of any country or territory within
the Licensed Territory, or is initiated by a Third Party against any patent or
pending patent application included in the DAPD Patents, the Parties agree to
negotiate in an attempt to establish an appropriate dispute resolution procedure
for the resolution of any such proceeding.
6.4 WITHDRAWAL OF EXISTING CLAIMS BY UNIVERSITY AND TRIANGLE.
(a) Within thirty (30) days of execution of this Agreement:
UNIVERSITY and TRIANGLE agree, for themselves and for each of their respective
Affiliates and assigns, to withdraw any interference, opposition, revocation or
other proceeding challenging the validity, enforceability or patentability of
any patent or pending patent application, or any claims included in any patent
or pending patent application, or any appeals arising from any order made in
connection with any such proceeding involving the SHIRE Patents in any court or
tribunal of
21
competent jurisdiction located in, or any patent office of, any country or
territory, including those proceedings set forth on EXHIBIT E. UNIVERSITY and
TRIANGLE, for themselves, and each of their respective Affiliates and each of
their respective assigns, hereby release and forever discharge SHIRE, its past
and present Affiliates, and each of their respective trustees, directors,
officers, employees, agents, representatives and licensees and any of their
customers, from any and all causes of action, actions, claims and demands
whatsoever, in law or in equity with respect to the SHIRE Patents and any
liabilities, losses, costs and expenses related thereto.
(b) UNIVERSITY and TRIANGLE further agree that, during the term of
this Agreement (and, if and as provided in SECTION 15.8, thereafter) to the
extent permitted by applicable law and except as otherwise provided in
SECTION 6.4(c), neither UNIVERSITY nor TRIANGLE, nor any of their respective
Affiliates or successors or assigns, shall initiate any interference,
opposition, revocation or other proceeding, or induce, assist or direct any
Third Party in challenging the validity, enforceability or patentability of any
patent or pending patent application, or any claims included in any patent or
pending patent application, included in the SHIRE Patents, or any appeals
arising from any order made in connection with any such proceeding, in any court
or tribunal of competent jurisdiction located in, or any patent office of, any
country or territory. In the event that, during the term of this Agreement, an
interference proceeding is declared by the patent office of any country or
territory within the Licensed Territory, or is initiated by a Third Party
against any patent or pending patent application included in the SHIRE Patents,
the Parties agree to negotiate in an attempt to establish an appropriate dispute
resolution procedure for the resolution of any such proceeding.
(c) In the event that UNIVERSITY and/or TRIANGLE or any of their
respective Affiliates wish to develop a specific compound other than the
Licensed Compound
22
(an "UNLICENSED COMPOUND") that may be covered by any claims included in any
patent or patent application included within the SHIRE Patents, UNIVERSITY
and/or TRIANGLE, as applicable, may notify SHIRE in writing of the proposed
development of any such Unlicensed Compound and request that SHIRE (or its
relevant Affiliate) enter into negotiations with UNIVERSITY and/or TRIANGLE, as
applicable, to reach agreement on the terms of a commercial royalty-bearing
license under any and all patents and patent applications included within the
SHIRE Patents containing claims covering such Unlicensed Compound to make, have
made, use, import, offer for sale and sell such Unlicensed Compound in the
Licensed Territory. Within *** days of receipt of any such notice from
UNIVERSITY and/or TRIANGLE, as applicable, SHIRE, within its sole discretion,
shall notify UNIVERSITY and/or TRIANGLE, as applicable, in writing whether it
agrees to negotiate such a license. If SHIRE declines to negotiate such a
license, or if the Parties are unable to negotiate in good faith and execute
such a license within *** of UNIVERSITY's and/or TRIANGLE's, as applicable,
receipt of any notice from SHIRE agreeing to enter into negotiations in
connection with any such a license, then in such event the provisions of SECTION
6.4(b) shall no longer apply to any claim in any patent or patent application
included within the SHIRE Patents containing claims covering the Unlicensed
Compound; PROVIDED, HOWEVER, THAT SECTION 6.4(b) shall continue to apply to any
claims included in any such patent or patent application that either
specifically or generically cover the compound *** or the Licensed Compound or
the compound *** in addition to the Unlicensed Compound. If, however, SHIRE or
its relevant Affiliate initiates any proceedings to enforce its rights under any
claim of the SHIRE
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23
Patents that either specifically or generically covers the compound *** or the
Licensed Compound or the compound *** in connection with UNIVERSITY's and/or
TRIANGLE's, or their respective Affiliate's or licensee's, manufacture, use or
sale of the Unlicensed Compound, the Party against which SHIRE or its relevant
Affiliate brings such proceedings (or its Affiliates or licensees, if and as
applicable) may, as part of such proceedings or, if required under the laws of
the relevant jurisdiction, in a separate action based upon such proceedings,
challenge the validity, enforceability or patentability of any such claims in
any such proceedings.
6.5 COVENANT BY UNIVERSITY'S AND TRIANGLE'S SUBLICENSEES AND OTHER THIRD
PARTIES NOT TO ASSERT CLAIMS. UNIVERSITY and TRIANGLE shall cause each of
TRIANGLE's sublicensees under the rights granted to TRIANGLE under the
UNIVERSITY Patents pursuant to the 1996 TRIANGLE Agreement, and any other Third
Party to whom UNIVERSITY or TRIANGLE may have granted, or may in the future
grant, rights under their respective rights to the UNIVERSITY Patents and/or the
TRIANGLE Patents, to agree, to the extent permitted by applicable law, during
such time that such sublicensee or other Third Party has rights under UNIVERSITY
Patents and/or TRIANGLE Patents, not to initiate any further interference,
opposition, revocation or other proceedings or appeals on the same terms as set
forth above in SECTION 6.4(b); PROVIDED, HOWEVER, THAT such agreement by any
such sublicensees and other Third Parties shall be limited to actions and
proceedings in which the validity, enforceability or patentability of a patent
or patent application, or any claims included in a patent or patent application,
included within SHIRE Patents is challenged on the basis of one or more patents
or
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24
patent applications included within UNIVERSITY Patents and/or TRIANGLE
Patents. UNIVERSITY and TRIANGLE shall further require that all such
sublicensees and other Third Parties cause any of their sublicensees under the
UNIVERSITY Patents and/or the TRIANGLE Patents to agree not to initiate any
further interference, opposition, revocation or other proceedings or appeals on
the same terms as those set forth in the preceding sentence. The obligation on
SHIRE and its Affiliates to release licensees of UNIVERSITY and TRIANGLE under
SECTION 6.2 shall not be effective unless and until UNIVERSITY and TRIANGLE have
caused each such sublicensee or other Third Party execute the covenants and
agreements required by this SECTION 6.5.
ARTICLE 7. PATENT PROSECUTION
SHIRE and its Affiliates shall be primarily responsible for all patent
prosecution activities pertaining to the SHIRE Patents. SHIRE and its Affiliates
may, in their sole discretion, select patent counsel to prosecute, acquire from
the relevant patent offices, defend and maintain and handle any litigation,
interference, opposition or other action pertaining to the validity,
enforceability, allowability or subsistence (all of the foregoing activities
being referred to as "PATENT PROSECUTION ACTIVITIES") of all such SHIRE Patents.
SHIRE shall provide, or cause to be provided, to UNIVERSITY within sixty (60)
days of the Effective Date of this Agreement a copy of all file histories of all
pending U.S., European and Japanese patent applications included in the SHIRE
Patents. SHIRE also shall, without written request, provide, or cause to be
provided, to UNIVERSITY copies of material correspondence and pleadings with any
patent office and/or court filed or received after the Effective Date that
relate to the prosecution and/or litigation of any U.S., European and/or
Japanese patent or patent application included in the SHIRE Patents unless
previously served on UNIVERSITY. SHIRE shall also promptly inform
25
UNIVERSITY of any inter partes actions concerning the SHIRE Patents, and shall
keep UNIVERSITY promptly advised of the status, proceedings and filings in such
action. SHIRE shall further, on reasonable written request by UNIVERSITY,
provide, or cause to be provided, to UNIVERSITY copies of material
correspondence to or from and pleadings filed with any patent office and/or
court that relates to the prosecution, opposition and/or litigation of any SHIRE
Patent in any country. SHIRE and its Affiliates shall reasonably cooperate with
UNIVERSITY to add, amend or delete any claims included in any patent application
included in the SHIRE Patents directed to Licensed Compounds or methods for
their use or manufacture; PROVIDED, THAT SHIRE and its Affiliates shall have the
sole discretion as to whether any such claims shall be added, amended or deleted
pursuant to UNIVERSITY's request or otherwise. If SHIRE or its relevant
Affiliate decides to abandon or allow to lapse any patent application or patent
in any country of the Licensed Territory included in the SHIRE Patents, SHIRE
shall timely inform UNIVERSITY and UNIVERSITY or TRIANGLE, as they shall agree,
shall be given the opportunity to assume Patent Prosecution Activities in
respect thereof, at UNIVERSITY's or TRIANGLE's, as applicable, expense. If such
Patent Prosecution Activities are assumed by TRIANGLE, the costs of such assumed
Patent Prosecution Activities shall be deducted from royalty payments due to
SHIRE and its Affiliates, and such deduction shall be allocated between
UNIVERSITY and TRIANGLE as they shall agree. UNIVERSITY or TRIANGLE, as
applicable, may thereafter from time to time abandon or allow to lapse any or
all Patent Prosecution Activities assumed hereunder.
ARTICLE 8. INFRINGEMENT
8.1 NOTICE. If UNIVERSITY, TRIANGLE or SHIRE becomes aware of any
activity that it believes infringes a SHIRE Patent, the Party obtaining such
knowledge shall promptly advise the other Parties of the material facts and
circumstances pertaining to the potential infringement.
26
8.2 SHIRE'S AND ITS AFFILIATES' RIGHT TO PURSUE THIRD PARTY INFRINGEMENT
NOT DIRECTLY RELATED TO LICENSED COMPOUND(S) AND/OR LICENSED PRODUCT(S). SHIRE
and its Affiliates shall have the right, but not the obligation, to enforce any
rights included in the SHIRE Patents against any Third Party, at the expense of
SHIRE and its Affiliates, to the extent that such rights do not relate to the
manufacture, sale or use of the Licensed Compound, the Licensed Products and/or
any metabolites resulting from the human ingestion and/or metabolism of the
Licensed Compound, in each case within the Field of Use.
8.3 UNIVERSITY'S AND TRIANGLE'S RIGHT TO PURSUE THIRD PARTY INFRINGEMENT.
UNIVERSITY and TRIANGLE, jointly or separately as they shall agree, shall have
the right, but not the obligation, to enforce any rights included in the SHIRE
Patents relating to the Licensed Products, the Licensed Compound and/or any
metabolites resulting from the human ingestion and/or metabolism of the Licensed
Compound, in each case within the Field of Use, by taking action to ▇▇▇▇▇ or
initiating proceedings against any Third Party in connection with such Third
Party's manufacture, sale or use of the Licensed Compound and/or the Licensed
Products within the Field of Use. SHIRE and its Affiliates shall cooperate with
UNIVERSITY and/or TRIANGLE, as applicable, in such effort, including by being
joined as a party or parties to such proceeding if necessary; PROVIDED, THAT if
any such proceeding involves the assertion of, or revocation against, any claim
included in any patent or patent application included in the SHIRE Patents that
includes any compound other than the Licensed Compound, then SHIRE and its
Affiliates shall have the right to retain its own counsel, at UNIVERSITY's or
TRIANGLE's expense, as applicable, and to direct and/or control such proceedings
insofar as they involve the validity, construction or interpretation of any such
claim. In no event shall UNIVERSITY or TRIANGLE settle any infringement suit if
such settlement would impose any obligation or
27
burden on SHIRE or its Affiliates or affect the validity or enforceability of
any of the patents and patent applications included in the SHIRE Patents,
without the prior written consent of SHIRE (such consent not to be unreasonably
withheld). In the event that UNIVERSITY and/or TRIANGLE, as applicable, join
SHIRE or its relevant Affiliates as a party to any proceeding initiated by
UNIVERSITY and/or TRIANGLE to enforce any rights included in the SHIRE Patents,
UNIVERSITY and/or TRIANGLE, as applicable, agree to indemnify and hold SHIRE and
its Affiliates harmless as provided in SECTION 9.5(b). Any damages award or
settlement payments made to UNIVERSITY and/or TRIANGLE resulting from
UNIVERSITY's or TRIANGLE's enforcement of such rights in the SHIRE Patents in
excess of UNIVERSITY's and/or TRIANGLE's expenses shall be treated as
royalty-bearing Sales of Licensed Products and TRIANGLE shall make royalty
payments on such revenues in accordance with ARTICLE 3 of this Agreement. Any
remaining damages awarded or settlement payments received will be retained by
UNIVERSITY and TRIANGLE, and shared between them as they shall agree.
8.4 SHIRE'S AND ITS AFFILIATES' RIGHT TO PURSUE THIRD PARTY INFRINGEMENT.
If, within sixty (60) days after receiving notice from SHIRE pursuant to SECTION
8.1 of a potential infringement by a Third Party of any rights included in the
SHIRE Patents relating to the Licensed Products, the Licensed Compound and/or
any metabolites resulting from the human ingestion and/or metabolism of the
Licensed Compound in the Field of Use, neither UNIVERSITY nor TRIANGLE provides
written notice to SHIRE of their intention to take action to seek to ▇▇▇▇▇ such
infringement or to institute proceedings to prevent the continuation thereof or
if, within a further sixty (60) days, neither UNIVERSITY nor TRIANGLE initiates
any action to seek to ▇▇▇▇▇ such infringement or to institute proceedings to
prevent the continuation thereof, then SHIRE and its Affiliates shall have the
right to seek to ▇▇▇▇▇ such infringement or to institute
28
proceedings to prevent the continuation thereof, at the expense of SHIRE and its
Affiliates. UNIVERSITY and/or TRIANGLE shall cooperate with SHIRE and its
Affiliates, at the expense of SHIRE and its Affiliates, in any such effort,
including by being joined as a party or parties to such action if necessary. In
the event that SHIRE or its relevant Affiliate joins UNIVERSITY and/or TRIANGLE
as a party or parties in any such action, SHIRE and its Affiliates agree to
indemnify and hold UNIVERSITY and/or TRIANGLE, as applicable, harmless as
provided in SECTION 9.5(b). Any damage award or settlement payments made to
SHIRE and its Affiliates in excess of SHIRE's and its Affiliates' expenses in
connection with any such action shall be shared by SHIRE and its Affiliates on
the one hand and UNIVERSITY and/or TRIANGLE on the other hand (UNIVERSITY and
TRIANGLE treated collectively for the purposes of this SECTION 8.4) on a ***
basis.
ARTICLE 9. WARRANTIES; EXCLUSION OF WARRANTIES;
AND INDEMNIFICATION
9.1 WARRANTIES OF SHIRE.
(a) SHIRE represents and warrants that it has used its best efforts
to include in EXHIBIT A-1 a complete list of all patents and patent applications
that, as of the Effective Date, contain one or more claims that cause such
patents and patent applications to be included within the SHIRE Patents.
(b) SHIRE further represents and warrants that SHIRE and its
Affiliates possess all such rights as are necessary to grant to UNIVERSITY the
rights and licenses granted pursuant to ARTICLE 2 and the covenant not to ▇▇▇
and release granted pursuant to SECTIONS 6.1 AND
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6.2. UNIVERSITY and TRIANGLE acknowledge that SHIRE and its Affiliates have not
undertaken any investigation with respect to the potential patent rights of any
Third Party.
9.2 WARRANTIES OF EACH PARTY. Each of SHIRE, UNIVERSITY and TRIANGLE
represents and warrants to the other Parties that it is free to enter into this
Agreement and to carry out all of the provisions hereof.
9.3 MERCHANTABILITY AND EXCLUSION OF WARRANTIES. UNIVERSITY and TRIANGLE
possess the necessary expertise and skill in the technical areas pertaining to
the SHIRE Patents and the Licensed Products to make, and have made, their own
evaluation of the capabilities, safety, utility and commercial application of
the SHIRE Patents and the Licensed Products. ACCORDINGLY, EXCEPT AS SET FORTH IN
SECTIONS 9.1 AND 9.2, SHIRE AND ITS AFFILIATES DO NOT MAKE ANY REPRESENTATION OR
WARRANTY OF ANY KIND WITH RESPECT TO THE VALIDITY OF SHIRE PATENTS OR THE
LICENSED PRODUCTS AND EXPRESSLY DISCLAIM ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT AND ANY
OTHER IMPLIED WARRANTIES WITH RESPECT TO THE CAPABILITIES, SAFETY, UTILITY, OR
COMMERCIAL APPLICATION OF THE SHIRE PATENTS OR THE LICENSED PRODUCTS.
9.4 NO LIABILITY FOR CONSEQUENTIAL DAMAGES AND LIMITATION OF LIABILITY.
SHIRE AND ITS AFFILIATES SHALL NOT BE LIABLE, IN ANY EVENT, TO UNIVERSITY,
TRIANGLE OR ANY OF THEIR SUBLICENSEES OR AUTHORIZED THIRD PARTIES OR ANY OF
THEIR RESPECTIVE AFFILIATES OR CUSTOMERS OR ANY OTHER THIRD PARTY FOR ANY
COMPENSATORY, SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR EXEMPLARY DAMAGES,
RESULTING FROM THE
30
MANUFACTURE, TESTING, DESIGN, LABELING, USE, OFFER FOR SALE OR SALE OF LICENSED
PRODUCTS BY OR THROUGH UNIVERSITY OR TRIANGLE OR ANY OF THEIR SUBLICENSEES OR
AUTHORIZED THIRD PARTIES OR ANY OF THEIR RESPECTIVE AFFILIATES.
9.5 INDEMNIFICATION.
(a) TRIANGLE shall defend, indemnify, and hold harmless Indemnitees,
from and against any and all claims, demands, loss, liability, expense, or
damage (including Third Party investigative costs, court costs and reasonable
attorneys' fees) (collectively, "LOSSES") the Indemnitees may suffer, pay, or
incur as a result of claims, demands or actions against any of the Indemnitees
arising or alleged to arise by reason of, or in connection with, any and all
bodily injury (including death) and property damage caused or contributed to, in
whole or in part, by manufacture, testing, design, use, offer for sale, Sale, or
labeling of any Licensed Products by TRIANGLE, its Sublicensees or Authorized
Third Parties or any of their respective Affiliates, except for any Losses
arising from the Indemnitees' gross negligence or willful misconduct; PROVIDED
and on the condition that SHIRE fulfills its notice and other obligations under
SECTION 9.6 below, but only to the extent that any failure to fulfill such
notice and other obligations prejudices the rights of TRIANGLE.
(b) Each Party shall indemnify and hold the Indemnitees harmless
from and against any and all Losses the Indemnitees may suffer, pay or incur as
a result of claims, demands or actions against any of the Indemnitees arising by
reason of, or in connection with: (i) the breach by that Party of any of its
representations and warranties set forth in this Agreement, except for any
Losses resulting from the Indemnitees' gross negligence or willful misconduct
and (ii) any action taken by that Party to enforce any rights included in the
SHIRE Patents in
31
which the Indemnitee is joined as a party; PROVIDED and on the condition that
the Indemnitee fulfills its notice and other obligations under SECTION 9.6
below, but only to the extent that any failure to fulfill such notice and other
obligations prejudices the rights of the Indemnitor (as defined in SECTION 9.6).
9.6 NOTICE OF CLAIMS; INDEMNIFICATION PROCEDURES. An Indemnitee entitled
to make a claim for indemnification under this ARTICLE 9 shall promptly notify
the other Party (the "INDEMNITOR") in writing of any matter in respect of which
the Indemnitee or any of its employees intend to claim such indemnification. The
Indemnitees shall permit, and shall cause its employees to permit, the
Indemnitor, at its discretion, to defend or settle any such matter and agree to
the complete control of such defense or settlement by the Indemnitor; PROVIDED,
HOWEVER, THAT such settlement does not adversely affect the Indemnitee's rights
under this Agreement or impose any obligations on the Indemnitee in addition to
those set forth herein in order for such Indemnitee to exercise its rights under
this Agreement. No such matter shall be settled without the prior written
consent of the Indemnitor (such consent not to be unreasonably withheld) and the
Indemnitor shall not be responsible for any legal fees or other costs incurred
other than as provided herein. The Indemnitee and its employees shall cooperate
fully with the Indemnitor and its legal representatives in the investigation and
defense or settlement of any matter covered by the applicable indemnification.
The Indemnitee shall have the right, but not the obligation, to be represented
by counsel of its own selection and expense.
32
ARTICLE 10. CONFIDENTIALITY;
PRESS RELEASES, DISCLOSURES AND PUBLIC ANNOUNCEMENTS
10.1 TREATMENT OF CONFIDENTIAL INFORMATION. Except as otherwise provided
hereunder, during the term of this Agreement and for a period of*** years
thereafter:
(a) UNIVERSITY and TRIANGLE and their respective Affiliates shall
retain in confidence and use only for purposes of this Agreement, any
information and data supplied by SHIRE and its Affiliates, or on behalf of SHIRE
and its Affiliates, to UNIVERSITY or TRIANGLE under this Agreement in writing
or, if supplied orally, which, within thirty (30) days of such disclosure, is
summarized by the Disclosing Party (as defined in SECTION 10.3) in writing; and
(b) SHIRE and its Affiliates shall retain in confidence and use only
for purposes of this Agreement, any information and data supplied by UNIVERSITY
or TRIANGLE, or on behalf of UNIVERSITY or TRIANGLE, to SHIRE and its Affiliates
under this Agreement in writing or, if supplied orally, which, within thirty
(30) days of such disclosure, is summarized by the Disclosing Party in writing.
For purposes of this Agreement, all such information and data which a Party
is obligated to retain in confidence shall be called "INFORMATION."
10.2 RIGHT TO DISCLOSE. To the extent that it is reasonably necessary to
fulfill its obligations or exercise its rights under this Agreement, or any
rights which survive termination or expiration hereof, each Party and its
Affiliates may disclose Information to its licensees,
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*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
33
sublicensees, consultants, outside contractors, actual or prospective investors,
governmental regulatory authorities and clinical investigators on condition that
such entities or persons agree:
(a) to keep the Information confidential during the term of this
Agreement and for a period of *** years thereafter to the same extent as each
Party is required to keep the Information confidential; and
(b) to use the Information only for such purposes as such Parties
are authorized to use the Information.
Each Party or its Affiliates, licensees or sublicensees may disclose
Information to government or other regulatory authorities to the extent that
such disclosure is necessary for the preparation, filing, prosecution and
enforcement of patents on any inventions or discoveries of such Party, or to
obtain authorizations to conduct clinical trials or commercially market the
Licensed Products; PROVIDED, THAT, such Party is then otherwise entitled to
engage in such activities during the term of this Agreement or thereafter in
accordance with the provisions of this Agreement.
10.3 RELEASE FROM RESTRICTIONS. The obligation not to disclose Information
shall not apply to any part of such Information that:
(a) is or becomes patented, published or otherwise part of the
public domain, other than by unauthorized acts of the Party obligated not to
disclose such Information (for purposes of this ARTICLE 10, the "RECEIVING
PARTY") or its Affiliates, licensees or sublicensees in contravention of this
Agreement; or
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*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
34
(b) is disclosed to the Receiving Party or its Affiliates, licensees
or sublicensees by a Third Party, without breach of any obligations of
confidentiality; or
(c) prior to disclosure under this Agreement, was already in the
possession of the Receiving Party, its Affiliates, licensees or sublicensees; or
(d) results from the independent research and development of the
Receiving Party or its Affiliates, licensees or sublicensees; PROVIDED, THAT,
the persons developing such information have not had exposure to the Information
received from such other Party to this Agreement; or
(e) is required by law, rule or regulation to be disclosed by the
Receiving Party, PROVIDED, THAT, except with respect to the specific terms of
this Agreement, the Receiving Party uses reasonable efforts to notify the
disclosing Party (for the purposes of this ARTICLE 10, the "DISCLOSING PARTY")
promptly upon learning of such requirement in order to give the Disclosing Party
reasonable opportunity to oppose such requirement; PROVIDED, FURTHER, THAT the
Parties shall cooperate in seeking confidential treatment of any such
Information that is required to be disclosed and, in any case where the
Receiving Party discloses such Information to a court or administrative agency,
such disclosure shall, to the extent the court or administrative agency permits,
be disclosed under seal; or
(f) the Parties agree in writing may be disclosed.
10.4 PRESS RELEASES, DISCLOSURES AND PUBLIC ANNOUNCEMENTS. On the date
that this Agreement is executed, the Parties may agree to issue a joint press
release; PROVIDED, THAT, the form of such press release shall be approved in
advance by all Parties. The specific terms of this Agreement shall be treated as
Information subject to the terms of SECTIONS 10.1 THROUGH 10.3 and,
35
subject to the exclusions set forth in SECTION 10.3, no Party may publicly
disclose, except to legal, accounting and financial consultants and except as
otherwise provided herein, any such term without the prior written approval of
the other Parties, unless such disclosure is compelled by a court or
administrative agency or otherwise required by law, rule or regulation.
UNIVERSITY or TRIANGLE or their respective Affiliates may disclose the terms of
this Agreement to a bona fide prospective Sublicensee or Authorized Third Party
or other potential business partner, subject to an obligation of confidentiality
of such Sublicensee, Authorized Third Party or other potential business partner
that is no less restrictive than the confidentiality obligations contained
herein. SHIRE and UNIVERSITY hereby acknowledge that TRIANGLE has notified each
of them that this Agreement constitutes a material agreement to TRIANGLE and
must be filed by TRIANGLE with the Securities and Exchange Commission pursuant
to TRIANGLE's reporting obligations under the Securities and Exchange Act of
1934, as amended; PROVIDED, THAT the copy of this Agreement filed by TRIANGLE
with the Securities and Exchange Commission shall be appropriately redacted so
as to preserve the confidentiality of the specific financial terms of this
Agreement.
ARTICLE 11. TERM AND TERMINATION
11.1 TERM. Unless sooner terminated as provided in this Agreement, the
term of this Agreement shall commence on the Effective Date and shall continue
in full force and effect until the expiration of the last to expire patent
included in the SHIRE Patents.
11.2 TERMINATION. SHIRE shall have the right to terminate this Agreement
upon the occurrence of any one or more of the following events, PROVIDED, THAT
SHIRE has given UNIVERSITY and TRIANGLE the notice required in SECTION 11.3 and
has exhausted the dispute resolution procedures of SECTION 15.1, and neither the
UNIVERSITY nor TRIANGLE
36
has cured or initiated reasonable steps to cure the breach described in such
notice within the time period specified in SECTION 11.3:
(a) the institution of any proceeding by TRIANGLE or UNIVERSITY
under any bankruptcy, insolvency, or moratorium law; PROVIDED, HOWEVER THAT if
TRIANGLE or UNIVERSITY continues to perform its obligations and those of the
Party instituting such proceedings such that no harm results to SHIRE from the
institution of such proceedings, this Agreement shall continue in full force and
effect; or
(b) any assignment by TRIANGLE or UNIVERSITY of substantially all of
its assets for the benefit of creditors; PROVIDED, HOWEVER, THAT if TRIANGLE or
UNIVERSITY continues to perform its obligations and those of the Party making
such assignment such that no harm results to SHIRE from such assignment, this
Agreement shall continue in full force and effect; or
(c) placement of UNIVERSITY's or TRIANGLE's assets in the hands of a
trustee or a receiver unless the receivership or trust is dissolved within
thirty (30) days thereafter and PROVIDED, THAT in the case of any involuntary
bankruptcy proceeding, which is contested by such Party, such termination shall
not become effective until the bankruptcy court of jurisdiction has entered an
order upholding the petition, and PROVIDED, FURTHER, THAT if TRIANGLE or
UNIVERSITY continues to perform its obligations and those of the Party whose
assets have been placed in trust or receivership such that no harm results to
SHIRE from the placement of such Party's assets in trust or receivership, this
Agreement shall continue in full force and effect; or
(d) the breach by UNIVERSITY or TRIANGLE of any material term of
this Agreement.
37
11.3 EXERCISE. SHIRE may exercise its right of termination by giving
UNIVERSITY and TRIANGLE sixty (60) days' prior written notice of SHIRE's
election to terminate, except with respect to failure by UNIVERSITY or TRIANGLE
to make any payment required pursuant to this Agreement when due for which SHIRE
may provide thirty (30) days prior written notice of its election to terminate.
Any such notice shall include the basis for such termination. Upon the
expiration of the applicable notice period, this Agreement shall automatically
terminate unless UNIVERSITY and/or TRIANGLE has cured such breach or has
initiated reasonable steps to cure the breach specified in such notice, in which
case this Agreement shall automatically terminate if such breach has not been
cured within a further thirty (30) days following the expiration of the
applicable notice period. Such notice and termination shall not prejudice
SHIRE's right to receive royalties or other sums due hereunder and shall not
prejudice any cause of action or claim of SHIRE.
11.4 FAILURE TO ENFORCE. The failure of SHIRE and its Affiliates, at any
time, or for any period of time, to enforce any of the provisions of this
Agreement, shall not be construed as a waiver of such provisions or as a waiver
of the right of SHIRE and its Affiliates thereafter to enforce each and every
such provision of this Agreement.
11.5 TERMINATION BY UNIVERSITY AND TRIANGLE. Subject to their obligations
under the 1996 TRIANGLE Agreement, and subject to ARTICLE 16 below, and PROVIDED
THAT UNIVERSITY has provided to SHIRE the notice required in SECTION 11.6 and
has exhausted the dispute resolution procedures of SECTION 15.1 and SHIRE has
not cured the breach described in such notice within the time period specified
in SECTION 11.6, UNIVERSITY shall have the right to terminate this Agreement
upon the occurrence of any breach of a material term of this Agreement by SHIRE.
For the avoidance of doubt, UNIVERSITY shall exercise any such right
38
to terminate this Agreement on behalf of itself and TRIANGLE and TRIANGLE shall
have no separate right to terminate this Agreement by itself, whether for its
own benefit or for the benefit of itself and UNIVERSITY.
11.6 EXERCISE. UNIVERSITY may exercise its right of termination pursuant
to SECTION 11.5 by giving SHIRE sixty (60) days' prior written notice of
UNIVERSITY's election to terminate. The notice shall include the basis for such
termination. Upon the expiration of such sixty (60) day period, this Agreement
shall automatically terminate unless SHIRE has cured such breach or has
initiated reasonable steps to cure the breach specified in such notice, in which
case this Agreement shall automatically terminate if such breach has not been
cured within a further thirty (30) days following the expiration of the notice
period. Such notice of termination shall not prejudice any cause of action or
claim of UNIVERSITY (or TRIANGLE) accrued or to accrue on account of any breach
or default by SHIRE.
11.7 EFFECT OF TERMINATION.
(a) If this Agreement is terminated by SHIRE pursuant to
SECTION 11.2 and:
(i) TRIANGLE is not in breach of the 1996 TRIANGLE Agreement,
then SHIRE and TRIANGLE shall enter into an agreement on substantially the same
terms and conditions as this Agreement; or
(ii) If UNIVERSITY has entered into a sublicense agreement with
a party other than TRIANGLE pursuant to ARTICLE 16, and such sublicensee is not
in breach of its sublicense agreement, then SHIRE and such sublicensee shall
enter into an agreement on substantially the same terms and conditions as in
this Agreement.
(b) Upon expiration or termination of this Agreement for any reason:
39
(i) All rights and licenses granted by SHIRE and its
Affiliates to UNIVERSITY and TRIANGLE under this Agreement shall automatically
and immediately revert back to SHIRE and its Affiliates or shall terminate,
except for those rights which are expressly stated to survive expiration or
termination of this Agreement as set forth in SECTION 15.8;
(ii) Each Party shall use its best efforts to return, and shall
cause its Sublicensees to return, or at the Disclosing Party's direction, to
destroy, all data, writings and other documents and tangible materials,
including all Information, supplied by the Disclosing Party to such Party; and
(iii) SECTION 11.7(a) shall apply if and to the extent such
provision is applicable.
(c) Expiration or termination of this Agreement for any reason shall
not affect TRIANGLE's (and, if and as applicable pursuant to SECTION 3.1(b),
UNIVERSITY's) obligation to pay royalties accruing to SHIRE and its Affiliates
under the provisions of this Agreement while then in effect.
ARTICLE 12. ASSIGNMENT;
NO SEPARATE ACTION; JOINT LIABILITY
This Agreement and all of the provisions hereof shall be binding upon and
inure to the benefit of the Parties hereto and their respective successors and
permitted assigns. Neither EMORY nor UGARF shall assign or sell its rights,
liabilities or obligations under this Agreement or any part thereof without the
prior written consent of SHIRE and any such purported assignment shall be void.
TRIANGLE may not assign or sell its rights, liabilities or obligations under
this Agreement or any part thereof without the prior written consent of SHIRE;
40
except that TRIANGLE may, without consent, assign or sell its rights,
liabilities or obligations under this Agreement: (a) in connection with the
transfer or sale of all or substantially all of its business to which this
Agreement pertains; (b) in the event of its merger or consolidation with another
company; or (c) an Affiliate. Notwithstanding the foregoing, EMORY, UGARF and
TRIANGLE may each only assign this Agreement if, simultaneously with such
assignment, EMORY, UGARF or TRIANGLE, as applicable, also assigns to the same
person the BCH-13520 Agreement; and PROVIDED, FURTHER, THAT any assignee of
EMORY or UGARF, as applicable, will acquire the right to enforce the UNIVERSITY
Patents and any assignee of TRIANGLE will acquire the right to enforce the
TRIANGLE Patents. SHIRE and its Affiliates may assign any of its rights,
liabilities or obligations hereunder upon thirty (30) days advanced written
notice to UNIVERSITY and TRIANGLE; PROVIDED, THAT the assignee will acquire the
right to enforce the SHIRE Patents and the BCH-13520 Patents. Any permitted
assignee shall assume all obligations of its assignor under this Agreement. No
assignment shall relieve any Party of responsibility for the performance of any
accrued obligation which such Party has under this Agreement. EMORY and UGARF
shall not act separately under this Agreement and EMORY and UGARF shall be
jointly liable for their obligations under this Agreement.
ARTICLE 13. REGISTRATION OF LICENSE
UNIVERSITY or TRIANGLE may register at UNIVERSITY's or TRIANGLE's expense,
the license granted under this Agreement in any country of the Licensed
Territory where the use, sale or manufacture of a Licensed Product in such
country would be covered by a claim of a SHIRE Patent. Upon request by
UNIVERSITY or TRIANGLE, SHIRE and its Affiliates agree promptly to execute any
"short form" licenses submitted to it by UNIVERSITY or TRIANGLE, and reasonably
acceptable to SHIRE, in order to effect the foregoing registration in such
country.
41
ARTICLE 14. NOTIFICATION AND AUTHORIZATION UNDER DRUG PRICE
COMPETITION AND PATENT TERM RESTORATION ACT
14.1 NOTICES RELATING TO THE ACT. SHIRE shall notify UNIVERSITY and
TRIANGLE of: (a) the issuance of each U.S. patent included among the SHIRE
Patents, giving the date of issue and patent number for each such patent; and
(b) each notice pertaining to any patent included among the SHIRE Patents which
SHIRE or its relevant Affiliate receives as patent owner pursuant to the Drug
Price Competition and Patent Term Restoration Act of 1984, as amended
(hereinafter the "ACT"), including, notices pursuant to Sections 101 and 103 of
the Act from persons who have filed an abbreviated NDA ("ANDA") or a "paper"
NDA. Such notices shall be given promptly, but in any event within ten (10) days
of SHIRE's notice of each such patent's date of issue or receipt of each such
notice pursuant to the Act, whichever is applicable. SHIRE and its Affiliates
hereby authorize TRIANGLE to submit to the U.S. Food and Drug Administration
information concerning any SHIRE Patent that covers a Licensed Product for
publication in the FDA publication entitled "Approved Drug Products with
Therapeutic Equivalence Evaluations," commonly known as the "Orange Book," or
any successor thereto, in connection with such Licensed Product.
14.2 AUTHORIZATION RELATING TO PATENT TERM EXTENSION. SHIRE and its
Affiliates hereby authorize UNIVERSITY or TRIANGLE: (a) to include in any NDA
for a Licensed Product, as UNIVERSITY or TRIANGLE may deem appropriate under the
Act, a list of patents included among the SHIRE Patents that relate to such
Licensed Product and such other information as UNIVERSITY or TRIANGLE, in its or
their reasonable discretion, believes is appropriate to be filed pursuant to the
Act; and (b) subject to SHIRE's consent (which consent will not be unreasonably
withheld or delayed), to exercise any rights that may be exercisable by SHIRE or
its relevant Affiliate as patent owner under the Act to apply for an extension
of the
42
term of any patent included among the SHIRE Patents; PROVIDED, THAT, UNIVERSITY
or TRIANGLE shall use its reasonable efforts to obtain an extension of the term
of any patent included in the SHIRE Patents if such extension is available. In
the event that applicable law in any other country of the Licensed Territory
provides for the extension of the term of any patent included among the SHIRE
Patents in such country, upon request by UNIVERSITY or TRIANGLE, SHIRE or its
relevant Affiliate shall use its reasonable efforts to obtain such extension or,
in lieu thereof, shall authorize UNIVERSITY or TRIANGLE to apply for such
extensions in consultation with SHIRE; PROVIDED, THAT, UNIVERSITY or TRIANGLE
shall exercise its reasonable efforts to obtain any such extension in such
country upon receipt of authorization from SHIRE or its relevant Affiliate in
accordance with this SECTION 14.2. SHIRE and its Affiliates agree to cooperate
in the exercise of the authorization granted herein or which may be granted
pursuant to this SECTION 14.2 and will execute such documents and take such
additional action as UNIVERSITY or TRIANGLE may reasonably request in connection
therewith.
ARTICLE 15. MISCELLANEOUS
15.1 ARBITRATION.
(a) The Parties shall initially attempt in good faith to resolve any
significant controversy, claim, or dispute arising out of or relating to this
Agreement or significant breach thereof or allegation of material breach under
ARTICLE 11, (hereinafter referred to as a "DISPUTE") through at least one
face-to-face negotiation between senior executives of the rank of at least Vice
President, or in the case of EMORY and/or UGARF, an officer of EMORY and/or
UGARF of equivalent rank and with power to bind each of EMORY and/or UGARF, at
the place of business of the Party of whom the meeting is first requested, or in
the case of a meeting
43
requested by EMORY and UGARF, at EMORY. If the Dispute is not resolved within
thirty (30) business days (or such other period of time mutually agreed upon by
the Parties) of commencing such face-to-face negotiations, or if the Party
against which a claim has been asserted refuses to attend such negotiations or
does not otherwise participate in such negotiations within thirty (30) business
days (or such other period of time mutually agreed upon by the Parties) from the
date of notice of a Dispute, then the Parties agree to submit the Dispute to
arbitration conducted under the auspices of the American Arbitration Association
pursuant to that organization's rules for commercial arbitration and according
to the procedures set forth on EXHIBIT F attached hereto. Any arbitration
initiated by UNIVERSITY or TRIANGLE shall be held in Montreal, Canada. Any
arbitration initiated by SHIRE and its Affiliates shall be held in Atlanta,
Georgia.
(b) Nothing in this Agreement shall be deemed to prevent any Party
from seeking preliminary injunctive relief (or any other provisional remedy)
from any court having jurisdiction over the Parties and the subject matter of
the Dispute.
15.2 LEGAL COMPLIANCE. TRIANGLE shall comply with any and all applicable
laws and regulations relating to the manufacture, use, sale, labeling or
distribution of Licensed Products and shall not take any action which would
cause any Party or any of their respective Affiliates, licensees or sublicensees
to violate any applicable laws or regulations.
15.3 INDEPENDENT CONTRACTOR. UNIVERSITY's and TRIANGLE's relationship to
SHIRE and its Affiliates shall be that of a licensee or sublicensee only. No
Party to this Agreement shall be, nor be deemed to be, an employee, agent,
co-venturer or legal representative of any other Party for any purpose related
to this Agreement. No Party shall have any authority to act for, or on behalf
of, any other Party in any matter, nor to hold itself as having any right to
44
do so. Persons retained by one Party as employees or agents shall not, by reason
thereof, be deemed to be employees or agents of any other Party.
15.4 PATENT MARKING. TRIANGLE shall, and shall ensure that its
Sublicensees shall, ▇▇▇▇ Licensed Products Sold in the United States with United
States patent numbers in accordance with United States law and that Licensed
Products manufactured or Sold in other countries shall be marked in compliance
with all applicable laws in such countries. The foregoing obligations shall be
subject to size and space limitations.
15.5 USE OF NAMES. Each Party shall obtain the prior written approval of
any other Party prior to it, or any of its Affiliates, licensees or
sublicensees, making use for any commercial purpose (including in any publicity
release) of the name of such other Party, any of its Affiliates or any of its
respective employees.
15.6 GOVERNING LAW. This Agreement and all amendments, modifications,
alterations, or supplements thereto, and the rights of the Parties hereunder,
shall be construed under and governed by the laws of the United States of
America and the State of
New York (without regard to conflicts of laws
provisions).
15.7 ENTIRE AGREEMENT. This Agreement and the BCH-13520 Agreement
constitute the entire agreement between the Parties with respect to the subject
matter hereof, and supersede any prior understandings, agreements or
representations by or between or among the Parties, written or oral (including,
that certain Binding Material Terms Agreement between the Parties dated as of
July 26, 2002), which may have related to the subject matter hereof in any way.
This Agreement shall not be modified, amended or terminated, except as herein
provided, or except by another agreement in writing executed by duly authorized
officers of the Parties hereto.
45
15.8 SURVIVAL. ARTICLES 5, 9, 10 AND 12 and Sections 4.2, 4.3, 6.2,
6.3(a), 6.4(a), 11.7, 15.1, 15.5, 15.6, 15.8, 15.11 AND 15.12 shall survive
expiration or termination of this Agreement for any reason. In addition to the
foregoing Articles and Sections: (i) SECTION 6.4(b) shall survive termination of
this Agreement by SHIRE pursuant to SECTION 11.2(d) (subject to any rights of
UNIVERSITY and/or TRIANGLE to initiate any interference, opposition, revocation
or other proceedings, or to induce, assist or direct any Third Party in
challenging the validity, enforceability or patentability of any claims covering
an Unlicensed Compound included in any patents and/or patent applications
included in the SHIRE Patents pursuant to SECTION 6.4(c)); and (ii)
SECTION 6.3(b) shall survive termination of this Agreement by UNIVERSITY
pursuant to SECTION 11.5.
15.9 SEVERABILITY. All rights and restrictions contained herein may be
exercised and shall be applicable and binding only to the extent that they do
not violate any applicable laws and are intended to be limited to the extent
necessary so that they will not render this Agreement illegal, invalid or
unenforceable. In the event that any provision of this Agreement shall be held
to be unenforceable, invalid or in contravention of applicable laws, such
provision or portion of a provision shall be of no effect, and the Parties shall
negotiate in good faith to replace such provision with a provision which effects
to the extent possible the original intent of such provision. In case such
provisions cannot be agreed upon, the invalidity, unenforceability or illegality
of one or several provisions of the Agreement shall not affect the validity of
the Agreement as a whole, unless the invalid, enforceable or illegal provisions
are of such essential importance to this Agreement that it is to be reasonably
concluded that the Parties would not have entered into this Agreement without
the invalid provisions.
46
15.10 FORCE MAJEURE. Any delays in, or failure of performance of any Party
to this Agreement (other than any delay in, or failure of performance of, any
payment obligation of UNIVERSITY and TRIANGLE under this Agreement), shall not
constitute a default hereunder, or give rise to any claim for damages, if and to
the extent caused by occurrences beyond the control of the Party affected,
including, acts of God, strikes or other concerted acts of workmen, fires,
floods, explosions, riots, war, rebellion, sabotage, acts of terrorism, acts of
governmental authority or failure of governmental authority to issue licenses or
approvals which may be required.
15.11 ATTORNEYS' FEES. If any action at law, in equity or under
SECTION 15.1 of this Agreement is necessary to enforce or interpret the terms of
this Agreement, the prevailing Party shall be entitled to reasonable attorneys'
fees, costs and necessary disbursements, in addition to any other relief to
which the Party may be entitled.
15.12 INTERPRETATION. This Agreement is executed in the English language.
The language used in this Agreement shall be deemed to be the language chosen by
the Parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any person. In this Agreement, the
singular shall include the plural and vice versa and the words "INCLUDING" and
"INCLUDES" shall be deemed to be followed by the phrase "WITHOUT LIMITATION."
15.13 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
47
ARTICLE 16. SUBSTITUTION OF SUBLICENSEE
16.1 SUBSTITUTIONS. In the event that the 1996 TRIANGLE Agreement is
terminated and TRIANGLE ceases to be UNIVERSITY's sublicensee for any reason,
then the following provisions shall apply to UNIVERSITY's substituting a
different sublicensee for TRIANGLE:
(a) UNIVERSITY shall promptly notify SHIRE of TRIANGLE's ceasing to
be a sublicensee;
(b) UNIVERSITY shall use its best efforts to identify to SHIRE in
writing one or more potential sublicensees within six (6) months of TRIANGLE's
ceasing to be a sublicensee. Any such potential sublicensees shall be
commercially reasonable and shall have expertise and skill in the technical
areas pertaining to the SHIRE Patents. In the event that UNIVERSITY fails to
identify one or more potential sublicensees within such six (6) month period,
SHIRE may, upon at least thirty (30) days' prior written notice, terminate this
Agreement, unless within such notice period, UNIVERSITY identifies one or more
potential sublicensees.
(c) Within thirty (30) days of UNIVERSITY's identification of one or
more potential sublicensees, SHIRE shall notify UNIVERSITY in writing of whether
or not any of such sublicensees are acceptable. SHIRE shall not unreasonably
withhold acceptance of such potential sublicensees and may only reject any such
potential sublicensee if it does not meet the criteria set forth in the
preceding SECTION 16.1(b). Should SHIRE reject any such potential sublicensee
then it shall provide a detailed, written explanation for its bases for such
rejection. If UNIVERSITY disputes any such rejection, the dispute shall be
promptly resolved in accordance with the dispute resolution procedures set forth
in SECTION 15.1. Should SHIRE reject all of the potential sublicensees proposed
by UNIVERSITY, then UNIVERSITY shall have another six (6)
48
months from the date of any notice of rejection by SHIRE (or, if SHIRE's
rejection of such potential sublicensees is disputed by UNIVERSITY and SHIRE's
rejection is affirmed following the dispute resolution procedures set forth in
SECTION 15.1, six (6) months from the date of resolution of any such dispute)
within which to propose one or more alternative sublicensees that meet the
criteria set forth in pursuant to SECTION 16.1(b); PROVIDED, THAT, if UNIVERSITY
fails to identify any such potential sublicensees within such further six (6)
month period, or if all of the alternative sublicensees proposed by UNIVERSITY
within such further six (6) month period, are also rejected by SHIRE pursuant to
this SECTION 16.1(c) and such rejections are not determined through the dispute
resolution procedures of SECTION 15.1 to have been improperly made, SHIRE may,
upon at least thirty (30) days prior written notice to UNIVERSITY, terminate
this Agreement; PROVIDED, THAT, SHIRE shall not exercise any such right of
termination until the resolution of a dispute (if any) pursuant to the dispute
resolution procedures set forth in SECTION 15.1.
(d) If SHIRE accepts any such potential sublicensee, then UNIVERSITY
shall negotiate in good faith to enter into a sublicensing agreement with such
approved sublicensee which sublicense agreement shall include terms and
conditions at least as favorable to SHIRE and its Affiliates as SECTIONS *** and
ARTICLES *** of this Agreement and SECTIONS *** of the BCH-13520 Agreement. In
the event that UNIVERSITY and such approved sublicensee fail to execute a
sublicensing agreement within one hundred and twenty (120) days of the date of
SHIRE's notice approving such sublicensee, UNIVERSITY shall promptly notify
SHIRE of such failure in writing and SHIRE may, upon at least thirty (30) days
----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
49
prior written notice to UNIVERSITY, terminate this Agreement, unless within such
notice period, UNIVERSITY and the approved sublicensee execute a sublicense
agreement as described in this SECTION 16.1(d). UNIVERSITY shall provide a copy
of any such sublicense agreement within thirty (30) days of execution thereof.
ARTICLE 17. NOTICES
All notices, statements and reports required to be given under this
Agreement shall be in writing in the English language, shall be effective when
received and shall be delivered in person or sent by mail, registered or
certified, postage prepaid (return receipt requested), to the Parties at the
following addresses:
TO SHIRE BIOCHEM: Shire Biochem Inc.
▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇
▇▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
TO SHIRE PHARMACEUTICALS
GROUP: Shire Pharmaceuticals Group plc
Hampshire International Business Park
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: General Counsel
Telephone: ▇▇▇-▇▇-▇▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇-▇▇▇▇-▇▇▇▇
TO EMORY: Emory University
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
Attention: Director, Office of Technology
Transfer
Telephone: ▇▇▇-▇▇▇-▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
50
TO UGARF: University of Georgia Research Foundation, Inc.
▇▇▇▇ Graduate Studies ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇
Attention: Director, Technology
Commercialization Office
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
TO TRIANGLE: Triangle Pharmaceuticals, Inc.
▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
Attention: General Counsel
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Any Party hereto may change the address to which notices to such Party are to be
sent by giving notice to the other Parties at the address and in the manner
provided above. Any notice may be given, in addition to the manner set forth
above, by facsimile, PROVIDED, THAT the Party giving such notice obtains
acknowledgment by facsimile that such notice has been received by the Parties to
be notified. Notice made in this manner shall be deemed to have been given when
such acknowledgment has been transmitted.
51
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.
EMORY UNIVERSITY UNIVERSITY OF GEORGIA RESEARCH
FOUNDATION, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, PhD., JD By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------ ---------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, PhD., JD Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Vice President and Director Title: Chief Licensing Officer
Office of Technology Transfer
TRIANGLE PHARMACEUTICALS, INC.
By: /s/ R. ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------
Name: R. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Executive Vice President
SHIRE BIOCHEM INC. SHIRE PHARMACEUTICALS GROUP PLC
By: /s/ ▇▇▇▇▇▇ Rus By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------- -------------------
Name: ▇▇▇▇▇▇ Rus Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President and CEO Title: Vice President,
Intellectual Property
52
