Exhibit 10.34
EXECUTION COPY
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement") is entered into as of May 4_,
2005 (the "Effective Date") by and between HENKAN PHARMACEUTICAL COMPANY, a
company limited by shares organized under the law of Taiwan, R.O.C., with
offices at 00xx Xxxxx, 00 Xxx Xxx Xxxxx Xxxx, Xxxxxxx 0, Xxxxxx, Xxxxxx
("HenKan") and COMBINATORX, INCORPORATED, a corporation incorporated under the
law of Delaware, with offices at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000
("CombinatoRx"). Each of HenKan and CombinatoRx may be referred to herein as a
"Party," or, collectively, as the "Parties."
RECITALS
WHEREAS, HenKan is engaged in the development and commercialization of
pharmaceutical products and is interested in developing and commercializing the
Product (as defined below);
WHEREAS, CombinatoRx owns certain rights to the Product and is willing to
grant some of these rights to HenKan on the terms set forth herein; and
WHEREAS, HenKan and CombinatoRx desire to collaborate on the further
preclinical and clinical development, regulatory approval, and commercialization
of the Product, with the intent that HenKan will develop and commercialize the
Product in the Field (as defined below) in the Territory (as defined below) and
under the terms of this Agreement.
WHEREAS, CombinatoRx and HenKan further desire to coordinate and
contribute to the global development of the Product by (i) establishing HenKan
as one site of a CombinatoRx global multi-centered pivotal trial for the Product
and by (ii) HenKan contributing, with its own resources, to demonstrating the
clinical utility of and seeking regulatory approval for the product in an
oncology indication that is different from the indications being pursued by
CombinatoRx, where such indication is scientifically reasonable based upon the
preclinical data.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
promises contained in this Agreement, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
As used throughout this Agreement, the following capitalized terms shall have
the meanings ascribed to them below:
1.1. "ADVERSE EXPERIENCES" means (i) information on any serious
unexpected adverse event related to or potentially related to the Product if the
relationship of the serious adverse event to the Product is unknown, for any
indication, (ii) any complaint related to the Product if the relationship of the
complaint to the Product is unknown, for any indication, (iii) any information,
regardless of source, sufficient to warrant the consideration of Product
administration changes or (iv) information from in vitro or animal studies
suggesting a significant hazard to humans. The phrase "Adverse Experiences"
includes without limitation information relating to any experience or event that
(a) suggests a significant hazard, contraindication, side effect or precaution,
(b) is fatal or life threatening, (c) is permanently disabling, (d) requires or
prolongs hospitalization, (e) involves a congenital anomaly, cancer or overdose,
(f) is one not identified in nature, specificity, severity or frequency in the
current investigator brochure or the approved product labeling for such product,
(g) includes findings from tests in laboratory animals that suggest a
significant safety risk to humans, including without limitation reports of
mutagenicity, teratogenicity or carcinogenicity, or (f) is otherwise implicated
or described by any applicable United States regulations (21 CFR 312, 314, 600)
and/or any foreign equivalent regulatory authority regulations.
1.2. "AFFILIATE" shall mean any company or entity controlled by,
controlling or under common control with a Party hereto, whereby the term
"control" shall include without limitation the ownership of fifty percent (50%)
or more of any entity's voting stock or participating profit interest or having
the power to directly or indirectly direct the management or determine the
policies of an entity.
1.3. "BUY BACK OPTION" shall have the meaning set forth in Section 2.2.
1.4. "CLAIM" shall mean any and all liabilities, damages, losses,
settlements, claims, actions, suits, penalties, fines, costs or expenses
(including, without limitation, reasonable attorneys' fees).
1.5. "COMBINATORX PRODUCT KNOW-HOW" shall mean all inventions,
concepts, discoveries, processes, Information, data, biological materials,
methods, formulations, formulae, know-how and the like that may be related to
any patent application or patent included in the CombinatoRx Product Patents and
that
(a) have been discovered, invented or developed by or on behalf
of CombinatoRx prior to or after the Effective Date; and
(b) are necessary or useful in connection with the development,
manufacture, use or sale of the Product in the Field in the Territory.
1.6. "COMBINATORX PRODUCT PATENTS" shall mean and collectively includes
the patent applications and patents set forth in Exhibit A attached hereto,
which shall be updated to reflect additional patents issued and patent
applications filed during the term of this Agreement, and all reissues,
extensions, renewals, substitutions, supplementary protection certificates,
additions, continuations, divisions and continuations-in-part thereof, but, in
the case of all of the foregoing, only to the extent that the foregoing cover
essentially the same subject matter as claimed in the patent applications and
patents included in Exhibit A on the Effective Date.
1.7. "COMBINATORX PRODUCT TECHNOLOGY" shall mean the CombinatoRx
Product Patents and the CombinatoRx Product Know-How.
1.8. "COMMERCIALLY REASONABLE EFFORTS" shall mean efforts and resources
commensurate with the efforts and resources in research and development used by
a reasonable
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party, possessing resources similar to the resources possessed by
the party to which this definition is applied, for projects of commensurate
economic value in consideration of the continuing progress and state of
scientific knowledge and in consideration of reasonably available resources, at
the time.
1.9. "CONFIDENTIAL INFORMATION" shall have the meaning set forth in
Section 9.1 hereof.
1.10. "DOLLAR" AND "$" shall mean United States dollars.
1.11. "FDA" shall mean the United States Food and Drug Administration
and any successor thereto.
1.12. "FIELD" shall mean all therapeutic and diagnostic applications in
oncology.
1.13. "FIRST COMMERCIAL SALE" shall mean the first sale or other
disposition for value of the Product, in a final dosage form packaged for the
ultimate consumer, to an independent Third Party following Regulatory Approval,
by HenKan, its Affiliates or a sublicensee of HenKan.
1.14. "FORCE MAJEURE" shall mean any act of God, any accident,
explosion, fire, storm, earthquake, flood, drought, peril of the sea, riot,
embargo, war or foreign, federal, state or municipal order of general
application, seizure, requisition or allocation, any failure or delay of
transportation, shortage of or inability to obtain supplies, equipment, fuel or
labor or any other circumstances or event beyond the reasonable control of the
Party relying upon such circumstance or event to excuse its non-performance.
1.15. "GROSS SALES" means the gross amount invoiced on sales to
independent Third Parties of the Product by either Party, as applicable, or any
of such Party's Affiliates and/or sublicensees.
1.16. "HCC" means Hepatocellular Carcinoma.
1.17. "HENKAN DEVELOPMENT COSTS" shall mean, as of a Buy Back Option
exercise date, the out-of-pocket and fully burdened internal costs incurred by
HenKan in the development of the Product attributable to the countries in the
Territory subject to the Buy Back Option, including any payment HenKan has
already made under Sections 5.1.1 and Sections 5.1.2. Any development costs
attributable to more than one country in the Territory shall be allocated
equally among all countries in the Territory, PROVIDED, HOWEVER, that such
allocation may be adjusted by mutual agreement of the Parties on the basis of
such countries expected market share within the Territory as of the Buy Back
Option exercise date.
1.18. "HENKAN INVENTION" shall mean any invention, development,
discovery, method, process, Information or other know-how that is conceived of
or discovered by HenKan's employees, consultants, agents or sublicensees through
the exercise of the rights to the Product granted pursuant to this Agreement,
except to the extent that any of the foregoing directly relates to the
manufacturing, formulation, dosing, use, or sale of the Product.
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1.19. "HENKAN PATENT" shall mean any patent application or patent
covering a HenKan Invention.
1.20. "HENKAN PRODUCT INVENTION" shall mean any invention, development,
discovery, method, process, Information or other know-how that is conceived of
or discovered by HenKan's employees, consultants, agents or sublicensees through
the exercise of the rights to the Product by HenKan or its employees,
consultants, agents or sublicensees pursuant to this Agreement and that directly
relates to the manufacturing, formulation, dosing, use, or sale of the Product.
1.21. "HENKAN PRODUCT PATENT" shall mean any patent application or
patent covering a HenKan Product Invention.
1.22. "INFORMATION" shall mean information and data of any type and in
any tangible or intangible form, including without limitation inventions,
practices, methods, techniques, specifications, formulations, formulae,
knowledge, know-how, skill, experience, test data including pharmacological,
biological, chemical, biochemical, toxicological and clinical test data,
analytical and quality control data, stability data, results of studies and
patent and other legal information or descriptions.
1.23. "IND" shall mean the foreign equivalent in any country in the
Territory of an Investigational New Drug filing made with the FDA.
1.24. "JOINT STEERING COMMITTEE" shall mean a committee comprised of
equal numbers of representatives of CombinatoRx and HenKan having the
responsibilities described in Article 4 hereof.
1.25. "NDA" shall mean the foreign equivalent in any country in the
Territory of a New Drug Application, or other application for the approval to
market the Product, which is submitted to the FDA.
1.26. "NET SALES" shall mean Gross Sales less the sum of (i) trade,
quantity and cash discounts actually allowed or paid; (ii) refunds, rebates,
chargebacks, retroactive price adjustments (including Medicaid, managed care and
similar types of rebates), and service allowances actually allowed or paid;
(iii) credits or allowances given or made for rejections or returns of previous
sales of the Product or for wastage replacement actually taken or allowed; (iv)
taxes, duties or other governmental charges levied on the sale, transportation
or delivery of the Product and paid by the selling party; and (v) charges for
shipping, freight and insurance directly related to the distribution of the
Product (excluding amounts reimbursed by third party customers).
No deductions shall be made for commissions paid to individuals whether
they are with independent sales agencies or regularly employed by such seller
and on its payroll, or for the cost of collections.
Transfers between a Party and any of its Affiliates for resale shall not
be considered a sale, and in such cases, Net Sales shall be based on the Net
Sales for the Products received by the Affiliate who sells to a Third Party.
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1.27. "PATENT ROYALTY TERM" shall mean the period beginning on the First
Commercial Sale of a Product in the Territory and ending, on a country by
country basis, upon the later of (i) fifteen (15) years following the Effective
Date or (ii) the latest date on which such a Product is covered by a Valid Claim
in each country in the Territory.
1.28. "PHASE II" shall mean a clinical trial which is defined as "Phase
II" in FDA regulations as amended from time to time, or any foreign equivalent
thereof.
1.29. "PHASE III" shall mean a clinical trial which is defined as "Phase
III" in FDA regulations as amended from time to time, or any foreign equivalent
thereof.
1.30. "PRODUCT" shall mean CombinatoRx's product under development known
as CRx-026, including a combination of chlorpromazine and pentamidine, and all
formulations of CRx-026.
1.31. "REGULATORY APPROVAL" shall mean, with respect to a country, all
approvals (including price and reimbursement approvals), licenses, registrations
or authorizations based on determinations of quality, safety and efficacy of any
federal, state or local regulatory agency, department, bureau or other
government entity, necessary for the use, storage, import, transport and sale of
the Product in such country.
1.32. "TERRITORY" shall mean Taiwan, R.O.C., People's Republic of China
and South Korea.
1.33. "THIRD PARTY" shall mean any individual or entity other than
HenKan or CombinatoRx or their Affiliates or any sublicensees.
1.34. "TRADEMARKS" shall mean all trademarks developed, owned or
controlled by CombinatoRx for commercialization of the Product (in countries
either within or outside of the Territory) for use in connection with the
commercialization of the Product in the Territory.
1.35. "VALID CLAIM" shall mean (i) any claim of an issued and unexpired
patent included under the CombinatoRx Product Patents that has not been revoked
or held unenforceable or invalid by a decision of a court or other governmental
authority of competent jurisdiction or unappealed within the time allowable for
appeal, and that has not been explicitly disclaimed, or admitted by CombinatoRx
to be invalid or unenforceable or of a scope not covering the Product through
reissue, disclaimer or otherwise, and (ii) any claim of a pending application
included under the CombinatoRx Product Patents being prosecuted in good faith
that has not been abandoned or finally rejected and that has been pending for
not more than six (6) years after the filing date from which such claim takes
priority. For clarity, any claim of a patent or patent application included
under the CombinatoRx Product Patents that ceases to be a Valid Claim as a
result of pending too long or otherwise, but subsequently issues and is
otherwise described by clause (i) of the foregoing sentence shall be a Valid
Claim for purposes of this definition.
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ARTICLE 2
LICENSE GRANTS
2.1. LICENSES TO HENKAN.
2.1.1. EXCLUSIVE LICENSE IN THE FIELD IN THE TERRITORY. Subject
to the terms and conditions of this Agreement, CombinatoRx hereby grants to
HenKan an exclusive, perpetual, irrevocable, royalty-bearing license, with the
right to sublicense, under CombinatoRx's rights in the CombinatoRx Product
Technology to develop, use, make, have made, sell, offer for sale and import and
export the Product in the Field in the Territory. HenKan shall not have any
rights to sell the Product outside of the Territory and shall use Commercially
Reasonable Efforts to ensure that no distributor, reseller or other agent of
HenKan shall sell or distribute the Product outside of the Territory.
In addition, subject to the terms and conditions of this Agreement,
CombinatoRx hereby grants to HenKan an exclusive license in the Territory to all
Trademarks. HenKan shall use the Trademarks in connection with the
commercialization of the Product and shall, to the extent permitted by law,
include CombinatoRx's name on all Product labels. HenKan acknowledges and agrees
that CombinatoRx is the sole and exclusive owner of the Trademarks. All goodwill
associated with the Trademarks arising from any and all use of the Trademarks
shall inure to the sole benefit of CombinatoRx which shall have sole and
exclusive right to file and prosecute registrations for such Trademarks
throughout the Territory. HenKan shall take no action to contradict, deny,
dilute, or erode HenKan's or CombinatoRx's respective rights, title, and
interests in and to any Trademarks. Without limitation, HenKan shall not use or
adopt, or purport to grant to any other party any right to use or adopt, any
xxxx that is confusingly similar to any Trademark. Further, HenKan shall not
file, initiate or assert any litigation, action, opposition, cancellation or
other proceeding or claim directed at or resulting in HenKan's or CombinatoRx's
loss of any right, title or interest in or to any Trademarks.
In connection with the development, manufacture, use or sale of the
Product in the Field in the Territory by HenKan, CombinatoRx shall, upon the
Effective Date, deliver to HenKan a copy of all of the then existing CombinatoRx
Product Know-How in tangible form to the extent it can practically be reduced to
tangible form, and shall promptly deliver to HenKan a copy of any additional
CombinatoRx Product Know-How in tangible form, to the extent it can practically
be reduced to tangible form, that is discovered, invented or developed after the
Effective Date.
2.1.2. PARTICIPATION IN COMBINATORX CLINICAL TRIALS. CombinatoRx
shall use Commercially Reasonable efforts to provide HenKan the opportunity to
manage, at its own expense under CombinatoRx's supervision and direction (to the
extent CombinatoRx supervises and directs other trial sites) and in accordance
with CombinatoRx's protocol, a local site in the Territory as part of the
CombinatoRx multi-site Phase II and Phase III pivotal studies for the Product.
In such event, the provisions of Article 4 shall apply.
2.1.3. RIGHT OF FIRST NEGOTIATION TO ADDITIONAL COMBINATORX
PRODUCTS. CombinatoRx hereby grants HenKan a right of first negotiation,
exercisable for 30 days
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following CombinatoRx's notice to HenKan (the "Negotiation Notice") that it has
designated a program as a candidate for out-licensing in the Territory and after
the availability of data from the initial Phase II trials of such programs, for
development and commercialization rights to any such designated program in the
Territory. To facilitate the negotiation process and/or the exercise of the
right of first refusal, CombinatoRx shall include in the Negotiation Notice
reasonably detailed information which pertains to such candidate program,
including without limitation the contemplated principal terms and conditions of
such out-licensing, and which CombinatoRx would distribute to the participating
parties as if there were an open bid or auction. The rights granted pursuant to
this Section 2.1.3 shall apply to the following list of CombinatoRx programs
after the delivery of the Negotiation Notice by CombinatoRx: XXx-000, XXx-000,
XXx-000, XXx-000, XXx-000 and CRx-140.
If HenKan exercises such right of first negotiation with respect to any
of the programs designated by CombinatoRx, the Parties shall negotiate in good
faith for a period of not less than 90 days (which may be extended by mutual
agreement of the Parties) the terms of an agreement regarding the development
and commercialization of such designated program in the Territory. If, despite
good faith efforts, the Parties are unable to reach agreement on the terms of
such development and commercialization agreement, CombinatoRx shall be free to
license such designated program to any other Third Party for rights in the
Territory.
2.1.4. HENKAN SUBLICENSE LIMITATIONS. HenKan shall be permitted
to grant a sublicense to the rights granted to it hereunder only with the prior
consent of CombinatoRx, such consent not to be unreasonably withheld. Any
sublicense by HenKan of the rights granted to HenKan hereunder shall be
consistent with the terms of this Agreement and shall include an obligation for
the sublicensee to comply with the applicable obligations of this Agreement
including, without limitation, Section 2.3 pertaining the grant of rights to
CombinatoRx, Article 5 pertaining to payments, Article 7 pertaining to records
and audits and Article 9 pertaining to confidentiality.
2.2. BUY BACK OPTION.
2.2.1. During the term of this Agreement, in the event that
CombinatoRx has a corporate opportunity including without limitation a merger,
acquisition, reorganization, business combination, sale of all or substantially
all of its assets, or the like (the "CombinatoRx Opportunity"), and that the
CombinatoRx Opportunity is conditioned upon CombinatoRx's consolidating its
global licensing activities or programs with respect to the Products, then
CombinatoRx shall have the option to buy back the rights granted to HenKan under
Section 2.1.1 (a "Buy Back Option") by paying the Purchase Price set forth in
Section 2.2.2 below. A Buy Back Option may be exercised on a country-by-country
basis and shall expire with respect to each country in the Territory upon the
First Commercial Sale in such country.
2.2.2. To exercise the Buy Back Option with respect to a country
in the Territory, CombinatoRx shall notify HenKan in writing (the "Buy Back
Notice") of its desire to exercise the Buy Back Option with respect to such
country prior to the expiration of the Buy Back Option in such country. The
purchase price for the exercise of the Buy Back Option (the "Purchase Price")
shall be equal to the HenKan Development Cost plus the applicable Premium listed
below, plus an obligation of CombinatoRx (or its successors or assigns, as the
case may
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be) to pay to HenKan a royalty on Net Sales in the Territory, for the Patent
Royalty Term (as set forth in Section 1.27), at the rates set forth below.
HenKan shall, within 30 days of receipt of the Buy Back Notice, provide
CombinatoRx with a detailed accounting of the HenKan Development Costs for such
country as of the date of HenKan's receipt of the Buy Back Notice. If
CombinatoRx disputes HenKan's accounting of the HenKan Development Costs,
CombinatoRx may retain an independent certified public accountant or auditor
reasonably acceptable to HenKan to inspect HenKan's books and records for the
purpose of verifying HenKan's accounting of the HenKan Development Costs. In the
event that any such audit discloses any deviation from the HenKan Development
Costs reported by HenKan, the Purchase Price shall be based on the determination
of the audit. Further, if such audit discloses that the HenKan Development Costs
are less than the amount of the HenKan Development Costs reported by HenKan by a
difference of greater than five percent (5%), then HenKan shall promptly pay the
reasonable costs of such audit after receipt of CombinatoRx's xxxx/invoice for
such audit. The results of such audit, and any and all information or data in
any form disclosed pursuant hereto, shall be deemed Confidential Information of
HenKan, and the provisions of Article 9 shall apply thereto.
TIME OF EXERCISE OF THE BUY BACK OPTION PREMIUM ROYALTY RATE(1)
--------------------------------------- ------- ---------------
From Effective Date through the end of a Phase II Trial 100% 1.5%
From the end of the Phase II through the end of the Phase III 200% 1.75%
After the end of the Phase III Trial 300% 2.5%
As used in the above table, the "end" of a Trial shall mean the
completion of the final study report for such Trial.
(1) Except as noted above, the terms regarding the payment of royalties
from CombinatoRx (or its successors or assigns, as appropriate) to HenKan
shall be identical (to the maximum extent possible) to those set forth in
this Agreement for royalty payments from HenKan to CombinatoRx.
2.2.3. CombinatoRx may, within twenty (20) days of the later of
(i) its receipt of the HenKan's accounting of the HenKan Development Costs
described in Section 2.2.2 or (ii) the final determination of the audit of the
HenKan Development Costs pursuant to Section 2.2.2, revoke its exercise of the
Buy Back Option in such country (without prejudice to its right to exercise the
Buy Back Option with respect to such country at a later date). If CombinatoRx
does not revoke its exercise of the Buy Back Option within such 20-day period,
then CombinatoRx (or its successors or assigns, as the case may be) shall pay to
HenKan, within 30 days of the expiration of such 20-day period, 25% of the
Purchase Price, and either (a) the remainder of the Purchase price upon or
promptly after the closing of the transactions contemplated by the Corporate
Opportunity or (b) additional 25% of the Purchase Price on or before each of the
90th, 180th and 270th day following the date of the first payment (each such
payment, a "Purchase Price Installment"), whichever pays the Purchase Price
sooner. Each payment, including each Purchase Price Installment, shall be paid
in United States dollars, except that, if, at the time a particular payment is
due, CombinatoRx's common stock is registered under the Securities Exchange Act
of 1934, as amended, such payment may, subject to HenKan's consent not to be
unreasonably withheld, be paid either in cash or shares of CombinatoRx common
stock, which, for such purposes, shall be valued at the average of the closing
price of such common stock on
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the principal market on which such common stock is traded for the 10 consecutive
trading days ending on the third trading day prior to the relevant payment date.
2.2.4. Upon exercise of the Buy Back Option, all licenses to
HenKan hereunder shall terminate with respect to the country for which the Buy
Back Option has been exercised, and the provisions of Sections 14.4 and 14.5
shall apply with respect to such country.
2.3 LICENSES TO COMBINATORX.
2.3.1 LICENSE TO HENKAN PRODUCT INVENTIONS. HenKan hereby grants
to CombinatoRx an exclusive, perpetual, irrevocable, royalty-free license, with
the right to sublicense, under HenKan's rights in the HenKan Product Inventions
to develop, use, make, have made, sell, offer for sale and import and export
products and services outside of the Field in the Territory and in and outside
of the Field outside of the Territory; provided that, in the event that this
Agreement is terminated for any reason other than by HenKan pursuant to Section
14.2.1, the license grant under this Section shall become an exclusive license
in and outside of the Field throughout the world.
2.3.2 LICENSE TO HENKAN INVENTIONS. Subject to an agreement
between the Parties in connection with the subject matter of this Section 2.3.2,
HenKan will grant to CombinatoRx a nonexclusive, nontransferable, perpetual,
irrevocable, royalty-bearing license, with the right to sublicense as set forth
in Section 2.3.3, under HenKan's rights in the HenKan Inventions to develop,
use, make, have made, sell, offer for sale and import and export products
outside of the Territory. The Parties will negotiate in good faith the terms of
such agreement including reasonable license fee and/or royalties provisions.
2.3.3 COMBINATORX SUBLICENSE LIMITATIONS. CombinatoRx shall be
permitted to grant a sublicense to the rights granted to it under Sections 2.3.2
only with the prior consent of HenKan, such consent not to be unreasonably
withheld. Any sublicense by CombinatoRx of the rights granted to CombinatoRx
under Sections 2.3.2 shall be consistent with the terms of the agreement
described in Sections 2.3.2 and shall include an obligation for the sublicensee
to comply with the applicable obligations of such agreement.
ARTICLE 3
DILIGENCE
3.1. DILIGENCE.
3.1.1. PRODUCT DEVELOPMENT AND SUPPLY. HenKan shall use
Commercially Reasonable Efforts to develop the Product in each country in the
Territory as soon as practicable. Without limiting the foregoing, HenKan shall
conduct development with respect to the Product in accordance with the following
timeline: (i) initiation of first clinical trial of the Product for HCC or such
other indication mutually agreed to by the Parties (the "Initial Indication")
within a reasonable timeframe after CombinatoRx makes available its own
formulation of the Product; and (ii) initiation of preclinical studies in
support of the Initial Indication for the Product no later than June 1, 2005 and
the joint publication with CombinatoRx of such data at the appropriate
scientific conferences in 2005 and 2006. If the data from the clinical trials do
not support continued development of the Product for the Initial Indication,
then another indication (the
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"Substitute Indication") will be selected that (i) is scientifically supported
by the preclinical data for the Product and (ii) is mutually agreed to by the
Parties, and the diligence obligations of this Article 3 shall apply with
respect to such Substitute Indication.
CombinatoRx will be HenKan's exclusive supplier of the Product for
preclinical studies and for clinical trials in the Territory at CombinatoRx's
out-of-pocket and fully burdened internal costs without additional xxxx-up.
HenKan shall provide CombinatoRx with reasonable forecasts and such prior
notices of its requirements of the Product as CombinatoRx may reasonably
require. If HenKan intends such forecasts or prior notices to be firm offers, it
shall accompany such firm orders with payment in full for the amount due for
such order of Product sufficiently in advance of the delivery date for such firm
order as CombinatoRx may reasonably request.
3.1.2. PRODUCT COMMERCIALIZATION. HenKan agrees to use
Commercially Reasonable Efforts to obtain Regulatory Approval for the Initial
Indication or the Substitute Indication for and to launch and continue
commercialization of the Product in each country in the Territory as soon as
reasonably possible after obtaining the first Regulatory Approval for such
Product.
HenKan will be permitted to contract directly with CombinatoRx's
supplier to obtain finished Product by itself or through a Third Party
manufacturer according to local specifications.
3.2. EFFECT OF FAILURE TO SATISFY DILIGENCE OBLIGATIONS. If all of
HenKan and/or its sublicensees fail to comply with the development and
commercialization obligations described in Section 3.1 with respect to the
Product and fails to remedy such failure within sixty (60) days after written
notice of such failure by CombinatoRx, CombinatoRx shall have the right to
terminate this Agreement pursuant to Section 14.2.3 hereof.
ARTICLE 4
COORDINATION OF GLOBAL DEVELOPMENT
4.1. INTEGRATION WITH GLOBAL DEVELOPMENT ACTIVITIES OF THE PRODUCT.
Except as set forth below in this Section 4.1, preclinical and clinical studies
of the Product by HenKan, and the publication of data from these studies, will
be conducted in a manner consistent with CombinatoRx's global development
activities of the Product, as monitored through the Joint Steering Committee.
Notwithstanding the foregoing:
4.1.1. All of HenKan's preclinical and clinical plans, protocols,
investigators and regulatory submissions related to the Product shall each be
subject to prior approval by CombinatoRx, such approval not to be unreasonably
withheld.
4.1.2. All preclinical and clinical data, including case reports
and data tables generated by or on behalf of HenKan will be shared with
CombinatoRx in a form consistent with FDA reporting requirements.
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4.1.3. Adverse Experiences shall be promptly communicated by each
Party to the other, along with all supporting documentation in a manner
consistent with applicable regulatory authority reporting requirements.
4.1.4. CombinatoRx shall have the option to file data provided by
HenKan as part of an amendment to CombinatoRx's IND and as part of CombinatoRx's
NDA. HenKan shall provide to CombinatoRx or file with any regulatory authority
requested by CombinatoRx any necessary documentation to permit CombinatoRx to
include such data in its regulatory filings. CombinatoRx will use Commercially
Reasonable efforts to amend its IND regarding the Product to include protocols
of HenKan that have been approved by CombinatoRx.
4.1.5. CombinatoRx shall provide HenKan with a right of reference
to the data included in its regulatory submissions regarding the Product outside
of the Territory, and shall file with any regulatory authority requested by
CombinatoRx any necessary documentation to permit HenKan to include such data in
its regulatory filings.
4.2. JOINT STEERING COMMITTEE:
4.2.1. Creation and Overview: within thirty (30) days following
the Effective Date, each Party shall nominate 3 members of a Joint Steering
Committee. The Parties may agree to change the total number of representatives
on the Joint Steering Committee, provided that the Parties always have an equal
number of representatives. The Chairperson of the Joint Steering Committee shall
be either a representative of CombinatoRx or a representative of HenKan, on an
alternate basis annually. Each Party may replace any of its Joint Steering
Committee representatives at any time upon written notice to the other Party.
The Joint Steering Committee may invite non-members to participate in the
discussions and meetings of the Joint Steering Committee, provided that such
participants shall have no vote and shall follow the order of the meeting. Each
Party shall be responsible for all travel and related costs for such Party's
representatives to attend meetings of, and otherwise participate on, the Joint
Steering Committee. Subject to Section 4.1.1, the purpose of the Joint Steering
Committee shall be (i) to coordinate and oversee the activities of the Parties
with respect development of the Products and (ii) coordinate the matters
described in Section 4.1.
4.2.2. JOINT STEERING COMMITTEE MEETINGS. The Joint Steering
Committee shall meet at such times and places as shall be mutually agreed by the
Parties. Meetings will be in-person or by video or teleconference, as the
Parties may agree. In the event that a Joint Steering Committee member of a
Party cannot attend a meeting, such Party shall have the right to nominate
another representative of that Party to attend the meeting, provided that such
representative is reasonably experienced in the areas for which such Joint
Steering Committee member is responsible. In-person meetings shall be held at
such location as mutually agreed upon by the Parties. The Chairperson shall
prepare and distribute to the Joint Steering Committee members an agenda for
each Joint Steering Committee meeting at least ten (10) Business Days before the
meeting. A Joint Steering Committee representative of the Party hosting the
meeting shall serve as Secretary of that meeting. The Secretary of the meeting
shall prepare and distribute to all members of the Joint Steering Committee
draft minutes of the meeting within five (5) Business Days after of the meeting
for review and comment by the other Joint Steering Committee members. Such
minutes shall provide a description in reasonable
11
detail of the discussions at the meeting and a list of any actions, decisions or
determinations approved by the Joint Steering Committee. After receipt of
comments from other Joint Steering Committee members and incorporation of such
comments as appropriate in the draft minutes, the Secretary shall provide the
Chairperson with the final draft minutes. The Chairperson shall distribute the
final minutes of each meeting to the members of the Joint Steering Committee for
final review and approval no later than twenty (20) Business Days after a
meeting. Minutes will be approved no later than the next meeting of the Joint
Steering Committee.
4.2.3. JOINT STEERING COMMITTEE DECISION MAKING. At least
four (4) members of the Joint Steering Committee shall constitute a quorum for
any meeting of the Joint Steering Committee, provided that at least two (2)
members from each Party are present. All decisions of the Joint Steering
Committee shall be made on a unanimous basis of all Joint Steering Committee
members participating in the meeting where a quorum is present. If the Joint
Steering Committee cannot reach agreement with respect to a particular issue
before it within thirty (30) days, then the Chairperson and a Joint Steering
Team member selected by the Party not designating the then current Chairperson
shall meet again (via phone or videoconference) within two (2) working days
after the date of the Joint Steering Committee vote on such matter or the
expiration of such thirty (30) day period, whichever is earlier, and will
negotiate in good faith to reach consensus. If the Chairperson and such other
member are unable to reach agreement after fourteen (14) days, the matter shall
be resolved in accordance with the dispute resolution mechanism described in
Article 15.
ARTICLE 5
PAYMENTS
5.1. PAYMENTS TO COMBINATORX.
5.1.1. UPFRONT PAYMENT. HenKan shall pay CombinatoRx an upfront
payment (the "Upfront Payment") of Five Hundred Thousand Dollars ($500,000),
payable on the Effective Date. The Upfront Payment may be credited to the
upfront payments associated with the licensing of other CombinatoRx products in
the event that, at the time the Parties enter into such additional license or
licenses, this Agreement has been terminated or is expected to be terminated due
to the fact that, after completion of both the ongoing clinical trials by
CombinatoRx and the first clinical trial by HenKan for HCC or such other
indication mutually agreed by the Parties, as described in Section 3.1.1, the
development of the Product has not advanced to such stage that warrants the
further development of the Product.
5.1.2. CLINICAL DEVELOPMENT MILESTONES. HenKan shall make the
payments set forth below for the Product on reaching the milestone events
described below, either by itself or through any sublicensee, ("Milestone
Events") in accordance with this Section. Payments for Clinical Development
Milestones shall be payable upon the occurrence of a Milestone Event for each
formulation of a Product that requires a separate IND or a separate regulatory
approval, except that additional payments of Clinical Development Milestones are
not required for an IND or a regulatory approval for a different dose of an
already approved formulation of a Product for which such milestones have been
previously paid, so that, for example, if the milestones below have been paid
with respect to a Product as an intravenous formulation for a particular cancer
indication, no such additional milestones shall be due for a different dosage of
the same product
12
for the same indication. HenKan shall promptly notify CombinatoRx of the
occurrence of any such Milestone Event.
MILESTONE EVENT PAYMENT
--------------- -----------
Earlier of (i) dosing by HenKan of first patient in the Phase III of the $ 750,000
Product or (ii) submission by HenKan of first application for Regulatory
Approval in the event that Phase II data is sufficient for submission for
regulatory approval
Submission by HenKan of first application for Regulatory Approval $ 750,000
Receipt by HenKan of first Regulatory Approval $ 750,000
All payments to be made to CombinatoRx by HenKan pursuant to this Section
5.1.2 shall be made within thirty (30) days of the achievement of each
applicable milestone. For purposes of clarity, each Milestone Event triggers the
payment set forth in this Section regardless of whether such Milestone Event
occurs prior to, after or simultaneously with any other Milestone Event, so, for
example, if HenKan seeks Regulatory Approval based on Phase II data and,
following receipt of such approval, conducts a Phase III trial, HenKan shall pay
to CombinatoRx the first two milestones shown above upon the submission of the
first application for Regulatory Approval.
5.2. COMMERCIALIZATION MILESTONES. HenKan shall make the payments set
forth below upon the first attainment of Net Sales in the amounts listed below
during any calendar year:
ANNUAL NET SALES PAYMENT
---------------- -----------
$16 million $ 480,000
$25 million $ 750,000
$50 million $ 1,500,000
$100 million $ 3,000,000
$200 million $ 6,000,000
$300 million $ 9,000,000
For clarification, if in any calendar year, Net Sales exceeds one of the
thresholds above, HenKan shall pay to CombinatoRx the amount associated with
such threshold PLUS the amount associated with all lesser thresholds for which
HenKan has not previously made a payment to CombinatoRx. All payments to be made
to CombinatoRx by HenKan pursuant to this Section 5.2 shall be made within
thirty (30) days of the achievement of the applicable threshold of Annual Net
Sales.
5.3. ROYALTIES. Until the expiration of the Patent Royalty Term, HenKan
shall pay to CombinatoRx royalties at the following marginal rates on annual Net
Sales of the Product in all countries in the Territory in which the Patent
Royalty Term has not expired:
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ANNUAL NET SALES ROYALTY RATE
---------------- ------------
$1 million to $25 million Six percent (6%)
Greater than $25 million but less than or equal to $50 million Eight percent (8%)
Greater than $50 million but less than or equal to $75 million Ten percent (10%)
Greater than $75 million Twelve percent (12%)
Royalties shall be paid at the applicable marginal rate set forth above with
respect to Net Sales in a particular year. Therefore, for example, if annual Net
Sales of the Product were $50 million in each of Taiwan, the People's Republic
of China and South Korea and the Patent Royalty Term had not expired in Taiwan
and the People's Republic of China but had expired in South Korea, then HenKan
would pay to CombinatoRx royalties for that year as follows:
For Net Sales in Taiwan and the People's Republic of China ($100 million
cumulatively), royalties would be based on the rates set forth in the table
above and would be equal to 6% of Net Sales up to $25 million ($1,500,000), 8%
of Net Sales above $25 million up to $50 million ($2,000,000), 10% of Net Sales
above $50 million up to $75 million ($2,500,000)., and 12% of Net Sales above
$75 million ($3,000,000), resulting in total royalties due in that year for such
countries of $9,000,000.
ARTICLE 6
GENERAL PAYMENT PROVISIONS AND ROYALTY REPORTS
6.1. CURRENCY. All monies due to CombinatoRx hereunder are payable in
United States dollars. When Products are sold for monies other than United
States dollars, the earned royalties will first be determined in the foreign
currency of the country in which such Products were sold and then converted into
equivalent United States funds. The exchange rate will be the average rate
between the buying and selling rate as quoted in THE WALL STREET JOURNAL for the
last twenty (20) days of the reporting period for which such rate is reported.
6.2. FOREIGN LEGAL RESTRICTIONS ON PAYMENT. If at any time legal
restrictions prevent the prompt remittance of part or all payments by HenKan
with respect to any country where the Product is sold, unless prohibited from
lawfully doing so, HenKan must convert the amount owed into United States funds
and must pay CombinatoRx directly from its U.S. source of funds, if such source
is available, for the amount impounded. HenKan will use Commercially Reasonable
Efforts to pay all future royalties due to CombinatoRx from its U.S. source of
funds, if such source is available, so long as the legal restrictions described
in this section still apply. For clarity, nothing in this Section shall relieve
HenKan from its obligation to make payments when due hereunder.
6.3. FIRST COMMERCIAL SALE. HenKan also agrees to report to CombinatoRx
in its immediately subsequent progress and royalty report the date of First
Commercial Sale of the Product in each country.
6.4. QUARTERLY PAYMENT REPORTS AND PAYMENTS. After the First Commercial
Sale of the Product anywhere in the Territory, HenKan shall make quarterly
payment reports ("Quarterly
14
Payment Reports") to CombinatoRx on or before the thirtieth (30th) day following
the end of the preceding calendar quarter. Each Quarterly Payment Report shall
cover the most recently completed calendar quarter and shall show (a) the Gross
Sales and Net Sales of the Product sold during the most recently completed
calendar quarter; (b) the royalties, in U.S. dollars, payable with respect to
Net Sales; (c) the method used to calculate the payments owed to CombinatoRx;
and (d) the exchange rates used and shall be accompanied by the payment shown as
due on such Quarterly Report. If, after the First Commercial Sale of the
Product, no sales of Products are made during any reporting period, a statement
to this effect is required.
6.5. INTEREST ON LATE PAYMENTS. For purposes of this Section 6.5 only,
HenKan will be in default with respect to payment, without receipt of a reminder
from CombinatoRx, for all payments not paid timely. In case of default with
respect to payment, any amount not paid timely shall bear interest from its due
date through the date of effective receipt of payment at the rate equal to the
lesser of the maximum rate allowable under applicable law or [four percent (4%)]
over the prime rate published in the eastern edition of THE WALL STREET JOURNAL
on the date such payment was due or a comparable newspaper if THE WALL STREET
JOURNAL shall cease publishing the prime rate.
6.6. TAXES. The Parties shall share equally in the payment of all Taxes
(as defined in this Section) levied on payments made pursuant to Sections 5.2
and 5.3 through a reduction by HenKan of any payments pursuant to such Sections
of fifty percent (50%) of Taxes actually paid by HenKan in respect of any such
payments. To the extent any payments made by HenKan pursuant to Sections 5.2 and
5.3 are reduced in accordance with the preceding sentence, HenKan shall provide
to CombinatoRx, at the time such payments are made to CombinatoRx, documentation
showing the payment of any such Taxes by HenKan. All other payments and prices
under this Agreement are net prices, and all such other payments under this
Agreement shall be made plus value added tax, if value added tax is levied under
applicable law, and shall be grossed up for any withholding tax that may be
required under applicable law, and fees of any nature levied or incurred on
account of any such other payments from HenKan to CombinatoRx accruing under
this Agreement, by national, state or local governments, will be assumed and
paid by HenKan. As used in this Section, "Taxes" shall mean the total of all
value added taxes levied under applicable law and all fees of any nature levied
or incurred on account of any particular payment by national, state or local
governments.
ARTICLE 7
BOOKS AND RECORDS
7.1. ACCOUNTING AND INTERNAL CONTROLS. HenKan shall maintain accounts
in accordance with good business practices and, specifically, shall (a) maintain
full and accurate books, records and accounts which shall, in reasonable detail,
accurately and fairly reflect all transactions related to this Agreement as far
as reasonably necessary in order to determine HenKan's claims hereunder (the
"Transactions"); such books and records shall include reasonable supporting
documentation that may be necessary in particular for purposes of evidencing the
Net Sales with respect to Product for which a royalty is due; and (b) devise and
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (i) Transactions are executed in accordance with
HenKan' s internal requirements for general or specific authorizations, and (ii)
Transactions are recorded as necessary to permit preparation of
15
financial statements in conformity with generally accepted accounting principles
and as otherwise required to comply with all tax statutes and to maintain
accountability for assets.
7.2. RECORDS AND AUDITS. HenKan's books of account and reasonable
supporting documentation shall be kept at it's principal place of business and
shall be open, upon reasonable advance written notice and during normal business
hours, for a minimum of five (5) years following the end of the calendar year to
which they pertain, to the inspection, to the extent reasonably required for
verifying CombinatoRx's claims against HenKan hereunder, by an independent
certified public accountant or auditor retained by the CombinatoRx and
acceptable to HenKan for the purpose of verifying HenKan's statements with
respect to, e.g., Net Sales of Products for which a royalty is due, or the other
Party's compliance in other material respects with this Agreement; PROVIDED,
HOWEVER, that such an audit shall be conducted with reasonable advance notice
and during normal business hours, and shall not be conducted more frequently
than once during a calendar year. In the event that any such audit discloses any
deviation, the related balance shall promptly be settled. Further, if any such
audit discloses deviations exceeding five percent (5%) or more for any calendar
year, then HenKan shall promptly pay the reasonable costs of such audit after
receipt of CombinatoRx's xxxx/invoice for such audit. The results of such
audits, and any and all information or data in any form related thereto, shall
be deemed Confidential Information of HenKan and the provisions of Article 9
shall apply thereto.
ARTICLE 8
REPRESENTATIONS AND WARRANTIES
8.1. REPRESENTATIONS, WARRANTS AND COVENANTS OF COMBINATORX.
CombinatoRx represents, warrants and covenants to HenKan as follows:
(a) CombinatoRx is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware with
corporate powers adequate for executing and delivering, and performing its
obligations under, this Agreement;
(b) The execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate action on the part of
CombinatoRx;
(c) This Agreement has been duly executed and delivered by
CombinatoRx and is a legal, valid and binding obligation of CombinatoRx,
enforceable against CombinatoRx in accordance with its terms;
(d) CombinatoRx is not aware of any issued patents or
published patent applications in the Territory that would be infringed by the
manufacture, use or sale of the Products as it is currently being developed, and
CombinatoRx has not received any notice of such an infringement.
(e) CombinatoRx is the legal and beneficial owner of the
CombinatoRx Product Technology and has the right to grant to HenKan the licenses
and other rights granted herein, and Exhibit A contains a complete and correct
list as of the Effective Date of all the patent and patent applications owned or
controlled by CombinatoRx relating to the development, use, making, having made,
sale, offer for sale and import and export of the Product in the Field in the
Territory.
16
(f) The execution, delivery and performance of this Agreement,
including without limitation the grant of licenses and sublicenses by
CombinatoRx hereunder, do not and will not conflict with or contravene any
provision of the charter documents or by-laws of CombinatoRx or any agreement,
documents, instrument, indenture or other obligation of CombinatoRx and, to the
best knowledge of CombinatoRx, do not conflict with any rights of Third Parties;
and
(g) CombinatoRx has not entered into, and shall not enter
into, any agreement, make any commitment, take any action or fail to take any
action that would contravene any provision of, or derogate or restrict any of
the rights and licenses granted to, HenKan under this Agreement.
8.2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF HENKAN. HenKan
represents, warrants and covenants to CombinatoRx as follows:
(a) HenKan is a company limited by shares duly organized,
validly existing and in good standing under the laws of Taiwan, R.O.C., with
corporate powers adequate for executing and delivering, and performing its
obligations under, this Agreement;
(b) The execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate action on the part of
HenKan;
(c) This Agreement has been duly executed and delivered by
HenKan and is a legal, valid and binding obligation of HenKan, enforceable
against HenKan in accordance with its terms;
(d) The execution, delivery and performance of this Agreement,
including without limitation the grant of licenses by HenKan hereunder, do not
and will not conflict or contravene any provision of the operating agreement or
certificate of formation of HenKan or any agreement, document, instrument,
indenture or other obligation of HenKan; and
(e) HenKan has not entered into, and shall not enter into, any
agreement, make any commitment, take any action or fail to take any action that
would contravene any provision of this Agreement.
ARTICLE 9
CONFIDENTIAL INFORMATION AND PUBLICATIONS
9.1. NON-DISCLOSURE OBLIGATIONS. Except as otherwise provided in this
Article 9, during the term of this Agreement and for a period of ten (10) years
thereafter, both Parties shall maintain in confidence and use only for purposes
specifically authorized under this Agreement Information and data received from
the other Party or created, discovered or conceived by the other Party in
connection with the Product ("Confidential Information").
To the extent it is reasonably necessary or appropriate to fulfill its
obligations or exercise its rights under this Agreement and with the prior
written consent of the disclosing Party, the receiving Party may disclose
Confidential Information of the disclosing Party that it is otherwise obligated
under this Section not to disclose to its Affiliates, licensees, sublicensees,
consultants,
17
outside contractors and clinical investigators, on a need-to-know basis on
condition that such entities or persons agree in writing to keep such
Confidential Information confidential under appropriate confidentiality
agreements. Prior to disclosing Confidential Information in accordance with this
Section 9.1, the receiving Party shall inform the Affiliate, licensee,
sublicensee, consultant, outside contractor or clinical investigator (i) that
the information constitutes Confidential Information, (ii) that the Confidential
Information is being provided in accordance with the terms and conditions of
this Agreement, and (iii) that such other party is, by accepting the
Confidential Information bound by and subject to the terms and conditions of
this Section 9.1.
Each Party understands and agrees that it will not, for itself or in
conjunction with others, directly or indirectly, test, modify, manipulate,
research, create a derivative including, but not limited to performing
activities to understand structural activity relationships, mechanism activity
relationships or mechanism of action of particular compounds, reverse engineer,
replicate the Confidential Information, or otherwise work with or manipulate the
Confidential Information in an effort to understand the other Party's
proprietary technology or learn information not explicitly stated in the
Confidential Information unless such testing, manipulation, replication, work,
reverse engineering or other research is otherwise contemplated under this
Agreement.
The term Confidential Information shall not include any information that
(i) is or becomes published or otherwise part of the public domain other than by
acts of the Party obligated not to disclose such information or its licensees or
sublicensees in contravention of this Agreement; (ii) is disclosed to the
receiving Party or its licensees or sublicensees by a Third Party; PROVIDED,
HOWEVER, that such information was not obtained by such Third Party directly or
indirectly from the disclosing Party; (iii) prior to disclosure under this
Agreement, was already in the possession of the receiving Party or its licensees
or sublicensees, provided that such information was not obtained directly or
indirectly from the disclosing Party; or (iv) can be shown by written documents
to have been independently developed by the receiving Party or its licensees or
sublicensees without breach of any of the provisions of this Agreement.
Notwithstanding the foregoing, any combination of features or disclosures
shall not be deemed to fall within the foregoing exclusions merely because
individual features are published or available to the general public or in the
rightful possession of the receiving Party unless the combination itself and
principle of operation are published or available to the general public or are
in the rightful possession of the receiving Party.
In the event the Confidential Information of the disclosing Party is
required to be disclosed by the recipient pursuant to a legal, judicial, or
administrative procedure, as required by law, the recipient may make the
disclosure provided that the Party being required to disclose such Confidential
Information gives the Party owning the Confidential Information notice of the
proposed disclosure as soon as reasonably practicable after it comes aware of it
and that such disclosure, if made, is made so as to minimize the disclosure at
such time and to maximize the protection of the information from further
disclosure.
Each Party agrees to notify the other Party immediately upon discovery of
any unauthorized use or disclosure of Confidential Information and will
cooperate with the other
18
Party in every reasonable way to help the other Party regain possession of the
Confidential Information and prevent its further unauthorized use or disclosure.
CombinatoRx and HenKan agree to take such steps to protect and maintain
the security and confidentiality of the Confidential Information as CombinatoRx
and HenKan would take in the case of its own confidential business information.
9.2. TERMS OF THIS AGREEMENT/USE OF NAME. Except as required by
applicable law or regulation, neither Party shall use the name of the other
Party in any publicity or advertising without the prior written approval of the
other Party, except that the Parties may disclose the existence of this
Agreement. HenKan agrees that CombinatoRx may disclose under a corresponding
confidentiality obligation of such Third Party, a copy of this Agreement to any
Third Party from whom CombinatoRx has licensed technology that CombinatoRx is
sublicensing to HenKan under this Agreement if necessary and only to the extent
to fulfill CombinatoRx's obligations under CombinatoRx's agreement with such
Third Party. HenKan agrees not to disclose any terms or conditions of this
Agreement to any Third Party without the prior written consent of CombinatoRx,
except as required by applicable law. The Parties shall, as soon as practical
following the execution of this Agreement, agree on the text of a joint press
release announcing this Agreement, and either Party may make disclosure of such
press release and any additional disclosure that contains substantially the same
information as such press release without the prior consent of the other Party.
9.3. PUBLICATIONS. Subject to Section 9.1, CombinatoRx and HenKan each
acknowledge the interest of the Parties in publishing certain of the results of
the Product to obtain recognition within the scientific community and to advance
the state of scientific knowledge. Notwithstanding anything contained herein to
the contrary, each of CombinatoRx and HenKan may, subject to Section 9.1, use
and disclose any data and results obtained its development or commercialization
of the Product for corporate presentations and in any other disclosure or
publication. HenKan shall not publish data or results obtained from the
development or commercialization of the Product without the consent of
CombinatoRx and, if desired by CombinatoRx, without jointly publishing such data
or results with CombinatoRx.
Notwithstanding the foregoing, this Section 9.3 will not apply to
publications or disclosures by CombinatoRx or its employees that have been
approved for publication or disclosure by CombinatoRx prior to the Effective
Date.
9.4. LIABILITY. Each Party shall be liable for any and all direct and
indirect damages, costs and expenses resulting from any violation of this
Article 9 including, without limitation, reasonable attorneys' fees and
disbursements, consequential damages and lost profits. The Parties further agree
that money damages will not be a sufficient remedy for any breach of this
Article 9, and CombinatoRx or HenKan, as the case may be, shall be entitled, in
addition to money damages, to specific performance and injunctive relief and any
other appropriate equitable remedies for any such breach. Such remedies shall
not be deemed to be the exclusive remedies for a breach of this Article 9 but
shall be in addition to all other remedies available at law or in equity.
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ARTICLE 10
OWNERSHIP OF INTELLECTUAL PROPERTY; PATENT PROSECUTION
10.1. OWNERSHIP. The ownership of all intellectual property rights
developed by or on behalf of a Party, or the Parties, hereunder shall be as set
forth in this Section 10.1.
10.1.1. HENKAN INTELLECTUAL PROPERTY RIGHTS. Subject to the other
terms and conditions of this Agreement, all rights, title and interests in, to
and under HenKan Inventions, HenKan Patents, HenKan Product Inventions and
HenKan Product Patents shall be owned by, and remain with, HenKan.
10.1.2. COMBINATORX PRODUCT TECHNOLOGY. Subject to the other terms
and conditions of this Agreement, all rights, title and interests in, to and
under the CombinatoRx Product Technology shall be owned by, and remain with,
CombinatoRx.
10.1.3. OTHER INTELLECTUAL PROPERTY. Subject to Sections 10.1.1
and 10.1.2, all intellectual property conceived by employees of a Party or
agents acting on behalf of such party shall be owned by such Party and all
intellectual property conceived jointly by employees of both Parties and/or
agents acting on behalf of both Parties shall be jointly owned by the Parties.
Inventorship shall be determined in accordance with United States patent law.
The Parties shall jointly determine the filing, prosecution, maintenance and
defense of jointly owned intellectual property.
10.2. DISCLOSURE OF INTELLECTUAL PROPERTY; FURTHER ASSURANCES. Each of
CombinatoRx and HenKan shall keep the other Party reasonably informed of
CombinatoRx Product Technolology, in the case of CombinatoRx, and HenKan
Inventions and HenKan Product Inventions, in the case of HenKan, and all
intellectual property that may reasonably be considered as jointly owned that is
discovered or conceived after the Effective Date. Each Party shall execute
irrevocable assignments of such right, title and interest in and to any
discoveries or inventions to the other Party pursuant to the allocations as set
forth in this Section 10.1 as reasonably necessary to vest in the other Party
all right, title and interest in such discoveries or inventions as set forth in
this Section 10.1 and shall take all other actions as may reasonably be
requested by the other Party to effect such assignments. Each Party shall
reimburse the other Party for any reasonable out-of-pocket expenses in
connection with any execution of assignment or any other actions reasonably
requested by such Party.
10.3. COMBINATORX PRODUCT PATENTS. CombinatoRx shall have the right but
not the obligation to prepare, file, prosecute and maintain the CombinatoRx
Product Patents in the Territory, and unless it has abandoned prosecution and
maintenance of such patent applications and patents, shall use its best efforts
to advance such prosecution and maintenance. CombinatoRx will provide copies of
all patent filings in the Territory to HenKan as far in advance of such filings
as reasonable practicable and shall give due consideration to HenKan's comments
on such filings.
Documents received from any patent office in the Territory shall be
provided to HenKan promptly after receipt by CombinatoRx. If CombinatoRx elects,
in its sole discretion, not to file, prosecute or maintain any patent or patent
application in the Territory, it shall promptly notify
20
HenKan of its intention. HenKan shall have the right to file, prosecute or
maintain any such patent or patent application in CombinatoRx's name and on
CombinatoRx's behalf at HenKan's sole expense. CombinatoRx shall provide to
HenKan on an annual basis a report setting forth the status of the CombinatoRx
Product Patents in the Territory in reasonable detail.
As of the Effective Date, HenKan will reimburse CombinatoRx for all costs
and expenses incurred by CombinatoRx pertaining to the prosecution and
maintenance of patent applications and patents covering the Product in the
Territory. CombinatoRx will take all necessary actions to accelerate the
prosecution of the patent applications in the Territory. The Parties hereby
acknowledge that associated costs and expenses to be reimbursed by HenKan for
such activities may be accelerated upon the execution of this Agreement.
10.4. HENKAN INTELLECTUAL PROPERTY. HenKan shall have the right but not
the obligation to prepare, file, prosecute and maintain patent applications and
patents, continuations, continuations-in-part, divisions, reissues, additions,
renewals, or extension thereof included in the HenKan Inventions, HenKan
Patents, HenKan Product Inventions and HenKan Product Patents in countries of
its choice throughout the world, for which it shall bear all costs. Documents
received from any patent office shall be provided to CombinatoRx promptly after
receipt by HenKan. If and to the extent HenKan elects not to file, maintain or
prosecute, or abandon any patent or patent application included in the HenKan
Inventions and HenKan Product Inventions, it shall promptly notify CombinatoRx
in writing of its intention. CombinatoRx shall have the right to file, prosecute
or maintain any such patent or patent application in HenKan's name and on
HenKan's behalf at CombinatoRx's sole expense; PROVIDED, HOWEVER, that no right
or license to any HenKan Patent or HenKan Product Patent or to practice any
HenKan Invention or HenKan Product Invention is granted under this Section 10.4.
ARTICLE 11
PATENT INFRINGEMENT
11.1. INFRINGEMENT BY THIRD PARTIES OF COMBINATORX PRODUCT PATENTS.
11.1.1. If either HenKan or CombinatoRx becomes aware of an
infringement of any CombinatoRx Product Patents within the Territory, it shall
give prompt notice thereof to the other Party. CombinatoRx shall have the right,
but not the obligation, to obtain a discontinuance of such infringement or bring
suit against the Third Party infringer. If CombinatoRx fails to take
commercially appropriate actions to interfere any infringement of any
CombinatoRx Product Patents in the Territory, HenKan may, but shall not be
obligated to take such necessary actions to stop such infringements (a "HenKan
Action"). Each Party will cooperate with the Party initiating an action, join in
any suits as may be brought by or as may be brought against the other Party and
be available at the other Party's reasonable request to be an expert witness or
otherwise to assist in such proceedings, all at the expense of the Party
initiating the action. With respect to any HenKan Action, no settlement, consent
judgment or other voluntary final disposition of the suit or action may be
entered into without the consent of CombinatoRx, which consent shall not be
unreasonably withheld or delayed.
11.1.2. CombinatoRx shall bear the expenses of any suit or other
legal action brought by it. HenKan shall bear the expenses of any HenKan Action.
Any recovery or
21
damages derived from a suit or action shall be used first to reimburse each
Party's documented out-of-pocket legal expenses, PROVIDED THAT, in the event
that HenKan initiates a HenKan Action and prevails in such action, HenKan shall
be reimbursed by CombinatoRx, either, at CombinatoRx's election, through direct
payments or by HenKan's deduction of royalty dues, of 50% of all expenses of
such action that exceed the awards of that lawsuit, up to two hundred fifty
thousand dollars ($250,000). Any remainder of a recovery or damages derived from
a suit or action shall be shared equally between the Parties, except that any
recovery or damages derived from a suit or action brought by CombinatoRx in
which HenKan was not joined shall be retained by CombinatoRx, and any recovery
or damages derived from a HenKan Action shall be retained by HenKan.
11.2. INFRINGEMENT BY THIRD PARTIES OF HENKAN PRODUCT PATENT.
11.2.1. If either CombinatoRx or HenKan becomes aware of an
infringement of any HenKan Product Patent or HenKan Patent (to the extent that
CombinatoRx is a licensee of such HenKan Product Patent or HenKan Patent
hereunder), it shall give prompt notice thereof t o the other Party. HenKan
shall have the right, but not the obligation, to obtain a discontinuance of such
infringement or bring suit against the Third Party infringer. If HenKan fails to
take commercially appropriate actions to interfere any infringement of any
HenKan Product Patent or HenKan Patent that may likely have a material adverse
effect on the sale of the Product in the Territory, CombinatoRx may, but shall
not be obligated to take such necessary actions to stop such infringements (a
"CombinatoRx Action"). Each Party will cooperate with the Party initiating an
action, join in any suits as may be brought by or as may be brought against the
other Party and be available at the other Party's reasonable request to be an
expert witness or otherwise to assist in such proceedings, all at the expense of
the Party initiating the action. With respect to any CombinatoRx Action, no
settlement, consent judgment or other voluntary final disposition of the suit or
action may be entered into without the consent of HenKan, which consent shall
not be unreasonably withheld or delayed.
11.2.2. HenKan shall bear the expenses of any suit or other legal
action brought by it. CombinatoRx shall bear the expenses of any CombinatoRx
Action. Any recovery or damages derived from a suit or action shall be used
first to reimburse each Party's documented out-of-pocket legal expenses, and any
remainder of a recovery or damages derived from a suit or action shall be shared
equally between the Parties, except that any recovery or damages derived from a
suit or action brought by HenKan in which CombinatoRx was not joined shall be
retained by HenKan, and any recovery or damages derived from a CombinatoRx
Action shall be retained by CombinatoRx.
11.3. INFRINGEMENT ACTIONS AGAINST HENKAN. In the event that any action,
suit or proceeding is brought against, or written notice or threat thereof is
provided to, HenKan alleging infringement of any patent or unauthorized use or
misappropriation of technology arising out of or in connection with HenKan's
practice of CombinatoRx Product Patents (to the extent such action, suit or
proceeding specifically relates to claims included in such CombinatoRx Product
Patents, an "Infringement Suit") or the CombinatoRx Product Technology, HenKan
shall have the right to defend at its own expense such action; provided,
however, that HenKan shall not settle any suit in a manner that would adversely
affect CombinatoRx's rights to its intellectual property or require the payment
in settlement of any loss, claim, damage, liability or action
22
without the prior written consent of CombinatoRx, which consent shall not be
unreasonably withheld. CombinatoRx agrees to cooperate with HenKan, at HenKan's
expense, in connection with an Infringement Suit.
ARTICLE 12
DISCLAIMER OF WARRANTIES; CONSEQUENTIAL DAMAGES
12.1. Except as expressly set forth in Section 8.1, nothing in this
Agreement shall be construed as a representation made or warranty by CombinatoRx
that any patents will issue based on pending applications licensed hereunder, or
that any such CombinatoRx Product Patents which do issue will be valid, or that
the practice by HenKan of any license or sublicense granted hereunder, or that
the use of any technology licensed or sublicensed hereunder, will not infringe
the patent or proprietary rights of any other person. In addition, except as
expressly set forth in Section 8.1, HenKan acknowledges that ALL TECHNOLOGY
LICENSED OR SUBLICENSED HEREUNDER IS LICENSED OR SUBLICENSED AS IS, AND
COMBINATORX EXPRESSLY DISCLAIMS, AND HENKAN HEREBY WAIVES, RELEASES AND
RENOUNCES, ANY WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO SUCH TECHNOLOGY,
INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE
12.2. Nothing in this Agreement shall be construed as a representation
made or warranty by HenKan that any patents will be filed or issued based on the
HenKan Product Inventions, or that any HenKan patents which do issue will be
valid. In addition, CombinatoRx acknowledges that ALL TECHNOLOGY LICENSED
HEREUNDER IS LICENSED AS IS, AND HENKAN EXPRESSLY DISCLAIMS, AND COMBINATORX
HEREBY WAIVES, RELEASES AND RENOUNCES, ANY WARRANTY, EXPRESS OR IMPLIED, WITH
RESPECT TO SUCH TECHNOLOGY, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
12.3. EXCEPT PURSUANT TO ARTICLE 13, NEITHER PARTY SHALL BE ENTITLED TO
RECOVER FROM THE OTHER ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES.
ARTICLE 13
INDEMNIFICATION
13.1. BY HENKAN. HenKan shall indemnify, hold harmless and defend
CombinatoRx, its successors and assigns, and the directors, officers, employees
and agents thereof (the "CombinatoRx Indemnitees") from and against any and all
Claims asserted against any such CombinatoRx Indemnitee by a Third Party arising
out of the development, manufacture, use or commercialization of the Product in
the Territory, except Claims arising out of the gross negligence or willful
misconduct of CombinatoRx.
Further, HenKan shall indemnify, hold harmless and defend the CombinatoRx
Indemnitees from and against any and all Claims asserted against any such
CombinatoRx Indemnitee by a Third Party arising out of the breach of any
representation, warranty or covenant of HenKan hereunder
23
or out of any action or omission of HenKan's directors, officers, employees
and/or agents relating to HenKan's obligations under this Agreement.
13.2. BY COMBINATORX. CombinatoRx shall indemnify, hold harmless and
defend HenKan, its successors and assigns, and the directors, officers,
employees and agents thereof (the "HenKan Indemnitees") from and against any and
all Claims asserted against any such HenKan Indemnitee by a Third Party arising
out of the practice of any HenKan Invention or HenKan Product Invention by
CombinatoRx, its Affiliates, licensees and/or sublicensees, except Claims
arising out of the gross negligence or willful misconduct of HenKan.
Further, CombinatoRx shall indemnify, hold harmless and defend the HenKan
Indemnitees from and against any and all Claims asserted against any such HenKan
Indemnitee by a Third Party arising out of the breach of any representation,
warranty or covenant of CombinatoRx hereunder or out of any action or omission
of CombinatoRx's directors, officers, employees and/or agents relating to
CombinatoRx's obligations under this Agreement.
13.3. CONDITIONS TO INDEMNIFICATION. The indemnified Party shall
promptly notify the indemnifying Party of any Claim with respect to which
indemnification is sought, upon becoming aware thereof. The indemnifying Party
shall have the right to defend against such Claim, with counsel chosen by it and
reasonably acceptable to the indemnitee(s) of the other Party. No indemnified
Party or indemnitee thereof shall enter into, or permit, any settlement of any
such Claim without the express written consent of the indemnifying Party, which
consent shall not be unreasonably withheld or delayed. An indemnitee may, at its
option and expense, have its own counsel participate in any proceeding and will
cooperate with the indemnifying Party or its insurer in the disposition of any
such matter.
ARTICLE 14
TERM AND TERMINATION
14.1. TERM AND EXPIRATION. The term of this Agreement shall commence
upon the Effective Date and continue until terminated in accordance with the
terms hereof.
14.2. TERMINATION. This Agreement may be terminated, in whole or on an
indication-by-indication or country-by-country basis, under the following
circumstances:
14.2.1. MATERIAL BREACH. By either Party upon written notice by
reason of a material breach by the other Party, other than for failure to pay as
set forth in Section 14.2.2 below or as described in Section 14.2.3, that the
breaching Party fails to remedy within sixty (60) days after written notice
thereof by the non-breaching Party.
14.2.2. FAILURE TO PAY. By CombinatoRx, if HenKan fails to make
any payment to CombinatoRx hereunder within thirty (30) days after such payment
becomes due, and, in any case, such failure is not remedied within thirty (30)
days after notice thereof from CombinatoRx.
14.2.3. FOR CAUSE. By CombinatoRx upon written notice to HenKan
and HenKan fails to remedy or take reasonable action to initiate a remedy within
sixty (60) days after
24
the date of notice thereof by CombinatoRx, if HenKan fails to use Commercially
Reasonable Efforts to develop and commercialize the Product in accordance with
Section 3.1 above.
14.2.4. FORCE MAJEURE. By CombinatoRx, with respect to a
particular country or countries in the Territory, if HenKan (or its Affiliate or
sublicensee) becomes incapable in such countr(y/ies) for a period of thirty (30)
days, of performing any of its material obligations under this Agreement with
respect to such countr(y/ies) due to circumstances described in Section 16.3.
14.2.5. HENKAN TERMINATION. By HenKan, at any time, upon 120 days
prior notice to provide CombinatoRx an opportunity to find a substitute partner
for the Product in the Territory.
14.2.6. BANKRUPTCY. By either Party, in addition to any other
remedies available to it by law or in equity, by written notice to the other
Party on or after the occurrence of any of the following events: (i) the
appointment of a trustee, receiver or custodian for all or substantially all of
the property of the other Party, or for any lesser portion of such property, if
the result materially and adversely affects the ability of the other Party to
fulfill its obligations hereunder, which appointment is not dismissed within
ninety (90) days, (ii) the determination by a court or tribunal of competent
jurisdiction that the other Party is insolvent such that a Party's liabilities
exceed the fair market value of its assets, (iii) the filing of a petition for
relief in bankruptcy by the other Party on its own behalf, or the filing of any
such petition against the other Party if the proceeding is not dismissed or
withdrawn within ninety (90) days thereafter, (iv) an assignment by the other
Party for the benefit of creditors, or (v) the dissolution or liquidation of the
other Party.
14.2.7. CHANGE OF CONTROL. In the event of a Change of Control of
HenKan, CombinatoRx shall have the right to terminate this Agreement in its
entirety upon sixty (60) days written notice. For purposes of this Section
14.2.7, "Change of Control" shall mean (i) a merger of HenKan with another
entity in which less than a majority of the outstanding shares of the surviving
entity immediately following such merger are owned by the holders of the
outstanding shares of HenKan immediately prior to such merger, or (ii) the
acquisition of more than 50% of the voting securities of HenKan or substantially
all of the assets of HenKan relating to this Agreement.
14.2.8. NO WAIVER. The right of a Party to terminate this
Agreement, as herein above provided, shall not be affected in any way by its
waiver or failure to take action with respect to any prior default or breach.
14.3. EFFECT OF COMBINATORX BREACH. In the event of a material breach by
CombinatoRx, HenKan may elect to either: (i) continue to perform under this
Agreement and offset the amount of damages awarded by an arbitrator pursuant to
the Rules of Conciliation and Arbitration of the International Chamber of
Commerce then in effect against any amounts otherwise due to CombinatoRx under
Article 5 of this Agreement; or (ii) terminate this agreement in accordance with
Section 14.2.1.
14.4. EFFECT OF TERMINATION. In the event of a termination of this
Agreement by either Party, the provisions of this Section 14.4 shall apply,
provided however that (i) if such
25
termination is by HenKan for material breach by CombinatoRx in accordance with
Section 14.2.1, then the assignments, licenses, and other transfers from HenKan
to CombinatoRx under this Section 14.4 will be on financial terms to be agreed
by the Parties in good faith; and (ii) if the termination is by CombinatoRx for
breach or force majeure under Sections 14.2.1, 14.2.2, 14.2.3, 14.2.4, 14.2.6 or
14.2.7, or if the termination is by HenKan pursuant to Section 14.2.5, then the
assignments, licenses, and other transfers from HenKan to CombinatoRx under this
Section 14.4 will be fully paid and royalty free. On termination:
14.4.1. all rights and licenses of, and grants to, HenKan under
this Agreement shall terminate (except to the extent required by HenKan to
fulfill its transition obligations under Section 14.5 below);
14.4.2. all materials, including, without limitation, Information,
regulatory filings, Regulatory Approvals, INDs, NDAs, data and intellectual
property rights owned or Controlled by HenKan and useful or necessary to
develop, file for regulatory approval, make, have made, use, have used, sell,
have sold, and offer for sale of the Product in the Territory shall be
transferred to CombinatoRx (by assignment, to the extent possible, and otherwise
by exclusive license or other transfer acceptable to CombinatoRx), and HenKan
shall promptly execute such documents and take any such action requested by
CombinatoRx to effect such transfer;
14.4.3. HenKan shall use Commercially Reasonable Efforts to assign
to CombinatoRx any applicable sublicenses to the extent related to the Product
and/or subcontracts relating to significant services to be performed by Third
Parties to the extent related to manufacture, development or commercialization
of the Product, as reasonably requested by CombinatoRx;
14.4.4. except to the extent required by HenKan to fulfill
HenKan's transition obligations set forth in Section 14.5 below, HenKan shall
promptly collect and return, and cause its Affiliates and sublicensees to
collect and return, to CombinatoRx or, at CombinatoRx's request, destroy (i) all
amounts of finished or unfinished Product, any remaining inventory of
promotional materials, and product samples; and (ii) all documents containing
Information directly relating to the Product. Except to the extent required by
HenKan to fulfill HenKan's transition obligations, HenKan shall immediately
cease, and cause its Affiliates and sublicensees to cease, all further use of
any Information with respect to the Product. Notwithstanding the foregoing,
HenKan may retain copies of any Information to the extent required by law, as
well as retain one (1) copy of such information solely for legal archive
purposes. CombinatoRx shall be entitled to use and disclose any such Information
(including any Confidential Information) in connection with the manufacture,
development or commercialization of the Product;
14.4.5. to the extent HenKan or its Affiliate is manufacturing (in
whole or in part) the Product, HenKan (or its Affiliate) will perform such
manufacturing responsibilities and supply CombinatoRx with the Product on such
terms and conditions as the Parties shall negotiate in good faith, through the
second anniversary of the effective date of termination of this Agreement or
such shorter period if CombinatoRx notifies HenKan that it is able to
manufacture or have manufactured the Product on comparable financial terms. To
the extent the Product is manufactured in whole or in part by a Third Party as
of the date notice of termination is given, then, upon CombinatoRx's request,
HenKan shall use Commercially Reasonable Efforts to assist
26
CombinatoRx in entering into an agreement with such Third Party or in obtaining
an assignment of such Third Party agreement to CombinatoRx with respect to the
Product; and
14.4.6. the Parties shall use Commercially Reasonable Efforts to
complete the transition of the development, manufacture and commercialization of
the Product in the Field in the Territory hereunder to CombinatoRx (or its
sublicensee or Third Party designee) as soon as is reasonably possible pursuant
to the Transition Arrangements set forth in Section 14.5 below;
14.5. TRANSITION ARRANGEMENTS. If this Agreement is terminated by
CombinatoRx for breach or force majeure under Sections 14.2.1, 14.2.2, 14.2.3,
14.2.4, 14.2.6 or 14.2.7 or if the termination is by HenKan pursuant to Section
14.2.5 or if CombinatoRx exercises a Buy Back Option under Section 2.2, then:
14.5.1. the Parties shall agree in good faith to a reasonable
transition period, not to exceed ninety (90) days (the "Transition Period")
during which time the Parties shall continue to develop, manufacture and/or
commercialize the Product in accordance with this Agreement;
14.5.2. during the Transition Period, to the extent set forth or
requested in one or more written notices from CombinatoRx to HenKan hereunder,
HenKan will promptly take the actions required by this Section 14.5. CombinatoRx
will reasonably cooperate with HenKan (for avoidance of doubt, such cooperation
shall not require CombinatoRx to pay any amounts or incur any liabilities or
obligations not otherwise required hereunder to be paid or incurred by
CombinatoRx) to facilitate CombinatoRx's (or its nominee's) expeditious
assumption, with as little disruption as reasonably possible, of the continued
development, manufacture, and/or commercialization of the Product;
14.5.3. upon expiration of the Transition Period, or earlier to
the extent provided in this Section 14.5, all licenses and rights granted to
HenKan hereunder shall automatically terminate (except to the extent required by
HenKan to fulfill its transition obligation, and upon the earlier of such
fulfillment or written notice from CombinatoRx that it will not require such
fulfillment, such licenses and rights, to the extent not previously terminated,
shall automatically terminate); and
14.5.4. HenKan shall use Commercially Reasonable Efforts to
provide all cooperation and assistance reasonably requested by CombinatoRx to
enable CombinatoRx (or its nominee) to assume with as little disruption as
reasonably possible, the continued development and/or commercialization of the
Product in the Field in the Territory. Such cooperation and assistance shall be
provided in a prompt and timely manner (having regard to the nature of the
cooperation or assistance requested).
14.6. DISPOSITION OF INVENTORY THE PRODUCT. Upon termination of this
Agreement in its entirety, or with respect to a particular indication or
country, HenKan shall be entitled to dispose of all previously made or partially
made Product, but no more, within a period of one hundred and twenty (120) days,
provided, however, that any sale of the Product is subject to the terms of this
Agreement including, but not limited to, paying royalties at the rate and the
time provided and delivery of royalty and progress reports.
14.7. ACCRUED RIGHTS; SURVIVING OBLIGATIONS.
27
14.7.1. Termination, relinquishment or expiration of this
Agreement for any reason shall be without prejudice to any rights which shall
have accrued to the benefit of a Party prior to such termination, or expiration.
Such termination, relinquishment or expiration shall not relieve a Party from
obligations that are expressly indicated to survive termination or expiration of
this Agreement.
14.7.2. Without limiting the foregoing, Articles 1, 5, 6, 7, 9,
10, 12, 13, 14, 15 and 16 of this Agreement shall survive the expiration or
termination of this Agreement for any reason.
14.8. RIGHTS IN BANKRUPTCY. All licenses granted under this Agreement by
CombinatoRx or HenKan and all rights to data, regulatory filings and
Information, are, and shall otherwise be deemed to be, for purposes of Section
365(n) of the U.S. Bankruptcy Code, licenses of rights to "intellectual
property" as defined under Section 101 of the U.S. Bankruptcy Code. The Parties
agree that the Parties, as licensees of such rights under this Agreement, shall
retain and may fully exercise all of their rights and elections under the U.S.
Bankruptcy Code. The Parties further agree that, in the event of the
commencement of a bankruptcy proceeding by or against either Party under the
U.S. Bankruptcy Code, the Party hereto which is not a party to such proceeding
shall be entitled to a complete duplicate of (or complete access to, as
appropriate) any such intellectual property and all embodiments of such
intellectual property, and same, if not already in their possession, shall be
promptly delivered to them (i) upon any such commencement of a bankruptcy
proceeding upon their written request therefore, unless the Party subject to
such proceeding elects to continue to perform all of its obligations under this
Agreement, or (ii) if not delivered under (i) above, following the rejection of
this Agreement by or on behalf of the Party subject to such proceeding upon
written request therefore by the non-subject Party.
ARTICLE 15
DISPUTE RESOLUTION
15.1. DISPUTE RESOLUTION. Any disputes arising between the Parties
relating to, arising out of or in any way connected with this Agreement or any
term or condition hereof, or the performance by either Party of its obligations
hereunder, whether before or after termination of this Agreement, shall be
resolved as follows:
15.1.1. CHIEF EXECUTIVE OFFICERS. The dispute shall be promptly
referred to the Chief Executive Officers or similar senior executive officers of
CombinatoRx and HenKan, who shall meet at a mutually acceptable time and
location within thirty (30) days of such notice and attempt to negotiate a
settlement.
15.2. ARBITRATION. If the matter remains unresolved within sixty (60)
days after the date of initiating the negotiation by the Chief Executive
Officers or similar senior executive officers, or if the Chief Executive
Officers or similar senior executive officers fail to meet within thirty (30)
days pursuant to Section 15.1.1, then the matter shall be settled by arbitration
in accordance with the Rules of Conciliation and Arbitration of the
International Chamber of Commerce then in effect; PROVIDED, HOWEVER, that
notwithstanding the foregoing, any dispute regarding the infringement or
validity of any patent shall be resolved in the courts of the
28
jurisdiction in which such patent issued. The court of arbitration shall consist
of three (3) arbitrators. Each Party shall nominate one (1) member and the two
nominated members shall select a third arbitrator within ten (10) days of their
appointment. The arbitration shall be held in San Francisco, California, in the
English language. The decision of the court of arbitration shall be final and
the prevailing Party may enter the arbitral award in any court having
jurisdiction.
15.3. EQUITABLE RELIEF. Notwithstanding the foregoing, each of the
Parties shall have the right to seek a preliminary or permanent injunction or
other equitable relief.
ARTICLE 16
MISCELLANEOUS
16.1. COMBINATORX ACCOUNT FOR PAYMENTS. CombinatoRx's US Dollar Bank
Account for payments to be made by HenKan under Articles 5 and 6:
ABA #: 000-000-000
Bank Name: Bank of America
Bank Address: 000 Xxxxxxx Xx., Xxxxxx, XX 00000
Account Number: 9429399019
Account Name: Disbursement
16.2. NO IMPLIED WAIVERS; RIGHTS CUMULATIVE. No failure on the part of
CombinatoRx or HenKan to exercise and no delay in exercising any right, power,
remedy or privilege under this Agreement, or provided by statute or at law or in
equity or otherwise, including, without limitation, the right or power to
terminate this Agreement, shall impair, prejudice or constitute a waiver of any
such right, power, remedy or privilege or be construed as a waiver of any breach
of this Agreement or as an acquiescence therein, nor shall any single or partial
exercise of any such right, power, remedy or privilege preclude any other or
further exercise thereof or the exercise of any other right, power, remedy or
privilege.
16.3. FORCE MAJEURE. CombinatoRx and HenKan shall each be excused for
any failure or delay in performing any of its respective obligations under this
Agreement if such failure or delay is caused by Force Majeure. If either Party
is prevented or delayed in the performance of any of its obligations under this
Agreement by Force Majeure, that Party shall forthwith serve notice in writing
on the other Party specifying the nature and extent of the circumstances giving
rise to the Force Majeure.
16.4. NOTICES. Any notice or payment required to be given to either
Party will be deemed to have been properly given and to be effective upon
receipt if (a) delivered in person, by telefax, or overnight courier, or (b)
mailed by first-class certified mail, postage paid, to the respective addresses
given below, or to another address as it shall designate by written notice given
to the other Party. The failure to provide a copy of any notice to CombinatoRx
to its counsel as described below shall not affect the validity of such notice
hereunder.
In the case of HenKan: HenKan Pharmaceutical Company
30th Floor
00
00 Xxx Xxx Xxxxx Xxxx, Xxxxxxx 0
Xxxxxx, Xxxxxx
With a copy to: Xxxxx X. Xxxxx
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
In the case of CombinatoRx:
CombinatoRx, Incorporated
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
XXX
Attn: CFO
Fax: (000) 000-0000
With a copy to: Ropes & Xxxx LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxx Xxxxxxxxxx
Fax: (000) 000-0000
16.5. ASSIGNABILITY. The terms and provisions of this Agreement shall
inure to the benefit of, and be binding upon, CombinatoRx, HenKan, and their
respective successors and permitted assigns; PROVIDED, HOWEVER, that neither
Party may assign or otherwise transfer any of its rights, nor delegate any of
its respective obligations hereunder, without the written consent of the other
Party such consent not to be unreasonably withheld or delayed; PROVIDED,
HOWEVER, that CombinatoRx may assign this Agreement without consent in
connection with any merger, reorganization, or sale of all or substantially all
of its assets to which this Agreement relates; and provided further, that HenKan
may assign this Agreement without consent: (a) in connection with any merger,
reorganization or sale of all or substantially all of its assets to which this
Agreement relates, provided that (i) HenKan reasonably demonstrates to
CombinatoRx that the assignee, transferee or surviving entity of such
transaction has sufficient intent, skills and resources in the development of
pharmaceutical products to perform its obligations hereunder or (b) to an
Affiliate of HenKan provided that such Affiliate of HenKan shall reassign any
such assignment to HenKan, on ceasing to be an Affiliate of HenKan. Assignment
by operation of law shall be deemed an assignment for purposes of this Section
16.5. Any assignment in violation of this Section shall be void.
16.6. AMENDMENTS. No amendment, modification, waiver, termination or
discharge of any provision of this Agreement, nor consent to any departure by
CombinatoRx or HenKan
30
therefrom, shall in any event be effective unless the same shall be in writing
signed by the Party against whom enforcement is sought.
16.7. GOVERNING LAW; CONSENT TO JURISDICTION.
16.7.1. GOVERNING LAW. This Agreement, and all claims arising
under or in connection therewith, shall be governed by and construed in
accordance with the laws of the State of
New York, without giving effect to any
choice or conflict of law provision or rule that would cause the application of
the laws of any other jurisdiction.
16.7.2. CONSENT TO JURISDICTION. Subject to Section 15.2, each
party to this Agreement, by its execution hereof, (i) hereby irrevocably submits
to the exclusive jurisdiction of the courts of the State of
New York for the
purpose of any action arising in whole or in part under or in connection with
this Agreement, (ii) hereby waives to the extent not prohibited by applicable
law, and agrees not to assert, by way of motion, as a defense or otherwise, in
any such action, any claim that it is not subject personally to the jurisdiction
of the above named courts, that its property is exempt or immune from attachment
or execution, that any such action brought in one of the above named courts
should be dismissed on grounds of FORUM NON CONVENIENS, should be transferred to
any court other than one of the above named courts, or should be stayed by
reason of the pendency of some other proceeding in any other court other than
one of the above named courts, or that this Agreement or the subject matter
hereof may not be enforced in or by such court, and (iii) hereby agrees not to
commence any action arising out of or based upon this Agreement or relating to
the subject matter hereof other than before one of the above named courts nor to
make any motion or take any other action seeking or intending to cause the
transfer or removal of any such action to any court other than one of the above
named courts whether on the grounds of inconvenient forum or other wise. Each
party hereby (x) consents to service of process in any such action in any manner
permitted by
New York law; (y) agrees that service of process made in accordance
with clause (x) or made by registered or certified mail, return receipt
requested, at its address specified pursuant to Section 16.5, shall constitute
good and valid service of process in any such action; and (z) waives and agrees
not to assert (by way of motion, as a defense, or otherwise) in any such action
any claim that service of process made in accordance with clause (x) or (y) does
not constitute good and valid service of process.
16.8. SEVERABILITY. All terms contained in this Agreement shall be so
construed as not to infringe the provisions of any applicable law, but, if any
such term does infringe any such provision, such term shall be deemed to be void
and severable. The Parties undertake to replace invalid terms or fill any gap
with valid terms which most closely approximate the intent and economic effect
of the invalid terms or, in case of a gap, the Parties' presumable intentions.
In the event that the terms and conditions of this Agreement are materially
altered as a result of the preceding sentence, the Parties will renegotiate the
terms and conditions of this Agreement in order to resolve any inequities.
16.9. HEADINGS. Headings used herein are for convenience only and shall
not in any way affect the construction of, or be taken into consideration in
interpreting, this Agreement.
31
16.10. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original, and all of which counterparts,
taken together, shall constitute one and the same instrument.
16.11. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of CombinatoRx and HenKan with respect to the subject matter hereof, and all
prior or contemporaneous understandings or agreements, whether written or oral,
between CombinatoRx and HenKan with respect to such subject matter are hereby
superseded in their entirety.
16.12. NO AGENCY, PARTNERSHIP OR JOINT VENTURE. Nothing herein shall
create, evidence or imply any agency, partnership or joint venture between the
Parties and neither Party shall act or describe itself as the agent of the other
Party nor shall either Party represent that is has any authority to make
commitments on behalf of the other Party.
IN WITNESS WHEREOF, the Parties hereby have been caused this Agreement to
be duly executed as of the date first above written.
COMBINATORX, INCORPORATED
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: President and CEO
Date: May 4th, 2005
-----------------------------
HENKAN PHARMACEUTICAL COMPANY
By: /s/ Xxxxx May
-------------------------------
Name: Xxxxx May
Title: President
Date: May 9, 2005
-----------------------------
32
EXHIBIT A
COMBINATORX PRODUCT PATENTS
TAIWAN CHINA S. KOREA
PATENT US PATENT APPLICATION APPLICATION APPLICATION
------------------------- ------------------ ------------- ------------- -------------
Chlorpromazine and 6569853 90127505 1821723 2003-7006212
Pentamidine for the
Treatment of Neoplastic US Divisional Filed Filed Filed
Disorders 6846816 10/31/01 10/31/01 10/31/01
Filed
11/6/00
1/21/03
Issued
5/27/03
1/25/05
Kinesin and Phosphotase 10/885130 93133826 N/A N/A
Inhibitors Composition of
Matter and Method of Use Filed 5/27/04 Filed 11/9/04 Filed 11/9/04 Filed 11/9/04
Compositions for the Filed 4/19/05
Treatment of Neoplasms
Attorney
Docket No.:
50164/100001
