Exhibit 10.6
LICENSE AGREEMENT
This License Agreement, dated as of July 9, 1997, is by and among
Angiotech Pharmaceuticals, Inc., a corporation organized under the laws of the
Province of British Columbia ("Angiotech"); Boston Scientific Corporation, a
Delaware corporation ("BSC"); and Xxxx Incorporated, an Indiana corporation
("Xxxx").
WITNESSETH
WHEREAS, Angiotech owns certain domestic and foreign patents and patent
applications and has acquired licenses to other domestic and foreign parents and
patent applications relating to the use of paclitaxel as a coating for certain
medical devices;
WHEREAS, Angiotech has also developed and owns certain products and
technology in the area of the use of paclitaxel as a coating for certain medical
devices;
WHEREAS, Angiotech has the right to grant licenses with respect to such
patents, patent applications, products and technology for use in specified
areas; and
WHEREAS, each of BSC and Xxxx desires to receive a co-exclusive
license, subject only to the grant of such a license to the other party, for the
use of such patents, patent applications, products and technology for the
duration of the United States and foreign patents covering such products and
technology for certain applications in the fields of vascular and alimentary
tract and liver applications, and Angiotech is willing to grant such a license
to each of BSC and Xxxx.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Angiotech, BSC and Xxxx hereby
agree as follows:
1. DEFINITIONS
Capitalized terms used in this Agreement and not otherwise defined
herein shall have the meaning as set forth below:
"Affiliate" means any entity that, directly or indirectly, through one
or more intermediaries, controls, is controlled by or is under common control
with a party to this Agreement. For purposes of this definition, control means
the direct or indirect ownership of at least fifty percent (50%) (or such lesser
percentage which is the maximum allowed to be owned by a foreign corporation in
a particular jurisdiction), of (a) the outstanding voting securities of such
entity, or (b) the decision making authority of such entity.
"Agreement" means this License Agreement, together with all exhibits
annexed hereto, as the same shall be modified and in effect from time to time.
"Allowable Fees" has the meaning set forth in Section 8.7.
"Angiotech" shall have the meaning set forth in the Preamble to this
Agreement.
"Angiotech Technology" shall mean (a) the Patent Rights, license rights
and existing technology set forth on Exhibit A hereto, (b) any New Angiotech
Technology which Xxxx or BSC, as the case may be, elects to have included in the
Angiotech Technology pursuant to Section 2.3, (c) any and all improvements to
the foregoing developed by Angiotech, or, subject to limitations and
restrictions on Angiotech's rights to technology licensed from third parties,
for Angiotech, during the term of this Agreement (including those arising under
the CRADA to the extent solely owned by Angiotech), and (d) Technical
Information that is useful or necessary to practice the foregoing.
"Base Unit Number" shall be calculated for each of BSC and Xxxx and
their respective Affiliates in each Geographical Area at such times as BSC or
Xxxx or their respective Affiliates, as the case may be, makes its first
commercial sale of an Eligible Stent Product in such Geographical Area for a
vascular application (each, a "Calculation Date") and shall mean, with respect
to BSC or Xxxx, as the case may be, the number of units of Stent Products sold
for vascular applications by BSC or Xxxx, as the case may be, to non-Affiliates
in such Geographical Area during the last Contract Quarter ending prior to the
applicable Calculation Date.
"BSC" has the meaning set forth in the preamble to this Agreement.
"BSC Endoluminal Royalty" has the meaning set forth in Section 3.2(c).
"BSC GI Sales Royalty" has the meaning set forth in Section 3.2(b).
"BSC IDE Approval Date" has the meaning set forth Section 3.1(b)(i).
"BSC IDE Filing Date" has the meaning set forth in Section 3.1(a).
"BSC License" shall have the meaning set forth in Section 2.1(a).
"BSC Milestone License Fees" has the meaning set forth in Section 3.1.
"BSC PMA Filing Date" has the meaning set forth in Section 3.1(b).
"BSC Royalty Payments" has the meaning set forth in Section 3.2 and
includes royalties under Section 3.3.
"BSC Sales Milestone License Fee" has the meaning set forth in Section
3.1(c).
"BSC Vascular Sales Royalty" has the meaning set forth in Section
3.2(a).
"Confidential Information" means all information and data provided by
the parties, to each other hereunder in written or other tangible medium and
marked as confidential, or if
-2-
disclosed orally or displayed, confirmed in writing as confidential within
thirty (30) days after disclosure, except any portion thereof which:
(a) is known to the receiving party, as evidenced by the
receiving party's written records, before receipt thereof under this Agreement;
(b) is disclosed to the receiving party by a third person
who is under no obligation of confidentially to the disclosing party hereunder
with respect to such information and who otherwise has a right to make such
disclosure;
(c) is or becomes generally known in the trade through no
fault of the receiving party;
(d) is independently developed by the receiving party, as
evidenced by the receiving party's written records, without access to such
information; or
(e) is required to be disclosed by applicable statute,
rule or regulation of any court or regulatory authority with competent
jurisdiction; provided, that the party whose information is to be disclosed
shall be notified as soon as possible and the party that is being required to
disclose such information shall, if requested by the party whose information is
to be disclosed, use reasonable good faith efforts, at the expense of the
requesting party, to assist in seeking a protective order (or equivalent) with
respect to such disclosure or otherwise take reasonable steps to avoid making
such disclosure.
"Contract Quarter" means a calendar quarter or any part thereof.
"Contract Year" shall mean each successive period of four consecutive
Contract Quarters, with the first such Contract Year beginning on the first day
of the first full Contract Quarter beginning after the date hereof.
"Xxxx" has the meaning set forth in the Preamble to this Agreement.
"Xxxx Endoluminal Royalty" has the meaning set forth in Section 4.2(c).
"Xxxx GI Sales Royalty" has the meaning set forth in Section 4.2(b).
"Xxxx IDE Approval Date" has the meaning set forth in Section
4.1(b)(i).
"Xxxx IDE Filing Date" has the meaning set forth in Section 4.1(a).
"Xxxx License" shall have the meaning set forth in Section 2.1(b).
"Xxxx Milestone License Fees" has the meaning set forth in Section 4.1.
"Xxxx PMA Filing Date" has the meaning set forth in Section 4.1(b).
-3-
"Xxxx Royalty Payments" has the meaning set forth in Section 4.2 and
includes royalties under Section 4.3.
"Xxxx Sales Milestone License Fee" has the meaning set forth in Section
4.1(c).
"Xxxx Vascular Sales Royalty" has the meaning set forth in Section
4.2(a).
"CRADA" has the meaning set forth in Section 6.1.
"Eligible Endoluminal Products" means any Endoluminal Products that
incorporate Angiotech Technology and are sold by BSC, Xxxx or their Affiliates,
respectively, provided, however, that "Eligible Endoluminal Products" shall not
include any Eligible Stent Products.
"Eligible Products" means Eligible Stent Products and Eligible
Endoluminal Products.
"Eligible Stent Products" means any Stent Products that incorporate
Angiotech Technology and are sold by BSC, Xxxx or their Affiliates,
respectively; provided, however, that "Eligible Stent Products" shall not
include any Eligible Endoluminal Products.
"Endoluminal Products" means endoluminal drug delivery devices,
including stent grafts and stent-like devices, as well as balloons and other
endoluminal delivery systems used for drug delivery, but excluding vascular
grafts and Stent Products.
"Entity" means any corporation, association, partnership (general or
limited), joint venture, trust, estate, limited liability company, limited
liability partnership or other legal entity or organization.
"FDA" means the United States Food and Drug Administration.
"Geographical Areas" means the five areas of the world comprised of the
(a) United States, (b) the countries of the European Union, as comprised on the
date of this Agreement, (c) Japan, (d) Canada, and (e) the remaining countries
of the world, respectively.
"GI" means the alimentary tract and liver.
"Investment Documentation" means that certain Investment Agreement
between Angiotech, BSC and Xxxx and related documents, each dated as of the date
of this Agreement, pursuant to which BSC and Xxxx shall each agree to purchase,
and Angiotech shall agree to sell to each of BSC and Xxxx, 190,042 Class C
Preference shares of Angiotech's capital stock for the purchase price, and
subject to the terms and conditions, specified therein.
"Licensed Application" shall means the use of Angiotech Technology in
the Licensed Field of Use on or incorporated in Stent Products and Endoluminal
Products, but specifically excluding systemic treatments and pastes,
micropheres, films, sprays and similar formulations in circumstances where such
are not applied to or incorporated in either a Stent Product or an Endoluminal
Product, as the case may be.
-4-
"Licensed Field of Use" means endoluminal vascular and GI applications.
"Licenses" has the meaning set forth in Section 7.2(d).
"Net Sales" means gross sales from the sale, rent, lease or otherwise
making available to third parties of Eligible Products, less the fol1owing, to
the extent the same are credited or deducted from the invoiced amount:
discounts, refunds, replacement or credits allowed to purchasers for return of
Eligible Products or as reimbursement for damaged Eligible Products, freight,
postage, insurance, and other shipping charges, sales and use taxes, customs
duties, and any other governmental tax or charge (except income taxes) imposed
on or at the time of the production, importation, use, or sale of Eligible
Products (if separately invoiced), including any value added taxes (VAT), as
adjusted for rebates and refunds, and transfers at or below cost by or on behalf
of BSC or Xxxx of Eligible Products or the practice of the Angiotech Technology
in connection with compassionate use, emergency use, bona fide research,
treatment, Investigational New Drug Applications (IND's) or the like authorized
by the FDA or corresponding foreign agencies, provided, however, that in the
case of an Eligible Product sold by BSC or Xxxx in combination with one or more
Non-Stent Products (collectively, a "Combination Product"), Net Sales shall
exclude the Value (as defined below) of any Non-Stent Products included in the
Combination Product (e.g., where a Stent Product is combined with a balloon for
delivery). No deductions shall be made for commissions paid to individuals,
whether they be with independent agencies or regularly employed by BSC, Xxxx,
their Affiliates and on their respective payrolls, or for the cost of
col1ections. "Value," for purposes of this subparagraph, shall mean fair market
value, as determined by the commercial sales price of the Non-Stent Product(s)
sold separately, or, if not sold separately, the fair market value of such
Non-Stent Product(s) reasonably determined by BSC or Xxxx, as the case may be,
with notice of such fair market value to be given to Angiotech together with the
basis upon which such determination was made. If Angiotech does not agree with
the fair market value determined by BSC or Xxxx, as the case may be, Angiotech
may submit the matter to arbitration in accordance with Section 10.2. The
calculation of Net Sales of Combination Products will be subject to the audit
rights set forth in Section 6.4(b).
"New Angiotech Technology" has the meaning set forth in Section 2.3(a).
"NIH" has the meaning set forth in Section 6.1.
"NIH Agreement" has the meaning set forth in Section 6.1.
"NIH License" means the licenses granted to Angiotech and its
sublicensees under the NIH Agreement.
"NIH Patent Rights" means the intellectual property rights covered
under the NIH Agreement.
-5-
"NIH Royalty" shall mean the percentage of Net Sales required to be
paid to the NIH under the NIH Agreement with respect to sales of Eligible
Products by BSC or Xxxx, as the case may be, in a Particular country.
"Non-Licensed Products" has the meaning set forth in Section 8.11.
"Non-Stent Product" means all Products of BSC and Xxxx other than
Endoluminal Products and Stent Products.
"Patent Rights" means all of the following intellectual property or
other rights of Angiotech:
(a) all United States and foreign patents, patent
applications and provisional applications concerning the Angiotech Technology
listed on Exhibit A hereto; including without limitation the patents owned or
filed by, or licensed to, Angiotech listed on Exhibit A hereto; and
(b) all United States and foreign patents issued with
respect to the applications identified in clause (a) hereof including
divisionals, continuations, re-examinations and re-issues of such applications
or patents.
"Remaining Licensee" has the meaning set forth in Section 9.3.
"Stent Products" means stents.
"Technical Information" means all know-how, data and other proprietary
information in the possession of or developed or acquired by Angiotech during
the term of this Agreement that directly relates to the Patent Rights, license
rights and technology set forth on Exhibit A hereto or otherwise relates to the
use of chemotherapeutic or anti-angiogenic compounds or is necessary or useful
to practice the licenses set forth in Section 2.1(a) or 2.l(b), as the case may
be.
"Technology Transfer" means delivery of all Angiotech Technology to BSC
and Xxxx, including all applicable documentation related thereto, including but
not limited to the documentation and procedures specified in Exhibit B annexed
hereto.
2. LICENSES
2.1 Grants. Subject to the terms and conditions hereof, the
following licenses are granted hereby, each effective as of the date of this
Agreement:
(a) BSC Technology License. In consideration for the
execution, delivery and performance of the Investment Documentation and the
assumption by BSC of its payment and other obligations hereunder and subject to
all the other terms and conditions of this license, Angiotech hereby grants to
BSC an exclusive (subject only to the rights granted to Xxxx and reserved to
Angiotech in paragraphs (b) and (c) below and the reservations in favor of the
NIH, the United States Government and third parties specified under the NIH
Agreement), worldwide
-6-
right and license to use, manufacture, have manufactured, distribute and sell,
and to grant sublicenses to its Affiliates to use, manufacture, have
manufactured, distribute and sell, the Angiotech Technology in the Licensed
Field of Use solely for use in the Licensed Applications (the "BSC License").
(b) Xxxx Technology License. In consideration for the
execution, delivery and performance of the Investment Documentation and the
assumption by Xxxx of its payment and other obligations hereunder and subject to
all the other terms and conditions of this license, Angiotech hereby grants to
Xxxx an exclusive (subject only to the rights granted to BSC and reserved to
Angiotech pursuant to paragraphs (a) above and (c) below and the reservations in
favor of the NIH, the United States Government and third parties under the NIH
Agreement) worldwide right and license to use, manufacture, have manufactured,
distribute and sell, and to grant sublicenses to its Affiliates to use,
manufacture, have manufactured, distribute and sell, the Angiotech Technology in
the Licensed Field of Use solely for use in the Licensed Applications (the "Xxxx
License").
(c) Reservation of Rights. Angiotech reserves all rights
to the Angiotech Technology for (i) any use or purpose outside the Licensed
Field of Use and Licenced Applications and (ii) noncommercial research purposes
in all fields and applications, including the Licensed Field of Use and Licensed
Applications.
2.2 Duration and Term. The BSC License, the Xxxx License and this
Agreement shall each, subject to the early termination provisions of Sections
5.1, 5.2 and 9.1, have a term from the date hereof until the last expiration
date of any United States or foreign patents included in the Angiotech
Technology (including any United States or foreign patents which become part of
the Angiotech Technology after the date of this Agreement), provided, however,
that the terms of Sections 6.4(b) and (c), 8.3 through 8.6 (but only with
respect to rights or obligations that arise prior to the termination of this
Agreement), 8.9, 9.2, 9.3, 10 and 11 shall survive the expiration or termination
of the Agreement or any licenses granted hereunder.
2.3 New Inventions or License Rights. Subject to the rights of
third parties that may exist at any time and from time to time, Angiotech hereby
grants to each of BSC and Xxxx, jointly or individually, a right to elect to
include in the BSC License (in the event that BSC so elects), and in the Xxxx
License (in the event that Xxxx so elects), (a) as "Angiotech Technology," any
new inventions and developments, and (b) as "Patent Rights," any patents and
patent applications, all of the foregoing which are made by, or for, or licensed
to, Angiotech (including those arising from the CRADA), to the extent such new
inventions, developments, patents and patent applications relate to the patents,
patent applications, license rights and other technology described on Exhibit A
hereto or may be used in the Licensed Field of Use (other than Angiotech
Technology) ("New Angiotech Technology"). Angiotech shall notify BSC and Xxxx in
writing of such inventions and developments, providing a description of the
technology and any financial and other obligations under any applicable third
party license, and each of BSC and Xxxx may, by giving written notice to
Angiotech at any time during the BSC License and Xxxx License elect to include
the New Angiotech Technology as Angiotech Technology or
-7-
Patent Rights, whichever is applicable, under this Agreement (to the extent an
election is made, the " Electing Parties"); provided, that an Electing Party
will be obligated to reimburse Angiotech for all of the costs and expenses of
Angiotech under any third party license (apportioned between BSC and Xxxx by
agreement between BSC and Xxxx, if both parties elect, and by Angiotech, acting
reasonably, notice of such apportionment to be given to BSC and Xxxx together
with the basis upon which the apportionment determination was made, between the
uses authorized in this Agreement and uses outside the scope of this Agreement,
subject to the right of BSC or Xxxx to review the determination and submit the
determination to arbitration pursuant to Section 10.2) and will be obligated to
pay royalties on sales as required by any third party license in addition to the
royalties payable under this Agreement. In addition, an Electing Party will be
subject to all performance, minimum sales and other obligations set forth in the
third party license (or apportioned by Angiotech) relating to such New Angiotech
Technology. Notwithstanding the foregoing, Angiotech shall be free to license
the New Angiotech Technology to third parties outside the Licensed Applications
and the Licensed Field of Use. Notwithstanding the foregoing, in no event shall
any failure by BSC or Xxxx to elect to include any New Angiotech Technology in
the Angiotech Technology pursuant to this Section 2.3 be deemed to grant any
right to Angiotech to use, manufacture, have manufactured, distribute or sell,
or grant any license to any third party to do any of the same, any Angiotech
Technology in the Licensed Field of Use for use in any Licensed Applications.
3. BSC ROYALTIES & FEES
3.1 BSC Milestone License Fees. In consideration for the license
granted under Section 2.1 (a) of this Agreement, BSC shall pay the following
amounts to Angiotech as license fees at the times, and subject to the
conditions, set forth below (col1ectively, the "BSC Milestone License Fees"):
(a) BSC IDE Fee. Within twenty (20) business days after
the date of the first filing by BSC of an Investigational Device Exemption with
the FDA or an equivalent filing with an appropriate governmental agency in one
or more European countries with respect to a product of BSC incorporating or
utilizing the Angiotech Technology in a vascular application (the "BSC IDE
Filing Date"), BSC shall pay a license fee calculated as follows:
(i) if the BSC IDE Filing Date is on or after
October 15, 1998, the amount of $1,275,000; or
(ii) if the BSC IDE Filing Date is prior to
October 15, 1998, the amount of (x) $1,275,000 minus (y) the product of $125,000
for each complete thirty (30) day period by which the BSC IDE Filing Date
precedes October 15, 1998; provided, however, that in no event shall any fee
calculated pursuant to this Section 3.1(a)(ii) be less than $525,000.
(b) BSC PMA Fee. Within twenty (20) business days after
the date of the first filing by BSC of a Pre-Market Approval Application or
Section 510(k) Pre-Marketing Notification with the FDA, or an equivalent filing
with an appropriate governmental agency in Europe, with respect to a product of
BSC incorporating or utilizing the Angiotech Technology in
-8-
a vascular application (the "BSC PMA Filing"), BSC shall pay an additional
license fee calculated as follows:
(i) subject to Section 3.1(b)(iii) below, if the
date of the BSC PMA Filing is on or after the twenty-four month anniversary of
the date on which the FDA (or appropriate governmental agency in Europe)
approves the applicable IDE or equivalent European filing filed by BSC (the
"BSC IDE Approval Date"), the amount of $2,050,000; or
(ii) if the date of the BSC PMA Filing is prior
to the twenty-four month anniversary of the BSC IDE Approval Date, the amount of
(x) $2,050,000,minus (y) the product of $200,000 for each complete thirty (30)
day period by which the date of the BSC PMA Filing precedes the twenty-four
month anniversary of the BSC IDE Approval Date, provided, however, that in no
event shall any fee calculated pursuant to this Section 3.1(b)(ii) be less than
$800,000; or
(iii) if, and to the extent, prior to the date of
the BSC PMA Filing, the FDA requires clinical follow-up in excess of nine (9)
months and BSC is unable to make the BSC PMA Filing prior to expiration of the
"twenty-four (24) month" period referenced in Section 3.2(b)(ii) above, the
amount of (x) $2,050,000, minus (y) the product of $100,000 for each complete
thirty (30) day period by which the date of the BSC PMA Filing precedes the
Extended BSC PMA Filing Date, provided, however, that in no event shall any fee
calculated pursuant to this Section 3.1(b)(iii) be less than $800,000. For
purposes of this paragraph, "Extended BSC PMA Filing Date" means the date which
is twenty-four (24) months following the BSC IDE Approval Date plus the number
of months the FDA requires clinical follow-up in excess of nine (9) months.
(c) BSC Milestone License Fee. Within twenty (20)
business days after the end of the first Contract Quarter in which the Net Sales
by BSC of Eligible Stent Products for such Contract Quarter and the immediately
preceding Contract Quarter together exceed $5,000,000, BSC shall pay Angiotech
an additional license fee (the "BSC Sales Milestone License Fee") equal to the
difference of (x) $4,500,000 minus (y) one-half of the amount of any BSC Royalty
Payments paid by BSC pursuant to Section 3.2 prior to or on the date on which
the BSC Sales Milestone License Fee is actually paid.
3.2 BSC Royalties. As additional consideration for the license
granted under Section 2.1(a) of the Agreement BSC shall pay the following
royalties to Angiotech (collectively, the "BSC Royalty Payments").
(a) Vascular Sales Royalty on Eligible Stent Products.
Within sixty (60) days after the end of each Contract Quarter during the term of
the BSC License, BSC shall pay Angiotech a royalty (the "BSC Vascular Sales
Royalty") on Net Sales of Eligible Stent Products that are covered in the
country of sale by one or more valid and enforceable claims included in the
Patent Rights, by BSC and its Affiliates during such Contract Quarter for
vascular applications in each of the Geographical Areas, calculated as the sum
of the following:
-9-
(i) with respect to sales during a Contract
Quarter of units of Eligible Stent Products covered in the country of sale by
one or more valid and enforceable claims included in the Patent Rights for
vascular applications from zero to the product of the Base Unit Number for such
Eligible Stent Products for such Geographical Area multiplied by 1.25, the
royalty shall be an amount equal to five percent (5%) of the Net Sales of such
units of Eligible Stent Products;
(ii) with respect to sales during a Contract
Quarter of units of Eligible Stent Products covered in the country of sale by
one or more valid and enforceable claims included in the Patent Rights for
vascular applications from (x) the product of the Base Unit Number for such
Eligible Stent Products for such Geographical Area multiplied by 1.25, to (y)
the product of the Base Units Number of such Eligible Stent Products for such
Geographical Area multiplied by two, the royalty shall be an amount equal to
seven percent (7%) of the Net Sales of such units of Eligible Stent Products:
and
(iii) with respect to sales during a Contract
Quarter of units of Eligible Stent Products covered in the country of sale by
one or more valid and enforceable claims included in the Patent Rights for
vascular applications above the product of the Base Unit Number for such
Eligible Stent Products for such Geographical Area multiplied by two, the
royalty shall be an amount equal to ten (l0%) percent of the Net Sales of such
units of Eligible Stent Products, provided, however, that from and after the
date on which the aggregate amount of BSC Royalty Payments made by BSC pursuant
to this Section 3.2(a)(iii) during the term of the BSC License exceed
$100,000,000, any further royalties payable under this Section 3.2(a)(iii) shall
be calculated as an amount equal to eight percent (8%) of the Net Sales of such
Eligible Stent Products.
(iv) by way of example but not limitation,
Exhibit E sets forth an example of calculating BSC Royalty Payments based on the
Base Unit Number.
(b) GI Sales Royalty on Eligible Stent Products. Within
sixty (60) days after the end of each Contract Quarter during the term of the
BSC License, BSC shall pay Angiotech an additional royalty (the "BSC GI Sales
Royalty") on Net Sales of Eligible Stent Products that are covered in the
country of sale by one or more valid and enforceable claims included in the
Patent Rights, by BSC and its Affiliates during such Contract Quarter for GI
applications in each of the Geographical Areas, calculated as five percent (5%)
of the Net Sales of such Eligible Stent Products.
(c) Royalties on Eligible Endoluminal Products. Within
sixty (60) days after the end of each Contract Quarter during the term of the
BSC License, BSC shall pay Angiotech an additional royalty (the "BSC Endoluminal
Royalty") on Net Sales of Eligible Endoluminal Products that are covered in the
country of sale by one or more valid and enforceable claims included in the
Patent Rights, by BSC and its Affiliates during such Contract Quarter in each of
the Geographical Areas, calculated as five percent (5%) of the Net Sales of such
Eligible Endoluminal Products.
-10-
(d) Royalties in Japan. Notwithstanding anything contrary
in this Agreement, for purposes of determining whether a particular Eligible
Product is covered in Japan by one or more valid and enforceable claims included
in the Patent Rights for purposes of Sections 3.2(a), (b) and (c), such Product
shall be deemed to be covered in Japan by one or more valid and enforceable
claims included in the Patent Rights if (i) the particular Eligible Product is
covered by a valid and enforceable claim of a patent included in the Patent
Rights which has been issued in Japan, or (ii) the particular Eligible Product
is covered by a claim of a pending patent application in Japan, and BSC has "de
facto exclusivity" (as defined in Section 3.3(a) below) in Japan with respect to
that Eligible Product.
3.3 Patent Coverage and De Facto Exclusivity
(a) De Facto Exclusivity Defined. BSC shall be deemed to
have "de facto exclusivity" for a particular Eligible Product in a particular
country unless a third party (other than Xxxx or an Affiliate of BSC or Xxxx)
(i) has obtained approval for sale (if required) in that country for a product
which is competitive to a particular Eligible Product in that country and (ii)
has made at least one commercial sale for value of that product in that country
within six (6) months prior to or after the Contract Quarter in which the
royalty calculation is being made, provided, however, that BSC shall not be
deemed to have "de facto exclusivity" in a particular country to the extent that
such "de facto exclusivity" is primarily attributable to patent rights (other
than the Patent Rights) owned by, or licensed to, BSC.
(b) Patent Coverage Defined. BSC shall be deemed to have
"Patent Coverage" for a particular Eligible Product in a country if there is a
valid claim that, but for the licenses granted to BSC under this Agreement,
would be infringed by the manufacture, use or sale of such Eligible Product in
such country or by the manufacture of such Eligible Product in the country of
manufacture.
(c) De Facto Royalty. For countries in which there is no
Patent Coverage, if at any time BSC does have de facto exclusivity for a
particular Eligible Product in a particular country, then BSC shall pay
Angiotech a royalty on its Net Sales of that Eligible Product in that country of
three percent (3%) during such period of de facto exclusivity, which payments
shall also constitute BSC Royalty Payments. If, during the term of the BSC
License, BSC does not have de facto exclusivity for a particular Eligible
Product in a particular country and there is no Patent Coverage for such
Eligible Product in that country, but an NIH Royalty is still payable by
Angiotech for Net Sales by BSC of such Eligible Product in such country, BSC
shall be responsible for the payment of such NIH Royalty during such period(s).
3.4 Reduction of BSC Royalties. After the BSC Sales Milestone
License Fee has been paid, BSC shall be entitled to reduce the amount of any BSC
Royalty Payments that may become payable with respect to any Contract Quarter by
an amount equal to one-half of the aggregate amount of such payment (calculated
without regard to any other possible reductions in such fees pursuant to the
terms of this Agreement) until the aggregate amount of the reductions made to
the BSC Royalty Payments pursuant to this Section 3.4 equal the amount of
-11-
the BSC Sales Milestone License fee actually paid and not already offset by BSC
Royalty Payments pursuant to Section 3.1(c), after which time no further
reductions will be made.
3.5 Sales to Affiliates. On sales of Eligible Products by BSC to
its Affiliates, or on sales made in other than an arm's-length transaction, the
value of the Net Sales attributed under this Section 3 to such a transaction
shall be that which would have been received in an arm's-length transaction.
Notwithstanding the foregoing, sales between and among BSC and its Affiliates
that are intended for resale shall not be included in Net Sales.
3.6 Reporting of BSC Royalties. BSC shall deliver to Angiotech
within sixty (60) days after the end of each Contract Quarter during the term of
the BSC License, a written account, including quantities, of the aggregate of
BSC's and its Affiliates' sales subject to royalty payments hereunder and the
amount of the royalty payment due to Angiotech for such Contract Quarter. Each
royalty report shall be certified as correct by an authorized employee of BSC
and shall include a reasonably detailed listing of all deductions made to
determine Net Sales and to calculate the royalties payable hereunder.
3.7 Payment of BSC Milestone License Fees and BSC Royalties. BSC
Milestone License Fees and BSC Royalties due under this Section 3 shall be paid
in U.S. dollars. For conversion of foreign currency to U.S. dollars, the
conversion rate shall be the conversion rate used by BSC to convert the
applicable sales into U.S. dollars for purposes of the preparation of BSC's
consolidated financial statements, such conversion to be calculated in
accordance with generally accepted accounting principles in the United States,
applied consistently. All payments shall be made by wire transfer to Angiotech's
account in accordance with the following instructions:
Chase Manahattan Bank
New York, NY
ABM# 000000000
For credit to the account of:
Angiotech Pharmaceuticals, Inc.
Account #000-000-0
Branch #7400
Institution #003
Royal Bank of Canada - Xxxxxx & Bute Branch
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Any loss of exchange, value, taxes, or other expenses incurred
in the transfer or conversion to U.S. dollars shall be paid entirely by BSC. The
royalty report required by Section 3.6 shall accompany each such payment.
3.8 Late Payments. Late charges will be assessed by Angiotech as
additional royalties on any overdue payments at one percent (1%) per month,
compounded monthly (an
-12-
effective annual rate of twelve and 68/100 percent (12.68%) per annum). The
payment of such late charges will not prevent Angiotech from exercising any
other rights it may have as a consequence of the lateness of any payment.
3.9 Governmental Filings. Except for taxes based on Angiotech's
income, BSC will be solely responsible for determining if any tax on Net Sales
and royalty payments is owed to any governmental authority and shall pay any
such tax and be responsible for all filings with appropriate governmental
authorities.
3.10 Estimation of Net Sales. In the event that BSC is unable to
report and pay royalties due under this Section 3 on actual Net Sales in any
Contract Quarter. BSC will make a good faith estimate of Net Sales for those
jurisdictions in which actual Net Sales information is not readily available and
will make Royalty Payments based on such estimate. When actual Net Sales
information becomes available for those jurisidictions for which estimates had
previously been made, BSC will promptly determine, and give notice to Angiotech
of, the appropriate adjustment necessary to reconcile the estimated Royalty
Payment with the actual Royalty Payment due to Angiotech based on actual Net
Sales (each a "Reconciliation"). The next Royalty Payment due Angiotech from BSC
under this Agreement will include an adjustment to reflect such Reconciliation,
or the amount of such Reconciliation will be paid in cash if no further
royalties are anticipated.
4. XXXX ROYALTIES & FEES
4.1 Xxxx Milestone License Fees. In consideration for the license
granted under Section 2.1(b) of this Agreement, Xxxx shall pay the following
amounts to Angiotech as license fees at the times, and subject to the
conditions, set forth below (collectively, the "Xxxx Milestone License Fees"):
(a) Xxxx IDE Fee. Within twenty (20) business days after
the date of the first filing by Xxxx of an Investigational Device Exemption with
the FDA or an equivalent filing with an appropriate governmental agency in one
or more European countries with respect to a product of Xxxx incorporating or
utilizing the Angiotech Technology in a vascular application (the "Xxxx IDE
Filing Date"), Xxxx shall pay a license fee calculated as follows:
(i) if the Xxxx IDE Filing Date is on or after
October 15, 1998, the amount of $1,275,000; or
(ii) if the Xxxx IDE Filing Date is prior to
October 15, 1998, the amount of (x) $1,275,000 minus (y) the product of $125,000
for each complete thirty (30) day period by which the Xxxx IDE Filing Date
precedes October 15, 1998; provided, however, that in no event shall any fee
calculated pursuant to this Section 4.1(a)(ii) be less than $525,000.
(b) Xxxx PMA Fee. Within twenty (20) business days after
the date of the first filing by Xxxx of a Pre-Market Approval Application or
Section 510(k) Pre-Marketing Notification with the FDA, or an equivalent filing
with an appropriate governmental agency in
-13-
Europe, with respect to a product of Xxxx incorporating or utilizing the
Angiotech Technology in a vascular application (the "Xxxx PMA Filing"), Xxxx
shall pay an additional license fee calculated as follows:
(i) subject to Section 4.1(b)(iii) below, if
the date of the Xxxx PMA Filing is on or after the twenty-four (24) month
anniversary of the date on which the FDA (or appropriate governmental agency in
Europe) approves the applicable IDE or equivalent European filing filed by Xxxx
(the "Xxxx IDE Approval Date"), the amount of $2,050,000; or
(ii) if the date of the Xxxx PMA Filing is prior
to the twenty-four (24) month anniversary of the Xxxx IDE Approval Date, the
amount of (x) $2,050,000, minus (y) the product of $200,000 for each complete
thirty (30) day period by which the date of the Xxxx PMA Filing precedes the
twenty-four month anniversary of the Xxxx IDE Approval Date, Provided, however,
that in no event shall any fee calculated pursuant to this Section 4.1(b)(ii)
be less than $800,000; or
(iii) if, and to the extent, prior to the date of
the Xxxx PMA Filing, the FDA requires clinical follow-up in excess of nine (9)
months and Xxxx is unable to make the Xxxx PMA Filing prior to expiration of the
"twenty-four (24) month" period referenced in Section 4.2(b)(ii) above, the
amount of (x) $2,050,000, minus (y) the product of $100,000 for each complete
thirty (30) day period by which the date of the Xxxx PMA Filing precedes the
Extended Xxxx PMA Filing Date, provided, however, that in no event shall any fee
calculated pursuant to this Section 4.1(b)(iii) be less than $800,000. For
purposes of this paragraph, "Extended Xxxx PMA Filing Date" means the date
which is twenty-four (24) months following the Xxxx IDE Approval Date plus the
number of months the FDA requires clinical follow-up in excess of nine (9)
months.
(c) Xxxx Sales Milestone License Fee. Within twenty (20)
business days after the end of the first Contract Quarter in which the Net Sales
by Xxxx of Eligible Stent Products for such Contract Quarter and the immediately
preceding Contract Quarter together exceed $5,000,000, Xxxx shall pay Angiotech
an additional license fee (the "Xxxx Sales Milestone License Fee") equal to the
difference of (x) $4,500,000 minus (y) one-half of the amount of any Xxxx
Royalty Payments paid by Xxxx pursuant to Section 4.2 prior to or on the date on
which the Xxxx Sales Milestone License Fee is actually paid.
4.2 Xxxx Royalties. As additional consideration for the license
granted under Section 2.1(a) of the Agreement, Xxxx shall pay the following
royalties to Angiotech (collectively, the "Xxxx Royalty Payments").
(a) Vascular Sales Royalty on Eligible Stent Products.
Within sixty (60) days after the end of each Contract Quarter during the term of
the Xxxx License, Xxxx shall pay Angiotech a royalty (the "Xxxx Vascular Sales
Royalty") on Net Sales of Eligible Stent Products that are covered in the
country of sale by one or more valid and enforceable claims included in the
Patent Rights, by Xxxx and its Affiliates during such Contract Quarter for
vascular applications in each of the Geographical Areas, calculated as the sum
of the following:
-14-
(i) with respect to sales during a Contract
Quarter of units of Eligible Stent Products covered in the country of sale by
one or more valid and enforceable claims included in the Patent Rights for
vascular applications from zero to the product of the Base Unit Number for such
Eligible Stent Products for such Geographical Area multiplied by 1.25, the
royalty shall be an amount equal to five percent (5%) of the Net Sales of such
units of Eligible Stent Products:
(ii) with respect to sales during a Contract
Quarter of units of Eligible Stent Products covered in the country of sale by
one or more valid and enforceable claims included in the Patent Rights for
vascular applications from (x) the product of the Base Unit Number for such
Eligible Stent Products for such Geographical Area multiplied by 1.25, to (y)
the product of the Base Unit Number of such Eligible Stent Products for such
Geographical Area multiplied by two, the royalty shall be an amount equal to
seven percent (7%) of the Net Sales of such units of Eligible Stent Products;
and
(iii) with respect to sales during a Contract
Quarter of units of Eligible Stent Products covered in the country of sale by
one or more valid and enforceable claims included in the Patent Rights for
vascular applications above the product of the Base Unit Number for such
Eligible Stent Products for such Geographical Area multiplied by two, the
royalty shall be an amount equal to ten (10%) percent of the Net Sales of such
units of Eligible Stent Products, provided, however, that from and after the
date on which the aggregate amount of Xxxx Royalty Payments made by Xxxx
pursuant to this Section 4.2(a)(iii) during the term of the Xxxx License exceed
$100,000,000, any further royalties payable under this Section 4.2(a)(iii) shall
be calculated as an amount equal to eight percent (8%) of the Net Sales of such
Eligible Stent Products.
(iv) by way of example but not limitation,
Exhibit E sets forth an example of calculating Xxxx Royalty Payments based on
the Base Unit Number.
(b) GI Sales Royalty on Eligible Stent Products. Within
sixty (60) days after the end of each Contract Quarter during the term of the
Xxxx License, Xxxx shall pay Angiotech an additional royalty (the "Xxxx GI Sales
Royalty") on Net Sales of Eligible Stent Products that are covered in the
country of sale by one or more valid and enforceable claims included in the
Patent Rights, by Xxxx and its Affiliates during such Contract Quarter for GI
applications in each of the Geographical Areas, calculated as five percent (5%)
of the Net Sales of such Eligible Stent Products.
(c) Royalties on Eligible Endoluminal Products. Within
sixty (60) days after the end of each Contract Quarter during the term of the
Xxxx License, Xxxx shall pay Angiotech an additional royalty (the "Xxxx
Endoluminal Royalty") on Net Sales of Eligible Endoluminal Products that are
covered in the country of sale by one or more valid and enforceable claims
included in the Patent Rights, by Xxxx and its Affiliates during such Contract
Quarter in each of the Geographical Areas, calculated as five percent (5%) of
the Net Sales of such Eligible Endoluminal Products.
-15-
(d) Royalties in Japan. Notwithstanding anything contrary
in this Agreement, for purposes of determining whether a particular Eligible
Product is covered in Japan by one or more valid and enforceable claims included
in the Patent Rights for purposes of Sections 4.2(a), (b) and (c), such Product
shall be deemed to be covered in Japan by one or more valid and enforceable
claims included in the Patent Rights if (i) the particular Eligible Product is
covered by a valid and enforceable claim of a patent included in the Patent
Rights which has been issued in Japan, or (ii) the particular Eligible Product
is covered by a claim of a pending patent application in Japan, and Xxxx has "de
facto exclusivity" (as defined in Section 4.3(a) below) in Japan with respect to
that Eligible Product.
4.3 Patent Coverage and De Facto Exclusivity
(a) De Facto. Exclusivity Defined. Xxxx shall be deemed
to have "de facto exclusivity" for a particular Eligible Product in a particular
country unless a third party (other than BSC or an Affiliate of BSC or Xxxx) (i)
has obtained approval for sale (if required) in that country for a product which
is competitive to a particular Eligible Product in that country and (ii) has
made at least one commercial sale for value of that product in that country
within six (6) months prior to or after the Contract Quarter in which the
royalty calculation is being made, provided, however, that Xxxx shall not be
deemed to have "de facto exclusivity" in a particular country to the extent that
such "de facto exclusivity" is primarily attributable to patent rights (other
than the Patent Rights) owned by, or licensed to, Xxxx.
(b) Patent Coverage Defined. Xxxx shall be deemed to have
"Patent Coverage" for a particular Eligible Product in a country if there is
valid claim that, but for the licenses granted to Xxxx under this Agreement,
would be infringed by the manufacture, use or sale of such Eligible Product in
such country or by the manufacture of such Eligible Product in the country of
manufacture.
(c) De Facto Royalty. For countries in which there is no
Patent Coverage, if at any time Xxxx does have de facto exclusivity for a
particular Eligible Product in a particular country, then Xxxx shall pay
Angiotech a royalty on its Net Sales of that Eligible Product in that country of
three percent (3%) during such period of de facto exclusivity, which payments
shall also constitute Xxxx Royalty Payments. If, during the term of the Xxxx
License, Xxxx does not have de facto exclusivity for a particular Eligible
Product in a particular country and there is no Patent Coverage for such
Eligible Product in that country, but an NIH Royalty is still payable by
Angiotech for Net Sales by Xxxx of such Eligible Product in such country, Xxxx
shall be responsible for the payment of such NIH Royalty during such period(s).
4.4 Reduction of Xxxx Royalties. After the Xxxx Sales Milestone
License Fee has been paid, Xxxx shall be entitled to reduce the amount of any
Xxxx Royalty Payments that may become payable with respect to any Contract
Quarter by an amount equal to one-half of the aggregate amount of such payment
(calculated without regard to any other possible reductions in such fees
pursuant to the terms of this Agreement) until the aggregate amount of the
reductions made to the Xxxx Royalty Payments pursuant to this Section 4.4 equal
the amount of
-16-
the Xxxx Sales Milestone License Fee actually paid and not already offset by
Xxxx Royalty Payments pursuant to Section 4.1(c), after which time no further
reductions will be made.
4.5 Sales to Affiliates. On sales of Eligible Products by Xxxx to
its Affiliates, or on sales made in other than an arm's-length transaction, the
value of the Net Sales attributed under this Section 4 to such a transaction
shall be that which would have been received in an arm's-length transaction.
Notwithstanding the foregoing, sales between and among Xxxx, its Affiliates that
are intended for resale shall not be included in Net Sales.
4.6 Reporting of Xxxx Royalties. Xxxx shall deliver to Angiotech
within sixty (60) days after the end of each Contract Quarter during the term of
the Xxxx License, a written account, including quantities, of the aggregate of
Xxxx'x and its Affiliates' sales subject to royalty payments hereunder and the
amount of the royalty payment due to Angiotech for such Contract Quarter. Each
royalty report shall be certified as correct by an authorized employee of Xxxx
and shall include a detailed listing of all deductions made to determine Net
Sales and to ca1culate the royalties payable hereunder.
4.7 Payment of Xxxx Milestone License Fees and Xxxx Royalties.
Xxxx Milestone License Fees and Xxxx Royalties due under this Section 4 shall be
paid in U.S. dollars. For conversion of foreign currency to U.S. dollars, the
conversion rate shall be the conversion rate used by Xxxx to convert the
applicable sales into U.S. dollars for purposes of the preparation of Xxxx'x
consolidated income statements, such conversion to be calculated in accordance
with generally accepted accounting principles in the United States, applied
consistently. All payments shall be made by wire transfer to Angiotech's account
in accordance with the following instructions:
Chase Manahattan Bank
New York, NY
ABM# 000000000
For credit to the account of:
Angiotech Pharmaceuticals, Inc.
Account #000-000-0
Branch #7400
Institution #003
Royal Bank of Canada - Xxxxxx & Bute Branch
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Any loss of exchange, value, taxes, or other expenses incurred
in the transfer or conversion to U.S. dollars shall be paid entirely by Xxxx.
The royalty report required by Section 4.6 shall accompany each such payment.
4.8 Late Payments. Late charges will be assessed by Angiotech as
additional royalties on any overdue payments at one percent (1%) per month,
compounded monthly (an
-17-
effective annual rate of twelve and 68/100 percent (12.68%) per annum). The
payment of such late charges will not prevent Angiotech from exercising any
other rights it may have as a consequence of the lateness of any payment.
4.9 Governmental Filings. Except for taxes based on Angiotech's
income. Xxxx will be solely responsible for determining if any tax on Net Sales
and royalty payments is owed to any governmental authority and shall pay any
such tax and be responsible for all filings with appropriate governmental
authorities.
4.10 Estimation of Net Sales. In the event that Xxxx is unable to
report and pay royalties due under this Section 4 on actual Net Sales in any
Contract Quarter, Xxxx will make a good faith estimate of Net Sales for those
jurisdictions in which actual Net Sales information is not readily available and
will make Royalty Payments based on such estimate. When actual Net Sales
information becomes available for those jurisdictions for which estimates had
previously been made, Xxxx will promptly determine, and give notice to Angiotech
of, the appropriate adjustment necessary to reconcile the estimated Royalty
Payment with the actual Royalty Payment due to Angiotech based on actual Net
Sales (each a "Reconciliation"). The next Royalty Payment due Angiotech from
Xxxx under this Agreement will include an adjustment to reflect such
Reconciliation, or the amount of such Reconciliation will be paid in cash if no
further royalties are anticipated.
5. TERMINATIONS AND AMENDMENTS RELATING TO ANGIOTECH TECHNOLOGY
5.1 Termination by BSC -- Vascular Paclitaxel-Based Technology. In
the event that BSC reasonably determines that the use of the paclitaxel-based
technology contained in the Angiotech Technology with vascular Stent Products is
not commercially viable, BSC shall have the right, subject to giving written
notice to Angiotech setting forth in reasonable detail the basis for its
determination, to cause the BSC License, insofar as it relates to such
paclitaxel-based technology in the use of vascular Stent Products, to be
terminated. In the event of any such termination, (a) the BSC License, insofar
as it relates to the Angiotech Technology other than paclitaxel-based technology
in the Licensed Field of Use, shall remain in full force and effect, (b) the
amount of any BSC Milestone License Fees which may become due after the date on
which BSC gives Angiotech notice of its intent to terminate pursuant to this
Section 5.l, shall be reduced by fifty percent (50%) and (c) the minimum amounts
payable under Sections 6.2 and 6.3 shall terminate.
5.2 Termination by Xxxx -- Vascular Paclitaxel-Based Technology.
In the event that Xxxx reasonably determines that the use of the
paclitaxel-based technology contained in the Angiotech Technology with vascular
Stent Products is not commercially viable, Xxxx shall have the right subject to
giving written notice to Angiotech setting forth in reasonable detail the basis
for its determination, to cause the Xxxx License, insofar as it relates to such
paclitaxel-based technology in the use of vascular Stent Products, to be
terminated. In the event of any such termination, (a) the Xxxx License, insofar
as it relates to the Angiotech Technology other than paclitaxel-based technology
in the Licensed Field of Use, shall remain in full force
-18-
and effect, (b) the amount of any Xxxx Milestone License Fees which may become
due after the date on which Xxxx gives Angiotech notice of its intent to
terminate pursuant to this Section 5.2, shall be reduced by fifty percent (50%)
and (c) the minimum amounts payable under Sections 6.2 and 6.3 shall terminate.
5.3 Amendment to Include Additional NIH License Rights. The
parties acknowledge that Angiotech intends to negotiate in good faith with the
NIH for an exclusive license to the NIH Patents Rights for vascular applications
(an "Exclusive License"). The parties anticipate that any Exclusive License may
be conditioned upon Angiotech and its sublicensees assuming additional
obligations, including performance milestones. The parties agree that if and
when such Exclusive License is granted, they will negotiate in good faith
amendments to this Agreement that are not inconsistent with the obligations and
terms of such Exclusive License.
6. OTHER OBLIGATION OF BSC, XXXX AND ANGIOTECH
6.1 CRADA Study. Angiotech covenants to pay the National
Institutes of Health ("NIH") all amounts owed to NIH under the License Agreement
dated as of November 26, 1996, between Angiotech and NIH relating to "Drug
Delivery Systems and Methods of Treating Fibroproliterative Vascular Diseases
using Microtubial Stabilizing Agents," a copy of which is attached hereto as
Exhibit B (the "NIH Agreement") and all amounts owed to NIH under its
cooperative research and development agreement with NIH (the "CRADA"). Each of
BSC and Xxxx shall reimburse Angiotech, within thirty (30) days of receipt of an
invoice therefor, for fifty percent (50%) of all direct expenditures made by
Angiotech for research relevant to determining the effect of Eligible Products
in the treatment of vascular disease under the CRADA, up to a maximum of
$351,500 for each of BSC and Xxxx. In addition, if the research conducted under
the CRADA is expanded at the request of BSC or Xxxx, BSC or Xxxx, as the case
may be, will reimburse Angiotech for one hundred percent (100%) of any
additional expenditures as a result thereof (with each of BSC and Xxxx
reimbursing Angiotech for fifty percent (50%) of such cost if both parties so
request, and solely if only one party so requests). Xxxx and BSC agree to
provide a reasonable number of stents and other endoluminal devices necessary
for the research to be conducted under the CRADA at no cost; provided, however,
that BSC and Xxxx shall not be required to provide any stents or other
endoluminal devices for any study protocols which they have not approved in
advance in writing (such approval not to be untimely or unreasonably withheld).
6.2 Regulatory Approvals. Each of BSC and Xxxx shall be
responsible for obtaining all regulatory approvals for their respective Eligible
Products in all Geographical Areas which such parties, in their sole discretion,
deem necessary or advisable, including funding all pre-clinical and clinical
studies deemed by such parties to be necessary or advisable for obtaining
regularly approvals, provided, however, that each of BSC and Xxxx agrees that
during the term of their respective licenses granted under Sections 2.1(a) and
2.1(b) hereof, they will each commit to spend a minimum of $ 1,750 000
(including any amounts reimbursed to Angiotech pursuant to Section 6.1, and
subject to reduction under Sections 5.1 and 5.2) on
- 19 -
clinical studies relating to products which may incorporate or utilize Angiotech
Technology. Angiotech agrees to provide reasonable assistance upon request by
BSC or Xxxx in the pursuit of regulatory approvals for products incorporating or
utilizing Angiotech Technology; provided that BSC or Xxxx, as the case may be,
reimburse Angiotech for its reasonable expenses of providing such assistance.
6.3 Market Launch. During the term of their respective licenses
granted under Section 2.1, each of BSC and Xxxx agrees to commit a minimum of
$1,000,000 in direct marketing and sales expenses for Eligible Products that
incorporate Angiotech Technology (subject to reduction pursuant to Sections 5.1
and 5.2).
6.4 Reporting
(a) Progress Reports. BSC and Xxxx shall each provide
written annual reports on their respective product development progress or
efforts to commercialize the Angiotech Technology for each of the Licensed
Applications and Licensed Fields of Use within forty-five (45) days after
December 31 of each calendar year. These progress reports shall include, but not
be limited to, progress on research and development, status of applications for
regulatory approvals, manufacturing, sublicensing, marketing, and sales during
the preceding calendar year, as well as plans for the present calendar year. BSC
and Xxxx each agree to provide any additional information reasonably required by
Angiotech to evaluate their respective performance under this Agreement and to
allow Angiotech to fulfill its obligations under the NIH Agreement.
(b) Audit Rights. BSC and Xxxx shall each keep accurate
records of all of their respective operations and of reports of operations by
their Affiliates within the scope of this Agreement for five (5) years following
a given reporting period, and Angiotech, at its expense, shall have the right,
exercisable with respect to each of BSC and Xxxx no more frequently than once
per Contract Year, to have a certified public accountant, reasonably acceptable
to BSC or Cock, as the case may be, inspect such records at the offices of BSC
or Xxxx, as applicable, no later than three (3) years after the end of the
Contract Quarter to which they pertain upon two (2) weeks prior notice by
Angiotech. Any such certified public accountant shall be required to agree in
writing to be bound by reasonable confidentiality provisions with respect to
such information prior to receiving access to such information. In the event the
examination shows an underpayment of more than five percent (5%) for any
Contract Year due to an error on the part of the record-keeping party, such
party shall pay the examining party the amounts underpaid, together with
interest pursuant to Section 3.8 or 4.8, as applicable, and the actual cost of
such examination.
(c) NIH Reporting. BSC and Xxxx shall use their
reasonable best efforts to assist Angiotech in fulfilling its reporting
obligations under the NIH Agreement, including but not limited to notifying
Angiotech of the date of First Commercial Sale (as defined in the NIH Agreement)
in each country within sixty (60) days of such occurrence, and providing the
information necessary to determine royalties due to NIH for Combined Products
(as defined in
- 20 -
the NIH Agreement). BSC and Xxxx hereby consent to the delivery to NIH by
Angiotech of any reports and information provided under this Agreement.
Angiotech agrees to (i) only provide such information to NIH as is required by
the NIH Agreement and (ii) take steps reasonably necessary under the NIH
Agreement to protect the confidentiality of such information.
6.5 Patent Applications and Foreign Filing. Angiotech shall be
entitled to fi1e, prosecute and maintain in force any and all patents and patent
applications included in the Patent Rights (excluding the NIH Patent Rights
which are governed by the NIH Agreement); provided, that with respect to the
Angiotech Patent Rights, Angiotech will provide BSC and Xxxx a reasonable
opportunity to review and comment on the same. The filing, prosecution and
maintenance of patents and patent applications pursuant to this Section shall be
done through patent counsel selected by Angiotech. Angiotech shall keep BSC and
Xxxx reasonably informed of all office actions, proposed responses or other
patent prosecution activities involving the Patent Rights.
6.6 Supply of Paclitaxel. If requested by either or both of BSC
and Xxxx, Angiotech agrees to use commercially reasonable efforts to assist such
party or parties in acquiring sufficient quantities of Paclitaxel to practice
the Angiotech Technology under the license granted to such party or parties
under Section 2.1.
7. REPRESENTATIONS AND COVENANTS
7.1 Mutual Representations. Angiotech, BSC and Xxxx each represent
and warrant to the other parties that:
(a) Organization & Power. The party is a corporation duly
organized and validly existing under the laws of its state of incorporation and
has all requisite corporate power and authority to enter into this Agreement;
(b) Authorization. The party is duly authorized by all
requisite action to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby, and that the same do not
conflict or cause a default with respect to its obligations under any other
agreement; and
(c) Execution & Delivery. The party has duly executed and
delivered this Agreement.
7.2 Angiotech Technology Representations and Warranties. Angiotech
represents and warrants to BSC and Xxxx that:
(a) Except as set forth on Exhibit A hereto, Angiotech is
the sole and exclusive owner of the Angiotech Technology, including without
limitation, the Patent Rights, free of any liens or encumbrances;
- 21 -
(b) Except as set forth on Exhibit A hereto, Angiotech
has not received any notice from any person or Entity claiming to have any
right, title or interest in or to the Angiotech Technology and, to Angiotech's
knowledge, there is no reason to expect that any such notice is forthcoming; and
(c) Except as set forth on Exhibit A hereto, Angiotech
has not entered into, and is not aware of, any outstanding options, licenses or
agreements relating to the Angiotech Technology; and
(d) Each of the Patent Rights included in the Angiotech
Technology which is listed on Exhibit A as being licensed to Angiotech is
subject to a valid and enforceable license (the "Licenses"), except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights and (ii) general principles of equity that
restrict the availability of equitable remedies. Neither Angiotech nor, to the
knowledge of Angiotech, the other party to any of such Licenses is in material
breach or violation of such License.
7.3 Covenants Regarding Licenses. Angiotech, BSC and Xxxx each
hereby covenant and agree to take all commercially reasonable actions necessary
to perform all of their respective obligations under the Licenses and remain in
compliance with any conditions of such Licenses. Angiotech agrees to notify each
of BSC and Xxxx in the event of any material breach of any of the Licenses. Upon
receipt of such notice from Angiotech, and provided Angiotech has not commenced
to cure, diligently pursued such cure and in fact cured such breach, within a
reasonable time period, each of BSC and Xxxx shall be permitted, acting
individually or in concert and upon prior written notice to Angiotech, to Cure
any such breach on behalf of Angiotech and shall be permitted to recover the
amount of any damages, losses or expenses (including any reasonable attorney's
fees and expenses) incurred by such party in connection with curing such breach,
or offset any such amounts against any obligations that such party shall have to
pay to Angiotech hereunder.
7.4 Compliance with NIH License. BSC and Xxxx each hereby agree to
comply with the covenants and conditions of the NIH Agreement set forth in
Exhibit C hereto as if they were a party to the NIH Agreement. To the extent the
NIH Agreement is amended to include additional terms and conditions, the parties
agree to amend Exhibit C to include such terms and conditions as are relevant to
the BSC License and Xxxx License; provided, that any such amendment to the NIH
Agreement will not impair the rights of BSC or Xxxx under this Agreement; and
provided further, that any such amendment to the NIH Agreement that imposes
additional obligations on BSC or Xxxx, or may reduce the benefits to either of
BSC or Xxxx of the NIH Agreement, will not be entered into without the prior
written consent of BSC and Xxxx, which consent will not be untimely or
unreasonably withheld.
7.5 Technical Assistance. Commencing promptly after the execution
of this Agreement. Angiotech shall use reasonable best efforts to complete the
Technology Transfer.
- 22 -
8. INFRINGEMENT AND OTHER PRODUCTS
8.1 Notification of Infringement. Each of BSC, Xxxx and Angiotech
agrees to promptly notify the other parties hereto of any infringements of any
rights contained within the Angiotech Technology in the Licensed Field of Use of
which they become aware.
8.2 Action by Angiotech. Subject to Angiotech's obligations to NIH
and any other third party licensors, Angiotech shall have in the first instance
the right, in its sole discretion and at its expense, to prosecute any alleged
infringements of the Angiotech Technology in its own name. Each of BSC and Xxxx
agrees to allow Angiotech to include it, at the expense of Angiotech, as a
plaintiff in any suit brought with respect to such infringement and Angiotech
agrees to consult with counsel for BSC and Xxxx on any significant matters
related to such litigation.
8.3 Actions by BSC or Xxxx. Subject to Angiotech's obligations to
NIH and any other third party licensors, in the event that Angiotech, within one
hundred twenty (120) days after being notified by BSC or Xxxx of any
infringement of the Angiotech Technology in the Licensed Field of Use, shall
have been unsuccessful in negotiating with the alleged infringer to cease and
desist such infringement and shall not have brought an infringement action, or
shall have notified BSC and Xxxx that it has determined not to bring an action
against the alleged infringer, then, in those events, BSC and Xxxx shall have
the right to bring an action against such infringer. Prior to instituting any
such action, Xxxx and BSC shall consult with one another to agree upon a
mutually acceptable strategy for pursuing such action. Angiotech agrees to allow
each of BSC and Xxxx to include it, at the expense of the requesting party or
parties, as a plaintiff in any suit brought with respect to any such
infringement and each of BSC and Xxxx agree to consult with counsel for
Angiotech on any significant matters relating to such litigation.
8.4 Damages. Any recovery of damages for each suit shall be
applied as follows: (a) first, to pay any amounts owed to NIH under the
corresponding infringement language in the NIH Agreement, (b) second, to the
party or parties bringing the action, to reimburse it or them for its or their
expenses of the litigation or suit, including reasonable attorneys' fees; (c)
third, to the other party or parties to reimburse it or them for its or their
expenses of the litigation or suit, including reasonable attorneys' fees; then
(d) fourth, twenty-five percent (25%) of the balance to Angiotech, then (e)
fifth, the remaining balance to each of BSC and Xxxx in amounts to be agreed
upon by BSC and Xxxx, giving appropriate weight to all relevant factors
including, but not limited to, historical and projected sales of products and
the relative market shares of BSC and Xxxx in the area or areas which are the
subject of such action, and the expenses of such parties incurred in pursuing
such action.
8.5 Disposition. No settlement, consent judgment or other
voluntarily final disposition of any such action relating to an alleged
infringement of the Angiotech Technology in the Licensed Field of Use may be
entered into (a) without the consent of Angiotech, BSC and Xxxx, as applicable,
if such party participates in the infringement action, which consent shall
- 23 -
not be unreasonably withheld by such party, and (b) without the Consent of NIH
to the extent required under the NIH Agreement.
8.6 Cooperation. In any infringement suit, any party shall be
entitled to request the cooperation and assistance of the other parties, at the
requesting party's expense, as may be reasonably necessary for the suit. Each
party agrees to make available relevant records, papers, information, samples
and specimens, as well as to have its employees testify upon request.
8.7 Third Party Licenses. Angiotech represents that, to its
knowledge, except as set forth on Exhibit A, there are no third parties to whom
license fees must be paid to utilize the Angiotech Technology in a manner
contemplated by the licenses granted in Section 2.1 of this Agreement. If use of
the Angiotech Technology in a manner contemplated by the licenses granted in
Section 2.1 of this Agreement would infringe third party rights such that BSC or
Xxxx require a license from such third party to use the Angiotech Technology for
any of the Licensed Applications (provided that this Section 8.7 shall not apply
(i) to the extent BSC or Xxxx, or an Affiliate of either BSC or Xxxx, decide to
use an agent, drug delivery technology or composition that would require a third
party license, even though an alternative agent, drug delivery technology or
composition might be available, or developed, that would not require a third
party license or (ii) to New Inventions licensed from third parties under
Section 2.3, in which event the license with the third party will govern the
rights of BSC and Xxxx), then BSC or Xxxx may obtain a license from such third
party and shall be permitted to offset the total of any royalties or other
amounts paid thereunder (subject to the limitation set out in this Section 8.7)
against any BSC Royalty Payments or Xxxx Royalty Payments, unless the third
party is BSC or Xxxx or an Affiliate of the party obtaining the license
("Allowable Fees"). Fifty percent (50%) of Allowable Fees which become due to
such third parties by BSC or Xxxx shall be credited against any BSC Royalty
Payments or Xxxx Royalty Payments owed by BSC or Xxxx, as the case may be, to
Angiotech in respect of the applicable period when paid, provided, however,
that, subject to any recoveries, reductions or offsets made by BSC or Xxxx, as
the case may be, pursuant to other Sections of this Agreement, in no event shall
any BSC Royalty Payments or Xxxx Royalty Payments be reduced by virtue of this
Section 8.7 below the following amounts:
Minimum Royalty in
Royalty: each Geographical Area:
-------- -----------------------
BSC Vascular Sales Royalty 4% of Net Sales of Eligible Products
BSC GI Sales Royalty 3% of Net Sales of Eligible Products
Xxxx Vascular Sales Royalty 4% of Net Sales of Eligible Products
Xxxx GI Sales Royalty 3% of Net Sales of Eligible Products
BSC Endoluminal Royalty 3% of Net Sales of Eligible Products
Xxxx Endoluminal Royalty 3% of Net Sales of Eligible Products
For purposes of determining whether or not of the Angiotech Technology in a
manner contemplated by the licenses granted in Section 2.1 of this Agreement
would infringe third party
- 24 -
rights such that BSC or Xxxx will require a license from such third party to use
the Angiotech Technology for any of the Licensed Applications, in the absence of
determination by a court or pursuant to arbitration under Section 10.2, BSC,
Xxxx or their Affiliates, as the case may be, shall be entitled to rely upon an
infringement opinion from a law firm reasonably acceptable to Angiotech, which
opinion shall be controlling for purposes of this Section 8.7.
8.8 Reduction Relating to Claims. In the event that BSC or Xxxx
incurs or accrues any expenses in connection with any claim or objection of any
third party that any of the Angiotech Technology infringes a patent or other
right of such third party relating to the Angiotech Technology, or other
intellectual property in which Angiotech has an ownership or licensee interest,
whether or not BSC or Xxxx, as the case may be, is a party to such litigation.
such party shall be entitled, from the date of such claim or objection until the
claim or objection is resolved favorably to Angiotech, BSC or Xxxx, as the case
may be, to reduce the amount of any payments in respect of royalties which may
otherwise be due in accordance with the terms of Sections 3.1 and 3.2, in the
case of BSC, or Sections 4.1 and 4.2, in the case of Xxxx (calculated without
regard to any other possible reductions in such fees pursuant to the terms of
this Agreement), by an amount equal to up to fifty percent (50%) of any such
payment; provided, however, that, subject to any recoveries, reductions or
offsets made by BSC or Xxxx, as the case may be, pursuant to other sections of
this Agreement, in no event shall the royalty payments be reduced by virtue of
this Section 8.8 below the minimum amounts set forth in Section 8.7 above.
8.9 Indemnification
(a) BSC and each of its Affiliates shall indemnify and
hold Xxxx, its Affiliates and Angiotech and their respective officers,
directors, employees, consultants, contractors and agents harmless from and
against any and all liability, damage, loss, Cost (including reasonable
attorneys' fees) and expense resulting from any claim of bodily injury or
property damage (i) relating to the development, manufacture, use, distribution
or sale of any Eligible Product by BSC, or its Affiliates, or (ii) due to the
negligence or willful misconduct of BSC, its Affiliates, or their respective
employees or agents.
(b) Xxxx and each of its Affiliates shall indemnify and
hold BSC and its Affiliates, and Angiotech and their respective officers,
directors, employees, consultants, contractors and agents harmless from and
against any and all liability, damage, loss, cost (including reasonable
attorneys' fees) and expense resulting from any claim of bodily injury or
property damage (i) relating to the development, manufacture, use, distribution
or sale of any Eligible Product by Xxxx or its Affiliates, or (ii) due to the
negligence or willful misconduct of Xxxx, its Affiliates, or their respective
employees or agents.
(c) Angiotech shall indemnify and hold BSC, Xxxx and
their respective Affiliates, officers, directors, employees, consultants,
contractors and agents harmless from and against any and all liability, damage,
loss, cost (including reasonable attorneys' fees) and expense resulting from any
claim of bodily injury or property damage (i) relating to the
- 25 -
development, manufacture, use, distribution or sale of any product by Angiotech
or its sublicensees (other than BSC, Xxxx or their respective Affiliates), or
(ii) due to the negligence or willful misconduct of Angiotech or its employees
or agents.
8.10 Insurance. BSC, Xxxx and each of their Affiliates shall
procure and maintain, during the term of this Agreement, public liability,
product liability and errors and omissions insurance in the minimum amounts, and
with the insurance carriers (or other insurance carriers of comparable
reputation and financial credibility), set forth on Exhibit D. BSC, Cock and
each of their Affiliates will provide Angiotech with a certificate of insurance
evidencing the insurance coverage required by this Section 8.10.
8.11 Strength of Patent Rights. In the event that, during the term
of any license granted Angiotech pursuant to this Agreement, one or more
products are marketed or sold by one or more Entities which are not Affiliates
of either of BSC or Xxxx, in one or more countries, that (a) employ delivery of
paclitaxel, or an analog or derivative thereof, on Stent Products in the
Licensed Field of Use that are competitive to the Eligible Products, (b) do not
infringe the Patent Rights, and (c) represent a market share of three percent
(3%) or more in such country or countries (collectively, "Non-License
Products"), then each of BSC, Xxxx or their respective Affiliates, as the case
may be, may either (i) upon written notice to Angiotech terminate the license
granted to such party with respect to such country or countries in which such
Non-License Products are marketed or sold, or (ii) give written notice of such
Non-License Products to Angiotech and all BSC Royalty Payments and Xxxx Royalty
Payments, as the case may be, due to Angiotech for such country or countries, on
and after notice to Angiotech of such Non-Licensed Products, shall be reduced to
a royalty rate equal to the NIH Royalty plus one percent (1%) of Net Sales of
Eligible Products (of any class) in such country or countries. For purposes of
determining whether or not the product or products infringe the Patent Rights,
in the absence of determination by a court or pursuant to arbitration under
Section 10.2, BSC, Xxxx or their Affiliates, as the case may be, shall be
entitled to rely upon an infringement Opinion from a law firm reasonably
acceptable to Angiotech, which opinion shall be controlling for purposes of this
Section 8.11.
9. TERMINATION
9.1 Early Termination of Licenses. Notwithstanding the foregoing,
and subject to the limitations set forth below, Angiotech shall be entitled in
the following circumstance to terminate one or more of the licenses granted to a
party pursuant to Section 2.1 in the following circumstances:
(a) Material Breach. If either BSC or Xxxx materially
breaches this Agreement, Angiotech shall have the right, at its election, to
terminate any or all 1icenses granted by it to such breaching party under this
Agreement upon forty-five (45) days, or thirty (30) days in the case of breach
for non-payment, prior written notice, provided, however, that if the breaching
party shall cure the breach or default within the forty-five (45) or thirty (30)
day period, as applicable, all such licenses and agreements shall continue in
full force and effect.
- 26 -
(b) Insolvency, Etc. If either BSC or Xxxx shall file a
petition in bankruptcy or if an involuntary petition shall be filed against it
and such petition shall not be dismissed within sixty (60) days, or if it shall
become insolvent or admit its inability to pay its debts when due, or if a
receiver or guardian shall be appointed for it, then all licenses granted to
such party under this Agreement shall immediately terminate.
(c) Abandonment. If either Xxxx or BSC shall have
acknowledged in writing its intention to abandon the commercial development of
products based on the Angiotech Technology, Angiotech shall have the right, at
its election, to terminate any and all licenses granted by it to such abandoning
party under this Agreement upon thirty (30) days prior written notice.
(d) Failure to Exploit. In the event that either BSC or
Xxxx shall have failed to (i) file an Investigational Device Exemption with the
FDA or an equivalent filing with an appropriate governmental authority in one or
more European countries with respect to a product incorporating or utilizing the
Angiotech Technology prior to the thirty-month anniversary of the date of this
Agreement, or (ii) file a Pre-market Approval Application or Section 510(K)
Pre-Marketing Notification with the FDA or equivalent filing with an appropriate
governmental authority in one or more European countries prior to the
sixty-month anniversary of the date of this Agreement, then Angiotech shall have
the right, at its election, to terminate any and all licenses granted by it to
such party under this Agreement upon thirty (30) days prior written notice at
any time prior to such filing.
(e) Limitation on Stent Products. If, for a period of
five (5) years during the term of this Agreement, BSC or Xxxx is unable to
obtain approval for, and gain significant sales of, an Eligible Stent Product in
the United States, Angiotech shall have the right, at its election, to terminate
any and all licenses in the United States granted by it to such party under this
Agreement upon thirty (30) days prior written notice.
(f) Termination of NIH Agreement. In the event of a
termination of the NIH License, (i) the Xxxx License and the BSC License,
insofar as they relate to the NIH License only, shall terminate; provided,
however, that BSC and Xxxx shall have the right, in accordance with the terms of
Section 4.03 of the NIH Agreement, to convert the NIH License to a direct
license between NIH and BSC and Xxxx, and (ii) each of BSC and Xxxx shall be
permitted to terminate this Agreement as it relates to the licenses granted to
such parties hereunder and such party's obligations thereunder, upon thirty (30)
days prior written notice to Angiotech.
9.2 Termination-Supply of Paclitaxel. In the event that either BSC
or Xxxx, as the case may be, is unable to acquire a supply of paclitaxel at
commercially reasonable prices sufficient to enable BSC or Xxxx to practice the
Angiotech Technology in accordance with the licenses granted under this
Agreement, then the party which is unable to acquire such supply shall have the
right, upon thirty (30) days prior written notice to Angiotech, to terminate the
license granted to such party.
- 27 -
9.3 Effect of Termination. Promptly after termination of any
license, or part thereof, pursuant to Sections 9.1 or 9.2, Angiotech shall
deliver notice of such termination to the other licensee, if any, remaining
under Section 2.1 ( the "Remaining Licensee"). In the event of the termination
of some or all of the BSC License or the Xxxx License, as the case may be, the
obligations of the party to such license under Sections 3.1, 3.2 and 3.3, in the
case of BSC, or Sections 4.1, 4.2 and 4.3, in the case of Xxxx, and Sections 6.1
to 6.4, shall also terminate, other than with respect to royalty payments which
may have accrued in respect of sales of Eligible Products by such party during
the current Contract Quarter, and such termination shall have no effect on the
remaining license granted pursuant to Section 2.1. Within sixty (60) days of
delivery of such notice of termination to any Remaining Licensee, such party
shall have the option to cause the license granted to such party under such
Section 2.1 to become exclusive as to all other parties by delivering notice of
such election to Angiotech. In the event that such Remaining Licensee makes such
an election, such party shall assume the obligations of such terminated licensee
to make any unpaid milestone fees under Sections 3.1 or 4.1, as the case may be,
and the amount of such Remaining Licensee's original royalty obligations under
Section 3.2 or Section 4.2, as the case may be shall be increased by one percent
(1%) of Net Sales of Eligible Products. If the remaining licensee does not make
such an election within the period of sixty (60) days after delivery of notice
of any such termination pursuant to this Section 9.3, Angiotech shall be
permitted to grant a license to the Angiotech Technology to a single third
party.
9.4 Accrued Obligations. Upon termination of any license granted
under this Agreement for any reason, each of Angiotech and the holder of such
license shall remain liable for those obligations that accrued with respect to
such license prior to the effective date of the termination. The party to such
terminated license may, for a period of no longer than six (6) months after the
effective date of the termination of such license, complete and sell any or all
products containing Angiotech Technology that it can demonstrate were in the
process of manufacture or in inventory on the effective date of the
termination; provided, however, that such party shall remain obligated to pay
any applicable royalties thereon as provided in this Agreement. Within thirty
(30) days after receipt of notice of termination, each party to such license
shall provide the other with an accounting of products incorporating the
Angiotech Technology then on hand and in process and its best estimate of when
within the one (1) year period sales of such products will conclude.
10. DISPUTE RESOLUTION
10.1 Negotiation of Parties. In the event of any dispute with
respect to the interpretation of any provision of this Agreement or with respect
to the performance of either party under this Agreement, either party may at any
time provide the other party written notice specifying the terms of such
disagreement in reasonable detail. As soon as practicable after receipt of such
notice, the President of Angiotech and a designated officer with appropriate
settlement authority from BSC and/or Xxxx shall meet at a mutually agreed upon
time and location for the purpose of resolving such disagreement. They shall
engage in good faith discussions and/or negotiations for a period of up to
thirty (30) days to resolve the disagreement
- 28 -
or negotiate an interpretation of revision of the applicable portion of this
Agreement which is mutually agreeable to both parties, without the necessity of
formal procedures relating thereto. During the course of such discussion and/or
negotiation, the parties shall reasonably cooperate and provide information that
is not materially confidential in order so that each of the parties may be fully
informed with respect to the issues in dispute.
10.2 Arbitration. In the event any dispute arising between the
parties concerning this Agreement is not resolved pursuant to Section 10.1, then
the same shall be submitted by the parties to arbitration in Seattle, Washington
in accordance with the then-current commercial arbitration rules of the American
Arbitration Association ("AAA") except as otherwise provided herein. The parties
shall choose, by mutual agreement, one (1) arbitrator within thirty (30) days
of receipt of notice of the intent to arbitrate. If no arbitrator is appointed
within the times herein provided or any extension of time which is mutually
agreed upon, the AAA shall make such appointment within thirty (30) days of such
failure. The judgment rendered by the arbitrator shall include costs of
arbitration, reasonable attorneys' fees and reasonable costs for expert and
other witnesses. Nothing in this Agreement shall be deemed as preventing either
party from seeking injunctive relief (or any other provisional remedy) pursuant
to Section 11.1 herein. If the issues in dispute involve scientific, technical
or commercial matters, any arbitrator chosen hereunder shall have educational
training and/or industry experience sufficient to demonstrate a reasonable level
of relevant scientific, medical and industry knowledge.
10.3 NIH Agreement. Sections 10.1 or 10.2 shall not prevent
Angiotech from seeking any remedies in law or equity it may have to protect its
rights under the NIH Agreement.
11. GENERAL PROVISIONS
11.1 Remedies. The parties acknowledge and agree that, in the event
of a breach or a threatened breach by either party of this Agreement for which
it will have no adequate remedy at law, the other party may suffer irreparable
damage and, accordingly, shall be entitled to injunctive and other equitable
remedies to prevent or restrain such breach or threatened breach, without the
necessity of posting any bond or surety, in addition to any other remedy they
might have at law or at equity.
11.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Washington in force
therein without regard to its conflict of law rules. Subject to Sections 10.1
and 10.2, all parties agree that by executing this Agreement they consent to the
exclusive jurisdiction of the courts of the State of Washington.
11.3 Confidentiality. It is contemplated that in the course of the
performance of this Agreement each party may, from time to time, disclose
Confidential Information to the other. Each party agrees that for the term of
this Agreement and for a period of five (5) years thereafter, the receiving
party shall keep confidential and shall not publish or otherwise disclose, and
will take all reasonable steps to prevent disclosure of, such Confidential
Information and will not use any Confidential Information except for the limited
purposes set forth in this Agreement; provided, however, that no provision of
this Agreement shall be construed to
- 29 -
preclude such disclosure of Confidential Information as may be necessary or
appropriate (i) to obtain from any governmental agency any necessary approval
(subject to Section 11.9), (ii) to obtain patents that are included in the
Angiotech Technology or (iii) to fulfill Angiotech's obligations under the CRADA
and the NIH Agreement; provided, further, however, that the party whose
information is to be disclosed shall be notified as soon as possible and the
party that is being required to disclose such information shall, if requested
by the party whose information is to be disclosed, use reasonable good faith
efforts, at the expense of the requesting party, to assist in seeking a
protective order (or equivalent) with respect to such disclosure or otherwise
avoid making such disclosure.
11.4 Amendment and Waiver. No provision of or right under this
Agreement shall be deemed to have been waived by any act or acquiescence on the
part of any party, its agents or employees, but only by an instrument in writing
signed by an authorized officer of such party. No waiver by either party of any
breach of this Agreement by any other party shall be effective as to any other
breach, whether of the same or any other term or condition and whether occurring
before or after the date of such waiver.
11.5 Intellectual Property
(a) Trademarks. During the term of their respective
licenses granted pursuant to Sections 2.1(a) and 2.1(b), each of BSC and Xxxx
shall have the right to market and advertise products incorporating or utilizing
Angiotech Technology under their respective names, trademarks, trade names,
labels, or other designations, and the same shall remain the property of their
respective owners, and Angiotech shall have no rights therein.
(b) Patents. BSC and Xxxx each agree to xxxx the Eligible
Products or their packaging sold in the United States with all applicable U.S.
patent numbers and similarly to indicate "Patent Pending" status. All Eligible
Products manufactured in, shipped to, or sold in other countries shall be marked
in such a manner as to protect and preserve the Patent Rights in such countries.
11.6 Independent Contractors. Each party represents that it is
acting on its own behalf as an independent contractor and is not acting as an
agent for or on behalf of any third party. This Agreement and the relations
hereby established by and among Angiotech, BSC and Xxxx do not constitute a
partnership, joint venture, agency or contract of employment between them.
11.7 Assignment. Except with respect to any sublicenses granted by
BSC or Xxxx pursuant to Section 2.1, no party may assign its rights or
obligations hereunder without the prior written consent of the other parties,
which consent shall not be unreasonably withheld in the case of any assignment
pursuant to a merger, consolidation or sale of substantially all of the assets
or stock; provided, however, that either BSC or Xxxx may assign their respective
rights and obligations to an Affiliate of such party without consent if BSC or
Xxxx, as the case may be, agrees to remain liable for their obligations under
this Agreement and provided, that no purported assignment under this Section
11.7 shall be effective unless and until the proposed assignee under this
Section 11.7 agrees in writing to assume all of the obligations of the
- 30 -
assignor party under this Agreement and shall remain effective only so long as
the proposed assignee remains an Affiliate.
11.8 Successors and Assigns. This Agreement shall bind and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.
11.9 Press Release. The parties agree that the public announcement
of the execution of this Agreement shall be in the form of a press release to be
agreed upon by the parties. Thereafter, Angiotech, BSC and Xxxx shall be free to
use the information set forth in such press release in future public
announcements. With respect to other public statements that reference a party,
including submissions to the Securities and Exchange Commission or stock
exchange or market system on which its securities are listed, such statements
shall be submitted to the referenced party for review and approval, which
approval shall not be untimely or unreasonably withheld.
11.10 Publications
(a) Subject to obligations under the NIH Agreement and
agreements with third party collaborators, if any, BSC and Xxxx each agree that
they shall not publish or present the results of studies carried out under this
Agreement without the opportunity for prior review by Angiotech. Each of BSC and
Xxxx shall provide to Angiotech the opportunity to review any proposed
abstracts, manuscripts or presentations (including information to be presented
orally) covering information arising from the use of the Angiotech Technology
under this Agreement and not previously disclosed at least thirty (30) days
prior to their intended submission for publication and such submitting party
agrees, upon written request from Angiotech, not to submit such abstract or
manuscript for publication or to make such presentation until Angiotech is given
a reasonable period of time to secure patent protection for any material in such
publication or presentation which it believes is patentable.
(b) Subject to obligations Under the NIH Agreement and
agreements with third party collaborators, if any, Angiotech agrees that it
shall not publish or present the results of studies relating to the Angiotech
Technology licensed under this Agreement without the opportunity for prior
review by BSC and Xxxx. Angiotech shall provide BSC and Xxxx the opportunity to
review any proposed abstracts, manuscripts or presentations (including
information to be presented orally) covering information related to the
Angiotech Technology in the Licensed Field of Use under this Agreement and not
previously disclosed at least thirty (30) days prior to its intended submission
for publication.
- 31 -
11.11 Notices. All communications hereunder shall be in writing and
shall be deemed to have been duly given upon receipt by the addressee at the
addresses set forth below, or such other address as either party may specify by
notice sent in accordance with this section:
If to BSC: Boston Scientific Corporation
Xxx Xxxxxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Director, New Business
Development
with a copy to: General Counsel
Boston Scientific Corporation
Xxx Xxxxxx Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
If to Angiotech: Angiotech Pharmaceuticals, Inc.
0000 X. X. Xxxxxx Xxxxx
Xxxxxxxxx, XX, Xxxxxx X0X lZ4
Attention: President and Vice
President-Corporate Affairs
with a copy to: Venture Law Group
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
If to Xxxx: Xxxx Incorporated
000 Xxxxx Xxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx
with a copy to: Xxxxxx and Xxxxxxx
4000 Bank One Tower
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
11.12 Severabi1ity. In the event any provision of this Agreement
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other term or provision hereof. The parties agree that they wil1 negotiate in
good faith or will permit a court or arbitrator to replace any provision hereof
so held invalid, illegal or unenforceable with a valid provision which is as
similar as possible in substance to the invalid, illegal or unenforceable
provision.
- 32 -
11.13 Conflict of Inconsistency. In the event of any conflict or
inconsistency between the terms and conditions hereof and any terms or
conditions set forth in any purchase order or other document relating to the
transactions contemplated by this Agreement, the terms and conditions set forth
in this Agreement shall prevail.
11.14 Captions. Captions of the Sections and subsections of this
Agreement are for reference purposes only and do not constitute terms or
conditions of this Agreement and shall not limit or affect the terms and
conditions hereof.
11.15 Word Meanings. Words such as herein, hereinafter, hereof and
hereunder refer to this Agreement as a whole and not merely to a Section or
paragraph in which such words appear, unless the context otherwise requires. The
singular shall include the plural, and each masculine, feminine and neuter
reference shall include and refer also to the others, unless the context
otherwise requires.
11.16 Entire Agreement. This Agreement and the Investment Agreement
contain the entire understanding of each of the parties hereto with respect to
the transactions and matters contemplated hereby, including without limitation
any licensing of the Angiotech Technology, supersedes all prior agreements and
understandings relating to the subject matter hereof, and no representations,
inducements, promises or agreements, whether oral or otherwise, between such
parties not contained herein or incorporated herein by reference shall be of any
force or affect.
11.17 Rules of Construction. The parties agree that they have
participated equally in the formation of this Agreement and that the language
and terms of this Agreement shall not be presumptively construed against any of
them.
11.18 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. In making proof of this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart.
[SIGNATURE PAGES FOLLOW]
- 33 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers, and have duly delivered
and executed this Agreement under seal as of the date first set forth above.
ANGIOTECH PHARMACEUTICALS, INC.
/s/ Xxxxxxx X. Xxxxxx
-------------------------
By: XXXXXXX X. XXXXXX
Title: CHAIRMAN & CEO
BOSTON SCIENTIFIC CORPORATION
_____________________________
By:__________________________
Title:_______________________
XXXX INCORPORATED
_____________________________
By:__________________________
Title:_______________________
SIGNATURE PAGE TO LICENSE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers, and have duly delivered
and executed this Agreement under seal as of the date first set forth above.
ANGIOTECH PHARMACEUTICALS, INC.
_____________________________
By:__________________________
Title:_______________________
BOSTON SCIENTIFIC CORPORATION
/s/ Xxxxxxxx X. Best
-------------------------
BY: Xxxxxxxx X. Best
Title: Sr. Vice President and
Chief Financial Officer
XXXX INCORPORATED
_____________________________
By:__________________________
Title:_______________________
SIGNATURE PAGE TO LICENSE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers, and have duly delivered
and executed this Agreement under seal as of the date first set forth above.
ANGIOTECH PHARMACEUTICALS, INC.
_____________________________
By:__________________________
Title:_______________________
BOSTON SCIENTIFIC CORPORATION
_____________________________
By:__________________________
Title:_______________________
XXXX INCORPORATED
/s/ Xxxxx Xxxxx
-------------------------
By: XXXXX XXXXX
Title: VICE PRESIDENT, PRODUCT DEVELOPMENT
SIGNATURE PAGE TO LICENSE AGREEMENT
AGREEMENT WITH RESPECT TO
LICENSE AGREEMENT
AMONG
ANGIOTECH PHARMACEUTICALS, INC.
BOSTON SCIENTIFIC CORPORATION
AND
XXXX INCORPORATED
This Agreement with respect to License Agreement is made and entered
into as of this 13th day of December, 1999, by and between Angiotech
Pharmaceuticals, Inc., a corporation organized under the laws of the Province of
British Columbia ("Angiotech") and Boston Scientific Corporation, a Delaware
corporation ("BSC").
WHEREAS, Angiotech, BSC and Xxxx Incorporated, an Indiana corporation
("Xxxx"), have entered into a License Agreement dated as of July 9, 1997,
pursuant to which Angiotech agreed to license to each of BSC and Xxxx certain
patents, patent applications, products and technology relating to the use of
paclitaxel as a coating for certain medical devices (as may be amended from time
to time, the "License Agreement");
WHEREAS, Angiotech and BSC desire to modify certain provisions of the
License Agreement as they relate to Angiotech and BSC as provided herein;
NOW THEREFORE, Angiotech and BSC hereby agree as follows:
1. As between Angiotech and BSC, to replace Sections 3.1(a) and 3.1(b) in
their entirety with the following:
3.1(a) BSC IDE Fee. Within twenty (20) business days after the date
of the (x) first filing by BSC of an Investigational Device
Exemption ("IDE") with the FDA or an equivalent filing in one
or more European countries or Canada or (y) initiation of a
BSC sponsored human clinical trial anywhere in the world, with
respect to a product incorporating or utilizing the Angiotech
Technology in a vascular application (the "BSC IDE Filing
Date"), BSC shall pay a license fee in the amount of
$1,275,000.
3.1(b) BSC PMA Fee. Within twenty (20) business days after the date
of the (x) first filing by BSC of a Pre-Market Approval
Application or Section 510(k) Pre-Market Notification
(collectively, "PMA") with the FDA or an equivalent filing in
on or more European. countries or Canada or (y) initiation of
commercial sale by BSC anywhere in the world, with respect to
a product incorporating or utilizing the Angiotech Technology
in a vascular application (the "BSC PMA Filing"), BSC shall
pay an additional license fee calculated as follows:
(i) subject to Section 3.1(b)(iii) below, if the date of
the BSC PMA Filing is on or after the twenty-four
month anniversary of the date on which the applicable
IDE or other equivalent filing in one or more
European countries or Canada is approved or a BSC
sponsored human clinical trial is initiated anywhere
in the world (the "BSC IDE Approval Date"), the
amount of $2,050,000; or
(ii) if the date of the BSC PMA Filing is prior to the
twenty-four month anniversary of the BSC IDE Approval
Date, the amount of (x) $2,050,000 minus (y) the
product of $200,000 for each complete thirty (30)
days period by which the date of the BSC PMA Filing
precedes the twenty-four month anniversary of the BSC
IDE Approval Date, provided, however, that in no
event shall any fee calculated pursuant to this
Section 3.1(b)(ii) be less than $800,000; or
(iii) if, and to the extent prior to the date of the BSC
PMA Filing, the FDA or similar authority in Europe or
Canada requires clinical follow-up in excess of nine
(9) months and BSC is unable to make the BSC PMA
Filing prior to the expiration of the "twenty-four
(24) month" period referenced in Section 3.1(b)(ii)
above, the amount of (x) $2,050,000, minus (y) the
product of $1,00,000 for each compete thirty (30)
day period by which the date of the BSC PMA Filing
precedes the Extended BSC PMA Filing Date, provided,
however, that in no event shall any fee calculated
pursuant to this Section 3.1(b)(iii) be less than
$800,000. For purposes of this paragraph," Extended
BSC PMA Filing Date" means the date which is
twenty-four (24) months following the BSC IDE
Approval Date plus the number of months of required
clinical follow-up in excess of nine (9) months.
2. As between Angiotech and BSC, to add as Section 3.11 of the License
Agreement, the following;
3.11 NeoRx License Fee Effective December 17, 1998, Angiotech
entered into an exclusive license agreement (the "NeoRx
License) with NeoRx Corporation ("NeoRx") which grants
Angiotech an exclusive license, with right to sublicense,
certain NeoRx Technology (as defined in the NeoRx License)
relating to paclitaxel and its structural analogs for vascular
applications. Angiotech and BSC agree that the BSC License
shall be deemed to include a co-exclusive sublicense (with
Xxxx) of the NeoRx Technology granted under the NeoRx License
for the Field, are the terms and subject to the limitations
and reservations set out in Section 2.1. As partial
consideration of this sublicense, BSC agrees to pay to
Angiotech an additional license fee in the maximum aggregate
amount of Five Hundred Thousand Dollars ($500,000) as follows:
(i) Two Hundred Fifty Thousand Dollars ($250,000)
payable on December 15, 1999; and
(ii) up to Two Hundred Fifty Thousand Dollars ($250,000)
as negotiated in good faith by the parties on or
prior to December 31, 2003.
Subject to the terms and conditions of the NeoRx License,
Angiotech will provide BSC with a reasonable opportunity to
review and provide input with respect to the preparation,
filing, prosecution and maintenance of the NeoRx Patents and
the NeoRx Interference. Angiotech, to the extent not
prohibited by the NeoRx License, will forward copies to BSC of
all materials available to it with respect to the NeoRx
Patents. Under no circumstances may Angiotech surrender to
NeoRx its rights to the NeoRx Patents, or any portion thereof,
to the extent they relate to the Licensed Field of Use without
the written consent of BSC.
3. As between Angiotech and BSC, to replace Section 9.1(d) in its entirety
with the following
9.1(d) Failure to Exploit. In the event that BSC shall have failed to
(i) file an Investigational Device Exemption ("IDE") with the
FDA or an equivalent filing in one or more European countries
or Canada or initiate a BSC sponsored human clinical trial
anywhere in the world, with respect to a product incorporating
or utilizing the Angiotech Technology prior to December 31,
2000 (the "BSC IDE Target Date"), or (ii) file a Pre-Market
Approval Application or Section 51O(k) Pre-Marketing
Notification (collectively, "PMA") with the FDA or equivalent
filing in one or more European countries or Canada or initiate
commercial sale anywhere in the world, with respect to a
product incorporating or utilizing Angiotech Technology prior
to December 31, 2003 (the "BSC PMA Target Date") then
Angiotech shall have the right, at its election, to terminate
any and all licenses granted by it to BSC under this Agreement
upon thirty (30) days prior written notice at any time prior
to such filing; provided however BSC may extend the BSC IDE
Target Date and/or the BSC PMA Target Date by up to twelve
(12) months by written notice to Angiotech, in which case the
next amount due of the BSC IDE Fee and the BSC PMA Fee shall
be increased by One Million Dollars ($1,000,000). In any
event, if clause (i) above is not satisfied by December 31,
2000, BSC shall pay Angiotech within twenty (20) business days
the amount of Five Hundred Thousand Dollars ($500,000).
As between Angiotech and Xxxx, the original Section 9.1(d) shall remain
in full force and effect until modified by Angiotech and Xxxx.
4. As between Angiotech and BSC, to replace Section 9.1(e) in its entirety
with the following
9.1(e) Limitation on Stent Products. If, for a period of seven (7)
years during the term of this Agreement BSC or Xxxx is unable
to obtain approval for, and gain significant sales of, an
Eligible Stent Product in the United States, Angiotech shall
have the right, at its election, to terminate any and all
licenses in the United States granted by it to such party
under this Agreement upon thirty (30) days prior written
notice.
As between Angiotech and Xxxx, the original Section 9.1(e) shall remain
in full force and effect until modified by Angiotech and Xxxx.
5. As between Angiotech and BSC, to add Section 9.1(f) as follows:
9.1(f) Unanticipated Regulatory Requirements. Both parties
acknowledge the necessity to meet all applicable regulatory
requirements in the major markets of the world (U.S., Europe
and Japan). Both parties also acknowledge the uncertain
regulatory requirements for a combination drug device product.
If regulatory requirements create significantly longer
timelines than currently anticipated (for instance, due to the
requirements of a separate and distinct dose finding trial in
a major market of the world), both parties shall meet to
review the impact on timelines and to negotiate in good faith
an extension to the BSC PMA Target Date and an extension to
the seven year period described in Section 9.1(e) above.
6. Angiotech and BSC agree that, except as provided in this Agreement, the
License Agreement shall remain unmodified and shall continue in full
force and effect.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first set forth above.
ANGIOTECH PHARMACEUTICALS, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Senior VP, Corporate Affairs
BOSTON SCIENTIFIC CORPORATION
By: /s/ Xxxxxxxx X. Best
-------------------------
Name:
Title:
