COMMERCIAL SUPPLY AND LICENSE AGREEMENT
[***]CERTAIN INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Exhibit 10.7
COMMERCIAL SUPPLY AND LICENSE AGREEMENT
This COMMERCIAL SUPPLY AND LICENSE AGREEMENT (this “Agreement”), is entered into as of day of January, 2007 (“Effective Date”) by and between
NeurogesX Inc., a California corporation with its principal place of business at San Xxxxxx Business Park, 000X Xxxxxxxxxx Xxxx, Xxx Xxxxxx, XX 00000, XXX (“NeurogesX”)
and
LTS Xxxxxxx Therapie-Systeme AG, a company existing under the laws of Germany and having its head office at Xxxxxxxxxxxxx 0, X-00000 Xxxxxxxxx, Xxxxxxx (“LTS”).
Each of NeurogesX and LTS shall be a “Party,” and together shall be referred to as the “Parties.”
ARTICLE 1
As used herein, the following terms will have the meanings set forth below:
1.1 “Active Ingredient” means the active pharmaceutical ingredient capsaicin meeting the Specifications therefor. The specifications for the Active Ingredient as of the Effective Date are attached as Exhibit D hereto.
1.2 “Affiliates” of an entity means the other entities that control, are under common control or are controlled by the subject entity. For purposes of this definition, an entity shall be regarded as in control of another entity if it owns or controls fifty percent (50%) or more of the shares of the subject entity entitled to vote in the election of directors (or, in the case of an entity that is not a corporation, for the election of the corresponding managing authority).
1.3 “Batch Size” means the quantity of Patches produced from a [***] production run as established in accordance with Section 2.4(a).
1.4 “Blocking Patent” means an issued patent or similar intellectual property right (e.g., utility model) of a third party, not licensed to either Party, which would in the reasonable opinion of a Party’s counsel be infringed by (a) the manufacture or sale of the Patch by the Parties in accordance with the terms of this Agreement, or (b) any or all uses of the Patch, in a particular jurisdiction.
1.5 “Calendar Quarter” shall mean the calendar quarters of the year beginning first of January, April, July and October.
1.6 “Commercialization Patents” means patents anywhere in the world owned or Controlled by LTS covering or claiming any subject matter which is incorporated into, or utilized as part of the operation of, the Patches, any method of use of the Patches, or otherwise which is necessary for the sale, distribution, marketing and/or commercialization of the Patches supplied to NeurogesX hereunder, including but not limited to the patents listed in Exhibit H.
1.7 “Control” means, with respect to any patent or other intellectual property right, the possession at any time during the term of this Agreement of the right or power of a Party to grant licenses under such patent or other intellectual property right within the scope set forth herein without violating the terms of any of such Party’s agreements with non-Affiliate third parties.
1.8 “Current GMP,” or “cGMP” means then current Good Manufacturing Practices promulgated by the United States Food & Drug Administration (FDA) and its counterpart governmental agencies in the Territory outside the United States, in the form of laws, regulations or guidance documents, including those practices and standards set forth in Current Good Manufacturing Practice Regulations of the US Code of Federal Regulations Title 21 (21 CFR §§210 and 211) in relation to the production of pharmaceutical products and those practices and standards provided for (as amended from time to time) in the European Community Directive 91/356/EEC, as interpreted by the ICH Harmonized Tripartite Guideline, and any arrangements, additions or clarifications agreed from time to time between the Parties.
1.9 “Defect” or “Defective” when applied to Patches means the failure of such Patches to meet the warranty set forth in Section 8.2.
1.10 “Ex Works” shall have the meaning as set forth in the Incoterms 2000.
1.11 “Facility” means LTS’ cGMP manufacturing facility for the Patches located at [***]. In the event the Parties qualify a second source for the Patches pursuant to Section 4.5 below, then the term “Facility” shall also mean LTS’ cGMP manufacturing facility for such second source.
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1.12 “Field” has the meaning as set forth in Section 6.3.
1.13 “Kit” means the commercial product form sold by NeurogesX, its Affiliates or Sublicensees of which the Patch(es) is a component.
1.14 “Launch Team” has the meaning as set forth in Section 4.1.
1.15 “Manufacturing Cost” shall mean the [***], in each case incurred by LTS during and allocable to the manufacture of Patches hereunder, and [***] incurred by LTS in implementing new GMP requirements requested by NeurogesX hereunder, which are not otherwise paid for or reimbursed by NeurogesX, all calculated in accordance with Generally Accepted Accounting Principles in the United States (“GAAP”) or its equivalent in Germany.
1.16 “Marketing Approval” means all approvals, registrations or authorizations of any federal, state or local regulatory agency, department, bureau or other governmental entity, necessary for the manufacturing, use, storage, import, transport and sale of Patches in a regulatory jurisdiction.
1.17 “Maximum Capacity” means NeurogesX’s forecast of the maximum quantities of Patches that NeurogesX may require be supplied from LTS by NeurogesX, its Affiliates or Sublicensees, per year of the term of this Agreement, as set forth on Exhibit G hereto. Such forecast may be amended from time to time in accordance with Section 3.4(d). It is understood that the Maximum Capacity is not a commitment by NeurogesX to purchase such amounts from LTS hereunder
1.18 “Net Sales” means the [***] sold by NeurogesX, its Affiliates or Sublicensees to a non-Affiliate third party in bona-fide, arms-length transactions, after deducting (to the extent actually incurred and to the extent not already deducted in the amount invoiced) (a) [***] determined in accordance with GAAP (as defined in Section 1.15), consistently applied.
If mutually agreed in writing by the Parties, some or all such items may be [***] and subsequently adjusted. The Parties agree that items (b) and (f) above may be [***] and subsequently adjusted as part of customary practice in accordance with GAAP. If a Kit is sold for consideration other than solely cash, the value of such other consideration attributable to the sale of the Kit shall be included in calculating Net Sales. In the event Kit is sold among NeurogesX and its Affiliates or Sublicensees for resale, Net Sales shall include the amounts invoiced by such entities to third parties on the resale, but not the amounts invoiced among such entities prior to the resale. Net Sales shall not include any sales of Kits as [***] NeurogesX, its Affiliates or Sublicensees.
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1.19 “Patch” or “Patches” means the TTS containing the Active Ingredient developed by the Parties under the MOU and the Clinical Supply Agreement.
1.20 “Patch Regulatory Information” means any and all information in the possession of LTS relating to the Patches, as reasonably necessary for NeurogesX’s, its Affiliates’ and Sublicensees’ efforts to file for, obtain or maintain Marketing Approvals for the Patch in any regulatory jurisdiction, including without limitation (a) such information as is required for the Chemistry, Manufacturing and Controls (CMC) section of an Investigational New Drug application (IND) or New Drug Application (NDA) for the Patches, (b) all data regarding stability, storage conditions and shelf life of Patches, and (c) all data reasonably required to qualify a manufacturing facility for the Patches under Regulatory Requirements or demonstrate compliance with cGMP.
1.21 “Quality Assurance Agreement” means the then-current quality assurance procedures as mutually agreed upon by the Parties in writing. The template of Quality Assurance Agreement as of the Effective Date is attached as Exhibit E. The Parties agree that the commercial supply of Patches by LTS hereunder is subject to the Parties entering into a Quality Assurance Agreement, which the Parties shall use good faith efforts to conclude at least three (3) months prior to the first delivery of Patches by LTS hereunder. Thereafter, the Parties shall update the Quality Assurance Agreement from time to time to reflect best practice at such time.
1.22 “Raw Materials” means the Active Ingredient, excipients, components, labels, primary packaging material and shipping containers, necessary for the manufacturing, processing and primary packaging of the Patch as set forth in the master batch record for the Patch.
1.23 “Reasonable Commercial Efforts” of a Party means [***].
1.24 “Regulatory Requirements” means all laws, regulations and other legal requirements applicable to the manufacture of Patches or components thereof, including without limitation cGMP, FDA regulations, ICH guidelines, any applicable local laws and regulations in the place of manufacture, storage and handling, and any requirements set forth in any IND, NDA, applications for Marketing Approval and other regulatory filings or approvals for the Patches in the Territory.
1.25 “Specifications” means the specifications for the Patch (including the components thereof) as set forth in the Marketing Approval for the Patch, as amended, clarified or supplemented from time to time upon mutual agreement of the Parties in writing. The Specifications for the Patch as of the Effective Date is attached as Exhibit C. For clarity, in the event there are different Specifications set forth in the Marketing Approvals for different countries, the applicable Specifications shall be as set forth in the Marketing Approval for the country identified by NeurogesX or its designee on the purchase order for the Patch.
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1.26 “Sublicensees” means a non-Affiliate third party to whom NeurogesX has granted (i) the right to market and sell Patches purchased from LTS under this Agreement, provided that such third party has [***] responsibility for and has the right to [***] the marketing and promotion of such Patches in its distribution territory and the right to [***] of such Patches for its own account, or (ii) the right to make (to the extent NeurogesX has the right to do so pursuant to Section 6.4 below) and sell a Patch, with respect to Patches that are manufactured and then sold by such third party pursuant to the license set forth in Section 6.4 below. For the [***], wholesalers, distributors or specialty distributors, but shall include [***] of NeurogesX for the Patches
1.27 “Territory” means the [***]. In addition, the Territory may be extended by NeurogesX to include additional countries and/or regulatory jurisdictions in accordance with Section 3.4(c) below.
1.28 “Transfer Price” has the meaning as set forth in Section 5.1 below.
1.29 “TTS” means transdermal therapeutic patches, including but not limited to liquid reservoir patches, microreservoir patches, monolithic layer patches, or other patch products for delivering drugs topically.
1.30 “VR1-Ligand” means any compound that bind to the vanilloid receptor subtype 1, as further described in Exhibit B. The Parties may amend Exhibit B from time to time upon mutual written agreement.
ARTICLE 2
2.1 Supply of NeurogesX’s Requirements.
(c) Clinical Supplies. NeurogesX and its designees may continue to purchase units of Patches for clinical trial purposes under the Clinical Supply Agreement, provided that such units shall be designated as clinical supplies at the time of order. Unless otherwise designated, all
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orders for Patches submitted by NeurogesX and its designees after the First Forecast provided under Section 2.2 below shall be deemed orders for Patches under this Agreement. To the extent LTS becomes aware that any Raw Materials or works-in-progress procured or made under this Agreement may be used to reduce the cost or price of units of Patches ordered under the Clinical Supply Agreement, LTS shall notify NeurogesX and the Parties shall negotiate in good faith to so use such Raw Materials and works-in-progress and correspondingly reduce the price to NeurogesX of such units under the Clinical Supply Agreement. It is understood that this Section 2.1(c) is not intended to prevent NeurogesX from using any supplies of Patches in its inventory that may have been purchased under this Agreement, for clinical trial purposes, provided however, that NeurogesX shall act in accordance with all applicable laws and regulations.
2.2 First Forecast NeurogesX will provide LTS with a written forecast of the number of Patches which will be required to be delivered during the first year following the first projected delivery hereunder (the “First Forecast”), at least [***] prior to the beginning of the Calendar Quarter in which the first delivery of Patches by LTS is projected to occur. This First Forecast shall contain an estimate of the number of Patches required to be delivered, on a monthly basis, for such Calendar Quarter and the [***] three (3) Calendar Quarters. It is understood that only the first Calendar Quarter of the First Forecast shall be binding on the Parties, and the subsequent Calendar Quarters in the First Forecast shall be non-binding for both Parties. NeurogesX agrees that the first Calendar Quarter in the first Rolling Forecast (as defined below) shall specify the same quantities as specified in the first Calendar Quarter in the First Forecast.
(a) Orders. NeurogesX shall place orders for quantities of Patches, on a [***] basis, [***] days before the month in which delivery of such Patches is requested (the “Delivery Month”). For example, [***]. Each order shall specify the requested delivery date(s) within the Delivery Month, the shipping destination(s) and any shipping instructions. Unless otherwise agreed, the quantities specified in each order shall be a [***] of the Batch Size. NeurogesX shall ensure that such orders, aggregated on a Calendar Quarter basis, specify a quantity of Patches to be delivered in such Calendar Quarter that is at least [***] of the Binding Quantities for such Calendar Quarter. The Parties agree to use good faith efforts to establish the Batch Size by mutual written agreement after manufacture of the first [***] batches of Product based on actual batch sizes for production hereunder; provided unfit such time the Batch Size for purposes of this Agreement shall be deemed to be the Theoretical Batch Size set forth in Exhibit A.
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2.7 Refusal to Supply. LTS, after good faith consultation with NeurogesX for at least [***] days, may refuse to supply Patches in a particular country, if LTS can reasonably demonstrate by evidence prepared or corroborated by an expert (recognized in the industry and having substantial experience in matters of public safety and toxicollogy) that the proper sale, distribution and use of the Patch hereunder is likely to unreasonably endanger the public health.
2.8 Invoicing; Payment. LTS shall submit an invoice to NeurogesX upon shipment of the Patches ordered by NeurogesX hereunder. All invoices shall be sent to the address specified in the purchase order, and each such invoice shall state the aggregate and unit Transfer Price for Patches in a given shipment, plus any insurance, taxes or other costs incident to the purchase or shipment initially paid by LTS but to be borne by NeurogesX hereunder.
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Any change to the artwork and text of the primary Patch packaging reasonably requested by NeurogesX or its Sublicensees or required by any regulatory authority shall be communicated by NeurogesX to LTS in writing together with suitable samples of the revised artwork or text no later than [***] months prior to the first delivery of Patches with such new primary Patch packaging. NeurogesX shall reimburse LTS for any packaging materials that can no longer be used as a result of any such change up to a maximum of [***] months inventory of such materials. Provided that NeurogesX shall communicate such changes in the artwork and LTS has given its reasonable consent to such changes with a lead time of not less than [***] days, such changes shall not affect or modify the lead times for the supplies pursuant to Section 2.4.
In the event [***] orders or purchases appropriate quantities of Raw Materials in order to be able to supply the Patches as forecasted in the most current [***] month period in the Rolling Forecast, as defined in Section 2.3, and has paid or has incurred a non-cancelable commitment to pay for such Raw Materials, and (A) [***] (i) cancels such orders pursuant to Section 2.12; (ii) changes the forecasted quantities subject to the terms of this Agreement; or (iii) does not place orders in the amounts forecasted in such [***] month forecast; or (B) the Specifications or the artwork has changed after the Raw Materials have been purchased or ordered, then:
(a) such Raw Materials and any works-in-progress may, in a manner to be reasonably agreed between LTS and NeurogesX, be kept in storage by LTS for future production of the Patches hereunder, provided that NeurogesX shall reimburse LTS for all costs and expenses associated with such storage; or
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(b) in the event such storage is not practicable or such Raw Materials become obsolete or unusable due to one or more of the events specified under (i) – (iv) above or the Parties do not agree on the manner or compensation for such storage, NeurogesX shall reimburse LTS for all documented out-of-pocket costs and expenses incurred by LTS for such Raw Materials (other than the Active Ingredient) and those reasonable costs and expenses incurred by LTS to produce the works-in-progress, which in each case, cannot be used by LTS for manufacturing Patches and cannot be used by LTS in the manufacture of products for its other clients. NeurogesX may then, at its option upon prior written notice to LTS, take ownership of such Raw Materials and works-in-progress, it being understood that any costs and expenses for transport shall be borne by [***]. If NeurogesX does not exercise such option, LTS will destroy such Raw Materials and works-in-progress, it being understood that NeurogesX shall pay any reasonable costs and expenses for destroying such Raw Materials and works-in- progress.
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2.17 Delegation to LTS Affiliates. LTS shall have the right to delegate all or any portion of its obligations under this Agreement to its Affiliates, provided that such delegation does not affect any Marketing Approvals filed or obtained by NeurogesX, its Affiliates or Sublicensees or in case any Marketing Approval would be affected, NeurogesX has given its prior written consent. Any such Affiliates shall be bound by all of the terms and conditions set forth herein as if named as a party hereto, and LTS shall remain responsible for the performance of such Affiliates under this Agreement.
ARTICLE 3
3.1 Quality Assurances. LTS shall comply with each requirement set forth in the Quality Assurance Agreement with respect to manufacturing and associated support functions including storage, handling and delivery of Patches to NeurogesX and its designees hereunder; provided, however, the provisions concerning LTS responsibility and liability as set forth in this Agreement shall [***] any provisions that in the event of a conflict between the terms in the Quality Assurance Agreement or any amendment thereof and this Agreement, the terms of this Agreement shall [***].
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requested by NeurogesX, LTS may, instead of providing such parts of the Patch Regulatory Information to NeurogesX, elect to directly provide such parts of the Patch Regulatory Information to the applicable regulatory authority in support of the regulatory filings of NeurogesX and its designees (and if so elected, will diligently do so), and will grant NeurogesX and its designees rights to reference such filings made by LTS. Except as set forth in this Section 3.2 or otherwise required by law, LTS shall not correspond directly with the FDA or other health regulatory agencies relating to the process of obtaining Marketing Approvals or any obtained Marketing Approvals for the Patch, without NeurogesX’s permission. It is understood and agreed that the license of Section 7.1 of the Clinical Supply Agreement shall apply with respect to Patch Regulatory Information disclosed under this Agreement, and that NeurogesX may disclose any and all Patch Regulatory Information to regulatory authorities in connection with obtaining and maintaining Marketing Approval for the Patches worldwide.
(b) Manufacturing Process. Unless otherwise required by applicable laws or regulations, LTS shall not, without the prior written consent of NeurogesX, change any aspect of manufacture, including the facilities, equipment, processes, vendors, sub-contractors or record keeping procedures, in any manner (i) which to LTS’ [***] knowledge has the potential to [***] affect the Patch, including any changes which may impact its safety or effectiveness, or (ii) which would delay or otherwise impact any filings for Marketing Approval for the Patch or would require an affirmative approval of the FDA, or any other health regulatory authority in the Territory in which the Patch is being marketed, prior to its implementation. In the event NeurogesX requests a change or adjustment of any aspect of manufacture, including
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the facilities, equipment, processes, vendors, sub-contractors or record keeping procedures and LTS agrees to implement such change or adjustment, or if such change or adjustment is necessary, in case the annual requirements of the Patch can no longer be supplied according the current manufacturing process (including but not limited to facilities and equipment), however subject to the prior written consent of NeurogesX as foreseen in the preceding sentence, NeurogesX shall pay LTS for the reasonable, documented, incremental labor and material costs incurred in connection with implementing such change, to the extent such costs are not covered by the mechanism for adjusting the Transfer Price in Section 5.6.
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3.10 Stability Testing. LTS shall use [***] to perform the stability testing of the Patches as set forth in Exhibit I; provided that NeurogesX may terminate the activities under this Section 3.10 at any time by providing at least [***] days’ prior written notice referencing this Section 3.10. NeurogesX shall pay for those activities initiated prior to any termination pursuant to this Section 3.10, the compensation as set forth in Exhibit I with respect thereto.
ARTICLE 4
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ARTICLE 5
(a) As further consideration for the supply of Patches and the other rights and licenses granted hereunder, NeurogesX shall pay LTS royalties at the rate of [***] on the Net Sales of Kits sold by NeurogesX, its Affiliates or Sublicensees, containing Patch(es) purchased from LTS under this Agreement.
(b) Notwithstanding Section 5.2(a) above, NeurogesX has the option to pay LTS royalties at the rate of [***] rather than [***] on the Net Sales of Kits sold by NeurogesX, its Affiliates or Sublicensees, containing Patch(es) purchased from LTS under this Agreement, in certain jurisdictions selected by NeurogesX as follows. NeurogesX shall exercise such option with respect to a jurisdiction within [***] days after the first commercial sale of a Kit in such jurisdiction. In the event NeurogesX exercises such option with respect to a jurisdiction, NeurogesX shall be entitled to a [***] share of recoveries from an Infringement as set forth in Sections 7.3(a)(ii) and 7.3(b)(ii) below.
(c) For the avoidance of doubt, if NeurogesX elects to exercise the option set forth in Section 5.2 (b), the royalty set forth in Section 5.2 (b) shall not be additional to those in Section 5.2 (a), NeurogesX shall in this case only pay the royalty set forth in Section 5.2 (b) with respect to the selected jurisdiction.
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5.5 No Setoff nor Suspension of Performance.
(a) NeurogesX. NeurogesX shall not exercise any right of setoff, net-out or deduction, take any credit, or otherwise reduce the balance owed to LTS, in each case with respect to payments under Sections 5.1 of this Agreement, unless otherwise expressly provided herein, the Parties otherwise agree or until NeurogesX has obtained a final determination under Section 12.1(b) against LTS in the amount asserted by NeurogesX.
(b) LTS. LTS shall not have the right to suspend performance (including without limitation refusing or withholding delivery of Patches) under this Agreement (i) unless and until LTS has obtained a [***] determination under Section 12.1(b) that NeurogesX has [***] failed to perform its obligations under this Agreement relating thereto, (ii) in the case where NeurogesX has failed to pay the Transfer Price for [***] shipments of Patches, which payment is not disputed by NeurogesX, is outstanding for longer than [***] or more days and, in the aggregate, exceeds a total amount of [***] unless NeurogesX fails to provide a letter of credit upon the request of LTS as set forth in Section 2.11; (iii) except as set forth in Section 7.6 below, or (iv) unless otherwise mandated by applicable laws, regulations or orders.
(c) No Other Charges. Except as otherwise set forth in this Agreement, LTS shall perform all of its obligations hereunder at its [***], and shall not [***] NeurogesX any amounts for the manufacture and supply of Patches hereunder except as expressly set forth in this Article 5 or otherwise mutually agreed in writing.
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5.6 Adjustment to the Transfer Price.
(a) Prior to first launch of Patch the Parties shall annually review the Transfer Price but starting not earlier than [***] Thereafter, beginning [***] years after the first calendar month in which Patches are delivered hereunder, the Parties shall annually review the Transfer Price and negotiate in good faith an adjustment for the Transfer Price taking into account all relevant factors, including but not limited to Manufacturing Costs, provided, that any increase will be commensurate with actual changes in the relevant factors relating to the manufacture of the Patch.
(b) LTS shall have the right to adjust the Transfer Price up to [***] over the Transfer Price set forth in Exhibit A for increases in costs for raw materials, labor or waste. Any further increases are subject to the mutual agreement of the Parties.
(c) If LTS requests an increase of the Transfer Price by more than [***] then NeurogesX shall have the right to have the Manufacturing Cost audited by an independent Certified Public Accountant (CPA), reasonably acceptable to LTS acting in confidence and retained by NeurogesX at NeurogesX’s expense, for purposes of confirming such increase in Manufacturing Costs. Such CPA shall however not disclose details of such Manufacturing Costs.
(d) LTS shall use [***] to avoid substantial increases in its Manufacturing Costs. In addition, at the request of NeurogesX from [***] LTS shall use [***] to suggest, and the Parties shall discuss, methods to reduce Manufacturing Costs and to provide a commensurate reduction in Transfer Price hereunder; provided it is agreed that any such methods shall be implemented only upon mutual agreement.
(e) In case the Transfer Price is adjusted according to the foregoing, Exhibit A shall be amended accordingly.
ARTICLE 6
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6.3 Limited Exclusivity of LTS.
(a) LTS shall for the duration of this Agreement not develop for, sell or license to, any third parties any TTS with capsaicin (1) with an area based content above [***], or (2) that is covered by LTS’ U.S. patent application no. [***], continuations, continuations-in-part, divisions and foreign counterparts thereof, patents issuing thereon, including renewals, reissues and extensions (such TTS with capsaicin as described in clauses (1) or (2), the “Field”). For clarity, during the term of this Agreement LTS shall not exploit on its own nor directly or indirectly license, assist or enable any third party under any patent rights, know-how, data or other intellectual property owned or Controlled by LTS to make, use, offer for sale, sell or import any TTS with capsaicin in the Field, provided, however, that LTS shall at all times have the right to toll manufacture (including performing manufacturing scale-up of) any products containing capsaicin the design and technical aspects solely developed by a third party and not falling within the scope of the Commercialization Patents.
(b) LTS shall not use, manufacture, sell, distribute or license for or to any third party any Patches, except as authorized in writing by NeurogesX.
(c) Except as set forth in this Sections 6.3, and subject to Section 7.1 below, LTS shall at all times have the right to develop and/or manufacture any other TTS’s or products developed by LTS and/or a third party, even if it contains any VRI-Ligand.
(d) During the term of the Agreement and except as otherwise provided herein, NeurogesX shall not purchase or otherwise procure Patches from any supplier other than LTS or its Affiliates.
6.4 Backup Manufacturing License.
(i) “Failure Event” means any of the following events: a Force Majeure Event, Failure to Supply, an Anticipated Failure to Supply, receipt of a Notice of Suspension (as defined in Section 7.6 below), termination by either Party under Section 11.3 below or termination by NeurogesX under Section 11.2 below.
(ii) “Force Majeure Event” means a failure of LTS to perform its obligations to supply the Patches to NeurogesX in accordance with the terms and conditions set forth herein due to Force Majeure (as defined in Section 12.6) causing an interruption of supply of Patches to the customer, and then a failure to remove any such cause by employing [***] and resume supply hereunder within [***] days thereafter.
(iii) “Failure to Supply” means either: (A) not including cases of Force Majeure, an inability of LTS to supply in accordance with this Agreement at least [***] in any one Calendar Quarter and at least [***] in the subsequent Calendar Quarter of the Binding Quantities of Patches ordered by NeurogesX for delivery in such quarters, provided that such failure is not due to failure of NeurogesX to supply Active Ingredient in accordance with Section 2.5 or otherwise caused by NeurogesX; or (B) a material breach of this Agreement by LTS causing an interruption of supply of Patches to the customer, which is not cured within [***] days after notice specifying such breach.
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(iv) “Anticipated Failure to Supply” means either: (A) a written notice by LTS that it anticipates that it will be unable to supply NeurogesX’s requirements of the Patch in accordance with this Agreement for at least [***] consecutive orders, when it can be foreseen by LTS that the following [***] consecutive orders cannot be fulfilled even though such orders were placed in accordance with Section 2.4 (a); or (B) a failure of LTS to maintain compliance with all Regulatory Requirements relating to the Facility and its manufacturing activities hereunder, which non-compliance cannot (or LTS anticipates will not) be or is not cured by using [***] and such non-compliance causes interruption of supply of Patches by LTS for [***] or more. LTS shall promptly notify NeurogesX in the event of clauses (A) or (B) above, and in the case of clause (B), shall keep NeurogesX updated as to its efforts to cure any such non-compliance.
(v) “LTS Know-how” means instructions, specifications, know-how, technology, materials and intellectual property describing the composition and manufacture of the Patches, including a description of the suppliers, raw materials, processes, equipment and instruments used for such manufacture and all Patch Regulatory Information. It is understood that LTS Know-how shall include all information or materials disclosed or provided under this Agreement, the Clinical Supply Agreement, the MOU and the Secrecy Agreement.
(vi) “LTS Technology” means LTS Know-how, the Commercialization Patents, and any and all other patents or intellectual property worldwide owned or Controlled by LTS which cover, is incorporated in or is used as part of any of the Patches, or which relate to a method of use or manufacture of any of the Patches (or equipment used in such manufacturing).
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and to have the Patches manufactured at this facility or, in the event the facility has already been qualified according to Section 4.5, to have the Patches manufactured at the LTS facility at LTS Xxxxxxx Therapy Systems Corp. or any other Facility; provided that the Parties enter into an agreement on bearing of the costs, the timelines for qualification and the manufacturing capacity within [***] days after execution of the option (such [***] day period, the “Negotiation Period”).
(e) LTS Supply after Failure Event. In case of any Failure Event, if after NeurogesX has exercised its License set forth under Section 6.4(d) and NeurogesX has qualified a third party manufacturer for the Patches, LTS is able to demonstrate by a statement of an independent expert ([***]) that it is able to resume manufacturing and supply of Patches, NeurogesX shall offer to have LTS supply [***] of its requirements of Patches from LTS. In the event LTS accepts such offer, its supply of Patches shall be subject to all of the terms and conditions of this Agreement; provided that if NeurogesX offers to have LTS supply less than [***] of its requirements for Patches, then notwithstanding Section 6.3 and Section 6.4(d), LTS shall have the right to develop by itself or with third parties, manufacture and supply products to third parties in the Field.
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
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(f) Royalties.
(i) In consideration of the license set forth in this Section 6.4, NeurogesX shall pay LTS a [***] on the [***] by NeurogesX, its Affiliates or Sublicensees of Kits made under the license set forth in this Section 6.4 after a Failure Event, calculated as follows. The royalty shall be [***] for the exclusive Backup License, and [***] in case of a non exclusive Backup-License.
(ii) Notwithstanding Section 6.4(f)(i) above, NeurogesX shall have the option to pay LTS a royalty at the rate of [***] in case of a non-exclusive Backup License and [***] in case of an exclusive Backup License, rather than the percentage calculated in accordance with Section 6.4(f)(i), on the Net Sales by NeurogesX, its Affiliates or Sublicensees of Kits made under the license set forth in this Section 6.4 after a Failure Event, in certain jurisdictions selected by NeurogesX as follows. NeurogesX shall exercise such option with respect to a jurisdiction within [***] days after the first commercial sale of a Kit in such jurisdiction after the Failure Event. In the event NeurogesX exercises such option with respect to a jurisdiction, NeurogesX shall be entitled to a [***] share of recoveries from Infringement as set forth in Sections 7.3(a)(ii) and 7.3(b)(ii) below.
(iii) For the avoidance of doubt, if NeurogesX elects to exercise the option set forth in Section 6.4(f)(ii), the royalty set forth in Section 6.4(f)(ii) shall not be additional to those in Section 6.4(f)(i), NeurogesX shall in this case only pay the royalty set forth in Section 6.4(f)(ii) with respect to the selected jurisdictions. In addition, for the avoidance of doubt, the royalty set forth in Section 5.2 above shall not apply to the Patches made under the license set forth in this Section 6.4, and the royalty set forth in this Section 6.4(f) shall not apply to the Patches purchased from LTS.
(a) LTS is informed of the identity of the Sublicensee and the scope of rights that are being granted;
(b) those Sublicensees shall be obligated to indemnify LTS regarding IP Claims and product liability to the extent NeurogesX is so obligated under Sections 9.2 and 9.3(b); and
(c) those Sublicensees shall be obligated to maintain a customary and reasonable level of product liability insurance which covers the Patch, for those countries in which such Sublicensee is authorized by NeurogesX to distribute the Patch.
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
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ARTICLE 7
7.1 Inventions relating to the Patch.
(a) LTS Owned. All inventions developed by the Parties or by either Party under this Agreement or the Clinical Supply Agreement solely relating to LTS’ existing TTS technology, including but not limited to design, formulation, manufacturing, testing and packaging of TTS, shall be the property of LTS (“LTS IP”). LTS shall not use any LTS IP for the development of TTS containing VR1-Ligand until [***], other than for NeurogesX. Thereafter, until [***], NeurogesX shall have a right of first refusal in case LTS commences development of TTS which contain any VR1-Ligand using LTS IP. NeurogesX hereby irrevocably assigns, and agrees to assign to LTS any right, title and interest it may have in and to the LTS IP, and shall assist LTS, upon reasonable request and at LTS’[s] sole expense, to secure or perfect any and all such rights.
(b) NeurogesX Owned. All inventions developed by the Parties or by either Party under this Agreement or the Clinical Supply Agreement solely relating to medical uses of any VR1-Ligand shall be the property of NeurogesX (“NeurogesX IP”). LTS hereby irrevocably assigns, and agrees to assign to NeurogesX all of its right, title and interest in and to NeurogesX IP, and shall assist NeurogesX, upon reasonable request and at NeurogesX’s sole expense, to secure or perfect any and all such rights.
(c) Jointly Owned. All other inventions developed by the Parties or by either Party under this Agreement or the Clinical Supply Agreement shall be the joint property of the Parties (“Joint IP”), provided that it does not belong under Section 7.1(a) or (b) to either LTS IP or NeurogesX IP. Neither Party shall have any obligation to account to the other Party for profits with respect to, or to obtain any approval of the other Party to license or exploit, any Joint IP by reason of their joint ownership, and each Party waives any such right it might have under the applicable laws in any country; provided, that NeurogesX shall only have the right to exploit and license the Joint IP for VR1-Ligand applications and products, and LTS shall only have the right to exploit or license the Joint IP for any applications and products other than VR1-Ligand applications and products.
(d) Exclusive License. Accordingly, the Parties grant to each other licenses under the Joint IP (which to avoid any doubt for purposes of these licenses includes all patent applications and patents claiming the inventions included therein) as follows:
(i) NeurogesX hereby grants to LTS an exclusive (even as to NeurogesX), royalty-free, fully-paid, freely sublicensable (though one or more layers of sublicensees without consent), perpetual, irrevocable, worldwide license under the Joint IP to [***] Notwithstanding Section 7.3 below, LTS shall have the [***] to enforce the Joint IP against infringement within the scope of the license set forth in this Section 7.1(d)(i) and to retain [***] recoveries therefrom, and NeurogesX shall cooperate with LTS, at LTS’ reasonable request and expense; however, nothing herein shall require NeurogesX to join any such action as a party to any such action. For clarity, the Parties intend that LTS shall have sufficient rights to enforce such Joint IP as set forth in this Section 7.1(d)(i) without NeurogesX joining as a co-plaintiff.
(ii) LTS hereby grants to NeurogesX an exclusive (even as to LTS), royalty-free, fully-paid, freely sublicensable (though one or more layers of sublicensees without consent),
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perpetual, irrevocable, worldwide license under the Joint IP to make, have made, use, sell, offer to sell, and import product candidates and products that contain any VR-1 Ligand(s) and/or are VR-1 Ligand applications and products. Notwithstanding Section 7.3 below, NeurogesX shall have the sole right to enforce the Joint IP against infringement within the scope of the license set forth in this Section 7.1(d)(ii) and to retain all recoveries therefrom, and LTS shall cooperate with NeurogesX, at NeurogesX’s reasonable request and expense; however, nothing herein shall require LTS to join any such action as a party to any such action. For clarity, the Parties intend that NeurogesX shall have sufficient rights to enforce such Joint IP as set forth in this Section 7.1(d)(ii) without LTS joining as a co-plaintiff.
7.2 Prosecution of Patents Covering the Patch.
(a) As used in Sections 7.2 and 7.4, “prosecute” means the procedure(s) involved in securing patent rights in patent offices worldwide.
(b) LTS shall have the right, [***] to file, prosecute and/or maintain any patent or patent application solely owned by LTS covering the Patches. With respect to such LTS patents and patent applications that are specific to the Patch, including [***] and foreign counterparts thereof, NeurogesX shall have the right to review and consult with LTS regarding the prosecution and maintenance thereof; provided however that in the event NeurogesX does not provide comments within a period of [***] days after receipt of a respective draft brief or office action by LTS, NeurogesX shall be deemed to have waived its right to review and consult.
(c) If LTS elects to file, prosecute and maintain any such patent or patent application, the expenses of such action shall be borne by LTS.
(d) If LTS elects not to file, prosecute or maintain any such patent or patent application in any jurisdiction, it shall notify NeurogesX at least [***] days prior to the due date for any action or payment. NeurogesX shall then have the right, to file, prosecute and/or maintain any such patent or patent application.
(e) If NeurogesX elects to file, prosecute and maintain any such patent or patent application in such jurisdiction, the expenses of such action shall be borne by NeurogesX, and NeurogesX shall have a [***] (except as set forth in this Section 7.2(e[***]. The foregoing license shall be exclusive for the Field. NeurogesX shall have the first right to enforce such patents and patent applications in the Field and retain all revenues therefrom, notwithstanding Section 7.3 below.
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
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[***] with LTS. LTS agrees not to settle or otherwise terminate or delay its enforcement against any Infringement in a manner which would permit the third party to continue manufacturing and/or selling infringing TTS in the Field in contravention of the exclusivity granted to NeurogesX under Article 6 of this Agreement. LTS shall not settle any Infringement action without the prior written approval of NeurogesX. In the event LTS notifies NeurogesX within [***] days after notice of an alleged Infringement by either Party that it intends to file suit against any alleged Infringement, or does not give any notification whether it intends to file suit within [***] days after notice of an alleged Infringement by either Party or drops any action against an alleged Infringement, then NeurogesX shall have the right, but not the obligation, to enforce LTS’ patents covering the Patch against such alleged Infringement. LTS agrees to use Reasonable Commercial Efforts to assist and cooperate with NeurogesX in any enforcement by NeurogesX under this Section 7.3, at NeurogesX’s cost and expense.
(a) If LTS decides to enforce its patents against Infringement and NeurogesX permits LTS to claim NeurogesX damages, then any proceeds from such enforcement of its Patents recovered from any such Infringement action shall be divided (i) [***] between NeurogesX and LTS unless clause (ii) applies, or (ii) [***] to NeurogesX and [***] to LTS with respect to recoveries for Infringement in a jurisdiction for which NeurogesX has elected to pay a higher royalty under Section 5.2(b) or 6.4(f)(ii) above, in each case after first subtracting [***].
(b) In the event NeurogesX is given the right to enforce LTS’ patents against Infringement and LTS permits NeurogesX to claim LTS’ damages, then any proceeds from such enforcement of LTS’ patents recovered from any such Infringement action shall be divided (i) [***] between NeurogesX and LTS unless clause (ii) applies, or (ii) [***] to NeurogesX and [***] to LTS with respect to recoveries for Infringement in a jurisdiction for which NeurogesX has elected to pay a higher royalty under Section 5.2(b) above or 6.4(f)(ii), in each case after first subtracting [***].
7.5 IP Review by LTS. LTS shall review on a [***] basis the intellectual property rights relevant for LTS’ obligations hereunder. LTS shall give NeurogesX a confirmation in writing [***] a year (on or about [***] of each year) that, to the best of its actual knowledge, LTS does not infringe third parties’ intellectual property rights with respect to the Patches.
(a) In the event a Party becomes aware of a Blocking Patent, such Party shall [***] notify the other Party giving such [***] details as such Party may be aware, and
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
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the Parties shall discuss the situation in [***] and agree on a plan to address the situation, with the mutual objective of removing the risk posed by such Blocking Patent so that the Parties may continue performance under this Agreement, including if appropriate and agreed by the Parties, by licensing and/or challenging such Blocking Patent. In the event the Parties agree on a plan to address such Blocking Patent, the Parties shall designate a lead Party to use Reasonable Commercial Efforts to perform such plan. It is understood that the costs of any license obtained with respect to a Blocking Patent (to the extent allocable to the manufacture, use or sale of Patches hereunder) will be shared by the Parties in proportion to their indemnification obligations for IP Claims under Section 9.2. It is understood and agreed that notices, communications and discussions under this Section 7.6 shall not be construed as [***] by either Party. In addition, all notices, communications and discussions under this Section 7.6 shall be deemed protected by the [***].
(b) After discussing the matter in [***] as described in Section 7.6(a) above, LTS and NeurogesX shall each have the right to [***] under this Agreement with respect to the affected country upon written notice (“Notice of Suspension”), until the risk of infringing such Blocking Patent has been removed, including if a Party or a Sublicensee has obtained a license with respect to the Blocking Patent for such country, or otherwise if in the [***] opinion of the Suspending Party’s counsel, such risk is removed. In the event LTS elects to provide a Notice of Suspension, then such notice shall be deemed a “Failure Event” under Section 6.4(a) above, effective upon receipt of the Notice of Suspension, provided however that the Parties shall discuss resuming their obligations as foreseen in case of termination under Section 11.3.
(c) Notwithstanding the foregoing, in the event that upon receiving a Notice of Suspension, a Party disputes in good faith such notice, then the Party providing the Notice of Suspension may [***] its performance as set forth in this Section 7.6 if it can show by an opinion of an independent counsel, approved by the other Party (whose approval shall not be unreasonably withheld), that the determination of its counsel that a third party’s intellectual property right would be infringed is [***]. Such opinion shall also summarize the underlying facts. The Parties shall cooperate to ensure that all attorney-client privilege and work product privilege shall be protected with respect to the opinion. If the Party providing the Notice of Suspension does not propose an independent counsel, which is [***] to the other Party, then an independent counsel shall be appointed by the ICC International Centre for Expertise in accordance with the rules for Expertise of the International Chamber of Commerce. Such independent counsel shall be a [***].
ARTICLE 8
REPRESENTATIONS AND WARRANTIES; DISCLAIMER; LIMITATION OF LIABILITY
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
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(c) Confirmation of Cause of Defects. LTS shall have the right to examine any Patches rejected by NeurogesX, provided such examination shall not delay the shipping of replacement Patches. In the case LTS disagrees that the rejected Patches are subject to this Section 8.2, the claim may be submitted for tests and a decision by a mutually agreed upon, independent and reputable third party laboratory in the United States, which appointment shall not be unreasonably withheld or delayed by either Party. In making its determination, such laboratory shall take into consideration any evidence provided by LTS that the Patches complied with the Specifications at the time of shipment, and also any evidence provided by NeurogesX that the Patches were correctly handled and stored (i.e. in accordance with the Specifications) by NeurogesX and third parties under authority of NeurogesX. The determination of such laboratory shall be [***] upon the Parties. The Party against whom the determination is made shall be responsible for the [***], as well as the costs of the replacements for the rejected Patches at issue, including [***].
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
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ACTIVE INGREDIENT SUPPLIED HEREUNDER, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. THE WARRANTIES GIVEN UNDER THIS AGREEMENT ARE EXPRESSLY IN LIEU OF ALL OTHER WARRANTIES EXPRESS OR IMPLIED.
8.4 Limitation of Liability. EXCEPT WITH RESPECT TO ARTICLES 9 AS RELATED TO THIRD PARTIES, AND ARTICLE 10, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL, PUNITIVE, EXEMPLARY OR INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING TO THE SAME), ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER SUCH CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EVEN IF ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF SAME.
ARTICLE 9
9.2 Intellectual Property Claims.
(a) NeurogesX Caused. NeurogesX shall indemnify and hold harmless LTS from any third party claims, actions, proceedings alleging the infringement of any patent, trade secrets or other intellectual property of a third party (“IP Claims”), arising from LTS’ development, manufacturing, sale and using the Patches for or to NeurogesX, which IP Claims are caused by LTS’ use of any technology or intellectual property owned or supplied by NeurogesX.
(i) If either Party is sued for an alleged LTS Infringement, LTS is liable up to an amount of [***] incurred by NeurogesX in connection with the defense of such IP Claims, provided that this does not apply in the event that NeurogesX is sued for an alleged LTS Infringement in case the Patches being subject of such IP Claims were manufactured by a third party in accordance with Section 6.4. For all costs and expenses
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
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incurred by NeurogesX in defense of such IP Claims in excess of [***], NeurogesX is liable and shall indemnify and hold harmless LTS. In the event LTS is the Party sued for an alleged LTS Infringement, and LTS desires indemnification from NeurogesX, LTS shall [***] notify NeurogesX of the alleged LTS Infringement, permit NeurogesX [***] of the defense and/or settlement of the alleged LTS Infringement as requested (but LTS may participate in such defense and/or settlement with counsel of its choice and its own expense), and cooperate with NeurogesX with respect to such defense and settlement.
(ii) LTS agrees to automatically reduce the royalty rates under this Agreement by the royalty rate or other amounts a court may require NeurogesX to pay to a third party claiming a LTS Infringement in satisfaction of a judgment against NeurogesX, or by the royalty rate or other amounts owed by NeurogesX in any settlement of the LTS Infringement; provided, that in no event shall the royalty rate under this Agreement fall below [***]
(iii) In case of a final and non-appealable court judgment which prohibits NeurogesX from using or selling Patches as a result of an LTS Infringement, LTS shall reimburse NeurogesX for [***] of the Development Costs (as defined in the Clinical Supply Agreement). This obligation shall only be valid during the term of this Agreement.
(c) Sole Remedy for IP Claims. Notwithstanding any other provision of this Agreement, this Section 9.2 and Sections 3.9 and 7.6 and 11.3 state the entirety of each Party’s obligations to indemnify and/or hold harmless the other Party and the entirety of each Party’s remedy from the other Party, with respect to IP Claims arising from the development, manufacturing, sale and/or use of the Patches.
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
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notifies NeurogesX of the Claim, (ii) NeurogesX has sole control of the defense and/or settlement of the Claim (but LTS may participate in such defense and/or settlement with counsel of its choice and its own expense), and (iii) LTS fully cooperates with NeurogesX with respect to such defense and settlement.
(a) NeurogesX. Prior to [***] of the Patches, NeurogesX shall obtain and maintain during the term of this Agreement sufficient insurance coverage of an amount reasonable and customary in the pharmaceutical industry considering the nature of the Patch, which insurance coverage can also be self insurance.
ARTICLE 10
(a) was, at the time of disclosure, in the public domain,
(b) has subsequent to disclosure, become part of the public domain through no fault, act, omission, or violation by the receiving Party of the confidentiality obligations hereunder or under the MOU, the Secrecy Agreement dated of January 23, 2001 or the Clinical Supply Agreement,
(c) was, at the time of disclosure, in the possession of the receiving Party and not otherwise acquired, directly or indirectly, from the disclosing Party,
(d) has been developed independently by the receiving Party without access to the Confidential Information of the disclosing Party, or
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
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(e) has subsequent to disclosure been obtained by the receiving Party from any other third party, provided however, that it was not obtained by said third party, directly or indirectly, from the disclosing Party under any obligation of confidentiality.
10.2 It is understood that a specific item of the Confidential Information shall not be deemed to be within the exceptions set forth in Section 10.1 above, if it is merely embraced by more general Confidential Information within one of such exceptions.
10.3 Each receiving Party shall limit access to the Confidential Information from the disclosing Party to those of its officers, employees and consultants who need to know such Confidential Information for the purpose of this Agreement and who will be advised of the conditions of this Agreement. In case a receiving Party wishes to disclose Confidential Information to one of its consultants, it may only do so on a need to know basis and provided that such consultant agrees in writing to be bound to the terms of this Article 10 and gives LTS the right to enforce any breach of such an agreement.
10.4 Each receiving Party shall not use Confidential Information of the disclosing Party to contest or challenge any protected rights of, or applications for protection of rights by, the disclosing Party concerning such Confidential Information.
10.5 Permitted Uses and Disclosures.
(a) Performance of this Agreement. Each Party hereto may use Confidential Information of the other Party as is [***] necessary or to perform obligations hereunder or to exercise rights granted to it hereunder.
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
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law to make any such disclosure, other than pursuant to a confidentiality agreement, it will give reasonable advance notice to the other Party of such disclosure and, save to the extent inappropriate in the case of patent applications or the like, will use Reasonable Commercial Efforts to secure confidential treatment of such information.
ARTICLE 11
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infringing a Blocking Patent in such jurisdiction, the Parties shall discuss in good faith to resume their obligations (including the terms and conditions thereof) under this Agreement with respect to such country.
11.5 Survival. Sections 3.2, 3.8 (to the extent necessary to comply with the other Party’s legal obligations after expiration or termination), 3.9 (with respect to Patches supplied by LTS to NeurogesX prior to such expiration or termination), 6.2, 6.4, 6.5, 7.1, 7.2, 7.4 and Articles 1, 8 (with respect to Patches delivered by LTS under this Agreement), 9 (with respect to Patches delivered by LTS under this Agreement), 10, 11 and 12 shall survive any expiration or termination of this Agreement. Except as set forth in this Section 11.5, all other sections of this Agreement shall terminate upon any expiration or termination of this Agreement.
(a) Accrued Liabilities. Termination of this Agreement for any reason shall not release either Party hereto from any liability which at the time of such termination has already accrued to the other Party.
(b) Backup Manufacturing License. In the event of termination of this Agreement by NeurogesX under Section 11.4(a) or 11.2 or by LTS under Section 11.4(a) or 11.3 any time after NeurogesX has the right to exercise its Backup License the following Sections shall survive (in addition to those described in Section 11.5 above), Sections 5.3 (as it relates to Section 6.4), 6.4, and 7.3 shall survive such termination. For clarity, an election to have this Agreement expire after a Failure Event shall be treated as a termination of this Agreement under Section 11.4(a) by either or both Parties. In any other termination or expiration of this Agreement, Section 7.3 shall survive only with respect to infringement occurring prior to such termination or expiration.
(c) Pending Orders. In the event of any termination or expiration of this Agreement other than termination under Section 11.2, 11.3 or 11.4(a), unless otherwise mutually agreed, all pending orders for the Patches shall be cancelled, and NeurogesX shall reimburse LTS for the
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
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cost of Raw Materials and works-in-progress of Patches that cannot be used by LTS in the manufacture of products for its other clients, and such Raw Materials and works-in-progress shall be disposed of or transferred in accordance with NeurogesX’s instruction at NeurogesX’s expense. In the event of termination of this Agreement under Section 11.3 with respect to a country, unless otherwise mutually agreed, all pending orders for Patches specifically for such country shall be cancelled.
ARTICLE 12
(c) THE UNDERSIGNED PARTIES ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED AND AFTER CONSULTING WITH COUNSEL, KNOWINGLY AND VOLUNTARILY WAIVE ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT AND ANY AGREEMENT CONNECTED THERETO.
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consent is required in connection with a sale or transfer of all or substantially all of the assets, securities or business of the assigning Party whether by sale, merger, operation of law, reincorporation or otherwise.
| If to NeurogesX: | NeurogesX, Inc. | |
| San Xxxxxx Business Park, | ||
| 000X Xxxxxxxxxx Xxxx, | ||
| Xxx Xxxxxx, XX 00000 | ||
| Xxxxxx Xxxxxx of America | ||
| Attn: President | ||
| If to LTS: | LTS Xxxxxxx Therapie-Systeme AG, | |
| Xxxxxxxxxxxxx 0, | ||
| X-00000 Xxxxxxxxx, | ||
| Xxxxxxx | ||
| Attn: General Counsel | ||
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| NeurogesX, Inc. | LTS Xxxxxxx Therapie-Systeme AG | |||||||
| By: | /s/ Xxxxxxx XxXxxxx |
By: | /s/ Xxxx Xxxxxx | |||||
| Name: | Xxxxxxx XxXxxxx | Name: | Xxxx Xxxxxx | |||||
| Title: | President and Chief Executive Officer | Title: | Head of Sales and Marketing | |||||
| Date: 1-28-2207 | Date: January 19th, 2007 | |||||||
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Exhibits
| Exhibit A: | Transfer Price |
| Exhibit B: | VR1-Ligands |
| Exhibit C: | Patch Specifications |
| Exhibit D: | Active Ingredient Specifications |
| Exhibit E: | Quality Assurance Agreement |
| Exhibit F: | LTS Liability Insurance |
| Exhibit G: | Maximum Capacity |
| Exhibit H: | List of Patents/Patent Applications |
| Exhibit I: | Stability Testing |
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EXHIBIT A
TRANSFER PRICE
The prices represent delivery in bulk, printing on front side of the pouch in [***] colours and lacquer and backside as random print in one colour.
Above [***] patches [***] : [***] / Patch
Above [***] patches [***] : [***] / Patch
Above [***] patches [***] : [***] / Patch
Above [***] patches [***] : [***] / Patch
Above [***] patches [***] : [***] / Patch
All prices are Ex Works Andernach plus prospective legal taxes.
The minimum quantity per label version is [***] pieces each.
Annual minimum volume: [***] Patches
Product description:
Patch Size: [***]
Consisting of: [***]
Coated with: [***]
Covered by: [***]
Punched: [***]
Packed in: [***]
Theoretical Batch size: [***] Patches based on mass preparation of [***]
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
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EXHIBIT B
VR1-LIGANDS
[***]
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
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EXHIBIT C
PATCH SPECIFICATIONS
[Information in the Patch Specifications will be updated with information from final
marketing approval including packaging information. Specifications will also include
compliance with GMP and all applicable laws and regulations]
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EXHIBIT D
ACTIVE INGREDIENT SPECIFICATIONS
[to be attached]
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EXHIBIT E
QUALITY ASSURANCE AGREEMENT
[to be attached]
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EXHIBIT F
LTS LIABILITY INSURANCE
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| Versicherungsbestätigung | Confirmation of Insurance | |
| Art der Versicherung
Betriebs-Haftpflichtversicherung inkl. Produkthaftpflicht (Grundvertrag)
|
Type of Cover
General Liability, including products liability (Primary) | |
| Summen-Anschlußversicherungen | Excess-Layers | |
| Versicherungsschein Nr.
[***] |
Policy No.
[***] | |
| Versicherungenehmer | Named insured | |
| LTS Xxxxxxx Therapie-Systeme XXXxxxxxxxxx. 0 00000 Xxxxxxxxx |
||
| Versicherungsbeginn
[***] |
Inception
[***] | |
| Versicherungsablauf
[***] Uhr MEZ Der Verträge verlängern sich still-schweigend um ein Jahr, sofem diese nicht unter Einhaltung einer drei-monatigen Kon-digungsfrist vor dem Ablauf von einem der Vertragspartelen schriftlich gekündigt werden. |
Expiry
[***] The policies will be automatically renewed for a further year, unless one of the contracting parties gives written notice three months before the date of expiration | |
| Örtlicher Geltungsbereich
[***] |
Policy Territory
[***] | |
| Deckungssummen
[***] |
Limits of Indemnity
[***] | |
| Betriebshaftpflicht EUR 10.000.000,00
[***] |
General Liability
[***] | |
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| Rechts - und Gerichtsstand
[***] |
Governing Law and Jurisdiction
. [***] | |
| Hinweis
[***] |
Annotation
[***] | |
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
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| Bestätigung der Versicherer:
[***] |
Confirmation of Insurer:
[***] | |
| XL Insurance Company Ltd. Direction of Germany München |
||
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
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| Bestätigung der Versicherer:
[***] |
Confirmation of Insurer:
[***] | |
| Xxxxxxx Allgemeine Versicherungs-AG Düsseldorf |
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
-48-
EXHIBIT G
MAXIMUM CAPACITY
The maximum capacity is [***] Patches per year.
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
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EXHIBIT H
LIST OF PATENTS/PATENT APPLICATIONS
Mikroreservoirsystem
Familie: 19930340
| Country | EP | WO | File-No | Priority date | Patent-No | granted | Status | |||||||
| AR P | [***] |
[***] |
[***] |
applied | ||||||||||
| AT P | EP | WO | [***] |
[***] |
[***] |
12.03.03 | granted | |||||||
| AU P | WO | [***] |
[***] |
[***] |
11.11.04 | granted | ||||||||
| BE P | EP | WO | [***] |
[***] |
[***] |
12.03.03 | granted | |||||||
| BR P | WO | [***] |
[***] |
[***] |
applied | |||||||||
| CA P | WO | [***] |
[***] |
[***] |
applied | |||||||||
| CH P | EP | WO | [***] |
[***] |
[***] |
12.03.03 | granted | |||||||
| CN P | WO | [***] |
[***] |
[***] |
applied | |||||||||
| CZ P | WO | [***] |
[***] |
[***] |
applied | |||||||||
| DE P | EP | WO | [***] |
[***] |
[***] |
12.03.03 | granted | |||||||
| DK P | EP | WO | [***] |
[***] |
[***] |
12.03.03 | granted | |||||||
| EP P | WO | [***] |
[***] |
[***] |
12.03.03 | granted | ||||||||
| ES P | EP | WO | [***] |
[***] |
[***] |
12.03.03 | granted | |||||||
| FI P | EP | WO | [***] |
[***] |
[***] |
12.03.03 | granted | |||||||
| FR P | EP | WO | [***] |
[***] |
[***] |
12.03.03 | granted | |||||||
| GB P | EP | WO | [***] |
[***] |
[***] |
12.03.03 | granted | |||||||
| GR P | EP | WO | [***] |
[***] |
[***] |
12.03.03 | granted | |||||||
| HK P | WO | [***] |
[***] |
[***] |
applied | |||||||||
| HU P | WO | [***] |
[***] |
[***] |
applied | |||||||||
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
-50-
| XX X | EP | WO | [***] | [***] | [***] | 12.03.03 | granted | |||||||
| IL P | WO | [***] | [***] | [***] | applied | |||||||||
| IN P | WO | [***] | [***] | [***] | applied | |||||||||
| IT P | EP | WO | [***] | [***] | [***] | 12.03.03 | granted | |||||||
| JP P | WO | [***] | [***] | [***] | applied | |||||||||
| KR P | WO | [***] | [***] | [***] | applied | |||||||||
| LU P | EP | WO | [***] | [***] | [***] | 12.03.03 | granted | |||||||
| MX P | WO | [***] | [***] | [***] | applied | |||||||||
| NL P | EP | WO | [***] | [***] | [***] | 12.03.03 | granted | |||||||
| NZ P | WO | [***] | [***] | [***] | 06.10.03 | granted | ||||||||
| PH P | [***] | [***] | [***] | applied | ||||||||||
| PL P | WO | [***] | [***] | [***] | applied | |||||||||
| PT P | EP | WO | [***] | [***] | [***] | 12.03.03 | granted | |||||||
| RU P | WO | [***] | [***] | [***] | applied | |||||||||
| SE P | EP | WO | [***] | [***] | [***] | 12.03.03 | granted | |||||||
| TR P | WO | [***] | [***] | [***] | 22.07.02 | granted | ||||||||
| TW P | [***] | [***] | [***] | applied | ||||||||||
| ZA P | WO | [***] | [***] | [***] | 24.12.02 | granted | ||||||||
| DE P | [***] | [***] | [***] | 13.06.02 | granted | |||||||||
| TW P | [***] | [***] | [***] | applied | ||||||||||
| US P | WO | [***] | [***] | [***] | applied | |||||||||
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
-51-
Capsaicinpflaster
Familie: 2003/103
| Country | EP | WO | File-No | Priority date | Patent-No | granted | Status | |||||||
| WO P |
[***] | [***] | [***] | applied | ||||||||||
| US P |
[***] | [***] | [***] | applied | ||||||||||
***Certain information on this page has been omitted and filed separately with the Commission. Confidential treatment has been requested with respect to the omitted portions.
-52-
EXHIBIT I
STABILITY TESTING PROGRAM
[To be completed and attached]
-53-