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EXHIBIT 10.15
INTELLECTUAL PROPERTY AGREEMENT
This Intellectual Property Agreement (this "Agreement") is made and
entered into as of this 18th day of July, 1996, among Xxxx X. Xxxxx, Ph.D.
("Xxxxx") and Xxxxxx Pharmaceuticals, Inc. ("Xxxxxx").
Whereas Xxxxxx and Xxxxx have entered into a Release, Exit and
Consulting Agreement (the "Consulting Agreement") dated as of even date
herewith;
Whereas prior to the effective date of the Consulting Agreement Xxxxx
served as Chairman of the Board of Xxxxxx, was an employee of Xxxxxx and/or its
affiliates including without limitation Xxxxxx Laboratories, Inc. and Circa
Pharmaceuticals, Inc.;
Whereas in connection with such employment, on or about December 21,
1992, Xxxxx executed Xxxxxx'x Employee Invention and Confidential Information
Agreement ("EICI Agreement") which obligates Xxxxx to disclose and assign
Inventions (as that term is defined in the EICI Agreement) conceived or reduced
to practice by Xxxxx;
Whereas during the term of Keith's employment, Xxxxx conducted research
in the field of a High Density Dosage Form designed to pass through the GI Tract
slower than is generally expected (such High Density Dosage Form is referred to
herein as "HDDF");
Whereas an invention using the research in the field of HDDF has been
reduced to practice (the "HDDF Invention") and is now the subject of a U.S.
Patent Application (attached hereto as Exhibit A and incorporated herein by this
reference); and
Whereas Xxxxxx wishes to assign to Xxxxx all of Xxxxxx'x rights with
respect to the HDDF Invention on the terms and subject to the conditions
contained in this Agreement;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Assignment: Xxxxxx on behalf of itself and all its affiliates hereby assigns
to Xxxxx all of Xxxxxx'x interest in Keith's research in the field of HDDF (the
"HDDF Research") and Xxxxxx'x and all its affiliates's interest in the HDDF
Invention.
2. Formation of Corporation: Xxxxx shall organize and incorporate a corporation
pursuant to the laws of the state of Delaware. Such corporation and any and all
other corporation(s), partnership(s) or other entity(s) that Xxxxx xxx establish
or utilize, either directly or indirectly, alone or with others, which is (are)
based upon, which exploits, or which utilizes the HDDF Research or the HDDF
Invention is referred to herein as the "Corporation". The purposes of the
Corporation shall include:
(i) the development, commercialization, manufacture, and marketing
of products and services based on the HDDF Research or the HDDF Invention
or any improvements, enhancements or additions thereto or modifications or
derivations thereof;
(ii) the filing, prosecution, holding, licensing and enforcement of
patents based on the HDDF Research or the HDDF Invention or any
improvements, enhancements or additions thereto or modifications or
derivations thereof; and
(iii) the performing of other acts reasonably necessary for the
profitable exploitation of the HDDF Research or the HDDF Invention or any
improvements, enhancement or additions thereto or modifications or
derivations thereof.
4. Distribution of Shares to Xxxxxx: In consideration of Xxxxxx'x assignment
hereunder, the parties hereby agree that upon incorporation of the Corporation,
Xxxxxx shall receive, without further consideration, a nineteen and ninety-nine
one hundredths percent (19.99%) ownership interest in the Corporation. Such
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ownership by Xxxxxx in the Corporation may, if so requested by Xxxxxx, be
subject to a shareholder's agreement reasonably acceptable to the parties.
Xxxxxx'x ownership interest shall be subject to dilution to reflect future
issuances for value of shares in any Xxxxx Corporation. In the event that no
Corporation is established by Xxxxx, then Xxxxxx shall nonetheless have a
nineteen and ninety-nine one hundredths percent (19.99%) ownership interest in
the HDDF Research and HDDF Invention. Collectively Xxxxx and Corporation are
referred to herein as Xxxxx Corporation. The obligations of Xxxxx Corporation
shall be jointly and severally the obligations of Xxxxx and Corporation.
5. Ratification: Upon the incorporation of the Corporation, the Corporation
shall, by resolution of its board of directors, ratify, adopt and become a party
to this Agreement, and shall thereupon cause to be issued the shares of stock to
be issued to Xxxxxx hereunder and to perform such other acts as may be required
to effect the provisions of this Agreement.
6. License to Xxxxxx: Xxxxx hereby grants to Xxxxxx, and hereby represents and
warrants that Corporation will grant to Xxxxxx, the exclusive, unlimited,
worldwide right and license to develop, manufacture, have manufactured, use,
market, have marketed, sell and have sold (2) Products (as herein defined) using
the HDDF Invention and selected by Xxxxxx as provided in Section 7. All
differing strengths and dosages and country-specific variations of a particular
drug entity or entities shall constitute one Product. Xxxxxx'x right and license
includes the right to grant sublicenses to third parties on such terms as are
consistent with the provisions of this Agreement. The right and license granted
herein shall apply to all inventions, improvements, patent applications and
letters patent, which Xxxxx Corporation now owns or controls, or hereafter may
own or control, and which relate to the HDDF Invention. "Product" as used in
this Agreement shall mean any drug entity or entities incorporated into a dosage
form that has completed the necessary registration and approvals by a drug
regulatory agency of a recognized government.
7. Xxxxxx to be Kept Informed: Not less than once per calendar quarter, Xxxxx
Corporation shall keep the CEO of Xxxxxx apprised of suitable drug entities that
can successfully be incorporated into the HDDF Invention and the general
findings of the research relating to the HDDF Invention and HDDF Research.
Xxxxxx shall have the sole right to select the two (2) Products contemplated by
Section 6 from the drug entities by providing written notice to Xxxxx.
8. Patent Filing, Maintenance and Extension
X. Xxxxx Corporation shall (i) prosecute all patent applications
constituting the HDDF Invention at Xxxxx Corporation's sole cost and
expense, (ii) keep Xxxxxx fully and promptly informed of the status
of the prosecution of such applications.
B. During the term of this Agreement, Xxxxx Corporation shall take
all steps and pay all expenses necessary to maintain the patents on
the HDDF Research and HDDF Invention for the full lives thereof.
X. Xxxxxx shall have the right, upon consultation with Xxxxx
Corporation, to file on behalf of and as agent for Xxxxxx, all
applications and to take all actions necessary (i) to obtain the
benefits under the Drug Price Competition and Patent Term
Restoration Act of 1984 and any amendments thereof and (ii) to
extend the lives of the patents on the HDDF Invention to the extent
permitted by any other law through, among other things, applications
for patent extension certificates. Xxxxx Corporation agrees to
execute and deliver such further authorizations and instruments and
to take such further actions as may be requested by Xxxxxx to
implement the foregoing.
9. Xxxxxx to Pursue Development of Selected Products without Delay: For any
Product selected by Xxxxxx, Xxxxxx agrees to undertake the developmental process
to pursue the development of the Product without undue loss of time. If Xxxxxx
shall not make any progress or not devote any attention to the Product for a
period of three years, then Xxxxxx shall forfeit its exclusive rights to that
selected Product, but such selected Product shall still count as a selected
Product for purposes of Sections 6 and 7.
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10. Royalties: In the event Xxxxxx completes the development of a selected
Product and markets said Product, then Xxxxxx shall pay to Xxxxx Corporation ten
percent (10%) of net sales. If Xxxxxx licenses the Product to a third party,
then Xxxxxx shall pay to Xxxxx Corporation twenty five percent (25%) of any
payments or royalties received by Xxxxxx pursuant to such agreement. Payments of
royalties from Xxxxxx to Xxxxx Corporation shall be made on a quarterly basis,
within 30 days of the end of each quarter in which royalties have accrued.
All royalties due hereunder shall be paid in U.S. Dollars. All royalties
for an accounting period computed in other currencies shall be converted into
U.S. Dollars at the buying rate for the transfer of such other currencies to
U.S. Dollars as quoted by Bank of America on the last day of such accounting
period, or the business day thereafter if such last day shall be a Saturday,
Sunday or holiday.
11. Books and Records: Xxxxxx agrees that it will keep complete, true and
correct books of account containing a current record of sales and licenses and
other data in sufficient detail to enable the royalties payable under this
Agreement to be computed and verified. Xxxxxx further agrees to permit Xxxxx
Corporation, its duly authorized agents or an independent certified public
accountant to have access, upon reasonable notice, for the inspection and/or to
make copies of said books of account at reasonable intervals during business
hours.
12. Right of First Negotiation for Future Projects: In addition to the rights
granted pursuant to Section 12, Xxxxx Corporation agrees to offer Xxxxxx the
first opportunity to negotiate with Xxxxx Corporation for the exclusive right to
develop, manufacture, have manufactured, use, market, have marketed, sell, and
have sold any products or technology, other than products or technology based
upon HDDF Research, initiated during Keith's tenure at Xxxxxx and developed by
Xxxxx Corporation ("Future Projects"). Xxxxx Corporation will notify Xxxxxx of
each Future Project such that Xxxxxx shall have at least fifteen (15) days
during which time to consider whether Xxxxxx wishes to pursue such Future
Project. Within fifteen (15) days after receipt of notice of a Future Project,
Xxxxxx shall, if it desires to pursue negotiations with respect to such Future
Project, notify Xxxxx Corporation of such desire. Xxxxx Corporation shall then
refrain from negotiating such Future Project with any entity other than Xxxxxx
for a period of sixty (60) days. During such sixty (60) day period the parties
shall engage in exclusive, good faith negotiations regarding the Future Project.
If such negotiations do not result in a definitive agreement within the sixty
(60) day period, the exclusive negotiation period shall terminate and Xxxxx
Corporation shall be entitled to pursue negotiations with respect to the Future
Projects with third parties.
13. Term: This Agreement shall remain and continue in full force and effect for
a period of 5 years from the date first above written or if letters patent issue
on the HDDF Invention then for the full life of the last to expire of such
letters patent, whichever is later; provided, however, the rights and licenses
granted to Xxxxxx hereunder shall continue for the full term thereof, but
subject to the following:
A. If Xxxxxx shall commit a breach of any duty to be performed or
observed by it hereunder and shall not remedy such breach within
sixty (60) days after written notice to do so is given to it by
Xxxxx Corporation, or if Xxxxxx assigns or make any disposition of
its assets for the benefit of its creditors, becomes insolvent, goes
into liquidation or becomes bankrupt, whether by voluntary or
involuntary action, or if all or a substantial part of Xxxxxx'x
business or assets is assigned or becomes subject to judicial or
governmental management, then and in any one of such events Xxxxx
Corporation by notice in writing to Xxxxxx may terminate forthwith
this Agreement. If Xxxxxx terminates this Agreement pursuant to this
Section 13.A., the license granted to Xxxxxx hereunder shall survive
the termination of this Agreement.
B. If Xxxxx Corporation shall commit a breach of any duty to be
performed or observed by it hereunder and shall not remedy such
breach within sixty (60) days after written notice to do so is given
to it by Xxxxxx, or assigns or makes any disposition of its assets
for the benefit of its creditors, becomes insolvent, goes into
liquidation or becomes bankrupt, whether by voluntary or involuntary
action, or if all or a substantial part of Xxxxx Corporation's
business or assets is voluntarily or involuntarily assigned or
becomes subject to judicial or governmental management, then and in
any one of such events Xxxxxx by notice in writing to Xxxxx
Corporation may terminate forthwith this Agreement, however, the
assignment made pursuant to Section 1 shall survive such
termination.
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14. Ownership of Patents: All patents resulting from Xxxxx Corporation
inventions, developments, discoveries, improvements or ideas shall be the sole
and exclusive property of Xxxxx Corporation, subject to the license granted
pursuant to this Agreement. Xxxxx Corporation shall, upon demand, execute and
deliver to Xxxxxx such documents as may be deemed necessary or advisable by
counsel for Xxxxxx for filing in the appropriate patent offices to evidence the
granting of the license granted hereunder.
15. New Inventions: If during the term of this Agreement, Xxxxx Corporation
makes any further improvements in the HDDF Invention or the mode of using it, or
becomes the owner(s) of any new improvement(s) in the HDDF Invention either
through patent(s) or otherwise, then Xxxxx Corporation shall communicate such
improvement(s) to Xxxxxx and Xxxxxx shall have the right to include the same in
this Agreement without additional compensation.
16. Representations of Xxxxx: Xxxxx represents the following:
A. That the HDDF Invention is secret and has not been revealed to
anyone, except Xxxxxx, current Xxxxxx employees and Keith's patent
attorney;
B. That upon execution of this Agreement Xxxxx is the exclusive owner
of all rights to the HDDF Invention; and
C. That Xxxxx has at no time filed, or caused to be filed, patent
applications other than the Application attached as Exhibit A, or
obtained in his name, or caused to be obtained in the name of
others, any letters patent in the United States or elsewhere, based
on or relating to the HDDF Invention or the HDDF Research.
D. That Xxxxx knows of no statutory bars or prior art which would
prevent the HDDF Invention from being the subject of one or more
United States Letters Patent.
17. Representations of Xxxxxx: Xxxxxx represents the following:
That neither Xxxxxx nor any of its affiliates have made any previous
assignment of Xxxxxx'x interest in the HDDF Research and HDDF Invention.
18. Most Favored Nations Clause: In the event that Xxxxx Corporation enters into
an agreement with a third party granting a licensee comparable business terms to
the license granted to Xxxxxx herein but containing royalty terms more favorable
to the third party than those contained herein, the Xxxxx Corporation shall
notify Xxxxxx of such grant and such more favorable royalty terms and Xxxxxx
shall have the right to elect to replace the royalty terms contained herein with
such more favorable royalty terms.
19. Infringement: Xxxxx Corporation shall defend, at its own expense, all
infringement suits that may be brought against Xxxxxx or its sublicensees based
on or related to the manufacture, use or sale of the Products based on or using
the HDDF Invention. In the event any information is brought to the attention of
Xxxxx Corporation that others without benefit of a license are infringing any of
the rights granted pursuant to this Agreement, Xxxxx Corporation shall, at its
own expense, diligently prosecute all such infringers. In any of the foregoing
suits, Xxxxxx may, at Xxxxxx'x expense, be represented by counsel of its own
choice.
20. Indemnification: During the course of this Agreement, Xxxxx Corporation
shall indemnify and hold Xxxxxx harmless from any and all liabilities, claims,
damages and expenses (including attorneys' fees) arising out of the HDDF
Research, HDDF Invention or Products; provided, however, that Xxxxx Corporation
shall not so indemnify Xxxxxx for product liability claims from manufacturing
defects or testing deficiencies in the Products resulting from Xxxxxx'x
negligence or intentional wrong-doing. During the course of this Agreement,
Xxxxxx shall indemnify and hold Xxxxx Corporation harmless from any and all
liabilities, claims, damages and expenses (including attorneys' fees) for
product liability claims resulting from Xxxxxx'x negligence or intentional
wrong-doing with respect to the Products.
In the event either party incurs, or expects to incur any liabilities,
expenses, damages or claims for which it intends to seek indemnification
from the other party, the party claiming indemnification
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("Indemnitee") shall promptly so notify the other party ("Indemnitor") in
writing. The omission so to notify the Indemnitor will not relieve the
Indemnitor from any liability which it may otherwise have to the Indemnitee
unless such Indemnitor is materially prejudiced by the failure to give such
notice. Upon such notification, the Indemnitor will be entitled to participate
in any such claim or suit and to assume the defense and settlement thereof, with
counsel of its own choice. After notice from the Indemnitor to the Indemnitee of
the Indemnitor's election to assume such defense, the Indemnitor shall not be
liable to the Indemnitee under this Section 20 for any legal fees subsequently
incurred by the Indemnitee in connection with such defense. The Indemnitee will
permit the Indemnitor, at the Indemnitor's sole discretion, to settle any such
claim or suit; provided, however, that the Indemnitor, without the written
consent of the Indemnitee, may not settle any such claim or suit, which
settlement would have an adverse effect on the Indemnitee. The Indemnitee, its
employees and agents, shall cooperate fully with the Indemnitor and its legal
representatives in the investigation and defense of any claims or suits covered
by the indemnification provisions of this Section 19.
Notwithstanding the provisions set forth in this Section 19, the
Indemnitor hereunder shall not have any liability or obligation to indemnify or
hold harmless the Indemnitee to the extent that the Indemnitee has received
payment under an insurance policy for any liabilities, claims, damages and
expenses (including attorneys' fees). In the event that the Indemnitee has been
indemnified by the Indemnitor hereunder against any liabilities for which such
Indemnitee subsequently receives payment under an insurance policy, such
Indemnitee shall apply the proceeds received by it from such insurance payment
to repay to such Indemnitor all amounts paid by such Indemnitor for any
liabilities described herein.
20. Xxxxx Corporation's Continued Responsibility: Xxxxx Corporation's
responsibility under this Agreement includes the requirement to continue to
provide special expertise relative to the development of the Products, as
required, in order to assist in the objective of developing commercially viable
Products for Xxxxxx.
21. Notice:
A. All notices pursuant to this Agreement shall be in writing and
shall be delivered personally or sent postage prepaid by registered
or certified mail, return receipt requested, or by telefacsimile or
by a nationally recognized overnight courier such as Federal Express
and addressed to the other party as follows:
If to Xxxxxx: Xxxxxx Pharmaceuticals, Inc.
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: President
fax: 000-000-0000
If to Xxxxx or Corporation:
Xx. Xxxx Xxxxx
00000 Xxxxxxxxxxx Xxxx
Xx Xxxxxx, XX 00000
B. All properly addressed notices shall be deemed given on the date
of delivery (or the next business day if delivered on a weekend or
holiday) if delivered personally or by confirmed telefacsimile, and
shall be deemed given on the date three (3) business days after the
postmark date if delivered by U.S. mail or one (1) business day
after being sent by overnight courier. Any notice of change of
address shall be prospective only.
22. Assignment: Except for the assignment of the HDDF Invention and HDDF
Research by Xxxxx to the Corporation as contemplated herein, Xxxxx Corporation
shall not have the right to assign this Agreement or any rights granted to Xxxxx
Corporation hereunder without the prior written consent of Xxxxxx which shall
not be unreasonably withheld. This Agreement and the rights and licenses granted
to Xxxxxx hereunder may be assigned only to a successor in interest of the
entire or of a substantial portion of the business of Xxxxxx.
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23. General Provisions:
A. This Agreement sets forth the entire agreement between the
parties with respect to the subject matter hereof.
B. There are no representations or covenants, express or
implied, or other than those set forth herein.
C. This Agreement may be amended or modified only by a writing
signed by both parties.
D. This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit
of the parties hereto and their respective successors and assigns.
E. If any provision of this Agreement is adjudicated by a
court of competent jurisdiction as void, invalid or inoperative, such
decision shall not affect any other provision hereof, and the remainder
of this Agreement shall be effective as though such void, invalid or
inoperative provision had not been contained herein.
F. Nothing contained herein shall create a partnership, agency
or joint venture between the parties. Neither party to this Agreement
may bind the other party by its actions except as expressly provided
herein.
G. This Agreement shall not be deemed to give any right or
remedy to any third party whatsoever unless specifically set forth in
this Agreement.
H. In the event of any action, suit or proceeding arising from
or based upon this Agreement brought by either party hereto against the
other, the prevailing party shall be entitled to recover from the other
its reasonable attorneys' fees in connection therewith in addition to
the costs of that action, suit or proceeding.
I. The paragraph headings herein are solely for the purpose of
convenience and shall be disregarded in the interpretation of this
Agreement or any of its terms.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
XXXXXX PHARMACEUTICALS, INC. XXXX X. XXXXX, Ph.D.
By: /s/ Xxxxx Xxxx By: /s/ Xxxx X. Xxxxx
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Title: CEO and Chairman Alec. X. Xxxxx, Ph.D.
