Exhibit 10.28
AMENDED AND RESTATED
LICENSE AND RESEARCH AND DEVELOPMENT AGREEMENT
BETWEEN
REVOTAR BIOPHARMACEUTICALS AG, registered in the commercial register of
the local court of Neuruppin HRB 5951 represented by its CEO, Xx. Xxxxxx
Xxxxxxxx
- referred to as "Revotar" -
and
TEXAS BIOTECHNOLOGY CORPORATION, represented by its President and C.E.O.
Xx. Xxxxx X. Given, 7000 Xxxxxx, XXX XX 00000 Houston,
referred to as "TBC" -
TABLE OF CONTENTS
PAGE
----
1. DEFINITIONS .......................................................................... 1
1.1 "AFFILIATE" ................................................................. 1
1.2 "CASH EQUIVALENTS" .......................................................... 2
1.3 "COMPOUND" .................................................................. 2
1.4 "CONFIDENTIAL INFORMATION" .................................................. 2
1.5 "COPD" ...................................................................... 2
1.6 "COST OF GOODS SOLD" OR "COGS" .............................................. 2
1.7 "DEVELOPMENT COSTS" ......................................................... 2
1.8 "DEVELOPMENT PROGRAM" ....................................................... 3
1.9 "DISTRIBUTION COSTS" ........................................................ 3
1.10 "EFFECTIVE DATE" ............................................................ 3
1.11 "EUROPEAN MARKET" ........................................................... 4
1.12 "FDA" ....................................................................... 4
1.13 "FIELD OF USE" .............................................................. 4
1.14 "FIRST COMMERCIAL SALE" ..................................................... 4
1.15 "GROSS RECEIPTS" ............................................................ 4
1.16 "IND" ....................................................................... 4
1.17 "IMPROVEMENTS" .............................................................. 4
1.18 "LICENSING TRANSACTION" ..................................................... 4
1.19 "MANUFACTURING COSTS" ....................................................... 5
1.20 "NDA ........................................................................ 5
1.21 "NET INCOME ................................................................. 6
1.22 "NET SALES" ................................................................. 6
1.23 "NEW INDICATIONS" ........................................................... 6
1.24 "NORTH AMERICA .............................................................. 6
1.25 "PRA" ....................................................................... 6
1.26 "PARTICIPATION AGREEMENT" ................................................... 6
1.27 "PATENTS" ................................................................... 6
1.28 "PHASE I CLINICAL TRIALS" ................................................... 7
1.29 "PHASE II CLINICAL TRIALS" .................................................. 7
1.30 "PHASE III CLINICAL TRIALS" ................................................. 7
1.31 "PRODUCT" ................................................................... 7
1.32 "PRODUCT EBITDA" ............................................................ 7
1.33 "PROJECT REPRESENTATIVE" .................................................... 7
1.34 "SUBJECT TECHNOLOGY" ........................................................ 8
1.35 "TBC1269 PROGRAM" ........................................................... 8
1.36 "TECHNOLOGY" ................................................................ 8
1.37 "TERRITORY" ................................................................. 8
1.38 "THIRD PARTY" ............................................................... 8
1.39 "WORK PLAN" ................................................................. 8
1.40 "WORLDWIDE LICENSE" ......................................................... 9
2. LICENSE TO REVOTAR ................................................................... 9
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PAGE
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2.1 EXCLUSIVE LICENSE FOR THE TERRITORY ......................................... 9
2.2 RIGHT OF REVOTAR AND TBC TO GRANT SUBLICENSES ............................... 9
2.4 RIGHTS AND DUTIES IN CONNECTION WITH A LICENSING TRANSACTION TO A THIRD PARTY 10
3. DEVELOPMENT PROGRAM .................................................................. 10
3.1 GOALS ....................................................................... 10
3.2 PROGRAM ADMINISTRATION ...................................................... 13
3.3 PERFORMANCE OF SERVICES ..................................................... 16
3.4 RECORDS AND DATA ............................................................ 16
3.5 VISIT OF FACILITIES ......................................................... 17
4. PAYMENTS AND REPORTS ................................................................. 17
4.1 Development Funding ......................................................... 17
4.2 ROYALTIES ................................................................... 18
4.3 AUDIT RIGHTS ................................................................ 21
4.4 PAYMENT CURRENCY ............................................................ 22
4.5 PAYMENT MECHANICS ........................................................... 23
5. COMMERCIALIZATION .................................................................... 24
5.1 TBC TO MANUFACTURE .......................................................... 24
5.2 REVOTAR AND TBC TO SELL IN TERRITORY AND NORTH AMERICA, RESPECTIVELY ........ 24
5.3 SUBLICENSING ................................................................ 25
6. TBC REPRESENTATIONS AND WARRANTIES ................................................... 25
6.1 NO THIRD PARTY AGREEMENTS ................................................... 25
6.2 NO THIRD PARTY RIGHTS ....................................................... 25
7. PROPRIETARY RIGHTS ................................................................... 27
7.1 IMPROVEMENTS ................................................................ 27
7.2 PATENT PROSECUTION AND MAINTENANCE .......................................... 27
7.3 THIRD PARTY CLAIM OF INFRINGEMENT ........................................... 29
7.4 INFRINGEMENT BY THIRD PARTIES ............................................... 30
8. CONFIDENTIALITY ...................................................................... 31
8.1 GENERAL ..................................................................... 31
8.2 DISCLOSURE OF AGREEMENT ..................................................... 32
9. INDEMNIFICATION ...................................................................... 33
9.1 MUTUAL RIGHT TO INDEMNIFICATION ............................................. 33
9.2 PROCEDURE ................................................................... 34
9.3 PRODUCT LIABILITY INSURANCE ................................................. 35
10. TERM AND TERMINATION ................................................................. 35
10.1 LICENSE TERM ................................................................ 35
10.2 TERMINATION FOR BREACH ...................................................... 36
10.3 TERMINATION FOR FAILURE TO PROCEED .......................................... 36
10.4 SURVIVAL OF OBLIGATIONS ..................................................... 38
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PAGE
11. MISCELLANEOUS ........................................................................ 38
11.1 FORCE MAJEURE ............................................................... 38
11.2 RELATIONSHIP OF THE PARTIES ................................................. 39
11.3 NOTICES.: ................................................................... 39
11.4 SUCCESSORS AND ASSIGNS ...................................................... 39
11.5 AMENDMENTS AND WAIVERS ...................................................... 40
11.6 GOVERNING LAW ............................................................... 40
11.7 DISPUTE RESOLUTION .......................................................... 40
11.8 SEVERABILITY ................................................................ 42
11.9 HEADINGS .................................................................... 42
11.10 EXECUTION IN COUNTERPARTS ................................................... 42
11.11 ENTIRE AGREEMENT ............................................................ 42
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AMENDED AND RESTATED
LICENSE AND RESEARCH AND DEVELOPMENT AGREEMENT
This Amended and Restated License and Research and Development Agreement is
entered into on this day of January 24, 2003, between Texas Biotechnology
Corporation, a Delaware corporation ("TBC"), and Revotar Biopharmaceuticals AG,
a German stock company.
R E C I T A L S
A. TBC and Revotar entered into a License and Research and Development
Agreement dated July 21, 2000 (the "License Agreement").
B. TBC and Revotar wish to amend and restate the License Agreement pursuant
to this Amended and Restated License and Research and Development
Agreement (the "Agreement").
In consideration of the foregoing and the mutual promises and covenants
contained in this Agreement, the parties hereto agree to amend and restate the
License Agreement in its entirety effective as of the date hereof as follows:
1. DEFINITIONS.
The following capitalized terms used herein shall have the respective meanings
set forth below. The accounting terms used but not defined herein shall have the
meanings ascribed to them under U.S. Generally Accepted Accounting Principles.
Certain other capitalized terms are defined elsewhere in this Agreement.
1.1 "AFFILIATE" means a person or entity that directly or indirectly
controls, is controlled by or is under common control with, a party
to this Agreement. "Control" (and, with correlative meanings, the
terms "controlled by" and "under common control with") means, in the
case of a corporation, the ownership of more than 50% of the
outstanding voting securities thereof or the right to acquire
such securities within 60 days and, in the case of any other type of
entity (including without limitation joint ventures), an interest
that results in the ability to direct or have a significant impact
on the direction of the management and policies of such entity or a
significant ownership position of no less than 25%.
1.2 "CASH EQUIVALENTS" means cash or other instrument which is
convertible into cash including equity in a Third Party valued as
follows: the value of securities that are freely tradable in an
established market will be determined by taking the average of the
closing market price for the 10 trading days prior to the execution
of an agreement, and the value of securities that are not freely
tradable shall be the fair market value thereof as determined by
Revotar and TBC.
1.3 "COMPOUND" means the compound owned by TBC and known as TBC1269, and
any salt forms thereof, and any Improvements thereon.
1.4 "CONFIDENTIAL INFORMATION" means all proprietary information
communicated to, learned of, developed or otherwise acquired by
either party separately or jointly under this Agreement.
1.5 "COPD" means chronic obstructive pulmonary disease.
1.6 "COST OF GOODS SOLD" OR "COGS" means TBC's total Manufacturing Costs
plus 10% of the Manufacturing Costs.
1.7 "DEVELOPMENT COSTS" means (a) the direct costs, fees and
out-of-pocket or other expenses incurred in the course of performing
the work under the Development Program (b) overhead allocable to
development and (c) the amount paid to Third Parties to acquire
goods and services for the development work, whether or not
completed. Overhead allocated to development shall be limited to (i)
a reasonable
2
allocation of the cost of employees who have a direct relationship
with the Development Program, but who are not classified as direct
labor, which allocation shall be based on each such employee's time
spent in the Development Program as compared to time spent on all
such employee's work, and (ii) a reasonable allocation of
facilities' costs allocable to development works. Development Costs
shall be determined on a reasonable and typical basis consistent
with the developing party's internal cost accounting system or on
actual charges from Third Parties.
1.8 "DEVELOPMENT PROGRAM" means development and other work conducted by
the parties hereunder on a Product or Compound for use in the Field
of Use, including clinical testing, regulatory submissions and
ongoing Product and Compound development.
1.9 "DISTRIBUTION COSTS" means all freight and other transportation
costs actually incurred by a party hereto in delivering a Product to
its final distribution point before delivery to an invoiced
customer, including transportation costs to a storage facility,
storage charges, Third Party handling fees, insurance during
transport and taxes payable for such transportation or storage
services. Distribution Costs shall exclude any transportation or
other charges deducted in calculating Net Sales. Distribution Costs
incurred by a party hereto shall be determined on a reasonable basis
consistent with such party's internal cost accounting system.
1.10 "EFFECTIVE DATE" means the day of the signing of this Agreement.
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1.11 "EUROPEAN MARKET" means countries which are party of the European
Patent Treaty ("Europaisches Patentrechtsubereinkommen").
1.12 "FDA" means the United States Food and Drug Administration.
1.13 "FIELD OF USE" means the development, manufacture, use or sale of
the Compound, Products or Subject Technology for any indication
except: a) organ transplantation, b) organ reperfusion injury, or c)
immunologic tissue rejection.
1.14 "FIRST COMMERCIAL SALE" means the first arms-length sale in the
Territory pursuant to this Agreement to one or more Third Parties of
any Product following receipt of approval to commence manufacturing
and selling such Product from any one PRA.
1.15 "GROSS RECEIPTS" means all cash or Cash Equivalents received by
Revotar or TBC from a Third Party pursuant to a Licensing
Transaction, including without limitation, up front payments,
royalties, milestones, and profit or cash flow payments.
1.16 "IND" means an investigational new drug application filed with the
FDA, or the similar filing made with any PRA, prior to beginning
clinical trials in humans.
1.17 "IMPROVEMENTS" means any Technology that is discovered, developed or
otherwise acquired in the course of the Development Program
hereunder that may be applied to the discovery, development,
manufacture, sale or use of the Compound or Products, excluding any
new chemical entities that are developed by Revotar under this
Agreement using the Subject Technology.
1.18 "LICENSING TRANSACTION" means any agreement or arrangement of any
type pursuant to which Revotar licenses or transfers to a Third
Party any interest or
4
rights of any kind to any Subject Technology, Compound or Product
which is the subject of this Agreement including without limitation
the rights to use and sell any Compound or Product in the Field of
Use.
1.19 "MANUFACTURING COSTS" means (a) the direct material and labor costs
associated with manufacturing the Products, (b) overhead allocable
to manufacture of the Products and (c) the amount paid to Third
Parties to acquire manufactured Products, whether or not completed,
and (d) Distribution Costs. Direct material costs include the costs
of purchasing raw materials and packaging components. Direct labor
includes the costs of employees directly employed in Product
manufacturing, quality control or packaging. Overhead allocated to
manufacture of the Products shall be limited to (i) a reasonable
allocation of the cost of employees who have a direct relationship
with Product manufacturing, quality control or packaging, but who
are not classified as direct labor, which allocation shall be based
on each such employee's time spent in Product manufacturing, quality
control or packaging as compared to time spent on all such
employee's work, and (ii) a reasonable allocation of facilities'
costs allocable to Product manufacturing, quality control and
packaging. Manufacturing Costs shall be determined on a reasonable
and typical basis consistent with the manufacturing party's internal
cost accounting system or on actual charges from Third Parties.
1.20 "NDA" means a new drug application filed with the FDA, or a similar
application filed with any PRA to obtain marketing approval for a
Product.
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1.21 "NET INCOME" means Gross Receipts and Net Sales minus Cost of Goods
Sold, promotional and selling expenses, payments to Third Parties,
general and administrative overhead expenses that can all be
attributed to the sales of Product.
1.22 "NET SALES" means the gross amount billed for Products sold pursuant
to this Agreement to a Third Party, less discounts, rebates,
returns, credits, allowances, uncollectible sales, shipping,
distribution and insurance charges, sales taxes, and other
governmental charges measured by the amount billed.
1.23 "NEW INDICATIONS" means any topical indication for the Compound,
Products or Subject Technology being proposed for addition to the
Work Plan.
1.24 "NORTH AMERICA": countries and regions which are subject to the
patent legislation of the USA and Canada.
1.25 "PRA" means any applicable regulatory authority in any jurisdiction
included within the Territory which regulates the development,
approval and marketing of pharmaceuticals.
1.26 "PARTICIPATION AGREEMENT" means that certain agreement entered into
on July 21, 2000 by and between TBC and Revotar and certain German
venture capital investors known as bmp Life Science AG Venture
Capital, bmp Venture Tech and Mediport Venture Fonds GmbH.
1.27 "PATENTS" means (a) the patent applications listed on APPENDIX 1
attached hereto and all patent applications hereafter filed in the
Territory that are owned by or licensed to or otherwise acquired by
TBC in the Territory and which have one or more claims covering the
Compound, Subject Technology or Improvements, (b) any patent
application in the Territory constituting an equivalent, reissue,
6
extension, continuation-in-part or a division of any of the
foregoing, and (c) any patents issued upon any of the foregoing
applications or any other patents acquired by TBC relating to the
Compound, Subject Technology or Improvements.
1.28 "PHASE I CLINICAL TRIALS" means the first phase of human clinical
trials of a Compound required by the FDA or a PRA in which the
Compound is tested to determine early safety profile, drug
distribution patterns, and metabolism.
1.29 "PHASE II CLINICAL TRIALS" means the second phase of human clinical
trials of a Compound required by the FDA or a PRA in which the
Compound is tested in patients afflicted with a particular disease
in order to gain preliminary evidence of efficacy, optimal dosage
and expanded evidence of safety.
1.30 "PHASE III CLINICAL TRIALS" means the third phase of human clinical
trials of a Compound required by the FDA or a PRA in which the
Compound is tested in patients afflicted with a particular disease
in order to gain statistical proof of efficacy and safety.
1.31 "PRODUCT" means any pharmaceutical composition incorporating the
Compound which is to be used in the Field of Use.
1.32 "PRODUCT EBITDA" means the Net Income before interest expense,
taxes, depreciation expense and amortization expense that can be
attributed to the development and commercialization of a Product.
1.33 "PROJECT REPRESENTATIVE" means an individual designated by a party
pursuant to Section 3.2(a). A Project Representative of a party may
be changed at any time by written notice to the other party.
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1.34 "SUBJECT TECHNOLOGY" means (i) all Technology owned or controlled by
TBC as of the date hereof or owned or controlled by TBC hereafter
during the term of this Agreement, but only to the extent that such
Technology relates to the use, manufacture or sale of the Compound
or Products. Technology "owned or controlled" includes Technology as
to which TBC has the right to grant or cause to be granted
sublicenses and/or immunity from suit.
1.35 "TBC1269 PROGRAM" means the development of TBC1269 pursuant to this
Agreement for the development of Products for use in the Field of
Use.
1.36 "TECHNOLOGY" means all ideas, methods, formulations, inventions,
techniques, processes, know-how, trade secrets and other
information.
1.37 "TERRITORY" shall mean all countries of the World excluding the use
and sale of the Compound, Products or Subject Technology for topical
indications in North America.
1.38 "THIRD PARTY" means any entity other than TBC, Revotar or their
Affiliates.
1.39 "WORK PLAN" means a written summary of the tasks to be undertaken by
each party during a particular calendar year in connection with the
development of the Compound or Products in the Territory only for
topical indications, together with a budget of the anticipated
Development Costs associated therewith, adopted by the parties. Each
Work Plan will include reasonably detailed descriptions of the tasks
and work to be performed, the resources required to accomplish the
work, the costs associated with the planned work, the party that
will be responsible for accomplishing each task, and the
reimbursement or payment of costs by Revotar incurred by each party.
8
1.40 "WORLDWIDE LICENSE" means a Licensing Transaction, which may include
multiple agreements with the same Third Party or Third Party
Affiliate(s), in at least - but not necessarily only - all countries
within North America and the European Market.
2. LICENSE TO REVOTAR.
2.1 EXCLUSIVE LICENSE FOR THE TERRITORY. Subject to the terms and
conditions of this Agreement, TBC hereby grants to Revotar an
exclusive right and license in the Territory, including the
exclusive right to grant sublicenses in the Territory, to develop,
use and sell the Compound, Products or Subject Technology in the
Field of Use.
TBC retains the exclusive rights to develop, make, have made,
use and sell the Compound or Products for a) topical indications in
North America, and b) all indications excluded from Field of Use.
The right of manufacturing remains with TBC pursuant to
section 5.1 hereof unless (a) Revotar grants a sublicense to a Third
Party which includes the manufacturing rights within the scope of
the sublicense agreement, (b) Revotar is able to produce the goods
at lesser Manufacturing Costs than TBC or (c) TBC determines that it
does not want to commence manufacturing of the Compound or any
Products, or with one year's notice to Revotar, determines that it
will cease its manufacturing of the Compound or any Products.
2.2 RIGHT OF REVOTAR AND TBC TO GRANT SUBLICENSES. TBC hereby grants to
Revotar an exclusive right and license to enter into a sublicense
agreement in the Territory of the same scope as defined in sec. 2.1
above in the Field of Use . TBC
9
has the right to enter into a sublicense agreement for topical
indications in North America and a worldwide right for a) organ
transplantation, b) organ reperfusion injury, or c) immunologic
tissue rejection.
Revotar and TBC shall be obligated to perform in full all of the
obligations and agreements of any sublicenses, including payment of
royalties.
2.3
2.4 RIGHTS AND DUTIES IN CONNECTION WITH A LICENSING TRANSACTION TO A
THIRD PARTY. Revotar will inform TBC if it enters into negotiations
with a Third Party concerning any Licensing Transaction. Revotar
will furthermore inform TBC about the course of such negotiations
and provide TBC the opportunity for review and comment under the
terms contained in 4.2.3(f) prior to the conclusion of a License
Transaction with a Third Party.
3. DEVELOPMENT PROGRAM.
3.1 GOALS.
3.1.1 WORK PLANS FOR TOPICAL INDICATIONS. TBC and Revotar agree that
they will conduct the development on the Compound and it's Products
according to the Work Plans, with the goal of developing
commercially marketable Products for topical indications in the
shortest feasible period of time. The parties also agree that
Revotar shall be responsible under the Work Plans for the
development program defined therein, conduct any non-clinical work
necessary for development of topical applications of the Compound,
conduct the clinical trials regarding the Compound and it's Products
in the Territory, and Patent filing,
10
maintenance and prosecution regarding the Products in the Territory.
The obligations of the Work Plans for topical indications are
considered to be completed when the conditions described in
paragraph 3.2.2 (ii) or (iii) apply.
3.1.2 DEVELOPMENT PROGRAM FOR OTHER INDICATIONS. Revotar will be
responsible for conducting all the Development Programs regarding
the Compound and the Products for all indications in the Field of
Use other than the topical indications, and will be responsible for
all costs associated therewith. TBC will have no responsibilities
under and bear none of the expense for such efforts.
3.1.3 PARTICIPATION BY TBC IN DEVELOPMENT PROGRAMS. Except where TBC
and Revotar agree that it is necessary for obtaining regulatory
approval, TBC does not intend to develop the Compound or it's
Products in the Territory and in the Field of Use pursuant to the
Development Program or the Work Plans. TBC, at its own expense, may
undertake development work on the Compound or it's Products for use
in topical indications in North America, or organ transplantation,
organ reperfusion injury or immunologic tissue rejection throughout
the world.
3.1.4 LIMITATION ON CLINICAL TRIAL SPENDING BY REVOTAR.
Notwithstanding the foregoing to the contrary, the parties
contemplate that Revotar will not be required under the Development
Program and the Work Plans to conduct and pay for any Phase III
Clinical Trials involving the Compound or it's Products. The parties
instead contemplate that Revotar will enter into a Licensing
Transaction whereby a Third Party will conduct such trials.
3.1.5 SHARING OF INFORMATION. Any safety data or information
generated by TBC or Revotar (the "Parties") regarding the Compound
will be shared with the
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other party in English without cost for use as safety data and for
the maintenance of the worldwide safety database. Any non-safety
information generated by Revotar in topical indications will be
shared with TBC in English without cost. Any information which is
relevant for registration purposes generated by the Parties for
non-topical indications will be shared in English upon reimbursement
of 50% of the Development Costs associated with such work. Once
information is paid for by a Party, its uses will be limited in the
following manner; (i) for internal evaluation, (ii) non-confidential
summary information may be shared with Third Parties without prior
consent from either Party, (iii) detailed data can be used by the
Parties or their licensees for registration or regulatory purposes
necessary to obtain approvals from governmental agencies, (iv)
detailed data may also be shared with a Third Party pursuant to a
separate confidentiality agreement subject to the limitations
contained in paragraph 8.2 and (v) any publication or public
presentation of information will require prior approval of the
originating party; such approval not to be unreasonably withheld.
Revotar and TBC will endeavor to oblige any of its sublicensees, at
their option, to pass on information concerning the Compound and
Products relating to non-topical indications and to assent to
passing on such information to Revotar and TBC on the same basis as
provided above. Regarding topical indications, Revotar and TBC will
endeavor to oblige any sublicensee to provide information regarding
Compound or it's Products to Revotar or TBC in English without cost.
TBC and Revotar will treat information in a manner consistent with
(i) through (v) above.
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3.1.6 BEST EFFORTS. While the parties agree to use best efforts to
achieve the goals of the Development Program, neither TBC nor
Revotar warrants or guarantees that their efforts will result in a
marketable or approvable Product or that the goals specified in the
Work Plan will be achieved within the periods set forth therein.
3.2 PROGRAM ADMINISTRATION.
3.2.1 PROJECT REPRESENTATIVE. The parties have each designated one
Project Representative to facilitate liaison between it and the
other party, oversee and review the progress of the Work Plans. In
addition, the Project Representatives will agree on the Work Plans,
will select which topical indications to pursue, determine the
development program of the Work Plans for topical indications,
develop clinical trial protocols, manage the clinical/regulatory
process and discuss potential competition and other relevant matters
to assure rapid development and commercialization of the Compound
and the Products for topical indications within the Work Plans.
3.2.2 DISAGREEMENTS. All decisions made hereunder relating to the
Work Plans for topical indications shall require the approval of the
Project Representatives. The Project Representatives shall attempt
in good faith to reach consensus on all matters regarding such Work
Plans. As long as (i) at least 30% of clinical spending in any
calendar year by Revotar is related to topical indications, or as
long as (ii) the Phase II clinical development for psoriasis and/or
atopic dermatitis is completed, or as long as (iii) Revotar
completes a Licensing Transaction for psoriasis and/or atopic
dermatitis involving the European Union, then the final
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decision making regarding any disagreements with the Work Plan will
reside with the CEO of Revotar. In any year where none of (i)
through (iii) above do occur, then the Project Representatives shall
promptly present the disagreement to the chief executive officers of
the Parties or their designees, who shall attempt resolution of the
matter. If the chief executives or designees cannot promptly resolve
such disagreement within thirty (30) days, then the dispute shall be
resolved under the arbitration provisions of Section 11.7.
3.2.3 WORK PLANS. The parties hereto will agree on the initial Work
Plan for 2003 within 90 days of the Effective Date. If the Project
Representatives agree to pursue New Indications, then a new Work
Plan for those indications will be developed. The Work Plan for
topical indications shall be the plan and budget as approved by both
parties in writing. Prior to November 1 of each year, the Project
Representatives shall prepare and recommend to each party a proposed
Work Plan for the next calendar year. Each Work Plan adopted shall
be agreed upon and signed by an officer of both parties no later
than January 10 of the year covered by the Work Plan. The Project
Representatives shall actively consult with one another throughout
the term of the Development Program so as to adjust the specific
work performed under each Work Plan to conform to evolving
developments in technology and the results of the development work
performed. While minor adjustments to a Work Plan may be made from
time to time upon approval by the Project Representatives,
significant changes to the scope or direction of the work in a Work
Plan shall be agreed to in writing by each party,
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in the absence of which the most recently approved Work Plan shall
remain in effect.
3.2.4 TOPICAL WORK OUTSIDE OF WORK PLAN BY TBC. TBC may conduct
development work with the Product in topical indications outside of
the Work Plan at TBC's expense. Revotar or its sublicensee will gain
access to this information by reimbursing TBC 100% of its costs to
generate such information and use of this information is limited to
the terms of 3.1.5 (i) through 3.1.5 (v).
3.2.5 PROGRESS REPORTS. Within 10 business days following the end of
each six-month period, (a) the Project Representatives shall jointly
produce a summary written report which shall describe the work
performed by the respective party during the six month period on the
Work Plans for topical indications and if appropriate, recommend any
revisions to such Work Plan that would improve the progress of such
Development Program, and (b) Revotar will provide TBC via the
Revotar Supervisory Board with a progress report of the development
program for all indications.
3.2.6 MEETINGS. The Project Representatives and other employees or
consultants of the parties responsible for management of the Work
Plans for topical indications shall consult each other and meet as
needed during the term of the Work Plans for review. Such meetings
shall be at such times as may be agreed to by the Project
Representatives, and may be conducted telephonically or in person as
necessary at a time and location to be agreed upon by the Project
Representatives. Revotar shall be responsible for the organization
of such meetings, including payment for transportation and hotel
accommodations. The
15
Project Representatives shall jointly produce minutes summarizing
the matters reviewed and any actions taken at such meetings within
10 business days following each meeting. Each party may invite
additional colleagues to participate at meetings as appropriate and
acceptable to the other party. Revotar shall be responsible for the
preparation and communication to TBC of the specific agenda of each
meeting in advance of each meeting and either party may place items
for consideration on the agenda.
3.3 PERFORMANCE OF SERVICES. Each party shall perform the work assigned
to it in a prudent and skillful manner in accordance, in all
material respects, with the Work Plan then in effect and applicable
laws. Revotar shall reimburse TBC its Development Costs, and its out
of pocket costs, including travel, lodging, salaries and benefits
for all labor, supervision, facilities, supplies and materials
necessary to perform the work assigned to TBC in accordance with the
Work Plan. All cost allocations for developmental work to be
performed by either party will be defined in detail in the Work Plan
and are binding to both parties. Revotar and TBC agree that all
development activities performed by either party will be conducted
according to accepted guidelines of the International Conference on
Harmonisation.
3.4 RECORDS AND DATA. Each party shall maintain records in sufficient
detail and in good scientific manner appropriate for patent and
regulatory purposes and so as to properly reflect all work done by
TBC and Revotar, and results achieved in the performance of the Work
Plans. Such records shall include books, records, reports, research
notes, charts, graphs, comments, computations, analyses,
16
recordings, photographs, computer programs and documentation
thereof, computer information storage means, samples of materials
and other graphic or written data generated in connection with the
Work Plans, including any data required to be maintained pursuant to
applicable governmental regulations. Each party shall provide the
other the right to inspect all such records, and shall provide
copies in the English language of all such requested records.
3.5 VISIT OF FACILITIES. Representatives of each party may, upon
reasonable notice and at times reasonably acceptable to the other
party, (a) visit the facilities at their own expense where the Work
Plans are being conducted and/or the facilities where the other
party manufactures any Product or Compound contained therein (or has
a Product or such a Compound manufactured by a Third Party), (b)
consult informally, during such visits and by telephone, with
personnel of the other party performing work on the Work Plans and
(c) with the other party's prior approval, which approval shall not
be unreasonably withheld, visit the sites of any clinical trials or
other experiments being conducted by such other party in connection
with the Work Plans, but only to the extent in each case as such
trials or other experiments relate to the Work Plans.
4. PAYMENTS AND REPORTS.
4.1 Development Funding. All Development Costs relating to the Compound
and Products in the Field of Use in the Territory, whether incurred
before or after marketing approval of any Product, shall be borne by
Revotar. Except as provided in Section 3.1.5 and 3.2.4 above, TBC
will bear its Development Costs regarding the Compound and Products
for use in topical indications in North
17
America and for organ transplantation, organ reperfusion injury and
immunologic tissue rejection.
4.2 ROYALTIES.
4.2.1 PAYMENTS TO TBC WHEN NO LICENSING TRANSACTION. In the event
that Revotar commences sales of Products without having entered into
any Licensing Transaction, Revotar or its Affiliates shall pay TBC
the following amounts:
(a) [*] of Net Sales relating to sales of Products in the
Territory for use in topical indications, asthma or COPD.
(b) [*] of Product EBITDA relating to sales of Products in the
Territory for use in all indications other than asthma, topical
indications or COPD.
4.2.2 PAYMENTS BY TBC TO REVOTAR. In the event that TBC or its
licensees commences sales of any products incorporating a Compound
relating to any organ transplantation, organ reperfusion injury or
immunologic tissue rejection, TBC or its Affiliates shall pay
Revotar [*] of TBC's Product EBITDA for sales of such products by
TBC, its licensees and its Affiliates. In the event TBC, its
licensees and its Affiliates commence sales of Products for topical
indications in North America, TBC or its Affiliates shall pay
Revotar [*] of TBC's Product EBITDA for such Product sales by TBC,
its licensees and its Affiliates; provided, that if Revotar is
successful in obligating a licensee to share data with TBC as
desired in 3.1.5, then TBC or its Affiliates shall pay Revotar [*]
(instead of [*]) of TBC's Product EBITDA for such Product sales by
TBC, its licensees and its Affiliates.
4.2.3 ROYALTY RATES PAID TO TBC AFTER LICENSING TRANSACTION BY
REVOTAR.
----------
[*] This information has been omitted in reliance on Rule 24B-2 under the
Securities Exchange Act of 1934, and has been filed separately with the
Securities and Exchange Commission.
18
(a) If Revotar enters into a Worldwide License pursuant to
Sec. 2.4 with a Third Party covering the asthma indication alone or
covering the asthma indication and COPD, then all royalties, license
fees, milestone payments and other payments or revenues of any kind
received by Revotar and its Affiliates pursuant to such Worldwide
License relating to the asthma indication and COPD shall be shared
equally with TBC. For purposes of this Section 4.2.3(a), in the
event that Revotar enters into any Worldwide License with a Third
Party covering Products for the treatment of asthma and then enters
into a Licensing Transaction with the same Third Party covering COPD
within nine (9) months before or after the Worldwide License
involving asthma, then Revotar shall be considered for purposes of
this Section 4.2.3 to have entered into a Worldwide License covered
by the provisions of this subparagraph (a) as to asthma and COPD.
(b) In the event Revotar enters into any Licensing Transaction
involving Products covering (i) any topical indication, or (ii) the
asthma indication alone or the asthma and COPD indications together
(which will include the series of Licensing Transactions described
in the second sentence of Section 4.2.3(a)), that includes only
countries within the European Market, and TBC is not required to
fund a Phase III Clinical Trial to obtain FDA approval regarding the
Product, then Revotar shall pay to TBC [*] of Revotar's royalty
revenues relating to such Products by Revotar and its Affiliates.
This applies to Revotar only to the royalty revenues generated out
of the European Market as defined above .
----------
[*] This information has been omitted in reliance on Rule 24B-2 under the
Securities Exchange Act of 1934, and has been filed separately with the
Securities and Exchange Commission.
19
(c) In the event Revotar enters into any Licensing Transaction
involving Products covering topical indications that includes only
countries within the European Market, and TBC is required to fund a
Phase III Clinical Trial to obtain FDA approval regarding the
Product, then Revotar shall pay to TBC [*] of Revotar's royalty
revenues relating to such Products by Revotar and its Affiliates.
This applies to Revotar only to the royalty revenues generated out
of the European Market as defined above.
(d) In the event Revotar enters into any Licensing Transaction
involving Products covering (i) topical indications, or (ii) the
asthma indication alone or the asthma and COPD indications together
(which will include the series of License Transactions described in
the second sentence of Section 4.2.3(a)), which includes the
European Market and any other countries in the Territory (i) all
royalties and other revenues received by Revotar for sales generated
outside the European Market which are in excess of Development Costs
incurred by Revotar in the development of the Product in question
shall be shared equally by Revotar and TBC, and (ii) Revotar shall
make payments to TBC according to subparagraphs (b) or (c) above for
Product sales within the European Market.
(e) In the event Revotar enters into any Licensing Transaction
(including a Worldwide License) not covered or described in Sections
4.2.3(a) through (d) above, then Revotar will pay TBC [*] of
Revotar's Product EBITDA for sales of such Products by Revotar and
its Affiliates.
----------
[*] This information has been omitted in reliance on Rule 24B-2 under the
Securities Exchange Act of 1934, and has been filed separately with the
Securities and Exchange Commission.
20
(f) TBC is entitled to review and provide comments to, for a
period not to exceed 14 days prior to execution by Revotar, any
Licensing Transaction entered into by Revotar and a Third Party.
Revotar may not enter into any Licensing Transaction, the terms of
which cause TBC to incur liabilities or obligations with a Third
Party, or agreements to indemnify or hold harmless a Third Party, of
any type.
(g) Revotar and TBC shall impose on their third party
licensees the duty to report on their Net Sales classified to the
regions defined for TBC and Revotar.
4.2.4 [NOT USED]
4.2.5 REPORTS AND PAYMENT. Each party shall keep, and shall require
all Affiliates and sublicensees to keep, accurate records in
sufficient detail to enable the amounts due to the other party to be
determined. Each party shall deliver to the other party within 60
days after the end of each calendar quarter a written accounting in
the English language, including quantities and monetary amounts of
sales of each Product by such party and its Affiliates and
sublicensees, on a country-by-country basis, and the amount of the
payments, if any, due to the other party for such quarter. Each
party or its Affiliates, simultaneously with the delivery of each
such accounting, shall tender payment of all amounts due hereunder.
In the event the Parties are being compensated by securities, the
Parties may choose to compensate each other either by cash or
securities.
4.3 AUDIT RIGHTS. Each party shall permit the other party or its
representatives to have access, at its own expense, no more than
once in each calendar year during
21
the term of this Agreement and twice during the three (3) calendar
years following the termination hereof, during regular business
hours and upon reasonable notice, to its records and books for the
sole purpose of determining the appropriateness of all amounts
payable hereunder or verifying the royalties and profit sharing
amounts payable hereunder. If such examination reveals that such
amounts have been overstated or such royalties have been understated
for any calendar year, such overpayment shall be promptly refunded
or in the case of any underpayment, such party shall promptly pay
the amount of any underpayment; provided that if such examination
was not conducted by an independent accountant, the party whose
records were examined shall have the right to engage an independent
accountant reasonably acceptable to examining party to verify the
results of such examination. Any sublicense granted by Revotar
hereunder shall contain audit provisions as set forth in this
Section 4.4, mutatis mutandis.
4.4 PAYMENT CURRENCY. All payments to be made under this Agreement shall
be made (a) if to TBC, in United States dollars and (b) if to
Revotar, in Euros. In the case of sales in foreign currencies, the
rate of exchange to be used in computing the amount of currency
equivalent in United States dollars due to TBC for the calendar
quarter just ended shall be made at the rate of exchange prevailing
on the last day of such calendar quarter published by a New York
money center bank designated by Revotar which Revotar uses for
currency conversion in the preparation of Revotar financial reports.
22
4.5 PAYMENT MECHANICS. All payments under this Agreement shall be made
by wire transfer of immediately available funds to such account as
the receiving party shall specify or by other payment method
acceptable to the parties.
23
5. COMMERCIALIZATION.
5.1 TBC TO MANUFACTURE. TBC has the right, but not the obligation,
subject to the provisions of Section 2.1 above, to manufacture all
Revotar's requirements for the Compound and/or Products, subject to
customary forecast and order procedures. If TBC or its subcontractor
is manufacturing the Compound and/or Products, TBC's (or its
subcontractor's) responsibilities shall include all aspects of the
manufacturing process, including maintenance of manufacturing
inventory, quality control and shipment of Compound and/or Products
in accordance with orders placed by Revotar. TBC and Revotar will
also agree to negotiate in good faith a manufacturing agreement
which will include provisions on forecasts, delivery time, quality
control, quality assurance, delivery location, insurance, packaging,
inventories, term and time of payment and such other provisions as
are customarily included in agreements of this type. As compensation
for such manufacturing services, TBC shall be entitled to receive
payment of its COGS. Revotar shall have the right to audit at its
expense the manufacturer or submanufacturer of the Compound or
Products.
5.2 REVOTAR AND TBC TO SELL IN TERRITORY AND NORTH AMERICA,
RESPECTIVELY. Following regulatory approval in any country in the
Territory or in North America, Revotar and TBC shall use
commercially reasonable efforts to market and sell the Products in
such country. Revotar and TBC will use all resources in such
marketing and sales efforts that it would use regarding any of its
other products with similar commercial potential. All terms of sale,
including pricing policies, credit terms, cash discounts and returns
and allowances, shall be set by
24
Revotar or TBC in their respective regions. Revotar and TBC shall be
responsible for invoicing the customers in their respective regions
for Products and collecting payment therefore. The Parties will
consult each other regarding the selection of the trademarks to be
used for the sale of Products in the Territory, which selection will
take into account the desirability for worldwide trademarks. Such
trademarks regarding sales of Products in the Territory will be
owned by Revotar. In the event TBC is marketing and selling
Products, TBC will have the right to use such trademarks outside the
Territory at no cost to TBC.
5.3 SUBLICENSING. If Revotar or TBC will grant a sublicense to Third
Parties then Revotar and TBC will impose to the sublicensee to
assume the obligations entered into by Revotar and TBC in section
5.2, sentences 1 and 2.
6. TBC REPRESENTATIONS AND WARRANTIES.
TBC represents and warrants to Revotar as follows:
6.1 NO THIRD PARTY AGREEMENTS. Except for the Participation Agreement
and the Side Letter to the Participation Agreement dated July 21,
2000, there are no agreements with third parties relating to the
Products.
6.2 NO THIRD PARTY RIGHTS. TBC owns or possesses adequate licenses or
other rights to use all patents, patent rights, inventions and
know-how necessary for the manufacture, use and sale of the Compound
and Products and to grant the licenses granted herein. To the best
knowledge of TBC, the manufacture, use or sale of the Products and
Compound pursuant to this Agreement will not infringe or conflict
with any Third Party right or patent and TBC is not aware of any
pending patent
25
application that if issued would be infringed by the manufacture,
use or sale of the Products pursuant to this Agreement. TBC has not
received any notice from a third party that any manufacture, use or
sale of the Products and Compound pursuant to this Agreement
infringes or conflicts with any Third party right or patent.
26
7. PROPRIETARY RIGHTS.
7.1 IMPROVEMENTS. Improvements conceived or made solely by the employees
of either party during the term of this Agreement shall be the sole
property of such party. Improvements made jointly by employees of
both parties during the term of this Agreement shall be owned by
Revotar. All Improvements no matter if conceived solely by one party
to this Agreement or jointly shall be automatically included in the
license granted to Revotar under Section 2; provided, that the
parties agree to negotiate in good faith appropriate modifications
to the terms of this Agreement which reflect the fact that an
Improvement has been jointly developed or developed only by TBC.
Each party shall promptly disclose to the other any Improvements
developed by its employees or agents acting on its behalf. Each
party agrees that all employees and other persons acting on its
behalf under this Agreement shall be obligated under a binding
written agreement to assign (or exclusively license in the case of
academics) to such party or as such party shall direct all
Improvements made or conceived by such employee or other person.
New Chemical Entities, including Compound follow-up molecules
discovered by Revotar will be the exclusive intellectual property of
Revotar. TBC agrees to waive patent infringement litigation against
Revotar related to such discoveries.
7.2 PATENT PROSECUTION AND MAINTENANCE. The parties agree that they will
coordinate with each other in all reasonable respects the worldwide
prosecution of the Patents, subject to the provisions of this
Section 7. TBC shall be responsible,
27
at its expense, for prosecuting and maintaining any patents and
patent applications relating to the Patents in existence on the date
of the License Agreement. Revotar shall be responsible, at its
expense, for filing, prosecuting and maintaining the Patents to the
extent they are not in existence on the date of the License
Agreement (including Improvements owned by Revotar or jointly
developed by Revotar and TBC, but excluding Improvements owned
exclusively by TBC). Each party shall furnish the other party with
copies of any patent application concerning Subject Technology or
Improvements sufficiently in advance of the anticipated filing date
(but in no event less than 5 working days before filing) so as to
give the other party a reasonable opportunity to review and comment.
Each party shall also furnish copies to the other party of all
communications to and from United States and foreign patent offices
regarding patents or patent applications relating to this Agreement
within a reasonable time prior to filing such communication or
promptly following the receipt thereof. Each party shall reasonably
consider any comments the other party may have related to such
patent applications or communications. Each party shall have the
right at its expense to file, prosecute and maintain patents in the
United States and all foreign countries on Improvements owned solely
by it. Notwithstanding the foregoing, beyond best efforts, neither
party assumes liability to the other for the successful prosecution
of any patent application. However, if either party shall fail to
pay an annuity, tax or other maintenance fee with respect to a
Patent or Patent application or otherwise decide not to pursue a
Patent relating to Improvements owned solely by
28
it, it shall give the other party timely notice and the opportunity
to take such action and assume all ownership rights to such Patent
or Patent application.
7.3 THIRD PARTY CLAIM OF INFRINGEMENT. Each party shall give the other
prompt notice of each claim or allegation that the exercise of
rights hereunder constitutes an infringement of one or more patents
or other rights of a Third Party. Revotar shall use all commercially
reasonable efforts to defend the parties against any such claim or
allegation with counsel of its own choice reasonably acceptable to
Revotar. The costs of such defense and any costs of settling or
otherwise satisfying such claim (including damage awards, if any)
shall be borne as follows:
7.3.1 TBC COSTS. TBC shall bear all costs associated with claims
based on any patent issued or patent application published as of the
date of the License Agreement. If Revotar continues to sell the
Products following notice of such claim against explicit requests to
the contrary by TBC, then Revotar shall have the obligation to
satisfy all claims in connection with such continued sales activity.
At all times, Revotar shall have the right to defend itself at its
cost against this with counsel of its own choice reasonably
acceptable to TBC.
7.3.2 REVOTAR COSTS. Revotar shall bear all costs associated with
claims based on any patent or patent application that was not issued
or published as of the date of the License Agreement.
7.3.3 COOPERATION. Each party agrees to cooperate with the other in
the defense of any such claim or allegation, including, to the
extent able, furnishing testimony by its employees and providing
technical support and information as requested. Neither party shall
settle or discontinue defense of any such case without the
29
other's prior written consent, which shall not be unreasonably
withheld. In the case of any proposed settlement involving a
cross-license with a Third Party, neither party may unreasonably
refuse to enter into such a cross-license. The provisions of this
Section 7.3 shall also apply to actions for declaratory relief which
raise or are in response to an issue of infringement of a Third
Party patent.
7.4 INFRINGEMENT BY THIRD PARTIES. Each party shall give the other party
prompt written notice of any incident of infringement of Patents
that comes to its attention. The parties shall thereupon confer as
to what steps are to be taken to stop or prevent such infringement.
Revotar agrees to use reasonable efforts to stop any such
infringement, but shall not be obligated to commence proceedings
against the infringer. If Revotar decides to commence proceedings,
however, Revotar shall be responsible for any legal costs incurred
and will be entitled to retain any settlement or damage award
received, and TBC agrees to cooperate with Revotar in such
proceeding. TBC shall have the right at its expense to engage its
own counsel in connection with such proceedings. Should Revotar
decide not to commence proceedings, and should the infringement
represent a substantial threat to the commercial value of any
Products, TBC shall be entitled (but not obligated) to do so in its
own name and/or in Revotar's name against the infringer, in which
event TBC shall be responsible for all legal costs incurred, and
will be entitled to retain any settlement or damage award received,
and Revotar agrees to cooperate with TBC in such proceedings and
Revotar shall have the right at its expense to engage its own
counsel in connection with such proceedings.
30
8. CONFIDENTIALITY.
8.1 GENERAL. Any party receiving Confidential Information pursuant to
this Agreement shall maintain the confidential and proprietary
status of such Confidential Information, keep such Confidential
Information and each part thereof within its possession or under its
control sufficient to prevent any activity with respect to the
Confidential Information that is not specifically authorized by this
Agreement and prevent the disclosure of any Confidential Information
to any Third Party using the same degree of care it would use with
respect to its own information of like importance; provided,
however, that such restrictions shall not apply to any Confidential
Information that is (a) independently developed outside the scope of
this Agreement by employees of the receiving party having no access
to or knowledge of the Confidential Information disclosed hereunder,
(b) in the public domain at the time of its receipt or thereafter
becomes part of the public domain through no fault of the receiving
party, (c) lawfully received without an obligation of
confidentiality from a Third Party having the right to disclose such
information, (d) released from the restrictions of this Section 8 by
the express written consent of the disclosing party, (e) disclosed
to any permitted assignee, sublicensee or subcontractor or customer
of Revotar or TBC, provided that such assignee, sublicensee,
subcontractor or customer is subject to the provisions of this
Section 8 or substantially similar provisions or (f) required by
law, statute, rule or court order to be disclosed, including
requirements of the Securities and Exchange Commission, the FDA, any
PRA, and other regulatory authorities, provided that the disclosing
party uses commercially reasonable efforts to obtain
31
confidential treatment of any such disclosure. Without limiting the
generality of the foregoing, Revotar and TBC each shall use all
commercially reasonable efforts to obtain, if not already in place,
confidentiality agreements from its respective relevant employees
and agents, to protect the Confidential Information as herein
provided.
8.2 DISCLOSURE OF AGREEMENT. Neither party shall make a public
announcement or otherwise disclose the terms of this Agreement to
any Third Party without the prior written consent of the other
except that the parties may without such consent disclose (a) the
existence of this Agreement, (b) the identity of the other party and
(c) the general subject matter of this Agreement. Notwithstanding
the foregoing statement, both parties may disclose details of this
agreement to third parties, pursuant to a confidentiality agreement,
for the purpose of business negotiations with potential licensees,
financial investors, financial advisors, patent attorneys and
governmental agencies.
Each party shall also be permitted to make such disclosure of the
terms of this Agreement as its counsel reasonably determines is
necessary to comply with law, provided that such party shall use
commercially reasonable efforts to obtain confidential treatment of
any such disclosure.
32
9. INDEMNIFICATION.
9.1 MUTUAL RIGHT TO INDEMNIFICATION. Each party shall defend, indemnify
and hold harmless the other and its directors, officers, employees
and agents from and against any and all claims, liabilities, losses
and expenses, including attorneys' fees, incurred by or asserted
against it or any of the foregoing arising out of the development,
testing, manufacture, handling or storage of any Product by such
party, including without limitation (i) any actual or alleged bodily
injury, death or property damage resulting from the use of any
Product manufactured by such party, (ii) any actual or alleged
violation of law applicable to the development, testing,
manufacture, handling or storage of the Products by such party and
(iii) any Product recall of Product manufactured by such party that
is ordered by a governmental agency or required by a confirmed
Product failure as reasonably determined by the parties, except as
otherwise provided herein and except to the extent that such
liabilities, losses and expenses result from the negligence or
willful misconduct of a party, in which case the party who engaged
in such negligence or willful misconduct shall indemnify and hold
harmless the other party and its directors, officers, employees and
agents. Each party shall defend, indemnify and hold harmless the
other party and its directors, officers, employees and agents from
and against any and all claims, liabilities, losses and expenses,
including attorneys' fees, incurred by or asserted against the other
party or any of the foregoing arising out of a misrepresentation
regarding any sales of Products by such party, it Affiliates or
sublicensees which is not in accordance with
33
approved Product claims.
9.2 PROCEDURE. Any person that intends to claim indemnification under
this Section 9 (an "Indemnitee") shall promptly notify the other
party (the "Indemnitor") of any claim, in respect of which the
Indemnitee intends to claim such indemnification, and the Indemnitor
shall assume the defense thereof with counsel mutually satisfactory
to the parties; provided, however, that an Indemnitee shall have the
right to retain its own counsel, with the fees and expenses to be
paid by the Indemnitor, if representation of such Indemnitee by the
counsel retained by the Indemnitor would be inappropriate due to
actual or potential differing interests between such Indemnitee and
any other party represented by such counsel in such proceedings. The
indemnity agreement in this Section 9 shall not apply to amounts
paid in settlement of any loss, claim, liability or action if such
settlement is effected without the consent of the Indemnitor, which
consent shall not be withheld unreasonably. The failure to deliver
notice to the Indemnitor within a reasonable time after the
commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such Indemnitor of any liability
to the Indemnitee under this Section 9, but not any liability that
it may have to any Indemnitee otherwise than under this Section 9.
The Indemnitee and its employees and agents shall cooperate fully
with the Indemnitor and its legal representatives in the
investigation of any action, claim or liability covered by this
indemnification. In the event that each party claims indemnity from
the other and one party is finally held liable to indemnify the
other, the Indemnitor shall additionally be liable to pay the
reasonable legal costs
34
and attorneys' fees incurred by the Indemnitee in establishing its
claim for indemnity.
9.3 PRODUCT LIABILITY INSURANCE. Each party shall use all commercially
reasonable efforts to maintain product liability insurance with
respect to its manufacture and sale of the Products hereunder. Such
insurance shall be in such amounts and subject to such deductibles
as the parties may agree based upon standards prevailing in the
industry at the time such manufacturing commences. At such time as a
Product is being launched by a party for commercial sale, the
parties shall attempt to maximize the product liability insurance
coverage for both parties. TBC shall maintain such insurance for so
long as Revotar continues to sell any Product manufactured by TBC,
and thereafter for so long as TBC maintains insurance for itself
covering such manufacture or sales. Revotar shall maintain such
insurance for as long as Revotar continues to sell any Product
pursuant to this Agreement manufactured by it, and thereafter for so
long as Revotar maintains insurance for itself covering such
manufacture or sales.
10. TERM AND TERMINATION.
10.1 LICENSE TERM. The obligations of Revotar under the license granted
in section 2 shall terminate on a country by country and Product
formulation by Product formulation basis upon the legal sale by a
Third Party of a generic version of TBC1269 for that particular
formulation in that particular country. Thereafter, Revotar shall
have a license to and perpetual rights in such Patents and Subject
Technology in such country as to the Product or Compound in
question.
35
10.2 TERMINATION FOR BREACH. Either party may terminate this Agreement by
written notice to the other in the event that (i) the other party
fails to perform any material obligation hereunder and such failure
is not cured within 60 days following prompt notice thereof from the
non-defaulting party, or (ii) any bankruptcy, receivership,
insolvency or bankruptcy reorganization proceedings are instituted
by the other party or any such proceedings are instituted against
the other party and not dismissed within 120 days. The bankruptcy of
a party shall not give rise to the right of the bankrupt party to
terminate any license granted herein.
10.3 TERMINATION FOR FAILURE TO PROCEED.
Regarding the asthma indication, if more than 18 months lapse
between the last patient completing treatment in a clinical trial
for asthma conducted by Revotar and (i) enrollment of the next
patient in a new clinical trial for asthma conducted by Revotar, or
(ii) the submission of a marketing application for asthma to the
EMEA or any country within the European Union by Revotar or (iii)
entering into a license(s) agreement(s) between Revotar and a Third
Party covering the asthma indication in at least the European
Market, Japan and/or North America market, then the license will
terminate for asthma. In the event that Revotar has entered into a
license agreement for Japan, an additional 6 months will be added to
the 18 month lapse period. Revotar must assure that adequate due
diligence provisions obligate its licensee(s) to timely conduct
clinical development and regulatory submissions. In case of breach
of contract by the licensee(s), the license will revert to Revotar
and Revotar will reassume the obligations as the licensee of TBC as
stated in this Agreement.
36
Regarding the topical indications, if more than 18 months lapse
between the last patient completing treatment in a clinical trial
for a topical indication conducted by Revotar and (i) enrollment of
the next patient in a new clinical trial for a topical indication
conducted by Revotar, or (ii) the submission of a marketing
application for a topical indication to the EMEA or any country
within the European Union by Revotar or (iii) entering into a
license(s) agreement(s) between Revotar and a Third Party covering
the topical indications in at least the European Market and/or
Japan, then the license will terminate for the topical indications.
Revotar must assure that adequate due diligence provisions obligate
its licensee(s) to timely conduct clinical development and
regulatory submissions. In case of breach of contract by the
licensee(s), the license will revert to Revotar and Revotar will
reassume the obligations as the licensee of TBC as stated in this
Agreement
Regarding TBC's obligations for developing the topical indications,
following provision by Revotar to TBC of a Phase II package, as
defined in APPENDIX 2, TBC's rights in North America with respect to
the topical indications shall revert to Revotar upon the occurrence
of any of the following: (i) more than 36 months lapses between the
receipt of the Phase II package and the initiation of a Phase III
clinical trial for a topical indication in North America by TBC and
TBC has not entered into a license(s) covering a topical indication
within North America within 36 months of receipt of the Phase II
package, or (ii) more than 36 months lapses between the last patient
completing treatment in a clinical trial for a topical
37
indication conducted by TBC and the enrollment of the next patient
in a new clinical trial for a topical indication (except where TBC
has submitted a regulatory approval dossier in any country within
North America) and TBC has not entered into a license(s) covering a
topical indication within North America. TBC must assure that
adequate due diligence provisions obligate its licensee(s) to timely
conduct clinical development and regulatory submissions.
10.4 SURVIVAL OF OBLIGATIONS. No termination of this Agreement shall
eliminate any rights and obligations accrued prior to such
termination. Promptly following any termination of this Agreement,
each party shall return all written materials containing
Confidential Information, except one copy that may be retained by
counsel for each of the parties for record keeping purposes only.
The provisions of Sections 7.3, 9, 10.4, 11.6 and 11.7 shall survive
any termination of this Agreement. The provisions of Section 8 shall
survive until five years after the expiration of the license as to
all of the Products.
11. MISCELLANEOUS.
11.1 FORCE MAJEURE. Each Party shall be excused for any failure or delay
in performing any of its obligations under this Agreement, if such
failure or delay is caused by Force Majeure. For purposes of this
Agreement, "Force Majeure" shall mean any act of God, accident,
explosion, fire, storm, earthquake, flood, drought, riot, embargo,
civil commotion, war, act of war or any other circumstances or event
beyond the reasonable control of the party relying upon such
circumstance or event.
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11.2 RELATIONSHIP OF THE PARTIES. The parties agree that each is acting
as an independent contractor with respect to the other and nothing
contained in this Agreement is intended, or is to be construed, to
constitute Revotar and TBC as partners or joint venturers or TBC an
agent of Revotar. Neither party hereto shall have any express or
implied right or authority to assume or create any obligations on
behalf of or in the name of the other party or to bind the other
party to any contract, agreement or undertaking.
11.3 NOTICES. Any notice or other communication hereunder shall be in
writing and shall be deemed given when so delivered in person, by
overnight courier (with receipt confirmed) or by facsimile
transmission (with receipt confirmed by telephone or by automatic
transmission report) or on the tenth business day after being sent
by registered or certified mail (postage prepaid, return receipt
requested), as follows (or to such other person's address as may be
specified in writing to the other party hereto):
Texas Biotechnology Corporation
0000 Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: President
Facsimile: (000) 000-0000
Revotar Biopharmaceuticals AG
Attention: President
Xxxxxxxxxxxxxxxx 00x
00000 Xxxxxxxxxxx
Xxxxxxx
Facsimile: x00 0000 000 0000
11.4 SUCCESSORS AND ASSIGNS. The terms and provisions of this Agreement
shall inure to the benefit of, and be binding upon, Revotar, TBC,
and their respective
39
successors (including a successor pursuant to a merger of a party
hereto) and assigns. This Agreement, or any of the rights granted
hereunder, may be assigned by Revotar or TBC to any of their
respective Affiliates; provided, that such assignment expressly
provides that the assignor remains liable for its obligations
hereunder and the performance of its Affiliate under this Agreement.
11.5 AMENDMENTS AND WAIVERS. No amendment, modification, waiver,
termination or discharge of any provision of this Agreement, nor
consent to any departure by Revotar or TBC therefrom, shall in any
event be effective unless the same shall be in writing specifically
identifying this Agreement and the provision intended to be amended,
modified, waived, terminated or discharged and signed by the party
against whom enforcement of such amendment is sought, and each
amendment, modification, waiver, termination or discharge shall be
effective only in the specific instance and for the specific purpose
for which given. No provision of this Agreement shall be varied,
contradicted or explained by any oral agreement, course of dealing
or performance or any other matter not set forth in an agreement in
writing and signed by the party against whom enforcement of such
variance, contradiction or explanation is sought.
11.6 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Federal Republic of Germany.
11.7 DISPUTE RESOLUTION
11.7.1 The parties agree to effect all reasonable efforts to resolve
any and all disputes between them in connection with this Agreement
in an amicable manner. The parties agree that any dispute that
arises in connection with this Agreement
40
and which cannot be amicably resolved by the parties shall be
resolved by binding Alternative Dispute Resolution (ADR) in the
manner set forth in the following Section 11.7.2
11.7.2 All disputes arising in connection with this Agreement or its
validity which cannot be amicably resolved by the parties shall be
finally settled in accordance with the Arbitration Rules of the
German Institution of Arbitration e.V. (DIS) without recourse to the
ordinary courts of law if not agreed otherwise in this section
11.7.2.
The place of arbitration shall be Berlin. The language of the
arbitral proceedings shall be English.
The arbitral tribunal shall consist of a single neutral
individual selected according to the following subsection.
If a party intends to begin ADR to resolve a dispute, such
party shall provide written notice to the other party informing the
other party of such intention and the issues to be resolved. Within
ten (10) business days after its receipt of such notice, the other
party may, by written notice to the party initiating ADR, add
additional issues to be resolved. If the parties cannot agree upon
the selection of a neutral within twenty (20) business days
following receipt of the original ADR notice, a neutral shall be
selected by the then President ("Vorstandsvorsitzender") of the
German Institution of Arbitration (D.I.S.), Bonn. The neutral shall
be a single individual having relevant experience in the
pharmaceutical industry. The neutral selected shall not be an
employee, director or shareholder of either party or of an
Affiliate. Each party shall have ten (10)
41
business days from the date the neutral is selected to object in
good faith to the selection of that person. If either party makes
such an objection, the then President of the DIS shall, as soon as
possible thereafter, select another neutral under the same
conditions as set forth above.
11.8 SEVERABILITY. If any provision hereof should be held invalid,
illegal or unenforceable in any respect in any jurisdiction, then,
to the fullest extent permitted by law, (a) all other provisions
hereof shall remain in full force and effect in such jurisdiction
and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and
(b) such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of such provision in any
other jurisdiction.
11.9 HEADINGS. Headings used herein are for convenience only and shall
not in any way affect the construction of, or be taken into
consideration in interpreting, this Agreement.
11.10 EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which counterparts, when so executed
and delivered, shall be deemed to be an original, and all of which
counterparts, taken together, shall constitute one and the same
instrument.
11.11 ENTIRE AGREEMENT. This Agreement and the Research Agreement, as
amended and attached hereto, contains the entire agreement and
understanding of the parties hereto, and supersedes any prior
agreements or understandings between the parties with respect to the
subject matter hereof.
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IN WITNESS HEREOF, the parties hereto have caused this Agreement to be
duly executed on this 24th day of January, 2003.
TEXAS BIOTECHNOLOGY CORPORATION
By: /s/ Xx. Xxxxx X. Given
------------------------------------------------
Title: President and CEO
---------------------------------------------
REVOTAR BIOPHARMACEUTICALS AG
By: /s/ Xx. Xxxxxx Xxxxxxxx
------------------------------------------------
Title: CEO
---------------------------------------------
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