Exhibit 10.14
JOINT RESEARCH, DEVELOPMENT AND LICENSE AGREEMENT
This Joint Research, Development and License Agreement (the "Agreement") is
made and shall be effective as of May 28, 1999 by and between Cephalon, Inc., a
Delaware corporation with its principal place of business located at 000
Xxxxxxxxxx Xxxxxxx, Xxxx Xxxxxxx, Xxxxxxxxxxxx 00000-0000, X.X.X. ("Cephalon")
and X. Xxxxxxxx A/S, a Danish corporation with its principal place of business
located at 0 Xxxxxxxxxx, XX-0000 Xxxxx, Xxxxxxxxxx, Xxxxxxx ("Lundbeck").
WITNESSETH:
WHEREAS, Kyowa Hakko Kogyo, Co. Ltd. ("Kyowa") granted to Cephalon the
right to develop, use and sell pharmaceutical products containing the Substance,
KT7515 (a derivative of K252a), under the terms and conditions of a license
agreement ("Kyowa License") dated May 15, 1992, as amended; said right,
including the right to sublicense, being exclusive in the United States of
America ("U.S.") and semi-exclusive in the rest of the world;
WHEREAS, Cephalon wishes to grant, and Lundbeck wishes to accept, an
exclusive sublicense under the Kyowa License, in that certain territory to be
defined herein, to a product developed by Cephalon that is based on KT7515 and
shall be known hereinafter as CEP-1347;
WHEREAS, the Parties intend to enter into discussions with Kyowa with the
objective of restructuring certain existing territorial marketing rights
covering CEP-1347 so that, pending the outcome of such discussions, Cephalon
would hold exclusive marketing rights in North America and Lundbeck would hold
exclusive marketing rights in Europe;
WHEREAS, Cephalon, independent of Kyowa, has developed a chemical platform
of fused pyrrolocarbazole compounds ("FP" or "FPs") believed to have potential
efficacy in treating diseases of the nervous system;
WHEREAS, Cephalon wishes to grant, and Lundbeck wishes to accept, an
exclusive license in that certain territory to be defined herein to such class
of FPs including, without limitation, those FPs known as CEP-5229, CEP-5732,
CEP-6107, CEP-6141, XXX-0000, XXX-0000, CEP-5567 and CEP-5280 for use as
provided herein;
WHEREAS, Cephalon and Lundbeck desire to enter into a research and
development collaboration to identify, develop and commercialize compounds for
uses related to diseases of the nervous system; and
WHEREAS, Cephalon and Lundbeck desire to establish commercial licensing and
supply arrangements under which Cephalon Licensed Products and Kyowa Licensed
Products (as defined below) will be marketed and sold exclusively by Lundbeck in
the Territory (as defined
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below), and Lundbeck Licensed Products (as defined below) will be marketed and
sold exclusively by Cephalon outside the Territory.
NOW, THEREFORE, for good and valuable consideration, the adequacy of which
is hereby affirmed, the parties hereby agree as follows.
Article 1. Definitions. Terms that are capitalized as defined terms in this
Agreement shall have the meanings set forth below, and defined terms may be used
in their singular and plural sense:
1.1 "Affiliate" shall mean any individual or entity directly or indirectly
controlling, controlled by or under common control with, a Party to this
Agreement. Without limiting the foregoing, the direct or indirect ownership of
fifty percent (50%) or more of the outstanding voting securities of an entity,
or the right to receive fifty percent (50%) or more of the profits or earnings
of an entity, or the right to control the policy decisions of a person or
entity, shall be deemed to constitute control.
1.2 "At Cost" shall mean all direct and indirect costs incurred in the
manufacturing, testing and storage of Development Compounds and Licensed
Products, as such terms are defined herein (allocated to the production of such
Development Compounds and Licensed Products, as the case may be, in a fair and
equitable manner in conformance with generally accepted accounting principles,
consistently applied with those established with respect to other products),
with such costs including, but not limited to:
(a) direct variable costs (e.g., excipients, packing material, wages);
(b) allocated semi-variable costs (e.g., wages and salaries of supervisors,
laboratory technicians and service personnel, other personnel costs, repair and
maintenance of machinery, stock material used internally, stationary and
acquisitions);
(c) fixed costs (e.g., wages and salaries of Director of Production, staff,
head of departments, supervisors and laboratory technicians, and other personnel
costs); and
(d) distributed costs (e.g., rent, energy);
(e) an allocation for overhead in an amount equal to forty percent (40%) of
the aforementioned Costs as herein defined;
provided, however, that if a Party engages a toll manufacturer or otherwise
incurs costs due to the payment of an invoice submitted by a third party in
connection with services rendered in connection with this Agreement, then "At
Cost" with respect to such services shall mean the amount(s) set forth on said
invoice(s) and paid by the applicable Party, all provided that the third party
has been engaged on competitive terms.
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1.3 "Backup Compounds" shall mean each set of Compounds, as such term is
defined herein, that fulfill those same criteria set forth by the Joint
Management Team (or "JMT," as defined herein) that enable a Compound to qualify
as a Development Compound, whether or not such Backup Compounds actually are
selected by the JMT for preclinical, clinical and commercial development. The
precise number of Backup Compounds in a set, as well as their respective
selection criteria, shall be determined by the JMT. It is the intention of the
Parties that such Backup Compounds initially shall be held in reserve and
subsequently may be designated and developed as Development Compounds.
1.4 "CEP-1347" shall mean a certain indolocarbazole compound for which
development and commercialization rights have been granted to Cephalon pursuant
to the Kyowa License. The chemical formula of CEP-1347 is as set forth on
Exhibit B.
1.5 "Cephalon Compounds" shall mean Compounds (as defined herein) other than
Joint Compounds and Lundbeck Compounds.
1.6 "Cephalon Know-How" shall mean Know-How that is proprietary to Cephalon.
1.7 "Cephalon Licensed Products" shall mean pharmaceutical products that
contain Cephalon Compounds.
1.8 "Cephalon Patent Rights" shall mean Patent Rights that are proprietary to
Cephalon.
1.9 "Cephalon Technology" shall mean Technology that is proprietary to
Cephalon. With respect to CEP-1347, Cephalon Technology includes the drug
development dossier related to the filing of an investigational new drug
application by Cephalon that supports short-term clinical studies; as well as
any Cephalon Patent Rights and Cephalon Know-How to the extent that it relates
to the synthesis, composition and uses of CEP-1347 in the Field.
1.10 "Compounds" shall mean:
(a) Subject to the exclusions set forth below, "Compounds" shall include
(i) CEP-1347; (ii) FPs that inhibit the same Targets (as such term is defined
herein) as does CEP-1347 including, without limitation, CEP-5229, CEP-5732,
CEP-6107, CEP-6141, CEP-5283, CEP-5398, CEP-5567, CEP-5280; (iii) FPs that act
upon any other Targets that may be selected by the JMT (as defined below); and
(iv) chemical entities other than FPs that are selected pursuant to the
unanimous consent of the Parties, and act upon Target(s) in the Field. For
purposes of this subsection, an FP or other chemical entity shall be deemed to
be a Compound only insofar as it has been conceived prior to the end of the
Research Program and synthesized prior to the later of (i) one (1) year
following the date of conception; and (ii) the end of the Research Program. Any
such chemical entities that act upon a Target and fulfill potency criteria
established by the JMT, but fail to meet the selectivity requirements
established by the JMT or would otherwise be excluded as "Compounds" under the
terms of subsection 1.10(b) below, nevertheless may be
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designated by the JMT to be "Compounds" so long as such chemical entities are
not covered by the terms of any then-existing third party obligations of
Cephalon.
(b) Notwithstanding the foregoing, "Compounds" shall not include any
chemical entities (whether or not FPs) which (i) are subject to any outstanding
third party obligations of Cephalon, as set forth on Exhibit C hereto; or (ii)
predominantly inhibit the biological activity, with an IC/50/ less than 50 nM,
of the following tyrosine kinases and receptors: nerve growth factor receptors
(e.g., trkA, trkB, trkC and homologues thereof), vascular endothelial growth
factor receptors (e.g., VEGFR1, VEGFR2 and homologues thereof), and glial
derived neurotrophic factor receptors (e.g., ret and its associated GFRa1,
XXXx0, XXXx0, and GFRa4 accessory receptors and homologues thereof). Any such
chemical entities that are deemed to fall outside the definition of Compounds as
a result of the application of this subsection 1.10(b) shall remain the sole and
exclusive property of Cephalon, and will not be subject to the terms and
conditions hereof.
1.11 "Development Compounds" shall mean Compounds that meet the criteria
established, and are selected, by the JMT to be Development Compounds, unless
and until said Compounds are otherwise excluded from further development by the
JMT in accordance with the terms of Section 3.2 below.
1.12 "Development Program" shall mean a program including, but not limited to,
preclinical, clinical, scale-up manufacturing and commercial development of a
Development Compound conducted by the Parties pursuant to this Agreement
primarily with the intent, and for the purpose, of generating data for
submission to regulatory authorities in support of an application for
governmental approval necessary to permit the commercialization of a Licensed
Product.
1.13 "Effective Date" shall mean the date hereof.
1.14 "Field" shall mean the treatment of diseases of the nervous system.
1.15 "FTE" shall mean a full time equivalent employee.
1.16 "Initial Research Term" shall mean the initial three (3) year period of the
Research Program, commencing upon the Effective Date of this Agreement.
1.17 "Joint Compounds" shall mean Compounds (as defined herein) that have been
conceived or reduced to practice jointly, as determined by the patent laws of
the United States, by Cephalon and Lundbeck during the conduct of the Research
Program.
1.18 "Joint Know-How" shall mean Know-How that is proprietary jointly to both
Parties.
1.19 "Joint Licensed Products" shall mean all pharmaceutical products that
contain Joint Compounds.
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1.20 "Joint Patents" shall mean all Patent Rights that are proprietary jointly
to both Parties.
1.21 "Joint Technology" shall mean Technology that is proprietary jointly to
both Parties.
1.22 "Joint Management Team" or "JMT" shall mean the group of research,
development, and commercial executives collectively designated to serve in such
capacity by each of Cephalon and Lundbeck.
1.23 "Know-How" shall mean know-how, trade secrets, Targets, inventions,
discoveries, technical information (including preclinical data and clinical
results), formulae, processes, expert opinions, data, and other confidential and
proprietary information, other than Kyowa Technology, owned, controlled or
licensed (with the right to assign or sublicense) by either Party or any of its
Affiliates, to the extent that it relates to the conduct of the Research Program
or a Development Program, or to the composition, manufacture or use of Compounds
or Licensed Products.
1.24 "Kyowa Licensed Products" shall mean all pharmaceutical products that
contain CEP-1347.
1.25 "Kyowa Technology" shall mean the patent rights, including all U.S. patent
applications and issued patents owned or controlled by Kyowa and its Affiliates
covering the composition, manufacture or use of CEP-1347 (as well as the use of
K252a solely in connection with the manufacture of CEP-1347) including but not
limited to any provisionals, divisionals, continuations, continuations-in-part,
reissues, reexaminations, extensions derived therefrom, as well as all foreign
patent applications, granted foreign patents and all counterparts thereof
including, but not limited to, supplemental protection certificates,
administrative protection certificates (or other governmental actions) which
provide exclusive rights to the patent holders in the patented subject matter,
manufacturing rights, and know-how relating to K252a and CEP-1347 to the extent
that they have been granted to Cephalon pursuant to the Kyowa License. A copy of
the Kyowa License is attached hereto as Exhibit D.
1.26 "Licensed Products" shall mean Cephalon Licensed Products, Kyowa Licensed
Products, and Lundbeck Licensed Products.
1.27 "Lundbeck Compounds" shall mean Compounds (as defined herein) that have
been conceived or reduced to practice solely by Lundbeck.
1.28 "Lundbeck Licensed Products" shall mean all pharmaceutical products that
contain Lundbeck Compounds.
1.29 "Lundbeck Know-How" shall mean Know-How that is proprietary to, or licensed
by, Lundbeck.
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1.30 "Lundbeck Patent Rights" shall mean Patent Rights that are proprietary to,
or licensed by, Lundbeck.
1.31 "Lundbeck Technology" shall mean Technology that is proprietary to, or
licensed by, Lundbeck.
1.32 "Marketing Authorization Application" or "MAA" shall mean an application
seeking the approval of the competent regulatory authority in any country in the
Territory (including, without limitation, the European Medicines Evaluation
Agency or "EMEA") to enable one of the Parties (or an Affiliate or assignee
thereof) to market a Cephalon Licensed Product or a Kyowa Licensed Product.
1.33 "Net Sales" shall mean the gross receipts derived in arms-length
transactions from the sale of Licensed Products in the Territory by Lundbeck (or
by its Affiliates, sublicensees, distributors or other authorized third parties
holding rights granted by Lundbeck to market and sell Cephalon Licensed Products
or Kyowa Licensed Products under this Agreement) to independent third parties in
the Territory, less an amount equal to three percent (3%) of such gross receipts
which amount shall be deducted in lieu of deducting any actual amounts for
transportation or insurance charges, taxes and duties, discounts, allowances,
rebates and commissions, or any other customary deductions which might otherwise
be taken. Sales between or among Lundbeck and its Affiliates (or sublicensees,
distributors or other authorized third party marketers) shall be excluded from
the computation of gross receipts hereunder except where such Affiliates (or
sublicensees or other authorized third party marketers) are end users, but gross
receipts shall include the subsequent final sales to third parties by such
Affiliates (or sublicensees or other authorized third party marketers). Where
(i) Cephalon Licensed Products and/or Kyowa Licensed Products are sold as one of
a number of items without a separate price; or (ii) the consideration for the
Cephalon Licensed Products and/or Kyowa Licensed Products shall include any
non-cash element; or (iii) the Cephalon Licensed Products and/or Kyowa Licensed
Products shall be transferred in any manner other than an invoiced sale, except
for Cephalon Licensed Products and/or Kyowa Licensed Products transferred as
samples or any other similar transfer for promotional purposes usually made in
the relevant part of the Territory, the gross receipts applicable to any such
transaction shall be deemed to be Lundbeck's average gross receipts for the
applicable quantity of Cephalon Licensed Products and/or Kyowa Licensed Products
at that time in the country in which the transaction occurred. If there are no
independent gross receipts of Cephalon Licensed Products and/or Kyowa Licensed
Products in the country at that time, then Lundbeck and Cephalon shall mutually
agree on a surrogate measure to be used in lieu thereof.
1.34 "Party" or "Parties" shall mean Cephalon and/or Lundbeck, as the case may
be.
1.35 "Patent Rights" shall mean all patent applications (whether in preparation
or filed) and issued patents, owned, controlled or licensed (with the right to
assign or sublicense) by a Party or Parties to this Agreement (or an Affiliate
thereof) covering the assays, Targets, processes, composition, manufacture or
use of any Compound (as well as any Know-How that may be
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patentable) that are owned by one or both of the Parties, including but not
limited to any provisionals, divisionals, continuations, continuations-in-part,
reissues, reexaminations, extensions derived therefrom, as well as all foreign
patent applications, granted patents and all counterparts thereof including, but
not limited to, substitutions, confirmations, registrations, revalidations,
supplemental protection certificates, administrative protection certificates (or
other governmental actions) which provide exclusive rights to the patent holders
in the patented subject matter. All such Cephalon Patent Rights in existence as
of the Effective Date shall be as set forth on Exhibit A hereto.
1.36 "Research Program" shall mean the program of preclinical discovery research
that will focus on the selection and validation of Targets and the discovery and
evaluation of Compounds in the Field, all to be conducted by the Parties under
the terms of this Agreement as more fully described in Exhibit E hereto.
1.37 "Target" or "Targets" shall mean a component of the human nervous system,
which component in its function or malfunction is involved in treating, or
otherwise relates to, diseases in the Field. More specifically, Targets will be
defined in terms of their respective protein or genetic sequence(s), molecular
structure(s), biochemical activity, binding of ligand(s) or interaction with
other components of the human nervous system.
1.38 "Technology" shall mean, collectively, Patent Rights and Know-How, but
excluding Kyowa Technology. For purposes of clarification, the term Technology
expressly excludes any Patent Rights and Know-How that either Party may license
from a third party after the Effective Date of this Agreement, unless (i) such
Party is permitted to grant a sublicense or other rights thereunder to the other
Party; and (ii) the sublicensing Party shall have executed and delivered a
sublicense or other agreement in a form reasonably required in connection
therewith.
1.39 "Territory" shall mean generally the regions of Europe, the Middle East,
and South America (including, without limitation, the countries within those
regions listed in Exhibit F hereto), as well as the countries of Australia, New
Zealand and South Africa.
1.40 "Valid Claim" shall mean a claim of an issued patent that has not lapsed or
become abandoned or been declared invalid or unenforceable by a court or agency
of competent jurisdiction from which no appeal can be or is taken. Article 2.
Research and Development Programs
2.1 Research Activities. The Parties agree to conduct a joint Research Program
as described in Exhibit E to discover and synthesize Compounds that act upon
Target(s) and may have efficacy in the Field. Under the Research Program the
Parties shall select and validate Targets, and evaluate Compounds as potential
modulators of those Targets. For purposes of clarification, Lundbeck shall not
use Cephalon Technology except in connection with the fulfillment of its
obligations and furtherance of its rights established hereunder. The Research
Program also may include studies relating to the potential efficacy of CEP-1347
in treating diseases in the Field,
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concentrating on, but without being limited to, studies relating to the
potential efficacy of CEP-1347 in treating neurodegenerative diseases and the
validation of key signaling kinases that act upon those Target(s) that are the
same as those targeted by CEP-1347 in neural tissues.
2.2 Selection of Compounds and Compound Synthesis. In addition to those
chemical entities defined as Compounds under the terms of Section 1.10 hereof,
the Parties shall determine whether or not certain other chemical entities shall
be deemed to be Compounds. For purposes of clarification, and subject to the
grant of any rights hereunder, the Party holding proprietary rights to any such
Compound(s) shall continue to hold all such rights in said Compound(s) during
the pendency of this Agreement and following the termination thereof.
2.3 Extension of the Research Program. At the option of Lundbeck, the Research
Program shall be extended for an additional term either of one (1) or two (2)
twelve-month periods beyond the date of expiry of the Initial Research Term,
with the level of financial support to be provided by Lundbeck to Cephalon
during any such extension period to be established in accordance with the terms
of Section 6.3 hereof.
2.4 Development Activities. The Parties agree jointly to conduct a Development
Program for the use of CEP-1347 to treat diseases in the Field, and of other
Development Compounds as may be selected by the JMT.
2.5 Term of the Development Program. The Development Program shall continue for
so long as the Parties agree, subject to the oversight and direction of the JMT,
to pursue marketing approval for not less than one Development Compound.
2.6 Use of Research Materials. The Parties agree that all compositions,
biological materials and animals used in the Research Program and the
Development Program shall be used in compliance with all applicable laws and
regulations.
Article 3. Joint Management Team
3.1 Joint Management Team. The JMT shall consist of six (6) members, three (3)
of whom shall be appointed by Cephalon and three (3) of whom shall be appointed
by Lundbeck. Each Party may change its representatives to the JMT at its sole
discretion. The JMT shall meet face-to-face at least two (2) times per year, and
shall communicate regularly and no less frequently than once per calendar
quarter. The first such meeting shall be held within ninety (90) days after the
Effective Date. The location of the meetings shall alternate between the
corporate headquarters of the Parties unless otherwise agreed to by the Parties.
3.2 Responsibilities of the JMT. The responsibilities of the JMT shall include:
(a) Management of the Research Program. The JMT shall establish and may
amend the scientific objectives of the Research Program from time to time and
shall review the progress
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of the Research Program. The JMT also shall guide the research activities of the
Parties with respect to the Research Program. For example, the JMT shall
determine the Target(s) and assay systems against which Compounds will be
screened for use in the Field. At any time during the pendency of the Research
Term, the JMT may change the Target(s), select additional Target(s) in the
Field, or redefine the principal Target of CEP-1347 or of any other Compound.
(b) Selection of Development and Backup Compounds. The JMT shall develop a
set of criteria by which a Compound shall be deemed to be either a Development
Compound or a Backup Compound. Such criteria may be revised at the sole
discretion of the JMT from time to time, but shall at least include references
to biological activity levels associated with the Target(s), as well as
customary pharmaceutical criteria (e.g., solubility, bioavailability and
safety). Once a Compound has fulfilled the criteria set forth at a given time,
the Compound shall remain classified as a Development Compound, or a Backup
Compound, as the case may be, for purposes of this Agreement. In addition,
Compounds that fail to meet such criteria for selection as a Development
Compound or as a Backup Compound at any given time hereunder, may be reevaluated
by the Parties against new Target(s) and thereafter may be designated by the JMT
as a Development Compound or a Backup Compound on the basis of having met such
revised selection criteria; provided however, that the JMT may not reevaluate
any such Compound that (i) is proprietary to a Party, and (ii) following the
initial evaluation thereof, has been selected by a Party for development outside
the scope of this Agreement.
(c) Catalogue of Compounds. The JMT shall maintain a complete list of all
Compounds to be evaluated under the Research Program, which list shall specify
the designation of all such Compounds either as Cephalon Compounds, Lundbeck
Compounds or Joint Compounds.
(d) Management of the Development Program. The JMT shall establish,
periodically review, and modify as may be necessary and advisable, the
preclinical, clinical and commercial objectives of a Development Program for
each Development Compound from time to time. Promptly following the Effective
Date, the JMT shall establish these objectives, and agree upon a projected
budget (which will be revised and set forth in writing on an annual basis) and
appropriate cost accounting methodologies for the Development Program. The JMT,
in its sole discretion, also will manage and coordinate all development
activities of the Parties with respect to the Development Program, including
scheduling preclinical studies and clinical trials for Development Compounds;
establishing milestones for the completion of Development Program objectives,
including without limitation those relating to anticipated filing dates to an
IND (or equivalent) filing and an MAA filing; nominating and selecting a
Compound for development as a Development Compound; evaluating the progress of
the Parties with respect to the Development Program; determining to end the
development of a Development Compound or to designate a Backup Compound as a
Development Compound; and generally ensuring that each Party exercises
consistently its respective commercially reasonable diligence to undertake and
complete in a timely manner the Development Program with respect to each
Development Compound.
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3.3 Decision Making by the JMT and Dispute Resolution.
(a) Regardless of the number of individual members of the JMT that may
attend any given meeting or proceeding, each Party shall be entitled to cast one
vote on all matters to be determined by the JMT, and each such matter shall be
governed by unanimous consent of the Parties. The Parties shall prepare and
approve written minutes of all JMT meetings, not later than thirty (30) days
after any such meeting(s). The Parties shall cooperate in implementing all
decisions taken by the JMT.
(b) If the JMT does not agree that any particular pre-clinical or clinical
study is necessary for a Development Compound, either Party may conduct such a
study at its own risk and expense. Data from such a study shall be made
available to the other Party pursuant to Article 11. Notwithstanding the
foregoing, neither Party may conduct a study that the other Party reasonably
believes would jeopardize the regulatory approval or commercialization of any
Development Compound worldwide.
(c) Any matters otherwise within the discretion of the JMT which cannot be
resolved by the JMT shall be subject to resolution as provided in Section 21.10.
Article 4. General Responsibilities of the Parties
4.1 General. The Parties agree to cooperate with each other in good faith to
ensure the success of the Research Program and Development Program. The Parties
agree to use commercially reasonable diligence to perform the tasks assigned to
them by the JMT and to perform their other obligations pursuant to this
Agreement, including without limitation the diligence requirements set forth in
Section 8.2. However, nothing in this Agreement shall give either Party the
authority to control or direct the activities of any employees or agents of the
other Party.
4.2 Research and Development of Development Compounds. The conduct of, and
expenses relating to, the Development Program (other than with respect to
CEP-1347) shall be shared equally by the Parties. With respect to CEP-1347, the
Parties will share equally all costs incurred under the Development Program
except for (i) those costs incurred in connection with the activities described
in Sections 4.3 and 4.4; and (ii) those costs specified in Section 6.4(a).
4.3 Process Development for CEP-1347. As contemplated under Section 9.1 hereof,
Cephalon shall be responsible for supplying Lundbeck with sufficient quantities
of K252a starting material. Promptly following the receipt by Lundbeck of such
starting material as well as the Cephalon Technology, Lundbeck shall be
responsible for the conduct and expenses associated with all chemical process
development for CEP-1347. During the term of this Agreement Cephalon shall use
its best efforts to make available to Lundbeck appropriate Cephalon personnel to
transfer to Lundbeck all applicable Cephalon Technology and Kyowa Technology
necessary for the production of CEP-1347.
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4.4 Drug Development for CEP-1347. Unless otherwise agreed upon by the Parties,
Lundbeck shall be responsible for conducting, and expenses incurred therewith,
the following activities:
(a) performing subchronic six-month drug safety studies in two (2) species
pursuant to ICH guidelines;
(b) filing an investigational new drug application ("IND"), or its
equivalent with a regulatory authority of a member state of the European Union,
for CEP-1347 in accordance with the schedule set forth in the Development Plan
as defined by the JMT; and
(c) performing Phase I clinical trials for safety and tolerability (single
and multiple dosages in volunteers, including pharmacokinetic analysis thereof).
Article 5. Grant of Rights
5.1 Exclusive Licenses.
(a) Cephalon Licensed Products. Subject to the limitations established in
Section 5.6, Cephalon hereby grants to Lundbeck an exclusive license (exclusive
even as to Cephalon) under the Cephalon Technology to make, have made, use and
sell Cephalon Licensed Products in the Territory. This grant shall permit
Lundbeck to develop and commercialize Development Compounds in the Territory,
whether within or outside the Field.
(b) Lundbeck Licensed Products. To the extent that Lundbeck agrees to
designate Lundbeck Compounds as contemplated under Section 1.10 hereof, Lundbeck
hereby grants to Cephalon a royalty-free exclusive license (exclusive even as to
Lundbeck) under the Lundbeck Technology to make, have made, use and sell
Lundbeck Licensed Products outside the Territory.
(c) Joint Licensed Products. To the extent applicable, each Party hereby
grants to the other Party for the term of this Agreement a royalty-free
exclusive license under the Joint Technology to make, have made, use and sell
Joint Licensed Products in the Territory, as to Lundbeck, and outside the
Territory, as to Cephalon.
5.2 Marketing and Distribution Rights to Cephalon Licensed Products. Lundbeck
may market and distribute Cephalon Licensed Products in the Territory through
the channels normally used for the Lundbeck product portfolio including, but not
limited to, Affiliates, agents, distributors, joint venture partners and
co-promotion and co-marketing partners (even if any such commercial contract
between Lundbeck and the applicable third party is formally described or
structured as a license). Subject to the written consent of Cephalon, with such
consent not to be unreasonably withheld, taking into account the commercial
interests of Lundbeck, Lundbeck may grant rights to third parties to market,
promote, sell and distribute Cephalon Licensed
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Products in any country in the Territory, where Lundbeck does not itself or
through its then-existing ordinary channels, wish to market Cephalon Licensed
Products. However, if Cephalon has established, or plans to develop, a
commercial operation in any such country in the Territory, then prior to doing
so Lundbeck hereby agrees to negotiate in good faith for a period not to exceed
sixty (60) days to grant such rights to Cephalon under terms and conditions to
be mutually agreed upon. If Lundbeck and Cephalon fail to so reach agreement
within such period, then Lundbeck may discuss terms and conditions with third
parties but it shall not enter into any such agreement with a third party on
terms and conditions more favorable to such third party than those offered to
Cephalon without first offering such more favorable terms to Cepahlon in
accordance with the procedures set forth herein. If Lundbeck thereafter enters
into such an agreement with a third party with the consent of Cephalon, then
such agreement shall contain terms and conditions customary in the
pharmaceutical industry with respect to such commercial arrangements, including
without limitation those relating to the prompt disclosure of adverse drug
experiences and any adverse regulatory or other governmental actions relating to
the Cephalon Licensed Products.
5.3 Exclusive Sublicense to Kyowa Licensed Products. Subject to the terms and
conditions set forth herein, and pursuant to the Kyowa License, Cephalon hereby
grants to Lundbeck an exclusive sublicense (exclusive even as to Cephalon) under
the Kyowa Technology to use and sell Kyowa Licensed Products in the Territory.
Lundbeck acknowledges that the rights of Cephalon with regard to Kyowa Licensed
Products under the Kyowa License are semi-exclusive as to Kyowa and, therefore,
that the rights granted hereunder to Lundbeck also are semi-exclusive as to
Kyowa in the Territory. Moreover, Lundbeck hereby agrees to cooperate with
Cephalon so as to ensure continued satisfaction of all those terms and
conditions of the Kyowa License, a copy of which Kyowa License is attached
hereto as Exhibit D. Subject to the determination by the Parties that Lundbeck
shall be responsible for the bulk synthesis and manufacture of commercial
supplies of CEP-1347, Cephalon hereby grants to Lundbeck manufacturing rights to
the extent that Kyowa has, or shall have, granted such rights to Cephalon.
5.4 Marketing and Distribution Rights to Kyowa Licensed Products. Lundbeck may
market and distribute Kyowa Licensed Products through the channels normally used
for the Lundbeck product portfolio, including but not limited to, Affiliates,
agents, distributors, joint venture partners and co-promotion and co-marketing
partners (even if the contractual relationship between Lundbeck and its partners
is formally built up as a license). Subject to the written consent of Cephalon,
with such consent not to be unreasonably withheld taking Lundbeck's commercial
interests into consideration, Lundbeck may grant rights to third parties to
market, promote, sell and distribute Kyowa Licensed Products in any country in
the Territory , where Lundbeck does not itself or through its then existing
ordinary channels, wish to market Kyowa Licensed Products. However if Cephalon
has established, or plans to develop, a commercial operation in any such country
in the Territory, then prior to doing so Lundbeck hereby agrees to negotiate in
good faith for a period not to exceed sixty (60) days to grant such rights to
Cephalon under terms and conditions to be mutually agreed upon. If Lundbeck and
Cephalon fail to so
12
reach agreement within such period, then Lundbeck may discuss terms and
conditions with third parties but it shall not enter into any such agreement
with a third party on terms and conditions more favorable to such third party
than those offered to Cephalon without first offering such more favorable terms
to Cepahlon in accordance with the procedures set forth herein. If Lundbeck
thereafter enters into such an agreement with a third party with the consent of
Cephalon, then such agreement shall contain terms and conditions customary in
the pharmaceutical industry with respect to such commercial arrangements,
including without limitation those relating to the prompt disclosure of adverse
drug experiences and any adverse regulatory or other governmental actions
relating to the Kyowa Licensed Products.
5.5 Potential Additional Rights to Kyowa Licensed Products
(a) Cephalon agrees to use its reasonable best efforts to obtain the
exclusive right and license (exclusive even as to Kyowa) to commercialize Kyowa
Licensed Products in Europe. If Kyowa shall grant to Cephalon an exclusive
license (exclusive even as to Kyowa) under the Kyowa Technology in Europe with
regard to Kyowa Licensed Products then, without further action or remuneration,
Lundbeck hereby shall be granted an exclusive sublicense (exclusive as to
Cephalon and to Kyowa) to all such rights in Europe.
(b) If Cephalon is unable to obtain an exclusive license as described in
Section 5.5(a), Cephalon agrees to use its reasonable best efforts to assist
Lundbeck to obtain the marketing rights, presently retained by Kyowa, to
commercialize Kyowa Licensed Products in Europe in the Field. In the event that
Lundbeck is unable to secure at least such marketing rights as described in this
Section 5.5(b), then it may terminate the portion of this Agreement that relates
to Kyowa Licensed Products as provided for in Section 17.2.
(c) If within one (1) year after the Effective Date Cephalon is unable to
obtain an exclusive license as described in Section 5.5(a) and Lundbeck is
unable to secure the marketing rights as described in Section 5.5(b), but
Lundbeck does not elect to terminate its rights as to the Kyowa Licensed
Products then, without further action or remuneration, the Territory
automatically shall be expanded to include all other countries of the world
(except for those in North America), and the Parties shall negotiate in good
faith to reach mutual agreement as to the amount of additional royalties or
other payments to be made by Lundbeck to Cephalon hereunder. In the event of
said expansion of the Territory, the royalty rate shall remain constant with
respect to those countries in the Territory as of the Effective Date, and may be
increased to an amount not to exceed [*The confidential material contained
herein has been omitted and has been separately filed with the Commission.] of
Net Sales for those countries that may be added to the Territory after the
Effective Date as contemplated herein, taking into account whether or not Kyowa
has, or plans to, exercise its semi-exclusive rights in all or part of the
Territory.
5.6 Use of Compounds Outside the Field.
If Lundbeck determines that it will not conduct preclinical, clinical and
commercial development activities of one or more Development Compound(s) having
indications outside the
13
Field, then Lundbeck may sublicense its development and commercialization rights
in the Territory to a third party subject to the written consent of Cephalon,
with such consent not to be unreasonably withheld taking Lundbeck's commercial
interests into consideration. However, prior to doing so Lundbeck agrees to
negotiate in good faith for a period not to exceed sixty (60) days to grant such
development and commercialization rights to Cephalon. If the Parties are unable
to agree on mutually acceptable terms and conditions within such period, then
Lundbeck may discuss sublicense terms and conditions with third parties but it
shall not enter into any such agreement with a third party on terms and
conditions more favorable to such third party than those offered to Cephalon
without first offering such more favorable terms to Cephalon in accordance with
the procedures set forth herein. For purposes of clarification, nothing in this
Agreement shall be construed so as to preclude Cephalon from developing and
commercializing outside the Field on a worldwide basis any Cephalon Compound
that has not been designated as a Development Compound or a Backup Compound.
5.7 Co-Promotion Rights in Canada.
Cephalon hereby agrees that it will not grant to any third party (other
than to an Affiliate) the right to co-promote in Canada either the Kyowa
Licensed Products or the Cephalon Licensed Products without first negotiating in
good faith for a period not to exceed sixty (60) days to reach agreement on
mutually acceptable terms and conditions that would grant such rights to
Lundbeck. If the Parties are unable to agree on mutually acceptable terms of
co-promotion within such period, then Cephalon may discuss co-promotion terms
with third parties but it shall not enter into any such agreement with a third
party on terms and conditions more favorable to such third party than those
offered to Lundbeck without first offering such more favorable terms to Lundbeck
in accordance with the procedures set forth herein.
Article 6. Research and Development Funding
6.1 General. Except as otherwise provided herein, all payments shall be due and
payable within thirty (30) days from the date that either Party receives an
invoice from the other Party, unless the invoicing Party consents in writing to
other payment terms. All payments by either Party in connection with this
Agreement shall be made by wire transfer and in U.S. dollars unless otherwise
agreed to by the Parties in writing.
6.2 Funding for Research Program during the Initial Research Term. Lundbeck
agrees to provide financial support for the employment by Cephalon of not less
than [*The confidential material contained herein has been omitted and has been
separately filed with the Commission.] FTEs during the entirety of the Initial
Research Term, and Cephalon hereby represents that such financial support shall
be used by Cephalon solely to fund such employment in direct support of the
Research Program. In connection herewith, Lundbeck will make twelve (12)
quarterly payments to Cephalon, the first of which shall be due and payable on
July 1, 1999. The first quarterly payment shall be prorated to cover that
remaining portion of the calendar quarter from the Effective Date to July 1,
1999 as well as the full amount for the following calendar quarter July 1 to
September 30, 1999. Subsequent payments shall be due and payable on the first
day of
14
each calendar quarter during the Initial Research Term. Notwithstanding the
above, the total number of Cephalon FTEs to be funded by Lundbeck hereunder may
exceed [*The confidential material contained herein has been omitted and has
been separately filed with the Commission.] in any given calendar quarter and
will be determined by mutual agreement of the Parties upon the recommendation of
the JMT, which will take into account the resources and expertise contributed to
the Research Program directly by Lundbeck. Each Cephalon FTE initially shall be
chargeable at a rate per annum of [*The confidential material contained herein
has been omitted and has been separately filed with the Commission.] ; such
amount shall be increased or decreased on December 31 of each year during the
Initial Research Term by the percentage increased or decrease in the U.S.
Consumer Price Index for those payments made by Lundbeck to Cephalon during the
following calendar year. For purposes of clarification, Lundbeck shall pay
Cephalon on July 1, 1999 an amount not less than [*The confidential material
contained herein has been omitted and has been separately filed with the
Commission.] covering the period July 1 to September 30, 1999, plus any
additional amount necessary to cover on a prorata basis the period from the
Effective Date to June 30, 1999. In addition, any external expenses incurred
(whether by Cephalon or by Lundbeck) during the Initial Research Term and
relating to the conduct of the Research Program shall be approved in advance by
the JMT and costs of any such approved external studies shall be shared equally
by the Parties.
6.3 Funding for Research Program during an Extended Research Term. If the
Research Program is extended beyond the Initial Research Term, then the amount
of financial support to be paid to Cephalon by Lundbeck during any such
extension period shall, unless otherwise agreed upon by the Parties, be
sufficient to support [*The confidential material contained herein has been
omitted and has been separately filed with the Commission.] (with the funding
level per FTE to be adjusted in accordance with changes in the Consumer Price
Index ("CPI") during the Initial Research Term).
6.4 Funding for the Development Program.
(a) Funding for CEP-1347. Lundbeck agrees to pay Cephalon [*The
confidential material contained herein has been omitted and has been separately
filed with the Commission.] in quarterly installments of [*The confidential
material contained herein has been omitted and has been separately filed with
the Commission.] each during the first year of this Agreement to cover costs
incurred by Cephalon in connection with the transfer of Kyowa Technology and
Cephalon Technology relating to CEP-1347. The first such payment shall be due on
July 1, 1999, and subsequent payments shall be due at the beginning of each
calendar quarter. In addition, and subject to the Cephalon Technology having
been transferred, Lundbeck also agrees to assume all costs necessary to develop
a plant scale chemical manufacturing process for CEP-1347, and to produce
sufficient bulk quantities of CEP-1347 necessary and sufficient to conduct (i)
Phase II clinical studies; and (ii) required six (6) month preclinical drug
safety studies. As established under Section 4.2 hereof, the Parties shall share
equally all costs incurred in connection with the development of CEP-1347 (other
than those to be funded solely by Lundbeck as provided in Section 4.2).
(b) Funding for Other Development Compounds. For those Development
Compounds other than CEP-1347, all costs incurred under the Development Program
shall be borne equally by the Parties in accordance with the plans and budgets
approved by the JMT including, without limitation, external expenses as well as
fully-burdened internal costs of operation.
15
6.5 Records and Audits Relating to the Research Program and the Development
Programs. The Parties shall maintain complete and accurate records of their
respective employee hours devoted, and expenses incurred, in connection with the
Research Program and the Development Program(s) for a period of not less than
three (3) years from the date of incurrence. Each Party shall have the right, at
its own expense and through a certified public accountant or like person
reasonably acceptable to the other Party, to examine such records during regular
business hours during the life of this Agreement; provided, however, that such
examination shall not take place more often than once a year and shall not cover
such records for more than the preceding two (2) years and provided further that
such certified public accountant shall report to the other Party only as to the
accuracy of said records.
Article 7. License Fees, Royalties and Milestone Payments
7.1 License Fees. Lundbeck shall pay Cephalon on the Effective Date, by wire
transfer (or as otherwise agreed upon by the Parties), an amount equal to [*The
confidential material contained herein has been omitted and has been separately
filed with the Commission.] multiplied by the average closing price of Cephalon
common stock for the five (5) trading days immediately prior to the Effective
Date.
7.2. Royalty Payments. Lundbeck shall pay the following amounts to Cephalon as
royalties on Net Sales:
(a) Lundbeck shall pay to Cephalon a royalty in the amount of [*The
confidential material contained herein has been omitted and has been separately
filed with the Commission.] of the Net Sales of Kyowa Licensed Products in the
Territory. Such royalty shall be payable on all such Net Sales completed prior
to the last to occur of (i) the expiration date of the last to expire of Valid
Claims of Patent Rights granted to Cephalon under the Kyowa License; (ii) the
expiration date of Valid Claims of any applicable R&D Patent Rights (if jointly
owned or solely owned by Cephalon); (iii) the end of any period of market
exclusivity under an MAA for Kyowa Licensed Products (or under the terms of
applicable laws and regulations) unless said market exclusivity is granted or
otherwise based solely upon Lundbeck Technology; and (iv) that date which is ten
(10) years from the date of first sale of a Kyowa Licensed Product.
Notwithstanding the above, if any third party (other than Kyowa, or an
Affiliate, sublicensee or authorized third party marketer thereof) shall market
and sell in the Territory pharmaceutical product(s) containing CEP-1347 and
having registered indications that are the same or substantially similar as
those held by Lundbeck for the Kyowa Licensed Products, and the market share in
terms of the defined daily dosage of products sold by all such third-party
competitor(s) in any given country in the Territory is at least thirty percent
(30%) of the respective Lundbeck market share in defined daily dosage of Kyowa
Licensed Products sold, then the royalty to be paid by Lundbeck to Cephalon
hereunder shall be reduced from [*The confidential material contained herein has
been omitted and has been separately filed with the Commission.] of Net Sales of
such Kyowa Licensed Products. For purposes of clarification, this royalty rate
reduction shall be made effective only for those countries in the Territory in
which the aforementioned market share threshold has been
16
met, and only during those rolling twelve (12) month periods hereunder in which
the aforementioned market share threshold has been met.
(b) Lundbeck shall pay to Cephalon a royalty in the amount of [*The
confidential material contained herein has been omitted and has been separately
filed with the Commission.] of the Net Sales of Cephalon Licensed Products in
the Territory. Such royalty shall be payable on all such Net Sales completed
prior to the last to occur of (i) the expiration date of the last to expire of
valid claims of patent rights granted to Cephalon; (ii) the expiration date of
valid claims of any applicable Cephalon or jointly owned R&D Patent Rights;
(iii) the last day of any period of market exclusivity under an MAA for Cephalon
Licensed Products (or under the terms of applicable laws and regulations) unless
said market exclusivity is granted or otherwise based solely upon Lundbeck
Technology; and (iv) that date which is ten (10) years from the date of first
sale of a Cephalon Licensed Product. Notwithstanding the above, if any third
party shall market and sell in the Territory pharmaceutical product(s)
containing the active drug substance found in any such Cephalon Licensed Product
and having registered indications that are the same or substantially similar as
those held by Lundbeck for the Cephalon Licensed Products, and the market share
in terms of the defined daily dosage of products sold by all such third-party
competitor(s) in any given country in the Territory is at least thirty percent
(30%) of the respective Lundbeck market share in defined daily dosage of
Cephalon Licensed Products sold, then the royalty to be paid by Lundbeck to
Cephalon hereunder shall be reduced from [*The confidential material contained
herein has been omitted and has been separately filed with the Commission.] of
Net Sales of such Cephalon Licensed Products. For purposes of clarification,
this royalty rate reduction shall be made effective only for those countries in
the Territory in which the aforementioned market share threshold has been met,
and only during those rolling twelve (12) month period hereunder in which the
aforementioned market share threshold has been met.
(c) Lundbeck shall maintain (and shall require its Affiliates, sublicensees
and third party marketers to maintain, if applicable) complete and accurate
records of all sales of Cephalon Licensed Products & Kyowa Licensed Products
pursuant to the licenses granted hereunder, for a period of not less than five
(5) years from the date of the applicable Net Sales. Cephalon shall have the
right, at its own expense and through a certified public accountant or like
person reasonably acceptable to Lundbeck, to examine such records during regular
business hours during the life of this Agreement and for twelve (12) months
after the later of its termination or the last sale of Cephalon Licensed
Products & Kyowa Licensed Products by Lundbeck subject to the royalty
obligations outlined above; provided, however, that such examination shall not
take place more often than once a year and shall not cover such records for more
than the preceding two (2) years and provided further that such certified public
accountant shall report to Cephalon only as to the accuracy of said royalty
statements and payments.
(d) Within thirty (30) days after the end of each calendar quarter during
the pendency of this Agreement, Lundbeck shall deliver to Cephalon a true
accounting of all Cephalon Licensed Products and Kyowa Licensed Products sold by
Lundbeck (and by its Affiliates, sublicensees and third party marketers, if
applicable) during such calendar quarter and shall, at the same time, pay all
royalties due Cephalon on the basis of the Net Sales attributable thereto,
except that Lundbeck
17
shall deliver such accounting within ninety (90) days of the end of said
calendar quarter for any countries in the Territory in which neither Lundbeck,
nor an Affiliate thereof, is engaged directly in the marketing and sale of the
Licensed Products. Such accounting shall show sales on a country-by country and
Licensed Product-by-Licensed Product basis, and such accounting shall state the
Net Sales subject to royalty under this Article 7, the calculation of royalties
with respect thereto, and shall separately show the calculation of all
adjustments thereto.
(e) All royalties due under this agreement shall be payable in U.S.
dollars. If governmental regulations prevent remittances from a country of the
territory to any other country with respect to sales made in the country, the
obligation of Lundbeck to pay royalties on sales in that country shall be
suspended until such remittances are possible, and once they are possible,
Lundbeck shall pay Cephalon any back royalties which may be owed. Alternatively,
Cephalon shall have the right, upon giving written notice to Lundbeck, to
receive payment in that country in local currency. Monetary conversions from the
currency of a foreign country, in which Cephalon Licensed Products & Kyowa
Licensed Products are sold, into United States currency shall be made at the
official exchange rate in force in that country for financial transactions at
the close of the last business day of the calendar quarter for which the
royalties are being paid. If there is no such official exchange rate, the
conversion shall be made at the rate prevailing on the last day of each of the
applicable calendar quarter as published in The Wall Street Journal under the
heading "Foreign Exchange," unless otherwise agreed upon in writing by the
Parties.
7.3 Additional License Fee for Exclusivity in Europe for CEP-1347. If, within
one (1) year of the Effective Date, Lundbeck holds exclusive (exclusive even as
to Cephalon and Kyowa) marketing rights to CEP-1347 in Europe as contemplated
under subsections 5.5(a) or 5.5(b), then Lundbeck shall pay Cephalon on such
date as it obtains such exclusive marketing rights an amount equal to [*The
confidential material contained herein has been omitted and has been separately
filed with the Commission.]
7.4 Milestone Payments.
(a) In consideration of the rights granted pursuant to this Agreement, and
subject to Sections 7.3 and 7.4(b), Lundbeck shall pay Cephalon those amounts
set forth below not later than sixty (60) days following the completion of the
milestones set forth below:
(i) [*The confidential material contained herein has been omitted and
has been separately filed with the Commission.] on the filing of an IND for
CEP-1347 in the United States (or its equivalent in a member state of the
European Union), which amount shall be due and payable on the first to
occur of (A) the date on which Lundbeck obtains exclusive marketing rights
to CEP-1347 in Europe pursuant to subsections 5.5(a) or (b), or (B)
eighteen (18) months from the date of the Effective Date; provided however,
that no such milestone payment shall be due and payable if Lundbeck has
terminated its rights to the Kyowa Licensed Products pursuant to Section
17.2;
(ii) [*The confidential material contained herein has been omitted and
has been separately filed with the Commission.] on the date of filing of an
IND in the United States (or its equivalent in a member state of the
European Union) for each
18
Development Compound other than CEP-1347, which other Development Compound
is active principally with respect to a Target other than the primary
Target identified with CEP-1347 (or with another Development Compound) as
of the date of such filing;
(iii)[*The confidential material contained herein has been omitted and
has been separately filed with the Commission.] upon the initiation of a
Phase II clinical trial for CEP-1347, and [*The confidential material
contained herein has been omitted and has been separately filed with the
Commission.] upon the initiation of a Phase II clinical trial for each
Development Compound other than CEP-1347, which other Development Compound
is active principally with respect to a Target other than the primary
Target identified with CEP-1347 (or with another Development Compound) as
of the date of such filing;
(iv) [*The confidential material contained herein has been omitted and
has been separately filed with the Commission.] upon the initiation of a
Phase III clinical trial for CEP-1347, and [*The confidential material
contained herein has been omitted and has been separately filed with the
Commission.] upon the initiation of a Phase III clinical trial for each
Development Compound other than CEP-1347, which other Development Compound
is active principally with respect to a Target other than the primary
Target identified with CEP-1347 (or with another Development Compound) as
of the date of such filing;
(v) [*The confidential material contained herein has been omitted and
has been separately filed with the Commission.] upon the filing of the
first MAA for CEP-1347, and [*The confidential material contained herein
has been omitted and has been separately filed with the Commission.] upon
the filing of the first MAA for each Development Compound other than
CEP-1347, which other Development Compound is active principally with
respect to a Target other than the primary Target identified with CEP-1347
(or with another Development Compound) as of the date of such filing;
provided however, that [*The confidential material contained herein has
been omitted and has been separately filed with the Commission.] of each
such milestone payment made under this subsection 7.4(a)(v) with respect to
a Development Compound shall be credited against the future royalties owed
to Cephalon by Lundbeck on Net Sales in the Territory of each Cephalon
Licensed Product or Kyowa Licensed Product containing such Development
Compound.
(b) [*The confidential material contained herein has been omitted and has
been separately filed with the Commission.] upon the filing of the first MAA for
each Development Compound that is active principally with respect to the primary
Target identified with CEP-1347 (or with another Development Compound) as of the
date of such filing, and an additional [*The confidential material contained
herein has been omitted and has been separately filed with the Commission.] upon
approval of any such MAA.
7.5 Credits against Milestone Payments. Milestone payments made by Lundbeck
under the terms of Section 7.4 hereof in connection with a Development Compound
that fails in development, or for which Lundbeck otherwise fails to obtain
approval of the applicable MAA, and is subsequently replaced by a Backup
Compound that is so designated by the JMT as a Development Compound for the same
indication, shall be credited against milestone payments for such Backup
Compound.
7.6 Credit Against Payments Due. In the event that any amount owed to the other
Party hereunder is not paid in accordance with the terms set forth herein, the
creditor shall have the right to credit that amount against any amounts that the
creditor may owe to the debtor.
19
7.7 Taxes. If Lundbeck is required by law to withhold any taxes or other
governmental obligations from the milestone or royalty obligations to be paid to
Cephalon under the terms of this Article 7, then Lundbeck shall provide notice
to Cephalon of any such requirement. In such event, Lundbeck may withhold and
pay such taxes or obligations on behalf of Cephalon, provided that Lundbeck
sends to Cephalon original receipts of such payments (or if it is not possible
to obtain an original receipt, other official written confirmation thereof).
7.8 Stock Purchase. In addition to all payments to be made under this Article
7, Lundbeck agrees to purchase from Cephalon on the Effective Date, and under
the terms and conditions of that certain Stock Purchase Agreement attached
hereto as Exhibit G (the "Stock Purchase Agreement"), [*The confidential
material contained herein has been omitted and has been separately filed with
the Commission.] shares of Cephalon common stock (the "Common Stock"), at a
purchase price per share equal to the average closing price of the Common Stock
for the five (5) trading days immediately prior to the date of said Stock
Purchase Agreement.
Article 8. Regulatory Matters
8.1 Regulatory Approvals. Lundbeck shall be responsible for obtaining all
necessary regulatory and marketing approvals for the use and sale of Licensed
Products in the Territory, unless otherwise agreed to by the Parties. Similarly,
Cephalon shall be responsible for obtaining all necessary regulatory and
marketing approvals for the use and sale of Licensed Products outside the
Territory.
8.2 Diligence in Regulatory Submissions and Product Launch. Lundbeck agrees to
prepare and file XXXx for Licensed Products in the Territory using resources as
if said Licensed Products were of Lundbeck origin and have the same commercial
potential. Unless otherwise agreed upon by the Parties, Lundbeck agrees to file
a MAA with the EMEA (or with a regulatory authority in another substantial
market in the Territory) within one (1) year following successful completion of
the Development Program (including all related activities) for any Kyowa
Licensed Products and Cephalon Licensed Products, and to launch such Licensed
Products in the Territory as soon as practicable following the date of marketing
(and, if applicable, pricing and reimbursement) approval in each country in the
Territory, and in a manner at least consistent with the launch of other products
having the same or similar commercial potential that are marketed and sold by
Lundbeck in such country. For purposes of this Section 8.2, the Parties
acknowledge that "successful completion" shall be understood to mean that,
following discussion by the JMT and reasonable consideration of the views
expressed by Cephalon, Lundbeck in its discretion deems the results of the
Development Program being of such a quality and having such content that
Lundbeck wishes to file a MAA for the Development Compound in question.
8.3 Cooperation. Subject to the limitations set forth in Section 11.2 below,
both Parties hereby agree to: (i) cooperate with each other and render
assistance in connection with the filing of an MAA (or other application for
regulatory approval) with any governmental authority or agency which may be
required to obtain
20
approval to market Licensed Products or to obtain pricing and reimbursement
approval; and (ii) execute documents, and provide a letter of authorization or
other documentation to the appropriate regulatory authorities or to any other
governmental authority or agency, as necessary or advisable, to enable either
Party to file, refer to or incorporate by reference all technical information
including data on file with any such agency or authority concerning Licensed
Products that may be contained in a drug master file or otherwise. In the event
that any such drug master file is supplemented or modified, each Party agrees to
notify the other Party promptly that supplements or modifications have been
made.
8.4 Adverse Drug Events. The Parties hereby agree that, not later than the
initiation of Phase I clinical studies, they will establish procedures for the
handling and reporting of adverse drug events, and that such procedures shall
require that the Parties inform each other in an appropriate and efficient
manner of any such adverse drug events with respect to Development Compounds and
the Licensed Products, taking into account those procedures used regularly by
the Parties and those requirements of the EMEA, the FDA and other relevant
regulatory authorities.
8.5 Notice of Governmental Action. During the term of this Agreement, each
Party further agrees to immediately notify the other Party about any information
such Party received regarding any threatened or pending action by a governmental
agency which may involve the safety and efficacy claims of Development Compounds
or Licensed Products or the continued clinical testing or marketing thereof.
Upon receipt of any such information, Cephalon shall consult with Lundbeck in an
effort to arrive at a mutually acceptable procedure for taking appropriate
action; provided, however, that nothing contained herein shall be construed as
restricting the right of either Party to make a timely report of such matter to
any government agency or take other action that it deems to be appropriate or
required by applicable law or regulation.
8.6 Product Recalls. If (i) any governmental or regulatory authority issues a
request, directive, or order that any Licensed Product be recalled or withdrawn
from the market, (ii) a court of competent jurisdiction in a final,
nonappealable judgment orders a recall or withdrawal of any Licensed Product, or
(iii) following discussion between the Parties, and giving due consideration to
the views of the other Party, the Party holding the MAA (or analogous marketing
application outside the Territory) for the applicable Licensed Product
determines in its sole discretion that said Licensed Product should be recalled
or withdrawn from one or more countries within its respective territory, then
the Parties together shall take all appropriate corrective actions to effect the
recall or withdrawal. The costs and expenses of notification and destruction or
return of the recalled or withdrawn Licensed Product in the Territory shall be
borne by Lundbeck, and outside the Territory shall be borne by Cephalon.
Article 9. Manufacture and Supply of Development Compounds and Licensed Products
9.1 Supply of K252a Precursor. Upon request of Lundbeck, Cephalon agrees to use
its reasonable best efforts to provide Lundbeck with a sufficient supply of GMP
quality compound K252a (i.e., the starting material for the synthesis of
CEP-1347) in order to permit Lundbeck to develop a scale-up synthetic process
for the manufacture of CEP-1347. Lundbeck acknowledges
21
that Cephalon presently must obtain its K252a material from Kyowa. Such supply
shall be provided by Cephalon to Lundbeck At Cost, and Lundbeck thereafter shall
undertake all chemical process development efforts necessary to produce
CEP-1347. All expenses incurred by the Parties in producing K252a (as well as
those incurred in producing CEP-1347 as provided below), necessary to conduct
any preclinical and clinical studies other than those referenced in subsections
4.4(a) and 4.4(c) will be borne equally by the Parties; if any studies
referenced in subsections 4.4(a) and 4.4(c) must be repeated due to changes
associated with the scale-up process for the manufacture of CEP-1347 then any
such additional costs incurred shall be borne equally by the Parties.
9.2 Supply of CEP-1347. If the Parties determine that Lundbeck shall
manufacture CEP-1347, and Cephalon supplies Lundbeck with the requisite K252a,
then as provided above in Section 9.1 Lundbeck shall reimburse Cephalon for such
K252a At Cost, and Lundbeck shall supply Cephalon with CEP-1347 At Cost. If
Lundbeck is unable to manufacture CEP-1347 or if for any other reason the
Parties determine that Cephalon shall manufacture CEP-1347, then Cephalon may,
with the written consent of Lundbeck (such consent not to be unreasonably
withheld), engage a third party manufacturer to produce CEP-1347 and Cephalon
shall in turn supply CEP-1347 to Lundbeck At Cost (which, for purposes of
clarification, shall include as well those costs associated with the production
of K252a).
9.3 Other Preclinical and Clinical Supplies. The costs of manufacturing all
Development Compounds other than CEP-1347 in quantities sufficient to conduct
all necessary and advisable preclinical and clinical studies, as determined by
the JMT, will be shared equally by the Parties.
9.4 Other Commercial Supplies. If the Parties agree that Lundbeck will be
responsible for manufacturing Development Compounds other than CEP-1347, then
Lundbeck will supply such Development Compound bulk drug substances to Cephalon
At Cost. If the Parties agree that Cephalon shall manufacture Development
Compounds other than CEP-1347, or if Lundbeck is unable to manufacture such
Development Compounds, then Cephalon may select a third party manufacturer for
such Development Compounds, and Cephalon will supply the Development Compounds
other than CEP-1347 to Lundbeck At Cost.
9.5 Competitive Pricing. Notwithstanding anything to the contrary in this
Article 9, if Cephalon determines in its sole discretion that CEP-1347, any
other Compounds or any Licensed Products can by manufactured by a third party at
a cost lower than that proposed by Lundbeck under the terms of this Agreement,
and Cephalon has not committed to purchase all of its requirements of such
Compounds or Licensed Products from Lundbeck, and Cephalon further determines in
its sole discretion to engage said third party to so manufacture Compounds or
Licensed Products, then Lundbeck will cooperate and will take all steps
reasonably necessary (including, without limitation, the transfer of Know-How)
to enable said third party to undertake such manufacture; provided however, that
in such case Lundbeck shall be entitled to continue to synthesize and
manufacture said Compounds and Licensed Products for its own use and sale to
third parties in the Territory.
22
9.6 Definitive Supply Agreement. The Parties agree to negotiate in good faith
the terms of a definitive supply agreement with regard to the Development
Compounds (and their associated Licensed Products) under which one Party may
manufacture and supply such Development Compounds to the other Party, which
supply agreement shall contain terms and conditions customary in the industry,
including without limitation those relating to quality control, records, storage
and inspection. Regardless of whether Lundbeck synthesizes and manufactures the
Development Compounds, or said Development Compounds are synthesized and
manufactured by Cephalon, Lundbeck will be responsible for manufacturing the
finished, packaged Licensed Products to be marketed and sold in the Territory,
and Cephalon will be responsible for manufacturing the finished, packaged
Licensed Products to be marketed and sold outside the Territory.
Article 10. Marketing, Promotion and Sale of Product
10.1 Marketing. Lundbeck agrees to use its commercially reasonable best efforts
to promote the sale of Kyowa Licensed Products and Cephalon Licensed Products in
the Territory and to maximize the Net Sales thereof. In connection with these
efforts, Lundbeck shall regularly prepare and update a commercialization plan
(the "Plan") for the review of the JMT not less than once per calendar year
following the filing of the first MAA, which Plan will set forth the Product
marketing and selling strategies, and will include an estimated promotional
budget, detailing objectives, planned training and educational programs for its
sales force, upcoming symposia, seminars and professional relations events in
the Territory, and other matters appropriate and customary in the industry for
such a Plan, all of which shall take into consideration the experience and
perspective of Lundbeck with respect to optimal marketing and selling practices
in the Territory. Similarly, Cephalon shall regularly prepare and update a
commercialization plan (the "Plan") for the review of the JMT for any Licensed
Products being sold outside of the Territory. For purposes of this Section 10.1,
"commercially reasonable best efforts" shall mean that during any given calendar
year following commercial launch of Licensed Products in the Territory, Lundbeck
shall complete that number of details, and incur promotional expenses, at a
level comparable to that completed and incurred by other firms marketing and
selling pharmaceutical products with the same or substantially the same
indications, clinical efficacy and safety profiles, cost per dosage and general
marketability, as those of the Licensed Product(s), but taking into account the
relative resources of Lundbeck. Notwithstanding anything to the contrary herein,
if Lundbeck is found not to have exercised commercially reasonable best efforts
as defined herein, and if the remedy for such failure is the forfeiture of
marketing rights to Cephalon, then Cephalon shall pay Lundbeck a royalty of
[*The confidential material contained herein has been omitted and has been
separately filed with the Commission.] of Net Sales of Kyowa Licensed Products
(less any royalty payments owed by Cephalon to Kyowa as a result of such sales)
and a royalty of [*The confidential material contained herein has been omitted
and has been separately filed with the Commission.] of Net Sales of Cephalon
Licensed Products with respect to all sales in such forfeited countries in the
Territory. Moreover, if Lundbeck determines in good faith that it would not be
in the mutual best interests of the Parties for it to commence (or to continue,
as the case may be) marketing and selling Kyowa Licensed Products or Cephalon
Licensed Products in any given country in the
23
Territory for which it has received marketing approval, then it will promptly
notify Cephalon of such determination and the Parties will discuss appropriate
resolution, which may include the forfeiture of territorial rights in such
countries to Cephalon under terms and conditions to be mutually agreed upon;
provided however, that Lundbeck shall be deemed to be marketing and selling the
applicable Licensed Product in all countries of the European Union if it is
marketing and selling said Licensed Product in each of the following countries:
France, Germany, Italy, Spain, the United Kingdom, the Netherlands, Denmark and
Sweden.
10.2 Compliance. Lundbeck shall have obtained and shall maintain in good
standing all required permits, licenses and regulatory approvals necessary or
advisable to market, promote, sell and distribute Kyowa Licensed Products and
Cephalon Licensed Products in the Territory. Lundbeck shall comply with all
local laws, rules, regulations, and reporting requirements in force in the
Territory covering, among other things, the marketing, promotion and sale, and
the payment for, the Kyowa Licensed Products and Cephalon Licensed Products.
10.3 Sale of Product. Prior to filing the initial MAA for a Kyowa Licensed
Product or Cephalon Licensed Product in the Territory, the Parties will
establish in writing non-binding aggregate Net Sales to be obtained in the
Territory for each calendar year hereunder ("Annual Sales Objective"). In the
event that a Kyowa Licensed Product or Cephalon Licensed Product has more than
one indication, the Annual Sales Objective may include separate minimum Annual
Sales Objectives for each Kyowa Licensed Product or Cephalon Licensed Product
indication. If Lundbeck fails to meet any such Annual Sales Objective, then the
Parties shall meet to discuss whether such shortfall is due principally to
market conditions beyond the control of Lundbeck, or whether certain marketing
and sales initiatives or other actions should be taken.
Article 11. Rights to Data and Regulatory Compliance
11.1 Sharing of Data. Subject to the license grants set forth in Article 5 and
the buy-back rights established under Section 11.2 below, the Parties shall have
reciprocal rights to use all data generated by the Parties under the Research
Program and the Development Program in each of its respective territories solely
in connection with the development and commercialization of Kyowa Licensed
Products or Cephalon Licensed Products. The Parties shall agree on a format to
be used to enable the Parties to have prompt, direct electronic access to all
data generated (whether generated jointly or by either Party separately).
11.2 Buy-Back Rights to Use Data for New XXXx. Except as provided in Article 4
with respect to the production of CEP-1347, either Party (the "Declining Party")
may decide not to share the costs incurred in generating data in the course of
developing a particular Kyowa Licensed Product or Cephalon Licensed Product. If
the Declining Party wishes subsequently to use said data in its respective
territory for purposes of seeking a new MAA, then the Declining Party shall
reimburse the other Party for half of its total costs incurred in generating
such data plus a premium of [*The confidential material contained herein has
been omitted and has been separately filed with the Commission.], compounded
annually, of all such costs. Unless otherwise agreed upon by the Parties, the
Declining Party shall have the opportunity to license
24
the right to use such data at any time prior to ninety (90) days after the
completion of the first Phase II clinical trial which demonstrates proof of
efficacy for any indication of the relevant Kyowa Licensed Product or Cephalon
Licensed Product. The Parties also agree to negotiate in good faith an
adjustment in milestone payments and/or royalties otherwise due under this
Agreement would also be appropriate for the relevant Kyowa Licensed Product or
Cephalon Licensed Product. Thereafter, after the completion of the first Phase
II clinical trial which demonstrates proof of efficacy for any indication, both
Parties agree to negotiate in good faith if one of the Parties desires to buy
back into the Development Program for a specific Development Compound.
Notwithstanding the foregoing, this Section 11.1 shall not affect the obligation
of the Parties to share data regarding adverse drug events or other medical or
safety information as contemplated in Section 8.4.
Article 12. Limited Liability
OTHER THAN THOSE WARRANTIES SET FORTH IN SECTIONS 19 AND 20 BELOW, NEITHER PARTY
MAKES ANY WARRANTIES (EXPRESS OR IMPLIED) AS TO THE COMPOUNDS, THE CONDUCT OF
THE RESEARCH PROGRAM AND THE DEVELOPMENT PROGRAM, OR THE LICENSED PRODUCTS.
EXCEPT AS OTHERWISE PROVIDED HEREIN, THE SOLE AND EXCLUSIVE REMEDY OF EITHER
PARTY HERETO FOR ANY LIABILITY OF A PARTY OF ANY KIND, INCLUDING LIABILITY BASED
ON WARRANTY (EXPRESS OR IMPLIED, WHETHER CONTAINED HEREIN OR ELSEWHERE),
NEGLIGENCE, STRICT LIABILITY, CONTRACT OR OTHERWISE IS LIMITED TO THE
REPLACEMENT OF COMPOUND OR THE REFUND OF THE SUPPLY PRICE THERFOR. NEITHER PARTY
SHALL IN ANY CASE BE LIABLE FOR SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF
ANY KIND.
Article 13. Trademark for Licensed Products
13.1 Selection of Trademarks. The Parties acknowledge that it may be in their
mutual best interests to attempt to develop a single trademark for use within
and outside the Territory for a given Licensed Product, and agree to discuss
this matter at an appropriate time prior to commercial launch. Notwithstanding
the above, following consultation with Cephalon, Lundbeck may freely select and
develop a trademark(s) under which a Licensed Product will be sold in the
Territory (the "Lundbeck Trademark"), and all Lundbeck Trademarks shall be owned
by, and registered in the name of, Lundbeck. Following consultation with
Lundbeck, Cephalon may freely select and develop a trademark(s) under which a
Licensed Product will be sold outside the Territory (the "Cephalon Trademark"),
and all Cephalon Trademarks shall be owned by, and registered in the name of,
Cephalon.
13.2 License Upon Termination For Breach. If this Agreement is terminated
pursuant to Section 17.3 due to breach by Lundbeck, then Lundbeck immediately
will grant to Cephalon a perpetual, exclusive (exclusive even as to Lundbeck),
fully-paid, royalty-free license to use in the
25
Territory the Lundbeck Trademark(s) in connection with the marketing and sale by
Cephalon of the Licensed Products.
Article 14. Inventions
14.1 Disclosure of Inventions. During the pendency of this Agreement, the
Parties agree to disclose to each other any and all inventions, discoveries and
improvements that may be conceived, reduced to practice, or made by either Party
while engaged in the performance of this Agreement and that are within the scope
of the licenses granted under Article 5 hereof, including without limitation any
new compositions, formulations, uses, methods of formulating, processes, or the
administration thereof (collectively, the "R&D Inventions"). The Parties further
agree to exchange any Know-How related to or covered by the R&D Inventions that
is reasonably necessary in order to utilize such R&D Inventions.
14.2 Inventorship. Inventorship and ownership with respect to all patentable R&D
Inventions shall be determined in accordance with applicable patent law.
Article 15. Patents
15.1 (a) Cephalon Patent Rights. Cephalon, at its own expense, shall prepare,
file, prosecute and maintain the Cephalon Patent Rights in the Territory.
Cephalon shall keep Lundbeck fully advised of the status of all Cephalon Patent
Rights. In addition, Cephalon shall make commercially reasonable efforts to send
Lundbeck advance drafts of any papers to be filed relating to Cephalon Patent
Rights in the Territory and shall consider the suggestions of Lundbeck and its
patent counsel with respect to the prosecution and maintenance of Cephalon
Patent Rights in the Territory. If Cephalon fails to prepare, file, prosecute or
maintain Cephalon Patent Rights as required by this Agreement, then Lundbeck
shall have the right to assume responsibility and control at its own expense for
said preparation, filing, prosecution and maintainance of any such Cephalon
Patent Rights in the name and on the account of Cephalon. Each Party shall
cooperate reasonably with the other upon request in promptly executing any and
all patent applications, or other instruments deemed necessary or useful by
either or both Parties in connection with the application, prosecution or
maintenance of Cephalon Patent Rights in the Territory.
(b) Lundbeck Patent Rights. Lundbeck, at its own expense, shall prepare,
file, prosecute and maintain the Lundbeck Patent Rights on a worldwide basis.
Lundbeck shall keep Cephalon fully advised of the status of all Lundbeck Patent
Rights. In addition, Lundbeck shall make commercially reasonable efforts to send
Cephalon advance drafts of any papers to be filed relating to Lundbeck Patent
Rights outside the Territory and shall consider the suggestions of Cephalon and
its patent counsel with respect to the prosecution and maintenance of Lundbeck
Patent Rights outside the Territory. If Lundbeck fails to prepare, file,
prosecute or maintain Lundbeck Patent Rights as required by this Agreement, then
Cephalon shall have the right to assume responsibility and control at its own
expense for said preparation, filing, prosecution and
26
maintainance of any such Lundbeck Patent Rights in the name and on the account
of Lundbeck. Each Party shall cooperate reasonably with the other upon request
in promptly executing any and all patent applications, or other instruments
deemed necessary or useful by either or both Parties in connection with the
application, prosecution or maintenance of Lundbeck Patent Rights outside the
Territory.
15.2 Jointly Owned R&D Patent Rights. Cephalon shall in the names of both
Parties prepare, file, prosecute and maintain patent application and patents
claiming the R&D Inventions in the Territory (the "R&D Patent Rights") that are
jointly owned by both Parties. Cephalon shall keep Lundbeck fully advised of the
status of all such R&D Patent Rights. In addition, Cephalon shall make
reasonable efforts to send Lundbeck advance drafts of any papers to be filed
relating to such jointly owned R&D Patent Rights and shall consider the
suggestions of Lundbeck and its patent counsel with respect to the prosecution
and maintenance of such R&D Patent Rights. If Cephalon fails to prepare, file,
prosecute or maintain such R&D Patent Rights, then Lundbeck shall have the right
to assume responsibility for the preparation, filing, prosecution, and
maintenance of any such R&D Patent Rights. Each Party shall cooperate reasonably
with the other upon request in promptly executing any and all patent
applications, or other instruments deemed necessary or useful by either or both
Parties in connection with the application, prosecution or maintenance of the
jointly owned R&D Patent Rights. For purposes of clarification, the Parties
acknowledge that jointly owned R&D Patent Rights may include Joint Compounds,
and that in such case the provisions of subsection 5.1(c) shall govern the
rights of the Parties with respect thereto.
15.3 Solely Owned R&D Patent Rights. Unless the Parties agree otherwise, the
owner of solely owned R&D Patent Rights shall have the right, but not the
obligation, to prepare, file, prosecute and maintain such R&D Patent Rights at
its own expense. If the sole owner of the R&D Patent Rights fails to prepare,
file, prosecute or maintain such R&D Patent Rights, then the other party shall
have the right but not the obligation to assume responsibility and control at
its own expense for the preparation, filing, prosecution and maintenance of any
such R&D Patent Rights in the name of the Party owning said R&D Patent Rights.
Each Party shall cooperate reasonably with the other upon request in promptly
executing any and all patent applications, or other instruments deemed necessary
or useful by either or both Parties in connection with the application,
prosecution or maintenance of the solely owned R&D Patent Rights.
15.4 Costs of Patent Preparation, Prosecution and Maintenance. The expenses of
preparing, filing, prosecuting and maintaining jointly owned R&D Patent Rights
shall be shared equally by the Parties, unless one Party decides not to
prosecute or wishes to abandon its rights in and to such patent rights (the
"Abandoning Party"). In such case, the Abandoning Party shall provide the other
Party (the "Retaining Party") with timely notice of such intent. The Retaining
Party shall have the right to assume ownership and responsibility for preparing,
filing, prosecuting and maintaining such R&D Patent Rights at its sole expense
and shall, for the term of this Agreement, grant the Abandoning Party a
nonexclusive, irrevocable license to such R&D Patent Rights for internal
research purposes only. On an annual basis, the Parties shall exchange
27
documentation establishing the aggregate amount of expense incurred in the
preparation, filing, prosecution and maintenance of jointly owned R&D Patent
Rights (excluding costs expended as a Retaining Party). The Parties further
agree to make appropriate payments to each other at the end of each calendar
year to equalize their respective expenses incurred relating to said jointly
owned R&D Patent Rights.
Article 16. Infringement
16.1 Notice Regarding and Authority to Take Action Against Infringers. Each
Party shall promptly notify the other Party of any known infringement by third
parties of the proprietary rights of either Party with regard to Development
Compounds, Licensed Products and R&D Patent Rights. If any of the Cephalon
Patent Rights and R&D Patent Rights are infringed in the Territory, Cephalon
shall have the right but not the obligation to commence appropriate legal action
to enjoin such infringement at its sole expense; in such case Lundbeck shall
provide its complete cooperation to Cephalon at its expense, but Cephalon shall
be entitled to retain any damages or awards that may result from its initiation
of said action. If Cephalon fails to initiate such action within ninety (90)
days after being notified of the infringement, then Lundbeck shall have the
right, but not the obligation, to undertake such action at its own expense in
the name of Cephalon, and Cephalon shall provide its complete cooperation to
Lundbeck at its expense. Any damages or awards resulting from the prosecution of
such claim by Lundbeck shall be applied first to reimburse Lundbeck for its
costs and expenses, with any balance to be shared by the Parties with an amount
equal to [*The confidential material contained herein has been omitted and has
been separately filed with the Commission.] of such balance being retained by
Lundbeck and [*The confidential material contained herein has been omitted and
has been separately filed with the Commission.] of such balance being given to
Cephalon. If no such damages or awards result from said prosecution or if such
damages or awards are insufficient to fully reimburse the costs and expenses of
Lundbeck associated with said prosecution, then Cephalon shall reimburse
Lundbeck in an amount equal to [*The confidential material contained herein has
been omitted and has been separately filed with the Commission.] of such
unreimbursed costs and expenses; provided however, that such reimbursement shall
be effected by reducing, during that twelve-month period immediately following
the issuance of the final order in any such action, the royalties otherwise
payable by Lundbeck to Cephalon hereunder, but in no case shall such reduction
exceed the aggregate amount due and payable by Lundbeck to Cephalon during said
twelve-month period (less any amounts otherwise that are payable by Cephalon to
Kyowa on the basis of Net Sales that resulted in such royalty payments).
Notwithstanding the foregoing, the Parties acknowledge that the Kyowa License,
which is attached hereto as Exhibit D, establishes all applicable procedures and
responsibilities for enforcement of rights relating to the Kyowa Technology.
16.2 Notice of Infringement of Third Party Patents. Each Party shall promptly
notify the other Party of any claim asserting infringement of the proprietary
rights of the other Party or of Kyowa by Development Compounds, Cephalon
Licensed Products, Kyowa Licensed Products and R&D Patent Rights.
16.3 Infringement of Third Party Patents. If a claim alleging infringement of
third party patents in the Territory is made against Lundbeck, then Cephalon may
elect to defend against
28
such a claim on behalf of Lundbeck at the cost and expense (including, without
limitation, attorneys fees) of Cephalon, but Lundbeck may be represented in such
event by legal counsel in an advisory capacity at its own expense. However, if
Cephalon does not elect to defend against such a claim within one hundred twenty
(120) days after receiving notice (whether from Lundbeck or otherwise) of such
claim, Lundbeck has the right, but not the obligation, to defend against such
claim at its own expense. The Party assuming said defense shall keep the other
Party informed of the status of the case. If the Party assuming said defense
determines to file a counterclaim against the third party claiming infringement,
and subsequently prevails in obtaining damages or awards, then it shall be
entitled to retain any such amounts. Regardless of which Party assumes the
defense of any such claim, if damages are awarded based upon said claim, then
the Parties shall allocate the responsibility for paying said damages in
proportion to their respective economic interests in the country or countries
within the Territory as to which such damage award is based. Notwithstanding the
foregoing, the Parties acknowledge that the Kyowa License, which is attached
hereto as Exhibit D, establishes all applicable procedures and responsibilities
for the defense of infringement claims raised with respect to Kyowa Licensed
Products.
Article 17. Term and Termination
17.1 Term of the Agreement. This Agreement shall commence as of the Effective
Date, and will terminate by mutual agreement of the Parties, or otherwise in
accordance with the provisions of this Article 17.
17.2 Termination By Lundbeck of Rights to Kyowa Licensed Products. If Lundbeck
is unable to obtain exclusive marketing rights to the Kyowa Licensed Products in
Europe under the terms of subsections 5.5(a) or (b) hereof within one (1) year
after the Effective Date, then Lundbeck may either: (i) end its support for the
development of CEP-1347 and the Kyowa Licensed Products and thereby terminate
any and all of its rights under this Agreement to CEP-1347 and the Kyowa
Licensed Products; or (ii) elect to expand the Territory as provided in
subsection 5.5(c) hereof. Effective notice of termination under this Section
17.2 must be made in writing and delivered to Cephalon not less than sixty (60)
days from the first anniversary of the Effective Date unless otherwise agreed
upon by the Parties. In the event of such termination, Lundbeck shall return to
Cephalon all Kyowa Technology and further shall provide to Cephalon all data and
other information relating to CEP-1347 and Kyowa Licensed Products. The rights
and obligations of the Parties with regard to the Compounds (other than
CEP-1347) and the Cephalon Licensed Products shall not be affected by the
termination of rights by Lundbeck with regard to CEP-1347 and Kyowa Licensed
Products.
17.3 Termination of the Research Program. Unless otherwise extended under the
terms of Section 2.3 hereof, the Research Program shall end on June 30, 2002.
Notwithstanding the above, Lundbeck may terminate the Research Program with such
termination to be made effective at any time following the first anniversary of
the Effective Date, pursuant to thirty (30) days written notice to Cephalon, but
upon any such termination Lundbeck shall remain obligated to make all those
29
payments to Cephalon in support of the Research Program as described in Section
6.2 that would otherwise be due during the remaining portion of the Initial
Research Term as defined in Section 1.16, or one (1) year following the
effective date of said termination, whichever is shorter. In such event, the
rights and obligations of the Parties with respect to the Development Compounds
(as well as the Backup Compounds thereto) and the Licensed Products thereafter
shall be modified as provided in this Section 17.3, and the terms and conditions
of Sections 3.2(b) and 5.6 shall be applicable. Upon any such expiration or
termination of the Research Program, the license and sublicense granted under
Sections 5.1(a) and 5.3 hereof automatically shall be curtailed so as to limit
going forward the exclusive rights granted to Lundbeck thereunder as follows:
(i) Lundbeck shall have exclusive rights only as to the Development Compounds
(and to Backup Compounds thereto) and only for so long as at least one such
Development Compound is being diligently developed or commercialized by Lundbeck
in accordance with the schedule established by the JMT; and (ii) Lundbeck shall
have the right to use Kyowa Technology and Cephalon Technology (regardless of
whether it has been developed under the Research Program) only in connection
with the further development of Development Compounds (and of Backup Compounds
thereto). For purposes of clarification, the Parties hereby confirm that all
worldwide rights to Cephalon Compounds shall revert to Cephalon unless they are
designated as Development Compounds or Backup Compounds, or are Development
Compounds for which development has been discontinued. Upon termination of the
Research Program, the cooperation between the Parties under this Agreement shall
continue for all Compounds which have met the criteria for being either Backup
Compounds or Development Compounds.
17.4 Termination of Development Program For A Development Compound. All rights
to any Cephalon Compounds that have been designated as Development Compounds and
for which development has been discontinued in its entirety by Lundbeck
automatically shall revert to Cephalon, unless Lundbeck confirms in writing
immediately upon any such discontinuance that such Development Compound shall be
replaced by a Backup Compound shown to be active principally against the primary
Target as said discontinued Development Compound and that it will promptly
commence active development of said Backup Compound.
17.5 Termination of this Agreement in its Entirety by Lundbeck. Lundbeck may
terminate this Agreement in its entirety with such termination to be made
effective at any time following the first anniversary of the Effective Date,
pursuant to thirty (30) days written notice to Cephalon, but upon any such
termination without cause Lundbeck shall remain obligated to make all those
payments to Cephalon in support of the Research Program as described in Section
6.2 that would otherwise be due during the remaining portion of the Initial
Research Term as defined in Section 1.16, or one (1) year following the
effective date of said termination, whichever is shorter. Subject to the terms
of Section 17.10, Lundbeck otherwise shall be relieved from all other
obligations that may accrue following the effective date of said termination,
including without limitation, any further milestone payments, development cost
payments, and royalty payments (except those applicable royalties due on Net
Sale of any unsold inventory of Cephalon Licensed Product or Kyowa Licensed
Product) which are incurred sixty
30
(60) days after receipt at Cephalon of Lundbeck's written notice of termination.
Notwithstanding the above, Lundbeck shall have the right to sell in accordance
with the terms of this Agreement all unsold inventories of such Kyowa Licensed
Products and Cephalon Licensed Products in its possession unless Cephalon shall
exercise, at its sole discretion, the option, by written notice to Lundbeck on
or before the effective date of such expiration or termination, to repurchase
all remaining inventory then held by Lundbeck at the cost to Lundbeck to
Cephalon for such inventory. Lundbeck acknowledges that except as provided
herein, upon any such termination it shall have no further rights with respect
to the Cephalon Technology, the Cephalon Licensed Products, the Kyowa Technology
or the Kyowa Licensed Products and Cephalon acknowledges that except as provided
herein, upon any such termination Cephalon shall have no further rights with
respect to Lundbeck Licensed Products.
17.6 Termination for Breach By Either Party. Upon breach of any material
provision of this Agreement, the breaching Party will be given written notice
and ninety (90) days within which to remedy such breach. Failure to remedy any
such breach within this time period will constitute sufficient grounds for
termination by the other Party without any further notice. Cephalon can not
terminate this Agreement unless Lundbeck breaches a material obligation and does
not remedy same in accordance with this Section.
17.7 Effects of Termination by Cephalon For Breach. Upon termination of this
Agreement due to unremedied breach by Lundbeck, the following provisions shall
apply:
(a) All rights granted to Lundbeck under this Agreement shall
immediately revert to Cephalon, except as provided below, and Lundbeck
shall immediately cease its use of Cephalon Technology and Kyowa
Technology;
(b) Any outstanding unpaid invoices shall become due and payable
immediately in lieu of any payment terms previously agreed upon by the
Parties;
(c) Lundbeck shall cease use of all Development Compounds and Backup
Compounds in the Territory, and shall cease all marketing, sales and
distribution of Licensed Products in the Territory; provided, however, that
Lundbeck shall have the right to sell in accordance with the terms of this
Agreement all unsold inventories of such Kyowa Licensed Products and
Cephalon Licensed Products in its possession unless Cephalon, at its sole
discretion, shall exercise the option, by written notice to Lundbeck on or
before the effective date of such expiration or termination, to repurchase
all remaining inventory then held by Lundbeck at the cost to Lundbeck to
Cephalon for such inventory;
(d) Lundbeck will provide Cephalon with all copies of any MAA (or its
equivalent outside the Territory) for Development Compounds and any
accompanying documentation (including without limitation all regulatory
agency correspondence) in its possession or, if such registration
application has not yet been filed in the Territory prior to the date of
said termination or expiration, with all pre-clinical and clinical data
relating to all Development Compounds in its
31
possession on such date. At the request of Cephalon, Lundbeck shall take
all steps as may be required by applicable law to transfer any such
Development Compound registration to Cephalon, or otherwise to enable
Cephalon to market and sell Cephalon Licensed Products and Kyowa Licensed
Products in the Territory, and also shall provide full support to Cephalon
to facilitate the prompt execution of such legal transfer. In no event
shall Cephalon be obligated to pay any fee or to make any other payment to
Lundbeck, to the local government in the Territory, or to any third party,
to effect such legal transfer; and
(e) Lundbeck immediately will grant to Cephalon a perpetual, exclusive
(exclusive even as to Lundbeck), fully-paid, royalty-free license under the
Joint Technology, and under any other Patent Rights and Know-How held by
Lundbeck necessary to enable Cephalon to make, have made, use and sell
Kyowa Licensed Products, Cephalon Licensed Products and Joint Licensed
Products in the Territory, and to make, have made, use and sell Lundbeck
Licensed Products and Joint Licensed Products outside the Territory.
17.8 Effects of Termination by Lundbeck For Breach. Upon termination of this
Agreement due to unremedied breach by Cephalon, the following provisions shall
apply:
(a) Cephalon shall not use any Development Compounds or Backup
Compounds in the Territory, nor shall it initiate any marketing, sales or
distribution of Licensed Products in the Territory;
(b) Cephalon will provide Lundbeck with all pre-clinical and clinical
data relating to a Development Compound or a Licensed Product in its
possession on such date, together with all other documentation and data
necessary to enable Lundbeck to continue to market and sell Kyowa Licensed
Products, Cephalon Licensed Products and Joint Licensed Products in the
Territory; and
(c) Cephalon immediately will grant to Lundbeck a perpetual, exclusive
(exclusive even as to Cephalon), fully-paid, royalty-free license under the
Joint Technology, and under any other Patent Rights and Know-How held by
Cephalon necessary to enable Lundbeck to make, have made, use and sell
Kyowa Licensed Products, Cephalon Licensed Products and Joint Licensed
Products in the Territory.
17.9 General Effects of Termination by Either Party for Breach. Upon termination
of this Agreement due to unremedied breach by either Party (the "Breaching
Party"), the Breaching Party shall have no liability to the other Party (or to
any third party) for any damages, losses, indemnity, compensation, costs or
expenses of any kind for lost profits or prospective sales, investments made or
expenses incurred in connection with the establishment, development or
maintenance of its business, markets or customers, fees for transferring
Development Compounds, product registrations, or any similar claims, damages,
fees or payments.
32
17.10 Survival of Obligations. All terms and conditions of this Agreement which
the Parties agree shall survive the expiration or termination hereof shall
within sixty (60) days from the Effective Date be listed in Exhibit G hereto,
but shall include without limitation, those terms and conditions relating to to
confidentiality, indemnification, intellectual property rights generally, and
rights to payment. More specifically, the termination of this Agreement shall
not relieve the Parties of any obligations accruing prior to such termination,
and any such termination shall be without prejudice to the rights of either
Party against the other, including without limitation the obligation to pay for
CEP-1347 purchased, or royalties for Kyowa Licensed Products and Cephalon
Licensed Products sold prior to said termination.
Article 18. Confidentiality.
18.1 Confidentiality Information. During the term of this Agreement, and for ten
(10) years after its termination or expiration, each Party shall maintain in
confidence any information concerning the subject matter hereof provided by the
other Party (the "Providing Party"), and that is considered to be confidential
by the Providing Party, regardless of whether provided prior to or after the
Effective Date. Such information, collectively the "Confidential Information"
includes but is not limited to Technology, documentation, business plans, cost
and operational information, whether or not related to Compounds or Licensed
Products. Confidential Information shall not be used or disclosed to others
except for carrying out the purpose of this Agreement. The foregoing obligation
of confidentiality shall not apply to any portion of the Confidential
Information that a Party ("Receiving Party") can demonstrate:
(a) was already known to the Receiving Party;
(b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure;
(c) became generally available to the public or otherwise part of the
public domain after its disclosure to the Receiving Party, other than
through any act or omission of the Receiving Party in breach of this
Agreement;
(d) was subsequently lawfully disclosed to the Receiving Party by a
third party; or
(e) the Receiving Party was compelled to disclose by governmental
administrative agency or judicial requirements; provided however, that any
disclosure under this subsection 18.1(e) shall neither relieve the
Receiving Party from attempting to impose confidentiality obligations on
the governmental administrative agency or judicial body, to the extent
feasible, nor shall it relieve the Receiving Party from maintaining the
confidentiality of the Confidential Information with respect to third
parties other than the agency or body as to which such compelled disclosure
has been made.
33
18.2 Protection of Confidential Information. The Parties shall take all
reasonable steps to eliminate the risk of disclosure of Confidential
Information, including, without limitation, ensuring that only employees,
agents, and representatives with a need to know the Confidential Information
have access thereto. The Parties acknowledge by the signing of this Agreement
that such employees, agents, and representatives are to be bound by
substantially similar obligations of confidentiality as are established under
this Article 18.
18.3 Presumptive Confidentiality of Information Exchanged. All information
exchanged by the Parties under the terms and conditions of this Agreement shall
be considered Confidential Information and treated as such unless otherwise
specified and agreed upon by the Parties.
18.4 Use Following Termination For Breach. In the event that this Agreement is
terminated for breach under the terms of Article 17, nothing herein shall be
construed so as to preclude the non-breaching Party from disclosing to a
competent regulatory authority or to a third party any preclinical or clinical
data, or other Confidential Information, that it may deem necessary or advisable
in order to support the further development or commercialization of Development
Compounds or Licensed Products.
Article 19. Representations, Warranties and Covenants
19.1 General Representations. Each Party hereby represents and warrants to the
other as follows:
(a) Duly Organized. It is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, is qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the conduct of its
business or the ownership of its properties requires such qualification and
has all requisite power and authority, corporate or otherwise, to conduct
its business as now being conducted, to own, lease and operate its
properties and to execute, deliver and perform this Agreement;
(b) Due Execution. The execution, delivery and performance by it of
this Agreement have been duly authorized by all necessary corporate action
and do not and will not (i) require any consent or approval of its
stockholders, (ii) violate any provision of any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award presently
in effect having applicability to it or any provision of its charter or
by-laws, or (iii) result in a breach of or constitute a default under any
agreement, mortgage, lease, license, permit, patent or other instrument or
obligation to which it is a Party or by which it or its assets may be bound
or affected;
(c) No Third Party Approval. No authorization, consent, approval,
license, exemption of, or filing or registration with, any court or
governmental authority or regulatory body is required for the due
execution, delivery or performance by it of this Agreement;
34
(d) Binding Agreement. This Agreement is a legal, valid and binding
obligation of such Party, enforceable against it in accordance with its
terms and conditions, except as may be limited by bankruptcy laws or other
laws affecting the rights of creditors generally, and rules of law
governing equitable remedies. Each is not under any obligation to any
person, contractual or otherwise, that is conflicting or inconsistent in
any respect with the terms of this Agreement or that would impede the
diligent and complete fulfillment of its obligations hereunder;
(e) Inventions. It will take all steps reasonably necessary to ensure
that its employees convey to it all rights in and to any and all inventions
that may be conceived or reduced to practice by said employees;
(f) Debarment. It is not debarred or suspended from receiving
contracts from the United States or Danish government or other governmental
authority or agency;
(g) Good Practices. All preclinical and clinical studies involving
Compounds will be conducted in accordance with current good laboratory
practices (GLP) as specified by the applicable laws and regulations in the
relevant country at the time of such laboratory research; good clinical
practices (GCP) as specified by the applicable laws and regulations in the
relevant country at the time of such studies, and that the K252a starting
material and the Development Compounds will be manufactured in accordance
with current good manufacturing practices (GMP) as specified by the
applicable laws and regulations of the relevant countries at the time of
manufacture; and
(h) Full Disclosure. It has disclosed in good faith any and all material
information related to the subject matter hereof and to the performance of
its obligations hereunder.
19.2 Cephalon Representations, Warranties and Covenants. Cephalon hereby
represents, warrants and covenants to Lundbeck that, as of the Effective Date:
(a) To the best of its knowledge and belief, Cephalon is the sole
owner of the entire right, title and interest in and to those Cephalon
Patent Rights which include a Valid Claim for Compounds and the same are
free of any liens, encumbrances, restrictions, licenses and other legal or
equitable claims of any kind or nature;
(b) To the best of its knowledge and belief, Cephalon is the sole
licensee of the entire right, title and interest in the part of the Kyowa
Technology, which is sublicensed to Lundbeck under this Agreement and the
same are free of any liens, encumbrances, restrictions, licenses and other
legal or equitable claims of any kind or nature;
(c) It has the right to grant to Lundbeck the licenses provided for in
this Agreement;
(d) Except as otherwise provided herein, during the term of this
Agreement it will not grant rights to any third party (including, without
limitation, an Affiliate of Cephalon) with respect to the research,
development, use, manufacture, marketing, sale or distribution of Backup
35
Compounds and Development Compounds in the Territory;
(e) To the best of its knowledge and belief, there are no third Party
rights, licenses or patents, other than those granted to Lundbeck
hereunder, which are necessary for Lundbeck's use and enjoyment of the
licenses granted to Lundbeck;
(f) The Kyowa License in the form attached hereto as Schedule D sets
forth all obligations that are applicable to Lundbeck as a sublicensee of
Cephalon hereunder;
(g) It will use its best efforts to secure from Kyowa not later than
one (1) year from the Effective Date a commitment that, if the Kyowa
License is terminated, Kyowa will enter into a license agreement granting
Lundbeck rights to the Kyowa Licensed Products under substantially the same
terms and conditions as the Kyowa License; and
(h) For so long as Lundbeck is engaged in the development or
commercialization of a Cephalon Licensed Product or a Kyowa Licensed
Product, it shall neither directly or indirectly develop nor commercialize
any pharmaceutical product in the Territory if the active ingredient of
which is a Compound whose primary mode of action has the same or similar
Target as the Target of such Development Compound (or a Backup Compound
thereto).
19.3 Lundbeck Representations and Covenants. Lundbeck hereby represents and
covenants to Cephalon that:
(a) Lundbeck is acknowledged by the authorities in parts of the
Territory as an approved manufacturer and marketer of drugs, and is as such
under the inspection of the competent authorities; and
(b) During the pendency of the Research Program, it will not engage in
any research or development activity with respect to any chemical entities
that have Targets that are the same as, or substantially similar to, the
Targets established by the JMT.
19.4 Warranty Disclaimers. Nothing in this Agreement shall be construed as:
(a) a warranty or representation by Cephalon as to the validity or
scope of the Cephalon Technology, other than as specifically provided to
the contrary herein;
(b) a warranty or representation that anything made, used, sold or
otherwise disposed of under this Agreement is or will be free from
infringement of patents, copyrights and trademarks of third Parties;
(c) an obligation to bring or prosecute actions or suits against third
parties for infringement;
(d) except as otherwise provided herein, conferring rights to use in
advertising, publicity or
36
otherwise any trademark or the name of Cephalon or Lundbeck;
(e) any representation by either Party, express or implied, other than
as specifically set forth herein, including representations of
merchantability or fitness for a particular purpose, or that the use,
manufacture, sale or distribution of Licensed Products will not infringe
upon any third party patent, copyright, trademark or other rights.
Article 20. Indemnification
20.1 Lundbeck Indemnitees. Cephalon shall indemnify and hold Lundbeck, its
parent companies, Affiliates and subsidiaries, and the officers, directors and
employees of each of them (the "Lundbeck Indemnitees") harmless from any and all
liability, loss, damages, costs or expenses (including reasonable attorneys'
fees) stemming from third party claims or actions (or the threat thereof) that
are based upon (i) the breach of any material covenant, representation or
warranty of Cephalon contained in this Agreement; (ii) the manufacture, use,
marketing, promotion, sale or distribution by Cephalon (or any Affiliate,
assignee or sublicensee thereof) of any Development Compounds or Licensed
Products; (iii) the use by any person of any Licensed Products that were
manufactured, marketed, sold or distributed by Cephalon (or any Affiliate,
assignee or sublicensee thereof), including without limitation, any claim that
said use resulted in personal injury or death; and (iv) the costs incurred by
Lundbeck in the successful enforcement of its rights under this Section 20.1.
Notwithstanding anything to the contrary herein, Cephalon shall have no
obligation to so indemnify the Lundbeck Indemnitees to the extent that such
losses, liabilities, obligations, claims, fees or expenses are based upon the
conduct of the Lundbeck Indemnitees.
20.2 Cephalon Indemnitees. Lundbeck shall indemnify and hold Cephalon, its
parent companies, Affiliates and subsidiaries, and the officers, directors and
employees of each of them (the "Cephalon Indemnitees") harmless from any and all
liability, loss, damages, costs or expenses (including reasonable attorneys'
fees) stemming from third party claims or actions (or the threat thereof) that
are based upon (i) the breach of any material covenant, representation or
warranty of Lundbeck contained in this Agreement; (ii) the manufacture, use,
marketing, promotion, sale or distribution by Lundbeck (or any Affiliate,
assignee or sublicensee thereof) of any Development Compounds or Licensed
Products; (iii) the use by any person of any Development Compounds or Licensed
Products that were manufactured, marketed, sold or distributed by Lundbeck (or
any Affiliate, assignee or sublicensee thereof), including without limitation,
any claim that said use resulted in personal injury or death; and (iv) the costs
incurred by Cephalon in the successful enforcement of its rights under this
Section 20.2. Notwithstanding anything to the contrary herein, Lundbeck shall
have no obligation to so indemnify the Cephalon Indemnitees to the extent that
such losses, liabilities, obligations, claims, fees or expenses are based upon
the conduct of the Cephalon Indemnitees.
20.3 Indemnification Procedures. In the event that one Party receives notice of
a claim, lawsuit, or liability for which it is entitled to indemnification by
the other Party, the Party
37
receiving notice shall give prompt notification to the indemnifying Party. The
Party being indemnified shall cooperate fully with the indemnifying Party
throughout the pendency of the claim, lawsuit or liability, and the indemnifying
Party shall have complete control over the conduct and disposition of the claim,
lawsuit, or liability, except that indemnifying Party shall have no obligation
to provide indemnity with respect to any amounts paid in settlement of any
claims if such settlement is effected without the prior written consent of the
indemnifying Party.
Article 21. General.
21.1 Headings. The headings and captions used herein are for the convenience of
the Parties only and are not to be construed to define, limit, or affect the
construction or interpretation thereof.
21.2 Severability. The provisions of this Agreement are separate and divisible,
and the invalidity or unenforceability of any part shall not affect the validity
or enforceability of any remaining part or parts, all of which shall remain in
full force and effect. However, the Parties agree to substitute, any invalid or
unenforceable provision, by a valid and enforceable provision which maintains,
to the greatest extent possible, the respective interests of the Parties
otherwise established hereunder.
21.3 Entire Agreement. This Agreement contains the entire agreement of the
Parties regarding the subject matter hereof and supersedes all prior agreements,
understandings or conditions (whether oral or written) regarding the same. This
Agreement may not be changed, modified, amended or supplemented except by a
written instrument signed by both Parties.
21.4 Assignability and Sublicenses. Except as otherwise provided herein, this
Agreement shall not be assignable, sublicensable or transferable, either in
whole or in part, by either Party without the prior written consent of the
other. In any event, no such assignment, sublicense or transfer shall relieve
any Party of responsibility for the performance of any accrued obligation which
such Party has then hereunder.
21.5 Publications. The Parties to this Agreement are free to make presentations
and publications relating to the results of any activities conducted pursuant to
this Agreement prior to marketing of Cephalon Licensed Product or Kyowa Licensed
Product, but with due regard to the protection of Confidential Information and
always provided that the other Party has approved the scientific content of any
such presentation or publication. For that purpose, the Parties agree to provide
the JMT with a copy of any proposed written presentation, abstract and/or
publication relating to the results of such activities at least thirty (30) days
prior to submission thereof for publication or presentation thereof. Each Party
will take due note of any comment by the other Party and shall respect the
response of the other Party.
38
21.6 Public Announcements. Each Party agrees that, except as may be required by
law, it shall not disclose the existence, substance or details of this Agreement
without the prior written consent of the other Party. In cases in which
disclosure is proposed or required by law, the disclosing Party, prior to such
disclosure, will notify the non-disclosing Party of the contents of the proposed
disclosure, provided however, that subsequent disclosure(s) of the same or
substantially similar contents shall not require further consent. The
non-disclosing Party shall have the right to make reasonable changes to the
disclosure to protect its interests. The disclosing Party shall not unreasonably
refuse to include such changes in its disclosure.
21.7 Further Assurances. Each Party hereto agrees to execute, acknowledge and
deliver such further instruments, and to take such other actions, as may be
necessary to appropriate in order to carry out the purposes and intent of this
Agreement.
21.8. Notices and Reports. All notices, consents or approvals required by this
Agreement shall be in writing and sent by courier or by certified or registered
air mail, postage prepaid or by facsimile or courier (confirmed by such
certified or registered mail) to the Parties at the following addresses or such
other addresses as may be designated in writing the respective Parties. Notices
shall be deemed effective on the date of mailing.
If to Cephalon:
Senior Vice President & General Counsel
Cephalon, Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxx Xxxxxxx, XX 00000-0000 XXX
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Lundbeck:
General Counsel
X. Xxxxxxxx X/X
0 Xxxxxxxxxx, XX-0000 Xxxxx,
Xxxxxxxxxx XXXXXXX
Telephone: 00 0000 0000
Facsimile: 45 3630 2732
21.9 Waiver. The waiver by either Party of a breach of any provisions contained
herein shall be effective only if made in writing and shall in no way be
construed as a waiver of any succeeding breach of such provision or the waiver
of the provision itself.
21.10 Dispute Resolution. Any dispute concerning or arising out of this
Agreement or concerning the existence or validity hereof, shall be determined by
the following procedure.
39
(a) Both Parties understand and appreciate that their long term mutual
interest will be best served by affecting a rapid and fair resolution of any
claims or disputes which may arise out of services performed under this contract
or from any dispute concerning the terms of this Agreement. Therefore, both
Parties agree to use their best efforts to resolve all such disputes as rapidly
as possible on a fair and equitable basis. Toward this end both Parties agree to
develop and follow a process for presenting, rapidly assessing, and settling
claims on a fair and equitable basis which takes into account the precise
subject and nature of the dispute.
(b) If any dispute or claim arising under this Agreement cannot be readily
resolved by the Parties pursuant to the process described above, the Parties
agree to refer the matter to a panel consisting of the Chief Executive Officer
("CEO") of each Party for review and resolution. A copy of the terms of this
Agreement, agreed upon facts (and areas of disagreement), and concise summary of
the basis for the contentions of each Party will be provided to both such CEOs
who shall review the same, confer, and attempt to reach a mutual resolution of
the issue.
(c) If the matter has not been resolved utilizing the foregoing process,
either or both Parties may elect to pursue definitive resolution through binding
arbitration, which the Parties agree to accept in lieu of litigation or other
legally available remedies (with the exception of injunctive relief where such
relief is necessary to protect a Party from irreparable harm pending the outcome
of any such arbitration proceeding). Binding arbitration shall be settled in
accordance with the Rules of Conciliation and Arbitration of the International
Chamber of Commerce by a panel of three arbitrators chosen in accordance with
said Rules. This Agreement shall be governed by and construed in accordance with
the substantive laws of the State of New York and of the United States of
America, without regard to the conflicts of laws provision thereof. The
arbitration will be conducted in English and will be held in London, England.
Judgment upon the award rendered may be entered in any court having jurisdiction
and the Parties hereby consent to the said jurisdiction and venue, and further
irrevocably waive any objection which either Party may have now or hereafter to
the laying of venue of any proceedings in said courts and to any claim that such
proceedings have been brought in an inconvenient forum, and further irrevocably
agrees that a judgment or order in any such proceedings shall be conclusive and
binding upon the Parties and may be enforced in the courts of any other
jurisdiction thereof.
21.11 Force Majeure. A Party shall not be liable for nonperformance or delay in
performance (other than of obligations regarding any payments or of
confidentiality) caused by any event reasonably beyond the control of such Party
including, without limitation, wars, hostilities, revolutions, riots, civil
disturbances, national emergencies, strikes, lockouts, unavailability of
supplies, epidemics, fires, floods, earthquakes, other forces of nature,
explosions, embargoes, or any other Acts of God, or any laws, proclamations,
regulations,
40
ordinances, or other acts or orders of any court, government or governmental
agency. Any occurrence of Force Majeure shall be reported promptly to the other
Party.
IN WITNESS THEREOF, the Parties have executed this Agreement by their duly
authorized representatives, as of the day and year first above written.
X. XXXXXXXX A/S CEPHALON, INC.
By: XXXXX XXXXXXXXX By: XXXXX X. XXXXXX
----------------------------- -------------------------------
Xxxxx Xxxxxxxxx Xxxxx X. Xxxxxx
Executive Vice President, R&D Senior Vice President, Business
Development
By: TORBEN SKARSFELDT
-----------------------------
Torben Skarsfeldt
Board Member
[STAMP]
41
Exhibit A - Listing of Patents
--------------------------------------------------------------------------------------------------------------------------------
CEP 1347 and Relatives:
US 5,621,100 April 15, 1997 Claims 1347 composition of matter
US 5,621,101 April 15, 1997 Composition claims to selected novel
indolocarbazoles
US 5,741,808 April 21, 1998 Method of use and composition claims for selected
indolocarbazole aglycones
US 5,756,494 May 25, 1998 Method of use and composition claims for 1347 and
other indolocarbazoles
WO 9746565 Published, Composition of matter for 3,9-aralkyl,
Dec. 11, 1998 alkyl-alkoxy, etc.
Fused Pyrrolocarbazoles:
US 5,475,110 Dec. 12, 0000 Xxxxx claims to the FP series
US 5,591,855 Jan. 7, 1997 Claims to expanded N13 and aromatic ring
substitutions
US 5,594,009 Jan. 14, 1998 Method claims
US 5,616,724 April 1, 1998 Composition of matter claims to 6-oxo class
US 5,705,511 Jan. 6, 1998 Expanded genus, heterocyclics... broadened
compositions of matter
US 5,801,190 Sept. 1, 1998 Expanded 6-oxo genus
US 5,808,060 Sept. 15, 1998 Analogs of FPs without ring nitrogens
[*The confidential material [*The confidential material [*The confidential material
contained herein has been contained herein has been contained herein has been
omitted and has been omitted and has been omitted and has been
separately filed with separately filed with separately filed with
the Commission.] the Commission.] the Commission.]
[*The confidential material [*The confidential material [*The confidential material
contained herein has been contained herein has been contained herein has been
omitted and has been omitted and has been omitted and has been
separately filed with separately filed with separately filed with
the Commission.] the Commission.] the Commission.]
--------------------------------------------------------------------------------------------------------------------------------
Exhibit B - Structure of CEP-1347
(DIAGRAM ART APPEARS HERE)
Exhibit C - Third Party Obligations
SUBLICENSE AGREEMENT
THIS SUBLICENSE AGREEMENT (the "Agreement") is made by and among Cephalon,
Inc., a Delaware corporation with its principal place of business located at 000
Xxxxxxxxxx Xxxxxxx, Xxxx Xxxxxxx, Xxxxxxxxxxxx 00000-0000, U.S.A. ("Cephalon"),
and Orion Corporation Orion Pharma, a Finnish corporation with its principal
place of business located at Xxxxxxxxxx X, XXX-00000, Xxxxx, Xxxxxxx ("Orion").
WIITNESSETH:
WHEREAS, the Institute of Biotechnology of the University of Helsinki
("Institute of Biotechnology" as defined in the LSRA identified herein below)
and Xxxxxxxxx Xxxx Xxxxxx, Ph.D. and certain of his scientific research
colleagues at the Institute of Biotechnology (collectively, the "Institute
Scientists" as defined in. the LSRA identified herein below) granted to Cephalon
an exclusive, worldwide, royalty-bearing right and license, with the further
right to sublicense, to make, have made, use, have used, sell, have sold, import
and have imported all Institute Technology (as defined in the LSRA identified
herein below) under the terms and conditions of a License and Sponsored Research
Agreement (the "LSRA") between said parties having an effective date of July 1,
1997;
WHEREAS, the Institute of Biotechnology and Institute Scientists granted to
Cephalon the right to obtain an exclusive or nonexclusive (as determined by
Cephalon), worldwide, royalty-bearing right and license, with the further right
to sublicense, to make, have made, use, have used, sell, have sold, import and
have imported all Option Patent Fights (as defined in the Option Agreement
identified herein below) under the terms and conditions of an Option Agreement
(the "Option Agreement") between the parties having an effective date of October
30, 1998; and
WHEREAS, Cephalon wishes to grant, and Orion wishes to obtain, a sublicense
covering Cephalon's rights and obligations as to the Institute Technology and
Option Patent Rights pursuant to Cephalon's letter of intent to Orion having an
effective date of January 18, 1999 (the "Letter of Intent");
NOW, THEREFORE, for good and valuable consideration, the adequacy of which
is hereby affirmed, the parties hereby agree as follows.
1. DEFIINITIIONS
Terms that are capitalized as defined terms in this Agreement shall have
the meanings set forth below:
1.1 "Affiliate" means any individual or entity directly or indirectly
controlling, controlled by or under common control with, a Party to this
Agreement. Without limiting the foregoing, the direct or indirect ownership of
50 percent or more of the outstanding voting securities of an entity, or the
right to receive 50 percent or more of the profits or earnings of an entity, or
the right to control the policy decisions of a person or entity, shall be deemed
to constitute control.
1.2 "Effective Date" means March31, 1999.
1.3 "Extended Term" means the eighteen (18) month period (January 1, 1999 to
June 30, 2000) by which the Research Program as set forth in the LSRA may be
extended pursuant to Section 3 of the LSRA.
1.4 "Field" means the diseases broadly classified as neurodegenerative,
neurologic, neuropsychiatric and oncologic and includes but is not limited to
the research, diagnostic, prophylactic and/or therapeutic aspects of such
diseases. Rights to Institute Technology, to the extent that they relate to such
other diseases that fa1l outside of these disease classifications, shall not be
considered to fall within the Field and such rights are acknowledged to be
retained by the Institute.
1.5 "Improvements" means:
(1) any new products, processes, and techniques, developed either by
Cephalon or Orion, that fall within the scope of a claim of the Patent Rights or
Option Patent Rights;
(2) any assay or method, developed either by Cephalon or Orion, whose key
substituents incorporate or utilize Institute Technology or Option Patent
Rights; and
(3) any assay system, developed either by Cephalon or Orion, that is useful
to screen the interaction of potential agonists, antagonists or other modulators
of any novel composition that falls within the scope of a claim of the Patent
Rights or Option Patent Rights, but not including such potential agonists,
antagonists or modulators themselves, unless they independently fall within the
scope of such claims. The term "assay systems" includes, but is not limited to,
methodologies, reagent sources and descriptions, validation schemes and the
results thereof. Notwithstanding the foregoing, products, processes, techniques,
assays, assay methods and assay systems developed by the Parties shall only be
considered Improvements to the extent that they relate to GDNF receptor or GDNF
signaling cascade assay development.
1.6 "Institute" means the Institute of Biotechnology and institute Scientists as
identified above.
1.7 "Institute Discoveries" means the experimental data and results and
associated methods and procedures, as well as tangible outcomes of research,
including but not limited to reagents, such as DNA clones, vectors, expression
systems, cell lines, peptides, proteins, hybridomas and antibodies that are
developed or used by the Institute in the course of the Research Program as set
forth in the LSRA between the Institute and Cephalon.
1.8 "Institute Inventions" means all Institute Discoveries and inventions
(including each process, use, article of manufacture and composition of matter)
that are first conceived or reduced to practice by the Institute in the course
of the Research Program as set forth In the LSRA between the Institute and
Cephalon.
1.9 "Institute Know-How" means know-how, trade secrets, technical information
(including but not limited to preclinical data and clinical results), formulas,
processes and data owned or controlled by the Institute and/or any of its
Affiliates, to the extent that it relates to Institute Discoveries or Institute
Inventions and that is produced in the course of the Research Program as set
forth in the LSRA between the Institute and Cephalon.
1.10 "Institute Patent Rights" means all United States patent applications or
issued patents owned or controlled by the Institute and/or any of its
Affiliates, but only to the extent that they contain one or more claims covering
the Institute Discoveries, Institute Inventions and Institute Know-How,
including provisionals, divisionals, continuations, continuations-in-xxx,
reissues and extensions derived therefrom, as well as all foreign patents and
foreign patent counterparts thereof. Institute Patent Rights retroactively
extend back to July 26, 1996, the effective date of a prior non-exclusive
license between the Institute and Cephalon. Notwithstanding the effective date
of the LSRA, Institute Patent Rights shall include Institute fights in and to
U.S. patent application [*The confidential material contained herein has been
omitted and has been separately filed with the Commission.] which was initially
filed prior to the effective date of the LSRA [*The confidential material
contained herein has been omitted and has been separately filed with the
Commission.] and corresponding PCT International Application No. PCT/US
96/18I97. Institute Patent Rights also include the PCT Application No. 98/09056
entitled Glial Cell Line Derived Neurotrophic Factor Receptors filed on May 4,
1998 and published as WO 98/52591 on November 26, 1998.
1.11 "Institute Technology" means collectively:
(i) Institute Discoveries,
(ii) Institute Inventions,
(iii) Institute Know-How, and
(iv) Institute Patent Rights.
1.12 "Invention-by-Invention" refers to an Institute Invention or a group of
Institute Inventions that are substantially related. For example, a novel GDNF
receptor, its homologs and allelic variants and antibodies to the foregoing are
substantially related
and would be considered to be the same invention. The discovery of small
molecule agonists or other ligands of such receptors would be considered to be
another invention.
1.13 "Licensed Process" means any process or method for the production,
manufacture or use of any Institute Discoveries, Institute Inventions or
Institute Know-How that is covered by a Valid Claim of any Institute Patent
Rights in the Field.
1.14 "Licensed Product" means any article, composition, apparatus, substance,
chemical material which incorporates or utilizes any Institute Discovery
Institute Invention, or Institute Know-How and is covered by a Valid Claim of
any Institute Patent Rights in the Field.
1.15 "Option Licensed Process" means any process or method falling within the
scope of Option Technology that is covered by a Valid Claim of any Option Patent
Rights.
1.16 "Option Licensed Product" means any article, composition, apparatus,
substance, chemical material or biological material falling within the scope of
Option Technology that is covered by a Valid Claim of any Option Patent Rights.
1.17 "Option Patent Rights" means all United States patent applications or
issued patents owned or controlled by the Institute Scientists, Institute of
Biotechnology and/or any of their Affiliates, but only to the extent that they
contain one or more claims covering Option Technology, including provisionals,
divisionals, continuations, continuations-in-part, reissues and extensions
derived therefrom, as well as all foreign patents and foreign patent
counterparts thereof. In the event that such patent applications or issued
patents are co-owned by the Institute and a third party, Option Patent Rights
include only those claims covering Option Technology that are owned by the
Institute.
1.18 "Option Technology" means:
(1) all Institute Discoveries, Institute Inventions, Institute Know-How,
and Institute Patent Rights that are outside of the Field; and
(2) all Institute discoveries, inventions and know-how made outside of the
Research Program as set forth in the LSRA between the Institute and Cephalon,
not committed to a third-party commercial relationship, and patent applications
or patents that relate to the subject matter of the Research Program as set
forth in the LSRA, between the Institute and Cephalon, such as receptors for
GDNF, Neurturin, Persefin, and their homologs (hereafter GDNF family), ligands
of receptors for GDNF family members and components of the signaling cascade for
GDNF family receptors, regardless of whether such discoveries and inventions are
inside or outside of the Field.
Thus, for example, Option Technology includes, but is not limited to, the
discovery and/or characterization of ligands that interact with GDNF, GDNF
receptors or GDNF-related receptors, including Drosophila ligands and vertebrate
and invertebrate homologs of such invertebrate ligands as embodied in a
Provisional Application No. [*The confidential material contained herein has
been omitted and has been separately filed with the Commission.]
1.19 "Parties" or the "Parties to this Agreement" means Cephalon and Orion.
1.20 "Proprietary Information" means information that is generated by the
signatory parties to the LSRA and Option Agreement, that is considered as being
confidential by its originator, and includes but is not limited to data,
formulas, trade secrets, know-how, methods, materials, prototypes, processes,
documentation, business plans, cost and operational information. Any information
and research results that are produced by the Institute in the course of the
Research Program as set forth in the LSRA between the Institute and Cephalon
shall be considered to be Institute Discoveries and/or Institute Know-How rather
than "Proprietary Information.
1.21 "Research Program" means the research activities as set forth in the LSRA
between the Institute and Cephalon as it may be amended from time-to-time.
1.22 "Territory" means the entire world.
1.23 "Valid Claim" means a claim of an issued patent that has not lapsed or
become abandoned or been declared invalid or unenforceable by a court or agency
of competent jurisdiction from which no appeal can be or was taken.
2. GRANT OF SUBLICENSE
2.1 Subject to the terms and conditions set forth herein, Cephalon hereby grants
a sublicense in the Territory to Orion under the rights to Institute Technology
granted to Cephalon under the LSRA (Exhibit A). Subject to the terms and
conditions set forth herein, Cephalon also hereby grants a sublicense in the
Territory to Orion under the rights to Option Patent Rights granted to Cephalon
on an Invention-by Invention basis under the LSRA and Option Agreement (Exhibit
B). The current list of Institute Technology and Option Patent Rights to which
rights are granted to Orion pursuant to this Agreement are listed in Exhibit C.
Exhibit C
List of Institute Technology and Option Patent Rights to which rights are
granted to Orion pursuant to this Agreement
Patent Rights
-------------
Glial Cell-line-Derived Neurotrophic Factor Receptors filed with Ret claims
[*The confidential material contained herein has been omitted and has been
separately filed with the Commission.] corresponding PCT US 96/18197 (filed 13
November 1996)
Glial Cell Lin-Derived Neurotrophic Factor Receptors filed with GDNFRB (GFRa2)
claims [*The confidential material contained herein has been omitted and has
been separately filed with the Commission.] corresponding PTC US 98/09056 (filed
4 May 1998)
[*The confidential material contained herein has been omitted and has been
separately filed with the Commission.]
[*The confidential material contained herein has been omitted and has been
separately filed with the Commission.]
Institute Technologies
----------------------
1. hGDNF in sense orientation in expression vector pEFBos
2. hGDNF is antisense orientation in pEFBos
3. rGDNF in pCRII
4. mPSP in pCDNA3
5. rGFRa2 cDNA in pCDNA3
6. mGFRa3 in pCDNA3
7. hGDNF cDNA in pCRII
8. mNTN in pCDNA3
9. rGFRa1 in pCDNA3
10. h c-Ret short form in pCDNA3 (Xxxxxxxx Xxxxxxx)
11. h c-Xxx xxxx isoform in pCDNA3 (Xxxxxxxx Xxxxxxx)
12. h c-Xxx xxxx isoform extracellular domain in pIG I vector as the fusion
with IgG Fc
13. r GFRa1 with the N-terminal fusion of GFP in PCDNA3
14. r GFRa1 with the N-terminal fusion of GFP in pBactin vector
15. NIH 3T3 firoblasts stably expressing rGFRa1
16. Neuro 2A endogenously expressing Ret and stably transfected with rGFRa1
(Xxxx Xxxxxxx)
17. Mice lacking GFRa2 gene function (GFRa2-/- mice, 2 lines), one line with
nlacZ knocking GFRa2nlacZ, potentially expressing the lacZ marker with
nuclear localization signal)
18. ES cells with targeted disruption of GFRa2 gene (GRFa2+/- 2 clones, one
Gfra2nlacZ)
19. GFRa2 gene targeting vectors (replacement type, one with neoR, one with
nlacZneoR)
20. GFRa2 mouse genomic DNA fragments
21. Rabbit anisera against GFRa2 and GFRa3 peptides (poorly characterized)
22. Transgenic mice overexpressing hGDNF under the translation elongation
factor I promoter; 4 mice lines (testis specific expression of GDNF)
Option Patent Rights
--------------------
[*The confidential material contained herein has been omitted and has been
separately filed with the Commission.]
Option Technologies
-------------------
[*The confidential material contained herein has been omitted and has been
separately filed with the Commission.]
[*The confidential material contained herein has been omitted and has been
separately filed with the Commission.]
TAP Holdings Inc.
June 28, 1996
Page 15
ATTACHMENT A
Required Criteria
-----------------
For establishing Subject Compounds under subparagraphs 1(b) and (c)
I. Subject Compounds must meet all of the criteria set forth in one row of the
following table:
--------------------------------------------------------------------------------
Assay % I Kinase Activity(a) % I Trk Phosphorylation Whole Cell(b)
Concentration(c) % Inhibition(d) Concentration % Inhibition
--------------------------------------------------------------------------------
Trlc 50 nM => 50% 50 nM >= 50%
PDGF 500 nM => 50% 100 nM >= 50%
--------------------------------------------------------------------------------
a Inhibition of PLC-y phosphorylation in the trk ELISA screen
b Inhibition of NGF or PDGF-induced receptor phosphorylation in whole
cell screens
c Concentration = screening concentration of drug
d % inhibition = the minimal % inhibition at the screening concentration
that would meet criteria
Note: Additional rows will be added to the foregoing table, specifying the
criteria for VEGF, EGF and FGF, as determined by the Development Committee
II. Subject Compounds must meet all of the criteria set forth in each row of
the following table:
-----------------------------------------------------
% I Kinase Activity
Assay Concentration % Inhibition
-----------------------------------------------------
PKC 10 uM less than 50%
Insulin 10 uM less than 50%
-----------------------------------------------------
ATTACHMENT A IS SUBJECT TO AMENDMENT BY THE DEVELOPMENT
-------------------------------------------------------
COMMITTEE
---------
===============
Discovery Flow
===============
------------------- ----------------
Indolocarbazole
Kyowa Hakko Major Fused-
Ceph (re-synthesis) - Minor Emphasis - pyrrolocarbazole
------------------- ----------------
Combinatorial/
Medicinal Chemistry
|
|
Assay --------------- Reagent
Validation/ --- Screening Group --- Support
Automation --------------- Recomb.
Expression
|
|
Trk, TrkB, PDGF, VEGF, IGF, Insulin, FGF
|
|
|In vitro whole cell functional
|
|
Cell
Biology
|
|
Chemical Resynthesis
| |
| |
2563 salts/process optimization process chem. general for FP's
|
|
TAP In Vivo Models
Exhibit D - Kyowa License
+ list of terms and conditions made applicable for Lundbeck
Page No. 1 [LOGO]
KYOWA
LICENSE AGREEMENT
This License Agreement, as defined in Article 13 in a screening consignment
agreement which was signed by both parties on 19th of April 1991, made and
entered into as of the 15 day of May 1992 by and between Cephalon, Inc., having
its principal office at 000 Xxxxxxxxxx Xxxxxxx, Xxxx Xxxxxxx, XX 00000 U.S.A.
(hereinafter referred to as "CEPHALON") and Kyowa Hakko Kogyo Co., Ltd., having
its principal office at 0-0-0 Xxxxxxxxx, Xxxxxxx-xx, Xxxxx 000 Xxxxx
(hereinafter referred to as "KYOWA").
WITNESSETH
----------
Whereas, KYOWA has in its possession Large numbers of Substance(s) (as
hereinafter defined) which are potential candidates for therapeutic use, and
owns the Patents (as hereinafter defined) and the Know-How (as hereinafter
defined) relating to the Substance(s); and
Whereas, KYOWA and CEPHALON have entered into a screening consignment agreement
dated April 19,1991, under which KYOWA consigned the Substance(s) to CEPHALON
for screening and granted to CEPHALON the option to enter into the License
Agreement; and
Whereas, the parties have a mutual desire to engage in the R & D (as hereinafter
defined) with respect to the Substance(s) provided by KYOWA; and
Whereas, CEPHALON desires to develop and sell the Pharmaceutical(s) (as
hereinafter defined) as human medicines in the Territory (as hereinafter
defined) and CEPHALON exercised the option pursuant to said screening
consignment agreement;
NOW THEREFORE, the parties agree as follows:
Article 1. Definitions
----------------------
1.1 "Substance(s)" shall mean K-252A and the derivatives of K-252A obtained by
KYOWA through the research and experiment activities, including, but not limited
to, the derivatives listed on Exhibit A hereto, and derivatives of any of the
foregoing developed by the parties hereto during the term of this License
Agreement, which may
Page No. 2 [LOGO]
KYOWA
be included within the scope of the claims of the Patents.
1.2 "Screening" shall mean the screening system of CEPHALON. The Screening shall
consist of the following phases, as described in CEPHALON's Neuroscreen
brochure:
Phase I Determine cytotoxicity
Phase II Establish neurotrophic potential
Phase III Identify responsive neuronal populations
1.3 "Pharmaceuticals(s)" shall mean any preparation in finished product form for
human use, ready for administration to the ultimate consumer containing the
Substance(s) as a therapeutically active ingredient.
1.4 "R&D" shall mean the activity including Phase IV (determine efficacy in
animal models and evaluate blood-brain barrier transport) of CEPHALON's
screening system, further laboratory investigations, clinical trials, field
studies and any registry activities of the Substance(s) conducted by CEPHALON in
order to market any Pharmaceutical in the Territory.
1.5 "Territory" shall mean all the world except Japan.
1.6 "Know-How" means the pharmacological, toxicological, clinical, analytical
and pharmaceutical data, instructions, specifications, experiences and
information relating to the manufacture, formulation, quality control, safety
and effectiveness of the Substance(s), owned by or under the control of KYOWA or
its Affiliates which is in existence as of the date of this License Agreement or
developed during the term of this License Agreement.
1.7 "Patents" means the patents and the patent applications in any jurisdiction
owned or controlled by KYOWA or its Affiliates and containing a claim covering
the use, manufacture or composition of a Substance, and any continuations,
additions, renewals, divisions, and reissues of any of the foregoing. The
Patents shall include any patent applications and patents that claim a joint
invention of both parties made after the signature of the screening consignment
agreement.
1.8 "Affiliate(s)" shall mean any corporation, association or other entity which
directly or indirectly controls, is controlled by, or is under common control
with the party in question. As used herein the term control means possession of
the power to direct, or cause the direction of, the management and policies of a
corporation or entity
Page No. 3 [LOGO]
KYOWA
by reason of any ownership interest therein.
Article 2. Kind and Scope of License
------------------------------------
2.1 KYOWA hereby grants to CEPHALON the exclusive right to Substance(s) and
license in the U.S. and the semi-exclusive right and license in the Territory
except the U.S. under the Patents owned or controlled by KYOWA or its Affiliates
and Know-How to develop and use the Substance(s) solely to conduct the R & D and
to make, have made, use and sell the Pharmaceutical(s) in the Territory. KYOWA's
semi-exclusive rights retained in the Territory outside of the U.S. means that
KYOWA or its Affiliate(s) or one sublicensee of KYOWA (but not both) per country
may exercise KYOWA's retained rights in the Territory outside of the U.S. KYOWA
shall retain the right to manufacture the Substance(s), and CEPHALON shall not
manufacture the Substance(s) except as permitted punuant to Article 7.2
Notwithstanding the foregoing, the both parties have acknowledged that Kyowa
Medex had already distributed [K252A, K2523, KT5720, KT5926 and KT5823 as
protein kinase inhibitors.
2.2 The license granted to CEPHALON hereunder shall carry with it the right to
grant sublicenses in the Territory, without the prior written consent of KYOWA.
Article 3. Disclosure of Know-How
---------------------------------
3.1 Promptly after the effective date of this License Agreement, and
periodically thereafter during the term of this License Agreement, KYOWA shall
disclose to CEPHALON the available Know-How to the extent that the parties
decides it is necessary for the R & D, registration and sales of the
Pharmaceutical(s).
3.2 CEPHALON shall furnish KYOWA with a semiannual report on he R&D at a meeting
semiannually held by the both parties. Said report shall contain the full
content of any progress and findings acquired by CEPHALON in the R & D. In
addition to such a semiannual report, CEPHALON shall as promptly as practicable,
provide KYOWA with the result, information and data of the R & D in the written
report form. CEPHALON shall not knowingly conceal from KYOWA nor intentionally
neglect to report with respect to any significant part of the R & D for any
purpose or reason.
3.3 Whenever requested by KYOWA, CEPHALON shall answer, in writing if so
requested, any reasonable question that may be put by KYOWA with respect to thef
above reports pursuant to Article 3.2 and the matters in connection with the
R&D.
Page No. 4 [LOGO]
KYOWA
Article 4. Consideration and Payments
-------------------------------------
4.1 In consideration of the grant of the rights and license under the provisions
of Article 2, CEPHALON shall pay to KYOWA one time payment of the amount of US
Dollars ________________ at the time CEPHALON submits the first Investigational
New Drug (I.N.D.) application relating to the Pharmaceutical(s) to the United
States Food and Drug Administration (F.D.A.).
4.2 Royalties shall be considered only when both parties feel it is necessary to
set the royalties depending on countries on such terms and conditions as may be
agreed by both parties. If the royalties to be paid by CEPHALON to KYOWA
established by the time CEPHALON files the initial I.N.D. for a Pharmaceutical
with the F.D.A., the parties shall negotiate the royalties in good faith during
the sixty (60) day period thereafter. In no event shall CEPHALON be required to
pay a royalty for the Pharmaceutical(s) which, together with the amount paid for
the supply of the related substance under Article 7.1, is greater than _______
of the net sales price of the Pharmaceutical.
Article 5. No Warranty
----------------------
Except as may be provided in the Supply Agreement between KYOWA and CEPHALON
pursuant to Article 7.3, KYOWA shall not be liable for any damages arising out
of or resulting from any activity of CEPHALON with respect to the Substance(s)
and Pharmaceutical(s) whether or not the activity by CEPHALON involves the use
of the Know-How or other information supplied by KYOWA. CEPHALON shall not be
liable for any damages arising out of or resulting from any activity of KYOWA
with respect to the Substance(s) and Pharmaceutical(s)) whether or not the
activity by KYOWA involves the use of information pursuant to Article 3.2 or
other information supplied by CEPHALON.
Article 6. Registration and Marketing
-------------------------------------
6.1 Within a reasonable time after the date of this License Agreement. CEPHALON
shall initiate and diligently pursue the R & D and other operations necessary
for registration and marketing of the Pharmaceutical(s) in the Territory. KYOWA
shall assist CEPHALON in pursuing the R & D as much as KYOWA can spare its
staff.
6.2 CEPHALON shall evaluate, promote and advertise the Pharmaceutical(s) and
shall make all reasonable efforts necessary to ensure their earliest possible
Page No. 5 [LOGO]
KYOWA
marketing in the Territory.
6.3 CEPHALON shall promptly inform KYOWA in writing of (i) the date and content
of the registration of the Pharmaceutical(s), (ii) the date and content of the
official approval(s) of the relevant authorities to market the Pharmaceutical(s)
and (iii) the marketing date of the Pharmaceutical(s) in the Territory.
6.4 The label of the Pharmaceutical(s) sold by CEPHALON shall bear the legend
"Licensed from Kyowa Hakko Kogyo Co., Ltd.".
Article 7. Supply of the Substance(s)
-------------------------------------
7.1 CEPHALON shall purchase all its requirements of the Substance(s) from
KYOWA,for the R&D and the manufacture and the sales of the Pharmaceuticals the
Territory on such terms and conditions as may be agreed by both parties in a
Supply Agreement pursuant to Article 7.3, provided that such terms and
conditions shall be negotiated and agreed between the both parties hereto by the
time CEPHALON submit the first I.N.D. application of the Pharmaceutical(s) to
the F.D.A. However, samples of the Substance(s) which are required for the
pre-clinical study within the R & D until the time CEPHALON submits the first
I.N.D. application to the F.D.A. shall be provided to CEPHALON by KYOWA free of
charge.
7.2 The Supply Agreement will provide that if for any reason KYOWA is unable to
supply CEPHALON's requirements of the Substance(s), KYOWA will arrange for a
third party to manufacture the needed quantities of Substance(s) upon the same
terms and conditions as continued in the Supply Agreement, or KYOWA will grant
to CEPHALON a right to make or have made the Substance(s) on such terms and
conditions as may be agreed by the both parties hereto
7.3 KYOWA and CEPHALON agree that a Supply Agreement which incorporates Articles
7.1 and 7.2 and any other necessary terms and conditions with respect to the
supply of the Substance(s)) shall be separately executed by the parties hereto.
Article 8. Regulatory Considerations
------------------------------------
When CEPHALON submits the first I.N.D. application relating to the Substance(s)
to the F.D.A. KYOWA shall file a manufacturing master file as required by the
United States Food & Drug Act and regulations so as to permit the timely supply
of the
Page No. 6 [LOGO]
KYOWA
Substance(s) to CEPHALON.
Article 9. Confidentiality
--------------------------
9.1 It is expressly agreed that the Know-How disclosed by KYOWA to CEPHALON and
scientific and technical advice and support furnished by KYOWA to CEPHALON
pursuant to Article 3.1 shall be treated by CEPHALON as confidential. CEPHALON
shall not disclose any such Know-How and advice and support to any third party
without the prior written consent of KYOWA, except to the extent required by the
appropriate governmental authorities. Notwithstanding the foregoing, CEPHALON
may disclose such information to any person to whom CEPHALON grants a sublicense
as permitted under Article 2.2 if such person agrees to be bound by the same
confidentiality obligation with respect to such information. The obligations
undertaken by CEPHALON under this Article 10.1 shall survive for ten (10) years
beyond the termination of this License Agreement.
9.2 It is expressly agreed that the information disclosed by CEPHALON to KYOWA
and scientific and technical advice and support furnished by CEPHALON pursuant
to Articles 3.2 and 3.3 shall be treated by KYOWA as confidential, and KYOWA
shall not disclose any such information and advice and support to any third
party without the prior written consent of CEPHALON, except to the extent
required by the appropriate governmental authorities. Notwithstanding the
foregoing, KYOWA may disclose such information to any person to whom KYOWA
grants a sublicense as permitted under Article 2.1 if such person agrees to be
bound by the same confidentiality obligations with respect to such information.
The obligation undertaken under this Article 9.2 shall survive for ten (10)
years beyond the termination of this License Agreement,
9.3 The obligations undertaken by the parties hereto pursuant to Article 9.1 and
9.2 shall not, in any event, apply to any information which:
(a) at the time of disclosure is or thereafter becomes available to the public
in published literature or otherwise through no fault of the receiving party; or
(b) as known to, or otherwise in its possession of the receiving party prior to
the receipt of such information from the other party as evidenced by the written
records of the receiving party; or
(c) is obtained by the receiving party from a third party who would not be
breaching a
Page No. 7 [LOGO]
KYOWA
commitment of confidentiality by disclosing such information; or
(d) was Independently developed by the receiving party by an employee who did
not have access to the disclosed information; or
(e) was disclosed in accordance with Article l0.
Article 10. Publicity and Publication
-------------------------------------
10.1 CEPHALON and KYOWA agree not to issue any press release or other public
statement disclosing the existence of or relating to this License Agreement
without the prior written consent of the other party, provided, however, that
neither party shall be prevented from complying with any duty of disclosure
(including SEC filings) it may have pursuant to securities or other applicable
law. The form of initial press release announcing this transaction, in the form
attached as Exhibit B hereto, is accepted by both parties.
lO.2 If either party wishes to publish or present information related to the
Substance(s) in a scientific journal or conference proceeding, it shall furnish
a copy of the proposed manuscript or presentation outline to the other party as
soon as practicable, but in no event less than thirty (30) days before
manuscript submission or the presentation date. The parties will cooperate to
permit patent filings and any other protections to be instituted to protect any
such proposed disclosure before the disclosure occurs.
Article 11. Patents
-------------------
11.1 Neither party shall be obliged to defend or hold harmless the other party
against any suit, damage claim or demand based on actual or alleged infringement
of any patent resulting from the exercise or use of any right or license granted
hereunder.
11.2 Notwithstanding the foregoing, each party shall promptly notify the other
party of any suit, damage claim or demand referred to in Article 11.1, whereupon
the parties shall negotiate to determine which party, if any, should defend or
prosecute. Neither party may settle such claim or action without the consent of
the other party. The parties also shall discuss how the expenses of defense or
prosecution should be treated, including the reduction of royalties if CEPHALON
is defending or prosecuting the action.
Page No. 8 [LOGO]
KYOWA
11.3 In the event that CEPHALON becomes aware of a product, made, used or sold
in the Territory which it believes to infringe a valid claim of an issued
Patents owned or controlled by KYOWA or its Affiliates. CEPHALON shall promptly
advise KYOWA of all the facts and circumstances known in connection therewith.
KYOWA shall have the right to enforce such Patents against such infringement, at
its own expense. In the event that, one hundred eighty (180) days after
receiving notice from CEPHALON of the infringement, KYOWA fails to decide to
institute any action to so enforce such Patents, or if KYOWA fails to timely
implement such action which KYOWA has decided to institute, then CEPHALON shall
have the right to do so at its own expense and in its own name if possible.
KYOWA shall cooperate with CEPHALON in such effort including being joined as a
party to such lawsuit. The party bearing the expenses for such litigation shall
keep any damages recovered therefrom.
11.4 KYOWA agrees to diligently prosecute and maintain the Patents owned or
controlled by KYOWA or its Affiliates and to inform CEPHALON of all written
communications to and from Patent Office in the Territory including providing
CEPHALON with copies of all such written communications upon request of
CEPHALON. However, if Kyowa does not prosecute the Patent CEPHALON may prosecute
the Patent in the CEPHALON's Territory.
11.5 During the life of this License Agreement, neither party shall
independently develop any chemical analogs based upon the Substance(s) or any
information obtained front the R & D with a purpose of applying for a patent
except in the cases where both parties co-apply for a patent on such terms and
conditions as may be agreed by both parties.
11.6 All the result, information and data directly derived from the R & D
hereunder shall be the sole property of CEPHALON except the cases where both
parties agree to co-apply for any patent or right, providing that KYOWA, its
Affiliates and its sublicensees are hereby granted a royalty-free right to use
the same in KYOWA's respective territory.
Article 12. Communication of Side Effects and Regulations
---------------------------------------------------------
12.1 Each party shall promptly report to the other parry any unusual or
unexpected reactions or side effects concerning the Pharmaceutical(s). All such
reports by KYOWA shall meet the requirements of the United States Food and Drug
Administration with respect to the reporting of adverse drug reactions. All such
reports by CEPHALON shall meet the requirements of the appropriate Japanese
regulatory
Page No. 9 [LOGO]
KYOWA
authority with respect to the reporting of adverse drug reactions.
12.2 Each party shall communicate to the other party all existing or
contemplated laws of regulations of which each party is aware in the Territory
applicable to or affecting the Pharmaceutical(s) and any government action
likely to have an impact on the Pharmaceutical(s).
Article 13. Term and Termination
--------------------------------
13.1 This License Agreement shall become effective as of the date first above
written and shall expire upon the expiration of the last to expire of the
Patents.
13.2 This License Agreement shall be automatically terminated if:
(a) CEPHALON fails in filing an I.N.D. for any Pharmaceutical(s) within five (5)
years from the date first above written or;
(b) CEPHALON discontinues the development of the Pharmaceutical(s) because of
reasons relating to the safety or efficacy of the Pharmaceutical(s).
No compensation for such termination shall be paid by CEPHALON to KYOWA in any
of the foregoing cases under this Article 13.2.
13.3 If either party breaches any material provision of this License Agreement
and fails to remedy such breach within sixty (60 ) days after the date of notice
thereof by the aggrieved party, the aggrieved party may at any time thereafter
terminate this License Agreement.
13.4 Either party hereto shall have the right to terminate this License
Agreement forthwith by written notice to the other party (i) if the other party
is declared insolvent or bankrupt by a court of competent jurisdiction, (ii) if
a voluntary or involuntary petition in bankruptcy is filed in any court of
competent jurisdiction against the other party or (iii) if other party shall
make or execute an assignment for the benefit of creditors.
13.5 In the event of the termination of this License Agreement pursuant to
Article 13.3 and 13.4, each party shall promptly, at no cost, transfer or
assign, upon request, to the requesting party or to such party's designee, all
approvals, permits, registrations and any other rights obtained by the other
party with respect to the Pharmaceutical(s), to the extent permitted by the laws
in the applicable territory.
Page No. 10 [LOGO]
KYOWA
13.6 No party shall on termination of the License Agreement for whatever reason
be relieved of its obligations accrued hereunder prior to the date of such
termination, including any obligation to make payments or reports relating to
the prior sales or use.
Article 14. Assignment
----------------------
Neither this agreement nor any rights or benefits or obligations hereunder shall
be assignable or transferable by either of the parties hereto without the prior
written consent of the other party.
Article 15. Force Majeure
-------------------------
Neither party shall be responsible nor liable to the other party for failure or
delay in the performance of this License Agreement due to any war, fire,
accident, or other casualty, or any labor disturbance or act of God or the
public enemy, or any other contingency beyond such party's reasonable control.
Article l6. Notices
-------------------
Any notice or communication required or permitted to be given or made under this
License Agreement by one of the parties hereto to the other shall be in writing
and shall be deemed to have been sufficiently given or made for all purposes if
mailed by registered mail, postage prepaid, addressed to such other party at its
respective address as follows:
Kyowa Hakko Kogyo Co., Ltd. Cephalon, Inc.
0-0-0 Xxxxxxxxx Xxxxxxx-xx, 000 Xxxxxxxxxx Xxxxxxx, Xxxx Xxxxxxx
Xxxxx 000 Xxxxx PA 19380 U.S.A.
Attention: General Manager Attention: President
Licensing
Article 17. Entire Agreement
----------------------------
This Agreement sets forth the entire agreement of the parties with respect to
the subject matter contained herein and may not be modified or amended except as
expressly stated
Page No. 11 [LOGO]
KYOWA
herein or by a written agreement duly executed by both parties hereto.
Article 18. Governing Law
-------------------------
This License Agreement shall be construed and the rights of the parties governed
in accordance with the laws of Japan. All dispute, controversies or differences
which may arise between the parties hereto, out of or in relation to or in
connection with this License Agreement, or the breach thereof, shall be settled
amicably through negotiations between the parties hereto. If such negotiations
should fail to yield an amicable settlement, then such disputes, controversies
or differences shall be brought in West Chester, Pennsylvania and shall be
brought in accordance with the Commercial Arbitration Rules of the American
Arbitration Association. Any proceeding brought by CEPHALON shall be brought in
Tokyo, Japan in accordance with the Commercial Arbitration Rules of the Japan
Commercial Arbitration Association. The award rendered by arbitrator(s) shall be
final and binding upon both parties.
Article 19. Severability
------------------------
If any provisions hereof shall be determined to be invalid, illegal or
unenforceable, the validity, legality or effect of the other provisions of this
License Agreement shall not be affected or impaired thereby. In the event any
provisions shall be held invalid, illegal or unenforceable the parties shall use
best efforts to substitute a valid, legal and enforceable provision, which,
insofar as practical, implements the purposes hereof.
IN WITNESS WHEREOF, the parties hereto have caused this License Agreement to be
signed and executed in duplicate by their duly authorized representatives as of
the day, month and year first above written.
CEPHALON, INC KYOWA HAKKO KOGYO CO., LTD
By: /s/ ILLEGIBLE By: /s/ ILLEGIBLE
-------------------- ---------------------
Title: Vice President Title: Senior Managing Director
------------------- -----------------------------
Dated: May 15, 1992 Dated: May 15, 1992
------------------- -----------------------------
EXHIBIT A
Substance(s)
KT# M.W. weight(mg) KT# M.W. weight(mg)
--- ---- ---------- --- ---- ----------
5554 311 1 5951 496 1.1
5555 467 1.1 5952 480 1
5557 475 0.8 5958 466 1
5632 551 1.2 5959 500 1.1
5633 509 1 6005 601 1.1
5634 464 1 6069 557 1.1
5638 407 1 6076 444 0.9
5639 409 1 6118 479 1.1
5640 339 1 6121 493 1.2
5642 581 1.1 6122 508 0.7
5644 325 1.2 6124 468 0.9
5707 479 1 6160 494 0.8
5709 415 0.9 6169 452 1
5710 399 1.1 6197 480 1
5711 394 1 6228 493 0.9
5713 481 1.1 6239 481 0.7
5720 537 1.2 6240 495 1.2
5738 509 1 6260 481 1.3
5739 523 0.6 6292 478 0.6
5740 551 1 6294 478 0.9
5812 422 0.9 6295 492 1.1
5813 485 1.5 6297 467 1.5
5818 495 1.1 6349 497 1.6
5822 481 1.1 6384 492 0.8
5823 495 1.1 6386 553 1.1
5860 639 1 6398 523 1
5861 546 1 6399 413 0.6
5871 466 1 6400 487 1
5872 550 1 6434 507 1.2
5876 452 0.7 6435 506 0.9
5906 440 1.1 6454 462 0.9
5907 440 1.1 6455 539 1.2
5920 538 1.1 6459 466 1.5
5921 483 1.6 6492 531.5 1
5923 552 1.1 6493 571.5 0.9
5926 525 1.3 6519 325 1.1
5932 436 1 6570 639 1.1
5935 481 1.7 6571 561.5 0.6
5937 508 1 6572 589.5 1.1
5943 480 1.1 6587 453 1.1
5944 464 1 6594 547 0.8
5945 485 1.4 6595 497 0.7
5946 469 1.2 6606 617 0.7
5947 501 1 6607 483 0.8
5948 480 1.2 6616 527 0.6
5949 494 1 6617 455 1.2
5950 522 1 6618 499 0.9
6663 506 0.8
Exhibit E - Research Program
[to be provided by Cephalon]
Proposed Research Collaboration
General Objectives
o Complete development of CEP-1347 and clinically evaluate potential for
treatment of neurodegenerative disease
o Refine and implement novel discovery path based on proposed mechanism (with
fused pyrrolocarbazoles) for identification of "back-up" molecule
o Identify additional innovative targets for further drug discovery efforts
Cephalon Confidential
[Draft: To be approved and implemented by Lundbeck/Cephalon JMT]
Year 1: Proposed Research Collaboration
Primary Development Objectives:
-------------------------------
I. Development of CEP-1347
Note: Decision to be made jointly with partner based on the best
opportunity with CEP-1347 or a fused pyrrolocarbazole.
o Complete development activities for CEP-1347 and initiate clinical
evaluation with the following objectives:
o Determine PK and multi-does tolerability in Phase 1
o Evaluate the potential for using a surrogate marker of mechanism
(to facilitate phase 2 dosage selection) and couple with
pre-clinical activities.
o With collaborator, determine the most appropriate path forward
for Phase 2 evaluation in an appropriate neurological disease
(AD, Xxxxxxxxx'x, ALS).
o Continue to define the breadth of pharmacological activities.
Cephalon Confidential
[Draft: To be approved and implemented by Lundbeck/Cephalon JMT]
Year 1: Proposed Research Collaboration
Primary Research Objectives:
1. Complete, validate and implement discovery cascade; identify potential
development candidates; chemically refine
o Complete the development of the discovery path, immediately target
chemistry, screen, identification of leads (Based on distribution
MLK2/DLK primary initial target).
o Complete the characterization of MLK Family in neuronal death
processes in vitro and in vivo.
o Complete localization and distribution studies IQ (rat and human
brain; non-CNS/PNS tissues)
o Complete confirmation of involvement in cell death of primary
neuronal and/or PC12 cultures (dominant negative; on-going)
o Complete characterization of test for inhibition of SAPK pathway
in vivo (MPTP, MES)
o Initiation of the elucidation of additional discovery targets involved
in neuronal death processes by utilizing "in-house" screens,
literature, genomics information, expression profiles in human
diseased brain and/or biochemical and molecular approaches, identify
candidate kinases, clone, express, characterize and provide for
screening
Cephalon Confidential
[Draft: To be approved and implemented by Lundbeck Cephalon JMT]
Years 2 and 3: Proposed Research Collaboration
I. Complete characterization of structurally novel, (e.g.:
non-indolocarbazole) selective MLK family member(s) (e.g.: MLK-2) (or
appropriate target) inhibitor and recommend for development (2Q, Year 2)
o Complete all pre-clinical, non-development activities for successful
recommendation of candidate compound
o Support development of candidate compound
II. Continued elucidation and identification of molecular processes involved in
neuronal death (continuation from Year 1)
o Identification and characterization of at least one to two additional
molecular targets for discovery efforts
o Validation of importance in neuronal death and role in specific
disease
o Establishment of necessary reagents, in vitro and in vivo models
per the discovery flow
o Initiate discovery program (targeted chemistry)
Cephalon Confidential
[Draft; To be approved and implemented by Lundbeck/Cephalon JMT]
Summary of Milestones
Year 1:
-------
o Development Milestones
CEP- 1347 enters phase I (makes assumption of joint
decision to proceed)
o Research Milestones
o Validation and implementation of MLK family member inhibitor
discovery program as a disease relevant target; identification of
viable predevelopment leads
o Initiate characterization of additional neuronal processes of
cell death for target identification
Year 2:
-------
o Research Milestones (Clinical development of CEP-1347 not considered
for simplicity)
o Recommendation of selective MLK family member (or appropriate
Kinase target) inhibitor for development (2Q)
o Expansion of therapeutic utility of leads by further
understanding of molecular involvement of target in disease
process
o Choice and initiation of "new target" discovery program (may
be continuation from Year 1)
Cephalon Confidential
[Draft: To be approved and implemented by Lundbeck/Cephalon JMT]
Identification/Screening: "Neurotrophic" Small Molecules
II. Target Directed Approach (Proposed)
Recom. Protein Expression
Medicinal - Molecular Biology Compound
Chemistry - Assay Development Library
In Vitro Kinase affinity;
Guide Chemical Effort
K, Determination
Kinase Screen Binding/Enzymatic
MLK-3, DLK, MEK Primary
Trk, PKC Secondary
Biochemical/Molecular
Identification of Relevant
Kinases in Neuronal Cell
Death Processes
Transient Transfection/Tet- Inhibits target
Inducible Cell Assay for Kinase in cells IC(50)
of choice
Inhibition of Target
Biochemical Validation Leads to Functional
Activation of Molecular Target Oral BA Event in Appropriate
in Disease Relevant In Vitro LC/MS/MS Cell Type (e.g.,
and In Vivo Models Neurons)
In Vivo Demonstration of Inhibition of
Molecular Target in the CNS or PNS
po/sc
Pharmacological Evaluation
(Biochemical, Functional, Behavioral) in
Disease Relevant Models
po
General Pharmacology
Recommendation for Development
Cephalon Confidential
[Draft; To be approved and implemented by Lundbeck/Cephalon JMT]
Exhibit F - List of Countries in the Territory
Europe
Western Europe
--------------
Austria
Belgium
Denmark
Finland
France
Germany
Greece
Iceland
Ireland
Italy
Liechtenstein
Luxembourg
The Netherlands
Norway
Portugal
Spain
Sweden
Switzerland
United Kingdom
Eastern Europe
--------------
Bosnia-Herzegovina
Bulgaria
Croatia
Czech Republic
Hungary
Poland
Romania
Serbia
Slovakia
Any country that was included within the boundaries of the Union of Soviet
Socialist Republics immediately prior to its dissolution on December 25,
1991.
Middle East
Babrain
Cyprus
Egypt
Iran
Iraq
Xxxxxx
Xxxxxx
Kuwait
Lebanon
Oman
Qatar
Saudi Arabia
Syria
Turkey
United Arab Emirates
Yemen
South America
Argentina
Bolivia
Brazil
Chile
Columbia
Easter Island
Ecuador
Falkland Islands
Xxxxxxxx de Noronha Archipelago
French Guiana
Galapagos Island
Guyana
Xxxx Xxxxxxxxx Islands
Paraguay
Peru
Suriname
Uruguay
Venezuela
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (the "Agreement") is made as of May
28, 1999 by and between Cephalon, Inc., a Delaware corporation with its
principal place of business located at 000 Xxxxxxxxxx Xxxxxxx, Xxxx Xxxxxxx,
Xxxxxxxxxxxx 00000-0000, XXX (the "Company"), and X. Xxxxxxxx A/S, a Danish
corporation with its principal place of business located at 0 Xxxxxxxxxx,
XX-0000 Xxxxx Xxxxxxxxxx, XXXXXXX ("Buyer").
WITNESSETH:
WHEREAS, as of this date the Company and the Buyer will enter into a Joint
Research, Development and License Agreement (the "License Agreement") covering
their collaborative efforts to engage in research, development and
commercialization of certain therapeutic drugs for the treatment of diseases of
the nervous system; and
WHEREAS, concurrent with the execution of the License Agreement by the
Company and Buyer, Buyer has agreed to purchase and the Company has agreed to
sell to Buyer shares (the "Shares") of the Company's common stock, par value
$0.01 per share (the "Common Stock"), on the terms and conditions set forth
herein.
NOW, THEREFORE, for good and valuable consideration, the adequacy of which
is hereby affirmed, the parties hereby agree as follows.
1. Authorization and Issuance.
1.1 Authorization of Shares. The Company has authorized the issuance to the
Buyer of [* The confidential material contained herein has been omitted and has
been separately filed with the Commission.] shares of its Common Stock (the
"Shares").
1.2 Issuance and Purchase of Shares. Subject to the terms and conditions
hereof, the Company will issue to the Buyer [* The confidential material
contained herein has been omitted and has been separately filed with the
Commission.] duly authorized, validly issued, fully paid and nonassessable
shares of its Common Stock at a purchase price per share equal to the average
closing price of the Common Stock for the five Trading Days immediately prior to
the date of this Agreement. In consideration for the Shares, Buyer shall pay the
Company in United States dollars the aggregate purchase price for the Shares
effected by wire transfer in accordance with those instructions provided by the
Company to the Buyer. The Company shall deliver to the Buyer on, or as soon as
practicable thereafter, the date hereof a certificate representing the Shares
registered in the name of the Buyer (or in the name of another entity as may
designated by the Buyer). For the purposes of this Agreement, (i) "Trading Day"
means at any time a day on which any of a national securities exchange, Nasdaq
or such other securities market which at such time constitutes the principal
securities market for the Common Stock is open for general trading of
securities; and (ii) "Nasdaq" means the Nasdaq National Market.
-1-
2. Representations and Warranties of the Company. The Company represents
and warrants to Buyer as of the date hereof as follows:
2.1 Organization and Standing. The Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
State of Delaware.
2.2 Corporate Power; Authorization. The Company has all requisite legal
and corporate power and has taken all requisite corporate action to execute and
deliver this Agreement, to issue the Shares to Buyer and to carry out and
perform all of its obligations hereunder. This Agreement has been duly
authorized, executed and delivered on behalf of the Company and constitutes the
valid and binding agreement of the Company, enforceable in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the enforcement of
creditors' rights generally; and (ii) as limited by equitable principles
generally. The consummation of the transactions contemplated herein and the
fulfillment of the terms hereof will not (i) result in a breach of any of the
terms or provisions of, or constitute a default under, the Company's Restated
Certificate of Incorporation, the Company's bylaws, or any material indenture,
mortgage, deed of trust or other agreement or instrument to which the Company is
a party or by which it or its properties is bound, or (ii) violate or contravene
any applicable law, rule or regulation or any applicable decree, judgment or
order of any court, United States federal or state regulatory body,
administrative agency or other governmental body having jurisdiction over the
Company or any of its subsidiaries or any of their respective properties or
assets, in any such case which would be reasonably likely to have a material
adverse effect on the business, properties, operations, condition (financial or
other), results of operations or prospects of the Company and its subsidiaries,
taken as a whole, or the validity or enforceability of, or the ability of the
Company to perform its obligations under this Agreement.
2.3 Shares. The Company has full corporate power and lawful authority to
issue the Shares to Buyer on the terms and conditions contemplated herein, and
when so issued against payment therefor as provided herein, the Shares will be
validly authorized and issued, fully paid and nonassessable. The issuance and
delivery of the Shares is not subject to preemptive or any similar rights of the
stockholders of the Company or any liens or encumbrances arising through the
Company. The Common Stock is listed for trading on Nasdaq and (1) the Company
and the Common Stock meet the criteria for continued listing and trading on
Nasdaq; (2) the Company has not been notified since January 1, 1996 by the NASD
or the Nasdaq Stock Market of any failure or potential failure to meet the
criteria for continued listing and trading on Nasdaq; and (3) no suspension of
trading in the Common Stock is in effect. The Company knows of no reason that
the Shares will become ineligible for listing on Nasdaq.
2.4 Capitalization. The authorized capital stock of the Company consists
of (A) [* The confidential material contained herein has been omitted and has
been separately filed with the Commission.] shares have been designated Series A
Junior Participating Preferred Stock, and none of which are outstanding. The
Company's Annual Report on Form 10-K for the year ended December 31, 1998
discloses as of the filing date thereof all outstanding options or warrants for
the purchase
-2-
of, or rights to purchase or subscribe for, or securities convertible into,
exchangeable for, or otherwise entitling the holder to acquire, Common Stock or
other capital stock of the Company, or any contracts or commitments to issue or
sell Common Stock or other capital stock of the Company or any such options,
warrants, rights or other securities; and from such date to the date hereof
there has been, no material change in the amount or terms of any of the
foregoing except for the grant or exercise of options to purchase shares of
Common Stock pursuant to the Company's stock option plans in effect on the date
of this Agreement.
2.5 Approvals, Filings, Etc. No authorization, approval or consent of,
or filing with, any court, governmental body, regulatory agency, self-regulatory
organization, or stock exchange or market or the stockholders of the Company is
required to be obtained or made by the Company for (x) the execution, delivery
and performance by the Company of this Agreement, (y) the issuance and sale of
the Shares as contemplated by this Agreement and (z) the performance by the
Company of its obligations under this Agreement, other than (1) as may be
required under applicable state securities or "blue sky" laws, (2) the listing
of the shares on Nasdaq, and (3) the filing of a Form D with the Securities and
Exchange Commission ("SEC") with respect to the Shares as required under
Regulation D promulgated under the Securities Act of 1933, as amended (the "1933
Act").
2.6 SEC Filings. The Company has timely filed all reports required to be
filed under the Securities Exchange Act of 1934, as amended (the "1934 Act") and
any other material reports or documents required to be filed with the SEC since
January 1, 1997 (the "SEC Filings"). All of such reports and documents complied,
when filed, in all material respects, with all applicable requirements of the
1933 Act and the 1934 Act. The Company meets the requirements for the use of (i)
Form S-3 for the registration of the resale of the Shares by the Buyer and/or
any subsequent holder(s) of the Shares and (ii) Rule 144 for the sale of the
Shares by the Buyer and/or any subsequent holder(s) of the Shares (subject to
compliance with applicable holding periods by the seller of the Shares). The
Company has not filed any reports with the SEC under the 1934 Act since December
31, 1998 other than the SEC Filings.
2.7 Investment Company. Neither the Company nor any of its subsidiaries
is an "investment company" within the meaning of such term under the Investment
Company Act of 1940, as amended, and the rules and regulations of the SEC
thereunder.
2.8 Absence of Brokers, Finders, Etc. No broker, finder or similar
person or entity is entitled to any commission, fee or other compensation by
reason of action taken by or on behalf of the Company in connection with the
transactions contemplated by this Agreement, and the Company shall pay, and
indemnify and hold harmless the Buyer from, any claim made against the Buyer by
any person or entity for any such commission, fee or other compensation.
2.9 No Solicitation. No form of general solicitation or general
advertising was used by the Company or, to the best of its knowledge, any other
person or entity acting on behalf of the Company, in respect of the Shares or in
connection with the offer and sale of the Shares. Neither the Company nor, to
its knowledge, any person or entity acting on behalf of the Company has, either
directly or indirectly, sold or offered for sale to any person or entity any of
-3-
the Shares or, within the six months prior to the date hereof, any other similar
security of the Company except as disclosed in the SEC Filings; and neither the
Company nor any person or entity authorized to act on its behalf will sell or
offer for sale any promissory notes, warrants, shares of Common Stock or other
securities to, or solicit any offers to buy any such security from, any person
or entity so as thereby to cause the issuance or sale of any of the Shares to be
in violation of any of the provisions of Section 5 of the 1933 Act.
3. Representations and Warranties of Buyer. Buyer hereby represents and
warrants to the Company as of the date hereof as follows:
3.1 Investment Experience. Buyer believes that it has received all the
information it considers necessary or appropriate to enable it to decide whether
to purchase the Shares. Buyer has had an opportunity to become aware of the
Company's business affairs and financial condition, has had an opportunity to
ask questions and receive answers, review documents and gather information about
the Company and has acquired sufficient information about the Company to reach
an informed and knowledgeable decision to acquire the Shares. Buyer has such
business and financial experience as is required to give it the capacity to
protect its own interests in connection with the purchase of the Shares and can
bear the economic risk of its investment. Buyer acknowledges receipt of the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1998, the Company's Proxy Statement for the 1999 Annual Meeting on Schedule 14A
and Quarterly Report on Form 10-Q for the quarter ended March 31, 1999 (the "SEC
Documents") filed by the Company with the SEC.
3.2 Investment Intent. Buyer is purchasing the Shares for investment for
its own account only and not with a view to, or for resale in connection with,
any "distribution" thereof within the meaning of the 1933 Act. Buyer has no
present intention of selling, granting any participation in, or otherwise
distributing the Shares, except in compliance with the 1933 Act or pursuant to
an available exemption thereunder.
3.3 Restricted Securities. Buyer understands that the Shares have not
been registered under the Securities Act or registered or qualified under any
state securities law in reliance on specific exemptions therefrom, which
exemptions may depend upon, among other things, the bona fide nature of Buyer's
investment intent as expressed herein. Buyer is familiar with Rule 144 under the
Securities Act, as presently in effect, and understands the resale limitations
imposed thereby and by the Securities Act.
3.4 No Legal, Tax or Investment Advice. Buyer understands that nothing
in the SEC Documents, this Agreement or any other materials presented to Buyer
in connection with the acquisition of the Shares constitutes legal, tax or
investment advice. Buyer has consulted such legal, tax and investment advisors
as it, in its sole discretion, has deemed necessary or appropriate in connection
with its acquisition of the Shares.
3.5 Corporate Power; Authority. Buyer has all requisite legal and
corporate power and has taken all requisite corporate action to execute, deliver
and perform its obligations under this Agreement. This Agreement has been duly
authorized, executed and delivered on
-4-
behalf of Buyer and constitutes the valid and binding agreement of Buyer,
enforceable in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization or similar laws relating to or affecting
the enforcement of creditors' rights generally and (ii) as limited by equitable
principles generally.
4. Restrictions on Transfer and Registration Rights.
4.1 Restrictions on Transferability. The Shares shall not be
transferable in the absence of registration under the Securities Act and any
applicable state securities laws or exemptions therefrom or in the absence of
compliance with any term of this Agreement. The Company shall be entitled to
give stop transfer instructions to the transfer agent with respect to the Shares
in order to enforce the foregoing restrictions.
4.2 Restrictive Legends. Each certificate representing the Shares shall
bear substantially the following legends (in addition to any legends required
under applicable securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
THE SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM.
THE SHARES REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF HOLDERS
THEREOF ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND OTHER
RESTRICTIONS SET FORTH IN THE COMMON STOCK PURCHASE AGREEMENT BETWEEN THE
ORIGINAL PURCHASER AND THE COMPANY (COPIES OF WHICH MAY BE OBTAINED FROM
THE COMPANY).
Notwithstanding the above, the Buyer (or any authorized subsequent holder of the
Shares) may request that the Company remove any such legend from the
certificate(s) evidencing the Shares or issue to Buyer (or to such holder) new
certificate(s) therefor that are free of such legend if, with such request, the
Company shall have received an opinion of counsel, which opinion is reasonably
satisfactory to the Company, to the effect that any transfer by the Buyer (or
said holder) of the Shares will not violate the securities laws of the United
States or any applicable state laws.
4.3 Shelf Registration. The Company shall file one registration on Form
S-3 (or any successor to Form S-3) or any similar short-form registration
statement under the Securities Act for the Shares (the "Registration
Statement"); provided, however, that the Company shall not be required to effect
such registration if the Company shall furnish to Buyer a certificate signed by
the President and Chief Executive Officer stating that in the good faith
judgment of the Board of Directors, it would be seriously detrimental to the
Company and its
-5-
stockholders for such registration to be effected at such time, in which event
the Company shall have the right to defer the filing of the Registration
Statement for a period of not more than ninety (90) days after the receipt of
the request from Buyer.
4.4 About Registration.
4.4.1 The Company shall pay all Registration Expenses (as defined
below) in connection with any registration, qualification or compliance
hereunder, and Buyer shall pay all Selling Expenses (as defined below) and other
expenses that are not Registration Expenses relating to the Shares to be
registered in accordance with this Section 4 (the "Registrable Securities")
resold by Buyer. "Registration Expenses" shall mean all expenses, except for
Selling Expenses, incurred by the Company in complying with the registration
provisions of this Agreement, including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration.
"Selling Expenses" shall mean all selling commissions, underwriting fees and
stock transfer taxes applicable to the Registrable Securities and all fees and
disbursements of counsel for Buyer.
4.4.2 In the case of any registration filed by the Company pursuant
to these registration provisions, the Company will use its best efforts to: (i)
prepare and file with the SEC such amendments and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of the Registrable Securities;
(ii) cause such Registration Statement to become effective and keep such
Registration Statement effective until the second anniversary of this Agreement
or, if earlier, until Buyer has completed the distribution of all of its Shares;
(iii) furnish such number of prospectuses and other documents incident thereto,
including any amendment of or supplement to the prospectus, as Buyer from time
to time may reasonably request; (iv) cause all such Registrable Securities
registered as described herein to be listed on each securities exchange and
quoted on each quotation service on which similar securities issued by the
Company are then listed or quoted; (v) provide a transfer agent and registrar
for all Registrable Securities registered pursuant to the Registration Statement
and a CUSIP number for all such Registrable Securities; (vi) comply with all
applicable rules and regulations of the SEC; and (vii) file the documents
required of the Company and otherwise use its best efforts to maintain requisite
blue sky clearance in (A) all jurisdictions in which any of the Shares are
originally sold and (B) all other states specified in writing by Buyer, provided
as to clause (B), however, that the Company shall not be required to qualify to
do business or consent to service of process in any state in which it is not now
so qualified or has not so consented.
4.4.3 Buyer shall furnish to the Company such information regarding
Buyer and the distribution proposed by Buyer as the Company may reasonably
request in writing and as shall be reasonably required in connection with any
registration, qualification or compliance described herein. Buyer shall
represent that such information is true and complete.
-6-
4.4.4 The Company shall submit to the SEC, within three business
days after the Company learns that no review of a particular Registration
Statement will be made by the staff of the SEC or that the staff of the SEC has
no further comments on such Registration Statement, as the case may be, a
request for acceleration of effectiveness of such Registration Statement to a
time and date not later than 48 hours after the submission of such request. The
Company shall notify Buyer of the effectiveness of the Registration Statement on
the date that it is declared effective by the SEC. The Company represents and
warrants to Buyer that (a) any Registration Statement (including any amendments
or supplements thereto and prospectuses contained therein), at the time it is
first filed with the SEC, at the time it is ordered effective by the SEC and at
all times during which it is required to be effective hereunder (and each such
amendment and supplement at the time it is filed with the SEC and at all times
during which it is available for use in connection with the offer and sale of
the Registrable Securities) shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading and (b) each Prospectus, at the
time the related Registration Statement is declared effective by the SEC and at
all times that such Prospectus is required by this Agreement to be available for
use by Buyer, shall not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading.
4.4.5 The Company will furnish to Buyer one copy of each letter
written by or on behalf of the Company to the SEC or the staff of the SEC and
each item of correspondence from the SEC or the staff of the SEC relating to any
Registration Statement pertaining to the Registrable Securities (other than any
portion of any such letter or item which contains information for which the
Company has sought confidential treatment), each of which the Company hereby
determines to be confidential information and which Buyer hereby agrees to keep
confidential.
4.4.6 As promptly as practicable after becoming aware of such event
or circumstance, the Company will notify Buyer of the occurrence of any event or
circumstance of which the Company has knowledge (x) as a result of which the
Prospectus relating to any Registration Statement pertaining to the Registrable
Securities, as then in effect, includes an untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and use its best efforts promptly to prepare a supplement
or amendment to such Registration Statement and the related Prospectus to
correct such untrue statement or omission.
4.4.7 As promptly as practicable after becoming aware of such event,
the Company will notify Buyer of the issuance by the SEC of any stop order or
other suspension of effectiveness of any Registration Statement pertaining to
the Registrable Securities at the earliest possible time.
4.4.8 The Company will permit Buyer and a firm of counsel designated
by Buyer (and identified in writing to the Company by Buyer prior to the Closing
Date, subject
-7-
to change by notice to the Company from Buyer), at Buyer's sole expense, to
review and have a reasonable opportunity to comment on such Registration
Statement and all amendments and supplements thereto at least two Business Days
(or such shorter period as may reasonably be specified by the Company) prior to
their filing with the SEC.
4.5 Indemnification and Contribution.
---------------------------------
4.5.1 To the extent not prohibited by applicable law, the Company
will indemnify and hold harmless Buyer against any third party claims to which
it may become subject under the 1933 Act, the 1934 Act, or otherwise, insofar as
such claims (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon (i) any untrue statement of
material fact in any Registration Statement; (ii) any omission to state in any
Registration Statement any material fact required to be stated therein; (iii)
any violation or alleged violation by the Company of the 1933 Act, the 1934 Act
or any state securities law; or (iv) any breach by the Company of any of its
representations and warranties set forth herein or failure by the Company to
fulfil any of its obligations hereunder. Subject to those limitations on legal
counsel set forth in Section 4.5.2, the Company shall reimburse the Buyer
promptly as such expenses are incurred and are due and payable, for any
documented reasonable legal fees or other documented and reasonable expenses
incurred by it in connection with investigating or defending any such claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 4.5.1 shall not apply to (i) a claim arising
out of or based upon information relating to the Buyer furnished in writing to
the Company by the Buyer expressly for use in connection with the preparation of
any Registration Statement or any such amendment thereof or supplement thereto;
(ii) any claim arising out of or based on any statement or omission in any
Prospectus, which statement or omission was corrected in any subsequent
Prospectus that was delivered to the Buyer prior to the pertinent sale or sales
of the Shares by the Buyer; and (iii) amounts paid in settlement of any claim if
such settlement is effected without the prior written consent of the Company.
4.5.2 Promptly after receipt by Buyer under this Section 4.5 of
notice of the commencement of any action (including any governmental action)
that may fall within the scope of indemnification hereunder, Buyer shall deliver
to the Company a notice of the commencement thereof and the Company shall have
the right to participate in and, to the extent the Company so desires, to assume
control of the defense thereof with counsel reasonably satisfactory to the
Buyer; provided, however, that the Buyer shall have the right to retain its own
counsel with the fees and expenses to be paid by the Company if, in the
reasonable opinion of counsel retained by the Company, the representation by
such counsel of the Buyer and the Company would be inappropriate due to actual
or potential differing interests between the Buyer and the Company, in which
case the Company shall not be responsible for more than one such separate
counsel, and one local counsel in each jurisdiction in which an action is
pending, for the Buyer. The failure to deliver notice to the Company within a
reasonable time of the commencement of any such action shall not relieve the
Company of any liability to Buyer under this Section 4.5.2, except to the extent
that the Company is prejudiced in its ability to defend such action. The
indemnification required by this Section 4.5.2 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as such
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expense, loss, damage or liability is incurred and is due and payable.
4.5.3 To the extent any indemnification by the Company as set forth
in Section 4.5.1 above is applicable by its terms but is prohibited or limited
by law, the Company agrees to make the maximum contribution with respect to any
amounts for which it would otherwise be liable under Section 4.5.1 to the
fullest extent permitted by law. In determining the amount of contribution to
which Buyer is entitled, there shall be considered the relative fault of each
party, the parties' relative knowledge of and access to information concerning
the matter with respect to which the claim was asserted, the opportunity to
correct and prevent any statement or omission and any other equitable
considerations appropriate under the circumstances; provided, however, that (a)
no contribution shall be made under circumstances where the maker would not have
been liable for indemnification under the fault standards set forth in Section
4.5.1 and (b) no person or entity guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution
from any other person or entity who was not guilty of such fraudulent
misrepresentation.
4.5.4 Other Rights. The indemnification and contribution provided in
this Section shall be in addition to any other rights and remedies available at
law or in equity.
4.6 Notice of Sale. If at any time after the date hereof the Buyer
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desires to sell any of the Shares beneficially owned by the Buyer to any
unrelated person or entity, then the Buyer shall fifteen (15) days prior to the
date of any such sale disclose the identity of the purchaser of such shares of
Common Stock, the number of shares proposed to be sold, and the terms and
conditions, including price, of the proposed sale.
4.7 Compliance.
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(a) Prior to the effective date of the registration of the Shares, the
Company shall take all actions required to ensure that the Company meets
the requirements for the use of Form S-3 for the registration of the resale
of the Shares by the Buyer and/or any subsequent holder(s) of the Shares.
(b) With a view to making available to Buyer the benefits of Rule 144
promulgated under the 1933 Act, the Company agrees:
(1) so long as Buyer or any subsequent holder(s) of the Shares
own the Shares, promptly upon request, to furnish to such owner such
information as may be necessary and otherwise reasonably to cooperate
with such owner to permit such owner to sell the Shares pursuant to
Rule 144 without registration; and
(2) if at any time the Company is not required to file reports
with the SEC pursuant to Sections 13 or 15(d) of the 1934 Act, to use
its best efforts to, upon the request of Buyer or any subsequent
holder(s) of any of the Shares, to make publicly available other
information so long as is necessary to permit publication by brokers
and dealers of
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quotations for the Common Stock and sales of the Shares in accordance
with Rule 15c2-11 under the 1934 Act.
5. Miscellaneous.
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5.1 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Delaware as such laws are applied to agreements between
Delaware residents entered into and performed entirely in Delaware.
5.2 Survival of Warranties. The representations and warranties of the
Company and Buyer contained in or made pursuant to this Agreement shall survive
until second anniversary date of this Agreement.
5.3 Successors and Assigns. The provisions hereof shall inure to the
benefit of, and be binding upon, the successors, assigns, heirs, executors and
administrators of the parties hereto (specifically including successors in
interest to the Shares).
5.4 Entire Agreement; Amendments. This Agreement sets forth all of the
promises, covenants, agreements, conditions and undertakings between the parties
hereto with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written, except as contained herein. This Agreement
may not be changed orally but only by an agreement in writing, duly executed by
or on behalf of the party or parties against whom enforcement of any waiver,
change, modification, consent or discharge is sought.
5.5 Notices, etc. All notices and other communications required or
permitted hereunder shall be effective upon receipt and shall be in writing and
may be delivered in person, by facsimile, overnight delivery service or U.S.
mail, in which event it may be mailed by first-class, certified or registered,
postage prepaid, addressed (a) if to Buyer, at X. Xxxxxxxx A/S, 9 Ottiliavej,
XX-0000 Xxxxx Xxxxxxxxxx, DENMARK, or at such other address as Buyer shall have
furnished the Company in writing, or (b) if to the Company, at 000 Xxxxxxxxxx
Xxxxxxx, Xxxx Xxxxxxx, XX 00000-0000, or at such other address as the Company
shall have furnished to Buyer in writing.
5.6 Severability of this Agreement. If any provision of this Agreement
shall be judicially determined to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
5.7 Titles and Subtitles. The titles of the paragraphs and subparagraphs
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
5.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first written above.
X. XXXXXXXX A/S CEPHALON, INC.
By:/s/ Xxxxx Xxxxxxxxx By:/s/ Xxxxx X. Xxxxxx
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Xxxxx Xxxxxxxxx Xxxxx X. Xxxxxx
Executive Vice President, R&D Senior Vice President,
Business Development
By:/s/ Torben Skarsfeldt
-----------------------------
Torben Skarsfeldt
Board Member
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