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CONFIDENTIAL TREATMENT REQUESTED
FOR PORTIONS OF THIS DOCUMENT
EXHIBIT 10.12
EXCLUSIVE LICENSE AGREEMENT
This Exclusive License Agreement ("Agreement") is made this 30th day of
October, effective as of the date of the last signature below (the "Effective
Date"), by and between United Therapeutics Corporation, a Delaware corporation,
having an address at 0000 X Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000 ("UT"), and
Cortech, Inc., a Delaware corporation, having an address at 0000 X. Xxxxxxxx,
Xxxxxx, Xxxxxxxx 00000 ("Cortech").
WITNESSETH:
WHEREAS, Cortech owns or has rights in certain technology relating to
CE-1037, a serine-elastase inhibitor as described in Exhibit A attached hereto.
WHEREAS, UT desires to obtain an exclusive license under Cortech's rights
in such technology to develop and commercialize products for use in the Field.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the terms defined in this Article 1 shall
have the respective meanings set forth below:
1.1 "Advisory Committee" shall mean the committee composed of
representatives of Cortech and UT described in Section 3.4.1 below.
1.2 "Affiliate" shall mean, with respect to any Person, any other Person
which directly or indirectly controls, is controlled by, or is under common
control with, such Person. A Person shall be regarded as in control of another
Person if it owns, or directly or indirectly controls, at least fifty percent
(50%) of the voting stock or other ownership interest of the other Person, or if
it directly or indirectly possesses the power to direct or cause the direction
of the management and policies of the other Person by any means whatsoever.
1.3 "Consideration" shall mean any cash or non-cash consideration of any
kind whatsoever, whether tangible or intangible, direct or indirect.
1.4 "Cortech Future Improvements" shall mean all improvements to the
Licensed Compound for use in the Field, including without limitation, all data,
know-how, methods, compositions or information, whether or not patentable, which
Cortech develops pursuant to its
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obligations under Sections 3.4 and 3.7 of this Agreement during the term of this
Agreement and in which Cortech has an ownership or licensable interest; all to
the extent and only to the extent that that Cortech has the right to grant
licenses, immunities or other rights thereunder during the term of this
Agreement.
1.5 "Dollars" or "$" means United States dollars.
1.6 "FDA" shall mean the United States Food and Drug Administration or any
successor entity.
1.7 "Field" shall mean the treatment of all indications other than the
treatment of dermatological conditions through the use of a topical preparation
administered to the skin.
1.8 "First Commercial Sale" shall mean, with respect to any Product, the
first sale for use or consumption by the general public of such Product. A
transfer of the Product by UT or its sublicensees (a) solely for research and
development purposes and for the purpose of directly enabling UT and its
permitted sublicensees to research and develop Products under this Agreement and
(b) prior to UT's receipt of approval of an NDA by the FDA (or from the
governing health authority of any other country) for use of such Product in
humans, shall not be considered a First Commercial Sale.
1.9 "Law" means any local, state or federal rule, regulation, statute or
law relevant to the activities undertaken pursuant to this Agreement or
applicable to either of the parties with respect to any matters set forth
herein.
1.10 "Licensed Compound" means CE-1037, a serine-elastase inhibitor with
such biochemical structure as described in Exhibit A, and all salts and esters
thereof that are claimed under the Licensed Patent Rights.
1.11 "Licensed Know-How" shall mean all information and data (i) which are
not generally known including, but not limited to, formulae, procedures,
protocols, techniques and results of experimentation and testing, (ii) which are
set forth on Exhibit B attached hereto, (iii) which are necessary or useful for
UT to make, use, develop, sell or seek regulatory approval to market a Product,
and (iv) in which Cortech has an ownership or licensable interest in the
Licensed Know-How as of the date of this Agreement.
1.12 "Licensed Patent Rights" shall mean (a) all issued patents and patent
applications set forth in Exhibit B attached hereto which are owned by or
licensed to Cortech which claim (i) a Product, (ii) the process of manufacture
or use of a Product or (iii) a congener described within the patents or patent
applications set forth in Exhibit B, together with any and all patents that
issue or in the future issue therefrom, including utility and design patents and
certificates of invention, and (b) all divisionals, continuations, reissues,
renewals and extensions to any such patents and patent applications.
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1.13 "Licensed Technology" shall mean, collectively, the Licensed Compound,
Licensed Patent Rights, Licensed Know-How, Cortech Inventions, Joint Inventions
and the Cortech Future Improvements. Without expanding the foregoing and
notwithstanding anything to the contrary in this Agreement, the foregoing shall
not include any technology, know-how, patent rights, trade secrets, information,
data, inventions, improvements or any intellectual property rights arising from
or relating to (a) Cortech's current or future oral elastase program or (b) the
treatment of dermatological conditions through the use of a topical preparation
administered to the skin.
1.14 "NDA" shall mean a New Drug Application or any equivalent successor
application.
1.15 "Net Sales" shall mean, with respect to any Product, the invoiced
sales price of such Product billed to independent customers who are not
Affiliates, less to the extent included in the invoiced sales price, (a)
credits, allowances, discounts and rebates to, and chargebacks from the account
of, such independent customers for spoiled, damaged, out-dated, rejected or
returned Product; (b) actual shipping and handling, freight and insurance costs
incurred in transporting such Product in final form to such customers; (c) cash,
quantity and trade discounts; and (d) sales, use, value-added and other taxes or
governmental charges incurred in connection with the exportation or importation
of such Product in final form.
1.16 "Orphan Indication" shall mean diseases or conditions affecting
200,000 or fewer people in the United States.
1.17 "Person" shall mean an individual, corporation, partnership, trust,
business trust, association, joint stock company, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization, governmental
authority or any other form of entity not specifically listed herein.
1.18 "Product" shall mean any product for use in the Field which contains,
incorporates, is based upon or is derived in whole or in part from the Licensed
Compound.
1.19 "Royalty Term" shall mean, with respect to each Product in each
country, the period of time equal to the longer of (a) ten (10) years from the
date of the First Commercial Sale of such Product in such country or (b) if the
manufacture, use, import, offering for sale or in sale of such Product in such
country was at the time of the First Commercial Sale in such country covered by
a Valid Patent Claim, the term for which such Valid Patent Claim remains in
effect and would, if in an issued patent, be infringed but for the license
granted by this Agreement.
1.20 "Third Party" shall mean any Person other than Cortech, UT and their
respective Affiliates.
1.21 "Valid Patent Claim" shall mean either (a) a claim of an issued and
unexpired patent included within the Licensed Patent Rights, which has not been
held permanently revoked, unenforceable, unpatentable or invalid by a decision
of a court or other governmental agency of competent jurisdiction, unappealable
or unappealed within the time allowed for appeal, and
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which has not been admitted to be invalid or unenforceable through reissue or
disclaimer or otherwise or (b) a claim of a pending patent application included
within the Licensed Patent Rights, which claim has not been abandoned or finally
disallowed without the possibility of appeal or refiling of such application.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Each party hereby represents and warrants to the other party as
follows:
2.1.1 Corporate Existence and Power. Such party (a) is a corporation
duly organized, validly existing and in good standing under the laws of the
state in which it is incorporated; (b) has the corporate power and authority and
the legal right to own and operate its property and assets, to lease the
property and assets it operates under lease, and to carry on its business as it
is now being conducted and (c) is in compliance with all requirements of
applicable law, except to the extent that any noncompliance would not have a
material adverse effect on the properties, business, financial or other
condition of it and would not materially adversely affect its ability to perform
its obligations under this Agreement.
2.1.2 Authorization and Enforcement of Obligations. Such party (a) has
the corporate power and authority and the legal right to enter into this
Agreement and to perform its obligations hereunder and (b) has taken all
necessary corporate action on its part to authorize the execution and delivery
of this Agreement and the performance of its obligations hereunder. This
Agreement has been duly executed and delivered on behalf of such party, and
constitutes a legal, valid, binding obligation, enforceable against such party
in accordance with its terms.
2.1.3 No Consents. All necessary consents, approvals and authorizations
of all governmental authorities and other Persons required to be obtained by
such party in connection with this Agreement have been obtained.
2.1.4 No Conflict. As of the Effective Date, the execution and delivery
of this Agreement and the performance of such party's obligations hereunder (a)
do not conflict with or violate any requirement of applicable laws or
regulations, and (b) do not conflict with, or constitute a default under, any
contractual obligation of it.
2.2 Warranties by Cortech. Cortech represents and warrants to UT as of the
Effective Date that to Cortech's actual knowledge:
2.2.1 Cortech is the sole and exclusive licensor or licensee of the
Licensed Technology and has the right to grant the licenses hereunder;
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2.2.2 Cortech has provided UT access to all information reasonably
available to Cortech which materially addresses the safety profile of compound
CE-1037; and
2.2.3 Cortech is not aware of (a) any pending or threatened claims of
litigation brought by a Third Party under any Third Party patent, trade secret
or other Third Party intellectual property right regarding the Licensed
Technology or compound CE-1037 or (b) any federally-funded research that
directly led to the development of the Licensed Patent Rights or the Licensed
Compound.
2.2.4 Except for arrangements already in place pursuant to which rights
will be transferred by Cortech to UT under this Agreement, Cortech is not aware
of any required third party patent or other intellectual property licenses to
make, sell, use, offer for sale or import compound CE-1037.
2.2.5 Cortech has provided UT with copies of all material agreements
relating to CE-1037, as listed on the attached Exhibit H, and this Agreement is
subject to all relevant provisions of such agreements.
2.2.6 If Cortech receives a notice of default ("Notice of Default")
under Section 5.2 of the License Agreement dated November 2, 1998 between
Cortech and Hoechst Xxxxxx Xxxxxxx, Inc. ("HMR") relating to elastase inhibitors
(the "HMR Agreement"), Cortech shall notify UT in writing within two (2)
business days.
2.3 Warranties by UT. UT represents and warrants to Cortech that as of the
Effective Date:
2.3.1 UT will use commercially reasonable good faith efforts and
resources to research, develop, seek regulatory approval, commercialize and
market Products for one or more indications; and
2.3.2 UT has delivered to Cortech (i) a complete and correct copy of
UT's Certificate of Incorporation and By-laws, each as amended to date (which
Certificate of Incorporation and By-laws so delivered are in full force and
effect);
2.3.3 UT has the requisite corporate power and authority and has taken
all corporate action necessary in order to execute and deliver the Warrant (as
defined below) and to consummate the transactions contemplated thereby;
2.3.4 The Warrant is a valid and binding agreement of UT enforceable
against UT in accordance with its terms;
2.3.5 No notices, reports or other filings are required to be made by
UT with, nor are any consents, registrations, approvals, permits or
authorizations required to be obtained
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by UT from, any governmental entity in connection with the execution and
delivery of the Warrant by UT and the consummation by UT of the transactions
contemplated thereby;
2.3.6 The execution and delivery of the Warrant by UT do not, and the
consummation of the transactions contemplated thereby by UT will not, constitute
or result in (i) a breach or violation of, or a default under, the Certificate
of Incorporation or By-Laws of UT or (ii) a breach or violation of, a default
under, the acceleration of or the creation of a lien, pledge, security interest
or other encumbrance on assets (with or without the giving of notice or the
lapse of time) pursuant to, any provision of any contract, agreement, lease,
note, or mortgage, indenture, arrangement or other obligation of UT (or by which
its assets or properties are bound) or any law, ordinance, rule or regulation or
judgment, decree, order, award or governmental or non-governmental permit or
license to which UT (or its assets or properties) is subject;
2.3.7 The authorized capital stock of UT consists of fifty million
(50,000,000) shares of common stock, par value $0.01 per share ("Common Stock"),
and ten million (10,000,000) shares of preferred stock, par value $0.01 per
share ("Preferred Stock"). As of the date hereof, (i) twenty-eight million four
hundred and fourteen thousand nine hundred and thirteen (28,414,913) shares of
Common Stock and no shares of Preferred Stock were issued and outstanding, (ii)
no shares of Common Stock were held by UT in its treasury, (iii) five million
(5,000,000) shares of Common Stock were reserved for issuance pursuant to
outstanding stock options to purchase shares of Common Stock ("Stock Options")
granted pursuant to UT's Employee Stock Option Plan and an additional one
million (1,000,000) shares of Common Stock were reserved for the grant of other
Stock Options.
2.3.8 All outstanding shares of Common Stock are, and all shares of
Common Stock to be issued upon any exercise of the Warrant will be, when so
issued, duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights;
2.3.9 As of the date hereof, except for the Warrant and as disclosed in
Section 2.3.7, there are no options, warrants, calls, rights, commitments or
agreements of any character to which UT is a party or by which it is bound
obligating UT to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock of UT or obligating UT to grant, extend
or enter into any such option, warrant, call, right, commitment or agreement;
2.3.10 UT has provided Cortech with (i) UT's audited balance sheet as
of December 31, 1997 and the related statements of operations, changes in
stockholders' equity and cash flows for the period June 26, 1996 to December 31,
1996 and year then ended, and (ii) UT's unaudited balance sheet as of August 31,
1998 and the related statements of operations, changes in stockholders' equity
and cash flows for the one month and eight-month period then ended (the audited
balance sheet at December 31, 1997 is hereinafter referred to as the "BALANCE
SHEET," and all such financial statements are hereinafter referred to
collectively as the "FINANCIAL STATEMENTS");
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2.3.11 The audited Financial Statements have been prepared in
accordance with generally accepted accounting principles ("GAAP") applied on a
consistent basis during the periods involved and are in accordance with UT's
books and records, and fairly present the financial position of UT and the
results of its operations as of the date and for the periods indicated thereon,
subject in the case of the unaudited portion of the Financial Statements to (i)
normal year-end audit adjustments which will not be material and (ii) the
absence of certain footnote disclosures;
2.3.12 At the date of the Balance Sheet (the "BALANCE SHEET DATE") and
as of the date hereof, UT had and has no liabilities or obligations, secured or
unsecured (whether accrued, absolute, contingent or otherwise - collectively,
"LIABILITIES") not reflected on the Balance Sheet except for Liabilities (i) as
may have arisen in the ordinary course of business prior to the date of the
Balance Sheet and which, under GAAP, would not have been required to be
reflected on the Balance Sheet and (ii) incurred in the ordinary course of
business since the date of the Balance Sheet which are usual and normal in
amount, but in any event not greater than $50,000.00 in the aggregate (inclusive
of clauses (i) and (ii));
2.3.13 On or about July 31, 1998, UT closed a private placement of
Common Stock resulting in gross proceeds to UT of not less than $5,000,000.00 at
a selling price of not less than $3.00 per share of Common Stock; and
2.3.14 There are no schedules of exceptions to any of the private
placements or stock offerings conducted by UT as of the date of this Agreement
which have not been provided to Cortech and UT is not aware of any material
information which has not been provided to Cortech which would reasonably be the
subject of inclusion on a schedule of exceptions with respect to the Warrant.
2.3.15 In connection with the private placements or stock offerings
conducted by UT as of the date of this Agreement, no third party has been
granted any material rights in connection with the stock which is the subject of
such private placements or stock offerings not granted to Cortech with respect
to the Warrant. UT has shared information with Cortech regarding warrant grants
as set forth in Exhibit G.
2.3.16 Any and all financial information or financial data pertaining
to UT, at the time such information or data was furnished by or on behalf of UT
to Cortech, does not contain any untrue statement of a material fact and does
not omit to state any material fact necessary to make any statement, in light of
the circumstances under which such statement was made, not misleading.
2.4 Disclaimer by Cortech. EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 2,
CORTECH MAKES NO OTHER REPRESENTATIONS, WARRANTIES, EXPRESS OR IMPLIED, WITH
RESPECT TO THE LICENSED TECHNOLOGY OR THE LICENSED COMPOUND AND CORTECH
DISCLAIMS ALL OTHER REPRESENTATIONS, WARRANTIES, EXPRESS AND IMPLIED, INCLUDING
WITHOUT
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LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE AND NONINFRINGEMENT. EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 2,
CORTECH MAKES NO REPRESENTATION AND EXTENDS NO WARRANTIES WHATSOEVER, EITHER
EXPRESS OR IMPLIED, (A) THAT THE LICENSED TECHNOLOGY MAY BE UTILIZED TO CREATE
ANY PRODUCT, (B) THAT THE LICENSED TECHNOLOGY OR A PRODUCT MANUFACTURED, USED,
SOLD OR OTHERWISE MARKETED UNDER THE LICENSED TECHNOLOGY SHALL BE FREE FROM
INFRINGEMENT OF ANY THIRD PARTY PATENT (WHETHER PRESENTLY ISSUED OR WHICH MAY
ISSUE IN THE FUTURE) OR OTHER INTELLECTUAL PROPERTY RIGHT OR (C) THAT THE
LICENSED TECHNOLOGY COMPRISES INVENTIONS WHICH WILL MATURE INTO ISSUED PATENTS
HAVING VALID AND ENFORCEABLE CLAIMS OR (D) THAT THE LICENSED TECHNOLOGY
COMPRISES PATENTS WHICH WILL REMAIN VALID AND ENFORCEABLE.
ARTICLE 3
DEVELOPMENT AND COMMERCIALIZATION PROGRAM
3.1 Research and Development Efforts. UT shall use its commercially
reasonable efforts to develop and conduct such research, development and
preclinical and human clinical trials to obtain all regulatory approvals to
manufacture, market and commercialize such Products as UT determines are
commercially reasonably feasible, and diligently obtain necessary approvals to
commence marketing and market each such Product in such countries as UT
determines are commercially feasible; provided however, that UT shall have the
right to distribute (without receipt of Consideration and without payment of a
royalty to Cortech) in any calendar year for compassionate purposes to indigent
patients, an aggregate of up to ten percent (10%) of the total number of
Products sold in units (with the receipt of Consideration) in such calendar year
by UT, its Affiliates and sublicensees. UT, at its sole expense, shall fund the
costs of all such research, development, preclinical and clinical trials,
regulatory approval, manufacture of the Products and commercialization and
marketing of the Products. UT shall use its commercially reasonable efforts to
conduct such research, development, clinical trials, manufacturing and
commercialization and marketing of Products pursuant to the development plan and
timeline attached hereto as Exhibit C. UT will solely and exclusively own all
regulatory applications and approvals obtained by UT with respect to Products.
3.2 Records. UT shall maintain records, in sufficient detail and in good
scientific manner appropriate for patent purposes, which shall reflect all work
done and results achieved in the performance of its research and development
regarding the Licensed Technology and the Products (including all data in the
form required under all applicable laws and regulations).
3.3 Reports. On a yearly basis, within ninety (90) days following the end
of each calendar year during the term of this Agreement, UT shall prepare and
deliver to Cortech a
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written report which shall describe, in reasonably sufficient detail (a) the
research performed by UT to date employing the Licensed Technology, (b) the
progress of the development and testing of Products in clinical trials and (c)
the status of obtaining the necessary approvals to market Products. In addition,
UT shall use its best efforts to provide Cortech with a minimum of three (3)
months' advance written notice of the contemplated filing of an Investigational
New Drug application ("IND") in the United States (or similar application in any
other country), written notice of all other regulatory filings and submissions
prior to the date of such submissions, and written notice of all approvals
obtained promptly after obtaining such approvals. UT shall keep Cortech
reasonably apprised of all written information or feedback provided by
regulatory authorities to UT during the term of this Agreement.
3.4 Advisory Committee.
3.4.1 Composition of the Advisory Committee. The Advisory Committee
shall be comprised of two (2) named representatives of Cortech and two (2) named
representatives of UT. Each party shall appoint its respective representatives
to the Advisory Committee from time to time, and may substitute one or more of
its representatives, in its sole discretion, effective upon notice to the other
party of such change. Notwithstanding anything to the contrary in this
Agreement, if Cortech is unable, for any material reason, to appoint such
representatives to the Advisory Committee or to participate in such Advisory
Committee meetings, such inability shall not be considered a breach of this
Agreement by Cortech.
3.4.2 Meetings. The Advisory Committee shall meet not less than once
each calendar quarter during the term of this Agreement on such dates and at
such times and places as agreed to by Cortech and UT, alternating between
Cortech's principal offices and UT's principal offices, or such other locations
as the parties shall agree, unless both parties mutually determine that a
meeting should not take place. At such meetings, the Advisory Committee shall
discuss UT's research, development and commercialization efforts under this
Agreement and establish priorities therefor, and shall discuss any actual
regulatory filings regarding Products together with any anticipated regulatory
filings with respect to possible Products. Each party shall bear its own
expenses in connection with travel and attendance at such meetings.
3.5 Purchase of Compound. UT, at UT's sole expense, shall have the right to
purchase the compound CE-1037 from Cortech's existing inventory in such
intermediate and bulk forms, amounts and prices set forth on Exhibit D hereto.
From time to time, upon the request of UT, Cortech may sell to UT additional
amounts of compound CE- 1 03 7 in such form and in such amounts as UT requests
and Cortech agrees to provide to UT; provided however, that (a) such compound
CE-1037 is reasonably available to Cortech in the forms and amounts requested by
UT and (b) Cortech shall have no obligations regarding Cortech's ability to
supply compound CE-1037 to UT or with respect to the quality, quantity,
viability or purity of compound CE-1037. UT will be solely responsible for all
costs and expenses relating to shipping, handling and delivery of compound
CE-1037 to UT. UT shall have the right to purchase the Licensed Compound from a
cGMP supplier, provided that, the royalty reduction under Section 5.7 shall not
apply to any royalty paid by UT to such supplier.
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3.6 Cessation of Development by UT. UT may choose to discontinue
development of Products under this Agreement at any time without penalty upon
written notice to Cortech if, in UT's commercially reasonable discretion, the
Products do not satisfy the clinical needs for UT's targeted clinical
indications; provided that, upon such discontinuation of development by UT (a)
all rights and licenses to the Licensed Technology granted by Cortech to UT
under this Agreement shall terminate and revert to Cortech; and (b) Cortech
shall have an unrestricted royalty-free exclusive license (with the right to
grant sublicenses) to conduct research and development and to make, use, sell,
offer for sale and import products (the "Cortech Products") utilizing or
incorporating inventions, improvements, compositions, know-how, data,
information, materials, regulatory filings and any intellectual property arising
out of or relating to UT's performance under this Agreement or UT's use of the
Licensed Technology (collectively, the "UT Improvements"). Upon such
discontinuation, UT shall promptly provide and deliver to Cortech the UT
Improvements. If such discontinuation of Product development by UT occurs during
or after UT's initiation of Phase III clinical studies, the license to Cortech
under subparagraph (b) above shall bear a [ ] royalty on Net Sales of Cortech
Products by Cortech to Third Parties, on a country-by-country basis, for the
longer of (x) ten (10) years from the date of Cortech's first commercial sale of
Cortech Products or (y) if the manufacture, use, import, offering for sale or
sale of Cortech Products was at the time of Cortech's first commercial sale of
Cortech Products covered by a patent owned by UT, the term for which such patent
remains in effect and would, if in an issued patent, be infringed. UT shall
promptly provide Cortech with all UT Improvements within thirty (30) days after
UT's discontinuation of Product development.
3.7 Cortech Obligations.
3.7.1 Within thirty (30) days following the execution of this
Agreement, Cortech shall supply UT with the information, items and other
materials relating to the Licensed Technology set forth on Exhibit E attached
hereto.
3.7.2 Cortech shall, upon the reasonable request of UT and subject to
the availability of Cortech personnel, provide UT with such reasonable
assistance and consultation that is mutually agreed to by Cortech and UT
regarding the Licensed Compound and the Licensed Technology, such agreement of
Cortech not to be unreasonably withheld or delayed. UT shall compensate Cortech
for such assistance and consultation at an hourly rate which shall be agreed to
by the parties in good faith. UT shall also reimburse Cortech for all reasonable
costs and expenses incurred by Cortech in connection with Cortech's assistance
and consultation under this Section 3.7.2. Cortech makes no representations,
warranties or covenants regarding the assistance or consulting services (if any)
provided by Cortech to UT under this Section 3.7.2.
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ARTICLE 4
LICENSE GRANT
4.1 Licensed Technology. Cortech hereby grants to UT and its Affiliates a
worldwide, exclusive, royalty-bearing license (with the right to grant
sublicenses as set forth in Section 4.2 below) under the Licensed Technology to
develop, make, have made, use, import, offer for sale and sell Products for use
in the Field.
4.2 Sublicenses. UT shall have the right to grant sublicenses under the
licenses in Section 4.1 above to any Third Party or Affiliate. UT shall deliver
a copy of each sublicense under this Agreement to Cortech promptly after
execution of the same. Each sublicense shall be subject to the terms and
conditions of this Agreement.
4.3 Cortech Future Improvements. Cortech shall notify UT within ninety (90)
days of Cortech's development (if any) of a Cortech Future Improvement.
ARTICLE 5
LICENSE FEES, ROYALTIES AND MILESTONE PAYMENTS
5.1 License Fees, Common Stock, Warrants. In consideration for the
exclusive license granted to UT herein, UT shall on the Effective Date:
5.1.1 Pay to Cortech a non-refundable license fee of [ ];
5.1.2 Execute and deliver to Cortech the Stock Purchase Warrant (the
"Warrant") attached hereto as Exhibit F which provides for the issuance to
Cortech of warrants to acquire three hundred and fifty thousand (350,000) shares
of UT common stock. The Warrant shall be exercisable by Cortech twenty-four (24)
months after the Effective Date (the "Warrant Exercise Date") at a purchase
price as described in Exhibit F, provided that, UT, using its commercially
reasonable discretion, has not terminated all research, development and
commercialization efforts regarding the Licensed Compound and the Products as
set forth in Section 3.6 above prior to the Warrant Exercise Date. UT's
execution and delivery of the Warrant shall be a condition precedent to this
Agreement.
5.2 Royalty. In further consideration for the exclusive license granted to
UT herein, during the Royalty Term, UT shall pay to Cortech the following
royalties:
5.2.1 A royalty of [ ] of Net Sales of Products (or Consideration
received) by UT, its Affiliates and sublicensees, where Net Sales (or
Consideration received) for the quarter in which such royalties are due are [ ]
or less;
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5.2.2 A royalty of [ ] Of Net Sales of Products (or Consideration
received) by UT, its Affiliates and sublicensees, where Net Sales (or
Consideration received) for the quarter in which such royalties are due are
greater than [ ] but less than [ ]; and
5.2.3 A royalty of [ ] of Net Sales of Products (or Consideration
received) by UT, its Affiliates and sublicensees, where Net Sales (or
Consideration received) for the quarter in which such royalties are due are
greater than [ ].
5.3 Accrual of Royalties. No royalty shall be payable on a Product
distributed to Third Parties solely for marketing and advertising purposes or as
a sample for testing or evaluation purposes; provided however, that UT shall be
obligated to pay royalties as set forth in Section 5.2 above if UT receives
Consideration for such distribution. No multiple royalty shall be payable on a
Product because the manufacture, use or sale of such Product is covered by more
than one Licensed Patent Right.
5.4 General Milestone Payments. As further consideration for the exclusive
license granted to UT under this Agreement, UT shall pay Cortech a
non-refundable milestone payment of [ ] on the earlier of (a) enrollment of the
first patient in the first clinical study in any country, using the Licensed
Compound, which is designed and "statistically powered" to demonstrate a
beneficial effect on a primary efficacy endpoint, or (b) the date two (2) years
and six (6) months after the Effective Date; provided that, with respect to this
clause (b), (i) a governmental regulatory agency has not imposed a material
restriction on UT's Product regulatory approval activities under this Agreement,
which restriction has delayed or prevented UT from commencing such clinical
trial, (ii) a governmental regulatory agency has not required UT to materially
change the development plan and timeline set forth in Exhibit C, which change
has delayed or prevented the commencement of such clinical trial or (iii)
negative or equivocal study results have not arisen which necessitate a material
and significant change in the development plan and timeline set forth in Exhibit
C, which change has delayed or prevented the commencement of such clinical
trial, and provided further in any event, such milestone payment shall be due
and payable as set forth in clause (a) above.
5.5 Milestone Payments for Orphan Indications. As further consideration for
the exclusive license granted to UT under this Agreement, UT shall pay Cortech
the following non-refundable milestone payments upon the first occurrence of
each event set forth below with respect to the first Product developed by or for
UT for an Orphan Indication which achieves such milestone set forth below:
5.5.1 [ ] upon filing an NDA in the United States;
5.5.2 [ ] upon the filing of a marketing authorization
application (MAA) in any country outside of
the United States;
5.5.3 [ ] upon receipt of the required marketing
approval from the FDA;
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5.5.4 [ ] upon receipt of MAA approval from the
governing health authority of any country
(other than the United States); and
5.5.5 [ ] on the date which is one year after the
date of UT's First Commercial Sale.
5.6 Milestone Payments for Non-Orphan Indications. As further consideration
for the exclusive license granted to UT under this Agreement, UT shall pay
Cortech the following non-refundable milestone payments upon the first
occurrence of each event set forth below with respect to the first Product
developed by or for UT for a non-Orphan Indication which achieves such milestone
set forth below:
5.6.1 [ ] upon commencement of Phase III clinical
trials in the United States (or their
equivalent in any other country);
5.6.2 [ ] upon filing an NDA in the United States;
5.6.3 [ ] upon the filing of an MAA in any country
outside the United States;
5.6.4 [ ] upon receipt of the required marketing
approval from the FDA; and
5.6.5 [ ] upon receipt of MAA approval from the
governing health authority of any country
(other than the United States).
5.7 Third Party Royalties. If UT is required during any quarter, with
respect to any Product in any country, to pay to Third Parties a royalty greater
than [ ] of Net Sales (the "Threshold Royalty") in order to exercise its rights
hereunder to practice any process or method, or to make, use or sell any
composition which is the subject of a Valid Claim in such country, the royalties
owning from UT to Cortech shall be offset as set forth below.
5.7.1 If such Net Sales of Products by UT, its Affiliates and
sublicensees are equal to or greater than [ ] for such quarter, then UT shall
have the right to credit the amount of such Third Party royalty payments in such
country against the royalties owing to Cortech under Section 5.2 above as set
forth in this Section 5.7.1. If the royalties payable by UT to such Third
Parties in such country exceeds the Threshold Royalty, the royalties payable by
UT to Cortech under Section 5.2 above for Products sold by UT in such country
shall be reduced by [ ] for each [ ] royalty payable by UT over the Threshold
Royalty; provided however that such royalty reductions shall not exceed [ ]. By
way of explanation and illustration only, if during a quarter UT has total
quarterly Net Sales greater than [ ] and UT is required in a particular country
to pay to Third Parties a total aggregate royalty of [ ] of Net Sales in such
country, the royalties owed by UT to Cortech for UT's Net Sales in such country
would be reduced by a total of [ ] (i.e., a [ ] reduction in the royalties
payable to Cortech for each [ ] royalty payable to the Third Parties over the
Threshold Royalty, up to a maximum reduction of [ ], and the total royalty
amount payable by UT to Cortech in such country would be equal to [ ] instead of
[ ].
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5.7.2 If such Net Sales of Products by UT, its Affiliates and
sublicensees are equal to or greater than [ ] but less than [ ] for such
quarter, then UT shall have the right to credit the amount of such Third Party
royalty payments in such country against the royalties owing to Cortech under
Section 5.2 above as set forth in this Section 5.7.2. If the royalties payable
by UT to such Third Parties in such country exceeds the Threshold Royalty, the
royalties payable by UT to Cortech under Section 5.2 above for Products sold by
UT in such country shall be reduced by [ ] for each [ ] royalty payable by UT
over the Threshold Royalty; provided however that such royalty reductions shall
not exceed [ ].
5.7.3 If such Net Sales of Products by UT, its Affiliates and
sublicensees are less than [ ] for such quarter, then UT shall have the right to
credit the amount of such Third Party royalty payments in such country against
the royalties owing to Cortech under Section 5.2 above as set forth in this
Section 5.7.3. If the royalties payable by UT to such Third Parties in such
country exceeds the Threshold Royalty, the royalties payable by UT to Cortech
under Section 5.2 above for Products sold by UT in such country shall be reduced
by [ ] for each [ ] royalty payable by UT over the Threshold Royalty; provided
however that such royalty reductions shall not exceed [ ].
5.8 HMR Agreement. In the event that Cortech fails to cure a Notice of
Default within forty-five (45) days of receipt, upon UT's written request,
Cortech shall assign the HMR Agreement to UT. In the event that such an
assignment is made, Cortech shall provide a credit to UT against the royalties
UT is required to pay to Cortech under Section 5.2 above equivalent to twice the
amount of the reasonable and direct expenses incurred by UT as a result of the
assignment, including but not limited to, payment of royalties to HMR required
under the Agreement.
ARTICLE 6
ROYALTY REPORTS AND ACCOUNTING
6.1 Reports, Exchange Rates. UT shall notify Cortech in writing promptly
upon the First Commercial Sale of a Product by UT, its Affiliates or its
sublicensees. During the term of this Agreement following the First Commercial
Sale of a Product, UT shall furnish to Cortech a quarterly written report
showing in reasonably specific detail, on a country by country basis, (a) the
gross sales of each Product sold by UT, its Affiliates and its sublicensees
during the reporting period and the calculation of Net Sales from such gross
sales; (b) the royalties payable in Dollars, if any, which shall have accrued
hereunder based upon Net Sales of each Product; (c) the withholding taxes, if
any, required by law to be deducted in respect of such sales, (d) the date of
the First Commercial Sales of each Product in each country during the reporting
period; and (e) the exchange rates used in determining the amount of Dollars.
With respect to sales of Products invoiced in Dollars, the gross sales, Net
Sales, and royalties payable shall be expressed in Dollars. With respect to
sales of Products invoiced in a currency other than Dollars, the gross sales,
Net Sales and royalties payable shall be expressed in the domestic currency of
the party
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making the sale together with the Dollar equivalent of the royalty payable. The
Dollar equivalent shall be calculated using the average exchange rate (local
currency per US$1) published in The Wall Street Journal Western Edition, under
the heading "Currency Trading," on each of the last business day of each month
during the applicable calendar quarter. Reports shall be due on the
seventy-fifth (75th) day following the close of each quarter. UT, its Affiliates
and its sublicensees shall keep complete and accurate records in sufficient
detail to properly reflect all gross sales and Net Sales and to enable the
royalties payable hereunder to be determined.
6.2 Audits.
6.2.1 Upon the written request of Cortech, and not more than twice in
each calendar year, UT shall permit an independent certified public accounting
firm of globally recognized standing, selected by Cortech, at Cortech's expense,
to have access during normal business hours to such of the records of UT as may
be reasonably necessary to verify the accuracy of the royalty reports hereunder
for the last three (3) full fiscal years prior to the date of such request. The
accounting firm shall disclose to Cortech or its licensors only whether the
records are correct or not and the specific details concerning any
discrepancies. No other information shall be shared.
6.2.2 If such accounting firm concludes that additional royalties were
owed during such period, UT shall pay the additional royalties within thirty
(30) days of the date Cortech delivers to UT such accounting firm's written
report so concluding. The fees charged by such accounting firm shall be paid by
Cortech; provided however, if the audit discloses that the royalties payable by
UT for the audited period are more than one hundred five percent (105%) of the
royalties actually paid for such period, then UT shall pay the reasonable fees
and expenses charged by such accounting firm.
6.2.3 UT shall include in each permitted sublicense granted by it
pursuant to this Agreement a provision requiring the sublicensee to make reports
to UT, to keep and maintain records of sales made pursuant to such sublicense
and to grant access to such records by Cortech's independent accountant to the
same extent required of UT under this Agreement. Upon the expiration of
twenty-four (24) months following the end of any year, the calculation of
royalties payable with respect to such year shall be binding and conclusive upon
Cortech and UT, its Affiliates and sublicensees.
6.3 Confidential Financial Information. Cortech shall treat all financial
information subject to review under this Article 6 or under any sublicense
agreement as confidential, and shall cause its accounting firm to retain all
such financial information in confidence.
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ARTICLE 7
PAYMENTS
7.1 Payment Terms. Royalties shown to have accrued by each royalty report
provided for under Article 6 above shall be due and payable on the date such
royalty report is due. Payment of royalties in whole or in part may be made in
advance of such due date.
7.2 Payment Method. Except as provided in this Section 7.2, all payments by
UT to Cortech under this Agreement shall be paid in Dollars, and all such
payments shall be originated from a United States bank located in the United
States and made by bank wire transfer in immediately available funds to such
account as Cortech shall designate before such payment is due. Upon Cortech's
election made in writing not less than thirty (30) days prior to any payment
date, UT shall pay all royalties owing to Cortech hereunder in the currency in
which such royalties accrued, without conversion into Dollars.
7.3 Exchange Control. If at any time legal restrictions prevent the prompt
remittance of part or all royalties with respect to any country where the
Product is sold, payment shall be made through such lawful means or methods as
Cortech reasonably shall determine.
7.4 Withholding Taxes. All amounts owing from UT to Cortech under this
Agreement are net amounts, and shall be grossed-up to account for any
withholding taxes, value-added taxes or other materially similar taxes, levies
or charges with respect to such amounts, other than United States taxes, payable
by UT, its Affiliates or sublicensees, or any taxes required to be withheld by
UT, its Affiliates or sublicensees having a permanent establishment in any
country or otherwise being subject to taxation by such country (except solely by
reason of the license granted under this Agreement).
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ARTICLE 8
INFRINGEMENT ACTIONS BY THIRD PARTIES
If UT, or any of its Affiliates, sublicensees or customers shall be sued by
a Third Party for infringement of a Third Party's patent because of the
manufacture, use or sale of Products, UT shall promptly notify Cortech in
writing of the institution of such suit. If the alleged infringing process,
method or composition is claimed under the Licensed Patent Rights, UT shall
promptly cease the manufacture, use, sale, offering for sale or importation of
the allegedly infringing process, method or composition claimed under the
Licensed Patent Rights and UT shall have the right, subject to the reasonable
approval of Cortech, to control the defense of such suit at UT's own expense, in
which event Cortech shall have the right to be represented by advisory counsel
of its own selection, at its own expense, and shall cooperate fully in the
defense of such suit and furnish to UT all evidence and assistance in its
control. If UT does not elect within thirty (30) days after such notice to so
control the defense of such suit, Cortech may undertake such control at its own
expense, and UT shall then have the right to be represented by advisory counsel
of its own selection, at its own expense, and UT shall cooperate fully in the
defense of such suit and otherwise furnish to Cortech all evidence and
assistance in UT's control. The party controlling the suit may not settle the
suit or otherwise consent to an adverse judgment in such suit that diminishes
the rights or interests of the non-controlling party without the express written
consent of the non-controlling party. Any judgments, settlements or damages
payable with respect to legal proceedings covered by this Article 8 shall be
paid by the party which controls the litigation.
ARTICLE 9
CONFIDENTIALITY
9.1 Confidential Information. During the term of this Agreement, and for a
period of five (5) years following the expiration or earlier termination hereof,
each party shall maintain in confidence all information of the other party
(including samples) disclosed by the other party and identified as, or
acknowledged to be, confidential (the "Confidential Information"), and shall not
use, disclose or grant the use of the Confidential Information except on a
need-to-know basis to those directors, officers, affiliates, employees,
permitted licensees, permitted assignees and agents, consultants, lawyers,
bankers, clinical investigators or contractors, to the extent such disclosure is
reasonably necessary in connection with such party's activities as expressly
authorized by this Agreement. To the extent that disclosure is authorized by
this Agreement, prior to disclosure, each party hereto shall obtain agreement of
any such Person to hold in confidence and not make use of the Confidential
Information for any purpose other than those permitted by this Agreement. Each
party shall notify the other promptly upon discovery of any unauthorized use or
disclosure of the other party's Confidential Information.
9.2 Permitted Disclosures. The confidentiality obligations contained in
Section 9.1 above shall not apply to the extent that (a) any receiving party
(the "Recipient") is required (i) to
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disclose information by law, order or regulation of a governmental agency or a
court of competent jurisdiction, or (ii) to disclose information to any
governmental agency for purposes of obtaining approval to test or market a
product, provided in either case that the Recipient shall provide written notice
thereof to the other party and sufficient opportunity to object to any such
disclosure or to request confidential treatment thereof, or (b) the Recipient
can demonstrate that (i) the disclosed information was public knowledge at the
time of such disclosure to the Recipient, or thereafter became public knowledge,
other than as a result of actions of the Recipient in violation hereof; (ii) the
disclosed information was rightfully known by the Recipient (as shown by its
written records) prior to the date of disclosure to the Recipient by the other
party hereunder; (iii) the disclosed information was disclosed to the Recipient
on an unrestricted basis from a source unrelated to any party to this Agreement
and not under a duty of confidentiality to the other party or (iv) the disclosed
information was independently developed by the Recipient without use of the
Confidential Information disclosed by the other party.
9.3 Terms of this Agreement. Except as otherwise provided in Section 9.2
above and subject to either party's reporting obligations under applicable state
and federal laws, Cortech and UT shall not disclose any terms or conditions of
this Agreement to any Third Party without the prior consent of the other party.
Notwithstanding the foregoing, prior to execution of this Agreement, UT and
Cortech shall agree upon the substance of information that can be used to
describe the terms of this transaction in a press release or other similar
publication, and UT and Cortech may disclose such information, as modified by
mutual agreement from time to time, without the other party's consent.
9.4 Publication. Neither party shall submit for written or oral publication
or presentation any manuscript, abstract, writing, printed material or the like
which includes data or any other information generated and provided solely by
the other party without first obtaining the prior written consent of the other
party, which consent shall not be unreasonably withheld or delayed, provided,
however, that valid commercial reasons may exist for withholding such consent.
Nothing contained herein shall be construed as precluding either party from
making, in its discretion, any disclosures of information of any type which
relate to the safety, efficacy, toxicology or pharmacokinetic characteristics of
the Products to the extent that either party may be required by law to make
disclosures of such information.
ARTICLE 10
PATENTS
10.1 Ownership of Inventions and Patents. The entire right and title in all
inventions, discoveries, improvements or other technology for the manufacture or
use of a Product, and all methods and processes relating thereto, whether or not
patentable, and any patent applications or patents based thereon, made or
conceived during and pursuant to the obligations of the parties set forth in
this Agreement (collectively, the "Inventions") (a) by employees or others
acting solely on behalf of Cortech or its Affiliates shall be owned solely by
Cortech (the "Cortech
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Inventions"), (b) by employees or others acting solely on behalf of UT, its
Affiliates or its sublicensees shall be owned solely by UT (the "UT
Inventions"), and (c) by employees or others acting jointly on behalf of Cortech
and UT or their respective Affiliates and sublicensees, shall be owned jointly
by Cortech and UT (the "Joint Inventions"). Each party promptly shall disclose
to the other party the making, conception or reduction to practice of Inventions
by employees or others acting on behalf of such party. Cortech and UT each
hereby represents that all employees and other Persons acting on its behalf in
performing its obligations under this Agreement shall be obligated under a
binding written agreement to assign to it, or as it shall direct, all Inventions
made or developed by such employees or other Persons; provided however that in
the case of an arrangement between UT and a university whereby Inventions arise
during the course of such university's performance of research or development
work with respect to a Product, UT shall have the right to enter into a binding
written agreement with such university for such Inventions to be either assigned
to UT or exclusively licensed to UT (on a worldwide basis with the right to
sublicense) by such university, provided that, all university employees
performing such research or development are under binding written agreements
with such university to assign to such university all Inventions made or
developed by such university employees.
10.2 Prosecution and Maintenance. Cortech and UT each shall have the right,
at its discretion and using commercially reasonable practices, control the
prosecution, grant and maintenance of its patent rights on its Inventions, and
to select all patent counsel or other professionals to advise, represent or act
for it in all matters relating to the prosecution and maintenance of its patent
rights on its Inventions. All costs incurred in connection therewith shall be
borne by the party taking action with respect to such patent rights on such
Inventions. UT shall control the prosecution, grant and maintenance of patent
rights regarding Joint Inventions, and UT and Cortech shall bear all costs
incurred in connection therewith. With respect to the costs of prosecution and
maintenance, Cortech shall bear [ ] of such costs and UT shall bear [ ] of such
costs. UT shall inform Cortech at regular intervals, or on request, about the
status of joint patent applications or joint patents for which it is
responsible.
In the event that Cortech or UT elects not to file a patent application or
decides to abandon any pending application or granted patent under its patent
rights (or Cortech, in the case of the Licensed Patent Rights), the UT
Inventions or the Joint Inventions in any country, it shall provide adequate
notice to the other party and give the other party the opportunity to file or
maintain such application or patent at its own expense; provided, however, that
except for the right to file and maintain such patent rights, the ownership
rights of Cortech and UT to such patent rights shall not be affected by reason
of this paragraph.
10.3 Cooperation. Each party shall make available to the other party or its
authorized attorneys, agents, consultants or representatives, if available, such
information necessary or appropriate to enable the appropriate party (at the
appropriate party's cost and expense) to file, prosecute and maintain patent
applications and resulting patents with respect to Inventions, as set forth in
Section 10.2 above, for a period of time reasonably sufficient for such party to
obtain the assistance it needs from such personnel. Where appropriate, each
party shall sign or cause to have signed all documents relating to said patent
applications or patents at no charge to the other.
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10.4 No Other Technology Rights. Except as otherwise provided in this
Agreement, under no circumstances shall a party, as a result of this Agreement,
obtain any ownership interest or other right in any technology, Licensed
Technology, Licensed Compound, know-how, patents, pending patent applications,
products, compounds, materials, vaccines, antibodies, cell lines or cultures, or
animals of the other party, including items owned, controlled or developed by
the other, or transferred by the other to such party at any time pursuant to
this Agreement. It is understood and agreed by the parties that this Agreement
does not grant to either party any license or other right in basic technology of
the other party except to the extent necessary to enable the parties to carry
out their obligations under this Agreement or the research, development,
commercialization and marketing of Products.
10.5 Notification of Infringement. Each party shall notify the other party
of any significant and continuing infringement known to such party of any joint
patent rights on Joint Inventions or patent rights of the other party and shall
provide the other party with the available evidence, if any, of such
infringement.
10.6 Enforcement of Licensed Patent Rights and Joint Inventions. UT, in the
case of Joint Inventions and Cortech, in the case of Licensed Patent Rights (the
"Enforcing Party") shall in good faith use its commercially reasonable
discretion and efforts to enforce such patent rights against infringers, and to
consult with the other party both prior to and during such enforcement.
The Enforcing Party shall have six (6) months from the date of receipt of
notice under this Section 10.6 to xxxxx the infringement, or to file suit
against at least one of the infringers, at its sole expense, following
consultation with the other party; provided, however, that within thirty (30)
days after receipt of notice from the party whose patent rights allegedly are
being infringed of its intent to file such suit, the other party shall have the
right to fund up to one-half (1/2) of the costs of such suit.
If the Enforcing Party does not within six (6) months of receipt of such
notice, xxxxx the infringement or file suit to enforce the patent rights against
at least one infringing party in a country, the other party shall have the right
to take whatever action it deems appropriate in its own name or, if required by
law, in the name of the party whose patent rights allegedly are being infringed,
to enforce the patent rights, provided that, the foregoing provisions of this
sentence shall not apply if the board of directors of UT or Cortech, in their
commercially reasonable discretion, has made a good faith determination that
such infringement should not be abated and provided, further, that, within sixty
(60) days after receipt of notice of the other party's intent to file such suit,
the Enforcing Party shall have the right to jointly prosecute such suit and to
fund up to one-half (1/2) the costs of such suit.
The party controlling the action may not settle the action or otherwise
consent to an adverse judgment in such action that diminishes the rights or
interests of the non-controlling party without the express written consent of
the non-controlling party. All monies recovered upon the final judgment or
settlement of any such suit shall be shared, after reimbursement of
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expenses, by Cortech and UT pro rata according to the respective percentages of
costs borne by each party in such suit pursuant to this Section 10.6.
Notwithstanding the foregoing, Cortech and UT shall fully cooperate with each
other in the planning and execution of any action to enforce the patent rights.
ARTICLE 11
INDEMNITY
11.1 Indemnity.
11.1.1 By Cortech. Cortech shall indemnify and hold UT harmless, and
hereby forever releases and discharges UT, from and against all losses,
liabilities, damages and expenses (including reasonable attorneys' fees and
costs) resulting from all claims, demands, actions and other proceedings by any
Third Party to the extent arising from (a) the breach of any representation,
warranty or covenant of Cortech under this Agreement or (b) the gross negligence
or willful misconduct of Cortech in the performance of its obligations and its
permitted activities under this Agreement.
11.1.2 By UT. UT shall indemnify and hold Cortech harmless, and hereby
forever releases and discharges Cortech, from and against all losses,
liabilities, damages and expenses (including reasonable attorneys' fees and
costs) resulting from all claims, demands, actions and other proceedings by any
Third Party to the extent arising from (a) the breach of any representation,
warranty or covenant of UT under this Agreement, (b) the research, development,
manufacturing, commercialization or marketing of Products (without regard to
culpable conduct), or (c) the gross negligence or willful misconduct of UT or
its Affiliates or sublicensees in the performance of its or their obligations,
and its or their permitted activities under this Agreement.
11.2 Procedure. A party (the "Indemnitee") that intends to claim
indemnification under this Article 11 shall promptly notify the other party (the
"Indemnitor") of any claim, demand, action or other proceeding for which the
Indemnitee intends to claim such indemnification, The Indemnitor shall have the
right to participate in, and to the extent the Indemnitor so desires jointly
with any other indemnitor similarly noticed, to assume the defense thereof with
counsel selected by the Indemnitor; provided, however, that the Indemnitee shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the Indemnitor, if representation of the Indemnitee by the counsel retained
by the Indemnitor would be inappropriate due to actual or potential differing
interests between the Indemnitee and any other party represented by such counsel
in such proceedings. The indemnity obligations under this Article 11 shall not
apply to amounts paid in settlement of any claim, demand, action or other
proceeding if s settlement is effected without the prior express written consent
of the Indemnitor, which consent shall not be unreasonably withheld or delayed.
The failure to deliver notice to the Indemnitor within a reasonable time after
notice of any such claim or demand, or the commencement any such action
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or other proceeding, if prejudicial to its ability to defend such claim, demand,
action or other proceeding, shall relieve such Indemnitor of any liability to
the Indemnitee under this Article 11 with respect thereto, but the omission so
to deliver notice to the Indemnitor shall not relieve it of any liability that
it may have to the Indemnitee otherwise than under Article 11. The Indemnitor
may not settle or otherwise consent to an adverse judgment in such claim,
demand, action or other proceeding, that diminishes the rights or interests of
Indemnitee without the prior express written consent of the Indemnitee, which
consent shall be unreasonably withheld or delayed. The Indemnitee, its employees
and agents, shall reasonably cooperate with the Indemnitor and its legal
representatives in the investigation of any claim, demand, action or other
proceeding covered by this Article 11.
11.3 Insurance. UT, at its own expense, shall maintain comprehensive
general liability insurance, including contractual liability insurance and
product liability insurance against claims regarding the research, development,
manufacture, commercialization or marketing of the Products under this
Agreement. UT shall maintain such insurance for so long as it continues to
research, develop, manufacture, commercialize, market, use or sell Products, and
thereafter for so long as it customarily maintains insurance for itself covering
similar activities with its other similar products. During the clinical
development of Products, such coverage shall be at least [ ] per occurrence.
Promptly upon commercial introduction of the initial Product, the parties shall
negotiate in good faith the level to which UT shall increase such insurance
coverage.
ARTICLE 12
TERMINATION
12.1 Expiration. Subject to the provisions of Sections 12.2 and 12.3 below,
this Agreement shall expire on the expiration of UT's obligation to pay
royalties to Cortech under Section 5.2 above.
12.2 Termination for Cause
12.2.1 By Either Party. Except as otherwise provided in Article 13,
either party may terminate this Agreement upon or after the breach of any
material provision of this Agreement by the other party if the other party has
not cured such breach within thirty (30) day after notice thereof by the
non-breaching party.
12.2.2 By Cortech. Except as otherwise provided in Article 13, Cortech
may terminate this Agreement if UT has not commenced Phase II clinical trials of
a Product within two (2) years and six (6) months after the Effective Date,
provided that, (a) a governmental regulatory agency has not imposed a material
restriction on UT's Product regulatory approval activities under this Agreement,
which restriction has delayed or prevented the commencement of such clinical
trial, or (b) negative or equivocal study results have not arisen which
necessitated
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a material and significant change in the development plan and timeline set forth
in Exhibit C, which change delayed or prevented the commencement of such
clinical trial.
12.2.3 By UT. UT may terminate this Agreement at any time and without
penalty, if UT, using commercially reasonable efforts, is unable to develop and
commercialize Products.
12.3 Bankruptcy. In the event of the institution by or against either party
of insolvency, receivership or bankruptcy proceedings or any other proceedings
for the settlement of such party's debts which are not dismissed within sixty
(60) days, or upon such party's making an assignment for the benefit of
creditors, or upon such party's dissolution or ceasing to do business, the other
party shall have the right to terminate this Agreement upon written notice to
the other party.
12.4 Effect of Expiration or Termination. Expiration or termination of this
Agreement shall not relieve the parties of any obligation accruing prior to such
expiration or termination, and the provisions of Section 6.2 and Articles 9, 10
and 11 shall survive the expiration or termination of this Agreement. Except in
the cases of a termination of this Agreement (a) by Cortech due to a material
breach of this Agreement by UT or (b) in connection with a Product's
infringement on the intellectual property rights of a Third Party, upon any
termination of this Agreement, UT shall have the right and option to promptly
sell any remaining UT inventories of Product using UT's best efforts.
ARTICLE 13
FORCE MAJEURE
Neither party shall be held liable or responsible to the other party nor be
deemed to have defaulted under or breached this Agreement for failure or delay
in fulfilling or performing any term of this Agreement to the extent, and for so
long as, such failure or delay is caused by or results from causes beyond the
reasonable control of the affected party including but not limited to fire,
floods, embargoes, war, acts of war (whether war be declared or not),
insurrections, riots, commotions, strikes, lockouts or other labor disturbances,
acts of God or acts, omissions or delays in acting by any governmental authority
or other party.
ARTICLE 14
MISCELLANEOUS
14.1 Notices. Any consent, notice or report required or permitted to be
given or made under this Agreement by one of the parties hereto to the other
party shall be in writing, delivered personally or by facsimile (and promptly
confirmed by personal delivery, U.S. first class mail or
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courier), U.S. first class mail or courier, postage prepaid (where applicable),
addressed to such other party at its address indicated below, or to such other
address as the addressee shall have last furnished in writing to the addressor
and (except as otherwise provided in this Agreement) shall be effective upon
receipt by the addressee.
If to Cortech: Cortech, Inc.
0000 Xxxxx Xxxxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: President
with a copy to: Dechert Price & Xxxxxx
Princeton Pike Corp. Center
000 Xxxxxx Xxxxx, Xxxxxxxx 0
Xxxxxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx, Esq.
If to UT: United Therapeutics Corporation
0 Xxxxx Xxxxx
Xxxxxxxx Xxxxxxxx Xxxx
Xxxxx Xxxxxxxx 00000
Attention: President
with a copy to: Xxxxx Patusky Xxxxxxxxx & Xxxxxx
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxx Xxxxx
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx X. Xxxxx, Esq.
14.2 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflicts of law principles thereof.
14.3 Assignment. UT shall not assign its rights or obligations under this
Agreement, in whole or in part, by operation of law or otherwise, without the
prior written consent of Cortech; provided however, that either party may,
without such consent, assign this Agreement and its rights and obligations
thereunder in connection with the transfer or sale of all or substantially all
of its business, or in the event of its merger, consolidation, change in control
or similar transaction. Any purported assignment in violation of this Section
14.3 shall be void.
14.4 Waivers and Amendments. No change, modification, extension,
termination or waiver of this Agreement, or any of the provisions herein
contained, shall be valid unless made in writing and signed by duly authorized
representatives of the parties hereto.
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14.5 Entire Agreement. This Agreement embodies the entire understanding
between the parties and supersedes any prior understanding and agreements
between and among them respecting the subject matter hereof. There are no
representations, agreements, arrangements or understandings, oral or written,
between the parties hereto relating to the subject matter of this Agreement
which are not fully expressed herein.
14.6 Severability. Any of the provisions of this Agreement which are
determined to be invalid or unenforceable in any jurisdiction shall be
ineffective to the extent of such invalidity or unenforceability in such
jurisdiction, without rendering invalid or unenforceable the remaining
provisions hereof and without affecting the validity or enforceability of any of
the terms of this Agreement in any other jurisdiction.
14.7 Waiver. The waiver by either party hereto of any right hereunder or
the failure to perform or of a breach by the other party shall not be deemed a
waiver of any other right hereunder or of any other breach or failure by said
other party whether of a similar nature or otherwise.
14.8 Construction. The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement.
14.9 Independent Contractors. The relationship between Cortech and UT is
that of independent contractors. Neither party has any actual or apparent
authority, express or implied, to act on behalf of the other party or to bind
the other party to any obligations. Neither party shall be deemed to be an agent
or servant of the other party or a partner or venturer with the other party.
Neither party shall control, or have any right to control, the manner, method
and means by which the other party makes, has made, uses, sells, leases or
otherwise provides or markets its products and services.
14.10 LIMITATION OF LIABILITY. EXCEPT AS MAY BE ELSEWHERE HEREIN
SPECIFICALLY PROVIDED FOR, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR
INDIRECT, SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES, OR FOR ANY
LOST PROFITS OF THE OTHER PARTY, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY,
ARISING OUT OF THE PERFORMANCE OR FAILURE TO PERFORM ANY OBLIGATIONS SET FORTH
HEREIN.
14.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth below.
CORTECH, INC.
/s/ Xxxxxxxx Xxxxx
-----------------------------
Xxxxxxxx Xxxxx
Chief Operating Officer
Dated: 11/4/98
--------------------
UNITED THERAPEUTICS CORPORATION
/s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxxxx
Chief Executive Officer
Dated: 10/30/98
--------------------
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