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Exhibit 99.3
AS EXECUTED - CONFORMED
AMENDED AND RESTATED
LICENSE AND OPTION AGREEMENT
BETWEEN
ASTRA AB
AND
ASTRA MERCK INC.
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS..................................................... 2
ARTICLE II LICENSE GRANTS BY KB............................................ 11
Section 2.1 Group A and Group B Compounds................................ 11
Section 2.2 Group C Compounds............................................ 11
Section 2.3 Exercise of Option........................................... 13
Section 2.4 Provision for Assignment of Options.......................... 14
Section 2.5 Abandonment.................................................. 14
Section 2.6 Combinations................................................. 15
Section 2.7 Sublicense of Certain New Processes.......................... 15
Section 2.8 Licenses of Certain Rights Outside the Territory............. 16
ARTICLE III FDA APPROVAL; NEW CLAIMS; FURNISHING COMPOUNDS.................. 16
Section 3.1 FDA Approval................................................. 16
Section 3.2 New Claims or Formulations................................... 19
ARTICLE IV MARKETING AND MANUFACTURING..................................... 20
Section 4.1 Commencement; Continuation................................... 20
Section 4.2 Quality in Marketing......................................... 20
ARTICLE V [OMITTED]....................................................... 21
ARTICLE VI SUBLICENSES..................................................... 21
ARTICLE VII PAYMENTS........................................................ 21
Section 7.1 Royalties.................................................... 21
Section 7.2 Payment, Reports and Records................................. 22
Section 7.3 Group E Payments, Reports, Records and Forecasts............. 24
ARTICLE VIII GROUP A COMPOUNDS AND GROUP B COMPOUNDS........................ 26
ARTICLE IX PATENT APPLICATIONS; INFRINGEMENT............................... 26
Section 9.1 Applications................................................. 26
Section 9.2 Infringement................................................. 27
Section 9.3 Reexamination and Reissue.................................... 33
Section 9.4 Cooperation.................................................. 34
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Section 9.5 Maintenance Fees............................................. 34
Section 9.6 Candesartan Cilexetil; Turbuhaler............................ 34
Section 9.7 Selected Compounds and Selected Uses......................... 35
ARTICLE X TECHNICAL INFORMATION; CONFIDENTIALITY.......................... 35
Section 10.1 Exchange of Information..................................... 35
Section 10.2 Confidentiality and Permitted Disclosure.................... 36
ARTICLE XI TRADEMARKS; IDENTIFICATION; INFRINGEMENT........................ 37
Section 11.1 Use ........................................................ 37
Section 11.2 Samples, Labels and Advertising Material.................... 37
Section 11.3 Infringement................................................ 37
ARTICLE XII DISCLAIMER AND LIMITATION OF LIABILITY.......................... 38
Section 12.1 Disclaimer.................................................. 38
Section 12.2 Limitation on Damages....................................... 38
ARTICLE XIII TERM AND RIGHTS UPON TERMINATION, REJECTION, OR ASSIGNMENT..... 38
Section 13.1 Term ....................................................... 38
Section 13.2 Rights of KB on Termination, Rejection or Assignment of
Licenses or Options for Licenses............................. 39
Section 13.3 Return of Data.............................................. 39
Section 13.4 Effect of Termination....................................... 39
ARTICLE XIV ARBITRATION..................................................... 39
Section 14.1 Arbitration................................................. 39
ARTICLE XV GENERAL PROVISIONS.............................................. 39
Section 15.1 Entire Agreement............................................ 39
Section 15.2 Binding Effect; Assignment.................................. 40
Section 15.3 Applicable Law.............................................. 41
Section 15.4 Notices..................................................... 41
Section 15.5 Waiver or Modification...................................... 42
Section 15.6 Expenses.................................................... 42
Section 15.7 Enforceability.............................................. 42
Section 15.8 Section and Other Headings.................................. 42
Section 15.9 Reasonable Efforts.......................................... 43
Section 15.10 Further Assurances......................................... 43
Section 15.11 Affiliates................................................. 43
Section 15.12 No Agency, etc............................................. 43
Section 15.13 Events of Force Majeur..................................... 43
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ARTICLE XVI TERMINATION OF RIGHTS........................................... 44
Section 16.1 Termination of Rights and Reversion to Licensee............. 44
Section 16.2 Reversion to KB............................................. 46
Section 16.3 Compliance Certificate; Audit Rights........................ 48
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EXHIBIT A - APPROVED COUNSEL
EXHIBIT B - EXCEPTED COMPOUNDS
EXHIBIT C - LICENSED PATENTS
EXHIBIT D - THERAPEUTIC CATEGORIES
EXHIBIT E - RESTRICTIONS WITH RESPECT TO CERTAIN GROUP C COMPOUNDS
EXHIBIT F - PRECLINICAL AND CLINICAL STUDIES
EXHIBIT G - FORM OF COMMON AND JOINT INTEREST AGREEMENT
EXHIBIT H - PRINCIPLES FOR COOPERATION ON PRILOSEC PATENT ISSUES
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AMENDED AND RESTATED
LICENSE AND OPTION AGREEMENT
This Agreement made as of the 12th day of July, 1982, as amended and
restated as of the 1st day of July, 1998, by and between Astra AB, a company
limited by shares organized and existing under the laws of Sweden and formerly
known as AB Astra ("KB"), and Astra Merck Inc., a corporation organized and
existing under the laws of the State of Delaware and formerly known as
Astra/Merck, Inc. ("KBI" or "Licensee").
R E C I T A L S
WHEREAS, the Parties entered into that certain License and Option
Agreement made as of July 12, 1982, as heretofore amended (the "Original
Agreement"), pursuant to which KB granted and Licensee obtained licenses, and
options for licenses, to make, have made, use and sell in the Territory under
Licensed Patents, Technical Information and Trademarks certain pharmaceutical
compounds which KB (or any of its Affiliates) has developed or acquired and
certain other pharmaceutical compounds which KB (or any of its Affiliates) may
discover, develop or acquire, all subject to the terms and conditions provided
for and referred to in the Original Agreement, to the end that all such
pharmaceutical compounds will be developed and marketed in the Territory;
WHEREAS, the parties desire to amend and restate the Original Agreement;
WHEREAS, KB, Licensee and certain of their respective Affiliates have
entered into that certain Master Restructuring Agreement (as hereinafter
defined), which provides for KB and Licensee to enter into this Amended and
Restated License and Option Agreement;
WHEREAS, it is contemplated by the parties hereto that certain rights
under this Agreement relating to the Trademarks (as hereinafter defined), the
Selected Compounds (as hereinafter defined) and the Selected Uses (as
hereinafter defined) will be assigned by Licensee to KBI Sub (as hereinafter
defined), a wholly-owned subsidiary of Licensee, and then further assigned by
such subsidiary to the Partnership (as hereinafter defined);
WHEREAS, it is contemplated by the parties hereto that the remaining
rights of Licensee under this Agreement will be assigned to KBI-E (as
hereinafter defined), a wholly-owned subsidiary of Licensee;
WHEREAS, following such assignments, all references to "Licensee"
hereunder shall mean, when referring to matters relating to the Trademarks,
Selected Compounds and Selected Uses, the Partnership and, when referring to
matters relating to all other Compounds and uses, KBI-E;
WHEREAS, it is contemplated by the parties hereto that KBI-E will appoint
the Partnership as its sole and exclusive distributor with respect to products
containing Licensed Compounds to which KBI-E will have rights as the assignee of
KBI, subject to certain exceptions to be set forth in the Distribution Agreement
(as hereinafter defined);
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WHEREAS, KBI-E proposes to contract with the Partnership, pursuant to the
Distribution Agreement, for the Partnership to provide certain services on
behalf of KBI-E which shall fulfill certain obligations of KBI-E, as assignee of
KBI hereunder, and to exercise certain rights of KBI-E, as assignee of KBI
hereunder;
WHEREAS, KB and KBI-E desire that certain information concerning
Distribution Compounds (as hereinafter defined) be provided directly to the
Partnership and that certain information be provided by the Partnership directly
to KB;
WHEREAS, for the purpose of providing for the supply of Distribution
Products (as defined in the Distribution Agreement) to the Partnership (or any
permitted assignee) and Exclusive Second Look Products and Non-Exclusive Second
Look Products (each as defined in the Manufacturing Agreement) to any permitted
sublicensee or distributor of KBI-E, it is contemplated that KBI-E will grant to
KBI the right to make and have made Distribution Products for the sole purposes
of enabling KBI to supply Distribution Products to the Partnership (or such
permitted assignee) and Exclusive Second Look Products and Non-Exclusive Second
Look Products to any permitted sublicensee or distributor of KBI-E, and KBI is
entering into the KBI Supply Agreement (as hereinafter defined) with the
Partnership for the sole purpose of supplying Distribution Products and
Distribution Compounds (as hereinafter defined) to the Partnership (or such
assignee) in fulfillment of KBI-E's supply obligation to the Partnership under
the Distribution Agreement; and
WHEREAS, it is contemplated that KBI will enter into the Manufacturing
Agreement (as hereinafter defined) for the purpose of establishing arrangements
under which TR and KB will supply to KBI certain of KBI's requirements for
Distribution Products for the sole purpose of satisfying KBI's obligations to
the Partnership under the KBI Supply Agreement, and TR and KB are willing to
perform such supply on the terms and subject to the conditions therein set
forth.
NOW, THEREFORE, in consideration of the premises and the covenants and
conditions herein contained, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Unless specifically set forth to the contrary herein, the following terms
shall have their indicated meanings when used in this Agreement.
Abandoned Compound shall have the meaning defined in Section 2.5.
Accounting Procedures shall mean GAAP, including, without limitation, (i)
accruing for reserves at the time of sale for estimated product returns, (ii)
recording cash discounts as taken by customers and (iii) establishing reserves
on an accrual basis for estimated managed care rebates/chargebacks at the time
of product sale.
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Active Development Program shall have the meaning defined in the
Distribution Agreement.
Actively Marketing shall have the meaning defined in the Distribution
Agreement.
Affiliate shall mean, with respect to any Person, any other Person
controlling, controlled by, or under common control with, such Person. The term
"control" of a Person shall mean direct or indirect ownership of more than 50%
of the outstanding voting stock of a corporation or voting interest in a
non-corporate Person.
Alternate Producer shall have the meaning defined in the Manufacturing
Agreement.
Amendment and Restatement Date shall mean July 1, 1998.
Ancillary Agreements shall have the meaning defined in the Master
Restructuring Agreement.
Approved Counsel shall mean any law firm listed on Exhibit A; provided,
however, Licensee may remove from Exhibit A any law firm at any time and replace
such law firm with any other law firm that has not represented TR within the
three-year period prior to the commencement of any representation by such law
firm of Licensee with regard to any matter described in Article IX, and that is
not representing TR at the time of such representation of Licensee.
Calendar Year shall mean each 12-month period commencing on January 1 and
ending on December 31.
Clinical Supply Agreement shall mean that certain Clinical Supply
Agreement dated as of the Amendment and Restatement Date by and between KB and
the Partnership, as such agreement is amended, modified, supplemented or
restated from time to time.
Combination shall mean any Licensed Compound in combination with one or
more other therapeutically active ingredients (including any other Licensed
Compound).
Common and Joint Interest Agreement shall have the meaning defined in
Section 9.2(b)(i).
Compound shall mean any pharmaceutical compound, and the salts and esters
thereof, which is suitable for use in human medicine.
Confidential Information shall have the meaning defined in the Master
Restructuring Agreement.
Covered Compound shall mean any Licensed Compound, Group D Compound, Group
E Compound and KB USA Product.
De Minimis Infringement shall mean any infringement, potential
infringement or
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suspected infringement in the Territory with respect to any Licensed Patent
where the economic effect, taken as a whole, of such infringement, potential
infringement or suspected infringement on such Licensed Patent would be de
minimis (for example, sales for laboratory or research purposes or sales of
minimal commercial value).
Discontinuation Notice shall have the meaning defined in Section 16.2(a).
Discontinued Licensed Compound shall have the meaning defined in Section
16.2(a).
Discretionary Compounds shall have the meaning defined in the KBI-E Asset
Option Agreement.
Distribution Agreement shall mean that certain Distribution Agreement
dated as of the Amendment and Restatement Date by and between KBI-E and the
Partnership, as such agreement is amended, modified, supplemented or restated
from time to time.
Distribution Compound shall have the meaning set forth in the Distribution
Agreement; provided, however, that in the event that the Partnership's rights to
a Distribution Compound under the Distribution Agreement are non-exclusive,
"Distribution Compound" shall refer to such Compound to the extent of the
Partnership's rights and obligations with respect thereto and shall not refer to
such Compound to the extent of the rights and obligations of KBI-E with respect
thereto.
Events of Force Majeure shall have the meaning defined in Section 15.13.
Excepted Compounds shall mean the Compounds listed on Exhibit B.
Exempted Combination shall have the meaning defined in the Distribution
Agreement.
FDA shall mean the United States Food and Drug Administration and any
successor agency having substantially the same functions.
First Commercial Sale shall mean, with respect to any Person, the first
sale of a Licensed Compound in the Territory by such Person (or any of its
Affiliates) or any sublicensee or distributor of any of the foregoing to any
Non-Affiliate or non-sublicensee or non-distributor thereof following approval
by the FDA of an NDA for such Compound.
Full Costs shall mean, in respect of any specific project, the sum of (a)
the direct costs incurred solely for such project, (b) the expenses allocated to
such project and (c) the costs of capital employed in connection with such
project. Any calculation of costs or expenses referred to in clause (a) or (b)
shall be made using the usual accounting system then employed by the Party
performing such project and any calculation of costs of capital referred to in
clause (c) shall be made, in respect of the costs of capital of KB or the
Partnership, in accordance with the principles set forth in Exhibit IVA to the
Manufacturing Agreement and, in respect of the costs of capital of KBI-E, in
accordance with the principles set forth with respect to TR in Exhibit III to
the Manufacturing Agreement.
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GAAP shall have the meaning defined in the Master Restructuring Agreement.
Generic Challenge Certification shall mean a Paragraph IV Certification
filed by an applicant under 21 U.S.C. Section 355(b)(2)(A)(iv) for a 21 U.S.C.
Section 355(b)(2) application, or a Paragraph IV Certification filed by an
applicant under 21 U.S.C. Section 355(j)(2)(A)(vii)(IV) for a 21 U.S.C.
Section 355(j)(1) application, in accordance with the applicable FDA regulations
in connection therewith, including, but not limited to, 21 C.F.R.
Section 314.50(i)(1)(A)(4) and 21 C.F.R. Section 314.94(a)(12)(i)(A)(4), as
applicable, and any subsequent amendments to such statutes or regulations.
Group A Compound shall mean the Compound tocainide.
Group B Compounds shall mean the Compounds felodipine and omeprazole.
Group C Compounds shall mean the Compounds rofleponide, remacemide,
candesartan cilexetil, perprazole [H199/18], budesonide for the treatment of
inflammatory bowel disease in humans (K50-51) and ropivacaine for the treatment
of inflammatory bowel disease in humans (K50-51), and any Compound that as of
the Amendment and Restatement Date has been, or hereafter is, discovered,
developed or acquired by KB (or any of its Affiliates), including without
limitation any acquired by license, other than (i) any Group A Compound, (ii)
any Group B Compound, (iii) nisin, bucindolol and balsalazide, (iv) any KB USA
Compound, (v) terbutaline sulphate, formoterol, foscarnet and bambuterol, and
(vi) Compounds listed on Exhibit B as Excepted Compounds.
Group D Compound shall have the meaning defined in the Master
Restructuring Agreement.
Group E Compound shall have the meaning defined in the Master
Restructuring Agreement.
Group E Product shall have the meaning defined in the Master Restructuring
Agreement.
Group E Products Contingent Amount shall have the meaning defined in the
Master Restructuring Agreement.
IND shall mean an Investigational New Drug Application made in accordance
with applicable regulations and requirements of the FDA as from time to time in
effect.
Information Package shall have the meaning defined in Section 2.3(b).
Initial Agreements shall have the meaning defined in the Master
Restructuring Agreement.
KB's Manufacturing Process shall mean in respect of any Licensed Compound
any process (or step thereof) used (or planned to be used) by KB (or any of its
Affiliates or subcontractors) prior to or on the date such process has been
satisfactorily demonstrated pursuant
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to Section 4.3(c) of the TR Licenses or Section 6.04(g) or 7.05(f) of the
Manufacturing Agreement for manufacturing or preparing (i) such Licensed
Compound (including any intermediate of such Licensed Compound and any dosage
form of such Compound included in the initial NDA for such Compound), but
excluding packaging except to the extent referred to in clause (ii) below, and
(ii) any device for the administration of such Licensed Compound if such device
is either unique to such Compound or is used by KB (or any of its Affiliates) in
the marketing of such Compound anywhere in the world; and any improvements or
New Processes thereafter used by KB (or any of its Affiliates) in respect of the
manufacture or preparation of such Licensed Compound or device; provided,
however, that KB's Manufacturing Process shall not include any process or
improvement (x) to the extent KB (or any of its Affiliates) does not have access
to such process or improvement or may not license or otherwise authorize the use
thereof by Licensee or (y) which is both (1) not so used at the principal
facility for the manufacture or preparation for KB (or any of its Affiliates) of
such Licensed Compound (or such intermediate or dosage form) or device and (2)
not material to such manufacture or preparation; provided, further, that
notwithstanding anything to the contrary contained in this Agreement, but except
as specifically provided in the proviso in Section 16.1(d), KB shall not be
obligated to provide Licensee with any information, data or know-how relating to
the formulation of quantities of Licensed Compounds delivered through the
Turbuhaler or to the filling or packaging of the Turbuhaler device, including,
without limitation, technologies or information relating to the Turbuhaler
itself.
KBI Sub shall mean KBI Sub Inc., a corporation organized and existing
under the laws of the State of Delaware.
KBI Supply Agreement shall mean that certain KBI Supply Agreement by and
between KBI and the Partnership dated as of the Amendment and Restatement Date,
as such agreement is amended, modified, supplemented or restated from time to
time.
KBI-E shall mean Astra Merck Enterprises Inc., a corporation organized and
existing under the laws of the State of Delaware.
KBI-E Asset Option Agreement shall mean that certain KBI-E Asset Option
Agreement dated as of the Amendment and Restatement Date by and among KB, TR,
KBI and KBI-E, as such agreement is amended, modified, supplemented or restated
from time to time.
KBLP shall mean KB USA, L.P., a limited partnership organized and existing
under the laws of the State of Delaware.
KB USA Compound shall have the meaning defined in the Master Restructuring
Agreement.
KB USA Product shall have the meaning defined in the Master Restructuring
Agreement.
Licensed Compound shall mean any (i) Group A Compound, (ii) Group B
Compound, or (iii) Group C Compound licensed to Licensee under Article II.
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Licensed Patents shall mean (A) those patent applications and any
divisions or continuations thereof and unexpired United States patents set forth
in Exhibit C; (B) any United States patent or patent application and any
division or continuation thereof which during the term of this Agreement is
owned by KB (or any of its Affiliates) or as to which KB (or any of its
Affiliates) has licensing rights in the Territory and (i) which claims any
Licensed Compound or compositions containing it or its methods of use, or
intermediates employed in the manufacture or preparation of such Licensed
Compound, or (ii) which claims any device for the administration of any Licensed
Compound and which device is either unique to such Compound or is used by KB (or
any of its Affiliates) in the marketing of such Compound anywhere in the world,
or (iii) which claims any of KB's Manufacturing Processes; and (C) any reissue
or extension of any of the foregoing patents.
Manufacturing Agreement shall mean that certain Second Amended and
Restated Manufacturing Agreement dated as of the Amendment and Restatement Date,
as such agreement is amended, modified, supplemented or restated from time to
time.
Market Exclusivity shall have the meaning defined in the Master
Restructuring Agreement.
Master Restructuring Agreement shall mean that certain Master
Restructuring Agreement dated as of June 19, 1998 among KB, TR, KBI, KB USA,
Inc., a corporation organized and existing under the laws of the State of New
York, KBLP, KBI-E, KBI Sub, TR Holdings, Inc., a corporation organized and
existing under the laws of the State of Delaware, and the Partnership, as such
agreement is amended, modified, supplemented or restated from time to time.
NDA shall mean a New Drug Application made in accordance with applicable
regulations and requirements of the FDA as from time to time in effect.
Net Sales shall mean for any period the total amount required to be
recorded for such period in the manner provided in Section 7.2(b) or Section
7.3(b) by Licensee and its Affiliates (or, in the case of Section 2.2(c), by KB
and its Affiliates) and its and their sublicensees, distributors and
subdistributors on its and their books and records, in each case in accordance
with the Accounting Procedures, with respect to sales in the Territory of
Compounds for any use (whether in human medicine or otherwise) to its and their
Non-Affiliates, non-sublicensees, non-distributors and non-subdistributors after
deducting (if not already deducted in the amount recorded) trade discounts,
rebates, returns and allowances, retroactive price reductions or adjustments,
and 5% of the amount recorded to cover cash discounts ("fast pay"), sales or
excise taxes, transportation, and insurance charges; provided, however, that Net
Sales shall not include sales by any sublicensee under any Required Sublicense.
If a Licensed Compound is combined with one or more other Compounds, one hundred
percent (100%) of Net Sales of such Combination shall be included. Net Sales
shall not include sales to a Person to the extent sales by such Person are
included in Net Sales.
New Process shall mean any process (or step thereof) developed or acquired
by KB (or any of its Affiliates) for the manufacture or preparation of (i) any
Licensed Compound (including
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any intermediate of such Licensed Compound or any dosage form of such Compound)
or (ii) any device for the administration thereof which is either unique to such
Licensed Compound or is used by KB (or any of its Affiliates) in the marketing
of such Compound anywhere in the world, after the date KB's Manufacturing
Process for such Licensed Compound has been satisfactorily demonstrated pursuant
to Section 4.3(c) of the TR Licenses or Section 6.04(g) or 7.05(f) of the
Manufacturing Agreement; provided, however, New Process shall not include any
such process which is licensed to KB (or any of its Affiliates) from any of KB's
Non-Affiliates, unless Licensee is sublicensed with respect to such New Process
pursuant to Section 2.7.
Non-Affiliate shall mean, with respect to any Person, any other Person
which is not an Affiliate of such Person.
Non-Performance Notice shall have the meaning defined in Section 16.2(b).
Original Execution Date shall mean July 12, 1982.
Option Notice shall have the meaning defined in Section 2.3(a).
Parenteral Form shall mean any route of administration of a Compound by
injection, including without limitation intravenous, intramuscular, subcutaneous
or intraspinal.
Partnership shall mean Astra Pharmaceuticals, L.P., a limited partnership
organized and existing under the laws of the State of Delaware.
Partnership Agreement shall mean that certain Limited Partnership
Agreement by and between KBLP, as General Partner, and KBI Sub, as Limited
Partner, dated as of the Amendment and Restatement Date, as such agreement is
amended, modified, supplemented or restated from time to time.
Party shall mean KB or Licensee.
Patent Committee shall mean a committee appointed by the Board of
Directors of KBI-E consisting of between one and three officers of KBI-E. The
members of the Patent Committee may be employees of TR, and KBI-E shall cause
the head of patent litigation at TR to be a member of such committee; provided,
however, that the Patent Committee will not include any representative of TR
from TR's research and development or marketing departments. No designee or
representative of KB may be a member of the Patent Committee.
Patent Matter shall have the meaning defined in Section 9.2(a).
Person shall mean an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture or other
entity of a similar nature.
Phase II Clinical Evaluation shall constitute, with respect to any
Compound, all tests and studies in patients which are required by the FDA from
time to time, pursuant to regulations, guidelines or otherwise, to obtain
sufficient data to initiate Phase III Clinical Evaluation of such
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Compound.
Phase III Clinical Evaluation shall constitute, with respect to any
Compound, all tests and studies using an extensive patient base which are
required to provide substantial evidence of efficacy and safety to obtain FDA
approval of an NDA for such Compound, including, but not limited to, all tests
and studies which are currently required by the FDA, pursuant to regulations,
guidelines or otherwise, as Phase III tests and studies for such Compound.
Product Composition shall mean, with respect to any Licensed Compound, the
quantitative and qualitative composition of the dosage forms, including both the
active and inert ingredients, of such Licensed Compound.
Product Definition shall mean the pharmaceutical dosage forms of a
Licensed Compound for sale, including without limitation its color, size, shape
and markings, as specified in Section 3.1(a)(i)(B).
Regulatory Outlicense shall have the meaning defined in the Master
Restructuring Agreement.
Required Sublicense shall mean any sublicense of a Licensed Compound in
the Territory, the grant of which by Licensee (or any of its Affiliates) is (x)
ordered by any decision of any administrative body or court of competent
jurisdiction which decision Licensee (or any such Affiliate) has determined not
to appeal or seek judicial review of or (y) otherwise required by law; provided,
however, any sublicense granted by Licensee (or any such Affiliate) pursuant to
a consent decree or settlement agreement entered into by Licensee (or any such
Affiliate) or pursuant to clause (y) above, without the prior consent of KB,
which consent shall not be unreasonably withheld, shall not be deemed a Required
Sublicense; provided, further, that any Regulatory Outlicense shall not be
deemed a Required Sublicense.
Selected Compounds shall have the meaning defined in the Selected
Compounds Contribution Agreement.
Selected Compounds Contribution Agreement shall have the meaning defined
in the Master Restructuring Agreement.
Selected Uses shall have the meaning defined in the Selected Compounds
Contribution Agreement.
Special Losses shall have the meaning defined in Section 12.2.
SPL shall mean Swedish Pharmaceuticals Limited, a corporation organized
and existing under the laws of the State of New York.
Subsidiary shall have the meaning defined in the Partnership Agreement
(other than the last sentence thereof).
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Technical Information shall mean all scientific and technical information,
data, and know-how possessed by KB (or any of its Affiliates) applicable to any
Licensed Compound including, without limitation, (i) research and preclinical
and clinical data; (ii) information, data and know-how relating to any device
for the administration of a Licensed Compound which is unique to such Compound
or which is used by KB (or any of its Affiliates) in the marketing of such
Compound anywhere in the world; and (iii) information, data and know-how
relating to any of KB's Manufacturing Processes.
Territory shall mean the United States of America, its territories and
possessions.
Therapeutic Category shall mean each category of disease or disorder
listed on Exhibit D.
TR shall mean Merck & Co., Inc., a corporation organized and existing
under the laws of the State of New Jersey.
TR Licenses shall mean collectively (i) that certain License and Option
Agreement between KB and SPL, made as of the Original Execution Date, and (ii)
that certain License Agreement between TR and KB Pharmaceutical Products, Inc.,
a New York corporation now known as KB USA Inc., made as of the Original
Execution Date.
Trademarks shall mean trademarks with respect to any and all Licensed
Compounds which have been, or currently or hereafter are, registered in the
Territory or for which a United States trademark application with respect to any
Licensed Compound is filed in the Territory and which during the term of this
Agreement is owned by KB (or any of its Affiliates) or as to which KB (or any of
its Affiliates) has licensing rights in the Territory. Such Trademarks include,
without limitation, Prilosec(R), Losec(R), Lexxel(R), Tonocard(R), Plendil(R),
Entocort(R), Ambicin(R), Atacand(R), Zelmid(R), Distrohaler(R), Hyprenan(R),
Mistohaler(R), Roxiam(R) and Oxeze(R).
Trigger Event shall have the meaning set forth in the Master Restructuring
Agreement.
Turbuhaler shall mean the dry powder delivery systems commonly known as
the Turbuhaler(R) system, as the same may be renamed from time to time, which
systems are primarily used for inhalation or nasal administration of Compounds,
and any modifications or variations or improvements thereto or thereof, and the
quantities of any Compound or the composition thereof contained in, delivered or
administered through such systems. Any reference to the manufacture of
Turbuhaler or Turbuhaler systems shall include the manufacture of the dry powder
delivery device, the formulation of the quantities of the Compounds for use in
the Turbuhaler(R) system from the bulk chemical form of such Compounds and the
filling and finishing of such devices and the packaging of such systems but it
shall not include the manufacture of such bulk chemical form of such Compounds.
Weighted Net Sales shall have the meaning defined in the Master
Restructuring Agreement.
ARTICLE II
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LICENSE GRANTS BY KB
Section 2.1 Group A and Group B Compounds. KB hereby grants on behalf of
itself and, with respect to the Compound tocainide, on behalf of KB USA, Inc.,
to Licensee an exclusive license under all Licensed Patents, Trademarks and
Technical Information to make, have made, use and sell each Group A Compound and
Group B Compound in any form in the Territory with the right to sublicense;
provided, however, KB (and its Affiliates) shall retain the nonexclusive,
licensable right to make, have made, use and sell any intermediate employed in
the manufacture or preparation of any Group A or Group B Compound.
Section 2.2 Group C Compounds. KB on behalf of itself and each of its
Affiliates hereby grants Licensee an option to acquire an exclusive license
under all Licensed Patents, Trademarks and Technical Information for each Group
C Compound as to which there exists at any time after November 1, 1994 either
(i) a United States patent, owned by KB (or any of its Affiliates), or as to
which KB (or any of its Affiliates) has licensing rights in the Territory,
claiming such Compound, any of its methods of use or any composition containing
it or (ii) an application (or any division or continuation thereof) for a United
States patent filed by KB (or any of its Affiliates) or as to which KB (or any
of its Affiliates) has licensing rights in the Territory claiming such Compound,
any of its methods of use or any composition containing it, to make, have made,
use and sell such Compound in any form in the Territory with the right to
sublicense, provided that:
(a) If a Group C Compound will have only an intravenous route of
administration and will not have an antibiotic, anticancer or antiviral
use, Licensee will not have an option for a license for the Territory for
such Group C Compound.
(b) If a Group C Compound is primarily for dental or anesthetic use,
Licensee will not have an option for a license for the Territory for such
Group C Compound.
(c) (i) In the case of (x) any Group C Compound acquired by or
licensed to KB (or by or to any of its Affiliates) from any of its
Non-Affiliates, including any Group C Compound acquired by (or the control
of which is acquired by) or licensed to KB (or any of its Affiliates) by
reason of the acquisition by KB (or any of its Affiliates) of a
controlling interest in any Person, (y) any Group C Compound discovered by
any Non-Affiliate of KB and jointly developed by KB (or any of its
Affiliates) and such Non-Affiliate or (z) any Group C Compound covered by
a joint research agreement entered into by KB (or any of its Affiliates)
with any of its Non-Affiliates prior to April 28, 1981, Licensee's option
for such Group C Compound will be only for such rights as KB (or any of
its Affiliates) may, consistent with applicable law or the terms of any
such acquisition, license or joint research or development agreement,
grant to Licensee, and shall be subject to any obligation of KB and its
Affiliates with respect to payments to Non-Affiliates of KB computed as a
percentage of net sales in the Territory applicable to such rights.
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(ii) In the event that KB (or such Affiliate) may not grant to
Licensee the right to make and have made any such Group C Compound in the
Territory, (A) such Compound shall be a Selected Compound as provided in
the Selected Compounds Contribution Agreement, (B) KB shall grant (or
cause to be granted) to the Partnership pursuant to this Agreement and the
Selected Compounds Contribution Agreement such rights as KB may grant for
such Compound in the Territory, in which case such Compound shall be
deemed a Group D Compound as provided in the Master Restructuring
Agreement, and such grant shall be subject to any payment and other
obligations applicable to such rights, and (C) if such rights may not be
granted to the Partnership, such Compound shall be deemed a Group E
Compound asprovided in the Master Restructuring Agreement.
(iii) In the event that any Compound is deemed a Group E
Compound, KB (or such Affiliate) shall pay to Licensee the Group E
Products Contingent Amount with respect to Net Sales by KB and its
Affiliates of products containing such Group E Compound in the manner
provided in Section 7.3; provided, however, if a Combination contains a
Group E Compound, no Group E Product Contingent Amount shall be paid to
the extent that KBI has received the Agreed ▇▇▇▇-Up (as defined in the KBI
Supply Agreement) with respect to such Combination pursuant to KBI Supply
Agreement. Subject to Section 3.14 of the Master Restructuring Agreement,
Licensee shall have no other rights, claims or demands, in law or in
equity, with respect to KB's inability to provide such rights to Licensee.
(iv) KB shall give KBI-E written notice promptly after the
acquisition or license of any such Group D Compound or Group E Compound
and of the grant of such rights to the Partnership or another Affiliate of
KB, as the case may be. Such notice shall be given no later than two
months after the Phase II Clinical Evaluation for such Compound has been
completed. With respect to any such Compound acquired by KB (or any of its
Affiliates) as to which Phase II Clinical Evaluation has been completed,
such notice shall be given no later than two months after such
acquisition.
(d) In the case of each Group C Compound, KB shall retain the
nonexclusive, licensable right to make, have made, use and sell any
intermediate employed in the manufacture or preparation of such Group C
Compound.
(e) If any Compound, other than a Licensed Compound or a Compound
covered by any patent or patent application referred to in clause (i) or
(ii) of this Section 2.2, is being marketed in the Territory by any Person
or governmental entity for use in human medicine and thereafter a new use
is discovered for such Compound and KB (or any of its Affiliates) owns, or
obtains licensing rights under, any patent or patent application for such
new use in the Territory, with the result that such Compound becomes
subject to an option pursuant to this Section 2.2, the option for such
Compound shall be limited to an option to acquire (x) an exclusive license
(subject to the exceptions provided above) from KB (or any of its
Affiliates) under such patent or patent application for such new use and
(y) a nonexclusive license under Technical Information to make,
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have made, use and sell such Compound for such new use in any form in the
Territory with the right to sublicense.
Prior to the Amendment and Restatement Date, KB granted Licensee licenses
pursuant to the terms and conditions of this Agreement for the Group C Compounds
rofleponide, remacemide, candesartan cilexetil, and perprazole (H199/18). KB
hereby confirms that licenses hereunder for such Group C Compounds are in
effect; provided, however, that the licenses for remacemide and candesartan
cilexetil are subject to the limitations summarized in Exhibit E hereto.
KB and Licensee hereby agree that the Compounds budesonide and
ropivacaine, in both cases for the treatment of inflammatory bowel disease in
humans (K50-51), are Group C Compounds and Licensed Compounds.
Section 2.3 Exercise of Option. (a) KB shall notify Licensee of each Group
C Compound with respect to which notification has not been given prior to the
Amendment and Restatement Date as to which Licensee will have an option pursuant
to Section 2.2 (an "Option Notice") no later than two months after the Phase II
Clinical Evaluation for such Compound has been completed. With respect to any
Group C Compound acquired by KB (or any of its Affiliates) as to which such
Phase II Clinical Evaluation has been completed, such Option Notice shall be
given no later than two months after such acquisition. The Option Notice shall
identify such Compound by its generic name, its tentative indications and the
patents relevant to such Compound.
(b) Subject to Section 2.3(d), simultaneously with the giving of such
Option Notice or prior thereto, KB will provide Licensee (or, at the election of
KB in the case of Distribution Compounds, the Partnership) with all relevant
information with respect to testing through the completion of Phase II Clinical
Evaluation for such Compound excluding any information regarding KB's
Manufacturing Process (the "Information Package").
(c) Subject to Section 2.3(d), from time to time after the giving of such
Option Notice KB will provide Licensee (or, at the election of KB in the case of
Distribution Compounds, the Partnership) with a reasonable quantity of samples
of such Compound, and such additional scientific, technical, and other
information in the possession of KB (or any of its Affiliates) relating to such
Compound, as Licensee (or, in the case of Distribution Compounds, the
Partnership) shall reasonably request in order to make a scientific, legal and
business evaluation of the development and marketing potential in the Territory
of such Compound; provided, however, that KB shall not be required to provide
information regarding KB's Manufacturing Process.
(d) Except as provided in the Distribution Agreement, KBI-E shall have
neither access nor any other rights with respect to the Information Package or
any samples and scientific, technical and other information made available to
the Partnership pursuant to this Section 2.3 or otherwise with respect to any
Group C Compound in the event the Partnership is the exclusive distributor of
products containing such Compound. In the event, however, that the Partnership
is
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not the exclusive distributor of products containing such Compound because it
does not wish to exercise its option to do so pursuant to Section C of the
Distribution Agreement, KBI-E shall notify KB thereof and KB shall promptly
thereafter deliver to KBI-E the Information Package, samples and other
information specified in Sections 2.3(b) and 2.3(c).
(e) Licensee shall be deemed to have exercised such option and accepted
the license for such Group C Compound if Licensee does not notify KB within one
hundred twenty (120) days of receipt of such Option Notice that it rejects a
license for such Group C Compound. If Licensee provides KB with a notice that it
rejects a license for such Group C Compound by the end of such one hundred
twenty (120) day period, the option and the rights of Licensee under this
Agreement shall terminate with respect to such Group C Compound. If Licensee
exercises such option, such Compound will become a Licensed Compound subject to
all of the terms and conditions of this Agreement.
Section 2.4 Provision for Assignment of Options. If a Trigger Event
occurs, certain options granted in Section 2.2 shall be assigned in accordance
with Section 3.15(h) of the Master Restructuring Agreement.
Section 2.5 Abandonment. (a) With respect to any Group C Compound covered
by Section 2.2 as to which KB has given, or is required to give, Licensee the
Option Notice provided in Section 2.3 and as to which Licensee has not yet
exercised its option and obtained a license pursuant to Section 2.3, KB may, for
any reason whatsoever at any time, decide that neither it nor any of its
Affiliates will develop, continue to develop, or have developed for it such
Group C Compound any place in the world (an "Abandoned Compound"). In such
event, KB shall no later than 30 days after such decision notify Licensee of
such decision and Licensee shall no longer have an option to acquire a license
for such Compound. In the event KB (or any of its Affiliates) thereafter decides
to institute or reinstitute a development program with respect to such Abandoned
Compound, KB shall no later than 30 days following such decision notify Licensee
of such decision and Licensee shall have an option to acquire a license therefor
pursuant to Sections 2.2 and 2.3 as a Group C Compound.
(b) With respect to any Group C Compound as to which KB has not given, and
will not be required to give, Licensee the Option Notice provided in Section 2.3
(but not with respect to any Group C Compound excluded under Section 2.2),
neither KB nor any of its Affiliates shall be under any obligation to Licensee
to develop, continue to develop, or have developed for it, such Compound. In the
event KB (or any of its Affiliates) decides to sell, license or transfer such an
undeveloped Compound or any indication or use of such undeveloped Compound in
the Territory to any of its Non-Affiliates, KB shall notify Licensee in writing
of its intent to sell, license or transfer such undeveloped Compound or such
indication or use and, within fifteen (15) days of receipt of such notice,
Licensee shall notify KB whether or not it will consent to such sale, license or
transfer of such undeveloped Compound or such indication or use in the
Territory, such consent not to be unreasonably withheld. If Licensee consents to
such sale, license or transfer of such undeveloped Compound or such indication
or use, KB (or such Affiliate) and Licensee shall share equally in all proceeds
received by KB (or such Affiliate) relating to the Territory in connection with
such sale, license or transfer. If Licensee does not
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consent to such sale, license or transfer of such undeveloped Compound or such
indication or use, KB shall not proceed with such sale, license or transfer of
such undeveloped Compound or such indication or use in the Territory.
(c) Licensee (or, in the case of Distribution Compounds, the Partnership)
may recall or effect a market withdrawal of a product containing a Licensed
Compound at any time, after consultation with KB. In addition, KB, after
consultation with Licensee (or, in the case of Distribution Compounds, the
Partnership), may, at any time, demand a recall or market withdrawal of a
product containing a Licensed Compound, and, if so requested, Licensee shall
(or, in the case of Distribution Compounds, Licensee shall require the
Partnership to) promptly effect such recall or market withdrawal. Licensee (or,
in the case of Distribution Compounds, the Partnership) and, if applicable, KB
(if KB has demanded such recall or market withdrawal), shall coordinate the
recall or market withdrawal. The costs relating to a recall or market withdrawal
shall be borne as set forth in the KBI Supply Agreement and the Manufacturing
Agreement.
Section 2.6 Combinations. Any Combination now or hereafter discovered,
developed or acquired (including, without limitation, any acquired by license)
by KB or Licensee (or any of their respective Affiliates) shall be treated as a
Group C Compound; provided, however, that if such Combination contains a Covered
Compound other than a Licensed Compound, such Combination shall be treated as a
Group D Compound or a Group E Compound as provided in Schedule 1.2 to the Master
Restructuring Agreement; provided, further, however, if a Combination containing
a KB USA Compound, a Group D Compound or a Group E Compound contains a Licensed
Compound, any royalties payable pursuant to Section 7.1 for the Licensed
Compound contained in such Combination shall be payable with respect to such
Combination. Such royalties shall not apply to Lexxel(R). For purposes of this
Agreement, the Combination product Logimax(R) shall not be treated as a Group C
Compound and shall be treated as a KB USA Product.
Section 2.7 Sublicense of Certain New Processes. If KB (or any of its
Affiliates) is offered a license for a New Process by a Non-Affiliate of KB and
such Non-Affiliate is willing to extend rights in the Territory to Licensee, KB
shall promptly notify Licensee of such offer and the proposed terms and
conditions thereof and, to the extent applicable under the Manufacturing
Agreement, shall provide Licensee with such information in the possession of KB
(or any of its Affiliates) relating to such New Process which KB is permitted to
disclose to Licensee by such Non-Affiliate. As promptly thereafter as
practicable, Licensee shall advise KB of its interest in obtaining a sublicense
to such New Process for the Territory. If such a sublicense is obtained, the
royalties or other amounts payable by Licensee to KB (or any of its Affiliates)
under any such sublicense, in addition to the amounts payable by Licensee to KB
pursuant to Sections 7.1 and 7.2, shall be determined in the same manner and
under the same formula as those payable by KB (or any of its Affiliates) to such
Non-Affiliate with respect to the rights sublicensed to Licensee.
Section 2.8 Licenses of Certain Rights Outside the Territory. If KB shall
consent pursuant to Section 4.08 of the Manufacturing Agreement to the
manufacture by TR or an
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Alternate Producer (either directly or through their respective Affiliates or
subcontractors) of a Product (as defined in the Manufacturing Agreement) outside
the Territory, KB shall, to the extent required, grant (and shall cause its
Affiliates to grant) to TR or such Alternate Producer, Affiliate or
subcontractor a non-exclusive license to manufacture such Product in such
country for the sole purpose of permitting TR or such Alternate Producer,
Affiliate or subcontractor to exercise its rights under Section 4.08 of the
Manufacturing Agreement solely in connection with performing its obligations
under such Manufacturing Agreement, it being understood that the grant of such
license will not imply that KB has any rights under any patents or other
intellectual property of any Non-Affiliates of KB. Notwithstanding the
foregoing, KB shall not be obligated, for purposes of permitting such
manufacturing of any such Product in any country outside the Territory, to
obtain for the benefit of Licensee or TR or any Alternate Producer, Affiliate or
subcontractor, as the case may be, any intellectual property rights with respect
to such country that are not then owned or held by KB or any of its Affiliates.
ARTICLE III
FDA APPROVAL; NEW CLAIMS; FURNISHING COMPOUNDS
Section 3.1 FDA Approval. KB and Licensee shall (or, in the case of
Distribution Compounds, Licensee shall require the Partnership to) use
reasonable efforts to obtain and maintain FDA approval of an NDA for each
Licensed Compound for use in human medicine. In furtherance thereof:
(a) Evaluation. After receipt of appropriate documentation from
KB, Licensee shall use (or, in the case of Distribution Compounds, shall require
the Partnership to use) reasonable efforts to file an IND with the FDA at its
sole cost in respect to each Licensed Compound. KB may, to the extent it deems
required or advisable, also file an IND with the FDA at its sole cost in respect
of any Licensed Compound. Each Party shall promptly notify the other of each IND
and NDA it has filed and of each FDA approval of an NDA, in respect of each
Licensed Compound; provided, however, in the case of Distribution Compounds, KB
shall provide such notice to the Partnership (rather than Licensee). Each Party
shall use reasonable efforts to complete as promptly as practicable its
obligations set forth at subparagraphs (i) and (ii) below in a manner which
complies with or exceeds FDA standards as from time to time in effect.
(i) (A) KB shall use reasonable efforts to complete for each
Licensed Compound (x) all tests, studies and other development
activities specified in, or required to obtain the information
specified in, Exhibit F hereto to the extent required by the FDA
from time to time, (y) such other tests, studies and other
development activities as may be required from time to time by the
FDA pursuant to regulations, guidelines or otherwise which are of a
similar nature to those specified in, or required to obtain the
information specified in, Exhibit F hereto, and (z) any other tests,
studies and other development activities which are of a similar
nature to those specified in clause (x) or (y) above and which would
in the
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reasonable judgment of Licensee (or, in the case of Distribution
Compounds, the Partnership), after consultation with KB, expedite
materially FDA approval of an NDA for such Licensed Compound or are
necessary or advisable to maintain such approval; provided, however,
the total of all tests, studies, and other development activities
under clause (z) shall not unreasonably exceed the tests, studies,
and other development activities specified in clauses (x) and (y).
If any tests, studies or other development activities to be
performed by KB hereunder for such Licensed Compound are required by
the FDA to be performed in the Territory, Licensee shall (or, in the
case of Distribution Compounds, Licensee shall require the
Partnership to), at the request of KB, use reasonable efforts to
perform, or to contract for the performance of, such tests, studies
or other development activities in the Territory, and KB shall
reimburse Licensee (or, in the case of Distribution Compounds, the
Partnership) for Licensee's (or any of its Affiliates') (or, in the
case of the Distribution Compounds, the Partnership's or any of its
Subsidiaries') out-of-pocket costs incurred in such performance.
(B) KB shall notify Licensee (or, in the case of
Distribution Compounds, the Partnership) of KB's Product Definition
and Product Composition for such Licensed Compound as soon as
reasonably available. If Licensee (or, in the case of Distribution
Compounds, the Partnership) desires a Product Definition different
from KB's Product Definition for such Licensed Compound, Licensee
(or, in the case of Distribution Compounds, the Partnership) shall
consult with KB and notify KB of Licensee's (or, in the case of
Distribution Compounds, the Partnership's) Product Definition for
such Licensed Compound, which shall be reasonably related to KB's
Product Composition for such Licensed Compound. KB shall use
reasonable efforts to develop Licensee's (or, in the case of
Distribution Compounds, the Partnership's) Product Definition.
Licensee shall (or, in the case of Distribution Compounds, Licensee
shall require the Partnership to) reimburse KB for the Full Costs
incurred by KB (and its Affiliates) in developing Licensee's (or, in
the case of Distribution Compounds, the Partnership's) Product
Definition for such Licensed Compound and in developing the Dosage
Form Information specified in Exhibit F for Licensee's (or, in the
case of Distribution Compounds, the Partnership's) Product
Definition.
(C) The Parties will consult as to whether any tests,
studies or other development activities of the nature described at
subparagraph (A) above are required to be performed with respect to
any reference drug or placebo for such Licensed Compound; provided,
however, in the case of Distribution Compounds, KB shall consult
with the Partnership. KB will use reasonable efforts to perform such
tests, studies or other development activities, and Licensee will
pay (or, in the case of Distribution Compounds, Licensee will
require the Partnership to pay) to KB the Full Costs incurred by KB
(and its Affiliates) for such performance.
(D) KB shall prepare and provide to Licensee (or, in the
case of Distribution Compounds, the Partnership), at no charge to
Licensee (or, in the
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case of Distribution Compounds, the Partnership) (except as provided
above), all appropriate documentation relating to the tests, studies
and other development activities referred to in subparagraphs (A),
(B) and (C) above for such Licensed Compound including, without
limitation, the results of, and supporting data and information for,
all such tests, studies and other development activities. Licensee
(or, in the case of Distribution Compounds, the Partnership) shall
be entitled to use such documentation and results, data and
information to obtain or maintain FDA approval of an NDA for such
Compound, and to incorporate such documentation and results, data
and information in any filings with the FDA for such Compound.
(ii) After Phase II Clinical Evaluation for a Licensed
Compound has been completed, Licensee shall (or, in the case of
Distribution Compounds, Licensee shall require the Partnership to)
use reasonable efforts to complete, (x) all Phase III Clinical
Evaluation and (y) all tests and studies in humans, other than those
contemplated by Section 3.1(a)(i) above, necessary or advisable to
obtain and maintain FDA approval of an NDA for such Compound.
Licensee (or, in the case of Distribution Compounds, the
Partnership) may, where special research and development expertise
exists, after consultation with KB, conduct outside the Territory
specific tests and studies which are required by the FDA to be
performed for Phase III Clinical Evaluation of such Compound; in
such event, KB shall agree with Licensee (or, in the case of
Distribution Compounds, the Partnership) on the appropriate
regulatory documentation required to permit such tests and studies.
After the completion of all tests, studies and other development
activities and the preparation of all data and other information,
necessary or appropriate to obtain FDA approval of an NDA for such
Compound, Licensee (or, in the case of Distribution Compounds, the
Partnership) shall use reasonable efforts to obtain such approval.
(iii) Licensee shall (or, in the case of Distribution
Compounds, Licensee shall require the Partnership to) provide KB
free-of-charge with such of the results of, and supporting data and
information for, any tests and studies performed by Licensee (or any
of its Affiliates) (or, in the case of Distribution Compounds, by
the Partnership or any of its Subsidiaries on behalf of Licensee)
pursuant to Section 3.1(a)(ii) hereof for any Licensed Compound
which KB shall request after review with Licensee (or, in the case
of Distribution Compounds, the Partnership) of the material
available, with authority to KB, its Affiliates or any licensee or
sublicensee thereof to use and make reference thereto.
(iv) If, after manufacturing of any Licensed Compound has been
commenced, there are changes in the method of synthesis, the final
composition of dosage forms, or the Product Definition of such
Licensed Compound such that the FDA requires any additional tests,
studies or other development activities, then Licensee shall (or, in
the case of Distribution Compounds, Licensee shall require the
Partnership to) use reasonable efforts to perform, at its own
expense,
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such additional tests, studies or other development activities.
(b) Regulatory Approval Cooperation. Licensee recognizes KB's
interest in maintaining a consistent profiling of each Licensed Compound
worldwide. In furtherance thereof, the Parties shall, in respect of all tests,
studies and other development activities to be performed in accordance with
Section 3.1(a) hereof, consult on product profiling; provided, however, in the
case of Distribution Compounds, KB shall consult with the Partnership, and
Licensee shall require the Partnership to consult with KB. In addition, to the
extent legal and practicable, the Parties shall consult periodically to review
the planning and the progress of all preclinical and clinical tests, studies and
other development activities for each Licensed Compound; provided, however, in
the case of Distribution Compounds, KB shall consult with the Partnership, and
Licensee shall require the Partnership to consult with KB. Each Party shall (i)
inform the other Party of all meetings with representatives of the FDA
concerning any Licensed Compound, (ii) arrange for representatives of the other
Party to attend such meetings as observers, and (iii) forward to the other Party
summaries of such meetings and copies of other significant communications with
representatives of the FDA concerning any Licensed Compound; provided, however,
that in the case of Distribution Compounds, KB shall inform the Partnership
(rather than Licensee) of such meetings and arrange for representatives of the
Partnership (rather than Licensee) to attend such meetings and forward to the
Partnership (rather than Licensee) such summaries and copies.
Section 3.2 New Claims or Formulations. The Parties shall consult from
time to time on an ad hoc basis regarding preclinical and clinical tests,
studies and other development activities relating to additional claims or
formulations for any Licensed Compound for which approval of a new or
supplemental NDA will be sought from the FDA; provided, however, in the case of
Distribution Compounds, KB shall consult with the Partnership, and Licensee
shall require the Partnership to consult with KB.
ARTICLE IV
MARKETING AND MANUFACTURING
Section 4.1 Commencement; Continuation. (a) Subject to the obligations of
KB as provided in the Clinical Supply Agreement and of any Producer as provided
in the Manufacturing Agreement, Licensee shall use reasonable efforts to cause
to be commenced and continued the manufacture of each Licensed Compound.
(b) Subject to the obligations of the Producers as provided in the
Manufacturing Agreement, during the period of Market Exclusivity with respect to
a Licensed Compound, Licensee shall use reasonable efforts to begin and to
continue the marketing, distribution and sale of each such Licensed Compound in
the Territory as promptly as practicable after the FDA has approved an NDA for
such Licensed Compound; provided, however, that Licensee shall not be required
to market a product containing a Licensed Compound if such product is
discontinued for reasons of safety or efficacy. For purposes of this Section
4.1(b), (i) a Compound shall be
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deemed to be in one or more Therapeutic Categories based on its approved
indications, and (ii) subject to Section 15.9, reasonable efforts with respect
to any Licensed Compound in a Therapeutic Category shall be satisfied if such
efforts are used with respect to the totality of Covered Compounds (taken as a
whole) in such Therapeutic Category. If the efforts employed by Licensee for the
totality of Covered Compounds (taken as a whole) in a specific Therapeutic
Category are reasonable in the aggregate, the requirement of reasonable efforts
for each Licensed Compound in such Therapeutic Category will be deemed
satisfied.
Section 4.2 Quality in Marketing. Licensee shall (or, in the case of
Distribution Compounds, Licensee shall require the Partnership to) maintain
standards with respect to the quality of marketing and promotion of each
Licensed Compound as follows: such standards shall be at least at a level
equivalent to the standards then employed by KB with respect to its Compounds,
as such standards may be set forth by KB by reasonable advance notice to
Licensee (or, in the case of Distribution Compounds, the Partnership) from time
to time. KB shall have the right to have the marketing and promotional standards
of Licensee (or, in the case of Distribution Compounds, the Partnership)
reviewed by a Non-Affiliate of KB of nationally-recognized standing (except a
Non-Affiliate to whom Licensee (or, in the case of Distribution Compounds, the
Partnership) has some reasonable objection) for the sole purpose of determining
that this policy is followed. To the extent legal, Licensee shall (or, in the
case of Distribution Compounds, Licensee shall require the Partnership to)
furnish KB for each Licensed Compound with monthly sales reports by dosage form
and strength and, to the extent requested by KB, copies of proposed labeling and
package inserts, and copies or other representations of advertising and other
promotional materials.
ARTICLE V
[OMITTED]
ARTICLE VI
SUBLICENSES
The Partnership has been appointed the sole and exclusive distributor of
the Distribution Compounds pursuant to the Distribution Agreement. Any
sublicense or distribution arrangement granted hereunder shall refer to this
Agreement and to the extent appropriate any such sublicense shall require the
sublicensee to assume and comply with all of the obligations of Licensee
hereunder. Any such sublicense or distribution arrangement shall be subject and
subordinate to this Agreement and shall terminate automatically upon any
termination of the license hereunder pursuant to which it is granted. Licensee
shall require any such sublicensee or distributor to enter into an undertaking
pursuant to which provisions in the same form as those contained in Section 10.2
and Article XII shall apply directly between such sublicensee or distributor and
KB. Licensee shall furnish KB with any such undertaking and a copy of any such
sublicense or distribution arrangement promptly upon executing same.
Notwithstanding the above, Licensee
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shall not be relieved of its obligation to perform its obligations hereunder
fully and faithfully by reason of such sublicense or distribution arrangement.
ARTICLE VII
PAYMENTS
Section 7.1 Royalties. (a) Royalty Period. Subject to the terms and
conditions hereof, Licensee shall pay royalties with respect to sales of
Licensed Compounds, at the rates and times and in the manner provided in this
Section 7.1 and Section 7.2. Such royalties shall be payable with respect to
sales of each such Licensed Compound during the longer of (x) such period as
there is an unexpired, valid and enforceable United States patent (whenever
issued, whether before or after First Commercial Sale of such Licensed Compound)
owned by KB (or any of its Affiliates), or under which KB (or any of its
Affiliates) has licensing rights in the Territory, which claims (i) such
Licensed Compound, (ii) the composition in which such Compound is sold by
Licensee, or (iii) the method of use for which such Compound is sold by
Licensee, or any of its Affiliates, or its or their sublicensees or
distributors; provided, however, that any such patent shall not be deemed
unenforceable if such patent has been rendered unenforceable by reason of the
misuse or misconduct of Licensee not involving misuse or misconduct by KB (or
any of its Affiliates) as reflected by a final decision (including any appeal or
judicial review) of any administrative body or court of competent jurisdiction,
and (y) the seven year period following the First Commercial Sale of such
Licensed Compound, as consideration for the Technical Information and Trademarks
licensed by KB (and its Affiliates) hereunder, and (z) any period of Market
Exclusivity with respect to any uses or indications for which such Licensed
Compound has been approved by the FDA.
(b) Amount. (i) (x) Licensee shall pay royalties solely with respect
to Group C Compounds licensed pursuant to Article II for each
Calendar Year in an amount equal to 10% of Net Sales of such
Compounds during such Calendar Year, and (y) no royalties shall be
payable with respect to Group A and Group B Compounds.
(ii) For purposes of calculating royalties for each Calendar
Year, Net Sales shall include only Net Sales of each Licensed
Compound for such portion of such Calendar Year as the sales of such
Licensed Compound are covered by clause (x) or (y) or (z) of
paragraph (a) above.
(c) Required Sublicenses. In addition to the royalties payable
pursuant to paragraph (b) above, Licensee shall pay royalties to KB with respect
to sales of any Licensed Compound by any sublicensee under a Required Sublicense
during each portion of each Calendar Year that royalties would be payable by
Licensee pursuant to paragraph (b) above with respect to such Licensed Compound
assuming there were sales of such Licensed Compound by Licensee during such
portion of such Calendar Year. Such royalties payable by Licensee for such
Calendar Year shall equal 87-1/2 % of the amount received by Licensee (and its
Affiliates)
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from such sublicensee as royalties with respect to such Licensed Compound for
such Calendar Year under such Required Sublicense.
Section 7.2 Payment, Reports and Records. (a) Payment. After First
Commercial Sale of any Licensed Compound for which royalties are payable
hereunder, Licensee shall render to KB within 30 days after the end of each
calendar quarter a royalty report for such quarter as to the royalty payments
due under this Article VII for such quarter and concurrent therewith Licensee
shall pay the royalty payment due for such quarter. The royalty report shall
state, in reasonable detail, Net Sales of each Licensed Compound with respect to
which royalties are payable and the amount of royalties due with respect to such
quarter. The royalty payment due for each quarter of any Calendar Year shall be
an amount equal to (x) the aggregate royalties due with respect to such Calendar
Year through the end of such quarter less (y) the aggregate royalties
theretofore paid with respect to such Calendar Year. All royalties payable
pursuant to this Article VII shall be paid in the aggregate to KB or to a Person
designated by KB as agent. All such royalty payments shall be made in United
States dollars in immediately available funds and to such place in the Territory
as KB may specify by notice to Licensee from time to time. If restrictions exist
or are imposed which prevent payment or the transfer thereof in United States
dollars, the Parties shall cooperate, at KB's expense, to eliminate such
restrictions or otherwise to permit transfer of such dollars. If payment in such
dollars shall not be lawful, then, at the request of KB, Licensee will, to the
extent lawful and at KB's expense, deposit the amount thereof in an interest
bearing account in the Territory designated by KB, make payments in Swedish
kronor in the Territory at the then prevailing rate of exchange, or otherwise
dispose of such dollars in the Territory in accordance with such request. If any
royalty payments have been made for any period and it is subsequently determined
that such royalty payments total less or more than the aggregate royalty
payments required to be made pursuant to this Article VII, Licensee or KB shall
pay promptly to the other such amount as will result in the aggregate royalties
actually paid for such period equaling those required to be paid for such
period.
(b) Recordkeeping; Inspection. Licensee shall keep, and shall cause
its Affiliates, sublicensees and distributors to keep, true, accurate and
complete records of total quantities of Licensed Compounds sold and the Net
Sales thereof in sufficient detail to permit determination of royalties payable
hereunder. At the request and expense of KB, KB shall have the right for its
then currently engaged independent accountants to have reasonable access at all
reasonable times upon reasonable prior notice during normal business hours, to
audit and examine, and make copies or extracts of and from, the books, records
and accounts of Licensee and its Affiliates, sublicensees and distributors as
may be necessary in such accountant's judgment to permit it to attest that the
royalties paid or payable hereunder conform to the terms of this Agreement. Such
rights of access, audit and inspection for any Calendar Year shall terminate two
years after the close of each Calendar Year in respect of royalties paid or
payable for such Calendar Year. KB shall enter into a written engagement with
such accountants, a copy of which shall be provided to Licensee, providing that
(i) the scope of the engagement with respect to such audit and examination is
limited to the rights provided in this Section 7.2(b) and, if the audit is
performed in connection with another audit permitted by any other agreement
between an Affiliate, sublicensee or distributor of KB and Licensee, the rights
of such Affiliate, sublicensee or distributor under such other agreement, (ii)
such accountants agree to use
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reasonable efforts, consistent with their professional responsibility, the
availability of materials and information and the level of assistance received,
to conclude the audit and examination within a reasonable period of time, and
(iii) such accountants agree to keep any such information to which they have
access pursuant to the foregoing confidential and not to disclose to KB (or any
of its Affiliates, sublicensees and distributors) any information other than
information relating to the accuracy of such determination and the conformance
of Licensee's computation of the royalties paid or payable hereunder with the
terms of this Agreement and in no event shall quantities or prices or rebates to
individual customers be disclosed to KB (or any of its Affiliates, sublicensees
and distributors) or any other Person. Notwithstanding the foregoing, KB shall
not, during the period from December 15 of any Calendar Year through January 31
of the following Calendar Year, exercise its rights of access, audit and
inspection under this Section and, during the period from February 1 through the
last day of February of any Calendar Year, exercise such rights with respect to
the activities of Licensee during the last calendar quarter of the prior
Calendar Year.
(c) Taxes. Any taxes which Licensee may be required to deduct or
withhold under then applicable laws of the Territory on royalties payable
hereunder may be so deducted or withheld and paid over by Licensee to the
appropriate authorities. Insofar as practicable, Licensee shall advise KB in
advance of such deduction or withholding and shall furnish KB with receipts and
with other information reasonably requested by KB evidencing such deductions or
withholdings. KB shall have the right at its expense to contest any such
deduction or withholding in its own name or, with Licensee's consent, which
consent shall not be unreasonably withheld, the name of Licensee.
Section 7.3 Group E Payments, Reports, Records and Forecasts. (a) Payment.
After First Commercial Sale by KB or any of its Affiliates or sublicensees or
its or their distributors or subdistributors of any Group E Compound for which
payments in respect of the Group E Products Contingent Amount are required
pursuant to Section 2.2(c) ("Group E Payments"), KB shall render to KBI-E within
30 days after the end of each calendar quarter a payment report for such quarter
as to the Group E Payments due under Section 2.2(c) for such quarter, and
concurrent therewith KB shall pay the Group E Payment due for such quarter. Such
report shall state, in reasonable detail, Net Sales of each such Group E
Compound with respect to which Group E Payments are payable and the amount of
Group E Payments due with respect to such quarter. The Group E Payments due for
each quarter of any Calendar Year shall be an amount equal to (x) the aggregate
Group E Payments due with respect to such Calendar Year through the end of such
quarter less (y) the aggregate Group E Payments theretofore paid with respect to
such Calendar Year. All such payments shall be made in United States dollars in
immediately available funds and to such place in the Territory as KBI-E may
specify by notice to KB from time to time. If any Group E Payments have been
made for any period and it is subsequently determined that such Group E Payments
total less or more than the aggregate Group E Payments required to be made
pursuant to this Agreement, KBI-E or KB shall pay promptly to the other such
amount as will result in the aggregate Group E Payments actually paid for such
period equaling those required to be paid for such period
(b) Recordkeeping; Inspection. KB shall keep, and shall cause its
Affiliates,
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sublicensees and distributors to keep, true, accurate and complete records of
total quantities of Group E Compounds sold and the Net Sales thereof in
sufficient detail to permit determination of Group E Payments payable hereunder.
At the request and expense of KBI-E, KBI-E shall have the right for its then
currently engaged independent accountants to have reasonable access at all
reasonable times upon reasonable prior notice during normal business hours, to
audit and examine, and make copies or extracts of and from, the books, records
and accounts of KB and its Affiliates, sublicensees and distributors as may be
necessary in such accountant's judgment to permit it to attest that the Group E
Payments paid or payable hereunder conform to the terms of this Agreement. Such
rights of access, audit and inspection for any Calendar Year shall terminate two
years after the close of each Calendar Year in respect of Group E Payments paid
or payable for such Calendar Year. KBI-E shall enter into a written engagement
with such accountants, a copy of which shall be provided to KB, providing that
(i) the scope of the engagement with respect to such audit and examination is
limited to the rights provided in this Section 7.3(b) and, if the audit is
performed in connection with another audit permitted by any other agreement
between an Affiliate, sublicensee or distributor of KBI-E and KB, the rights of
such Affiliate, sublicensee or distributor under such other agreement, (ii) such
accountants agree to use reasonable efforts, consistent with their professional
responsibility, the availability of materials and information and the level of
assistance received, to conclude the audit and examination within a reasonable
period of time, and (iii) such accountants agree to keep any such information to
which they have access pursuant to the foregoing confidential and not to
disclose to KBI-E (or any of its Affiliates, sublicensees and distributors) any
information other than information relating to the accuracy of such
determination and the conformance of KB's computation of the Group E Payments
with the terms of this Agreement and in no event shall quantities or prices or
rebates to individual customers be disclosed to KBI-E (or any of its Affiliates,
sublicensees and distributors) or any other Person. Notwithstanding the
foregoing, KBI-E shall not, during the period from December 15 of any Calendar
Year through January 31 of the following Calendar Year, exercise its rights of
access, audit and inspection under this Section and, during the period from
February 1 through the last day of February of any Calendar Year, exercise such
rights with respect to the activities of KB during the last calendar quarter of
the prior Calendar Year.
(c) Forecasts. KB shall prepare, or cause to be prepared, and
deliver to KBI-E forecasts of aggregate Net Sales and Weighted Net Sales of
Group E Products on March 1, June 1, September 1, and December 1 of each year;
provided, however, that the foregoing requirements will be satisfied by the
delivery of such forecasts that have been prepared no more than ninety (90) days
prior to, and have been updated as of, each of March 1, June 1, September 1, and
December 1, respectively, of the year in which they are delivered to KBI-E. Each
such forecast shall include (i) a forecast for the calendar quarter in which
such forecast is required to be delivered, each of the calendar quarters in the
remainder of such Calendar Year and (except in the case of the March forecast)
each of the four (4) calendar quarters in the next succeeding Calendar Year and
(ii) forecasts of the aggregate Net Sales and the Combined Weighted Net Sales of
Tiered Rate Products (as defined in the Master Restructuring Agreement) for each
of such calendar quarters.
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ARTICLE VIII
GROUP A COMPOUNDS AND GROUP B COMPOUNDS
With respect to the Group A Compounds set forth in Exhibit A to the
Original Agreement, the Parties acknowledge that (i) the licenses for the
Compounds foscarnet and budesonide were terminated and all rights in the
Territory to such Compounds were returned to KB and (ii) KB confirms that the
development of the Compound zimelidine was discontinued.
With respect to the Group B Compounds set forth in Exhibit B to the
Original Agreement, KB confirms that the license for prenalterol was terminated
by TR and all rights in the Territory to such Compound were returned to KB, and
that the development of the Compounds H38-03, enprofylline, alaproclate, FLA 336
and FLA 731 (remoxipride) was discontinued.
ARTICLE IX
PATENT APPLICATIONS; INFRINGEMENT
Section 9.1 Applications. (a) KB will, at its expense, use reasonable
efforts to prosecute (i) with respect to each Licensed Compound, all patent
applications included within Licensed Patents, and (ii) with respect to each
Group C Compound for which KB has given, or is required to give, Licensee an
Option Notice under Section 2.3 hereof, all patent applications which would be
included within Licensed Patents if such Group C Compound were a Licensed
Compound. KB will use reasonable efforts to prosecute any interference
proceedings involving such applications or patents issued on such applications.
Such applications or proceedings will not be abandoned prior to a final decision
of the Patent Office Board of Appeals or Patent Office Board of Interferences
without consent of Licensee, which consent will not be unreasonably withheld
taking into consideration, inter alia, the merits of the action of the United
States Patent and Trademark Office, priority dates provable by any interference
party (should an application or patent be involved in interference) and the
technological and commercial importance of the subject matter of the claims of
the application or patent. KB shall keep Licensee informed of developments and
at the request of Licensee will furnish Licensee with copies of any such
applications and papers filed in or by the Patent and Trademark Office relating
thereto. Notwithstanding the foregoing, with respect to any Group C Compound as
to which KB has notified Licensee in accordance with Section 2.3, and Licensee
has failed to exercise its option within the period specified in Section 2.3
hereof, KB will have no further obligation to Licensee relating to the
prosecution of any patent application relating thereto.
(b) Licensee shall take any action necessary or appropriate to preserve
its rights with respect to any Licensed Patent hereunder in connection with, and
shall cooperate with KB in, the prosecution of any appeal of an adverse final
decision of the Patent and Trademark Office pending before any judicial or
administrative body which was initiated prior to November 1, 1994 with respect
to any Licensed Patent. Within ninety (90) days of the Amendment and
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Restatement Date, KB shall advise Licensee of any appeals of any adverse final
decisions by the Patent and Trademark Office pending before any judicial or
administrative body as of such date. KB and Licensee shall consult following an
adverse final decision by the Patent and Trademark Office rendered after
November 1, 1994 to determine whether or not to appeal such final decision to
the courts. In the event that KB, in its sole judgment, concludes that an appeal
is justified, KB shall prosecute such an appeal and bear all expenses of
prosecuting it. In the event that KB determines not to prosecute an appeal, it
shall give Licensee notice in time to permit Licensee, if it so elects, to
prosecute an appeal, and in such event will execute (and will cause its
Affiliates to execute) all papers necessary to permit Licensee to proceed with
such an appeal either in the name of KB (or any of its Affiliates), in the name
of the applicants, or in Licensee's own name. In the event that Licensee
prosecutes an appeal in accordance with this Section 9.1, it will be reimbursed
by KB for Licensee's expenses only if such appeal results in reversal, in whole
or in substantial part, of the decision of the Patent and Trademark Office.
(c) In connection with all matters governed by this Section 9.1, Licensee
shall act solely through the Patent Committee and shall be represented solely by
Approved Counsel. Approved Counsel will communicate with Licensee only through
the Patent Committee. The Patent Committee shall be subject to a strict
obligation of confidentiality not to transmit to TR or any other Person, and to
prevent the transmission to TR or any other Person (except as permitted by
Section 9.2(b)(iii)) of, confidential information obtained or provided to it in
connection with any such matter, without the prior written consent of KB. The
Patent Committee shall not disclose any confidential information obtained or
provided to it in connection with any such matter to the Board of Directors of
Licensee or to any officers of Licensee (other than those officers of Licensee
who are also members of the Patent Committee) without the prior written consent
of KB. The Patent Committee may provide summaries and analyses of information
provided to it by KB to the Board of Directors of Licensee (which shall be
subject to a strict obligation of confidentiality not to transmit to TR or any
other Person, and to prevent the transmission to TR or any other Person, of
confidential information provided to it) to the extent necessary for Licensee's
Board of Directors to discharge its fiduciary duties.
Section 9.2 Infringement. (a) Each Party shall give prompt notice to the
other of any infringement, potential infringement or suspected infringement
(including, without limitation, any Generic Challenge Certification) in the
Territory with respect to any Licensed Patent (a "Patent Matter") that may come
to such Party's attention; provided, however, that neither Party shall be
obligated to notify the other Party of any De Minimis Infringement. Promptly
thereafter, the Parties shall consult and cooperate fully to determine a course
of action, including but not limited to the commencement of legal action by one
or both Parties, with respect to any Patent Matter as to which notice shall have
been given pursuant to the preceding sentence. The Parties will share equally in
the costs of any agreed upon course of action to ▇▇▇▇▇ any Patent Matter,
including the costs of any legal action commenced. Failing agreement on a course
of action to ▇▇▇▇▇ such Patent Matter within sixty (60) days (thirty (30) days
in the case of a Generic Challenge Certification or such shorter time period, if
any, as may be necessary to satisfy any statutory or regulatory deadline) after
such notice has been given to the other Party, either Party shall have the right
(subject to the terms and provisions of this Article IX) at its own expense to
initiate and prosecute an action against the third party infringer or to join in
such an
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action brought by the other Party if it elects to do so or if it is a necessary
party. In the event either Party is unable to initiate and prosecute such an
action solely in its own name, the other Party will join in the suit or will
execute (and cause its Affiliates to execute) all documents necessary to permit
the Party initiating such action to initiate and prosecute such action solely in
its own name. Notwithstanding anything to the contrary contained herein, in
pursuing any rights under this Article IX, Licensee shall give no consideration
to its and its Affiliates' commercial interests other than its interests under
this Agreement.
(b) In connection with all Patent Matters, Licensee shall act solely
through the Patent Committee and shall be represented solely by Approved
Counsel. Approved Counsel will communicate with Licensee only through the Patent
Committee. The Patent Committee shall be subject to a strict obligation of
confidentiality not to transmit to TR or any other Person, and to prevent the
transmission to TR or any other Person (except as permitted by Section
9.2(b)(iii)) of, confidential information obtained or provided to it in
connection with any Patent Matter, without the prior written consent of KB. The
Patent Committee shall not disclose any confidential information obtained or
provided to it in connection with any Patent Matter to the Board of Directors of
Licensee or to any officers of Licensee (other than those officers of Licensee
who are also members of the Patent Committee) without the prior written consent
of KB. The Patent Committee may provide summaries and analyses of information
provided to it by KB to the Board of Directors of Licensee (which shall be
subject to a strict obligation of confidentiality not to transmit to TR or any
other Person, and to prevent the transmission to TR or any other Person, of
confidential information provided to it) to the extent necessary for Licensee's
Board of Directors to discharge its fiduciary duties. KBI-E agrees that no
member of its Board of Directors shall have or be in research and development,
sales or marketing functions at or for TR or any of its Affiliates, assignees or
subcontractors. KB will supply information solely to the Patent Committee and
Approved Counsel as follows:
(i) To the extent Licensee initiates, joins or otherwise becomes
a party to a patent enforcement suit to ▇▇▇▇▇ a Patent Matter, Approved
Counsel (and, except as herein provided, no other Person) will have access
to all relevant information in KB's or its Affiliates' possession or
control, including privileged or work product-protected information, if KB
and Licensee have entered into an agreement substantially in the form of
Exhibit G reflecting their joint and common interest and setting forth the
procedures for exchanging and protecting privileged and work
product-protected information (the "Common and Joint Interest Agreement")
which KB and Licensee agree to enter into in the event of a Patent Matter.
All such information shall be deemed confidential under such a Common and
Joint Interest Agreement. Information provided by KB to Approved Counsel
will not be provided by Approved Counsel to the Patent Committee unless
(A) such confidential information is contained in pleadings, produced in
discovery or entered as evidence in connection with such patent
enforcement suit and is not subject to an applicable protective order;
provided, however, that KB shall use reasonable efforts to provide in any
such protective order that such disclosure by Approved Counsel to the
Patent Committee is permissible, or (B) Approved Counsel determines that
such information is necessary for the Patent Committee to evaluate
Licensee's rights or a potential settlement or to make strategic or
tactical decisions concerning such suit.
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Information related to such suit produced by third parties to KB or
Licensee, by subpoena or otherwise, also shall be deemed confidential
under either such a Common and Joint Interest Agreement or the
confidentiality provisions of this Agreement, as applicable. All of the
information referred to above may in no event be provided to TR (other
than to employees of TR who are members of the Patent Committee).
(ii) If Licensee determines not to initiate, join or otherwise
become a party to such a suit, the Patent Committee and Approved Counsel
will have the right to receive from KB copies of all pleadings and other
filings and regular summaries of the status of any such suit commenced by
KB and may meet with and discuss such suit with KB's counsel in such
matter; provided, however, that Licensee shall have access to privileged
or work product-protected information only if KB and Licensee have entered
into a Common and Joint Interest Agreement which KB and Licensee agree to
enter into in the event of a Patent Matter. The Patent Committee also will
be entitled to receive from KB all information in KB's possession that
Approved Counsel determines is reasonably necessary for the Patent
Committee to evaluate any potential settlement.
(iii) In addition to the information to be provided to the Patent
Committee by KB as set forth herein, Approved Counsel and the Patent
Committee may obtain such assistance, advice, expertise and other support
as either of them deems appropriate from other Persons or experts who may
be either (A) Persons unaffiliated with KB or TR or any of their
respective Affiliates or (B) provided that there is no disclosure of
confidential information without the prior written consent of KB,
employees of TR or any of its Affiliates; provided, however, the Patent
Committee may not consult any legal counsel other than Approved Counsel.
(iv) Out-of-pocket costs incurred by KB in connection with its
obligations under Sections 9.2(b)(i) and (ii) shall be borne by Licensee.
(c) (i) To the extent KB initiates, joins or otherwise becomes a
party to a patent enforcement suit to ▇▇▇▇▇ a Patent Matter, KB will have access
to all relevant information in Licensee's or its Affiliates' possession or
control, including privileged or work product-protected information, if KB and
Licensee have entered into a Common and Joint Interest Agreement which KB and
Licensee agree to enter into in the event of a Patent Matter. All such
information shall be deemed confidential under such a Common and Joint Interest
Agreement. Information related to such suit produced by third parties to KB or
Licensee, by subpoena or otherwise, also shall be deemed confidential under
either such a Common and Joint Interest Agreement or the confidentiality
provisions of this Agreement, as applicable.
(ii) If KB determines not to initiate, join or otherwise become a
party to such a suit, KB will have the right to receive from Licensee
copies of all pleadings and other filings and regular summaries of the
status of any such suit commenced by Licensee and may meet with and
discuss such suit with Licensee's counsel in such matter; provided,
however, that KB shall have access to privileged or work product-protected
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information only if KB and Licensee have entered into a Common and Joint
Interest Agreement which KB and Licensee agree to enter into in the event
of a Patent Matter. KB also will be entitled to receive from Licensee all
information in Licensee's possession that KB determines is reasonably
necessary for KB to evaluate any potential settlement.
(iii) In addition to the information to be provided to KB by
Licensee as set forth herein, KB may obtain such assistance, advice,
expertise and other support as it deems appropriate from other Persons or
experts.
(iv) Out-of-pocket costs incurred by Licensee in connection with
its obligations under Sections 9.2(c)(i) and (ii) shall be borne by KB.
(d) Each Party will have the right to participate and join in
actions initiated by the other Party to ▇▇▇▇▇ a Patent Matter; provided,
however, that Licensee will defer to KB with respect to strategic and tactical
matters in the conduct of such actions if Licensee determines in its sole
discretion at the time of the litigation or dispute that its rights are being
adequately protected by KB; provided, further, however, that (i) KB will have
the exclusive right to control on behalf of Licensee patent infringement actions
against TR or any of TR's Affiliates related to a Patent Matter and (ii)
Licensee will have the exclusive right to control on behalf of Licensee patent
infringement actions against KB or any of KB's Affiliates related to a Patent
Matter. Solely for purposes of this Section 9.2(d), (i) the term "TR's
Affiliates" shall mean all entities in which TR has a material financial
interest; (ii) the term "KB's Affiliates" shall mean all entities in which KB
has a material financial interest; and (iii) "material financial interest" shall
mean an interest in any entity in which TR or KB, as applicable, directly or
indirectly controls, through share ownership or contract, the election of 30% or
more of the board of directors or 30% or more of the voting power.
(e) Neither Party may enter into any settlement of any Patent Matter
without the prior written consent of the other Party, which consent will not be
unreasonably withheld, provided, however, that:
(i) Subject to Sections 9.2(e)(iii) and (iv), KB may settle
without Licensee's consent any Patent Matter (except for any action which
Licensee has initiated or joined or to which it has otherwise become a
party) involving a third party that owns or has licensing rights to
non-United States pharmaceutical patents or patent applications (whether
or not such non-United States pharmaceutical patents or patent
applications are in controversy) if the settlement does not (A) impose
injunctive relief or other restrictions on Licensee or any sublicensee, or
(B) permit such third party to carry out in the Territory acts which
could, absent permission from the proper owner of rights under a patent,
be construed by Licensee in its reasonable judgment as constituting
infringement of a Licensed Patent. Licensee may not initiate any action
against such third party with respect to any matter settled pursuant to a
settlement permitted by this Section 9.2(e)(i) subsequent to such
settlement.
(ii) Subject to Sections 9.2(e)(iii) and (iv), either Party may
settle without
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the other Party's consent any Patent Matter (except for any action which
the other Party has initiated or joined or to which it has otherwise
become a party) involving a third party that does not own or have
licensing rights to non-United States pharmaceutical patents or patent
applications if the settlement does not (A) impose injunctive relief or
other restrictions on the non-consenting Party or any sublicensee, or (B)
permit the third party to carry out in the Territory acts which could,
absent permission from the proper owner of rights under a patent, be
construed by the other Party in its reasonable judgment as constituting
infringement of a Licensed Patent. The non-consenting Party may not
initiate any action against such third party with respect to any matter
settled pursuant to a settlement permitted by this Section 9.2(e)(ii)
subsequent to such settlement.
(iii) If a Party has not consented to the settlement of any Patent
Matter that has been settled pursuant to Section 9.2(e)(i) or (ii), the
other Party shall provide to such Party notice of the material terms of
such settlement within sixty (60) days of such settlement.
(iv) If a Party has not consented to the settlement of any Patent
Matter that has been settled pursuant to and in accordance with Section
9.2(e)(i) or (ii), the non-consenting Party may submit, as its sole and
exclusive remedy for any dispute or controversy arising from or related to
such settlement, any such dispute or controversy to arbitration in
accordance with Article XIV within 180 days of receipt of the notice
provided pursuant to Section 9.2(e)(iii). Nothing in the immediately
preceding sentence shall be deemed to limit either Party's right to
consummate such a settlement, or the non-consenting Party's right to
indemnification pursuant to Section 9.2(f)(ii).
(f) (i) In connection with any settlement submitted to arbitration
pursuant to Section 9.2(e)(iv), the arbitrators will determine the fairness of
such settlement to the non-consenting Party, taking into account only the value
and nature of the interest in the Territory of such non-consenting Party. The
arbitrators may consider, but shall not be required to determine, whether
infringement of a Licensed Patent or other patent has occurred or the validity
of any Licensed Patent or other patent in reaching their decision. After
considering the evidence presented by the Parties, the arbitrators will
determine, subject to Section 12.2, whether the settlement is fair under the
circumstances to the non-consenting Party. If the settlement is determined to be
fair to the non-consenting Party, the arbitrators will enter an award setting
forth that conclusion and stating that the non-consenting Party is not entitled
to any adjustment to the benefits, if any, that it has received or will receive
pursuant to the settlement. If the settlement is determined not to be fair to
the non-consenting Party, the arbitrators will enter an award setting forth that
conclusion and awarding the nonconsenting Party the difference between (i) the
present value of benefits received or to be received by the non-consenting Party
pursuant to the settlement and (ii) the present value of what the arbitrators
determine the non-consenting Party should have received pursuant to such
settlement in light of its interest in the Territory. If the arbitrators award
additional value to the nonconsenting Party, the settling Party will pay that
amount to the non-consenting Party within twenty (20) days of the final
determination of such amount by the arbitrators.
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(ii) Subject to Section 12.2 and notwithstanding anything to the
contrary in Section 9.2(e), in the event either Party enters into a
settlement pursuant to Section 9.2(e) without the consent of the other
Party, the Party that settled such a dispute shall indemnify and hold the
non-consenting Party harmless from and against any and all loss, cost or
expense suffered by the non-consenting Party by reason of an action
brought by a Non-Affiliate of the Parties against the non-consenting
Party, if such action arises out of or is related to such settlement,
provided, however, the non-consenting Party shall not be indemnified
pursuant to this Section: (A) for any conduct or matter arising prior to
the settlement, (B) other than in connection with a decision to withhold
consent, for its or any of its Affiliates' gross negligence or willful
misconduct, or (C) for any action taken by it or any of its Affiliates in
contravention of the last sentence of Section 9.2(e)(i) or the last
sentence of Section 9.2(e)(ii) which action the non-consenting Party has
taken having had notice of a settlement entered into pursuant to Section
9.2(e).
(g) Any recovery obtained by the Parties or either Party
attributable to the Territory, net of the litigation costs and expenses incurred
by either Party attributable to the Territory, in connection with or as a result
of any action to ▇▇▇▇▇ a Patent Matter, by settlement or otherwise, shall be
shared by the Parties, as follows: in the case of a Licensed Compound that is a
Group C Compound, 20% shall be allocated to KB and 80% shall be allocated to
Licensee and, in the case of any other Licensed Compound, 0% shall be allocated
to KB and 100% shall be allocated to Licensee.
(h) Notwithstanding anything to the contrary contained in this
Section 9.2, the procedures set forth in Exhibit H shall apply to any Patent
Matter with respect to the Compound omeprazole marketed under the trademark
Prilosec(R).
(i) The Parties acknowledge that P&G has certain rights to enforce
intellectual property rights with respect to the Compound omeprazole pursuant to
the P&G License (as defined in the Manufacturing Agreement).
Section 9.3 Reexamination and Reissue. (a) KB will defend, at its expense,
the Licensed Patents in any reexamination or reissue proceedings in the United
States Patent and Trademark Office. KB shall have the sole right to initiate a
reissue proceeding. Before KB initiates a reissue proceeding or either Party
initiates a reexamination proceeding, KB and Licensee shall consult as to the
desirability or necessity of such a proceeding. Such proceedings will not be
abandoned prior to a final decision of the Patent Office Board of Appeals or
Patent Office Board of Interference without the consent of the Party not
initiating or defending such proceeding, which consent will not be unreasonably
withheld taking into consideration, inter alia, the merits of the action of the
Patent and Trademark Office, priority dates provable by any interference party
(should an interference be involved), and the technological and commercial
importance of the subject matter of the claims of the application or patents.
(b) Licensee shall take any action necessary or appropriate to preserve
its rights with respect to any Licensed Patent hereunder in connection with, and
shall cooperate with KB in, the prosecution of any such appeal which was
initiated by KB prior to November 1, 1994 with
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respect to any Licensed Patent. Within ninety (90) days of the Amendment and
Restatement Date, KB shall advise Licensee of any appeals of any adverse final
decisions by the Patent and Trademark Office pending before any judicial or
administrative body as of such date. KB and Licensee shall consult following any
adverse final decision by the Patent and Trademark Office rendered after
November 1, 1994 to determine whether or not to appeal such final decision to
the courts. In the event that KB, in its sole judgment, concludes that an appeal
is justified, KB shall prosecute such an appeal and bear all expenses of
prosecuting it. In the event that KB determines not to prosecute an appeal, it
shall give Licensee notice in time to permit Licensee, if it so elects, to
prosecute an appeal and, in such event, will execute (and will cause its
Affiliates to execute) all papers necessary to permit Licensee to proceed with
such an appeal either in the name of KB (or any of its Affiliates), the name of
the applicants, or in Licensee's own name. In the event that Licensee elects to
prosecute an appeal, it will be reimbursed by KB for Licensee's expenses only if
such appeal results in reversal, in whole or in substantial part, of the
decision of the Patent and Trademark Office.
(c) In connection with all matters governed by this Section 9.3, Licensee
shall act solely through the Patent Committee and shall be represented solely by
Approved Counsel. Approved Counsel will communicate with Licensee only through
the Patent Committee. The Patent Committee shall be subject to a strict
obligation of confidentiality not to transmit to TR or any other Person, and to
prevent the transmission to TR or any other Person, except as permitted by
Section 9.2(b)(iii), of, confidential information obtained or provided to it in
connection with any such matter, without the prior written consent of KB. The
Patent Committee shall not disclose any confidential information obtained or
provided to it in connection with any such matter to the Board of Directors of
Licensee or to any officers of Licensee (other than those officers of Licensee
who are also members of the Patent Committee) without the prior written consent
of KB. The Patent Committee may provide summaries and analyses of information
provided to it by KB to the Board of Directors of Licensee (which shall be
subject to a strict obligation of confidentiality not to transmit to TR or any
other Person, and to prevent the transmission to TR or any other Person, of
confidential information provided to it) to the extent necessary for Licensee's
Board of Directors to discharge its fiduciary duties.
Section 9.4 Cooperation. The Parties shall cooperate fully in connection
with any action or proceeding referred to in this Article IX in a manner
consistent with this Article IX.
Section 9.5 Maintenance Fees. KB shall pay all fees and taxes necessary to
maintain each Licensed Patent in full force and effect in the Territory during
the term of each such Licensed Patent.
Section 9.6 Candesartan Cilexetil; Turbuhaler. Notwithstanding anything to
the contrary contained in this Agreement, Licensee shall have no rights under
this Article IX with respect to the Licensed Compound candesartan cilexetil or
to Turbuhaler and any Licensed Patents relating to that device.
Section 9.7 Selected Compounds and Selected Uses. (a) Notwithstanding
anything to the contrary contained in this Agreement, KBI-E shall have no rights
under Sections 9.1, 9.2
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and 9.3 with respect to any Selected Compounds. As to such Compounds, KB and the
Partnership shall be jointly responsible for and shall agree, on an ad hoc
basis, on their respective roles in discharging such responsibilities for any
matter relating to a Selected Compound that might otherwise be governed by
Sections 9.1, 9.2 or 9.3.
(b) Notwithstanding anything to the contrary contained in this Agreement,
if any matter governed by Section 9.1, 9.2 or 9.3 involves solely a Selected
Use, the Partnership shall have full rights under Sections 9.1, 9.2 and 9.3. If
such matter or its resolution involves or affects, or could potentially involve
or affect, both a Selected Use and another use as to which KBI-E has rights
under this Agreement, the provisions of Sections 9.1, 9.2 and 9.3 shall govern
the rights of the Partnership; provided, however, that the Partnership shall be
entitled to participate only to the extent necessary to preserve and protect its
interests in the Selected Uses; provided, further, that the Partnership shall be
entitled to 100% and KB will be entitled to 0% in the case of a Group A Compound
or Group B Compound, and the Partnership shall be entitled to 80% and KB will be
entitled to 20%, in the case of a Group C Compound, of any recovery obtained
with respect to a Selected Use by KBI-E, KB or the Partnership or all of them
together, attributable to the Territory, net of litigation costs and expenses
incurred by such party attributable to the Territory, in connection with or as a
result of any action to ▇▇▇▇▇ a Patent Matter, by settlement or otherwise.
ARTICLE X
TECHNICAL INFORMATION; CONFIDENTIALITY
Section 10.1 Exchange of Information. To the extent legal and reasonable
under the circumstances, KB from time to time, after request by Licensee (or, in
the case of Distribution Compounds, the Partnership), shall provide Licensee
(or, in the case of Distribution Compounds, the Partnership) with summaries of
such Technical Information possessed by KB (or any of its Affiliates) regarding
each Licensed Compound as the Parties after consultation deem necessary or
advisable for use or application in connection with the use of any such Licensed
Compound in the Territory; provided, however, (i) in the case of Distribution
Compounds, KB shall consult with the Partnership and Licensee shall require the
Partnership to consult with KB and (ii) KB shall not be obligated to provide
Licensee with any Technical Information to the extent neither KB nor any of its
Affiliates has the right to grant Licensee a license with respect thereto or
otherwise authorize the use thereof by Licensee. Licensee may transfer such
Technical Information provided to it only to a permitted sublicensee or
distributor (and to no other Person, including without limitation any
stockholder of Licensee (except as provided herein)), and may use such Technical
Information solely in the Territory and only in furtherance of its rights and
obligations hereunder. Each Party shall promptly, and in full accordance with
FDA requirements, bring to the other Party's attention any unusual or unexpected
reactions or side-effects with respect to each Licensed Compound and
Combination; provided, however, that in the case of Distribution Compounds, KB
shall bring such information to the attention of the Partnership.
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In furtherance of and without limiting the foregoing and for the
purpose of more effectively providing the Manufacturing Technical Information
(as defined in the Manufacturing Agreement), Licensee hereby requests, and KB
agrees, that KB shall provide such cooperation and information to KBI and the
Producers (as defined in the Manufacturing Agreement) and shall engage in such
consultations as may be provided for in Article VI of the Manufacturing
Agreement, all in accordance with the terms of the Manufacturing Agreement.
Section 10.2 Confidentiality and Permitted Disclosure. Subject to the
provisions of Section 9.2, each Party shall maintain in strict confidence all
Confidential Information pursuant to and in accordance with Sections 4.1 and 4.2
of the Master Restructuring Agreement, provided, however, that:
(a) KB may disclose such information (other than the privileged and
work product-protected information referred to in Sections 9.2(b)(i) and
9.2(c)(i)) to any governmental agency or authority to the extent necessary to
obtain the approval of any agency or authority to make, have made, use or sell
any Compound; provided, further, however, to the extent permitted by applicable
law, such disclosure shall be made on a confidential and restricted basis;
(b) Licensee may disclose such information (other than the
privileged and work product-protected information referred to in Sections
9.2(b)(i) and 9.2(c)(i)) to any governmental agency or authority to the extent
necessary to obtain the approval of any agency or authority to make, have made,
use or sell any Exclusive Second Look Product or Non-Exclusive Second Look
Product; provided, further, however, to the extent permitted by applicable law,
such disclosure shall be made on a confidential and restricted basis; and
(c) Subject to Article VI, Licensee may disclose such information on
a confidential and restricted basis to any manufacturer, producer or supplier to
the extent necessary for the sole purpose of exercising its right to make or
have made any Exclusive Second Look Product or any Non-Exclusive Second Look
Product (each as defined in the Manufacturing Agreement), provided, however,
that any such manufacturer, producer or supplier shall agree to assume and
comply with all the obligations (including all confidentiality obligations) that
a sublicensee or distributor must assume and comply with under Article VI and
that any arrangement with any such manufacturer, producer or supplier shall
comport with all of the requirements set forth in Article VI.
ARTICLE XI
TRADEMARKS; IDENTIFICATION; INFRINGEMENT
Section 11.1 Use. (a) As to each Licensed Compound for which a Trademark
has been used by Licensee prior to the Amendment and Restatement Date, Licensee
shall continue the use of such Trademark unless in the reasonable business
judgment of Licensee, after consultation with KB, Licensee determines such use
would be inadvisable for legal, commercial, or other reasons.
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(b) KB shall notify Licensee of each Trademark as promptly as
practicable after an application for such Trademark is filed in the Territory.
(c) Licensee shall not use any Trademark in any manner which would
adversely affect the significance, distinctiveness or validity of such
Trademark. In order to protect the goodwill associated with the Trademarks and
to prevent any deception to the public, Licensee shall use the Trademarks only
in connection with the manufacture, distribution, labeling, packaging,
advertising, marketing, promotion and sale of Licensed Compounds meeting the
standards and specifications, as from time to time are set by the Parties and
which have been adopted by KB (or, if owned by any of its Affiliates, by such
Affiliate).
Section 11.2 Samples, Labels and Advertising Material. Licensee shall from
time to time upon the request of KB furnish KB with specimens of all labels,
and, to the extent practicable, advertising and any other materials on which any
Trademark is used, or is to be used, by Licensee and with samples of the
Licensed Compound on which such Trademark is used.
Section 11.3 Infringement. KB and Licensee will promptly inform each other
of any infringement, potential infringement or suspected infringement within the
Territory of any Trademark used by Licensee (or any of its Affiliates). Promptly
thereafter the Parties shall consult and cooperate fully to determine a course
of action including the commencement of proceedings in the courts to cause such
infringement, potential infringement or suspected infringement to be terminated.
Failing prompt agreement on a course of action, KB shall have the right to
initiate and prosecute an action against the infringer, at its expense. The
prosecuting Party shall be entitled to retain all damages awarded. In connection
with any action, the Parties shall cooperate fully, and the Party not
instituting or prosecuting the action shall provide the prosecuting Party with
such information and assistance as it may reasonably request.
ARTICLE XII
DISCLAIMER AND LIMITATION OF LIABILITY
Section 12.1 Disclaimer. Except for the express representations and
warranties set forth herein and in the Master Restructuring Agreement and in the
other Ancillary Agreements, neither Party makes any representation or warranty
of any kind, express or implied, written or oral, including, without limitation,
any representation or warranty with respect to the value, adequacy, freedom from
fault of, or the quality, efficiency, suitability, characteristics or usefulness
of, or merchantability or fitness for a particular purpose of, any Compound, or
of any Licensed Patents, Technical Information, Trademarks or other information,
data or know-how relating in any way to any Compound; provided, however, nothing
contained in this Section 12.1 shall be deemed a waiver of, or be deemed to
limit, the obligations of each Party hereunder.
Section 12.2 Limitation on Damages. In no event shall either Party be
liable for special, indirect, incidental or consequential damages ("Special
Losses") arising under or in connection with this Agreement, or the performance
of, or failure to perform, any obligations
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hereunder, whether in contract, warranty, negligence, tort, strict liability or
otherwise; provided, however, that the foregoing shall not apply in the case of
willful misconduct or gross negligence of any Party or any of its Affiliates, or
to any Special Losses which are incurred by any Party or any of its Affiliates
to any Non-Affiliate of such Party; and provided further that the Parties agree
that Special Losses shall not include any amounts set forth in Section 10.6 (w),
(x), (y) or (z) of the Master Restructuring Agreement.
ARTICLE XIII
TERM AND RIGHTS UPON TERMINATION, REJECTION, OR ASSIGNMENT
Section 13.1 Term. This Agreement shall be effective as of the Amendment
and Restatement Date.
Section 13.2 Rights of KB on Termination, Rejection or Assignment of
Licenses or Options for Licenses. Upon termination or rejection of any license
or option or the assignment thereof pursuant to the fourth sentence of Section
15.2, KBI-E shall have no further rights hereunder with respect to the Compound
for which the license or option is terminated, rejected or assigned, and KB (and
its Affiliates) shall have the right to make, have made, use and sell such
Compound in the Territory or to license any Person within the Territory in KB's
sole discretion.
Section 13.3 Return of Data. Upon termination or rejection of any license
or option or the assignment thereof pursuant to the fourth sentence of Section
15.2, KBI-E shall, at KB's direction, to the extent legal and practicable,
promptly transfer to KB or its designee at KBI-E's sole expense all IND's and
NDA's, other registrations, licenses and regulatory approvals, samples (to the
extent not consumed) and all originals of Technical Information and of other
confidential information covered by Section 10.2 furnished by KB (or any of its
Affiliates) to KBI-E (or its Affiliates), concerning each Compound for which the
license or option is terminated, rejected or assigned.
Section 13.4 Effect of Termination. Notwithstanding any termination of
this Agreement, Articles X and XII and any obligations which have accrued prior
to such termination shall survive such termination.
ARTICLE XIV
ARBITRATION
Section 14.1 Arbitration. Subject to Section 9.4 of the Master
Restructuring Agreement, any dispute, controversy or claim between KB and
Licensee arising out of or related to this Agreement, or the interpretation or
breach hereof, shall be settled by binding arbitration pursuant to the
principles and procedures set forth in Article 9 of the Master Restructuring
Agreement.
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ARTICLE XV
GENERAL PROVISIONS
Section 15.1 Entire Agreement. This Agreement, the Partnership Agreement,
the Initial Agreements, the Master Restructuring Agreement and the other
Ancillary Agreements (and the Exhibits and Schedules hereto and thereto)
constitute the entire agreement between the Parties with respect to the subject
matter hereof.
Section 15.2 Binding Effect; Assignment. This Agreement shall inure to the
benefit of and be binding upon the Parties and their respective successors and
permitted assigns. Except as provided below and except as expressly set forth in
this Agreement, the other Ancillary Agreements, the Initial Agreements or the
Partnership Agreement, neither Party shall assign this Agreement or any of its
rights or obligations hereunder without the prior consent of the other Party. In
the event of any permitted assignment, the assignee or assignees shall expressly
assume the due and punctual performance of all obligations which are so assigned
and any such assignment shall not release the assignor from such obligations
except to the extent that they are performed by the assignee or assignees
(except as provided below with respect to the Partnership); provided, however,
that as a condition to and prior to the effectiveness of such assignment and
assumption, the assigning Party shall deliver a copy of such assignment and
assumption to the other Party. This Agreement shall be deemed to have been
assigned by KBI-E to KB or its designee with respect to all Compounds, other
than omeprazole and perprazole and any Discretionary Compounds that are not
purchased if either KB or KBI-E exercises its Assignment Right (as such term is
defined in the KBI-E Asset Option Agreement) or the Required Sale (as defined in
the KBI-E Asset Option Agreement) occurs under the KBI-E Asset Option Agreement,
in either case effective on the Assignment Date (as defined in the KBI-E Asset
Option Agreement). KB may assign any or all of its rights or obligations
hereunder to any of its Affiliates or to a successor to all or substantially all
of its business; provided, however, that as a condition to and prior to the
effectiveness of such assignment and assumption, KB or its Affiliates shall
deliver a copy of such assignment and assumption to KBI. Notwithstanding the
foregoing, KBI and its Affiliates may make the partial assignments of this
Agreement and of its rights and obligations hereunder provided for in the KBI-E
Asset Contribution Agreement (as defined in the Master Restructuring Agreement),
the Selected Compounds Contribution Agreement, the Trademark Rights Contribution
Agreement (as defined in the Master Restructuring Agreement), the KBI Sub
Assignment and Assumption Agreement (#1) (as defined in the Master Restructuring
Agreement), the KBI Sub Assignment and Assumption Agreement (#2) (as defined in
the Master Restructuring Agreement) and the KBI License Assignment and
Assumption Agreement (as defined in the Master Restructuring Agreement);
provided, however, that as a condition to and prior to the effectiveness of such
assignment and assumption, KBI or its Affiliate shall deliver a copy of such
assignment and assumption to KB. KBI and its Affiliates shall be released from
such obligations to the extent such obligations are assumed by the Partnership
pursuant to such agreements. KB hereby consents to such assignments and to the
delegations of duties provided for in such agreements and in the Distribution
Agreement. This Agreement and the rights of Licensee hereunder may not be
further assigned without compliance with Section 6.3 of the KBI-E Asset Option
Agreement or, with respect to the Selected
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Compounds, Section 3.6 of the Master Restructuring Agreement. Nothing in this
Agreement, express or implied, is intended to confer on any Person other than
the Parties and their respective Affiliates, or their respective successors or
permitted assigns, any rights or obligations under or by reason of this
Agreement.
Section 15.3 Applicable Law. This Agreement shall be construed and
governed in accordance with the laws of the State of New York without regard to
any choice of law rules other than Section 5-1401 of the New York General
Obligations Law.
Section 15.4 Notices. Any notice, request or other communication under or
with respect to this Agreement shall be in writing and shall be deemed to have
been duly given if delivered personally, sent by telefax with confirmation of
receipt, or sent by internationally-recognized courier service to either Party
at its address as specified below.
If to KB, to:
▇▇▇▇▇ ▇▇
▇-▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
Attention: General Counsel
Telefax: 011-46-8-553-288-12
If to Licensee, to:
Astra Merck Inc.
▇/▇ ▇▇▇▇▇ & ▇▇., ▇▇▇.
▇.▇. ▇▇▇ ▇▇▇
One Merck Drive
Whitehouse Station, New Jersey 08889-0100
U.S.A.
Attention: General Counsel
Copy to: Corporate Secretary
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Partnership, to:
Astra Pharmaceuticals, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
Or such other address as the Partnership may specify to KB from time
to time.
Either Party by written notice to the other in accordance with the above may
change the address to which such notices, requests or other communications to it
shall be directed.
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Section 15.5 Waiver or Modification. This Agreement may be amended,
modified or supplemented only by a written instrument duly executed by each
Party, and may be waived only by a written instrument duly executed by the Party
to be bound. No omission or delay on the part of either Party in requiring the
due and punctual fulfillment by the other Party of any of its obligations
hereunder shall constitute a waiver by the omitting or delaying Party of any of
its rights to require such due and punctual fulfillment of any obligation
hereunder, whether similar or otherwise, or a waiver of any remedy it may have
hereunder or otherwise.
Section 15.6 Expenses. Each of the Parties shall pay the fees and expenses
of its respective counsel and other experts, and all other expenses, except as
otherwise expressly provided herein, incurred by such Party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement.
Section 15.7 Enforceability. If any one or more of the provisions of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity,
legality or enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby. To the extent permitted by applicable law,
each Party waives any provision of law which renders any provision hereof
invalid, illegal or unenforceable in any respect. In the event any provision of
this Agreement shall be held to be invalid, illegal or unenforceable the Parties
shall use reasonable efforts (which shall not require payments to its
Non-Affiliates) to substitute a valid, legal and enforceable provision which,
insofar as practical, implements the purposes hereof.
Section 15.8 Section and Other Headings. The Article and Section headings
herein are for the convenience and reference of the Parties and shall not affect
the meaning or interpretation hereof. References in the text hereof to Articles,
Sections, Paragraphs, Clauses and Exhibits mean the Articles, Sections,
Paragraphs, Clauses and Exhibits in this Agreement, respectively, unless
otherwise specifically stated.
Section 15.9 Reasonable Efforts. Wherever it is provided in this Agreement
that a Party shall use reasonable efforts for any purpose, such Party shall be
required only to use such efforts, if any, as are commercially reasonable in the
circumstances and as are consistent with the policies and practices utilized by
it in conducting its own business. Without limiting any other provision hereof,
each Party will perform its respective obligations under this Agreement (and the
Exhibits hereto) in a manner reasonably consistent with that employed by such
Party in connection with its other pharmaceutical products of comparable
commercial potential. Any obligation of Licensee to use reasonable efforts
hereunder in respect of any Distribution Compound shall be deemed to be
satisfied by causing the Partnership to enter into an agreement obligating the
Partnership to use its reasonable efforts to satisfy such obligation.
Section 15.10 Further Assurances. Each Party shall execute such other
instruments, give such further assurances and perform such acts which are or may
become necessary or appropriate to effectuate and carry out the provisions of
this Agreement.
Section 15.11 Affiliates. Each Party will cause its respective Affiliates
to comply fully with the provisions of this Agreement to the extent such
provisions relate, or are intended to
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relate, to such Affiliates, as if such Affiliates were expressly named as joint
obligors hereunder. Without limiting the foregoing, to the extent reasonably
requested by either Party, the other Party will cause any such Affiliate to
execute any and all instruments, give such assurances and perform such acts
which are or may become appropriate to effectuate and carry out the intent of
the Parties as reflected in this Agreement.
Section 15.12 No Agency, etc. Neither Party hereto shall be deemed to be
an agent, employee or legal representative of the other for any purpose. Each
Party shall conduct itself under this Agreement as an independent contractor and
all persons employed by a Party shall be employees of that Party and not the
other and all costs and obligations incurred by reason of any such employment
shall be for the account and expense of that Party (although any such Party may
be reimbursed therefor, directly or indirectly, to the extent provided herein).
Section 15.13 Events of Force Majeure. No Party shall be responsible or
liable to the other Party, nor shall Licensee's rights to any Licensed Compound
and any product containing a Licensed Compound terminate and revert to KB
pursuant to Section 16.2, for any failure or inability to perform any of such
Party's covenants or obligations under this Agreement, or, in the case of
Licensee, for neither conducting an Active Development Program for a Licensed
Compound nor Actively Marketing any product containing such Licensed Compound,
if such failure or inability results from events or circumstances reasonably
beyond the control of such Party (collectively, "Events of Force Majeure").
Events of Force Majeure shall include, without limitation, any order, decree,
law or regulation of any nature whatsoever of any court or governmental
authority; war (whether or not declared); embargo; strike, lockout or other
labor difficulty; riot; epidemic; disease; unavoidable accident; explosion; act
of God; civil commotion; fire; earthquake; storm; flood; failure of public
utilities or common carriers; unavailability of, or material reduction in the
supply of, raw materials or intermediates, labor, fuel, electricity, water or
transport; and any other circumstances whatsoever whether similar to the above
causes or not; provided, however, that the foregoing shall not include any event
or circumstance which prevents a Party from obtaining the funds sufficient to
make any payment required to be made by it pursuant to this Agreement, but shall
include any such event or circumstance which prevents a Party from transferring
such funds to the other Party to effect such payment. The Party failing or
unable to perform as a result of an Event of Force Majeure shall promptly notify
the other Party of such Event of Force Majeure and shall take all action as is
reasonably possible to remove such Event of Force Majeure; provided, however,
that nothing contained herein shall require the settlement of any strike,
lockout or other labor difficulty, or of any investigation or proceeding by any
governmental authority or of any litigation, by a Party on terms unsatisfactory
to it.
ARTICLE XVI
TERMINATION OF RIGHTS
Section 16.1 Termination of Rights and Reversion to Licensee. It is
understood by the Parties that, as of the Amendment and Restatement Date,
Licensee shall assign certain rights
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under this Agreement to KBI-E and KBI-E, as such assignee, shall simultaneously
enter into the Distribution Agreement with the Partnership. In the event that,
pursuant to Section C or D of the Distribution Agreement, the Partnership does
not become or ceases to be the distributor with respect to a Licensed Compound
and any products containing such Licensed Compound or if the Partnership's
rights under the Distribution Agreement become non-exclusive under the
Distribution Agreement with respect to a Licensed Compound and any products
containing such Licensed Compound:
(a) KB shall provide to KBI-E the Information Package and any
additional relevant information with respect to such Licensed Compound and
any products containing such Licensed Compound then in the possession of
KB and its Affiliates developed or acquired by KB or such Affiliates
subsequent to the delivery of such Information Package to the Partnership
but prior to the date on which the Partnership is no longer the exclusive
distributor of any products containing such Licensed Compound; provided,
however, that this subsection (a) shall be applicable only if the Compound
ceases to be a Distribution Compound or only if the rights of the
Partnership under the Distribution Agreement with respect to such Compound
become non-exclusive;
(b) KB shall no longer be subject to its obligations set forth in
Sections 2.7, 3.1, 3.2 and 10.1 (except as set forth in Section 2.3(d),
the last sentence of Section 10.1(a) and Section 16.1(a)) with respect to
such Licensed Compound; provided, however, that KBI-E shall be obligated
to perform all of KB's obligations set forth in such Sections at its own
expense and KBI-E shall provide KB with such of the results of, and
supporting data and information for, any tests and studies performed by
KBI-E (or any of its Affiliates) pursuant thereto for any Licensed
Compound which KB shall request after review with KBI-E of the material
available, with authority to KB, its Affiliates or any licensee or
sublicensee thereof to use and make reference thereto; provided, further,
however, that this subsection (b) shall be applicable only if such
Compound ceases to be a Distribution Compound.
(c) If such Licensed Compound is a Group C Compound and will have
intravenous and other routes of administration or will have an antibiotic,
anticancer or antiviral use, KB (and its Affiliates) shall be granted the
nonexclusive, nonlicensable right to make, have made, use and sell such
Group C Compound in the Territory in all Parenteral Forms; and
(d) KB shall provide KBI-E with all information, data and know-how
then in the possession of KB or any of its Affiliates with respect to such
Licensed Compound to which KBI-E would be entitled under the Manufacturing
Agreement as if KBI-E were the Producer (as such term is defined in the
Manufacturing Agreement) of products containing such Licensed Compound
pursuant to the Manufacturing Agreement but shall not have any obligation
to provide KBI-E with any additional information, data or know-how later
developed or acquired by KB or any of its Affiliates; provided, however,
that with respect to products containing such Licensed Compound delivered
through the Turbuhaler, KB may, in its sole discretion, (i) provide to
KBI-E the information, data and
41
47
know-how referred to in this subsection 16.1(d) or (ii) manufacture such
products for, and supply such products to, KBI-E in accordance with terms
of the Manufacturing Agreement.
(e) KBI-E from time to time, and in any event as promptly as
practicable after any request by KB, shall provide KB with summaries of
such information, data and know-how (including without limitation any such
information, data and know-how covered by patents owned by KBI-E, or any
of its Affiliates, or as to which KBI-E, or any of its Affiliates, has
licensing rights) as relate uniquely to manufacturing or preparing any
Licensed Compound (including any intermediate of such Licensed Compound)
and are now or hereafter possessed by KBI-E (or any of its Affiliates).
KBI-E shall provide KB with such of the foregoing information, data and
know-how, referred to in any such summary, as KB shall request; provided,
however, KBI-E shall not be obligated to provide KB with any such
information, data or know-how to the extent neither KBI-E nor any of its
Affiliates has the right to grant KB a license with respect thereto or
otherwise authorize the use thereof by KB; provided, further, KBI-E shall,
to the extent legal, use its reasonable efforts (which shall not require
payments to its Non-Affiliates) to make available to KB the broadest
rights to such information, data and know-how. KB shall pay KBI-E such
reasonable consideration, if any, as KBI-E and KB shall agree for such
information, data and know-how requested by KB and as to which KBI-E has
notified KB it expects to be compensated (which notice shall be given in
advance of providing such information, data and know-how); but failure to
agree upon such consideration shall not prevent or delay the provision of
such information, data and know-how to KB. If such consideration is not
agreed to by KBI-E and KB within 180 days of the request by KB for such
information, data and know-how, then such consideration shall be set by
arbitration in accordance with Article XIV.
(f) KBI-E shall not enter into any sublicense or distribution
arrangement under this Agreement with any Non-Affiliate of KBI-E with
respect to any Discretionary Compound; provided, however, that on and
after the Assignment Date KBI-E may enter into any such sublicense or
distribution arrangement with respect to any Discretionary Compounds that
are not purchased if either KB or KBI-E exercises its Assignment Right or
the Required Sale occurs under the KBI-E Asset Option Agreement and
provided, further, that any sublicense or distribution arrangement entered
into with an Affiliate of KBI-E with respect to any Discretionary Compound
prior to the KBI-E Asset Purchase (as defined in the Master Restructuring
Agreement) shall terminate upon the exercise of KB's right to purchase the
rights to such Compound under Article V of the KBI-E Asset Option
Agreement.
Section 16.2 Reversion to KB. With respect to each Licensed Compound as to
which, pursuant to Section C or D of the Distribution Agreement, the Partnership
does not become or ceases to be the distributor with respect to such Licensed
Compound and any products containing such Licensed Compound or if the
Partnership's rights under the Distribution Agreement become non-exclusive under
the Distribution Agreement with respect to a Licensed Compound and any products
containing such Compound:
42
48
(a) At any time after KBI-E shall have determined (i) that it is
neither (A) currently conducting or planning to conduct an Active
Development Program for such Licensed Compound nor (B) Actively Marketing
or planning to Actively Market any product containing such Licensed
Compound or (ii) to discontinue the development of a Licensed Compound and
any product containing such Licensed Compound, KBI-E may deliver to KB a
written notice (a "Discontinuation Notice") identifying such Compound and
products containing such Compound, if any (collectively, the "Discontinued
Licensed Compound"). Upon KB's receipt of a Discontinuation Notice and
without any further action by KBI-E or KB, the license with respect to
such Discontinued Licensed Compound shall automatically terminate, all
rights granted thereunder shall revert to KB (including any rights with
respect to Trademarks and the good will associated therewith) and the
provisions of Section 13.2 shall apply.
(b) (i) After the Amendment and Restatement Date, KB may deliver to
KBI-E a written notice (a "Non-Performance Notice") with respect to such
Licensed Compound setting forth its contention that KBI-E is neither (A)
conducting an Active Development Program for such Licensed Compound nor
(B) Actively Marketing any product containing such Licensed Compound;
provided, however, that if such Non-Performance Notice has not been
delivered by KB within six (6) months after the end of the Calendar Year
in which the facts which form the basis of KB's contention have occurred,
KB's rights under this Section 16.2(b) shall terminate, for such Calendar
Year.
(ii) Within ninety (90) days of receipt of a Non-Performance
Notice, KBI-E shall deliver to KB a written notice that either (A)
confirms KB's claim as set forth in subparagraph (b)(i) or (B) disputes
KB's claim. If KBI-E confirms that it is neither (A) conducting an Active
Development Program for such Licensed Compound nor (B) Actively Marketing
any product containing such Licensed Compound, then, without any further
action by KBI-E or KB, the license with respect to such Licensed Compound
and any products containing such Licensed Compound shall automatically
terminate, all rights granted thereunder shall revert to KB (including any
rights with respect to Trademarks and the good will associated therewith)
and the provisions of Section 13.2 shall apply. If KBI-E does not deliver
such notice to KB within such ninety-day period, KBI-E shall be deemed to
have confirmed KB's claim as set forth in subparagraph (b)(i).
(iii) If, in the notice provided to KB pursuant to subparagraph
(b)(ii) above, KBI-E disputes a Non-Performance Notice, such dispute shall
be resolved by arbitration pursuant to Article XIV. Such arbitration shall
be initiated by KB within ninety (90) days after receipt by KB of such
notice. If the arbitrators determine that KBI-E is conducting an Active
Development Program for such Licensed Compound or is Actively Marketing
any product containing such Licensed Compound, KBI-E shall retain all
rights with respect to such Licensed Compound granted hereunder. If the
arbitrators determine that KBI-E is neither conducting an Active
Development Program for such Licensed Compound nor Actively Marketing any
product containing such Licensed Compound, without any further action by
KBI-E or KB, the license with respect to such Licensed Compound and any
products containing such Licensed Compound shall automatically
43
49
terminate, all rights granted thereunder shall revert to KB (including any
rights with respect to Trademarks and the good will associated therewith)
and the provisions of Section 13.2 shall apply.
(iv) Notwithstanding the foregoing, KB may deliver a
Non-Performance Notice to KBI-E with respect to any given Licensed
Compound (and seek resolution of any dispute arising therefrom pursuant to
subparagraph (b)(iii) above) only once during the development of such
Licensed Compound and only once during the marketing of a product
containing such Licensed Compound.
(c) If the license with respect to a Discontinued Licensed Compound
or a Licensed Compound, as the case may be, is terminated pursuant to this
Section 16.2, KBI-E shall require any sublicensee or distributor to
transfer to KB all rights which such sublicensee or distributor shall have
with respect to any uses of such Licensed Compound or Discontinued
Licensed Compound, as the case may be, so that KB shall be in possession
of all rights with respect to such Licensed Compound, including the
Selected Uses of such Licensed Compound and any Exempted Combinations
thereof.
Section 16.3 Compliance Certificate; Audit Rights. With respect to each
Licensed Compound as to which, pursuant to Section C or D of the Distribution
Agreement, the Partnership does not become or ceases to be the distributor with
respect to such Licensed Compound and any products containing such Licensed
Compound or if the Partnership's rights under the Distribution Agreement become
non-exclusive under the Distribution Agreement with respect to a Licensed
Compound and any products containing such Compound:
(a) KBI-E shall deliver to KB within sixty (60) days after the end
of each Calendar Year a certificate, executed by the chief executive
officer or other senior officer of KBI-E, certifying as to each such
Licensed Compound whether or not KBI-E as of the end of such Calendar Year
is then conducting an Active Development Program for such Licensed
Compound and Actively Marketing products containing such Licensed Compound
(an "Annual Certificate"), which certificate may be a combined certificate
with respect to all such Licensed Compounds. Such certificate shall (A)
identify each such Licensed Compound and product, (B) certify whether the
amount of KBI-E's (and its Affiliates') development expenditures for such
Calendar Year in respect of such Licensed Compound exceed the $1 million
and $3 million amounts for the applicable development phase described in
the definition of "Active Development Program," and (C) identify the
applicable development phase for such Compound.
In the event such certificate does not certify that KBI-E is either
(i) conducting an Active Development Program for such Licensed Compound or
(ii) Actively Marketing products containing such Licensed Compound, the
delivery of such certificate shall be deemed to be the delivery of a
Discontinuation Notice with respect to such Licensed Compound; provided,
however, that if such certificate omits the certification with respect to
any Licensed Compound, the failure to deliver such certificate shall not
constitute the delivery of a Discontinuation Notice unless KBI-E fails to
deliver such certification
44
50
within thirty (30) days after the delivery to KBI-E of notice of such
omission. In the event KBI-E fails to deliver to KB within the 60-day
period referred to in this Section 16.3(a) an Annual Certificate with
respect to each such Licensed Compound and fails to deliver such Annual
Certificate within thirty (30) days after written notice from KB of such
failure to deliver or if the Annual Certificate with respect to a year was
prepared with reckless disregard for the accuracy or inaccuracy of the
information contained therein, KBI-E shall reimburse KB for the Full Costs
of any audit by KB's accountants pursuant to Section 16.3(b) with respect
to such Calendar Year.
(b) KBI-E shall keep, and shall cause its Affiliates and
sublicensees and distributors to keep, true, accurate and complete records
of the development and marketing expenditures and commitments therefor in
respect of each Licensed Compound and each product (and the Licensed
Compound contained therein) in sufficient detail to permit the
verification of the information contained in the certificate provided to
KB pursuant to subsection (a) of this Section 16.3. Upon KB's request,
KBI-E shall permit an independent certified public accountant selected and
paid by KB (except one to whom KBI-E has some reasonable objection) to
have reasonable access during ordinary business hours to such of KBI-E's
and its Affiliates' and sublicensees' and distributors' records as may be
necessary in such accountant's judgment to confirm to its reasonable
satisfaction the accuracy of any certificate delivered to KB pursuant to
this Section 16.3. This right to request a review for any Calendar Year
shall be effective only with respect to the immediately preceding Calendar
Year and shall terminate six (6) months after the end of such Calendar
Year. Such accountant shall keep its findings confidential and shall not
disclose to KB (or any of its Affiliates) any information except that it
shall report to KB (i) its findings and any other information relating to
the accuracy of the certificate delivered under this Section 16.3, (ii)
interpretations of the terms of this Agreement applied by KBI-E to the
information contained in such certificate, and (iii) any restrictions on
access to KBI-E's and its Affiliates' and sublicensees' and distributors'
data which the accountant deems to be a restriction of scope with respect
to its engagement.
45
51
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized as of the Amendment and
Restatement Date.
ASTRA AB
(publ)
By: /s/ Goran Lerenius
-------------------------------------
Name: Goran Lerenius
Title: Authorized Signatory
ASTRA MERCK INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
Acknowledged and consented to with respect to the Selected Compounds and the
Selected Uses of the Licensed Compounds:
ASTRA PHARMACEUTICALS, L.P.
By: KB USA, L.P., its General Partner
By: Astra AB, its General Partner
(publ)
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
52
EXHIBIT A
APPROVED COUNSEL
Connolly, Bove, Lodge & Hutz
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
53
EXHIBIT B
The following Compounds are "Excepted Compounds" and are excepted
from Group C Compounds:
(a) Alprenolol
Bacampicillin
Bacmecillinam
Etidocaine
Glucoferron
Metoprolol
Ritodrine Hydrochloride
(b) KB shall treat any salt or ester of any Compound listed in
subparagraph (a) above and any analogue, homologue or derivative thereof as a
Group C Compound to the extent that KB (or any of its Affiliates), at April 28,
1981, had not licensed (other than in accordance with understandings made prior
to that date) or had not committed, or otherwise undertaken, to license such
salt, ester, analogue, homologue or derivative to any Non-Affiliate of KB (other
than Licensee); it being represented and warranted by KB that no such license,
commitment or undertaking exists, at the Original Execution Date (x) in respect
of the Compounds Etidocaine, Glucoferron and Ritodrine Hydrochloride; and (y) in
respect of any analogue, homologue or derivative of the Compounds Metoprolol and
Alprenolol, except as to any analogue, homologue or derivative claimed by any
United States, Swedish or Swiss patent or patent application owned by KB (or its
Affiliates), or as to which KB (or any of its Affiliates) had licensing rights,
in each case, as at April 28, 1981.
54
EXHIBIT C
LICENSED PATENTS
PRILOSEC (OMEPRAZOLE)
PATENT NUMBER PATENT EXPIRES TYPE OF PATENT
------------- -------------- --------------
4,255,431 April 05, 2001 (inc. PTE) Drug product and method of use
("compound patent")
4,620,008 October 28, 2003 Process and intermediate
4,786,505 April 20, 2007 Drug product and method of use
("formulation patent")
5,093,342 Feb. 02, 2010 Use
4,544,750 Aug. 26, 2003 Intermediate
4,853,230 April 20, 2007 Formulation
4,636,499 May 30, 2005 Sulphenamide compound
5,599,794 Feb. 04, 2014 Combination, Formulation
5,386,032 Jan. 31, 2012 Process
5,629,305 Feb. 04, 2014 Combination, Formulation
PATENT APPLICATIONS FILING DATE
------------------- -----------
08/776 222 Dec. 05, 1996 Process - (No appeals)
55
H199/18 (PERPRAZOLE)
In addition to the patents covering omeprazole, the following:
PATENT NUMBER PATENT EXPIRES TYPE OF PATENT
------------- -------------- --------------
4,738,974 April 19, 2005 Product
5,714,504 February 03, 2015 Formulation
5,693,818 December 02, 2014 Process
PATENT APPLICATIONS FILING DATE
------------------- -----------
.08/492,087 July 05, 1995 Process - (No appeals)
.08/491,939 July 03, 1995 Process - (No appeals)
.08/313,342 July 08, 1994 Specific crystallinity - (No
appeals)
08/833962 April 11, 1997 Use - (No appeals)
08/899931 July 24, 1997 Formulation - (No appeals)
C-2
56
REMACEMIDE
PATENT NUMBER PATENT EXPIRES TYPE OF PATENT
------------- -------------- --------------
5,331,007 Mar. 03, 2009 (PTE Product
possible)
5,650,443 July 22, 2014 Combination, Formulation
PATENT APPLICATIONS FILING DATE TYPE OF PATENT
------------------- ----------- --------------
PCT/SE97/02092 (US Dec. 12, 1997 Process - (No appeals)
number not yet received)
C-3
57
TONOCARD (TOCAINIDE HCl)
PATENT NUMBER PATENT EXPIRES TYPE OF PATENT
------------- -------------- --------------
4,210,670 June 23, 1998 Use
4,237,068 Nov. 09, 1998 Product
C-4
58
ROFLEPONIDE
PATENT NUMBER PATENT EXPIRES TYPE OF PATENT
------------- -------------- --------------
5,674,861 October 07, 2014 Compound
5,614,514 March 25, 2015 Compound
4,693,999 July 03, 2005 Formulations
PENDING APPLICATIONS FILING DATE TYPE OF PATENT
-------------------- ----------- --------------
08/944676
(cont.-in part of 5,674,861) October 7,1997` Process (No appeals)
08/493733
(cont.-in part of 5,614,514) June 22, 1995 Compound*
08/617918 December 20, 1995 Compound
*Appeal on the basis of lack of inventive step.
C-5
59
PLENDIL (FELODIPINE)
PATENT NUMBER PATENT EXPIRES TYPE OF PATENT
------------- -------------- --------------
4,264,611 June 19, 2001 (inc. PTE) Product
4,803,081 April 03, 2007 Formulation
4,942,040 Sep. 29, 2008 Logimax (Product)
PATENT APPLICATIONS FILING DATE TYPE OF PATENT
------------------- ----------- --------------
08/648000 May 08, 1996 Felo cerebral (use) - (No
appeals)
08/750933 Dec. 13, 1996 Process - (No appeals)
C-6
60
ROPIVACAINE FOR THE TREATMENT OF INFLAMMATORY BOWEL DISEASE IN HUMANS
PATENT NUMBER PATENT EXPIRES TYPE OF PATENT
------------- -------------- --------------
4,695,576 April 26, 2005 Substance
4,870,086 November 24, 2006 Substance
(Application for
PTE is pending)
5,670,524 September 23, 2014 Use
PATENT APPLICATIONS FILING DATE TYPE OF PATENT
------------------- ----------- --------------
08/647994 April 30, 1996 Process (No appeals)
C-7
61
BUDESONIDE FOR THE TREATMENT OF INFLAMMATORY BOWEL DISEASE IN HUMANS
PATENT NUMBER PATENT EXPIRES TYPE OF PATENT
------------- -------------- --------------
5,643,602 July 1, 2014 Composition, 2nd medical use
PATENT APPLICATIONS FILING DATE TYPE OF PATENT
------------------- ----------- --------------
08/853 142 May 8, 1997 Composition, use (No appeals)
08/764 985 December 13, 1996 Prodrug, composition (No
appeals)
C-8
62
ATACAND (CANDESARTAN CILEXETIL)
(Patents owned by Takeda Chemical Industries, Ltd.)
PATENT NUMBER PATENT EXPIRES TYPE OF PATENT
------------- -------------- --------------
5,196,444 April 18, 2011(PTE possible) Product
5,705,517 April 18, 2011 Product (general)
5,703,110 April 18, 2011 Metabolite
5,534,534 July 9, 2013 Formulation
C-9
63
EXHIBIT D
THERAPEUTIC CATEGORIES
All lettered/numbered references in this Exhibit D are to the International
Classification of Diseases - 10th Edition (ICD-10) as issued by the World Health
Organization.
Intestinal infectious diseases (A00-A07; A09)
Viral and other specified intestinal infections (A08)
Tuberculosis (A15-A19)
Certain zoonotic bacterial diseases (A20-A28)
Other bacterial diseases (A30-A49). Includes both prevention and treatment of
susceptible bacterial diseases.
Gonococcal infection (A54)
Sexually transmitted chlamydial diseases (A55-A56)
Anogenital herpesviral [herpes simplex] infections (A60)
Other Infections with a predominantly sexual mode of transmission (A50-A53;
A57-A59; A63-A64)
Other spirochaetal diseases (A65-A69)
Other diseases caused by chlamydiae (A70-A74)
Rickettsioses (A75-A79)
Acute poliomyelitis (A80)
Other Viral Infections of the central nervous system (A81-A89)
Arthropod-borne viral fevers and viral haemorrhagic fevers (A90-A99)
Viral infections characterized by skin and mucous membrane lesions (B00-B09).
Includes both prevention and treatment of susceptible viral infections in group.
Acute hepatitis A (B15)
Acute hepatitis B (B16)
Acute hepatitis C (New from B17)
Other Viral hepatitis (B17-B19)
HIV disease and AIDS (B24; Z21)
Other viral diseases (B24-B34). Includes both prevention and treatment of
susceptible viral diseases in group.
Mycoses (B35-B36; B38-B43; B46-B49)
Candidiasis (B37)
Aspergillosis (B44)
Cryptococcosis (B45)
Protozoal disease (B50-B58; B60-B64)
Pneumocystosis (B59)
Helminthiases (B65-B72; B74-B83)
Onchocerciasis (B73)
Pediculosis, acariasis and other infestations (B85-B89)
Sequelae of infectious and parasitic diseases (B90-B94)
64
Malignant neoplasms of lip, oral cavity and pharynx (C00-C14)
Malignant neoplasm of oesophagus (C15)
Malignant neoplasm of stomach (C16)
Malignant neoplasm of colon/rectum (C18-C20)
Malignant neoplasm of liver and intraheptic bile ducts (C22)
Other Malignant neoplasms of digestive organs (C17; C21; C23-C24; C26)
Malignant neoplasm of pancreas (C25)
Malignant neoplasms of respiratory and intrathoracic organs (C30-C33; C37-C39)
Malignant neoplasm of bronchus and lung (C34)
Malignant neoplasms of bone and articular cartilage (C40-C41)
Melanoma and other malignant neoplasms of skin (C43-C44)
Malignant neoplasms of mesothelial and soft tissue (C45-C49)
Malignant neoplasm of breast (C50)
Malignant neoplasms of female genital organs (C51-C52; C57-C58)
Malignant neoplasm of cervix/uterus (C53-C55)
Malignant neoplasm of ovary (C56)
Malignant neoplasms of male genital organs (C60; C62-C63)
Malignant neoplasm of prostate (C61)
Malignant neoplasms of urinary tract (C66; C68)
Malignant neoplasm of kidney (C64-C65)
Malignant neoplasm of bladder (C67)
Malignant neoplasms of eye, brain and other parts of central nervous systems
(C69-C72)
Malignant neoplasms of thyroid and other endocrine glands (C73-C75)
Malignant neoplasms of ill-defined, secondary and unspecified sites (C76-C80)
Malignant neoplasms of lymphoid, haematopoietic and related tissue (C81-C96)
Malignant neoplasms of independent (primary) multiple sites (C97)
In situ neoplasms (D00-D09
Benign neoplasms (D10-D36)
Neoplasms of uncertain or unknown behaviour (D37-D48)
Nutritional anaemias (D50-D53)
Haemolytic anaemias (D55-D59)
Aplastic and other anaemias (D60-D64)
Disseminated intravascular coagulation [defibrination syndrome] (D65)
Hereditary factor VIII deficiency (D66)
Hereditary factor IX deficiency (D67)
Factor X (from D68)
Other Coagulation defects, purpura and other haemorragic conditions (Part
D68-D69)
Other diseases of blood and blood-forming organs (D70-D77)
Certain disorders involving the immune mechanism (D80-D89)
Disorders of thyroid gland (E00-E07)
Insulin-dependent diabetes mellitus (E10)
▇-▇
▇▇
▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ diabetes mellitus (E11)
Other Diabetes mellitus (E12-E14)
Other disorders of glucose regulation and pancreatic internal secretion
(E15-E16)
Disorder of other endocrine glands (E20-E27; E30-E35)
Ovarian dysfunction (E28)
Testicular dysfunction (E29)
Short stature (from E34)
Malnutrition (E40-E46)
Other nutritional deficiencies (E50-E64)
Other hyperallmentation (E65; E67-E68)
Obesity (E66)
Metabolic disorders (E70-E77; E79-E90)
Disorders of lipoprotein metabolism and other lipidaemias (E78)
Dementia in Alzheimer's disease (F00)
Other dementia (F01-F03)
Organic, including symptomatic, mental disorders (F04-F05; F09)
Other mental disorders due to brain damage an dysfunction and to physical
disease (F06)
Personality and behavioural disorders due to brain disease, damage and
dysfunction (F07)
Mental and behavioural disorders due to psychoactive substance use (F10-F19)
Schizophrenia (F20-F21; F25)
Delusional and psychotic disorders (F22-24; F28-F29)
Manic episode (F30)
Bipolar affective disorder (F31)
Depression (F32-F33)
Other mood [affective] disorders (F34-F39)
Anxiety disorders (F40-F41)
Obsessive-compulsive disorder (F42)
Other neurotic, stress-related and somatoform disorders (F43-F48)
Eating disorders (F50)
Nonorganic sleep disorders (F51)
Sexual dysfunction, not caused by organic disorder or disease (F52)
Other behavioural syndromes associated with physiological disturbances and
physical factors (F53-F59)
Personality disorders (F60-F62)
Other disorders of adult personality and behaviour (F63-F69)
Mental retardation (F70-F79)
Disorders of psychological development (F80-F89)
Hyperkinetic disorders (F90)
Other behavioural and emotional disorders with onset usually occurring in
childhood and adolescence (F91-F98)
Inflammatory diseases of the central nervous system (G00-G09)
Systemic atrophies primarily affecting the central nervous system (G10-G13)
▇-▇
▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ (▇▇▇-▇▇▇)
▇▇▇▇▇▇▇▇ (G24)
Other extrapyramidal and movement disorders (G23; G25-G26)
Alzheimer's disease (G30)
Other degenerative diseases of the nervous system (G31-G32)
Multiple sclerosis (G35)
Other demyelinating diseases of the central nervous system (G36-G37)
Epilepsy (G40-G41)
Migraine (G43)
Other headache syndromes (G44)
Transient cerebral ischaemic attacks and related syndromes (G45)
Vascular syndromes of brain in cerebrovascular diseases (G46)
Sleep disorders (G47)
Nerve, nerve root and plexus disorders (G50-G59)
Polyneuropathies and other disorders of the peripheral nervous system
(G60-G64)
Diseases of myoneural junction and muscel (G70-G73)
Cerebral palsy and other paralytic syndromes (G80-G83)
Other disorders of the nervous system (G90-G99)
Disorders of eyelid, lacrimal system and orbit (H00-H06)
Disorders of conjunctiva (H10-H13)
Other disorders of sclera, cornea, iris and ciliary body (H15; H17-H22)
Keratitis (H16)
Cataract (H25-H26; H28)
Other disorders of lens (H27)
Disorders of choroid and retina except retinopathy (H30-H36)
Retinopathy (from H35/H36)
Glaucoma (H40-H42)
Disorders of vitreous body and globe (H43-H45)
Disorders of optic nerve and visual pathways (H46-H48)
Disorders of ocular muscles, binocular movement, accommodation and refraction
excluding myopia (H49-H52)
Myopia (from H52)
Visual disturbances and blindness (H53-H54)
Other disorders of eye and adnexa (H55-H59)
Diseases of external ear (H60-H62)
Otitis media (H65-H67)
Other diseases of middle ear and mastoid (H68-H75)
Diseases of inner ear (H80-H83)
Other disorders of ear (H90-H95)
Acute rheumatic fever (I00-I02)
Chronic rheumatic heart diseases (I05-I09)
Hypertensive diseases (I10-I15)
▇-▇
▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇)
Myocardial infarction (I21-I23)
Other acute ischaemic heart disease (I24)
Chronic ischaemic heart disease (I25)
Pulmonary embolism and diseases of pulmonary circulation (I26; I28)
Other pulmonary heart diseases (I27)
Acute and subacute endocarditis (I33)
Cardiomyopathy (I42-I43)
Cardiac arrhythmias (I44-I49)
Heart failure (I50)
Other forms of heart disease (I30-I32; I34-I41; I51-I52)
Cerebrovascular haemorrhege (I60-I62)
Cerebral infarction and occlusion (I63; I65-I66)
Other cerebrovascular diseases (I64; I67-I69)
Atherosclerosis (I70)
Aneurysm (I71-I72)
Other peripheral vascular diseases (I73)
Arterial embolism and thrombosis (I74)
Other diseases of arteries, arterioles and capillaries (I77-I79)
Venous thrombosis (I81-I82)
Other diseases of veins, lymphatic vessels and lymph nodes, not elsewhere
classified (I80; I83-I89)
Other and unspecified disorders of the circulatory system (I95-I99)
Acute upper respiratory infections (J00-J06)
Viral influenza (J10-J11)
Viral pneumonia, not elsewhere classified (J12)
Bacterial pneumonia (J13-J15)
Pneumonia, other (J16-J18)
Other acute lower respiratory infections (J20-J22)
Rhinitis, allergic (from J30)
Rhinitis, other (from J31)
Other diseases of upper respiratory tract (J30-J39)
Chronic lower respiratory diseases (J40-J42; J44-J47)
Emphysema (J43)
Asthma (J45)
Lung diseases due to external agents (J60-J70)
Adult respiratory distress syndrome (J80)
Other respiratory diseases principally affecting the interstitium (J81-J84)
Suppurative and necrotic conditions of lower respiratory tract (J85-J86)
Other diseases of pleura (J90-J94)
Other diseases of the respiratory system (J95-J99)
Diseases of oral cavity, salivary glands and jaws (K00-K14)
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Diseases of oesophagus (K20-K23)
Peptic ulcer (K25-K28)
Other diseases of stomach and duodenum (K29-K31)
Diseases of appendix (K35-K38)
Hernia (K40-K46)
Inflammatory bowel disease (K50-K51)
Other noninfective gastroenteritis and colitis (K52)
Other diseases of intestines (K55-K57; K59-K63)
Irritable bowel syndrome (K58)
Diseases of peritoneum (K65-K67)
Diseases of liver (K70-K77)
Disorders of gallbladder, biliary tract and pancreas (K80-K87)
Other diseases of the digestive system (K90-K93)
Infections of the skin and subcutaneous tissue (L00-L08)
Bullous disorders (L10-L14)
Dermatitis and eczema (L20-L30)
Psoriasis (L40)
Other papulosquamous disorders (L41-L45)
Urticaria (L50)
Erythema (L51-L54)
Skin changes due to chronic exposure to nonionizing radiation (L57)
Other radiation-related disorders of the skin and subcutaneous tissue
(L55-L56; L58-L59)
Other disorders of skin appendages (L60-L62; L67-L68; L71-L75)
Alopecia and hair loss (L63-L66)
Acne (L70)
Other disorders of the skin and subcutaneous tissue (L80-L99)
Infectious Arthropathis (M00-M03)
Arthritis (M05-M09; M13)
Other inflammatory polyarthropathies (M10-M12; M14)
Arthrosis (M15-M19)
Other joint disorders (M20-M25)
Systemic lupus erythematosus (M32)
Other systemic connective tissue disorders (M30-M31; M33-M36)
Deforming dorsopathies (M40-M43)
Spondylopathies (M45-M49)
Other dorsopathies (M50-M54)
Disorders of muscles (M60-M63)
Disorders of synovium and tendon (M65-M68)
Bursitis (from M70-M71; M73 - M76)
Tendinitis (from M75-M76)
Other soft tissue disorders (M70-M79)
Osteoporosis (M80-M82)
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Other disorders of bone density and structure (M83-M85)
Paget's disease of bone [osteitis deformans] (M88)
Other osteopathies (M86-M87; M89-M90)
Chondropathies (M91-M94)
Other disorders of the musculoskeletal system and connective tissue (M95-M99)
Glomerular diseases (N00-N08)
Renal tubulo-interstitial diseases (N10-N16)
Renal failure (N17-N19)
Urolithiasis (N20-N23)
Other disorders of kidney and ureter (N25-N29)
Other diseases of the urinary system (N30-N39)
Hyperplasia of prostate (N40)
Inflammatory diseases of prostate (N41)
Other diseases of male genital organs (N42-N49)
Disorders of breast (N60-N64)
Endometriosis (N80)
Inflammatory diseases of female pelvic organs (N70-N77)
Other noninflammatory disorders of female genital tract (N81-N93; N96-N98)
Pain and other conditions associated with female genital organs and menstrual
cycle (N94)
Menopausal and other perimenopausal disorders (N95)
Other disorders of the genitourinary system (N99)
Pregnancy with abortive outcome (O00-O08)
Oedema, proteinuria and hypertensive disorders in pregnancy, childbirth and
the puerperium (O10-O16)
Other maternal disorders predominantly related to pregnancy (O20-O29)
Maternal care related to the fetus and amniotic cavity and possible delivery
problems (O30-O48)
Preterm delivery (O60)
Other complications of labour and delivery (O61-O75)
Delivery (O80-O84)
Complications predominantly related to the puerperium (O85-092)
Other obstetric conditions, not elsewhere classified (O95-O99)
Fetus and newborn affected by maternal factors and by complications of
pregnancy, labour and delivery (P00-P04)
Disorders related to length of gestation and fetal growth (P05-P08)
Birth trauma (P10-P15)
Respiratory and cardiovascular disorders specific to the perinatal period
(P20-P29)
Infections specific to the perinatal period (P35-P39)
Haemorrhagic and haematological disorders of fetus and newborn (P50-P61)
Transitory endocrine and metabolic disorders specific to fetus and newborn
(P70-P74)
Digestive system disorders of fetus and newborn (P75-P78)
Conditions involving the integument and temperature regulation of fetus and
newborn (P80-P83)
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Other disorders originating in the perinatal period (P90-P96)
Congenital malformations (Q00-Q99)
Cough (R05)
Other symptoms and signs involving the circulatory and respiratory systems
(R00-R04; R06-R09)
Other symptoms and signs involving the digestive system and abdomen (R10;
R13-R19)
Nausea and vomiting (R11)
Heartburn (R12 in GI segment)
Symptoms and signs involving the skin and subcutaneous tissue (R20-R23)
Symptoms and signs involving the nervous and musculoskeletal systems (R25-R29)
Unspecified urinary incontinence (R32)
Other symptoms and signs involving the urinary system (R30-R31; R33-R39)
Symptoms and signs involving cognition, perception, emotional state and
behaviour (R40-R46)
Symptoms and signs involving speech and voices (R47-R49)
General symptoms and signs (R50-R63; R68-R69)
Cachexia (R64 in "B" Section)
Abnormal findings on examination of blood, without diagnosis (R70-R79)
Abnormal findings on examination of urine, without diagnosis (R80-R82)
Abnormal findings on examination of other body fluids, substances and
tissues, without diagnosis (R83-R89)
Abnormal findings on diagnostic imaging and in function studies, without
diagnosis (R90-R94)
Ill-defined and unknown causes of mortality (R95-R99)
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EXHIBIT E
1. KB's acquisition of remacemide from Fisons Corporation (now Rhone
Poulenc ▇▇▇▇▇ and referred to herein as "Fisons") did not include rights to
make, have made, use or sell remacemide for any ophthalmic indication for
glaucoma and other related pathologies of the anterior and/or posterior chamber
and optic nerve and retinal ischemic and non-ischemic neural degeneration, an
option for the rights to such indications having been previously committed to
Alcon by Fisons. In addition, if KB discontinues research and development of
remacemide, KB has an obligation to return such Compound to Fisons. There is a
6% royalty payable on Net Sales of remacemide by a member of the Astra Group (as
such terms are defined in the Fisons acquisition agreement).
2. KB's acquisition of rights to candesartan cilexitil ("candesartan")
from Takeda Chemical Industries, Ltd. ("Takeda") does not include rights to
manufacture candesartan substance unless specifically authorized by Takeda. The
development of candesartan is subject to agreement between Takeda and KB, and KB
and its subsidiaries may not proceed with development activities without such
agreement. KB has an obligation to pay Takeda 28% of the Net Selling Price as
such term is defined in the license KB obtained from Takeda. KB may grant only
subdistribution rights to KBI.
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EXHIBIT F
PRECLINICAL AND CLINICAL STUDIES
SAFETY ASSESSMENT
PREAMBLE: All safety assessment protocols should be consistent with the
current standards of the Food and Drug Administration and should be
in compliance with Good Laboratory Practices.
1. Acute toxicity - 2 species (2 rodents), both sexes, by two routes of
administration.
2. ▇▇▇▇ test
3. Depending on test compound and proposed clinical program, a 2-week,
4-week, 3-month, 6-month, 12-month, or 24-month toxicity study, or combination
of one or more of these, would be done in one rodent and one non-rodent species,
using both sexes.
4. Ocular, topical and/or parenteral irritation studies, where
required, in appropriate species.
5. Teratology studies (Segment II) in rats and rabbits.
6. Reproduction studies (Segments I and III) in rats.
7. Carcinogenicity studies which include range finding to establish
maximum tolerated dose. 2 species of rodents.
8 The carcinogenicity study in rat can be combined with the 12-month
toxicity study.
PHARMACOKINETICS
A. Pre-clinical
1. Metabolism and disposition of the compound in a rodent and
non-rodent species that have undergone safety assessment. If similar studies
were done in other species, this information should be included.
2. Identification of metabolites
3. Evidence of metabolite activity
4. Tissue distribution
5. Protein binding
73
6. Where appropriate, evidence of drug or metabolite transport into the
CNS (spinal fluid), breast milk, or across the placenta.
7. Evidence of possible induction or inhibition of drug metabolism.
8. Relevant in-vitro data on biotransformation.
B. Clinical: Reports, summaries and case report forms of all studies
concerning
1. Metabolism and disposition in man
2. Pharmacokinetics, including possible dose dependencies within the
therapeutic range.
3. Bioavailability of final formulations intended for the market.
4. Bioequivalence among formulations used in pivotal clinical trials of
efficacy and safety and linking them to the final formulations.
5. Other relevant data, e.g., drug interaction, effects of diseases.
C. Analytical Methods
1. Detailed procedures of methods used in pre-clinical and clinical
studies.
2. Documentation on assay specificity, sensitivity, linearity, and
reproducibility.
3. Quality assurance procedures in keeping with Good Clinical
Practices.
Conduct of Sections B and C should be consistent with FDA guidelines and
in compliance with Good Clinical Practices.
GENERAL PHARMACOLOGY
Methods of pharmacological studies will vary with the type of compound
under investigation.
Evaluation of compound concerning:
1. Studies of activities related to the primary therapeutic activity.
2. Studies of activities related to secondary therapeutic activity,
e.g.
a. CNS
b. Autonomic system
c. Cardiovascular system
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d. Respiratory system
e. Gastro-intestinal system
f. Other systems, where relevant, such as
? liver function
? kidney function
? endocrine functions.
CLINICAL
Phase I (Clinical Pharmacology) includes those tests and studies required
as such by the FDA from time to time.
Phase I (Clinical Pharmacology) is intended to include the initial
introduction of a drug into man. It may be in the usual "normal" volunteer
subjects to determine levels of toxicity, and be followed by early dose-ranging
studies in patients for safety and in some cases early efficacy.
Alternatively, with some new drugs, for ethical or scientific
consideration the initial introduction into man is more properly done in
selected patients.
The number of subjects and patients in Phase I will, of course, vary with
the drug but may generally be stated to be in the range of 20-80 on drug.
Drug dynamic and metabolic studies, in whichever stage of investigation
they are performed, are considered to be Phase I clinical pharmacological
studies. While some, such as absorption studies, are performed in the early
stages, others, such as efforts to identify metabolites, may not be performed
until later in the investigations.
Phase II (Clinical Investigation) includes those tests and studies
required as such by the FDA from time to time.
Phase II (Clinical Investigation) is intended to include early clinical
controlled trials designed to demonstrate effectiveness and relative safety.
Normally, these are performed on closely monitored patients of limited number.
As a rule this phase will include 50-200 patients on drug.
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NDA - CONTROL & MANUFACTURING DATA REQUIREMENTS
DRUG SUBSTANCE INFORMATION
A. Nomenclature
1. Structural and empirical formula and molecular weight
2. Names
a. Chemical names (including chemical abstracts, KB laboratory
identification)
b. Proprietary names (including generic and trade marks)
B. Physical and chemical properties
1. Description: Appearance, color, odor and form
2. Physical properties, e.g.
a. Thermal behavior
b. Solubilities: water, selected organic solvents of analytical
and pharmaceutical interest. Aqueous solubility as a function of pH.
c. Specific rotation
d. Index of refraction (liquids)
e. pKa
f. Partition coefficient
g. Hygroscopicity
h. Dehydration ? desolvation behavior
i. Density
3. Discussion of physico-chemical properties of particular interest; e.g.
solvates, polymorphs, powder technological aspects
4. Evidence of chemical structure
a. A scientific discussion of the chemistry of the molecule on
synthetic route
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b. Spectral data such as UV, IR, NMR, MS and interpretation
c. Optical rotation in the case of D- or L-isomers
5. Chromatographic behavior (TLC, GLC, LC)
6. Purity (impurities arising from synthetic process)
a. Potential and actual products
b. Methods for quantification and information on separation
characteristics, sensitivity etc.
7. Stability
a. Potential and actual degradates
b. Methods description and justification of suitability
c. Stability evaluation of compound in solid state when exposed
to various temperatures, humidities and light
d. Stability evaluation of compound in solution
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NDA - CONTROL & MANUFACTURING DATA REQUIREMENTS
BULK CHEMICAL INFORMATION
A. Synthesis information
1. Chemical raw materials used in the synthesis with acceptance tests,
methods and limits
2. Chemical process description
a. Flow diagram
b. Description of synthesis on a 1 mole basis (provides limits
under which the production scale must operate)
c. Description of synthesis for a typical production lot (more
specific than b. and is not intended as a commitment for all future
production batches)
3. In-process material specifications and test methods for each
synthetic step to demonstrate suitability for next step
4. Description of hypothetical and actual impurities resulting from the
process
5. Purchased synthetic intermediates that are not items of commerce
will require information under A1, A2a and B1.
B. Bulk chemical specifications and test methods
1. Basic specifications and test methods consistent with compendial
monographs for similar substances (identity, purity, strength, etc.)
2. Report on analytical development describing rationale for selection
of methods, precision and accuracy of assay methods, etc.
3. Reference standard
a. Method of preparation, isolation and purification of lot
b. Analytical characterization
(1) Spectral data, e.g., UV, IR, 1[SUBSCRIPT H], and
13[SUBSCRIPT C], NMR, MS and interpretation
(2) Chromatographic data, e.g. TLC, LC
(3) Other, e.g., phase solubility
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c. Certificate of analysis demonstrating conformance to bulk
chemical specification
C. Facilities information (if compound is to be imported for commercial use)
A description of the site performing the commercial scale process and
quality control of the new drug substance (conforming to current FDA drug master
file guidelines). A statement identifying local environmental regulations to
which the facility conforms.
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NDA -- CONTROL & MANUFACTURING DATA REQUIREMENTS
DOSAGE FORM INFORMATION
A. Composition (KBI Product Definition)
1. Formula (mg/dosage unit or mass/volume of each component for a
typical production batch)
2. Specifications and test methods for components. USP/NF if possible
3. Detailed description of production
B. Packaging
Packaging components supplied by KBI may be preferred for use in stability
studies and commercial production for the USA. If other components are used they
should be characterized in a suitable way, e.g. by the USP physicochemical tests
for plastic or high density polyethylene containers.
C. Dosage form testing
1. Finished product test methods and specifications
a. Specifications and test methods consistent with USP
specifications associated with the dosage form
b. Dissolution methods, specifications and rationale for the
selection of the medium
c. Assay method is specific and stability indicating. In case
degradation of the active ingredient might occur during production and
shelf life, suitable tests and limits are included. Report of methods
suitability is provided.
d. Automated methods for content uniformity and dissolution
procedures should be validated against manual procedures
e. Additional test procedures and specifications as necessary to
assure control of specific dosage forms and compounds
2. In-process tests and specifications
3. Stability testing (KBI Product Definition)
a. Stability study protocols jointly approved by KBI and KB prior
to the initiation of studies
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b. Test methods and information on accuracy, precision,
selectivity, sensitivity
c. Report on the stability characteristics of the product
D. Samples
1. Bulk drug and finished product samples (4 times the quantity
required to perform all test procedures contained in the NDA) and analytical
data
2. Referenced standard samples (in duplicate) and analytical
characterization data
3. Samples of isolated intermediates from the synthetic process,
in-process impurities and when possible product degradates (in duplicate)
E. Facilities Information (If commercial dosage form to be imported)
A description of the site performing commercial dosage form production and
quality control (conforming to current FDA Drug Master File guidelines). A
statement identifying local environmental regulations to which the facility
conforms.
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EXHIBIT G
FORM OF COMMON AND JOINT INTEREST AGREEMENT
COMMON AND JOINT INTEREST AGREEMENT, dated as of ___________, by and
among [ASTRA AB, a company limited by shares organized and existing under the
laws of Sweden KB, ("KB"), ASTRA MERCK ENTERPRISES INC., a corporation organized
and existing under the laws of the State of Delaware ("KBI-E"), ASTRA MERCK
INC., a corporation organized and existing under the laws of the State of
Delaware ("KBI"), ASTRA PHARMACEUTICALS, L.P., a limited partnership organized
and existing under the laws of the State of Delaware ("the Partnership"), and
MERCK & CO., INC., a corporation organized and existing under the laws of the
State of New Jersey ("TR")] (the "Agreement"). [Add or delete parties as
appropriate]
WHEREAS, KB and KBI entered into that certain Amended and Restated
License and Option Agreement made as of July 12, 1982, as amended and restated
as of July 1, 1998 (the "KBI License") relating to the development and marketing
of certain pharmaceutical compounds;
WHEREAS, KBI has assigned its rights and delegated its obligations
under the KBI License to KBI-E, other than KBI's rights and obligations with
respect to Trademarks (as defined in the KBI License), Selected Compounds (as
defined in the KBI License) and the Selected Uses (as defined in the KBI
license) for Licensed Compounds (as defined in the KBI License);
WHEREAS, KB, KBI-E, KBI, TR, the Partnership and the other entities
noted therein are parties to that certain Master Restructuring Agreement dated
as of June 19, 1998 (the "Master Restructuring Agreement");
[Insert additional WHEREAS clauses including, if appropriate, those
bracketed in the following form]
[WHEREAS, ____ is the holder of the New Drug Applications ("NDAs")
for certain compounds, including _________, and has listed certain patents
relating to _________ with the Food and Drug Administration (the "FDA") pursuant
to the ▇▇▇▇▇▇-▇▇▇▇▇ Act;]
[WHEREAS, KB and _________, a wholly-owned subsidiary of KB, own the
patents listed with the FDA and other patents relating to ______________ (the
"Patents");]
[WHEREAS, pursuant to the above-described agreements, the parties
hereto have worked jointly and cooperatively in connection with the [licensing,
development, marketing and sale] in the Territory of certain compounds,
including ___________, and have exchanged and communicated information related
to the Patents and Proceedings (as hereafter defined);]
[WHEREAS, the parties anticipate disputes, litigation, or other
proceedings
82
concerning, inter alia, (i) the validity, enforceability or coverage of the
Patents, or (ii) the filing of abbreviated new drug applications ("ANDAs"), or
other efforts by third parties, including filings with or proceedings before the
FDA relating to the approval of ____________ (collectively, "Proceedings");]
[WHEREAS, in anticipation of the Proceedings, the parties expect to
continue to exchange or communicate information relating to such Proceedings by,
between or among themselves;]
[WHEREAS, the parties now understand that one or more ANDAs have
been or are likely to be filed in the near future, and that certain Proceedings
relating to the Patents or other matters related to ______________ may be filed
in connection therewith;]
WHEREAS, in connection with and in anticipation of the Proceedings,
the parties want to ensure the continued protection of:
(i) advice, attorney-client information, mental impressions,
conclusions, opinions, legal theories, witness statements,
trial preparation, trial strategy, trial tactics, and other
notes, memoranda and work product of counsel, the identity and
work product of consulting experts retained to advise a party
regarding the proper analysis of the underlying facts, and
other privileged information or information protected by the
work product doctrine relating to the Patents and Proceedings
("Privileged Information/Work Product"); as well as
(ii) client confidences, trade secrets, and other proprietary,
business or technical information ("Confidential Information");
while at the same time being able to exchange certain information and cooperate
in certain joint and common efforts relating to the Patents and Proceedings, in
order that each may obtain an accurate appraisal of the facts underlying the
Proceedings, and present the most appropriate positions with respect thereto;
WHEREAS, the parties have had and continue to have a common interest
relating to ___________ and the Patents;
WHEREAS, the parties have been and continue to be of the opinion
that it is in their best interests to exchange information and to cooperate in
furtherance of their common interest relating to ____________ and the Patents
relating to ____________; and
WHEREAS, this Agreement confirms and reduces to writing the bases
for the continuing exchange of Privileged Information/Work Product and
Confidential Information in furtherance of the parties' common interest in
______________ and the Patents and in anticipation of Proceedings, such that the
exchange of Privileged Information/Work Product and Confidential Information has
not and will not defeat claims of privilege or work product protection, or
impair the confidentiality of such Privileged Information/Work Product and
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Confidential Information.]
NOW, THEREFORE, in order to accomplish the goals set forth above,
[KB, KBI, KBI-E the Partnership, TR] and [add or delete parties as appropriate]
hereby agree as follows:
1. Pursuant to their common and joint interests in the Patents and
Proceedings and in connection with and anticipation of Proceedings, the parties
have and will cooperate with each other in connection with such Patents and
Proceedings, and will further cooperate to protect all Privileged
Information/Work Product and Confidential Information to the maximum extent
permitted by law.
2. In connection with any actual or potential Proceedings,
Privileged Information/Work Product and Confidential Information heretofore and
hereafter exchanged by, between or among the parties, and the parties'
respective employees, counsel and agents, shall retain all privileges and
protections (including, but not limited to, the attorney-client privilege and
the protection of the work product doctrine) as if the parties were one party.
The exchange of Privileged Information/Work Product and Confidential Information
between or among the parties, and the parties' respective employees, counsel and
agents, in connection with any actual or potential Proceedings, shall not be
deemed a waiver of any privilege by the disclosing party with respect to any
information or subject matter. Each party to this Agreement shall retain the
right to assert any and all privileges and protections against non-parties to
this Agreement with respect to shared Privileged Information/Work Product and
Confidential Information that originated from it.
3. The parties do not intend by this Agreement to compel the
disclosure to each other of any materials or information that any party believes
should be kept confidential to itself, and nothing in this Agreement shall
require the disclosure among the parties of any such information. Nonetheless,
each party agrees to share Privileged Information/Work Product and Confidential
Information with the other parties, to the maximum extent such sharing is, in
its sole judgment, consistent with such party's protection of its own interests.
4. Any Privileged Information/Work Product and Confidential
Information exchanged or communicated in the past or future by, between or among
the parties or their counsel concerning the Patents and in contemplation or
anticipation of Proceedings shall be deemed subject to this Agreement.
5. All oral, written, pictorial, electronic, and physical Privileged
Information/Work Product and Confidential Information communicated by, between
and among the parties relating to the Proceedings shall be covered by this
Agreement.
6. Each party shall take appropriate steps to ensure the
confidentiality of all Privileged Information/Work Product and Confidential
Information received by it. Privileged Information/Work Product and Confidential
Information may be disclosed by a receiving party only to persons with whom such
a communication would be privileged or protected by the work product doctrine or
attorney-client privilege. Except as stated in the preceding sentence, each
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84
party agrees that all Privileged Information/Work Product and Confidential
Information received from another party shall be held in strictest confidence
and shall not be given, shown, made available, communicated or otherwise
disclosed in any way to anyone without the express consent of the party from
whom the Privileged Information/Work Product and Confidential Information was
received. It shall be the duty of each party to inform all persons to whom
disclosures are made pursuant to this Agreement that all such disclosures are to
be kept confidential.
7. Privileged Information/Work Product and Confidential Information
exchanged or communicated by, between or among the parties may be used by the
party to whom such Privileged Information/Work Product and Confidential
Information is given for the purposes set forth in this Agreement and for no
other purpose. However, each party shall retain the right to use all Privileged
Information/Work Product and Confidential Information it has furnished to other
parties for any purpose.
8. Notwithstanding any provision of this Agreement, the
confidentiality, use or disclosure of any Confidential Information that a party
received and is or was entitled to receive under any other agreement shall be
governed entirely by the terms and conditions of that other agreement, and shall
not be subject to any higher level of confidentiality or greater restriction by
reason of this Agreement.
9. If any non-party to this Agreement requests that any party to
this Agreement disclose any Privileged Information/Work Product and Confidential
Information supplied by another party, the party receiving the disclosure
request shall (a) notify the party from whom the materials originated that the
request for disclosure has been made, and (b) shall provide the party from whom
the materials originated with an opportunity to assert a claim of privilege or
work-product protection or otherwise seek relief to prevent disclosure of
Privileged Information/Work Product and Confidential Information. In addition,
at the request and expense of the party from whom the materials originated, the
party receiving the disclosure request shall seek a protective order or other
relief from a court in order to prevent the disclosure of said materials.
10. Nothing in this Agreement or the exchange of Privileged
Information/Work Product and Confidential Information pursuant to this Agreement
shall create an attorney-client relationship between any counsel and any party
to this Agreement, or affect any existing attorney-client relationship between
any counsel and any party to this Agreement. Except as set forth in Paragraph 9
above, each party shall be responsible for the payment of the fees and expenses
of its own counsel related to any Proceedings.
11. Any party to this Agreement can withdraw from participation
herein by notifying the other parties in writing on fifteen (15) days' notice.
Such withdrawal does not affect the obligations relating to maintenance of the
confidentiality of Privileged Information/Work Product and Confidential
Information received by such withdrawing party which existed pursuant to this
Agreement prior to any such withdrawal. Any party which withdraws from
participation in this Agreement must continue to assert the privileges and work
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85
product protections with respect to all Privileged Information/Work Product and
Confidential Information received by such party prior to such party's withdrawal
unless and until such privileges and protections are expressly waived by the
remaining parties hereto, and shall continue to abide by the provisions of
Paragraph 9 in the event that any third party requests that the withdrawing
party disclose any Privileged Information/Work Product and Confidential
Information materials subject to this Agreement. Upon request by the party or
parties from which Privileged Information/Work Product and Confidential
Information originated, the withdrawing party shall return all physical copies
of such Privileged Information/Work Product and Confidential Information to such
party or parties.
12. This Agreement shall be governed by the substantive laws of the
State of New York, without regard to that state's conflict of laws rules.
13. The parties agree that there exists no adequate remedy or law
for breach of this Agreement and that specific performance and or injunctive
relief are appropriate remedies to compel performance hereunder.
14. 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 above written.
[MERCK & CO., INC. [ASTRA AB
By: ____________________________ By:__________________________________
Name: Name:
Title:] Title:]
[ASTRA MERCK ENTERPRISES INC. [ASTRA MERCK INC.
By: ____________________________ By:__________________________________
Name: Name:
Title:] Title:]
[ASTRA PHARMACEUTICALS, L.P. [ADD OR DELETE PARTIES AS APPROPRIATE]
By: KB USA, L.P., its General Partner
By: Astra AB, its General Partner
By:__________________________________
Name:
Title:]
G-6
87
EXHIBIT H
PRINCIPLES FOR COOPERATION ON PRILOSEC PATENT ISSUES
1. Full cooperation and communication between KB and TR on ANDAs, other
infringements and other patent issues related to Prilosec.
2. TR will have full representation on the KB Prilosec patent working group
and will be entitled to full disclosure of information.
3. Decision making by the working group will be by consensus.
4. If the working group cannot reach consensus the issue will ultimately be
decided by a committee consisting of one executive from each of KB and TR.
The working group and/or executives may seek the advice of a liaison
committee consisting of a high level representative from each of KB and
TR. Astra has appointed Cege Johansson and Merck has appointed ▇▇▇▇
▇▇▇▇▇▇. Appointed for the liaison committee are M. Parup (for KB) and P.
Matukatis (for TR).
5. The working group will establish procedures for operation consistent with
the principles set forth herein.
6. Merck shall be permitted to have outside counsel representation. KB will
accept Fitzpatrick, Cella, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ as Merck's representative.
88
EXHIBIT H (cont'd)
[▇▇▇▇, SCHOLER, FIERMAN, ▇▇▇▇ & HANDLER, LLP LETTERHEAD]
June 12, 1998
VIA FACSIMILE
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Fitzpatrick, Cella, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Possible Patent Litigation against
Abbreviated New Drug Application Filers
Dear ▇▇▇:
In furtherance of our clients' common legal interests and strategies
with respect to the PRILOSEC(R) product, we have been working together for some
time, together with our respective clients and other lawyers, to prepare for
anticipated litigations on the patents listed in the Orange Book relating to
that product. This letter will confirm the cooperation and communication
arrangements you and I have agreed upon to assist us in preparing for these
prospective litigations and for cooperation in the litigations now commenced.
▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ will be trial counsel,
representing their respective clients, Astra and Hassle, on the one hand, and
Astra Merck Enterprises and Astra Merck on the other. We have also been
consulting with other counsel for our clients, both outside and inside counsel,
including, regulatory, patent and antitrust counsel.
The coordination system upon which we have agreed is that each of our
clients have in-house attorneys assigned to this matter: ▇▇▇▇▇▇ ▇▇▇▇▇▇ for Astra
and Hassle, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ for Merck, and ▇▇▇ ▇▇▇▇▇▇▇▇▇ for AMEI and AMI. We
have had, and will continue to have, joint meetings between counsel, including
client representatives when appropriate. Pursuant to the Common and Joint
Interest Agreement entered into by our respective clients, documents have been
and will continue to be exchanged between the various
89
[▇▇▇▇, SCHOLER, FIERMAN, ▇▇▇▇ & HANDLER, LLP LETTERHEAD]
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq. 2 June 12, 1998
parties as appropriate to prepare for anticipated litigations and for
coordination in the litigations now commenced.
If anything I have set forth herein is not accurate, please contact
me.
Very truly yours,
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
TLC: mts
cc: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
Surton ▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
