EXHIBIT 10.38
RESEARCH, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT
BETWEEN
3-DIMENSIONAL PHARMACEUTICALS, INC.
AND
CENTOCOR, INC.
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS...................................................1
ARTICLE 2 GRANT OF LICENSE RIGHTS......................................11
2.1 License for Direct Thrombin Inhibitors and Licensed Products....11
ARTICLE 3 BACK-UP RESEARCH PROGRAM.....................................12
3.1 Generally.......................................................12
3.2 The Research Plan...............................................12
3.3 The JRC.........................................................13
3.4 Information and Reports.........................................13
3.5 Collaboration Tangible Research Products........................14
3.6 Dedicated FTEs..................................................14
3.7 Support of FTEs.................................................15
3.8 Research Audit..................................................15
3.9 Extension of the Research Term..................................15
3.10 Additional Extension by Mutual Consent..........................16
3.11 Ownership of Tangible Research Products.........................16
3.12 Ownership of Collaboration Tangible Research Products...........16
ARTICLE 4 DEVELOPMENT OF LICENSED PRODUCTS.............................16
4.1 Centocor's Right to Select Direct Thrombin Inhibitors...........16
4.2 3DP's Responsibilities..........................................16
4.3 Development Observer............................................17
4.4 Centocor Development Efforts....................................17
4.5 Development Responsibility and Costs............................18
4.6 Regulatory Responsibilities and Costs...........................18
4.7 3DP Co-Development in the United States for Deep Vein
Thrombosis (DVT) ...............................................18
4.8 Joint Steering Committee........................................19
4.9 Responsibilities for Co-Developed Licensed Product..............22
4.10 3DP Right to Terminate..........................................22
4.11 Centocor Development and Commercialization......................22
ARTICLE 5 COMMERCIALIZATION OF LICENSED PRODUCTS.......................23
5.1 Manufacture of Licensed Product.................................23
i
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
TABLE OF CONTENTS
Page
5.2 Commercial Responsibilities.....................................23
5.3 Marking.........................................................23
5.4 Centocor's Marketing Obligations For Licensed Products..........23
5.5 Co-Promotion Option of 3DP......................................23
5.6 Trademarks......................................................26
ARTICLE 6 FINANCIAL PROVISIONS.........................................26
6.1 License Fee.....................................................26
6.2 First Licensed Product Development Milestone Payments...........26
6.3 Development Milestone Payments for Replacement Compositions.....27
6.4 Development Milestone Payments for Subsequent Compositions......27
6.5 Approval Milestone Payments For Additional Indications..........28
6.6 Royalty Rate for Licensed Products Developed and Commercialized
by Centocor.....................................................28
6.7 Royalty Rate Reduction..........................................28
6.8 Royalty Adjustment for Cost of Goods............................30
6.9 Currency Restrictions...........................................30
6.10 Royalty Period..................................................30
6.11 Mode of Payment.................................................31
6.12 Timing of Payments..............................................31
6.13 Quarterly Royalty Reports.......................................31
6.14 Royalty Payment Due Date; Accrual...............................32
6.15 Royalty Report Timing...........................................32
6.16 Financial Records...............................................32
6.17 Currency Exchange...............................................32
6.18 Audit...........................................................32
6.19 Interest Due....................................................33
6.20 Tax Withholding.................................................33
ARTICLE 7 CONFIDENTIAL INFORMATION.....................................34
7.1 Confidentiality Obligations.....................................34
7.2 Written Assurances and Permitted Uses of Confidential
Information.....................................................34
7.3 Authorized Disclosure...........................................35
ii
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
TABLE OF CONTENTS
Page
7.4 Publication.....................................................36
7.5 Public Announcements............................................36
ARTICLE 8 PATENTS AND INTELLECTUAL PROPERTY............................36
8.1 Ownership; Inventions...........................................37
8.2 Disclosure of Patentable Inventions.............................37
8.3 3DP Patentable Inventions and Know-How..........................37
8.4 Centocor Patentable Inventions and Know-How.....................38
8.5 Jointly Owned Program Patents...................................38
8.6 Initial Filing if Made Outside of the United States.............39
8.7 Infringement Claims by Third Parties............................39
8.8 Patent Assignment...............................................40
8.9 Infringement Claims Against Third Parties.......................40
8.10 Notices Relating to the Act.....................................41
8.11 Patent Term Extensions..........................................42
8.12 Rights to Research Compounds....................................42
ARTICLE 9 INDEMNIFICATION..............................................43
9.1 Research and Development Indemnification........................43
9.2 Indemnification for Direct Thrombin Inhibitors and Licensed
Products .......................................................43
9.3 Insurance Proceeds..............................................44
9.4 Insurance.......................................................44
ARTICLE 10 TERM AND TERMINATION.........................................45
10.2 Termination of this Agreement by Centocor for any Reason........45
10.3 Termination for Breach..........................................45
10.4 Termination for Bankruptcy......................................45
10.5 Effect of Termination...........................................45
10.6 No Waiver.......................................................46
10.7 Consequences of Termination.....................................46
10.8 Results of Termination by Centocor for Cause....................46
10.9 Survival of Obligations.........................................46
iii
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
TABLE OF CONTENTS
Page
10.10 Termination Not Sole Remedy.....................................46
10.11 3DP Change of Control...........................................46
ARTICLE 11 REPRESENTATIONS AND WARRANTIES...............................47
11.1 Authority.......................................................47
11.2 No Conflicts....................................................48
11.3 No Existing Third Party Rights..................................48
11.4 Patents and Know-How Warranties.................................48
11.5 Control of Know-How.............................................48
11.6 Development Material............................................48
11.7 Disclaimer of Warranties........................................48
11.8 Continuing Representations......................................48
ARTICLE 12 DISPUTE RESOLUTION...........................................48
12.1 Dispute Resolution and Arbitration..............................48
12.2 Arbitration.....................................................49
ARTICLE 13 MISCELLANEOUS PROVISIONS.....................................49
13.1 Entire Agreement................................................49
13.2 Further Actions.................................................49
13.3 Binding Effect..................................................49
13.4 Assignment......................................................49
13.5 No Implied Licenses.............................................49
13.6 No Waiver.......................................................50
13.7 Force Majeure...................................................50
13.8 Independent Contractors.........................................50
13.9 Notices and Deliveries..........................................50
13.10 Restrictions on Unsolicited Activities..........................51
13.11 Headings........................................................51
13.12 Severability....................................................51
13.13 Applicable Law..................................................51
13.14 Advice of Counsel...............................................52
13.15 Counterparts....................................................52
iv
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
TABLE OF CONTENTS
Page
13.16 Waiver..........................................................52
13.17 Bankruptcy......................................................52
13.18 Compliance with Laws............................................52
13.19 Guaranty........................................................52
ARTICLE 14 HSR FILING...................................................52
14.1 HSR Filing......................................................52
14.2 HSR-Related Definitions.........................................53
14.3 HSR Denial......................................................53
v
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
RESEARCH, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT
This Agreement is made and effective as of December 29, 2000 (the "Execution
Date"), by and between 3-Dimensional Pharmaceuticals, Inc., a Delaware
corporation having a principal place of business at Eagleview Corporate Center,
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("3DP"), and Centocor, Inc., a
Pennsylvania corporation having a principal place of business at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ("Centocor"). ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, a New
Jersey corporation, having its place of business at ▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ (hereinafter referred to as "J&J") is a
party to this Agreement as a guarantor of the performance under this Agreement
of Centocor and its Affiliates. 3DP and Centocor may be referred to individually
herein as a "Party" or together as the "Parties" and all references to "3DP" and
"Centocor" shall include their respective Affiliates, unless otherwise
indicated.
RECITALS
WHEREAS, 3DP has identified and developed certain Direct Thrombin Inhibitors
with potential application in the prevention and treatment of human disease;
WHEREAS, Centocor is engaged in research, development and commercialization of
pharmaceutical products for the prevention and treatment of human disease;
WHEREAS, 3DP has a proprietary position in such Direct Thrombin Inhibitors; and
Centocor wishes to obtain from 3DP certain licenses to the patent applications,
patents and know-how relating to such Direct Thrombin Inhibitors and 3DP is
willing to grant such licenses to Centocor on the terms and subject to the
conditions hereinafter set forth; and
WHEREAS, the Parties wish to collaborate on certain additional research
activities with respect to certain follow-up compositions to such Direct
Thrombin Inhibitors using technology contributed by either Party and Developed
pursuant to this Agreement on the terms and subject to the conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the various promises and undertakings set
forth herein, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
The terms in this Agreement with initial letters capitalized, whether used in
the singular or the plural, shall have the meaning set forth below or, if not
listed below, the meaning designated where first used in this Agreement.
1.1 "Additional Indication" means an Indication other than the first
Indication to receive Regulatory Approval as referenced in Section
6.5.
1
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
1.2 "Affiliate" means, with respect to any Party, any corporation or
other business entity, which directly or indirectly controls, is
controlled by, or is under common control with such Party. For the
purposes of this definition, the term "control" (including, with
correlative meanings, the term "controlled by" and "under common
control with") as used with respect to any Party, shall mean the
possession of at least 50% of the voting stock or other ownership
interest of the other corporation or entity, or the power to direct
or cause the direction of the management and policies of the
corporation or other entity or the power to elect or appoint at
least 50% of the members of the governing body of the corporation or
other entity through the ownership of the outstanding voting
securities or by contract or otherwise.
1.3 "Agreement" means this agreement, including its schedules and
exhibits, as the same may be amended from time to time.
1.4 "Centocor Know-How" means Information which (a) Centocor discloses
to 3DP under this Agreement or under the Confidentiality Agreements
between the Parties dated April 5, 1999 and June 2, 1999 as amended
on October 27, 1999 and (b) is within the Control of Centocor during
the Term of the Agreement.
1.5 "Centocor Patent" means the rights granted by any governmental
authority under a Patent owned or Controlled by Centocor during the
Term of this Agreement claiming a method, apparatus, material,
manufacture or business method relating to a Direct Thrombin
Inhibitor or Licensed Product, including its interest in Program
Patents. A list of Centocor Patents is appended hereto as Exhibit
1.5 and will be updated periodically to reflect additions thereto
during the course of this Agreement.
1.6 "Co-Develop" means Development of Licensed Product for DVT under an
arrangement wherein 3DP pays for all Development costs or where 3DP
and Centocor share Development costs for Development of Licensed
Product for DVT in accordance with Section 4.7.
1.7 "Collaboration Tangible Research Product" means any composition of
matter or other tangible asset, including but not limited to
compounds, natural products immunoglobulin molecules, proteins and
peptides made or synthesized by either Party pursuant to the
Research Plan in the course of the Research Program, including
Research Compounds.
1.8 "Combination Product" means a Licensed Product that includes one or
more active ingredients in addition to a Direct Thrombin Inhibitor.
1.9 "Commercialize" or "Commercialization" means any and all activities
directed to marketing, promoting, manufacturing, packaging and
distributing Licensed Product, offering for sale and selling of
Licensed Product or importing Licensed
2
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Product for sale. When used as a verb, "Commercialize" means to
engage in Commercialization.
1.10 "Completion of a [**]" means fifteen (15) days after receipt by
Centocor of a draft report containing all [**].
1.11 "Control" or "Controlled" means possession of the ability to grant a
license or sublicense of Patents, know-how or other intangible
rights as provided for herein without violating the terms of any
contract or other arrangements with any Third Party.
1.12 "Co-Promote" or "Co-Promotion" means to promote a Licensed Product
for DVT through 3DP's sales force alone or together with Centocor's
sales force under a single trademark in the United States.
1.13 "Co-Promotion Net Sales" are as defined in Paragraph 19 of Exhibit
5.5.1.
1.14 "Details" or "Detailing" shall mean sales presentations made to
surgeons and other medical professionals who provide health care
services to patients for Licensed Product for DVT in the United
States.
1.15 "Development" or "Develop" means preclinical and clinical drug
development activities, including, among other things: test method
development and stability testing, toxicology, formulation, process
development, manufacturing scale-up, development-stage
manufacturing, quality assurance/quality control development,
statistical analysis and report writing, clinical studies and
regulatory affairs, product approval and registration. For the
purposes of this Agreement, Development shall include, without
limitation, Pre-Phase I, Phase I, Phase II, Phase III, phase IIIB
and phase IV Clinical Trials. When used as a verb, "Develop" means
to engage in Development.
1.16 "Development Cost" shall mean the out of pocket costs paid to Third
Parties associated with Development of Direct Thrombin Inhibitors
and Licensed Products for DVT and a reasonable allocation of
internal personnel costs pursuant to such Development and other
costs included in the Development budget in accordance with the
Development Plan.
1.17 "Development Plan" means the plan and budget describing the proposed
Development of Direct Thrombin Inhibitors for DVT in the United
States, including, but not limited to, the Development activities
for obtaining Regulatory Approval.
1.18 "Direct Thrombin Inhibitor" means: [**] (i) [**] that are
discovered, synthesized or acquired (to the extent such composition
of matter is not encumbered at the time of its acquisition) by 3DP
or Centocor during the
3
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Research Term, and up until [**] after the end of the Research Term
including, but not limited to, [**]; and (ii) [**].
[**]
1.19 "Dollars" means the legal currency of the United States.
1.20 "Drug Approval Application" means an application for Regulatory
Approval required before commercial sale or use of a Licensed
Product as a drug in a regulatory jurisdiction.
1.21 "DVT" means the prevention and/or treatment of deep venous
thrombosis.
1.22 "EMEA" means the European Medicines Evaluation Agency or any
successor agency.
1.23 "Execution Date" means the date of this Agreement as set forth
above.
1.24 "FDA" means the United States Food and Drug Administration or any
successor agency.
1.25 "Field" means the research, discovery, synthesis and identification
of Direct Thrombin Inhibitors, and the Development, use and
Commercialization of Licensed Product for therapeutic, prophylactic
or diagnostic use in humans or animals.
1.26 "First Commercial Sale" means, with respect to a given Licensed
Product, the first sale in an arms length transaction and shipment
of a Licensed Product to a Third Party by Centocor or its
Sublicensee in a country in the Territory following applicable
Regulatory Approval of the Licensed Product in such country.
1.27 "FTE" means a full time scientific person dedicated to the Research
Program, or in the case of less than a full-time dedicated
scientific person, a full-time, equivalent scientific person year,
based upon a total of forty-seven (47) weeks or one thousand eight
hundred eighty (1,880) hours per year of scientific work, on or
directly related to the Research Program, carried out by an employee
and/or consultant under contract and/or a Third Party under
contract.
1.28 "Generic Equivalent" means a Product that is being sold in a country
without infringing a claim of a 3DP Patent, Centocor Patent or
jointly owned Program Patent covering a Licensed Product being sold
hereunder by Centocor, which would have infringed such claim of a
3DP Patent, Centocor Patent or jointly owned Program Patent, or
which would have prevented a Third Party from selling the same
Direct Thrombin Inhibitor that is part of the Licensed Product, if
such claim of a 3DP Patent, Centocor Patent or jointly owned Program
Patent were in force in that country.
4
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
1.29 "IND" means an investigational new drug application filed with the
FDA as more fully defined in 21 C.F.R.ss.312.3 or its equivalent in
any country.
1.30 "Indication" means a recognized disease or condition as identified
in an NDA for a Licensed Product. Notwithstanding the foregoing for
the purposes of this Agreement, [**] will be considered separate
Indications even if they are included in the same NDA.
1.31 "Information" means all information including, but not limited to,
screens, models, inventions, practices, methods, knowledge,
know-how, skill, experience, test data including pharmacological,
toxicological and clinical test data, analytical and quality control
data, marketing, pricing, distribution, costs, sales, manufacturing
data, and patent and legal data or descriptions (to the extent that
disclosure thereof would not result in loss or waiver of privilege
or similar protection) and methods as each of the foregoing relate
to the Licensed Product or Direct Thrombin Inhibitor and is
Controlled by a Party or its Affiliates.
1.32 "Joint Research Committee" or "JRC" shall have the meaning and roles
ascribed in Section 3.3.
1.33 "Joint Steering Committee" or "JSC" shall have the meaning and roles
ascribed in Section 4.8.
1.34 "Licensed Product" means a Product that includes a Direct Thrombin
Inhibitor as an active ingredient.
1.35 "Major Market Country" means the United States, Japan, France, the
United Kingdom, Germany and Italy.
1.36 "Manufacturing Cost" means the cost incurred for the manufacture of
commercial supplies of the Licensed Product as calculated in
accordance with generally accepted accounting principles consistent
with the standards and policies ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ applies to its
other oral prescription pharmaceutical products of the same dosage
form(s). Manufacturing cost shall be calculated as a "Standard Cost"
by adding Material Costs, Direct Labor Costs, Variable Overhead
Costs, and Fixed Overhead Costs, all of the foregoing to be, as
applicable, directly attributable or reasonably allocated to the
manufacture of the Licensed Product. In no event shall Manufacturing
Cost include costs associated with unused manufacturing capacity.
Furthermore, to the extent any Manufacturing Costs are incurred by
one Centocor Affiliate and invoiced to another Centocor Affiliate or
to Centocor itself, any intracompany profit contained within the
transfer price shall be deducted in the Manufacturing Cost
calculation.
1.36.1 "Materials Costs" means the out of pocket cost for raw
material, packaging components and/or finished goods which are
purchased from any Third Party or its Affiliates. To the extent
invoiced to Centocor by such Third Party or
5
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
its Affiliates, Material Costs shall also include (1) freight and
duty, (2) quality assurance sample amounts, and (3) any component
wastage adjustment (i.e., scrap percentage).
1.36.2 "Direct Labor Costs" means the standard labor hours required
for an operation according to the standard operating procedures
multiplied by the direct labor rate (i.e., the employment costs per
man hour including, without limitation, salary and employee
benefits, uniforms, supplies and training) for work centers within
the relevant manufacturing operating unit.
1.36.3 "Variable Overhead Costs" means the actual cost of specific
activities that are provided by support functions and are required
to manufacture Licensed Product in accordance with Current Good
Manufacturing Practices ("CGMP") standards. Variable Overhead Costs
may include the cost of quality assurance testing, batch review and
reconciliation, equipment maintenance costs, manufacturing
utilities, supplies and waste removal. These expenses must be
reasonably allocated to the Licensed Product based on production
activity.
1.36.4 "Fixed Overhead Costs" means the actual cost of equipment
depreciation, management and administrative expenses, and general
facility costs (including property taxes, insurance and maintenance,
each of which shall be allocated on a reasonable basis in accordance
with generally accepted accounting principles and ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
standards and policies). For the avoidance of doubt, Standard Costs
shall include all out of pocket costs for subcontractors necessary
to complete manufacturing and distribution of the Licensed Product.
1.36.5 Costs not covered by Standard Cost shall include costs
associated with labor and variable overhead variances, material
usage, and purchase price variance, as the foregoing relate to the
specific Licensed Product. In no event shall costs not covered by
the Standard Cost exceed 2% of net sales for the purposes of
Manufacturing Cost calculations.
1.37 "Marketing Plan(s)" shall mean a marketing plan or plans for
specified periods which shall set forth promotion, Detailing and
marketing tactics and strategies related to a Licensed Product for
DVT in the United States.
1.38 "NDA" means a new drug application filed pursuant to 21 U.S.C.
Section 505(b)(1) including all documents, data and other
information concerning a Licensed Product which are necessary for or
included in, FDA approval to market a Licensed Product and all
supplements and amendments, including supplemental new drug
applications, that may be filed with respect to the foregoing as
more fully defined in 21 C.F.R. ss.314.50 et. seq.
1.39 "Net Sales" means the gross amounts invoiced by Centocor or its
Sublicensees for sales of Licensed Product in finished package form
(ready for use by the ultimate consumer) in the Territory to a Third
Party, including, but not limited to, sales to wholesalers or other
customers typical in each country in bona fide, arm's
6
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
length transactions. In the event Centocor does not sell directly to
such customers in one or more countries, electing instead to utilize
another party as a distributor to those customers, it is understood
that Net Sales shall include sales by the distributor rather than
Centocor's sales to the distributor. In determining Net Sales,
certain deductions may be taken against the gross amount invoiced.
These allowable deductions are:
1.39.1 (i) discounts, including cash discounts, discounts to managed
care or similar organizations or government organizations,
administrative fees paid to pharmacy benefits managers; (ii)
rebates paid or credited, including government rebates such
as Medicaid chargebacks or rebates; (iii) retroactive price
reductions or allowances actually allowed or granted from the
billed amount; and (iv) commercially reasonably promotional
allowances actually granted to customers as reflected on the
same invoice as for the sale of Licensed Product;
1.39.2 credits or allowances actually granted upon claims,
rejections or returns of such sales of Licensed Products,
including government mandated recalls and recalls that
Centocor reasonably believes are in the best interest of the
consumer, it being understood that if the recalled Licensed
Product is resupplied, Net Sales shall be calculated based on
the resupplied quantities at the price previously charged,
provided that the cause of the recall was not due to the
negligence of Centocor;
1.39.3 taxes, duties or other governmental charges levied on or
measured by the billing amount when included in billing, as
adjusted for rebates, charge-backs and refunds; and
1.39.4 freight, postage, shipping and insurance charges to the
extent included on the same invoice by Centocor or its
Sublicensee for delivery of such Licensed Products.
In the case of discounts on packages of products or services which
include Licensed Product in those countries of the Territory in
which such is legally permissible ("Packages"), the discount applied
to Licensed Product within the Package shall be no greater than the
discount determined by discounting the list price of the Licensed
Product in the Package by the average percentage discount of list
prices of all products of Centocor in the same Package, calculated
as follows:
Average percentage
Discount on a A
Particular Package = ( 1- - ) X 100
B
where A equals the total discounted value of a particular Package of
products, and B equals the sum of the undiscounted value of the same
Package of products.
7
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Centocor shall provide 3DP with reasonable documentation supporting
the percentage discounts with respect to each product within such
Package.
A "sale" of a Licensed Product is deemed to occur upon the
invoicing, or if no invoice is issued, upon the earlier of shipment
or transfer of title in the Licensed Product to a Third Party.
With respect to Combination Products, Net Sales for such Combination
Product sold by Centocor shall be determined by the Parties to this
Agreement in good faith based on the relative value of the Direct
Thrombin Inhibitor and the additional active ingredients that are
included in the Combination Product.
For the purposes of calculating royalties pursuant to Section 6.6,
Net Sales shall not include Co-Promotion Net Sales.
1.40 "Patents" shall mean all patents and patent applications, including
any continuations, continuations-in-part, divisions, provisionals or
any substitute applications, any patent issued with respect to any
such patent applications, any reissue, reexamination, renewal or
extension (including any supplemental patent certificate) of any
such patent, and any confirmation patent or registration patent or
patent of addition based on any such patent, and all foreign
counterparts of any of the foregoing.
1.41 "Phase II Clinical Trial" or "Phase II" means a human clinical trial
conducted for inclusion in (i) that portion of the FDA submission
and approval process which provides for trials of a Product on a
limited number of patients for the purposes of collecting data on
dosage, evaluating safety and collecting preliminary information
regarding efficacy in the proposed therapeutic indication, as more
fully defined in 21 C.F.R. ss. 312.21(b), and (ii) equivalent
submissions with similar requirements in other countries in the
Territory.
1.42 "Phase III Clinical Trial" or "Phase III" means that portion of the
clinical development program beyond Phase II, which provides for
large scale clinical studies conducted in a sufficient number of
patients to establish the clinical efficacy of a Product for one or
more indications and its safety, as more fully defined in the United
States in 21 C.F.R.ss.312.21(c), and equivalent submissions with
similar requirements in other countries in the Territory.
1.43 "Pre-Phase I" means that portion of the development program which
starts with the selection of a compound for development into a
Product or the beginning of toxicological studies relating to such
compound. Pre-Phase I includes, but is not limited to,
toxicological, pharmacological and any other studies, the results of
which are required for filing with an IND, as well as product
formulation and manufacturing development necessary to obtain the
permission of regulatory authorities to begin and continue
subsequent human clinical testing. Toxicology as used in this
definition means full-scale toxicology using CGMP material for
8
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
obtaining approval from a regulatory authority to administer the
Product to humans. This toxicology is distinguished from initial
dose range finding toxicology, which usually includes a single and
repeated dose ranging study in two species with less than half of
the animals required by the FDA, an ▇▇▇▇ test or a related
chromosome test.
1.44 "Product" means a pharmaceutical product in any dosage form for the
prevention, treatment or diagnosis of disease in humans or animals.
1.45 "Program Patent" means any Patent, the subject of which is an
invention that (i) was conceived and/or reduced to practice by
Centocor or 3DP or by a Third Party acting under authority of
Centocor or 3DP in the course of the Research Program, or their
respective work in the Field during the Research Term and the one
(1) year period following the Research Term and (ii) comprises a
Direct Thrombin Inhibitor or a formulation, dosing regimen, dosing
device, method of use or method of manufacture thereof.
1.46 "Regulatory Approval" means all official approvals by government,
pricing or health authorities in a country (or supra-national
organizations, such as the EMEA) which are required for first use or
sale, including, importation, manufacture (where manufacture is
required), and if required, approvals for pricing or reimbursement
of a Product in such country.
1.47 "Replacement Composition" means a Direct Thrombin Inhibitor that is
intended to be reserved as a back-up for a lead Direct Thrombin
Inhibitor for a particular Indication. A Replacement Composition is
not intended to be Developed and Commercialized unless Development
and/or Commercialization of a lead Direct Thrombin Inhibitor is
terminated.
1.48 "Research Compound" means any composition of matter, including, but
not limited to, chemical entities, prodrugs, isomers, peptides,
non-peptides, natural products and monoclonal antibodies that is a
Collaboration Tangible Research Product made pursuant to the
Research Program, but is something other than a Direct Thrombin
Inhibitor.
1.49 "Research Plan" means the detailed description of the research
activities of the Parties in the performance of the Research
Program, an outline of which is attached hereto as Exhibit 1.49 and
as it may be amended from time to time by mutual agreement of the
Parties.
1.50 "Research Program" means all research activities performed by the
Parties during the Research Term to identify, synthesize and develop
Direct Thrombin Inhibitors, including, without limitation,
Replacement Compositions and Subsequent Compositions.
1.51 "Research Term" means the period commencing on the Execution Date
and ending on the first to occur of (a) termination of this
Agreement by either Party
9
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
under Section 10.3 or 10.4 hereof or (b) two (2) years after the
Execution Date subject to renewal in accordance with provisions of
this Agreement.
1.52 "Sales and Marketing Committee" shall mean a committee consisting of
members from the marketing and/or sales functions of 3DP and
Centocor for the Co-Promotion of Licensed Product for DVT in the
United States.
1.53 [**] from the test treatments as described in the study description
attached hereto as Exhibit 1.53, a protocol for which will be
finalized and approved by the Parties as soon as reasonably
practicable after the Execution Date.
1.54 "Sublicensee" shall mean, with respect to a particular Licensed
Product, a Third Party to whom Centocor has granted a license or
sublicense under any Centocor Patents or 3DP Patents or jointly
owned Program Patent to make, use and sell such Licensed Product. As
used in this Agreement, "Sublicensee" shall also include a Third
Party to whom Centocor has granted the right to distribute a
Licensed Product.
1.55 "Subsequent Composition" means a Direct Thrombin Inhibitor that is
intended to be Developed and Commercialized as a follow-up to a lead
Direct Thrombin Inhibitor that is already under Development or being
Commercialized for the same Indication or another Indication.
1.56 "Tangible Research Product" means any composition of matter or other
tangible asset, including, but not limited to, compounds, natural
products, immunoglobulin molecules, proteins and peptides, made or
synthesized by 3DP or Centocor prior to the Execution Date and which
are necessary to carry out the Research Program.
1.57 "Term" shall have the meaning ascribed thereto in Section 10.1.
1.58 "Territory" means the entire world.
1.59 "Third Party" means an individual, corporation or other entity other
than a Party or any of its Affiliates or Sublicensees.
1.60 "Valid Patent Claim" means a claim in any issued and unexpired
Patent, which claim has not been held invalid by a non-appealed or
unappealable decision by a court or other appropriate body of
competent jurisdiction. For the purpose of royalty determination and
payment, any claim being prosecuted in a pending patent application
shall be deemed to be a "Valid Patent Claim" provided such claim is
not pending for more than six (6) years from the earliest filing
date of the patent application in which case it shall cease to be
considered a Valid Patent Claim until the patent issues.
1.61 "3DP Patent" means the rights granted by any governmental authority
under a Patent owned or Controlled by 3DP during the Term of this
Agreement claiming a
10
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
method, apparatus, material, manufacture or business method relating
to a Direct Thrombin Inhibitor or Licensed Product, including its
interest in Program Patents. A list of 3DP Patents is appended
hereto as Exhibit 1.61 and will be updated periodically to reflect
additions thereto during the course of this Agreement.
1.62 "3DP Know-How" means Information which (a) 3DP discloses to Centocor
under this Agreement or under the Confidentiality Agreements between
the Parties dated April 5, 1999 and June 2, 1999 as amended on
October 27, 1999 and (b) is within the Control of 3DP during the
Term of the Agreement.
ARTICLE 2
GRANT OF LICENSE RIGHTS
2.1 License for Direct Thrombin Inhibitors and Licensed Products.
2.1.1 Subject to the terms and conditions of this Agreement, 3DP
hereby grants to Centocor an exclusive (even as to 3DP),
royalty bearing, worldwide license under the 3DP Patents and
3DP Know-How to Develop, make, have made and use Direct
Thrombin Inhibitors and Develop, make, have made, use, sell,
have sold, import, offer to sell and Commercialize Licensed
Products in the Territory in the Field, with the right to
sublicense only as set forth below. Notwithstanding the
foregoing grant, 3DP reserves the right to use all 3DP Patents
and 3DP Know-How to the extent necessary to exploit its rights
and fulfill its obligations under this Agreement, but in no
event shall 3DP retain any rights to make, use and/or sell
Licensed Product or Direct Thrombin Inhibitors beyond what
rights it needs to retain to exploit its rights and fulfill
its obligations under this Agreement. Additionally, subject to
the terms and conditions of this Agreement, Centocor hereby
grants to 3DP a non-exclusive, royalty free, worldwide license
under the Centocor Patents and Centocor Know-How to Develop,
make, have made and use Direct Thrombin Inhibitors in the
Territory in the Field to the extent necessary to exploit its
rights and fulfill its obligations under this Agreement.
2.1.2 Centocor may sublicense or subcontract its rights to
manufacture Licensed Product to Third Parties upon 3DP's prior
written approval (which approval shall not be unreasonably
withheld); provided, however, that such sublicense occurs
pursuant to a written agreement that subjects such Sublicensee
to all relevant restrictions and limitations in this
Agreement. In addition, and notwithstanding the foregoing,
Centocor may, without the need for approval by 3DP, distribute
Licensed Product, granting any necessary licenses or
sublicenses using Third Party distributors that it
conventionally uses. Additionally, Centocor may, without the
consent of 3DP, contract with reputable contract research
organizations to conduct or assist in the conduct of (i)
Pre-Phase I activities and (ii) human clinical
11
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
trials and the evaluation of clinical trial data. Centocor
shall be jointly and severally responsible with its
Sublicensees and subcontractors for failure by its
Sublicensees and subcontractors to comply with, and Centocor
guarantees the compliance by each of its Sublicensees and
subcontractors with, all such applicable restrictions and
limitations in accordance with the terms and conditions of
this Agreement.
2.1.3 Centocor shall not permit any Sublicensees or subcontractors
to use 3DP Patents, Program Patents or 3DP Know-How without
provisions safeguarding confidentiality which are at least
equivalent to those provided in this Agreement and Centocor
guarantees the compliance by each of its Sublicensees and
subcontractors with all such applicable provisions
safeguarding confidentiality in accordance with the terms and
conditions of this Agreement.
ARTICLE 3
BACK-UP RESEARCH PROGRAM
3.1 Generally. The Parties agree to conduct the Research Program
according to the Research Plan.
3.2 The Research Plan. Centocor shall be responsible for developing the
initial Research Plan, an outline of which has been agreed to by the
Parties and which is attached hereto as Exhibit 1.49. The Research
Plan, among other things, shall specify scientific direction and
Research Program milestones and allocate Research Program
activities, responsibilities and resources, including the number of
3DP FTE's in a manner consistent with this Agreement.
3.3 The JRC.
3.3.1 The Parties shall establish a Joint Research Committee
promptly after the Execution Date.
3.3.2 The JRC shall be comprised of representatives of each Party
with the size of the JRC to be agreed upon by the Parties from
time to time. The purpose of the JRC is to coordinate the
Research Program effort of the Parties and to expedite the
progress of work being done under the Research Plan. The JRC
shall meet from time to time as agreed upon by the Parties.
3.3.3 The JRC will set specific Research Program goals, evaluate the
results of the Research Program, discuss information relating
to the Research Program and ensure that there is appropriate
scientific direction for the collaboration. During the
Research Term, either Party may propose changes to the
Research Plan which will be discussed by the JRC. If, after
12
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
discussion, the JRC mutually agrees upon such proposed change,
the Research Plan shall be modified to incorporate such
change. If the JRC cannot reach agreement on any proposed
change to the Research Plan, the Research Plan currently in
effect will remain in effect. Regardless of the number of
representatives from each Party, each Party shall present one
consolidated view and have one vote on any issue in dispute.
3.3.4 If the JRC fails to reach unanimous agreement on any other
matter before consideration (other than consideration of
revisions to the Research Plan which will be handled in
accordance with Section 3.3.3), the matter shall be resolved
consistent with Centocor's position, provided that if such
matter in dispute would result in additional expenditures by
3DP, then Centocor agrees to pay 3DP for such additional
expenditures.
3.4 Information and Reports.
3.4.1 During the course of implementing the Research Program, the
Parties acknowledge and agree that they will freely exchange
relevant Information as may be reasonably necessary for each
Party to fulfill its respective obligations under the Research
Plan, provided, however, that in no event shall 3DP be
obligated to disclose its proprietary drug discovery platform
technology (including, without limitation, ThermoFluor(R) and
Directed Diversity(R)) to Centocor unless such technology
directly relates to the work being conducted under the
Research Plan and is necessary for the Parties to effectively
collaborate in carrying out the Research Plan. Notwithstanding
the foregoing, under no circumstances shall the research
activities be allocated in such a manner that requires the
transfer of 3DP's proprietary drug discovery platform
technology to Centocor. Each Party will use reasonable efforts
consistent with its normal business practices not to
communicate to the other Party information which has no
application to the Field.
3.4.2 During the Research Term, the Parties will, from time to time,
exchange written reports presenting a meaningful summary of
the results of the activities completed pursuant to the
Research Program. Such reports shall be presented, at a
minimum, on a quarterly basis. Thirteen (13) months after the
expiration of the Research Term, Centocor and 3DP shall each
provide a final written report to the other providing a
meaningful summary of the results obtained and the Program
Patents filed in that period. Upon reasonable request, a Party
will provide the other with the supporting data for research
activities carried out under the Research Program.
3.5 Collaboration Tangible Research Products. During the Research Term,
each Party shall use commercially reasonable efforts to make
available to the other Party within a reasonable time after their
acquisition, discovery or synthesis Collaboration Tangible Research
Products in Control of such Party, including
13
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Direct Thrombin Inhibitors and Research Compounds. 3DP will provide
Centocor with sufficient amounts (up to [**]) of Direct Thrombin
Inhibitors for testing in Centocor's assays and screens in
accordance with the Research Plan.
3.6 Dedicated FTEs.
3.6.1 Each Party agrees to commit to the Research Program such
efforts and resources necessary to carry out the Research
Plan.
3.6.2 3DP shall initially dedicate, and Centocor shall fund, [**]
FTEs to the Research Program. The Parties may amend the
Research Plan at any time to adjust the number of dedicated
FTEs; provided, however, that each 3DP FTE shall be dedicated
and supported in twelve (12) month increments. Over the course
of the Research Term, [**] of 3DP's research activities
conducted pursuant to the Research Plan (contemplated by the
Research Plan as of the Execution Date) shall be performed by
3DP employees.
3.6.3 Unless prior written permission is received from Centocor, in
any given quarter, 3DP shall dedicate the number of FTEs
specified in the Research Plan for such quarter to the
research activities allocated to 3DP under the Research Plan.
If, in any given quarter, 3DP desires to use greater or fewer
FTEs than specified in the Research Plan for the applicable
quarter, it must first receive written permission from
Centocor to do so.
3.6.4 Scientific work on or directly related to the Research Program
to be performed by 3DP FTEs can include, but is not limited
to, experimental laboratory work, recording and writing up
results, reviewing literature and references, holding
scientific discussions, attending selected and appropriate
seminars and symposia, managing and leading scientific staff
and carrying out management duties related to the Research
Program.
3.7 Support of FTEs.
3.7.1 FTE Reimbursement Fees. Centocor shall fund the 3DP FTEs at a
rate of [**] per FTE per year. Unless otherwise agreed in
writing, Centocor shall only fund the number of 3DP FTEs
identified in the Research Plan. Such funding shall be
provided in four (4) equal quarterly installments during each
calendar year, payable quarterly in advance by same day wire
transfer prior to January 1, April 1, July 1 and October 1,
provided, however, that Centocor has received an invoice for
such quarter at least 30 days in advance of the due date.
Notwithstanding the foregoing, the first payment shall be due
ten (10) days after the Execution Date. Any payment for a
portion of a quarterly period shall be made on a pro rata
basis.
3.7.2 Costs. In addition to the payment of FTE costs as set forth in
Section 3.7.1, Centocor will pay any costs incurred by either
of the Parties in
14
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
carrying out the Research Plan as agreed in writing in advance
by the Parties and/or otherwise reflected in the Research
Plan. It is presently anticipated, based on the Research Plan
outline as of the Execution Date, that no additional costs
will result from carrying out the Research Plan.
3.8 Research Audit. 3DP shall maintain complete and accurate records
tracking the number of FTEs carrying out the Research Program.
During the Research Term and for one year thereafter, upon
Centocor's reasonable request, 3DP shall make such records available
no more than twice a year during normal business hours for
examination at Centocor's expense for the sole purpose of verifying
for Centocor whether or not 3DP is using the required number of FTEs
to carry out the Research Program as specified in the Research Plan.
Should it be determined that 3DP has used fewer than the required
FTEs during any period of the Research Term, Centocor shall receive
a credit for the lost FTE time against any future payments owed to
3DP (or if the Parties mutually agree, the lost FTE time will be
made up in subsequent quarters) or if no future payments will be
owed, a payment by 3DP to Centocor for the lost FTE time.
3.9 Extension of the Research Term. After the initial Research Term of
two (2) years, Centocor shall have the option to extend the Research
Term for an additional one (1) year period on the same terms. Notice
that Centocor elects to exercise its option to extend the Research
Term must be provided to 3DP in writing ninety (90) days prior to
the end of the initial Research Term.
3.10 Additional Extension by Mutual Consent. The Parties may, by mutual
consent, extend the Research Term beyond the period set forth in
Section 3.9, on such terms and conditions as the Parties may then
agree in writing.
3.11 Ownership of Tangible Research Products. Tangible Research Products
shall remain the sole and exclusive property of the providing Party
and the receiving Party shall have no rights therein other than as
specifically granted herein.
3.12 Ownership of Collaboration Tangible Research Products. Collaboration
Tangible Research Products, other than Research Compounds, shall be
jointly owned by 3DP and Centocor.
ARTICLE 4
DEVELOPMENT OF LICENSED PRODUCTS
4.1 Centocor's Right to Select Direct Thrombin Inhibitors. Centocor
shall, in consultation with the JRC, be solely responsible for and
shall have the exclusive right to select Direct Thrombin Inhibitors
for Development. This right to select Direct Thrombin Inhibitors
shall not terminate with the expiration of the Research Term, but
rather shall continue thereafter, since once Direct Thrombin
Inhibitors become Direct Thrombin Inhibitors they shall remain as
such. Moreover, the license granted under Section 2.1 shall likewise
continue beyond the end of the
15
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Research Term. Once a Direct Thrombin Inhibitor is selected to enter
Pre-Phase I, Centocor shall have the sole right to Develop the
Direct Thrombin Inhibitor (except as provided in Section 4.7),
including, but not limited to, preparing, filing and exclusively
owning, all Drug Approval Applications and obtaining and exclusively
owning all Regulatory Approvals on a worldwide basis. Centocor will
notify 3DP in writing when a Direct Thrombin Inhibitor has been
designated as a Subsequent Composition or a Replacement Composition.
Once designated as a Subsequent Composition, if Development of the
lead Direct Thrombin Inhibitor is terminated, Centocor shall have
the right to re-designate a Subsequent Composition as a Replacement
Composition, in which case future milestones will be paid as a
Replacement Composition under Section 6.3, and for any milestones
already paid on such Subsequent Composition under Section 6.4,
Centocor shall receive a credit against future milestones due on
additional Subsequent Compositions under Section 6.4.
4.2 3DP's Responsibilities. 3DP shall use commercially reasonable
efforts to assist Centocor, at Centocor's sole expense, in
Centocor's Development activities relating to any Direct Thrombin
Inhibitor or Licensed Product, as reasonably requested by Centocor,
by providing Centocor any relevant 3DP Know-How relating to Direct
Thrombin Inhibitors or Licensed Products selected for Development
and/or being Developed by Centocor. The Parties agree that 3DP will
conduct a [**] under Centocor's direction and Centocor will
compensate 3DP for its costs related to such [**].
4.3 Development Observer. 3DP may designate one employee to act as a
"Development Observer." Centocor shall keep the Development Observer
informed of material Development activities in connection with
Direct Thrombin Inhibitors and Licensed Products, including all
material results, material Information and material data generated
in the course of Development. In addition, Centocor will provide the
Development Observer with a copy of Centocor's Development plan, and
updates thereto, for each Direct Thrombin Inhibitors and Licensed
Products in Development. The Development Observer may visit
Centocor's facility from time to time to meet with the project
director who manages Development of Direct Thrombin Inhibitors and
Licensed Products in order to maintain up-to-date knowledge of the
status of each Direct Thrombin Inhibitor and Licensed Product in
Development. Once established, the project director for any
Development project directed to a Direct Thrombin Inhibitor or a
Licensed Product shall be the direct contact at Centocor for the
Development Observer. The Development Observer agrees to arrange all
visits and meetings through such project director or his/her
designee. The Development Observer shall be advised reasonably in
advance of material meetings of Centocor's product development team
for each Direct Thrombin Inhibitor and Licensed Product and may
attend meetings of the product development team in connection with
any Direct Thrombin Inhibitor and Licensed Product in Development at
Centocor.
16
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
4.4 Centocor Development Efforts. Centocor agrees to use commercially
reasonable efforts consistent with its and its pharmaceutical
Affiliates' normal business practices, which shall in no event be
less than efforts standard in the pharmaceutical industry, to
Develop Licensed Products and Direct Thrombin Inhibitors. Such
efforts shall be efforts consistent with efforts used by Centocor in
Developing its own pharmaceutical Products that are at a similar
stage of Development with a target market of similar size and
importance. Evidence that Centocor is using the efforts described in
this Section 4.4 to Develop a Direct Thrombin Inhibitor or Licensed
Product shall be that such Direct Thrombin Inhibitor or Licensed
Product is in Active Development. "Active Development" shall mean
that at any given time Centocor shall be diligently engaging in one
or more of the following Development activities for the lead Direct
Thrombin Inhibitor or Licensed Product it has selected to Develop:
[**].
4.5 Development Responsibility and Costs. Except in the case where 3DP
Co-Develops Licensed Product for DVT in the United States as
described in Section 4.7 herein, Centocor shall have sole
responsibility for, and shall bear the cost of conducting,
Development with respect to Licensed Products and Direct Thrombin
Inhibitors.
4.6 Regulatory Responsibilities and Costs. Centocor shall have sole
responsibility for, and shall bear the cost of preparing, all
regulatory filings and related submissions with respect to Direct
Thrombin Inhibitors and Licensed Products.
4.6.1 3DP shall be responsible for the current IND pertaining to
3DP-4815 and, to the extent applicable, any supplements or
amendments thereto. The Parties shall determine whether to
transfer such IND to Centocor.
4.6.2 Centocor shall have the exclusive right to prepare and
prosecute Drug Approval Applications, and Centocor shall
solely own all such Drug Approval Applications.
4.6.3 All Regulatory Approvals shall be obtained by and in the name
of Centocor, solely owned by Centocor, and Centocor shall be
the only interface with and otherwise handle all interactions
and communications with regulatory agencies concerning any
Direct Thrombin Inhibitors and Licensed Product, except to the
extent permitted in the case of Co-Development in accordance
with Section 4.7.
4.7 3DP Co-Development in the United States for Deep Vein Thrombosis
(DVT).
4.7.1 Except in the case where Centocor has begun Development and is
continuing Active Development of a Licensed Product for DVT,
at any time after the initiation of the first Phase III
Clinical Trial for a Licensed Product in an Indication other
than DVT, but prior to filing of an NDA in such other
Indication,
17
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
(a) Upon 3DP's reasonable written request, Centocor shall
provide Centocor Know-How reasonably necessary to enable
3DP to evaluate the Development and commercial
opportunity for such Licensed Product for DVT in the
United States, including, by way of example, marketing
information pertaining to Licensed Products Developed
and/or Commercialized for any Indication, including,
without limitation, competitive analyses, pricing
information, market analyses, marketing plans, strategic
analyses and risk or cost analyses.
(b) 3DP may notify Centocor in writing that it wishes to
Develop such Licensed Product for DVT in the United
States.
4.7.2 This right to request Development of the Licensed Product for
DVT and the subsequent right to Co-Develop as defined herein
shall only exist in connection with the first Licensed Product
(or its Replacement Composition) to reach a Phase III Clinical
Trial.
4.7.3 As soon as reasonably practicable and in no event more than
one hundred twenty (120) days after receipt of notice from 3DP
pursuant to Section 4.7.1(b), Centocor shall inform 3DP that:
(a) Centocor will Develop the Licensed Product for DVT in the
United States with Centocor paying all costs associated with
such Development; (b) Centocor will Develop the Licensed
Product for DVT in the United States with 3DP paying all costs
associated with such Development; or (c) Centocor will Develop
the Licensed Product for DVT in the United States with
Centocor and 3DP [**] (options (b) and (c) are hereinafter
referred to as "Co-Development" or to "Co-Develop"). Within
thirty (30) days of receiving such notice, 3DP shall provide
written notice of its decision to proceed or not to proceed.
4.7.4 If Centocor informs 3DP that it chooses option (a), then
Development of the Licensed Product for DVT will proceed in
accordance with Sections 4.1-4.6 herein. In the case of
Co-Development by 3DP, Development of the Licensed Product for
DVT in the United States will proceed in accordance with
Sections 4.8-4.10 below.
4.8 Joint Steering Committee.
4.8.1 Formation and Membership of Joint Steering Committee. As soon
as practicable after 3DP's acceptance of Co-Development under
Section 4.7.3, 3DP and Centocor shall establish a Joint
Steering Committee initially comprised of four (4)
representatives designated by 3DP and four (4) representatives
designated by Centocor, each of whom shall have experience and
seniority sufficient to enable him or her to make decisions on
behalf of the Party he or she represents. The JSC shall
oversee the
18
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Development and Commercialization of the Licensed Product for
DVT in the United States.
4.8.2 JSC Responsibilities. The JSC shall be responsible for, among
other things:
(a) Providing a forum for consensual decision making;
(b) Monitoring the progress of Development and
Commercialization of the Licensed Product for DVT in the
United States;
(c) Reviewing, amending, and commenting on the Development
Plans or Marketing Plans (collectively "Plans") for the
Licensed Product for DVT in the United States; and
(d) Establishing and overseeing project teams, as necessary to
implement the Plans.
4.8.3 Meetings.
(a) The first meeting of the Joint Steering Committee shall
occur within four (4) weeks following formation of the JSC.
The purpose of this initial meeting shall be to review the
current status of the Development Plan for the Licensed
Product and to agree on an operational charter which shall
set forth the principles and guidelines for the governance
of the Joint Steering Committee in accordance with this
Agreement.
(b) Thereafter, meetings shall be held once each calendar
quarter except if, no later than thirty (30) days in
advance of any scheduled meeting, there is a determination
by the chairperson of the Joint Steering Committee, and
endorsed by the senior 3DP representative of the Joint
Steering Committee, that no new business or other activity
has originated since the previous meeting, in which case
that quarterly meeting shall be cancelled and the next
quarterly meeting shall be scheduled. The location of the
Joint Steering Committee meetings shall alternate in
succession unless agreed upon otherwise by the Parties,
with the first meeting to be held at Centocor's offices. By
approval of the chairperson, which approval may not
unreasonably be withheld, representatives may participate
in any meeting of the Joint Steering Committee by means of
conference telephone or similar communications equipment
by means of which all persons participating in the meeting
can hear each other.
(c) Each Party shall use reasonable efforts to cause its
representatives to attend the meetings of the Joint
Steering Committee
19
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
in person. If a Party's representative is unable to
attend a meeting, such Party may designate an alternate
representative to attend such meeting in place of the
absent representative. In addition, each Party may, at
its discretion, invite additional employees, and, with
the consent of the other Party, consultants or
scientific advisors, to attend the meetings of the Joint
Steering Committee.
(d) Either Party may also convene a special meeting of the
Joint Steering Committee by providing good reason, with at
least ten (10) business days' written notice to the other
Party, specifying the date, time, place and agenda.
4.8.4 Project Teams. From time to time, as determined by the Joint
Steering Committee, one or more project teams or subcommittees
may be established. Such project teams or subcommittees shall
be governed in the same manner and subject to the relevant
requirements as set forth herein for the Joint Steering
Committee; provided, however, that the overall responsibility
for the Development and Commercialization of the Licensed
Products for DVT in the United States shall remain with the
Joint Steering Committee. It is anticipated that, at a
minimum, a development team and a marketing team will be
established by the JSC.
4.8.5 Administrative Matters. The Joint Steering Committee shall be
chaired by a representative from Centocor. The chairperson
shall be responsible for calling meetings of the Joint
Steering Committee and for leading the meetings. A Joint
Steering Committee member of the Party hosting a meeting of
the Joint Steering Committee shall serve as secretary of that
meeting. The secretary of the meeting shall prepare and
distribute to all members of the Joint Steering Committee
minutes of the meeting sufficiently in advance of the next
meeting to allow adequate review and comment prior to the
meeting. Such minutes shall provide a description in
reasonable detail of the discussions conducted at the meeting
and a list of any actions, decisions or determinations
approved by the Joint Steering Committee. Minutes of each
Joint Steering Committee meeting shall be approved or
disapproved, and revised as necessary, at the next meeting.
Final minutes of each meeting shall be distributed by the
chairperson to the members of the Joint Steering Committee.
4.8.6 Dispute Resolution.
(a) If a conflict arises that directly relates to the
Development of the Licensed Product and that would have a
material adverse effect on Centocor's Development and
Commercialization strategy for such Licensed Product for
Indications other than DVT, then the Parties shall first
attempt to resolve the conflict by the unanimous consent of
the JSC. However, if the JSC is unable to resolve the
conflict
20
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
after reasonable consideration, then Centocor shall have
the Casting Vote (as defined in Paragraph 10 of Exhibit
5.5.1).
(b) If a conflict arises that directly relates to the
Development of the Licensed Product and that would not have
a material adverse effect on Centocor's Development and
Commercialization strategy for such Licensed Product for
Indications other than DVT, then the Parties shall first
attempt to resolve the conflict by the unanimous consent of
the JSC. However, if the JSC is unable to resolve the
conflict after reasonable consideration, then the Parties
shall resolve the issue using an independent Third Party
expert.
4.9 Responsibilities for Co-Developed Licensed Product.
4.9.1 In the event the Parties are Co-Developing, Centocor shall
provide 3DP with draft and final copies (which may be wholly
or partly in electronic form) of all material correspondence
with the FDA relating to use of the Licensed Product for DVT,
including any draft NDAs, for 3DP's review and comment within
a reasonable time prior to filing with the FDA. Centocor shall
give due consideration to 3DP's comments, however, Centocor
shall not be bound thereby. To the extent not prohibited by
law or regulation, 3DP shall have the right to have one
representative participate in all material meetings pertaining
to Development of Licensed Product for DVT in the United
States between representatives of Centocor and the FDA.
Centocor shall provide 3DP, prior to a scheduled meeting with
the FDA when possible, with copies of all documents,
correspondence and other materials in its possession which are
relevant to the matters to be addressed at any such meeting.
Centocor shall also provide 3DP with reasonable access to all
exchanges of material correspondence with the FDA.
4.9.2 Centocor shall be solely responsible for preparing the
Development Plan for DVT. Centocor shall make Development
Plans, clinical protocols, investigator brochures and
regulatory submissions by Centocor available to the JSC for
discussion in the early concept stage, and provide 3DP with a
meaningful opportunity to contribute as such documents are
proposed for modification from time to time.
4.10 3DP Right to Terminate. 3DP shall have the right to terminate its
Co-Development of any Licensed Product, and its obligations under
this Article 4, with respect to such Licensed Product by providing
at least ninety (90) days' advanced written notice to Centocor. If
3DP terminates its Co-Development under this section, then 3DP's
option to Co-Promote under Section 5.5 shall also terminate.
21
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
4.11 Centocor Development and Commercialization. Nothing in the foregoing
shall be interpreted to limit Centocor's ability to institute and
continue to Develop and Commercialize Licensed Products in the Field
for all Indications other than DVT in the United States.
ARTICLE 5
COMMERCIALIZATION OF LICENSED PRODUCTS
5.1 Manufacture of Licensed Product. Centocor shall be responsible for
manufacturing and supplying Licensed Products in the Territory by
itself or through a Third Party manufacturer. Supplies for human
clinical trials and commercial supplies of Licensed Product shall be
manufactured in accordance with CGMP standards. Centocor shall use
commercially reasonable efforts to achieve the lowest Manufacturing
Cost that it can achieve while maintaining J&J quality control,
safety and labor standards.
5.2 Commercial Responsibilities. Centocor agrees to use commercially
reasonable efforts consistent with its and its pharmaceutical
Affiliates' normal business practices, and in no event less than
efforts standard in the pharmaceutical industry, to Commercialize
Licensed Products. Such efforts shall be consistent with efforts
used by Centocor (in each case comparable to such efforts used by
Centocor's principal pharmaceutical marketing Affiliate responsible
for marketing in the country where the Commercialization takes place
for that Licensed Product) in Commercializing its own Products that
are similar with regard to, for example, market potential, price per
treatment, patient population and competitive position. Centocor
shall use commercially reasonable efforts to effect the commercial
launch of Licensed Products in the Major Market Countries within six
(6) months of Regulatory Approval in such Major Market Countries.
5.3 Marking. To the extent not prohibited by applicable law or
regulation, 3DP shall be identified as the licensor of the Licensed
Products in easily legible text on all printed promotional materials
(including advertisements appearing in journals), printed
educational materials, product labeling, the product label and
documentary information for the Licensed Products. In the event that
3DP's name changes, Centocor shall begin marking the Licensed
Products with 3DP's new name when new materials are printed in the
normal course of business.
5.4 Centocor's Marketing Obligations For Licensed Products. Except to
the extent otherwise specifically agreed in connection with 3DP's
rights to Co-Promote hereunder, all business decisions, including,
without limitation, the design, sale, price and promotion of
Licensed Products under this Agreement and the decisions whether to
market any particular Licensed Product shall be within the sole
discretion of Centocor. Any marketing of a Licensed Product in one
market or country shall not obligate Centocor to market such
Licensed Product in
22
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
any other market or country, recognizing that the foregoing does not
relieve Centocor's obligation to launch under Section 5.2.
5.5 Co-Promotion Option of 3DP.
5.5.1 3DP shall exercise its option to Co-Promote by providing
Centocor with written notice of its intent to Co-Promote
within 30 days of receiving results of pivotal Phase III
Clinical Trials sufficient to file an NDA for a Licensed
Product for DVT and any other information reasonably required
by 3DP to make its decision to Co-Promote, for example
chemistry, manufacturing and control (CMC) information.
Failure by 3DP to provide notification by the required time
will be deemed a decision by 3DP not to Co-Promote. In the
event that 3DP exercises its option to Co-Promote, the Parties
shall enter into a comprehensive Co-Promotion Agreement on
terms consistent with those identified in Exhibit 5.5.1.
5.5.2 In the event that Centocor Develops the Licensed Product
pursuant to Section 4.7.3(a), the Parties Co-Develop the
Licensed Product pursuant to Section 4.7.3(c) or the Parties
Co-Develop the Licensed Product pursuant to Section 4.7.3(b)
and Centocor decides to Co-Promote, in order to be eligible to
Co-Promote, 3DP must have the following infrastructure in
place:
(a) Within [**] after providing Centocor with written notice
of its intent to Co-Promote, 3DP shall have [**];
(b) [**] prior to the [**], 3DP must have (i) begun to [**]
by [**] for such function and instituting an [**] and
(ii) [**] for [**];
(c) [**] prior to the [**], 3DP must have [**] its [**];
(d) [**] prior to the [**], 3DP must have [**] of its [**];
(e) on the date of [**], 3DP must have [**]of its [**];
(f) within [**] of the date of [**], 3DP must have [**] of
its [**]; and
(g) within [**] of the date of [**], 3DP must have completed
[**] of its [**].
3DP may, with Centocor's written consent, fulfill its [**]
obligations by [**].
5.5.3 In the event the Parties Co-Develop the Licensed Product
pursuant to 4.7.3 (b) and where Centocor decides not to
Co-Promote, 3DP must have the following infrastructure in
place:
23
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
(a) Prior to the [**], 3DP shall have (i) created its [**]
by [**] of such function, including [**] and [**], (ii)
instituted an [**] and (iii) [**] for [**];
(b) on the date of [**], 3DP must have completed [**] of its
[**];
(c) within [**] of the date of [**], 3DP must have [**] of
its [**]; and
(d) within [**] of the date of [**], 3DP must have completed
[**] of its [**].
3DP may, with Centocor's written consent, fulfill its [**]
obligations by [**].
5.5.4 Development Costs. In the event that 3DP does not have the
infrastructure set forth in Section 5.5.2 or has Developed the
Licensed Product in accordance with 4.7.3(b) and opts not to
Commercialize the Licensed Product, then Centocor will
reimburse 3DP for its Development expenditures by paying 3DP
[**]% of its Development Costs for the Development of the
Licensed Product for DVT prior to continuing Development on
its own account, provided, however, that Centocor continues to
Develop and/or Commercialize Licensed Product for DVT.
5.5.5 3DP Right to Terminate. 3DP shall have the right to terminate
its Co-Promotion of any Licensed Product and its obligations
under this Article 5 with respect to such Licensed Product by
providing at least [**] advance written notice to Centocor
before the [**] of the [**], or upon [**] advance written
notice to Centocor after the [**] of the [**].
5.6 Trademarks. Centocor shall select its own trademarks under which it
will market the Licensed Products, and no right or license is
granted to 3DP hereunder with respect to such trademarks.
Notwithstanding the foregoing, as part of any Co-Promotion Agreement
between the Parties and with the restrictions and limitations on use
as will be set forth therein to protect Centocor's trademark,
Centocor shall grant to 3DP a license under Centocor's trademark
solely for the purpose of Co-Promoting Licensed Product for DVT in
the United States.
ARTICLE 6
FINANCIAL PROVISIONS
6.1 License Fee. Centocor agrees to pay a nonrefundable license fee of
six million Dollars ($6,000,000) within ten (10) days of the
Execution Date. Such payment is unconditional and is not subject to
any future performance by 3DP under this Agreement.
24
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
6.2 [**] Product Development Milestone Payments. The following
milestones shall become due and payable by Centocor to 3DP when
3DP-4815 or an alternative Direct Thrombin Inhibitor licensed
hereunder first achieves each of the following Development
milestones for its [**]:
6.2.1 Upon the later of [**] or [**] from the [**]: [**] Dollars
($[**]).
6.2.2 Upon [**] of the [**] in the [**]: [**] Dollars ($[**]).
6.2.4 Upon [**] of the [**] in the [**]: [**] Dollars ($[**]).
6.2.5 (a) Upon [**] and [**] for [**] of an [**] in [**]: [**]
Dollars ($[**]);
(b) Upon [**] and [**] for [**], if applicable, of the [**]
in a [**] of the [**]: [**] Dollars ($[**]); and
(c) Upon [**] and [**] for [**], if applicable, of a [**] in
[**]: [**] Dollars ($[**]).
6.2.6 (a) Upon [**] in the [**]: [**] Dollars ($[**]);
(b) Upon [**] in a [**] of the [**]: [**] Dollars ($[**]);
and
(c) Upon [**] in [**]: [**] Dollars ($[**]).
6.3 Development Milestone Payments for Replacement Compositions. If a
Direct Thrombin Inhibitor is dropped from Development by Centocor
and a Replacement Composition is moved into Development in its
place, Centocor shall not be obligated to remit the same milestone
payments for the Replacement Composition as it already paid under
Section 6.2 in connection with the Direct Thrombin Inhibitor which
was replaced. However, subsequent milestone payments achieved by the
Replacement Composition shall remain payable.
6.4 Development Milestone Payments for Subsequent Compositions. The
following milestones shall become due and payable by Centocor to 3DP
when a Subsequent Composition licensed hereunder first achieves each
of the following Development milestones for its first Indication:
6.4.1 Upon [**] of the [**] in the [**]: [**] Dollars ($[**]).
6.4.2 Upon [**] of the [**] in the [**]: [**] Dollars ($[**]).
6.4.3 (a) Upon [**] and [**] for [**] of an [**] in [**]: [**]
Dollars ($[**]);
25
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
(b) Upon [**] and [**] for [**], if applicable, of the [**]
in a [**] of the [**]: [**] Dollars ($[**]); and
(c) Upon [**] and [**] for [**], if applicable, of a [**] in
[**]: [**] Dollars ($[**]).
6.4.4 (a) Upon [**] in [**]: [**] Dollars ($[**]);
(b) Upon [**] by a [**] of the [**]: [**] Dollars ($[**]);
and
(c) Upon [**] in [**]: [**] Dollars ($[**]).
6.5 Approval Milestone Payments For Additional Indications. Upon
Regulatory Approval of any Licensed Product for an Additional
Indication in [**] or [**], a milestone payment shall become due and
payable by Centocor to 3DP in the amount of [**]. Notwithstanding
the foregoing, once Centocor has paid [**] for a Licensed Product,
[**].
6.6 Royalty Rate for Licensed Products Developed and Commercialized by
Centocor. Centocor shall pay 3DP a royalty based on Net Sales of
Licensed Products sold by Centocor or its Sublicensees, on a
product-by-product basis for each calendar year according to the
following schedule:
6.6.1 [**] percent ([**]%) on Annual Net Sales on the portion less
than [**] Dollars ($[**]);
6.6.2 [**] percent ([**]%) on the incremental amount of Annual Net
Sales on the portion between [**] Dollars ($[**]) and [**]
Dollars ($[**]); and
6.6.3 [**] percent ([**]%) on the incremental amount of Annual Net
Sales on the portion greater than [**] Dollars ($[**]).
For the purpose of this section, "Annual Net Sales" will be
determined on a calendar year basis. For the purpose of determining
the applicable percentage, "Annual Net Sales" does not include Net
Sales in countries where the royalty period has terminated or
expired.
6.7 Royalty Rate Reduction.
6.7.1 Generic Equivalent. If, in any quarterly royalty reporting
period, (i) a third Party commences selling a Product which is
a Generic Equivalent of the Licensed Product in a country in
the Territory and (ii) such Unlicensed Unit Sales (as defined
below) amount to the following percentages of Centocor's Unit
Sales of the Licensed Product in such country in the same
royalty reporting period, the average percentage royalty rate
on total world-wide Net Sales (calculated annually as the sum
of total royalty actually paid pursuant to Section 6.6 divided
into Net Sales for the same
26
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
annual period) shall be reduced in such country in accordance
with the percentages below and such lower royalty rate shall
then apply on the Net Sales in such country as long as the
Unlicensed Unit Sales amount to the particular percentage of
Centocor's Unit Sales of the Licensed Product in such country
in the same royalty reporting period.
Unlicensed Unit Sales as a Royalty Rate
Reduction*
(% of Centocor Unit Sales) (% of world-wide average Royalty Rate)
-------------------------- --------------------------------------
(Less than [**]% [**]%
Equal to)
(Greater than) [**]% (Less than [**]% [**]%
Equal to)
(Greater than) [**]% [**]%
* A royalty rate reduction will, however, only be applicable
if Centocor also experiences a decrease in Net Sales of the
applicable Licensed Product in that country from the Net Sales
of the applicable Licensed Product in the same royalty
reporting period in the previous calendar year.
For purposes of this Section 6.7.1, (i) "Unlicensed Unit
Sales" and "Centocor Unit Sales" shall be deemed to mean the
total grams of the Direct Thrombin Inhibitor contained in the
Third Party Product (irrespective of dosage form) and the
Licensed Product (irrespective of dosage form), respectively,
as reflected on the label of each such Licensed Product and
Third Party Product; and (ii) Unlicensed Unit Sales shall be
determined by the sales reports of IMS America Ltd. of
Plymouth Meeting, Pennsylvania ("IMS") or any successor to IMS
or any other independent sales auditing firm selected by
Centocor and reasonably acceptable to 3DP. Centocor shall bear
all costs of providing 3DP with such information. If Centocor
is entitled to a royalty reduction based on Unlicensed Unit
Sales pursuant to this Section 6.7.1 for any royalty reporting
period, Centocor shall submit the sales report of IMS or such
other independent firm, as applicable, for the relevant
royalty reporting period to 3DP, together with Centocor's or
its Sublicensees' sales report for the relevant royalty
reporting period. Such sales reports for each royalty
reporting period in which Centocor is entitled to such royalty
reduction shall be submitted with the royalty report for such
royalty reporting period submitted pursuant to Section 6.13.
6.7.2 Third Party Patents. If a Patent of a Third Party should exist
in any country during the term of this Agreement covering the
manufacture, use or sale of any Licensed Product, and if it
should prove in Centocor's reasonable judgment (as supported
by an opinion from outside patent
27
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
counsel which counsel is acceptable to both Parties)
impractical or impossible for Centocor or its Sublicensee to
continue the activity or activities licensed hereunder without
obtaining a royalty bearing license from such Third Party
under such Patent or Patents in said country, then Centocor
shall be entitled to a credit against the royalty payments due
hereunder of an amount equal to the royalty paid to such Third
Party, not to exceed [**] percent ([**]%) of the royalty rate
due under this Agreement, arising from the manufacture, use or
sale of the Licensed Product in said country.
6.7.3 Compulsory License. If at any time and from time to time a
Third Party in any country shall, under the right of a
compulsory license granted or ordered to be granted by a
competent governmental authority, manufacture, use or sell any
Licensed Product, with respect to which royalties would be
payable pursuant to Section 6.6 hereof, then Centocor may
reduce the royalty on sales in such country of such Licensed
Product according to the rates specified in Section 6.7.1.
6.8 Royalty Adjustment for Cost of Goods. In any year in which annual
sales of Licensed Product are [**] Dollars ($[**]) or greater, a
calculation shall be made to determine if a royalty adjustment
should be made under this Section 6.8. There shall be a standard
(hereinafter referred to as the "COG Standard") calculated annually
as the sum of the total royalty actually payable pursuant to Section
6.6 for the same annual period and the Manufacturing Cost covering
the Net Sales subject to royalties under Section 6.6 for the same
annual period, expressed as a percentage of such annual Net Sales.
In the event Net Sales subject to royalties under Section 6.6 are
[**] Dollars ($[**]) or greater and the COG Standard is other than
[**]% of such Net Sales, the royalty adjustment shall be calculated
as follows: if such COG Standard is greater than [**]%, the Parties
shall equally share in up to [**] percentage points ([**]%) of the
excess above [**]%, with 3DP's share being taken as a credit by
Centocor against royalty otherwise payable to 3DP. On the contrary,
if the COG Standard is less than [**]%, the Parties shall equally
share in up to [**] percentage points ([**]%) of the underage below
[**]% with 3DP's share of such underage being added as an addition
by Centocor to the royalty payable to 3DP under Section 6.6. For the
purposes of clarity, the royalty adjustment shall be applied to the
total Net Sales which are subject to royalties under Section 6.6 and
not merely the incremental amount above $[**].
6.9 Currency Restrictions. Except as herein provided in this Article,
all royalties shall be paid in Dollars. If, at any time, legal
restrictions prevent the prompt remittance of part of or all of the
royalties with respect to any country where Licensed Products are
sold, Centocor shall have the right and option to make such payments
by depositing the amount thereof in local currency to 3DP's accounts
in a bank or depository in such country.
28
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
6.10 Royalty Period. The royalty payments set forth above shall be
payable for each Licensed Product on a product-by-product and
country-by-country basis from the date of First Commercial Sale of
such Licensed Product in such country until the later of: (a) [**]
from the date of First Commercial Sale of such Licensed Product in
such country; or (b) until [**].
6.11 Mode of Payment. All payments to 3DP hereunder shall be made by wire
transfer of Dollars in the requisite amount to the account
designated by 3DP which is attached hereto as Exhibit 6.11;
provided, however, that any notice by 3DP of a change in such
account shall not be effective until thirty (30) days after receipt
thereof by Centocor.
6.12 Timing of Payments. Milestone payments shall be made within thirty
(30) days after occurrence of the relevant milestone event. Royalty
payments shall be made within forty-five (45) days after the close
of each reporting period. Centocor shall be responsible for all
payments that are due to 3DP but have not been paid by Centocor's
Sublicensees or Commercialization partners.
6.13 Quarterly Royalty Reports. During the term of this Agreement and
commencing with the First Commercial Sale of each Licensed Product,
Centocor shall furnish or cause to be furnished to 3DP on a
quarterly basis, a written report or reports covering each quarter
(each such quarter being sometimes referred to herein as a
"reporting period") showing:
6.13.1 Gross invoiced sales and total deductions used to calculate
Net Sales of each Licensed Product sold by Centocor and its
Sublicensees during the reporting period on a
country-by-country basis. For the United States only, twice
per calendar year, Centocor shall provide to 3DP a report
showing all itemized deductions from gross invoiced sales to
Net Sales. In any Major Market Country or country which
represents [**] or more of world wide gross invoiced sales
(other than the United States), to the extent that there are
significant variances in total deductions from gross invoiced
sales to Net Sales from one quarter to another, Centocor
shall, at 3DP's reasonable request, provide a reasonably
detailed explanation as to such increase.
6.13.2 The royalties, payable in Dollars, which shall have accrued
hereunder in respect of such Net Sales.
6.13.3 The exchange rates used, if any, in converting into Dollars,
from the currencies in which sales were made.
6.13.4 Dispositions of such Licensed Product other than pursuant to
sale for cash, if such data is normally reported in royalty
reports of other licensed products.
29
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
6.13.5 Any withholding taxes required to be paid from such
royalties.
6.14 Royalty Payment Due Date; Accrual. Royalties which have accrued
during any month and are required to be shown on a final quarterly
sales report provided for hereunder shall be due and payable on the
date such final quarterly sales report is due. In addition, at the
end of each calendar year in which royalties are paid hereunder,
Centocor agrees to reconcile estimated or accrued rebates and
discounts taken during such calendar year in accordance with its
standard reconciliation practices and make any necessary adjustment
in the next calendar quarter in which royalties are due and payable.
6.15 Royalty Report Timing. Centocor shall provide flash sales reports to
3DP fifteen (15) days after the close of each reporting period, and
final reports shall be due forty five (45) days following the close
of each reporting period.
6.16 Financial Records. Centocor shall keep accurate records, including,
without limitation, gross invoiced sales, Net Sales, royalty
payments, Development costs, and Manufacturing Costs ("Financial
Records"), in accordance with U.S. generally accepted accounting
practices, in sufficient detail to enable the amounts due hereunder
to be determined and verified by 3DP.
6.17 Currency Exchange. In the case of sales of any Licensed Product
outside the United States, royalty payments by Centocor to 3DP shall
be converted to Dollars in accordance with Centocor's current
customary and usual procedures for calculating same which are the
following: the rate of currency conversion shall be calculated using
a simple monthly period average of the end "spot rates" provided by
▇▇▇▇▇ Brothers ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇ ▇▇▇▇▇, for each
quarter, or if such rate is not available, the spot rate as
published by a leading United States commercial bank for such
accounting period. This method of conversion is consistent with
Centocor's current accounting methods. Centocor shall give 3DP
prompt written notice of any changes to Centocor's customary and
usual procedures for currency conversion, which shall only apply
after such notice has been delivered and provided that such changes
continue to maintain a set methodology for currency conversion.
6.18 Audit. Financial Records under this Agreement shall be open during
reasonable business hours for a period of two (2) years from
creation of individual records for examination. Upon the written
request of 3DP but not more often than once each year, at 3DP's
expense, Centocor shall permit an independent public accounting firm
of national prominence selected by 3DP and acceptable to Centocor to
have access during normal business hours to those records of
Centocor as may be reasonably necessary for the sole purpose of
verifying the accuracy of the Net Sales report (including all of its
component calculation such as Manufacturing Costs), Development
costs and royalty calculation conducted by Centocor pursuant to this
Agreement.
30
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
6.18.1 Centocor shall include in each sublicense or
Commercialization agreement entered into by it pursuant to
this Agreement, a provision requiring, among others, the
Sublicensee or Commercialization partner to keep and maintain
adequate Financial Records pursuant to such sublicense or
Commercialization agreement and to grant access to such
records by the aforementioned independent public accountant
for the reasons specified in this Agreement.
6.18.2 The report prepared by such independent public accounting
firm, a copy of which shall be sent or otherwise provided to
Centocor by such independent public accountant at the same
time as it is sent or otherwise provided to 3DP, shall
contain the conclusions of such independent public accountant
regarding the audit and will specify that the amounts paid to
3DP pursuant thereto were correct or, if incorrect, the
amount of any underpayment or overpayment.
6.18.3 If such independent public accounting firm's report shows any
underpayment, Centocor shall remit or shall cause its
Sublicensees or Commercialization partners to remit to 3DP
within 30 days after Centocor's receipt of such report, (i)
the amount of such underpayment and (ii) if such underpayment
exceeds five percent (5%) of the total amount owed for the
calendar year then being audited, the reasonable and
necessary fees and expenses of such independent public
accountant performing the audit, subject to reasonable
substantiation thereof. If such independent public accounting
firm's report shows any overpayment, Centocor shall receive a
credit equal to such overpayment against the royalty
otherwise payable to 3DP.
6.19 Interest Due. In case of any delay in payment by Centocor to 3DP,
interest on the overdue payment shall accrue at an annual interest
rate, compounded monthly, equal to the prime rate as reported in The
Wall Street Journal, as determined for each month on the last
business day of that month, assessed from the day payment was
initially due. The foregoing interest shall be due from Centocor
without any special notice.
6.20 Tax Withholding. Any income or other taxes which Centocor is
required by law to pay or withhold on behalf of 3DP with respect to
milestones or royalties, and any interest thereon, payable to 3DP
under this Agreement shall be deducted from the amount of such
milestones or royalties and interest due and paid or withheld, as
appropriate, by Centocor on behalf of 3DP. Any such tax required to
be paid or withheld shall be an expense of, and be borne solely by,
3DP. Centocor shall furnish 3DP with reasonable evidence of such
withholding payment in electronic or written form as soon as
practicable after such payment is made. The Parties hereto shall
reasonably cooperate in completing and filing documents required
under the provisions of any applicable tax laws or under any other
applicable law
31
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
in connection with the making of any required withholding payment,
or any claim to a refund of any such payment.
ARTICLE 7
CONFIDENTIAL INFORMATION
7.1 Confidentiality Obligations. The Parties agree that, for the term of
this Agreement and for five (5) years thereafter, either Party that
receives Information (a "Receiving Party") and other confidential
and proprietary information and materials furnished to it by the
other Party (a "Disclosing Party") pursuant to this Agreement or any
Information developed during the term of this Agreement
(collectively "Confidential Information"), shall keep completely
confidential and shall not publish or otherwise disclose and shall
not use for any purpose (except as expressly permitted hereunder)
such Confidential Information, except to the extent that it can be
established by the Receiving Party that such Confidential
Information: (a) was already known to the Receiving Party, other
than under an obligation of confidentiality from the Disclosing
Party; (b) was generally available to the public or otherwise part
of the public domain at the time of its disclosure to the Receiving
Party; (c) became generally available to the public or otherwise
part of the public domain after its disclosure which was other than
through any act or omission of the Receiving Party in breach of this
Agreement; (d) was subsequently lawfully disclosed to the Receiving
Party by a Third Party; (e) can be shown by written records to have
been independently developed by the Receiving Party without
reference to the Confidential Information received from the
Disclosing Party and without breach of any of the provisions of this
Agreement; or (f) is information that the Disclosing Party has
specifically agreed in writing that the Receiving Party may
disclose.
7.2 Written Assurances and Permitted Uses of Confidential Information.
7.2.1 Each Party shall inform its employees and consultants who
perform work on the Research Program of the obligations of
confidentiality specified in Section 7.1, and all such persons
shall be bound by obligations of confidentiality substantially
similar to those set forth herein.
7.2.2 The Receiving Party may disclose Confidential Information to
the extent the Receiving Party is compelled to disclose such
information by a court or other tribunal of competent
jurisdiction, provided, however, that in such case the
Receiving Party shall immediately give notice to the
Disclosing Party so that the Disclosing Party may seek a
protective order or other remedy from said court or tribunal.
In any event, the Receiving Party shall disclose only that
portion of the Confidential Information that, in the opinion
of its legal counsel, is legally required to be disclosed and
will exercise reasonable efforts to ensure that any such
information so disclosed will be accorded confidential
treatment by said court or tribunal.
32
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
7.2.3 To the extent it is reasonably necessary or appropriate to
fulfill its obligations and exercise its rights under this
Agreement, either Party may disclose Confidential Information
to its Affiliates on a need-to-know basis on condition that
such Affiliates agree to keep the Confidential Information
confidential for the same time periods and to the same extent
as such Party is required to keep the Confidential Information
confidential under this Agreement, and to any regulatory
authorities to the extent reasonably necessary to obtain
Regulatory Approval.
7.2.4 The existence and the terms and conditions of this Agreement
which the Parties have not specifically agreed to disclose
pursuant to this Section 7.2 shall be treated by each Party as
Confidential Information of the other Party.
7.2.5 If a Party is required to make any disclosure of the other
Party's Confidential Information, it will give at least 30
days' advance written notice to the other Party of such
disclosure requirement. If a Party is required to disclose
Confidential Information to comply with applicable laws or
governmental regulations, including, but not limited to,
submitting information to tax authorities or complying with
any discovery or similar request for production of documents
in litigation or similar alternative dispute resolution
proceedings, such Party may make such disclosure, provided
that it gives prompt notice to the other Party, and provided
that it makes all reasonable efforts to comply with all
administrative or other procedures or to establish a
reasonable protective or similar order under which the
confidential nature of the information will be maintained.
7.3 Authorized Disclosure. Except as expressly provided otherwise in
this Agreement, each Party may disclose Confidential Information of
the other Party as follows: (i) to Third Parties under appropriate
terms and conditions, including confidentiality provisions
substantially equivalent to those in this Agreement for consulting,
manufacturing, development, external testing and marketing trials
with respect to the Licensed Products covered by this Agreement, or
otherwise as is reasonably necessary to exercise the rights and
licenses granted herein (including the right to grant sublicenses),
provided, however, any such disclosure shall be limited to the
specific matter for which the Third Party is engaged or (ii) to the
extent such disclosure is reasonably necessary in filing or
prosecuting patent, copyright and trademark applications,
prosecuting or defending litigation, complying with applicable
governmental regulations, obtaining regulatory approval, conducting
preclinical or clinical trials or marketing Licensed Products,
provided, however, that if a Party is required by law or regulation
to make any such disclosure of the other Party's Confidential
Information, it will, except where impracticable for necessary
disclosures, for example in the event of medical emergency, give
reasonable advance notice to the other Party of such disclosure
requirement and, except to the extent inappropriate in the case of
patent
33
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
applications, will use its reasonable efforts to secure
confidential treatment of such Confidential Information required to
be disclosed.
7.4 Publication. Each Party shall submit any proposed scientific
publication containing Confidential Information of the other Party
relating to its Research Program activities and/or Development
and/or Commercialization activities relating to Direct Thrombin
Inhibitors or Licensed Products at least thirty (30) days in advance
of submission of an abstract of a proposed publication, if any, and
again at least 30 days in advance of submission of the scientific
publication, to allow such other Party to review such planned public
disclosure. The reviewing Party will promptly review such
publication and make any objections that it may have to the
publication of the Confidential Information contained therein.
Should the reviewing Party make an objection to the publication of
the Confidential Information or require its modification, then the
Parties will discuss the merits of publishing and any such
modifications; provided, however, that in any case, no publication
of Confidential Information of the other Party shall take place
under this Section without the other Party's prior written approval
thereof or unless the obligations of confidentiality as to such
Confidential Information shall be waived or disclosure of
Confidential Information of the other Party is authorized under
Section 7.1.
7.5 Public Announcements. A press release, deemed agreed upon by the
Parties, is attached to this Agreement as Exhibit 7.5. Otherwise,
neither Party shall originate any publicity, news release or public
announcements, written or oral, whether to the public or press,
stockholders or otherwise, relating to this Agreement, including its
existence, the subject matter to which it relates, performance under
it or any of its terms, to any amendment hereto or performances
hereunder without the prior written consent of the other Party, save
only such announcements that are required by law to be made or that
are otherwise agreed to by the Parties. Such announcements shall be
brief and factual. If a Party decides to make an announcement
required by law, it shall give the other Party at least five (5)
business days advance notice, where possible, of the text of the
announcement so that the other Party shall have an opportunity to
comment upon the announcement. To the extent that the receiving
Party reasonably requests the deletion of any information in the
materials, the disclosing Party shall delete such information
unless, in the opinion of the disclosing Party's legal counsel, such
Confidential Information is legally required to be fully disclosed.
ARTICLE 8
PATENTS AND INTELLECTUAL PROPERTY
8.1 Ownership; Inventions. Inventorship for patentable inventions
conceived and reduced to practice during the course of the
performance of activities pursuant to this Agreement shall be
determined in accordance with U.S. patent laws for determining
inventorship. Ownership shall be determined based on inventorship.
34
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
In the event of a dispute regarding inventorship, if the parties are
unable to resolve such inventorship dispute, the Parties shall
establish a procedure to resolve such dispute, which may include
engaging a Third Party patent attorney jointly selected by the
Parties to resolve such dispute.
8.2 Disclosure of Patentable Inventions. Each Party shall promptly
provide to the other any invention disclosure submitted in the
normal course of business and disclosing an invention arising in the
course of the Research Program.
8.3 3DP Patentable Inventions and Know-How.
8.3.1 3DP Patent Prosecution.
(a) Prosecution and Maintenance. During the term of the
Agreement, 3DP shall, at its own expense, prepare, file,
prosecute and maintain 3DP Patents and use reasonable
efforts to file initially all such patent applications
in the United States. To the extent 3DP Patents are
Program Patents, Centocor shall provide a list of
countries in which such patent applications shall be
filed reasonably in advance of 3DP's estimated filing
date. 3DP shall file such patent applications in each
indicated country. [**] of the cost of such filings.
(b) Discontinuance. If 3DP does not intend to file for
patent protection or does not wish to continue
preparation, prosecution or maintenance of a 3DP Patent,
then it shall give at least [**] advance notice to
Centocor, and in no event less than a reasonable period
of time for Centocor to act in its stead. In such case,
Centocor may elect at its sole discretion to continue
preparation, filing and prosecution or maintenance of
the discontinued patent at its sole expense. 3DP shall
execute such documents and perform such acts as may be
reasonably necessary for Centocor to file or to continue
prosecution or maintenance of such patent.
Discontinuance may be elected on a country-by-country
basis or for a patent application or patent series in
total.
8.3.2 Cooperation. 3DP shall consult with Centocor and shall keep
Centocor continuously informed of all material matters
relating to the preparation, filing, prosecution and
maintenance of 3DP Patents covered by this Agreement,
including, but not limited to, disclosing to Centocor the
complete text of all such 3DP Patents. In addition, 3DP shall
provide Centocor with copies of all material correspondence
with the applicable patent office.
8.4 Centocor Patentable Inventions and Know-How.
35
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
8.4.1 Centocor Patent Prosecution.
(a) Prosecution and Maintenance. During the term of the
Agreement, Centocor shall, at its own expense, prepare,
file, prosecute and maintain Centocor Patents and use
reasonable efforts to file initially all such patent
applications in countries in which Centocor would file
patent applications in its normal business practice for
comparable technology.
(b) Discontinuance. If Centocor does not intend to file for
Patent protection or does not wish to continue
preparation, prosecution or maintenance of a Centocor
Patent, then it shall give at least [**] advance notice
to 3DP, and in no event less than a reasonable period of
time for 3DP to act in its stead. In such case, 3DP may
elect at its sole discretion to continue preparation,
filing and prosecution or maintenance of the
discontinued patent at its sole expense. Centocor shall
execute such documents and perform such acts as may be
reasonably necessary for 3DP to file or to continue
prosecution or maintenance of such patent.
Discontinuance may be elected on a country-by-country
basis or for a patent application or patent series in
total.
8.4.2 Cooperation. Centocor shall consult with 3DP and shall keep
3DP continuously informed of all material matters relating to
the preparation, filing, prosecution and maintenance of
Centocor Patents covered by this Agreement, including, but not
limited to, disclosing to 3DP the complete text of all such
Centocor Patents.
8.5 Jointly Owned Program Patents
8.5.1 The parties shall jointly determine whether to prepare, file,
prosecute and maintain any jointly owned Program Patents. The
JRC shall assign responsibility to one Party to act as the
lead Party for the prosecution and maintenance of such Program
Patent.
8.5.2 The filing Party shall keep the other Party apprised of the
status of each jointly owned Program Patent and shall seek the
advice of the other Party with respect to patent strategy and
drafting applications and shall give reasonable consideration
to any suggestions or recommendations of the other Party
concerning the preparation, filing, prosecution, maintenance
and defense thereof. With respect to such jointly owned
Program Patents wherein 3DP is the filing Party, Centocor
shall provide a list of countries in which such patent
applications shall be filed reasonably in advance of
36
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
3DP's estimated filing date. 3DP shall file such patent
applications in each indicated country. [**] of the cost of
such filings.
8.5.3 The Parties shall cooperate reasonably in the prosecution of
all jointly owned Program Patents and shall share all material
information relating thereto, including all material
communications from patent offices, promptly after receipt of
such information.
8.5.4 If, during the term of this Agreement, the filing Party
intends to allow any jointly owned Program Patent to lapse or
to abandon any such Program Patent, the filing Party shall,
whenever practicable, notify the non-filing Party of such
intention at least [**] prior to the date upon which such
Patent shall lapse or become abandoned, and the non-filing
Party shall thereupon have the right, but not the obligation,
to assume responsibility for the prosecution, maintenance and
defense thereof and all expenses related thereto.
8.6 Initial Filing if Made Outside of the United States. The Parties
agree to use reasonable efforts to ensure that any Patent filed
outside of the United States prior to a U.S. filing will be in a
form sufficient to establish the date of original filing as a
priority date for the purposes of a subsequent U.S. filing.
8.7 Infringement Claims by Third Parties.
8.7.1 Notice. If the manufacture, use or sale of Direct Thrombin
Inhibitor or any Licensed Product results in a claim or a
threatened claim by a Third Party against a Party hereto for
patent infringement or for inducing or contributing to patent
infringement ("Infringement Claim"), the Party first having
notice of an Infringement Claim shall promptly notify the
other in writing. The notice shall set forth the facts of the
Infringement Claim in reasonable detail.
8.7.2 Defense. Centocor shall have the right but not the obligation
to defend any suit resulting from an Infringement Claim at its
expense. 3DP shall cooperate and assist Centocor in any such
litigation at Centocor's expense.
8.7.3 Settlement. In the event that the manufacture, use or sale of
the Direct Thrombin Inhibitor or the Licensed Product in a
country would infringe a Third Party Patent and a license to
such Third Party Patent is available, and Centocor in its sole
discretion seeks such a license, the Parties agree:
(a) Subject to Section 6.7.2, [**] shall be responsible for
[**] associated with acquiring such Third Party license;
and
(b) [**] shall use reasonable efforts to obtain required
licenses under the Third Party Patents, with [**].
37
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
8.8 Patent Assignment. Neither Party may assign its interest in rights
under jointly owned Program Patents or any Patents claiming a Direct
Thrombin Inhibitor or Licensed Product, except with the prior
written consent of the other Party, such consent not to be
unreasonably withheld or delayed; provided, however, that either
Party may assign such rights without consent of the other Party to a
permitted assignee under this Agreement.
8.9 Infringement Claims Against Third Parties.
8.9.1 Cooperation. 3DP and Centocor each agree to take reasonable
actions to protect 3DP Patents or jointly owned Program
Patents from infringement. If one Party brings any such action
or proceeding, the other Party may be joined as a Party
plaintiff if necessary for the action or proceeding to proceed
and, in case of joining, the other Party agrees to give the
first Party reasonable assistance and authority to file and to
prosecute such suit. The other Party shall be reimbursed for
any costs associated with its participation.
8.9.2 Notice. If any 3DP Patent, Centocor Patent, and/or jointly
owned Program Patent is infringed by a Third Party in any
country in connection with the manufacture, use and/or sale of
a Licensed Product in such country, the Party to this
Agreement first having knowledge of such infringement, or
knowledge of a reasonable probability of such infringement,
shall promptly notify the other in writing. The notice shall
set forth the known facts of such infringement in reasonable
detail.
8.9.3 Institution of Proceedings.
(a) 3DP shall have the primary right, but not the
obligation, to institute, prosecute and control with its
own counsel, any action or proceeding with respect to
infringement of a 3DP Patent. Centocor shall have the
right, at its own expense, to be represented in such
action by its own counsel; provided, however, no
settlement may be entered into by 3DP without the
written consent of Centocor, which consent shall not be
unreasonably withheld or delayed, if such settlement
would have a material adverse effect on Centocor's
interests.
(b) With respect to jointly owned Program Patents, Centocor
shall have the primary right, but not the obligation, to
institute, prosecute and control any action or
proceeding with respect to infringement of such Patents,
by counsel of its own choice and at its own expense;
provided, however, no settlement may be entered into by
Centocor without the written consent of 3DP, which
consent shall not be unreasonably withheld or delayed,
if such
38
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
settlement would have a material adverse effect on 3DP's
interests.
(c) Centocor shall have the sole right to enforce any rights
under the Centocor Patents at its own expense.
8.9.4 Failure to Institute Proceedings. If the Party having the
primary right to institute proceedings under Section 8.9.3
(hereinafter referred to as the "First Prosecuting Party")
fails to institute, prosecute or control such action or
prosecution within a period of one hundred eighty (180) days
after receiving notice of the infringement from the other
Party (hereinafter referred to as the "Second Prosecuting
Party"), then the Second Prosecuting Party shall have the
right to bring and control any such action by counsel of its
own choice, and the First Prosecuting Party shall have the
right, at its own expense, to be represented in any such
action by counsel of its own choice. The First Prosecuting
Party shall cooperate with the Second Prosecuting Party in
such effort, including being joined as a party to such action
if necessary.
8.9.5 Costs. The Party bringing suit under this Article shall bear
all costs of the suit and shall retain any damages or other
monetary awards recovered.
8.9.6 Settlement. The parties shall keep each other informed of the
status of and of their respective activities regarding any
litigation or settlement thereof concerning Licensed Products
in the Field. A settlement or consent judgment or other
voluntary final disposition of a suit brought by a Party under
this Section 8.9 may be entered without the consent of the
other Party; provided such settlement, consent judgment or
other disposition does not admit the invalidity or
unenforceability of any Patent; and provided further, that any
rights to continue the infringing activity in such settlement,
consent judgment or other disposition shall be limited to the
product or activity that was the subject of the suit.
8.10 Notices Relating to the Act. 3DP shall notify Centocor of the
issuance of each U.S. patent included among the 3DP Patents, giving
the date of issue and patent number for each such patent. 3DP and
Centocor each shall immediately give notice to the other of any
certification filed under the "U.S. Drug Price Competition and
Patent Term Restoration Act of 1984" (hereinafter the "Act"),
including, but not necessarily limited to, notices pursuant to
ss.ss.101 and 103 of the Act from persons who have filed an
abbreviated NDA ("ANDA") or a "paper" NDA claiming that a 3DP,
Centocor, or jointly owned Program Patent is invalid or that
infringement will not arise from the manufacture, use or sale of any
Direct Thrombin Inhibitor or Licensed Product by a Third Party.
8.10.1 If Centocor decides not to bring infringement proceedings
against the entity making such a certification, Centocor shall
give notice to 3DP of its
39
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
decision not to bring suit within [**] after receipt of
notice of such certification.
8.10.2 3DP may then, but is not required to, bring suit against the
party that filed the certification.
8.10.3 Any suit by Centocor or 3DP shall either be in the name of
Centocor or in the name of 3DP, or jointly in the name of
Centocor and 3DP, as may be required by law.
8.10.4 For purposes of this Section, the Party not bringing suit
shall execute such legal papers necessary for the prosecution
of such suit as may be reasonably requested by the Party
bringing suit.
8.11 Patent Term Extensions. 3DP hereby authorizes Centocor to (a)
provide in any NDA a list of patents which includes 3DP Patents that
relate to such Product and such other information as Centocor
believes is appropriate; (b) commence suit for infringement of 3DP
Patents under ss. 271(e) (2) of Title 35 of the United States Code;
and (c) exercise any rights that may be exercisable by 3DP as patent
owner under the Act, including without limitation, applying for an
extension of the term of any patent included in 3DP Patents. In the
event that applicable law in any country provides for the extension
of the term of any patent included among 3DP Patents, such as under
the Act, the Supplementary Certificate of Protection of the Member
States of the European Union and other similar measures in any other
country, 3DP shall apply for and use its reasonable efforts to
obtain such an extension or, should the law require Centocor to so
apply, 3DP hereby gives permission to Centocor to do so. Centocor
and 3DP agree to cooperate with one another in obtaining such
extension. 3DP agrees to cooperate with Centocor or its Sublicensee,
as applicable, in the exercise of the authorization granted herein
and shall execute such documents and take such additional action as
Centocor may reasonably request in connection therewith, including,
if necessary, permitting itself to be joined as a Party in any suit
for infringement brought by Centocor hereunder.
8.12 Rights to Research Compounds. Research Compounds shall be solely and
exclusively owned by 3DP. However, if during the Research Term, 3DP
identifies Research Compounds having activity indicating potential
for Development in an Indication selected from [**], then 3DP shall
notify Centocor regarding such Research Compounds and shall provide
Centocor with data and test results confirming such activity. If
Centocor is interested in obtaining rights to such Research
Compounds, the Parties shall negotiate in good faith a comprehensive
licensing agreement to such Research Compounds on substantially the
same terms and conditions of this Agreement. If the Parties fail to
reach agreement regarding such Research Compounds, then the Parties
shall use a Third Party expert to resolve the conflict.
40
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
With regard to any Research Compounds which may be the subject of a
Centocor Patent, Centocor shall, to the extent practicable, assign
all right, title and interest in such Research Compound, or, in the
alternative, grant to 3DP a fully paid-up, exclusive license to such
Research Compounds.
ARTICLE 9
INDEMNIFICATION
9.1 Research and Development Indemnification. Each Party (the
"Indemnifying Party") shall indemnify, defend and hold the other
Party (the "Indemnified Party") harmless from and against any and
all liabilities, claims, damages, costs, expenses or money judgments
incurred by or rendered against the Indemnified Party and its
Affiliates and Sublicensees incurred in the defense or settlement of
a Third Party lawsuit or in a satisfaction of a Third Party judgment
arising out of any injuries to person and/or damage to property
resulting from (i) negligent acts of the Indemnifying Party
performed in carrying out the Research Program hereunder, including
failure by the Indemnifying Party to provide the Indemnified Party
with any Information of the Indemnifying Party which, if timely
received, would have avoided injury, death or damage, provided such
failure to provide such know-how is due to negligence of the part of
the Indemnifying Party and (ii) personal injury to the Indemnified
Party's employees or agents, or damage to the Indemnified Party's
property, resulting from acts performed by, under the direction of,
or at the request of the Indemnifying Party in carrying out the
activities contemplated by this Agreement.
9.2 Indemnification for Direct Thrombin Inhibitors and Licensed
Products.
9.2.1 Indemnification by Centocor. Centocor shall indemnify, defend
and hold 3DP and its agents, employees and directors (the "3DP
Indemnitees") harmless from and against any and all liability,
damage, claim, loss, cost or expense, including reasonable
attorneys' fees ("Losses") resulting directly from the
manufacture, use, handling, storage, sale or other disposition
of chemical agents, Direct Thrombin Inhibitors or Licensed
Products by Centocor or its Sublicensees, distributors and
agents, except to the extent such Losses result from the gross
negligence or willful misconduct of the 3DP Indemnitees. Upon
the assertion of any such claim or suit, the 3DP Indemnitees
shall promptly notify Centocor thereof and shall permit
Centocor to assume direction and control of the defense of the
claim (including the right to settle the claim solely for
monetary consideration) and shall cooperate as requested (at
the expense of Centocor) in the defense of the claim. The 3DP
Indemnities shall not settle any such claim or suit without
the prior written consent of Centocor,
41
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
unless they shall have first waived their rights to
indemnification hereunder.
9.2.2 Indemnification By 3DP. 3DP shall indemnify, defend and hold
Centocor and its agents, employees and directors (the
"Centocor Indemnitees") harmless from and against any and all
Losses resulting directly from the manufacture, use, handling,
storage, sale or other disposition of chemical agents, Direct
Thrombin Inhibitors or Licensed Products by 3DP and its
Sublicensees, distributors and agents, except to the extent
that such Losses result from the gross negligence or willful
misconduct of the Centocor Indemnitees. Upon the assertion of
any such claim or suit, the Centocor Indemnitees shall
promptly notify 3DP thereof and shall permit 3DP to assume
direction and control of the defense of the claim (including
the right to settle the claim solely for monetary
consideration) and shall cooperate as required (at the expense
of 3DP) in the defense of the claim. The Centocor Indemnitees
shall not settle any such claim or suit without the prior
written consent of 3DP, unless they shall have first waived
their rights to indemnification hereunder.
9.3 Insurance Proceeds. Any indemnification hereunder shall be made net
of any insurance proceeds recovered by the Indemnified Party;
provided, however, that if, following the payment to the Indemnified
Party of any amount under this Article 9, such Indemnified Party
recovers any insurance proceeds in respect of the claim for which
such indemnification payment was made, the Indemnified Party shall
promptly pay an amount equal to the amount of such proceeds (but not
exceeding the amount of such indemnification payment) to the
Indemnifying Party.
9.4 Insurance. Centocor and 3DP shall use all commercially reasonable
efforts to maintain insurance, including product liability
insurance, with respect to its activities hereunder. Such insurance
shall be in such amounts and subject to such deductibles as the
Parties may agree, based upon standards prevailing in the industry
at the time. Centocor may satisfy its obligations under this Section
through self-insurance to the same extent.
ARTICLE 10
TERM AND TERMINATION
10.1 Term. This Agreement shall commence on the Execution Date and shall
remain in effect until the expiration of Centocor's obligation to
pay royalties for all Licensed Products, unless earlier terminated
as provided in this Article 10.
10.2 Termination of this Agreement by Centocor for any Reason. After the
[**] and [**] as provided herein, Centocor may terminate this
Agreement for any
42
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
reason upon [**] advance written notice to 3DP before the [**] of
[**] in a [**], or upon [**] advance written notice to 3DP after the
[**] in a [**].
10.3 Termination for Breach. The failure by a Party to comply with any of
the material obligations contained in this Agreement shall entitle
the other Party to give notice to have the default cured. If such
default is not cured within sixty (60) days after the receipt of
such notice, or if by its nature such default could not be cured
within sixty (60) days, the notifying Party shall be entitled,
without prejudice to any of its other rights conferred on it by this
Agreement, and in addition to any other remedies that may be
available to it, to terminate this Agreement. Centocor's [**] to
[**] a [**] or [**] to [**], shall constitute a material breach.
With respect to the Co-Promotion of Licensed Product for DVT in the
United States, breach by 3DP of the Co-Promotion Agreement between
the Parties will not allow Centocor to terminate this Agreement
under this Section 10.3.
10.4 Termination for Bankruptcy. Either Party hereto shall have the right
to terminate this Agreement forthwith by written notice to the other
Party (i) if the other Party is declared insolvent or bankrupt by a
court of competent jurisdiction, (ii) if a voluntary or involuntary
petition in bankruptcy is filed in any court of competent
jurisdiction against the other Party and such petition is not
dismissed within ninety (90) days after filing or (iii) if the other
Party shall make or execute an assignment of substantially all of
its assets for the benefit of creditors.
10.5 Effect of Termination. In the event of termination by Centocor under
Section 10.2 or by 3DP under Section 10.3 or 10.4: (i) all rights
licensed herein shall revert to 3DP and Centocor shall grant to 3DP
a royalty free license under all Patents and know-how Controlled by
Centocor that are reasonably necessary for the Development,
manufacture and Commercialization of Licensed Products; (ii)
Centocor shall, at its own expense, promptly provide 3DP with all
data and results pertaining to Direct Thrombin Inhibitors and
Licensed Products; (iii) Centocor shall, at its own expense,
promptly assign or transfer to 3DP all filings with regulatory
authorities concerning Licensed Products, including, without
limitation, Drug Approval Applications; and (iv) Centocor shall
provide 3DP with its requirements of Licensed Product, at actual
cost, for a period of time reasonably sufficient for 3DP to find an
acceptable (at 3DP's sole discretion) alternative source of both
clinical and commercial supply of Licensed Product.
10.6 No Waiver. The right of a Party to terminate this Agreement, as
provided in this Article 10 shall not be affected in any way by its
waiver or failure to take action with respect to any prior default.
10.7 Consequences of Termination. Except as otherwise provided herein,
upon termination of this Agreement, all remaining records and
materials in its possession or control containing the other Party's
Confidential Information and to which the former Party does not
retain rights hereunder, shall promptly be
43
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
returned. Notwithstanding the foregoing, one copy of such records
may be retained by legal counsel for the former Party.
10.8 Results of Termination by Centocor for Cause. In the event of
termination of this Agreement by Centocor pursuant to Section 10.3
or 10.4, the licenses granted to Centocor in Article 2 hereof shall
survive termination. In addition, the royalty rates recited in
Sections 6.6 and 6.7 shall each be amended and reduced by [**], with
Sections 6.6 through 6.20 and all relevant definitions in Article 1
surviving termination. Furthermore, Sections 8.7 through 8.12 shall
survive termination.
10.9 Survival of Obligations. The termination or expiration of this
Agreement shall not relieve the Parties of any obligations accruing
prior to such termination, and any such termination shall be without
prejudice to the rights of either Party against the other. The
provisions of Sections 2.1 (except in the case of termination by 3DP
under Section 10.3 or 10.4), 3.11, 3.12, 8.1, and Articles 1, 7, 9,
12 and 13 shall survive any termination of this Agreement.
10.10 Termination Not Sole Remedy. Termination is not the sole remedy
under this Agreement and, whether or not termination is effected,
all other remedies will remain available except as agreed to
otherwise herein.
10.11 3DP Change of Control. In the event that a 3DP Change in Control (as
defined below) occurs during the Term, Centocor shall have the
right, exercisable upon written notice to 3DP and delivered at any
time within [**] after the effective date of such 3DP Change in
Control, to terminate any on-going Research Program under Article 3,
any Co-Development under Section 4.7, any Co-Promotion activities by
3DP pursuant to Section 5.5 and any Co-Promotion Agreement, to
eliminate 3DP's right to Co-Promote Licensed Products under Section
5.5 or any Co-Promotion Agreement, to not provide 3DP with copies of
its Marketing Plan for review and to end the Joint Steering
Committee, Centocor being allowed to carry out Development and
Commercialization of the Products without a Joint Steering
Committee.
For purposes of this Agreement, "3DP Change in Control" means any
transaction or series of related transactions by which a Third Party
pharmaceutical company acquires or becomes the beneficial owner of
(i) fifty percent (50%) or more of the outstanding voting securities
of 3DP or the surviving entity, whether by merger, consolidation,
reorganization, tender offer or other similar means or (ii) all or
substantially all of the assets of 3DP. For purposes of this Section
10.11, "Third Party pharmaceutical company" shall mean a Third Party
healthcare company (including a biotech company or a "group" within
the meaning of Section 13(d)(3) of the Securities Exchange Act of
1934 (the "Exchange Act") but excluding Centocor and any Affiliates
of the Parties) whose net sales (or reported equivalent) of human
pharmaceutical in the most recently completed fiscal year for which
audited financial statements are publicly available exceed $[**] as
reported in such financial statements, or if not publicly available
as appropriately provided by 3DP.
44
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
In the event of termination by Centocor under this Section 10.11:
(i) if Centocor shall continue the Development and/or
Commercialization of the Direct Thrombin Inhibitors or Licensed
Product for DVT, then Centocor shall reimburse 3DP for [**]% of any
Development Costs 3DP incurred (if Centocor does not continue
Development and/or Commercialization of the Direct Thrombin
Inhibitors or Licensed Product for DVT then no such payment shall be
due); (ii) to the extent the Co-Promotion Agreement is terminated,
Centocor shall pay 3DP the greater of (a) the [**] or (b) a [**] of
[**] for the [**] period prior to the [**] as follows: in the first
year following termination: [**]%, in the second year following
termination: [**]%; and in the third year following termination:
[**]%; and (iii) 3DP shall, at Centocor's expense, promptly provide
Centocor all data and results pertaining to Direct Thrombin
Inhibitors and the Licensed Products.
ARTICLE 11
REPRESENTATIONS AND WARRANTIES
11.1 Authority. Each Party represents and warrants that as of the
Execution Date, it has the full right, power and authority to enter
into this Agreement and that this Agreement has been duly executed
by such Party and constitutes a legal, valid and binding obligation
of such Party, enforceable in accordance with its terms.
11.2 No Conflicts. Each Party represents and warrants that the execution,
delivery and performance of this Agreement by such Party does not
conflict with any agreement, instrument or understanding, oral or
written, to which it is a party or by which it is bound, nor violate
any law or regulation of any court, governmental body or
administrative or other agency having jurisdiction over it.
11.3 No Existing Third Party Rights. Each Party represents and warrants
that it has not, and during the term of the Agreement will not,
grant any right to any Third Party relating to its respective
technology in the Field which would conflict with the rights granted
to the other Party hereunder.
11.4 Patents and Know-How Warranties. To the best of its knowledge, as of
the Execution Date, each Party represents and warrants that (i) any
Patent, know-how or other intellectual property right owned or
controlled by such Party is not currently being infringed by any
Third Party and (ii) the practice of such rights does not infringe
any property right of any Third Party.
11.5 Control of Know-How. 3DP and Centocor each represent and warrant
that it owns or Controls all of the rights, title and interest in
and to the 3DP Know-How and the Centocor Know-How, respectively.
11.6 Development Material. 3DP represents and warrants that the drug
substance material identified as 3DP-4815 to be used for the [**]
was manufactured
45
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
pursuant to CGMPs, and that 3DP has in its possession or has access
to all batch records for such drug substance material.
11.7 Disclaimer of Warranties. 3DP MAKES NO REPRESENTATIONS AND EXTENDS
NO WARRANTIES OR CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED,
WITH RESPECT TO THE LICENSED PRODUCTS LICENSED HEREUNDER, INCLUDING,
BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
11.8 Continuing Representations. The representations and warranties of
each Party contained in this Article 11 shall survive the execution
and delivery of this Agreement and shall remain true and correct at
all times during the Term with the same effect as if made on and as
of such later date.
ARTICLE 12
DISPUTE RESOLUTION
12.1 Dispute Resolution and Arbitration. In the case of any disputes
between the Parties arising from this Agreement, and in case this
Agreement does not provide a solution for how to resolve such
disputes, the Parties shall discuss and negotiate in good faith a
solution acceptable to both Parties and in the spirit of this
Agreement. If, after negotiating in good faith pursuant to the
foregoing sentence, the Parties fail to reach agreement within sixty
(60) days, then the Chief Executive Officer of 3DP and the President
of Centocor shall discuss in good faith an appropriate resolution to
the dispute. If these executives fail, after good faith discussions,
to reach an amicable agreement within sixty (60) days, then either
Party may upon written notice to the other submit the dispute to
binding arbitration pursuant to Section 12.2.
12.2 Arbitration. Any claim, dispute or controversy arising out of or in
connection with or relating to this Agreement (including, without
limitation, disputes with respect to the rights and obligations of
the Parties following termination) not settled by the procedures set
forth in Section 12.1 above, or the breach or alleged breach of a
material provision of this Agreement, shall be adjudicated by
arbitration in accordance with the Arbitration Proceedings as set
forth in Exhibit 12.2 attached hereto.
ARTICLE 13
MISCELLANEOUS PROVISIONS
13.1 Entire Agreement. This Agreement and each of the Exhibits hereto
constitute and contain the entire understanding and agreement of the
Parties respecting the subject matter of this Agreement and cancels
and supersedes any and all prior or
46
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
contemporaneous negotiations, correspondence, understandings and
agreements between the Parties, whether oral or written, regarding
such subject matter.
13.2 Further Actions. Each Party agrees to execute, acknowledge and
deliver such further instruments and to do all such other acts as
may be necessary or appropriate in order to carry out the purposes
and intent of this Agreement.
13.3 Binding Effect. This Agreement and the rights granted herein shall
be binding upon, and shall inure to the benefit of, 3DP, Centocor
and their respective lawful successors and permitted assigns.
13.4 Assignment. Neither Party shall assign this Agreement without the
prior written consent of the other Party (such consent not to be
unreasonably withheld) except that a Party may assign this Agreement
to an Affiliate or to a successor in connection with the merger,
consolidation or sale of all or substantially all of its assets or
that portion of its business pertaining to the subject matter of
this Agreement. Any permitted assignee shall assume all obligations
of its assignor under this Agreement.
13.5 No Implied Licenses. No rights to any other patents, know-how or
technical information, or other intellectual property rights, other
than as explicitly identified herein, are granted or deemed granted
by this Agreement. No right, expressed or implied, is granted by
this Agreement to a Party to use in any manner the name or any other
trade name or trademark of the other Party or its Affiliates in
connection with the performance of this Agreement.
13.6 No Waiver. No waiver, modification or amendment of any provision of
this Agreement shall be valid or effective unless made in writing
and signed by a duly authorized officer of each Party. The failure
of either Party to assert a right hereunder or to insist upon
compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent
failure to perform any such term or condition.
13.7 Force Majeure. The failure of a Party to perform any obligation
under this Agreement by reason of force majeure such as acts of God,
acts of governments, riots, wars, strikes, accidents or deficiencies
in materials or transportation or other causes of a similar
magnitude beyond its control shall not be deemed to be a breach of
this Agreement. The Party which is affected by any force majeure
shall contact the other Party for discussion of possible emergency
measures.
13.8 Independent Contractors. Both Parties are independent contractors
and not agents or employees of the other Party under this Agreement.
Nothing contained in this Agreement is intended nor is to be
construed so as to constitute 3DP or Centocor as partners or joint
venturers with respect to this Agreement. Neither Party shall have
any express or implied right or authority to assume or create any
obligations on behalf of or in the name of the other Party or to
bind the other
47
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Party to any other contract, agreement or undertaking with any Third
Party except as may be explicitly provided for herein or authorized
in writing.
13.9 Notices and Deliveries. Any notices, request, delivery, approval or
consent required or permitted to be given under this Agreement shall
be in writing and shall be deemed to have been sufficiently given
when it is received, whether delivered in person, transmitted by
facsimile with contemporaneous confirmation, or delivery by
registered letter (or its equivalent) or delivery by certified
overnight courier service, to the Party to which it is directed at
its address shown below or such other address as such Party shall
have last given by notice to the other Parties.
If to Centocor: with a copy to: Office of General Counsel
Centocor, Inc. ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: President Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to 3DP: with a copy to:
3-Dimensional Pharmaceuticals, Inc. ▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP
Eagleview Corporate Center ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: Chief Executive Officer ATTN: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
13.10 Restrictions on Unsolicited Activities. In consideration of the
licenses granted hereunder, Centocor agrees that for the term of
this Agreement, without the prior written consent of the board of
directors of 3DP, neither Centocor nor any of its respective
Affiliates (including any person or entity directly or indirectly,
through one or more intermediaries, controlling one of these
entities, or controlled by one of these entities or under common
control with one of these entities) will (i) purchase, offer or
agree to purchase, or announce an intention to purchase, directly or
indirectly, any securities or assets of 3DP; (ii) make, or in any
way participate, directly or indirectly, in any "solicitation" of
"proxies" to vote or "consents" (as such terms are used in the rules
and regulations of the Securities and Exchange Commission), or seek
to advise or influence any person with respect to the voting of any
voting securities of 3DP or any Affiliate thereof; (iii) initiate or
support, directly or indirectly, any stockholder proposal with
respect to 3DP; (iv) directly or indirectly make any public
announcement with respect to, or submit a proposal for, or offer of
(with or without conditions) any extraordinary transaction involving
3DP or its securities or assets, or any Affiliate thereof, or of any
successor to or person in control of 3DP or any of its businesses,
or any assets of 3DP any Affiliate or division thereof, or of any
such successor or controlling
48
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
person; or (v) form, join or in any way participate in a "group" as
defined in Section 13(d)(3) of the Exchange Act in connection with
any of the foregoing. Nothing contained in this Section 13.10 shall
prohibit the ownership by Centocor of up to 1% of any class of
securities of 3DP which are registered pursuant to the Exchange Act.
13.11 Headings. The captions to the sections and articles in this
Agreement are not a part of this Agreement, and are included merely
for convenience of reference only and shall not affect its meaning
or interpretation.
13.12 Severability. In the event that any provision of this Agreement
shall, for any reason, be held to be invalid or unenforceable in any
respect, such invalidity or unenforceability shall not affect any
other provision hereof, and this Agreement shall be construed as if
such invalid or unenforceable provision had not been included
herein.
13.13 Applicable Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Delaware without
reference to its choice of laws or conflicts of laws provisions.
13.14 Advice of Counsel. Centocor and 3DP have each consulted with counsel
of their choice regarding this Agreement, and each acknowledges and
agrees that this Agreement shall not be deemed to have been drafted
by one Party or another and will be construed accordingly.
13.15 Counterparts. This Agreement may be executed in two or more
counterparts, or facsimile versions, each of which shall be deemed
to be an original, and all of which together shall be deemed to be
one and the same agreement.
13.16 Waiver. Except as specifically provided for herein, the waiver from
time to time by either of the Parties of any of their rights or
their failure to exercise any remedy shall not operate or be
construed as a continuing waiver of same or of any other of such
Party's rights or remedies provided in this Agreement.
13.17 Bankruptcy. All rights and licenses granted under or pursuant to
this Agreement by Centocor or 3DP are, and shall otherwise be deemed
to be, for purposes of Section 365(n) of Title ll, U.S. Code (the
"Bankruptcy Code"), licenses of right to "Intellectual Property" as
defined under Section 101(35A) of the Bankruptcy Code. The Parties
agree that the Parties as licensees of such rights under this
Agreement, shall retain and may fully exercise all of their rights
and elections they would have in the case of a licensor bankruptcy
under the Bankruptcy Code. Each Party agrees during the term of this
Agreement to create or maintain current copies, or if not amenable
to copying, detailed descriptions or other appropriate embodiments,
of all such intellectual property licensed to the other Party.
13.18 Compliance with Laws. The Parties shall comply with all applicable
laws, rules, regulations and orders of the United States and
applicable European countries and
49
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
supra-governmental organizations and all jurisdictions and any
agency or court thereof in connection with this Agreement and the
transactions contemplated thereby.
13.19 Guaranty. J&J jointly and severally hereby guarantees the full,
complete, and timely performance by Centocor of all the terms and
conditions in this Agreement to be performed by Centocor during the
term of this Agreement and thereafter as long as any obligation or
duty remains undischarged by Centocor.
ARTICLE 14
HSR Filing
14.1 HSR Filing. The Parties shall cooperate fully and comply with the
HSR Act to file with the Federal Trade Commission ("FTC") and the
Antitrust Division of the U.S. Department of Justice ("DOJ") any
required notification and report form with respect to the
transactions contemplated hereby. The Parties shall cooperate with
one another to the extent necessary in the preparation of any HSR
Filing required to be filed under the HSR Act. Each Party shall be
responsible for its own costs, expenses, and filing fees associated
with any filing under the HSR Act. In the event such a filing is
required, any payments related to the license grant under Article 2
made to 3DP shall be held in escrow until after the HSR Clearance
Date.
14.2 HSR-Related Definitions. As used in Section 14.1, the following
terms have the following meanings:
14.2.1 "HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended (15 U.S.C. Sec. 18a), and the rules
and regulations promulgated thereunder.
14.2.2 "HSR Clearance Date" means the earlier of (i) the date on
which the FTC shall notify Centocor and 3DP of early
termination of the applicable waiting period under the HSR
Act or (ii) the day after the date on which the applicable
waiting period under the HSR Act expires.
14.2.3 "HSR Filing" means filings by 3DP and Centocor with the FTC
and the Antitrust Division of the DOJ of a Notification and
Report Form for Certain Mergers and Acquisitions (as that
term is defined in the HSR Act) with respect to the matters
set forth in this Agreement, together with all required
documentary attachments thereto.
14.3 HSR Denial. The licenses granted pursuant to Article 2 shall not be
effective until the HSR Clearance Date. In the event that either (a)
the FTC and/or the DOJ shall seek a preliminary injunction under the
HSR Act against Centocor and 3DP to enjoin the transactions
contemplated by this Agreement or (b) the HSR Clearance Date (as
defined in Section 14.2) shall not have occurred on or prior to
50
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
April 1, 2001, this Agreement shall terminate and all payments made
to 3DP and held in escrow pursuant to Section 14.1 shall be returned
to Centocor.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
51
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their respective duly authorized officers as of the Execution Date, each copy of
which shall for all purposes be deemed to be an original.
3-DIMENSIONAL PHARMACEUTICALS, INC.
By: /s/ F. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: F. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President & CEO
[SIGNATURES CONTINUED ON NEXT PAGE]
52
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
CENTOCOR, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VP, Finance
GUARANTOR FOR CENTOCOR
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Company Group Chairman
53
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Exhibit 1.5 Centocor Patents
Exhibit 1.49 Research Plan
Exhibit 1.53 [**]
Exhibit 1.61 3DP Patents
Exhibit 5.5.1 Basic Terms of a Co-Promotion Agreement
Exhibit 6.11 Wire Transfer Instructions
Exhibit 7.5 Press Release
Exhibit 12.2 Arbitration Proceedings
54
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Exhibit 1.5
Centocor Patents
[**]
55
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Exhibit 1.49
Research Plan
[**]
56
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Exhibit 1.53
[**]
57
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Exhibit 1.61
3DP Patents
[**]
58
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Exhibit 5.5.1
Basic Terms of a Co-Promotion Agreement
1. If under the terms of the Agreement, there is a Co-Promotion Agreement,
the terms of such Co-Promotion Agreement will include the following and
such other reasonable commercial terms agreed to by the Parties.
2. Co-Promotion duration will be as follows:
(a) In the case wherein 3DP has co-developed Licensed Product for DVT
pursuant to Section 4.7.3(b) or (c), the term of the Co-Promotion
shall be [**], renewable [**] in advance for individual periods of
[**] upon mutual agreement of the parties.
(b) In the case wherein Centocor has funded [**] of the Development
Costs pursuant to Section 4.7.3(a), the term of the Co-Promotion
shall be [**], renewable [**] in advance for individual periods of
[**], upon mutual agreement of the parties.
(c) In the event of termination of the Co-Promotion by Centocor in
either (a) or (b), 3DP shall receive a [**] residual royalty in
recognition of the value added by 3DP during the Co-Promotion
period. Centocor shall pay 3DP the greater of (i) the [**] or (ii) a
residual royalty based on [**] of [**] for the [**] period prior to
the effective date of termination as follows: in the first year
following termination: [**]%, in the second year following
termination: [**]%; and in the third year following termination:
[**]%.
3. It is the intention of the Parties to start Co-Promotion at the time of
the launch of the Licensed Product for DVT in the United States. In such
case, 3DP shall inform Centocor of its decision to exercise the
Co-Promotion option for the Licensed Product within 30 days of receiving
results of pivotal Phase III Clinical Trials sufficient to file an NDA for
a Licensed Product for DVT and any other information reasonably required
by 3DP to make its decision to Co-Promote, for example chemistry,
manufacturing and control (CMC) information.
4. In the case where 3DP did not Co-Develop the Licensed Product for DVT in
the United States (as defined in Section 4.7), there will be no Joint
Steering Committee as defined in Section 4.8, but only a Sales and
Marketing Committee to guide the Co-Promotion.
5. The scope of the Co-Promotion for 3DP will include Detailing activities
and other appropriate direct marketing activities as determined by the
Sales and Marketing Committee. The Marketing Plan shall set forth the
selling and marketing activities for each year of sale of the Licensed
Product.
59
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
6. 3DP will have the right to have appropriate representation on the Sales
and Marketing Committee to provide input and advice. 3DP may provide input
on the Marketing Plan and all aspects of the sales and marketing of the
Product in the United States and Centocor shall consider in good faith
3DP's input and discuss with 3DP. Centocor will have the final decision on
all aspects of the Marketing Plans and sales and marketing activities
relating to the Licensed Product in the United States; provided, however,
Centocor shall allocate to 3DP's sales representatives a called on
audience based upon the same standards used for Centocor's medical
representatives. Any allocation will attempt to optimize the use of 3DP's
field force taking into consideration, however, the reasonable promotional
requirements of the Licensed Product. Moreover, Centocor shall not
discriminate in favor of Centocor's sales representatives as compared to
3DP's sales representatives.
7. At least 60 days prior to the start of each calendar year, the Parties
will agree on the precise number of Details which 3DP and Centocor will
perform in a given year. The Details performed by 3DP will be limited to
[**] who specialize [**] (other specialty doctors may be added by Centocor
depending upon the approved label for the Licensed Product and will be
identified in the Marketing Plan for DVT). In no event will 3DP become
responsible for promotion to the following specialties: [**].
8. 3DP shall bear all costs associated with the Co-Promotion of Licensed
Products by 3DP, including, but not limited to, hiring, training and
deployment of a sales force, the establishment and maintenance of the
necessary sales and marketing infrastructure and the cost of all
promotional materials.
9. The Parties agree that 3DP under its Co-Promotion obligation, may receive
orders from Third Parties for the Licensed Product. 3DP shall transmit
said orders to Centocor, and Centocor shall record all sales resulting
from such orders.
10. The JSC or Sales and Marketing Committee, as appropriate, shall meet from
time to time, at mutually agreeable times and locations, to discuss and
coordinate the Co-Promotion of Licensed Products in accordance with this
Agreement and the strategies and programs that should be developed to
optimally carry-out Details, including but not limited to, the assignment
of Details and developing a Marketing Plan. Centocor will have the final
responsibility, with the cooperation and assistance of 3DP, for
establishing, detailing, marketing, pricing and promotion strategies with
respect to the Licensed Products and budgets therefor. Any disagreements
or disputes relating to Co-Promotion of Licensed Products which can not be
resolved by the JSC or Sales and Marketing Committee will be escalated to
the CEO of 3DP and the VP of Sales and Marketing at Centocor to attempt a
mutually agreeable resolution after which Centocor will have final say or
decision-making authority (the "Casting Vote") in any disagreement or
dispute arising from such issues.
11. 3DP shall use all reasonable efforts consistent with its normal business
practices and legal requirements to deploy a professional and trained
sales force to Co-Promote the Licensed Product in the United States for
DVT. 3DP agrees that its sales force employed in Co-Promoting Licensed
Products shall be comprised of individuals at least [**] of whom
60
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
have at least [**] prior pharmaceutical sales experience, and such sales
force shall meet standards of competence and professionalism as is common
in the pharmaceutical industry. In all events, the Co-Promotion and
Detailing shall be conducted in accordance with the then current Marketing
Plan in accordance with Section 5.5. Centocor shall provide to 3DP sales
personnel at 3DP's expense such Licensed Product-specific training and
promotional materials (including samples) as are reasonably necessary to
effectively promote the particular Licensed Product consistent with the
Marketing Plan.
12. Each Party shall submit to the other Party, within thirty (30) days after
the end of each calendar quarter for the term of the Co-Promotion
Agreement, a reasonably detailed description of each Party's promotional,
Detailing and marketing efforts pursuant to such Co-Promotion Agreement.
Any Detailing information shall be based on each companies' then current
call reporting system. Each such certification shall contain a full
disclosure of any material changes to such system from that previously
disclosed to the other Party and of any non-compliance by the disclosing
Party with its promotional and Detailing obligations under such
Co-Promotion Agreement.
13. Each Party shall have the right to annually review and audit the other
Party's call reporting records during regular business hours to confirm
satisfaction of the obligations set out in the Marketing Plan where for
any two consecutive calendar quarters there is a substantial difference
between such other Party's call reporting records and the records of the
IMS auditing service or other pharmaceutical industry call reporting
service utilized by the Parties hereunder. For this purpose, each Party
shall, at the other Party's expense and request, subscribe to the IMS
auditing service or other pharmaceutical industry recognized auditing
service. Further, each Party shall provide the other Party such Party's
call reporting records on a quarterly basis. If, after such review, the
Parties are unable to agree as to the results of the audit, the auditing
Party may demand a verification of any certification by audit of the other
Party's call reporting system to be conducted by a mutually agreed upon
auditor. In any event, the audit for a given year will occur at a mutually
agreed upon time during or after the year, and it must begin no later than
120 days after the close of the year.
14. In the event that, after the later of the date on which 3DP is required to
have a [**] available for [**], or [**] after the [**], and for reasons
within 3DP's reasonable control: the Co-Promotion efforts made by 3DP are
determined using 3DP's own records, or records which are the result of an
audit pursuant to Paragraph 13, to have been less than [**] percent
([**]%) of those that 3DP was obligated to make for any [**], and 3DP
fails to bring its level of efforts up to such percentage of efforts (as
evidenced by 3DP's own records or records which are the result of an audit
by Centocor) for the [**] following Centocor's notice to 3DP of such
failure, then Centocor may immediately terminate 3DP's right to Co-Promote
such Licensed Product for breach of the Co-Promotion Agreement. It is
understood that for purposes of determining 3DP's performance under this
Paragraph 14 only, if Centocor does not supply all of the efforts that
Centocor committed to supply for the same year of sale 3DP underperformed
in its Details, then the level of efforts that 3DP was obligated to make
for such year of sale shall be deemed to have been reduced
proportionately.
61
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confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
15. Except as expressly otherwise provided in this Agreement, Centocor shall
have the sole right and responsibility, and shall bear all costs related
thereto, to take such actions with respect to the Licensed Product as
would normally be taken in accordance with accepted business practices and
legal requirements to manufacture or arrange for the manufacture of the
Licensed Product, obtain and maintain the authorization and/or ability to
market and commercialize the Licensed Product in the United States
including, without limitation, the following:
(a) Any activity relating to the manufacture of the Licensed Product,
including, without limitation, determination of the content of
labeling and the style, design and type of packaging;
(b) Responding to medical complaints and inquiries relating to the
Licensed Product;
(c) Handling all returns of the Licensed Products; and
(d) Communicating and dealing with any governmental agencies and
satisfying their requirements regarding the authorization and/or
continued authorization to market the Licensed Product in commercial
quantities; provided, however, that 3DP shall be able to communicate
with such agencies regarding the Licensed Product if, (i) in the
reasonable opinion of 3DP's counsel, such communication is necessary
to comply with the requirements of any applicable law, order or
governmental regulation, and (ii) 3DP, if practical, made a request
of such agency to communicate with Centocor instead, and such agency
refused such request; but in any such event, unless in the
reasonable opinion of 3DP's counsel there is a legal prohibition
against doing so, Centocor shall be immediately notified of such
agency's request and or 3DP's intention to make such communication
and Centocor shall be permitted to accompany 3DP to any meeting with
such agency, take part in any such communications and receive copies
of all such communications.
16. If 3DP is carrying out Details, 3DP agrees, for the [**] from the [**] of
the [**], to Detail Licensed Product in a first (P1) position. Thereafter,
the Parties shall mutually agree on the detail position for the Licensed
Product. Centocor's Casting Vote exercised in accordance with Paragraph 10
of this Exhibit, shall not apply to conflicts arising after the [**]
period and related to the detail position of the Licensed Product.
17. 3DP's sales force incentive compensation plan shall, consistent with such
comparable incentive plans in the industry, provide incentives based on
detail positions. Centocor's sales force incentive plan shall be
consistent with such incentive plans used by other Centocor sales forces
for comparable products to Licensed Product.
18. The Co-Promotion Agreement will provide an adverse event reporting policy
consistent with Centocor's adverse event reporting policy and in
compliance with the applicable FDA laws and regulations.
62
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
19. Compensation to the Parties of Operating Profits and allocation of
Marketing Expenses directly related to Co-Promotion of Licensed Product
for DVT will be as follows:
(a) In the case wherein 3DP has funded [**] of the [**] and where
Centocor does [**], the Parties will split the Operating Profits as
follows: [**]% to 3DP; [**]% to Centocor.
(b) In the case wherein 3DP has funded [**] of the [**] and at the [**],
Centocor decides to [**], Centocor agrees to reimburse 3DP [**]% of
its share of prior Development Costs, such share to be equivalent to
the share of [**] to be [**] based on the Parties [**] agreed to by
the Parties prior to launch. For example, if Centocor is to
undertake [**] percent ([**]%) of the marketing effort, it shall pay
3DP [**] percent ([**]%) of 3DP's total Development Costs plus a
[**] percent ([**]%) premium.
(c) in the case wherein Centocor has funded [**] of the [**], and 3DP
decides to [**], 3DP agrees to reimburse Centocor [**]% of its share
of [**], such share to be equivalent to the share of [**] to be [**]
based on the Parties [**] agreed to by the Parties prior to launch.
For example, if 3DP is to undertake [**] percent ([**]%) of the
marketing effort, it shall pay Centocor [**] percent ([**]%) of
Centocor's total Development Costs plus a [**] percent ([**]%)
premium.
(d) In the case wherein 3DP and Centocor have [**] in funding the
Development Costs, the compensation to the Parties for Co-Promoting
Licensed Product for DVT will be as follows. There will be a [**] of
[**], as recited in (e).
(e) In addition, and in the cases described above in subparagraphs, (b),
(c) and (d), the compensation to the Parties for Co-Promoting
Licensed Product for DVT will be as follows. There will be a [**] of
[**], with the ratio being equivalent to the ratio of the [**]
agreed to by the Parties prior to launch. The Parties will strive to
set these ratios at the earliest possible time during Development
and in no event later than launch of the Licensed Product in the
United States. On an annual basis, the Parties will reconsider, and
adjust, if necessary, these ratios.
(f) Notwithstanding anything herein to the contrary, in no event shall
the split of Operating Profits be greater than [**]% to 3DP; [**]%
to Centocor or [**]% to Centocor; [**]% to 3DP.
"Operating Profits" means the profits or losses relating to the
Commercialization of Licensed Product for DVT in the United States which
shall be equal to: (i) Co-Promotion Net Sales minus (ii) Allowable
Expenses.
"Co-Promotion Net Sales" are defined as the sales resulting from the total
presciptions for DVT written by orthopedic surgeons and other specialties
identified for Detailing in the Marketing Plan. In order to identify such
prescription sales, the Parties may use,
63
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
among other things, the IMS EXPONENT(R) database to obtain this
information or another similar database if either the IMS database no
longer exists or another database is deemed more accurate for identifying
the Indication for which a prescription is written. If applicable, the
Parties shall apply the appropriate gross-up factor, recommended by IMS,
or such other database provider, to adjust the IMS reported data for any
under-reporting of actual sales invoiced by Centocor.
By way of example, in the case of the tablet form, Co-Promotion Net Sales
will be calculated by taking annual Net Sales of the Licensed Product in
the United States, and dividing that number by the total number of tablets
shipped in that period. This calculation would derive the "Average Net
Selling Price" per tablet. Total prescriptions for DVT written by the
audience Detailed by the Parties in accordance with the Marketing Plan and
the average number of tablets per prescription would be determined as
reported by, for example, IMS EXPONENT(R). The total number of
prescriptions for DVT would be multiplied by the average number of tablets
per prescription for DVT and that result will then be multiplied by the
Average Net Selling Price per tablet to determine the Co-Promotion Net
Sales. To the extent that there is more than one dosage form or strength,
this calculation would be conducted on a per dosage form or strength
basis.
The Parties recognize that Co-Promotion Net Sales as defined above fail to
account for hospital sales made for DVT in the United States. Therefore,
only in the case of Co-Promotion and in addition to the royalty recited in
Section 6.6, there shall be an additional royalty paid on hospital sales
according to the following mechanism. On a quarterly basis beginning on
the date of First Commercial Sale of Licensed Product for DVT in the
United States, using data from DDD, IMS or such other appropriate audit
source, a percentage of hospital sales of Licensed Product in the United
States to total sales of Licensed Product in the United States as reported
in such DDD, IMS or such other appropriate audit source data will be
determined ("Percentage"). If this Percentage is [**]% or less, then the
Percentage will be multiplied by the Net Sales derived in the United
States used to calculate royalties pursuant to Section 6.6 to arrive at
"Hospital Net Sales". Centocor shall pay to 3DP a royalty of [**]% on such
Hospital Net Sales in addition to the royalty due to 3DP on Net Sales
under Section 6.6. If, however, the Percentage is more than [**]% or in
the event the way in which DVT prescriptions written by [**] are filled,
changes from the current practice of being filled at retail pharmacies to
being filled by hospital pharmacies, then the Parties shall in good faith
negotiate a mechanism to identify the Net Sales in the United States from
DVT derived from hospitals and such Net Sales will then be included in
Co-Promotion Net Sales. Moreover, if there becomes available an industry
accepted standard for determining sales for DVT in hospitals, such as a
validated IMS database, the Parties will consider using such database to
identify DVT hospital sales. In any such case where a mechanism is used to
identify Net Sales in the United States from DVT derived from hospitals,
the additional royalty compensation mechanism will be discontinued and
such DVT hospital sales will be added to the definition of Co-Promotion
Net Sales.
64
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
"Allowable Expenses" means those expenses incurred in preparation for and
after commercial launch of Licensed Product for DVT in the United States
and directly related thereto and shall consist of Manufacturing Costs,
Allowable Operating Expenses and working capital allowance.
"Allowable Operating Expenses" means pre-marketing expenses, Marketing
Expenses, distribution expenses, post-launch product R&D expenses, and
reasonably allocated administrative expenses.
"Marketing Expenses" mean the costs incurred after the First Commercial
Sale of the Licensed Product for DVT in the United States and are
specifically attributable to the sale (including, without limitation, the
sales force), promotion, advertising and marketing of such Licensed
Product for DVT in the United States. Marketing Expenses shall include
selling expenses, marketing management, marketing consumer research,
advertising, trade promotion, symposium, consumer promotion and education.
Marketing Expenses shall, however, exclude such expenses related to
Detailing of physicians other than [**] and other specialties, if any,
identified in the Marketing Plan.
An example of a Profit and Loss Statement illustrating how Operating
Profits will be calculated is attached hereto as Appendix A. Adjustments
to Operating Profits will be made on a calendar quarterly basis within 60
days of the end such calendar quarter. At such time, any equalization
payments shall be made by one Party to the other to reconcile the Parties
to their appropriate share of Operating Profits.
20. With respect to pre-Marketing Expenses that were expended by the Parties
in, and directly related to, the preparation for launch of the License
Product for DVT, the Parties shall share those expenses according to the
same ratio as set according to paragraph (e) hereof using a P&L as
described above in Section 19.
65
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
APPENDIX A
[**]
66
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Exhibit 6.11
Wire Transfer Instructions
[**]
67
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Exhibit 7.5
Press Release
FOR IMMEDIATE RELEASE
Media Contact Business Contact
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ & Associates Vice President, Finance & Administration
703-757-0950 or ▇▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇ 3-Dimensional Pharmaceuticals, Inc.
Pager: ▇▇▇-▇▇▇-▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇▇ or ▇▇▇▇▇▇▇@▇▇▇.▇▇▇
3DP ANNOUNCES AGREEMENT WITH CENTOCOR, INC.
Centocor Acquires Worldwide Rights to Orally Active Direct Thrombin Inhibitors
Exton, PA -- January 2, 2001 -- 3-Dimensional Pharmaceuticals, Inc. (Nasdaq:
DDDP) today announced that it has reached an agreement with Centocor, Inc., a
wholly owned subsidiary of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, under which Centocor has acquired
worldwide rights to 3DP's orally active direct thrombin inhibitor program,
including the lead anticoagulant compound, 3DP-4815, currently in Phase I
clinical development.
Under terms of the agreement, 3DP receives an upfront cash payment of $6 million
from Centocor, and further payments of up to $44 million based on the
achievement of certain milestones for the first compound developed and approved
for marketing for any indication. 3DP will receive additional milestone payments
from Centocor for subsequent indications approved for the first product, and/or
if a second product is developed and approved under the agreement. In addition,
3DP will receive royalties on sales of any products marketed under the
agreement. The agreement is subject to clearance under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended.
Thrombin is an enzyme that converts fibrinogen to fibrin, causing blood
clotting. Excessive blood clotting, or thrombosis, is a significant factor in
cardiovascular and related diseases. It is estimated that more than 5 million
people in the United States are treated each year for thrombotic conditions
associated with heart attack, stroke, unstable angina, pulmonary embolism,
bypass surgery, angioplasty, atrial fibrillation and venous thrombosis
associated with surgical procedures
Centocor will be responsible for development and worldwide commercialization of
all compounds under the agreement. For the deep vein thrombosis indication,
however, 3DP retains an option to co-develop and co-promote with Centocor in the
United States. Centocor and 3DP will also collaborate on a research program to
continue 3DP's effort to design and elucidate back-up and follow-on compounds to
3DP-4815.
68
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
"3DP's compounds represent a new chemical class of orally active direct thrombin
inhibitors which appear to offer promise in a number of important disease areas.
3DP-4815 has performed very well in Phase I by demonstrating good
pharmacokinetic, safety and tolerability characteristics, as well as suggesting
preliminary signs of efficacy," said ▇▇▇▇▇ ▇. U'▇▇▇▇▇▇▇▇, Ph.D., 3DP Chief
Executive Officer. "We discovered 3DP-4815, and several follow-on thrombin
inhibitors, using a close integration of structure-based drug design and our
proprietary DirectedDiversity(R) combinatorial chemistry technology. We look
forward to working with Centocor to further develop these compounds."
Centocor, Inc. is a leading biopharmaceutical company that creates, acquires and
markets cost-effective therapies that yield long-term benefits for patients and
the healthcare community. Its products, developed primarily through monoclonal
antibody technology, help physicians deliver innovative treatments to improve
human health and restore patients' quality of life. Centocor is a wholly owned
subsidiary of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, the worldwide manufacturer of healthcare
products.
3-Dimensional Pharmaceuticals, Inc. (▇▇▇▇://▇▇▇.▇▇▇.▇▇▇) is a post-genomics drug
discovery company dedicated to revolutionizing small-molecule discovery. 3DP has
developed and integrated a set of proprietary technologies called
DiscoverWorks(TM), which accelerates and improves the drug discovery process and
capitalizes on opportunities arising from human genome sequencing. 3DP
technologies can be applied to virtually any disease target, and can produce
compounds suitable for drug development in a more timely and cost-effective
manner and with a higher probability of success than conventional methods. 3DP
is using its technologies both to assist collaborators in discovering drug
candidates, and to discover and develop its own drug candidates.
Statements in this press release that are not strictly historical are
"forward-looking" statements which involve a high degree of risk and
uncertainty. Such statements are only predictions, and the actual events or
results may differ materially from those projected in such forward-looking
statements. Factors that could cause or contribute to differences include, but
are not limited to, risks associated with clinical trials and product
development, the long and arduous process of obtaining regulatory approvals,
protection and enforcement of relevant patents and proprietary rights, and
development and availability of competitive products or technologies. Certain of
these factors and others are more fully described in the Company's Registration
Statement on Form S-1, as filed with the Securities and Exchange Commission.
# # #
69
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
Exhibit 12.2
Arbitration Proceedings
1.1 (a) Any dispute, controversy or claim arising out of or related to
this Agreement, or the interpretation, application, breach, termination or
validity thereof, including any claim of inducement by fraud or otherwise, which
claim would, but for this provision, be submitted to arbitration shall, before
submission to arbitration, first be mediated through non-binding mediation in
accordance with the Model Procedures for the Mediation of Business Disputes
promulgated by the CPR Institute for Dispute Resolution, or successor ("CPR")
then in effect, except where those rules conflict with these provisions, in
which case these provisions control. The mediation shall be conducted in
Wilmington, Delaware and shall be attended by a senior executive with authority
to resolve the dispute from each of the operating companies that are Parties.
(b) The mediator shall be neutral, independent, disinterested and shall be
selected from a professional mediation firm such as ADR Associates or
JAMS/ENDISPUTE or CPR.
(c) The parties shall promptly confer in an effort to select a mediator by
agreement. In the absence of such an agreement within 10 days of initiation of
the mediation, the mediator shall be selected by CPR as follows: CPR shall
provide the parties with a list of at least 15 names. Each party shall exercise
challenges for cause, two peremptory challenges, and rank the remaining
candidates within 5 working days of receiving the CPR list. The parties may
together interview the three top-ranked candidates for no more than one hour
each and, after the interviews, may each exercise one peremptory challenge. The
mediator shall be the remaining candidate with the highest aggregate ranking.
(d) The mediator shall confer with the parties to design procedures to
conclude the mediation within no more than 45 days after initiation. Under no
circumstances may the commencement of arbitration under Section 1.2 hereof be
delayed more than 45 days by the mediation process specified herein absent
contrary agreement of the parties.
(e) Each party agrees not to use the period or pendency of the mediation
to disadvantage the other party procedurally or otherwise. No statements made by
either side during the mediation may be used by the other or referred to during
any subsequent proceedings.
(f) Each party has the right to pursue provisional relief from any court,
such as attachment, preliminary injunction, replevin, etc., to avoid irreparable
harm, maintain the status quo, or preserve the subject matter of the
arbitration, even though mediation has not been commenced or completed.
1.2 (a) Following the mediation procedures set forth in Section 1.1, any
dispute, claim or controversy arising from or related in any way to this
Agreement or the interpretation, application, breach, termination or validity
thereof, including any claim of inducement of this Agreement by fraud or
otherwise, will be submitted for resolution to arbitration pursuant to the
70
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
rules then pertaining of CPR, except where those rules conflict with these
provisions, in which case these provisions control. The arbitration will be held
in Wilmington, Delaware.
(b) The panel shall consist of three arbitrators chosen from the CPR
Panels of Distinguished Neutrals (or, by agreement, from another provider of
arbitrators) each of whom is a lawyer with at least 15 years experience with a
law firm or corporate law department of over 25 lawyers or was a judge of a
court of general jurisdiction. In the event the aggregate damages sought by the
claimant are stated to be less than $[**], and the aggregate damages sought by
the counterclaimant are stated to be less than $[**], and neither side seeks
equitable relief, then a single arbitrator shall be chosen, having the same
qualifications and experience specified above. Each arbitrator shall be neutral,
independent, disinterested, impartial and shall abide by The Code of Ethics for
Arbitrators in Commercial Disputes approved by the AAA. There shall be no ex
parte communications with an arbitrator either before or during the arbitration,
relating to the dispute or the issues involved in the dispute or the
arbitrator's views on any such issues.
(c) The parties agree to cooperate (1) to attempt to select the
arbitrator(s) by agreement within 45 days of initiation of the arbitration,
including jointly interviewing the final candidates, (2) to meet with the
arbitrator(s) within 45 days of selection and (3) to agree at that meeting or
before upon procedures for discovery and as to the conduct of the hearing which
will result in the hearing being concluded within no more than 9 months after
selection of the arbitrator(s) and in the award being rendered within 60 days of
the conclusion of the hearings, or of any post-hearing briefing, which briefing
will be completed by both sides within 45 days after the conclusion of the
hearings.
(d) In the event the parties cannot agree upon selection of the
arbitrator(s), CPR will select arbitrator(s) as follows: CPR shall provide the
parties with a list of no less than 25 proposed arbitrators (15 if a single
arbitrator is to be selected) having the credentials referenced above. Within 25
days of receiving such list, the parties shall rank at least 65% of the proposed
arbitrators on the initial CPR list, after exercising cause challenges. The
parties may then interview the five candidates (three if a single arbitrator is
to be selected) with the highest combined rankings for no more than one hour
each and, following the interviews, may exercise one peremptory challenge each.
The panel will consist of the remaining three candidates (or one, if one
arbitrator is to be selected) with the highest combined rankings.
In the event these procedures fail to result in selection of the required number
of arbitrators, CPR shall select the appropriate number of arbitrators from
among the members of the various CPR Panels of Distinguished Neutrals, allowing
each side challenges for cause and three peremptory challenges each.
(e) In the event the parties cannot agree upon procedures for discovery
and conduct of the hearing meeting the schedule set forth in Section 1.2(c)
above, then the arbitrator(s) shall set dates for the hearing, any post-hearing
briefing, and the issuance of the award in accord with the Section 1.2(c)
schedule. The arbitrator(s) shall provide for discovery according to those time
limits, giving recognition to the understanding of the parties that they
contemplate reasonable discovery, including document demands and depositions,
but that such discovery be limited so that the Section 1.2(c) schedule may be
met without difficulty. In no event will the arbitrator(s),
71
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
absent agreement of the parties, allow more than a total of ten days for the
hearing or permit either side to obtain more than a total of 40 hours of
deposition testimony from all witnesses, including both fact and expert
witnesses, or serve more than 20 individual requests for documents, including
subparts, or 20 individual requests for admission or interrogatories, including
subparts. Multiple hearing days will be scheduled consecutively to the greatest
extent possible.
(f) The arbitrator(s) must render their award by application of the
substantive law of the State of Delaware and are not free to apply "amiable
compositeur" or "natural justice and equity." The arbitrator(s) shall render a
written opinion setting forth findings of fact and conclusions of law with the
reasons therefor stated. A transcript of the evidence adduced at the hearing
shall be made and shall, upon request, be made available to either party. The
arbitrator(s) shall have power to exclude evidence on grounds of hearsay,
prejudice beyond its probative value, redundancy, or irrelevance and no award
shall be overturned by reason of such ruling on evidence. To the extent
possible, the arbitration hearings and award will be maintained in confidence.
(g) The United States District Court for the District in which the
arbitration is held may enter judgment upon any award. In the event the panel's
award exceeds $[**] in monetary damages or includes or consists of equitable
relief, or rejects a claim in excess of that amount or for that relief, then the
court shall vacate, modify or correct any award (including remanding to the
arbitrators for further proceedings) where the arbitrators' findings of fact are
clearly erroneous, and/or where the arbitrators' conclusions of law are
erroneous; in other words, the court will undertake the same review as if it
were a federal appellate court reviewing a district court's findings of fact and
conclusions of law rendered after a bench trial. An award for less than $[**] in
damages and not including equitable relief, or which neither rejects a claim in
excess of that amount or for that relief, may be vacated, modified or corrected
only pursuant to the Federal Arbitration Act. The parties consent to the
jurisdiction of the above-specified Court for the enforcement of these
provisions, the review specified herein, and the entry of judgment on any award.
In the event such Court lacks jurisdiction, then any court having jurisdiction
of this matter may enter judgment upon any award and provide the same relief,
and undertake the same review, as specified herein.
(h) In the event the expanded judicial review provided for under Section
1.2(g) above is not available from the court as a matter of law, the party
unable to obtain such review may instead obtain review of the arbitrators' award
or decision by a single appellate arbitrator (the "Appeal Arbitrator") selected
from the CPR list of distinguished neutrals and pursuant to selection procedures
specified in Section 1.2(d) above. If CPR cannot provide such services, the
parties will together select another provider of arbitration services that can.
No Appeal Arbitrator shall be selected unless he or she can commit to rendering
a decision within forty-five days following oral argument as provided in this
paragraph. Any such review must be initiated within thirty (30) days following
the date the court declines the expanded review specified in Section 1.2(g)
above. In the event timely review is sought, the Appeal Arbitrator will make the
same review of the arbitration panel's ruling and its bases that the U.S. Court
of Appeals of the Circuit where the arbitration hearings are held would make of
findings of fact and conclusions of law rendered by a district court after a
bench trial and then modify, vacate or affirm the
72
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.
arbitration panel's award or decision accordingly, or remand to the panel for
further proceedings. The Appeal Arbitrator will consider only the arbitration
panel's findings of fact and conclusions of law, pertinent portions of the
hearing transcript and evidentiary record as submitted by the parties, opening
and reply briefs of the party pursuing the review, and the answering brief of
the opposing party, plus a total of no more than four (4) hours of oral argument
evenly divided between the parties. The party seeking review must submit its
opening brief and any reply brief within seventy-five (75) and one hundred
thirty (130) days, respectively, following the date the court declines the
expanded review specified in Section 1.2(g); whereas, the opposing party must
submit its responsive brief within one hundred ten (110) days of that date. Oral
argument shall take place within five (5) months after the court declines the
expanded review specified in Section 1.2(g), and the Appeal Arbitrator shall
render a decision within forty-five (45) days following oral argument. That
decision will be final and not subject to further review, except pursuant to the
Federal Arbitration Act.
(i) Each party has the right before or, if the arbitrator(s) cannot hear
the matter within an acceptable period, during the arbitration to seek and
obtain from the appropriate court provisional remedies such as attachment,
preliminary injunction, replevin, etc. to avoid irreparable harm, maintain the
status quo, or preserve the subject matter of the arbitration.
(j) EACH PARTY HERETO WAIVES ITS RIGHT TO TRIAL OF ANY ISSUE BY JURY.
(k) EACH PARTY HERETO WAIVES ANY CLAIM TO PUNITIVE, EXEMPLARY OR
MULTIPLIED DAMAGES FROM THE OTHER.
(l) EACH PARTY HERETO WAIVES ANY CLAIM OF CONSEQUENTIAL DAMAGES FROM THE
OTHER.
(m) EACH PARTY HERETO WAIVES ANY CLAIM FOR ATTORNEYS' FEES AND COSTS AND
PREJUDGMENT INTEREST FROM THE OTHER.
73
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.