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EXHIBIT 10.30
EXHIBIT "A"
FIRST AMENDMENT
OF
RESEARCH & DEVELOPMENT AGREEMENT
THIS AGREEMENT is made and shall be effective as of the 1st day of
November, 1997, by and among Iomed, Inc., a Utah corporation ("Iomed"), Novartis
Pharmaceuticals Corporation, a Delaware corporation and the successor to the
ethical pharmaceuticals business of Ciba-Geigy Corporation ("Novartis"), and
Dermion, Inc., a Delaware corporation ("Dermion"). Each of Iomed, Novartis and
Dermion are referred to herein individually as a "Party", and are referred to
collectively herein as the "Parties".
RECITALS:
A. Iomed, Novartis and Dermion are the parties in interest to that
certain Research and Development Agreement, dated as of March 29, 1996 (the "R&D
Agreement").
B. Pursuant to the terms of that certain Exchange Agreement among
the Parties, of even date herewith (the "Exchange Agreement"), Iomed, Dermion
and Novartis have agreed to enter into this Agreement in order to amend certain
of the terms, conditions and provisions of the R&D Agreement.
C. The Parties intend that this Agreement shall satisfy their
respective duties and obligations under paragraph 4 of the Exchange Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing Recitals, the
execution and delivery by the Parties of the Exchange Agreement, and the
covenants and agreements set forth herein, together with other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties agree as follows:
1. References to Ciba-Geigy Corporation. The R&D Agreement is hereby
amended by deleting therefrom, in each instance at which it appears, the term
"Ciba", or any other reference to Ciba-Geigy Corporation, and substituting
therefore in each such instance the term "Novartis" or an appropriate reference
to Novartis Pharmaceuticals Corporation.
2. Use of Defined Terms. All capitalized terms used in this
Agreement which are not otherwise defined herein shall have the meaning assigned
to such terms in the R&D Agreement.
3. Numbering of Sections. The internal numbering sequence of the R&D
Agreement is herewith modified and amended, as necessary, in order to reflect
the additions and deletions to the R&D Agreement provided for by this Agreement.
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4. Amendment of Defined Terms. The Definition of the term
"Products," as set forth in Article I of the R&D Agreement is modified and
amended to read in its entirety as follows:
" "Product". Shall mean a System developed by Dermion or Iomed
and Novartis pursuant to this Agreement for delivery of any Drug
specified by the parties."
5. Amendment of Paragraph 3.1(c). Paragraph 3.1(c) of the R&D
Agreement is hereby modified and amended to read in its entirety as follows:
"(c) Updates. If Ciba desires at any time during the Exclusivity
Period to update Schedule 3.1(a) in order to include a new
therapeutic field (the "proposed Ciba Field"), or at any time during
the term of this Agreement to update Schedule 3.1(b) to include a
new Ciba Proprietary Drug (such Drug, together with the associated
Specified Indication, the "Proposed Ciba Proprietary Drug"), it
shall notify Iomed and Dermion in writing, which notice shall
contain (i) in the case of a Proposed Ciba Field, a certification
that such Proposed Ciba Field satisfies the condition set forth in
either clause (i) or clause (ii) of Section 3.1(a) hereof, or (ii)
in the case of a Proposed Ciba Proprietary Drug, a certification
that such Proposed Ciba Proprietary Drug satisfies the condition set
forth in Section 3.1(b) hereof. Such Proposed Ciba Field or Proposed
Ciba Proposed Proprietary Drug shall automatically and without
further action by any party hereto become a Ciba Field or a Ciba
Proprietary Drug, as the case may be, and be treated as such for all
purposes of this Agreement immediately upon receipt by Dermion of
such written notice; provided, however, that if Iomed or Dermion
has, prior to their receipt of such notice and in compliance with
the terms of this Agreement (including without limitation Section
3.3 hereof), independently or pursuant to an agreement with any
other Person (a "Third Party Agreement") undertaken research,
development, manufacture, distribution or sale of any System to
deliver a Drug in the Proposed Ciba Field or the Proposed Ciba
Proprietary Drug for treatment of the Specified Indication, neither
the rights of Iomed and Dermion nor such Third Party Agreement shall
be subject to this Article 3."
6. Amendment of Paragraph 3.2. Paragraph 3.2 of the R&D Agreement is
hereby modified and amended to read in its entirety as follows:
"3.2 Exclusivity. Neither Iomed nor Dermion shall conduct, have
conducted or fund any research or development activity with
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respect to, or manufacture, distribute or sell (whether
independently or on behalf of a third party) any System for
delivery of any Drug in a Novartis Field during the Exclusivity
Period or any Novartis Proprietary Drug for treatment of the
Specified Indication during the term of this Agreement, except
(i) pursuant to the Program in accordance with this Agreement, or
(ii) outside the scope of the Program, subject to compliance with
Section 3.3."
7. Amendment of Section 3.3. Section 3.3 of the R&D Agreement is
hereby modified and amended to read in its entirety as follows:
"3.3 Development of Systems for or by Iomed or Dermion Outside
the Program.
(a) Notice of Proposed Systems. In the event that during the
Exclusivity Period Iomed or Dermion determines to develop a
System (including any Abandoned Product) outside the scope of the
Program, either pursuant to a third party offer (a "Third Party
Offer") to develop a System, or otherwise (a "Proposed System"),
Dermion or Iomed, as the case may be, shall give notice of the
Proposed System to the Committee (the "Notice"). The Notice shall
include at least the therapeutic field of the drug to be
delivered pursuant to the Proposed System (the "Proposed Field"),
as well as such other information as is relevant to the Proposed
System, provided, that if the Proposed System is to be developed
pursuant to a Third Party Offer, Iomed or Dermion shall not be
required to disclose to the Committee the name of such third
party, the specific drug for which the System is to be developed
(unless such drug is a Novartis Proprietary Drug, in which case
such drug, as well as whether the indication proposed to be
treated thereby is the Specified Indication with respect to such
drug, shall be disclosed) or any other information that Iomed or
Dermion determines, in its good faith judgment, should not be
disclosed to Novartis because of confidentiality or competitive
concerns (other than the therapeutic field, which must in any
event be disclosed).
(b) Proposed Systems in a Novartis Field. If the Proposed
Field is in whole or in part a Novartis Field, Iomed, Dermion or
both, as the case may be, shall be prohibited from pursuing the
development of the Proposed System during the Exclusivity Period
without the prior written consent of Novartis, which may be given
or withheld in the sole discretion of Novartis.
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(c) Proposed Systems for Novartis Proprietary Drugs. If the
Proposed System relates to the delivery of a Novartis Proprietary
Drug for treatment of the Specified Indication, Novartis shall
have the right during the term of this Agreement to elect to have
Iomed or Dermion develop a Product for such Novartis Proprietary
Drug for treatment of the Specified Indication for it pursuant to
the Program instead of the Proposed System. If Novartis so
elects, it shall give notice thereof to the Committee within
fifteen (15) Business Days of receipt by the Committee of the
Notice, in which case Iomed and Dermion shall be prohibited
during the term of this Agreement from developing the Proposed
System for treatment of the Specified Indication, subject to the
last sentence of this Section 3.3(c). The development of any such
Product for a Novartis Proprietary Drug for treatment of the
Specified Indication pursuant to the Program shall be pursuant to
this Agreement or an amendment to this Agreement (provided, that,
other than providing for incremental costs to be paid by Novartis
and incremental personnel, facilities and resources to be
provided by Dermion, such amendment shall be on the same terms
and conditions as this Agreement). If Novartis fails to give such
notice within such fifteen (15) Business Day period, or if
activities with respect to developing a Product for the Novartis
Proprietary Drug for treatment of the Specified Indication
pursuant to the Program have not commenced within ninety (90)
days of receipt by the Committee of the Notice (other than as a
result of any acts or omissions of Iomed or Dermion), Iomed or
Dermion, as the case may be shall be free to pursue the
development of the Proposed System for treatment of the Specified
Indication outside the scope of the Program, provided, that if
activities with respect to developing such Proposed System for
treatment of the Specified Indication outside the scope of the
Program have not commenced within ninety (90) days after
expiration of such fifteen (15) Business Day period or such
ninety (90) day period, as the case may be, any activities by
Iomed or Dermion with respect to such Proposed System shall
thereafter be subject to compliance with this Section 3.3.
(d) Other Proposed Systems. If the Proposed Field is not a
Novartis Field and if the Drug proposed to be delivered pursuant
to the Proposed System is not a Novartis Proprietary Drug for
treatment of the Specified Indication, Iomed or Dermion, as the
case may be, may freely develop the Proposed System either
independently or for a third party (which development may be
exclusively for the benefit of Iomed or Dermion or pursuant to an
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agreement under which Iomed or Dermion, as appropriate, grants
exclusive licenses to such third party)."
8. Amendment of Section 3.4. Section 3.4 of the R&D Agreement is
hereby modified and amended to read in its entirety as follows:
"3.4 Development of Abandoned Products. Dermion or Iomed shall be
entitled to pursue research concerning and development of
Abandoned Products outside the scope of the Program, provided,
that (i) any such activity shall be subject to compliance with
Section 3.3, (ii) Patent Rights covering the Drug for which such
Abandoned Product was being developed or such drug's manufacture
or use shall have expired, and (iii) Dermion or Iomed, as the
case may be, shall reimburse Novartis in accordance with the next
sentence for all costs and expenses previously incurred in
conducting Program activities with respect to such Abandoned
Product. In reimbursement of such costs and expenses incurred
with respect to any Abandoned Product, Dermion or Iomed shall pay
to Novartis (i) within thirty (30) days after giving Notice
pursuant to Section 3.3(a) with respect to the proposed
development by Dermion or Iomed of such Abandoned Product, all
such costs and expenses up to a maximum amount of $250,000, and
(ii) within thirty (30) days of receipt thereof, fifty percent
(50%) of all revenues received by Dermion or Iomed with respect
to such Abandoned Product (including revenue from sales of and
fees and/or royalties received with respect to such Abandoned
Product) up to the amount of such costs and expenses not
reimbursed pursuant to clause (i)."
9. Amendment of Section 3.5. Section 3.5 of the R&D Agreement is
hereby modified and amended to read in its entirety as follows:
"3.5 Development of Systems for or by Novartis.
(a) Systems for the Delivery of Novartis Proprietary Drugs.
In the event that during the term of this Agreement Novartis
determines to develop a System for a Novartis Proprietary Drug
for treatment of the Specified Indication, it shall give notice
thereof to the Committee (a "Novartis Proposed Proprietary
System"). Dermion shall have the right to elect to develop such
Novartis Proposed Proprietary System for treatment of the
Specified Indication as a Product pursuant to the Program. If
Dermion so elects, it shall give notice thereof to the Committee
within fifteen (15) Business Days of receipt by the Committee of
such notice, in which case Novartis shall be prohibited during
the
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term of this Agreement from developing the Novartis Proposed
Proprietary System for treatment of the Specified Indication
outside the scope of the Program, subject to the last sentence of
this Section 3.5(a). The development of a Novartis Proposed
Proprietary System for treatment of the Specified Indication as a
Product pursuant to the Program shall be pursuant to this
Agreement or an amendment to this Agreement (provided, that,
other than providing for incremental costs to be paid by Novartis
and incremental personnel, facilities and resources to be
provided by Dermion, such amendment shall be on the same terms
and conditions as this Agreement). If Dermion fails to give such
notice within such fifteen (15) Business Day period, or if
activities with respect to developing a Product for the Novartis
Proprietary Drug for treatment of the Specified Indication have
not commenced within ninety (90) days of receipt by the Committee
of such notice (other than as a result of any acts or omissions
of Novartis), Novartis shall be free to pursue the development of
the Novartis Proposed Proprietary System for treatment of the
Specified Indication outside the scope of the Program, provided,
that if activities with respect to developing such Novartis
Proposed Proprietary System for treatment of the Specified
Indication outside the scope of the Program have not commenced
within ninety (90) days after the expiration of such fifteen (15)
Business Day period or such ninety (90) day period, as the case
may be, any activities by Novartis with respect to such Novartis
Proposed Proprietary System shall thereafter be subject to
compliance with this Section 3.5(a).
(b) Other Systems. If during the term of this Agreement
Novartis makes the determination to engage a third party (other
than Dermion) to develop a System for a Drug owned, licensed or
manufactured by Novartis (other than a Novartis Proprietary Drug
for treatment of the Specified Indication, which shall be covered
by Section 3.5(a) above) (a "Novartis Proposed System"), prior to
initiating discussions with such third party, Novartis shall
notify Dermion and Iomed in writing. Novartis agrees for a period
of thirty (30) days from such notice (the "Novartis Standstill
Period"), (i) to negotiate in good faith with Dermion or Iomed to
reach an agreement under which Dermion or Iomed will develop the
Novartis Proposed System for Novartis either pursuant to this
Agreement or an amendment to this Agreement (provided, that,
other than providing for incremental costs to be paid by Novartis
and incremental personnel, facilities and resources to be
provided by Dermion or Iomed, such amendment shall be on the same
terms and conditions as this
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Agreement), and (ii) Novartis shall not negotiate with or enter
into a binding agreement with any third party for the development
of such Novartis Proposed System. If, upon expiration of the
Novartis Standstill Period, Novartis and either Dermion or Iomed
have not reached an agreement with regard to the development of
the Novartis Proposed System, Novartis shall be free to negotiate
with and to enter into an agreement with a third party to develop
the Novartis Proposed System. Notwithstanding the foregoing, this
Section 3.5(b) shall not apply to any Novartis Proposed System to
the extent that discussions regarding the development of such
Novartis Proposed System are initiated by a third party.
(c) No Other Restrictions. Notwithstanding any other
provision of this Agreement, Novartis shall be free to pursue the
development of any System (including any Novartis Proposed
System) independently without the assistance of a third party at
any time without complying with Section 3.5(b) or any other
provision of this Agreement (other than Section 3.5(a) which
shall apply only in the case of a Novartis Proposed Proprietary
System), and without any other restriction or limitation of any
kind."
10. Amendment of Section 4.3. Section 4.3 of the R&D Agreement is
hereby modified and amended to read in its entirety as follows:
"4.3 Ownership and Use of Jointly Developed Technology.
(a) Ownership of Jointly Developed Technology. Subject to
Section 4.3(b), Dermion, Iomed and Novartis shall jointly hold
all right, title and interest in and to all Jointly Developed
Technology. Except as otherwise provided in this Agreement,
Novartis, Iomed and Dermion may each freely practice and
otherwise exploit any and all Jointly Developed Technology
without the consent of, and without any obligation (including
without limitation any obligation to pay royalties or other
amounts, or to render an accounting) to any of the other parties.
Dermion, Iomed and Novartis shall each cause its employees and
others performing Program activities on its behalf (including, in
the case of Dermion, Program Employees, and in the case of
Novartis, Novartis Personnel) (its "Scientists") to execute
agreements (i) assigning world-wide rights to all Jointly
Developed Technology made or developed by such Scientists to
Dermion, Iomed and Novartis, jointly, and (ii) agreeing to
cooperate with Dermion, Iomed and Novartis in obtaining patent
protection with respect thereto (including by executing such
documents as may be required by any patent office in connection
with a related patent application
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or patent). Each of Dermion, Iomed and Novartis shall cause its
Scientists promptly to disclose to such party, and shall
thereafter promptly disclose to the other parties and the
Committee, the conception or reduction to practice of any Jointly
Developed Technology that it believes has a reasonable likelihood
of receiving patent protection.
(b) Limitations on Use of Jointly Developed Technology by
Dermion and Iomed. Notwithstanding the rights of Dermion, Iomed
and Novartis as joint owners of Jointly Developed Technology
pursuant to Section 4.3(a), any use of Jointly Developed
Technology by Dermion, Iomed and Novartis shall be subject to
Article 3 hereof.
11. Amendment of Section 4.4. Section 4.4 of the R&D Agreement is
hereby modified and amended to read in its entirety as follows:
"4.4 Transfer of Jointly Developed Technology. During the term of
this Agreement, and for a period of three (3) years after the
effective date of termination thereof (such term and period, the
"Technology Transfer Restriction Period"), Dermion, Iomed and
Novartis shall not sell, assign, transfer or convey (for purposes
of this Section 4.4, "Assign") all right, title and interest in
or to any item of Jointly Developed Technology without the prior
written consent of the other parties, except (i) to a successor
to substantially all of the business of Dermion, Iomed or
Novartis, as the case may be, whether by merger, consolidation,
stock sale, asset sale or otherwise, (ii) in the case of
Novartis, to any Person other than a Prohibited Transferee, or
(iii) in the case of Dermion and Iomed, to any Person other than
for use in connection with the research, development,
manufacture, distribution or sale of Systems for delivery of
drugs in any of the Novartis Fields (as defined from time to time
in accordance with Section 3.1(a)), it being a condition
precedent to any Assignment of Jointly Developed Technology
pursuant to this clause (iii) that Dermion or Iomed obtain the
agreement of such Person not to so use during the Technology
Transfer Restriction Period the Jointly Developed Technology to
be Assigned; provided, however, that notwithstanding any other
provision of this Section 4.4, in the event that Dermion or Iomed
Assigns any Jointly Developed Technology to a Prohibited
Transferee (which Assignment by its terms shall require the
Assignee to give notice to Dermion or Iomed of subsequent
Assignments by such Prohibited Transferee), and such Prohibited
Transferee subsequently Assigns such Jointly Developed Technology
to another Prohibited Transferee, Dermion
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or Iomed, as the case may be, shall promptly give Novartis notice
of such subsequent Assignment, in which case the restriction set
forth in clause (ii) above shall, as of the date of such
subsequent Assignment, terminate and thereafter be of no further
force or effect."
12. Amendment of Section 4.5. Section 4.5 of the R&D Agreement is
hereby modified and amended to read in its entirety as follows:
"4.5 Patents and Patent Applications.
(a) Initial Filings. Each party shall promptly disclose to
the Committee the conception or reduction to practice of any
Jointly Developed Technology that the disclosing party believes
has a reasonable likelihood of receiving patent protection.
Promptly after such disclosure, the Committee shall meet (in
person or by teleconference) to discuss such Jointly Developed
Technology, including (i) whether to proceed with a patent
application with respect thereto and (ii) the jurisdictions in
which such patent application should be filed. In the event that
the Committee elects to file a patent application with respect to
any Jointly Developed Technology, Novartis shall be responsible
therefor (unless the Committee determines that Dermion or Iomed
should file such patent application (which determination shall
not be a Novartis Matter)) (the party filing such patent
application being referred to in this Section 4.5 as the
"Responsible Party"). The Responsible Party shall (i) give the
other parties an opportunity to review the text of any such
application promptly (with consideration of all applicable filing
deadlines) before filing and (ii) promptly supply the other
parties with a copy of the application as filed, together with
notice of its filing date and serial number. Unless otherwise
agreed by the parties, the Responsible Party shall be responsible
for the initial filing of any such patent application and the
subsequent prosecution and maintenance of the application and any
resulting patents.
(b) Foreign Filings. Within a reasonable period of time
(which the parties shall use reasonable efforts to ensure is no
more than nine (9) months) following the filing date of a patent
application pursuant to Section 4.4(a), the Committee shall
determine whether to abandon such application without
replacement, abandon and refile such application, proceed with
such application only in the country of filing, or use such
application (e.g. as the basis for a claim of priority under the
Paris Convention) for corresponding applications in other
countries.
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Dermion, Iomed and Novartis shall consult together to ensure
that, so far as practicable, the texts of applications filed in
different jurisdictions contain the same information and claim
the same scope of protection.
(c) Patent Prosecution and Maintenance. The Responsible
Party shall diligently prosecute and maintain, using commercially
reasonable practices, patent applications and patents with
respect to Jointly Developed Technology for which it is
responsible, and promptly provide the other party with copies of
all relevant documentation with respect thereto. The Responsible
Party shall use patent counsel and other professional advisors of
its own selection, reasonably acceptable to the other party. The
Committee shall periodically review the status of patents and
patent applications constituting Jointly Developed Technology,
including whether the prosecution and/or maintenance of each such
patent or patent application should be continued.
(d) Authority. The Responsible Party shall have the sole and
exclusive authority to prosecute and maintain the patent
application and patent for which it is responsible, including the
right to amend and cancel claimed subject matter, as may be
reasonably appropriate or desirable in the view of the
Responsible Party, but shall consult in good faith with the other
parties regarding such prosecution and maintenance with respect
to Jointly Developed Technology for which it is responsible, and
will promptly provide the other parties with a copy of all
relevant documentation with respect thereto. The other parties
shall cooperate with the Responsible Party, including providing
the Responsible Party with access to such information as may be
reasonably necessary to permit such prosecution and maintenance,
and signing, or causing to have signed, such documents as may be
necessary or appropriate in connection therewith. Prior to
abandoning any such patent application or patent, the Responsible
Party shall offer the same to the other parties for prosecution
or maintenance, as the case may be. The costs, if any, of such
cooperation shall be Prosecution Costs subject to Section 4.4(e).
(e) Prosecution Costs. Dermion, Iomed and Novartis shall
bear all Prosecution Costs equally, provided, that Dermion's
share of such Prosecution Costs shall not exceed $50,000 per
patent application (not including any Premium payable pursuant to
Section 4.5(f)).
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(f) Independent Filing. In the event that after
consideration thereof the Committee elects not to file a patent
application in any jurisdiction with respect to any Jointly
Developed Technology, any of Dermion, Iomed or Novartis shall be
entitled to file a patent application in such jurisdiction with
respect to such Jointly Developed Technology (an "Independent
Filing"). In such event, the party making the Independent Filing
shall bear all Prosecution Costs with respect to such patent
application and shall own all right, title and interest in and to
any Patent Rights arising or resulting from such Independent
Filing. Notwithstanding the foregoing, the other parties may
within one (1) year of the filing date elect to join the filing
party in such Independent Filing, in which case (i) such other
parties shall pay to the filing party such other party's share of
Prosecution Costs incurred by the filing party to date in
connection with such Independent Filing plus an amount equal to
twenty percent (20%) (a "Premium") of all such Prosecution Costs,
(ii) all Patent Rights arising or resulting from such filing
shall be deemed Jointly Developed Technology for all purposes
under this Agreement, and (iii) thereafter all of the other
provisions of this Section 4.5 shall apply to such patent
application (with the filing party serving as the Responsible
Party).
13. Amendment of Section 4.6(b). Section 4.6(b) of the R&D Agreement
is hereby modified and amended to read in its entirety as follows:
"(b) Jointly Developed Technology. Promptly upon receipt of
any Infringement Notice relating to Infringement of Jointly
Developed Technology, the Committee shall meet to determine
appropriate action to take with respect to such Infringement (the
"Committee's Determination"), including (i) whether the parties
should prosecute such Infringement jointly, whether any party
should prosecute such Infringement independently, or whether no
action should be taken by the parties with respect to such
Infringement, (ii) in the event that the Committee determines to
prosecute such Infringement jointly, the party or parties to have
primary responsibility therefor (the "Responsible Party(ies)"),
(iii) allocation among the parties of expenses to be incurred
with respect to the prosecution of such Infringement, (iv)
allocation among the parties of any damages recovered in respect
of such Infringement, and (v) any other matter deemed relevant by
the Committee in respect of such Infringement. With respect to
any joint prosecution, the Responsible Party(ies) shall take such
action, as deemed appropriate, whether by action,
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suit, proceeding or otherwise, in accordance with the Committee's
Determination to prevent or eliminate the Infringement and to
collect damages with respect thereto. Except as set forth below,
all costs and expenses incurred by any party in connection with
the Infringement shall be borne by the parties in accordance with
the Committee's Determination. Except as set forth below, damages
recovered by any party in such action, suit or proceeding in
connection with such Infringement shall be apportioned among the
parties in accordance with the Committee's Determination. In the
event that the Committee is unable to make a determination
mutually acceptable to the parties as to how to proceed with
respect to such Infringement, any party shall be entitled to
prosecute such Infringement in its own name and on its own
behalf, in which case such party shall bear all costs and
expenses incurred by it in connection with prosecuting such
Infringement and shall retain all damages recovered in respect
thereof."
14. Amendment of Section 4.7. Section 4.7 of the R&D Agreement is
hereby modified and amended to read in its entirety as follows:
"4.7 Infringement of Third Party Rights.
(a) Notice. If Dermion, Iomed or Novartis shall become aware
of any Infringement Action with regard to the manufacture, use or
sale of any System incorporating (or developed or manufactured
through processes incorporating) Jointly Developed Technology,
the party aware shall promptly notify the other parties of the
same and fully disclose, to its knowledge, the basis therefor.
(b) Infringement Actions with respect to Products. If the
Infringement Action relates to a Product incorporating (or
developed or manufactured through processes incorporating)
Jointly Developed Technology, the parties shall jointly
compromise or defend the Infringement Action on such basis and on
such terms as the parties shall mutually agree. In such event the
parties shall cooperate fully with respect to the compromise or
defense of such Infringement Action, and each party shall keep
the other fully informed as to the status of such Infringement
Action. If, in connection with such Infringement Action, Dermion,
Iomed or Novartis is required to obtain a Third Party License in
order to make, have made, use or sell Products incorporating (or
developed or manufactured through processes incorporating)
Jointly Developed Technology, such Third Party License shall be
obtained for the benefit of all of Dermion, Iomed and Novartis,
and all
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rights under such Third Party License shall be held jointly by
the parties. All Settlement Costs incurred by the parties with
respect to such Infringement Action shall be borne eighty percent
(80%) by Novartis and twenty percent (20%) by Iomed or Dermion.
(c) Infringement Actions with respect to Other Systems. If
the Infringement Action relates to a System incorporating (or
developed or manufactured through processes incorporating)
Jointly Developed Technology, which System is not a Product
developed pursuant to the Program, the Committee shall meet to
determine appropriate action to take with respect to such
Infringement Action, including (i) whether the parties should
compromise or defend such Infringement jointly or whether a
particular party should compromise or defend such Infringement
independently, (ii) in the event that the Committee determines to
compromise or defend such Infringement Action jointly, the party
or parties to have primary responsibility therefor, (iii)
allocation among the parties of expenses to be incurred with
respect to the compromise or defense of such prosecution, (iv)
allocation among the parties of rights under any Third Party
License obtained in connection with such Infringement Action, and
(v) any other matter deemed relevant by the Committee in respect
of such Infringement Action. In the event that the Committee is
unable to make a determination mutually acceptable to the parties
as to how to proceed with respect to such Infringement Action,
any party shall be entitled to compromise or defend such
Infringement Action in its own name and on its own behalf, in
which case such party shall bear all Settlement Costs incurred by
it in connection with compromising or defending such Infringement
Action and shall retain sole ownership of all rights under any
Third Party License obtained by it in connection with such
Infringement Action."
15. Amendment of Section 5.2. Section 5.2 of the R&D Agreement is
hereby modified and amended to read in its entirety as follows:
"5.2 License from Novartis. Novartis hereby grants to Dermion and
to Iomed during the term of this Agreement a non-exclusive,
royalty-free, license under the Patent Rights included in the
Novartis Technology to make, have made, use and sell Products in
the Territory pursuant to the Program. In addition to the
foregoing, Novartis hereby grants to Dermion and to Iomed during
the term of this Agreement a non-exclusive license to practice
the Know-How included in the Novartis Technology in the Territory
pursuant to the Program. All rights to Novartis Technology
(including Patent
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Rights and Know-How) granted to Dermion and to Iomed pursuant to
this Agreement shall terminate upon the effective date of
termination of this Agreement, and neither Dermion nor Iomed
shall have any right, title or interest in such Novartis
Technology thereafter."
16. Amendment of Section 5.3(a). Section 5.3(a) of the R&D Agreement
is hereby modified and amended to read in its entirety as follows:
"(a) Dermion and Iomed. Notwithstanding any other provision
of this Agreement, neither Dermion nor Iomed shall sublicense the
rights granted to it under Section 5.2 (except to the
other)without the prior written consent of Novartis, which
Novartis may give or withhold in its sole discretion.
Notwithstanding the foregoing, Dermion and Iomed each shall have
the right to license to the other, without restriction (other
than that any such license shall impose upon the licensee the
same restrictions as are applicable to the licensor under this
Agreement), any right or license granted to it by Novartis
pursuant to this Agreement."
17. Amendment of Section 5.4. Section 5.4 of the R&D Agreement is
hereby modified and amended to read in its entirety as follows:
"5.4 Transfers of Second Generation Technology by Dermion and
Iomed. If at any time during the term of this Agreement and for a
period of five (5) years after the effective date of termination
thereof, Dermion or Iomed obtains any Patent Rights covering
Second Generation Technology (as defined below), Dermion or
Iomed, as the case may be, shall notify Novartis in writing of
such event. Dermion and Iomed agree that for a period of thirty
(30) days from such notice (the "Dermion/Iomed Standstill
Period"), (i) Dermion or Iomed, as the case may be, will
negotiate in good faith with Novartis to reach an agreement to
license the Second Generation Technology to Novartis on terms and
conditions acceptable to the parties, and (ii) Dermion or Iomed,
as the case may be, shall not negotiate or enter into a binding
agreement with any third party to Transfer the Second Generation
Technology, provided, that clause (ii) of this sentence shall
only apply during the term of this Agreement. If, upon expiration
of the Dermion/Iomed Standstill Period, Novartis and either
Dermion or Iomed, as appropriate, have not reached an agreement
for the license of such Second Generation Technology to Novartis,
Dermion or Iomed, as the case may be, shall be free to Transfer
such Second Generation Technology to any third party. In
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addition, if Novartis and Dermion or Iomed, as the case may be,
have reached an agreement for a license, Dermion or Iomed, as the
case may be, shall also be free to Transfer such Second
Generation Technology to any third party to the extent permitted
under the terms of the license from Dermion or Iomed, as the case
may be, to Novartis. Notwithstanding the foregoing, Dermion or
Iomed, as the case may be, shall not be required to enter into a
license with Novartis if and to the extent that the terms of such
license would, in the good faith judgment of Dermion or Iomed on
advice of counsel, violate the terms of any agreement between
Dermion or Iomed, as the case may be, and any third party then in
effect. As used in this Section 5.4, "Second Generation
Technology" shall mean any technology (including Patent Rights
and Know-How), other than Improvements to Dermion Technology or
IOMED Technology, developed by Dermion or Iomed that is
applicable or potentially applicable to the development of
Systems. If any transaction is covered by both this Section 5.4
and Section 8.4 below, the terms of Section 8.4 shall exclusively
govern such transaction. The parties specifically agree that all
technology to which Iomed has acquired a license pursuant to
those Agreements, dated April 14, 1997, between Iomed and Drug
Delivery Systems, Inc. (an affiliate of Elan Corporation plc)
shall constitute "Second Generation Technology" under this
paragraph 5.4; provided that the Dermion/Iomed Standstill Period
in respect to such technology shall commence upon December 1,
1997."
18. Elimination of Section 5.5. From and after the effective date of
this Agreement, Section 5.5 of the R&D Agreement, entitled "Future IOMED
Licenses" shall be deemed to be entirely deleted and removed therefrom, and
shall have no further force or effect.
19. Amendment of Section 8.2. Section 8.2 of the R&D Agreement is
hereby modified and amended to read in its entirety as follows:
"8.2 Unrestricted Iomed Areas. No provision of this Agreement
shall be deemed or construed to restrict Iomed's right, on its
own behalf and not for a third party, to conduct research and
development with respect to or to develop Systems for Drugs used
in the treatment of acute inflammation or for the inducement of
local anesthesia."
20. Amendment of Section 8.3(a). Section 8.3(a) of the R&D Agreement
is hereby modified and amended to read in its entirety as follows:
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"(a) Covenant Against a Change of Control of Dermion. Iomed
and Dermion covenant and agree that until March 29, 1998, without
the prior written consent of Novartis, they shall not cause or
approve a Change of Control of Dermion. The provisions of this
paragraph 8.3(a) shall not restrict Iomed's right to issue debt
or equity securities, to engage or participate in a merger or
consolidation (whether or not it is the surviving corporation in
such transaction), to sell all or substantially all of its
assets, or to engage in any similar transaction or series of
transactions. For the purpose of this Section 8.3 and Section 8.4
hereof, the transfer of Dermion's assets to Iomed, whether by
dividend or other means, and subsequent sale or other conveyance
of those assets to a third-party (other than as part of a
transaction described in the immediately preceding sentence)
shall constitute a Change of Control of Dermion."
21. Amendment of Section 8.4. Section 8.4 of the R&D Agreement is
hereby modified and amended to read in its entirety as follows:
"8.4 Right of First Offer.
(a) Offer. If at any time the Board of Directors of Dermion
proposes to enter into or approve a transaction or series of
related transactions which, if consummated, would result in a
Change of Control of Dermion (a "Transaction"), then it shall
promptly forward to Novartis a written notice (an "Offer Notice")
offering to enter into a Transaction with Novartis and specifying
the purchase price (the "Proposed Purchase Price") and other
terms and conditions under which it would enter into such
Transaction with Novartis (the offer made in any such Offer
Notice, the "Offer"). Novartis shall have sixty (60) days after
its receipt of an Offer Notice (the "Acceptance Period") to
provide written notice to Dermion of its acceptance of the Offer.
Additionally, if the Board of Directors of Iomed proposes to
enter into or approve either a sale or similar transfer of the
Dermion Shares held by Iomed or the sale of the assets employed
by Dermion in its business (other than in a transaction or series
of transactions of the type described in the immediately
following sentence of this Section 8.4(a)), and if such
transaction would result in a Change in Control of Dermion, Iomed
shall provide Novartis with written notice of the type described
in the first sentence of this Section 8.4(a), and Novartis shall
have offer rights, in regard to the transaction or series of
transactions described in such notice, as set forth in hereunder
this Section 8.4, as if the
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proposed transaction by Iomed constituted a "Transaction" by
Dermion. Notwithstanding any provision or interpretation of this
Agreement to the contrary, a "Transaction" shall not be deemed to
include any sale by Iomed of its debt or equity securities, any
merger or consolidation involving Iomed, or the sale by Iomed of
all or substantially all of its assets.
(b) Response to Offer. If Novartis accepts the Offer, it
shall be obligated to consummate such Transaction at the price
and other terms specified in the Offer Notice within one hundred
twenty (120) days after the acceptance of the Offer, subject to
negotiation of a definitive acquisition agreement containing
representations and warranties, covenants, conditions to closing
and such other terms and conditions customary for agreements of
its type. If Novartis rejects the Offer (or otherwise fails to
forward an acceptance of the Offer prior to the expiration of the
Acceptance Period), Dermion shall, for a period of two hundred
seventy (270) days after expiration of the Acceptance Period,
have the right to consummate a Transaction of the type described
in the Offer Notice only at a price greater than ninety percent
(90%) of the Proposed Purchase Price and on such other terms and
conditions more favorable to it than those offered to Novartis
(unless Novartis consents to such lower price or other terms and
conditions, which consent shall not be unreasonably withheld, it
being understood that Novartis' withholding of consent based on
its desire to consummate a Transaction at such lower price or
other terms and conditions shall be deemed reasonable); provided,
however, that in the event that a Transaction has not been
consummated within such two hundred seventy (270) day period,
then any proposed future Transaction shall continue to be subject
to this Section 8.4.
(c) Survival. The offer rights of Novartis described in this
Section 8.4 shall survive any termination of this Agreement for a
period of twelve (12) months from the effective date of such
termination; provided, however, that if for any annual period
during the term hereof the amount of funding which Novartis is
required to provide to Dermion under this Agreement represents
less than 50% of Dermion's operating budget for such annual
period, the offer rights of Novartis hereunder shall terminate
and this paragraph 8.4 shall permanently cease to be effective."
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22. Amendment of Section 9.3. Section 9.3 of the R&D Agreement is
hereby modified and amended to read in its entirety as follows:
"9.3 Survival Upon Termination. The parties agree that their
respective rights and obligations pursuant to Sections 2.4(f),
2.5(e), 3.1-3.3 (to the extent of the Exclusivity Period),
4.1-4.4, 4.6, 4.7, 5.1, 5.3(b), 5.4, 6.3-6.6, 7.4, 8.1, 8.3, 8.4,
(subject to the limitation set forth in Section 8.4(c)), 9.3-9.5,
9.6, 9.7, 9.8, 10.1, 10.2, 11.1 and 11.10 shall survive
termination of this Agreement for any reason, and a non-breaching
party shall have the right to seek monetary or injunctive relief
upon any material breach by the other parties of such provisions,
provided that such rights and obligations shall in any event
terminate on the tenth (10th) anniversary of the effective date
of termination of this Agreement."
23. Amendment of Section 11.2. Section 11.2 of the R&D Agreement is
hereby modified and amended to read in its entirety as follows:
"11.2 Publicity. Except after consultation with the other
parties, no party shall publicize, advertise, announce or
publicly describe to any Governmental Authority or other Person,
the terms of this Agreement, the parties hereto or the
transactions contemplated hereby, except as required by
Applicable Law or as required pursuant to this Agreement. In the
event that Dermion or IOMED on the one hand or Novartis on the
other is requested or required pursuant to Applicable Law by any
Governmental Authority to disclose to any Governmental Authority
or other Person any terms of this Agreement, the party subject to
such request or requirement shall provide the other with prompt
written notice of such request or requirement so that the other
party may seek a protective order or other appropriate remedy or
waive compliance with the provisions of this Agreement. If, in
the absence of a protective order or other remedy or the receipt
of a waiver by the other party, the party being requested or
required to disclose such terms of this Agreement is nonetheless
legally compelled to disclose such terms, it may, without
liability hereunder, disclose only that portion of this Agreement
which it is legally compelled to disclose. Notwithstanding the
provisions of this paragraph 11.2, Iomed shall have the right, in
connection with any public offering of its securities, to
disclose the terms and conditions of this Agreement and to file
this Agreement with the Securities and Exchange Commission to the
extent recommended by its legal counsel; provided that such
disclosure or filing is reviewed and approved by
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Novartis, which approval shall not be unreasonably withheld or
delayed."
24. Amendment of Certain Provisions of Section 11.6. Those
provisions of Section 11.6 of the R&D Agreement which set forth the addresses
and telecopier numbers of the Parties are hereby modified and amended to provide
as follows:
If to Iomed or Dermion:
Iomed, Inc.
ββββ ββββ ββββ βββββ
ββββ ββββ ββββ, ββββ βββββ
Attn: Chief Executive Officer
Tel: βββ-βββ-ββββ
Fax: βββ-βββ-ββββ
If to Novartis:
Novartis Pharmaceuticals Corporation
ββ βββββ ββ
ββββ βββββββ, βββ ββββββ βββββ-ββββ
Attn: Vice President, Business Development
and Licensing
Fax: (βββ) βββ-ββββ
With a copy to:
Novartis Pharmaceuticals Corporation
ββ βββββ ββ
ββββ βββββββ, βββ ββββββ βββββ-ββββ
Attn: General Counsel
Tel: (βββ) βββ-ββββ
Fax: (βββ) βββ-ββββ
25. Further Assurances. The Parties shall each take and perform such
additional acts, including the execution and delivery of instruments and
documents, and shall do all such other things as may be reasonably necessary to
implement and document the modifications and amendments of the R&D Agreement
contemplated by this Agreement.
26. Confirmation and Ratification of the R&D Agreement. Each Party
herewith ratifies and confirms the R&D Agreement, as specifically modified and
amended by paragraphs 1 through 24 of this Agreement, as their valid and binding
legal agreement and obligation, and confirm that the R&D Agreement, as
specifically modified and amended by paragraphs 1 through 24 hereof, remains
enforceable against each such Party in accordance with its terms.
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27. Dispute Resolution. Any controversy, claim or dispute among the
Parties concerning this Agreement or the breach hereof or the subject matter
hereof, shall be resolved and finally settled by arbitration in accordance with
the provisions of Section 11.1 of the R&D Agreement.
28. Governing Law. This Agreement, and the modifications to the R&D
Agreement contemplated hereby, shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to the conflicts
of laws provisions thereof.
29. Entire Agreement. This Agreement contains the entire agreement
and understanding of the Parties in regard to the amendment and modification of
the R&D Agreement, and supersedes any prior understandings and agreements,
whether written or oral, among the Parties in regard to the amendment and
modification of the R&D Agreement.
30. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original instrument, but all of
which, taken together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have caused this First Amendment of
Research and Development Agreement to be executed by their duly authorized
representatives as of the date first herein written.
IOMED:
Iomed, Inc.
By: /s/ βββ β. βββββββββββ
------------------------------------------
βββ β. βββββββββββ,
President and Chief Executive Officer
DERMION:
Dermion, Inc.
By: /s/ ββββββ β. βββββββ
------------------------------------------
ββββββ β. βββββββ, Secretary
NOVARTIS:
Novartis Pharmaceutical Corporation
By: [SIG]
------------------------------------------
Its:
-----------------------------------------
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