CONFIDENTIAL
DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT
BY AND BETWEEN
NAPRO BIOTHERAPEUTICS, INC.
AND
▇▇▇▇▇▇ LABORATORIES
JULY 23, 1999
CONFIDENTIAL
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND REFERENCES..................................................................................2
1.1 Definitions...............................................................................2
1.2 References...............................................................................17
ARTICLE 2
LICENSE GRANT..............................................................................................17
2.1 NaPro Grant..............................................................................17
2.2 ▇▇▇▇▇▇ ▇▇▇▇▇.............................................................................18
2.3 Additional Licenses......................................................................18
2.3.1 Related to NaPro.........................................................................18
2.3.2 Related to Abbott Formulated Product.....................................................19
2.3.3 Other than Related to NaPro or Abbott Formulated Product.................................19
ARTICLE 3
MILESTONE PAYMENTS AND OTHER FUNDING.......................................................................19
3.1 Milestone Payments.......................................................................19
3.2 Single Payment Obligation................................................................23
3.3 Other Funding............................................................................23
3.4 Use of Certain Milestone Payments........................................................23
ARTICLE 4
ADDITIONAL FINISHED PRODUCT PAYMENTS ......................................................................24
4.1 Additional Consideration.................................................................24
4.2 Abbott Formulated Product in Lieu of or in Addition to NaPro Formulated Product..........25
4.3 Reduction in Applicable Percentages Due to Competitive Paclitaxel Product................26
4.4 Adjustments to Additional Consideration..................................................27
4.5 Increase or Decrease in Additional Consideration for Additional Licenses.................27
4.6 Net Sales Reports and Payments...........................................................27
4.7 Currency.................................................................................28
4.8 Sales Between Abbott and Affiliates......................................................28
4.9 Loan Agreement Offset....................................................................28
ARTICLE 5
PAYMENT, RECORD KEEPING AND AUDIT RIGHTS...................................................................29
5.1 Method of Payment........................................................................29
5.2 Record Keeping and Audit Rights..........................................................29
5.2.1 Audit of Net Sales.......................................................................30
5.2.2 Audit of Development Costs...............................................................30
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ARTICLE 6
RESEARCH AND DEVELOPMENT PROGRAM...........................................................................31
6.1 Research and Development.................................................................31
6.1.1 Responsibilities.........................................................................31
6.1.1.1 NaPro Responsibilities...................................................................31
6.1.1.2 Abbott Responsibilities..................................................................31
6.1.1.3 Joint Responsibilities...................................................................32
6.1.2 Development Plan.........................................................................32
6.1.3 Formulation..............................................................................32
6.2 Development Plan Funding.................................................................33
6.2.1 Up to Twenty Million Dollars.............................................................33
6.2.2 Above Twenty Million Dollars.............................................................33
6.2.3 Performance..............................................................................34
6.3 Development Costs Quarterly Budgets and Reports..........................................35
6.4 Development Committee....................................................................35
6.5 Finished Product Packaging...............................................................37
6.6 Pro-Drug Development.....................................................................38
ARTICLE 7
CLINICAL AND REGULATORY MATTERS............................................................................39
7.1 Pre-Clinical/Clinical Data...............................................................39
7.2 Regulatory Submission and Maintenance....................................................39
7.3 Bulk Drug DMF............................................................................39
7.4 Regulatory Approval Ownership............................................................40
ARTICLE 8
BULK DRUG MANUFACTURE, PURCHASE AND SUPPLY.................................................................40
8.1 Requirements and Exclusivity.............................................................40
8.1.1 Purchase and Sale........................................................................40
8.1.2 Limitations on NaPro Sale................................................................40
8.1.3 NaPro Enforcement of Limitations.........................................................41
8.1.4 Limitations on Abbott Resale.............................................................41
8.2 Pricing..................................................................................41
8.2.1 Development Use..........................................................................41
8.2.2 Primary Standard Product.................................................................42
8.2.3 Commercial Use...........................................................................42
8.2.4 Restoration or Replacement of Bulk Drug.................................................42
8.3 Shipping, Invoice and Payment............................................................43
8.4 Quality and Inspection of Bulk Drug......................................................43
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8.4.1 Bulk Drug Warranties.....................................................................43
8.4.2 Bulk Drug Inspection.....................................................................44
8.4.3 NaPro Response to Bulk Drug Inspection...................................................45
8.4.4 Bulk Drug Storage........................................................................45
8.5 NaPro Manufacturing Facility.............................................................45
8.5.1 Inspection by Abbott.....................................................................45
8.5.2 Inspection by Regulatory Authorities.....................................................46
8.5.3 Inspection of ▇. ▇. ▇▇▇▇▇▇▇▇ Facility....................................................46
8.5.4 Required Manufacturing Changes...........................................................47
8.5.5 Other Manufacturing Changes..............................................................47
8.5.6 Changes Requiring Regulatory Approval....................................................48
8.6 ▇▇▇▇▇▇'▇ and the Stand-By Manufacturing Source's Facilities..............................49
8.6.1 Inspection by Regulatory Authorities.....................................................49
8.6.2 Inspection by NaPro......................................................................50
8.6.3 Abbott Required Manufacturing Changes....................................................50
8.6.4 Abbott Manufacturing Changes.............................................................51
8.7 Abbott Stand-By Manufacture of Bulk Drug.................................................51
8.7.1 Qualification of Stand-By Manufacturing Facility.........................................51
8.7.2 Stand-By Manufacturing Election..........................................................52
8.7.3 Transition of Manufacturing Back to NaPro................................................53
8.7.4 Continued Supply Obligations.............................................................54
8.8 Forecasts and Orders of Bulk Drug for Commercial Use.....................................54
8.8.1 Pre-Launch Forecast and Quarterly Forecasts..............................................54
8.8.2 Updated Forecasts........................................................................54
8.8.3 NaPro Supply Constraints.................................................................54
8.8.4 Orders...................................................................................55
8.8.5 Required Inventory.......................................................................55
8.9 Supply Allocation........................................................................55
ARTICLE 9
FINISHED PRODUCT MANUFACTURE, MARKETING AND SALE...........................................................56
9.1 Abbott Manufacture and Labeling of Finished Product......................................56
9.2 Marketing Committee......................................................................57
9.3 Abbott Marketing and Sales Efforts.......................................................57
9.4 NaPro Assistance with Technical Marketing................................................58
9.5 Co-Promotion of Finished Product.........................................................59
9.6 Trademarks...............................................................................60
9.7 Manufacturing of Other Formulated Products...............................................60
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ARTICLE 10
PROPRIETARY RIGHTS; PATENT ENFORCEMENT AND INFRINGEMENT....................................................60
10.1 Patent Rights............................................................................60
10.2 Program Invention........................................................................61
10.2.1 Invention Disclosure.....................................................................61
10.2.2 Ownership................................................................................61
10.2.3 Prosecution and Maintenance..............................................................61
10.2.4 Trade Secrets............................................................................62
10.2.5 Cooperation..............................................................................62
10.3 No Other Technology Rights...............................................................62
10.4 Rights to Third Party Technology.........................................................62
10.5 Notice of Patent Infringement............................................................63
10.6 Patent Enforcement.......................................................................63
10.7 Defense of Assertions of Patent Infringement ............................................63
ARTICLE 11
RIGHTS TO REFERENCE AND USE PACLITAXEL
DATA AND EXPAND THE FIELD AND/OR TERRITORY.................................................................63
11.1 Abbott Exclusive Option Period for Other Territories and Expansion of the Field..........63
11.2 Abbott Right of First Refusal for Development Opportunities..............................64
11.3 Development Opportunities that Include Paclitaxel Data...................................64
11.4 Development Opportunities that Do Not Include Paclitaxel Data............................68
11.5 Abbott Initiation of Negotiations........................................................69
11.6 Certain Obligations Regarding Use of Paclitaxel Data and Joint Patent Rights.............69
11.7 Exclusive Enumeration of Rights..........................................................70
11.8 Certificate of Free Sale.................................................................70
ARTICLE 12
REPRESENTATIONS AND WARRANTIES.............................................................................71
12.1 Reciprocal...............................................................................71
12.1.1 Corporate Status.........................................................................71
12.1.2 Authority................................................................................71
12.1.3 No Conflicts.............................................................................71
12.1.4 No Approvals.............................................................................71
12.1.5 Enforceability...........................................................................71
12.1.6 Compliance with Laws.....................................................................72
12.1.7 Data.....................................................................................72
12.1.8 Year 2000 Warranties.....................................................................72
12.2 NaPro Representations and Warranties.....................................................72
12.3 NaPro Representations Regarding Data.....................................................74
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12.4 NaPro Representations Regarding IVAX.....................................................74
12.5 NaPro Representations Regarding Bryn Mawr................................................74
12.6 NaPro Representations Regarding ▇.▇. ▇▇▇▇▇▇▇▇............................................75
12.7 Future Necessary Licenses................................................................75
12.8 Abbott Representations and Warranties....................................................75
ARTICLE 13
INDEMNIFICATION AND INSURANCE..............................................................................76
13.1 Indemnities..............................................................................76
13.1.1 NaPro Indemnity..........................................................................76
13.1.2 Abbott Indemnity.........................................................................77
13.1.3 Indemnification Sharing..................................................................77
13.1.4 Procedures...............................................................................77
13.1.5 Defense..................................................................................78
13.1.6 Indemnifiable Loss Recovery..............................................................79
13.2 Insurance................................................................................79
13.3 Limitations of Damages...................................................................80
ARTICLE 14
PRODUCT RECALL AND ADVERSE EVENTS..........................................................................80
14.1 Recall Notification and Implementation...................................................80
14.2 Recall Costs and Expenses................................................................80
14.3 Adverse Events...........................................................................80
14.4 Complaint Handling.......................................................................81
ARTICLE 15
TERM AND TERMINATION.......................................................................................82
15.1 Term and Termination.....................................................................82
15.2 Termination by Abbott Without Cause......................................................82
15.3 Termination by Either Party for Cause....................................................83
15.3.1 Bankruptcy...............................................................................83
15.3.2 Material Breach..........................................................................83
15.4 [SECTION NOT USED].......................................................................84
15.5 Termination by Abbott for Cause..........................................................84
15.5.1 Related to Finished Product..............................................................84
15.5.2 Related to Patent Invalidation...........................................................85
15.5.3 Related to Breach of Representation or Warranty..........................................85
15.6 Consequences of Termination..............................................................86
15.6.1 Expiration of Term.......................................................................86
15.6.2 Termination by Abbott Without Cause......................................................86
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15.6.3 Termination by NaPro for Cause...........................................................87
15.6.4 Termination by Abbott for Cause..........................................................87
15.6.5 [SECTION NOT USED].......................................................................87
15.6.6 Termination by Abbott for Cause Related to Finished Product..............................87
15.6.7 Termination by Abbott for Cause Related to a Breach of Representation or
Warranty.................................................................................88
15.6.8 NaPro Sale of Finished Product Post-Termination..........................................88
15.6.9 Joint Patent Rights and Joint Program Inventions.........................................88
15.7 Survival of Certain Provisions...........................................................89
15.8 Effect of Termination on Milestone Payments..............................................91
ARTICLE 16
ALTERNATIVE DISPUTE RESOLUTION.............................................................................91
16.1 Attempted Amicable Resolution............................................................91
16.2 Alternate Dispute Resolution.............................................................92
16.3 ADR Ruling...............................................................................92
16.4 ADR Remedies.............................................................................93
16.5 Effect on Time Periods in this Agreement.................................................93
16.6 Exclusivity..............................................................................93
16.7 Express Remedies.........................................................................93
ARTICLE 17
CONFIDENTIALITY AND PUBLICITY..............................................................................94
17.1 Transfer of Information..................................................................94
17.2 Restricted Disclosure....................................................................95
17.3 Precautions..............................................................................96
17.4 Duration of Confidentiality Obligation...................................................96
17.5 Publicity and Announcements..............................................................97
ARTICLE 18
MISCELLANEOUS PROVISIONS...................................................................................97
18.1 Force Majeure............................................................................97
18.2 Severability.............................................................................98
18.3 Assignment/Third Parties.................................................................98
18.4 Relationship of Parties..................................................................99
18.5 Waiver...................................................................................99
18.6 Contract Modification....................................................................99
18.7 Notices..................................................................................99
18.8 Entire Agreement........................................................................100
18.9 Compliance with Laws....................................................................101
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18.10 Interpretation..........................................................................101
18.11 Governing Law...........................................................................101
18.12 Counterparts............................................................................101
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LIST OF EXHIBITS
EXHIBIT A-1
ABBOTT FORMULATED PRODUCT
EXHIBIT A-2
NAPRO FORMULATED PRODUCT
EXHIBIT A-3
NAPRO ORAL FORMULATED PRODUCT
EXHIBIT B-1
PACLITAXEL
EXHIBIT C-1
BULK DRUG SPECIFICATIONS
EXHIBIT C-2
FINISHED PRODUCT SPECIFICATIONS
EXHIBIT D-1
DEVELOPMENT PLAN
EXHIBIT D-2
DEVELOPMENT COSTS
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EXHIBIT E-1
NAPRO PATENTS
EXHIBIT E-2
ABBOTT PATENT RIGHTS
EXHIBIT E-3
JOINT PATENT RIGHTS
EXHIBIT F-1
OTHER CUSTOMERS
EXHIBIT F-2
"UNAVAILABLE" COUNTRIES PURSUANT TO ARTICLE 11
EXHIBIT F-3
IVAX AGREEMENT
EXHIBIT G
ALTERNATE DISPUTE RESOLUTION
[ALL EXHIBITS HAVE BEEN INTENTIONALLY OMITTED. NAPRO
BIOTHERAPEUTICS, INC. WILL FURNISH SUPPLEMENTALLY A COPY OF ANY
OMITTED EXHIBIT TO THE COMMISSION UPON REQUEST]
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DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT
THIS DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT (together with the
exhibits attached to this Development, License and Supply Agreement and
incorporated herein by reference, the "Agreement") is made as of this 23rd day
of July, 1999 ("Effective Date"), between NaPro BioTherapeutics, Inc., a
corporation organized under the laws of the State of Delaware with its principal
place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("NaPro"),
and ▇▇▇▇▇▇ Laboratories, a corporation organized under the laws of the State of
Illinois, with its principal place of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Abbott").
RECITALS
WHEREAS, NaPro is a manufacturer and developer of Paclitaxel (as
hereinafter defined) products;
WHEREAS, Abbott wishes to market and sell formulated Paclitaxel for the
treatment of cancer in the Territory (as hereinafter defined);
WHEREAS, Abbott wishes to purchase bulk Paclitaxel from NaPro and work
with NaPro to develop and obtain necessary regulatory approvals for formulated
Paclitaxel;
WHEREAS, Abbott wishes, in conjunction with NaPro, to develop a range
of formulations of Paclitaxel which may include its own formulation, as well as
the formulation(s) developed by NaPro and, therefore, wishes to obtain a license
to any patents owned by NaPro covering any such formulation(s) or use of
Paclitaxel;
WHEREAS, after extensive negotiations during which the parties
considered various transaction structures and payment mechanisms, Abbott and
NaPro have both come to a mutually agreeable business arrangement which includes
all elements of the transactions set forth in this Agreement;
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WHEREAS, the parties are, simultaneously with this Agreement also
entering into that certain Stock Purchase Agreement dated July 23, 1999 ("Stock
Purchase Agreement") and that certain Loan and Security Agreement dated July 23,
1999 ("Loan Agreement") to support the general working capital and operational
needs of NaPro;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and in the Stock Purchase Agreement and the Loan Agreement, the parties
hereby agree as follows:
ARTICLE 1
DEFINITIONS AND REFERENCES
1.1 Definitions. Unless otherwise provided in this Agreement, the
following terms when used with initial capital letters shall have the meanings
set forth below:
"Abbott Formulated Product" shall mean Paclitaxel formulated
for use in Finished Product and encompassed by a Valid Claim of an Abbott Patent
Right, as described in Exhibit A-1, as may be modified by Abbott from time to
time.
"Abbott Know-How" shall mean proprietary, nonpatented
information, data, trade secrets and technology relating specifically to
Paclitaxel in the Field which are used for the benefit of the Development
Program and/or Commercial Use during the Term and which are owned or controlled
by Abbott, with the right to license, or licensed to Abbott, with the right to
sublicense, during the Term, but excluding Joint Program Inventions.
"Abbott Patent Rights" shall mean all patent applications and
patents listed in Exhibit E-2 and all patents and patent applications owned by
Abbott relating specifically to Paclitaxel (other than Joint Patent Rights),
with the right to license, or licensed by Abbott from one or more Third Parties
with the right to sublicense, in the Field in the Territory, which are invented
during and used for the benefit of the Development Program in developing,
commercializing, manufacturing, using or selling Finished Product in the Field
in the Territory. Abbott Patent Rights shall include all provisionals,
divisions,
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continuations, continuations-in-part, registrations, renewals, extensions,
supplemental protection certificates, reexaminations, and reissues of the above
patent applications and patents.
"Abbott Technology" shall mean Abbott Know-How, Abbott Patent
Rights, ▇▇▇▇▇▇'▇ interest in Joint Patent Rights and Joint Program Inventions,
and ▇▇▇▇▇▇'▇ interest in Third Party Technology.
"Act" shall mean the Federal Food, Drug and Cosmetic Act,
including all rules and regulations promulgated thereunder, as amended from time
to time.
"Additional Consideration" shall have the meaning set forth in
Sections 4.1 through 4.3.
"ADR" or "Alternative Dispute Resolution" shall have the
meaning set forth in Article 16.
"Affiliate" shall mean a Person that directly, or indirectly
through one or more intermediaries, Controls, is Controlled by, or is under
common Control with, the Person specified. With respect to Abbott, the term
"Affiliate" shall specifically exclude TAP Holdings Inc., TAP Finance Inc. and
TAP Pharmaceuticals Inc.
"ANDA" shall mean Abbreviated New Drug Application, as such
term is defined in the Act.
"Application for Regulatory Approval" shall mean a submission
made to the FDA (whether such application be in the form of an NDA, ANDA, sNDA
or other similar application) or the appropriate regulatory body equivalent to
the FDA in a country other than the United States in the Territory, seeking
approval to market and sell a Finished Product in either the United States or
such other country, respectively.
"Applicable Percentages" shall have the meanings variously
ascribed thereto in Sections 4.1, 4.2, and 4.3.
"Approval Date" shall mean the date on which the FDA or the
appropriate regulatory body equivalent to the FDA in a country in the Territory
other than the United
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States in the Territory grants all approvals that are required for sale of the
Finished Product for Commercial Use.
"Average Selling Price" shall mean the Net Sales of any given
Finished Product for a Sales Year (or for the Base Period, when used in
reference to a "Competitive Paclitaxel Product") divided by the total number of
units of that Finished Product shipped (excluding non-revenue units, such as
samples) and invoiced by Abbott, its Affiliates or distributors to End-User
Customers for that Sales Year (or Base Period, as the case may be).
[THIS PORTION HAS BEEN REDACTED.]
"Base Period" shall have the meaning set forth in the
definition of "Competitive Paclitaxel Product."
[THIS PORTION HAS BEEN REDACTED.]
"Bryn Mawr Agreement" shall mean that certain License
Agreement by and between NaPro and Bryn Mawr College dated November 3, 1993.
"Bulk Drug" shall mean Paclitaxel as specified in Exhibit C-1,
manufactured according to GMP and Bulk Drug Specifications.
"Bulk Drug Forecast" shall have the meaning set forth in
Section 8.8.2.
"Bulk Drug Specifications" shall mean the specifications for the
manufacture of the Bulk Drug set forth in Exhibit C-1, as such specifications
may be amended from time to time either: (a) by mutual written agreement of the
Parties; (b) in response to directives issued by a relevant governmental
authority in connection with an Application for Regulatory Approval or marketing
of the Finished Product in a particular jurisdiction; or (c) if applicable,
based upon the decision of the Development Committee to pursue the ▇▇▇▇▇▇
Formulated Product or the NaPro Oral Formulated Product in addition to or in
lieu of the NaPro Formulated Product.
"Business Day" shall mean any day of the week other than a
Saturday, Sunday or any other day on which commercial banks in the City of
Chicago are authorized to close.
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"Calendar Quarter" shall mean the three (3) month period
beginning on each January 1, April 1, July 1 and October 1 during the Term.
"Certificate of Analysis" shall have the meaning set forth in
Section 8.3.
"Claims" shall mean all claims, demands, actions, causes of
action and judgments of any kind; including, but not limited to, those arising
out of or related to personal injury or death or patent infringement.
"Commercial Use" shall mean use of a Finished Product on or
after the Approval Date in a particular country in the Territory in the Field
for purposes other than research and development.
"Competitive Paclitaxel Product" shall mean a product
containing Paclitaxel for use in the Territory in the Field, the commencement of
commercial sales of which results in either: [THIS PORTION HAS BEEN REDACTED.]
subsequent to the introduction of such product containing Paclitaxel when
compared to the Average Selling Price or Finished Product Sales Volume for the
period of twelve (12) months immediately preceding the commencement of
commercial sales of such product containing Paclitaxel (the first day of such
twelve (12) month period being the date which is twelve (12) months prior to the
commencement of commercial sales and the last day being the date of first
commercial sale, of the Competitive Paclitaxel Product) ("Base Period");
provided, however, that a Competitive Paclitaxel Product shall not include a
product containing Paclitaxel that is either: [THIS PORTION HAS BEEN REDACTED.]
In the event that commencement of commercial sale of a Competitive Paclitaxel
Product occurs prior to twelve (12) months following First Commercial Sale, the
Base Period shall mean the time period between First Commercial Sale and the
commencement of commercial sale of the Competitive Paclitaxel Product.
"Confidential Information" shall have the meaning set forth in
Article 17.
"Control" and the correlative terms "Controlling" and
"Controlled" shall mean, in the case of any Person, the possession of the power
to direct or cause the direction
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CONFIDENTIAL
of the management and policies of such Person through the ownership or control
of voting securities or contractual agreement giving right to such ownership or
control.
"Development Committee" shall mean a committee comprised of
three (3) representatives from each of ▇▇▇▇▇▇ and NaPro which shall plan,
oversee, manage and direct the activities of the Parties under the Development
Plan.
"Development Costs" shall mean the costs for research and
development activities including, but not limited to, formulation, stability
runs and testing, pre-clinical and manufacturing start-up (scale-up) activities,
development of packaging, clinical studies, regulatory filing and other studies
intended to expand the product label for the Finished Product (including, but
not limited to, phase IIIb and phase IV studies) as further described in Exhibit
D-2. "Development Costs" shall include, without limitation, costs for services
provided by ▇▇▇▇▇▇, NaPro or Third Parties, as provided in Section 6.2.3,
incurred by both NaPro and ▇▇▇▇▇▇ in connection with the research and
development activities set forth in the Development Plan.
"Development Plan" shall mean the plan and schedule of
research, development pre-clinical, clinical and regulatory activities in the
Field for the Territory to be performed by or on behalf of one or both of the
Parties and the desired and targeted outcomes of the activities with respect to
the Bulk Drug and Finished Product, all as set forth in Exhibit D-1.
"Development Program" shall mean the research, development and
other activities in the Field for the Territory for development, manufacturing
and Regulatory Approval of one or more Finished Products as described in the
Development Plan.
"Development Use" shall mean use of the Bulk Drug for
development purposes in a particular country in the Territory including, but not
limited to, formulation, stability testing and batch runs, and pre-clinical and
clinical studies.
"Dollars or $" shall mean United States dollars.
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"Drug Master File" or "DMF" shall mean a Drug Master File, as
such term is defined in the Act.
"Effective Date" shall have the meaning set forth on page 1 of
this Agreement.
"End-User Customer" shall mean a Third Party who purchases the
Finished Product for administration to a patient without any intermediary
between the Third Party and the patient; provided, however, that the patient is
the End-User Customer if ▇▇▇▇▇▇ or an Affiliate of ▇▇▇▇▇▇ provides the Finished
Product to the patient.
"Exclusive Option Period" shall have the meaning set forth in
Section 11.1 "Expanded Field Rights" shall have the meaning
set forth in Section 11.1.2. "FDA" shall mean the United
States Food and Drug Administration or any
successor body thereto.
"▇.▇. ▇▇▇▇▇▇▇▇" shall mean ▇. ▇. ▇▇▇▇▇▇▇▇ & Co., Ltd., with
which NaPro has entered into the Faulding Agreement.
"▇.▇. ▇▇▇▇▇▇▇▇ Formulation" shall mean the Paclitaxel product
formulated and marketed by ▇. ▇. ▇▇▇▇▇▇▇▇ pursuant to the Faulding Agreement.
"Faulding Agreement" shall mean that certain Amended and
Restated Master Agreement, as amended, by and between ▇.▇. ▇▇▇▇▇▇▇▇ and NaPro,
dated January 19, 1994 for the development, supply and licensing of products
containing Paclitaxel.
"F.O.B." shall mean such delivery term as defined in the
Uniform Commercial Code as adopted by the State of Illinois in effect as of the
Effective Date.
"Field" shall mean the use of Paclitaxel for human
antineoplastic uses as an intravenous, injectable or orally administered
product, excluding Pro-Drug.
"Finished Product" shall mean Paclitaxel formulated for use in
the Field, which shall mean NaPro Formulated Product, ▇▇▇▇▇▇ Formulated Product,
NaPro Oral Formulated Product, or any other formulation of Paclitaxel mutually
agreed upon in writing by the Parties.
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"Finished Product Sales Volume" shall mean the number of units
of a certain Finished Product sold in a Sales Year (or for the Base Period), and
invoiced by ▇▇▇▇▇▇, its Affiliates or distributors to End-User Customers for
that Sales Year (or Base Period, as the case may be).
"Finished Product Specifications" shall mean the
specifications for the manufacture of a Finished Product, which specifications
shall be established by mutual agreement of the Parties pursuant to and as a
result of the Development Plan, as such specifications may be amended from time
to time, either: (a) by mutual written agreement of the Parties; or (b) in
response to directives issued by a relevant governmental authority in connection
with the registration or marketing of the Finished Product in a particular
jurisdiction. As of the Effective Date, Preliminary Finished Product
Specifications are attached as Exhibit C-2, which Preliminary Finished Product
Specifications shall be replaced by the Finished Product Specifications, once
established pursuant to the Development Plan.
"First Commercial Sale" shall mean the date of the first sale
following Regulatory Approval of Finished Product in the United States by
▇▇▇▇▇▇, its Affiliates or distributors to a wholesaler or any End-User Customer,
excluding any sales or transfers of Finished Product: (a) by ▇▇▇▇▇▇ to its
Affiliates or distributors; (b) by ▇▇▇▇▇▇'▇ Affiliates to distributors; or (c)
to any Party or Third Party in connection with pre-clinical evaluation, clinical
trials or regulatory or safety testing.
"GMP" shall mean current good manufacturing practices as
required by the Act and any other regulations of any governmental authority in
any country whose approval is required to manufacture and sell the Product in
the Territory.
[THIS PORTION HAS BEEN REDACTED.]
"IND" shall mean an Investigational New Drug Application, as
defined in the Act, and any equivalent applications filed outside the United
States in the Territory in
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CONFIDENTIAL
relation to the Finished Product in order that the Finished Product may be used
for investigational clinical use with human subjects.
"Indemnifiable Losses" shall mean any and all Losses and any
and all Claims by any Third Party.
"Indemnifying Party" shall mean any Person required to provide
indemnification under this Agreement.
"Indemnitee" shall mean any Person entitled to seek
indemnification under this Agreement.
"Indemnity Payment" shall mean any amount of Indemnifiable
Losses required to be paid pursuant to this Agreement.
"Initial Forecast" shall have the meaning set forth in Section
8.8.1.
"IVAX Agreement" shall mean that certain Termination
Agreement between NaPro and ▇▇▇▇▇ ▇▇▇▇▇▇ Pharmaceuticals, Inc. (a division of
IVAX Corporation) dated as of March 20, 1998 (which terminated and replaced the
Original IVAX Agreement), a complete and unredacted copy of which has been
provided to ▇▇▇▇▇▇ prior to the Effective Date and a full and complete copy of
which has been attached hereto as Exhibit F-3.
"Joint Patent Rights" shall mean all patent applications and
patents in the Territory during the Term which claim Joint Program Inventions.
Joint Patent Rights shall include all provisional, divisions, continuations,
continuations-in-part, registrations, renewals, extensions, supplemental
protection certificates, re-examinations, and reissues of the above patent
applications and patents. The Joint Patent Rights shall be listed on Exhibit E-3
from time to time during the Term by the Parties in a manner that complies with
Section 18.6.
"Joint Program Invention" shall mean a Program Invention by
two or more individuals, at least one of which is an employee, agent or
subcontractor of each Party working on the Development Program at the time of
the invention.
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"Loan Agreement" shall have the meaning set forth in the
recitals to this Agreement.
"License" shall have the meaning set forth in Section 2.1.
"Loss" shall mean all loss, damage, cost and expense,
including without limitation the costs and expenses of any and all actions,
suits, proceedings, demands, assessments, judgments, settlements, and
compromises relating thereto; those arising out of or related to personal injury
or death or patent infringement, and including reasonable attorneys' fees and
out-of-pocket expenses in connection therewith.
"Marketing Committee" shall mean the committee comprised of
three (3) representatives from ▇▇▇▇▇▇ and two (2) representatives from NaPro,
which shall provide recommendations on ▇▇▇▇▇▇'▇ marketing activities for the
Finished Product.
"Material Manufacturing Change"shall mean a change proposed by
NaPro to either its manufacturing facilities or processes used in connection
with the manufacturing of Bulk Drug that could, if implemented as proposed,
either: (a) adversely affect the uninterrupted supply of Bulk Drug from NaPro to
▇▇▇▇▇▇; (b) affect ▇▇▇▇▇▇'▇ manufacturing of Finished Product; or (c) adversely
affect ▇▇▇▇▇▇'▇ ability to market and sell Finished Product.
[THIS PORTION HAS BEEN REDACTED]
"NDA" shall mean a New Drug Application, as such term is
defined in the Act.
"NaPro Formulated Product" shall mean Bulk Drug in Cremophor
EL, stabilized with citric acid, as specified in Exhibit A-2, as such
formulation may be amended by the Development Committee from time to time to
incorporate improvements or other modifications.
"NaPro Know-How" shall mean proprietary, nonpatented
information, data, trade secrets and technology (including, without limitation,
Pre-Clinical and Clinical Data) which are useful in the Development Program
and/or Commercial Use during the Term and
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which are owned or controlled by NaPro and NaPro's Affiliates (including joint
ownership rights with any Third Party), with the right to license, or licensed
to NaPro, with the right to sublicense, but excluding Joint Program Inventions.
"NaPro Oral Formulated Product" shall mean Paclitaxel
formulated as specified in Exhibit A-3, as amended by the Development Committee
from time to time to incorporate improvements or other modifications.
"NaPro Patents" shall mean all patents and patent applications
owned by NaPro or licensed to NaPro with the right to license in the Field in
the Territory listed on Exhibit E-1.
"NaPro Patent Rights" shall mean: (a) the NaPro Patents; and
(b) all patent applications and patents which are owned by NaPro and NaPro's
Affiliates (including joint ownership with any Third Party, but not including
Joint Patent Rights) with the right to license, or licensed by NaPro and NaPro's
Affiliates from one or more Third Parties with the right to sublicense in the
Field in the Territory. NaPro Patent Rights shall include all provisionals,
divisions, continuations, continuations-in-part, registrations, renewals,
extensions, supplemental protection certificates, re-examinations, and reissues
of the above patent applications and patents.
"NaPro Technology" shall mean NaPro Know-How, NaPro Patent
Rights, NaPro's interest in Joint Patent Rights and Joint Program Inventions,
and NaPro's and its Affiliates' interest in Third Party Technology.
"Net Sales" shall mean the gross Dollar amount of sales for
the Finished Product in the Territory by ▇▇▇▇▇▇, its Affiliates or distributors
to End-User Customers and invoiced by ▇▇▇▇▇▇, its Affiliates or distributors in
a Sales Year, less deductions for the following charges or expenses directly
attributable to sales of Finished Product:
(a) allowances, adjustments and refunds separately and actually credited
or paid, including credit or replacement product for rejected,
damaged, outdated, returned, withdrawn and recalled Finished Product;
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(b) trade discounts, cash discounts, rebates or other discounts and
wholesaler chargebacks actually credited, paid or granted, whether or
not such discounts or rebates or chargebacks are paid directly to the
End-User Customer;
(c) non-cash consideration offered as a discount or other product
incentive at fair market value, including, but not limited to free
Finished Product;
(d) transportation charges and Third Party handling charges (including,
but not limited to, insurance, postage and freight costs);
(e) sales taxes, value added, excise taxes and duties, and other similar
charges related to the sale or use of the Finished Product invoiced to
End-User Customers (but not including income taxes assessed against
the income derived from the sale of the Finished Product);
(f) management or administrative fees paid to End-User Customers or
purchasing groups by ▇▇▇▇▇▇;
(g) commissions paid to Third Party distributors or sales agents
(excluding commissions to individual sales representatives employed by
▇▇▇▇▇▇ or otherwise acting as an agent for ▇▇▇▇▇▇) in connection with
the sale of the Finished Product; and
(h) any statutory or contractual rebates paid to any governmental entity
including, but not limited to, rebates paid pursuant to the
Medicaid/Medicare rebate legislation; provided, however, Net Sales
shall not include sales to Affiliates or NaPro of samples and supplies
for clinical studies and studies of the Finished Product conducted in
connection with the Applications for Regulatory Approval and
maintenance thereof and customer evaluation pursuant to this
Agreement. No later than twenty-five (25) Business Days following the
end of every Calendar Quarter, ▇▇▇▇▇▇ shall provide summary
documentation supporting any of the deductions to Net Sales set forth
above during the previous Calendar Quarter. Any sales or transfers
among ▇▇▇▇▇▇ or ▇▇▇▇▇▇ Affiliates shall not be included in the
definition of Net Sales.
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In the event the invoice includes products other than the Finished
Product, then, if possible, such charges and expenses shall be allocated
directly to the product or products to which they relate, including the Finished
Product. In the event any charges or expenses cannot be attributed to a specific
product, including the Finished Product, then such charges and expenses shall be
allocated on a pro-rata basis, based on the Dollar value of such products,
including the Finished Product.
In the event that the Parties desire to package the Finished Product in
a kit with other products or components, the Parties shall negotiate financial
terms of such arrangement, including the manner in which Net Sales shall be
calculated in good faith.
For any Sales Year which is less than a full calendar year, Net Sales
in that Short Sales Year shall be annualized to arrive at a twelve (12) month
equivalent; any payments, however, due for such Short Sales Year shall be based
on actual Net Sales and not an annualized amount.
[THIS PORTION HAS BEEN REDACTED.]
"Original IVAX Agreement" means the Agreement between NaPro
and ▇▇▇▇▇ Norton Pharmaceuticals, Inc. dated as of June 7, 1993, as amended,
which was terminated by the IVAX Agreement, a complete and unredacted copy of
which has been provided to ▇▇▇▇▇▇ prior to the Effective Date.
"Other Territory Rights" shall have the meaning set forth in
Section 11.1.1.
[THIS PORTION HAS BEEN REDACTED.]
"Paclitaxel" shall mean the chemical entity of the formula set
forth in Exhibit B-1.
"Paclitaxel Data" shall mean all data and information
contained within any Application for Regulatory Approval, any Regulatory
Approval and all Pre-Clinical Data and Clinical Data. However, solely for
purposes of and as used in Article 11, the term "Paclitaxel Data" shall exclude
that data and information obtained prior to the Effective Date by either Party
or ▇. ▇. ▇▇▇▇▇▇▇▇.
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"Party" or "Parties" shall mean either ▇▇▇▇▇▇ or NaPro, or
both.
"Person" shall mean an individual, partnership, corporation,
joint venture, unincorporated association, or other entity, or a government or
department or agency thereof.
"Phase III Studies" shall mean a program of expanded,
controlled or uncontrolled clinical studies which are performed after
preliminary evidence suggests the drug is effective and are intended to gather
the additional information regarding the effectiveness and safety required to
evaluate the overall benefit-risk relationship of the drug and to provide an
adequate basis for NDA approval and/or other equivalent Applications for
Regulatory Approval.
[THIS PORTION HAS BEEN REDACTED.]
"Pre-Bulk Drug" shall mean a stable intermediate compound
which can be used in the manufacture of the Bulk Drug.
"Pre-Clinical and Clinical Data" shall mean all data in any
form (including, but not limited to case reports, raw data, etc.) regarding the
use of Paclitaxel in the Field (including, but not limited to in vitro and in
vivo studies) developed by, or acquired or obtained (with rights to use or
reference) by either of the Parties or other agents, including, but not limited
to, ▇.▇. ▇▇▇▇▇▇▇▇ or any of its agents, or which is developed during the course
of the Development Program.
"Preliminary Finished Product Specifications" shall mean those
specifications listed in Exhibit C-2 as of the Effective Date.
"Primary Standard Product" shall mean high purity Paclitaxel
in accordance with the Specifications set forth in Exhibit B-2, for use as a
reference standard.
[THIS PORTION HAS BEEN REDACTED.]
"Pro-Drug" shall mean any drug that changes structure such
that the active ingredient after administration into a patient is Paclitaxel as
evidenced by a mutually agreed upon test or standard.
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"Program Invention" shall mean all inventions, innovations,
ideas, or discoveries which arise during the Term and are used for the benefit
of the Development Program which are first conceived and reduced to practice
during the Development Program or in the period of four (4) months following the
conclusion of the Development Program by one or more individuals who are
employees, agents, contractors or subcontractors of one of the Parties.
"Protected Term" shall mean, solely with respect to a Stand-By
Manufacturing Source, a period of time equal to: (a) five (5) years after the
date of termination of this Agreement, if this Agreement is terminated before
the first anniversary of the Effective Date; (b) four (4) years after the date
of termination of this Agreement, if this Agreement is terminated on or after
the first, but before the second, anniversary of the Effective Date; (c) three
(3) years after the date of termination, if this Agreement is terminated on or
after the second, but before the third, anniversary of the Effective Date; (d)
two (2) years after the date of termination of this Agreement, if this Agreement
is terminated on or after the third, but before the fourth, anniversary of the
Effective Date; (e) one (1) year after the date of termination of this
Agreement, if this Agreement is terminated on or after the fourth, but before
the fifth, anniversary of the Effective Date; or (f) the earlier of seventeen
(17) years or the Term of this Agreement, if this Agreement is terminated on or
after the fifth anniversary of the Effective Date.
"Q4 Day Schedule" shall mean the method of drug administration
covered by U.S. Patent No. 5696153.
[THIS PORTION HAS BEEN REDACTED.]
[THIS PORTION HAS BEEN REDACTED.]
"Regulatory Approval" shall mean the approval by the
regulatory authority(s) required in a particular country in the Territory in
relation to the Finished Product in order that the Finished Product can be
marketed and sold for Commercial Use in that country pursuant to the terms of
this Agreement.
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"sNDA" shall mean a Supplemental New Drug Application, as
defined in the Act.
"Sales Year" shall mean: (a) in the case of the first Sales
Year, the period of time from the Approval Date through and including December
31 of the calendar year in which the Approval Date falls (a "Short Sales Year"),
and (b) in the case of each subsequent year, each twelve (12) month period
beginning on January 1 and ending on December 31 or the termination date of this
Agreement, during the Term. In order to accommodate accounting and sales
reporting practices of ▇▇▇▇▇▇'▇ International Division, the term "Sales Year"
may be modified to include a different twelve (12) month period solely with
respect to sales within the Territory outside the United States.
"Short Sales Year" shall have the meaning set forth in the
definition of "Sales Year" in this Section 1.1.
"Stand-by Manufacturing Source" shall mean either ▇▇▇▇▇▇ or a
Third Party chosen by ▇▇▇▇▇▇ to provide supplies of Bulk Drug, as described in
Section 8.7.
"Stock Purchase Agreement" shall have the meaning set forth in
the recitals to this Agreement.
"Term" shall have the meaning set forth in Section 15.1.
"Termination Fee" shall have the meaning set forth in Section
15.6.2.
"Territory" shall mean the following countries: the United
States (and its territories and possessions, Puerto Rico and the U.S. Virgin
Islands) and Canada.
"Third Party" shall mean a Person other than a Party or an
Affiliate of a Party.
"Third Party Claim" shall mean any Claim or Loss made or
brought or asserted by any Third Party.
"Third Party Technology" shall mean all patents, patent
applications, inventions, innovations, ideas and discoveries relating to
Finished Product in the Field:
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(a) to which a Party obtains rights from a Third Party; (b) specifically relate
to the Development Program; and (c) is obtained for Commercial Use.
"Unavailable Territories" shall have the meaning set forth in
Section 11.1.1.
"United States" shall mean the fifty (50) states and the
District of Columbia.
"Valid Claim" shall mean one (1) or more claims of an issued
and unexpired patent which neither has been held unenforceable, unpatentable or
invalid by a decision of a court or governmental agency or competent
jurisdiction, that is either unappealable or unappealed within the time allowed
for appeal, nor has been admitted by the holder of the patent to be invalid or
unenforceable through reissue, disclaimer, abandonment or otherwise.
1.2 References. References to Articles, Sections and Exhibits are
references to the Articles, Sections and Exhibits of this Agreement unless
otherwise stated.
ARTICLE 2
LICENSE GRANT
2.1 NaPro Grant. Subject to the provisions of this Section 2.1, NaPro
hereby grants to ▇▇▇▇▇▇ and its Affiliates an exclusive license under the NaPro
Technology to research and develop, make, have made, import, use, offer to sell
and sell Finished Product in the Field in the Territory ("License"). Other than:
(a) the license granted to IVAX pursuant to the terms of the IVAX Agreement; (b)
as required solely for NaPro's performance of its obligations under this
Agreement; and (c) as otherwise explicitly granted to NaPro herein, such License
shall be exclusive to ▇▇▇▇▇▇, even to the exclusion of NaPro, and NaPro shall
grant no further licenses to NaPro Technology to any Third Party in the Field in
the Territory. In the event that ▇▇▇▇▇▇ determines to manufacture the Finished
Product in a country outside the Territory (solely for marketing, sale and use
of Finished Product inside the Territory) NaPro shall grant to ▇▇▇▇▇▇ a license
to the NaPro Technology (for which NaPro has the right to grant such license)
solely for purposes of ▇▇▇▇▇▇'▇ manufacture of the Finished Product in such
country. Except as specifically provided for in
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Section 10.8, NaPro will not enter into any agreement with a Third Party that is
inconsistent with the provisions of this Section 2.1.
2.2 ▇▇▇▇▇▇ ▇▇▇▇▇. ▇▇▇▇▇▇ hereby grants to NaPro a non-exclusive license
(without the right to sublicense without ▇▇▇▇▇▇'▇ prior written consent) during
the Term to the ▇▇▇▇▇▇ Technology in the Field in the Territory solely to the
extent necessary for NaPro to perform NaPro's duties and responsibilities under
the terms of the Development Program; provided, however, that during the Term,
▇▇▇▇▇▇ will not grant any license to ▇▇▇▇▇▇ Technology for the manufacture, use,
sale, or marketing of Finished Product to any Third Party other than: (a) in
furtherance of the Development Program; or (b) in connection with the marketing
of Finished product pursuant to this Agreement.
2.3 Additional Licenses.
2.3.1 Related to NaPro. Except as provided in Section 2.3.2,
in the event that a license to any Third Party Technology is required in order
to: (a) manufacture Bulk Drug by NaPro and its Affiliates; (b) sell Bulk Drug by
NaPro and its Affiliates; (c) use Bulk Drug by NaPro and its Affiliates; (d)
manufacture NaPro Formulated Product by NaPro and its Affiliates; (e)
manufacture NaPro Formulated Product as disclosed in U.S. Patent No. 5,733,888
by or on behalf of ▇▇▇▇▇▇; (f) make, use and sell Primary Standard Product; or
(g) use (including, but not limited to, in connection with the Development
Program), market or sell the NaPro Formulated Product for use related to the Q4
Day Schedule (in each such case without infringement of such Third Party
Technology), then NaPro shall use reasonable commercial efforts to secure
promptly such license(s) to such Third Party Technology at NaPro's sole cost and
expense (including, but not limited to, any up-front license fees, milestones
and any royalties) and the cost and expense of such license shall not result in
a change in Additional Consideration. Notwithstanding the foregoing, NaPro shall
not be required to secure any license for the benefit of ▇▇▇▇▇▇ or a Stand-By
Manufacturing Source that NaPro itself would not be required to secure in order
to comply
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with this Section 2.3.1. For any license that NaPro itself is required to
secure, NaPro shall obtain the right to sublicense to ▇▇▇▇▇▇ and any Stand-By
Manufacturing Source.
2.3.2 Related to ▇▇▇▇▇▇ Formulated Product. Except as provided
in Section 2.3.1, in the event that a license to any Third Party Technology is
required in order to: (a) manufacture ▇▇▇▇▇▇ Formulated Product in the
Territory; or (b) market or sell the ▇▇▇▇▇▇ Formulated Product for use related
to the Q4 Day Schedule (without infringement of such Third Party Technology in
the Territory), then ▇▇▇▇▇▇ shall use reasonable commercial efforts to secure
promptly such license(s) to such Third Party Technology at ▇▇▇▇▇▇'▇ sole cost
and expense (including, but not limited to, any up-front license fees,
milestones and any royalties).
2.3.3 Other than Related to NaPro or ▇▇▇▇▇▇ Formulated
Product. In the event that a license to any Third Party Technology is required
in order to manufacture, use (including, but not limited to in connection with
the Development Program), market or sell any Finished Product other than the
NaPro Formulated Product or the ▇▇▇▇▇▇ Formulated Product, (in each such case,
without infringement of such Third Party Technology) then the Parties jointly
through the Development Committee shall determine the strategy to pursue and
obtain such license in the Territory. Neither Party shall commit to license such
Third Party Technology without the prior written agreement of the other Party.
Unless otherwise agreed to by the Parties in writing, ▇▇▇▇▇▇ and NaPro shall
each share equally in, and each shall be responsible for, fifty percent (50%) of
the total cost and expense to secure and maintain such license(s) including, but
not limited to, any up front license fees, milestones and royalties.
ARTICLE 3
MILESTONE PAYMENTS AND OTHER FUNDING
3.1 Milestone Payments. In addition to payments for Bulk Drug as set
forth in Article 8, ▇▇▇▇▇▇ shall make the following one time milestone payments
to NaPro, upon the following events:
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3.1.1 One Million Dollars ($1,000,000) on the Effective Date;
3.1.2 Except as otherwise may be provided in this Section 3.1,
[THIS
PORTION HAS BEEN REDACTED.];
3.1.3 Except as otherwise may be provided in this Section 3.1,
[THIS PORTION HAS BEEN REDACTED.];
3.1.4 Approval/First Commercial Sale Milestones. Regulatory
Approval and/or First Commercial Sale shall trigger milestone payments set forth
in either 3.1.4.1 or 3.1.4.2, but not both.
3.1.4.1 If the first indication for a Finished
Product receiving Regulatory Approval [THIS PORTION HAS BEEN REDACTED.] within
five (5) Business Days following the date of First Commercial Sale for a
Finished Product;
3.1.4.1.1 if the second indication for a
Finished Product receiving Regulatory Approval [THIS PORTION HAS BEEN REDACTED.]
within thirty (30) Business Days following the date of Regulatory Approval in
the United States of that second indication; and
3.1.4.1.2 except as provided in 3.1.8, no
additional milestones for any additional indications or Regulatory Approvals.
3.1.4.2 If the first indication for a Finished
Product receiving Regulatory Approval [THIS PORTION HAS BEEN REDACTED.] within
five (5) Business Days following the date of First Commercial Sale for a
Finished Product; then, if the second
indication for the Finished Product receiving Regulatory Approval is either:
3.1.4.2.1 [THIS PORTION HAS BEEN REDACTED.] the
Regulatory Approval of which triggered payment of the [THIS PORTION HAS BEEN
REDACTED.] milestone set forth in the first sentence of Section 3.1.4.2, [THIS
PORTION HAS BEEN REDACTED.] within thirty (30) Business Days following the date
of Regulatory Approval in the United States of that second indication and if the
third
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indication for the Finished Product receiving Regulatory Approval [THIS PORTION
HAS BEEN REDACTED.] within thirty (30) Business Days following the date of
Regulatory Approval in the United States of that third indication and, except as
provided in Section 3.1.8, no additional milestones for any additional
indications or Regulatory Approvals; or
3.1.4.2.2 [THIS PORTION HAS BEEN REDACTED.]
within thirty (30) Business Days following the date of Regulatory Approval in
the United States of that second indication and, except as provided in Section
3.1.8, no additional milestones for any additional indications or Regulatory
Approvals.
3.1.4.3 For avoidance of doubt, in no event shall an
amount in excess of [THIS PORTION HAS BEEN REDACTED.] be payable by ▇▇▇▇▇▇ to
NaPro pursuant to this Section 3.1.4.
3.1.5 [THIS PORTION HAS BEEN REDACTED.] within thirty (30)
Business Days after the end of the first Sales Year for which Net Sales of
Finished Product exceeds [THIS PORTION HAS BEEN REDACTED.]
3.1.6 [THIS PORTION HAS BEEN REDACTED.] within thirty (30)
Business Days after the end of the first Sales Year for which Net Sales of
Finished Product exceeds [THIS PORTION HAS BEEN REDACTED.]
3.1.7 [THIS PORTION HAS BEEN REDACTED.] within thirty (30)
Business Days after the end of the first Sales Year for which Net Sales of
Finished Product exceeds [THIS PORTION HAS BEEN REDACTED.]
3.1.8 The amounts set forth in this Section 3.1.8 within
thirty (30) Business Days after the first to occur of either: (a) 3.1.8.1 (Net
Sales threshold); or (b) 3.1.8.2 [THIS PORTION HAS BEEN REDACTED.] but not both,
as set forth in either 3.1.8.1 or 3.1.8.2, respectively:
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3.1.8.1 [THIS PORTION HAS BEEN REDACTED.] following
the end of the first Sales Year for which Net Sales of Finished Product exceeds
[THIS PORTION HAS BEEN REDACTED.] or
3.1.8.2 in the event that ▇▇▇▇▇▇ directs (such
direction shall be made solely by the President of the Hospital Products
Division the Development Committee in writing to pursue studies evaluating [THIS
PORTION HAS BEEN REDACTED.] an amount paid as follows:
3.1.8.2.1 [THIS PORTION HAS BEEN REDACTED.]
following the date of the First Commercial Sale [THIS PORTION HAS BEEN
REDACTED.]
3.1.8.2.2 [THIS PORTION HAS BEEN REDACTED.]
following the end of the first Sales Year which Net Sales of Finished Product
exceeds [THIS PORTION HAS BEEN REDACTED.]
3.1.8.3 For the avoidance of doubt, in the event
that the milestone in Section 3.1.8.1 is earned, then the milestone in Section
3.1.8.2 may not be earned by NaPro and shall not be paid by ▇▇▇▇▇▇.
All payments made pursuant to this Section 3.1 will be made upon written
verification from NaPro to ▇▇▇▇▇▇ as set forth in Section 18.7 that the
milestones have occurred. However, the payment referred to in Section 3.1.2
shall be made upon written verification from the Development Committee to ▇▇▇▇▇▇
that the requirements of the milestone set forth in Section 3.1.2 have been met.
The Development Committee shall either: (a) direct ▇▇▇▇▇▇ to make such payment;
or (b) advise ▇▇▇▇▇▇ and NaPro that such payment shall not be made, within ten
(10) Business Days following the Development Committee's receipt of all
information (including FDA approval of the Development Program) necessary to
determine to proceed with the Development Plan. The Development Committee must
authorize the payment if the Development Committee determines to proceed with
the Development
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Program. Any disagreement or dispute regarding the milestone payment pursuant
to Section 3.1.2 shall be resolved pursuant to the provisions set forth in
Section 6.4.
3.2 Single Payment Obligation. Each milestone payment set forth in
Section 3.1 shall not be made more than once with respect to the Finished
Product(s), regardless of the formulation(s) developed (e.g., the NaPro
Formulated Product, ▇▇▇▇▇▇ Formulated Product or NaPro Oral Formulated Product)
the number of Applications for Regulatory Approval in the Territory, clinical
trials or Regulatory Approvals that may be undertaken or granted with respect to
the Finished Product(s), including, without limitation, such activities with
multiple product forms or formulations of any Finished Product(s), combinations
with different and/or additional active or inactive ingredients, additional
indications, different delivery modalities and/or various dosage strengths. For
the avoidance of doubt, in the event that the ▇▇▇▇▇▇ Formulated Product or NaPro
Oral Formulated Product is pursued either in lieu of or in addition to the NaPro
Formulated Product, any milestone set forth in Section 3.1 shall be paid only
once during the Term and shall not be paid again.
3.3 Other Funding. ▇▇▇▇▇▇ has also agreed to provide funding for
NaPro's general working capital and operational needs under: (a) the Loan
Agreement pursuant to which ▇▇▇▇▇▇ shall lend NaPro up to Twenty Million Dollars
($20,000,000) with the borrowing base and terms for draws and security set forth
therein; and (b) the Stock Purchase Agreement pursuant to which ▇▇▇▇▇▇ shall
purchase up to two million (2,000,000) shares of Common Stock of NaPro as
provided in and pursuant to the terms of the Stock Purchase Agreement.
3.4 Use of Certain Milestone Payments. NaPro and ▇▇▇▇▇▇ agree that the
funds from milestone payments set forth in both Sections 3.1.1 and 3.1.2 shall
be used solely for purposes of the Development Program.
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ARTICLE 4
ADDITIONAL FINISHED PRODUCT PAYMENTS
4.1 Additional Consideration. In further consideration of the supply of
Bulk Drug to ▇▇▇▇▇▇ hereunder, ▇▇▇▇▇▇ shall pay to NaPro additional
consideration equal to a portion of ▇▇▇▇▇▇=s Net Sales in every Sales Year
during the Term as follows:
4.1.1 [THIS PORTION HAS BEEN REDACTED.] of Net Sales of all
Finished Product other than ▇▇▇▇▇▇ Formulated Product in an amount up to but not
including [THIS PORTION HAS BEEN REDACTED.] in a single Sales Year;
4.1.2 [THIS PORTION HAS BEEN REDACTED.] of Net Sales of all
Finished Product other than ▇▇▇▇▇▇ Formulated Product in an amount from [THIS
PORTION HAS BEEN REDACTED.] in a single Sales Year; and
4.1.3 [THIS PORTION HAS BEEN REDACTED.] of Net Sales of all
Finished Product other than ▇▇▇▇▇▇ Formulated Product in an amount of [THIS
PORTION HAS BEEN REDACTED.]
LESS (in all cases set forth in Section 4.1) the cost of Bulk
Drug for Commercial Use paid by ▇▇▇▇▇▇ pursuant to Section 8.2, 8.3 or Section
8.7 (the difference being the "Additional Consideration"). For clarification
purposes in calculating, the cost of Bulk Drug shall be subtracted after the
Applicable Percentage is applied to Net Sales.
Notwithstanding the foregoing, in the event there is a Competitive Paclitaxel
Product being marketed and/or sold in any country in the Territory, with respect
to that country in which the Competitive Paclitaxel Product is being marketed
and/or sold, each of the percentage amounts specified in Sections 4.1.1 through
4.1.3, inclusive ("Applicable Percentages") shall be reduced as set forth in
Section 4.3. In the event that the calculation of a stated percentage of Net
Sales less the cost of Bulk Drug results in a negative number, such that no
Additional Consideration would be due by ▇▇▇▇▇▇ to NaPro, the negative number
shall be carried forward to the next (one or more) Sales Years as a credit
against the next payments
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of Additional Consideration otherwise owed by ▇▇▇▇▇▇ to NaPro until such credit
has been fully applied or until there are no more Net Sales pursuant to this
Agreement.
4.2 ▇▇▇▇▇▇ Formulated Product in Lieu of or in Addition to NaPro
Formulated Product. Notwithstanding the provisions in Section 4.1, in the event
that the ▇▇▇▇▇▇ Formulated Product is marketed and sold in lieu of or in
addition to the NaPro Formulated Product, ▇▇▇▇▇▇ shall pay to NaPro Additional
Consideration equal to a portion of ▇▇▇▇▇▇'▇ Net Sales in every Sales Year
during the Term as follows:
4.2.1 [THIS PORTION HAS BEEN REDACTED.] of Net Sales of ▇▇▇▇▇▇
Formulated Product in an amount up to but not including [THIS PORTION HAS BEEN
REDACTED.] in a single Sales Year;
4.2.2 [THIS PORTION HAS BEEN REDACTED.] of Net Sales of ▇▇▇▇▇▇
Formulated Product in an amount from [THIS PORTION HAS BEEN REDACTED.] in a
single Sales Year;
4.2.3 [THIS PORTION HAS BEEN REDACTED.] of Net Sales of ▇▇▇▇▇▇
Formulated Product in an amount of [THIS PORTION HAS BEEN REDACTED.] or more in
a single Sales Year;
LESS (in all cases set forth in Section 4.2) the cost of Bulk
Drug for Commercial Use paid by ▇▇▇▇▇▇ pursuant to Section 8.2 or Section 8.7
(the difference being the "Additional Consideration"). For clarification
purposes in calculating, the cost of Bulk Drug shall be subtracted after the
Applicable Percentage is applied to Net Sales.
Notwithstanding the foregoing, in the event there is a Competitive Paclitaxel
Product being marketed and/or sold in any country in the Territory, with respect
to the country in which the Competitive Paclitaxel Product is being marketed
and/or sold, each of the percentage amounts specified in Sections 4.2.1 through
4.2.3, inclusive ("Applicable Percentages") shall be reduced as set forth in
Section 4.3. In the event that the calculation of a stated percentage of Net
Sales less the cost of Bulk Drug results in a negative number, such that no
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Additional Consideration would be due by ▇▇▇▇▇▇ to NaPro, the negative number
shall be carried forward to the next (one or more) Sales Years as a credit
against the next payments of Additional Consideration otherwise owed by ▇▇▇▇▇▇
to NaPro until such credit has been fully applied or until there are no Net
Sales pursuant to this Agreement.
4.3 Reduction in Applicable Percentages Due to Competitive Paclitaxel
Product. Notwithstanding Section 4.1 and Section 4.2, with respect to the sale
of a particular Finished Product in any country in the Territory in which a
Competitive Paclitaxel Product (of same or similar formulation or mode of
delivery) is also marketed and/or sold:
4.3.1 If the Average Selling Price or Finished Product Sales
Volume has been reduced by as much as [THIS PORTION HAS BEEN REDACTED.] lower
than it was for the Base Period but less than [THIS PORTION HAS BEEN REDACTED.]
lower than it was for the Base Period, then the Applicable Percentages shall be
as follows:
4.3.1.1 in the case of Section 4.1.1, [THIS PORTION
HAS BEEN REDACTED.]
4.3.1.2 in the case of Section 4.1.2, [THIS PORTION
HAS BEEN REDACTED.]
4.3.1.3 in the case of Section 4.1.3, [THIS PORTION
HAS BEEN REDACTED.]
4.3.1.4 in the case of Section 4.2.1, [THIS PORTION
HAS BEEN REDACTED.]
4.3.1.5 in the case of Section 4.2.2, [THIS PORTION
HAS BEEN REDACTED.]
4.3.1.6 in the case of Section 4.2.3, [THIS PORTION
HAS BEEN REDACTED.]
4.3.2 If the Average Selling Price or Finished Product Sales
Volume has been reduced by [THIS PORTION HAS BEEN REDACTED.] or more than it was
for the
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Base Period then ▇▇▇▇▇▇ and NaPro shall meet to renegotiate and revise in good
faith the rate applied to Net Sales to be used in the calculation of Additional
Consideration and the Applicable Percentages to share available profit on a
basis equivalent to that set forth in Sections 4.1 through 4.3 and profit
distribution as originally contemplated by the Parties in this Article 4.
In any Sales Year following the reduction of the Applicable Percentages
required by the foregoing clauses 4.3.1 and 4.3.2, and regardless of whether a
Competitive Paclitaxel Product is being sold in such following Sales Year, when
and if the Average Selling Price is less than [THIS PORTION HAS BEEN REDACTED.]
lower than it was for the Base Period with respect to which the Applicable
Percentage was reduced for not less than two (2) Consecutive Calendar Quarters,
then the Applicable Percentage shall be restored to the amounts specified in
Sections 4.1.1 through 4.1.3 and/or 4.2.1 through 4.2.3, as applicable. Any
increases and decreases in the Applicable Percentages required by this Section
4.3 shall take effect thirty (30) days after the Average Selling Price has
either increased or decreased and the Applicable Percentage adjusted
accordingly.
4.4 Adjustments to Additional Consideration. In addition to adjustments
due to a Competitive Paclitaxel Product, as set forth in Section 4.1 through
4.3, the amount of Additional Consideration payable with respect to each
Calendar Quarter as determined by Sections 4.1 through 4.3 shall be further
decreased (but not to less than zero) by any excess cost to manufacture Bulk
Drug by ▇▇▇▇▇▇'▇ Stand-by Manufacturing Source as set forth in Section 8.7.2.
Such reduction for excess cost to manufacture Bulk Drug shall be applied after
the reduction for the cost of Bulk Drug specified in Section 4.1 or 4.2.
4.5 Increase or Decrease in Additional Consideration for Additional
Licenses. In the event that a license to any Third Party Technology is required
as set forth in Section 2.3.1, 2.3.2 or 2.3.3 there shall be no change in
Additional Consideration.
4.6 Net Sales Reports and Payments. Commencing with the first
Calendar Quarter in which ▇▇▇▇▇▇ makes the First Commercial Sale in the
Territory, ▇▇▇▇▇▇ shall
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provide NaPro with a written report of Net Sales on a country-by-country basis:
(a) within forty-five (45) days after the last day of March, June, September and
December and the related computation of Additional Consideration accruing on Net
Sales in the United States during the three (3) preceding calendar months; and
(b) within seventy-five (75) days after the last day of February, May, August
and November and the related computation of Additional Consideration accruing on
Net Sales in the Territory in countries other than the United States during the
three (3) preceding calendar months. Concurrently with the submission of each
such written report, ▇▇▇▇▇▇ shall pay or cause to be paid to NaPro the total
amount shown to be due thereon. The periods set forth in (b) above shall be
modified to accommodate sales reporting practices of ▇▇▇▇▇▇'▇ International
Division.
4.7 Currency. ▇▇▇▇▇▇ shall make all payments to NaPro pursuant to this
Agreement in Dollars. Additional Consideration shall be first determined by
▇▇▇▇▇▇ in the currency of the country where the Net Sales were made and then
converted by ▇▇▇▇▇▇ directly to its equivalent in Dollars. The rates of exchange
for converting the currencies involved to Dollars as quoted by The Wall Street
Journal, Midwest Edition, as Foreign Exchange Rates based on the average of the
market rate at the last Business Day of the prior Calendar Quarter and the last
Business Day of the current Calendar Quarter in which the Additional
Consideration was earned shall be used by ▇▇▇▇▇▇ to determine such conversion
rates.
4.8 Sales Between ▇▇▇▇▇▇ and Affiliates. No Additional Consideration
shall be payable to NaPro on sales between ▇▇▇▇▇▇ and its Affiliates or on sales
between ▇▇▇▇▇▇ or its Affiliates and distributors.
4.9 Loan Agreement Offset. In the event of an Event of Default (as
defined in the Loan Agreement) by NaPro (that is not subject to a bone fide
dispute by NaPro as permitted pursuant to the Loan Agreement) on any payments
due to ▇▇▇▇▇▇ pursuant to the terms of the Loan Agreement by a period of time in
excess of thirty (30) days, in addition to any and all rights ▇▇▇▇▇▇ may have
under the Loan Agreement ▇▇▇▇▇▇ may, at ▇▇▇▇▇▇'▇
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option, offset any payment due NaPro for milestone or Additional Consideration
against payments due by NaPro to ▇▇▇▇▇▇ pursuant to the Loan Agreement
(including principal, interest and any applicable penalties). Any withholding or
offset of payments for milestones or Additional Consideration by ▇▇▇▇▇▇ pursuant
to this Section 4.9 shall not constitute a breach, Material Breach or any other
default by ▇▇▇▇▇▇ under this Agreement or waiver of NaPro's obligations under
the Stock Purchase Agreement or the Loan Agreement.
ARTICLE 5
PAYMENT, RECORD KEEPING AND AUDIT RIGHTS
5.1 Method of Payment. All payments by either Party to the other Party
under this Agreement (including, but not limited to, ▇▇▇▇▇▇'▇ milestone payments
under Article 3, research and development payments under Article 6, and
Additional Consideration payments under Article 4) shall (except as expressly
permitted by this Agreement) be made without deduction of any withholdings for
any purposes other than taxes, if applicable, to the extent required by law. In
the event of any tax withholding or other withholding permitted pursuant to this
Agreement, the paying Party shall provide the receiving Party with the best
available evidence of the taxes or other amount withheld as well as any relevant
certificates, documents or other evidence required for national, state or local
tax credit and reporting purposes. ▇▇▇▇▇▇ may offset payments for milestones or
Additional Consideration owing to NaPro against any amounts owed by NaPro to
▇▇▇▇▇▇ which are past due except for those amounts disputed in good faith by
NaPro. Payments hereunder shall not be creditable against any other amounts
payable by the other Party under this Agreement, except as otherwise expressly
stated in this Agreement. Payments shall be made by either wire transfer or
electronic funds transfer to an account designated by the receiving Party in
advance and in writing.
5.2 Record Keeping and Audit Rights. Each Party shall keep or
cause to be kept accurate records relating to Net Sales, Additional
Consideration, Development Program
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expenses and any other costs and expenses subject to payment or reimbursement by
either Party to the other Party in sufficient detail to enable the amounts
payable hereunder to be determined.
5.2.1 Audit of Net Sales. For the purposes of verifying Net
Sales and other payments due to NaPro under this Agreement, ▇▇▇▇▇▇ shall on an
annual basis prior to May 31 of each Sales Year provide its report of payments
of Additional Consideration due by ▇▇▇▇▇▇ to NaPro to the auditors for NaPro
including a report on sales of Finished Product by Finished Product in each of
the countries within the Territory as well as information on all applicable
selling prices in each of the countries within the Territory, and other records
pertinent to the loss, corruption, contamination, or destruction of Finished
Product. NaPro, at its expense (except as provided below), shall have the right
to hire an independent accountant, upon reasonable notice and during normal
business hours but not more than once per Sales Year, to review ▇▇▇▇▇▇'▇ books
and records relating to Net Sales or other payments of Additional Consideration
or milestones made pursuant to this Agreement. If there is an underpayment
disclosed during such audit, ▇▇▇▇▇▇ shall promptly pay NaPro the amount of such
underpayment. If there is an overpayment disclosed during such audit, NaPro
shall promptly reimburse ▇▇▇▇▇▇ for the amount of such overpayment. Should any
underpayment equaling or exceeding five percent (5%) of the Additional
Consideration payments due over any twelve (12) month period be detected, then
the cost of such audit shall be borne by ▇▇▇▇▇▇ and any such underpayment shall
be promptly paid.
5.2.2 Audit of Development Costs. Each Party shall have the
right, not more than once per Sales Year, to hire an independent accountant and
that accountant may, upon reasonable notice and during normal business hours,
review the other Party's books and records relating to Development Costs
pursuant to this Agreement. If there is an underpayment disclosed during such
audit, the Party underpaying shall promptly pay the other Party the amount of
such underpayment. If there is an overpayment disclosed during such audit, the
Party that overpaid shall be promptly reimbursed by the other Party for the
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amount of such overpayment. Should any underpayment or overcharge equaling or
exceeding five percent (5%) of the payments due over any twelve (12) month
period be detected, then the cost of such audit shall be borne by the Party
owing monies and any such underpayment or overcharge shall be promptly
rectified.
ARTICLE 6
RESEARCH AND DEVELOPMENT PROGRAM
6.1 Research and Development. Each Party shall use its commercially
reasonable efforts to develop one or more Finished Product(s) and obtain
Regulatory Approval for one or more Finished Product(s) for sale and Commercial
Use within the Territory in the Field for the indications described in the
Development Plan or other indications agreed upon by the Development Committee.
6.1.1 Responsibilities. The general responsibilities of the
Parties (which may be modified by the Development Committee to achieve the most
efficient execution of the Development Program) are set forth in this Section
6.1.1.
6.1.1.1 NaPro Responsibilities. In general, NaPro
shall be responsible for the following: (a) submission and maintenance of the
Bulk Drug DMF and Bulk Drug supply for the Development Program; (b) procuring,
as necessary, clinical supplies of finished Paclitaxel product in the form of
NaPro Formulated Product, or other formulation as determined by the Development
Committee, suitable for use in clinical studies in order to obtain Regulatory
Approval; and (c) providing clinical supplies of Finished Product using NaPro's
formulation until ▇▇▇▇▇▇ is approved as a manufacturer and/or receives
Regulatory Approval, as necessary.
6.1.1.2 ▇▇▇▇▇▇ Responsibilities. In general, ▇▇▇▇▇▇
shall be responsible for the following: (a) finishing the Bulk Drug into a
finished dosage form for patient administration as a Finished Product for
Commercial Use; (b) reviewing, preparing, with input from NaPro, and filing the
Applications for Regulatory Approval as holder of the NDA or equivalent; and (e)
maintaining the Application for Regulatory Approval.
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6.1.1.3 Joint Responsibilities. NaPro and ▇▇▇▇▇▇
shall jointly be responsible for the following: (a) conducting clinical research
and clinical studies and trials for the Finished Product(s) in accordance with
the Development Plan under supervision of the Development Committee; (b)
preparing clinical and pre-clinical documentation necessary for submitting
Application(s) for Regulatory Approval in accordance with the Development Plan
under supervision of the Development Committee, including but not limited to
pre-clinical and toxicology data; (c) administering the Development Program
subject to the supervision and direction of the Development Committee.
6.1.2 Development Plan. The Parties shall pursue the
activities and the development and Regulatory Approval of Finished Product(s) in
accordance with the Development Plan, which more specifically sets forth the
responsibilities of each Party. The Parties understand and agree that many
deviations from or changes to the Development Plan will result from: (a) study
outcomes; (b) information received from the FDA or applicable regulatory
authorities in countries other than the United States within the Territory from
time to time; or (c) action by the Development Committee. Development Plan
activities are targeted to expedite Regulatory Approval from the FDA or
applicable regulatory authority within the United States and shall not in any
way be compromised or delayed to facilitate registrations outside the United
States. Any non-material deviation from or change to the Development Plan shall
require the prior written agreement of both Parties through action at the
Development Committee level. Any material deviation from or change to the
Development Plan shall require the prior written agreement of either the
President of the Hospital Products Division or Divisional Vice President of
Pharmaceutical and Clinical Development of the Hospital Products Division of
▇▇▇▇▇▇ and the CEO of NaPro. A "material deviation" shall include, but not be
limited to, a deviation causing delay in the development schedule for more than
three (3) months or increases in Development Costs by more than One Hundred
Thousand Dollars ($100,000.00) in any Calendar Quarter.
6.1.3 Formulation. [THIS PORTION HAS BEEN REDACTED.]
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6.2 Development Plan Funding. The research and development activities
set forth in the Development Plan shall be funded by the Parties as set forth in
this Section 6.2. All costs of the Development Program (whether such costs be
incurred by ▇▇▇▇▇▇ or NaPro) shall be aggregated and shall be paid to either
▇▇▇▇▇▇ or NaPro (or a Third Party) as appropriate. The ▇▇▇▇▇▇ full time
equivalent (FTE) rate schedule and the NaPro full time equivalent (FTE) rate
schedule shall be attached as Exhibit D-2 which rates for both ▇▇▇▇▇▇ and NaPro
shall be commensurate with the type of work performed. The full time equivalent
(FTE) rates shall be subject to adjustment based on general inflationary
factors.
6.2.1 Up to Twenty Million Dollars. NaPro shall fund the first
Twenty Million Dollars ($20,000,000) of Development Costs associated with
performance of the activities set forth in the Development Plan including, but
not limited to, clinical and pre- clinical activities in support of the
Application for Regulatory Approval to commercialize a Finished Product. The
Twenty Million Dollars ($20,000,000) shall be applied to research and
development activities set forth in the Development Plan, and Development Costs
associated with such research and development activities, beginning on and
following the Effective Date.
6.2.2 Above Twenty Million Dollars. In the event that funds in
excess of the Twenty Million Dollars ($20,000,000) set forth in Section 6.2.1
are necessary to continue and complete the Development Plan in order to obtain
Regulatory Approval and commercialize a Finished Product, the Development
Committee shall meet to discuss the further activities necessary and the budget
to complete the Development Plan activities to commercialize a Finished Product.
The Development Committee shall establish the budget for funding of the
Development Plan activities beyond Twenty Million Dollars ($20,000,000), and
▇▇▇▇▇▇ and NaPro shall share equally (fifty percent (50%) by each Party) the
Development Costs identified pursuant to this Section 6.2.2. In the event that
NaPro determines in good faith that it is unable to fund further Development
Costs due to severe financial distress or bankruptcy, NaPro may request that
▇▇▇▇▇▇ pay NaPro's fifty percent
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(50%) share of the Development Costs as set forth in this Section 6.2.2. ▇▇▇▇▇▇
may, in ▇▇▇▇▇▇'▇ sole discretion, fund all or a portion of NaPro's fifty percent
(50%) share of Development Costs as set forth in this Section 6.2.2. For any of
NaPro's share of the Development Costs that ▇▇▇▇▇▇ assumes, ▇▇▇▇▇▇ shall receive
a credit against Additional Consideration payments due by ▇▇▇▇▇▇ to NaPro as set
forth in Article 4 in an amount equal to the total which ▇▇▇▇▇▇ provides for
NaPro's share of the Development Costs, plus interest at the prime rate of
interest as published by the Wall Street Journal, Midwest Edition, on the date
of the payment of the Development Costs by ▇▇▇▇▇▇, accrued over and until such
time as the amount paid with such interest shall have been fully credited
against Additional Consideration payments. Notwithstanding the foregoing, in the
event that Development Plan expenses pursuant to this Section 6.2.2 shall exceed
[THIS PORTION HAS BEEN REDACTED.] for which each ▇▇▇▇▇▇ and NaPro shall be
responsible for [THIS PORTION HAS BEEN REDACTED.] prior to incurring any further
Development Plan expenses, the Development Committee shall obtain the prior
written approval of the President of the ▇▇▇▇▇▇ Hospital Products Division and
the Chief Executive Officer of NaPro.
6.2.3 Performance. All activities to be performed pursuant to
the Development Plan which are indicated to be "▇▇▇▇▇▇ responsibilities" or
"NaPro responsibilities" or "joint responsibilities" under the Development Plan
shall be performed by the respective Party on a FTE for the benefit of the
Development Program. The invoices shall be paid: (a) by NaPro out of the funds
identified and provided pursuant to Sections 6.2.1 and 6.2.2; or (b) by ▇▇▇▇▇▇
out of the funds identified and provided pursuant to Sections 6.2.2, within
thirty (30) days following receipt of the invoice. Furthermore, each Party, in
its discretion, may request the other Party to provide services or activities
for the requesting Party which the requesting Party's responsibility in the
Development Plan. Subject to mutual written agreement of the Parties, the
requested Party shall provide such services at a FTE rate set forth for the
requested Party in the Development Plan. In such
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case, the Party providing the service shall record services performed and shall
provide an itemized accounting and invoice the Development Program for such
services. Either Party may also engage Third Parties, approved by the
Development Committee, to perform services or activities pursuant to the
Development Plan at negotiated rates approved by the Development Committee.
Development Costs and permitted charges are set forth on Exhibit D-2.
6.3 Development Costs Quarterly Budgets and Reports. The Development
Committee shall establish quarterly budgets for Development Costs on a Calendar
Quarter basis not less than thirty (30) days prior to the first day of each
Calendar Quarter. Within thirty (30) days following the last day of each
Calendar Quarter, each Party shall provide to the other Party a written report,
including an itemized accounting and invoice, of all Development Costs incurred
by it during the Calendar Quarter. The Development Committee shall have the
right to review the report submitted by either Party and verify the purpose and
amounts of the Development Costs. Approved invoices shall be paid net thirty
(30) days in accordance with Section 5.1.
6.4 Development Committee. The Development Committee shall develop and
review a program for compliance with the requirements to obtain Regulatory
Approval and commercialize Finished Products in countries in the Territory and
monitor such program. The Development Committee will meet no less frequently
than once each Calendar Quarter to review clinical studies underway and to
discuss and consider clinical studies covering, among other things, additional
cancer indications and/or improvements to formulation and performance of
Finished Product. Each Party may appoint substitutes for its committee members
and each Party shall be permitted to send additional observers to committee
meetings to discuss other strategic issues, to include, but not be limited to,
regulatory, intellectual property, licensing and litigation matters. The site
for such Development Committee meetings shall alternate between the NaPro and
▇▇▇▇▇▇ facilities, or be held at such other locations as may be mutually agreed.
Travel by the three (3) Development
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Committee members (or their designees) from each of ▇▇▇▇▇▇ and NaPro shall be
considered a reimbursable expense of the Development Program pursuant to
Sections 6.2.1 or 6.2.2, as applicable. Travel by attendees of the Development
Committee meetings other than the three (3) Development Committee members (or
their designees) from each Party shall not be considered a reimbursable expense
of the Development Program pursuant to Sections 6.2.1 or 6.2.2, as applicable.
Decisions required or permitted under this Agreement to be made by the
Development Committee, shall be with each member of the Development Committee
having one (1) vote and the affirmative vote of a simple majority of the members
being required to constitute action by the Development Committee. In the event
of an absence of a member, another member representing the same Party as the
absent member may cast a vote on behalf of the absent member. In the event that
the members of the Development Committee cannot agree on a matter, the matter
shall be submitted: (a) first, to the Divisional Vice President of
Pharmaceutical and Clinical Development of the ▇▇▇▇▇▇ Laboratories Hospital
Products Division or in the case of matters specifically applicable to Canada,
his or her equivalent in ▇▇▇▇▇▇ International and the Chief Executive Officer of
NaPro for resolution and if no resolution is reached, then (b) second, to the
President of the ▇▇▇▇▇▇ Hospital Products Division or his or her designee or in
the case of matters specifically applicable to Canada, his or her equivalent in
▇▇▇▇▇▇ International and the CEO of NaPro, or his or her designee, for
determination. If a determination is not made through either (a) or (b) above,
the matter shall be resolved in accordance with the ADR procedures set forth in
Exhibit G. In the event that one Party desires to pursue additional
indication(s) (other than as described in the Development Plan) for the Finished
Product and the Development Committee cannot make a determination by majority
vote to pursue such additional indication, then the Party proposing the new
indication may pursue and fund the research and development required for such
new indication at its own expense; provided, however, with respect to such new
indication, the data and right of reference for any Application for Regulatory
Approval for any uses outside the Field or outside the Territory
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(either within or outside the Field) that arise during the research and
development for such new indication(s), shall be exclusively that Party's and
the provisions and rights set forth in Article 11 for that indication or data
shall not apply. Notwithstanding anything to the contrary, in the event that
NaPro funds and pursues the additional indication (other than as described in
the Development Plan) in the Territory in the Field on its own, ▇▇▇▇▇▇ shall
have the right to market and sell the Finished Product for such indication and
for Finished Product manufactured and sold by ▇▇▇▇▇▇, ▇▇▇▇▇▇ shall pay NaPro
milestones earned pursuant to Article 3, if applicable, and Additional
Consideration pursuant to Article 4.
6.5 Finished Product Packaging. All packaging matters (including label,
outer packaging, package insert and any other aspects of Finished Product
packaging for commercial supply) for Finished Products shall be determined by
▇▇▇▇▇▇. ▇▇▇▇▇▇ shall use its reasonable commercial efforts to obtain approval
from the FDA or other regulatory authorities (in countries within the Territory
outside the United States) for NaPro's name to appear on the package insert as
the manufacturer of the Bulk Drug. In the event that the FDA or other regulatory
authority does not grant approval for the identification of NaPro as the
manufacturer of the Bulk Drug on the Finished Product package insert, ▇▇▇▇▇▇
shall have no obligation to identify NaPro as the manufacturer of the Bulk Drug
or pursue the matter further. In the event that the FDA or other regulatory
authority approves the identification of NaPro as the manufacturer of Bulk Drug,
NaPro shall grant to ▇▇▇▇▇▇ the royalty-free right to use and print NaPro's name
and if desired by ▇▇▇▇▇▇, corporate logo and trademark on the package insert. In
the event that ▇▇▇▇▇▇ has need to purchase Bulk Drug from a Stand-By
Manufacturing Source, and ▇▇▇▇▇▇ is required to change the package insert or
such other packaging which identifies NaPro as the Bulk Drug manufacturer, NaPro
shall pay all costs incurred by ▇▇▇▇▇▇ to change the package insert for Finished
Product containing Bulk Drug manufactured by the Stand-By Manufacturing Source.
All costs (excluding marketing related costs) incurred by ▇▇▇▇▇▇ in the
development of packaging and labeling materials for
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the Finished Product shall be Development Costs reimbursable out of Development
Plan Funds.
6.6 Pro-Drug Development. In the event that NaPro elects to pursue the
development of an identified NaPro owned or in-licensed Pro-Drug ("NaPro
Pro-Drug"), NaPro shall provide to ▇▇▇▇▇▇ (under an appropriate confidentiality
agreement) a development plan and substantive data, including proof of principle
(which may or may not include human data), for that NaPro Pro-Drug in order to
allow ▇▇▇▇▇▇ to adequately evaluate the opportunity to collaborate with NaPro on
the NaPro Pro-Drug and include the NaPro Pro-Drug in the Development Program.
NaPro shall allow ▇▇▇▇▇▇ not less than ninety (90) Business Days to evaluate the
opportunity. During such ninety (90) day period, NaPro shall not discuss the
NaPro Pro-Drug opportunity with any Third Party. If ▇▇▇▇▇▇ is interested in
working with NaPro on the NaPro Pro-Drug and including the NaPro Pro-Drug in the
Development Program, ▇▇▇▇▇▇ shall so notify NaPro in a writing executed by the
President of ▇▇▇▇▇▇'▇ Hospital Products Division and the NaPro Pro-Drug shall be
included within Development Program and the definition of "Finished Product"
under this Agreement shall include any Pro-Drug, whether developed by ▇▇▇▇▇▇ or
NaPro. ▇▇▇▇▇▇ shall not be obligated to pay any milestone payments (except
payments that would be due under Sections 3.1.2 through 3.1.8 which have not
previously been paid as described in Section 3.2) or other fees in connection
with the NaPro Pro-Drug, other than through sharing expenses for the research
and development in connection with the development and Regulatory Approval of
the NaPro Pro-Drug as a Finished Product as contemplated by Section 6.2. In the
event that ▇▇▇▇▇▇ does not elect to include NaPro Pro-Drug in the Development
Program and within the definition of "Finished Product", NaPro may develop the
NaPro Pro-Drug on its own and ▇▇▇▇▇▇ shall not have rights to that certain NaPro
Pro- Drug Product in the Territory.
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ARTICLE 7
CLINICAL AND REGULATORY MATTERS
7.1 Pre-Clinical/Clinical Data. NaPro shall supply to ▇▇▇▇▇▇ all
Pre-Clinical and Clinical Data and any other data and information necessary (as
determined by the Development Committee) for ▇▇▇▇▇▇ to compile, prepare and file
all necessary Applications for Regulatory Approval to obtain Regulatory Approval
and to commercialize the Finished Products in the Territory. The rights to use
all such Pre-Clinical and Clinical Data provided by NaPro in the Territory in
the Field shall be jointly owned by NaPro and ▇▇▇▇▇▇.
7.2 Regulatory Submission and Maintenance. ▇▇▇▇▇▇ shall be responsible
with input from NaPro, for compiling, preparing and filing all necessary
Application(s) for Regulatory Approval for the Finished Product(s) in the
Territory. NaPro shall, upon request of ▇▇▇▇▇▇, use its best efforts to provide
additional information to complete the Application(s) for Regulatory Approval.
The filing fees for the Application(s) for Regulatory Approval and fees for
maintaining the Regulatory Approval shall be treated as a Development Cost. The
IND(s) shall be transferred to ▇▇▇▇▇▇ in sufficient time to support all
Application(s) for Regulatory Approval in accordance with the Development Plan.
▇▇▇▇▇▇ shall be the sponsor and holder/owner of each Application for Regulatory
Approval except as provided in Sections 6.1.2.
7.3 Bulk Drug DMF. NaPro shall have sole ownership of its DMF related
to the manufacture and control of Bulk Drug submitted in support of any
Application for Regulatory Approval. ▇▇▇▇▇▇ shall have the right to reference
the data and information in the DMF for the Bulk Drug for purposes of filing an
Application(s) for Regulatory Approval in the Territory in the Field and
qualifying a Stand-By Manufacturing Source for the Bulk Drug, as described in
Section 8.7. The DMF for the Stand-By Manufacturing Source shall be owned by
▇▇▇▇▇▇ or the Third Party with which ▇▇▇▇▇▇ contracts as the Stand-By
Manufacturing Source.
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7.4 Regulatory Approval Ownership. ▇▇▇▇▇▇ shall own the Regulatory
Approvals. NaPro shall not have the right to access the Regulatory Approval
without ▇▇▇▇▇▇'▇ prior written consent, except as provided in Section 6.4 and
Article 11.
ARTICLE 8
BULK DRUG MANUFACTURE, PURCHASE AND SUPPLY
8.1 Requirements and Exclusivity
8.1.1 Purchase and Sale. Pursuant to the terms and subject to
the conditions of this Agreement: (a) NaPro and NaPro's Affiliates shall sell
exclusively to ▇▇▇▇▇▇ and ▇▇▇▇▇▇'▇ Affiliates [THIS PORTION HAS BEEN REDACTED.]
Paclitaxel for manufacture and sale of Finished Product in the Territory in the
Field; (b) ▇▇▇▇▇▇ and ▇▇▇▇▇▇'▇ Affiliates shall purchase exclusively from NaPro
and NaPro's Affiliates (except as permitted by Section 8.7), Paclitaxel for
manufacture and sale of Finished Product in the Territory in the Field; (c)
NaPro and NaPro's Affiliates shall sell and deliver all of ▇▇▇▇▇▇'▇ and ▇▇▇▇▇▇'▇
Affiliates requirements of Paclitaxel for manufacture or formulation into
Finished Product for use in the Territory in the Field; and (d) ▇▇▇▇▇▇ and
▇▇▇▇▇▇'▇ Affiliates shall purchase and take delivery of all their requirements
of Paclitaxel exclusively from NaPro and NaPro's Affiliates for ▇▇▇▇▇▇'▇ and
▇▇▇▇▇▇'▇ Affiliates' sale of Finished Product for use in the Territory in the
Field.
8.1.2 Limitations on NaPro Sale. Neither NaPro nor any of its
Affiliates shall manufacture, market, sell or distribute Paclitaxel in the
Territory for use in the Field, except to ▇▇▇▇▇▇ as provided in this Agreement.
Except as required by the IVAX Agreement as described in Section 8.1.1, NaPro
shall not sell or otherwise transfer Paclitaxel to any Third Party, either
inside or outside the Territory for use, manufacturing, sale or distribution by
such Third Party in any form, whether in bulk or any form of Finished Product,
in the Territory in the Field.
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8.1.3 NaPro Enforcement of Limitations. NaPro shall: (a)
prohibit its customers outside the Territory with whom NaPro has supply
agreements for Bulk Drug as permitted pursuant to Section 8.1.2 or other product
containing Paclitaxel from selling any product containing Paclitaxel in the
Territory in the Field, and (b) take all reasonable steps necessary to prevent
any product containing Paclitaxel sold in the Territory for use outside the
Field from being used in the Field. In order for ▇▇▇▇▇▇ to monitor such
activities and compliance with the terms of this Section 8.1, NaPro shall notify
▇▇▇▇▇▇ in writing of the name of such Third Parties to which NaPro supplies
Paclitaxel, along with the use of the product and the field of use or other
rights with respect to Paclitaxel within thirty (30) days following the
effectiveness of a license or supply arrangement. If such arrangement exists
prior to the Effective Date, such licensees or customers are listed in Exhibit
F-1. The obligations of NaPro pursuant to clause (b) of this Section 8.1.3 may
require NaPro to take action to compel its customers or distributors to comply
with their contractual obligations to NaPro by terminating supplies of
Paclitaxel, if necessary, and/or altering packaging or formulation to discourage
or, if necessary, to preclude use of Paclitaxel in the Field in the Territory.
8.1.4 Limitations on ▇▇▇▇▇▇ Resale. Neither ▇▇▇▇▇▇ nor any of
its Affiliates shall resell any Bulk Drug sold to it by NaPro, except to any
party which ▇▇▇▇▇▇ enters into an agreement with to perform one or more aspects
of the manufacturing, finishing or packaging processes for the Finished Product.
Neither ▇▇▇▇▇▇ nor any of its Affiliates shall sell any Finished Product for
sale or resale outside the Territory or for use outside the Field.
8.2 Pricing. The purchase price that ▇▇▇▇▇▇ shall pay for Bulk Drug
supplied by NaPro to ▇▇▇▇▇▇ shall be as set forth in this Section 8.2.
8.2.1 Development Use. The F.O.B. Boulder (or other NaPro
facility approved by ▇▇▇▇▇▇) price that NaPro shall charge the Development
Program for Bulk Drug, for Development Use shall be [THIS PORTION HAS BEEN
REDACTED.] of Bulk
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Drug. Notwithstanding the foregoing, so as to not financially overburden the
Development Program or unnecessarily deplete Development Program funds, in the
event that NaPro's cost for Bulk Drug is reduced below [THIS PORTION HAS BEEN
REDACTED.] , then the cost of Bulk Drug for Development Use shall be reduced to
NaPro's cost, but in no event to less than [THIS PORTION HAS BEEN REDACTED.] per
gram.
8.2.2 Primary Standard Product. The F.O.B. Boulder (or other
NaPro facility approved by ▇▇▇▇▇▇) price that: (a) NaPro shall charge ▇▇▇▇▇▇
(or, as appropriate, the Development Program); and (b) ▇▇▇▇▇▇ (or, as
appropriate, the Development Program) shall pay NaPro for Primary Standard
Product shall be [THIS PORTION HAS BEEN REDACTED.] of Primary Standard Product .
8.2.3 Commercial Use. The F.O.B. Boulder (or other NaPro
Facility approved by ▇▇▇▇▇▇) price that NaPro shall charge and ▇▇▇▇▇▇ shall pay
for Bulk Drug, for Commercial Use shall be [THIS PORTION HAS BEEN REDACTED.] of
Bulk Drug.
8.2.4 Restoration or Replacement of Bulk Drug. In the event
that Bulk Drug that met Bulk Drug Specifications at the time of delivery to
▇▇▇▇▇▇ has become corrupted, contaminated or damaged, at ▇▇▇▇▇▇'▇ request, NaPro
shall provide to ▇▇▇▇▇▇ a written estimate of the cost to restore the Bulk Drug
to Bulk Drug Specifications (subject to all applicable regulatory requirements
including the ability to make such restoration pursuant to the Bulk Drug DMF).
▇▇▇▇▇▇ shall have the option to direct NaPro to use its reasonable best efforts
to restore the corrupted or contaminated Bulk Drug to meet Bulk Drug
Specifications (subject to all applicable regulatory requirements), or replace
the corrupted, contaminated or damaged Bulk Drug to meet Bulk Drug
Specifications at ▇▇▇▇▇▇'▇ expense within ninety (90) days of ▇▇▇▇▇▇'▇ notice to
NaPro that the Bulk Drug has become corrupted, contaminated or damaged. The
F.O.B. Boulder (or other NaPro facility) price of any replacement Bulk Drug
which is to be replaced at ▇▇▇▇▇▇'▇ expense shall be [THIS PORTION HAS BEEN
REDACTED.].
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8.3 Shipping, Invoice and Payment. NaPro shall deliver the Bulk Drug to
▇▇▇▇▇▇'▇ designated facility F.O.B. NaPro's manufacturing facility. NaPro shall
cooperate with ▇▇▇▇▇▇ to ship the Bulk Drug from NaPro's facility to ▇▇▇▇▇▇'▇
designated facility at ▇▇▇▇▇▇'▇ expense and pursuant to instructions provided by
▇▇▇▇▇▇. Risk of loss to the Bulk Drug shall pass upon delivery to ▇▇▇▇▇▇'▇
common carrier at NaPro's facility. NaPro shall invoice ▇▇▇▇▇▇ for Bulk Drug
upon delivery of Bulk Drug to ▇▇▇▇▇▇ in the amount specified in Section 8.2.
Payment for Bulk Drug shall be due within forty-five (45) days from the date the
Bulk Drug passes ▇▇▇▇▇▇ internal Bulk Drug quality inspection, as set forth in
Section 8.4, but in no event shall such payment be due prior to the date which
is sixty (60) days following the date on which ▇▇▇▇▇▇ received delivery of the
Bulk Drug. Payments shall be made by either wire transfer or electronic funds
transfer of immediately available funds to an account specified by NaPro in
advance and in writing. NaPro shall include with each delivery of Bulk Drug to
▇▇▇▇▇▇ a Certificate of Analysis in a mutually agreed upon format in which NaPro
certifies that the Bulk Drug in such delivery has been analyzed and meets the
applicable Bulk Drug Specifications, GMP and other manufacturing requirements
(each, a "Certificate of Analysis"). Such Certificate of Analysis shall also set
forth the batch numbers of the Bulk Drug, the date of manufacture, the date on
which the shelf-life for such Bulk Drug expires and the Bulk Drug batch-to-batch
test data.
8.4 Quality and Inspection of Bulk Drug
8.4.1 Bulk Drug Warranties. NaPro warrants and represents that
each shipment of Bulk Drug shall: (a) meet the Bulk Drug Specifications and
comply with the applicable Certificate of Analysis at the time of delivery to
▇▇▇▇▇▇ and until the end of the specified shelf life for the Bulk Drug, unless
corrupted, damaged, mishandled, improperly stored or destroyed by ▇▇▇▇▇▇ or a
Third Party; (b) be manufactured in accordance with GMP and any other applicable
laws and regulations in the Territory; (c) be manufactured in accordance with
the approved NDA, the Bulk Drug DMF and any applicable Regulatory Approvals; (d)
be transferred to ▇▇▇▇▇▇ free and clear of any security interests, liens and
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encumbrances; and (e) be manufactured to the best of NaPro's knowledge, so as to
not infringe any Third Party Technology. EXCEPT AS EXPRESSLY STATED IN THIS
AGREEMENT, NAPRO MAKES NO OTHER REPRESENTATION, EXPRESS OR IMPLIED, SOLELY WITH
REGARD TO THE BULK DRUG, INCLUDING ANY REPRESENTATIONS OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. EXCEPT AS PROVIDED
ELSEWHERE IN THIS ARTICLE 8 OR IN ARTICLE 13 OR SECTION 15.3.2.2 OR SECTION
15.6.4, THE REMEDY PROVIDED IN THIS ARTICLE 8 REPRESENTS ▇▇▇▇▇▇'▇ EXCLUSIVE
REMEDY FOR ANY DEFECT IN THE BULK DRUG. IN NO EVENT SHALL NAPRO BE LIABLE TO
▇▇▇▇▇▇ FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF ANY DEFECT IN THE
BULK DRUG.
8.4.2 Bulk Drug Inspection. ▇▇▇▇▇▇ shall inspect and analyze
the first ten (10) manufacturing lots (and any lots thereafter as ▇▇▇▇▇▇ may
specify) of Bulk Drug supplied by NaPro within fifteen (15) days following
receipt thereof, unless certain tests require longer periods of time, in which
case ▇▇▇▇▇▇ shall endeavor to inspect the Bulk Drug as soon as practicable. If,
after inspection of such lots, ▇▇▇▇▇▇ reasonably believes the Bulk Drug in such
lot does not comply with NaPro's representations and warranties therefor under
Section 8.4.1, ▇▇▇▇▇▇ shall notify NaPro in writing as soon as practicable, but
no later than sixty (60) days, after ▇▇▇▇▇▇'▇ receipt of any such goods. If
▇▇▇▇▇▇ does not so notify NaPro, ▇▇▇▇▇▇ shall be deemed to have waived all
claims against NaPro for said quantity delivered, except for any infringement of
Third Party Technology or latent defects that could not have been reasonably
discovered upon such inspection. Any claims by ▇▇▇▇▇▇ regarding Bulk Drug
delivered shall specify in reasonable detail the nature and basis for the claim
and cite relevant NaPro lot numbers or other information to enable specific
identification of the Bulk Drug involved. ▇▇▇▇▇▇ shall not be required to accept
Bulk Drug having a shelf-life of less than [THIS PORTION HAS BEEN REDACTED.] of
the original shelf-life following
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the date of shipment from NaPro, unless mutually agreed upon by the Parties in
writing prior to shipment.
8.4.3 NaPro Response to Bulk Drug Inspection. NaPro shall
respond to all claims made by ▇▇▇▇▇▇ under Section 8.4.2 on a case-by-case
basis. NaPro shall have the right to first inspect any Bulk Drug involved before
being required to take any action with respect thereto. NaPro shall review any
such claim of non-conformity made by ▇▇▇▇▇▇ as soon as practicable, but no later
than ten (10) Business Days following receipt. NaPro shall conduct any required
testing of the goods involved as soon as practicable, but no later than
forty-five (45) days, after receipt thereof or earlier if the FDA or any
corresponding regulatory authority in the Territory requires an earlier response
from NaPro. If such review and testing by NaPro (or testing by an independent
laboratory as set forth below) confirms that a claimed quantity does not meet
the Bulk Drug Specifications, then, at NaPro's expense, ▇▇▇▇▇▇ shall dispose of
or return such quantity of Bulk Drug involved as NaPro shall direct in writing
and NaPro shall replace such quantity with Bulk Drug conforming to the Bulk Drug
Specifications as soon as practicable, but no later than sixty (60) days, after
testing is completed. If the Parties fail to agree as to whether a delivered
quantity meets the Bulk Drug Specifications, then the Parties shall have the
batch in dispute analyzed by a mutually agreed upon independent testing
laboratory. Such laboratory's determination shall be deemed final as to any
dispute over the Bulk Drug Specifications and the non-prevailing Party shall
bear the costs of such independent laboratory's testing.
8.4.4 Bulk Drug Storage. Each Party shall properly store Bulk
Drug under conditions that will not adversely affect the quality or normal shelf
life thereof.
8.5 NaPro Manufacturing Facility
8.5.1 Inspection by ▇▇▇▇▇▇. ▇▇▇▇▇▇ reserves the right to
conduct such inspections of NaPro's Bulk Drug manufacturing facilities and
related books and records as ▇▇▇▇▇▇ deems reasonably necessary to ensure
compliance with GMP at any time during normal business hours upon reasonable
prior written notice (stating the purpose and scope of
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the inspection requested). Such inspections shall not occur more frequently than
once per Calendar Quarter absent ▇▇▇▇▇▇'▇ good faith belief that it has a
compelling reason to do so. The books and records subject to inspection include,
but are not limited to, batch records, manufacturing procedures and guidelines,
and all quality assurance/quality control documentation.
8.5.2 Inspection by Regulatory Authorities. NaPro shall allow
representatives of the FDA and any other regulatory agency or authority with
jurisdiction over the manufacture, marketing and/or distribution of the Finished
Product to tour and inspect all facilities utilized by NaPro in the manufacture,
testing, packaging, storage, and shipment of Bulk Drug sold under this
Agreement. NaPro shall cooperate with such representatives in every reasonable
manner. NaPro shall notify ▇▇▇▇▇▇ immediately whenever NaPro receives notice of
a pending inspection of its manufacturing facilities by any regulatory agency.
NaPro shall also provide ▇▇▇▇▇▇ with a copy of any FDA Form 483 notices of
adverse findings, regulatory letters or similar notifications it receives from
any other governmental authority setting forth adverse findings or
non-compliance with any applicable laws, regulations or standards relating to
the items supplied by it hereunder within five (5) Business Days of its own
receipt thereof. NaPro shall also provide ▇▇▇▇▇▇ with a copy of NaPro's proposed
written response to such governmental authority before submission and shall
consider in good faith any changes thereto which ▇▇▇▇▇▇ may reasonably request.
8.5.3 Inspection of ▇. ▇. ▇▇▇▇▇▇▇▇ Facility. In the event that
product manufactured or finished by ▇.▇. ▇▇▇▇▇▇▇▇ is used in the Development
Program, NaPro shall cause ▇.▇. ▇▇▇▇▇▇▇▇ to allow ▇▇▇▇▇▇ (or if ▇.▇. ▇▇▇▇▇▇▇▇
will not allow ▇▇▇▇▇▇, then to allow ▇▇▇▇▇▇ to appoint a consultant) as an
authorized representative of NaPro to inspect the ▇.▇. ▇▇▇▇▇▇▇▇ manufacturing
facility in the same manner as ▇▇▇▇▇▇ may inspect the NaPro facility as set
forth in this Section 8.5.
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8.5.4 Required Manufacturing Changes. In the event that: (a)
the FDA (or other appropriate regulatory authority for countries outside of the
United States) or other federal, state or local governmental agency requires
changes to NaPro's manufacturing facility or manufacturing process of the Bulk
Drug; or (b) changes are required to NaPro's manufacturing facility or
manufacturing process of the Bulk Drug to comply with applicable laws and
regulations (together with the matters referred to in clause (a), the "Required
Changes"), NaPro shall promptly notify ▇▇▇▇▇▇ of any such Required Changes. In
consultation with ▇▇▇▇▇▇ and with ▇▇▇▇▇▇'▇ prior written approval, which
approval shall not be unreasonably withheld or delayed, NaPro shall make all
such Required Changes by the date specified by the FDA or other regulatory
authority and, if no such date is specified, no later than sixty (60) days after
the date of notice of the Required Change. NaPro shall consult with ▇▇▇▇▇▇ in
connection with Required Changes to coordinate changes with: (i) the other
aspects of the Development Program; (ii) the Regulatory Approval; and (iii) the
finishing of the Finished Product or marketing of the Finished Product so as to
avoid any business interruptions. In the event that NaPro fails to make the
Required Changes by the time specified in this Section 8.5.4, ▇▇▇▇▇▇ shall have
the right to acquire Bulk Drug from a Stand-By Manufacturing Source. All costs
of any Required Changes (including, but not limited to FDA and other regulatory
authority approval costs described in Section 8.5.6 and manufacturing and
stability runs) shall be the sole responsibility of NaPro.
8.5.5 Other Manufacturing Changes
8.5.5.1 NaPro shall not make any Material
Manufacturing Change to any of its manufacturing facilities or processes used in
connection with the manufacturing of Bulk Drug without the prior written consent
of ▇▇▇▇▇▇ as provided in this Section 8.5.5. In the event NaPro wishes to make a
Material Manufacturing Change, NaPro shall notify ▇▇▇▇▇▇ in writing. Within
fifteen (15) Business Days following ▇▇▇▇▇▇'▇ receipt of NaPro's notice of
proposed Material Manufacturing Change, ▇▇▇▇▇▇ shall notify NaPro either: (a)
that it consents to the Material Change; or (b) that it cannot consent to the
Material
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Manufacturing Change because it poses operational, quality, regulatory or other
difficulties for ▇▇▇▇▇▇. If ▇▇▇▇▇▇ responds to NaPro that the Material Change
poses operational, quality, regulatory or other difficulties, then ▇▇▇▇▇▇ and
NaPro shall consult in good faith to resolve any such difficulties within thirty
(30) days after ▇▇▇▇▇▇ has so responded to NaPro. Notwithstanding the foregoing,
NaPro may propose a Material Manufacturing Change not more than one (1) time in
any twelve (12) month period.
8.5.5.2 In the event that the Development Committee
desires to make changes to the manufacturing process for the Bulk Drug in order
to promote quality control, quality assurance, and/or achieve greater efficiency
or cost savings in the manufacture of the Bulk Drug as it relates either to the
Bulk Drug itself or to the manufacture of the Bulk Drug into Finished Product
("Other Manufacturing Changes"), then NaPro and ▇▇▇▇▇▇ shall review such Other
Manufacturing Changes in good faith and work together to determine the benefits
and implementation of such changes.
8.5.5.3. NaPro shall be responsible for obtaining
any and all approvals from the FDA or applicable regulatory authority required
for either Material Manufacturing Changes or Other Manufacturing Changes. NaPro
shall be solely responsible for the cost of any Material Manufacturing Changes
contemplated by Section 8.5.5.1 including, but not limited to, manufacturing
runs and stability runs for Finished Product that may be effected. ▇▇▇▇▇▇ and
NaPro shall negotiate and mutually agree upon the allocation of responsibility
for the costs for any Other Manufacturing Change contemplated by Section
8.5.5.2; provided, however, (a) if the Other Manufacturing Change primarily
benefits NaPro by achieving greater efficiency or cost savings for Bulk Drug,
NaPro shall be responsible for the cost, and (b) if the Other Manufacturing
Change primarily benefits ▇▇▇▇▇▇ by achieving greater efficiency or cost savings
for Finished Product, ▇▇▇▇▇▇ shall be responsible for the cost.
8.5.6 Changes Requiring Regulatory Approval. NaPro shall
not make any changes to NaPro's manufacturing facility or processes for the
manufacture of Bulk Drug
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which require prior approval from the FDA (or other appropriate regulatory
authority for countries outside of the United States) without receiving such
prior approval from the FDA or such regulatory authority and from ▇▇▇▇▇▇, which
approval shall not be unreasonably withheld or delayed by ▇▇▇▇▇▇. NaPro shall
consult with ▇▇▇▇▇▇ in connection with these manufacturing changes to coordinate
changes with the other aspects of the Development Program. NaPro shall implement
any changes in NaPro's manufacturing operations for Bulk Drug that are required
to comply with applicable laws and regulations as soon as practicable or as
directed by the FDA or other Regulatory Authority. In the event that a Required
Manufacturing Change requires approval by the FDA or other applicable regulatory
authority, the responsibility for the costs of obtaining the Regulatory Approval
and the costs for the manufacturing and stability batches are set forth in
Section 8.5.4. In the event that an Other Manufacturing Change requires
Regulatory Approval by the FDA or other applicable regulatory authority, the
responsibility for the costs of obtaining the Regulatory Approval and the costs
for the manufacturing and stability batches shall be governed by Section
8.5.5.3.
8.6 ▇▇▇▇▇▇'▇ and the Stand-By Manufacturing Source's Facilities
8.6.1 Inspection by Regulatory Authorities. NaPro reserves
the right to conduct such inspections of ▇▇▇▇▇▇'▇ final finishing manufacturing
facility and the Stand-By Manufacturing Source's manufacturing facility and
related books and records as NaPro deems reasonably necessary, to ensure
compliance with GMP, at any time during normal business hours upon reasonable
prior written notice (stating the purpose and scope of the inspection
requested). Such inspections shall not occur more frequently than once per
Calendar Quarter absent NaPro's good faith belief that it has a compelling
reason to do so. The books and records subject to inspection include, but are
not limited to, batch records, manufacturing procedures and guidelines, and all
quality assurance/quality control documentation.
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8.6.2 Inspection by NaPro. ▇▇▇▇▇▇ shall, and shall cause the
Stand-By Manufacturing Source to, allow representatives of the FDA and any other
regulatory agency or authority with jurisdiction over the manufacture, marketing
and distribution of Bulk Drug or Finished Product to tour and inspect all
facilities utilized by ▇▇▇▇▇▇ or the Stand-By Manufacture Source in the
manufacture, testing, packaging, storage, and shipment of Bulk Drug or Finished
Product. ▇▇▇▇▇▇ shall, and shall cause the Stand-By Manufacturing source to,
cooperate with such representatives in every reasonable manner. ▇▇▇▇▇▇ shall,
and shall cause the Stand-By Manufacturing Source to, notify NaPro immediately
whenever ▇▇▇▇▇▇ or the Stand-By Manufacturing Source receives notice of a
pending inspection of its manufacturing facilities by any regulatory agency.
▇▇▇▇▇▇ shall also provide NaPro with a copy of any FDA Form 483 notices of
adverse findings, regulatory letters or similar notifications it or the Stand-By
Manufacturing Source receives from any other governmental authority setting
forth adverse findings or non-compliance with any applicable laws, regulations
or standards relating to the items supplied by it hereunder within ten (10)
Business Days of its own receipt thereof. ▇▇▇▇▇▇ shall also provide NaPro with a
copy of ▇▇▇▇▇▇'▇ or the Stand-By Manufacturing Source's proposed written
response to such governmental authority before submission and shall consider in
good faith any changes thereto that NaPro may reasonably request.
8.6.3 ▇▇▇▇▇▇ Required Manufacturing Changes. In the event
that: (a) the FDA (or other appropriate regulatory authority for countries
outside of the United States) or other federal, state or local governmental
agency requires changes to ▇▇▇▇▇▇'▇ manufacturing facility or manufacturing
process of Finished Product; or (b) changes are required to ▇▇▇▇▇▇'▇
manufacturing facility or manufacturing process of Finished Product to comply
with applicable laws and regulations (together with the matters referred to in
clause (a), the "▇▇▇▇▇▇ Required Changes"), ▇▇▇▇▇▇ shall promptly notify NaPro
of any such ▇▇▇▇▇▇ Required Changes. ▇▇▇▇▇▇ shall make all such ▇▇▇▇▇▇ Required
Changes by the date specified by the FDA or other regulatory authority. ▇▇▇▇▇▇
shall consult with NaPro in
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connection with ▇▇▇▇▇▇ Required Changes to coordinate changes with: (i) the
other aspects of the Development Program; (ii) the Regulatory Approval; and
(iii) the finishing of the Finished Product or marketing of the Finished Product
so as to avoid any business interruptions. All costs of any ▇▇▇▇▇▇ Required
Changes (including, but not limited to FDA and other regulatory authority
approval costs and manufacturing and stability runs) shall be the sole
responsibility of ▇▇▇▇▇▇.
8.6.4 ▇▇▇▇▇▇ Manufacturing Changes. ▇▇▇▇▇▇ shall not make any
changes to ▇▇▇▇▇▇'▇ manufacturing facility or processes for the manufacture of
Finished Product which require prior approval from the FDA (or other appropriate
regulatory authority for countries outside of the United States) without
receiving such prior approval from the FDA or such regulatory authority. ▇▇▇▇▇▇
shall consult with NaPro in connection with these manufacturing changes to
coordinate changes with the other aspects of the Development Program. ▇▇▇▇▇▇
shall implement at its sole expense any changes in ▇▇▇▇▇▇'▇ manufacturing
operations for Finished Product that are required to comply with applicable laws
and regulations as soon as practicable or as directed by the FDA or other
Regulatory Authority.
8.7 ▇▇▇▇▇▇ Stand-By Manufacture of Bulk Drug
8.7.1 Qualification of Stand-By Manufacturing Facility. At any
time following the Effective Date and at ▇▇▇▇▇▇'▇ expense, ▇▇▇▇▇▇ shall have the
right to qualify an ▇▇▇▇▇▇ facility or a facility owned or operated by one or
more Third Parties as a Stand-By Manufacturing Source for Bulk Drug. Any Third
Party used by ▇▇▇▇▇▇ to manufacture Bulk Drug pursuant to this Section 8.7 shall
be subject to prior written approval by NaPro, such approval not to be
unreasonably withheld or delayed. If, and only if, NaPro provides to the
Stand-by Manufacturing Source: (a) analytical methods and procedures for
analyzing Bulk Drug; or (b) other NaPro Confidential Information (other than
Bulk Drug Specifications) in support of the filing with the FDA or other
applicable regulatory authority, then the Stand-By Manufacturing Source shall be
required to enter in to a contract with ▇▇▇▇▇▇ that requires such Third Party to
supply Paclitaxel exclusively to ▇▇▇▇▇▇ and to
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no other Person in the Territory for a period of time not less than the
Protected Term. Upon ▇▇▇▇▇▇'▇ reasonable request, NaPro shall assist ▇▇▇▇▇▇ in
the qualification process by reviewing and testing samples of Bulk Drug provided
by the Stand-By Manufacturing Source, at the expense of ▇▇▇▇▇▇. NaPro shall
cooperate with and assist ▇▇▇▇▇▇ in qualifying the Stand-By Manufacturing Source
to manufacture Bulk Drug by providing such Third Party with Bulk Drug
Specifications, analytical methods and procedures for analyzing Bulk Drug,
support for the filing of any necessary data with the FDA or other applicable
regulatory authority to pre-qualify the Stand-By Manufacturing Source. Such Bulk
Drug Specifications, analytical methods and other NaPro Technology provided to
the Third Party shall be treated as Confidential Information, and such Third
Party shall be required to enter into a confidentiality agreement with NaPro and
▇▇▇▇▇▇ as a condition to NaPro providing such information to the Third Party.
NaPro shall grant to the Stand-By Manufacturing Source a non-exclusive license
to issued NaPro Patents, required for the Stand-By Manufacturing Source's
manufacture of Bulk Drug for ▇▇▇▇▇▇ pursuant to this Agreement, other than those
NaPro Patents relating to semi-synthetic Paclitaxel manufacture, and such
license shall be limited solely to the Stand-By Manufacturing Source's
manufacture of Bulk Drug for ▇▇▇▇▇▇ pursuant to this Agreement. NaPro may, but
shall not be required to, provide such Third Party with any other information
that discloses NaPro Technology.
8.7.2 Stand-By Manufacturing Election. In the event that, at
any time during the Term (including, but not limited to, a force majeure event
as described in Section 18.1, a violation of any law, rule, regulation or court
order, including, but not limited to, an injunction or other limitation related
to the manufacture, use or sale of Bulk Drug), NaPro is unable to: (a) provide
Bulk Drug that meets the Bulk Drug Specifications; or (b) deliver to ▇▇▇▇▇▇ such
quantities of Bulk Drug within thirty (30) days from the delivery date set forth
in ▇▇▇▇▇▇'▇ purchase order for any reason, then ▇▇▇▇▇▇ may, at its option, elect
to have the qualified Stand-By Manufacturing Source manufacture Bulk Drug for
use in the Finished Product in the Territory. NaPro shall promptly notify ▇▇▇▇▇▇
in writing of any
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circumstances rendering it unable to provide Bulk Drug and the estimated
duration of such circumstances. ▇▇▇▇▇▇ shall discontinue its use of a Stand-By
Manufacturing Source only as and when provided in Section 8.7.3. In the event
that ▇▇▇▇▇▇'▇ actual cost to secure Bulk Drug from a Stand-By Manufacturing
Source exceeds the price set forth in Sections 8.2.1 or 8.2.3, either ▇▇▇▇▇▇ or
NaPro shall be responsible for the excess cost as follows:
8.7.2.1 if ▇▇▇▇▇▇ used a Stand-By Manufacturing
Source because NaPro failed to supply Bulk Drug which meets the Bulk Drug
Specifications and any other requirements set forth in this Agreement, such
excess cost for the Bulk Drug from the Stand-By Manufacturing Source shall be
credited against the Additional Consideration; or
8.7.2.2 if ▇▇▇▇▇▇ used a Stand-By Manufacturing
Source because NaPro was not able to supply ▇▇▇▇▇▇'▇ requirements of Bulk Drug
and such requirements did not exceed [THIS PORTION HAS BEEN REDACTED.] of Bulk
Drug Forecast, such excess cost, for amounts not to exceed [THIS PORTION HAS
BEEN REDACTED.] of the Bulk Drug Forecast, for the Bulk Drug from the Stand-By
Manufacturing Source shall be credited against Additional Consideration;
8.7.2.3 if ▇▇▇▇▇▇ used a Stand-By Manufacturing
Source because NaPro was not able to supply ▇▇▇▇▇▇'▇ requirements of Bulk Drug
and such requirements exceeded [THIS PORTION HAS BEEN REDACTED.] of Bulk Drug
Forecast, such excess cost for the Bulk Drug from the Stand-By Manufacturing
Source shall be at ▇▇▇▇▇▇'▇ expense and shall not be credited against Additional
Consideration; or
8.7.2.4 if ▇▇▇▇▇▇ used a Stand-By Manufacturing
Source because NaPro was unable to supply to ▇▇▇▇▇▇ Bulk Drug which in the
manufacture or sale thereof did not infringe any Third Party Technology, such
excess cost for Bulk Drug from the Stand-By Manufacturing Source shall be
credited against the Additional Consideration.
8.7.3 Transition of Manufacturing Back to NaPro. ▇▇▇▇▇▇ may
purchase Bulk Drug from the Stand-By Manufacturing Source until such time as
NaPro demonstrates to ▇▇▇▇▇▇'▇ reasonable satisfaction that it is able to
manufacture ▇▇▇▇▇▇'▇ required quantities
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(subject to the terms of Section 8.8.1) without interruption as provided in the
next sentence. NaPro shall provide to ▇▇▇▇▇▇ written notice indicating NaPro's
proposal for transition of manufacturing from the Stand-By Manufacturing Source
back to NaPro. Subject to ▇▇▇▇▇▇'▇ commitments to the Stand-By Manufacturing
Source, ▇▇▇▇▇▇ shall transition its supply of Bulk Drug back to NaPro, as soon
as practicable, taking into consideration ▇▇▇▇▇▇'▇ contractual arrangements with
the Stand-By Manufacturing Source, but in any event not later than [THIS PORTION
HAS BEEN REDACTED.] after NaPro has made the demonstration to ▇▇▇▇▇▇ set forth
in this Section 8.7.3.
8.7.4 Continued Supply Obligations. Notwithstanding ▇▇▇▇▇▇'▇
identification, qualification, and/or use of a Stand-by Manufacturing Source,
NaPro shall not be relieved of its supply obligations under Article 8 and ▇▇▇▇▇▇
shall not be relieved of its obligation to pay NaPro the Additional
Consideration (subject to the crediting of Bulk Drug costs against Additional
Consideration as permitted by this Section 8.7 and Section 4). In the event that
▇▇▇▇▇▇ utilizes a Stand-By Manufacturing Source due to a NaPro supply constraint
(as opposed to NaPro's failure to provide Bulk Drug that meets the Bulk Drug
Specifications, or a complete inability of NaPro to supply), then ▇▇▇▇▇▇ shall
purchase from NaPro, pursuant to the terms of this Agreement, Bulk Drug which
NaPro is capable of supplying.
8.8 Forecasts and Orders of Bulk Drug for Commercial Use
8.8.1 Pre-Launch Forecast and Quarterly Forecasts. [THIS
PORTION HAS BEEN REDACTED.] At NaPro's option, [THIS PORTION HAS BEEN REDACTED.]
8.8.2 Updated Forecasts. [THIS PORTION HAS BEEN REDACTED.]
8.8.3 NaPro Supply Constraints. In the event that NaPro
believes that it may be unable to supply all of ▇▇▇▇▇▇'▇ requirements for Bulk
Drug, then NaPro shall promptly provide ▇▇▇▇▇▇ with notice and NaPro and ▇▇▇▇▇▇
shall promptly meet to discuss ▇▇▇▇▇▇'▇ Bulk Drug requirements and NaPro's
supply capabilities, including the possibility
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of utilizing a Stand-By Manufacturing Source. At such meeting, NaPro shall
provide to ▇▇▇▇▇▇ NaPro's good faith estimate of the amount of Bulk Drug which
NaPro is capable of supplying for the then current Bulk Drug Forecast period.
8.8.4 Orders. From time to time during the Term, ▇▇▇▇▇▇ shall
submit to NaPro purchase orders for quantities of Bulk Drug for research and
development and for Commercial Use and, subject to limitations set forth in
Section 8.8.1, NaPro shall fill all purchase orders for Bulk Drug received from
▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall accept delivery of such ordered quantities of Bulk Drug.
Orders shall be entered on ▇▇▇▇▇▇ purchase orders. Issued purchase orders shall
include the quantity of Bulk Drug ordered and the date on which the Bulk Drug
shall be delivered to ▇▇▇▇▇▇. All terms and conditions of the ▇▇▇▇▇▇ purchase
order shall apply, except that if the terms and conditions of the purchase order
are in conflict with this Agreement, then this Agreement shall control unless
otherwise agreed by the Parties in writing.
8.8.5 Required Inventory. [THIS PORTION HAS BEEN REDACTED.]
8.9 Supply Allocation. If NaPro is unable, for any reason beyond its
reasonable control (including but not limited to a force majeure event as
described in Section 18.1 or an unanticipated increase in demand) to supply Bulk
Drug to ▇▇▇▇▇▇ under this Agreement and to Third Parties under then existing
contractual obligations outside the Territory, then NaPro shall establish an
allocation procedure with respect to the total available supply of Bulk Drug
which will provide the following allocation to ▇▇▇▇▇▇:
8.9.1 First, an amount of Bulk Drug sufficient to satisfy any
warranty obligation to replace any nonconforming Bulk Drug due to ▇▇▇▇▇▇ at the
time of such allocation; provided, however, that if the total available supply
is insufficient to satisfy such obligation to ▇▇▇▇▇▇ plus all of NaPro's similar
warranty obligations to other purchasers or users, then this allocation shall be
made pro rata among all purchasers or users including ▇▇▇▇▇▇ (the pro rata share
of each purchaser or user to be determined by multiplying the total
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available supply of Bulk Drug by a fraction, the numerator of which shall be the
amount of Bulk Drug required to satisfy the warranty obligation to such
purchaser or user and the denominator of which shall be the amount of Bulk Drug
required to satisfy the warranty obligation to all purchasers or users,
including ▇▇▇▇▇▇); and
8.9.2 Next, a fraction of the remaining supply (if any) of
Bulk Drug, as applicable, the numerator of which fraction shall be the
quantities of Bulk Drug which ▇▇▇▇▇▇ has forecasted pursuant to the Bulk Drug
Forecast for the next four (4) Calendar Quarters, and the denominator of which
shall be the quantities of Bulk Drug which is forecasted by all purchasers or
users (including ▇▇▇▇▇▇) during such four (4) Calendar Quarters, as determined
by such parties' latest firm orders and forecasts submitted to NaPro for such
Calendar Quarters.
8.9.3 The Parties shall use commercially reasonable efforts to
avoid any circumstances which would require allocation under this Section 8.9
and to eliminate such circumstances as soon as reasonably possible if they
arise.
8.9.4 Notwithstanding the provisions of this Section 8.9,
▇▇▇▇▇▇ shall be NaPro's preferred customer for Commercial Use along with ▇. ▇.
▇▇▇▇▇▇▇▇. In the event of shortage of Bulk Drug for any reason, ▇▇▇▇▇▇ and ▇.▇.
▇▇▇▇▇▇▇▇ shall receive priority and preference for supply of Bulk Drug over any
purchaser not under written contract to purchase Bulk Drug from NaPro as of the
Effective Date. Notwithstanding the foregoing, the supply of Bulk Drug for
development purposes in the Development Program shall have priority and
preference over any other proposed disposition of Bulk Drug by NaPro.
ARTICLE 9
FINISHED PRODUCT MANUFACTURE, MARKETING AND SALE
9.1 ▇▇▇▇▇▇ Manufacture and Labeling of Finished Product. ▇▇▇▇▇▇ shall
manufacture or have manufactured the Finished Product in accordance with the
Finished Product Specifications and applicable GMP for the Finished Product.
▇▇▇▇▇▇ shall package
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and label the Finished Product in a form and manner suitable for commercial sale
in the Territory. ▇▇▇▇▇▇ shall be responsible for all labeling, inserts,
promotional materials and any other materials which accompany, are distributed,
used or referred to in any way by ▇▇▇▇▇▇ or any Party or Third Party as provided
for in this Agreement in connection with the Commercial Use of the Finished
Product.
9.2 Marketing Committee. The Marketing Committee shall provide
recommendations to ▇▇▇▇▇▇ on marketing strategies, marketing/promotional
programs and publications, technical marketing, and other marketing activities
which ▇▇▇▇▇▇ may consider or use in marketing, selling and distributing the
Finished Product. ▇▇▇▇▇▇ shall determine and establish all marketing,
promotional and sales strategies and determine the marketing, promotional and
sales activities which are likely to optimize Finished Product sales. ▇▇▇▇▇▇
shall discuss the strategies and activities with the Marketing Committee. During
the twelve (12) month period preceding the anticipated date of First Commercial
Sale, the Marketing Committee shall meet once per calendar quarter. Following
the date of First Commercial Sale, the Marketing Committee shall meet once per
year.
9.3 ▇▇▇▇▇▇ Marketing and Sales Efforts. ▇▇▇▇▇▇ and ▇▇▇▇▇▇'▇ Affiliates
shall use commercially reasonable efforts to market, sell and distribute the
Finished Product in the Territory. ▇▇▇▇▇▇ shall commence marketing and selling
the Finished Product within a reasonable time following the Approval Date.
Notwithstanding the foregoing, failure on the part of NaPro to supply quantities
of Bulk Drug ordered by ▇▇▇▇▇▇ which conforms with the Bulk Drug Specifications
in a timely manner pursuant to the orders for Bulk Drug shall not constitute a
failure on the part of ▇▇▇▇▇▇ to use commercially reasonable efforts as required
pursuant to this Section 9.3. ▇▇▇▇▇▇ and is Affiliates and distributors shall be
solely responsible for establishing price and other financial terms for the sale
of Finished Products to End-User Customers. Notwithstanding the foregoing, for
countries or areas in the Territory outside the United States, in the event that
▇▇▇▇▇▇, in its sole discretion, determines that the Finished Product either
lacks commercial viability, or its commercial
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opportunity is compromised due to the existence of one or more Competitive
Paclitaxel Products, or if it is determined by ▇▇▇▇▇▇ not to take steps toward
filing and decides not to file, ▇▇▇▇▇▇ shall not be obligated to launch, market
or sell Finished Product in such countries or areas in the Territory outside the
United States. In the event that ▇▇▇▇▇▇ does not diligently pursue Regulatory
Approval or launch, market and sell the Finished Product in any such country or
area outside the United States [THIS PORTION HAS BEEN REDACTED.] ▇▇▇▇▇▇ shall
offer the opportunity for such country or area to NaPro for rights to
manufacture, market and supply the Finished Product. Notwithstanding the
foregoing, in the event that any legal, regulatory or other event including, but
not limited to an injunction, were to prevent the Regulatory Approval, launch,
marketing or sale of the Finished Product, [THIS PORTION HAS BEEN REDACTED.]
shall be extended for an equivalent period of time as such legal, regulatory or
other event delayed the Regulatory Approval, launch, marketing or sale of the
Finished Product. Notwithstanding the foregoing, if ▇▇▇▇▇▇ has offered the
opportunity to NaPro, ▇▇▇▇▇▇ shall not have breached the terms of this Article 9
or any other terms of this Agreement, whether or not NaPro launches, markets or
sells the Finished Product in such country or area within the Territory. NaPro's
acceptance of such offer shall be deemed a termination of this Agreement as to
the country or area in question, and the definition of the term "Territory"
shall be deemed thereby to have been amended to exclude that country or area.
NaPro's rights to develop products containing Paclitaxel for manufacture, use
and sale in that country or area shall include the right to use and reference
Paclitaxel Data in the Field only in that country or area without any of the
limitations imposed by Article 11 of this Agreement. Subject to Section 9.7,
▇▇▇▇▇▇ shall have no obligation to manufacture Finished Product for such country
or area.
9.4 NaPro Assistance with Technical Marketing. ▇▇▇▇▇▇ shall establish
the strategy for technical marketing of the Finished Product. NaPro may assist
▇▇▇▇▇▇ with technical marketing of the Finished Product at NaPro's cost and
expense beginning not
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earlier than the number of months determined by the Marketing Committee
following the First Commercial Sale of the Finished Product in the United
States. Such technical marketing performed by NaPro may include participation
(in conjunction with an ▇▇▇▇▇▇ representative) in symposia, conventions, and
trade shows, in the oncology market. Representatives of NaPro involved in
technical marketing shall be appropriately trained as experts in the Field
(defined as medical or technical personnel with specific knowledge and training
in oncology practice). NaPro shall limit the number of NaPro representatives
involved in technical marketing activities to five (5) employees of NaPro, so as
to allow proper coordination with ▇▇▇▇▇▇. If NaPro participates in the technical
marketing, NaPro and ▇▇▇▇▇▇ shall work together to coordinate the technical
marketing for the Finished Product so as to present a uniform marketing program
to End-User Customers. All materials and technical marketing programs must be
approved prior to use by the Marketing Committee.
9.5 Co-Promotion of Finished Product. In the event that ▇▇▇▇▇▇ is in
Material Breach of ▇▇▇▇▇▇'▇ obligation under Section 9.3 and such Material
Breach has not been cured by ▇▇▇▇▇▇ within ninety (90) days following the
written decision of the neutral in an ADR proceeding brought under Exhibit G,
NaPro may, at its option, itself establish a sales force to co-promote the
Finished Product along with ▇▇▇▇▇▇ at NaPro's sole expense. Subject to NaPro's
assistance with technical marketing, ▇▇▇▇▇▇ shall remain responsible for all
Finished Product marketing and sales. Any co-promotion activities by NaPro must
be approved by ▇▇▇▇▇▇ and shall comply with: (a) the marketing strategies
employed by ▇▇▇▇▇▇; and (b) applicable regulations of the FDA and or other
regulatory authorities. All publications or promotional materials used by NaPro
in its co-promotion activities must be approved by the Marketing Committee in
advance of any dissemination. The percentage of Net Sales on which Additional
Consideration pursuant to Sections 4.1 through 4.3 are made shall not be
adjusted in the event that NaPro co-promotes the Finished Product.
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Furthermore, NaPro may challenge ▇▇▇▇▇▇'▇ failure to comply with the terms of
this Article 9 only one (1) time per Sales Year.
9.6 Trademarks. In the event that ▇▇▇▇▇▇ desires to pursue trademark
protection for the Finished Product, ▇▇▇▇▇▇ shall, at its sole discretion,
select and protect such trademark. Any such trademark or trademark application
shall be owned exclusively by ▇▇▇▇▇▇, and NaPro shall have no rights to such
trademark(s) during the Term or thereafter, except as provided in Sections
15.6.2 or 15.6.3 as otherwise expressly agreed to in writing by ▇▇▇▇▇▇.
9.7 Manufacturing of Other Formulated Products. From time to time
during the Term, NaPro may request ▇▇▇▇▇▇ to consider manufacturing formulated
products containing Paclitaxel for sale by NaPro or other persons outside the
Field or outside the Territory. Upon such request by NaPro, ▇▇▇▇▇▇ shall
negotiate in good faith with NaPro with respect to such request.
ARTICLE 10
PROPRIETARY RIGHTS; PATENT ENFORCEMENT AND INFRINGEMENT
10.1 Patent Rights
10.1.1 NaPro shall, through counsel of its own choosing and at
its own expense, take all reasonable steps to prosecute and maintain NaPro
Patent Rights in the Territory or in certain countries outside the Territory
pursuant to the last sentence of Section 2.1. NaPro shall: (a) provide ▇▇▇▇▇▇
with copies of all documents related to prosecution of NaPro Patent Rights; and
(b) permit ▇▇▇▇▇▇ to communicate directly with the attorney responsible for
NaPro Patent Rights. Notwithstanding the foregoing, NaPro shall not be obligated
either: (a) to prosecute any NaPro Patent Rights outside of the Territory solely
to permit ▇▇▇▇▇▇ to manufacture Finished product outside of the Territory; or
(b) to consult with ▇▇▇▇▇▇ with respect to any NaPro Patent Rights outside of
the Territory.
10.1.2 ▇▇▇▇▇▇ shall, through counsel of its own choosing and
at its own expense, take all reasonable steps to prosecute and maintain ▇▇▇▇▇▇
Patent Rights in the
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Territory. ▇▇▇▇▇▇ shall: (a) provide NaPro with copies of all documents related
to prosecution of ▇▇▇▇▇▇ Patent Rights and (b) permit NaPro to communicate
directly with the attorney responsible for ▇▇▇▇▇▇ Patent Rights.
10.2 Program Invention
10.2.1 Invention Disclosure. Program Inventions and Third
Party Technology (except inventions directed to the manufacture of Bulk Drug)
shall be promptly disclosed by the originating Party to the other Party.
10.2.2 Ownership. Ownership of all Program Inventions shall be
vested, respectively, in the Party that invents and jointly by the Parties if
jointly invented with the inventorship of all such Program Inventions determined
according to United States patent law. In the event the Parties cannot agree on
the determination of inventorship of a Program Invention, the Parties shall
jointly select and retain independent patent counsel to determine inventorship.
The determination shall be binding on both parties and each party shall pay one-
half of any costs associated with such determination.
10.2.3 Prosecution and Maintenance
(a) With respect to any Program Inventions owned solely by
one of the Parties, that Party shall be responsible for and control all
decisions and all costs and expenses related to whether and where to file for
patent protection, as well as for the preparation, filing (foreign and/or
domestic), prosecution, issuance and maintenance of patent applications and/or
patents resulting from such Program Inventions. The responsible Party for such
expenses shall inform the other Party at regular intervals, or on written
request, about the status of all patent applications or patents for which it is
responsible under this Section 10.2.3(a).
(b) With respect to any Joint Patent Rights and any
counterparts outside the Territory, the parties shall select independent patent
counsel, mutually acceptable to both Parties, for the preparation, filing
(foreign and/or domestic), prosecution, issuance and maintenance of patent
applications and/or patents covering such Joint Patent
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Rights. The parties shall mutually agree and instruct such patent counsel as to
the patent applications and/or patents covering such Joint Patent Rights. If the
Parties cannot agree, the issue shall be reviewed by the Development Committee
whose decision shall be final. ▇▇▇▇▇▇ shall be responsible for all costs and
expenses incurred under this Section 10.2.3(b) within the Territory. NaPro shall
be responsible for all costs and expenses incurred under this Section 10.2.3(b)
outside the Territory.
10.2.4 Trade Secrets. Should NaPro or ▇▇▇▇▇▇ elect not to
file, continue prosecution, or permit issuance of a patent application on a
Program Invention that is solely owned by either Party, the other Party shall
have no right to assume responsibility for an application for patent on such
invention.
10.2.5 Cooperation. Each Party shall cooperate with and make
available to the other Party or its authorized attorneys, agents,
representatives, employees or consultants all reasonable assistance necessary or
appropriate to enable the other Party to prepare, file, prosecute and maintain
patent applications and/or resulting patents claiming any Program Invention(s)
or Joint Program Invention(s). Each Party shall provide such cooperation as well
as sign or cause to have signed all documents relating to said patent
applications and/or patents at no charge to the other Party.
10.3 No Other Technology Rights. Except as otherwise specifically
provided in this Agreement, under no circumstances shall a Party hereto or its
sublicensee(s), as a result of this Agreement, obtain any ownership interest or
other right in any pending patent application(s), license(s) or product(s),
including items owned, controlled or developed by, the other Party, or
transferred by the other Party to such Party at any time pursuant to this
Agreement. Each Party covenants that it shall not use or practice any of the
other Party's technology licensed under this Agreement for any purpose except as
expressly permitted in this Agreement.
10.4 Rights to Third Party Technology. [THIS PORTION HAS BEEN
REDACTED.]
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10.5 Notice of Patent Infringement. Each Party shall promptly notify
the other Party of: (a) any possible infringement of a NaPro Patent Right or
Joint Patent Right; or (b) Third Party assertion of infringement by one or both
Parties of a Third Party patent right. Such notice shall be in writing and shall
set forth the details of the known facts relating to such activities.
10.6 Patent Enforcement
[THIS PORTION HAS BEEN REDACTED.]
10.7 Defense of Assertions of Patent Infringement
[THIS PORTION HAS BEEN REDACTED.]
ARTICLE 11
RIGHTS TO REFERENCE AND USE PACLITAXEL
DATA AND EXPAND THE FIELD AND/OR TERRITORY
11.1 ▇▇▇▇▇▇ Exclusive Option Period for Other Territories and Expansion
of the Field. For a period of time beginning on the Effective Date and ending
two hundred seventy (270) days after the Effective Date (the "Exclusive Option
Period"), ▇▇▇▇▇▇ shall have the right to negotiate exclusively with NaPro and
NaPro shall negotiate exclusively with ▇▇▇▇▇▇ with respect to:
11.1.1 a license or similar arrangement covering the NaPro
Technology and/or grant of rights to develop, register, market or sell Finished
Product in any country outside the Territory ("Other Territory Rights") except
for: (a) Other Territory Rights granted by NaPro to ▇.▇. ▇▇▇▇▇▇▇▇ prior to the
Effective Date; and (b) Other Territory Rights as to which NaPro is in
significant contract negotiations with a Third Party and/or has entered into a
contract with a Third Party as of the Effective Date, both of which groups of
Other Territory Rights are listed in Exhibit F-2 (collectively referred to as
the "Unavailable Territories"); and
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11.1.2 within the Territory, expanding the Field to include
any other methods of delivery or forms of Paclitaxel and uses not contemplated
as of the Effective Date by this Agreement ("Expanded Field Rights").
11.2 ▇▇▇▇▇▇ Right of First Refusal for Development Opportunities. From
time to time following the Effective Date, in the event that: (a) one or more of
the Unavailable Territories shall become available either because (i) the Other
Territory Rights of ▇.▇. ▇▇▇▇▇▇▇▇ shall cease to be exclusive or (ii) any of the
negotiations referred to in Section 11.1.1(b) (with respect to the Third Party
with which NaPro is in negotiations with or has granted other Territory Rights
to as of the Effective Date) shall terminate within two (2) years following the
Effective Date without NaPro having entered into a license or similar
arrangement granting Other Territory Rights and/or Expanded Field Rights, or
once a license or similar arrangement is entered into covering Other Territory
Rights and/or Expanded Field Rights and such arrangement later ceases to be
exclusive; or (b) the Exclusive Option Period has ended and NaPro desires to
solicit or consider offers from any Third Party with respect to the Other
Territory Rights and/or Expanded Field Rights in any particular country; then
NaPro shall give ▇▇▇▇▇▇ written notice of its intent to undertake development,
marketing or sale of products containing Paclitaxel in the previously
Unavailable Territory or to grant Other Territory Rights and/or Expanded Field
Rights in any particular country (each a "Development Opportunity" and
collectively the "Development Opportunities").
Upon the giving of such notice of a Development Opportunity: (x) NaPro
and ▇▇▇▇▇▇ shall have the rights and obligations specified in Section 11.3 if
the Development Opportunity would include the use of, or right of reference to,
Paclitaxel Data; and (y) NaPro and ▇▇▇▇▇▇ shall have the rights and obligations
specified in Section 11.4 if the Development Opportunity would not include the
use of, or right of reference to, Paclitaxel Data.
11.3 Development Opportunities that Include Paclitaxel Data
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11.3.1 Within thirty (30) days after the date ▇▇▇▇▇▇ receives
a written notice pursuant to Section 11.2, ▇▇▇▇▇▇ shall notify NaPro in writing
of ▇▇▇▇▇▇'▇ interest in the Development Opportunity. If ▇▇▇▇▇▇ does not deliver
a written notice as contemplated by the preceding sentence, then ▇▇▇▇▇▇ shall
have no further rights under this Section 11.3 with respect to the Development
Opportunity.
11.3.2 In the event that ▇▇▇▇▇▇ delivers to NaPro the written
notice contemplated by the first sentence of Section 11.3.1, NaPro shall
negotiate with ▇▇▇▇▇▇ exclusively and in good faith for a period of not less
than ninety (90) days after ▇▇▇▇▇▇ delivers to NaPro such written notice. The
ninety (90) day period contemplated by this Section 11.3.2 may be extended by
mutual written agreement of the Parties; provided, however, the failure by
either Party to agree to extend the negotiation period shall not be evidence of
any failure to negotiate in good faith. If the Parties do not reach a written
agreement covering such Development Opportunity during such ninety (90) day
period or longer period if mutually agreed, then NaPro shall have the
opportunity to solicit offers from Third Parties for the Development
Opportunity.
11.3.3 In the event that: (a) the ninety (90) day negotiation
period as described in 11.3.2 ends and the Parties do not execute a definitive
agreement covering the Development Opportunity; (b) during the ninety (90) day
negotiation period, ▇▇▇▇▇▇ offered in writing economic terms which were rejected
by NaPro ("▇▇▇▇▇▇'▇ Economic Terms"); and (c) during the Term, NaPro
subsequently solicits and receives a bona fide Third Party offer with respect to
such Development Opportunity; then NaPro shall be free enter into an agreement
with that Third Party regarding the Development Opportunity if the written
economic terms (taken in the aggregate) and as determined by a mutually
acceptable Third Party independent consultant/appraiser knowledgeable in the
area) offered by the Third Party ( "Third Party's Economic Terms") are more
favorable to NaPro (taken in the aggregate and as determined by a mutually
acceptable Third Party independent consultant/appraiser knowledgeable in the
area) than ▇▇▇▇▇▇'▇ Economic Terms (taken in the
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aggregate), upon which event ▇▇▇▇▇▇ shall have no further rights with respect to
such Development Opportunity. If, on the other hand, ▇▇▇▇▇▇'▇ Economic Terms
(taken in the aggregate) are more favorable to NaPro than the Third Party's
Economic Terms (taken in the aggregate), then ▇▇▇▇▇▇ shall have the right for a
period of thirty (30) days to determine whether to accept the Third Party's
Economic Terms as the basis for an arrangement with NaPro with respect to the
Development Opportunity. All determinations as to whether a Third Party's
Economic Terms are more or less favorable than ▇▇▇▇▇▇'▇ Economic Terms shall be
made as provided in Section 11.3.3.1. If at the end of such thirty (30) day
period (or longer if mutually agreed upon by the Parties) ▇▇▇▇▇▇ and NaPro have
not executed a definitive agreement after good faith negotiations substantially
on the Third Party's Economic Terms, then ▇▇▇▇▇▇ shall have no further rights
with respect to such Development Opportunity. The thirty (30) day period
contemplated by this Section 11.3.3 may be extended by mutual written agreement
by the Parties; provided, however, the failure by either Party to agree to
extend the negotiation period shall not be evidence of any failure to negotiate
in good faith.
11.3.3.1 NaPro shall notify ▇▇▇▇▇▇ in writing of
NaPro's reasonable determination as to whether the Third Party's Economic Terms
(taken in the aggregate) are more or less favorable to NaPro than ▇▇▇▇▇▇'▇
Economic Terms (taken in the aggregate) not later than: (a) ten (10) Business
Days following the date that NaPro received the formal written offer from the
Third Party containing the Third Party's Economic Terms; or (b) thirty (30)
Business Days prior to the time that NaPro enters into a definitive agreement
with the Third Party regarding the Development Opportunity, outlining the basis
for its determination. If ▇▇▇▇▇▇ agrees with NaPro's determination, then the
determination shall be final and binding on the Parties. If ▇▇▇▇▇▇ does not
agree with NaPro's determination, then ▇▇▇▇▇▇ shall notify NaPro in writing not
later than the close of business on the tenth (10th) Business Day following
NaPro's delivery of the notice specified in the first sentence of this Section
11.3.3.1. If ▇▇▇▇▇▇ has not given NaPro the notice contemplated by the preceding
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sentence within the time required, then NaPro's determination shall be final and
binding on the Parties. If ▇▇▇▇▇▇ desires more information regarding or does not
agree with NaPro's determination, the Parties shall attempt to resolve in good
faith their difference of opinion on the question of whether the Third Party's
Economic Terms (taken in the aggregate) are more or less favorable to NaPro than
▇▇▇▇▇▇'▇ Economic Terms (taken in the aggregate), for a period of ten (10)
Business Days after ▇▇▇▇▇▇ delivers the notice contemplated by the preceding
sentence. If at the end of such ten (10) Business Day period, the Parties still
have a difference of opinion, the Parties shall select a mutually acceptable
Third Party independent appraiser knowledgeable in the area to determine whether
the Third Party's Economic Terms (taken in the aggregate) are more or less
favorable to NaPro than ▇▇▇▇▇▇'▇ Economic Terms (taken in the aggregate). If the
Parties are unable to agree on such an appraiser within ten (10) Business Days
after the end of the ten (10) Business Day period described in the preceding
sentence, then the question of whether the Third Party's Economic Terms (taken
in the aggregate) are more or less favorable to NaPro than ▇▇▇▇▇▇'▇ Economic
Terms (taken in the aggregate) shall be determined by a panel of three Third
Party independent appraisers knowledgeable in the area, one of whom shall be
selected in good faith by NaPro, another of whom shall be selected in good faith
by ▇▇▇▇▇▇, and the third of whom shall be selected by such other two appraisers
or, if such appraisers shall be unable to agree upon a third appraiser within
ten (10) Business Days of the selection date of the second of such two
appraisers, by the Center for Public Resources; provided, that if either party
fails to select its appraiser within ten (10) Business Days after the expiration
of the time period for selecting a single appraiser, then the question of
whether a Third Party's Economic Terms (taken in the aggregate) are more or less
favorable to NaPro than ▇▇▇▇▇▇'▇ Economic Terms (taken in the aggregate) shall
be determined solely by the appraiser selected by the other party. The appraiser
or appraisers appointed pursuant to the foregoing procedure shall be instructed
to determine whether the Third Party's Economic Terms (taken in the aggregate)
are more or less favorable to NaPro than ▇▇▇▇▇▇'▇ Economic Terms (taken
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in the aggregate) within fifteen (15) Business Days after the final appointment
of all appraisers, and such determination shall be final and binding upon the
Parties. The procedure described in this Section 11.3.3.1 is the exclusive means
to resolve any dispute as to whether a Third Party's Economic Terms (taken in
the aggregate) are more or less favorable to NaPro than ▇▇▇▇▇▇'▇ Economic Terms
(taken in the aggregate), and neither Party shall have recourse to the
procedures contemplated by Section 16 or any legal process for purposes of
resolving any such dispute.
11.3.4 Upon completion of the procedures contemplated by
Section 11.3.3, if NaPro has entered into an agreement covering such Development
Opportunity with a Third Party, then the Territory covered by such Development
Opportunity shall be deemed an Unavailable Territory for purposes of this
Agreement and added to Exhibit F-2 in the manner contemplated by Section 18.6.
11.3.5 Notwithstanding the foregoing provisions of this
Section 11.3, if the Development Opportunity concerns Expanded Field Rights,
then the right to refer to and use the Paclitaxel Data in connection with the
Development Opportunity shall be limited to the Expanded Field Rights and shall
not encroach the Field.
11.4 Development Opportunities that Do Not Include Paclitaxel Data
11.4.1 Within thirty (30) days after the date ▇▇▇▇▇▇ receives
a written notice
pursuant to Section 11.2, ▇▇▇▇▇▇ shall notify NaPro in writing of ▇▇▇▇▇▇'▇
interest in the Development Opportunity. If ▇▇▇▇▇▇ does not deliver a written
notice as contemplated by the preceding sentence, then ▇▇▇▇▇▇ shall have no
further rights under this Section 11.4 with respect to the Development
Opportunity.
11.4.2 In the event that ▇▇▇▇▇▇ delivers to NaPro the written
notice contemplated by the first sentence of Section 11.4.1, NaPro shall
negotiate with ▇▇▇▇▇▇ exclusively and in good faith for a period of not less
than ninety (90) days after ▇▇▇▇▇▇ delivers to NaPro such written notice. If the
Parties do not reach a written agreement covering such Development Opportunity
during such ninety (90) day period, then ▇▇▇▇▇▇
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shall have no further rights under this Section 11.4 with respect to such
Development Opportunity. The ninety (90) day period contemplated by this Section
11.4.2 may be extended by mutual written agreement of the Parties; provided,
however, the failure by either Party to agree to extend the negotiation period
shall not be evidence of any failure to negotiate in good faith.
11.4.3 In the event that: (a) the ninety (90) day negotiation
period as described in 11.4.2 ends and the Parties do not execute a definitive
agreement covering the Development Opportunity; and (b) during the Term, NaPro
subsequently solicits and receives a bona fide Third Party offer with respect to
such Development Opportunity; then NaPro shall be free enter into an agreement
with that Third Party regarding the Development Opportunity.
11.4.4 Upon completion of the procedures contemplated by
Section 11.4.3, if NaPro has entered into an agreement covering such Development
Opportunity with a Third Party, then the territory covered by such Development
Opportunity shall be deemed an Unavailable Territory for purposes of this
Agreement and added to Exhibit F-2 in the manner contemplated by Section 18.6.
11.4.5 NaPro shall not use or have the right to reference any
Paclitaxel Data in connection with any Development Opportunity entered into with
a Third Party under this Section 11.4.
11.5 ▇▇▇▇▇▇ Initiation of Negotiations. If ▇▇▇▇▇▇ should have an
interest in and desire to negotiate for any Other Territory Rights and/or
Expanded Field Rights, ▇▇▇▇▇▇ will give written notice to NaPro and if NaPro is
interested in discussing an arrangement, such discussions will commence pursuant
to Sections 11.3 or 11.4, as applicable.
11.6 Certain Obligations Regarding Use of Paclitaxel Data and Joint
Patent Rights.
11.6.1 Notwithstanding anything in this Article 11 to the
contrary, during the Term in the Field in the Territory, NaPro shall not: (a)
use, reference or have any rights to
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use or reference any Paclitaxel Data; (b) develop, manufacture or sell a
Competitive Paclitaxel Product either itself or with or through a Third Party by
licensing NaPro Technology to a Third Party or a NaPro Affiliate; or (c)
develop, manufacture, market or sell a Competitive Paclitaxel Product either
itself or with or through a Third Party which uses or references or infringes a
Valid Claim of any Joint Program Inventions or Joint Patent Rights.
11.6.2 In the Unavailable Territories in which NaPro or a
NaPro Affiliate is either marketing or selling a product containing Paclitaxel
in the Field or has a definitive written agreement with a Third Party with
respect to the marketing or sale of a product containing Paclitaxel in the
Field, then during the Term ▇▇▇▇▇▇ will not: (a) market or sell any products
containing Paclitaxel in the Field where a Valid Claim of a Joint Patent Right
would be infringed by the marketing or sale of such product; or (b) practice, or
grant any sublicense with respect to, Joint Patent Rights in the Field.
11.7 Exclusive Enumeration of Rights. Except as set forth in this
Article 11: (a) ▇▇▇▇▇▇ shall not have any rights to use or reference Paclitaxel
Data outside the Field or outside the Territory; (b) ▇▇▇▇▇▇ shall have the
exclusive right (exclusive even as to NaPro) to reference and to use the
Paclitaxel Data in the Field in the Territory; and (c) NaPro shall have the
exclusive right to reference and to use Paclitaxel Data (exclusive even as to
▇▇▇▇▇▇) either outside the Field or outside the Territory. Notwithstanding the
foregoing, NaPro's exclusive rights to reference and to use the Paclitaxel Data
either outside the Field or outside the Territory shall apply only after such
time as any Development Opportunity w
ith respect to the Paclitaxel Data has been
offered to ▇▇▇▇▇▇ and ▇▇▇▇▇▇ has had the opportunity to negotiate with NaPro
with respect to the Development Opportunity pursuant to the terms of Section
11.3.
11.8 Certificate of Free Sale. Upon the request of NaPro from time to
time, ▇▇▇▇▇▇ shall provide a certificate of free sale or other documentation
necessary to permit NaPro to utilize any Regulatory Approval in both the
Unavailable Territories and the other countries outside the Territory in which
▇▇▇▇▇▇ had the right to pursue a Development
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Opportunity but did not enter into a definitive agreement with NaPro to pursue
the Development Opportunity pursuant to this Article 11.
ARTICLE 12
REPRESENTATIONS AND WARRANTIES
12.1 Reciprocal. Each Party hereby represents and warrants to the other
Party the following:
12.1.1 Corporate Status. It is a corporation duly organized
and validly existing under the laws of its state or other jurisdiction of
incorporation or formation.
12.1.2 Authority. It has the power and authority to execute
and deliver this Agreement, and to perform its obligations hereunder.
12.1.3 No Conflicts. The execution, delivery and performance
by it of this Agreement and its compliance with the terms and provisions hereof
does not and will not conflict with or result in a breach of any of the terms
and provisions of or constitute a default under: (a) any loan agreement,
guaranty, financing agreement, agreement affecting a product or other agreement
or instrument binding or affecting it or its property; (b) the provisions of its
charter documents or by-laws; or (c) any order, writ, injunction or decree of
any court or governmental authority entered against it or by which any of its
property is bound.
12.1.4 No Approvals. Except for the DMF, Application(s) for
Regulatory Approval or Regulatory Approvals for Bulk Drug and Finished Product
referenced herein, no authorization, consent or approval of any governmental
authority or third party is required for the execution, delivery or performance
by it of this Agreement, and the execution, delivery or performance of this
Agreement will not violate any law, rule or regulation applicable to such Party.
12.1.5 Enforceability. This Agreement has been duly
authorized, executed and delivered, and constitutes its legal, valid and binding
obligation enforceable against it in
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accordance with its terms subject to laws governing bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights and to the availability of particular remedies under general
equity principles regardless of whether such remedies are pursued at law or in
equity.
12.1.6 Compliance with Laws. It shall comply with all
applicable laws and regulations relating to its activities under this Agreement.
12.1.7 Data. The Parties represent and warrant that to the
best of their knowledge the Pre-Clinical and Clinical Data is true and accurate,
and that each Party has the right to share the Pre-Clinical and Clinical Data
with the other Party.
12.1.8 Year 2000 Warranties. Each Party makes the following
warranties with respect to Year 2000 compliance:
12.1.8.1 NaPro warrants that all software used by it
in the
manufacture of Bulk Drug and in its business relationship with ▇▇▇▇▇▇ will, on
and following January 1, 2000, have no lesser functionality with respect to
dates prior to January 1, 2000 than previously with respect to dates prior to
January 1, 2000.
12.1.8.2 ▇▇▇▇▇▇ warrants that all software used by
it in its business relationship with NaPro will, on and following January 1,
2000, have no lesser functionality with respect to records containing dates
before or after January 1, 2000.
12.2 NaPro Representations and Warranties. NaPro represents and
warrants the following:
12.2.1 The NaPro Patents have not knowingly been obtained
through any activity, omission or representation that would limit or destroy the
validity of the NaPro Patents and to the best of NaPro's knowledge, the existing
NaPro Patents are valid and enforceable.
12.2.2 To the best of NaPro's knowledge, there are no actions,
threatened or pending, before any court relating to the NaPro Patents.
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12.2.3 Exhibit E-1 lists all patents issued and patent
applications in the Territory filed on or before the Effective Date of this
Agreement within the scope of the NaPro Patents. All of the inventors named in
the patents and patent applications listed in Exhibit E-1 have assigned, or are
under an obligation to assign, to NaPro all of their right, title and interest
in the inventions claimed.
12.2.4 Except for the rights granted to IVAX under the IVAX
Agreements, NaPro has not authorized others to practice NaPro Technology in the
Territory in the Field.
12.2.5 Except for the rights granted to IVAX under the IVAX
Agreement, NaPro owns and possesses all right, title and interest in and to the
NaPro Patents and no Third Party has acquired, owns or possesses any right,
title or interest in or to the NaPro Patents in the Territory in the Field.
12.2.6 Except for: (a) the rights granted to IVAX under the
IVAX Agreement; and (b) the obligations of NaPro under [THIS PORTION HAS BEEN
REDACTED.] NaPro has no agreement with any Third Party which (i) gives any
rights to such Third Party, or (ii) imposes obligations upon NaPro or gives any
rights to NaPro which, in either case, would adversely affect the rights of
▇▇▇▇▇▇ or the obligations of NaPro under this Agreement.
12.2.7 The IVAX Agreement is the only agreement with any Third
Party that grants any rights to any NaPro Technology in the Territory in the
Field.
12.2.8 NaPro shall not take any action with respect to the
IVAX Agreement that would alter, expand or extend the scope of any license
granted thereunder.
12.2.9 NaPro has not and will not provide to IVAX any rights
to any intellectual property developed or in-licensed during the course of the
Development Program and NaPro has no outstanding agreements with IVAX or any
IVAX Affiliate that either grant any rights to NaPro Technology or impose
obligations upon NaPro with respect to Paclitaxel in the Territory other than
the IVAX Agreement.
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12.2.10 NaPro has provided ▇▇▇▇▇▇ with a true and correct copy
of the IVAX Agreement (including all exhibits thereto), which is attached to
this Agreement as Exhibit F-3. NaPro has not and will not extend, enlarge, or
otherwise modify the IVAX Agreement, and the IVAX Agreement is currently in
effect according to its written terms.
[THIS PORTION HAS BEEN REDACTED.] NaPro's obligation to supply IVAX with
Paclitaxel will be complete and NaPro shall not supply any further quantities of
Bulk Drug to IVAX.
12.3 NaPro Representations Regarding Data. NaPro represents, warrants
and covenants that, with respect to Pre-Clinical and Clinical Data and other
information that NaPro may share with ▇.▇. ▇▇▇▇▇▇▇▇ or with any other Third
Party with which NaPro enters into an arrangement for the development and rights
to market and sell Finished Product in European countries pursuant to Article
11, NaPro shall have in place with ▇.▇. ▇▇▇▇▇▇▇▇ or such Third Party, a written
agreement sufficient to protect the confidential nature of all information and
data derived pursuant to the Development Program shared with ▇.▇.
▇▇▇▇▇▇▇▇ or such Third Party.
12.4 NaPro Representations Regarding IVAX. NaPro represents and
warrants that it has no obligation to share with IVAX the Pre-Clinical and
Clinical Data developed during the course of the Development Program and
covenants that it will not share with IVAX the Pre-Clinical and Clinical Data
developed during the course of the Development Program.
12.5 NaPro Representations Regarding Bryn Mawr. NaPro represents,
warrants and covenants that it: (a) is not in breach of the Bryn Mawr Agreement;
(b) shall maintain the Bryn Mawr Agreement and shall comply with and fulfill all
of its obligations thereunder; (c) shall not modify the terms of the Bryn Mawr
Agreement in any way that may adversely affect NaPro's obligations under this
Agreement or any of ▇▇▇▇▇▇'▇ rights under this Agreement; (d) shall be
responsible for and shall pay all amounts owing under the Bryn Mawr Agreement
both under the license or any sublicense necessary for either NaPro or the
Stand-By Manufacturing Source to manufacture the Bulk Drug; and (e) will obtain
any consents from Bryn Mawr that may be necessary to sublicense all rights to
the technology granted to NaPro under this Agreement whether to ▇▇▇▇▇▇ or
▇▇▇▇▇▇'▇ designated Stand-By
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Manufacturing Source. Notwithstanding anything contained in this Section 12.5,
NaPro shall not have any obligation to provide to a Stand-By Manufacturing
Source Confidential Information or technical support for the semi-synthetic
manufacture of Bulk Drug.
12.6 NaPro Representations Regarding ▇.▇. ▇▇▇▇▇▇▇▇. NaPro has the right
to: (a) use the ▇.▇. ▇▇▇▇▇▇▇▇ Formulation in connection with the Development
Program and other activities contemplated by this Agreement; (b) share with
▇▇▇▇▇▇ the data and other information derived pursuant NaPro's relationship with
▇.▇. ▇▇▇▇▇▇▇▇, and (c) shall not modify the Faulding Agreement in any way that
may adversely affect ▇▇▇▇▇▇'▇ rights under this Agreement.
12.7 Future Necessary Licenses. With regard to any technology that
NaPro may obtain rights to in the future necessary for the manufacture,
marketing, sale and distribution of Finished Product(s), NaPro shall provide a
license to ▇▇▇▇▇▇ to such technology sufficient to permit ▇▇▇▇▇▇ to exercise its
rights and discharge its obligations under this Agreement and, in the event that
such technology is obtained from a Third Party, NaPro shall represent, warrant
and covenant that it: (a) shall maintain and comply with any terms of any
agreement with any Third Party regarding such technology; (b) shall not enter
into an agreement with the terms that would adversely affect NaPro's obligations
under this Agreement or any of ▇▇▇▇▇▇'▇ rights under this Agreement; and (c)
shall obtain the necessary approvals to license such technology to ▇▇▇▇▇▇ and
its Affiliates. Unless otherwise agreed to in writing by ▇▇▇▇▇▇, the costs and
expenses associated with such technology obtained in the future shall be
NaPro's.
12.8 ▇▇▇▇▇▇ Representations and Warranties. ▇▇▇▇▇▇ represents and
warrants the following:
12.8.1 ▇▇▇▇▇▇ and/or its Affiliates owns and possesses all
right, title and interest in and to the ▇▇▇▇▇▇ Formulated Product and, no Third
Party has acquired, owns or possesses any right, title or interest in or to the
▇▇▇▇▇▇ Formulation in the Territory in the Field.
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12.8.2 Neither ▇▇▇▇▇▇ nor any of its Affiliates has granted to
any Third Party any rights in or to the ▇▇▇▇▇▇ Technology or the ▇▇▇▇▇▇
Formulated Product in the Territory in the Field.
12.8.3 Exhibit E-2 lists all patents issued and patent
applications in the Territory filed on or before the Effective Date of this
Agreement within the scope of the ▇▇▇▇▇▇ Patents and hence subject to this
Agreement and all of the inventors named in the patents and patent applications
listed in Exhibit E-2 have assigned, or are under an obligation to assign, to
▇▇▇▇▇▇ all of their right, title an interest in the inventions claimed.
12.8.4 ▇▇▇▇▇▇ has no agreement with any Third Party which
either gives any rights to such Third Party or imposes obligations upon ▇▇▇▇▇▇
or gives any rights to ▇▇▇▇▇▇ which, in either case, would adversely affect the
rights of NaPro or the obligations of ▇▇▇▇▇▇ under this Agreement.
ARTICLE 13
INDEMNIFICATION AND INSURANCE
13.1 Indemnities
13.1.1 NaPro Indemnity. NaPro shall indemnify, defend, and
hold harmless ▇▇▇▇▇▇ and its Affiliates and their respective directors,
officers, partners, employees, agents, and representatives (the "▇▇▇▇▇▇
Indemnified Parties") from and against any and all Indemnifiable Losses to the
extent relating to, resulting from, or arising out of Third Party Claims for:
(a) the failure of the Bulk Drug supplied by NaPro or its Affiliates to meet the
Bulk Drug Warranties as required by Section 8.4.1; (b) NaPro's breach of the
representations and warranties set forth in Article 12 or Section 8.4.1 (c)
NaPro's negligence, willful misconduct or breach of this Agreement; (d) NaPro's
activities in connection with any promotion or technical marketing of the
Finished Product in accordance with Sections 9.4 or 9.5, if applicable,
including, but not limited to misrepresentation of the Finished Product or
representation of the Finished Product other than in accordance with the
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Finished Product Label; (e) fifty percent (50%) of any other Third Party Claims
for product liability for which NaPro is not solely responsible for pursuant to
Section 13.1.1(a) through (d), excluding product liability relating to Bulk Drug
manufactured and supplied by a StandBy Manufacturing Source or ▇▇▇▇▇▇ is not
solely responsible for pursuant to Section 13.1.2(a) through (d).
13.1.2 ▇▇▇▇▇▇ Indemnity. ▇▇▇▇▇▇ shall indemnify, defend, and
hold harmless NaPro and its Affiliates and their respective directors, officers,
partners, employees, agents, and representatives (the "NaPro Indemnified
Parties") from and against any and all Indemnifiable Losses to the extent
relating to, resulting from, or arising out of Third Party Claims for: (a)
failure of the Finished Product to meet the Finished Product Specifications and
applicable GMP for the Finished Product; (b) ▇▇▇▇▇▇'▇ breach of any
representations and warranties set forth in Article 12; (c) ▇▇▇▇▇▇'▇ negligence,
willful misconduct or breach of this Agreement; (d) ▇▇▇▇▇▇'▇ marketing and sale
of the Finished Product in a manner which misrepresents the Finished Product or
represents the Finished Product other than in accordance with the Finished
Product Label; and (e) fifty percent (50%) of any other Third Party Claims for
product liability for which NaPro is not solely responsible for pursuant to
Section 13.1.1(a) through (d) or ▇▇▇▇▇▇ is not responsible for pursuant to
Section 13.1.2(a) through (d).
13.1.3 Indemnification Sharing. The Parties understand and
agree that the development, design, clinical activities, Regulatory Approval and
labeling of the Finished Product is a joint effort by the Parties under the
Development Program. ▇▇▇▇▇▇ and NaPro shall each be responsible for fifty
percent (50%) of any Third Party Claims for product liability for which neither
NaPro nor ▇▇▇▇▇▇ are solely responsible as set forth in Section 13.1.1(a)
through (d) (in the case of NaPro) and Section 13.1.2(a) through (d) (in the
case of ▇▇▇▇▇▇.)
13.1.4 Procedures. If any Indemnitee receives notice of
assertion or commencement of any Third Party Claim against such Indemnitee with
respect to which an
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Indemnifying Party is obligated to provide indemnification under this Agreement,
the Indemnitee will give such Indemnifying Party reasonably prompt written
notice thereof, but in any event not later than ten (10) Business Days after
receipt of such notice of such Third Party Claim. Such notice will describe the
Third Party Claim in reasonable detail, will include copies of all material
written evidence thereof, and will indicate the estimated amount, if reasonably
practicable, of the Indemnifiable Loss that has been or may be sustained by the
Indemnitee. The Indemnifying Party will have the right to participate in, or, by
giving written notice to the Indemnitee, to assume, the defense of any Third
Party Claim at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel (reasonably satisfactory to the Indemnitee), and the
Indemnitee will cooperate in good faith in such defense.
13.1.5 Defense. If, within ten (10) Business Days after giving
notice of a Third Party Claim to an Indemnifying Party pursuant to Section
13.1.3, an Indemnitee receives written notice from the Indemnifying Party that
the Indemnifying Party has elected to assume the defense of such Third Party
Claim as provided in the last sentence of Section 13.1.3, the Indemnifying Party
will not be liable for any legal expenses subsequently incurred by the
Indemnitee in connection with the defense thereof; provided, however, that if
the Indemnifying Party fails to take reasonable steps necessary to defend
diligently such Third Party Claim within ten (10) Business Days after receiving
written notice from the Indemnitee that the Indemnitee believes the Indemnifying
Party has failed to take such steps or if the Indemnifying Party has not
undertaken fully to indemnify the Indemnitee in respect of all Indemnifiable
Losses relating to the matter, the Indemnitee may assume its own defense, and
the Indemnifying Party will be liable for all reasonable costs or expenses paid
or incurred in connection therewith. Without the prior written consent of the
Indemnitee, the Indemnifying Party will not enter into any settlement of any
Third Party Claim which would lead to liability or create any obligation on the
part of the Indemnitee for which the Indemnitee is not entitled to
indemnification hereunder.
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13.1.6 Indemnifiable Loss Recovery. If the amount of any
Indemnifiable Loss, at any time subsequent to the making of an Indemnity
Payment, is reduced by recovery, settlement, or otherwise under or pursuant to
any insurance coverage, or pursuant to any claim, recovery, settlement, or
payment by or against any other Person, the amount of such reduction, less any
costs, expenses, premiums or taxes incurred in connection therewith will
promptly be repaid by the Indemnitee to the Indemnifying Party. Upon making any
Indemnity Payment the Indemnifying Party will, to the extent of such Indemnity
Payment, be subrogated to all rights of the Indemnitee against any Person that
is not an Affiliate of the Indemnitee in respect of the Indemnifiable Loss to
which the Indemnity Payment related; provided, however, that: (a) the
Indemnifying Party shall then be in compliance with its obligations under this
Agreement in respect of such Indemnifiable Loss; and (b) until the Indemnitee
recovers fully payment of its Indemnifiable Loss, any and all claims of the
Indemnifying Party against any such Person on account of said Indemnity Payment
will be subrogated and subordinated in right of payment to the Indemnitee's
rights against such Person. Without limiting the generality or effect of any
other provision hereof, each such Indemnitee and Indemnifying Party will duly
execute upon request all instruments reasonably necessary to evidence and
perfect the above-described subrogation and subordination rights.
13.2 Insurance. Beginning on the Effective Date and until the date
which is one day prior to the date of First Commercial Sale, NaPro shall
maintain product liability insurance with an A.M. Best Company rating of at
least A+ with a minimum annual amount of: (a) Five Million Dollars ($5,000,000)
per occurrence; and (b) Ten Million Dollars ($10,000,000) in the aggregate.
Beginning on the date of First Commercial Sale and for a period of five (5)
years after termination of this Agreement, NaPro shall maintain product
liability insurance with a A.M. Best Company rating of at least A+ with minimum
annual amounts of: (x) Ten Million Dollars ($10,000,000) per occurrence; and (y)
Forty Million Dollars ($40,000,000) in the aggregate. Upon ▇▇▇▇▇▇'▇ request,
NaPro shall deliver to
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▇▇▇▇▇▇ a certificate of insurance evidencing such insurance and stating that the
policy will not be canceled or modified without at least thirty (30) days prior
written notice to ▇▇▇▇▇▇. ▇▇▇▇▇▇ shall be named as an additional insured party
under any such insurance policies.
13.3 Limitations of Damages. Neither Party shall be liable to the other
Party for any incidental or consequential damages arising out of the terms of
this Agreement.
ARTICLE 14
PRODUCT RECALL AND ADVERSE EVENTS
14.1 Recall Notification and Implementation. Each Party shall promptly
notify the other Party in writing of any facts relating to the advisability of
the recall, destruction or withholding from the market of Bulk Drug or Finished
Product anywhere in the Territory (collectively, "Recall"). If at any time: (a)
any governmental or regulatory authority in the Territory issues a request,
directive or order for a Recall; (b) a court of competent jurisdiction orders a
Recall in the Territory; or (c) ▇▇▇▇▇▇ determines, following consultation with
NaPro (except in emergency situations in which there is insufficient time for
such consultation), that a Recall in the Territory is necessary or advisable,
▇▇▇▇▇▇ shall take all appropriate corrective actions to effect the Recall and
NaPro shall provide ▇▇▇▇▇▇ with such cooperation in connection with the Recall
as ▇▇▇▇▇▇ may reasonably request.
14.2 Recall Costs and Expenses. ▇▇▇▇▇▇ shall bear the costs and
expenses of any Recall in the Territory to the extent such Recall is the result
of any fault or omission attributable to ▇▇▇▇▇▇ or its Affiliates, and NaPro
shall bear all costs and expenses of any Recall in the Territory to the extent
such Recall is the result of any fault or omission attributable to NaPro or its
Affiliates.
14.3 Adverse Events. During the term, each Party shall promptly inform
the other Party of any information it receives or develops regarding the safety
of Bulk Drug or Finished Product or any product containing Bulk Drug anywhere in
the world and shall promptly report to the other Party any information regarding
serious adverse reactions or
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side effects related to the use of the Bulk Drug or Finished Product. To allow
the Parties to comply with the adverse drug experience reporting requirements
for Bulk Drug or Finished Product to the FDA and its counterpart regulatory
agencies in the Territory NaPro shall notify ▇▇▇▇▇▇ in writing of any "adverse
drug experience" that is considered "serious" as defined in FDA regulations (21
CFR 314.80) or the comparable regulations of other regulatory agencies in the
Territory, regardless of source, so that ▇▇▇▇▇▇ will receive such notice within
three (3) Business Days of NaPro's first having "obtained or otherwise received
such" "adverse drug experience" from "any source", as those terms are defined in
FDA regulations (21 CFR 314.80). Such information shall be communicated by NaPro
to ▇▇▇▇▇▇ at the following address:
To ▇▇▇▇▇▇: ▇▇▇▇▇▇ Laboratories
Hospital Products Division
Attn: Divisional Vice President of
Pharmaceutical and Clinical Development
Dept. 970, Bldg. AP30
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇.▇.▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
14.4 Complaint Handling. ▇▇▇▇▇▇ shall be responsible for addressing and
resolving customer complaints regarding the Finished Product distributed by
▇▇▇▇▇▇ in the Territory, and for answering and responding to any customer
questions with respect to the Finished Product in the Territory; provided,
however, that NaPro shall reasonably cooperate with ▇▇▇▇▇▇ to resolve complaints
related to Bulk Drug. Any serious adverse event report or medical complaint
received by ▇▇▇▇▇▇ or NaPro from any country in the Territory relating to the
Finished Product shall be promptly investigated by ▇▇▇▇▇▇. NaPro shall notify
▇▇▇▇▇▇ three (3) Business Days after becoming aware of an adverse event or
medical complaint, and provide to ▇▇▇▇▇▇ contact information to allow ▇▇▇▇▇▇ to
act on the matter with customers
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within the Territory. ▇▇▇▇▇▇ shall promptly report to the FDA or applicable
regulatory authority any such report that involves an event that is serious (as
those terms are defined by then applicable FDA or applicable regulatory
authority regulations), but in any event within fifteen (15) calendar days of
receipt (term definition and reporting requirements to be modified to meet then
applicable regulations). ▇▇▇▇▇▇ shall prepare adverse event periodic reports in
accordance with FDA or applicable regulatory authority regulations. ▇▇▇▇▇▇ shall
be responsible for submission of periodic reports to the FDA or applicable
regulatory authority. Adverse event reports required to be made to regulatory
agencies in other countries shall be handled solely by NaPro, with ▇▇▇▇▇▇
providing necessary supportive information.
ARTICLE 15
TERM AND TERMINATION
15.1 Term and Termination. The term of this Agreement ("Term") shall
commence on the Effective Date and shall continue, unless terminated earlier
pursuant to this Article 15, until the earlier to occur of: (a) the date of
expiration of the last to expire of the NaPro Patent Rights containing a Valid
Claim that would be infringed by the manufacture, use (involving methods of
administration), marketing or sale of a Finished Product in the Territory; or
(b) twenty (20) years following the Effective Date. The consequences of
termination, whether by expiration of the Term or by earlier termination
pursuant to this Article 15, shall be as set forth in Section 15.6. For the
purposes of this Section 15.1, the term "date of expiration" shall mean the date
on which the NaPro Patent Rights containing a Valid Claim expire following their
full term (including any extension) as granted by the United States Patent and
Trademark Office or the equivalent patent authority in other countries in the
Territory (with respect to non-U.S. patents) and shall not include pre-mature
invalidation as contemplated in Section 15.5.2.
15.2 Termination by ▇▇▇▇▇▇ Without Cause. ▇▇▇▇▇▇ may terminate
this Agreement at any time without cause upon twelve (12) months prior written
notice to
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NaPro. ▇▇▇▇▇▇ shall be responsible for payment of any milestone payments set
forth in Section 3.1, that have been earned prior to the date of ▇▇▇▇▇▇'▇ notice
of termination.
15.3 Termination by Either Party for Cause. Either Party shall have the
right, without prejudice to any other rights or remedies available to it, to
terminate this Agreement for cause upon thirty (30) days' written notice to the
other Party in any of the following events:
15.3.1 Bankruptcy. If the other Party becomes insolvent, is
adjudged bankrupt, applies for judicial or extra-judicial settlement with its
creditors, makes an assignment for the benefit of its creditors, voluntarily
files for bankruptcy or has a receiver or trustee (or the like) in bankruptcy
appointed by reason of its insolvency, or in the event an involuntary bankruptcy
action is filed against the other Party and not dismissed within ninety (90)
days, or if the other Party becomes the subject of liquidation or dissolution
proceedings or otherwise discontinues business.
15.3.2 Material Breach. If the other Party commits a Material
Breach of this Agreement and the Party alleged to be in breach fails to either:
(a) cure such Material Breach; or (b) commence dispute resolution proceedings
under Article 16 contesting whether a Material Breach has occurred and/or
whether such breach is a Material Breach within sixty (60) days after receipt of
written notice from the Party asserting the Material Breach. "Material Breach"
as used herein shall mean:
15.3.2.1 with respect to ▇▇▇▇▇▇, a willful failure
by ▇▇▇▇▇▇ to pay any: (a) milestone payments pursuant to Section 3.1; (b)
Additional Consideration payments pursuant to Article 4; (c) Development Plan
funding payments that ▇▇▇▇▇▇ is obligated to make pursuant to Section 6.2; (d)
or Bulk Drug supply payments pursuant to Sections 8.2 and 8.3 (except to the
extent of any good faith payment dispute submitted to Alternate Dispute
Resolution pursuant to Article 16); or
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15.3.2.2 with respect to NaPro, a willful failure to
perform any material obligations of NaPro under Article 6 and/or the Development
Plan, and/or under Article 8.
15.3.3 Notwithstanding anything to the contrary herein, NaPro
may challenge ▇▇▇▇▇▇'▇ failure to comply with its obligations pursuant to
Section 9.3 as a potential Material Breach of the terms of this Agreement only
one (1) time per Sales Year.
15.4 [SECTION NOT USED]
15.5 Termination by ▇▇▇▇▇▇ for Cause.
15.5.1 Related to Finished Product. If at any time during the
Term: (a) the Development Committee determines that obtaining or maintaining a
Regulatory Approval is not feasible due to any one (1) or more of the following:
(i) documented adverse reactions or other safety issues with the Finished
Product, (ii) the Finished Product's lack of efficacy or limited efficacy, or
(iii) registration is not allowed or approved because of orphan drug status of a
product containing Paclitaxel owned, marketed or sold by a Third Party; (b) the
Finished Product is withdrawn or recalled from the market in any country in the
Territory due to safety issues or adverse events which lead ▇▇▇▇▇▇ to conclude
that such safety issues or adverse events could not be alleviated using
commercially reasonable efforts to allow re-entry into the market; (c) the
Finished Product is withdrawn or recalled from the market in any country in the
Territory due to efficacy issues which lead the Development Committee to
conclude that such efficacy issues could not be alleviated using commercially
reasonable efforts to allow re-entry into the market; (d) Regulatory Approval
for at least one Finished Product is not received on or before [THIS PORTION HAS
BEEN REDACTED.] ; or (e) ▇▇▇▇▇▇ withdraws any Application of Regulatory Approval
for a Finished Product due to documented adverse reactions or other safety
issues which lead ▇▇▇▇▇▇ (in consultation with the Development Committee) to
conclude that such adverse reactions and safety issues could not be alleviated
using commercially reasonable efforts and that re-submission of another
Application for Regulatory Approval would not be reasonably feasible, then
▇▇▇▇▇▇
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may, at its option, terminate this Agreement upon thirty (30) days' prior
written notice to NaPro. ▇▇▇▇▇▇ may, at its option, exercise its right of
termination under this Section 15.5.1 on a country-by-country basis, and, if
▇▇▇▇▇▇ does so, ▇▇▇▇▇▇'▇ termination notice shall specify the country or
countries of the Territory affected. Upon such termination, the definition of
the term "Territory" shall be deemed thereby to have been amended to exclude
that country or area, and NaPro shall have the right to develop products
containing Paclitaxel for manufacture, use and sale in that country or area and
the right to use and reference Paclitaxel Data without any of the limitations
imposed upon NaPro by Article 11 of this Agreement.
15.5.2 Related to Patent Invalidation. In the event that one
(1) or more claims of an issued and unexpired NaPro Patent (in the case of the
NaPro Formulated Product) or ▇▇▇▇▇▇ Patent (in the case of the ▇▇▇▇▇▇ Formulated
Product) or a patent included in Joint Patent Rights or any patent in-licensed
from a Third Party as contemplated in Section 2.3 has been held unenforceable,
unpatentable or invalid by a decision of a court or governmental agency of
competent jurisdiction that is unappealable or unappealed within the time
allowed for appeal, or has been admitted by NaPro (in the case of a NaPro
Patent) or ▇▇▇▇▇▇ (in the case of an ▇▇▇▇▇▇ Patent) to be invalid or
unenforceable through reissue, disclaimer, abandonment or otherwise, and the
result of such invalidation(s) is that the manufacture, sale or Commercial Use
of no Finished Product(s) in accordance with the actual or anticipated NDA
approval is covered by any Valid Claim of a NaPro Patent (in the case of the
NaPro Formulated Product) or ▇▇▇▇▇▇ Patent (in the case of the ▇▇▇▇▇▇ Formulated
Product) or a patent included in Joint Patent Rights or any patent in-licensed
from a Third Party as contemplated in Section 2.3, then ▇▇▇▇▇▇ may, at its
option, terminate this Agreement upon thirty (30) days' prior written notice to
NaPro.
15.5.3 Related to Breach of Representation or Warranty. In the
event that NaPro breaches a representation or warranty made by NaPro in Article
12, which breach has a material adverse effect on the Development Program or the
development, marketing, or
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sale of Finished Product, ▇▇▇▇▇▇ may terminate this Agreement upon thirty (30)
days prior written notice to NaPro.
15.6 Consequences of Termination. In the event of expiration or early
termination of this Agreement pursuant to this Article 15, the Parties shall
have the following rights and obligations:
15.6.1 Expiration of Term. Upon expiration of the Term: (a)
the License shall be fully-paid up and irrevocable; (b) ▇▇▇▇▇▇ shall be entitled
to retain all Paclitaxel Data within the Territory and shall have the exclusive
right (exclusive even as to NaPro) to use all Paclitaxel Data within the
Territory, within the Field; and (c) subject to any arrangements negotiated by
the Parties pursuant to Article 11, NaPro shall be entitled to retain all
Paclitaxel Data outside the Territory or outside the Field and use all
Paclitaxel Data outside the Territory or outside the Field. Subject to any
arrangements negotiated by the Parties pursuant to Article 11, ▇▇▇▇▇▇ shall not
be entitled to use or reference any Paclitaxel Data outside the Territory or
outside the Field. NaPro shall not be entitled to use or reference any
Paclitaxel Data within the Territory, within the Field.
15.6.2 Termination by ▇▇▇▇▇▇ Without Cause. If ▇▇▇▇▇▇
terminates the Agreement without cause pursuant to Section 15.2: (a) the License
shall automatically terminate upon the effective date of termination; (b) ▇▇▇▇▇▇
shall transfer and/or return to NaPro all Regulatory Approvals and copies of all
Paclitaxel Data, and ▇▇▇▇▇▇ shall have no right to use such Paclitaxel Data; (c)
▇▇▇▇▇▇ shall pay for and NaPro shall deliver to ▇▇▇▇▇▇ any Bulk Drug scheduled
to be delivered within the six (6) months following the date of the notice of
termination at a cost of [THIS PORTION HAS BEEN REDACTED.] of Bulk Drug; (d)
NaPro may, at its option, repurchase from ▇▇▇▇▇▇ at ▇▇▇▇▇▇'▇ cost, any remaining
inventory of Bulk Drug or Finished Product on the effective date of termination;
(e) upon NaPro's request, the Parties shall reasonably cooperate to effectuate
the transfer or assignment of End-User Customer contracts for Finished Product
from ▇▇▇▇▇▇ to NaPro; (f) ▇▇▇▇▇▇ shall ▇▇▇▇▇ to NaPro a co-exclusive license to
use the trademarks referred to in
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Section 9.6 for a transition period not to exceed two (2) years from the date of
termination; and (g) ▇▇▇▇▇▇ shall pay NaPro a termination fee determined in
accordance with the calculation mutually agreed upon by the Parties
("Termination Fee") upon the effective date of termination, which Termination
Fee may be offset, at ▇▇▇▇▇▇'▇ option, either against any remaining indebtedness
of NaPro under the Loan Agreement or any other financial obligation of NaPro,
including any amounts otherwise due ▇▇▇▇▇▇ as a credit against Additional
Consideration. The Termination Fee is limited to the [THIS PORTION HAS BEEN
REDACTED.] The Termination Fee shall be mutually agreed upon between the
Parties, but in no event shall [THIS PORTION HAS BEEN REDACTED.]
Notwithstanding the foregoing, ▇▇▇▇▇▇ shall not pay a Termination Fee in the
event that the date of termination is after the date which is two (2) years
after the date of First Commercial Sale.
15.6.3 Termination by NaPro for Cause. In the event NaPro
terminates this Agreement for cause pursuant to Section 15.3, then: (a) the
provisions of Section 15.6.2(a)-(f) shall be applicable; and (b) NaPro may
either, at its option, require ▇▇▇▇▇▇ to pay a Termination Fee as referenced in
Section 15.6.2(g) or seek and, if successful, collect damages from ▇▇▇▇▇▇ in an
ADR proceeding pursuant to Article 16. Notwithstanding the foregoing, ▇▇▇▇▇▇
shall not pay a Termination Fee in the event that the date of termination is
after the date which is two (2) years after the date of First Commercial Sale.
15.6.4 Termination by ▇▇▇▇▇▇ for Cause. In the event ▇▇▇▇▇▇
terminates this Agreement for cause pursuant to Section 15.3, then: (a) the
provisions of Section 15.6.1(a)-(c), shall be applicable and (b) ▇▇▇▇▇▇ may seek
and, if successful, collect damages from NaPro in an ADR proceeding pursuant to
Article 16.
15.6.5 [SECTION NOT USED]
15.6.6 Termination by ▇▇▇▇▇▇ for Cause Related to Finished
Product. In the event of termination of this Agreement by ▇▇▇▇▇▇ for cause
related to the Finished Product pursuant to Section 15.5.1 or 15.5.2, then: (a)
the provisions of Section 15.6.2(a),
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(b), (d) and (e) shall be applicable; and (b) the due date(s) for any remaining
payments due to ▇▇▇▇▇▇ by NaPro under the Loan Agreement shall be extended by
twelve (12) months, provided that interest shall continue to accrue during such
twelve (12)-month period in accordance with the terms of the Loan Agreement.
15.6.7 Termination by Abbott for Cause Related to a Breach of
Representation or Warranty. In the event of termination of this Agreement by
Abbott for cause related to the breach of a representation and warranty made by
NaPro in Article 12 pursuant to Section 15.5.3, then: (a) the License shall
automatically terminate upon the effective date of termination; (b) Abbott shall
transfer and/or return to NaPro all Regulatory Approval and copies of all
Paclitaxel Data; provided, however, that Abbott shall have the right to retain
copies of the Paclitaxel Data and use such Paclitaxel Data; (c) Abbott shall not
be obligated to pay for any Bulk Drug scheduled to be delivered after the date
of termination; and (d) NaPro may, at its option, repurchase from Abbott, at
▇▇▇▇▇▇'▇ cost, any remaining inventory of Bulk Drug on the effective date of
termination. In addition to termination of this Agreement pursuant to Section
15.5.3 and the consequences of termination of this Agreement pursuant to this
Section 15.6.7, Abbott shall have all other remedies available to it for breach
of contract and may seek and, if successful, collect damages from NaPro in an
ADR proceeding pursuant to Article 16.
15.6.8 NaPro Sale of Finished Product Post-Termination. In the
event that NaPro continues to sell Finished Product following termination of the
Agreement, NaPro shall indemnify and hold harmless Abbott for any and all Third
Party Claims of whatever nature and however arising, except with respect to any
Finished Product Manufactured by Abbott prior to termination and sold by NaPro
following termination (if applicable) as set forth in Section 13.1.2(a).
15.6.9 Joint Patent Rights and Joint Program Inventions. In
the event of termination of this Agreement for whatever reason, both Parties
shall have the right to practice or grant sublicenses under the Joint Patent
Rights and Joint Program Inventions
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anywhere in the Territory or outside the Territory either inside or outside the
Field. Notwithstanding the foregoing, (except in the event of termination of
this Agreement by Abbott pursuant to Section 15.3.2.2), then for a period of
five (5) years following the date of termination, Abbott shall not practice or
grant sublicenses under the Joint Patent Rights or Joint Program Inventions in
the Unavailable Territories in the Field where NaPro has an existing agreement
with a Third Party relating to the Joint Patent Rights or Joint Program
Inventions at the time of termination of this Agreement; subject, however, to
▇▇▇▇▇▇'▇ right to continue to practice, or maintain sublicenses to, Joint Patent
Rights or Joint Program Inventions which are in effect at the date of
termination.
15.7 Survival of Certain Provisions. Expiration or early termination of
this Agreement pursuant to this Article 15 shall not relieve either Party of its
obligations incurred prior to expiration or termination, including, but not
limited to obligations to make payments which were earned and accrued prior to
expiration or termination and obligations for indemnification which arose out or
actions which occurred prior to termination. The following sections shall
survive expiration or termination of this Agreement by any means and for any
reason following such expiration or termination for such period of time as
stated in this Agreement or as indicated in this Section 15.7:
Article 1 Definitions;
Section 5.2 Record Keeping and Audit Rights (records to be
maintained not less than three (3) years post
expiration or termination.);
Section 8.4.1 Bulk Drug Warranties;
Section 8.7.1 Qualification of Stand-By Manufacturing Facility;
Section 10.3 Ownership;
Section 10.5(b) Prosecution and Maintenance (provided, however, that after
termination, (i) outside counsel of NaPro and
Abbott shall jointly make any determination that
the Development Committee was required to make
pursuant to the third full sentence of
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Section 10.5(b), and (ii) in lieu of the
requirements of the last sentence of Section
10.5(b), Abbott and NaPro shall each be responsible
for 50% of all costs and expenses incurred under
Section 10.5 within the Territory, and NaPro shall
be responsible for all costs and expenses incurred
under Section 10.5 outside the Territory);
Section 10.7 Cooperation;
Section 10.9 Patent Enforcement;
Section 10.10 Defense of Certain Claims;
Section 10.11 Expense for Defense;
Section 10.12 Settlement (if litigation is pending at termination date);
Section 12 Representations and Warranties (provided, however, that the
provisions of Section 12 shall survive for (i) only
three (3) years following termination with respect
to Indemnifiable Losses asserted with respect to
Third Party Claims; and (ii) only two (2) years
with respect to Claims asserted by the Parties
against each other that do not involve the
assertion of a Third Party Claim);
Section 13 Indemnification (survival for three (3) years) (in the event that
NaPro continues to sell the Finished Product in the event of
termination, NaPro shall indemnify Abbott for 100% of all Claims
and Losses arising out of continued sale of the Finished Product);
Section 15.6 Consequences of Termination;
Article 16 Alternative Dispute Resolution;
Section 17 Confidentiality and Publicity (provided, however, that the rights to
disclose or use Confidential Information shall be commensurate
with each Party's rights to use Paclitaxel Data following
termination);
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Section 18.2 Severability;
Section 18.5 Waiver;
Section 18.7 Notices;
Section 18.8 Entire Agreement;
Section 18.10 Interpretation; and
Section 18.11 Governing Law.
15.8 Effect of Termination on Milestone Payments. Abbott shall not be
responsible for any milestone payments pursuant to Section 3.1 which are earned
after the date of ▇▇▇▇▇▇'▇ notice of termination to NaPro under any provision
under this Article 15.
ARTICLE 16
ALTERNATIVE DISPUTE RESOLUTION
All disputes arising out of or in connection with this Agreement
(except those involving actions commenced by or involving Third Parties and
affecting or involving only one of the Parties) shall be resolved with the
following mechanism:
16.1 Attempted Amicable Resolution. The Parties shall promptly give
each other written notice of any disputes requiring resolution hereunder, which
written notice shall specify the Section(s) of this Agreement the other Party is
alleged to have breached or pursuant to which there is a dispute and shall
briefly state the initiating Party's claims. The Parties shall use reasonable
efforts to resolve any such disputes in an amicable manner.
Any disputes arising in connection with this Agreement which cannot be
resolved in an amicable manner by representatives of the Parties shall be
referred, not later than thirty (30) days after initiation of dispute resolution
proceedings under this Section 16.1, to the following corporate officers of the
Parties for resolution:
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For Abbott:
President, Hospital Products Division (or his or her designee)
For NaPro:
CEO (or his or her designee)
Such officers (or their designees) shall attempt to resolve the dispute
and shall communicate with each other by facsimile or telephone or in personal
meetings in an effort to resolve the dispute.
16.2 Alternate Dispute Resolution. Any disputes arising in connection
with this Agreement which cannot be resolved by the Parties within forty-five
(45) days after initiation of dispute resolution proceedings under Section 16.1
shall be finally settled by binding Alternate Dispute Resolution in accordance
with the procedures set forth in Exhibit G ("ADR"); provided, however, that an
assertion by NaPro that Abbott is in Material Breach of ▇▇▇▇▇▇'▇ obligations
pursuant to Section 9.3 shall not be more than one (1) time in any Sales Year.
Judgment upon any award rendered by the neutral in such proceedings may be
issued and enforced by any court having competent jurisdiction.
16.3 ADR Ruling. The neutral in any ADR proceeding under Section 16.2
relating to an alleged breach of the Agreement by either Party shall determine
and advise the Parties in writing:
16.3.1 whether either Party has committed a breach of any of
its obligations under this Agreement; and
16.3.2 if either Party has committed a breach;
16.3.2.1 whether such breach is a Material Breach or
a breach other
than a Material Breach; and
16.3.2.1 the appropriate remedy for any such breach
pursuant to Section 16.4.
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16.4 ADR Remedies. The neutral in any ADR proceeding under Section 16.2
shall have the authority to award the non-breaching Party the following relief
and any other relief as set forth in Article 15:
16.4.1 For a Material Breach, an award of damages and/or
equitable relief and/or termination of this Agreement in whole or in part
(including the termination of any licenses granted to the breaching Party,
whether in whole or in part, in the Territory or on a country-by-country basis);
and
16.4.2 For a breach other than a Material Breach, an award of
damages and/or equitable relief, but not termination of this Agreement in whole
or in part or any licenses granted to the breaching Party under this Agreement.
16.5 Effect on Time Periods in this Agreement. If there is a dispute
regarding the exercise of any right, or the performance of any obligation, under
this Agreement, and this Agreement provides that such right may or must be
exercised, or that such performance must be rendered, by a specified date or
within a specified period of time, then the applicable date shall be extended,
and the applicable time period shall be tolled, without prejudice to either
Party pending the outcome of the ADR proceeding.
16.6 Exclusivity. The ADR process contemplated by this Article 16 shall
be the exclusive means for either Party to this Agreement to seek resolution of
any dispute or adjudication of alleged breach arising out of, relating to, or
connected with this Agreement, except that either Party may bring an action
before a competent court for the adoption of provisional or protective measures
or equitable relief. The pendency of a matter referred to ADR shall not excuse
any Party for performance under this Agreement, it being understood that such
performance is without prejudice to the Party's position in the dispute
resolution process.
16.7 Express Remedies. If this Agreement provides for an express remedy
in the event of a breach or an express outcome upon the occurrence of certain
events, the neutral in the ADR proceeding shall not have the authority to award
a different remedy or mandate a
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different outcome, unless both Parties agree. The preceding sentence shall not
limit the neutral's ability to award a remedy or mandate an outcome that is in
addition to the express remedy or outcome provided in this Agreement.
ARTICLE 17
CONFIDENTIALITY AND PUBLICITY
17.1 Transfer of Information. Each Party has provided to the other
information relating to Paclitaxel in connection with negotiation of this
Agreement and each Party will in the future provide information in relation to
this Agreement which the disclosing Party considers to be confidential
(collectively, "Confidential Information"). "Confidential Information" shall
include, but is not limited to, the terms and provisions of this Agreement, Bulk
Drug Forecast, Finished Product, sales forecasts, Bulk Drug Specifications,
Development Plan, Finished Product Specifications, NaPro Technology, Abbott
Technology, Pre-Clinical and Clinical Data and information related to NaPro
Formulated Product, Abbott Formulated Product and NaPro Oral Formulated Product.
"Confidential Information" shall not include any information which:
17.1.1 Is now, or hereafter becomes, through no act or failure
to act on the part of the receiving Party, generally known or available to the
public;
17.1.2 Is known to the receiving Party at the time of
disclosure as evidenced by the receiving Party's written records;
17.1.3 Is hereafter furnished to the receiving Party by a
Third Party, as a matter of right and without restriction on disclosure;
17.1.4 Is developed independently by or for the receiving
Party without reference to Confidential Information, as evidenced by the
receiving Party's competent written records;
17.1.5 Is legally required to be disclosed by the receiving
Party, provided that the receiving Party gives the other Party prompt notice of
such legal requirement such
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that such other Party shall have the opportunity to apply for confidential
treatment of such Confidential Information; or
17.1.6 Is disclosed with the written approval of the
disclosing Party.
17.2 Restricted Disclosure. The Parties will restrict
dissemination of Confidential Information received from the other Party to only
those of its employees and agents with a need to know such information, except
that:
17.2.1 In the case of Abbott, NaPro Confidential Information
may be provided to regulatory authorities in connection with any application for
an IND, or Application(s) for Regulatory Approval for the Finished Product(s).
17.2.2 In the case of NaPro, Abbott Confidential Information
may be provided to: (a) regulatory authorities in connection with any
application for an IND or an equivalent application in countries in the
Territory other than the United States; (b) Application(s) for Regulatory
Approval for the Finished Product(s); or (c) to any other Person with which
NaPro has an agreement relating to the Application for Regulatory Approval and
sale of the Finished Product, solely in the Unavailable Territories for the
purpose of obtaining an IND or Application for Regulatory Approval for the
Finished Product, subject to suitable confidentiality undertakings.
17.2.3 In the case of Abbott, NaPro Confidential Information
may be used and provided to Third Parties to the extent reasonably necessary for
Abbott to perform its obligations and/or exercise its rights under this
Agreement, including but not limited to, performing research and development
activities pursuant to the Development Plan and in connection with the sale of
Finished Product in the Field in the Territory during the Term; provided,
however, that as a pre-condition to any disclosure by Abbott to such Third
Parties, Abbott shall procure from such Third Parties for the joint benefit of
Abbott and NaPro a written agreement to be bound to confidentiality obligations
no less strict than those imposed by this Article 17. Abbott shall supply NaPro
with a copy of each such written agreement within a reasonable period of time
after its execution by Abbott and such Third
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Party. Without NaPro's prior written consent and subject to the provisions in
Section 8.7.1, Abbott shall under no circumstances disclose any NaPro
Confidential Information to any Third Party which, itself or through an
Affiliate, manufactures or sells products containing Paclitaxel.
17.2.4 Following expiration or termination of this Agreement
and for a period of seven (7) years thereafter, neither Party shall utilize the
Confidential Information of the other Party and neither Party shall provide
Confidential Information to any Third Party, except as specifically stated in
this Agreement. Each Party shall, within twenty (20) Business Days following
expiration or termination of this Agreement, return to the other Party or
destroy all of the other Party's documents (whether in written or electronic (to
the extent ordinarily accessible) or other tangible format) containing
Confidential Information which are in that Party's or its agents' possession,
and destroy all documents (whether in written or electronic (to the extent
ordinarily accessible) or other tangible format) created by a Party or its
agents which incorporate the other Party's Confidential Information, however
only to the extent of the Confidential Information or the other Party. One (1)
copy of such documents containing Confidential Information so returned or
destroyed may be retained by each Party as part of its permanent records solely
for purposes of maintaining a record of Confidential Information returned or
destroyed. Upon completion of the obligations contained herein, each Party shall
provide the other a written document, signed by an officer of such Party,
certifying compliance with the provisions of this Section 17.2.4.
17.3 Precautions. Each Party shall maintain Confidential Information
received from the other Party as confidential, and protect the same from misuse,
espionage, loss or theft and shall not disclose the Confidential Information to
others except as provided in Section 17.2.
17.4 Duration of Confidentiality Obligation. Unless otherwise stated in
this Article 17, the confidentiality obligations of the Parties hereunder shall
remain in effect during the Term and for seven (7) years after expiration or
termination of the Term.
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17.5 Publicity and Announcements. The Parties agree that, upon
execution of this Agreement, a press release approved by both parties will be
issued. Except as specifically set forth in this Section 17.5, neither Party (an
"Originating Party") shall: (a) originate any publicity, news release or other
public announcement, written or oral, whether to the public press, stockholders
or otherwise, relating to this Agreement, matters relevant to this Agreement,
amendments hereto or performance by the Parties hereunder or the Bulk Drug or
Finished Product; or (b) use the name of the other Party in any publicity, news
release or other public announcement, except (i) with the prior written consent,
review and approval of the other Party (a "Reviewing Party") in which case the
Originating Party shall forward the proposed public announcement to the
Receiving Party (which, in the case of Abbott, shall be its Manager of Public
Affairs, Hospital Products Division, and in the case of NaPro, shall be its
General Counsel) not less than three (3) Business Days prior to its use or
publication, or (ii) as required by written state or federal securities law or
regulation in the written opinion of legal counsel to the Originating Party, in
which case the Originating Party will give to the Reviewing Party at least one
(1) full twenty-four (24) hour Business Day prior written notice of such
proposed legally required disclosure to review, comment and propose
modifications. In the event that the Reviewing Party fails to respond within the
three (3) Business Days in the case of (i), or the twenty-four (24) hour period
in the case of (ii), the Originating Party shall be free to issue such release
without comment from the Reviewing Party.
ARTICLE 18
MISCELLANEOUS PROVISIONS
18.1 Force Majeure. Except as set forth in Section 8.7.2, in the event
that either Party's performance of its obligations under this Agreement shall be
prevented by any cause beyond its reasonable control, including without
limitation acts of God, acts of government, shortage of material, accident,
fire, delay or destruction of means of transport or other disaster, provided
that the affected Party shall have used its reasonable best efforts to avoid
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or remove the cause of such nonperformance and to minimize the duration and
negative affect of such nonperformance, then such affected Party's performance
shall be excused and the time for performance shall be extended for the period
of delay or inability to perform due to such occurrence. The affected Party
shall continue performance under this Agreement using its best efforts as soon
as such cause is removed.
18.2 Severability. In the event that any provision of this Agreement
shall be held to be unenforceable, invalid or in contravention of applicable
law, such provision shall be of no effect, the remaining portions of this
Agreement shall continue in full force and effect, and the parties shall
negotiate in good faith to replace such provision with a provision which effects
to the extent possible the original intent of such provision.
18.3 Assignment/Third Parties. Neither Party shall assign any rights or
obligations under this Agreement to Third Parties without the prior written
consent of other Party. Notwithstanding the foregoing, (a) Abbott may assign
this Agreement or any of its rights or obligations under this Agreement to one
or more of its Affiliates (provided that Abbott guarantees the performance of
such assigned rights or obligations by the Affiliate and such Affiliate shall
become a party to this Agreement) without NaPro's prior written consent, (b)
Abbott may engage a Third Party to assist Abbott in marketing, sales and
distribution activities for the Finished Product, provided that Abbott continues
to market and sell the Finished Product as well, (c) Abbott may perform any one
or more of its obligations (other than marketing, sales and distribution
activities, which is addressed in Subsection (b)) set forth in this Agreement by
appointing Third Parties to perform some or all of ▇▇▇▇▇▇'▇ obligations
hereunder on ▇▇▇▇▇▇'▇ behalf and in ▇▇▇▇▇▇'▇ name, provided that NaPro has given
Abbott its prior written consent to each such appointment, which consent shall
not be unreasonably withheld or delayed, (d) either Party may assign this
Agreement and all of its rights and obligations under this Agreement to any
successor (whether by merger, sale of assets, or otherwise) to all of the
respective Party's business related to this Agreement, and (e) subject to
approval of the Development Committee, NaPro may engage one or more
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Third Parties to assist NaPro or Abbott in conducting research and development
activities under the Development Program.
18.4 Relationship of Parties. Nothing contained in this Agreement shall
be construed so as to operate or to place any Party hereto in the relationship
of employee or agent or joint venturer or legal representative of the other
Party. It is hereby expressly agreed and acknowledged that each of the parties
hereto is an independent contracting Party which does not have the authority or
power for or on behalf of the other Party hereto to enter into any contract to
incur debts, to accept money, to assume any obligations or to make any
warranties or representations whatsoever.
18.5 Waiver. The waiver by either Party of a breach or a default of any
provision of this Agreement by the other Party shall not be construed as a
waiver of any succeeding breach of the same or any other provisions, nor shall
any delay or omission on the part of either Party to exercise or avail itself of
any right, power or privilege that it has, or may have hereunder, operate as a
waiver of any right, power or privilege by such Party.
18.6 Contract Modification. Any modification, alteration, change or
variation in any provision of this Agreement shall be only made in a writing
that refers to this Agreement executed by both parties.
18.7 Notices. Notices by one Party to the other shall be in writing
and, unless otherwise provided in this Agreement, will be deemed to have been
duly given when delivered in person or when dispatched by registered mail or
reputable overnight air delivery service (receipt provided) or by a telecopy, a
copy of which is dispatched by reputable overnight delivery service, as follows:
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If to NaPro:
NaPro BioTherapeutics, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Bartlit ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to ▇▇▇▇▇▇:
▇▇▇▇▇▇ Laboratories
Hospital Products Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇. ▇▇-▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President, Hospital Products Division
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ Laboratories
Domestic Legal Operations
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇. 322, Bldg. AP6D
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Divisional Vice President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
18.8 Entire Agreement. This Agreement, together with the Stock Purchase
Agreement and the Loan Agreement, constitutes the entire agreement of the
parties (and into which all prior negotiations, commitments, representations and
undertakings with respect to the subject matter are merged) and there are no
other undertakings, warranties or agreements between the parties relating to the
subject matter of this Agreement. This Agreement is not
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based upon any representations as to profit or worth nor has any representation
been made (whether by this Agreement or otherwise) to induce either NaPro or
Abbott to accept and execute this Agreement.
18.9 Compliance with Laws. Each Party shall comply with, and cause
their Affiliates to comply with, all applicable laws, rules, regulations and
treaties in each country in which each such Party shall manufacture, store,
market, sell and/or distribute either the Bulk Drug or Finished Product with
respect to their conduct of each of their respective rights and obligations
under this Agreement.
18.10 Interpretation. Headings and captions in this Agreement are for
ease of reference only and shall not be used to interpret this Agreement. The
language of this Agreement shall be deemed to be the language mutually chosen by
the parties and no rule of strict construction shall be applied against either
Party hereto.
18.11 Governing Law. This Agreement shall be construed in accordance
with and governed by the internal laws of the State of Illinois, excluding such
state's rules relating to conflicts of laws, and its form, execution, validity,
construction and effect shall be determined in accordance with such internal
laws.
18.12 Counterparts. This Agreement may be executed in two (2)
counterparts, each of which shall be an original, but which together shall form
one agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Development,
License and Supply Agreement to be executed by their duly authorized
representatives as of the Effective Date.
▇▇▇▇▇▇ LABORATORIES NAPRO BIOTHERAPEUTICS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Print Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President Title: President/CEO
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