DEVELOPMENT AND LICENSE AGREEMENT between Eurand, Inc. And SmithKline Beecham Corporation d/b/a GlaxoSmithKline For a
Exhibit 4.18
Confidential Treatment has been requested for portions of this exhibit. The copy filed herewith
omits the information subject to the confidentiality request. Omissions are designated as “***”. A
complete version of this exhibit has been filed separately with the Securities and Exchange
Commission.
DEVELOPMENT
AND
LICENSE AGREEMENT
AND
LICENSE AGREEMENT
between
Eurand, Inc.
Eurand, Inc.
And
SmithKline ▇▇▇▇▇▇▇ Corporation d/b/a GlaxoSmithKline
SmithKline ▇▇▇▇▇▇▇ Corporation d/b/a GlaxoSmithKline
For a
***
CONFIDENTIAL
PREAMBLE
THIS DEVELOPMENT AND LICENSE AGREEMENT dated as of the 21st day of April 2006, (the
“Effective Date”) is by and between Eurand, Inc., a Nevada corporation with its principal
offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (“Eurand”) and SmithKline ▇▇▇▇▇▇▇
Corporation d/b/a GlaxoSmithKline, a Pennsylvania corporation with its principal offices at One
Franklin Plaza, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (“GSK”).
Eurand and GSK are sometimes collectively referred to herein as the “Parties” and
separately as a “Party”.
A. Eurand is the owner or licensee of the Eurand Intellectual Property Rights (as hereinafter
defined), and has the right to grant certain licenses or sublicenses thereunder.
B. GSK desires that Eurand undertake a project to develop Product (as hereinafter defined)
that is covered under the Eurand Intellectual Property Rights.
C. GSK also desires to obtain an *** license from Eurand under the Eurand Intellectual
Property Rights to use, package, sell, offer for sale and import Product in the Field (as
hereinafter defined) in the Territory (as hereinafter defined) on the terms and conditions set
forth in this Agreement (as hereinafter defined).
D. Eurand is willing to undertake such a development project relating to Product and to grant
such a license on the terms and conditions set forth in this Agreement.
E. Eurand and GSK will enter into supply agreements pursuant to which Eurand will manufacture
and supply GSK’s total clinical and commercial requirements for bulk tablets of Product.
NOW, THEREFORE, in consideration of the agreements and covenants hereinafter set forth and
intending to be legally bound hereby, Eurand and GSK hereto covenant and agree as follows:
1 DEFINITIONS: The following capitalized terms shall have the following meanings when used in this
Agreement and all terms defined in the singular will have the same meanings when used in the plural
(and vice versa), unless otherwise specified. Further, the word “including” or any
variation thereof means “including without limitation” and the word “including” or any
variation thereof will not be construed to limit any general statement which it follows to the
specific or similar items or matters immediately following it.
1.1 “AAA” will have the meaning set forth in Section 14.14.1.
1.2 “Abandoned Eurand Patent Rights” will have the meaning set forth in Section 9.4.2.
1.3 “Abandoned GSK Invention Patent Rights” will have the meaning set forth in Section
9.4.1.
1.4 “Act” means the United States Food, Drug and Cosmetic Act, as amended, and the
regulations promulgated thereunder from time to time.
1.5 “Action” will have the meaning set forth in Section 9.7.2.
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1.6 An “Affiliate” of an Entity means any other Entity, directly or indirectly
controlling, controlled by or under common control with such Entity and, for purposes of this
Section 1.6 only, “control” means (i) direct or indirect beneficial ownership of fifty percent
(50%) or more (or such lesser percentage which is the maximum allowed to be owned by a foreign
corporation in a particular jurisdiction) of the voting stock or shares entitled to vote on or
direct the affairs of such Entity, or (ii) the possession, directly or indirectly, of the right or
power to direct or cause the direction of the policies or management of such Entity, whether by
ownership of stock, by contract or otherwise.
1.7 “Agreement” means this Development and License Agreement, together with all
exhibits annexed hereto.
1.8 “Applicable Laws” means the applicable provisions of any and all national,
supranational, regional, state and local laws, treaties, statutes, rules, regulations,
administrative codes, ordinances, judgments, decrees, directives, injunctions, orders, permits
(including the Regulatory Approvals) of or from any court, arbitrator or governmental agency or
authority having jurisdiction over or related to the subject item.
1.9 “Business Day” means any day other than a day which is a Saturday, a Sunday or any
day banks are authorized or required to be closed in Ohio, Pennsylvania, Italy or the United
Kingdom.
1.10 “Calendar Quarter” means each of the consecutive three (3) month periods ending
March 31, June 30, September 30, and December 31; provided, however, that the first
(1st) Calendar Quarter under this Agreement will be the period beginning on the
Effective Date and ending on the end of the Calendar Quarter in which the Effective Date is
encompassed.
1.11 “Calendar Year” means, for the first Calendar Year, the period beginning on the
Effective Date and ending December 31, 2006, and for each Calendar Year thereafter, each successive
period beginning on January 1 and ending twelve (12) consecutive calendar months later on December
31; provided, however, that the last Calendar Year of the Term will be the period beginning on
January 1 and ending on the effective date of expiration or termination of the Term.
1.12 “cGMP” or “GMP” means current Good Manufacturing Practices as determined
at any given time by the FDA, based on the authority and regulations set forth in Parts 210 and 211
of the United States Code of Federal Regulations and based on all applicable FDA rules,
regulations, guides and guidances, as amended from time to time and in effect during the Term.
1.13 “Clinical Studies” means any testing, use or administration of the Product in
humans in preparation for obtaining Regulatory Approvals to commercialize Product in the Field in
the Territory, including, but not limited to, bioequivalence studies, pharmacokinetic studies,
organoleptic evaluation studies, and/or clinical efficacy studies.
1.14 “Clinical Supply Agreement” will have the meaning set forth in Section 6.2.
1.15 “Commercially Reasonable” or “Commercially Reasonable Efforts” means
efforts and resources normally used by a Party to accomplish a similar objective for a
pharmaceutical product owned by it or to which it has rights, which is of similar market potential at a
similar stage in its development or product life, taking into account issues of patent coverage,
safety and efficacy, product profile, the competitiveness of the marketplace, the proprietary
position of the compound or
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product, the regulatory structure involved, the profitability of the
applicable product, and other relevant factors.
1.16 “Commercial Supply Agreement” will have the meaning set forth in Section 6.3.
1.17 “Competing Business Entity” will have the meaning set forth in Section 10.6.3.
1.18 “Competitive Product” means any *** (i.e., *** any s***, *** or *** component to
the drug ***) orally disintegrating, dispersing or dissolving dosage labeled as containing any
amount of the Compound, whether or not as the sole active pharmaceutical ingredient, other than
Product. For the avoidance of doubt, the term “Competitive Product” will in no event include, or
be deemed to include, any ***, *** or *** pharmaceutical formulation or composition containing ***.
1.19 “Compound” means ***, the compound that is known by the generic name ***, and its
*** and ***.
1.20 “Confidential Information” means any and all information disclosed to or obtained
by Recipient pursuant to or in connection with the negotiation, execution, delivery and performance
of this Agreement or the consummation of the transactions contemplated hereby and any and all
information regarding, related to, or associated with any or all elements of this Agreement,
including the development, manufacture and/or commercialization of Product in the Field in and
outside of the Territory or any aspect thereof, or each Party’s operations that is disclosed by the
Disclosing Party to the Recipient; provided, however, that Confidential Information will not
include information which: (i) at the time of disclosure is in the public domain; (ii) after
disclosure becomes part of the public domain, except through breach of this Agreement; (iii) the
Recipient can demonstrate by reasonable proof was in its possession prior to the time of disclosure
by the Disclosing Party hereunder, and was not acquired directly or indirectly from the Disclosing
Party; (iv) the Recipient can demonstrate by reasonable proof was developed by or on behalf of
Recipient independent of and without reference to the Disclosing Party’s Confidential Information;
or (v) becomes available to Recipient from a Third Party who did not acquire such information
directly or indirectly from the Disclosing Party and who is not otherwise prohibited from
disclosing such information.
1.21 “Confidentiality Agreements” will have the meaning set forth in Section 13.1.9.
1.22 “Control” means, with respect to the subject item, the ability and authority of a
Party or its Affiliate, whether arising by ownership, possession or pursuant to a license or
sublicense, to grant licenses or sublicenses to the other Party under or to the subject item as
specified in this Agreement, without breaching the terms of any agreement with any Third Party
and/or its Affiliates.
1.23 “CTM” (i.e., “clinical trial material”) means presentations of Product
manufactured by Eurand pursuant to the Clinical Supply Agreement for use by or on behalf of GSK in
Clinical Studies.
1.24 “CTM Specifications” means with respect to any CTM, all specifications for
materials, approved suppliers, formula, manufacturing, analytical and testing procedures, release
and other processes relating to the manufacture of the CTM, which have been mutually agreed by the
Parties and made part of the Clinical Supply Agreement.
1.25 “Cure Period” will have the meaning set forth in Section 11.2.2.
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1.26 “Data” means all data and information generated by or on behalf of either Party
during the performance of their respective activities under the Program, including any data
generated by or on behalf of GSK during the conduct of any Clinical Studies.
1.27 “Disclosing Party” will have the meaning set forth in Section 13.1.1.
1.28 “DMF” means the Drug Master File developed and filed with Regulatory Authorities
by Eurand which relates to and describes the composition and manufacture of the Product.
1.29 “Drug Substance” means Compound which is manufactured by or on behalf of GSK and
which is used by Eurand in the manufacture of Product, including CTM.
1.30 “Drug Substance Specifications” means the GSK provided United States
specifications for the Drug Substance.
1.31 “Effective Date” will have the meaning set forth in the Preamble.
1.32 “Entity” means any individual, partnership, association, joint venture, limited
liability company, corporation or other business entity, or any government or regulatory,
administrative or political subdivision or agency, department or instrumentality thereof.
1.33 “Eurand” will have the meaning set forth in the Preamble.
1.34 “Eurand Auditor” will have the meaning set forth in Section 8.4.3(i).
1.35 “Eurand Data” means Data relating solely to (i) the ODT Technology and (ii) the
DMF as it relates solely to the ODT Technology.
1.36 “Eurand Development Activities” means those activities to be carried out by
Eurand in connection with the Program, which activities are conducted in accordance with the
Proposal and the terms of this Agreement, and as directed by the Steering Committee.
1.37 “Eurand Intellectual Property Rights” means Intellectual Property Rights
Controlled by Eurand *** on the Effective Date and at any time during the Term relating to the ODT
Technology, including, without limitation, the Eurand Patent Rights, Eurand Know-How, and Eurand
Trademarks relating to the ODT Technology, but excluding any GSK Intellectual Property Rights.
1.38 “Eurand Inventions” will have the meaning set forth in Section 9.3.4.
1.39 “Eurand Know-How” means any and all Know-How that is Controlled by Eurand *** on
the Effective Date or at any time during the Term (including, without limitation, any Know-
How to which Eurand *** under the ***), which is used in the making, having made, use, sale,
offering for sale and/or import of the Formulation and/or Product, but excluding any GSK Know-How.
1.40 “Eurand Patent Rights” means any and all Patent Rights Controlled by Eurand ***
(including, without limitation, any Patent Rights to which Eurand and/or its Affiliate obtained
rights under the ***), which include one or more claims that, but for this Agreement, would be
infringed by the making, having made, use, sale, offering for sale or import of the Formulation
and/or Product, *** patent applications filed by or on behalf of Eurand *** pursuant to Section ***
or *** by *** to
4
Section ***, but *** the ***. A list of the Patent Rights included within the
Eurand Patent Rights as of the Effective Date is attached hereto as Exhibit A, and *** such
Exhibit ***, or *** after ***.
1.41 “Eurand Publication” will have the meaning set forth in Section 13.3.1.
1.42 “Eurand Trademarks” means all Trademarks Controlled by Eurand *** on the
Effective Date or at any time during the Term, which are used in connection with the ODT
Technology. A list of the Eurand Trademarks as of the Effective Date is attached hereto as
Exhibit B, and *** such Exhibit ***, or *** after ***.
1.43 “Existing Eurand Patent Rights” will have the meaning set forth in Section 9.1.
1.44 “FDA” means the United States Food and Drug Administration or any successor
agency thereto.
1.45 “Field” means the treatment, palliation and/or treatment of all human disease.
1.46 “First Commercial Sale” means the date of the first commercial sale of Product in
the Field in the Territory by GSK and/or its Affiliates or sublicensees to distributors,
wholesalers or other customers in a quantity sufficient for the distribution of such Product to
pharmacies or other commercial distribution channels for sale in the Field in the Territory. Sales
of Product for compassionate use, named patient use, clinical trial purposes or other similar uses,
including, without limitation, for any Clinical Studies, will not constitute a First Commercial
Sale.
1.47 “Force Majeure Event” means any cause or causes which wholly or partially prevent
or delay the performance of obligations arising under this Agreement and which are not reasonably
within the control of the non-performing Party and cannot be prevented by the non-performing Party
through the use of Commercially Reasonable Efforts, including fire, floods, epidemics, explosions,
embargoes, war, acts of war (whether war is declared or not), insurrections, riots, civil
commotions, *** or other ***, acts of God or ***or *** in *** by any governmental authority
(including any ***).
1.48 “Formulation” means the formulation developed pursuant to the Program which (i)
identifies and selects the ingredients (including the Drug Substance) for inclusion in the Product,
(ii) sets forth the quantities of such ingredients, and (iii) ***and ***for ***and ***such *** with
the ODT Technology to form the ***.
1.49 “GSK” will have the meaning set forth in the Preamble.
1.50 “GSK Auditor” shall have the meaning set forth in Section 8.4.3(ii).
1.51 “GSK Data” means any and all Data other than Eurand Data.
1.52 “GSK Development Activities” will have the meaning set forth in Section 3.2.
1.53 “Generic Equivalent” means on a product by product basis, any (i) FDA approved
prescription generic *** product for human use that is supplied or manufactured by or for *** or
any *** (or any of their respective Affiliates) under *** for sale in the Territory as a generic
equivalent to any strength (including, without limitation, the ***mg, ***mg, ***mg, or ***mg
strengths) of *** approved under ***, and (ii) FDA approved prescription generic *** *** product
for human use that
5
is supplied or manufactured by or for *** or any *** *** (or any of their
respective Affiliates) under *** for sale in the Territory as a generic equivalent to any strength
(including, without limitation, the ***mg or ***mg strengths) of *** approved under ***.
1.54 “GSK Intellectual Property Rights” means Intellectual Property Rights Controlled
by GSK and/or its Affiliates or a Third Party on behalf of GSK or its Affiliates on the Effective
Date or at any time during the Term, including the GSK Patent Rights, GSK Know-How, GSK Trademarks
and GSK Program Rights, but excluding the Eurand Intellectual Property Rights.
1.55 “GSK Inventions” will have the meaning set forth in Section 9.3.3.
1.56 “GSK Invention Patent Rights” will have the meaning set forth in Section 9.3.3.
GSK will provide Eurand with a list of any GSK Invention Patent Rights, which GSK will update at
*** during the Term or *** after ***.
1.57 “GSK Know-How” means any and all Know-How that is Controlled by GSK or its
Affiliates or a Third Party on behalf of GSK or its Affiliates on the Effective Date or at any time
during the Term which is directly related to or used in the making, having made, use, sale,
offering for sale and import of the Compound, Drug Substance, the Formulation and/or the Product,
including the GSK Data and Know-How included in the GSK Program Rights, but excluding any Eurand
Know-How.
1.58 “GSK Patent Rights” means any and all Patents Rights Controlled by GSK and/or its
Affiliates as of the Effective Date or during the Term, which include one or more claims that, but
for this Agreement, would be infringed by the making, having made, use, sale, offering for sale and
import of the Compound, Drug Substance, the Formulation and/or Product, including any GSK Invention
Patent Rights filed by or on behalf of GSK or its Affiliates pursuant to Section *** or assumed by
GSK under Section *** but excluding the Eurand Patent Rights. A list of the Patent Rights included
within the GSK Patent Rights as of the Effective Date is attached hereto as Exhibit C.
1.59 “GSK Program Rights” means any and all Intellectual Property Rights and ***
developed or generated by or on behalf of either Party after the Effective Date and in the
performance of its respective obligations under the Program and this Agreement, including (i)
Intellectual Property Rights relating to the ***, and/or ***, (ii) the GSK Data, and (iii) the GSK
Invention Patent Rights and the *** under Section ***, but in each case specifically excluding the
ODT Technology.
1.60 “GSK Publication” will have the meaning set forth in Section 13.3.2.
1.61 “GSK Trademarks” will have the meaning set forth in Section 4.3.
1.62 “Intellectual Property Rights” means Patent Rights, Know How, Trademarks and any
and all other forms of intellectual property rights whatsoever.
1.63 “Inventions” will have the meaning set forth in Section 9.3.2.
1.64 “Know-How” means trade secrets and inventions (patentable or otherwise), and
proprietary data, formulations, methods, technology and information directly related to or used in
the subject item but which are not disclosed in any published Patent Rights claiming the subject
item,
6
including ideas, designs, processes, techniques, innovations, discoveries, improvements,
and/or analytical methodology used in development, testing, analysis, manufacture and/or medical,
clinical, toxicological testing as well as other scientific data.
1.65 “***” means ***. For the avoidance of doubt, *** is not an Affiliate of Eurand.
1.66 “*** Agreement” means the *** Agreement dated as of December 19, 2002, by and
between *** and Eurand Pharmaceuticals Limited, an Affiliate of Eurand.
1.67 “*** Patent” means U.S. Patent *** and any reissues, reexaminations or extensions
thereof.
1.68 “*** Patent Expiration Date” means ***, or if GSK or its Affiliates ***, then
***. For the purposes of this definition, the term “***” means the *** to GSK (or its
Affiliate) by the FDA for *** related to Product as applied to *** and ***.
1.69 “Materials Safety Data Sheet” means a document which sets forth the handling and
use standards for hazardous materials.
1.70 “Merger” or “Merging” will have the meaning set forth in Section 10.6.2.
1.71 “Milestone Events” will have the meaning set forth in Section 8.2.
1.72 “Milestone Payments” will have the meaning set forth in Section 8.2.
1.73 “NDA” means a New Drug Application or a Supplemental New Drug Application, as
applicable, which is filed with the FDA in accordance with the Act in order to gain the FDA’s
approval to market a pharmaceutical product in the Territory for the indications set forth in the
New Drug Application or Supplemental New Drug Application, as applicable.
1.74 “NDA No. ***” means NDA No. ***, including all amendments and supplements
thereto.
1.75 “NDA No. ***” means NDA No. ***, including all amendments and supplements
thereto.
1.76 “New Country License Agreement” will have the meaning set forth in Section 9.5.4.
1.77 “Net Sales” means the gross invoiced sales of Product in the Field in the
Territory by GSK, its Affiliates or any of its sublicensees to Third Parties on an arms-length
basis less any of the following charges or expenses that are incurred in connection with such gross
sales:
1.77.1 *** relating to Product, including *** and ***
1.77.2 and *** paid by ***, its Affiliates or sublicensees in relation to Product and any
other equivalent governmental charges imposed upon the ***, *** or *** of Product;
1.77.3 government-mandated and other rebates (such as those in respect of any state or federal
Medicare, Medicaid or similar programs);
7
1.77.4 customary trade, quantity and cash discounts allowed on Product;
1.77.5 *** or *** to *** on account of *** Product;
1.77.6 customary Product rebates and Product charge backs *** to ***; and
1.77.7 the lesser of (i) *** percent (2%) of the *** amount billed or invoiced on sales of
Product or (ii) the actual amount of any write-offs for bad debt relating to such sales of Product.
In the event that non-monetary consideration is received for any Product, Net Sales will be
calculated based on the average price charged for such Product during the preceding Calendar
Quarter, or in the absence of such sales, the fair market value of the Product, as determined by
the Parties in good faith.
Net Sales will be calculated in accordance with the *** consistently applied. The Parties
acknowledge and agree that this *** will be *** appropriate to reflect changes to *** brought about
by *** or *** of ***, *** or *** or changes in Applicable Laws.
1.78 “Non-Participating Party” will have the meaning set forth in Section 9.7.2.
1.79 “Non-Competing Business Entity” will have the meaning set forth in Section
10.6.3.
1.80 “ODT Technology” means the proprietary oral dissolve drug delivery and related
technology Controlled by Eurand and/or its Affiliates as of the Effective Date or during the Term,
including, without limitation, the Microcaps® taste masking microencapsulation technology and the
AdvaTab® oral disintegrating tablet technology and, in each case, any manufacturing processes
relating thereto.
1.81 “Participating Party” will have the meaning set forth in Section 9.7.2.
1.82 “Party” or “Parties” will have the meaning set forth in the Preamble.
1.83 “Patent Rights” means patents and patent applications including continuations,
continuations-in-part, divisions, patents of addition, patents issuing from reissue,
re-examination, renewal or extension proceedings, utility models, all Supplemental Protection
Certificates and any foreign counterparts thereof, including PCTs.
1.84 “Potential Contaminants” will have the meaning set forth in Section 3.3.2(vii).
1.85 “Pre-Registration Activities” means those activities that are necessary
prerequisites to the preparation and filing of the NDA with the FDA, which activities include: (i)
filing the DMF, (ii) conducting stability studies on Product, and (iii) conducting the Clinical
Studies deemed necessary by GSK for filing of the NDA for Product.
1.86 “Product” means an *** (i.e., *** or ***) pharmaceutical composition containing
the Compound, as the *** and *** or ***, which is developed by or on behalf of the Parties pursuant
to this Agreement, and which uses the Formulation and incorporates the ODT Technology.
1.87 “Product Specifications” means, with respect to any Product, all specifications
for materials, approved suppliers, formula, manufacturing, analytical and testing procedures,
release,
8
packaging, labeling, artwork and other processes relating to the manufacture of Product
other than CTM, which have been mutually agreed by the Parties and made part of the Commercial
Supply Agreement.
1.88 “Program” means the development work conducted by the Parties under this
Agreement as specified in the Proposal and such other work relating to the Formulation and/or
Product as mutually agreed upon by the Parties from time to time during the Term.
1.89 “Program Initiation Date” will have the meaning set forth in Section 3.1.
1.90 “Proposal” will have the meaning set forth in Section 3.1.
1.91 “Recipient” will have the meaning set forth in Section 13.1.1.
1.92 “Regulatory Approval” means an approval, license, registration, and/or
authorization necessary for the development, manufacture and/or commercialization of a prescription
pharmaceutical or other product in any country, including the NDA.
1.93 “Regulatory Authority” means any or all national, supranational, regional, state,
or local regulatory agency, department, bureau, commission, council, or other government entity
involved in the granting of Regulatory Approval for a prescription pharmaceutical or other product
in any country.
1.94 “Right of Negotiation” will have the meaning set forth in Section ***.
1.95 “Right of Negotiation Notice” will have the meaning set forth in Section ***.
1.96 “Right of Negotiation Period” will have the meaning set forth in Section ***.
1.97 “Royalties” will have the meaning set forth in Section 8.3.1.
1.98 “Steering Committee” will have the meaning set forth in Section 5.1.
1.99 “Term” will have the meaning set forth in Section 11.1.
1.100 “Territory” means the fifty (50) states of the United States of America, the
District of Columbia, and all of its territories and possessions (including Puerto Rico).
1.101 “Third Party” means any Entity other than Eurand GSK or their respective
Affiliates.
1.102 “Third Party Infringement” will have the meaning set forth in Section 9.7.1.
1.103 “Third Party Payments” will have the meaning set forth in Section 8.3.5.
1.104 “Trademarks” means trademarks, trade names, brand names, copyrights, logo types,
symbols, service marks, designs, domain names and URLs, including, without limitation,
registrations and applications for registrations thereof and all renewals, modifications and
extensions thereof.
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2 LICENSES:
2.1 Eurand’s License Grants to GSK. Subject to the terms and conditions of this
Agreement, Eurand hereby grants to GSK the following:
2.1.1 an *** license (or sublicense as the case may be with respect to Know-How and Patent
Rights arising ***), with the *** to *** *** as provided in Section ***, under the Eurand
Intellectual Property Rights (excluding the Eurand Trademarks) to use, sell, offer for sale,
package, and import Product in the Field in the Territory;
2.1.2 a *** license (or sublicense as the case may with respect to Know-How and Patent Rights
arising ***), with the *** to *** *** as provided in Section *** under the Eurand Intellectual
Property Rights (excluding the Eurand Trademarks) in the Field *** Product solely to the extent
that GSK is permitted to make or have made Product under the Clinical Supply Agreement and
Commercial Supply Agreement; and
2.1.3 a *** license (or sublicense as the case may be with respect to Know-How and Patent
Rights arising ***), with the *** to *** *** as provided in Section ***, under the Eurand
Intellectual Property Rights (excluding the Eurand Trademarks) to package Product in any country
*** of the *** and to use Product for the purpose of conducting Clinical Studies in any country ***
of the ***.
2.2 GSK’s License Grants to Eurand. Subject to the terms and conditions of this
Agreement, GSK hereby grants to Eurand the following:
2.2.1 a *** license, with the *** to *** *** as provided in Section ***, under the GSK
Intellectual Property Rights (excluding the ***) to use Drug Substance for the *** of conducting
the Eurand Development Activities as provided herein;
2.2.2 a ***, royalty-free license, with the *** to *** *** as provided in Section ***, under
the GSK Intellectual Property Rights (excluding the GSK Trademarks) to make Product *** as set
forth under the Clinical Supply Agreement and Commercial Supply Agreement.
2.3 ***.
2.3.1 Subject to the terms and conditions of this Agreement, Eurand hereby grants to GSK:
(i) an *** right, with ***, to use the Eurand Trademarks in connection with the using,
selling, offering for sale and importing of Product in the Field in the Territory;
(ii) a *** right to use the Eurand Trademarks in connection with the making and having made of
Product solely to the extent that GSK is permitted to make or have made Product under the Clinical
Supply Agreement and Commercial Supply Agreement; and
(iii) a *** right to use the Eurand Trademarks in connection with the packaging of Product ***
of the *** and the use of Product for the purpose of conducting Clinical Studies in *** outside of
the ***.
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2.3.2 Except where prohibited by Applicable Laws, GSK will refer to the Eurand Trademarks on
the final packaging for, and internal leaflets used with, Product and on promotional materials used
in connection with Product. Prior to printing any materials containing the Eurand Trademark, GSK
will use Commercially Reasonable Efforts to send to Eurand, *** than *** (***) Business Days prior
to their distribution, a sample of such materials (in final or substantially final form) for
Eurand’s prior review and approval *** with respect to GSK’s use of the Eurand Trademark, which
approval will not be unreasonably withheld or delayed. In the event that Eurand does not provide
any comment to GSK during such *** (***) Business Day period, Eurand will be deemed to have
consented to GSK’s use of the Eurand Trademarks on such materials. GSK may *** any *** to *** an
*** other than *** to the Eurand Trademark, *** the *** from Eurand. GSK covenants that its use of
the Eurand Trademark will be in accordance with the terms of this Agreement and that all rights to
and ownership of the Eurand Trademark will remain with Eurand. GSK may use the Eurand Trademark
solely with respect to CTM and Product manufactured under the Clinical Supply Agreement and
Commercial Supply Agreement, respectively, and no other product. For the avoidance of doubt, CTM
and Product manufactured under an agreement with a Third Party manufacturer is deemed to be
manufactured under the Clinical Supply Agreement or Commercial Supply Agreement, respectively,
provided that the manufacturer is authorized under those agreements.
2.4 Right to ***.
2.4.1 Except as set forth in Section 10.6 with respect to any Competing Business Entity, GSK
will have the *** any or all of its rights under the Eurand Intellectual Property Rights as
provided in Section 2.1 and under the Eurand Trademarks as provided in Section 2.3 to its
Affiliates *** the *** of ***. Except as set forth in Section 10.6 with respect to any Competing
Business Entity, Eurand will have the right to sublicense any or all of its rights under the GSK
Intellectual Property Rights as provided in Section 2.2 to its Affiliates *** the *** of GSK.
2.4.2 GSK will have the *** its rights under the Eurand Intellectual Property Rights as
provided in Section 2.1.2 to Third Parties to make and have made Product *** the *** of Eurand, and
solely in connection with any ***, GSK will have the right to *** under the Eurand Trademarks as
provided in Section 2.3 to Third Parties solely to make and have made Product *** the *** of
Eurand. Notwithstanding the foregoing GSK will only be permitted to *** under this Section 2.4.2
to the extent that the manufacture of CTM or Product by Third Parties is permitted under the
Clinical Supply Agreement or the Commercial Supply Agreement, respectively.
2.4.3 GSK will have the right to *** under the Eurand Intellectual Property Rights as provided
in Section 2.1 to any Third Parties who GSK may engage to provide services to or on behalf of GSK
relating to this Agreement or to perform any GSK Development Activities under this Agreement
(including a Clinical Research Organization (CRO), Third Party packagers and Third Party
distributors), in *** case *** the *** of ***, and solely in connection with any ***, GSK will
have the *** its rights under the Eurand Trademarks as provided in Section 2.3 to Third Parties ***
the *** of ***.
2.4.4 For all instances other than as provided in Sections 2.4.1, 2.4.2 and 2.4.3, GSK will
have the right to *** under the Eurand Intellectual Property Rights as provided in Section 2.1 and
under the Eurand Trademarks as provided in Section 2.3 to any Third Party upon the *** of Eurand,
*** will *** or ***. Eurand will have the right to *** under the GSK Intellectual Property Rights
as provided in Section 2.2 to any Third Party upon the *** of GSK.
11
2.4.5 The Parties acknowledge and agree that any *** with a *** will provide that the *** is
bound by all the terms and obligations of this Agreement. In addition, each Party will guarantee
the performance of its ***.
2.5 Affiliates. Notwithstanding anything in this Agreement to the contrary, either
Party may contract or agree with one or more of its Affiliates to have such Affiliate perform any
of such Party’s obligations herein. In no event will such use of an Affiliate be deemed to relieve
a Party of its liabilities or obligations to the other Party under this Agreement; provided, that
performance of an obligation hereunder by an Affiliate of a Party will be attributed to such Party.
Each Party expressly acknowledges and agrees that it will remain fully and unconditionally
obligated and responsible for the full and complete performance of all of its obligations under the
terms and conditions of this Agreement, whether or not such performance is carried out by such
Party or any of its Affiliates.
2.6 *** Agreement.
2.6.1 Eurand will ***, and will cause its Affiliates ***: (i) on its or their own or in
agreement with ***, *** the *** Agreement or *** or *** the *** Agreement in any way that *** and
*** GSK’s rights under the Eurand Intellectual Property Rights or in this Agreement *** the *** of
GSK; or, (ii) send written notice to *** of *** or *** by *** of the *** Agreement without
providing at least *** (***) calendar days’ *** to GSK.
2.6.2 Within *** (***) Business Days of receiving written notice of a monetary breach or
non-monetary material breach from *** pursuant to Section 10.2 of the *** Agreement, Eurand will,
subject to its obligations to protect the confidential information of *** or Eurand’s Third Party
licensees, *** GSK concerning the nature of any problem or occurrence that is related to *** of
such *** from *** and shall *** GSK of the *** it *** to *** to *** any problems and *** that
Eurand’s rights to the *** Agreement, and GSK’s rights under the Know-How and Patent Rights arising
under the *** Agreement pursuant to this Agreement, remain in effect and undiminished. Eurand will
use Commercially Reasonable Efforts to *** from *** to *** to GSK any *** pertinent to any such ***
received from *** and pertinent to the nature of the problem.
2.6.3 Eurand will, within *** (***) Business Days, *** GSK in the event that Eurand and/or any
of its Affiliates becomes aware that *** will, *** or ***, *** its reserved rights pursuant to
Section *** under the *** Agreement with respect to *** in the Territory.
2.7 Reservation of Rights. No right or license under any Intellectual Property Rights
Controlled by either Party is granted or implied except as expressly granted in this Agreement.
Except for the rights specifically granted in this Agreement, each Party expressly reserves all
rights Controlled by it or its Affiliates to all its products and intellectual property, and
reserves the right to utilize or allow its Affiliates or Third Parties to utilize such products and Intellectual Property
Rights in any manner not inconsistent with the terms of this Agreement.
3 PROGRAM:
3.1 Eurand Development Activities.
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Eurand will be solely responsible for, using Commercially Reasonable Efforts, conducting the Eurand
Development Activities in accordance with the terms and conditions of this Agreement and as
directed by the Steering Committee, which Eurand Development Activities are initially set forth in
Exhibit D, attached hereto and incorporated herein (the “Proposal”). Eurand will
initiate the Eurand Development Activities on the *** (***) Business Day after the Effective Date
(the “Program Initiation Date”). Further, Eurand will assign professionally qualified
personnel to perform the Eurand Development Activities and Eurand will, and will cause its
Affiliates and personnel to, perform the Eurand Development Activities in compliance with the
requirements of Applicable Laws, including cGMPs when appropriate.
3.2 GSK Development Activities. GSK, at its sole discretion and expense, will be
solely responsible for, using Commercially Reasonable Efforts, conducting all aspects of the
development of the Program other than the Eurand Development Activities (the “GSK Development
Activities”), including, without limitation, determining the clinical, regulatory and ***
strategy (in accordance with the terms of the Clinical Supply Agreement and Commercial Supply
Agreement) for the Product, the conduct of *** and *** Clinical Studies, and liaising and managing
*** interactions with Regulatory Authorities, with the exception of the filing and maintenance of
the DMF.
3.3 Supply of Drug Substance for use in Eurand Development Activities. The Parties
acknowledge and agree that in order for Eurand to commence performing the Eurand Development
Activities upon the *** Business Day after the Effective Date, GSK has provided Eurand with ***
(***) *** of Drug Substance prior to the Effective Date at no cost. In addition to Drug Substance
transferred by GSK to Eurand prior to the Effective Date, GSK may transfer additional reasonable
quantities of Drug Substance to Eurand at no cost except as set forth in Section 3.3.2(iv), which
Eurand may reasonably request in connection with conducting the Eurand Development Activities and
which request will be agreed to by GSK provided that it is consistent with the Proposal or in
accordance with Section 3.5.
3.3.1 Prior to receipt by Eurand of Drug Substance before the Effective Date, GSK shall have
provided Eurand with available information pertaining to procedures and warnings for the safe
handling and use of the Drug Substance through the issuance to Eurand of Material Safety Data
Sheets for the Drug Substance, and GSK shall provide Eurand with such additional available
information pertinent to procedures and warnings for the safe handling and use of the Drug
Substance and update the same during the course of the Program. Further, GSK shall have delivered
to Eurand with such shipment of Drug Substance prior to the Effective Date a certificate of
analysis stating that the Drug Substance meets the Drug Substance Specifications and has been
manufactured in accordance with cGMP. Prior to receipt by Eurand of any additional quantities of
Drug Substance after the Effective Date pursuant to this Section 3.3, GSK shall provide Eurand with
available information pertaining to procedures and warnings for the safe handling and use of the
Drug Substance through the issuance to Eurand of Material Safety Data Sheets for the Drug
Substance, and GSK shall provide Eurand with such additional available information pertinent to procedures
and warnings for the safe handling and use of the Drug Substance and update the same during the
course of the Program. All Drug Substance provided after the Effective Date as provided in this
Section 3.3 shall meet the Drug Substance Specifications. Further, GSK shall deliver to Eurand
with each such shipment of Drug Substance after the Effective Date a certificate of analysis
stating that the Drug Substance meets the Drug Substance Specifications and has been manufactured
in accordance with cGMP.
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3.3.2 Eurand agrees to use Drug Substance supplied to it by GSK pursuant to this Section 3.3,
whether supplied prior to or after the Effective Date, in accordance with the following terms:
(i) Upon receipt, Eurand will sample and analyze each shipment of Drug Substance to determine
if such shipment meets the Drug Substance Specifications. Eurand shall notify GSK within *** (***)
Business Days after delivery of such shipment of Drug Substance if there are shortages, if the
shipment of Drug Substance does not meet the Drug Substance Specifications or if the shipment of
Drug Substance is considered to be adulterated or misbranded within the meaning of the Act. Unless
Eurand advises GSK that a shipment is unsatisfactory within such *** (***) Business Day period,
such shipment shall be deemed to have been accepted by Eurand.
(ii) Eurand will ensure that all quantities of Drug Substance received from GSK pursuant to
this Section 3.3, whether received prior to or after the Effective Date, are used for the sole
purpose of completing the Eurand Development Activities under this Agreement and as specified in
the Proposal.
(iii) Eurand will not make Drug Substance available to any Entity not under the direct
supervision of Eurand without the prior written consent of GSK.
(iv) Eurand will use Commercially Reasonable Efforts to ensure its use of the Drug Substance
provided to it by GSK pursuant to this Section 3.3, whether provided prior to or after the
Effective Date, minimizes or eliminates any loss or waste of such Drug Substance. Eurand *** and
*** that the Drug Substance is available from GSK in *** and *** or *** of the Drug Substance (but
excluding process-related yield losses normally encountered in developing a product) may result in
*** Eurand for *** of *** *** of Drug Substance pursuant to this Section 3.3.
(v) All Drug Substance provided to Eurand by GSK pursuant to this Section 3.3, whether
provided prior to or after the Effective Date, will remain the property of GSK; *** of *** and ***
to the Drug Substance shall *** with *** while the Drug Substance is under *** care and control.
(vi) Eurand will ensure that all Drug Substance received from GSK pursuant to this Section
3.3, whether received prior to or after the Effective Date, is stored in accordance with cGMP and
Applicable Laws, and is kept *** other materials belonging to *** or ***.
(vii) Eurand will not store or process any Drug Substance in the same building in which Eurand
manufactures, stores or processes cytotoxics, penicillin, genetically modified organisms,
cephalosporins, sex hormones, anabolic steroids, and infectious agents (e.g.,
spore-bearing and live viruses), (collectively, “Potential Contaminants”) unless the
Potential Contaminants are stored or manufactured in contained environments and in compliance with
cleaning, validation and changeover standards of all cGMPs, and all Applicable Laws. Eurand will
*** GSK if any of the Potential Contaminants are manufactured, processed or stored in any portion
of the facility which may result in the introduction of Potential Contaminants into the areas of
the facility where Eurand stores the Drug Substance. Eurand will notify GSK by not later than the
earlier to occur of (A) *** (***) calendar days prior to such event or (B) ***, if Eurand intends
to change the nature or use of any portion of the Eurand facility or any module to include the use
of any
14
of the Potential Contaminants. Eurand will not make such changes if the change could
reasonably be expected to result in a material adverse effect on Eurand’s ability to fully perform
its obligations under this Agreement and Eurand has not demonstrated to GSK’s reasonable
satisfaction that such Potential Contaminants shall be completely segregated from the Drug
Substance at all times in the Eurand facility.
(viii) Upon termination of this Agreement for any reason or upon GSK’s request, Eurand will at
GSK’s sole option and expense either (A) certify destruction of all Drug Substance provided to it
by GSK pursuant to this Section 3.3, whether provided prior to or after the Effective Date, and
account for any used Drug Substance or (B) return the remaining Drug Substance provided to it by
GSK pursuant to this Section 3.3, whether provided prior to or after the Effective Date, and
account for any used Drug Substance.
3.4 Each Party will use Commercially Reasonable Efforts to cooperate with the other Party in
carrying out the Program. Each Party will make available such of its scientific, engineering,
manufacturing and other personnel necessary to perform its respective responsibilities under the
Program in accordance with the terms of this Agreement. The Parties shall use prudence and
reasonable care in the use, handling, storage, transportation, disposition and containment of the
Drug Substance and any Product resulting from the Program. The Parties agree that the Drug
Substance and Product will be used in compliance with all Applicable Laws, including without
limitation those governing disposal of hazardous materials.
3.5 Program Changes. The Parties acknowledge that the nature of the development
process is such that modifications to the Program (including modifications relating to the
acquisition of additional equipment and materials) may be desirable or reasonably necessary at
certain times for regulatory, legal, commercial or other reasons. Accordingly, in the event that
either Party believes that a change to the Program is required, that Party will immediately notify
the Steering Committee in writing of the exact nature of any desired change and the specific
reasons therefor. The Steering Committee will then meet promptly to discuss the changes that may be
needed. If the Steering Committee agrees that changes in the Program are required, the Parties
will amend the Proposal to reflect the necessary changes, and also set out any cost increases or
additional time that is required to fulfill the Program. All cost increases relating to any
changes in the Program will be borne wholly by GSK *** such changes to the Program were *** due to
*** or ***, in which case the cost increases relating to the changes in the Program *** or *** to
an *** or *** will be *** or ***, as applicable.
4 COMMERCIALIZATION:
4.1 GSK will have *** control, authority and responsibility for the commercialization of
Product in the Field in the Territory. GSK will exercise its Commercially Reasonable Efforts in
commercializing Product in the Territory *** it has obtained all required Regulatory Approvals.
GSK will have *** decision-making authority, ***, relating to *** aspects of the marketing and
commercialization of Product in the Field in the Territory, including *** and *** for Product,
Product *** and ***, Product *** and *** with *** regarding the commercialization of Product in the
Field.
15
4.2 GSK will *** of Product in the Field in the Territory and will *** and *** the Product in
the Field in the Territory; provided, however, that GSK will be *** to *** Product in the Field ***
if such Product has been *** by or on behalf of *** outside of the Territory or manufactured by or
on behalf of *** outside of the Territory to the extent permitted under the Clinical Supply
Agreement or the Commercial Supply Agreement.
4.3 Subject to Applicable Law and Section 2.3.2, GSK will, in its sole discretion, *** all
Trademarks used in connection with Product in the Field (the “GSK Trademarks”). For the
avoidance of doubt, the term “GSK Trademarks” means all Trademarks Controlled by GSK and/or its
Affiliates or a Third Party on behalf of GSK or its Affiliates on the Effective Date or at any time
during the Term; provided, however, that the term “GSK Trademarks” will in no way be deemed to
include the Eurand Trademarks.
4.4 Except if GSK terminates this Agreement pursuant to Sections *** or ***, GSK agrees that
it will not, and it will prevent its Affiliates and contractually mandate that its sublicensees
will refrain from, making, using, selling, offering for sale or importing Product upon the
termination *** of this Agreement.
5 STEERING COMMITTEE:
5.1 Within *** (***) Business Days after the Effective Date, the Parties will form a committee
(the “Steering Committee”), which will oversee each Party’s conduct of its respective
obligations under the Program and to serve as a forum for the Parties to discuss any issues that
may arise under this Agreement during the Term.
5.2 Each Party will designate at least *** (***) representatives for membership on the
Steering Committee. Each Party may change *** or *** of its representatives to the Steering
Committee at *** time. In addition, each Party may from time to time and in its sole discretion
include non-voting ad-hoc representatives to participate in Steering Committee meetings to address
specific issues. A *** member will chair the Steering Committee. Each Party will have one (1)
vote on each matter brought before the Steering Committee.
5.3 The first meeting of the Steering Committee will be face to face at a location agreed to
by the Parties and will occur within *** (***) Business Days after the Effective Date. Thereafter,
the meetings will be held at least once every *** or more or less frequently as the Steering
Committee members may agree. The location of such meetings will alternate between sites *** and
***, unless otherwise agreed upon by the Parties. Steering Committee meetings need not necessarily
be face to face but, upon the agreement of the Parties, can be via other methods of
communication such as teleconferences and/or videoconferences. Each Party will bear all expenses
it incurs in regard to participating in all Steering Committee meetings, including, without
limitation, traveling and living expenses.
5.4 Minutes of the Steering Committee will be prepared by the chair or his/her designee.
Draft minutes shall be sent to all members of the Steering Committee within *** (***) Business Days
after each meeting. The draft minutes shall be edited by the chair based on comments from the
members of the Steering Committee and shall be distributed to the members prior to the next meeting
16
of the Steering Committee. All records of the Steering Committee shall at all times be available
to both Parties.
5.5 The Steering Committee may delegate its responsibilities to any one or more subcommittees,
each of which shall have an equal number of members from GSK and Eurand. Any disputes between the
members of any subcommittees will be submitted to the Steering Committee for resolution in
accordance with Section 5.6.
5.6 Resolution of Disputes. All decisions of the Steering Committee will be by
unanimous vote, which decisions will be final and binding on the Parties. Should the members of
the Steering Committee become deadlocked on an issue after good faith but unsuccessful effort to
break such deadlock, the issue will be resolved in accordance with the following procedures:
5.6.1 the disputed matter will be presented to the President of Eurand or to his/her
respective designee and as to the senior executives of GSK as follows: (i) to the Chairman of
Research and Development of GSK, or to his/her respective designee for disputes relating to
development issues, (ii) to the President of U.S. Pharmaceuticals of GSK, or to his/her respective
designee for disputes relating to commercial issues; and (iii) to either of the foregoing senior
executives of GSK, as determined by GSK, for all other disputes.
5.6.2 such executives shall meet or discuss in a telephone or video conference each Party’s
view and explain the basis for such disagreement; and
5.6.3 if such executives cannot promptly resolve such disagreement under Section 5.6.1(i),
(ii)or (iii), as applicable, within *** (***) calendar days after such issue has been referred to
them, then *** will in good faith and using Commercially Reasonable business judgment make the ***
decision regarding the matter *** such decision would have a *** and *** impact on ***, in which
case *** may refer the decision to the dispute resolution process set forth in Section 14.14. For
the avoidance of doubt, if such executives are unable to resolve a dispute regarding whether a
Milestone Event has been achieved as set forth in Section 8.2, *** will *** to make the *** and ***
decision regarding such matter, but rather such matter will be resolved through the dispute
resolution process set forth in Section 14.14.
5.7 The Steering Committee will have only such powers as are specifically delegated to it in
this Agreement, and will have no power to amend this Agreement or waive a Party’s rights or
obligations under this Agreement.
6 SUPPLY OF CLINICAL AND COMMERCIAL MATERIAL:
6.1 Generally. Notwithstanding anything set forth in Section 2, the Parties
acknowledge and agree that GSK hereby engages Eurand to exclusively (even as to GSK except as set
forth in the Clinical Supply Agreement and Commercial Supply Agreement): (i) manufacture CTM which
GSK will use in Clinical Studies, and (ii) manufacture bulk tablet forms of Product which GSK will
commercialize and sell in the Territory. The terms pursuant to which Eurand will supply such CTM
and Product are set forth in Sections 6.2 and 6.3, respectively.
17
6.2 Clinical Supply Agreement. Within *** (***) calendar days after the Effective
Date, the Parties will execute a supply agreement (the “Clinical Supply Agreement”) and
quality agreement, which will set forth the terms and conditions pursuant to which Eurand will
supply CTM to GSK. Such Clinical Supply Agreement will include the terms set forth on Exhibit
E, attached hereto and incorporated herein. If the Parties *** within *** (***) calendar days
***, the Parties *** that the *** by GSK for use in Clinical Studies until a Clinical Supply
Agreement is executed, and the terms and conditions of *** are *** any *** of *** contained in this
Agreement.
6.3 Commercial Supply Agreement. Prior to NDA Acceptance (as such term is defined in
8.2.1(vi), the Parties will execute a supply agreement (the “Commercial Supply Agreement”)
and quality agreement, which will set forth the terms and conditions pursuant to which Eurand will
supply Product to GSK for sale in the Territory. Such Commercial Supply Agreement will include the
terms set forth on Exhibit F, attached hereto and incorporated herein. If the Parties ***
*** to ***, the Parties acknowledge and agree that the *** Product *** and the *** of this
Agreement shall ***are *** any *** of *** contained in this Agreement.
6.4 For the avoidance of doubt, GSK will be responsible for conducting, or arranging for the
conducting of, commercial packaging, commercial stability testing and commercial labeling of all
Product.
7 REGULATORY:
7.1 Regulatory Affairs.
7.1.1 During the Program, to the extent required by the FDA or any other Regulatory Authority
to conduct Clinical Studies in humans or in order for GSK to receive Regulatory Approvals for
Product, Eurand shall prepare a DMF and submit the DMF to the FDA; provided, however, that *** will
have the right, and will be provided a *** of time, to *** and *** on the DMF prior to each such
submission by ***, which *** of *** will be *** by *** for *** in each DMF submission. *** shall
*** *** of the *** date for the DMF at least *** (***) Business Days *** to *** such ***, and
notify *** *** regarding *** with respect to the filing or maintenance of the DMF. Further, ***
will allow *** to *** all *** and *** regarding each DMF submission and permit *** to *** on ***,
which *** will be considered in good faith by *** for *** in any *** to *** regarding *** DMF
submission. During the Term and for *** (***) *** after the expiration thereof, *** will provide
*** with ***, *** to the DMF, copies of which will be *** by *** to a *** by ***, so that *** may
*** and *** the DMF as appropriate to prepare the CMC portion of the NDA for the Product and to
prepare any other applications to obtain Regulatory Approvals for the Product during the Term. ***
will *** in the DMF as Eurand’s Confidential
Information and to the extent possible, *** will limit the review of the DMF to certain named
individuals at ***.
7.1.2 The Parties will use Commercially Reasonable Efforts to complete, and to cooperate with
the other Party in its completion of, the Pre-Registration Activities. Any disagreement as to
whether the Pre-Registration Activities are completed shall be resolved in accordance with Section
5.6.
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7.1.3 GSK will use Commercially Reasonable Efforts to prepare and submit all necessary
applications to obtain Regulatory Approvals to use, market and sell the Product in the Territory as
provided in this Agreement. Eurand shall have the right to review and comment upon the portions of
proposed protocols and investigator brochures and informed consent forms as far as they relate to
the ODT Technology or Eurand’s Confidential Information, and GSK will *** in good faith, but will
in *** way be *** to *** in such *** and ***, any *** by ***. With the exception of the DMF as set
forth in Section 7.1.1, and except to the extent that Eurand is exclusively using, marketing or
selling Product in a country as set forth in Section 9.5, it is understood that GSK will prepare
and make all other necessary filings for Regulatory Approvals with the appropriate Regulatory
Authorities which are required to secure approval to use, market and sell the Product in the Field
as provided in this Agreement. Eurand agrees, upon request from GSK, to promptly provide GSK with
such information as *** may reasonably require to complete any and all such filings and submissions
for Regulatory Approvals, unless such information is contained in the DMF in which case the
information will be filed with the DMF. *** will, on a *** and as *** by *** from time to time
during the Term, *** co-operate with *** by *** and *** as *** to ***, and *** with, Regulatory
Authorities relating to filings for Regulatory Approvals made by *** relating to the Product. GSK
shall own all Regulatory Approvals for Product.
7.1.4 GSK shall notify Eurand of the submission date of each application for Regulatory
Approvals for the Product in the Territory at least *** (***) Business Days prior to such
submission, and notify Eurand of the effective dates of any such Regulatory Approvals or NDA
Acceptance not later than *** (***) Business Days *** each such date. During the Term, GSK shall
provide Eurand with a report on the status of progress of all filings for Regulatory Approval in
the Territory every *** (***) *** following completion of the Pre-Registration Activities until
such filings are approved by the appropriate Regulatory Authorities and thereafter, on the status
of its progress toward making the First Commercial Sale of Product in the Territory. GSK shall
notify Eurand of the date of First Commercial Sale within *** (***) Business Days *** its
occurrence.
7.1.5 Eurand shall use Commercially Reasonable Efforts to give GSK *** of any impending
governmental or other Third Party audit of Eurand as it relates to the manufacture or testing of
the Product or CTM supplied to GSK pursuant to the Commercial Supply Agreement and the Clinical
Supply Agreement, respectively, and shall provide GSK with *** to it relating to such audit. In
the event that any such audit involves an inspection of a Eurand facility, then Eurand shall use
Commercially Reasonable Efforts to *** GSK of any such inspection and provide GSK the *** of such
inspection as it relates solely to the Product or CTM, provided that GSK acknowledges that Eurand
does not control the timing of such inspections and, as such, cannot guarantee timing that will
permit GSK’s attendance. GSK acknowledges that should representatives of GSK be present during an
audit, their function is restricted to that of being an observer and that Eurand is solely
responsible for the manner and conduct of any and all audits. Eurand shall also use Commercially
Reasonable Efforts to provide GSK with a reasonable opportunity to ***, ***, any *** prepared in
response to such governmental or other Third Party audit and shall *** with the *** of such audit
following its conclusion; however, Eurand shall have sole discretion in responding to any such audit.
Eurand agrees that GSK shall have the right *** during the Term to carry out an audit of Eurand for
conformance with cGMPs, but not more than once per Calendar Year, unless an audit results in
adverse findings in which case GSK shall be entitled to *** Eurand with respect to such adverse
findings pursuant to this Section 7.1.5 without reference to the once per Calendar Year limitation.
GSK must provide advanced written notice at least *** (***) Business Days prior to such audits and
audits may only be scheduled with the consent and approval of Eurand, ***.
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7.1.6 Eurand shall *** GSK with *** notification of its receipt of any of the following
related to the manufacture or testing of the Product: a copy of any *** of observations (Form FDA
483), warning letter, information letter, regulatory letter or the like issued by the FDA as well
as *** GSK an opportunity to *** to *** to the issuing agency. However, Eurand shall have sole
discretion regarding the resolution of any matter pertaining to such notifications.
8 COMPENSATION:
8.1 Development Fees.
8.1.1 Eurand shall invoice GSK at the end of each month for its personnel costs and expenses
incurred in Eurand’s performance of the Eurand Development Activities. Each invoice shall be
accompanied by a *** accounting of the ***, and *** and *** incurred, by Eurand in performing the
Eurand Development Activities. Eurand shall also invoice GSK for all out-of-pocket expenses ***
incurred by Eurand which are *** associated with Eurand’s performance of the Eurand Development
Activities in accordance with the Proposal and this Agreement, provided, *** such costs and
expenses are ***. Such invoices shall be sent to:
*** Project Leader
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ OHE
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ OHE
With a copy to:
Alliance Director for ***
New Frontiers Science ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇ SAW
New Frontiers Science ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇ SAW
8.1.2 Eurand’s monthly invoices as provided above shall reflect an hourly rate of *** U.S.
Dollars and *** Cents (U.S. $***) per ***; such rate may be adjusted by *** than the *** change for
the *** (***) months in the *** as published by the *** of *** of *** of *** each *** (***) month
period after the Effective Date by Eurand to reflect *** and *** changes to its billing rates.
Eurand’s personnel time for performing the Eurand Development Activities shall *** the *** set
forth in Exhibit D by *** (***) for *** stage of Eurand Development Activities under the
Proposal, *** such Eurand Development Activities are changed as set forth in Section 3.5, or as
otherwise agreed to *** and *** by ***.
8.1.3 Additional Expenses. In addition to the cost estimates set forth in Exhibit D
hereto, GSK shall be responsible for the following additional, costs and/or expenses:
20
(i) the cost of any additional Eurand Development Activities performed by Eurand as a result
of changes made to the Program, subject to Section 3.5;
(ii) the cost of any external contract research, which is *** to by *** in*** to such costs
***; and
(iii) the cost of any Program specific ***, which is agreed to by GSK in *** to such costs
***, and which *** and *** will be the *** of ***.
All such permitted additional costs and expenses will be invoiced by Eurand on a monthly basis in
accordance with Sections 8.1.1 and 8.1.2 above.
8.1.4 Payments. Subject to Section 8.4, GSK shall make payments to Eurand for all uncontested
amounts due under this Section 8.1 within *** (***) Business Days of *** of an invoice from Eurand
as provided in this Section 8.1. In the event GSK fails to pay any uncontested amounts set forth
in any invoice as provided in this Section 8.1.4, Eurand may at its discretion impose a late
payment fee on GSK equivalent to *** (***) of the outstanding uncontested amount due per month. In
the event of a late payment by Eurand to GSK of any overpayment received by Eurand under this
Section 8.1, as provided in Section 8.4.3(ii), *** may at its discretion impose a late payment fee
on Eurand equivalent to *** (***) of the overdue payment from the date such payment was due to the
date such payment is received by GSK.
8.2 Milestone Payments. In consideration for Eurand’s performance of the Eurand
Development Activities, subject to Sections 8.2.1 and 8.2.2, GSK will make the following *** (the
“Milestone Payments”) to Eurand in the *** amounts and in the manner set forth below, which
Milestone Payments will not exceed Forty Two Million U.S. Dollars (U.S. $42,000,000), upon
achieving the Milestone Payment events set forth below (the “Milestone Events”):
| Milestone Event | Milestone Payment | |||
(i)
|
*** | U.S. *** | ||
(ii)
|
*** | U.S. *** | ||
(iii)
|
*** | U.S. *** | ||
(iv)
|
*** | U.S. *** | ||
(v)
|
*** | U.S. *** | ||
(vi)
|
*** | U.S. *** | ||
(vii)
|
*** | U.S. *** | ||
(viii)
|
*** | U.S. *** | ||
(ix)
|
Net Sales Equal to U.S. *** | U.S. *** | ||
(x)
|
Net Sales Equal to U.S. *** | U.S. *** | ||
(xi)
|
Net Sales Equal to U.S. *** | U.S. *** | ||
21
8.2.1 Milestone Payment Definitions.
(i) The phrase “***”, as used in Section 8.2(ii) above and Section 9.6 below, means that
Eurand has delivered to GSK *** (*** *** of Product within *** (***) *** after the Program
Initiation Date as follows:
***: using *** approach (*** flavor);
***: using *** approach (*** flavor);
***: using *** approach (*** flavor);
***: using *** approach (*** flavor); and
***: using *** approach (*** flavor);
or such other smaller combination of the same *** (***) *** listed above as determined by the
Steering Committee. GSK may in no event request *** of Product from Eurand pursuant to this
Section 8.2.1(i). In the event that the Steering Committee requires a material change to the
requirements for any of the *** described in this Section 8.2.1(i), then the Steering Committee
shall agree on an appropriate time extension for Successful Completion of Stage I.
(ii) The phrase “***”, as used in Section 8.2(iii) above and Section 9.6 below, means that
Eurand has delivered to GSK, *** after the Program Initiation Date and in accordance with the terms
and conditions of the Clinical Supply Agreement, *** of *** for use by or on behalf of GSK in ***
study relating to Product as follows:
***: using *** approach (*** flavor);
***: using *** approach (*** flavor);
***: using *** approach (*** flavor); and
***: using *** approach (*** flavor);
or such other smaller combination of *** as determined by the Steering Committee. In the event
that the Steering Committee requires a material change to the requirements for any of the ***
described in this Section 8.2.1(ii), then the Steering Committee shall agree on an appropriate time
extension for Successful Completion of Stage II.
(iii) The phrase “***”, as used in Section 8.2(iv) above, means the date on which *** in
accordance with the Applicable Laws.
(iv) The phrase “***”, as used in Section 8.2(v) above, means the date on which the *** is ***
in a *** or *** of GSK to determine whether CTM supplied by Eurand to GSK (pursuant to the ***
Agreement) is *** tablets, provided, however, that such date is *** calendar days after the ***.
22
(v) The phrase “***”, as used in Section 8.2(vi) above, means the date on which *** that the
*** of a ***, which *** and its *** to ***, demonstrates that CTM provided by Eurand to GSK
pursuant to the Clinical Supply Agreement is ***.
(vi) The phrase “***”, as used in Section 8.2(vii) above, means the date on which *** of ***
for *** of a *** by or on behalf of GSK for the *** of *** to *** in the *** in the ***, which date
must be *** to ***.
(vii) The phrase “***” as used in Section 8.2(viii) above, means the date on which *** that it
*** the *** *** or *** of GSK to *** in the *** in the ***, which date must be *** to ***.
(viii) The phrase “Net Sales Equal to U.S. ***”, as used in Section 8.2(ix) above, means the
first time Net Sales reach *** U.S. Dollars (U.S. ***) in any *** during the Term.
(ix) The phrase “Net Sales Equal to U.S. ***”, as used in Section 8.2(x) above, means the
first time Net Sales reach *** U.S. Dollars (U.S. ***) in any *** during the Term.
(x) The phrase “Net Sales Equal to U.S. ***”, as used in Section 8.2(xi) above, means the
first time Net Sales reach *** U.S. Dollars (U.S. ***) in any *** during the Term.
8.2.2 Milestone Payment Provisions.
(i) Each Milestone Payment will be made only one time and only for the first time that the
corresponding Milestone Event is achieved, regardless of how many times such Milestone Event is
achieved, and no Milestone Payments will be owed for a Milestone Event which is not achieved;
provided however, that in the event that GSK achieves the First Commercial Sale of Product in the
Territory, the Milestone Payments set forth in Sections 8.2(ii)-(viii) which have not been paid by
GSK will be deemed to have been achieved as of the date of such First Commercial Sale and will be
payable as provided herein.
(ii) Subject to Section 8.4, GSK will remit payment to Eurand of each Milestone Payment within
*** (***) Business Days after *** of an *** from Eurand following the earlier of (i) ***, or (ii)
***, of the *** of the ***.
8.3 Royalties.
8.3.1 Full Royalty. In consideration for the licenses and sublicenses granted to GSK by
Eurand in this Agreement, and subject to Sections 8.3.2, 8.3.3, 8.3.4, 8.3.5, 8.4, 10.4.3 and
10.6.3, GSK will pay to Eurand a percentage of Net Sales in each Calendar Year (the
“Royalties”), as follows:
| Incremental Royalty Rate | ||
| Aggregate Net Sales in the Territory | on Aggregate Net Sales in the | |
| in a Calendar Year | Territory in a Calendar Year | |
| (i) *** to U.S. *** | ***% | |
| (ii) U.S. *** to U.S. *** | ***% |
23
| Incremental Royalty Rate | ||
| Aggregate Net Sales in the Territory | on Aggregate Net Sales in the | |
| in a Calendar Year | Territory in a Calendar Year | |
| (iii) U.S. *** to U.S. *** | ***% | |
| (iv) U.S. *** and above | ***% |
8.3.2 *** Royalty.
(i) In the event that Competitive Products are marketed by a Third Party(ies) in the
Territory, GSK shall promptly notify Eurand of such event providing information regarding the
Competitive Product(s) and Third Party(ies). In the event that such Competitive Products in the
*** market share equal to *** (***) or *** in the *** of *** for Product (*** on the *** as the ***
using reference data published by ***, or *** source, provided that such other source is agreed
upon by the Steering Committee), then *** in the *** and *** (subject to Section 8.3.3), the
Royalties set forth in *** will be ***.
(ii) In the event that *** are *** by a *** in the *** which, in the ***, achieve *** to ***
*** or *** in *** of *** for Product (*** on the *** as the *** using reference data published by
***, or *** source, provided that such other source is agreed upon by the Steering Committee), then
*** in the *** and *** (subject to Section ***), the Royalties set forth in Sections 8.3.1(ii),
8.3.1(iii) and 8.3.1(iv) will be ***.
(iii) GSK shall provide the Steering Committee with such reference data described in Section
8.3.2(i) and 8.3.2(ii) detailing the prescriptions for Product and Competitive Products for such
Calendar Quarters for which GSK seeks a royalty rate *** in the corresponding following Calendar
Quarters.
8.3.3 Commencement and Expiration of Royalty Obligations. GSK’s obligation to pay the
Royalties as provided in Section 8.3.1 and 8.3.2 will commence upon the First Commercial Sale in
the Territory and *** on the date that is *** (***) years from the date of the First Commercial
Sale in the Territory. During the period that is equal to or more than *** (***) *** from the date
of the First Commercial Sale in the Territory but in *** than *** (***) *** the First Commercial
Sale in the Territory, the Royalties set forth in Sections 8.3.1 and 8.3.2, as applicable, will be
*** to the *** of (i) ***, or (ii) the royalty rate owed by Eurand to *** under the *** Agreement
on sales of Product in the Territory *** percent (***%).
8.3.4 *** to ***. For the avoidance of doubt, the Parties acknowledge and agree that the
Royalties payable by GSK to Eurand on Net Sales as provided in this Section 8.3 are *** of any ***
or *** by Eurand to *** under the *** Agreement on sales of Product in the Territory, and that GSK
will *** consideration to Eurand and/or *** on Net Sales in the Territory in any period during the
Term or thereafter.
8.3.5 ***. Although as of the Effective Date, they have no actual knowledge of such a
requirement, the Parties acknowledge that, during the Term, one (1) or more royalty-bearing
licenses may be required from one (1) or more Third Parties in order for GSK and its Affiliates to
use, sell, offer for sale and import Product in the Field without infringing the Intellectual
Property Rights of one or more Third Parties. Subject first to Eurand’s rights and obligations
under Section 9.6.1, GSK will have the right but not the obligation, to use Commercially Reasonable
Efforts to *** and *** such Third Party licenses. If Eurand is *** to effect any of the ***
described in ***, and as
24
a result of GSK subsequently *** and ***, it is necessary for GSK to *** and/or ***
(collectively, the “***”) *** in order for *** Sections 2.1 and 2.3 *** such Third Party’s
rights, GSK will be *** Third Party Payments *** pursuant to this Section 8.3 during the Term;
provided, however, that GSK *** Royalties owed to Eurand ***; and provided, further that any ***
that *** be *** against Royalties in any *** may be *** to *** Royalties in ***, subject to this
Section 8.3.5. Specifically, GSK shall be *** to *** such ***: (i) only against Royalties *** by
Eurand after GSK pays such ***, and (ii) only with *** to *** for *** that are *** to practice the
***. For the avoidance of doubt, Eurand will have no obligation to make any payments to either GSK
or to such Third Party under this Section 8.3.5 in order for GSK to practice its rights under the
Eurand Intellectual Property Rights.
8.3.6 Royalty Payment Terms.
(i) Notwithstanding anything in this Agreement to the contrary, the Parties acknowledge and
agree that Royalties will only be payable on Net Sales occurring *** and *** the First Commercial
Sale by GSK, its Affiliates and their respective sublicensees to a Third Party.
(ii) No later than *** (***) *** the *** of each ***, GSK shall use Commercially Reasonable
Efforts to report to Eurand the Net Sales in the Territory for the *** month.
(iii) Subject to Section 8.4, within *** (***) *** the *** of each ***, GSK will report the
Net Sales in the *** and the Royalty owed on such Net Sales and will pay to Eurand all Royalties
due and payable on Net Sales in the ***, or portion thereof if applicable.
(iv) Any and all Royalty payments made by GSK to Eurand pursuant to this Agreement will be
accompanied by a written statement setting forth the calculation of Royalties due.
(v) In the event of a late payment of Royalties, GSK will pay to Eurand interest calculated on
a *** on the *** payment from the *** such payment was *** to the date such payment is received by
Eurand at a rate of *** percent (***%) per ***. In the event of a late payment of any overpaid
Royalties by Eurand to GSK as provided in Section 8.4.3(i), Eurand *** to GSK *** on a *** basis on
the *** from the *** such *** was *** to the *** such *** is *** by GSK at a rate of *** percent
(***%) ***.
8.4 General Payment Terms. Notwithstanding anything to the contrary in this Section
8, all payments made by GSK to Eurand under this Agreement will be subject to the following:
8.4.1 All payments made under this Agreement will be made in U.S. dollars. All payments will
be made by wire transfer in immediately available funds to one or more bank accounts to be
designated in writing by Eurand.
8.4.2 If taxes, assessments, fees or other charges are required to be withheld from payments
to Eurand, GSK will make such payments to the applicable taxing authority as required to fulfill
such requirement and pay to Eurand the net amount of the Milestone Payments, Royalties or other
payments due. Receipts, if available, for all such withholdings will be provided to Eurand.
25
GSK will assist Eurand in claiming exemption from such deductions or withholdings under any
applicable double taxation or similar agreement or treaty.
8.4.3 Audit Rights.
(i) After the *** (***) anniversary of the date of First Commercial Sale and upon the
provision of not less than *** (***) calendar days’ prior written notice, Eurand will have the
right, during normal business hours not more than *** in each Calendar Year during the Term and for
*** (***) Calendar Year thereafter, using an independent public accountant designated by Eurand and
*** (the “Eurand Auditor”), to inspect GSK’s books of account, records, documents and
instruments for up to the previous *** (*** Calendar Years during the Term (or such lesser period
if Product has been commercialized for less than *** (***) Calendar Years), to ascertain the
accuracy of GSK’s Net Sales and the Royalty payments made by GSK to Eurand pursuant to this
Agreement. If such examination by the Eurand Auditor results in a determination that GSK’s Net
Sales or Royalty payments owed to Eurand by GSK have been understated, unpaid amounts due will be
paid by GSK to Eurand within *** (***) calendar *** after such Eurand Auditor notifies the Parties
of such discrepancy. If such examination results in a determination that GSK’s Net Sales or
Royalty payments owed to Eurand by GSK have been overstated, overpaid amounts due will be re-paid
by Eurand to GSK within *** (***) calendar *** after such Eurand Auditor notifies the Parties of
such discrepancy. The expense of such audit shall be Eurand’s unless the audit shall demonstrate
an underpayment of Royalties greater than *** percent (***%) between Royalties reported and paid
and those which were actually due, in which event the reasonable expenses of Eurand Auditor shall
be borne by GSK. The Eurand Auditor will report to the Parties *** its conclusions as to whether
GSK is in compliance with its Royalty obligations and the amount of any underpayment or
overpayment, and such report and the conclusions contained therein will constitute *** Confidential
Information.
(ii) After the *** (***) anniversary of the *** and upon the provision of not less than ***
(***) calendar days’ prior written notice, GSK will have the right, during normal business hours
not more than *** in each Calendar Year during the Term and for *** (***) Calendar Year thereafter,
using an independent public accountant designated by GSK and reasonably acceptable to Eurand (the
“GSK Auditor”), to inspect Eurand’s books of account, records, documents and instruments
for up to the previous *** (***) Calendar Years during the Term (or such ***), to ascertain the
accuracy of the invoices provided by Eurand pursuant to Section *** and of the *** and *** and ***
incurred by Eurand in performing the Eurand Development Activities pursuant to this Agreement. If
such examination by the GSK Auditor results in a determination that amounts invoiced by Eurand
pursuant to Section *** have been overstated, such amounts overpaid by GSK will be *** by Eurand to
GSK within *** (***) calendar *** such GSK Auditor *** the Parties of such discrepancy. If such
examination results in a determination that amounts invoiced by Eurand have been understated, any
underpaid amounts due will be re-paid by GSK to Eurand within *** (***) calendar *** such GSK
Auditor notifies the Parties of such discrepancy. The expense of such audit shall be GSK’s unless
the audit shall demonstrate an overpayment by GSK of any amounts pursuant to Section 8.1 greater
than *** percent (***%) of what was actually owed to Eurand, in which event the reasonable expenses
of GSK Auditor shall be borne by Eurand. The GSK Auditor will report to the Parties *** its
conclusions as to whether Eurand has accurately invoiced GSK for amounts due pursuant to Section
8.1 and the conclusions contained therein will constitute Eurand Confidential Information.
26
9 INTELLECTUAL PROPERTY:
9.1 Responsibility for Eurand Patent Rights Existing as of ***. Eurand will have ***
responsibility for and control over, subject to Sections *** and *** of the *** Agreement, and will
use its Commercially Reasonable Efforts with regard to, the preparation, filing, prosecution and
maintenance of the Eurand Patent Rights existing as of *** (the “***”) and Eurand will bear
all the costs and expenses associated therewith. Notwithstanding the foregoing, GSK will have the
right to *** within the ***, *** and *** which relate *** to the Program and/or GSK’s
commercialization of Product in the Field in the Territory (but only to the extent that Eurand
(***) conducts the applications and filings; provided, however, that Eurand will *** GSK with
copies of any applications or filings made by *** with respect to any ***), and *** to Eurand ***
and ***, which *** Eurand will consider in good faith. GSK will provide any such patent
consultation to Eurand at no cost to Eurand. Notwithstanding the foregoing, Eurand shall not be
required to make any disclosure that would violate its confidentiality obligations to *** under the
*** Agreement, although Eurand will use Commercially Reasonable Efforts to *** to *** to GSK.
9.2 Responsibility for GSK Patent Rights Existing as of ***. GSK will have ***
responsibility for and ***, and will use its Commercially Reasonable Efforts with regard to, the
preparation, filing, prosecution and maintenance of the GSK Patent Rights existing as of *** and
GSK will bear all the costs and expenses associated therewith.
9.3 Ownership of Inventions.
9.3.1 At all times during the Term and thereafter, GSK will own the GSK Program Rights.
Eurand will at all times during the Term and thereafter own any and all inventions relating *** to
the ODT Technology.
9.3.2 Each Party will promptly disclose to the Steering Committee any inventions or
improvements made or conceived by such Party, its Affiliates or any person or Entity under such
Party’s or its Affiliate’s supervision, either alone or jointly in the course of or as a result of
the activities under the Program (the “Inventions”); provided, however for the avoidance of
doubt, the term “Inventions” will not include or be deemed to include *** or *** or *** or its
Affiliates relating to *** and/or *** for Product. The Steering Committee will determine the
strategy for protecting all such Inventions, including, without limitation, the filing of patent
applications on any Inventions, in a manner consistent with this Section 9.3 and in accordance with
Section 5.6; provided, however, the Steering Committee shall not prevent Eurand from filing patent
applications that do not disclose or claim any GSK Inventions or prevent GSK from filing any
application that does not disclose or claim any Eurand Inventions.
9.3.3 GSK will *** own Inventions which relate to the *** and/or ***, but excluding Inventions
relating *** to the ODT Technology (collectively, the “GSK Inventions”), irrespective of
whether the inventor is an employee of Eurand or its Affiliates or GSK or whether there are joint
inventors, some of whom are employees of Eurand (or its Affiliates) and some of whom are employees
of GSK. As determined by the Steering Committee, GSK will have the right, at its sole expense
using in-house or outside legal counsel selected ***, to prepare, file, prosecute, maintain and
extend any and all Patent Rights inside and/or outside of the Territory on GSK Inventions (the
“GSK Invention Patent Rights”). Notwithstanding the foregoing, Eurand will have the right
to review all pending patent applications included within the GSK Invention Patent Rights,
significant filings and other significant proceedings ***, and make recommendations to GSK
27
concerning them and their conduct, which recommendations GSK will consider in good faith.
Eurand will provide any such patent consultation to GSK at *** to GSK. Further, Eurand will, and
will cause its Affiliates and its and their respective employees to, *** GSK in preparing patent
applications on GSK Inventions to the extent such are related to the *** *** and will provide GSK
with *** of *** to the GSK Inventions. Any GSK Invention Patent Rights, except as set forth in
Section ***, will be deemed to be included within the GSK Patent Rights and any Know-How related to
such GSK Inventions will be deemed to be included within GSK Know-How.
9.3.4 Eurand will solely own Inventions which relate *** (the “Eurand Inventions”),
irrespective of whether the inventor is an employee of GSK or its Affiliates or Eurand or whether
there are joint inventors, some of whom are employees of GSK (or its Affiliates) and some of whom
are employees of Eurand. As determined by the Steering Committee Eurand will have the right at ***
expense using in-house or outside legal counsel selected at Eurand’s sole discretion to prepare,
file, prosecute, maintain and extend any and all Patent Rights inside and/or outside of the
Territory on Eurand Inventions. GSK will, and will cause its Affiliates and its and their
respective employees to, cooperate with Eurand in preparing patent applications on Eurand
Inventions and to provide Eurand with appropriate assignment of Intellectual Property Rights to the
Eurand Inventions. Any patent applications and patents filed by or on behalf of Eurand on Eurand
Inventions, except as set forth in Section 9.4.2, will be deemed to be included within the Eurand
Patent Rights and any Know-How related to such Eurand Inventions will be deemed to be included
within Eurand Know-How.
9.3.5 GSK will exclusively own the GSK Data and such GSK Data will be deemed to be GSK
Know-How and GSK Confidential Information, and will constitute part of the GSK Program Rights.
Eurand will exclusively own the Eurand Data and such Eurand Data will be deemed to be Eurand
Know-How and Eurand Confidential Information, and will constitute part of the Eurand Intellectual
Property Rights.
9.3.6 Any information contained in a patent filing by a Party under this Agreement will be
subject to the confidentiality provisions of Section 13, unless and until such patent filing is
published by an applicable Patent Office, and the Confidential Information of a Party may not be
used by the other Party in a patent filing without the express written consent of such first Party.
9.4 Abandoned Patent Rights.
9.4.1 Should GSK elect to abandon any Patent Right contained in the GSK Invention Patent
Rights relating to the Formulation and/or Product, including, without limitation, any Patent Rights
on any GSK Invention relating to the Formulation and/or Product (the “Abandoned GSK Invention
Patent Rights”), it will (i) provide Eurand with written notice as soon as reasonably possible
after making such election but in any event no later than *** (***) calendar days after making such
election but in any event before a possible loss of rights, and Eurand will have the right to file,
prosecute and maintain any Abandoned Invention GSK Patent Rights in its sole discretion, at its
sole expense and in Eurand’s name, and such Abandoned Invention GSK Patent Rights will be deemed to
be included in the Eurand Patent Rights. For the avoidance of doubt, the Abandoned Invention GSK
Patent Rights will not include any Patent Rights contained in the GSK Invention Patent Rights that
may be abandoned by GSK which relate to the *** and/or ***.
28
9.4.2 Should Eurand elect to abandon any Patent Right contained in the *** including, without
limitation, any Patent Rights on any Eurand Invention (the “Abandoned Eurand Patent
Rights”), it will (i) provide GSK with *** as soon as reasonably possible after making such
election but in any event no later than *** (***) calendar days after making such election but in
any event before a possible loss of rights, and GSK will have the right to file, prosecute and
maintain any Abandoned Eurand Patent Rights ***, at its *** expense and in Eurand’s name, GSK’s
name or the name of both GSK and Eurand, as determined by *** in its *** discretion, and such
Abandoned Eurand Patent Rights will be deemed to be included in the *** Patent Rights.
9.5 Commercialization of Product and Competitive Product:
9.5.1 Eurand acknowledges and agrees that during the Term: (i) ***, and will ***, *** pursuant
to this ***, the Clinical Supply Agreement and Commercial Supply Agreement *** for *** and/or ***
in the Field in any country in the world or assist any Third Party in ***, *** for *** and/or ***
in the Field in any country in the world; and (ii) Eurand will ***, and will cause its Affiliates
***, except as set forth in this Section 9.5 and in Section 10.6, *** for *** and/or *** in any
country in the world. If, after the date of the First Commercial Sale of Product in the Territory
provided that the date of the First Commercial Sale is after the *** *** or if the First Commercial
Sale has not occurred then the date that is *** (***) months after the ***, ***, Eurand, on its own
or through any of its Affiliates or any Third Party, desires to commercialize Product and/or
Competitive Product in the Field ***, Eurand will *** notice to GSK and thereby grant to GSK an ***
right to negotiate with Eurand for an *** license under the Eurand Intellectual Property Rights to
*** for *** and *** such *** and/or *** in the *** (each such notice referred to as a
“***”). GSK shall have *** (***) Right of Negotiation with respect to each ***.
9.5.2 GSK must exercise a Right of Negotiation by providing written notice to Eurand (each
such notice referred to as a “Right of Negotiation Notice”) within *** (***) calendar days
after receiving written notice from Eurand as provided in Section 9.5.1 of such Right of
Negotiation.
9.5.3 If GSK does not submit a Right of Negotiation Notice to Eurand as provided in Section
9.5.2 *** to the expiration of the *** (***) calendar day period referenced in Section 9.5.2, the
corresponding Right of Negotiation will immediately terminate *** that is *** the *** of such ***
(***) calendar day period and Eurand will have no further obligation to GSK with respect to such
Right of Negotiation for Product and/or Competitive Product (as applicable) in such country except
as provided below in Section 9.5.6.
9.5.4 If GSK exercises a Right of Negotiation by providing a Right of Negotiation Notice as
provided in Section 9.5.2, the Parties will in good faith negotiate during the Right of Negotiation
Period a license and supply agreement pursuant to which GSK would obtain an *** license under the
Eurand Intellectual Property Rights to *** for *** and *** and/or *** in the Field in such ***, and
Eurand will supply GSK’s total requirements for clinical and commercial supply of bulk tablets of
Product in such *** (the “***”). The “Right of Negotiation Period” will be the
period that commences on the date on which GSK provides Eurand with a Right of Negotiation Notice
as provided in Section 9.5.2 (for the purposes of this Section 9.5.4 only, the “commencement date”)
and *** on the day *** following the *** (***) day after the ***. Each such Right of Negotiation
Period may be *** upon the *** of the *** prior to the *** thereof as provided in Section 9.5.5 or
earlier terminated by the termination of this Agreement. Notwithstanding the foregoing, *** will
have the
29
right, at *** and for *** during a Right of Negotiation Period, to terminate in writing such
Right of Negotiation Period which would terminate the corresponding Right of Negotiation.
9.5.5 In the event the Parties have not executed the *** during the Right of Negotiation
Period, after starting to negotiate the terms and conditions thereof in good faith: (i) then at ***
request, the Parties will extend such Right of Negotiation Period for *** of *** (***) Business
Days; or (ii) if not extended by *** as provided in (i), such Right of Negotiation Period will
expire as provided in Section 9.5.4 and *** will have no further obligation to *** with respect to
such Right of Negotiation or Product and/or Competitive Product (as applicable) in such *** except
as provided in Section 9.5.6; provided, however, that in the making, having made, use, sale,
offering for sale and import of Product and/or Competitive Product in such country, *** covenants
and agrees it will ***, and will cause its Affiliates and any Third Party *** to, *** and *** the
*** of *** in the *** or *** and ***, *** (only pursuant to the Clinical Supply Agreement and the
Commercial Supply Agreement*** and *** in the ***.
9.5.6 In the event that the Parties do not enter into a *** as provided in this Section 9.5,
then subject to Section 11.3.5(v) GSK will enter into a license agreement which will include the
following:
(i) GSK will grant to Eurand an *** license with the right to grant sublicenses, under the GSK
Program Rights to make, have made, use, sell, offer for sale and import Product (if applicable) in
the Field in such country, *** to *** *** and *** as provided in Section *** and *** (if any) to
*** and *** in such *** to the extent *** under the Clinical Supply Agreement and the Commercial
Supply Agreement.
(ii) GSK will grant to Eurand a *** license with the right to grant sublicenses, under the GSK
Program Rights to make, have made, use, sell, offer for sale and import Competitive Product (if
applicable) in the Field in such ***, *** and *** as provided in Section *** and *** (if any) ***
and *** in such *** to the extent *** under the Clinical Supply Agreement and the Commercial Supply
Agreement.
(iii) In consideration for such license, but subject to Section 11.3.5(iii) Eurand will pay to
GSK *** on *** of *** and/or *** by Eurand, its Affiliates or sublicensees in such *** for a period
of *** after the *** of such *** and/or ***, at a *** to *** of *** of *** or *** (as applicable).
For the purposes of the license, “***” of *** and/or Competitive Product by Eurand, its Affiliates
and sublicensees will be calculated similarly to Net Sales under this Agreement. Further such
royalty will be payable by Eurand to GSK in the same manner in which Royalties are payable by GSK
to Eurand pursuant to Sections 8.3.6.
9.6 Infringement. Eurand agrees that it will *** GSK with *** within *** (***)
Business *** the following: the *** (as defined in Section 8.2.***), the *** (as defined in Section
8.2.***), and thereafter whenever the *** is ***, in each case so that GSK may monitor the freedom
to use *** as contemplated under this Agreement ***. In the event that a claim of infringement of
a Third Party’s Intellectual Property Rights is made or brought against either Party or grounds for
a claim of infringement of a Third Party’s Intellectual Property Rights becomes known to either
Party, as a result of the activities under the Program or otherwise under the Agreement, the Party
receiving such claim or becoming aware of grounds for such claim shall promptly inform the other
Party, and the Parties shall consult with each other in order to develop a strategy for addressing
the alleged
30
infringement. Each Party shall reasonably cooperate with the other in any investigations
undertaken to determine any potential infringement.
9.6.1 To the extent the alleged infringement relates primarily to the use of the Eurand
Intellectual Property Rights, Eurand shall take one or more of the following actions at ***
(simultaneously or sequentially):
(i) ***, or
(ii) ***, or
(iii) *** and/or ***.
9.6.2 If Eurand is unable to effect any of the actions described in Section 9.6.1, after
explaining to the Steering Committee in reasonable detail what actions Eurand has taken, then GSK
may exercise its rights under Section 8.3.5 with respect to alleged infringement related *** to the
use of the ***.
9.6.3 In the event that the alleged infringement relates to the use of the *** but also
relates to an aspect of the Product other than ***, Eurand and GSK will work in good faith to
jointly address the alleged infringement. To the extent the alleged infringement does not relate to
the use of the ***, GSK may, at its *** discretion, cost and expense, defend the claim or obtain a
license to use the technology upon which the Third Party Claim is based, but, in any case, GSK
shall indemnify and hold harmless Eurand with respect to any such alleged infringement claim under
this Section 9.6.3 pursuant to Section 12.2.
9.7 Third Party Infringement of Patents
9.7.1 Each Party shall promptly report in writing to the other Party during the Term any (i)
known infringement or suspected infringement of any Patent Rights included in the *** or the ***,
(ii) unauthorized use or misappropriation of Confidential Information, Eurand Intellectual Property
Rights or GSK Program Rights by a Third Party, or (iii) known infringement or suspected
infringement relating to either the Formulation or Product (in each case, “Third Party
Infringement”) of which it becomes aware (including infringement under 35 U.S.C. Section
271(e)(2)), and which relate to a Product or a Competitive Product, and shall provide the other
Party with all available evidence indicative of said infringement, suspected infringement or
unauthorized use or misappropriation.
9.7.2 In the event of a report of a Third Party Infringement under Section 9.7.1, Eurand and
GSK shall consult with each other in order to develop a strategy for addressing the Third Party
Infringement. In the event that the Parties agree to take legal action to stop the Third Party
Infringement (the “Action”), they shall agree upon legal counsel and unless they agree upon
a different formula for sharing the expenses (including attorney and expert fees) of such action
and for sharing any award or settlement, they shall share them equally. In the event that a Party
(the “Nonparticipating Party”) does not desire to participate in the Action, the other
Party shall be free (at its sole discretion) to bring the action (the “Participating
Party”) based on the Participating Party’s own Intellectual Property Rights in its own name, at
its own expense and retain any award or
31
settlement in its entirety. The Participating Party may, only with the written consent of the
Nonparticipating Party, bring an Action based on the Nonparticipating Party’s Intellectual Property
Rights (i.e., the Eurand Intellectual Property Rights if Eurand is the Nonparticipating Party and
the GSK Program Rights if GSK is the Nonparticipating Party), in its Participating Party’s own
name, and own expense, and retain any award or settlement in its entirety. The Nonparticipating
Party will in *** and ***, or *** to the *** Party if the *** Party ***, *** Party to legal or
regulatory harm. *** obligation to participate except to the extent that such ***, and shall ***
in connection therewith at *** charge to the other Party *** for *** of ***. If either Party
desires to retain counsel independently, at its own expense, the Party may do so, but it shall not
relieve the Party of its obligations under this section.
10 REPRESENTATIONS AND WARRANTIES:
10.1 Mutual Representations and Warranties. Eurand and GSK each hereby represent and
warrant to the other as follows, as of the Effective Date:
10.1.1 It is a corporation duly organized, validly existing and is in good standing under the
laws of its jurisdiction of formation, and has all requisite power and authority, corporate or
otherwise, to execute, deliver and perform this Agreement, the Clinical Supply Agreement (and
related quality agreement) and the Commercial Supply Agreement (and related quality agreement);
10.1.2 The execution, delivery and performance of this Agreement have been duly authorized by
all necessary corporate action and do not and will not (i) require any consent or approval of its
stockholders, (ii) violate any provision of any Applicable Law or any provision of its certificate
of incorporation, by-laws or other founding document, or (iii) result in a breach of or constitute
a default under any material agreement, mortgage, lease, license, permit or other instrument or
obligation to which it is a party or by which it or its properties may be bound or affected;
10.1.3 It is not currently debarred, suspended or otherwise excluded by any government agency
from receiving government contracts that would adversely affect its ability to perform its
obligations hereunder;
10.1.4 It is not under any obligation to any Entity, contractual or otherwise, that is
conflicting or inconsistent in any respect with the terms of this Agreement or that would impede
the diligent and complete fulfillment of its obligations hereunder; and
10.1.5 This Agreement is a legal, valid and binding obligation enforceable against it in
accordance with its terms and conditions, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws, from time to time in
effect, affecting creditor’s rights generally.
10.2 Eurand Representations and Warranties. Eurand represents and warrants to GSK
that as of the Effective Date:
10.2.1 It owns the entire right, title and interest in and to, or otherwise has the right to
grant the license or sublicense rights outlined in Section 2 under the Eurand Intellectual Property
32
Rights, all of which are, to Eurand’s actual knowledge, free and clear of any liens,
mortgages, security interests, charges, encumbrances or otherwise;
10.2.2 It has not, up through and including the Effective Date, knowingly withheld any
material information in Eurand’s possession from GSK in response to GSK’s reasonable inquiries in
connection with GSK’s due diligence relating to the ODT Technology, this Agreement and the
underlying transaction, and to *** of its knowledge, the information related to the ODT Technology
that Eurand has provided to GSK prior to the *** is up-to-date and accurate in all material
respects;
10.2.3 Except as set forth on Exhibit G, to the best of its knowledge, the Patent Rights
included in the Eurand Patent Rights are valid and enforceable and there are *** or threatened
claims or legal actions asserting that the Patent Rights included in the Eurand Patent Rights are
invalid or unenforceable;
10.2.4 To *** of its knowledge, except with respect to ***, the ODT Technology will not
constitute an infringement of any patents, trade secrets, or other industrial or Intellectual
Property Rights of any Third Party;
10.2.5 To *** of its knowledge, the Eurand Trademarks are valid and enforceable and that there
are no pending or threatened claims or legal actions asserting that such Eurand Trademarks are
invalid or unenforceable in the Territory; and
10.2.6 Eurand has provided GSK with a redacted copy of the *** Agreement, including, without
limitation, any and all amendments made thereto as of the Effective Date. To *** of Eurand’s
knowledge, the *** Agreement remains in full force and effect and Eurand is in compliance in all
*** respects with the terms of the *** Agreement.
10.3 GSK’s Representations and Warranties. GSK represents and warrants to Eurand that
as of the Effective Date:
10.3.1 It owns the entire right, title and interest in and to, or otherwise has the right to
grant the license or sublicense rights outlined in Section 2 under the GSK Intellectual Property
Rights, all of which are, to GSK’s actual knowledge, free and clear of any liens, mortgages,
security interests, charges, encumbrances or otherwise; and
10.3.2 To *** of GSK’s ***, the Drug Substance will not constitute and infringement of any
patents, trade secrets, or other industrial or Intellectual Property Rights of any Third Party.
10.4 Covenants of Eurand and GSK.
10.4.1 Eurand covenants to GSK that Eurand will not at any time during the Term, *** of *** or
the *** with ***, or otherwise in any manner that could *** to have a *** on GSK’s rights under the
*** to *** and *** (only to the extent provided in the Clinical Supply Agreement or Commercial
Supply Agreement), *** and *** Product in the Field.
10.4.2 Eurand covenants to GSK that Eurand will *** take or omit to take any actions that
would constitute a material breach of the *** Agreement, which breach would be *** to
33
have a *** effect on GSK’s rights under the Eurand Intellectual Property Rights as set forth
in Section 2.1.
10.4.3 Eurand covenants to GSK that, at all times during the Term, Eurand *** and take ***
available to it to *** and *** the *** and any of its rights thereunder, the loss or restriction of
which would in *** or *** with the exercise of any of GSK’s rights under this Agreement.
Notwithstanding any other provision hereof, in the event Eurand is in *** of the *** or becomes
aware of any set of facts or circumstances that make a *** of the *** *** or ***, and such ***
presents a *** of *** with, *** of or *** the exercise or scope of any of GSK’s rights under this
Agreement (or under any agreement entered into in connection herewith, including the Clinical
Supply Agreement and Commercial Supply Agreement), Eurand shall, *** GSK’s ***, use its ***rts to
*** GSK, on or *** or ***, to *** with respect to the Product that are ***. Further, *** and ***
will *** without the application of any *** as set forth in Section *** and GSK will, as of the ***
of the *** of this Agreement, have an *** license, with the right to ***, under the *** to *** and
*** and/or *** in the Field.
10.4.4 Eurand covenants to GSK that Eurand will only use Drug Substance in its performance of
the Eurand Development Activities, and manufacture of CTM and Product for GSK pursuant to the
Clinical Supply Agreement and Commercial Supply Agreement, respectively.
10.4.5 Eurand covenants to GSK that *** and for *** Eurand will ***, and will cause its
Affiliates *** during the Term and for *** ***, use any *** or *** in the making, have made, use,
sale, offering for *** and/or import of, or directly or indirectly assist any Third Party *** and
for *** in using any *** or *** in the making, having made, use, sale, offering for sale and/or
import of, any product other than as set forth in this Agreement, including *** for any *** which
has any *** or *** component to the drug release and which contains *** of the ***, whether or ***.
10.4.6 GSK covenants to Eurand that GSK will not and will cause its Affiliates not to analyze
any of the prototypes of the Formulation or CTM provided hereunder to determine their composition
or the manner in which they have been manufactured unless and until required under the Program.
10.5 Compliance with Laws. Each Party covenants and agrees that it will comply, and
will cause its respective Affiliates to and contractually mandate that its sublicensees will
comply, with all Applicable Laws in the performance of its respective obligations under this
Agreement.
10.6 Non-Competition.
10.6.1 Eurand represents and warrants to GSK that Eurand will not, and will cause its
Affiliates not to, make, have made, use, sell, offer for sale and/or import, or directly or
indirectly assist any Third Party in making, having made, using, offering for sale and/or importing
a Competitive Product in the Field in the Territory during the Term. GSK represents and warrants
to Eurand that GSK will not, and will cause its Affiliates not to, make, have made, use, sell,
offer for sale and/or import, or directly or indirectly assist any Third Party in the making,
having made, use, sale, offering for sale and/or import of, a Competitive Product in the Field in
the Territory during the Term.
34
10.6.2 Notwithstanding anything contained in this Section 10.6 to the contrary, nothing herein
will, expressly or impliedly, preclude or restrict either Party (or its respective Affiliates) in
any way from (i) acquiring a majority of the voting stock, or all or substantially all of the
assets of, a Competing Business Entity or a Non-Competing Business Entity (as both such terms are
defined in Section 10.6.3 below); (ii) being acquired by a Competing Business Entity or a
Non-Competing Business Entity; or (iii) merging, amalgamating, taking over, or consolidating (or
engaging in any similar transaction) with a Competing Business Entity or Non-Competing Business
Entity (hereinafter, the actions referred to in (i), (ii) and (iii) of this Section 10.6.2 are
collectively referred to as “Merger” or “Merging” as of the date that any such
action becomes effectively complete).
10.6.3 The term “Competing Business Entity” as used in Section 10.6.2 means an Entity
that markets a Competitive Product in the Field in the Territory during the Term. A
“Non-Competing Business Entity” means any other Entity other than a Competing Business
Entity. In the event that a Party or any of its Affiliates *** with a *** during the Term (the
“*** Party”), such *** Party will *** the other Party *** Business Days after the date of
the *** of the *** or *** of such ***, as to whether such *** will *** or *** the *** of the *** by
the ***. If the Merging Party notifies the other Party that it plans to so ***, then the other
Party may *** this Agreement for *** of Section 10.6.1 any *** than *** after the ***. The *** or
*** of any such *** by the *** or *** during such *** *** the *** is *** and *** be *** for ***
other Party ***: (i) *** or *** *** is *** to *** itself of the *** as promptly as *** such ***
period, and (ii) the *** continues to comply with the terms of this Agreement in all respects;
provided, however, that during the period in which *** is *** a *** in the *** pursuant to this
Section 10.6.3, *** will have ***, and *** will have *** to *** on *** during such period. If the
*** notifies the other Party that the *** does *** to ***, then the other Party may *** this
Agreement upon prior written notice to *** that in the event ***, then *** as of the *** of the ***
of this Agreement *** will have an *** license, with the right to ***, under the *** to *** for ***
and *** in the ***, except with respect to any countries in which *** has obtained an *** license
under the *** pursuant to Section *** to make, *** and ***.
10.7 Limitation of Warranty. EXCEPT AS EXPRESSLY STATED IN THIS SECTION 10 NEITHER
PARTY MAKES ANY OTHER REPRESENTATION OR WARRANTY, AND EACH PARTY EXPRESSLY DISCLAIMS ALL IMPLIED
WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NON-INFRINGEMENT, WITH RESPECT TO ANY PRODUCT, MATERIALS, INFORMATION, SERVICES OR LICENSES
PROVIDED TO THE OTHER PARTY PURSUANT TO THIS AGREEMENT.
11 TERM AND TERMINATION
11.1 Term. The term of this Agreement (the “Term”) will commence on the
Effective Date, and unless sooner terminated as provided in this Sections 10.4.3, 10.6.3, or 11,
will expire on the date GSK’s obligations to pay Royalties as provided in Section ***. *** of this
Agreement, *** and ***, and *** or *** to ***.
11.2 Termination.
35
11.2.1 By GSK. GSK may terminate this Agreement *** with *** (***) calendar days’ *** notice
to Eurand if such termination is prior to the *** and ***, in each case if based upon a *** or ***
or ***.
11.2.2 By Either Party for Material Breach. Either Party may terminate this Agreement in its
entirety upon written notice to the other Party in the event that the other Party is in material
default or breach of any of its material obligations hereunder, and fails to remedy any such
default or breach within *** (***) calendar days without (i) providing a written explanation
reasonably satisfactory to the non-defaulting Party that a default has not occurred or (ii)
commencing to cure the default within *** (***) days of such notice and thereafter curing such
default within *** (***) days of such notice; or in the case of failure to pay any uncontested
amounts due hereunder, *** (***) calendar days (in each case, the “Cure Period”) after
notice thereof by the non-defaulting/non-breaching Party. If such default or breach is not
corrected within the applicable Cure Period, the non-defaulting/non-breaching Party will have the
right to immediately terminate this Agreement by giving written notice to the Party in default or
breach. However, in the event that the Party in default provides a written explanation to the
non-defaulting Party and there is a dispute regarding whether the explanation is reasonably
satisfactory, the dispute shall be resolved in accordance with Section 14.14 and the Cure Period
shall be extended during the pendency of the resolution of the dispute.
11.2.3 By Mutual Consent. The Parties may terminate this Agreement in its entirety at any
time and for any reason during the Term upon their mutual written agreement.
11.2.4 By Either Party for Bankruptcy. Either Party may terminate this Agreement in its
entirety at any time during the Term by giving written notice to the other Party if the other Party
files in any court or agency pursuant to any statute or regulation of any state or country, a
petition in bankruptcy or insolvency or for reorganization or for an arrangement or for the
appointment of a receiver or trustee of the Party or of its assets, or if the other Party is served
with an involuntary petition against it, filed in any insolvency proceeding, and such petition will
not be dismissed with sixty (60) calendar days after the filing thereof, or if the other Party
makes a general assignment for the benefit of creditors. Notwithstanding the bankruptcy of Eurand,
or the impairment of performance by Eurand of its obligations under this Agreement as a result of
bankruptcy or insolvency of *** will be entitled to retain all rights and licenses granted to ***
under this Agreement. All rights and licenses granted under or pursuant to this Agreement by ***
are, and will otherwise be deemed to be, for purposes of Article 365(n) of the Bankruptcy Code,
licenses of rights to “intellectual property” as defined under Article 101(52) of the Bankruptcy
Code. The Parties agree that ***, as a licensee of such rights under this Agreement, will retain
and may fully exercise all of its rights and elections under the Bankruptcy Code. The Parties
further agree that, in the event of the commencement of a bankruptcy proceeding by or against
Eurand under the Bankruptcy Code, *** of (or ***o, as appropriate) *** and *** of such *** and
same, ***, will be *** (i) upon any such *** of a *** GSK, unless *** to *** to *** all of its ***
under this Agreement, or (ii) if not delivered under (i) above, upon the rejection of this
Agreement by or on behalf of Eurand upon written request therefor by GSK.
11.2.5 Eurand may terminate this Agreement in the event that: (i) GSK, *** to ***, ***
conducting any GSK Development Activities for ***, or (ii) GSK fails to make *** in the Territory
within *** of the ***, or (iii) GSK discontinues selling the Product in the Territory, *** case
***, such *** is *** to *** or ***, or *** of this Agreement or the *** Agreement or *** is
36
using *** to address. The provisions of this paragraph shall operate independently of the
cure provisions in Section 11.2.2.
11.3 Effects of Termination.
11.3.1 Upon termination of this Agreement, Eurand will have the right to retain any sums
already paid by GSK hereunder.
11.3.2 The expiration or termination of this Agreement for any reason shall not relieve the
Parties of any obligation (including any payments) that accrued prior to such expiration or
termination. Further, neither Party will be precluded from pursuing all rights and remedies that
it may have hereunder at law or in equity with respect to any breach of this Agreement nor
prejudice either Party’s right to obtain performance of any obligation.
11.3.3 Upon termination of this Agreement by GSK pursuant to Section 11.2.2, GSK will *** have
an ***, with *** to ***, under the *** to *** and ***.
11.3.4 If *** has *** at the time of termination of this ***, and such sales will be subject
to the Royalty provisions contained herein.
11.3.5 Post-Termination Rights of Eurand Under the *** Program Rights.
(i) *** to *** and *** to the ***.
(A) If this Agreement is terminated *** and *** by the Parties pursuant to Section *** or by
*** pursuant to Section ***, then (1) GSK will grant to Eurand a worldwide, non-exclusive license,
with the right to grant sublicenses, under the GSK Program Rights to make, have made and use
Product in the Field for the *** of *** Product in the ***, and (2) after the *** Patent Expiration
Date, GSK will grant to Eurand a worldwide, non-exclusive license, with the right to grant
sublicenses, under the GSK Program Rights to make, have made, use, sell, offer for sale and import
Product in the Field, provided, that Eurand pays a ***. Such *** will be *** by *** to *** in the
same manner in which *** are *** by GSK to Eurand pursuant to Sections 8.3.6.
(B) If this Agreement is terminated *** and *** Sections ***, *** or ***, then (1) upon the
effective date of the termination of this Agreement, Eurand will have a worldwide, non-exclusive
license, with the right to grant sublicenses, under the GSK Program Rights to make, have made and
use Product in the Field for the *** purpose of ***, and (2) after the *** Patent Expiration Date,
Eurand will have a worldwide, non-exclusive license, with the right to grant sublicenses, under the
GSK Program Rights to make, have made, use, sell, offer for sale and import Product in the Field.
The license rights of Eurand under the *** pursuant to this Section 11.3.5(i)(B) will be royalty
free.
(ii) *** to *** and *** the ***.
(A) If this Agreement is terminated *** to the *** and *** by the Parties pursuant to Section
*** or by *** pursuant to Section ***, then GSK will grant to Eurand a worldwide, *** license,
with the right to grant sublicenses, under the GSK Program Rights to make, have made, use, sell,
offer for sale, import and seek Regulatory Approvals for the Product in the Field, provided that
***. Such *** will be payable by ***
37
(B) If this Agreement is terminated *** to *** and *** by *** pursuant to Section *** or ***,
then upon the effective date of the termination of this Agreement, Eurand will have a worldwide,
non-exclusive license, with the right to grant sublicenses, under the GSK Program Rights to make,
have made, use, sell, offer for sale, import and seek Regulatory Approvals for the Product in the
Field. The license rights of Eurand under the GSK Program Rights pursuant to this Section
11.3.5(ii)(B) will be ***.
(iii) *** and *** to the ***.
(A) If this Agreement is terminated *** and *** by *** pursuant to Sections *** or ***, then
(1) upon the effective date of the termination of this Agreement***5, Eurand will have a worldwide,
*** license, with the right to grant sublicenses, under the GSK Program Rights to make, have made
and use Product in the Field for the *** purpose of *** and (2) ***, Eurand will have a worldwide,
non-exclusive license, with the right to grant sublicenses, under the GSK Program Rights to make,
have made, use, sell, offer for sale, import, and seek Regulatory Approval for the Product in the
Field. The license granted by GSK to Eurand under this Section 11.3.5(iii)(A) will be royalty
free.
(B) If this Agreement is terminated *** pursuant to Section ***, by *** pursuant to Section
*** or by *** pursuant to Section ***, then (1) ***, *** grant to Eurand a worldwide, *** license,
with the right to grant sublicenses, under the GSK Program Rights to make, have made and use
Product in the Field for the sole purpose of seeking Regulatory Approvals for the Product in the
Field, and (2) ***, GSK will grant to Eurand a worldwide, non-exclusive license, with the right to
grant sublicenses, under the GSK Program Rights to make, have made, use, sell, offer for sale,
import, and seek Regulatory Approval for the Product in the Field, ***. ***
(iv) *** the *** and *** the ***.
(A) If this Agreement is terminated *** pursuant to Sections *** or ***, then upon the
effective date of the termination of this Agreement, Eurand will have a worldwide, *** license,
with the right to grant sublicenses, under the GSK Program Rights to make, have made, use, sell,
offer for sale, import and seek Regulatory Approvals for the Product in the Field. The license
granted by GSK to Eurand under this Section 11.3.5(iii)(B) will be royalty free.
(B) If this Agreement is terminated *** pursuant to Section ***, by *** pursuant to Section
*** or by *** pursuant to Section ***, then GSK will grant to Eurand a worldwide, non-exclusive
license, with the right to grant sublicenses, under the GSK Program Rights to make, have made, use,
sell, offer for sale, import, and seek Regulatory Approval for the Product in the Field, ***. ***
(v) For Cause by GSK. If this Agreement is terminated before or after the First Commercial
Sale pursuant to Section *** or by *** to *** or *** and as to those countries in which Eurand is
already commercializing Product pursuant to Section 9.5, such licenses (and any sublicenses granted
by Eurand) under the GSK Program Rights in such countries will terminate as of the effective date
of the termination of this Agreement.
(vi) Notwithstanding anything to the contrary in this Section 11.3.5 or in this Agreement, the
Parties acknowledge and agree that the term “GSK Program Rights “ included in this Section 11.3.5
will ***, the *** *** and any *** Intellectual Property Rights *** and/or ***
38
Product. Further, the Parties acknowledge and agree that the licenses and rights that may be
granted to Eurand pursuant to this Section 11.3.5 will *** or *** or under the ***, *** and/or any
*** relating to the *** Product.
11.4 Survival. The following provisions will survive any expiration or termination of
this Agreement:
11.4.1 Sections *** and ***, all with regard to *** Product pursuant to Section ***;
11.4.2 Sections *** (solely with respect to payments which have accrued prior to the
expiration or termination of this Agreement), 8.3.6 (solely with respect to payments which have
accrued prior to the expiration or termination of this Agreement*** (last sentence only), *** (last
sentence only), *** and ***; and
11.4.3 Section 1 for the sole purposes of interpreting the obligations and liabilities between
the Parties surviving termination of this Agreement;
which will survive termination or expiration of this Agreement for the time period specified in
such Sections or if no such time period is specified, indefinitely.
12 INDEMNIFICATION AND INSURANCE: SUBLICENSEES
12.1 Indemnification of GSK. Eurand shall indemnify and hold GSK harmless from and
against all damages, losses, expenses, claims (including wrongful death), demands, suits,
penalties, judgments or administrative and judicial orders and liabilities (including, but not
limited to, reasonable counsel fees and expenses) incurred, assessed or sustained by GSK, its
Affiliates, or any of their respective officers, directors, and employees resulting from or arising
out of a claim or proceeding brought by a Third Party with respect to or involving or arising out
of (i) Eurand’s negligence or willful misconduct, (ii) Eurand’s breach of any representation,
warranty, obligation or *** of this Agreement; (iii) *** or *** of Eurand’s *** of any *** or ***
of this Agreement; (iv) *** of any *** of *** of a *** as set forth in Section ***; and/or (v) ***
in any *** as set forth in Section *** provided that *** is a *** in such ***; except however in
each of (i) through (v) to the extent such claim arises from an event for which GSK has an
obligation to indemnify Eurand under Section 12.2 or pursuant to the Clinical Supply Agreement
Commercial Supply Agreement.
12.2 Indemnification of Eurand. GSK shall indemnify and hold Eurand and its
Affiliates harmless from and against all damages, losses, expenses, claims (including wrongful
death and product liability), demands, suits, penalties, judgments or administrative and judicial
orders and liabilities (including, but not limited to, reasonable counsel fees and expenses)
incurred, assessed or sustained by Eurand, its Affiliates, or any of their respective officers,
directors, and employees resulting from or arising out of a claim or proceeding brought by a Third
Party with respect to or involving or arising out of (i) GSK’s negligence or willful misconduct;
(ii) GSK’s breach of any representation, warranty, obligation or covenant of this Agreement; (iii)
Eurand’s use of the Drug Substance in conducting the Eurand Development Activities to the extent
the claim arises from or relates to GSK’s failure to provide up to date information procedures and
warnings regarding the safe handling and use of the Drug Substance; (iv) the sale, packaging,
labeling, advertising, distribution, design, consumption or use of any CTM or Product; (v)
resulting from or arising out of GSK’s *** of
39
any *** or *** of this Agreement; (vi) GSK’s defense of any claim of infringement of a Third
Party’s Intellectual Property Rights as set forth in Section ***; and/or (vii) GSK’s participation
in any Action as set forth in Section 9.7.2 provided that Eurand is a Nonparticipating Party in
such Action; except however in each *** to the extent such claim arises from an event for which
Eurand has an obligation to indemnify GSK under Section 12.1 or pursuant to the Clinical Supply
Agreement or Commercial Supply Agreement.
12.3 Notice and Legal Defense. Promptly after receipt by a Party seeking
indemnification under Section 12.1 or 12.2 (the “Indemnified Party”) of any claim, suit or
proceeding brought by a Third Party or notice of the commencement of any action, administrative or
legal proceeding, or investigation as to which the indemnity provided for in Section 12.1 and 12.2
hereof may apply, the Party seeking indemnification shall notify the indemnifying Party of such
fact (i) within *** (***) calendar days after receipt of services of process of the commencement
of a suit or (ii) for non-litigated matters, within *** (***) calendar days after receipt of notice
thereof; provided, however, that in each case, the failure to give such notice will not relieve the
Indemnifying Party of its obligation to provide indemnification hereunder except if, and to the
extent that, such failure materially and adversely affects the ability of the Indemnifying Party to
defend the applicable claim, suit or proceeding. The Indemnified Party will permit the
Indemnifying Party to assume sole control over the defense of any such claim, suit or proceeding at
the Indemnifying Party’s own cost and expense; and, ***, the Indemnified Party will co-operate as
reasonably requested in the defense of the claim, suit or proceeding. The Indemnified Party will
have the right to retain its own counsel at its own expense, provided, however, that if the
Indemnified Party reasonably concludes, based on advice from counsel, that the Indemnifying Party
and the Indemnified Party have material conflicting interests with respect to such claim, suit or
proceeding, the Indemnifying Party will be responsible for the reasonable fees and expenses of
counsel to the Indemnified Party solely in connection therewith. The Indemnifying Party may not
settle such action or claim, or otherwise consent to an adverse judgment in such action or claim,
which would subject the Indemnified Party to an injunction or if such settlement or judgment would
materially diminish or limit or otherwise adversely affect the rights, activities or financial
interests of the Indemnified Party, without the express written consent of the Indemnified Party.
12.4 Consequential Damages IN NO EVENT, SHALL EITHER PARTY BE LIABLE TO THE OTHER
PARTY FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES ARISING OUT OF, OR
AS THE RESULT OF, THE SALE, DELIVERY, NON-DELIVERY, SERVICING, USE OR LOSS OF USE OF ANY CTM OR
PRODUCT, REGARDLESS OF WHETHER SUCH CLAIM IS BASED UPON BREACH OF WARRANTY, BREACH OF CONTRACT,
NEGLIGENCE, STRICT LIABILITY OR ANY OTHER LEGAL THEORY.
12.5 Insurance *** will, at its sole cost and expense, carry *** insurance,
including *** and *** insurance, which coverage shall have limits of liability which are
commercially reasonable but ***. Such coverage shall be maintained during the Term and for ***
following the expiration or earlier termination of this Agreement or if such coverage is ***, for
*** (***) years *** of this Agreement. *** agrees that during the Term and for *** (***) years
following the expiration or earlier termination of this Agreement, it will *** for the same amounts
and types of coverage set forth above.
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13 CONFIDENTIALITY:
13.1 Confidential Information. Eurand and GSK each hereby recognize and acknowledge
that the other Party’s Confidential Information constitutes valuable and confidential information.
Subject to other express provisions of this Agreement, Eurand and GSK each agree that during the
Term, and for a period of *** (***) years after the effective date of the expiration or earlier
termination of this Agreement for any reason:
13.1.1 The Parties will not disclose, directly or indirectly, in any manner whatsoever to any
Third Parties any Confidential Information received from the other Party (the “Disclosing
Party”) without ***, and the other Party (“Recipient”) will keep confidential, all of
the Disclosing Party’s Confidential Information that is disclosed to Recipient. Recipient agrees
to use the same level of care in safeguarding the Disclosing Party’s Confidential Information that
Recipient uses with its own confidential information of a similar nature, but in no event less than
reasonable care. Recipient will restrict disclosure of the Disclosing Party’s Confidential
Information solely to those of its (or its Affiliate’s) employees or representatives having a need
to know such Confidential Information in order to exercise a right granted or fulfill an obligation
under, this Agreement.
13.1.2 Both Parties shall ensure that each of their respective employees and representatives
who will have access to the Confidential Information of the Disclosing Party are bound by an
obligation to maintain such Confidential Information in accordance with the confidentiality
obligations set forth in this Section 13.
13.1.3 Recipient will not use the Disclosing Party’s Confidential Information in any manner
whatsoever other than solely in connection with the performance of its obligations, or exercise of
its rights, under this Agreement.
13.1.4 Except as permitted by this Section 13, or as otherwise required by Applicable Law, and
subject to the *** Agreement, Eurand and GSK each agree not to disclose any terms or conditions of
this Agreement or the existence of this Agreement to any Third Party without the *** of the other
Party, *** each Party *** to *** the *** of this *** to its *** and *** or ***, to *** and ***, and
to such Party’s consultants and advisors, and to its permitted licensees and sublicensees on the
condition that such Entities agree to keep such Confidential Information in accordance with the
obligations set forth in this Section 13.
13.1.5 In the event Recipient is requested pursuant to, or required by, Applicable Law to
disclose any of the Disclosing Party’s Confidential Information, it will notify the Disclosing
Party promptly so that the Disclosing Party may seek a protective order or other appropriate remedy
or, in the Disclosing Party’s sole discretion, waive compliance with the confidentiality provisions
of this Agreement. ***, in connection with any *** to be *** for the ***rpose. In the event that
no such protective order or other remedy is obtained, or that the Disclosing Party waives
compliance with the confidentiality provisions of this Agreement, Recipient will, without liability
hereunder, furnish only that portion of the Confidential Information which Recipient is advised by
its counsel is legally required, and Recipient will exercise reasonable efforts to obtain reliable
assurances that confidential treatment will be accorded the Disclosing Party’s Confidential
Information.
13.1.6 Upon the effective date of the termination of this Agreement for any reason, either
Party may request in writing, and the other Party will either: (i) promptly destroy all copies of
the requesting Party’s Confidential Information in the possession of the other Party and confirm
such
41
destruction in writing to the requesting Party; or (ii) promptly deliver to the requesting
Party, at the other Party’s expense, all copies of such Confidential Information in the possession
of the other Party, provided, however, the other Party will be permitted to retain one (1) copy of
the requesting Party’s Confidential Information for the sole purpose of determining any continuing
obligations hereunder. Additionally, upon termination of this Agreement for any reason, both
Parties will immediately cease all use of the other Party’s Confidential Information including, to
the extent reasonably possible, removing all references to such Confidential Information ***: (a)
*** and ***. For the avoidance of doubt, each Party will be permitted to use the other Party’s
Confidential Information after the expiration of this Agreement and will not be obligated to return
such Confidential Information of the other Party in accordance with this Section 13.1.6. All
Confidential Information will continue to be subject to the terms of this Agreement for the period
set forth in Section 13.1.
13.1.7 Each Party represents and warrants to the other Party that it has all right, title and
ownership interest in and to its Confidential Information and/or it has the right to disclose its
Confidential Information to the other Party. Each Party may seek to enforce all rights and legal
remedies available under this Section 13 or by law, including injunctive relief, specific
performance and other equitable remedies in the event of a breach of the provisions of this Section
13 by the other Party.
13.1.8 Notwithstanding the provisions of this Section 13, the Parties agree that nothing
contained in this Section 13 will prevent GSK, in any way whatsoever from disclosing any Eurand
Confidential Information, without obtaining Eurand’s prior consent, to any Affiliate of GSK or to
any Third Party for the purposes of engaging in the development (including the Clinical Studies and
filing of Regulatory Approvals for Product) and commercialization of Product in the Field in the
Territory, provided such Affiliate or Third Party is under an obligation of confidentiality at
least as restrictive as the obligations contained in Section 13 herein with respect to the
Confidential Information.
13.1.9 The confidentiality obligations set forth in this Section 13 will supersede the
Confidential Disclosure Agreements dated as of October 10, 2005 and November 30, 2005, between the
Parties (“Confidentiality Agreements”), and will govern any and all information disclosed
by either Party to the other pursuant thereto, and will be retroactively effective to the date of
the Confidentiality Agreement.
13.2 Publicity. Any announcements or publicity regarding the existence of this
Agreement or any terms or subject matter of this Agreement by either Eurand and/or GSK will be
agreed to by Eurand and GSK in writing in advance of any such announcement or publicity. The Party
preparing any such announcement, publicity or press release will provide the other Party with a
draft thereof reasonably in advance of disclosure so as to permit the other Party to review and
comment on such announcement, publicity or press release, unless Applicable Law otherwise requires
immediate public disclosure. The foregoing notwithstanding, the Parties will agree on a press
release to announce the execution of this Agreement, together with a corresponding question/answer
outline for use in responding to inquiries about this Agreement. Thereafter, Eurand and GSK may
each disclose to Third Parties the information contained in such press release and question/answer
outline without the need for further approval by the other Party. Each Party agrees that it will
co-operate fully with the other with respect to all disclosures regarding this Agreement to the
Securities Exchange Commission and any other governmental or regulatory agencies, including
42
requests for confidential treatment of proprietary information of either Party included in any
such disclosure. Further, *** and *** that it will *** to disclose the *** and/or ***, as it
relates solely to this Agreement, in any announcement, publicity or press release prior to ***
unless agreed to by ***.
13.3 Publication.
13.3.1 Eurand will not submit for written, electronic or oral publication any document,
manuscript, abstract or the like (a “Eurand Publication”) which includes any GSK Data or
any other information regarding, related to, Product in the Field without first providing GSK with
a copy of such Eurand Publication for GSK’s review. GSK will review and provide its comments and
changes, if any, to such Eurand Publication which is an abstract, within fifteen (15) Business Days
after receipt of the Eurand Publication from Eurand and to such Eurand Publication which is a
manuscript or any other document, within thirty (30) Business Days after receipt of the Eurand
Publication from Eurand, or in each of foregoing cases, such longer period of time as agreed to by
the Parties in order to afford GSK a reasonable opportunity to protect its rights under any GSK
Intellectual Property Rights. Eurand will incorporate any comments and changes received from GSK
as provided herein with respect to such Eurand Publication. Any GSK contributions will be
acknowledged in any such Eurand Publication.
13.3.2 GSK will not submit for written, electronic or oral publication any document,
manuscript, abstract or the like (a “GSK Publication”) which includes any Eurand Data or
any other information regarding, related to, Product in the Field without first providing Eurand
with a copy of such GSK Publication for Eurand’s review. Eurand will review and provide its
comments and changes, if any, to such GSK Publication which is an abstract, within fifteen (15)
Business Days after receipt of the GSK Publication from GSK and to such GSK Publication which is a
manuscript or any other document, within thirty (30) Business Days after receipt of the GSK
Publication from GSK, or in each of the foregoing cases, such longer period of time as agreed to by
the Parties in order to afford Eurand a reasonable opportunity to protect its rights under any
Eurand Intellectual Property Rights. GSK will consider in good faith any comments and changes
received from GSK as provided herein with respect to such GSK Publication. Any Eurand
contributions will be acknowledged in any such GSK Publication.
13.4 Clinical Trial Registries. The Parties acknowledge and agree that
notwithstanding anything to the contrary contained in this Section 13, GSK may publish the
protocols, results and/or summaries of any clinical trials relating to Compound and/or Product,
including without limitation the Data, on a clinical trial register maintained by GSK or its
Affiliate and the protocols of clinical trials relating to Compound and/or Product on
▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ (and/or in each case publish the results, summaries and/or protocols of
clinical trials on such other websites and/or repositories as required by Applicable Law or such
GSK’s or its Affiliate’s standard operating procedures), and that each such publication will not be
a breach of the confidentiality obligations provided in this Section 13.
14 MISCELLANEOUS:
14.1 Assignment Neither this Agreement nor any interest herein may be assigned, in
whole or in part, by either Party hereto without the prior written consent of the other Party
hereto, provided that either Party shall have the right to assign all or part of its rights,
interest and obligations
43
to an Affiliate, a successor to a controlling or majority share of such Party, or to a
successor to substantially all the assets of the business to which this Agreement relates. Subject
to the foregoing, this Agreement shall be binding upon and inure to the benefit of the Parties
hereto and their respective permitted successors and assigns. Eurand acknowledges and agrees that
*** under this Agreement as provided in this Section 14.1 ***, and ***.
14.2 Safety Data Exchange Agreement. The procedures for sharing and reporting of
Adverse Events and Serious Adverse Events encountered by each Party relating to or associated in
any way with the development, use, manufacture and/or commercialization of Compound, Drug Substance
and/or Product as contemplated under this Agreement, which procedures will be no less stringent
that those set forth in the applicable guidelines of the ICH and will be sufficient to allow each
Party to satisfy both expedited and periodic regulatory reporting requirements, will be as set
forth in a Safety Data Exchange Agreement to be finalized and exchanged by the Parties within
ninety (90) days after the Effective Date, or such other date as agreed upon by the Steering
Committee. For the purposes of this Agreement, the terms “Adverse Event” and “Serious Adverse
Event” will have the meanings ascribed to them in the Safety Data Exchange Agreement. For the
purposes of this Section 14.2, “ICH” means the International Committee on Harmonization developed
through a collaboration between the FDA and regulatory agencies in the European Union and Japan to
harmonize regulatory requirements to produce marketing applications acceptable to the countries of
the European Union, Japan and the United States.
14.3 No Implied Waiver. Failure by either Party hereto on one or more occasions to
avail itself of a right conferred by this Agreement shall in no event be construed as a waiver of
such Party’s right to enforce said right in the future.
14.4 Choice of Law. This Agreement and all rights and obligations hereunder,
including matters of construction, validity and performance, shall be exclusively governed by and
construed in accordance with the laws of the state of New York, without regard to the choice-of-law
provisions thereof. The Parties hereby consent to service of process by mailing or delivering such
service to the Party at its respective principal business address. The Parties hereby submit to
the jurisdiction of the *** for the resolution of any disputes through any judicial mechanism.
14.5 No Third Party Beneficiaries. No Third Party, including any employee of any
Party to this Agreement, will have or acquire any rights by reason of this Agreement.
14.6 Notices. Any notice and other communication required or permitted to be given
hereunder shall be in writing and shall be deemed given when delivered personally, telecopied or
received by registered mail, return receipt requested, to the Parties at the following addresses:
If to Eurand, to:
Eurand, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Office of Business Development
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Office of Business Development
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to GSK, to:
44
GlaxoSmithKline R&D Limited
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
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▇▇
Attention: Vice President, Worldwide Business Development Transactions
Facsimile: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇
Attention: Vice President, Worldwide Business Development Transactions
Facsimile: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ Corporation d/b/a GlaxoSmithKline
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Vice President and Associate General Counsel, R&D Legal Operations,
Business Development Transactions Team
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Vice President and Associate General Counsel, R&D Legal Operations,
Business Development Transactions Team
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
or at such other addresses as the Parties may designate by notice sent in accordance with this
Section 14.6.
14.7 Execution of Additional Documents. Each Party hereto agrees to execute such
further documents or agreements, and do all such other commercially reasonable acts, as may be
reasonably necessary or desirable to effect the purpose of this Agreement and carry out its
provisions.
14.8 Severability. If any provision of this Agreement is or becomes invalid or is
ruled invalid by any court of competent jurisdiction or is deemed unenforceable, such provision
shall be considered severed from this Agreement, and it is the intention of the Parties that the
remainder of the Agreement will not be affected. The Parties shall make a good faith effort to
replace any invalid or unenforceable provision with a valid and enforceable one such that the
objectives contemplated by the Parties when entering this Agreement may be realized.
14.9 Captions/Headings. The article and section captions or headings in this
Agreement have been inserted as a matter of convenience and are not part of this Agreement.
14.10 Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original of this Agreement and all of which together shall
constitute one and the same instrument.
14.11 Independent Relationship. Nothing herein contained shall be deemed to create an
employment, agency, joint venture or partnership relationship between the Parties hereto or any of
their agents or employees, or any other legal arrangement that would impose liability upon one
Party for the act or failure to act of the other Party. Neither Party shall have any power to
enter into any contracts or commitments or to incur any liabilities in the name of, or on behalf
of, the other or to bind the other Party in any respect whatsoever. All activities undertaken by
Eurand hereunder shall be that of an independent contractor.
45
14.12 Entire Agreement. This Agreement, together with the Safety Data Exchange
Agreement, Clinical Supply Agreement (and related quality agreement) and Commercial Supply
Agreement (and related quality agreement), contains the entire agreement between the Parties
related to subject matter hereof, and this Agreement cannot be amended, varied or abridged in any
manner except by amendment in writing duly signed by the Parties. This Agreement takes the place
of any existing agreement, arrangements or discussions between the Parties relating to the subject
matter hereof, whether oral or written, including, without limitation, the Confidentiality
Agreements.
14.13 Force Majeure. Neither Eurand nor GSK will be liable for failure of or delay in
performing obligations set forth in this Agreement (other than the payment of amounts owed), and
neither will be deemed in breach of its obligations, if such failure or delay is due to a Force
Majeure Event. When a Force Majeure Event arises, the Parties will discuss what, if any,
modification of the terms of this Agreement may be required in order to arrive at an equitable
solution.
14.14 Resolution of Disputes.
14.14.1 If the dispute cannot be resolved *** as set forth in Section 5.6, then either Party
may submit the matter to arbitration conducted in New York, New York in accordance with ***. The
award of such arbitration shall be final, binding and non-appealable, except to the extent provided
for in the rules of the ***. The arbitrator(s) will have the discretion to impose the cost of the
arbitration upon the losing Party or divide it between the Parties upon any terms which he/they
deem appropriate; provided, however, that each Party shall bear its own legal fees and costs. A
judgment upon an award rendered by the arbitrator(s) may be entered in any court of competent
jurisdiction, or application may be made to such court for confirmation of such award or a judicial
acceptance of such award, and for an order of enforcement or other legal remedy.
14.14.2 If the total aggregate amount at issue in a dispute to be arbitrated is ***, the
number of arbitrators shall be ***. The arbitrator shall be selected by the ***. If the total
aggregate amount at issue in a dispute to be arbitrated is ***, the number of arbitrators shall be
***. Each Party shall select *** arbitrator from among a list of qualified arbitrators compiled by
the ***. The *** arbitrators so selected shall select a *** qualified arbitrator, who shall *** of
the tribunal. If the *** arbitrators selected by the Parties fail to agree on the third arbitrator
within *** (***) calendar days of the selection of the *** arbitrator, the *** qualified arbitrator
shall be *** in *** with the rules of the ***. In addition to the qualification criteria for
arbitrators established by the rules of the ***, each arbitrator shall meet the following
additional criteria: (i) the arbitrator shall be experienced in resolving the type of dispute(s)
at issue; and (ii) the arbitrator shall have technical or intellectual property related background
and/or knowledge if relevant to the dispute.
14.14.3 Notwithstanding the foregoing, either Party may, without waiving any remedy under this
Agreement, seek, from any court having jurisdiction, any interim relief or provisional relief
(including, without limitation, injunctive relief) that is necessary to protect the rights or
property of that Party pending the establishment of the arbitral tribunal set forth in this Section
14.14.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the Parties have caused this Development and License Agreement to be
executed by their duly authorized representatives as of the Effective Date.
| EURAND, INC. | ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ CORPORATION D/B/A GLAXOSMITHKLINE | |||||||||
By:
|
/s/ ▇▇▇▇ ▇▇▇▇▇▇
Title: President, Eurand North America |
By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Secretary |
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47
EXHIBIT A
EURAND PATENT RIGHTS
***
EXHIBIT B
EURAND TRADEMARKS — United States
***
2
EXHIBIT C
GSK PATENT RIGHTS
***
3
EXHIBIT D
PROPOSAL
Product Development Proposal
***
Formulation Development and Clinical Trial Materials
Formulation Development and Clinical Trial Materials
***
4
EXHIBIT E
KEY TERMS FOR CLINICAL SUPPLY AGREEMENT
***
EXHIBIT F
KEY TERMS FOR COMMERCIAL SUPPLY AGREEMENT
***
2
EXHIBIT G
***
3