EXHIBIT NO. 10.4
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS
DENOTE OMISSIONS.
DEVELOPMENT AND LICENSE AGREEMENT
BY AND BETWEEN
NITROMED, INC.
AND
BOSTON SCIENTIFIC CORPORATION
TABLE OF CONTENTS
PAGE
Article I Definitions..............................................................1
Section 1.1 "Affiliate"..............................................................1
Section 1.2 "Blocking Third Party Intellectual Property".............................1
Section 1.3 "BSC Intellectual Property"..............................................2
Section 1.4 "BSC Know-How"...........................................................2
Section 1.5 "BSC Patent Rights"......................................................2
Section 1.6 "Confidential Information"...............................................2
Section 1.7 "Effective Date".........................................................2
Section 1.8 "Executive Officers".....................................................2
Section 1.9 "FDA"....................................................................2
Section 1.10 "Field"..................................................................2
Section 1.11 "First Commercial Sale"..................................................2
Section 1.12 "FTE"....................................................................3
Section 1.13 "IDE"....................................................................3
Section 1.14 "Joint Intellectual Property"............................................3
Section 1.15 "Joint Know-How".........................................................3
Section 1.16 "Joint Patent Rights"....................................................3
Section 1.17 "Know-How"...............................................................3
Section 1.18 "Limited License Compounds"..............................................3
Section 1.19 "Net Sales"..............................................................3
Section 1.20 "Nitric Oxide Releasing Compounds".......................................4
Section 1.21 "NitroMed Composition Patent Rights".....................................4
Section 1.22 "NitroMed Delivered Compounds"...........................................4
Section 1.23 "NitroMed Intellectual Property".........................................4
Section 1.24 "NitroMed Know-How"......................................................4
Section 1.25 "NitroMed Nitric Oxide Releasing Compounds"..............................4
Section 1.26 "NitroMed Patent Rights".................................................4
Section 1.27 "Party"..................................................................5
Section 1.28 "Patent Rights"..........................................................5
Section 1.29 "Phase II Clinical Study"................................................5
Section 1.30 "Phase III Clinical Study"...............................................5
Section 1.31 "Program Director".......................................................5
Section 1.32 "R&D Plan"...............................................................5
Section 1.33 "R&D Program"............................................................5
Section 1.34 "R&D Term"...............................................................5
Section 1.35 "ROFR Field".............................................................5
Section 1.36 "Royalty-Bearing Product"................................................6
Section 1.37 "Royalty Term"...........................................................6
Section 1.38 "Territory"..............................................................6
Section 1.39 Additional Definitions...................................................6
TABLE OF CONTENTS
(Continued)
PAGE
Article II R&D Program..............................................................7
Section 2.1 General..................................................................7
Section 2.2 Joint Steering Committee.................................................7
Section 2.3 Decisionmaking...........................................................7
Section 2.4 Management of R&D Program................................................8
Section 2.5 R&D Program Responsibilities.............................................8
Section 2.6 Extensions of R&D Program................................................9
Section 2.7 NitroMed Exclusivity Obligations.........................................9
Section 2.8 Commercial Supply of NitroMed Delivered Compounds........................9
Article III Grant of Rights.........................................................10
Section 3.1 NitroMed Grants.........................................................10
Section 3.2 BSC Research License Grant..............................................11
Section 3.3 NitroMed Retained Rights................................................11
Section 3.4 Compound Right of First Refusal.........................................11
Section 3.5 ROFR Field Exclusivity Option...........................................12
Article IV Financial Provisions....................................................12
Section 4.1 Equity Investment.......................................................12
Section 4.2 License Payment.........................................................12
Section 4.3 Milestone Payments......................................................12
Section 4.4 Royalty Payments........................................................14
Section 4.5 Length of Royalty Payments..............................................14
Section 4.6 Royalties Payable Only Once.............................................14
Section 4.7 Royalty Reports and Accounting..........................................15
Section 4.8 Currency Exchange.......................................................15
Section 4.9 Tax Withholding.........................................................15
Section 4.10 Late Payments...........................................................15
Article V Intellectual Property Ownership, Protection and Related Matters.........16
Section 5.1 Ownership of Inventions.................................................16
Section 5.2 Prosecution and Maintenance of Patent Rights............................17
Section 5.3 Exploitation of Joint Intellectual Property.............................18
Section 5.4 Third Party Infringement................................................18
Section 5.5 Claimed Infringement; Claimed Invalidity................................20
Section 5.6 Patent Term Extensions..................................................21
Section 5.7 Patent Marking..........................................................21
Article VI Confidentiality.........................................................21
Section 6.1 Confidential Information................................................21
Section 6.2 Employee and Advisor Obligations........................................22
Section 6.3 Term....................................................................22
Section 6.4 Publications............................................................22
TABLE OF CONTENTS
(Continued)
PAGE
Article VII Representations and Warranties..........................................23
Section 7.1 Representations of Authority............................................23
Section 7.2 Consents................................................................23
Section 7.3 No Conflict.............................................................23
Section 7.4 Enforceability..........................................................23
Section 7.5 Employee Obligations....................................................23
Section 7.6 Intellectual Property...................................................23
Section 7.7 No Warranties...........................................................24
Article VIII Term and Termination....................................................24
Section 8.1 Term....................................................................24
Section 8.2 Survival of Commercialization License upon Expiration...................24
Section 8.3 Termination For Material Breach.........................................25
Section 8.4 Effect of Termination...................................................25
Section 8.5 Survival................................................................25
Article IX Dispute Resolution......................................................25
Section 9.1 Alternative Dispute Resolution..........................................25
Section 9.2 No Limitation...........................................................26
Article X Miscellaneous Provisions................................................26
Section 10.1 Indemnification.........................................................26
Section 10.2 Governing Law...........................................................27
Section 10.3 Assignment..............................................................27
Section 10.4 Amendments..............................................................27
Section 10.5 Notices.................................................................28
Section 10.6 Force Majeure...........................................................28
Section 10.7 Public Announcements....................................................28
Section 10.8 Disclosure of Provisions of Agreement...................................29
Section 10.9 Independent Contractors.................................................29
Section 10.10 No Strict Construction..................................................29
Section 10.11 Headings................................................................29
Section 10.12 No Implied Waivers; Rights Cumulative...................................29
Section 10.13 Severability............................................................29
Section 10.14 Execution in Counterparts...............................................30
Section 10.15 No Consequential Damages................................................30
Exhibit A R&D Plan
DEVELOPMENT AND LICENSE AGREEMENT
This Development and License Agreement (the "Agreement") is entered
into as of the 20th day of November, 2001 (the "Execution Date") by and between
NitroMed, Inc., a corporation organized and existing under the laws of the State
of Delaware and having its principal office at ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("NitroMed"), and Boston Scientific Corporation, a
corporation organized and existing under the laws of the State of Delaware and
having its principal office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("BSC").
INTRODUCTION
1. NitroMed is engaged in the business of discovering and developing
nitric oxide releasing compounds for use in drug products and medical devices.
2. BSC is engaged in the business of developing and marketing medical
devices, including vascular stents and specialty catheters.
3. NitroMed and BSC are interested in collaborating in the development
and pre-clinical evaluation of certain nitric oxide releasing compounds for
delivery using vascular stents to be developed by BSC for the treatment of
restenosis in humans.
NOW, THEREFORE, NitroMed and BSC agree as follows:
ARTICLE I
DEFINITIONS
When used in this Agreement, each of the following terms shall have the meanings
set forth in this Article I:
Section 1.1 "AFFILIATE". Affiliate shall mean any corporation, company,
partnership, joint venture or other entity which controls, is controlled by, or
is under common control with a person or entity. For purposes of this Section
1.1, "control" shall mean (a) in the case of corporate entities, direct or
indirect ownership of at least fifty percent (50%) of the stock or shares having
the right to vote for the election of directors, and (b) in the case of
non-corporate entities, direct or indirect ownership of at least fifty percent
(50%) of the equity interest with the power to direct the management and
policies of such non-corporate entities.
Section 1.2 "BLOCKING THIRD PARTY INTELLECTUAL PROPERTY". Blocking
Third Party Intellectual Property shall mean, on a country-by-country basis,
issued patent claims owned or controlled by a third party other than an
Affiliate or sublicensee of BSC that cover the composition of matter or use of a
NitroMed Nitric Oxide Releasing Compound that is incorporated into a
Royalty-Bearing Product, but only if the manufacture, use or sale of such
Royalty-Bearing Product in such country would, in the absence of a license
granted by such third party, infringe such issued patent claims.
Section 1.3 "BSC INTELLECTUAL PROPERTY". BSC Intellectual Property
shall mean BSC Know-How and BSC Patent Rights, collectively.
Section 1.4 "BSC KNOW-HOW". BSC Know-How shall mean any Know-How that
(a) either (i) is in BSC's possession on the Effective Date, or (ii) BSC
develops or acquires during the R&D Term (including, but not limited to, BSC's
rights in Device Inventions and Other Sole Inventions), and (b) BSC and NitroMed
reasonably and jointly determine to be useful to discover and develop Nitric
Oxide Releasing Compounds for incorporation into Royalty-Bearing Products, and
(c) is owned or controlled by, or licensed to, BSC and to which BSC has the
right to grant licenses or sublicenses without violating the terms of any
agreement with a third party.
Section 1.5 "BSC PATENT RIGHTS". BSC Patent Rights shall mean Patent
Rights (a) that cover BSC Know-How, and (b) that are owned or controlled by, or
licensed to, BSC and to which BSC has the right to grant licenses or sublicenses
without violating the terms of any agreement with a third party.
Section 1.6 "CONFIDENTIAL INFORMATION". Confidential Information shall
mean all Know-How or other information, including, without limitation,
proprietary information and materials (whether or not patentable) regarding a
Party's technology, products, business information or objectives, which is
designated as confidential in writing by the disclosing Party, whether by letter
or by the use of an appropriate stamp or legend, prior to or at the time any
such Know-How or other information is disclosed by the disclosing Party to the
other Party. Notwithstanding the foregoing, all information which is orally,
electronically or visually disclosed by a Party, or is disclosed in writing
without an appropriate letter, stamp or legend, shall constitute Confidential
Information of a Party (a) if the disclosing Party, within thirty (30) days
after such disclosure, delivers to the other Party a written document or
documents describing the information and referencing the place and date of such
oral, visual, electronic or written disclosure and the names of the persons to
whom such disclosure was made, or (b) if such information constitutes NitroMed
Know-How, if NitroMed is the disclosing Party, or BSC Know-How, if BSC is the
disclosing Party.
Section 1.7 "EFFECTIVE DATE". Effective Date shall mean November 20,
2001.
Section 1.8 "EXECUTIVE OFFICERS". Executive Officers shall mean the
Chief Executive Officer of BSC (or a senior executive officer of BSC designated
by BSC) and the Chief Executive Officer of NitroMed (or a senior executive
officer of NitroMed designated by NitroMed).
Section 1.9 "FDA". FDA shall mean the United States Food and Drug
Administration.
Section 1.10 "FIELD". Field shall mean [**].
Section 1.11 "FIRST COMMERCIAL SALE". First Commercial Sale shall mean,
for each Royalty-Bearing Product, the first commercial sale in a country by BSC,
its Affiliates, distributors and/or agents. Sales for test marketing, clinical
trial purposes or compassionate or similar use shall not be considered to
constitute a First Commercial Sale.
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Section 1.12 "FTE". FTE shall mean a full time equivalent person year
of scientific, technical or managerial work on or directly related to the R&D
Program.
Section 1.13 "IDE". IDE shall mean an investigational device exemption
application or similar application that is required to be filed with the FDA
before beginning clinical testing of a Royalty-Bearing Product.
Section 1.14 "JOINT INTELLECTUAL PROPERTY". Joint Intellectual Property
shall mean Joint Know-How and Joint Patent Rights, collectively.
Section 1.15 "JOINT KNOW-HOW". Joint Know-How shall mean any Know-How
that is developed or acquired jointly by the Parties during the R&D Term,
including Compound/Device Inventions and Other Joint Inventions, but excluding
Compound Inventions, Device Inventions and Other Sole Inventions.
Section 1.16 "JOINT PATENT RIGHTS". Joint Patent Rights shall mean
Patent Rights that cover Joint Know-How.
Section 1.17 "KNOW-HOW". Know-How shall mean any information,
inventions, copyrights, trade secrets, data or materials, whether proprietary or
not, including, without limitation, Nitric Oxide Releasing Compounds and data
generated in pre-clinical and clinical studies.
Section 1.18 "LIMITED LICENSE COMPOUNDS". Limited License Compounds
shall mean NitroMed Nitric Oxide Releasing Compounds not covered by NitroMed
Composition Patent Rights.
Section 1.19 "NET SALES". Net Sales shall mean, with respect to a
Royalty-Bearing Product, the gross amount invoiced by BSC, its Affiliates and/or
its sublicensees on sales or other dispositions of the Royalty-Bearing Product
to unrelated third parties, less the following items:
(a) Trade, cash and quantity discounts actually allowed and taken
directly with respect to such sales;
(b) Tariffs, duties, excises, sales taxes or other taxes imposed upon
and paid directly with respect to the production, sale, delivery or use of the
Royalty-Bearing Product (excluding national, state or local taxes based on
income);
(c) Amounts repaid or credited by reason of rejections, defects,
recalls or returns or because of chargebacks, refunds, rebates or retroactive
price reductions; and
(d) Separately invoiced distribution expenses (such as freight,
transportation and insurance expenses).
Such amounts shall be determined from the books and records of BSC, its
Affiliates and/or its sublicensees, maintained in accordance with generally
accepted accounting principles, consistently applied.
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Net Sales shall not include amounts separately invoiced by BSC, its Affiliates
and/or its sublicensees for devices other than a Royalty-Bearing Product that
are included in the same package as the Royalty-Bearing Product if such other
devices are included other than in connection with the use or administration of
the NitroMed Nitric Oxide Releasing Compound incorporated into such
Royalty-Bearing Product.
Section 1.20 "NITRIC OXIDE RELEASING COMPOUNDS". Nitric Oxide Releasing
Compounds shall mean compounds that [**].
Section 1.21 "NITROMED COMPOSITION PATENT RIGHTS". NitroMed Composition
Patent Rights shall mean NitroMed Patent Rights that cover compounds as
compositions of matter.
Section 1.22 "NITROMED DELIVERED COMPOUNDS". NitroMed Delivered
Compounds shall mean the Nitric Oxide Releasing Compounds provided by NitroMed
to BSC pursuant to Section 2.5 for incorporation into Royalty-Bearing Products.
Section 1.23 "NITROMED INTELLECTUAL PROPERTY". NitroMed Intellectual
Property shall mean NitroMed Know-How and NitroMed Patent Rights, collectively.
Section 1.24 "NITROMED KNOW-HOW". NitroMed Know-How shall mean any
Know-How that (a) either (i) is in NitroMed's possession on the Effective Date,
or (ii) NitroMed develops or acquires during the R&D Term (including, but not
limited to, NitroMed's rights in Compound Inventions and Other Sole Inventions),
and (b) NitroMed and BSC reasonably and jointly determine to be useful to
discover and develop Nitric Oxide Releasing Compounds for incorporation into
Royalty-Bearing Products, and (c) is owned or controlled by, or licensed to,
NitroMed and to which NitroMed has the right to grant licenses or sublicenses
without violating the terms of any agreement with a third party.
Section 1.25 "NITROMED NITRIC OXIDE RELEASING COMPOUNDS". NitroMed
Nitric Oxide Releasing Compounds shall mean Nitric Oxide Releasing Compounds the
discovery, development or use of which uses NitroMed Know-How or the making,
using, offering to sell, selling or importation of which would, in the absence
of a license directly or indirectly from NitroMed, infringe any NitroMed Patent
Rights, including without limitation Limited License Compounds and NitroMed
Delivered Compounds.
Section 1.26 "NITROMED PATENT RIGHTS". NitroMed Patent Rights shall
mean Patent Rights (a) that cover NitroMed Know-How, and (b) that are owned or
controlled by, or are licensed to, NitroMed and to which NitroMed has the right
to grant licenses or sublicenses without violating the terms of any agreement
with a third party.
Section 1.27 "PARTY". Party shall mean NitroMed or BSC; "PARTIES" shall
mean NitroMed and BSC. As used in this Agreement, references to "third parties"
do not include a Party or its Affiliates.
Section 1.28 "PATENT RIGHTS". Patent Rights shall mean all existing
patents and patent applications and all patent applications hereafter filed,
including any continuations, continuations-in-part, divisions, provisionals or
any substitute applications, any patent issued
4
with respect to any such patent applications, any reissue, reexamination,
renewal or extension (including any supplemental patent certificate) of any such
patent, and any confirmation patent or registration patent or patent of addition
based on any such patent, and all foreign counterparts of any of the foregoing.
Section 1.29 "PHASE II CLINICAL STUDY". Phase II Clinical Study shall
mean a preliminary efficacy and safety study of a candidate drug or medical
device product in the target patient population.
Section 1.30 "PHASE III CLINICAL STUDY". Phase III Clinical Study shall
mean a controlled study to confirm with statistical significance the efficacy
and safety of a candidate drug or medical device product performed to obtain
marketing and/or manufacturing approval for the product in any country.
Section 1.31 "PROGRAM DIRECTOR". Program Director shall mean the
research executive appointed by a Party to serve as such Party's principal
coordinator and liaison for the R&D Program.
Section 1.32 "R&D PLAN". R&D Plan shall mean the R&D plan describing
the activities to be undertaken in the R&D Program, which is attached as EXHIBIT
A to this Agreement, as such plan may be updated or amended pursuant to Section
2.4.
Section 1.33 "R&D PROGRAM". R&D Program shall mean the research and
development program to be performed by the Parties to develop Royalty-Bearing
Products.
Section 1.34 "R&D TERM". R&D Term shall mean, subject to extension in
accordance with Section 2.6, the period commencing on the Effective Date and
ending on the latest of (a) the second anniversary of the Effective Date, (b)
the date twelve (12) months after delivery of the first NitroMed Delivered
Compound and (c) the date six (6) months after delivery of the second NitroMed
Delivered Compound. Notwithstanding the foregoing, the R&D Term may be
terminated by BSC in its sole discretion upon thirty (30) days prior written
notice to NitroMed. Notwithstanding any provisions of this Section to the
contrary, but subject to extension in accordance with Section 2.6, for purposes
of Sections 2.7, 3.4 and 3.5, the R&D Term shall end on the earlier of (x) the
date on which the R&D Term otherwise ends in accordance with this Section and
(y) the date thirty (30) months after the Effective Date.
Section 1.35 "▇▇▇▇ ▇▇▇▇▇". ▇▇▇▇ Field shall mean the [**].
Section 1.36 "ROYALTY-BEARING PRODUCT". Royalty-Bearing Product shall
mean a medical device or a specialty catheter product developed for use in the
Field, in either case incorporating one or more NitroMed Nitric Oxide Releasing
Compounds.
Section 1.37 "ROYALTY TERM". Royalty Term shall mean, with respect to
each Royalty-Bearing Product in each country of the Territory, the period of
time ending on the later of: (i) twelve (12) years from the date of the First
Commercial Sale of such Royalty-Bearing Product in such country, PROVIDED THAT,
during such time BSC maintains at least a [**]% market share in delivery of the
Nitric Oxide Releasing Compound contained in such Royalty-Bearing Product in the
Field in such country as measured in any [**] period, and (ii) the latest date
on
5
which the manufacture, use or sale of such Royalty-Bearing Product in such
country is (A) covered by a claim of NitroMed Patent Rights or (B) in the case
of Royalty-Bearing Products containing NitroMed Delivered Compounds, covered by
a claim of Joint Patent Rights.
Section 1.38 "TERRITORY". Territory shall mean all countries of the
world.
Section 1.39 ADDITIONAL DEFINITIONS. Each of the following definitions
is set forth in the section of this Agreement indicated below:
DEFINITION SECTION
---------- -------
"1974 Convention" 10.2
"AAA" 9.1(a)
"Agreement" Preamble
"Breaching Party" 8.3
"BSC" Preamble
"BSC Claim" 5.5(b)
"BSC Indemnified Parties" 10.1(b)
"Compound/Device Inventions" 5.1(c)
"Compound Inventions" 5.1(a)
"Compound Notification" 3.4(a)
"Compound Response Period" 3.4(b)
"Compound Right of First Refusal" 3.4
"Device Inventions" 5.1(b)
"Electing Party" 5.2(c)
"Execution Date" Preamble
"Invalidity Claim" 5.5(e)
"Joint Steering Committee" 2.2
"NitroMed" Preamble
"NitroMed Claim" 5.5(b)
"NitroMed Indemnified Parties" 10.1(a)
"Non-Breaching Party" 8.3
"Non-Electing Party" 5.2(c)
"Other Joint Inventions" 5.1(d)
"Other Sole Inventions" 5.1(d)
"SEC" 10.8(b)
"Stock Purchase Agreement" 4.1
"Third Party Claim" 5.5(a)
ARTICLE II
R&D PROGRAM
Section 2.1 GENERAL. Pursuant to the terms of this Agreement, the
Parties have agreed to collaborate on the research and development of
Royalty-Bearing Products. The objective of the R&D Program will be for NitroMed
to identify and deliver to BSC two (2) NitroMed Delivered Compounds meeting the
criteria set forth in the R&D Plan and for BSC to develop and commercialize
Royalty-Bearing Products based on such NitroMed Delivered Compounds. Both
6
Parties will be engaged in, and responsible for, the conduct of the R&D Program.
BSC will be responsible for the commercialization of Royalty-Bearing Products.
Section 2.2 JOINT STEERING COMMITTEE. The Parties shall establish a
Joint Steering Committee (the "Joint Steering Committee"), comprised of the
Program Directors and such other representatives of the Parties, if any, as each
Party may designate from time to time. Each Party shall make its designation of
its representative(s) not later than thirty (30) days after the Effective Date.
Each Party shall designate as its representative(s) individuals who have the
requisite experience and knowledge to oversee the R&D Program. The Joint
Steering Committee shall meet within thirty (30) days after the Effective Date
and, thereafter, at least quarterly during the R&D Term and thereafter through
the First Commercial Sale of a Royalty-Bearing Product in the United States, to
(i) review the efforts of the Parties in the conduct of the R&D Program and (ii)
review and approve updates and amendments to the R&D Plan. The location of such
meetings of the Joint Steering Committee shall be in Massachusetts, or as
otherwise agreed by the Parties. The Joint Steering Committee may also meet by
means of a telephone or video conference call, and may take action by vote at a
meeting or telephone or video conference call, or pursuant to a written vote.
Each Party may change any one or more of its representative(s) to the Joint
Steering Committee at any time upon notice to the other Party. Each Party shall
use reasonable efforts to cause its representative(s) to attend the meetings of
the Joint Steering Committee. If a representative of a Party is unable to attend
a meeting, such Party may designate an alternate to attend such meeting in place
of the absent representative. In addition, each Party may, at its discretion,
invite non-voting employees, and, with the consent of the other Party,
consultants or scientific advisors (provided they are engaged under obligations
of confidentiality) to attend the meetings of the Joint Steering Committee.
Section 2.3 DECISIONMAKING. All decisions of the Joint Steering
Committee shall be made by unanimous vote of the representatives of the Parties,
with each Party's representatives collectively having one vote, and the goal of
all decision making shall be to achieve consensus. Upon ten (10) business days
written notice, either Party may convene a special meeting of the Joint Steering
Committee for the purpose of resolving disputes. If the Joint Steering Committee
is unable to reach agreement on any matter referred to it for resolution by the
Parties within thirty (30) days after the matter is referred to it, such matter
shall be referred to the Executive Officers for resolution. If the Executive
Officers are unable to resolve a matter referred to them under this Section
within thirty (30) days after the matter is referred to them, the provisions of
Article IX shall apply.
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Section 2.4 MANAGEMENT OF R&D PROGRAM.
a. PROGRAM DIRECTORS. NitroMed and BSC shall each appoint a
Program Director prior to the Effective Date. Each Party shall have the right,
after consultation with the other Party, to designate a different Program
Director. The Program Directors shall jointly oversee the conduct of the R&D
Program and shall be responsible for, among other things, recommending to the
Joint Steering Committee any updates and amendments to the R&D Plan.
b. R&D PLAN. The Parties shall undertake the R&D Program during
the R&D Term in accordance with the R&D Plan. The Program Directors shall review
the R&D Plan from time to time and submit any proposed updates or amendments to
the Joint Steering Committee for its review. Any such updates or amendments
shall not become effective until approved by the Joint Steering Committee. The
Joint Steering Committee shall review and consider any such proposed updates or
amendments on an expeditious basis.
Section 2.5 R&D PROGRAM RESPONSIBILITIES.
a. GENERAL. Each Party agrees to use commercially reasonable
efforts to (i) undertake the responsibilities assigned to such Party in the R&D
Plan, (ii) perform its obligations hereunder in good faith in a scientific,
commercially reasonable and workmanlike manner; (iii) as appropriate, make
available to the other Party those resources set forth in the R&D Plan; and (iv)
carry out all work done in the course of the R&D Program in material compliance
with all applicable federal, state or local laws, regulations and guidelines
governing the conduct of such work.
b. NITROMED RESPONSIBILITIES. NitroMed shall undertake those
activities set forth in the R&D Plan which are to be undertaken by NitroMed in
connection with the R&D Program, including, but not limited to: (i) providing
BSC with [**] NitroMed Delivered Compounds meeting the criteria set forth in the
R&D Plan, [**] which shall be delivered to BSC within [**] of the Effective Date
and [**] which shall be delivered to BSC within [**] of the Effective Date; (ii)
dedicating an average of [**] FTEs to the R&D Program over the course of the R&D
Term; (iii) providing BSC with analytical support during the R&D Term; (iv)
conducting the initial in-vivo pre-clinical studies specified in the R&D Plan at
NitroMed's facilities in conjunction with BSC [**] (v) supplying BSC [**] with
sufficient quantities of clinical grade NitroMed Delivered Compounds to support
BSC's pre-clinical activities for purposes of porcine studies; (vi) supplying
BSC, at NitroMed's [**] percent ([**]%), with clinical grade NitroMed Delivered
Compounds for BSC's use in clinical trials throughout the Territory; (vii)
conducting pre-clinical studies, including but not limited to stability,
characterization and animal studies, as required to develop the NitroMed
Delivered Compounds to a point where such compounds are ready for porcine
studies as reasonably determined by the Joint Steering Committee; (viii)
providing BSC with support for BSC's regulatory submissions and meetings with
regulatory bodies; (ix) submitting to regulatory bodies and maintaining with
such regulatory bodies drug master files or their equivalent with respect to
NitroMed Delivered Compounds; and (x) preparation, filing, prosecution and
maintenance of patent applications and patents relating to NitroMed Intellectual
Property and Joint Intellectual Property, as further provided in Section 5.2.
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c. BSC RESPONSIBILITIES. BSC shall undertake those activities set
forth in the R&D Plan which are to be undertaken by BSC in connection with the
R&D Program, including, but not limited to: (i) providing such biological and
technical resources as may be available for use in the R&D Program; (ii)
preparing the coating, blending the NitroMed Delivered Compounds into such
coating, applying such coating to the medical device or specialty catheter, and
sterilizing such device or catheter for use in pre-clinical evaluation of the
resulting Royalty-Bearing Product; (iii) coordinating [**] Royalty-Bearing
Product; (iv) preparation, filing, prosecution and maintenance of patent
applications and patents relating to BSC Intellectual Property and Joint
Intellectual Property, as further provided in Section 5.2; and (v) sharing
expertise and providing such support as is reasonably required by NitroMed in
order for NitroMed to perform its responsibilities under Section 2.5(b).
Section 2.6 EXTENSIONS OF R&D PROGRAM. If either Party desires to
extend the R&D Program, such Party shall give notice of such desire to the other
Party at least ninety (90) days prior to the expiration of the R&D Term. Upon
such notice, the Parties shall in good faith discuss extending the R&D Program
and, if the Parties determine to extend the R&D Program, the terms on which the
R&D Program will be extended. If the Parties agree to extend the R&D Term and to
continue substantially the same scope of R&D Program activities during the
extension period, and without obligating either Party to agree to any extension,
the Parties anticipate that the terms of such extension would include license
fees and/or program funding payable by BSC to NitroMed based on NitroMed's fully
absorbed costs relating to R&D Program activities during the extension period
plus a mutually agreed ▇▇▇▇-up over such costs, as well as additional milestone
and royalty payment provisions based on development and commercialization of
products developed during the extension period.
Section 2.7 NITROMED EXCLUSIVITY OBLIGATIONS. During the R&D Term,
NitroMed agrees that NitroMed will [**] in the ROFR Field [**] (other than the
R&D Program) [**] for use in the ROFR Field. In addition, during the Royalty
Term(s) relating to any Royalty-Bearing Product(s) incorporating a NitroMed
Delivered Compound, NitroMed will [**] such NitroMed Delivered Compound, [**].
Section 2.8 COMMERCIAL SUPPLY OF NITROMED DELIVERED COMPOUNDS. NitroMed
shall supply NitroMed Delivered Compounds to BSC for use in the commercial
manufacture of Royalty-Bearing Products. Prior to the First Commercial Sale of a
Royalty-Bearing Product, the Parties shall negotiate the terms and conditions of
a separate supply agreement under which NitroMed shall supply such NitroMed
Delivered Compounds to BSC.
ARTICLE III
GRANT OF RIGHTS
Section 3.1 NITROMED GRANTS.
a. DEVELOPMENT LICENSE. Subject to the terms and conditions of
this Agreement, NitroMed hereby grants to BSC a non-exclusive,
non-royalty-bearing right and license in the Territory, without the right to
grant sublicenses, under NitroMed's rights in
9
NitroMed Intellectual Property, to make and use NitroMed Nitric Oxide Releasing
Compounds in the course of the R&D Program to develop Royalty-Bearing Products.
b. COMMERCIALIZATION LICENSES. Subject to the terms and
conditions of this Agreement, NitroMed hereby grants to BSC:
i. an exclusive, royalty-bearing right and license in the
Territory during the Royalty Term, with the right to grant sublicenses only to
the extent provided in Section 3.1(c), under NitroMed's rights in NitroMed
Intellectual Property and Joint Intellectual Property, to make, use, sell, offer
to sell and import Royalty-Bearing Products incorporating NitroMed Delivered
Compounds; and
ii. a non-exclusive, royalty-bearing right and license in the
Territory during the Royalty Term, with the right to grant sublicenses only to
the extent provided in Section 3.1(c), under NitroMed's rights in the NitroMed
Intellectual Property other than the NitroMed Composition Patent Rights, to
make, use, sell, offer to sell and import Royalty-Bearing Products incorporating
Limited License Compounds.
c. BSC SUBLICENSE RIGHTS.
i. If BSC determines that, solely for the purpose of
facilitating commercial distribution of a Royalty-Bearing Product, it would be
advantageous to grant a sublicense to a third party for such purpose, then BSC
may grant such sublicense; PROVIDED THAT such sublicense occurs pursuant to a
written agreement that subjects the sublicensee to all relevant restrictions and
limitations in this Agreement.
ii. Any third party granted a sublicense in accordance with
subsection (i) above shall have no right to grant further sublicenses.
iii. BSC shall be jointly and severally responsible with its
sublicensees for failure by such sublicensees to comply with, and BSC guarantees
to NitroMed the compliance by each of its sublicensees with, all relevant
restrictions and limitations in this Agreement.
iv. BSC shall provide NitroMed with a copy of each sublicense
agreement entered into by BSC in accordance with this Section 3.1(c) within
thirty (30) days after the execution of such sublicense agreement
Section 3.2 BSC RESEARCH LICENSE GRANT. Subject to the terms and
conditions of this Agreement, BSC hereby grants to NitroMed and its Affiliates a
non-exclusive, non-sublicensable, non-royalty-bearing right and license in the
Territory under BSC's rights in BSC Intellectual Property and Joint Intellectual
Property, to the extent necessary for NitroMed to undertake its responsibilities
as set forth in the R&D Plan or as otherwise determined by the Joint Steering
Committee for research and other non-commercial purposes only. Such grant is to
automatically terminate upon the expiration of the R&D Term.
Section 3.3 NITROMED RETAINED RIGHTS. Except as otherwise specifically
provided for herein, NitroMed retains, and BSC hereby covenants not to assert
any of BSC's rights in
10
NitroMed Intellectual Property or Joint Intellectual Property in any manner that
would restrict NitroMed's exercise of, all rights and licenses to exploit
NitroMed Intellectual Property and NitroMed's rights in Joint Intellectual
Property.
Section 3.4 COMPOUND RIGHT OF FIRST REFUSAL. In respect of NitroMed
Nitric Oxide Releasing Compounds, BSC shall, in addition to the rights set forth
in Section 3.1, have the rights set forth in this Section 3.4. Provided BSC has
not terminated the R&D Term prior to its expiration, if, at any time during [**]
the R&D Term, with respect to any such NitroMed Nitric Oxide Releasing
Compounds, NitroMed desires to undertake development or commercialization
activities in the Field with respect to such NitroMed Nitric Oxide Releasing
Compound and any compounds structurally derived in one or more steps from such
NitroMed Nitric Oxide Releasing Compound in collaboration with a third party or
grant or assign a license or other rights to a third party to undertake such
activities in the Field, then [**] NitroMed's rights in NitroMed Intellectual
Property and Joint Intellectual Property to such NitroMed Nitric Oxide Releasing
Compound for development and commercialization in the Field (such opportunity, a
"Compound Right of First Refusal"). A Compound Right of First Refusal shall
operate as follows:
a. NitroMed shall notify BSC in writing (the "Compound
Notification") of its desire and shall provide to BSC an identification of the
specific compound class of such NitroMed Nitric Oxide Releasing Compound.
b. [**] after its receipt of the Compound Notification (the
"Compound Response Period"), BSC shall notify NitroMed of [**] such NitroMed
Nitric Oxide Releasing Compound.
c. In the event that BSC notifies NitroMed prior to the
termination of the Compound Response Period [**] such NitroMed Nitric Oxide
Releasing Compound, the Parties shall thereafter, for a period not to exceed
[**] unless otherwise mutually agreed by the Parties, negotiate in good faith
the terms under which [**] such NitroMed Nitric Oxide Releasing Compound.
d. If (A) BSC fails to notify NitroMed prior to the termination
of the Compound Response Period that [**], or (B) BSC notifies NitroMed prior to
the termination of the Compound Response Period that [**], or (C) the Parties
[**], then NitroMed shall be entitled to enter into the proposed collaboration,
license or other arrangement.
Section 3.5 ROFR FIELD EXCLUSIVITY OPTION. If BSC notifies NitroMed
prior to the expiration or termination of the R&D Term that [**], then the
Parties shall negotiate in good faith for a period of up to [**] after such
notification the terms under which NitroMed would grant BSC an exclusive,
royalty-bearing right and license in the Territory during the Royalty Term under
NitroMed's rights in NitroMed Intellectual Property and Joint Intellectual
Property, to make, use, sell, offer to sell and import Royalty-Bearing Products
incorporating NitroMed Nitric Oxide Releasing Compounds for use in the ROFR
Field or sub-field, as the case may be.
11
ARTICLE IV
FINANCIAL PROVISIONS
Section 4.1 EQUITY INVESTMENT. On or prior to the Effective Date,
NitroMed and BSC are entering into a Stock Purchase Agreement (the "Stock
Purchase Agreement") pursuant to which, subject to the terms and conditions
contained therein, BSC shall purchase Series F convertible preferred stock of
NitroMed for an aggregate purchase price of Three Million Five Hundred Thousand
U.S. Dollars (US$3,500,000) at a per share price of Fourteen U.S. Dollars
(US$14).
Section 4.2 LICENSE PAYMENT. On the Effective Date, and in
consideration of the grant by NitroMed to BSC of the rights granted under
Article III, BSC shall make a non-refundable license payment to NitroMed of One
Million Five Hundred Thousand U.S. Dollars (US$1,500,000).
Section 4.3 MILESTONE PAYMENTS.
a. FIRST ROYALTY-BEARING PRODUCT. BSC shall make the following
milestone payments to NitroMed in connection with the first Royalty-Bearing
Product incorporating a NitroMed Delivered Compound upon achievement of the
following milestones:
12
PAYMENT DUE
UPON ACHIEVEMENT
MILESTONE OF MILESTONE
[**] [**] U.S. Dollars
(US$[**])
[**] [**] U.S. Dollars
(US$[**])
b. ALL ROYALTY-BEARING PRODUCTS. BSC shall make the following
milestone payment to NitroMed in connection with each Royalty-Bearing Product
upon achievement of the following milestone:
PAYMENT DUE
UPON ACHIEVEMENT
MILESTONE OF MILESTONE
[**] [**] U.S. Dollars
(US$[**])
A Royalty-Bearing Product shall be deemed a distinct Royalty-Bearing Product for
which the milestone payment set forth in this Section 4.3(b) is payable if such
Royalty-Bearing Product either (i) [**] a previous Royalty-Bearing Product or
(ii) is developed [**]. For purposes of clarity, [**] a Royalty-Bearing Product
shall not in itself make such Royalty-Bearing Product a distinct Royalty-Bearing
Product for which the milestone payment set forth in this Section 4.3(b) is
payable if such Royalty-Bearing Product does not otherwise satisfy one of the
criteria set forth in the immediately preceding sentence. For purposes of this
Section 4.3(b), a previous Royalty-Bearing Product is a Royalty-Bearing Product
for which the milestone payment required under this Section 4.3(b) has
previously been paid.
c. COMMERCIAL SUCCESS MILESTONES. BSC shall make the following
milestone payments to NitroMed in connection with each Royalty-Bearing Product
upon achievement of the following milestones:
PAYMENT DUE
UPON ACHIEVEMENT
MILESTONE OF MILESTONE
[**] [**] U.S. Dollars (US$[**])
[**] [**] U.S. Dollars (US$[**])
13
For purposes of clarity, the milestone payments set forth in this Section 4.3(c)
are separate milestone payments and both can become payable during the same
twelve (12) month period or during overlapping twelve (12) month periods.
d. TIMING OF PAYMENTS. Each milestone payment shall be made by
BSC to NitroMed within forty-five (45) days after the achievement of the
applicable milestone.
Section 4.4 ROYALTY PAYMENTS.
a. Subject to adjustment as set forth in subsection (b) below,
BSC shall pay to NitroMed a [**] percent ([**]%) royalty with respect to Net
Sales of any Royalty-Bearing Product.
b. The royalty with respect to Net Sales set forth in
subsection (a) above shall be reduced by an amount equal to [**]percent ([**]%)
of royalties paid by BSC with respect of such Net Sales to third parties
for licenses under Blocking Third Party Intellectual Property; PROVIDED THAT
the royalty reduction provided for in this subsection (b) shall not reduce
such royalty below [**] percent ([**]%) of such Net Sales of Royalty-Bearing
Products.
Section 4.5 LENGTH OF ROYALTY PAYMENTS. The royalties payable under
Section 4.4 shall be paid on a country-by-country basis on each Royalty-Bearing
Product until the expiration of the Royalty Term.
Section 4.6 ROYALTIES PAYABLE ONLY ONCE. BSC's obligation to pay
royalties under Section 4.4 is imposed only once with respect to the same unit
of Royalty-Bearing Product. Except as specifically provided in this Agreement,
there shall be no deductions from the royalties payable hereunder.
Section 4.7 ROYALTY REPORTS AND ACCOUNTING.
a. ROYALTY REPORTS; ROYALTY PAYMENTS. BSC shall deliver to
NitroMed, within forty-five (45) days after the end of each calendar quarter,
reasonably detailed written accountings of Net Sales of Royalty-Bearing Products
that are subject to royalty payments due to NitroMed for such calendar quarter.
Such quarterly reports shall indicate (i) gross sales and Net Sales on a
country-by-country and Royalty-Bearing Product-by-Royalty-Bearing Product basis,
and (ii) the calculation of royalties from such gross sales and Net Sales. When
BSC delivers such accounting to NitroMed, BSC shall also deliver all royalty
payments due under Section 4.4 to NitroMed for the calendar quarter.
b. AUDITS BY NITROMED. BSC shall keep, and shall require its
Affiliates, distributors, agents and sublicensees to keep, complete and accurate
records of the latest three (3) years relating to gross sales, Net Sales and all
information relevant under Sections 4.4, 4.8, 4.9 and 4.10. For the sole purpose
of verifying amounts payable to NitroMed, NitroMed shall have the right
annually, at NitroMed's expense, to retain an independent certified public
accountant selected by NitroMed and reasonably acceptable to BSC, to review such
records in the location(s) where such records are maintained by BSC, its
Affiliates and sublicensees upon reasonable notice and during regular business
hours and under obligations of strict confidence. Results of such review shall
be made available to both Parties. If the review reflects an underpayment to
NitroMed, such underpayment shall be promptly remitted to NitroMed, together
with interest calculated in the manner provided in Section 4.10. If the
underpayment is
14
equal to or greater than ten percent (10%) of the amount that was otherwise due,
NitroMed shall be entitled to have BSC pay all of the costs of such review. If
the review reflects an overpayment, such amount will be refunded by NitroMed
promptly to BSC.
Section 4.8 CURRENCY EXCHANGE. With respect to sales of Royalty-Bearing
Products invoiced in U.S. Dollars, the sales and royalties payable shall be
expressed in U.S. Dollars. With respect to sales of Royalty-Bearing Products
invoiced in a currency other than U.S. Dollars, the sales and royalties payable
shall be expressed in their U.S. Dollar equivalent calculated using the
applicable average conversion rate for buying U.S. Dollars determined by
reference to the conversion rates published by Bloomberg for the calendar
quarter to which the royalty report relates. All royalty payments shall be made
in U.S. Dollars.
Section 4.9 TAX WITHHOLDING. The Parties shall use all reasonable and
legal efforts to reduce tax withholding on payments made to NitroMed.
Notwithstanding such efforts, if BSC concludes that tax withholdings under the
laws of any country are required with respect to payments to NitroMed, BSC shall
withhold the required amount and pay it to the appropriate governmental
authority. In such case, BSC shall promptly provide NitroMed with original
receipts or other evidence reasonably required and sufficient to allow NitroMed
to document such tax withholdings adequately for purposes of claiming foreign
tax credits and similar benefits.
Section 4.10 LATE PAYMENTS. BSC shall pay interest to NitroMed on the
aggregate amount of any payments that are not paid on or before the date such
payments are due under this Agreement at a rate per annum equal to the lesser of
one and one-half percent (1 1/2%) per month or the highest rate permitted by
applicable law, calculated on the number of days such payments are paid after
the date such payments are due.
ARTICLE V
INTELLECTUAL PROPERTY OWNERSHIP, PROTECTION AND RELATED MATTERS
Section 5.1 OWNERSHIP OF INVENTIONS.
a. COMPOUND INVENTIONS. NitroMed shall exclusively own all
inventions made by either Party, their employees, agents and consultants, or
jointly by any of the foregoing, in the course of, and while engaged in, the R&D
Program that relate solely to the composition of Nitric Oxide Releasing
Compounds ("Compound Inventions").
b. DEVICE INVENTIONS. BSC shall exclusively own all inventions
made by either Party, their employees, agents and consultants, or jointly by any
of the foregoing, in the course of, and while engaged in, the R&D Program that
relate solely to medical devices, coatings for medical devices or the use of
medical devices ("Device Inventions").
c. COMPOUND/DEVICE INVENTIONS. BSC and NitroMed shall jointly own
all inventions made by either Party, their employees, agents and consultants, or
jointly by any of the foregoing, in the course of, and while engaged in, the R&D
Program that relate to both the composition or use of Nitric Oxide Releasing
Compounds, on the one hand, and medical devices,
15
coatings for medical devices or the use of medical devices, on the other
("Compound/Device Inventions").
d. OTHER JOINT INVENTIONS AND OTHER SOLE INVENTIONS. All
inventions other than Compound Inventions, Device Inventions and Compound/Device
Inventions made jointly by employees, agents and consultants of BSC and
employees, agents and consultants of NitroMed in the course of the R&D Program
("Other Joint Inventions") shall be owned jointly on the basis of each Party
having an undivided interest in the whole. All inventions other than Compound
Inventions, Device Inventions and Compound/Device Inventions made solely by
employees, agents and consultants of a Party in the course of the R&D Program
("Other Sole Inventions") shall be owned exclusively by such Party.
e. INVENTORSHIP. The determination of inventorship shall be made
in accordance with United States patent laws. In the event of a dispute
regarding inventorship, if the Parties are unable to resolve the dispute,
mutually acceptable independent patent counsel not regularly employed by either
Party shall resolve such dispute.
f. DATA OWNERSHIP; RIGHT OF REFERENCE. All data generated in
pre-clinical studies of NitroMed Nitric Oxide Releasing Compounds and
Royalty-Bearing Products in the course of the R&D Program shall be jointly owned
by the Parties and the Parties shall have equal access to such data. Each Party
shall have access to and a right of reference with respect to all data generated
in clinical studies of Royalty-Bearing Products.
g. FURTHER ACTIONS AND ASSIGNMENTS. Each Party shall take all
further actions and execute all assignments requested by the other Party and
reasonably necessary or desirable to vest in the other Party the ownership
rights set forth in this Section 5.1.
Section 5.2 PROSECUTION AND MAINTENANCE OF PATENT RIGHTS.
a. COMPOUND INVENTIONS AND OTHER SOLE INVENTIONS OWNED BY
NITROMED. NitroMed shall have the exclusive right and option to file and
prosecute any patent applications and maintain any patents covering Compound
Inventions and Other Sole Inventions owned by NitroMed; PROVIDED THAT in the
event that NitroMed declines the option to file and prosecute any such patent
applications or maintain any such patents that pertain solely to Royalty-Bearing
Products, it shall give BSC reasonable notice to this effect and thereafter BSC
may, upon written notice to NitroMed, file and prosecute such patent
applications and maintain such patents in NitroMed's name, all at BSC's expense,
and all such Compound Inventions and Other Sole Inventions shall remain owned
exclusively by NitroMed.
b. DEVICE INVENTIONS AND OTHER SOLE INVENTIONS OWNED BY BSC. BSC
shall have the exclusive right and option to file and prosecute any patent
applications and to maintain any patents covering Device Inventions and Other
Sole Inventions owned by BSC; PROVIDED THAT in the event that BSC declines the
option to file and prosecute any such patent applications or maintain any such
patents that pertain solely to Royalty-Bearing Products, it shall give NitroMed
reasonable notice to this effect and thereafter NitroMed may, upon written
notice to BSC, file and prosecute such patent applications and maintain such
patents in BSC's name, all at
16
NitroMed's expense, and all such Device Inventions and Other Sole Inventions
shall remain owned exclusively by BSC.
c. COMPOUND/DEVICE INVENTIONS AND OTHER JOINT INVENTIONS. The
Joint Steering Committee shall determine which Party shall have the right and
option to file and prosecute any patent applications and to maintain any patents
covering Compound/Device Inventions and Other Joint Inventions at the shared
expense of both parties; PROVIDED THAT in the event that either Party declines
an option to file and prosecute any such patent applications or maintain any
such patents that pertain solely to Royalty-Bearing Products or declines to
share in such filing, prosecution and maintenance expenses ("Non-Electing
Party"), it shall give the other Party ("Electing Party") reasonable notice to
this effect and thereafter the Electing Party may, upon written notice to the
Non-Electing Party, file and prosecute such patent applications and maintain
such patents in its sole name and expense, and the Non-Electing Party shall
assign any of its rights therein to the Electing Party for no additional
consideration.
d. COSTS AND EXPENSES. Each Party shall bear its own costs and
expenses in preparing, filing, prosecuting, maintaining and extending Patent
Rights.
e. COOPERATION. Each Party agrees to cooperate with the other
with respect to the preparation, filing, prosecution, maintenance and extension
of patents and patent applications pursuant to this Section 5.2, including,
without limitation, the execution of all such documents and instruments and the
performance of such acts as may be reasonably necessary in order to permit the
other Party to continue any preparation, filing, prosecution, maintenance or
extension of patents and patent applications that such Party has elected not to
pursue, as provided for in Sections 5.2(a), (b) and (c).
Section 5.3 EXPLOITATION OF JOINT INTELLECTUAL PROPERTY. Subject to all
provisions of this Agreement, including without limitation (a) the grant of
licenses to NitroMed and BSC, respectively, under Article III, and (b) BSC's
royalty obligations pursuant to Article IV, each Party shall be free to exploit
Joint Intellectual Property worldwide without restriction and without payment of
any additional compensation to the other Party.
Section 5.4 THIRD PARTY INFRINGEMENT.
a. NOTICE. Each Party shall promptly report in writing to the
other Party during the term of this Agreement any (i) known or suspected
infringement of any of the BSC Patent Rights, the NitroMed Patent Rights or
the Joint Patent Rights or (ii) known or suspected unauthorized use of any of
the BSC Know-How, the NitroMed Know-How or the Joint Know-How, of which such
Party becomes aware, and shall provide the other Party with all available
evidence supporting such infringement, suspected infringement, unauthorized
use or suspected unauthorized use.
b. INFRINGEMENT ACTION.
i. NitroMed shall have the initial right to initiate a suit or
take other appropriate action that it believes is reasonably required to protect
the NitroMed Intellectual Property. To the extent that any such suit or actions
pertains to Royalty-Bearing Products, NitroMed shall give BSC sufficient advance
notice of its intent to file any such suit or take any
17
such action and the reasons therefor, and shall provide BSC with an opportunity
to make suggestions and comments regarding such suit or action. Thereafter,
NitroMed shall keep BSC promptly informed, and shall from time to time consult
with BSC regarding the status of any such suit or action and shall provide BSC
with copies of all material documents (i.e., complaints, answers, counterclaims,
material motions, orders of the court, memoranda of law and legal briefs,
interrogatory responses, depositions, material pre-trial filings, expert
reports, affidavits filed in court, transcripts of hearings and trial testimony,
trial exhibits and notices of appeal) filed in, or otherwise relating to, such
suit or action.
ii. BSC shall have the initial right to initiate a suit or
take other appropriate action that it believes is reasonably required to protect
the BSC Intellectual Property. To the extent that any such suit or actions
pertains to Royalty-Bearing Products, BSC shall give NitroMed sufficient advance
notice of its intent to file any such suit or take any such action and the
reasons therefor, and shall provide NitroMed with an opportunity to make
suggestions and comments regarding such suit or action. Thereafter, BSC shall
keep NitroMed promptly informed, and shall from time to time consult with
NitroMed regarding the status of any such suit or action and shall provide
NitroMed with copies of all material documents (i.e., complaints, answers,
counterclaims, material motions, orders of the court, memoranda of law and legal
briefs, interrogatory responses, depositions, material pre-trial filings, expert
reports, affidavits filed in court, transcripts of hearings and trial testimony,
trial exhibits and notices of appeal) filed in, or otherwise relating to, such
suit or action.
c. CONDUCT OF ACTION; COSTS. The Party initiating suit shall have
the sole and exclusive right to select counsel for any suit initiated by it
under this Section 5.4. If required under applicable law in order for such Party
to initiate and/or maintain such suit, the other Party shall join as a party to
the suit. The other Party shall offer reasonable assistance to the Party
initiating suit in connection therewith at no charge to such Party except for
reimbursement of reasonable out-of-pocket expenses incurred in rendering such
assistance. The Party initiating suit shall assume and pay all of its own
out-of-pocket costs incurred in connection with any litigation or proceedings
described in this Section 5.4, including, without limitation, the fees and
expenses of the counsel selected by it. The other Party shall have the right to
participate and be represented in any such suit by its own counsel at its own
expense. The Party initiating suit shall not settle any such suit involving
rights of the other Party in the Field without obtaining the prior written
consent of such other Party, which consent shall not be unreasonably withheld or
delayed.
d. STEP-IN RIGHT. If the Party with the right to initiate suit
pursuant to subsection (b) fails to initiate a suit or take such other
appropriate action within sixty (60) days after becoming aware of the alleged
infringements or unauthorized use, then, to the extent that such alleged
infringement or unauthorized use pertains to Royalty-Bearing Products, the other
Party may, in its discretion, provide the Party with the initial right with
written notice of its intent to initiate a suit or take other appropriate
action, such notice to be provided within thirty (30) days after the expiration
of such sixty (60) day period. If such other Party provides such notice and the
Party with the initial right fails to initiate a suit or take such other
appropriate action within thirty (30) days after receipt of such notice from
such other Party, then such other Party shall have the right to initiate a suit
or take other appropriate action that it believes is reasonably required to
protect the BSC Intellectual Property, the NitroMed Intellectual Property and
Joint
18
Intellectual Property, as applicable. Such other Party shall give the Party with
the initial right sufficient advance notice of its intent to file any such suit
or take any such action and the reasons therefor, and shall provide the Party
with the initial right with an opportunity to make suggestions and comments
regarding such suit or action. Thereafter, such other Party shall keep the Party
with the initial right promptly informed, and shall from time to time consult
with the Party with the initial right regarding the status of any such suit or
action and shall provide the Party with the initial right with copies of all
material documents (i.e., complaints, answers, counterclaims, material motions,
orders of the court, memoranda of law and legal briefs, interrogatory responses,
depositions, material pre-trial filings, expert reports, affidavits filed in
court, transcripts of hearings and trial testimony, trial exhibits and notices
of appeal) filed in, or otherwise relating to, such suit or action. In addition,
the provisions of subsection (c) above shall apply to suits initiated under this
subsection (d).
e. RECOVERIES. To the extent that any such suit or action
pertains to Royalty-Bearing Products, any recovery obtained as a result of any
proceeding described in this Section 5.4 or from any counterclaim or similar
claim asserted in a proceeding described in Section 5.5, by settlement or
otherwise, shall be applied in the following order of priority:
i. first, the Party initiating the suit or action shall be
reimbursed for all costs in connection with such proceeding paid by such Party
and not otherwise recovered;
ii. second, the other Party shall be reimbursed for all costs
in connection with such proceeding paid by the other Party and not otherwise
recovered; and
iii. third, any remainder shall be paid [**] percent ([**]%)
to NitroMed and the balance to BSC.
Section 5.5 CLAIMED INFRINGEMENT; CLAIMED INVALIDITY.
a. NOTICE. In the event that a third party at any time provides
written notice of a claim to, or brings an action, suit or proceeding against a
Party, or any of its Affiliates or sublicensees, claiming infringement of such
third party's Patent Rights or unauthorized use of such third party's Know-How,
based upon an assertion or claim arising out of the research, development,
manufacture, use or sale of Royalty-Bearing Products by such Party (a "Third
Party Claim"), such Party shall promptly notify the other Party of the claim or
the commencement of such action, suit or proceeding, enclosing a copy of the
claim and/or all papers served. Each Party agrees to make available to the other
Party its advice and counsel regarding the technical merits of any such claim at
no cost to the other Party and to offer reasonable assistance to the other Party
at no cost to the other Party.
b. DEFENSE OF THIRD PARTY CLAIM. NitroMed shall have sole and
exclusive responsibility for the defense of any Third Party Claim brought
against NitroMed or its Affiliates or sublicensees arising out of the research,
development, manufacture, use or sale of Royalty-Bearing Products (a "NitroMed
Claim"). BSC shall have sole and exclusive responsibility for the defense of any
Third Party Claim brought against BSC or its Affiliates or sublicensees arising
out of the research, development, manufacture, use or sale of Royalty-Bearing
Products (a "BSC Claim").
19
c. CONDUCT OF DEFENSE; COSTS. NitroMed shall have the sole and
exclusive right to select counsel for any NitroMed Claim and BSC shall have the
sole and exclusive right to select counsel for any BSC Claim. Each Party shall
from time to time consult with the other Party regarding the status of any such
Third Party Claim and shall provide the other Party with copies of all documents
filed in, and all written communications relating to, such Third Party Claim.
Each Party shall offer reasonable assistance to the other Party in connection
therewith at no charge to the other Party except for reimbursement of reasonable
out-of-pocket expenses incurred in rendering such assistance. Each Party shall
assume and pay all of its own out-of-pocket costs incurred in connection
therewith, including, without limitation, the fees and expenses of the counsel
selected by it.
d. SETTLEMENT OF THIRD PARTY CLAIMS. Neither Party shall settle
any claims or suits involving rights of the other Party without obtaining the
prior written consent of the other Party, which consent shall not be
unreasonably withheld.
e. PATENT INVALIDITY CLAIM. If a third party at any time asserts
a claim that any BSC Patent Right, NitroMed Patent Right or Joint Patent Right
is invalid or otherwise unenforceable (an "Invalidity Claim"), whether as a
defense in an infringement action brought by NitroMed pursuant to Section 5.4 or
in a Third Party Claim brought against NitroMed or BSC, the Parties shall
cooperate with each other in preparing and formulating a response to such
Invalidity Claim. Neither Party shall settle or compromise any Invalidity Claim
without the consent of the other Party, which consent shall not be unreasonably
withheld.
Section 5.6 PATENT TERM EXTENSIONS. The Parties shall cooperate, if
necessary and appropriate, with each other in gaining patent term extension
wherever applicable to BSC Patent Rights, NitroMed Patent Rights or Joint Patent
Rights covering Royalty-Bearing Products. The Parties shall, if necessary and
appropriate, use reasonable efforts to agree upon a joint strategy relating to
patent term extensions, but, in the absence of mutual agreement with respect to
any extension issue, a patent shall be extended if either Party elects to extend
such patent. All filings for such extension shall be made by the Party owning
the patent, PROVIDED, HOWEVER, that in the event that the Party owning the
patent elects not to file for an extension, such Party shall (i) inform the
other Party of its intention not to file and (ii) grant the other Party the
right to file for such extension.
Section 5.7 PATENT MARKING. BSC agrees to comply with any applicable
patent marking statutes in any country in which Royalty-Bearing Products are
sold by BSC, its Affiliates and/or sublicensees.
ARTICLE VI
CONFIDENTIALITY
Section 6.1 CONFIDENTIAL INFORMATION. Each Party agrees that all
Confidential Information of a Party that is disclosed by a Party to the other
Party (a) shall not be used by the receiving Party except in connection with the
activities contemplated by this Agreement or in
20
order to further the purposes of this Agreement, (b) shall be maintained in
confidence by the receiving Party, and (c) shall not be disclosed by the
receiving Party to any third party who is not an Affiliate or consultant of, or
an advisor to, the receiving Party without the prior written consent of the
disclosing Party. Notwithstanding the foregoing, the receiving Party shall be
entitled to use and disclose Confidential Information that:
a. was known or used by the receiving Party or its Affiliates
prior to its date of disclosure to the receiving Party as demonstrated by
legally admissible evidence available to the receiving Party or its Affiliates;
or
b. either before or after the date of the disclosure to the
receiving Party is lawfully disclosed to the receiving Party or its Affiliates
by sources other than the disclosing Party rightfully in possession of the
Confidential Information and not bound by confidentiality obligations to the
disclosing party; or
c. either before or after the date of the disclosure to the
receiving Party or its Affiliates is or becomes published or otherwise is or
becomes part of the public domain through no breach hereof on the part of the
receiving Party or its Affiliates; or
d. is independently developed by or for the receiving Party or
its Affiliates without reference to or reliance upon the Confidential
Information as demonstrated by competent written records; or
e. is reasonably necessary for the filing, prosecution and
maintenance of Patent Rights; or
f. is required to be disclosed by the receiving Party to comply
with applicable laws, to defend or prosecute litigation or to comply with
governmental regulations, PROVIDED THAT the receiving Party provides prior
written notice of such disclosure to the disclosing Party and takes reasonable
and lawful actions to avoid and/or minimize the degree of such disclosure.
Section 6.2 EMPLOYEE AND ADVISOR OBLIGATIONS. NitroMed and BSC each
agree that they shall provide Confidential Information received from the other
Party only to their respective employees, consultants and advisors, and to the
employees, consultants and advisors of such Party's Affiliates, who have a need
to know such Confidential Information to assist such Party in fulfilling its
obligations under this Agreement, PROVIDED THAT such employees, consultants and
advisors agree to treat such information and materials as confidential.
Section 6.3 TERM. All obligations of confidentiality imposed under this
Article VI shall expire five (5) years following termination or expiration of
this Agreement.
Section 6.4 PUBLICATIONS. The Parties acknowledge that scientific lead
time is a key element of the value of the R&D Program and further agree to use
commercially reasonable efforts to monitor public scientific disclosures of the
results of the R&D Program to prevent any potential adverse effect of any
premature public disclosure of such results. The Parties shall establish a
procedure for publication review and each Party shall first submit to the other
Party an early draft of all such publications, whether they are to be presented
orally or in written form,
21
at least thirty (30) days prior to submission for publication. Each Party shall
review such proposed publication in order to avoid the unauthorized disclosure
of a Party's Confidential Information and to preserve the patentability of
inventions arising from the R&D Program. If, as soon as reasonably possible, but
no longer than thirty (30) days following receipt of an advance copy of a
Party's proposed publication, the other Party informs such Party that its
proposed publication contains Confidential Information of the other Party, then
such Party shall delete such Confidential Information from its proposed
publication. In addition, if at any time during such thirty (30) day period, the
other Party informs such Party that its proposed publication discloses
inventions made by either Party in the course of the R&D Program which are
subject to the rights granted by one Party to the other Party pursuant to
Sections 3.1 or 3.2 of this Agreement, or the public disclosure of such proposed
publication could be expected to have a material adverse effect on any Patent
Rights or Know-How of such other Party, then such Party shall delay such
proposed publication, for up to sixty (60) days from the date the other Party
informed such Party of its objection to the proposed publication, to permit the
timely preparation and first filing of patent application(s) on the information
involved. The Parties agree that all publications of results of the R&D Program
by NitroMed or BSC shall acknowledge the contribution of the other Party and
third party collaborators, as applicable, to such results.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.1 REPRESENTATIONS OF AUTHORITY. NitroMed and BSC each
represents and warrants to the other Party that it has full corporate right,
power and authority to enter into this Agreement and to perform its respective
obligations under this Agreement and, subject to Section 7.6 hereof, that it has
the right to grant to the other the licenses and sublicenses granted pursuant to
this Agreement.
Section 7.2 CONSENTS. NitroMed and BSC each represents and warrants to
the other Party that all necessary consents, approvals and authorizations of all
government authorities and other persons required to be obtained by it as of the
Effective Date in connection with the execution, delivery and performance of
this Agreement have been or shall be obtained by the Effective Date.
Section 7.3 NO CONFLICT. NitroMed and BSC each represents and warrants
to the other Party that, notwithstanding anything to the contrary in this
Agreement, the execution and delivery of this Agreement, the performance of such
Party's obligations in the conduct of the R&D Program and the licenses and
sublicenses to be granted pursuant to this Agreement (a) do not and will not
conflict with or violate any requirement of applicable laws or regulations
existing as of the Execution Date and (b) do not and will not conflict with,
violate, breach or constitute a default under any contractual obligations of
such Party or any of its Affiliates existing as of the Effective Date.
Section 7.4 ENFORCEABILITY. NitroMed and BSC each represents and
warrants to the other Party that this Agreement is a legal and valid obligation
binding upon it and is enforceable in accordance with its terms.
22
Section 7.5 EMPLOYEE OBLIGATIONS. NitroMed and BSC each represents and
warrants that all of its employees, officers, consultants and advisors who are
or will be involved in the R&D Program have executed or will have executed
agreements or have existing obligations under law requiring assignment to such
Party of all intellectual property made during the course of and as the result
of their association with such Party, and obligating the individual to maintain
as confidential such Party's Confidential Information, to the extent required to
support such Party's obligations under this Agreement. NitroMed and BSC each
represents and warrants that to its knowledge, none of its employees who are or
will be involved in the R&D Program are, as a result of the nature of such R&D
Program to be conducted by the Parties, in violation of any covenant in any
contract with a third party relating to non-disclosure of proprietary
information, non-competition or non-solicitation.
Section 7.6 INTELLECTUAL PROPERTY.
a. NitroMed represents and warrants to BSC that, to the knowledge
of NitroMed, as of the Execution Date, the Know-How of NitroMed that is expected
to be utilized by the Parties in the R&D Program (based on the duties expected
to be performed by them under the R&D Plan as of the Execution Date) has not
been developed or obtained by NitroMed or its Affiliates in violation of any
contractual obligation to any third party nor has it been misappropriated from
any third party or obtained without the proper consent of any third party.
b. NitroMed represents and warrants to BSC that, as of the
Execution Date, there is no action, suit or proceeding which is pending or, to
the knowledge of the officers of NitroMed or its Affiliates, no written claim or
demand of any third party that has been received, that challenges or would
materially adversely affect (i) the right of the Parties to use in the conduct
of the R&D Program the Patent Rights or Know-How of NitroMed that are reasonably
expected to be utilized by the Parties to fulfill their duties under the R&D
Plan that they expect to perform as of the Execution Date, or (ii) the right of
NitroMed to grant to BSC the rights and licenses to use such Patent Rights or
Know-How granted as of the Effective Date.
c. BSC represents and warrants to NitroMed that, to the knowledge
of BSC, as of the Execution Date, the Know-How of BSC that is expected to be
utilized by the Parties in the R&D Program (based on the duties expected to be
performed by it under the R&D Plan as of the Execution Date) has not been
developed or obtained by BSC or its Affiliates in violation of any contractual
obligation to any third party nor has it been misappropriated from any third
party or obtained without the proper consent of any third party. d. BSC
represents and warrants to NitroMed that, as of the Execution Date, there is no
action, suit or proceeding which is pending or, to the knowledge of the officers
of BSC or its Affiliates, no written claim or demand of any third party that has
been received, that challenges or would materially adversely affect (i) the
right of BSC to use in the conduct of the R&D Program the Patent Rights or
Know-How of BSC that are reasonably expected to be utilized by the Parties to
fulfill their duties under the R&D Plan that they expect to perform as of the
Execution Date, or (ii) the right of BSC to grant to NitroMed the rights and
licenses to use such Patent Rights or Know-How granted as of the Effective Date.
23
Section 7.7 NO WARRANTIES. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
HEREIN, THE PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY
KIND, EITHER EXPRESS OR IMPLIED. THE PARTIES SPECIFICALLY DISCLAIM ANY
WARRANTIES THAT ROYALTY-BEARING PRODUCTS WILL BE SUCCESSFULLY DEVELOPED
HEREUNDER, AND IF DEVELOPED, WILL HAVE COMMERCIAL UTILITY OR MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE VIII
TERM AND TERMINATION
Section 8.1 TERM. This Agreement shall become effective as of the
Effective Date, may be terminated as set forth in this Article VIII, and shall
otherwise remain in effect until the expiration of all obligations to make
payments set forth in Article IV.
Section 8.2 SURVIVAL OF COMMERCIALIZATION LICENSE UPON EXPIRATION. Upon
the expiration of BSC's obligations to pay royalties to NitroMed under Section
4.4 with respect to each Royalty-Bearing Product in any country, the licenses
under NitroMed's rights in NitroMed Intellectual Property and Joint Intellectual
Property set forth in Section 3.1(b) shall be deemed to be perpetual and fully
paid-up licenses.
Section 8.3 TERMINATION FOR MATERIAL BREACH. Upon any breach of a
material provision of this Agreement by a Party (the "Breaching Party"), the
other Party (the "Non-Breaching Party") may terminate this Agreement by
providing sixty (60) days written notice to the Breaching Party, specifying the
material breach. The termination shall become effective at the end of the sixty
(60) days period unless the Breaching Party cures such breach during such sixty
(60) days period. Notwithstanding the foregoing, if such breach, by its nature,
is incurable, this Agreement may be terminated immediately. The Parties shall
use reasonable efforts to work together to cure any breach.
Section 8.4 EFFECT OF TERMINATION.
a. TERMINATION BY BSC PURSUANT TO SECTION 8.3. If this Agreement
is terminated under Section 8.3 and NitroMed is the Breaching Party, (i) the
license granted by BSC to NitroMed under Section 3.2 shall terminate as of the
effective date of such termination and (ii) the licenses granted by NitroMed to
BSC under Sections 3.1(a) and 3.1(b) shall, at the election of BSC (to be made
in writing within thirty (30) days after the effective date of termination),
continue in effect, subject to the payment obligations set forth in Article IV
of this Agreement.
b. TERMINATION BY NITROMED PURSUANT TO SECTION 8.3. If this
Agreement is terminated under Section 8.3 and BSC is the Breaching Party, the
licenses granted by NitroMed to BSC under Sections 3.1(a) and 3.1(b) shall
terminate as of the effective date of such termination, and all sublicenses
granted to third parties by BSC pursuant to Section 3.1 shall also terminate as
of such date.
24
Section 8.5 SURVIVAL. In the event of any expiration or termination of
this Agreement, (a) all financial obligations under Article IV or Article V owed
as of the effective date of such expiration or termination shall remain in
effect, and (b) the obligations set forth in Article VI and in Sections 5.4,
5.5, and 10.1, and all other terms, provisions, representations, rights and
obligations contained in this Agreement which by their sense and context are
intended to survive expiration or termination of this Agreement, shall survive.
ARTICLE IX
DISPUTE RESOLUTION
Section 9.1 ALTERNATIVE DISPUTE RESOLUTION. Any controversy, claim or
dispute arising out of or relating to this Agreement that has not been resolved
by the Executive Officers within thirty (30) days of referral in accordance with
Section 2.3 shall be resolved through binding arbitration as follows:
a. All disputes arising out of this Agreement and referred to
arbitration pursuant to this Section 9.1 shall be finally resolved by
arbitration conducted in the English language in Boston, Massachusetts, in
accordance with the American Arbitration Association ("AAA") Arbitration Rules
and Supplementary Procedures for Large, Complex Disputes.
b. The arbitrator shall rule on each disputed issue within ninety
(90) days after he or she has accepted the appointment to serve as an
arbitrator, provided that if the arbitrator is unable to render a decision
within such ninety (90) day period, he or she shall render such decision as soon
thereafter as is practicable. The arbitrator shall issue a written decision in
order to explain the basis of the ruling. The arbitrator shall not have the
authority to award punitive damages.
c. The arbitrator shall be paid reasonable fees plus expenses.
These fees and expenses, along with the reasonable legal fees and expenses of
the prevailing Party (including all expert witness fees and expenses), the fees
and expenses of a court reporter, and any expenses for a hearing room, shall be
paid as follows:
i. If the arbitrator rules in favor of one Party on all
disputed issues in the arbitration, the losing Party shall pay 100% of such fees
and expenses.
ii. If the arbitrator rules in favor of one Party on some
issues and the other Party on other issues, the arbitrator shall issue with the
ruling a written determination as to how such fees and expenses shall be
allocated between the Parties. The arbitrator shall allocate fees and expenses
in a way that bears a reasonable relationship to the outcome of the arbitration,
with the Party prevailing on more issues, or on issues of greater value or
gravity, recovering a relatively larger share of its legal fees and expenses.
d. Any decision or award of the arbitrator shall be final,
conclusive, and binding on the Parties to the dispute, and judgment may be
entered on any award in any court of competent jurisdiction. To the extent
lawful, the Parties exclude any right of application or appeal to the
Massachusetts, United States or other courts in connection with any question of
law
25
arising in the arbitration or in connection with any award or decision made by
the arbitrator, except as is necessary to recognize or enforce such award or
decision.
Section 9.2 NO LIMITATION. Notwithstanding the foregoing, nothing in
this Article IX shall be construed as limiting in any way the right of a Party
to seek injunctive or other equitable relief from a court of competent
jurisdiction with respect to any actual or threatened breach of this Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.1 INDEMNIFICATION.
a. BSC. BSC agrees to defend NitroMed and its Affiliates at its
cost and expense, and shall indemnify and hold NitroMed and its Affiliates and
their respective directors, officers, employees and agents (the "NitroMed
Indemnified Parties") harmless from and against any losses, costs, damages, fees
or expenses arising out of any third party claim relating to (i) any breach by
BSC of any of its representations, warranties or obligations pursuant to this
Agreement or (ii) personal injury resulting from the development, manufacture,
use, sale or other disposition of any Royalty-Bearing Products offered by BSC or
its Affiliates or sublicensees. In the event of any such claim against the
NitroMed Indemnified Parties by any third party, NitroMed shall promptly notify
BSC in writing of the claim and BSC shall manage and control, at its sole
expense, the defense of the claim and its settlement. The NitroMed Indemnified
Parties shall cooperate with BSC and may, at their option and expense, be
represented in any such action or proceeding. BSC shall not be liable for any
litigation costs or expenses incurred by the NitroMed Indemnified Parties. In
addition, BSC shall not be responsible for the indemnification of any NitroMed
Indemnified Party arising from any negligent or wrongful acts by such party, or
as the result of any settlement or compromise by the NitroMed Indemnified
Parties without BSC's prior written consent.
b. NITROMED. NitroMed agrees to defend BSC and its Affiliates at
its cost and expense, and shall indemnify and hold BSC and its Affiliates and
their respective directors, officers, employees and agents (the "BSC Indemnified
Parties") harmless from and against any losses, costs, damages, fees or expenses
arising out of any third party claim relating to any breach by NitroMed of any
of its representations, warranties or obligations pursuant to this Agreement. In
the event of any claim against the BSC Indemnified Parties by any third party,
BSC shall promptly notify NitroMed in writing of the claim and NitroMed shall
manage and control, at its sole expense, the defense of the claim and its
settlement. The BSC Indemnified Parties shall cooperate with NitroMed and may,
at their option and expense, be represented in any such action or proceeding.
NitroMed shall not be liable for any litigation costs or expenses incurred by
the BSC Indemnified Parties. In addition, NitroMed shall not be responsible for
the indemnification of any BSC Indemnified Party arising from any negligent or
wrongful acts by such party, or as the result of any settlement or compromise by
the BSC Indemnified Parties without NitroMed's prior written consent.
26
Section 10.2 GOVERNING LAW. This Agreement shall be construed and the
respective rights of the Parties determined (including the determination of
substantive rights in any arbitration proceeding under Article IX) according to
the substantive laws of the Commonwealth of Massachusetts notwithstanding the
provisions governing conflict of laws under such Massachusetts law to the
contrary and without giving effect to the United Nations Convention on Contracts
for the International Sale of Goods, the 1974 Convention on the Limitation
Period in the International Sale of Goods (the "1974 Convention") and the
Protocol amending the 1974 Convention, done at Vienna April 11, 1980, except
matters of intellectual property law which shall be determined in accordance
with the national intellectual property laws relevant to the intellectual
property in question.
Section 10.3 ASSIGNMENT. Neither NitroMed nor BSC may assign this
Agreement in whole or in part without the consent of the other Party, except if
such assignment is to an Affiliate of the assigning Party or occurs in
connection with the sale or transfer of all or substantially all of the business
or assets of the assigning Party to which the subject matter of this Agreement
pertains.
Section 10.4 AMENDMENTS. This Agreement constitutes the entire
agreement between the Parties with respect to the subject matter hereof, and
supersedes all previous arrangements with respect to the subject matter hereof,
whether written or oral. Any amendment or modification to this Agreement shall
be made in writing signed by both Parties.
Section 10.5 NOTICES.
Notices to NitroMed shall be addressed to:
NitroMed, Inc.
▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
Notices to BSC shall be addressed to:
Boston Scientific Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telefacsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Any Party may change its address by giving notice to the other Party in the
manner herein provided. Any notice required or provided for by the terms of this
Agreement shall be in writing and shall be (a) sent by registered or certified
mail, return receipt requested, postage prepaid, (b) sent via a reputable
overnight courier service, or (c) sent by facsimile transmission with an
original to be followed the same day via a reputable overnight courier service,
in each case
27
properly addressed in accordance with the paragraph above. The effective date of
notice shall be the actual date of receipt by the Party receiving the same.
Section 10.6 FORCE MAJEURE. No failure or omission by the Parties in
the performance of any obligation of this Agreement shall be deemed a breach of
this Agreement or create any liability if the same shall arise from any cause or
causes beyond the control of the Parties, including, but not limited to, the
following: acts of God; acts or omissions of any government; any rules,
regulations or orders issued by any governmental authority or by any officer,
department, agency or instrumentality thereof; fire; storm; flood; earthquake;
accident; war; rebellion; insurrection; riot; and invasion and provided that
such failure or omission resulting from one of the above causes is cured as soon
as is practicable after the occurrence of one or more of the above-mentioned
causes.
Section 10.7 PUBLIC ANNOUNCEMENTS. The timing and content of press
releases, if any, announcing the execution of this Agreement shall be mutually
agreed. Any announcements or similar publicity with respect to the execution of
this Agreement, if any, shall be agreed upon between the Parties in advance of
such announcement. In the event that the existence or material terms of this
Agreement are required by law, regulation or judicial order to be disclosed, the
Parties will consent to the minimum required disclosure. The Parties agree that
any such announcement will not contain confidential business or technical
information other than the existence or material terms of this Agreement and, if
disclosure of confidential business or technical information is required by law
or regulation, will make commercially reasonable efforts to minimize such
disclosure and obtain confidential treatment for any such information which is
disclosed to a governmental agency or group. The contents of any announcement or
similar publicity which has been reviewed and agreed by the Parties can be
re-released by either Party without a requirement for re-approval.
Section 10.8 DISCLOSURE OF PROVISIONS OF AGREEMENT.
a. Each Party agrees to hold as confidential the terms of this
Agreement except that each Party shall have the right to disclose such terms to
potential investors and other third parties in connection with financing
activities, provided that any such third party has entered into a written
obligation with the disclosing Party to treat such information and materials as
confidential. At the request of the other Party, the disclosing Party shall use
commercially reasonable efforts to enforce such obligations against such third
parties.
b. In the event that this Agreement shall be included in any
report, statement or other document filed by either Party or an Affiliate of
either Party with the United States Securities and Exchange Commission (the
"SEC"), such Party shall use, or shall cause its Affiliate, as the case may be,
to use, reasonable efforts to obtain confidential treatment from the SEC of any
financial information or other information of a competitive or confidential
nature, and shall include in such confidentiality request such provisions of
this Agreement as may be reasonably requested by the other Party.
Section 10.9 INDEPENDENT CONTRACTORS. It is understood and agreed that
the relationship between the Parties hereunder is that of independent
contractors and that nothing in this
28
Agreement shall be construed as authorization for either NitroMed or BSC to act
as agent for the other.
Section 10.10 NO STRICT CONSTRUCTION. This Agreement has been prepared
jointly and shall not be strictly construed against any Party.
Section 10.11 HEADINGS. The captions or headings of the sections or
other subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof.
Section 10.12 NO IMPLIED WAIVERS; RIGHTS CUMULATIVE. No failure on the
part of NitroMed or BSC to exercise, and no delay in exercising, any right,
power, remedy or privilege under this Agreement, or provided by statute or at
law or in equity or otherwise, shall impair, prejudice or constitute a waiver of
any such right, power, remedy or privilege or be construed as a waiver of any
breach of this Agreement or as an acquiescence therein, nor shall any single or
partial exercise of any such right, power, remedy or privilege preclude any
other or further exercise thereof or the exercise of any other right, power,
remedy or privilege.
Section 10.13 SEVERABILITY. If any provision hereof should be held
invalid, illegal or unenforceable in any respect in any jurisdiction, then, to
the fullest extent permitted by law, (a) all other provisions hereof shall
remain in full force and effect in such jurisdiction and shall be liberally
construed in order to carry out the intentions of the Parties as nearly as may
be possible and (b) such invalidity, illegality or unenforceability shall not
affect the validity, legality or enforceability of such provision in any other
jurisdiction.
Section 10.14 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in counterparts, each of which counterparts, when so executed and delivered,
shall be deemed to be an original, and all of which counterparts, taken
together, shall constitute one and the same instrument.
Section 10.15 NO CONSEQUENTIAL DAMAGES. NEITHER PARTY HERETO WILL BE
LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS
AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, INCLUDING WITHOUT LIMITATION
LOST PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT,
REGARDLESS OF ANY NOTICE OF SUCH DAMAGES. NOTHING IN THIS SECTION 10.15 IS
INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF
EITHER PARTY.
[Remainder of page intentionally left blank]
29
IN WITNESS WHEREOF, the Parties have executed this Development and
License Agreement as of the Execution Date.
NITROMED, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Title: SVP and Chief Financial Officer
-------------------------------
BOSTON SCIENTIFIC CORPORATION
By: /s/ Illegible
-------------------------------
Name:
-------------------------------
Title:
-------------------------------
30
EXHIBIT A
R&D PLAN
The flow chart for the screening and identification of a development compound is
outlined in Fig 1. In the compound selection process, the criteria for
identification of an [**] compound as a development candidate is as follows:
COMPOUND SELECTION
NitroMed will provide BSCI with a list of proprietary [**] compounds with
SUPPORTING DATA that meet the following criteria:
------------------------------------------------------------------------------
ASSAY PERFORMANCE MEASUREMENT
------------------------------------------------------------------------------
At least [**] [**]
------------------------------------------------------------------------------
Solubility[**] [**]
------------------------------------------------------------------------------
Stability [**] [**]
------------------------------------------------------------------------------
Sterilizable [**] [**]
------------------------------------------------------------------------------
Demonstrated [**] [**]
------------------------------------------------------------------------------
[**]
------------------------------------------------------------------------------
(*[**])
BSCI will select [**] as follows:
1. [**]
STENT COATING
o Boston Scientific Corporation will provide stents and perform all coating,
sterilization and packaging of stents.
NitroMed will perform the following assays to determine the [**]
------------------------------------------------------------------------------
ASSAY ([**]) PERFORMANCE MEASUREMENT
------------------------------------------------------------------------------
Content [**] [**]
------------------------------------------------------------------------------
Loss [**] [**]
------------------------------------------------------------------------------
[**] stability [**] [**]
-----------------------------------------------------------------------------
[**] [**]
[**] profile
------------------------------------------------------------------------------
A-1
[**] EVALUATION
NitroMed will perform the following [**]:
1. [**].
2. [**].
3. [**].
[**] EVALUATION
NitroMed will [**] 1. [**]
2. [**]
3. [**]
(ALL STUDIES WILL BE CONDUCTED WITH [**]
DOCUMENTATION:
[**] equivalent documentation.
Upon meeting the criteria above, the [**] compounds shall be " NITROMED
DELIVERED COMPOUNDS".
BSCI will select appropriate formulations of coated stents [**] 1. [**]
2. [**]
3. [**]
(ALL STUDIES WILL BE CONDUCTED WITH [**]
B-2
FIGURE 1. FLOW CHART FOR SCREENING OF [**] STENTS.
[FLOW CHART]
B-3