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Exhibit 10.30
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
NORASTEMIZOLE COLLABORATION AND LICENSE AGREEMENT
THIS NORASTEMIZOLE COLLABORATION AND LICENSE AGREEMENT
is made and entered into as of the 30th day of January, 1998 by and between
SEPRACOR INC. ("Sepracor"), a Delaware corporation which has offices at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ PHARMACEUTICA
N.V., ("▇▇▇▇▇▇▇"), a Belgian company which has offices at ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇,
▇-▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇.
WHEREAS, Sepracor and ▇▇▇▇▇▇▇ (the "Parties") each possesses certain
intellectual and industrial property rights relating to norastemizole; and
WHEREAS, each Party is willing to grant, and the other Party desires
to acquire, a license to use such rights in accordance with the terms and
conditions hereinafter set forth.
WHEREAS, the Parties desire to engage in collaborative research and
development as generally described in the research and development plan attached
hereto;
NOW, THEREFORE, in consideration of the premises and mutual
promises, terms and conditions hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties do hereby agree as follows:
1. DEFINITIONS
As used herein, the following terms shall have the following definitions.
1.1 Affiliates. "Affiliates" of a Party hereto shall mean: (i)
companies the majority of whose voting shares are now or hereafter owned or
controlled directly or indirectly by such Party; (ii) companies which now or
hereafter own or control directly or indirectly a majority of the voting shares
of such Party; and (iii) companies a majority of whose voting shares are now or
hereafter owned or controlled directly or indirectly by any company mentioned in
(i) or (ii) of this definition. A company shall be considered an "Affiliate"
only for so long as such ownership or control exists. For the purposes of this
definition, partnerships or similar entities where a majority-in-interest of its
partners or owners are a Party hereto and/or Affiliates of such Party shall also
be deemed to be Affiliates of such Party. For the purpose hereof "majority"
shall mean fifty percent (50%) or more.
1.2 Business Day. "Business Day" shall mean a day on which banks are
open for business in both Marlborough, Massachusetts and Beerse, Belgium.
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1.3 Business Information. "Business Information" shall mean all
information relating to the business of a Party which is disclosed by that Party
to the other prior to the termination or expiration of this Agreement.
1.4 Compound. "Compound" shall mean the compound
1-[(4-fluorophenyl)methyl]-N-(4-piperidinyl)-1H-benzimidazol-2-amine, sometimes
called norastemizole, and any salts, crystal polymorphs, clathrates, and other
non-covalent derivatives thereof.
1.5 Confidential Information. "Confidential Information" shall mean
those parts of Business Information and those parts of the Technical
Information, whether written or oral, which are (i) not publicly known and (ii)
annotated as "confidential" or "proprietary" either at the time of disclosure
or, in the case of an oral disclosure, by a written instrument provided by a
Party within thirty (30) days of its oral disclosure of such Business or
Technical Information to the other Party (the "receiving Party"). "Confidential
Information" also includes any such Technical Information or Business
Information disclosed by either Party to the other Party in the course of or
pursuant to the research and development collaboration as described under
Article 4.
1.6 Cost of Goods Sold. "Cost of Goods Sold" shall mean the direct
and indirect costs, which are reasonable and necessary, incurred by either Party
in manufacturing or having manufactured including quality control an Rx Product
for sale in the United States, in accordance with generally accepted accounting
principles consistently applied and consistent with general industry practices,
but excluding amounts included in Marketing and Technology Costs.
1.7 Dollars. "Dollars" or "$" shall mean lawful money of the United
States in immediately available funds.
1.8 Effective Date. "Effective Date" shall mean the later of (a) the
date on which Sepracor executes this Agreement; (b) the date on which ▇▇▇▇▇▇▇
executes this Agreement; and (c) if applicable, the next Business Day following
the expiration or earlier termination of any notice and waiting period under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended ("HSR Act").
1.9 FDA. "FDA" shall mean the United States Food and Drug
Administration.
1.10 ▇▇▇▇▇▇▇ Patent Rights. "▇▇▇▇▇▇▇ Patent Rights" shall mean the
patents and patent applications listed on Exhibit 1.10(a) hereto, and all
continuations, divisions, extensions including supplementary protection
certificates, reissues, foreign equivalents or counterparts, and other filings
thereof.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
1.11 Joint Marketing Committee. "Joint Marketing Committee" or "JMC"
means the committee established pursuant to Section 5.2 below.
1.12 Joint Research and Development Committee. "Joint Research and
Development Committee" or "JR&DC" means the committee established pursuant to
Section 4.2(a) below.
1.13 Licensed Technology. "Licensed Technology" shall mean the
Patent Rights and Technical Information.
1.14 Marketing and Technology Costs. "Marketing and Technology
Costs" shall mean
(a) (i) any and all costs and expenses directly attributable
to the selling, marketing, promotion, and administrative support, distribution,
carrying of inventory and receivables incurred by either Party (including
without limitation expenses incurred in connection with seminars, samples and
advertising) for the commercialization of the Rx Products in United States, (ii)
regulatory expenses incurred by either Party in connection with the
commercialization of the Rx Products in United States or the maintenance of NDAs
in United States, (iii) costs and expenses incurred in connection with Phase IV
studies undertaken in connection with selling, marketing, or promoting Rx
Product in the United States; and (iv) reasonable overhead allocated to the Rx
Products in United States; provided, however, that (A) the expenses described in
Sections 1.14(a)(i), (ii) and (iii) above shall all be determined in accordance
with generally accepted accounting principles consistently applied and
consistent with general industry practices, but shall all exclude amounts
included in Cost of Goods Sold; (B) the expenses described in Sections
1.14(a)(i), (ii) and (iii) above are directly related to the commercialization
of the Rx Products in United States, and are not incurred solely to promote the
name or goodwill of the Party which incurred such expenses; and (C) absent any
change of the Rx Products or change in usage of Rx Products in United States
(including without limitation indications, restrictions, combinations and dosage
forms) when compared to the capsule and tablet presentations of Rx Products and
the initial indications of perennial allergic rhinitis and seasonal allergic
rhinitis, the total expenses to be incurred under Section 1.14(a)(i) (ii) and
(iii) above shall not exceed (but shall not necessarily be equal to) a total of
[**]during the period between the date of this Agreement and the second
anniversary of the date of first sale of Rx Product in the United States. If
there is a change of the Rx Products or change in the usage of Rx Products in
the United States as indicated above, then any amount in excess of [**] during
the period between the date of this Agreement and the second anniversary of the
date of first sale of Rx Products in the United States must be expenses incurred
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
solely for presentations of Rx Products other than tablet or capsule or uses of
Rx Products for indications other than perennial allergic rhinitis or seasonal
allergic rhinitis. Any expenses incurred by either or both Parties in excess of
such amounts shall not be included in Marketing and Technology Costs for the
purposes of this Agreement unless otherwise agreed to in writing by the Parties;
and
(b) royalties and other amounts to be paid as a result of good
faith settlements agreed to by Sepracor and ▇▇▇▇▇▇▇ and made pursuant to Section
10.2 hereof of claims of infringement of patents of third parties with respect
to the manufacture, use, or sale of Rx Products in United States.
1.15 Operating Income. "Operating Income" shall mean, for each
Payment Period, (a) the [**] of Rx Products sold in United States, [**] (b) with
respect to such Rx Products, the sum of : (i) [**] ; and (ii) [**] incurred by
both Parties.
1.16 Marketing Plan. "Marketing Plan" shall mean the marketing plan
established by ▇▇▇▇▇▇▇ and then reviewed prior to implementation and from time
to time during its execution by the JMC in accordance with Section 5.2 below.
1.17 NDA. "NDA" shall mean a New Drug Application for Product and
its equivalents outside the United States.
1.18 ▇▇▇▇▇▇▇ Net Invoice Price. "▇▇▇▇▇▇▇ Net Invoice Price" shall
mean, on a country-by-country basis, the [**] of ▇▇▇▇▇▇▇, its Affiliates or its
Permitted Sublicensees or assigns for a Product to third parties, ex works the
manufacturing facility for such Product, [**]: any [**] and similar such
charges. ▇▇▇▇▇▇▇ Net Invoice Price for a Product transferred free of charge or
for consideration other than cash (except for promotional purposes relating to
Product consistent with ▇▇▇▇▇▇▇'▇ normal business practices for pharmaceutical
products not licensed from a third party) shall, for the purposes of this
Agreement, be deemed to be equal to the current list price for such Product in
the relevant country during the Payment Period. ▇▇▇▇▇▇▇ Net Invoice Price for a
Product sold as part of a bundle shall, for the purposes of this Agreement, be
deemed to be equal to the current list price of such Product in the relevant
country during the Payment Period [**] of the bundle and the [**] for each and
every unit in the bundle.
1.19 OTC Product. "OTC Product" shall mean: (a) within the United
States, any and all over-the-counter pharmaceutical products comprising Compound
as an active ingredient; and (b) outside the United States, any and all products
comprising Compound as an active ingredient and of which the legal status is a
non-
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
prescription medicine; both in and outside the United States, including any
combination products including Compound as an active ingredient.
1.20 Patent Rights. "Patent Rights" shall mean the ▇▇▇▇▇▇▇ Patent
Rights and the Sepracor Patent Rights.
1.21 Payment Period. "Payment Period" shall mean each of the
calendar quarters as defined in the ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ universal calendar, as
specified in Exhibit 1.21 hereto as amended by ▇▇▇▇▇▇▇ each subsequent year.
1.22 Pre-Option Clinical Testing. "Pre-Option Clinical Testing"
means: [**] as further described in Exhibit 1.22, which contains, inter alia,
the above-referenced protocols.
1.23 Products. "Products" shall mean the OTC Products and the Rx
Products.
1.24 R&D. "R&D" shall mean all NDA track research , development
(including without limitation process development) and related activities
directed toward development of the Rx Product for the United States market to be
conducted by the Parties in accordance with the R&D Plan.
1.25 R&D Expenses. "R&D Expenses" shall mean the expenses incurred
by either Sepracor or ▇▇▇▇▇▇▇ or for their account which are incurred under the
R&D Plan (as defined hereafter) and the budget to be agreed between the Parties
for such R&D Plan and that are specifically attributable to the development of
Rx Products for the United States market. R&D Expenses do not include the
Pre-Option Clinical Testing or any other studies not in the R&D Plan agreed
between the parties to be conducted prior to exercising the option as defined in
Section 2.3(a).
1.26 R&D Plan. "R&D Plan" shall mean the plan for R&D attached as
Exhibit 1.26 hereto.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
1.27 Revenue. "Revenue" shall mean the [**] charged by ▇▇▇▇▇▇▇, a
▇▇▇▇▇▇▇ Affiliate or Permitted Sublicensee, to independent third parties for Rx
Products in the United States during a particular Payment Period, after
deduction of the following items (all determined under generally accepted
accounting principles consistently applied and consistent with general industry
practices), provided and to the extent such items are incurred and do not exceed
reasonable and customary amounts in the market in which such sale occurred: [**]
Gross invoiced sales price for an Rx Product transferred for consideration other
than cash or free of charge (except for promotional purposes relating to Product
consistent with ▇▇▇▇▇▇▇'▇ normal business practices for pharmaceutical products
not licensed from a third party) shall, for the purposes of this Agreement, be
deemed to be equal to the current list price for such Rx Product in the United
States during the Payment Period. Gross invoiced sales price for an Rx Product
sold as part of a bundle shall, for the purposes of this Agreement, be deemed to
be equal to the current list price of such Rx Product in the United States
during the Payment Period [**] of the bundle and the [**] for each and every
unit in the bundle.
1.28 Rx Countries. "Rx Countries" shall mean all countries other
than the United States.
1.29 Rx Product. "Rx Product" shall mean any and all prescription
pharmaceutical products comprising Compound as an active ingredient, including
any combination products including Compound as an active ingredient.
1.30 Sepracor Net Invoice Price. "Sepracor Net Invoice Price" shall
mean, on a country-by-country basis, the [**] of Sepracor, its Affiliates or its
Permitted Sublicensees or assigns to third parties for an Rx Product, ex works
the manufacturing facility for such Rx Product,[**]: any [**] and similar such
charges. Sepracor Net Invoice Price for an Rx Product transferred free of charge
or for consideration other than cash (except for promotional purposes relating
to Product consistent with Sepracor's normal business practices for
pharmaceutical products not licensed from a third party) shall, for the purposes
of this Agreement, be deemed to be equal to the current list price for such Rx
Product in the relevant country during the Payment Period. Sepracor Net Invoice
Price for an Rx Product sold as part of a bundle shall, for the purposes of this
Agreement, be deemed to be equal the current list price of such Rx Product in
the relevant country during the Payment Period [**] of the bundle and [**] for
each and every unit in the bundle.
1.31 Sepracor Patent Rights. "Sepracor Patent Rights" shall mean the
patents and patent applications listed on Exhibit 1.31(a) hereto, and all
continuations,
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divisions, extensions including supplementary protection certificates, reissues,
foreign equivalents or counterparts, and other filings thereof.
1.32 Technical Information. "Technical Information" of a Party shall
mean all technical and scientific know-how and information, pre-clinical and
clinical trial results, computer programs, knowledge, technology, means,
methods, processes, practices, formulas, techniques, procedures, technical
assistance, designs, drawings, apparatus, written and oral rectifications of
data, specifications, assembly procedures, schematics and other valuable
information of whatever nature, whether confidential or not, and whether
proprietary or not, which is now in (or hereafter, during the term of this
Agreement, comes into) the possession of such Party or ▇▇▇▇▇▇▇ Pharmaceutica
Inc., which it is allowed to disclose and which relates specifically to the
manufacture, sale, distribution, registration, use or testing of Compound and of
any Product.
1.33 Trademarks. "Trademarks" shall mean any and all trademarks,
service marks and other commercial symbols listed on Exhibit 1.33 attached
hereto or which ▇▇▇▇▇▇▇ may from time to time designate for inclusion in Exhibit
1.33.
1.34 United States. "United States" shall mean the United States of
America and it territories and possessions.
1.35 Valid Claim. "Valid Claim" means, with respect to a country, a
claim of any patent application or unexpired patent in such country which shall
not have been withdrawn, canceled or disclaimed, nor held invalid by a court of
competent jurisdiction in an unappealed or unappealable decision.
1.36 Permitted Sublicensee. "Permitted Sublicensee" shall mean the
holder of any sublicense granted pursuant to Section 2.6.
1.37 Field."Field" shall mean histamine-mediated disorders and
asthma.
2. GRANT OF RIGHTS AND LICENSES
Subject to all of the terms and conditions set forth in this Agreement:
2.1 Licensing of Rights, Relation to Options.
(a) Sepracor hereby grants to ▇▇▇▇▇▇▇ an exclusive worldwide
right and license in the Field during the term of this Agreement to develop,
make, have made, use, and sell the OTC Products under the Sepracor Patent Rights
and the Technical Information of Sepracor.
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(b) Sepracor hereby grants to ▇▇▇▇▇▇▇ an exclusive worldwide
right and license in the Field during the term of this Agreement to develop,
make, have made, use and sell Compound solely for use in OTC Products under the
Sepracor Patent Rights and the Technical Information of Sepracor.
(c) ▇▇▇▇▇▇▇ hereby grants to Sepracor a sole worldwide right
and license in the Field during the term of this Agreement to make and have made
the Rx Products under the ▇▇▇▇▇▇▇ Patent Rights and Technical Information of
▇▇▇▇▇▇▇, and an exclusive right and license in the Field to develop, use and
sell the Rx Products under the ▇▇▇▇▇▇▇ Patent Rights and Technical Information
of ▇▇▇▇▇▇▇ in such country(ies) of Rx Countries, where and provided ▇▇▇▇▇▇▇ has
not exercised the option described in Section 2.2 below in such country(ies) and
with the clear understanding that ▇▇▇▇▇▇▇ always retains the exclusive rights in
the Field to develop, make, have made, use and sell OTC Products and Compound
solely for use in the OTC Products, as defined in Sections 2.1 (a) and (b).
(d) ▇▇▇▇▇▇▇ hereby grants to Sepracor a sole worldwide right
and license in the Field during the term of this Agreement to make and have made
the Compound solely for use in Rx Products under the ▇▇▇▇▇▇▇ Patent Rights and
the Technical Information of ▇▇▇▇▇▇▇, and an exclusive right and license in the
Field to develop, use, and sell the Compound solely for use in Rx Products under
the ▇▇▇▇▇▇▇ Patent Rights and the Technical Information of ▇▇▇▇▇▇▇ in such
country(ies) of Rx Countries, where and provided ▇▇▇▇▇▇▇ has not exercised the
option described in Section 2.2 below in such country(ies) and with the clear
understanding that ▇▇▇▇▇▇▇ always retains the exclusive rights in the Field to
develop, make, have made, use and sell OTC Products and Compound solely for use
in OTC Products, as defined in Sections 2.1 (a) and (b).
(e) ▇▇▇▇▇▇▇ hereby grants to Sepracor: (i) a sole worldwide
right and license in the Field during the term of this Agreement to make and
have made the Rx Products under the ▇▇▇▇▇▇▇ Patent Rights and the Technical
Information of ▇▇▇▇▇▇▇, and an exclusive right and license in the Field to use,
develop and sell the Rx Products under the ▇▇▇▇▇▇▇ Patent Rights and the
Technical Information of ▇▇▇▇▇▇▇ in the United States; and (ii) a sole worldwide
right and license in the Field during the term of the Agreement to make and have
made Compound solely for use in Rx Product under the ▇▇▇▇▇▇▇ Patent Rights and
the Technical Information of ▇▇▇▇▇▇▇, and an exclusive right and license in the
Field to develop, use and sell Compound solely for use in Rx Product under the
▇▇▇▇▇▇▇ Patent Rights and the Technical Information of ▇▇▇▇▇▇▇ in the United
States, subject to ▇▇▇▇▇▇▇'▇ not exercising the option as described in Section
2.3 below and with the clear understanding that ▇▇▇▇▇▇▇ always retains the
exclusive rights in the Field to develop, make, have made, use and sell OTC
Products and Compound solely for use in OTC Products, as defined in Sections
2.1(a) and (b).
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(f) As to the rights and licenses to Technical Information of
▇▇▇▇▇▇▇ granted in Sections 2.1(c), 2.1(d), and 2.1(e) concerning any NDA
relating to Compound, Products, or astemizole owned or controlled by ▇▇▇▇▇▇▇ or
any Affiliate thereof, these rights and licenses are limited to the right to
read and reference those portions of such NDAs which the Parties agree are
necessary in order to obtain expedited or timely approval from applicable
regulatory agencies to manufacture, use, sell, or distribute Compound or
Products and to respond to inquiries made by applicable regulatory agencies
regarding Compound or Products, but these licenses and rights are not limited by
this subsection (f) with respect to any other Technical Information of ▇▇▇▇▇▇▇.
(g) In the event that ▇▇▇▇▇▇▇ exercises the option described
in Section 2.2(a), Sepracor grants to ▇▇▇▇▇▇▇ a sole worldwide right and license
in the Field during the term of this Agreement to make and have made the Rx
Products and Compound solely for use in Rx Products under Sepracor Patent Rights
and Technical Information of Sepracor, and an exclusive right and license in the
Field in and for each of the Rx Countries where ▇▇▇▇▇▇▇ exercises the option
during the term of this Agreement to develop, use and sell the Rx Products and
Compound solely for use in Rx Products under Sepracor Patent Rights and
Technical Information of Sepracor.
(h) In the event that ▇▇▇▇▇▇▇ exercises the option described
in Section 2.3(a), Sepracor grants to ▇▇▇▇▇▇▇ a sole worldwide right and license
in the Field during the term of this Agreement to make and have made the Rx
Products and Compounds solely for use in Rx Products under the Sepracor Patent
Rights and the Technical Information of Sepracor, and an exclusive right and
license in the Field (but for Sepracor, its Affiliates, or Permitted
Sublicensees subject to Section 2.3(a)) during the term of this Agreement to
develop, use and sell the Rx Products and Compound solely for use in Rx Products
under the Sepracor Patent Rights and the Technical Information of Sepracor in
the United States.
(i) In the event that ▇▇▇▇▇▇▇ exercises the option described
in Section 2.3(a), ▇▇▇▇▇▇▇ grants to Sepracor a sole worldwide right and license
in the Field during the term of this Agreement to make and have made Rx Products
and Compounds solely for use in Rx Products under the ▇▇▇▇▇▇▇ Patent Rights and
the Technical Information of ▇▇▇▇▇▇▇, and an exclusive right and license in the
Field (but for ▇▇▇▇▇▇▇, its Affiliates, or Permitted Sublicensees subject to
Section 2.3(a)) during the term of this Agreement to develop, use, and sell Rx
Products and Compounds solely for use in Rx Products under the ▇▇▇▇▇▇▇ Patent
Rights and the Technical Information of ▇▇▇▇▇▇▇ in the United States, and
further subject to ▇▇▇▇▇▇▇'▇ right pursuant to Section 5.3(h) to book all sales
of Rx Product in the United States.
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(j) In the event that ▇▇▇▇▇▇▇ exercises the option described
in Section 2.3(a) and Sepracor exercises an option described in Section 2.3(d)
to convert profit-sharing and cost sharing to a royalty bearing license, then
Sepracor's grants to ▇▇▇▇▇▇▇ in Section 2.1(h) shall become fully exclusive,
even as to Sepracor and its Affiliates and Permitted Sublicensees, and ▇▇▇▇▇▇▇'▇
grants to Sepracor in Section 2.1(i) shall be terminated, except when and only
to the extent Sepracor would still co-promote Rx Products in the United States,
subject to the provisions of Section 5.4.
(k) Subject to Section 2.1(f) as soon as practical after the
Effective Date, but in no event later than thirty (30) days after the Effective
Date, each Party shall provide to the other Party, at no additional cost to the
other Party, all of its Technical Information that is requested by the other
Party and on which both Parties agree is reasonable and necessary to effectuate
the purpose of this Agreement.
(l) For the purpose of Sections 2.1(c), (d), (e), and (i), the
term "sole" shall mean exclusive but for ▇▇▇▇▇▇▇, its Affiliates and Permitted
Sublicensees, only to the extent however ▇▇▇▇▇▇▇, its Affiliates and Permitted
Sublicensees will make or have made Compound and/or Product in accordance with
this Agreement.
For the purpose of Sections 2.1(g) and (h) the term "sole"
shall mean exclusive but for Sepracor, its Affiliates and Permitted
Sublicensees, only to the extent however Sepracor, its Affiliates and Permitted
Sublicensees will make or have made Compound and/or Product in accordance with
this Agreement.
2.2 Option with Respect to Rx Products Outside United States.
(a) Sepracor hereby grants ▇▇▇▇▇▇▇ an option to a sole
worldwide right and license in the Field during the term of this Agreement to
make and have made the Rx Products and Compound solely for use in Rx Products
under Sepracor Patent Rights and Technical Information of Sepracor and an
exclusive right and license in the Field in and for each of the Rx Countries
where ▇▇▇▇▇▇▇ exercises the option during the term of this Agreement to develop,
use and sell the Rx Products and Compound solely for use in Rx Products under
Sepracor Patent Rights and Technical Information of Sepracor. The option is
granted and exercisable on a country-by-country basis.
(b) The option described in Section 2.2(a) above may be
exercised by ▇▇▇▇▇▇▇ on a country by country basis at any time until the date
which is ninety (90) days after ▇▇▇▇▇▇▇ receives from Sepracor a report(s)
including the final analyzed data for the Pre-Option Clinical Testing (including
the underlying data and individual patient data) or such later date as may be
applicable pursuant to Section 6.2(a). If ▇▇▇▇▇▇▇ does not exercise such option
by such date, then such option shall be deemed to have lapsed for such
country(ies) for any and all purposes and the licenses grant to Sepracor in
Sections 2.1(c) and 2.1(d) shall become effective in all
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countries of Rx Countries where ▇▇▇▇▇▇▇ has not exercised the above mentioned
option and include the right to sublicense in such countries subject to the
provisions of Section 2.6. Until exercise or lapse of the option, Sepracor shall
not grant any rights or licenses in the Field to any third parties with respect
to the manufacture, development, use, or sale of the Rx Products and Compound
under the Sepracor Patent Rights or Technical Information of Sepracor in any Rx
Country(ies).
(c) If ▇▇▇▇▇▇▇ exercises the option described in Section
2.2(a) above in an Rx Country, and for Rx Countries other than the European
Union and Japan: (i) fails to exercise reasonable diligence to develop and
register Rx Products consistent with ▇▇▇▇▇▇▇'▇ standard practices for
development and registration of similar products in such Rx Country or similar
markets, or (ii) fails to launch Rx Product within nine (9) months of obtaining
marketing, price and reimbursement approval in such Rx Country, or (iii)
subsequently abandons promotion and sale of Rx Products in such Rx Country
during the first three (3) years starting from launch of such Rx Product in such
Rx Country, then rights and licenses granted to ▇▇▇▇▇▇▇ upon exercise of the
option described in Section 2.2(a) may be terminated by Sepracor in such Rx
Country and upon such termination ▇▇▇▇▇▇▇ grants Sepracor rights and licenses in
such Rx Country as set forth in Sections 2.1(c) and 2.1(d) and under the terms
and conditions of Article 7. Any marketing authorizations for Rx Product in such
Rx Country shall be assigned to Sepracor, and any trademarks used in connection
with Rx Product in such Rx Country shall be licensed to Sepracor on a royalty
free basis in such Rx Country under normal and customary terms to be negotiated
in good faith. For the purpose of this Section 2.2.(c) the term "abandon
promotion and sale" shall mean the active discontinuation of selling and
promotion activities to such an extent that such promotion and selling
activities would be significantly less than the promotion and selling activities
which would normally be spent by ▇▇▇▇▇▇▇ for similar products of ▇▇▇▇▇▇▇ in such
Rx Country or similar markets.
(d) For the purpose of Section 2.2(a) the term "sole" shall
mean exclusive but for Sepracor, its Affiliates and Permitted Sublicensees, to
the extent however Sepracor, its Affiliates and Permitted Sublicensees will make
or have made Compound or Product in accordance with this Agreement.
2.3 Option with Respect to Rx Products in the United States.
(a) Sepracor hereby grants to ▇▇▇▇▇▇▇ an option to a sole
worldwide right and license in the Field during the term of this Agreement to
make and have made Rx Products and Compound solely for use in Rx Products under
Sepracor Patent Rights and Technical Information of Sepracor, and an exclusive
right and license in the Field (but for Sepracor, its Affiliates and Permitted
Sublicensees) during the term of this Agreement to develop, use, and sell Rx
Products and Compound solely for use in Rx Products under Sepracor Patent Rights
and Technical
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Information of Sepracor in the United States with the obligation on the Parties
however, upon exercise of the option, to enter into the collaborative research
and development program, including but not limited to those provisions described
in Article 4, to enter into the co- promotion agreement, including but not
limited to those provisions described in Section 5.3, and to enter into the
profit-sharing and cost sharing agreement, including but not limited to those
provisions described in Section 6.4 of this Agreement; provided, however that
the co-promotion agreement will be subject to the conditions, as specified in
Section 5.3 and that the profit-sharing and cost sharing provisions may be
converted by Sepracor into a royalty bearing license, as specified in Section
2.3(d). Nothing in any such subsequent agreement shall be inconsistent with the
terms of this Agreement.
(b) The option described in Section 2.3(a) above may be
exercised by ▇▇▇▇▇▇▇ at any time until the date which is forty-five (45) days
after ▇▇▇▇▇▇▇ receives from Sepracor a report(s) including the final analyzed
data for the Pre-Option Clinical Testing (including the underlying data and
individual patient data) or such later date as may be applicable pursuant to
Section 6.2(a). If ▇▇▇▇▇▇▇ does not exercise such option by such date, such
option shall be deemed to have lapsed for any and all purposes and the licenses
granted to Sepracor in Sections 2.1(e) shall become effective in the United
States and include the right to sublicense in the United States subject to the
provisions of Section 2.6. Until exercise or lapse of the option, Sepracor shall
not grant any rights or licenses in the Field to any third parties with respect
to the manufacture, development, use, or sale of Rx Products and Compound under
the Sepracor Patent Rights or Technical Information of Sepracor in the United
States.
(c) If ▇▇▇▇▇▇▇ exercises the option described in Section
2.3(a) above, then the Parties shall promote and market the Rx Products in the
United States in accordance with Article 5 below.
(d) Within (A) three (3) calendar months following the
exercise of the option by ▇▇▇▇▇▇▇ pursuant to Section 2.3(a) and (B) at the
latest six (6) months after an NDA is filed in the United States, ▇▇▇▇▇▇▇ will
submit to Sepracor its marketing, sales and marketing expense forecast for the
United States market. During the entire calendar month following the submission
of such forecast, Sepracor will each time have the option (hereinafter
respectively Option A and Option B) to convert the profit-sharing and cost
sharing as envisaged in Section 6.4 into a royalty bearing exclusive license in
the Field to ▇▇▇▇▇▇▇ for the United States market. In the event Sepracor
exercises the Option A to convert such profit-sharing and cost sharing following
the exercising of the option by ▇▇▇▇▇▇▇ pursuant to Section 2.3(a), ▇▇▇▇▇▇▇
shall pay a royalty to Sepracor of [**] and [**] thereafter on the ▇▇▇▇▇▇▇ Net
Invoice
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Price for each Rx Product sold by or on behalf of ▇▇▇▇▇▇▇, its Affiliates or its
Permitted Sublicensees or assigns in the United States. In the event Sepracor
exercises the Option B to convert such profit-sharing and cost sharing, ▇▇▇▇▇▇▇
shall pay to Sepracor, as a consideration for development efforts and payments
made by Sepracor, a royalty of [**] on the ▇▇▇▇▇▇▇ Net Invoice Price for each Rx
Product sold by or on behalf of ▇▇▇▇▇▇▇, its Affiliates or its Permitted
Sublicensees or assigns in the United States. The principles of Sections 6.3(c)
to (g) 6.5, 6.6, 6.8, 6.9, 6.10 and 6.11 shall apply mutatis mutandis to the
royalty payments as meant under this Section 2.3(d). The exercise of the Option
A or B does not release Sepracor from its obligations to pay its share of the
R&D Expenses shared and to be shared by ▇▇▇▇▇▇▇ and Sepracor in accordance with
the provisions of Section 6.2, which expenses are incurred prior to the date on
which Sepracor exercises Option A or B.
(e) For the purpose of Section 2.3(a) the term "sole" shall
mean exclusive but for Sepracor, its Affiliates and Permitted Sublicensees, to
the extent however Sepracor, its Affiliates and Permitted Sublicensees will make
or have made Compound and Product in accordance with this Agreement.
2.4 Rights to Use Trademarks.
(a) If ▇▇▇▇▇▇▇ exercises the option described in Section
2.3(a) above, then Sepracor shall use the Trademarks for the United States for
Rx Products on a non-exclusive basis in connection with the sale, distribution,
marketing and promotion of the Rx Products in the United States. Sepracor shall
not pay ▇▇▇▇▇▇▇ any additional fee for such use. Except as provided in Section
5.3(i) below, Sepracor may not use any other trademarks, trade names, service
marks and commercial symbols in connection with the sale, distribution,
marketing and promotion of the Rx Products in the United States.
(b) If ▇▇▇▇▇▇▇ exercises the option described in Section
2.3(a), all right, title and interest in the Trademarks for the United States
for Rx Products shall be owned by ▇▇▇▇▇▇▇. Sepracor shall not at any time take
or omit to take any reasonable action, or permit any action to be taken on its
behalf which shall in any way impair the rights of ▇▇▇▇▇▇▇ in the Trademarks.
(c) If ▇▇▇▇▇▇▇ exercises the option described in Section
2.2(a) for Rx Products in (an) Rx Country(ies) all right, title and interest in
the Trademarks for such Rx Country(ies) where the option has been exercised
shall be owned by ▇▇▇▇▇▇▇. Sepracor shall not at any time take or omit to take
any reasonable action, or permit any act to be taken on its behalf, which shall
in any way impair the rights of ▇▇▇▇▇▇▇ in the Trademarks.
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14
(d) If ▇▇▇▇▇▇▇ does not exercise the option for Rx Product as
described in Section 2.3(a) for the United States or ▇▇▇▇▇▇▇ does not exercise
the option described in Section 2.2 (a) in the European Union or in Japan,
▇▇▇▇▇▇▇ has no obligation to select, file and defend a trademark for either the
United States or the European Union or Japan. In the foregoing cases it shall be
Sepracor's responsibility to select, file and defend a trademark where ▇▇▇▇▇▇▇
has not exercised the option in either the United States, the European Union or
Japan. Sepracor shall take into due consideration ▇▇▇▇▇▇▇'▇ remarks in the final
choice of the trademark, and shall not select such a trademark without ▇▇▇▇▇▇▇'▇
consent, which consent shall not unreasonably be withheld.
(e) All right, title and interest in the Trademark for OTC
Products shall be owned by ▇▇▇▇▇▇▇. Sepracor shall not at any time take or omit
to take any reasonable action, or permit any act to be taken on its behalf,
which shall in any way impair the rights of ▇▇▇▇▇▇▇ in the Trademarks.
(f) Sepracor shall promptly and completely apprise ▇▇▇▇▇▇▇ of
any actual, threatened or suspected infringement of any Trademark and/or the use
of confusingly similar names and/or marks to the extent Sepracor has knowledge
of such, and shall cooperate, at ▇▇▇▇▇▇▇'▇ expense, in any and all actions which
▇▇▇▇▇▇▇ may take in order to terminate such infringements and/or the use of
confusingly similar names and/or marks; provided, however, that Sepracor shall
not take any action to terminate such infringements and/or the use of
confusingly similar names and/or marks without ▇▇▇▇▇▇▇'▇ prior written consent
or pursuant to ▇▇▇▇▇▇▇'▇ prior written instructions. Except as provided in
Section 2.4(a) above, and 5.3(i) below, Sepracor has no rights in the
Trademarks, other trademarks or tradenames of ▇▇▇▇▇▇▇, or of any goodwill
associated therewith, and Sepracor agrees that, except as expressly provided in
this Agreement, it shall not acquire any rights in respect thereof and that all
such rights and goodwill are, and shall remain, vested in ▇▇▇▇▇▇▇.
2.5 ▇▇▇▇▇▇▇ GMP Policy and Quality Control. In order to comply with
▇▇▇▇▇▇▇'▇ quality control standards, Sepracor shall as soon as and to the extent
Sepracor manufactures one or more steps of Compound and/or Products for sale
under a Trademark or tradename of ▇▇▇▇▇▇▇ or its Affiliates:
(a) maintain the quality of Products by adhering to applicable
GMP standards and to those specific quality control standards that may from time
to time be communicated to Sepracor by or on behalf of ▇▇▇▇▇▇▇ with respect to
Products (the current version of which is to be provided within ten (10) days of
the execution date of this Agreement and shall constitute Exhibit 2.5(a), and
with respect to which ▇▇▇▇▇▇▇ reserves the right to change from time to time
without Sepracor's consent); provided, however, that those specific ▇▇▇▇▇▇▇
standards shall be no higher than the standards by which ▇▇▇▇▇▇▇ manufactures,
uses and sells such Products itself
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(or through its licensees, Permitted Sublicensees (if any) and assigns); further
provided, however, that unless otherwise agreed to in writing by the Parties,
Sepracor shall have three (3) months from its receipt as defined in the notice
provisions of Section 13.6 of ▇▇▇▇▇▇▇'▇ quality control standards set forth in
Exhibit 2.5(a) to ensure compliance therewith, and should ▇▇▇▇▇▇▇ amend such
quality control standards Sepracor shall have three (3) months from its receipt
as defined in the notice provisions of Section 13.6 of any amendment to
institute any changes necessitated by any such amendment.
(b) use the Trademarks in compliance with all relevant laws
and regulations and in accordance with ▇▇▇▇▇▇▇'▇ instructions;
(c) submit samples of Products and appropriate documentation
therefor to ▇▇▇▇▇▇▇, upon the request of ▇▇▇▇▇▇▇, so as to enable ▇▇▇▇▇▇▇ to
inspect such samples and documentation and confirm that Sepracor is in
compliance with its obligations under this Section; and
(d) not modify any of the Trademarks in any way and not use
any of the Trademarks on any goods or services other than the Rx Products.
2.6 Right to Sublicense. Each Party shall have the right to
sublicense any of the rights and licenses granted hereunder with the other
Party's prior written consent (such consent not to be unreasonably withheld), so
long as the sublicensor remains responsible to the other Party under this
Agreement and each such sublicensee confirms in writing to the sublicensor that
it agrees to be bound by all of the terms and conditions contained in this
Agreement; provided, however, that Sepracor's consent shall not be required with
respect to sublicenses granted by ▇▇▇▇▇▇▇ in any of the Rx Countries where
▇▇▇▇▇▇▇ has exercised the option of Section 2.2(a) with regard to Rx Product,
and with regard to OTC Products in all countries worldwide; further provided,
however, that ▇▇▇▇▇▇▇'▇ consent shall not be required if ▇▇▇▇▇▇▇ terminates this
Agreement pursuant to Section 12.3, or with respect to sublicenses granted by
Sepracor in the United States in the event that ▇▇▇▇▇▇▇ does not exercise the
option of Section 2.3(a). Neither Party shall have any other right to sublicense
such rights and licenses.
2.7 No Rights by Implication. No rights or licenses with respect to
Licensed Technology are granted or deemed granted hereunder or in connection
herewith, other than those rights or licenses expressly granted in this
Agreement.
2.8 HSR Act Filing.
(a) To the extent necessary, each of Sepracor and ▇▇▇▇▇▇▇
shall file within fifteen (15) days after the date of this Agreement with the
Federal Trade Commission and the Antitrust Division of the U.S. Department of
Justice, any
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notification and report form required of it in the reasonable opinion of both
Parties under the HSR Act with respect to the transactions contemplated hereby.
The parties shall cooperate with one another to the extent necessary in the
preparation of any notification and report form required to be filed under the
HSR Act. Each Party shall be responsible for its own costs, expenses, and filing
fees associated with any filing under the HSR Act. If any filings are required
under foreign equivalents to the HSR Act, the parties shall cooperate as set
forth above with respect to such filings.
(b) If ▇▇▇▇▇▇▇ does not exercise the option granted in Section
2.3(a), Sepracor exercises one of the options set forth in Section 2.3(d), or if
the co-promotion rights pursuant to Section 5.3 and profit-sharing and
cost-sharing envisaged in Section 6.4 are converted to a royalty bearing license
to Rx Product in the United States pursuant to any provision of this Agreement,
then the grants of exclusivity resulting therefrom shall become effective upon
the expiration or earlier termination of any applicable notice and waiting
period under the HSR Act.
3. SALES BY SEPRACOR TO ▇▇▇▇▇▇▇
3.1 Offer and Acceptance; Pricing.
(a) If ▇▇▇▇▇▇▇ exercises the option of Section 2.2(a) or
Section 2.3(a), in those countries where and for such time as ▇▇▇▇▇▇▇ holds the
rights granted pursuant to such options, ▇▇▇▇▇▇▇ shall be free to determine
whether it will manufacture Rx Product and/or Compound for use in Rx Product
itself or have such manufactured by Sepracor or a third party; provided,
however, if Sepracor or its designee complies with Good Manufacturing Practices
and the quality control standards set forth in Exhibit 2.5(a) within the time
frame set forth in Section 2.5(a), but ▇▇▇▇▇▇▇ determines not to use Sepracor to
make or have made Rx Products for the United States market, such determination
shall not materially delay expected filing of the NDA for Rx Products in the
United States as set forth in the R&D Plan with Sepracor as the manufacturer;
further provided, however, that if ▇▇▇▇▇▇▇ cannot manufacture itself or cannot
elect a party other than Sepracor to make or have made Rx Product for the United
States market prior to NDA submission because such election would materially
delay filing of the NDA, or ▇▇▇▇▇▇▇ desires to change the manufacturer
subsequent to NDA submission, ▇▇▇▇▇▇▇ retains the right to manufacture itself or
to elect a party other than Sepracor to manufacture Rx Product for the United
States subsequent to NDA approval by (i) filing an application with the FDA
requesting a manufacturer change after ▇▇▇▇▇▇▇'▇ or its alternative
manufacturer's DMF (drug master file) is ready, and (ii) providing Sepracor with
not less than twelve (12) months notice of the expected change in manufacturer.
▇▇▇▇▇▇▇ shall also be free to determine whether it will manufacture OTC Product
and/or Compound for use in OTC Product itself or have such manufactured by a
third party. Provided ▇▇▇▇▇▇▇ has elected Sepracor to be the manufacturer of
Compound
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and/or Product, and provided that Sepracor agrees to so manufacture, during the
term of this Agreement, ▇▇▇▇▇▇▇ shall provide to Sepracor, prior to each
calendar year, a non-binding forecast for such year and the immediately
succeeding calendar year of ▇▇▇▇▇▇▇'▇ anticipated quarterly purchases of the
Compound and/or Product from Sepracor for such years and indicating the likely
tender dates on which Compound and/or Product will have to be available in
Sepracor's manufacturing location pursuant to Section 3.2 (b) to be requested.
(b) For each proposed purchase of the Compound and/or Product
by ▇▇▇▇▇▇▇ from Sepracor, ▇▇▇▇▇▇▇ shall present the purchase order the condition
of which will be as agreed between the Parties to Sepracor (a "Purchase Order).
For each calendar quarter, ▇▇▇▇▇▇▇ shall present binding Purchase Orders for an
aggregate quantity of Compound and/or Product which is at least forty percent
(40%) of the quantity which ▇▇▇▇▇▇▇ forecasted for such calendar quarter in
accordance with Section 3.1(a) above. ▇▇▇▇▇▇▇ shall place each such Purchase
Order with Sepracor at least three(3) months before the requested tender date.
Each such Purchase Order shall identify the quantity ordered, the requested
tender date, and any export/import information required to enable Sepracor to
fill such Purchaser Order. Each such Purchase Order shall be deemed an offer to
purchase the Compound and/or Product. Unless ▇▇▇▇▇▇▇ is notified in writing to
the contrary within seven (7) Business Days after Sepracor receives a Purchase
Order, such Purchase Order shall be deemed accepted by Sepracor. In the event of
any discrepancy between any Purchase Order and this Agreement, the terms of this
Agreement shall govern.
(c) Sepracor agrees to undertake the necessary actions at its
own expense (including without limitation Good Manufacturing Practices
compliance and compliance with the quality control standards set forth in
Exhibit 2.5(a) within the time frame set forth in Section 2.5 (a)) to qualify
Sepracor or its designated Affiliate or supplier with the FDA and other
regulatory agencies as a supplier to ▇▇▇▇▇▇▇ with respect to the Compound and/or
Product. ▇▇▇▇▇▇▇ agrees to render Sepracor assistance by giving recommendations
with respect to such undertaking.
(d) If ▇▇▇▇▇▇▇ elects Sepracor (or a third party manufacturer
for Sepracor, as proposed by Sepracor and accepted by ▇▇▇▇▇▇▇) for the
manufacturing of one or more manufacturing steps of Compound and/or Product, and
Sepracor agrees to so manufacture, then for the purchase of each quantity of
Compound and/or Product, ▇▇▇▇▇▇▇ shall pay Sepracor:
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(i) with respect to the United States, for quantities of
Rx Product and Compound solely for use in Rx Product for clinical trials
including phase 4 studies and for samples, an amount [**] of Sepracor's cost in
manufacturing such quantity of such Compound and/or Product;
(ii) with respect to all countries other than the United
States, for quantities of Rx Product and Compound solely for use in Rx Product
for clinical trials including phase 4 studies and for samples, and with respect
to the United States for quantities for commercial sale of Rx Product and
Compound solely for use in such Rx Product for commercial sale, an amount [**]
of Sepracor's cost in manufacturing such quantity of the Compound and/or
Product;
(iii) for quantities of Rx Product for commercial sale
outside the United States and Compound solely for use in Rx Product outside the
United States, an amount [**] of Sepracor's cost in manufacturing such quantity
of the Compound and/or Product;
(iv) the above notwithstanding in no event shall ▇▇▇▇▇▇▇
be required to pay an amount for a quantity of Compound for use in Rx Product
for commercial sale which [**] of the aggregate ▇▇▇▇▇▇▇ Net Invoice Price of
such Products incorporating such quantity of Compound, as notified by ▇▇▇▇▇▇▇ to
Sepracor for any given calendar year; provided, however, that Sepracor shall not
be required to supply Compound or Product for commercial sale [**] of Sepracor's
cost of manufacturing (the "price floor"). In the event that the price cap falls
below the price floor, the parties shall discuss alternative supply terms and/or
sources. ▇▇▇▇▇▇▇ is entitled, with a minimum prior written notice of twelve (12)
months, to terminate the manufacturing and supply of Compound and/or Products by
Sepracor at any time during the term of this Agreement;
(v) as regards subsections (i) to (iv) above, in no
event shall Sepracor's cost for any Compound or Product [**] of the prevailing
market price as defined by the average of three (3) arm's length qualified bids
from reliable GMP compliant suppliers for such Compound or Product, as will be
agreed by ▇▇▇▇▇▇▇ and Sepracor; and
(vi) any quantity of Product or Compound supplied by or
on behalf of Sepracor to ▇▇▇▇▇▇▇ shall be the subject of a separate quality and
supply agreement.
(e) Costs for the purposes of Section 3.1(d) are defined in
Exhibit 3.1(e) hereto.
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(f) Sepracor shall keep and maintain complete and accurate
records and books of account in sufficient detail and form so as to enable
verification of its manufacturing costs. Such records and books of account shall
be maintained for a period of no less than two (2) years following the calendar
year to which they pertain. Sepracor shall permit such records and books of
account to be examined by ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇'▇ duly appointed agent(s) no more
than once each calendar year, to the extent necessary for ▇▇▇▇▇▇▇ to verify such
costs. Such examination shall be during normal business hours, upon thirty (30)
days' prior written notice to Sepracor, and at ▇▇▇▇▇▇▇'▇ expense unless the
examination should establish that Sepracor's claimed manufacturing costs for the
period examined were more than one hundred five percent (105%) of Sepracor's
actual manufacturing costs for such period, in which case Sepracor shall be
responsible for the reasonable expenses of such examination. Prompt adjustment
shall be made by the proper Party to compensate for any errors or omissions
disclosed by such examination. Information obtained during the course of such an
examination shall be kept confidential by ▇▇▇▇▇▇▇ and its agents, except to the
extent necessary to enforce ▇▇▇▇▇▇▇'▇ rights hereunder.
3.2 Tender.
(a) Unless ▇▇▇▇▇▇▇ or its Affiliates requests otherwise, all
quantities of the Compound and/or Product ordered by ▇▇▇▇▇▇▇ shall be packed for
shipment and storage in accordance with ▇▇▇▇▇▇▇'▇' standard commercial
practices. It is ▇▇▇▇▇▇▇'▇ obligation to notify Sepracor of any special
packaging requirements (which shall be at ▇▇▇▇▇▇▇'▇ expense).
(b) Sepracor shall make such quantities of the Compound and/or
Product available to ▇▇▇▇▇▇▇ for pick-up at Sepracor's manufacturing location no
later than the requested tender date specified on the relevant Purchase Order
for such quantity.
(c) It shall be ▇▇▇▇▇▇▇'▇ responsibility to arrange and pay
for all transportation, insurance and other charges incurred after Sepracor's
tender. Upon agreement of the Parties, the Compound and/or Product may be
delivered to Sepracor's warehouse facility for storage. ▇▇▇▇▇▇▇ shall thereupon
pay such storage and handling fees as will be agreed between the Parties in
advance. Such fees shall be part of the cost formula described in Exhibit 3.1(e)
hereto.
(d) Sepracor shall be responsible for preparing invoices and
shipping documents for ▇▇▇▇▇▇▇ in respect of Compound and/or Product tendered
hereunder by Sepracor; provided, however, that Sepracor shall submit its invoice
to ▇▇▇▇▇▇▇ for a quantity of Compound and/or Product no earlier than the date on
which Sepracor makes available such quantity for pick up by ▇▇▇▇▇▇▇ or delivers
such
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Products to Sepracor's warehouse facility for storage pursuant to the agreement
of the Parties.
(e) Risk of loss and damage to any quantity of Compound and/or
Product shall pass to ▇▇▇▇▇▇▇ upon the removal of such quantity from Sepracor's
manufacturing location.
3.3 Method of Payment for Compound and/or Product.
(a) All amounts due and payable with respect to a quantity of
Compound and/or Product tendered by Sepracor in accordance with Section 3.2 (b)
above shall be paid in full within [**] after ▇▇▇▇▇▇▇'▇ or ▇▇▇▇▇▇▇'▇ Affiliates'
receipt of an invoice with respect to such quantity. All such amounts shall be
paid in Dollars, by wire transfer, to such bank or account as Sepracor may from
time to time designate in writing.
(b) Whenever any amount hereunder is due on a day which is not
a Business Day, such amount shall be paid on the immediately succeeding Business
Day.
(c) Amounts hereunder shall be considered to be paid as of the
day on which they are received by Sepracor's bank.
(d) All amounts due and owing to Sepracor hereunder but not
paid by ▇▇▇▇▇▇▇ on the due date thereof shall bear interest at the rate of the
lesser of: (i) [**]; and (ii) the maximum lawful interest rate permitted under
applicable law. Such interest shall accrue on the balance of unpaid amounts from
time to time outstanding from the date on which portions of such amounts become
due and owing until payment thereof in full.
3.4 Limited Warranty.
(a) As to the Compound and/or Product purchased from Sepracor
by ▇▇▇▇▇▇▇, Sepracor warrants that such Compound and/or Product conforms to the
specifications set forth in Exhibit 3.4(a) attached hereto and made a part
hereof and these have been manufactured in accordance with the applicable GMP
standards and standards set forth in Exhibit 2.5(a) and communicated by ▇▇▇▇▇▇▇.
All warranty claims for non-conforming shipments, except for hidden defects,
must be made in writing to Sepracor within thirty (30) days after arrival of
Compound and/or Product at ▇▇▇▇▇▇▇'▇ or ▇▇▇▇▇▇▇'▇ Affiliates' warehouse. Except
for hidden defects, any warranty claims not made within such period shall be
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deemed waived and released. Warranty claims made by ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇'▇
Affiliates for hidden defects shall be made within thirty (30) days following
discovery of the hidden defect.
(b) THIS WARRANTY IS IN LIEU OF ANY OTHER WARRANTY, WHETHER
EXPRESS OR IMPLIED, WRITTEN OR ORAL (INCLUDING ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT).
(c) THIS WARRANTY EXTENDS TO ▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇'▇ AFFILIATES
ONLY AND SHALL NOT BE APPLICABLE TO ANY OTHER PERSON OR ENTITY INCLUDING,
WITHOUT LIMITATION, CUSTOMERS OR ▇▇▇▇▇▇▇'▇ PERMITTED SUBLICENSEES AND ASSIGNS.
(d) ▇▇▇▇▇▇▇, its Permitted Sublicenses and assigns shall not
bind or purport to bind Sepracor to any affirmation, representation or warranty
with respect to the Compound or to the Products to any third party.
3.5 Facility Inspections. Upon reasonable prior notice, Sepracor
shall permit ▇▇▇▇▇▇▇, its designated agents or representatives or
representatives of any United States or other regulatory agency if so required,
to inspect, during normal business hours, any facility used by Sepracor or
proposed to be used by Sepracor or any subsidiary or third party supplier of
Sepracor for performing Sepracor's obligations under this Agreement, which
inspection may include, without limitation, manufacturing procedures, quality
assurance procedures and quality assurance records. In the event such inspection
would reveal non-compliance with any of the obligations of Sepracor or any of
the standards applicable, Sepracor, its Affiliates, or third party supplier of
Sepracor shall use reasonable efforts to remedy or have remedied at no expense
to ▇▇▇▇▇▇▇ these shortcomings without further delay in accordance with ▇▇▇▇▇▇▇'▇
instructions. In the event that the shortcomings are not remedied within a
period of three (3) months, ▇▇▇▇▇▇▇ shall have the right to terminate the rights
granted in the Field to Sepracor by ▇▇▇▇▇▇▇ pursuant to this Agreement to
manufacture or have manufactured Compound or Products for ▇▇▇▇▇▇▇ pursuant to
this Agreement, with immediate effect.
3.6. Supply by ▇▇▇▇▇▇▇ to Sepracor. Should ▇▇▇▇▇▇▇ supply Compound
or Products for the co-promotion of Section 5.3 or to Sepracor pursuant to a
right or license granted under this Agreement, the terms of this Article 3 shall
apply mutatis mutandis to the supply arrangement, unless otherwise agreed to in
writing by the Parties.
4. RESEARCH AND DEVELOPMENT COLLABORATION
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4.1 Collaborative Research and Development Program. If ▇▇▇▇▇▇▇
exercises the option granted in Section 2.3(a) and for such time that ▇▇▇▇▇▇▇
retains the rights and licenses granted pursuant thereto, the Parties agree that
they will conduct the R&D on a collaborative basis subject to Section 6.2 below.
The Parties have agreed to an initial R&D Plan (Exhibit 1.26), which, among
other things, contains scientific direction and R&D milestones.
4.2 Role of Joint Research and Development Committee.
Responsibilities of Parties
(a) The Parties shall establish a Joint Research and
Development Committee ("JR&DC") promptly after ▇▇▇▇▇▇▇ exercises the option
granted in Section 2.3(a). The JR&DC shall be comprised of an equal number of
representatives of each Party, with the exact size of the JR&DC to be agreed
upon by the Parties from time to time. The purpose of the JR&DC is to consult
about and review (i) the coordination of the R&D, (ii) the expedition of the
progress of work being done under the R&D Plan, (iii) specific R&D goals and
budgets, (iv) evaluation of the results of the R&D, and (v) appropriate
scientific direction for the collaboration including the development and
periodic modifying of the R&D Plan. Regardless of the number of representatives
from each Party, each Party shall present one consolidated view and have one
vote on any issue in dispute. Notwithstanding the above any matter reviewed in
the JR&DC shall be resolved by (a) final decision(s) taken unilaterally by
▇▇▇▇▇▇▇. The JR&DC shall have regular meetings at least semi-annually, with the
time and location of such to be agreed to by the Parties.
(b) In the event ▇▇▇▇▇▇▇ exercises the option granted in
Section 2.3(a) and for such time that ▇▇▇▇▇▇▇ retains the rights and licenses
granted pursuant thereto for the further development of Rx Products for the
United States market, Sepracor shall be responsible for the execution of the
R&D, including non-clinical Product development in accordance with the ▇▇▇▇▇▇▇
pharmaceutical manufacturing technology transfer file, pre-filing communications
with the FDA, preparing and submission of the NDA, communication with the FDA
during the approval process and negotiation of the product labeling, all of
these under control and supervision of ▇▇▇▇▇▇▇ or designated Affiliate of
▇▇▇▇▇▇▇. After ▇▇▇▇▇▇▇ exercises the option granted in Section 2.3(a) and for
such time that ▇▇▇▇▇▇▇ retains the rights and licenses granted pursuant thereto,
▇▇▇▇▇▇▇ shall have the right to be present during all prearranged communication
with the FDA, of which it shall receive sufficient prior notice to make the
necessary practical arrangements to be present or to participate. Sepracor shall
use reasonable efforts to allow ▇▇▇▇▇▇▇ to participate in any impromptu
communication with the FDA. In the event such participation is not reasonably
possible, ▇▇▇▇▇▇▇ shall receive a copy of the write-up of the communication with
the FDA. After ▇▇▇▇▇▇▇ exercises the option granted in Section 2.3(a) and for
such time that ▇▇▇▇▇▇▇ retains the rights and licenses granted pursuant thereto,
all product labeling has to be approved by ▇▇▇▇▇▇▇ before submission to the FDA,
and ▇▇▇▇▇▇▇
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shall obtain a copy of all correspondence to and from the FDA prior to and after
NDA submission.
(c) ▇▇▇▇▇▇▇ retains primary responsibility for and shall bear
all costs and expenses related to: (i) development of Rx Product in any Rx
Countries where ▇▇▇▇▇▇▇ exercises the option of Section 2.2(a) and retains the
rights granted pursuant thereto; (ii) all development of OTC Product; and (iii)
all regulatory filings related to (i) and (ii).
(d) Sepracor has disclosed or will disclose promptly after
signing of this Agreement any and all information and data, including Technical
Information, in its possession with respect to all research and development work
done by or on behalf of Sepracor with respect to Compound and Product prior to
the Pre-Option Clinical Testing. During the Pre- Option Clinical Testing,
Sepracor shall provide ▇▇▇▇▇▇▇ with monthly reports summarizing the preliminary
data from the Pre-Option Clinical Testing. With respect to each study of the
Pre- Option Clinical Testing, upon closing of the database and receipt of
verified statistical analysis concerning the parameters set forth in Exhibit
4.2(d), Sepracor shall promptly provide ▇▇▇▇▇▇▇ with the underlying data and
statistical analysis concerning such parameters.
4.3 Sharing of Data.
(a) On an on-going basis during the term of this Agreement,
each Party shall share with the other Party:
(i) all animal and human data which it develops during
clinical studies, pre-clinical tests or otherwise with respect to astemizole,
the Compound and Products and which are deemed by both Parties to be required or
fit for NDA submission or similar submissions outside the United States; and
(ii) such other Technical Information in its possession
that both Parties deem necessary in order to obtain expedited or timely approval
of applicable government regulatory agencies to manufacture, sell and/or
distribute the Compound and/or Products or to respond to inquiries made by
applicable regulatory authorities regarding Compound or Products, including but
not limited to the NDA information referred to in Section 2.1(f) above.
(b) Each Party shall also keep the other Party informed
regarding the status of regulatory processes and procedures with respect to the
Compound and Product.
(c) During the term of this Agreement, the Parties shall
exchange quarterly written reports, including a meaningful summary of Product
development and registration progress under this Agreement.
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(d) Each Party may share information obtained under this
Section 4.3 with its Affiliates, Permitted Sublicensees and assigns.
(e) Data shall, when required or to the extent reasonably
possible if not required, be consistent with international standards of Good
Clinical Practice.
4.4 Sharing Modifications and/or Improvements of Products.
(a) If ▇▇▇▇▇▇▇ exercises the option granted in Section 2.3(a)
or if ▇▇▇▇▇▇▇ exercises the option granted in Section 2.2(a) in Japan or all of
the United Kingdom, Italy, France and Germany, each Party shall propose to the
JR&DC or to the other Party in the absence of a JR&DC each modification or
improvement in a Product which it has conceived and which it would like to
introduce, and no modification or improvement shall be introduced in the
Compound and/or Product without express prior approval of the other Party, such
approval not to be withheld except on the basis of reasonable medical grounds.
The other Party may use each approved such modification or improvement in Rx
Product and OTC Product, without paying any amounts to the developing Party
(other than the compensation which is payable in accordance with Article 6
below) in such countries where it has obtained rights pursuant to Article 2 on
Rx Product or OTC Product.
(b) For the purposes of this Section 4.4, a modification or an
improvement shall mean any invention, discovery, modification or improvement,
whether patented or not in the Field, which can be employed to improve the
manufacturing of or reduce the manufacturing costs of the Compound or Product,
improve or modify performance of the Compound or Product, or broaden the
applicability or range of uses of Compound or Product, including but without
limitation combination products including Compound as an active ingredient and
new formulations and dosage forms of Product. Any patents issuing to either
Party or ▇▇▇▇▇▇▇ Pharmaceutica Inc. on a modification or improvement shall be
deemed to be Sepracor Patent Rights or ▇▇▇▇▇▇▇ Patent Rights, as appropriate.
4.5 Ownership of NDAs.
(a) NDAs for OTC Products shall be owned by ▇▇▇▇▇▇▇.
(b) If ▇▇▇▇▇▇▇ exercises its option described in Section
2.3(a) above, then approved NDAs in United States with respect to Rx Products
shall be owned by ▇▇▇▇▇▇▇ for so long as ▇▇▇▇▇▇▇ retains the rights granted
pursuant to such option. Furthermore,
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(i) the NDA prior to approval shall contain a reference
to ▇▇▇▇▇▇▇ DMF (drug master file); provided, however, if Sepracor or its
designee complies with Good Manufacturing Practices and the quality control
standards set forth in Exhibit 2.5(a) within the time frame set forth in Section
2.5(a), this requirement to reference such ▇▇▇▇▇▇▇ DMF shall not materially
delay expected filing of the NDA for Rx Product in the United States as set
forth in the R&D Plan with Sepracor as the manufacturer;
(ii) Sepracor agrees to transfer, immediately upon any
NDA approval, the NDAs to ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇'▇ designated Affiliate in the
United States; and
(iii) Sepracor shall render all necessary assistance to
▇▇▇▇▇▇▇ in this respect and shall after NDA transfer continue to render further
assistance to ▇▇▇▇▇▇▇, as may be required by ▇▇▇▇▇▇▇.
(c) If ▇▇▇▇▇▇▇ exercises its option described in Section
2.2(a) above, then NDAs in all countries where the option has been exercised
with respect to Rx Products shall be owned by ▇▇▇▇▇▇▇ for so long as ▇▇▇▇▇▇▇
retains the rights granted pursuant to such option and the NDA shall contain a
reference to ▇▇▇▇▇▇▇ DMF (drug master file), unless otherwise agreed. As the
owner of such NDAs, ▇▇▇▇▇▇▇ shall maintain such NDAs, shall file all ADE reports
and other required reports and filings, and shall keep Sepracor informed with
respect to regulatory actions concerning its NDAs. In any of the countries where
▇▇▇▇▇▇▇ has not exercised the option, and in those countries where ▇▇▇▇▇▇▇ had
exercised the option but has not retained the rights granted pursuant thereto,
Sepracor shall own and maintain the NDAs and the NDA shall contain a reference
to the ▇▇▇▇▇▇▇ and/or Sepracor DMF (drug master file), as will be agreed between
the parties, shall file all ADE reports and other required reports and filings,
and shall keep ▇▇▇▇▇▇▇ informed with respect to regulatory actions concerning
its NDAs.
(d) For such time as ▇▇▇▇▇▇▇ retains rights granted pursuant
to exercise of the option of Section 2.2(a) in any Rx Country or the rights
granted pursuant to exercise of the option of Section 2.3(a), ▇▇▇▇▇▇▇ shall be
responsible for centralized ADE reporting for such countries where ▇▇▇▇▇▇▇ has
exercised the option. In all other countries where Sepracor markets Rx Product,
Sepracor shall be responsible for any ADE reporting. Both Parties will
coordinate their efforts in this respect. ▇▇▇▇▇▇▇ shall be responsible for all
ADE reporting concerning OTC Products.
4.6 Reading and Reference Rights. Without prejudice to Section
2.1(f), each Party hereby grants the other Party the right to read and reference
complete NDAs (as well as any individual aspects thereof) owned or controlled by
the other Party with respect to Compound and/or the Products.
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4.7 Coordinating Manufacturing. The Parties shall mutually share
manufacturing process improvements regarding Compound and/or Product that each
may conceive. Each Party shall make available to the other Party all
documentation and information which it provides to its manufacturing source
concerning production of the Compound and Product. The Party receiving such
documentation and information may either contract to purchase quantities of the
Compound and Product from the other Party, the other Party's manufacturer, or
else establish its own manufacturing source.
4.8. If ▇▇▇▇▇▇▇'▇ rights in an Rx Country are terminated pursuant to
Section 2.2(c) or reduced pursuant to Section 6.7(b) after product launch in
said Rx Country and ▇▇▇▇▇▇▇ is manufacturing Rx Product or having Rx Product
manufactured by a third party, ▇▇▇▇▇▇▇ shall provide Sepracor with continued
supply of the Rx Product for such Rx Country for a period of eighteen (18)
months following termination of ▇▇▇▇▇▇▇'▇ rights in such Rx Country.
4.9 Regulatory Compliance Audits. If ▇▇▇▇▇▇▇ exercises its option
described in Section 2.3(a) and for so long as ▇▇▇▇▇▇▇ retains the rights
granted pursuant to such option, the following shall apply:
(a) Sepracor's Regulatory Affairs (RA) group shall be an
independent entity from the clinical organization at Sepracor. RA will conduct
regulatory compliance audits consistent with Sepracor's internal compliance
standards and provide ▇▇▇▇▇▇▇ with a copy of all reports written corresponding
to these audits.
(b) ▇▇▇▇▇▇▇ or other ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ personnel may join
Sepracor or conduct separate regulatory compliance audits at investigative sites
or Sepracor's facilities, at ▇▇▇▇▇▇▇'▇ discretion. ▇▇▇▇▇▇▇ will notify Sepracor
of its intent to perform such audits in advance. Sepracor shall have the right
to accompany ▇▇▇▇▇▇▇ or any other ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ personnel on such an audit.
There will be no remuneration to Sepracor by ▇▇▇▇▇▇▇ for Sepracor's personnel
time.
(c) In the event of any inspections of investigator sites or
CRO's facilities by regulatory authorities or government agencies, Sepracor will
provide sufficient resources and qualified personnel to monitor and report on
the progress of such inspections. Such assistance will include, but not be
limited to i) furnishing ▇▇▇▇▇▇▇ with as much advance notice as is reasonably
possible of the inspection; ii) assigning qualified Sepracor personnel on-site
for the duration of the inspection, if deemed necessary in ▇▇▇▇▇▇▇'▇ judgment;
iii) assembling, organizing and explaining data and information requested by
regulatory authorities during the inspection; iv) preparing reports requested by
the regulatory authority; v) keeping ▇▇▇▇▇▇▇ apprised of the conduct of the
inspection and providing a copy of the FDA
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Form 483, if issued; and vi) obtaining appropriate approval from authorized
▇▇▇▇▇▇▇ personnel before taking any material action in response to the
inspection.
(d) Sepracor will provide ▇▇▇▇▇▇▇ with verbal daily updates on
the status of the inspection. At the conclusion of the inspection, Sepracor will
forward to ▇▇▇▇▇▇▇ a written report of the inspection and a copy of any reports
left by the regulatory authorities or government agencies as a result of the
inspection within a reasonable time subsequent to the inspection, not to exceed
two (2) business days.
5. MARKETING RESPONSIBILITIES; CO-PROMOTION
5.1 ▇▇▇▇▇▇▇ Marketing Responsibilities.
Diligently following the exercising of the options as
described in Section 2.2(a) above, ▇▇▇▇▇▇▇ undertakes to use reasonable efforts,
at its own expense, with respect to the Rx Products in such countries of the Rx
Countries for which the option has been exercised, in order to:
(i) conduct trials and apply for all governmental
approvals necessary to manufacture, sell, distribute, use and test such Products
in the European Union and Japan;
(ii) permit Sepracor to monitor ▇▇▇▇▇▇▇'▇ progress with
respect to its efforts pursuant to this Section 5.1; and
(iii) submit quarterly updates to Sepracor with respect
to such efforts. The Parties shall coordinate efforts in a planning meeting to
occur at least two (2) times per year, unless the Parties agree otherwise.
5.2 Role of Joint Marketing Committee. If ▇▇▇▇▇▇▇ exercises its
option described in Section 2.3(a) above, then the Parties shall establish a
U.S. Joint Marketing Committee ("JMC") promptly after the exercise of such
option. The JMC shall be comprised of an equal number of representatives of each
Party or Party's Affiliate, with the exact size of the JMC to be agreed upon by
the Parties from time to time. The JMC shall meet from time to time, at mutually
agreeable times and locations to review the following (i) the launch plan; (ii)
the annual and three year brand marketing plan (hereinafter collectively
referred to as "co-promotion plan") and (iii) the field force allocation
strategy, each of which shall be drawn up by ▇▇▇▇▇▇▇, allowing Sepracor to give
input in the creation process of such plans. During the first two (2) years of
marketing following launch, the co-promotion plan shall include a preliminary
sales call forecast estimating the number of sales calls to be performed in each
Payment Period by the Parties, and thereafter shall be amended annually to
include a preliminary annual sales call forecast estimating the number of
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
sales calls to be made in each Payment Period of the upcoming year and
thereafter the preliminary sales call forecast for each Payment Period will be
finalized at the start of the preceding Payment Period. Any of such matter
reviewed by the JMC on which no consensus can be reached after review as
aforesaid shall be resolved by unilateral decision of ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇'▇
Affiliate. Any other matter not to be reviewed by the JMC relating to the
promotion and sale of Rx Product in the United States shall be ▇▇▇▇▇▇▇'▇ sole
decision at its own discretion, including but without limitation the time
allocation and allocation of ▇▇▇▇▇▇▇'▇ sales and marketing staff and ▇▇▇▇▇▇▇'▇
field force to the marketing and selling of Rx Product in the United States
subject to the provisions of Section 5.3.
5.3 Co-Promotion. If ▇▇▇▇▇▇▇ exercises its option described in
Section 2.3(a) above, then:
(a) Provided that Sepracor: (i) shall have established an
adequately trained sales force of an adequate professional level, specialization
and training consistent with industry standards; and (ii) shall have available a
sufficient number of sales representatives to be in a position to give the
priorities to the promotion of Rx Product as established in the co-promotion
plan, each Party shall co-promote the Rx Products in United States by making
presentations to physicians and others, subject however to the conditions set
forth herebelow with regard to Sepracor's right to co-promote.
(b) No later than three (3) months following NDA submission,
▇▇▇▇▇▇▇ shall provide Sepracor with the co-promotion plan. No later than three
(3) months following Sepracor's receipt of the co-promotion plan, Sepracor shall
present to ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇'▇ designated Affiliate a hiring and training plan
for its sales representatives in view of the co-promotion activities envisaged
under this Agreement in accordance with the co-promotion plan. No later than
twelve (12) months after NDA filing, Sepracor shall have hired one hundred
percent (100%) of the required number of sales representatives (of which at
least seventy-five percent (75%) will have pharmaceutical sales experience) and
make them available for training jointly with the ▇▇▇▇▇▇▇ field force.
(c) The field force allocation, as mentioned in Section 5.2
shall take into account the following principles:
(i) for the first two (2) years following launch each
Party shall perform a minimum of [**] unless the co-promotion plan provides for
fewer calls in which case each Party shall perform pro rata fewer calls;
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(ii) an approximate equal number of high volume
prescribers will be allocated to the Sepracor and the ▇▇▇▇▇▇▇ field forces in
locations selected to allow efficiency of each Party's field force to be
substantially equal, and overall an approximate [**] of the field force
activities is envisaged;
(iii) optimal effectiveness of the joint field force
activities will be a primary objective to be achieved.
(d) Both Sepracor and ▇▇▇▇▇▇▇ shall achieve the targets, as
mentioned in Section 5.3(c)(i), and Sepracor shall achieve the targets of
Sections 5.3(a) and (b). The sales representatives shall be hired on the
Parties' or their Affiliates' respective payrolls. Each Party agrees not to
actively recruit sales representatives currently in the employ of the other
Party.
(e) If during the first two (2) years of marketing following
the launch date the total number of calls envisaged in the co-promotion plan
[**], Sepracor shall be allowed during, but no longer than the first year of
marketing, to hire an external contract field force in order to achieve the
overall approximate [**] of field force activity. Such external field force
shall meet the same qualifications, experience and training requirements as the
requirements for the internal Sepracor sales force. At latest after such first
year, Sepracor shall hire such number of representatives on the payroll of
Sepracor or its Affiliates in order to achieve the overall approximate [**]
split of field force activity.
(f) In the event Sepracor is, for whatever reason, including
Force Majeure delay or default which persists for longer than six (6) months,
unable or unwilling to substantially comply with the obligations under this
Article 5, and in particular, but without limitation, with the approximate [**]
of the field force coverage of the market pursuant to Section 5.3(g) below,
▇▇▇▇▇▇▇ shall have the right:
(i) if Sepracor is able and willing to cover at least
[**] of the total field force calls, as defined in the co-promotion plan, adapt
the profit-sharing and cost-sharing provisions of Section 6.4, both pro rata
with the shortage of field force coverage in each Payment Period on the side of
Sepracor; or
(ii) if Sepracor is unable or unwilling or fails to
cover at least [**] of the total field force calls, as defined in the
co-promotion plan, terminate the co-promotion activities as envisaged under this
Agreement, and simultaneously switch the profit-sharing and cost-sharing as
defined in Section 6.4 into a royalty bearing license. Such license shall be
subject to the same terms and conditions as in Sections 6.3(c) to (g), 6.5, 6.6,
6.8, 6.9, 6.10, and 6.11. In the foregoing case the royalty
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
on sales of Rx Products by ▇▇▇▇▇▇▇ in the United States shall be: (i)[**] and
thereafter [**] in case foregoing termination takes place prior to NDA
submission in the United States; or (ii)[**] in case termination takes place
after NDA submission in the United States.
(g) If a Party makes less than [**] of the sales call forecast
in the co-promotion plan or actual sales calls in a Payment Period, that Party
shall be deemed to have complied with the overall [**] of the field force
activity in that Payment Period; however, if in the following Payment Period
that Party provides less than [**] of the sales call forecast in the
co-promotion plan or actual sales calls for that Payment Period, then
(i) if Sepracor is the non-complying Party, the
provisions of Section 5.3(f) shall apply in that Payment Period and each
subsequent Payment Period, and
(ii) if ▇▇▇▇▇▇▇ is the non-complying Party, ▇▇▇▇▇▇▇
shall at its option have the right to (a) continue the profit-sharing and
cost-sharing as defined in Section 6.4 irrespective of each Party's relative
share of the sales call forecast or actual sales calls, or (b) adapt the
profit-sharing and cost-sharing provisions of Section 6.4, both pro rata with
the shortage of field force coverage for that and each subsequent Payment Period
on the part of ▇▇▇▇▇▇▇.
(h) All sales of the Rx Products in United States shall be
booked and invoiced by ▇▇▇▇▇▇▇ consistent with the pricing policy established by
▇▇▇▇▇▇▇ and reviewed from time to time by the JMC pursuant to Section 5.2 above.
The Parties shall share profits from sales of Rx Products in United States in
accordance with Section 6.4 below.
(i) The Rx Products shall be sold in United States with the
Trademarks selected by ▇▇▇▇▇▇▇ and tradenames of both Parties displayed in equal
prominence in all packaging, advertising, promotional materials, seminars and
other promotional and marketing media, subject to applicable laws.
(j) The co-promotion activities pursuant to this Section 5.3
shall continue for the commercial life of the Product; provided, however, that
the Parties may mutually agree to terminate the co-promotion at any time.
The level of co-promotion shall be determined in the co-promotion plan. If
active sales promotion through the joint field force is decided to be continued
after the
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
second anniversary of Rx Product launch in the United States, then the
principles of Sections 5.3(c) (ii) and (iii) shall continue to apply to sales
force allocation.
5.4 If Sepracor exercises Option B described in Section 2.3(d) or
the co- promotion is terminated pursuant to Section 5.3(f)(ii) after NDA
submission, both ▇▇▇▇▇▇▇ and Sepracor may still agree that Sepracor will
participate in the promotion and selling efforts of Rx Product in the United
States by providing sales calls on a fee for service basis consistent with
current industry standards for rental sales force. Such promotion and selling
efforts will be agreed in a separate co-promotion agreement.
6. COMPENSATION PAYABLE TO SEPRACOR
6.1 Pre-Option Clinical Testing Expenses.
(a) For the rights and options granted hereunder, ▇▇▇▇▇▇▇
shall pay Sepracor [**] of the expenses incurred by Sepracor in conducting and
analyzing the results of the Pre-Option Clinical Testing.
(b) Sepracor shall submit a statement to ▇▇▇▇▇▇▇ on a monthly
basis at the end of each month of the ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ universal calendar as to
the aforesaid expenses in Section 6.1(a) actually incurred by Sepracor, together
with an invoice for [**] of such expenses. ▇▇▇▇▇▇▇ shall pay such invoices
within thirty (30) days of the end of the calendar month during which the
invoice was issued to ▇▇▇▇▇▇▇.
(c) These expenses are subject to the same record-keeping and
examination requirements as apply to Sepracor's manufacturing costs under
Section 3.1(f) above.
6.2 Funding for Research and Development Efforts.
(a) Subject to ▇▇▇▇▇▇▇ exercising the option pursuant to
Section 2.3(a), ▇▇▇▇▇▇▇ and Sepracor each agrees to pay [**] of the R&D Expenses
incurred in accordance with the R&D Plan, even for studies consented to by
▇▇▇▇▇▇▇ and started by Sepracor before the option is exercised; provided,
however that ▇▇▇▇▇▇▇'▇ obligation to pay [**] of the expenses of such studies
shall only become effective upon exercising the option pursuant to Section
2.3(a) whereupon ▇▇▇▇▇▇▇ shall pay Sepracor [**] of the R&D Expenses incurred
prior to ▇▇▇▇▇▇▇'▇ exercise of the option for studies started before such
exercise. Moreover, Sepracor and ▇▇▇▇▇▇▇ shall each
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
carry [**] of expenses incurred in connection with any studies additional to the
Pre-Option Clinical Testing and other than covered by the R&D Plan agreed to by
the Parties and commenced prior to exercise or lapse of the option. In no event,
however, shall ▇▇▇▇▇▇▇ be required to pay any amount for repetition of all or
part of any study which was performed by Sepracor without ▇▇▇▇▇▇▇'▇ review and
consent prior to the date of this Agreement and which the FDA requires to be
repeated in whole or in part for submission of the NDA for Rx Product. If
Sepracor is required by the FDA to repeat such a study prior to the lapse or
exercise of ▇▇▇▇▇▇▇'▇ option under Section 2.3(a), the option period set forth
in Section 2.3(b) shall not start to run until such study is completed and the
results of the study have been made available to ▇▇▇▇▇▇▇. If Sepracor is
required by the FDA to repeat such a study prior to the lapse or exercise of
▇▇▇▇▇▇▇'▇ option under Section 2.2(a), the option period set forth in Section
2.2(b) shall not start to run until such study is completed and the results of
the study have been made available to ▇▇▇▇▇▇▇.
The following shall apply:
(i) each Party shall maintain a separate general ledger
account for the purposes of recording all of the R&D Expenses which it incurs
during the term of this Agreement.
(ii) within thirty (30) days after the end of each
Payment Period, the Parties shall exchange information detailing the accounts
described in Section 6.2(a) above during the Payment Period. If one Party has
recorded more than the other in said Payment Period, that Party shall submit an
invoice to the other Party for [**] of the difference between the amounts
recorded by the respective Parties. The other Party shall pay the full amount of
each such invoice within thirty (30) days of the end of the calendar month
during which the invoice was issued.
(iii) R&D Expenses which are subject to reimbursement in
accordance with Section 6.2(a) above are subject to the same record-keeping and
examination requirements as apply to Sepracor's manufacturing costs under
Section 3.1(f) above.
(b) ▇▇▇▇▇▇▇ shall develop OTC Product, and Rx Products outside
United States, at its own cost and expense.
6.3 Royalties.
(a) ▇▇▇▇▇▇▇ agrees to pay Sepracor, for the rights granted to
▇▇▇▇▇▇▇ with respect to OTC Products pursuant to Section 2.1 above, a royalty
for each and every OTC Product sold by or on behalf of ▇▇▇▇▇▇▇ or its
Affiliates,
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Permitted Sublicensees or assigns (excluding returns). Such royalty for each OTC
Product shall be [**] of the ▇▇▇▇▇▇▇ Net Invoice Price for each such OTC
Product.
(b) If ▇▇▇▇▇▇▇ exercises its option described in Section
2.2(a) above, then ▇▇▇▇▇▇▇ agrees to pay Sepracor, for the rights granted to
▇▇▇▇▇▇▇ with respect to Rx Products outside United States pursuant to Section
2.1 above, a royalty for each and every Rx Product sold by or on behalf of
▇▇▇▇▇▇▇ or its Affiliates, Permitted Sublicensees or assigns outside United
States (excluding returns). Such royalty for each Rx Product shall be [**] of
the ▇▇▇▇▇▇▇ Net Invoice Price for each such Rx Product for sales made prior to
[**] , and [**] of the ▇▇▇▇▇▇▇ Net Invoice Price for each such Rx Product for
sales made thereafter.
(c) RESERVED.
(d) Once a royalty becomes payable on a Product in accordance
with this Section 6.3, no other royalty shall ever become payable on such
Product, regardless of whether and how such Product may subsequently be sold.
For the purposes of this Section 6.3, a sale shall be deemed to occur when
▇▇▇▇▇▇▇, its Affiliates or its Permitted Sublicensees or assigns sends an
invoice to an independent third party with respect to such sale.
(e) ▇▇▇▇▇▇▇ shall not be required to pay any royalty with
respect to any Compound or Product sold to Sepracor or any of its Affiliates,
Permitted Sublicensees or assigns of Sepracor.
(f) Each royalty for Rx Product described in Section 6.3(b)
shall be deemed to be payable for sales in a country until the later of the
following dates:
(i) if the Rx Product is covered by a Valid Claim of a
patent or patent application of the Sepracor Patent Rights as listed in Exhibit
1.31(a) hereto in that country, until the date upon which such patents or patent
applications expire, are abandoned, or are declared no longer valid in any such
country;
(ii) the date which is ten (10) years after the first
commercial sale of such Rx Product by ▇▇▇▇▇▇▇ or its Permitted Sublicensees or
assigns in such country of sale;
(iii) with respect to (i) and (ii) above, thereafter the
license of the Licensed Technology shall be considered fully paid up and no
royalties shall be payable to Sepracor for sales of such Rx Product in such
country of sale; and
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(iv) with respect to (i) and (ii) above, the royalty
shall be reduced by [**] in such country(ies) if and when a third party
introduces a generic version of Rx Product in such country(ies).
(g) If ▇▇▇▇▇▇▇ pays a royalty on a Product pursuant to this
Section 6.3 which has been or is subsequently returned to ▇▇▇▇▇▇▇, its
Affiliates or its Permitted Sublicensees or assigns or if ▇▇▇▇▇▇▇ pays such a
royalty on a Product, the sale of which is subsequently cancelled, and any money
paid to ▇▇▇▇▇▇▇ is returned to the buyer, the royalty so paid shall be deemed a
credit against royalties payable by ▇▇▇▇▇▇▇ for subsequent Payment Periods. If
no royalties amounts are payable for a subsequent Payment Period pursuant to
this Section 6.3, then the remaining balance of such credits shall be refunded
to ▇▇▇▇▇▇▇ within thirty (30) days after Sepracor's receipt of ▇▇▇▇▇▇▇'▇ report
for such Payment Period prepared pursuant to Section 6.5 below.
(h) Each royalty for OTC Product described in Section 6.3(a)
shall be deemed to be payable for sales in a country until the later of the
following dates:
(i) if the OTC Product is covered by a Valid Claim of a
patent or patent application of the Sepracor Patent Rights as listed in Exhibit
1.31(a) hereto in that country, until the date upon which such patents or patent
applications expire, are abandoned, or are declared no longer valid in any such
country;
(ii) the date which is ten (10) years after the first
commercial sale of such OTC Product by ▇▇▇▇▇▇▇, its Affiliates or Permitted
Sublicensees or assigns in such country of sale;
(iii) with respect to (i) and (ii) above, thereafter
such royalties shall be reduced by [**]; provided, however, that if a third
party introduces an OTC Product in such country then no further royalties shall
be payable on sales of OTC Products in such country after the later of such date
and the date of introduction of the third party OTC Product in such country.
6.4 Profit-Sharing and Cost Sharing for Co-Promotion of Rx Products
in United States.
(a) Subject to ▇▇▇▇▇▇▇ exercising the option pursuant to
Section 2.3(a), ▇▇▇▇▇▇▇ and Sepracor each agree to pay [**] of the Marketing and
Technology Costs and Costs of Goods Sold. Therefore, for each Payment Period,
▇▇▇▇▇▇▇ shall pay an amount to Sepracor so that Sepracor will receive [**] of
the Operating Income
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
for such Payment Period; provided, however, that to the extent Operating Income
is less than [**] for such Payment Period, Sepracor shall pay an amount to
▇▇▇▇▇▇▇ which is equal to [**] of the amount by which Operating Income for such
Payment Period is less than [**].
(b) Sales of Rx Products in United States shall be deemed to
occur when they are invoiced, or if not invoiced, when delivered to a third
party.
(c) RESERVED.
6.5 Contents of ▇▇▇▇▇▇▇'▇ Reports. ▇▇▇▇▇▇▇ shall deliver to Sepracor
within thirty (30) days after the end of each Payment Period, beginning with the
first Payment Period, a written report describing, for the applicable Payment
Period:
(a) the number and full description of each Product sold by or
on behalf of ▇▇▇▇▇▇▇, its Affiliates and its Permitted Sublicensees and assigns
during such Payment Period;
(b) with respect to Rx Products sold outside the United States
and OTC Products, no matter where they are sold:
(i) the Net Sales for Product, being ▇▇▇▇▇▇▇ Net
Invoice Prices multiplied by the volume of
Products sold;
(ii) the total royalty due on such payments under
Section 6.3 above; and
(c) if ▇▇▇▇▇▇▇ exercises its option described in Section 2.3
(a) above, then with respect to Rx Products sold in United States:
(i) the Operating Income for such Payment Period; and
(ii) [**] share of Operating Income, or [**] of the
amount by which Operating Income is less than
[**], as the case may be.
6.6 Payments Accompany ▇▇▇▇▇▇▇'▇ Reports. Each report for a Payment
Period required in Section 6.5 above shall be accompanied by full payment to
Sepracor of the royalties and other amounts payable under Sections 6.3 and 6.4
above.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
6.7 Minimum Royalty.
(a) If ▇▇▇▇▇▇▇ exercises the option described in Section
2.2(a) above, minimum royalty requirements for the three (3) full calendar years
starting after two (2) full calendar years have elapsed following first
commercial launch of Rx Product in each of Japan, the United Kingdom, Germany,
Italy, and France, independently, shall be calculated based on [**] of a
non-binding forecast for each such country to be submitted by ▇▇▇▇▇▇▇ to
Sepracor for the immediately succeeding calendar year. The minimum royalty for
each such country shall be [**] of the non-binding forecasted volume for such
country multiplied by the average ▇▇▇▇▇▇▇ Net Invoice Price for Rx Products in
the relevant country multiplied by the royalty rate in Section 6.3(b). If
Sepracor exercises one of the options set forth in Section 2.3(d), or if the
co-promotion rights pursuant to Section 5.3 and profit-sharing and cost-sharing
envisaged in Section 6.4 are converted to a royalty bearing license to Rx
Product in the United States pursuant to any provision of this Agreement,
minimum royalty requirements for the three (3) full calendar years starting
after two (2) full calendar years have elapsed following first commercial launch
of Rx Product in the United States shall be calculated based on [**] of a
non-binding forecast for the United States to be submitted by ▇▇▇▇▇▇▇ to
Sepracor for the immediately succeeding calendar year. The minimum royalty for
the United States shall be [**] of the non-binding forecasted volume for the
United States multiplied by the average ▇▇▇▇▇▇▇ Net Invoice Price for Rx
Products in the United States multiplied by the royalty rate in Section 2.3(d),
Section 5.3(f), Section 6.12 or Section 13.1, as appropriate.
(b) ▇▇▇▇▇▇▇'▇ [**] of Section 6.7(a) above shall constitute a
basis for Sepracor to [**] granted to ▇▇▇▇▇▇▇ with respect to Rx Products
pursuant to exercise of the option of Section 2.2(a) or Section 2.3(a), as
appropriate, to non-exclusive rights in each of Japan, the United Kingdom,
Germany, Italy, France and the United States, independently, as the case may be;
provided, however, that before and in lieu of such decision by Sepracor, ▇▇▇▇▇▇▇
may [**] the minimum royalty requirement and the royalty payments actually due
for any calendar year within thirty (30) days after having received notification
from Sepracor that [**] and, failing this, Sepracor shall then have the right,
among other things, to grant additional licenses in the Field with respect to
the Rx Products and (both for itself and its Affiliates) to make, have made, use
and sell the Rx Products in such country.
(c) Minimum royalty requirements for Sepracor for the three
(3) full calendar years starting after two (2) full calendar years have elapsed
following first commercial launch of Rx Product for each of the countries of the
Rx Countries for which ▇▇▇▇▇▇▇ has not exercised the option pursuant to Section
2.2(a) shall be calculated based on [**] of the non-binding forecast submitted
by Sepracor to ▇▇▇▇▇▇▇
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
for the immediately succeeding calendar year. The minimum royalty shall be [**]
of the non-binding forecasted volume for a relevant Rx Country multiplied by the
average Sepracor Net Invoice Price for Rx Product for the relevant Rx Country
multiplied by the royalty rate of Section 7.1(a). If ▇▇▇▇▇▇▇ fails to exercise
the option pursuant to Section 2.3(a), minimum royalty requirements for the
three (3) full calendar years starting after two (2) full calendar years have
elapsed following first commercial launch of Rx Product in the United States
shall be calculated based on [**] of a non-binding forecast for the United
States submitted by Sepracor to ▇▇▇▇▇▇▇ for the immediately succeeding calendar
year. The minimum royalty shall be [**] of the non-binding forecasted volume for
the United States multiplied by the average Sepracor Net Invoice Price for Rx
Product in the United States multiplied by the royalty rate of Section 7.1(a).
(d) Sepracor's [**] in Section 6.7(c) above shall constitute a
basis for ▇▇▇▇▇▇▇ to [**] granted to Sepracor hereunder with respect to Rx
Products to non-exclusive rights in any such country where the minimum
requirements were not reached; provided, however, that before and in lieu of
such decision by ▇▇▇▇▇▇▇, Sepracor may [**] between the minimum royalty
requirement and the royalty payments actually due for any calendar year within
thirty (30) days after having received notification from ▇▇▇▇▇▇▇ that the [**]
and failing this, ▇▇▇▇▇▇▇ shall then have the right, among other things, to
grant additional licenses in the Field with respect to the Rx Products and (both
for itself and its Affiliates) to make, have made, use and sell the Rx Products
in such country.
6.8 Payment of Compensation to Sepracor.
(a) All payments under Sections 6.1, 6.2, 6.3, 6.4 and 6.7
above shall be made by wire transfer, to Fleet Bank of Massachusetts, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (ABA #▇▇▇▇▇▇▇▇▇) to Account No. 9372882375
or such other bank or account as Sepracor may from time to time designate in
writing. All such payments shall be made in Dollars.
(b) Whenever any payment hereunder shall be stated to be due
on a day which is not a Business Day, such payment shall be made on the
immediately succeeding Business Day.
(c) Payments hereunder shall be considered to be made as of
the day on which they are received in Sepracor's designated bank or account.
(d) If the Net Invoice Price of any Product or any part of
Revenue for a Payment Period is stated in a currency other than Dollars, then,
for the
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
purpose of determining the amount of royalties payable pursuant to Section 6.3
above and Sepracor's share of Operating Income which is payable pursuant to
Section 6.4 above, such Net Invoice Price or part of Revenue, as the case may
be, shall be converted into Dollars using an average exchange rate between those
two currencies during the Payment Period for which such royalties or share of
Operating Income become due pursuant to Section 6.6 above, wherein such
calculated average exchange rate is calculated as the average of the exchange
rates most recently quoted in the Wall Street Journal in New York on or before
each of the last days for (i) each month according to the ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
universal calendar in the Payment Period, and (ii) the last month according to
the ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ universal calendar in the immediately preceding Payment
Period.. If no such exchange rates have been quoted in the Wall Street Journal
in New York at any time during the twelve (12) month period preceding the date
on which such royalties or share of Operating Income become due, then such Net
Invoice Price or part of Revenue shall be converted to Dollars at the average
exchange rate used by BankBoston during the Payment Period.
(e) All payments due to Sepracor hereunder but not paid by
▇▇▇▇▇▇▇ on the due date thereof shall bear interest (in Dollars) at the rate
which is the lesser of: (i) [**] and (ii) the maximum lawful interest rate
permitted under applicable law. Such interest shall accrue on the balance of
unpaid amounts from time to time outstanding from the date on which portions of
such amounts become due and owing until payment thereof in full.
6.9 Books and Records; Audits.
(a) ▇▇▇▇▇▇▇ shall keep and maintain, and shall cause its
Permitted Sublicensees and assigns to keep and maintain, complete and accurate
records and books of account (including without limitation customer call reports
and other information required to confirm the accuracy of ▇▇▇▇▇▇▇'▇ methodology
for allocating the time of its sales staff between selling the Rx Product in the
United States and such staff's other responsibilities) in sufficient detail and
form so as to enable amounts payable under Sections 6.3 and 6.4 above to be
determined. Such records and books of account shall be maintained for a period
of no less than two (2) years following the calendar year to which they pertain.
▇▇▇▇▇▇▇ shall permit such records and books of account to be examined by
Sepracor or Sepracor's duly appointed agent(s) no more than once each calendar
year, to the extent necessary for Sepracor to verify such amounts. Such
examination shall be during normal business hours, upon twenty (20) days' prior
written notice to ▇▇▇▇▇▇▇, and at Sepracor's expense unless the examination
should establish that ▇▇▇▇▇▇▇'▇ payment of such royalties (and payment of
Sepracor's share of Operating Income, in the case of Section 6.5 above) for the
period examined were less than ninety-five percent (95%) of the
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royalties and share which should have been paid, in which case ▇▇▇▇▇▇▇ shall be
responsible for the reasonable expenses of such examination. Audits related to
Products sold as part of a bundle shall be conducted by an independent
accounting firm which shall disclose to Sepracor only whether the calculated
invoice price for such Products is consistent with the terms of this Agreement
and ▇▇▇▇▇▇▇'▇ normal business practices for pharmaceutical products not licensed
from a third party and the specific details concerning any discrepancies.
(b) If ▇▇▇▇▇▇▇ exercises its option described in Section 2.3
above, then Sepracor shall keep and maintain complete and accurate records and
books of account (including without limitation customer call reports and other
information required to confirm the accuracy of Sepracor's methodology for
allocating the time of its sales staff between selling the Rx Product in the
United Stated and such staff's other responsibilities) in sufficient detail and
form so as to enable the amounts of Marketing and Technology Costs incurred by
Sepracor with respect to Rx Products sold in United States to be determined.
Such records and books of account shall be maintained for a period of no less
than two (2) years following the calendar year to which they pertain. Sepracor
shall permit such records and books of account to be examined by ▇▇▇▇▇▇▇ or
▇▇▇▇▇▇▇'▇ duly appointed agent(s) no more than once each calendar year, to the
extent necessary for ▇▇▇▇▇▇▇ to verify such amounts. Such examination shall be
during normal business hours, upon twenty (20) days' prior written notice to
Sepracor, and at ▇▇▇▇▇▇▇'▇ expense unless the examination should establish that
Sepracor's claims with respect to such Marketing and Technology Costs for the
period examined were more than one hundred five percent (105%) of the Marketing
and Technology Costs which were actually incurred for such period, in which case
Sepracor shall be responsible for the reasonable expenses of such examination.
(c) Prompt adjustment shall be made by the proper Party to
compensate for any errors or omissions disclosed by such examinations.
Information obtained during the course of such an examination shall be kept
confidential by the examining Party and its agents, except to the extent
necessary to enforce the examining Party's rights hereunder.
6.10 Reports and Invoices Conclusively Correct. All reports,
invoices and payments not disputed as to correctness by the receiving Party
within three (3) years after receipt thereof shall thereafter conclusively be
deemed correct for all purposes.
6.11 Issuance of Patents. Notwithstanding anything contained in this
Agreement to the contrary, in the event a patent is issued prior to expiration
or termination of this Agreement with respect to any part of the Technical
Information of Sepracor, such patent shall be deemed to be Sepracor Patent
Rights and the
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
royalties and other amounts payable hereunder shall not be increased on those
Products which embody or rely on such patent.
6.12 In the event Sepracor is, for whatever reason, including Force
Majeure delay or default which persists for longer than one (1) month, unable or
unwilling to comply with its obligation to fund its share of R&D Expenses or
Marketing and Technology Costs, ▇▇▇▇▇▇▇ has the option to either (A) terminate
the co-promotion activities and cost-sharing as envisaged under this Agreement
and to simultaneously switch the profit-sharing and cost sharing as defined in
Section 6.4 into a royalty bearing exclusive license in the Field to ▇▇▇▇▇▇▇ or
(B) terminate the co-promotion activities and cost-sharing as envisaged under
this Agreement and to maintain the profit-sharing as defined in Section 6.4 as
described hereunder. Such license (if ▇▇▇▇▇▇▇ chooses Option A) shall be subject
to the same terms and conditions as in Sections 6.3(c) to (g), 6.5, 6.6, 6.8,
6.9, 6.10 and 6.11. In the foregoing case the royalty on sales of Rx Products by
▇▇▇▇▇▇▇ in the United States shall be (i) either [**] and thereafter [**] in
case foregoing termination takes place prior to NDA submission in the United
States or (ii)[**] in case the foregoing termination takes place after NDA
submission in the United States. If ▇▇▇▇▇▇▇ chooses Option B, i.e., to maintain
the profit-sharing, all amounts of R&D Expenses and/or Marketing and Technology
Costs which are or have become due (to be increased with interest in accordance
with Section 7.4(e)) from Sepracor at the time ▇▇▇▇▇▇▇ selects Option B in
accordance with this Agreement and which have been assumed by ▇▇▇▇▇▇▇ following
▇▇▇▇▇▇▇'▇ choice of Option B hereunder shall be deducted from any amounts due to
Sepracor pursuant to Section 6.4 hereof.
7. COMPENSATION PAYABLE TO ▇▇▇▇▇▇▇
7.1 Royalties Paid to ▇▇▇▇▇▇▇.
(a) If ▇▇▇▇▇▇▇ does not exercise its option described in
Section 2.2 above, or if ▇▇▇▇▇▇▇ does exercise such option but has not retained
the rights granted pursuant thereto, Sepracor agrees to pay ▇▇▇▇▇▇▇, for the
rights granted to Sepracor with respect to Rx Products pursuant to Sections
2.1(c) and (d) above, a royalty for each and every Rx Product sold by or on
behalf of Sepracor, its Affiliates or its Permitted Sublicensees or assigns
outside the United States (excluding returns). If ▇▇▇▇▇▇▇ does not exercise its
option described in Section 2.3 above, Sepracor agrees to pay ▇▇▇▇▇▇▇, for the
rights granted to Sepracor with respect to Rx Products pursuant to Sections
2.1(e) above, a royalty for each and every Rx Product sold by or on behalf of
Sepracor, its Affiliates or its Permitted Sublicensees or assigns in the
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
United States (excluding returns). Such royalties for each Rx Product shall be
equal to [**] of the Sepracor Net Invoice Price for each such Rx Product.
(b) RESERVED.
(c) Once a royalty becomes payable on an Rx Product in
accordance with this Section 7.1, no other royalty shall ever become payable on
such Rx Product, regardless of whether and how such Rx Product may subsequently
be sold. For the purposes of this Section 7.1, a sale shall be deemed to occur
when Sepracor, its Affiliates or its Permitted Sublicensees or assigns send an
invoice to an independent third party with respect to such sale.
(d) Sepracor shall not be required to pay any royalty with
respect to any Rx Product sold to ▇▇▇▇▇▇▇ or any of its Affiliates.
(e) Each royalty described in this Section 7.1 shall be deemed
to be payable for sales in a country until the later of the following dates:
(i) if the Rx Product is covered by a Valid Claim of a
patent or patent application of the ▇▇▇▇▇▇▇ Patent Rights as listed in Exhibit
1.10(a) hereto in that country, until the date upon which such patents or patent
applications expire, are abandoned, or are declared no longer valid in any such
country;
(ii) the date which is ten (10) years after the first
commercial sale of such Rx Product by Sepracor, its Affiliates or its Permitted
Sublicensees or assigns in such country of sale;
(iii) with respect to (i) and (ii) above, thereafter the
license of the Licensed Technology shall be considered fully paid up and no
royalties shall be payable to ▇▇▇▇▇▇▇ for sales of such Rx Product in such
country of sale.
(iv) with respect to (i) and (ii) above, the royalty
shall be reduced by [**] in such country(ies) if and when a third party
introduces a generic version of Rx Product in such country(ies).
(f) If Sepracor pays a royalty on an Rx Product pursuant to
this Section 7.1 which has been or is subsequently returned to Sepracor, its
Affiliates or its Permitted Sublicensees or assigns or if Sepracor pays such a
royalty on a Product, the sale of which is subsequently cancelled, and any money
paid to Sepracor is returned to the buyer, the royalty so paid shall be deemed a
credit against royalties payable by Sepracor for subsequent Payment Periods. If
no royalties amounts are
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payable for a subsequent Payment Period pursuant to this Section 7.1, then the
remaining balance of such credits shall be refunded to Sepracor within thirty
(30) days after ▇▇▇▇▇▇▇'▇ receipt of Sepracor's report for such Payment Period
prepared pursuant to Section 7.2 below.
7.2 Contents of Sepracor's Reports. Sepracor shall deliver to
▇▇▇▇▇▇▇ within thirty (30) days after the end of each Payment Period, beginning
with the Payment Period during which ▇▇▇▇▇▇▇'▇ option under Section 2.2 or 2.3
above lapses or ▇▇▇▇▇▇▇ otherwise waives its right to exercise either such
option, a written report describing, for the applicable Payment Period:
(a) if ▇▇▇▇▇▇▇ does not exercise its option described in
Section 2.2 above, the number and full description of each Rx Product sold by or
on behalf of Sepracor, its Affiliates and its Permitted Sublicensees and assigns
outside the United States during such Payment Period;
(b) if ▇▇▇▇▇▇▇ does not exercise its option described in
Section 2.3 above, the number and full description of each Rx Product sold by or
on behalf of Sepracor, its Affiliates and its Permitted Sublicensees and assigns
in the United States during such Payment Period;
(c) with respect to Rx Products reported pursuant to Sections
7.2(a) and/or (b) above:
(i) the Net Sales for Product being Sepracor Net
Invoice Price multiplied by the volume of Rx
Product sold;
(ii) the total royalty due on such payments under
Section 7.1 above.
7.3 Payments Accompany Sepracor's Reports. Each report for a Payment
Period required in Section 7.2 above shall be accompanied by full payment to
▇▇▇▇▇▇▇ of the royalties payable under Section 7.1 above.
7.4 Payment of Compensation to ▇▇▇▇▇▇▇.
(a) All payments under Section 7.1 above shall be made by wire
transfer, to Generale Bank, Leuven, Belgium (Wire #:__________) to Account No.
230- ▇▇▇▇▇▇▇-94 or such other bank or account as ▇▇▇▇▇▇▇ may from time to time
designate in writing. All such payments shall be made in Dollars.
(b) Whenever any payment hereunder shall be stated to be due
on a day which is not a Business Day, such payment shall be made on the
immediately succeeding Business Day.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(c) Payments hereunder shall be considered to be made as of
the day on which they are received in ▇▇▇▇▇▇▇'▇ designated bank or account.
(d) If the Sepracor Net Invoice Price of any Rx Product is
stated in a currency other than Dollars, then, for the purpose of determining
the amount of royalties payable pursuant to Section 7.1 above, such Sepracor Net
Invoice Price shall be converted into Dollars using a calculated average
exchange rate between those two currencies during the Payment Period for which
such royalties become due pursuant to Section 7.3 above, wherein such calculated
average exchange rate is calculated as the average of the exchange rates most
recently quoted in the Wall Street Journal in New York on or before each of the
last days for (i) each month according to the ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ universal
calendar in the Payment Period, and (ii) the last month according to the ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇ universal calendar in the immediately preceding Payment Period. If no
such exchange rate has been quoted in the Wall Street Journal in New York at any
time during the twelve (12) month period preceding the date on which such
royalties become due, then such Net Invoice Price or part of Revenue shall be
converted to Dollars at the average exchange rate used by BankBoston during the
Payment Period.
(e) All payments due to ▇▇▇▇▇▇▇ hereunder but not paid by
Sepracor on the due date thereof shall bear interest (in Dollars) at the rate
which is the lesser of: (i) [**] and (ii) the maximum lawful interest rate
permitted under applicable law. Such interest shall accrue on the balance of
unpaid amounts from time to time outstanding from the date on which portions of
such amounts become due and owing until payment thereof in full.
7.5 Sepracor Books and Records; Audits.
(a) Sepracor shall keep and maintain, and shall cause its
Affiliates, Permitted Sublicensees and assigns to keep and maintain, complete
and accurate records and books of account in sufficient detail and form so as to
enable amounts payable under Section 7.1 above to be determined. Such records
and books of account shall be maintained for a period of no less than two (2)
years following the calendar year to which they pertain. Sepracor shall permit
such records and books of account to be examined by ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇'▇ duly
appointed agent(s) no more than once each calendar year, to the extent necessary
for ▇▇▇▇▇▇▇ to verify such amounts. Such examination shall be during normal
business hours, upon twenty (20) days' prior written notice to Sepracor, and at
▇▇▇▇▇▇▇'▇ expense unless the examination should establish that Sepracor's
payment of such royalties for the period examined were less than ninety-five
percent (95%) of the royalties which should have
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been paid, in which case Sepracor shall be responsible for the reasonable
expenses of such examination. Audits related to Products sold as part of a
bundle shall be conducted by an independent accounting firm which shall disclose
to ▇▇▇▇▇▇▇ only whether the calculated invoice price for such Products is
consistent with the terms of this Agreement and Sepracor's normal business
practices for pharmaceutical products not licensed from a third party and the
specific details concerning any discrepancies.
(b) Prompt adjustment shall be made by the proper Party to
compensate for any errors or omissions disclosed by such examinations.
Information obtained during the course of such an examination shall be kept
confidential by ▇▇▇▇▇▇▇ and its agents, except to the extent necessary to
enforce ▇▇▇▇▇▇▇'▇ rights hereunder.
7.6 Sepracor Reports and Invoices Conclusively Correct. All reports,
invoices and payments not disputed as to correctness by ▇▇▇▇▇▇▇ within three (3)
years after receipt thereof shall thereafter conclusively be deemed correct for
all purposes.
7.7 Issuance of Patents. Notwithstanding anything contained in this
Agreement to the contrary, in the event a patent is issued prior to expiration
or termination of this Agreement with respect to any part of the Technical
Information of ▇▇▇▇▇▇▇, such patent shall be deemed to be ▇▇▇▇▇▇▇ Patent Rights
and the royalties and other amounts payable hereunder shall not be increased on
those Products which embody or rely on such patent.
8. INTELLECTUAL PROPERTY RIGHTS AND REGULATORY APPROVALS
8.1 Intellectual Property Maintenance Fees.
(a) Sepracor shall keep current all Sepracor Patent Rights and
the trademarks selected by Sepracor pursuant to Section 2.4(d), and shall pay
all maintenance fees, issue fees, taxes and expenses in connection therewith
promptly as such fees, taxes and expenses become due and payable.
(b) ▇▇▇▇▇▇▇ shall keep current all ▇▇▇▇▇▇▇ Patent Rights and
the Trademarks, subject to Section 2.4, and shall pay all maintenance fees,
issue fees, taxes and expenses in connection therewith promptly as such fees,
taxes and expenses become due and payable.
8.2 Registering Patents and Other Intellectual Property Rights.
(a) All right, title, and interest in any Technical
Information (including but not limited to inventions, whether patentable or not)
conceived by
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45
Sepracor prior to the termination or expiration of this Agreement shall vest in
Sepracor. Sepracor may apply, at its own expense and discretion, for appropriate
patent and other intellectual property right registrations of such invention or
rights in any and all jurisdictions.
(b) All right, title, and interest in any Technical
Information (including but not limited to inventions, whether patentable or not)
conceived by ▇▇▇▇▇▇▇ prior to the termination or expiration of this Agreement
shall vest in ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ may apply, at its own expense and discretion, for
appropriate patent and other intellectual property right registrations of such
invention and rights in any and all jurisdictions.
(c) If Sepracor and ▇▇▇▇▇▇▇ jointly conceive a patentable
invention all right, title, and interest therein shall vest jointly in Sepracor
and ▇▇▇▇▇▇▇. The patent representatives of each Party shall determine jointly on
a case by case basis which Party shall have primary responsibility for making
application for appropriate patent and other intellectual property right
registrations of such invention in any and all jurisdictions, and they shall
make all decisions concerning filing, maintenance, or defense of such patents
and patent applications. Costs of drafting, filing, and maintenance of jointly
owned patents and patent applications, and defense of jointly owned intellectual
property rights, shall be borne equally. Each Party shall provide to the other
Party, as to those jointly owned applications which it is filing, copies of all
patent applications prior to filing, for the purpose of obtaining comments and
advice from the other Party's patent advisors and the other Party's approval to
so file which approval shall be provided within a reasonable time. Upon the
other Party's approval, such Party shall be free to file said patent
applications. Such Party shall also consult with the other Party on the
prosecution of said applications and provide to such Party copies of all
substantive documents relating to the prosecution of said applications. If a
first Party wishes to abandon a jointly owned patent or patent application or to
refrain from filing such patent application or defending such patent, the other
Party shall have the right to take contrary action at its own expense, whereupon
the first Party shall assign all its right, title, and interest in such patent
or application to the other Party.
(d) Each Party hereto shall, at the request of the other
Party, both during and after the term of this Agreement, execute such documents
and render such assistance as may be appropriate to enable the other Party to
maintain or obtain registrations of patents or intellectual property rights in
any jurisdiction in accordance with this Section 8.2.
(e) Any decisions regarding the choice of extensions of Patent
Rights, including but without limitation supplementary protection certificates,
where such extensions can only be obtained for either the ▇▇▇▇▇▇▇ Patent Right
or the Sepracor Patent Right, shall be the right of the Party marketing and
selling the
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46
Product. In the United States such decision shall be the right of ▇▇▇▇▇▇▇ if
▇▇▇▇▇▇▇ exercises the option of Section 2.3(a) and for so long as ▇▇▇▇▇▇▇
retains the rights granted pursuant thereto.
9. CONFIDENTIAL INFORMATION
9.1 Confidentiality Maintained. Each Party hereto has a proprietary
interest in its own Confidential Information. During and after the term of this
Agreement, all disclosures of the Confidential Information of a Party (the
"disclosing Party") to the other Party (the "receiving Party"), its agents and
employees shall be held in strict confidence by such receiving Party, which
shall disclose such Confidential Information only to those of its agents and
employees to whom it is necessary in order to properly carry out their duties as
limited by the terms and conditions hereof. During and after the term of this
Agreement, the receiving Party shall not use such Confidential Information
except for the purposes of exercising its rights and carrying out its duties
hereunder or except to the extent the licenses granted under this Agreement have
been fully paid up in accordance with Article 6 of this Agreement. This Section
9.1 shall also apply to any consultants or subcontractors during and after the
term of this Agreement, that the receiving Party may engage in connection with
its obligations under this Agreement.
9.2 Liability for Disclosure. Notwithstanding anything contained in
this Agreement to the contrary, obligations of confidentiality shall not apply
when and to the extent that Confidential Information:
(a) was in the public domain at the time it was disclosed by
the disclosing Party to the receiving Party; or
(b) was known to or contained in the records of the receiving
Party from a source other than the disclosing Party at the time of disclosure by
the disclosing Party to the receiving Party and can be so demonstrated; or
(c) is disclosed inadvertently despite the exercise of the
same degree of care which the receiving Party takes to preserve and safeguard
its own proprietary confidential information; or
(d) was independently developed by the receiving Party and is
so demonstrated promptly upon receipt of the documentation and technology by the
receiving Party; or
(e) becomes known to the receiving Party from a source other
than the disclosing Party without breach of this Agreement by the receiving
Party and can be so demonstrated; or
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(f) must be disclosed pursuant to a court order or as
otherwise required by law, order, or regulation.
10. PROTECTION OF LICENSED TECHNOLOGY; LIMITATIONS ON LIABILITY
10.1 Infringements of Licensed Technology.
(a) This subsection (a) is with respect to OTC Product.
▇▇▇▇▇▇▇ may take and control, but is not required to take and control, at its
own expense any and all actions which are necessary to: (i) terminate
infringements of any part of the ▇▇▇▇▇▇▇ Patent Rights involving OTC Product or
misappropriations of its Confidential Information involving OTC Product; or (ii)
terminate any attempted passing-off by imitation of any OTC Product. Sepracor
shall have the right to be kept informed of the status and progress of all such
actions instituted by ▇▇▇▇▇▇▇. Any monetary recoveries received by ▇▇▇▇▇▇▇ in
excess of expenses incurred by ▇▇▇▇▇▇▇ in such action shall be considered as an
aggregate ▇▇▇▇▇▇▇ Net Invoice Price subject to the royalty obligation of Section
6.3(a). ▇▇▇▇▇▇▇ may also take and control, but is not required to take and
control, at its own expense any and all actions which are necessary to terminate
infringements of any part of the Sepracor Patent Rights involving OTC Product.
Sepracor shall have the right to be kept informed of the status and progress of
all such actions instituted by ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ shall take into due
consideration recommendations made by Sepracor. Any monetary recoveries received
by ▇▇▇▇▇▇▇ in excess of expenses incurred by ▇▇▇▇▇▇▇ in such action shall be
considered as an aggregate ▇▇▇▇▇▇▇ Net Invoice Price subject to the royalty
obligation of Section 6.3(a). If ▇▇▇▇▇▇▇ does not initiate such action within
one hundred twenty (120) days of receiving notice of infringement of Sepracor
Patent Rights involving OTC Product, Sepracor may initiate and control such
action at its own expense, whereupon any monetary recoveries received by
Sepracor in excess of expenses incurred by Sepracor in such action shall be
retained and/or received by ▇▇▇▇▇▇▇, subject to the royalty obligation of
Section 6.3(a).
(b) This subsection (b) is with respect to Rx Product in the
United States if ▇▇▇▇▇▇▇ exercises its option described in Section 2.3 above and
provided and as long as Sepracor does not exercise an option under Section
2.3(d) of this Agreement and as long as the profit-sharing pursuant to Section
6.4 is in effect. Each Party shall have the primary right to take and control at
its own expense any and all actions which are necessary to terminate
infringements of any part of its own Patent Rights involving Rx Product in the
United States or misappropriations of its own Confidential Information involving
Rx Product in the United States. Any monetary recoveries received by the
proprietor Party shall be considered as Operating Income disbursed pursuant to
Section 6.4, after deduction of the expenses incurred in any such action. If a
Party does not initiate such action within one hundred twenty (120) days of
receiving notice of infringement of its own Patent
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Rights involving Rx Product in the United States, the other Party may initiate
and control such action at its own expense, and any monetary recoveries shall be
considered as Operating Income disbursed pursuant to Section 6.4, after
deduction of the expenses incurred in an such action. Each Party shall have the
right to be kept informed of the status and progress of all such actions
instituted by the other and shall take into due consideration recommendation
made by the other Party. The Parties shall jointly take and control any and all
actions necessary to terminate or any attempted passing-off by imitation of any
Rx Product in United States, and shall bear equally all the expenses of and all
monetary recoveries in all such actions.
(c) This subsection (c) is with respect to Rx Product in those
Rx Countries where ▇▇▇▇▇▇▇ exercises the option of Section 2.2 and for so long
as ▇▇▇▇▇▇▇ retains the rights and licenses granted pursuant thereto. ▇▇▇▇▇▇▇ may
take and control, but is not required to take and control, at its own expense
any and all actions which are necessary to: (i) terminate infringements of any
part of the ▇▇▇▇▇▇▇ Patent Rights involving Rx Product or misappropriations of
its Confidential Information involving Rx Product; or (ii) terminate any
attempted passing-off by imitation of any Rx Product. Sepracor shall have the
right to be kept informed of the status and progress of all such actions
instituted by ▇▇▇▇▇▇▇. Any monetary recoveries received by ▇▇▇▇▇▇▇ in excess of
expenses incurred by ▇▇▇▇▇▇▇ in such action shall be considered as an aggregate
▇▇▇▇▇▇▇ Net Invoice Price subject to the royalty obligation of Section 6.3(b).
▇▇▇▇▇▇▇ may also take and control, but is not required to take and control, at
its own expense any and all actions which are necessary to terminate
infringements of any part of the Sepracor Patent Rights involving Rx Product.
Sepracor shall have the right to be kept informed of the status and progress of
all such actions instituted by ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ shall take into due
consideration recommendations made by Sepracor. Any monetary recoveries received
by ▇▇▇▇▇▇▇ in excess of expenses incurred by ▇▇▇▇▇▇▇ in such action shall be
considered as an aggregate ▇▇▇▇▇▇▇ Net Invoice Price subject to the royalty
obligation of Section 6.3(b). If ▇▇▇▇▇▇▇ does not initiate such action within
one hundred twenty (120) days of receiving notice of infringement of Sepracor
Patent Rights involving Rx Product, Sepracor may initiate and control such
action at its own expense, whereupon any monetary recoveries received by
Sepracor in excess of expenses incurred by Sepracor in such action shall be
retained and/or received by ▇▇▇▇▇▇▇, subject to the royalty obligation of
Section 6.3(b).
(d) This subsection (d) is with respect to Rx Product in the
United States if ▇▇▇▇▇▇▇ does not exercise the option of Section 2.3 and to Rx
Product in those Rx Countries where ▇▇▇▇▇▇▇ does not exercise the option of
Section 2.2 and in those Countries where ▇▇▇▇▇▇▇ exercises the relevant option
but does not retain the rights and licenses granted pursuant thereto. Sepracor
may take and control, but is not required to take and control, at its own
expense any and all actions which are necessary to: (i) terminate infringements
of any part of the Sepracor Patent Rights involving Rx Product or
misappropriations of its Confidential Information involving
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Rx Product; or (ii) terminate any attempted passing-off by imitation of any Rx
Product. ▇▇▇▇▇▇▇ shall have the right to be kept informed of the status and
progress of all such actions instituted by Sepracor. Any monetary recoveries
received by Sepracor in excess of expenses incurred by Sepracor in such action
shall be considered as an aggregate Sepracor Net Invoice Price subject to the
royalty obligation of Section 7.1(a). Sepracor may also take and control , but
is not required to take and control, at its own expense any and all actions
which are necessary to terminate infringements of any part of the ▇▇▇▇▇▇▇ Patent
Rights involving Rx Product. ▇▇▇▇▇▇▇ shall have the right to be kept informed of
the status and progress of all such actions instituted by Sepracor and Sepracor
shall take into due consideration recommendations made by ▇▇▇▇▇▇▇. Any monetary
recoveries received by Sepracor in excess of expenses incurred by Sepracor in
such action shall be considered as an aggregate Sepracor Net Invoice Price
subject to the royalty obligation of Section 7.1(a). If Sepracor does not
initiate such action within one hundred twenty (120) days of receiving notice of
infringement of ▇▇▇▇▇▇▇ Patent Rights involving Rx Product, ▇▇▇▇▇▇▇ may initiate
and control such action at its own expense, whereupon any monetary recoveries
received by ▇▇▇▇▇▇▇ in excess of expenses incurred by ▇▇▇▇▇▇▇ in such action
shall be retained and/or received by Sepracor, subject to the royalty obligation
pursuant to Section 7.1(a).
(e) Each Party agrees to keep watch to detect any actual or
suspected unauthorized use of any part of the Licensed Technology, any
misappropriation of any part of the Confidential Information, and any attempted
passing-off by imitation of any Product, and shall notify the other Party of any
such actual or suspected unauthorized use and any such attempted passing-off
within thirty (30) days after receiving knowledge of the actual or suspected
unauthorized use or the attempted passing-off.
10.2 Intellectual Property Infringements.
(a) Sepracor represents and warrants that it has not
previously granted, and will not grant to any third party during the term of
this Agreement, any rights, licenses or options with respect to the Compound,
the Products, the Sepracor Patent Rights or Sepracor's Confidential Information
that are inconsistent with the rights, licenses and options granted to ▇▇▇▇▇▇▇
herein.
(b) ▇▇▇▇▇▇▇ represents and warrants that it has not previously
granted, and will not grant to any third party during the term of this
Agreement, any rights, licenses or options with respect to the Compound, the
Products, the ▇▇▇▇▇▇▇ Patent Rights, the Trademarks or ▇▇▇▇▇▇▇'▇ Confidential
Information that are inconsistent with the rights and licenses granted to
Sepracor herein.
(c) In the event of any claim or suit against either Party or
one of its Permitted Sublicensees or assigns for infringement of any
intellectual property
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
right of any third party as the result of the manufacture, use or sale of the
Compound or the Products by a Party hereto or one of its Permitted Sublicensees
or assigns, the Parties shall cooperate in good faith in determining how to
respond to such claim or suit. NEITHER PARTY SHALL HAVE ANY OBLIGATION TO
INDEMNIFY OR HOLD HARMLESS THE OTHER PARTY OR ITS PERMITTED SUBLICENSEES OR
ASSIGNS WITH RESPECT TO ANY SUCH CLAIM OR SUIT.
10.3 Product Liability Indemnity with Respect to Rx Products in
United States. If ▇▇▇▇▇▇▇ exercises the option described in Section 2.3 above,
the Parties shall divide equally between them any adverse monetary judgement
awarded against either one of them or any of their Permitted Sublicensees and
assigns with respect to any loss, cost, liability or expense (including court
costs and reasonable fees of attorneys and other professionals) incurred from a
claim or settlement arising or alleged to arise out of the use, distribution or
sale of any Rx Product in United States. To the extent that either Party is
required to pay to a third party more than [**] of any such judgment, the
other Party shall reimburse such Party for the amount which it paid over [**] of
such amount. If ▇▇▇▇▇▇▇ does not exercise the option described in Section 2.3
above, it shall be Sepracor's sole responsibility to defend and indemnify
against any loss, cost, liability or expense (including court costs and
reasonable fees of attorneys and other professionals) incurred from a claim
arising or alleged to arise out of the use, distribution or sale of any Rx
Product in the United States, excluding ▇▇▇▇▇▇▇ from any liability and
obligation to defend or indemnify Sepracor, its Affiliates, employees,
directors, officers, Permitted Sublicensees, agents or distributors.
10.4 Product Liability Indemnity with Respect to OTC Products and Rx
Products Outside United States.
(a) ▇▇▇▇▇▇▇ shall defend and indemnify against, and hold
Sepracor and its Affiliates, employees, directors, officers and agents harmless
from, any loss, cost, liability or expense (including court costs and reasonable
fees of attorneys and other professionals) incurred from a claim arising or
alleged to arise out of the use, distribution or sale by ▇▇▇▇▇▇▇, its Affiliates
and its Permitted Sublicensees and assigns of any OTC Product anywhere in the
world and, if and to the extent ▇▇▇▇▇▇▇ exercises the option described in
Section 2.2 above, any Rx Product outside of United States; provided, however,
that: (i) Sepracor shall provide notice promptly to ▇▇▇▇▇▇▇ of any such actual
or threatened claim of which Sepracor becomes aware and reasonable cooperation,
information, and assistance in connection therewith; (ii) ▇▇▇▇▇▇▇ shall have
sole control and authority with respect to the defense, settlement, or
compromise thereof; and (iii) this Section 10.4(a) shall not
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apply to: (A) claims of infringement of a third party's intellectual property
rights; and (B) claims caused directly or indirectly by Sepracor's negligence or
willful misconduct.
(b) Sepracor shall defend and indemnify against, and hold
▇▇▇▇▇▇▇ and its Affiliates, employees, directors, officers and agents harmless
from, any loss, cost, liability or expense (including court costs and reasonable
fees of attorneys and other professionals) incurred from a claim arising or
alleged to arise directly or indirectly out of Sepracor's negligence or willful
misconduct; provided, however, that (A) ▇▇▇▇▇▇▇ shall provide notice promptly to
Sepracor of any such actual or threatened claim of which ▇▇▇▇▇▇▇ becomes aware
and reasonable cooperation, information, and assistance in connection therewith;
and (B) Sepracor shall have sole control and authority with respect to the
defense, settlement, or compromise thereof, provided ▇▇▇▇▇▇▇ is no longer a
defendant in such claim.
(c) In the event a claim is based partially on an indemnified
claim described in Section 10.4(a) or (b) above and partially on a
non-indemnified claim, or in the event a claim is based partially on an
indemnified claim described in Section 10.4(a) above and partially on an
indemnified claim described in Section 10.4(b) above, any payments and
reasonable attorney fees incurred in connection with such claims are to be
apportioned between the Parties in accordance with the degree of cause
attributable to each Party.
(d) If and to the extent ▇▇▇▇▇▇▇ does not exercise the option
described in Section 2.3 above, it shall be Sepracor's sole responsibility to
defend and indemnify against any loss, cost, liability or expense (including
court costs and reasonable fees of attorneys and other professionals) incurred
from a claim arising or alleged to arise out of the use, distribution or sale of
any Rx Product in the United States, excluding ▇▇▇▇▇▇▇ from any liability and
obligation to defend or indemnify Sepracor, its Affiliates, employees,
directors, officers, Permitted Sublicensees, agents or distributors
10.5 Use of Name in Suit. Where, in the reasonable judgement of
Sepracor or ▇▇▇▇▇▇▇ it is necessary to use the other Party's name to prosecute
or defend an action pursuant to this Article 10, Sepracor and ▇▇▇▇▇▇▇ agree to
allow the other Party to so use its name; provided, however, that the other
Party agrees to hold Sepracor or ▇▇▇▇▇▇▇, as the case may be, harmless against
any award of court costs or damages resulting solely from the use of Sepracor's
or ▇▇▇▇▇▇▇'▇ name by such other Party in such action.
10.6 Limitations on Liability. IN NO EVENT SHALL EITHER PARTY BE
LIABLE TO THE OTHER PARTY FOR SPECIAL, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY
DAMAGES (INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS OR LOSS OF USE DAMAGES)
ARISING OUT OF THE
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MANUFACTURE, SALE OR SUPPLYING OF THE COMPOUND OR THE PRODUCTS, EVEN IF SUCH
PARTY HAD BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR LOSSES.
11. REPRESENTATIONS, WARRANTIES AND COVENANTS
Each of Sepracor and ▇▇▇▇▇▇▇ hereby represents, warrants and
covenants to the other as follows:
11.1 Right, Power and Authority. It has full right, power and
authority to enter into this Agreement and there is nothing which would prevent
it from performing its obligations under the terms and conditions imposed on it
by this Agreement.
11.2 Binding Obligation. This Agreement has been duly authorized by
all necessary corporate and stockholder action of Sepracor and ▇▇▇▇▇▇▇,
respectively, and constitutes a valid and binding obligation on Sepracor and
▇▇▇▇▇▇▇, respectively, enforceable in accordance with the terms hereof.
11.3 Corporate Good-Standing. Sepracor and ▇▇▇▇▇▇▇ represents and
warrants that it is a corporation, duly organized and validly existing and in
good standing under the laws of Delaware and Belgium, respectively, and is duly
qualified and authorized to do business wherever the nature of its activities or
properties requires such qualification or authorization.
11.4 No Government Approvals Needed. Except as otherwise provided
herein, no registration with or approval of any government agency or commission
of any jurisdiction is necessary for the execution, delivery or performance by
it of any of the terms of this Agreement, or for the validity and enforceability
hereof or with respect to its obligations hereunder.
11.5 No Provisions Contravened. There is no provision in its
articles of incorporation, By-Laws or equivalent governing documents, and no
provision in any existing mortgage, indenture, contract or agreement binding on
it which would be contravened by the execution, delivery or performance by it of
this Agreement.
11.6 No Consent of Third Parties Needed. Except as provided in
Exhibit 11.6 hereto, no consent of any trustee or holder of any of its
indebtedness or any other third party is or shall be required as a condition to
the validity of this Agreement.
11.7 No Proceedings Pending. There is no action or proceeding
pending or in so far as it knows or ought to know threatened against it before
any
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court, administrative agency or other tribunal which might have a material
adverse effect on its business or condition, financial or otherwise, or its
operation of any business. It knows of no claim by any third party of
infringement by the Licensed Technology on such third party's patent, trademark,
copyright, trade secret or other intellectual property rights.
11.8 Not Contravene Any Law. Neither its execution nor its delivery
of this Agreement, nor its fulfillment of or compliance with the terms and
provisions hereof, shall contravene any provision of the laws of any
jurisdiction, including, without limitation, any statute, rule, regulation,
judgment, decree, order, franchise or permit applicable to it.
11.9 NEITHER PARTY MAKES ANY EXPRESS OR IMPLIED WARRANTY, STATUTORY
OR OTHERWISE, CONCERNING THE LICENSED TECHNOLOGY OR ANY CONFIDENTIAL INFORMATION
COMMUNICATED TO THE OTHER PARTY HERETO, INCLUDING WITHOUT LIMITATION ANY
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, ANY WARRANTY AS TO QUALITY OR THE
USEFULNESS OF THE LICENSED TECHNOLOGY FOR ITS INTENDED PURPOSE OR ANY WARRANTY
OF NON-INFRINGEMENT.
12. TERMINATION OR EXPIRATION
12.1 Term of Agreement. Unless it is terminated earlier pursuant to
this Article 12, this Agreement shall continue in full force and effect for the
commercial life of Product or until it is terminated by mutual agreement of the
Parties. The term of this Agreement shall be from the Effective Date to the date
of termination or expiration of this Agreement, as the case may be.
12.2 Termination for Cause. This Agreement may be terminated by
either Party (the "Terminating Party") by giving written notice of termination
to the other Party, such termination being immediately effective upon the giving
of such notice of termination, after the occurrence of any of the following
events:
(a) a material breach or default as to any obligation
hereunder by the other Party and the failure of the other Party to promptly
pursue (within thirty (30) days after receiving written notice thereof from the
terminating Party) a reasonable remedy designed to cure (in the reasonable
judgement of the terminating Party) such material breach or default; or
(b) the filing of a petition in bankruptcy, insolvency or
reorganization against or by the other Party, or the other Party becoming
subject to a composition for creditors, whether by law or agreement, or the
other Party going into receivership or otherwise becoming insolvent.
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12.3 Termination by ▇▇▇▇▇▇▇ Without Cause. This Agreement may be
terminated by ▇▇▇▇▇▇▇ at any time without cause by giving written notice of
termination to Sepracor, such termination becoming effective ninety (90) days
after the giving of such notice. Upon such termination all rights and licenses
granted to ▇▇▇▇▇▇▇ hereunder shall be immediately revoked, and ▇▇▇▇▇▇▇ shall
have no right to any continued use of Sepracor Patent Rights or Technical
Information of Sepracor.
12.4 After Termination.
(a) In the event that this Agreement is terminated by ▇▇▇▇▇▇▇
in accordance with Section 12.2(a) above based on a material breach or default
by Sepracor, then all rights and licenses granted to Sepracor under this
Agreement shall cease, effective immediately upon such termination. Sepracor and
▇▇▇▇▇▇▇ agree that all rights and licenses granted under this Agreement by
Sepracor to ▇▇▇▇▇▇▇ shall become exclusive even as to Sepracor, its Affiliates
and Permitted Sublicensees, and all licenses granted under this Agreement by
Sepracor to ▇▇▇▇▇▇▇ shall become royalty-free, perpetual licenses in the Field.
If this Agreement is rejected by a trustee (including without limitation by
Sepracor as debtor in possession) in a bankruptcy proceeding with respect to
Sepracor, then Sepracor and ▇▇▇▇▇▇▇ agree that ▇▇▇▇▇▇▇, as a licensee of the
rights granted under this Agreement, shall retain and may fully exercise all of
its rights and elections under the relevant bankruptcy code. Sepracor agrees
during the term of this Agreement to maintain and create current copies or, if
not amenable to copying, detailed descriptions or other appropriate embodiments
of the Licensed Technology hereunder. If a case is commenced by or against
Sepracor under the relevant bankruptcy code, then, unless and until this
Agreement is rejected as provided in the relevant bankruptcy code, Sepracor (in
any capacity, including debtor-in-possession) and its successors and assigns
(including, without limitation, a bankruptcy trustee) shall either perform all
of the obligations provided in this Agreement to be performed by Sepracor or
provide to ▇▇▇▇▇▇▇ all Licensed Technology (including all embodiments thereof)
held by Sepracor and such successors and assigns, as ▇▇▇▇▇▇▇ may elect in a
written request, immediately upon such request. If a bankruptcy case is
commenced by or against Sepracor, this Agreement is rejected as provided in the
relevant bankruptcy code and ▇▇▇▇▇▇▇ elects to retain the rights hereunder as
provided in the relevant bankruptcy code, then Sepracor (in any capacity,
including debtor-in-possession) and its successors and assigns (including
without limitation, a bankruptcy trustee) shall provide to ▇▇▇▇▇▇▇ all Licensed
Technology (including all embodiments thereof) held by Sepracor and such
successors and assigns immediately upon ▇▇▇▇▇▇▇'▇ written request therefor. All
rights, powers and remedies of ▇▇▇▇▇▇▇ provided herein are in addition to and
not in substitution for any and all other rights, powers and remedies now or
hereafter existing at law or in equity (including, without limitation, the
relevant bankruptcy code) in the event of commencement of a bankruptcy case by
or against Sepracor. ▇▇▇▇▇▇▇, in addition to the rights, powers and remedies
expressly provided herein,
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shall be entitled to exercise all other such rights and powers and resort to all
other such remedies as may now or hereafter exist at law or in equity (including
the relevant bankruptcy code) in such event.
(b) In the event that this Agreement is terminated by Sepracor
in accordance with Section 12.2(a) above based on a material breach or default
by ▇▇▇▇▇▇▇, then all rights and licenses granted to ▇▇▇▇▇▇▇ under this Agreement
shall cease, effective immediately upon such termination. Sepracor and ▇▇▇▇▇▇▇
agree that all rights and licenses granted under this Agreement by ▇▇▇▇▇▇▇ to
Sepracor shall become exclusive even as to ▇▇▇▇▇▇▇, its Affiliates and Permitted
Sublicensees, and all licenses granted under this Agreement by ▇▇▇▇▇▇▇ to
Sepracor shall become royalty-free, perpetual licenses in the Field. If this
Agreement is rejected by a trustee (including without limitation by ▇▇▇▇▇▇▇ as
debtor in possession) in a bankruptcy proceeding with respect to ▇▇▇▇▇▇▇, then
Sepracor and ▇▇▇▇▇▇▇ agree that Sepracor, as a licensee of the rights granted
under this Agreement, shall retain and may fully exercise all of its rights and
elections under the relevant bankruptcy code. ▇▇▇▇▇▇▇ agrees during the term of
this Agreement to maintain and create current copies or, if not amenable to
copying, detailed descriptions or other appropriate embodiments of the Licensed
Technology hereunder. To the extent consistent with Belgium's bankruptcy code,
if a case is commenced by or against ▇▇▇▇▇▇▇ under the relevant bankruptcy code,
then, unless and until this Agreement is rejected as provided in the relevant
bankruptcy code, ▇▇▇▇▇▇▇ (in any capacity, including debtor-in-possession) and
its successors and assigns (including, without limitation, a bankruptcy trustee)
shall either perform all of the obligations provided in this Agreement to be
performed by ▇▇▇▇▇▇▇ or provide to Sepracor all Licensed Technology (including
all embodiments thereof) held by ▇▇▇▇▇▇▇ and such successors and assigns, as
Sepracor may elect in a written request, immediately upon such request. All
rights, powers and remedies of Sepracor provided herein are in addition to and
not in substitution for any and all other rights, powers and remedies now or
hereafter existing at law or in equity (including, without limitation, the
relevant bankruptcy code) in the event of commencement of a bankruptcy case by
or against ▇▇▇▇▇▇▇. Sepracor, in addition to the rights, powers and remedies
expressly provided herein, shall be entitled to exercise all other such rights
and powers and resort to all other such remedies as may now or hereafter exist
at law (including the relevant bankruptcy code) in such event.
(c) The Parties hereto agree that, once this Agreement is
terminated in accordance with Section 12 .2(a) or expires in accordance with
Section 12.1, each Party (or, in the case of termination under Section 12.2(a),
the breaching Party) shall, at its own expense, return to the disclosing Party
all of its Confidential Information as soon as practicable after the date of
such termination or expiration, including, but not limited to, original
documents, drawings, computer diskettes, models, samples, notes, reports,
notebooks, letters, manuals, prints, memoranda and any copies thereof, which
have been received or derived by the receiving Party. All
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Confidential Information of the disclosing Party shall remain the exclusive
property of the disclosing Party during the term of this Agreement and
thereafter.
(d) The termination of this Agreement by ▇▇▇▇▇▇▇ in accordance
with Section 12.3 shall terminate any and all obligations of ▇▇▇▇▇▇▇ and
Sepracor under this Agreement and ▇▇▇▇▇▇▇ shall be deemed as having failed to
exercise its options under Sections 2.2(a) and 2.3(a). Such termination shall
have no effect on Sepracor's rights and licenses pursuant to Sections 2.1, 2.6,
and 4.6, and the provisions of Article 7 shall remain in effect.
12.5 Payment Obligations Continue. Upon termination or expiration of
this Agreement, nothing shall be construed to release either Party from its
obligations to pay the other Party any and all fees, royalties or other amounts
accrued or irrevocably obligated but unpaid hereunder prior to the date of such
termination or expiration.
12.6 No Damages for Termination. The Parties hereto agree that if
either Party terminates the other Party pursuant to this Article 12, then the
terminating Party shall not be liable for damages or injuries suffered by the
other Party as a result of that termination.
13. MISCELLANEOUS
13.1 Assignments and Change of Control. For the purposes of this
Section 13.1, "Control" shall mean the holding and/or possession of a beneficial
interest in and/or the ability to exercise the voting rights applicable to
shares, stocks, or other securities of a Party (whether directly or by means of
holding such interests in one or more legal entities) which confer in aggregate
on the holders thereof (i) in the case of an industrial corporate holder, 35% or
more, or (ii) in the case of a non-industrial holder, more than 50%, of the
total voting rights exercisable at general meetings of that Party or with
respect to all or substantially all matters affecting that Party.
(a) Except as provided in Section 2.6 above, this Agreement
and any and all of the rights and obligations of either Party hereunder shall
not be assigned, delegated, sublicensed, sold, transferred or otherwise disposed
of, by operation of law or otherwise, without the prior written consent of the
other Party; provided, however, that either Party may assign, delegate,
sublicense, sell, transfer or otherwise dispose of (collectively "transfer")
rights and obligations hereunder without such prior written consent to: (i) any
of its respective Affiliates; or (ii) a third party which acquires Control of or
all or substantially all of the assets or stock of such Party through purchase,
merger, consolidation or otherwise, provided, however, if ▇▇▇▇▇▇▇ exercises the
option of Section 2.3(a) and the profit-sharing and cost-sharing
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
provisions of this Agreement have not been converted to a royalty-bearing
license by action of any provision in this Agreement, the rights and licenses
for Rx Product in the United States shall be subject to and limited by the
provisions of Sections 13.1(b) and 13.1(c). This Agreement shall be binding
upon, and inure to the benefit of, Sepracor and ▇▇▇▇▇▇▇ and their respective
Permitted Successors and assigns, to the extent such assignments are in
accordance with this Section 13.1(a).
(b) With respect to the rights and licenses for Rx Product in
the United States, in the event that ▇▇▇▇▇▇▇ exercises the option of Section
2.3(a) and the profit-sharing and cost-sharing provisions of this Agreement have
not been converted to a royalty-bearing license by action of any provision in
this Agreement, and either (1) a third party not listed in Exhibit 13.1(b)
acquires Control of or all or substantially all of the assets or stock of
Sepracor through purchase, merger, consolidation or otherwise, or (2) a third
party listed in Exhibit 13.1(b) acquires Control of all or substantially all of
the assets or stock of Sepracor through purchase, merger, consolidation or
otherwise, and subsequently Control of such third party is acquired by a third
party not listed in Exhibit 13.1(b), then ▇▇▇▇▇▇▇ shall elect, in its sole
discretion,
(i) to continue the co-promotion rights pursuant to
Section 5.3 and the profit-sharing and cost-sharing envisaged in Section 6.4
under the terms and conditions of this Agreement, provided, however, that
▇▇▇▇▇▇▇ must obtain the acquirer's written approval, and if such approval is
withheld, the provisions of Section 13.1(b)(iii) shall apply; or
(ii) to terminate the co-promotion rights pursuant to
Section 5.3 and maintain the profit-sharing and cost-sharing pursuant to Section
6.4 under the terms and conditions of this Agreement, provided, however, that
▇▇▇▇▇▇▇ must obtain the acquirer's written approval, and if such approval is
withheld, the provisions of Section 13.1(b)(iii) shall apply; or
(iii) to convert the co-promotion rights pursuant to
Section 5.3 and the profit-sharing envisaged in Section 6.4 into a royalty
bearing exclusive license to the Rx Products in the United States, subject to
paying Sepracor or its successor a royalty or other amount for Rx Product sold
by or on behalf of ▇▇▇▇▇▇▇, its Affiliates or its Permitted Sublicensees or
assigns (excluding returns) in the United States, which:
(A) if the third party acquires Control of or all
or substantially all of the assets or stock of Sepracor prior to submission of
the NDA for Rx Product in the United States, the royalty shall be [**] and
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
thereafter [**] of the ▇▇▇▇▇▇▇ Net Invoice Price for each Rx Product sold by or
on behalf of ▇▇▇▇▇▇▇, its Affiliates or its Permitted Sublicensees or assigns,
provided, however, that the acquirer may elect to continue the joint funding of
R & D Expenses pursuant to Section 6.2 until NDA submission thereby raising the
royalty to [**]; and
(B) if the third party acquires Control of or all
or substantially all of the assets or stock of Sepracor after submission of the
NDA for Rx Product in the United States, then (1) if Sepracor has paid or is
obligated to pay [**] in Marketing and Technology Costs at the time of closing
of the acquisition, the royalty shall be [**] of the ▇▇▇▇▇▇▇ Net Invoice Price
for each Rx Product sold by or on behalf of ▇▇▇▇▇▇▇, its Affiliates or its
Permitted Sublicensees or assigns, or (2) if Sepracor has paid or is obligated
to pay [**] or more in Marketing and Technology Costs at the time of closing of
the acquisition, then the royalty shall be [**] of the ▇▇▇▇▇▇▇ Net Invoice Price
for each Rx Product sold by or on behalf of ▇▇▇▇▇▇▇, its Affiliates or its
Permitted Sublicensees or assigns.
Should the provisions of Section 13.1(b)(iii)apply, all such royalties shall be
reported, paid and audited in accordance with Sections 6.3, 6.5, 6.6, 6.8, 6.9
and 6.10 above. If the provisions of Section 13.1(b)(ii) apply, audits under
Section 6.9 shall be conducted by an independent accounting firm and ▇▇▇▇▇▇▇ may
designate competitively sensitive information, which the accounting firm may not
disclose to the acquirer, but such designation shall not encompass the
accounting firm's conclusions, and the accounting firm shall disclose to the
acquirer only whether the royalty reports are correct or incorrect and the
specific details concerning any discrepancies.
(c) In the event that ▇▇▇▇▇▇▇ exercises the option of Section
2.3(a) and the profit-sharing and cost-sharing provisions of this Agreement have
not been converted to a royalty-bearing license by action of any provision in
this Agreement, and a third party listed in Exhibit 13.1(b) acquires Control of
or all or substantially all of the assets or stock of Sepracor through purchase,
merger, consolidation or otherwise, then with respect to the rights and licenses
for Rx Product in the United States
(i) if the acquirer or any of its Affiliates do not
market a competing product in the United States or have a competing product in
development for the United States market, the acquirer shall decide to either:
(A) continue the co-promotion described in Section
5.3 and the profit-sharing and cost-sharing envisaged under Section 6.4 under
the terms and conditions of this Agreement; or
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(B) terminate the co-promotion described in
Section 5.3 and the profit-sharing and cost-sharing envisaged under Section 6.4
and convert such into a royalty bearing exclusive license to Rx Products in the
United States having a royalty equal to (1) if the third party acquires Control
of or all or substantially all of the assets or stock of Sepracor prior to
submission of the NDA for Rx Product in the United States,[**] and thereafter
[**] of the ▇▇▇▇▇▇▇ Net Invoice Price for each Rx Product sold by or on behalf
of ▇▇▇▇▇▇▇, its Affiliates, or Permitted Sublicensees or assigns, or (2) if the
third party acquires Control of or all or substantially all of the assets or
stock of Sepracor after submission of the NDA for Rx Product in the United
States,[**] of ▇▇▇▇▇▇▇ Net Invoice Price for each Rx Product sold by or on
behalf of ▇▇▇▇▇▇▇, its Affiliates or its Permitted Sublicensee or assigns.
(ii) if the acquirer or any of its Affiliates markets a
competing product in the United States or has a competing product in development
for the United States market, or subsequently develops or acquires a competing
product for the United States market, the acquirer shall decide to either:
(A) divest the competing product to an independent
third party, or discontinue marketing or development of such competing product,
within six (6) months after the closing of the acquisition or within six (6)
months of the subsequent development or acquisition of the competing product, as
appropriate, in which case, the acquirer may make an election as set forth in
Section 13.1(c)(i) above; or
(B) continue marketing or developing of the
competing product for the United States market, in which case, ▇▇▇▇▇▇▇ may make
an election as set forth in Sections 13.1(b)(i), 13.1(b)(ii), or
13.1(b)(iii)(A);
(iii) for the purposes of this Section 13.1(c), a
"competing product" means any pharmaceutical product which has been approved in
the United States or is actively promoted in the United States or as
appropriate, in development, for one or both of allergic rhinitis or chronic
urticaria.
(d) If the provisions of Sections 13.1(b)(i), 13.1(b)(ii),
13.1(b)(iii), 13.1(c)(i)(A) or 13.1(c)(i)(B) apply, the JMC of Section 5.2 and
the JR&DC of Section 4.2(a) shall cease to exist and ▇▇▇▇▇▇▇ alone shall assume
total control of marketing and R&D of Rx Product in the United States, as
appropriate.
13.2 Governing Law. This Agreement shall be governed, interpreted
and construed in accordance with the laws of the Commonwealth of Massachusetts,
applicable to agreements made and to be fully performed therein.
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13.3 Dispute Resolution.
(a) Any dispute, controversy or claim arising out of or
relating to this Agreement, or to a breach thereof, including its
interpretation, performance or termination, shall be submitted to and finally
resolved by arbitration. The arbitration shall be conducted in accordance with
the commercial rules of the American Arbitration Association (AAA), which shall
administer the arbitration and act as appointing authority. The arbitration,
including the rendering of the award, shall take place in Beerse, Belgium if
initiated by Sepracor or in Marlborough, Massachusetts if initiated by ▇▇▇▇▇▇▇,
and shall be the exclusive forum for resolving such dispute, controversy or
claim. For the purposes of this arbitration, the provisions of this Agreement
and all rights and obligations hereunder shall be governed and construed in
accordance with the laws of the Commonwealth of Massachusetts, applicable to
agreements made and to be fully performed therein. The decision of the
arbitrators shall be executory, final and binding upon the parties hereto, and
the expense of the arbitration (including without limitation the award of
attorneys' fees to the prevailing Party) shall be paid as the arbitrators
determine.
(b) The arbitration shall be conducted by three (3)
arbitrators, one (1) to be appointed by Sepracor, one (1) to be appointed by
▇▇▇▇▇▇▇ and the remaining arbitrator being nominated by the arbitrators so
selected or, if they cannot agree on the remaining arbitrator, by the President
of the AAA.
(c) Notwithstanding anything contained in this Section 13.3 to
the contrary, each Party shall have the right to institute judicial proceedings
against the other Party or anyone acting by, through or under such other Party
as necessary to prevent imminent and irreparable harm to its interests.
13.4 Waiver. A waiver of any breach of any provision of this
Agreement shall not be construed as a continuing waiver of other breaches of the
same or other provisions of this Agreement.
13.5 No Other Relationship. Nothing herein contained shall be deemed
to create a joint venture, agency or partnership relationship between the
Parties hereto. Neither Party shall have any power to enter into any contracts
or commitments in the name of, or on behalf of, the other Party, or to bind the
other Party in any respect whatsoever.
13.6 Notices.
(a) Each notice required or permitted to be sent under this
Agreement shall be given by telecopy transmission or by registered or recorded
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delivery letter to Sepracor and to ▇▇▇▇▇▇▇ at the addresses and telecopy numbers
indicated below.
For Sepracor:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President, Pharmaceuticals
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
For ▇▇▇▇▇▇▇:
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇-▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Attention: Managing Director
Telecopy: 011 3214 60 3999
Either Party may change its address and/or telecopy number for purposes of this
Agreement by giving the other Party written notice of its new address and/or
telecopy number.
(b) Any properly addressed notice if given or made by
registered or recorded delivery letter shall be deemed to have been received on
the earlier of the date actually received and the date ten (10) Business Days
after the same was posted (and in proving such it shall be sufficient to prove
that the envelope containing the same was properly addressed and posted as
aforesaid) and if given or made by telecopy transmission shall be deemed to have
been received at the time of dispatch, unless such date of deemed receipt is not
a Business Day, in which case the date of deemed receipt shall be the next
succeeding Business Day.
13.7 Entire Understanding. This Agreement embodies the entire
understanding between the Parties relating to the subject matter hereof, whether
written or oral, and there are no prior representations, warranties or
agreements between the Parties not contained in this Agreement.
13.8 Invalidity. If any provision of this Agreement is declared
invalid or unenforceable by arbitration or a court having competent
jurisdiction, it is mutually agreed that this Agreement shall endure except for
the part declared invalid or unenforceable by order of such court. The Parties
shall consult and use their best efforts to agree upon a valid and enforceable
provision which shall be a reasonable substitute for such invalid or
unenforceable provision in light of the intent of this
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Agreement, and if the Parties cannot agree, the provision in question shall be
severed from this Agreement and the Agreement shall endure except for the
provision severed.
13.9 Amendments. Any amendment or modification of any provision of
this Agreement must be in writing, dated and signed by both Parties hereto.
13.10 RESERVED.
13.11 Responsibility for Taxes.
(a) ▇▇▇▇▇▇▇ shall be responsible for payment of taxes arising
out of or related to Product sales made by ▇▇▇▇▇▇▇ and for submission of proper
documentation with respect thereto to the tax authorities. ▇▇▇▇▇▇▇ shall
indemnify and hold Sepracor harmless from and against any and all claims and
losses (including but not limited to attorney fees) arising out of ▇▇▇▇▇▇▇'▇
failure or delay in paying such taxes or submitting such documentation. No
interest or penalties associated with such failure or delay shall be included in
Marketing and Technology Expenses. Sepracor shall be responsible for payment of
taxes arising out of or related to Product sales made or profit shared by
Sepracor and for submission of proper documentation with respect thereto to the
tax authorities. Sepracor shall indemnify and hold ▇▇▇▇▇▇▇ harmless from and
against any and all claims and losses (including but not limited to attorney
fees) arising out of Sepracor's failure or delay in paying such taxes or
submitting such documentation. No interest or penalties associated with such
failure or delay shall be included in Marketing and Technology Expenses.
(b) Any tax required to be withheld by ▇▇▇▇▇▇▇ under the laws
of Belgium for the account of Sepracor in respect of payments to be made by
▇▇▇▇▇▇▇ to Sepracor shall be promptly paid by ▇▇▇▇▇▇▇ for and on behalf of
Sepracor to the appropriate tax authorities and ▇▇▇▇▇▇▇ shall furnish Sepracor
with proof of payment of such tax together with receipts or other evidence of
payment sufficient to enable Sepracor to support a claim for income tax credit
in respect of any sum so withheld. Any such tax required to be withheld shall be
borne solely by Sepracor.
(c) Any tax required to be withheld by Sepracor for the
account of ▇▇▇▇▇▇▇ in respect of payments to be made by Sepracor to ▇▇▇▇▇▇▇
shall be promptly paid by Sepracor for and on behalf of ▇▇▇▇▇▇▇ to the
appropriate tax authorities and Sepracor shall furnish ▇▇▇▇▇▇▇ with proof of
payment of such tax together with receipts or other evidence of payment
sufficient to enable ▇▇▇▇▇▇▇ to support a claim for income tax credit in respect
of any sum so withheld. Any such tax required to be withheld shall be borne
solely by ▇▇▇▇▇▇▇.
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13.12 Scientific Publications. If ▇▇▇▇▇▇▇ exercises the option of
Section 2.3(a) or if ▇▇▇▇▇▇▇ exercises the option granted in Section 2.2(a) in
Japan or all of the United Kingdom, Italy, France and Germany, each Party shall
submit to the other any proposed publication containing Confidential Information
at least thirty (30) days in advance to allow the other Party to review the
publication and make any objections. If the reviewing Party makes any objections
to the publication, then the Parties shall discuss the advantages and
disadvantages of the proposed publication. If the Parties are unable to agree,
the research management of each of the Parties shall discuss with the President
of ▇▇▇▇▇▇▇ Research having the final say.
13.13 Force Majeure.
(a) Neither Sepracor nor ▇▇▇▇▇▇▇ shall be liable in damages,
or shall be subject to termination of this Agreement by the other Party, for any
delay or default in performing any obligation hereunder (other than payment
obligations) if that delay or default is due to any cause beyond the reasonable
control and without fault or negligence of such Party; provided, however, that:
(i) in order to excuse its delay or default hereunder, a Party shall notify the
other Party of the occurrence or the cause, specifying the nature and
particulars thereof and the expected duration thereof; and (ii) within ten (10)
Business Days after the termination of such occurrence or cause, such Party
shall give notice to the other Party specifying the date of termination thereof.
All obligations of both Parties shall return to being in full force and effect
upon the termination of such occurrence or cause. The Parties also agree that if
either Party is prevented from performing its obligation hereunder for a period
of more than six (6) months, then the other Party shall have the right to
terminate this Agreement, effectively immediately.
(b) For the purposes of this Section 13.13, a "cause beyond
the reasonable control" of a Party shall include, without limitation, any act of
God, act of any government or other authority or statutory undertaking,
industrial dispute, fire, explosion, accident, power failure, flood, riot or war
(declared or undeclared).
13.14 Public Announcements. If either Party desires to, or is
required by law to, make a public announcement concerning this Agreement or the
subject matter hereof, such Party shall provide the proposed text of such
announcement to the other Party for review and written approval prior to release
of such announcement.
13.15 Compliance With Laws. Each Party covenants and agrees that all
of its activities under or pursuant to this Agreement shall comply with all
applicable laws, rules and regulations.
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13.16 Headings. Any headings contained herein are for directory
purposes only, do not constitute a part of this Agreement, and shall not be
employed in interpreting this Agreement.
13.17 Counterparts. This Agreement may be executed in any number of
counterparts and each such counterpart shall be deemed to be an original.
13.18 Exhibits. All exhibits referred to in this Agreement are
attached hereto and incorporated herein by this reference.
IN WITNESS WHEREOF, the Parties hereto have signed this Agreement under
seal.
SEPRACOR INC. ▇▇▇▇▇▇▇ PHARMACEUTICA N.V.
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ By: /s/Staf VanReet
---------------------------- ----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Name:
Executive Vice President and Managing Director
Chief Financial Officer
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65
EXHIBIT 1.10(a) ▇▇▇▇▇▇▇ Patents and Patent Applications
EXHIBIT 1.21 J&J Universal Calendar
EXHIBIT 1.22 Pre-Option Clinical Testing
EXHIBIT 1.26 R&D Plan
EXHIBIT 1.31 Sepracor Patents and Patent Applications
EXHIBIT 1.33 Trademarks, Trade Names, Service
Marks and Other Commercial Symbols
EXHIBIT 2.5(a) Quality Control Standards
EXHIBIT 3.1(e) Sepracor's Cost in Manufacturing
EXHIBIT 3.4(a) Specifications with Respect to the
Compound and the Product
EXHIBIT 4.2(d) Pre-Option Clinical Testing Parameters
EXHIBIT 11.6 Fleet Bank Letter
EXHIBIT 13.1(b) List of Third Parties
-65-
66
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT 1.10(a)
Docket No. JAB 286
Country Type Application Filing Date Patent Grant Date Expiry Date Status
Number Number
Algeria
Austria DIV
Austria MAIN
Bahrain REG
Belarus REG
Belgium EPO
Canada
Cyprus (Greek) REG
Democratic Rep. of Congo
Denmark MAIN
Denmark DIV
EPO
Finland
France EPO
Germany EPO
Great Britain EPO
Hong Kong REG
Hungary
Ireland
Israel
Italy EPO
Japan MAIN
Japan DIV
Kenya REG
Latvia REG [**]
Luxemburg EPO
Malaysia REG
Morocco
Netherlands EPO
New Zealand
Nigeria
Norway MAIN
Norway DIV
Philippines
Russia
Saban REG
Sarawak REG
Sierra Leone REG
Singapore REG
South Africa
Spain
Sweden EPO
Switzerland EPO
Trinidad & Tobago REG
Tunisia
Uganda REG
Ukraine REG
USA CIP
Zanzibar REG
67
Confidential materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT 1.21
J&J Pharmaceutical Group
1998 Reporting Calendar
[**]
68
EXHIBIT 1.22
PRE-OPTION CLINICAL TESTING
THE EVALUATION OF THREE NORASTEMIZOLE DOSES (15 ▇▇,
▇▇ ▇▇, ▇▇ ▇▇) AND LORATADINE WHEN ADMINISTERED TO
SUBJECTS WITH SEASONAL ALLERGIC RHINITIS
A Multi-Dose, Double-Dummy, Double-Blind, Placebo-Controlled, Parallel
Group Study
Protocol 110-008
IND No. 49,639
26 June 1997
SEPRACOR INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
69
EXHIBIT 1.22
PRE-OPTION CLINICAL TESTING
Protocol 110-005
THE EFFECT OF ADMINISTRATION OF KETOCONAZOLE ON THE
PHARMACODYNAMICS AND PHARMACOKINETICS OF NORASTEMIZOLE
IN NORMAL HEALTHY VOLUNTEERS
IND NO. 49,639
6 November, 1997
DRAFT
SEPRACOR INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
70
EXHIBIT 1.22
PRE-OPTION CLINICAL TESTING
Protocol 110-005
THE EFFECT OF ADMINISTRATION OF KETOCONAZOLE ON THE
PHARMACODYNAMICS AND PHARMACOKINETICS OF NORASTEMIZOLE
IN NORMAL HEALTHY VOLUNTEERS
IND NO. 49,639
6 November, 1997
DRAFT
SEPRACOR INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
71
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions
EXHIBIT 1.26
R&D Plan
[**]
72
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions
EXHIBIT 1.31
SEPRACOR PATENTS AND PATENT APPLICATION
norastemizole patents
--------------------------------------------------------------------------------------------------------------------
Case Number Country Status FilDate ApplNumber PatNumber Title
--------------------------------------------------------------------------------------------------------------------
[**]
--------------------------------------------------------------------------------------------------------------------
P056.A GB GRANTED 03-Sep-1993 9504329.5 2285219 METHOD AND COMPOSITIONS FOR TREATING
ALLERGIC DISORDERS ... USING
METABOLIC DERIVATIVES OF ASTEMIZOLE
--------------------------------------------------------------------------------------------------------------------
[**]
73
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions
norastemizole patents
--------------------------------------------------------------------------------------------------------------------
Case Number Country Status FilDate ApplNumber PatNumber Title
--------------------------------------------------------------------------------------------------------------------
[**]
74
EXHIBIT 1.33
TRADEMARKS, TRADE NAMES, SERVICE MARKS AND
OTHER COMMERCIAL SYMBOLS
None Existing as of the Date of the Agreement
75
EXHIBIT 2.5(a)
QUALITY CONTROL STANDARDS
To be provided pursuant to Section 2.5(a)
76
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions
EXHIBIT 3.1(e)
Sepracor's Cost in Manufacturing
Under the Agreement, Sepracor is paid for a quantity of Compound and/or
Product based on Sepracor's fully-loaded manufacturing cost, which in turn is
equal to the sum of: [**]. For purposes of this Agreement, such costs are
defined as follows:
The cost of production includes [**] (including without limitation
[**]). Overheads include **].
The cost of production shall also include [**] to be agreed upon by the
Parties.
Administrative costs include [**].
77
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions
EXHIBIT 3.4(a)
SPECIFICATIONS WITH REGARDS TO THE
COMPOUND AND THE PRODUCT
Chemical Name;
Common Name:
Structural Formula:
Chemical Structure: [**]
Molecular Formula:
Molecular Weight:
78
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions
EXHIBIT 3.4(a)
Physical & Chemical Characteristics
Description:
Appearance: [**]
Melting Range:
Solubility: Solubility data is provided below.
Solubility in different solvents
----------------------------------------------------------------
Solvent Solubility (g/100 mL)
----------------------------------------------------------------
[**]
79
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions
EXHIBIT 4.2(d)
Pre-Option Data Package Prioritization
[**]
80
EXHIBIT 11.6
Fleet Bank Letter
81
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions
EXHIBIT 13.1(b)
LIST OF THIRD PARTIES
[**]
This list is an exhaustive list as of the date of this Agreement and shall not
include any of the companies or successor companies to the listed companies
resulting from a merger, consolidation, acquisition or other transaction as a
result of which the control (as defined in Section 13.1 in relation to the
Parties) over such company is changed.