Exhibit 10.28
Amendment
to
Collaboration Agreement
between
Procter & ▇▇▇▇▇▇ Pharmaceuticals, Inc.
and
Alexion Pharmaceuticals, Inc.
This Amendment is made on April 6, 1999, by and between and Procter &
▇▇▇▇▇▇ Company (herein together with its Affiliate Procter & ▇▇▇▇▇▇
Pharmaceuticals Inc., "Procter & ▇▇▇▇▇▇"), an Ohio corporation with principle
offices at ▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and Alexion
Pharmaceuticals, Inc., a Delaware corporation with a principle office at ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ (hereinafter, together with its Affiliates,
"Alexion") generally referred to herein individually as a "Party" or
collectively as the "Parties".
Background
The Parties entered into the Collaboration Agreement (the "Agreement") as of
January 25, 1999. The Parties wish to amend the Agreement as set forth herein.
Section 4.1 of the Agreement is hereby amended by deleting the first
sentence and replacing it with the following:
The parties will agree to finalize a Research & Development Plan within
ninety (90) days after the Effective Date.
All other terms and condition of the Agreement shall remain in force
without modification.
IN WITNESS WHEREOF, the Parties hereto have executed this Amendment as of
the date first set forth above.
Procter & ▇▇▇▇▇▇ Company
(Procter & ▇▇▇▇▇▇)
By /s/ [ILLEGIBLE] Form MPM
--------------------------------- ------------------------------------
Title Vice President Execution AFM
------------------------------ -------------------------------
Alexion Pharmaceuticals, Inc.
(Alexion)
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Title Exec. VP & COO
------------------------------
Execution Copy
COLLABORATION AGREEMENT
between
THE PROCTER & ▇▇▇▇▇▇ COMPANY
and
ALEXION PHARMACEUTICALS, INC.
January 25, 1999
Table of Contents
I. Definitions ....................................................... 2
II. License Grants .................................................... 9
III. Overview and Management of Collaboration .......................... 12
IV. Research and Development .......................................... 15
V. Manufacturing of Product .......................................... 19
VI. Health Registration Obligation .................................... 21
VII. Marketing of Products ............................................. 21
VIII. Milestones, Royalties, Payments and Accounting .................... 23
IX. Patents, Trademarks and Infringement .............................. 31
X. Confidentiality ................................................... 36
XI. Representations and Warranties .................................... 38
XII. Indemnification; Insurance ........................................ 42
XIII. Term, Termination, Change of Control .............................. 45
IV. Miscellaneous ..................................................... 59
XV. Execution ......................................................... 65
COLLABORATION AGREEMENT
Made as of this 25th day of January, 1999, by and among:
The Procter & ▇▇▇▇▇▇ Company, an Ohio corporation having its principal
offices at ▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (hereinafter,
together with its Affiliate Procter & ▇▇▇▇▇▇ Pharmaceuticals, Inc., "Procter &
▇▇▇▇▇▇"), and
Alexion Pharmaceuticals, Inc., a Delaware corporation having its principal
office at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ (hereinafter, together with
its Affiliates, "Alexion").
The following sets forth the background for this Agreement:
Alexion conducts pharmaceutical research and development, based on
significant expertise in identifying and developing therapeutic agents
targeted at treating a variety of disorders, including without limitation
products having utility in the treatment of acute cardiovascular
disorders.
Procter & ▇▇▇▇▇▇ conducts research and develops and markets pharmaceutical
products for the treatment of a variety of disorders, including without
limitation products having utility in the treatment of cardiovascular
disorders.
Procter & ▇▇▇▇▇▇ and Alexion share a mutual interest in a collaboration
aimed at the further development of C5 complement inhibitor agents
identified by Alexion with Procter & ▇▇▇▇▇▇ to market resulting products.
Procter & ▇▇▇▇▇▇ and Alexion intend fully to utilize their capabilities,
capitalize on each other's expertise, and put forth commercially
reasonable efforts to achieve the objectives of this collaboration, and
recognize that Alexion is contributing valuable technologies, and each
party is contributing valuable expertise and capabilities to this effort
and that the combination of these compatible and complementary
technologies, expertise and capabilities creates the basis for a
successful collaboration.
Accordingly, in consideration of the mutual promises, covenants and agreements
hereinafter set forth, the Parties agree to the following terms and conditions:
Article I - Definitions
1.1. "Affiliate" means any entity that directly or indirectly Owns, is
Owned by, or is under common Ownership with a Party to this Agreement. "Owns" or
"Ownership" means direct or indirect possession of more than fifty percent (50%)
of the votes of holders of a corporation's voting securities or a comparable
equity interest in any other type of entity.
1.2. "Alexion Indications" are described in Section 4.6.
1.3. "Agreement" means the present agreement together with all
attachments.
1.4. "Alexion Know-how" means Know-how owned or Controlled in the Field by
Alexion, but excluding Alexion Patents and Joint Patents.
1.5. "Alexion Patents" means all Patents owned or Controlled by Alexion
with the right to sublicense to the extent claiming, in the Field, a
Collaboration Inhibitor, research methods and materials used in performing
research and manufacturing processes or for discovering, identifying or testing
a Collaboration Inhibitor, or the manufacture, use, import, or sale of a
Collaboration Inhibitor or Product where such Patents cover (a) inventions made
prior to the date of this Agreement or (b) inventions made in the course of the
Research & Development Plan by employees of Alexion. Alexion Patents include,
without limitation, the patents and patent applications listed in Schedule 1.5
delivered to Procter & ▇▇▇▇▇▇ contemporaneously herewith (as may be amended as
appropriate). Continuations-in-part covered by Licensed Technology are limited
to continuations-in-part dominated by claims in any of the patents or
applications licensed to Alexion thereunder.
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1.6. "Alexion Product Cost" means [*******].
1.7. "Article" means any article of this Agreement.
1.8. "Collaboration Inhibitor" means [*******].
1.9. "Collaboration Term" means the period commencing on the Effective
Date and ending on the expiration of the Research & Development Plan, unless
terminated earlier pursuant to Sections 13.2, 13.3 or 13.4, or extended by
mutual agreement of the Parties.
1.10. "Commercially Reasonable Efforts" means efforts and resources
commonly used in the research-based pharmaceutical industry for a compound or
product at a similar stage of research, development or commercialization, and
having similar market potential. Commercially Reasonable Efforts shall be
determined taking into account the stage of research, development or
commercialization of the compound or product, the cost-effectiveness of efforts
or resources while optimizing profitability, the competitiveness of alternative
products that are or are expected to be in the relevant marketplace, the
proprietary position of the product, the regulatory and business environment,
the likelihood of regulatory approval and product reimbursement, the
profitability of the product, the existence of alternative products that may
also be developed by the Parties, and all other relevant factors. Commercially
Reasonable Efforts shall be determined on an indication-by-indication and
market-by-market basis, and it is anticipated that the level of effort will
change over time reflecting changes in the status of the compound, product and
the market involved.
1.11. "Competing Product" means [*******]
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and which is not a Product.
1.12. "Contract year" means the twelve (12) month period following the
Effective Date.
1.13. "Control" means, with respect to an item of information or
intellectual property right, the possession of the ability to grant a license or
sublicense as provided for herein under such item or right without violating the
terms of any agreement or other arrangement, express or implied, with any Third
Party.
1.14. "Direct Costs" means costs, of a nature, amount, and method of
calculation approved in advance by the Research & Development Steering Committee
via the Research & Development Plan, that are incurred by Alexion, based upon
efforts, funds and/or resources expended to perform its obligations under such
plan. Direct Costs may include the fully burdened costs associated with
activities performed by Alexion, or by a Third Party, for the research,
development, testing or manufacturing of Products. Direct Costs shall not
include any ▇▇▇▇-up or profit above actual costs.
1.15. "Effective Date" means the date described in Section 13.1(a).
1.16. "Effort Year" means nineteen hundred and twenty (1,920) hours of
direct effort expended on or in furtherance of the Research & Development Plan
during a year.
1.17. "Field" means [*******].
1.18. "Fiscal Quarter" means each period of three (3) months ending on 31
March or 30 June or 30 September or 31 December. The first Fiscal Quarter starts
as of the Effective Date and ends on 31 March.
1.19. "Fiscal Year" means the twelve (12) month period of time from July
to June 30,
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except that the first Fiscal Year commences on the Effective Date and ends on
June 30, 1999, and the last Fiscal Year during the Term shall end on the
anniversary of the Effective Date in the Fiscal Year in which the Term expires
or is terminated pursuant to Article XIII.
1.20. "Full Time Equivalent" ("FTE") means one Effort Year of an employee
or class of employees.
1.21. "GAAP" means U.S. generally accepted accounting principles.
1.22. "Health Registration" means any and all consents, licenses,
authorizations, reimbursement pricing or approvals required by a regulatory
authority such as the USFDA or any other Ministry of Health, for the
distribution, sale, manufacture, or testing of the Product, including, without
limitation, an IND, NDA or supplemental NDA or other application or supplemental
application for a Health Registration.
1.23. "Joint Patents" means all Patents, to the extent claiming, in the
Field, a Collaboration Inhibitor, the manufacture or use of a Collaboration
Inhibitor, research methods and materials used in performing research and
manufacturing process or for discovering, identifying, or testing for a
Collaboration Inhibitor, where such Patents cover inventions made jointly by
employees or agents of Alexion and Procter & ▇▇▇▇▇▇ prior to the end of the
Collaboration Term. In determining inventorship and rights in joint inventions,
the laws of the United States shall apply to any particular patent.
1.24. "Know-how" means techniques and data specifically in the Field,
including, without limitation, inventions, practices, methods, knowledge,
know-how, skill, test data including pharmacological, toxicological and clinical
test data, analytical and quality control data, but excluding Alexion Patents,
Joint Patents, and Procter & ▇▇▇▇▇▇ Patents.
1.25. "Licensed Technology" means the technology licensed to Alexion under
the license agreements identified on Schedule 1.25 delivered contemporaneously
herewith.
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1.26. "Marketed Product" means a Product which is approved by a regulatory
agency for sale pursuant to this Agreement in any country in the Territory.
1.27. "Net Sales" shall mean, for any period, the gross sales (as defined
below) by Procter & ▇▇▇▇▇▇, its Affiliates and sublicensees to Third Parties,
attributable to Products, determined by the gross amount invoiced to the
purchaser, including, if applicable, the value of all properties and services
received in consideration of sales of Products, less: (i) normal and customary
quantity and/or cash discounts, allowances, rebates, customer merchandising and
pricing funds (which includes price declines, Procter & Gamble's Business
Development Funds, and managed care discounts), fees paid to distributors
measured by the billing amount and chargebacks actually allowed or given from
the billed amount; (ii) freight, postage, shipping, and insurance expenses (if
separately identified in such invoice); (iii) credits or refunds actually
allowed for rejected, outdated or returned Product; and (iv) sales and other
taxes and duties directly related to the sale, to the extent that such items are
included in the gross invoice price (but not including taxes assessed against
the income derived from such sale) provided that any discounts, allowances and
rebates, based on overall purchases by the customer of the selling Party may be
applied to reduce Net Sales only to the extent of the pro rata amount of such
discounts or rebates attributable to the Products included in such overall
purchases. Any of the deductions listed above which involves a payment by
Procter & ▇▇▇▇▇▇ shall be taken as a deduction against aggregate sales for the
Fiscal Quarter in which the expense is accrued by Procter & ▇▇▇▇▇▇. For purposes
of determining Net Sales, Product shall be deemed to be sold when shipped or to
be the subject of a sale upon the delivery of Products to the purchaser or a
common carrier at the risk of the purchaser and the transfer of title thereto to
the purchaser.
Sales between or among Procter & ▇▇▇▇▇▇ and its Affiliates shall be
excluded from the computation of Net Sales, but sales by such Parties to their
customers shall be included in such computation.
Where a sale is deemed consummated by the gift or other disposition of
Products for
6
other than a selling price stated in cash, the term "Net Sales" shall mean the
average gross selling price billed by Procter & ▇▇▇▇▇▇, an Affiliate or its
sublicensee, as the case may be, in consideration of comparable Products during
the three (3) month period immediately preceding such disposition, without
reduction of any kind. For such purposes, a gift shall not include product
samples distributed in customary manner for similar products in the
pharmaceutical industry and Products supplied for clinical studies.
In the event a Product incorporate or is sold in combination with one or
more other active ingredients ("Other Product"), Net Sales shall be calculated
by multiplying the Net Sales of the combination Product by a fraction
"A/A(A+B)," where "A" is the average gross selling price of the Product during
the preceding calendar quarter sold separately by Procter & ▇▇▇▇▇▇ and "B" is
the average gross selling price during such quarter of the Other Product sold
separately by Procter & ▇▇▇▇▇▇ or, in the event the Product and Other Product
are not sold separately, a fraction "C/(C+D)," where "C" is the cost of
manufacture or acquisition to Procter & ▇▇▇▇▇▇ of the Products alone and "D" is
the cost of manufacture or acquisition to Procter & ▇▇▇▇▇▇ of the Other Product;
provided, however, such fraction shall in no event be less than one-half (1/2).
1.28. "Party" means Alexion or Procter & ▇▇▇▇▇▇.
1.29. "Patent" means all Valid Claims in all patent applications, and all
continuing and divisional patent applications, continuations-in-part and reissue
applications claiming priority, indirectly and directly, to such applications,
and all patents issuing therefrom in the Territory as well as extensions
thereof, including Supplementary Certificates of Protection of a member state of
the European Community.
1.30. "Primary Indication" means an indication for the Product for
treatment of [*******] as defined in an approved Research & Development Plan.
1.31. "Procter & ▇▇▇▇▇▇ Know-how" means Know-how owned or Controlled in
the
7
Field by Procter & ▇▇▇▇▇▇, but excluding Procter & ▇▇▇▇▇▇ Patents and Joint
Patents.
1.32. "Procter & ▇▇▇▇▇▇ Patents" means all Patents owned or Controlled by
Procter & ▇▇▇▇▇▇ to the extent claiming, in the Field, a Collaboration
Inhibitor, research methods and materials used in performing research and
manufacturing processes or for discovering, identifying or testing a
Collaboration Inhibitor, or the manufacture, sale or import of a Collaboration
Inhibitor or Product, where such Patents cover inventions made solely by
employees or agents of Procter & ▇▇▇▇▇▇ after the Effective Date and prior to
the end of the Term.
1.33. "Product" means any pharmaceutical composition containing any form
or dosage, including the Product in a vial, of a pharmaceutical or other product
or any process, which contains or is based upon a Collaboration Inhibitor or
which results from the manufacture, production or use of a claim of an Alexion
Patent or Joint Patent, wherever sold, which if not licensed, would infringe
upon Alexion Patents or Joint Patents (if issued).
1.34. "Research & Development Steering Committee" means the committee
described in Section 3.2.
1.35. "Secondary Indication" means an indication for the Product for
treatment of [*******] as defined in an approved Research & Development Plan.
1.36. "Section" means any section of this Agreement.
1.37. "Success Criteria" means the specific criteria that define the
minimum technical and commercial requirements for a Product[*******].
1.38. "Term" means the period of time specified in Section 13.1(b).
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1.39. "Territory" means the entire world.
1.40. "Tertiary Indication" means an indication for the Product for
[*******] defined in an approved Research & Development Plan as a Tertiary
Indication.
1.41. "Third Party" means any entity other than Alexion or Procter &
▇▇▇▇▇▇.
1.42. "Valid Claim" means any claim in a published or unexpired
application or patent included within a Patent which claim has not been held
unenforceable, unpatentable or invalid by a decision of a court or other
governmental agency of competent jurisdiction, unappealable or unappealed within
the time allowed for appeal, and which has not been finally abandoned or
admitted to be invalid or unenforceable through disclaimer by the patenting
Party.
Article II - License Grants
2.1. License Grants.
(a) Patent License For Commercialization of Products. Alexion hereby
grants Procter & ▇▇▇▇▇▇ a worldwide, exclusive royalty-bearing license or
sublicense, in the Field, under Alexion Patents and Alexion's interest in Joint
Patents, with [*******], to make, have made, use, import, and offer for sale and
sell Products.
(b) Know-how License to Procter & ▇▇▇▇▇▇. Alexion hereby grants to
Procter & ▇▇▇▇▇▇:
(i) an [*******] license to use Alexion Know-how within the Field,
wherein such Know-how is [*******], in pursuance of the
Research & Development Plan, during the Collaboration Term,
and during the
9
remaining Term of this Agreement.
(ii) a [*******] worldwide license to use Alexion Know-how
within the Field, wherein such Know-how [*******]
during the Collaboration Term, and during the remaining Term
of this Agreement.
(c) Research License to Procter & ▇▇▇▇▇▇. With respect to any
Alexion Patents and Alexion's interest in Joint Patents, Procter & ▇▇▇▇▇▇ shall
have the worldwide right, within the Field and in pursuance of the Research &
Development Plan, for Products, [*******], with the [*******] as authorized by
the Research & Development Steering Committee to:
(i) to make, have made, use and have used, import and have
imported, but not to sell or have sold, any such discovery or
invention;
(ii) to practice and have practiced on its behalf any such
discovered or invented methods of making devices or materials,
provided any devices or materials made by said methods are not
offered for sale to non-Affiliate third parties; and
(iii) to use and have used on its behalf any such discovered
or invented methods of using devices or materials, provided said
devices or materials are not offered for sale to non-Affiliate Third
Parties.
2.2. [*******] Licenses to Alexion. Procter & ▇▇▇▇▇▇ hereby grants Alexion
a [*******] license, with the [*******] as authorized by the Research &
Development Steering Committee, to use Procter & ▇▇▇▇▇▇ Patents and Procter &
▇▇▇▇▇▇ Know-how, within the Field in pursuance of the Research & Development
Plan, to perform research and development and manufacturing activities in
accordance with the Research & Development Plan, or for Products.
2.3. Sublicenses.
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(a) Procter & ▇▇▇▇▇▇ shall provide to Alexion [*******]. Procter &
▇▇▇▇▇▇ shall provide to Alexion (i) a copy of all sublicense agreements promptly
after execution, and (ii) annually, together with the report required in Section
8.5 of this Agreement, copies of reports related to financial and research and
development performance received by Procter & ▇▇▇▇▇▇ from its sublicensees
during the preceding three (3) month period or twelve (12) month period, as the
case may be.
(b) If a Third Party licensor of Licensed Technology, wherein the
manufacture, use, importation or sale of a Marketed Product would, but for the
licenses granted by the Third Party, infringe the Third Party Valid Claim, shall
seek to terminate such license due to the default by Alexion, Alexion shall give
Procter & ▇▇▇▇▇▇ written notice specifying the nature of the breach. If Alexion
cannot or does not cure the Third Party breach and provided Procter & ▇▇▇▇▇▇
shall have paid all amounts payable hereunder due (without reference to any
notice, cure, audit or other effective extension of the period of performance)
and fully complied with all of its obligations hereunder, including without
limitation, to commercialize the Product, then Procter & ▇▇▇▇▇▇ shall have the
right upon written notice to Alexion to cure the Third Party breach and credit
all amounts paid by it to the Third Party licensor against royalties payable by
it to Alexion pursuant to Section 8.2(a).
2.4. Certain Rights; No Implied License. In addition to all other rights
of Alexion under this Agreement, Alexion retains on behalf of itself the
perpetual, royalty-free, non-transferable right and license to practice all
technology exclusively licensed by it hereunder for research and educational
purposes, on a non-commercial basis, as approved by the Research
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& Development Steering Committee. Except as otherwise provided in this
Agreement, under no circumstances shall a Party hereto as a result of this
Agreement obtain any ownership interest or other right in any technology,
know-how, trade secrets, patents, pending patent applications, products,
vaccines, antibodies, cell lines or cultures, or animals of the other Party,
including items owned, controlled, developed by the other, or transferred by the
other to such Party at any time pursuant to this Agreement. The licenses and
rights granted in this Agreement shall not be construed to confer any rights
upon a Party by implication, estoppel or otherwise as to any technology not
specifically identified in this Agreement as or included within such license
rights, and no other assignments or licenses are made or granted by implication,
estoppel or otherwise, by this Agreement. All rights granted by Alexion to
Procter & ▇▇▇▇▇▇ under this Agreement which are now or in the future licensed to
Alexion are and shall be subject to the rights of the licensors and the terms of
the licenses thereof
2.5. Government. Procter & ▇▇▇▇▇▇ acknowledges that the Licensed
Technology hereunder or a portion thereof was developed with financial or other
assistance from the United States of America, and that applicable statutes,
regulations and Executive Orders of the United States of America may control,
apply to or affect the license granted hereunder and any sublicenses granted
hereunder. Procter & ▇▇▇▇▇▇ acknowledges that it is responsible for making its
own determination about the applicability of any statutes, regulations or
Executive Orders and the licensors' compliance therewith.
Article III - Overview and Management of Collaboration
3.1. Scope of Collaboration. The Parties will work together to research,
develop and commercialize Products pursuant to this Agreement. All such research
and development work shall be conducted according to a Research & Development
Plan during the Collaboration Term established and approved by the Research &
Development Steering Committee pursuant to Article III. The Research &
Development Plan will be conducted with the goals of (a) worldwide development
of product in Primary, Secondary and Tertiary Indications and exploration of
additional indications; and (b) development of efficient and economic processes
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for manufacture of Product. Procter & ▇▇▇▇▇▇ will commercialize Products
pursuant to Article ▇. ▇▇▇▇▇▇▇ and Procter & ▇▇▇▇▇▇ agree that they will conduct
the Research & Development Plan on a collaboration basis with the goal of
commercializing Products.
3.2. Research & Development Steering Committee Membership. The research
and development work under this Agreement, as set forth in Section 3.1, shall be
performed by the Parties pursuant to the oversight of the Research & Development
Steering Committee. Notwithstanding the overall responsibility of the Research &
Development Steering Committee for the management and direction of the
collaboration hereunder, it is the expectation of the Parties that the following
initial primary responsibilities shall be allocated between the parties, as
follows:
Initial Responsible Party for Primary
Secondary & Tertiary Indications
-------------------------------------
Function/Activity U.S. Global
----------------- ---- ------
non-clinical R&D [*******] [*******]
process development &
clinical manufacture [*******] [*******]
clinical packaging [*******] [*******]
clinical design [*******] [*******]
clinical implementation [*******] [*******]
clinical monitoring [*******] [*******]
* Indicating shared responsibility with the first named Party being the lead
Party.
The Research & Development Steering Committee has overall responsibility
for the definition, conduct and execution of the Research & Development Plan,
which will include without limitation defining Success Criteria, setting the
budget for Alexion activities, and determining allocation of work to be done by
Alexion, Procter & ▇▇▇▇▇▇ or Third Parties. The Research & Development Steering
Committee may delegate its responsibilities and activities to other committees
(e.g., to a Patent Committee, Research Committee, Finance Committee,
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Clinical Committee or such other committees as the Research & Development
Steering Committee may establish); however, the Research & Development Steering
Committee has final approval. The Research & Development Steering Committee will
be co-chaired by two (2) members with one (1) member designated by each Party.
The co-chairmen are senior R&D executives. The Parties will be free to change
their respective representatives, on notice to the other Party. Total
representation shall not exceed ten (10) members (five (5) members per Party)
unless otherwise agreed to by the Parties. The first Research & Development
Steering Committee meeting shall occur within thirty (30) days of the Effective
Date.
3.3. Meetings. The Research & Development Steering Committee will meet at
least quarterly, or as the Parties shall otherwise agree. Either Party may call
a special meeting of the Research & Development Steering Committee up to two (2)
times per year, on fifteen (15) days' written notice to the other Party. The
Party convening a special meeting shall send notices and agenda for such
meeting. Meetings will alternate between the offices of the Parties, or may be
held via teleconference, videoconference or such other place or manner as the
Parties may mutually agree. The Party hosting any meeting shall appoint a
secretary to the meeting who will record the minutes of the meeting which will
be circulated to the members of the Research & Development Steering Committee
promptly following the meeting for review, comment, and adoption.
3.4. Decision-making Criteria. All decisions of the Research & Development
Steering Committee shall be made by the co-chairmen and in the exercise of good
faith. Such decisions shall adhere to the ethical and legal standards for the
research-based pharmaceutical industry and shall be consistent with the use of
Commercially Reasonable Efforts to research and develop Products. Subject to the
foregoing, [*******] in the Research & Development Steering Committee.
3.5. Dispute Resolution. If Alexion does not agree with a decision by the
Research & Development Steering Committee, the matter shall be referred for
further review and resolution by the Chairman or CEO of Alexion and the
President of Procter & ▇▇▇▇▇▇ Pharmaceuticals (the
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"CEOs"), if both CEOs were not voting members of the Research & Development
Steering Committee. Action will be delayed until such meeting or discussion
between the CEOs. If the CEOs (or the Research & Development Steering Committee,
if the CEOs are both voting members) cannot resolve the issue within ten (10)
business days of such reference, the decision by Procter & Gamble's CEO shall be
binding.
3.6. Record-keeping. The Research & Development Steering Committee and all
other committees formed thereunder shall appoint one Party to keep complete and
accurate records pertaining to the committees' meetings and activities. The
other Party shall have the right to review such records upon reasonable notice
to the record-keeping party and at reasonable times.
3.7. Non-compete. Neither Alexion nor Procter & ▇▇▇▇▇▇ shall itself or in
conjunction with a Third Party enter into the development or commercialization
of a Competing Product during the Term of this Agreement.
Article IV - Research and Development
4.1. Research & Development Plan. The initial Research & Development Plan
is set forth in Schedule 4.1 delivered contemporaneously herewith. Prior to the
finalization of a Research & Development Plan, the Research & Development
Steering Committee, or designated subcommittee, will adopt a process for
managing project costs including but not limited to budget timing, forecast
updates, invoicing procedures, etc. The Parties will agree to finalize a
Research & Development Plan within sixty (60) days after the Effective Date. The
Research & Development Steering Committee is authorized to approve and amend the
Research & Development Plan (other than matters affecting Milestone payments or
minimum number of FTEs set forth in Section 4.2(a)). The Research & Development
Steering Committee may periodically modify the Research & Development Plan,
within the scope of and in a manner consistent with this Agreement, and the more
detailed responsibilities of each Party within the general scope of
responsibilities set forth herein, and revise the Research & Development Plan
accordingly. Procter & ▇▇▇▇▇▇ hereby designates Alexion as its favored
development and
15
commercialization partner and collaborator with respect to Collaboration
Inhibitor except as otherwise specifically provided herein. The Research &
Development Plan shall include a line item description and budget for all
approved Alexion R&D activities and expenditures, including Alexion FTE
allocations and any Third Party costs incurred by Alexion which will be
reimbursed by Procter & ▇▇▇▇▇▇.
4.2. Funding of Research & Development Plan.
(a) FTE-Based Funding and Other Funding. Procter & ▇▇▇▇▇▇ will fund
Alexion FTEs for work pursuant to the Research & Development Plan and approved
by the Research & Development Steering Committee. However, during the first
three (3) Contract Years of the Agreement, notwithstanding any re-allocation of
research effort or responsibility or any other changes to the Research &
Development Plan, but subject to Sections 13.2 and 13.7(a) below, Procter &
▇▇▇▇▇▇ agrees to fund at least the following minimum number of Alexion FTEs
listed below per Contract Year for work pursuant to the Research & Development
Plan. Work includes without limitation, non-clinical research and development,
process development and clinical assays.
Contract Year Alexion FTEs
------------- ------------
[*******] [*******]
[*******] [*******]
[*******] [*******]
In addition to such FTE-based funding, Procter & ▇▇▇▇▇▇ shall pay or
reimburse Alexion for outside costs to Third Parties approved by the Research &
Development Steering Committee and incurred in connection with the Research &
Development Plan but such outside costs shall exclude the routine costs of
compensation, facilities, supplies and overhead of Alexion FTEs.
All Direct Costs associated with work done pursuant to the approved
Research & Development Plan shall be borne by Procter & ▇▇▇▇▇▇.
(b) Alexion's FTE Rate; Payment. Calculation of any FTE rate
includes [*******]
16
[*******]. Procter & Gamble's funding of Alexion's FTEs will be made at an
annual rate of [*******] per FTE. Such rate shall be adjusted for inflation by
multiplying the amount in the contract by the percentage change in the U.S. CPI
for all Urban Consumers as published by the U.S. Bureau of Labor Standards (the
"CPI") for the period January 1999 to the June immediately preceding the Fiscal
Year in question. An example calculation of the CPI adjustment is set forth in
Schedule 4.2(b) delivered contemporaneously herewith.
4.3. Alexion Obligations. Alexion shall use Commercially Reasonable
Efforts to diligently perform the obligations of Alexion set forth in the
Research & Development Plan, within the resources provided by Procter & ▇▇▇▇▇▇.
[*******]. To the extent not related to Alexion Patents or Joint Patents,
[*******]. Alexion shall proceed diligently with the work to be performed by it
as set out in the Research & Development Plan by using its reasonable commercial
efforts within the resources provided by Procter & ▇▇▇▇▇▇ to provide allocation
of sufficient time and effort, using personnel with sufficient skills and
experience, to execute and substantially perform its obligations under the
Research & Development Plan. During the Collaboration Term, Alexion shall commit
such FTEs in its employ to the Research & Development Plan as determined by the
Research & Development Steering Committee on an annual basis, subject to this
Section 4.4 and Section 4.2.
4.4. P&G Obligations. Procter & ▇▇▇▇▇▇ shall use the Commercially
Reasonable Efforts to diligently complete the development of Products pursuant
to the Research & Development Plan, and to diligently perform the obligations
set forth in the Research &
17
Development Plan. Procter & ▇▇▇▇▇▇ shall be responsible for all costs and
expenses in connection with such development efforts. In addition to Procter &
Gamble's obligation for funding pursuant to Section 4.2, Procter & ▇▇▇▇▇▇ agrees
to commit to the Research & Development Plan the resources which shall be
necessary to fulfill its obligation under the Research & Development Plan
(including extensions for the balance of the Collaboration Term).
4.5. Research and Development Communication. Alexion and Procter & ▇▇▇▇▇▇
will submit reports to each other not less than two (2) times per year
presenting a meaningful summary of research and development activities performed
under this Agreement. Alexion and Procter & ▇▇▇▇▇▇ will make presentations of
such activities to each other, beyond that made to the Research & Development
Steering Committee, as reasonably requested by each other. All technology
generated by the Parties in the course of the Agreement, in the Field, shall be
disclosed pursuant to Section 10.1. The Parties shall use their best efforts to
communicate information only within the scope of this Agreement. Alexion and
Procter & ▇▇▇▇▇▇ will also communicate informally and through the Research &
Development Steering Committee to inform each other of research and development
done under this Agreement. Alexion will provide Procter & ▇▇▇▇▇▇ with raw data
in original form or a photocopy thereof for any and all work carried out under
this Agreement as reasonably requested by Procter & ▇▇▇▇▇▇. Further, each Party
shall keep complete and accurate records pertaining to the Parties' activities
hereunder consistent with the creation and maintenance of raw data, records and
reports necessary or useful in the preparation, approval and maintenance of
Health Registrations for Products and Marketed Products and sufficient to
enable, for example, the efficient transfer of Product manufacturing Know-how
from Alexion to P&G. All information provided under this Section 4.5 is subject
to Article X.
4.6. Alexion Indications. During the term of the licenses granted to
Procter & ▇▇▇▇▇▇ pursuant to Article II, Alexion may propose to the Research &
Development Steering Committee indications which are not part of the Research &
Development Plan for clinical development (Alexion Indications). The Research &
Development Steering Committee shall evaluate the
18
proposed Alexion Indication within sixty (60) days of such proposal. If the
Research & Development Steering Committee shall deem the Alexion Indication not
worthy of development, no such development shall occur.
If, however, the Research & Development Steering Committee shall deem the
Alexion Indication worthy of development, then (i) the Research & Development
Plan shall be so modified within such sixty (60) day period or (ii) the Parties
shall negotiate in good faith, within an additional sixty (60) day period, terms
for development of such Alexion Indication. If the Parties cannot agree on such
terms within ninety (90) days after Alexion proposes to Procter & ▇▇▇▇▇▇ an
Alexion Indication, then Alexion can proceed at its own cost to develop the
Alexion Indication in a manner approved by the Research & Development Steering
Committee. Any actions by Alexion under these conditions is contingent on such
actions being approved by the Research & Development Steering Committee and not
being to the disadvantage of the collaborative efforts under the Research &
Development Plan. At any time thereafter Procter & ▇▇▇▇▇▇ and Alexion will again
meet and negotiate in good faith terms to provide Procter & ▇▇▇▇▇▇ an
opportunity to buy back into the program for the development and
commercialization of the Alexion Indication. In any case, it is intended that
all work done on this indication continue to be discussed and approved by the
Research & Development Steering Committee.
4.7. No Solicitation of Employees. During the Collaboration Term and for a
period of two (2) years thereafter, neither Alexion nor Procter & ▇▇▇▇▇▇ nor
their respective Affiliates shall, without the prior consent of the other Party,
solicit the employment of any person who during the course of employment with
the other party or its Affiliate was involved with activities relating to the
Research & Development Plan.
Article V - Manufacturing of Product
5.1. Manufacturing of Product(s).
(a) Alexion shall be responsible for process development and
production of Collaboration Inhibitor and Product for the Research & Development
Plan. To the extent such
19
activities are being conducted through Third Parties, the terms of such Third
Party agreement shall be approved by the Research & Development Steering
Committee. Procter & ▇▇▇▇▇▇ shall purchase for such purpose clinical bulk
material and/or vials of Product from Alexion at Alexion Product Cost calculated
according to GAAP, payable within thirty (30) days of invoice, and verifiable by
audit. Such supply of bulk material and vials of Product for clinical use shall
be in accordance with applicable specifications and requests made and approved
by the Research & Development Steering Committee.
(b) Alexion shall have the continuing right, at its election, to bid
for the manufacture of all or a portion of the commercial requirements of
Product. Subject to the provisions of this paragraph, award of all or a portion
of the right to manufacture commercial Product shall be determined by Procter &
▇▇▇▇▇▇. If Alexion has in place or will have in place manufacturing capacity and
Alexion shall meet required QA, regulatory, manufacturing and production
criteria and its bid be at a price no higher than that offered by a comparably
qualified bona fide Third Party contract manufacturer, Alexion shall have the
right to manufacture all or a portion of such commercial requirements of
Products upon [*******] to be negotiated by Alexion and the Research &
Development Steering Committee or Procter & ▇▇▇▇▇▇, as the case may be. In the
event the Parties are unable to reach agreement, either Party shall be entitled
to submit the matter for settlement by arbitration in accordance with Section
14.4. During such periods as Alexion shall not be manufacturing all of the
requirements of Product, Alexion shall be entitled to recommend the other
contract manufacturing source, subject to final approval by the Research &
Development Steering Committee or Procter & ▇▇▇▇▇▇. Alexion shall fully
cooperate in the license and transfer of the requisite manufacturing know-how to
such Third Party contract manufacturer as Procter & ▇▇▇▇▇▇ determines.
20
Article VI - Health Registration Obligation
Seeking Approvals. Procter & ▇▇▇▇▇▇ and its Affiliates will be the sponsor
of Health Registrations where applicable in the Territory. Procter & ▇▇▇▇▇▇ and
Alexion shall share responsibilities for Health Registration filings,
interactions and correspondences related to the development, registration and
approval of a Product within the Territory. Alexion shall have primary
responsibility for the CMC part of regulatory filings. Alexion shall transfer
sponsorship of all current Health Registration applications for Products to
Procter & ▇▇▇▇▇▇ as established by the Research & Development Steering
Committee. To the extent that Alexion intends to develop an Alexion Indication,
the Research & Development Steering Committee shall provide the necessary access
to any regulatory filings (including applications for Health Registrations). All
costs associated with the Health Registration filings shall be borne by Procter
& ▇▇▇▇▇▇.
Article VII - Marketing of Products
7.1. Marketing and Sales Strategy. As set forth herein, Procter & ▇▇▇▇▇▇
shall make all decisions regarding the strategy and tactics of marketing,
selling and otherwise commercializing Marketed Products, [*******] method of
sales and distribution, organization and management of sales and marketing,
packaging and labeling, appointment of distributors pursuant to Section 7.2,
extent of Alexion's co-promotional activity pursuant to Section 7.3, and other
terms and conditions for such sales and marketing. Notwithstanding the
foregoing, Procter & ▇▇▇▇▇▇ will use Commercially Reasonable Efforts to
commercialize each Product that receives Regulatory Approval, taking into
account the scientific and commercial potential for such Product. Alexion will
provide thirty (30) days' notice to Procter & ▇▇▇▇▇▇, if, in Alexion's opinion,
Procter & ▇▇▇▇▇▇ is not using such commercially reasonable and diligent efforts,
in order for the Parties to discuss the situation and for Procter & ▇▇▇▇▇▇ to
make diligent and continuing efforts to rectify the situation. If the Parties
agree that Procter & ▇▇▇▇▇▇ is not using such commercially reasonable and
diligent efforts, Procter & ▇▇▇▇▇▇ shall have an additional sixty (60) days to
rectify the situation. If no agreement is made within the thirty (30) day
period, then the matter may be taken to arbitration
21
pursuant to Section 14.4.
7.2. Exclusive Distributor. Subject to Section 7.3 below, Procter & ▇▇▇▇▇▇
may elect a Third Party to act as its agent in connection with the marketing,
sale and distribution of Marketed Products on a country basis in the Territory.
No amounts payable to or retained by any such agent shall affect the calculation
of Net Sales.
7.3. Alexion Co-Promotional Activities. Alexion will have an opportunity,
but not the obligation, to participate in the sales efforts in the United States
of a minimum [*******] of a Marketed Product's sales effort. Upon the Research &
Development Steering Committee's decision to prepare a Health Registration in
the United States, Procter & ▇▇▇▇▇▇ shall provide a written request to Alexion
regarding Alexion's intent to co-promote the Marketed Product. Said request
shall contain a comprehensive Product marketing plan, and number of details and
position, as defined in Schedule 7.3 [*******] and rate of reimbursement to
Alexion. Within thirty (30) days of receipt, Alexion shall provide its written
response. Should Alexion elect to participate, the Parties will immediately
begin negotiations to enter into a Co-Promotional Agreement. Said Agreement will
incorporate traditional provisions including but not limited to those set forth
in Schedule 7.3. Alexion shall be solely responsible for hiring and funding the
establishment of its internal sales organization. Procter & ▇▇▇▇▇▇ shall pay
Alexion an amount equal to Procter & Gamble's costs for details and sales call
position as if such details were made by Procter & Gamble's dedicated
field-based sales force or trained contract sales force. Calculation of
reimbursement to Alexion will be determined according to the proportion of
dedicated field-based sales force or trained contract sales force that Procter &
▇▇▇▇▇▇ will employ for the promotion of Product in the U.S.
7.4. No Restrictions on Business. Except as otherwise specifically
provided herein, Alexion agrees that Procter & ▇▇▇▇▇▇ is in the business of
developing, manufacturing and selling of pharmaceutical products and nothing in
this Agreement shall be construed as restricting such business or imposing on
Procter & ▇▇▇▇▇▇ the duty to market and sell Marketed Products hereunder to the
exclusion of or in preference to any other product, provided such
22
product is not a Competing Product.
Article VIII - Milestones, Royalties, Payments and Accounting
8.1. Milestones. In consideration of Alexion's commitment to conduct the
Research & Development Plan and for the licenses granted hereunder, Procter &
▇▇▇▇▇▇ agrees to pay, in addition to funding all of the research and development
costs related to Product incurred during this Agreement pursuant to Section 4.2,
the following non-refundable, non-creditable one-time milestone payments to
Alexion, contingent upon meeting the following milestones as follows:
Milestone Amount
--------- ------
(US $ Million)
Pre-Health Registration Events
Upon execution of this Agreement [*******]
[*******] [*******]
[*******] [*******]
[*******] [*******]
U.S. Health Registration Events
[*******] [*******]
[*******] [*******]
[*******] [*******]
[*******] [*******]
[*******] [*******]
23
[*******] [*******]
Foreign Health Registration Events
[*******] [*******]
[*******] [*******]
[*******] [*******]
[*******] [*******]
8.2. Royalty Calculation.
(a) Procter & ▇▇▇▇▇▇ will pay to Alexion a royalty on [*******],
sold by Procter & ▇▇▇▇▇▇, its Affiliates and sublicensees (including sales by
distributors) in the Territory at the applicable rate listed below multiplied by
the Annual Contribution:
[*******] Royalty
--------- -------
(US$)
[*******] Million* [*******]
[*******] Million* [*******]
[*******] Million* [*******]
[*******] Million* [*******]
For example, if [*******] in 1998 was [*******] Million, Procter &
▇▇▇▇▇▇ would pay Alexion [*******] Million [*******].
If however, such royalty payment based on [*******] in any year was less
than a sum equal to [*******] of that year's annual Net Sales of the Products,
then Procter & ▇▇▇▇▇▇ shall pay Alexion a total percentage payment for that year
equal to [*******] of that year's annual Net Sales. With respect to each Product
sold by Procter & ▇▇▇▇▇▇,
24
its Affiliates or sublicensees, Procter & ▇▇▇▇▇▇ shall pay Alexion hereunder, on
a country by country basis, until the expiration of the period equal to the
longer of (a) or (b) where (a) is the longer of (i) [*******] or (ii) [*******],
and (b) [*******]. In countries in which there exist a non-infringing, marketed
generic equivalent product (a product recognized and approved by the relevant
regulatory authorities as pharmaceutically equivalent, directly substitutable
and equivalent to the Marketed Product) in which sales of such product in such
country by such Third Party [*******] of sales of the Product, then the
royalties payable by Procter & ▇▇▇▇▇▇ to Alexion pursuant to Section 8.2(a)
shall be [*******]. Notwithstanding anything else in this Agreement, such
royalties shall not in any event be lower than the aggregate royalties payable
by Alexion to its licensors of Licensed Technology with respect to Products.
(b) In the case of Product sales in a country wherein (a) [*******]
(b) [*******].
(c) In addition to the royalties paid pursuant to Section 8.2(a) or
(b), Procter & ▇▇▇▇▇▇ will also pay Alexion the following additional milestone
payments based on Net Sales. These are one-time only payments triggered on the
first occurrence where total Fiscal Year Net Sales for Products exceeds Net
Sales threshold levels described below:
25
Sales
Milestone
Net Sales Payments
--------- --------
(US$) (US $ Million)
[*******] [*******]
[*******] [*******]
[*******] [*******]
[*******] [*******]
[*******] [*******]
All payments will be made pursuant to Section 8.5(d). An example
calculation is set forth in Schedule 8.2(c) delivered contemporaneously
herewith.
* The Annual Contribution threshold levels in Section 8.2(a) and Net Sales
threshold levels in Section 8.2(c) shall be adjusted for inflation by
multiplying the value in the contract by the percentage change in the U.S. CPI
for all Urban Consumers as published by the U.S. Bureau of Labor Standards (the
CPI) for the period from January 1999, to the June immediately preceding the
Fiscal Year in question. An example calculation of the CPI adjustment is set
forth in Schedule 4.2(b) delivered contemporaneously herewith.
8.3. Sublicense Agreements. If Procter & ▇▇▇▇▇▇, an Affiliate or
sublicensee of Procter & ▇▇▇▇▇▇ sublicenses Alexion Patents or Alexion Know-how
pursuant to Article V, or licenses or sublicenses Joint Patents, Procter &
▇▇▇▇▇▇ shall pay to Alexion [*******] of all amounts received from the
sublicensee or licensee, including without limitation, [*******] in accordance
with Section 8.2(a) of all amounts paid to Alexion under this Section 8.3 for
which Procter & Gamble's licensee [*******] amounts payable to Procter & ▇▇▇▇▇▇
under the terms of the applicable license or [*******] agreement delivered to
Alexion in accordance with Section 2.3.
26
8.4. Cash Only. Procter & ▇▇▇▇▇▇ shall not receive from sublicensees
anything of value in lieu of cash payments in satisfaction of payment of
obligations under a sublicense and this Agreement unless the express written
permission of Alexion is obtained in advance. Procter & ▇▇▇▇▇▇ shall be entitled
to receive rights to improvements and other benefits from sublicensees under
sublicense agreements, without incurring any royalty obligations to Alexion in
respect thereof.
8.5. Payment.
(a) Milestones payable under Section 8.1 will be paid not later than
ten (10) calendar days following the event.
(b) The FTE-based and other funding contemplated by Section 4.2
shall be payable quarterly during each Contract Year. Within 10 days of the
Effective Date, Procter & ▇▇▇▇▇▇ will pay Alexion the pro rata payment for
minimum FTEs for the first quarter of the first Contract Year.
(c) Royalties payable under Section 8.2(a) and (b) and amounts
payable under Section 8.3 will be paid not later than fifty-five (55) calendar
days following the end of each Fiscal Quarter. All payments shall be accompanied
by a report in writing showing on a country by country basis for the Fiscal
Quarter for which such payment applies, the amount billed to Third Parties for
Products sold during such Fiscal Quarter, the deductions from the amount billed
to arrive at the Annual Contributions, the Annual Contributions for the Fiscal
Quarter, and the royalties due on such Annual Contributions, such report being
broken down by Marketed Product.
(d) Royalties payable under Section 8.2(c) will be paid not later
than fifty-five (55) calendar days following the end of each Fiscal Year. All
payments shall be accompanied by a report in writing showing the Fiscal Year for
which such payment applies, the Net Sales for the Fiscal Year, and the royalties
due on such Net Sales, such report being broken down by Marketed Product.
(e) Within ninety (90) days after the end of each Fiscal Year during
the term of this Agreement commencing with the year during which the first
commercial sale of a Product
27
shall occur, Procter & ▇▇▇▇▇▇ shall provide to Alexion a report, prepared by
Procter & ▇▇▇▇▇▇, relating to the sale of Products, containing:
(i) the total Net Sales of all Products sold by Procter & ▇▇▇▇▇▇, it
Affiliates and its sublicensees during such year; and
(ii) the amounts owed to Alexion pursuant to this Agreement with
respect to such year.
(f) Any amounts owed pursuant to Sections 8.2(a), 8.2(b), 8.2(c) or
8.3 shall be paid in U.S. dollars using the average rate of exchange for the
currency of the country from which the royalties are payable for the applicable
period. Rates are averaged using those quoted in The Wall Street Journal (or
Citibank, N.A. if such rates are not available in The Wall Street Journal).
(g) Alexion shall submit a report to Procter & ▇▇▇▇▇▇ within sixty
(60) days after the end of each Fiscal Quarter detailing the number of Alexion
FTEs performing work pursuant to the Research & Development Plan, detailed
description of such work and other costs incurred pursuant to Section 4.2.
Alexion shall submit invoices in U.S. dollars to Procter & ▇▇▇▇▇▇. Invoices
submitted to Procter & ▇▇▇▇▇▇ pursuant to this Section 8.5(g) are payable net
thirty (30) days after receipt and are subject to audit by Procter & ▇▇▇▇▇▇ in
addition to the audit provision pursuant to Section 8.8.
(h) All payments due under this Article VIII will be deposited by
Electronic Funds Transfer in a bank chosen by Alexion by the date due. Any
amounts or royalties prohibited from export by a particular country will be
deposited in a bank chosen by Alexion in such country. Any deductions for
withholding taxes imposed by the country in which Net Sales take place will be
withheld and paid as required by law. The amount of tax withheld shall be for
the account of Alexion. Procter & ▇▇▇▇▇▇ will provide prompt evidence of payment
of such taxes to the governmental or taxing authority. Procter & ▇▇▇▇▇▇ will
assist Alexion in claiming relief from double taxation and shall use reasonable
efforts to minimize any income taxes required to be withheld on behalf of
Alexion by Procter & ▇▇▇▇▇▇, its Affiliates or sublicensees, and promptly shall
deliver to Alexion copies of all communications from or with such governmental
authority with respect thereto.
(i) Procter & ▇▇▇▇▇▇ shall report sales of Products by its
sublicensees and
28
pay royalties on such sales on the same basis as if such sales had been made by
Procter & ▇▇▇▇▇▇. Procter & ▇▇▇▇▇▇ shall ensure that its sublicense agreements
obligate sublicensees to pay royalties and report on such a basis, and shall
further give Alexion a right to require (to the extent permitted under the
applicable sublicense agreement) that Procter & ▇▇▇▇▇▇ initiate an audit of such
sublicensees' books. Alexion shall reimburse Procter & ▇▇▇▇▇▇ for Auditing costs
initiated at Alexion's request should the Auditor determine the cumulative
material discrepancy (Procter & ▇▇▇▇▇▇ and Sublicensee) is less than 3%.
8.6. Records. Procter & ▇▇▇▇▇▇ (and its Affiliates and Sublicensees) and
Alexion (and its Affiliates) will maintain, and will require their Affiliates to
maintain, complete and accurate written records which are relevant to costs,
expenses and payments under this Agreement and such records shall be open for
inspection by a designated representative of the other Party with reasonable
notice during reasonable business hours for a period of five years from creation
of individual records. Such inspections are limited to two times per year.
8.7. Interest Rate. Unless otherwise provided in this Agreement, any
payments past due will bear interest at the prime rate (such quoted in The Wall
Street Journal on the first day of the month of the accrual) plus two (2)
percentage points, compounded monthly.
8.8. Audit. Not more than once in any Fiscal Year and upon reasonable
advance notice to the other party to this Agreement, Alexion or Procter &
▇▇▇▇▇▇, as the case may be (the "Requesting Party"), shall be entitled to
nominate a reasonably acceptable representative or independent certified public
accountants reasonably acceptable to the other party to have access at
reasonable times during normal business hours and upon reasonable prior notice
(subject to signing a confidentiality agreement) to (a) Procter & Gamble's, its
Affiliates' or sublicensees' records for Annual Contribution and Net Sales of
Products (such audit of Procter & Gamble's sublicensee shall be initiated by
Procter & ▇▇▇▇▇▇), as the case may be, as they relate to the relevant Products
for the purpose of verifying Procter & Gamble's calculation of royalty payments
due hereunder or (b) Alexion' s records for Alexion' s calculation of FTE costs,
Alexion Product Cost and any other costs to be paid by Procter & ▇▇▇▇▇▇. Such
accounting firm
29
shall not disclose to the Requesting Party or to any third party any financial
or other information relating to the business of the party whose records are
being audited (the "Audited Party") except that which is necessary to inform the
Requesting Party of the accuracy or inaccuracy of the Audited Party's
calculation. Should such accounting firm discover information indicating, in its
opinion, an inaccuracy in the calculation of the royalty payments or the Alexion
expenses subject to payment by Procter & ▇▇▇▇▇▇, as the case may be, it shall so
notify the parties in writing thereof (and shall set out its preliminary
conclusions in reasonable detail).
The Audited Party shall advise the Requesting Party in writing within ten
business days of receiving such notice should the Audited Party disagree with
the determination of such representative or accounting firm. During the next 20
business days, such representative or accounting firm and the accountants of the
Audited Party shall attempt to resolve the issue in dispute. Failing such
agreement within such 20 day period, the accounting firm of the Requesting Party
and the accountants of the Audited Party shall appoint another independent,
nationally recognized accounting firm to conduct its own audit. The
determination by such second accounting firm (the "Auditors") shall be final and
binding on the parties. Any payments owed by the Audited Party shall be made
within ten (10) days of the Audited Party's receipt of the Auditor's
determination.
In the absence of material discrepancies [*******] in any request for
reimbursement or audit resulting from such examination or audit, the accounting
expense shall be paid by the Party requesting the examination or audit. If
material discrepancies adverse to the Party requesting the examination or audit
do result, the Audited Party shall bear the accounting expenses.
Notwithstanding the foregoing, neither Party shall audit the same records
twice.
30
Article IX - Patents, Trademarks and Infringement
9.1. Disclosure. Alexion shall disclose to Procter & ▇▇▇▇▇▇ Know-how,
patents and developments in the Field included within Alexion Patents and
Alexion Know-how known prior to the Effective Date. Further, each Party shall
promptly disclose to the other Party any invention or Know-how or other
developments in the Field. Invention disclosures in the Field will be disclosed
in the normal course of the Agreement. Such disclosures will be made pursuant to
Article X.
9.2. Alexion Obligation. Alexion shall take all such actions within its
control required to maintain rights to Licensed Technology which is part of
Alexion Patents and Alexion Know-how and, where necessary, subject to Section
2.4(b), shall take such action as Procter & ▇▇▇▇▇▇ reasonably deems necessary to
enable Alexion to maintain such licenses, subject to the payment and performance
by Procter & ▇▇▇▇▇▇ of its obligations and responsibilities under this Agreement
and provided, that Alexion shall not be required to pay any licensor any funds
in respect of Sales by Procter & ▇▇▇▇▇▇, its Affiliates or sublicensees which it
has not received from Procter & ▇▇▇▇▇▇.
9.3. Patent Applications. Alexion and Procter & ▇▇▇▇▇▇ will discuss and
evaluate technology disclosed pursuant to Section 9.1, and confer regarding the
advisability of filing patent applications to cover any technology resulting
from the collaboration under this Agreement. The Party responsible for the
filing, prosecution and maintenance of patent applications (herein "Responsible
Party") shall be: (a) Procter & ▇▇▇▇▇▇, if the subject invention is made solely
by employees of Procter & ▇▇▇▇▇▇; or (b) Alexion, if the subject invention is
made solely by employees of Alexion or a licensor or agent thereof or (c)
determined by agreement of the Parties for all other inventions, taking into
account the nature of the invention and the relationship of the invention to
inventions claimed in other patents or applications. Any patent `for an
invention conceived or reduced to practice regarding technology during the
Agreement shall be owned: (i) by Alexion (and shall be an Alexion Patent), if
said invention is conceived and reduced to practice solely by employees of
Alexion; (ii) by Procter & ▇▇▇▇▇▇
31
(and shall be a Procter & ▇▇▇▇▇▇ Patent with respect to a Product) if said
invention is conceived and reduced to practice solely by employees of Procter &
▇▇▇▇▇▇; and (iii) by Procter & ▇▇▇▇▇▇ and Alexion (and shall be a Joint Patent),
if said invention is conceived and reduced to practice by employees of Procter &
▇▇▇▇▇▇ and Alexion. Inventorship shall be determined according to the laws of
the USA. Any dispute regarding the inventorship of an invention made under the
Research & Development Plan shall be resolved by the decision of independent
patent counsel, mutually acceptable to the Parties, after consideration of all
evidence submitted by the Parties, except to the extent such decision is
inconsistent with the subsequent determination of the appropriate patent or
judicial authorities. Filing, prosecution, maintenance and enforcement of such
Patents shall be handled pursuant to Article IX. Alexion and Procter & ▇▇▇▇▇▇
will discuss with each other the advisability of filing Patent applications
beyond the priority country.
9.4. Filing and Prosecution of Patents. The Responsible Party shall
diligently file, prosecute, seek prompt issuance of, and maintain patent
applications according to its own internal standards for effectively covering
other inventions made by its employees or consultants. The Responsible Party
will endeavor to ensure that all patent applications are filed before any public
disclosures so as to ensure validity of patent applications filed outside of the
United States. The Responsible Party will submit a substantially complete draft
of each patent application to the other Party at least thirty (30) days prior to
the contemplated filing date and consider any comments of the other Party,
provided that in those circumstances where the Responsible Party believes time
is of the essence, the Responsible Party will endeavor to provide the other with
such advance notice as it reasonably can under the circumstances. Alexion and
Procter & ▇▇▇▇▇▇ will ▇▇▇▇▇▇ with each other regarding the prosecution of such
Patent Applications and will copy each other with any official action and
submission in such Patent Applications. Except where otherwise noted, Procter &
▇▇▇▇▇▇ will be responsible for expenses associated with filing, prosecution and
maintenance of Procter & ▇▇▇▇▇▇ patents and Alexion will be responsible for
expenses associated with its patents.
9.5. Alternate Responsibility for Prosecution. In the event a Party
determines that it will not file, prosecute or maintain, a Patent in the Field
in a particular country, it shall promptly
32
notify the other Party, and such other Party shall then have the right, but not
obligation, to assume responsibility for the Patent, and thereby become the
Responsible Party for that Patent pursuant to Section 9.3. Such other Party
shall be given all necessary authority by the Party not so filing, prosecuting
or maintaining the Patent to file, prosecute, and maintain the Patent at the
expense of such other Party.
9.6. Infringement of Patents. Procter & ▇▇▇▇▇▇ and Alexion shall promptly
notify the other in writing of any infringement of a Patent within the Patent
rights licensed or to be licensed pursuant to Article II of which they become
aware. Procter & ▇▇▇▇▇▇ and Alexion shall also promptly notify the other party
in writing of any patent rights a Third Party may assert against a Product or
Marketed Product.
9.7. Enforcement of Patents.
(a) Third Party Licenses. If (a) Procter & ▇▇▇▇▇▇ believes that a
license to a Third Party patent is necessary for sale of Products in a country
outside the United States and (b) Alexion does not agree that such Third Party
license is necessary, then the Parties will submit the issue to a mutually
acceptable independent counsel who will determine whether such Third Party
license is necessary for sale of such Product in such country. If such
independent counsel determines that such Third Party license is necessary for
sale of Products in such country, or if Alexion agrees with Procter & Gamble's
assessment, the Parties will share license costs, with Alexion responsible for
[*******] of such costs and Procter & ▇▇▇▇▇▇ responsible for [*******] of such
costs. If such independent counsel determines that such license is not
necessary, Procter & ▇▇▇▇▇▇ may execute such Third Party license and be
responsible for all such costs.
(b) Defense and Settlement of Third Party Claims. If a Third Party
asserts that a patent or other right owned by it is infringed by the
manufacture, use or sale of any Product, then Procter & ▇▇▇▇▇▇ shall have the
right but not the obligation to defend against any such assertions at its own
expense, and Alexion shall have the right at its own expense to be represented
by counsel of its own choice. In the event that Procter & ▇▇▇▇▇▇ declines to
defend against such Third Party assertion, or Procter & ▇▇▇▇▇▇ fails to defend
within sixty (60) days, then Alexion may defend against such assertion at its
own expense.
33
(c) Infringement of Licensed Technology by Third Parties with
Respect to Products. If any exclusively licensed Licensed Technology appears to
be infringed by a Third Party in any country in connection with the manufacture,
use, offer for sale, or sale of any Product or a functionally equivalent
competitive product in such country, the Party to this Agreement first having
knowledge of such infringement shall promptly notify the other in writing. The
notice shall set forth the facts of that infringement in reasonable detail, to
the knowledge of the Party. Alexion shall have the primary right, but not the
obligation, to institute, prosecute, and control any action or proceeding with
respect to such infringement, by counsel of its own choice, and Procter & ▇▇▇▇▇▇
shall have the right, at its own expense, to be represented by counsel of its
own choice. If Alexion fails to bring an action or proceeding within a period of
twenty-five (25) days after having knowledge of infringement of an Alexion
Patent or a Joint Patent, Procter & ▇▇▇▇▇▇ shall have the right to bring and
control any such action by counsel of its own choice. Alexion will retain
control of non-exclusively licensed Licensed Technology and Procter & ▇▇▇▇▇▇
shall have the right to be represented in any such action by counsel of its own
choice at its own expense. If one Party brings any such action or proceeding,
the other Party agrees to be joined as a party plaintiff if necessary to
prosecute the action and to give the first Party reasonable assistance and
authority to file and prosecute the suit. No Party shall be obligated to bring
or maintain more than one such suit at any time with respect to claims directed
to any one method of manufacture or composition of matter or method of use.
(d) Infringement of Certain Exclusively Licensed Alexion Patents
other than Licensed Technology or Joint Patents by Third Parties with Respect to
Products. If an exclusively licensed Alexion Patent, not including Licensed
Technology, or Joint Patent appears to be infringed by a Third Party in any
country in connection with the manufacture, use, offer for sale, sale or import
of any product including Product, the Party to this Agreement first having
knowledge of such infringement shall promptly notify the other in writing. The
notice shall set forth the facts of that infringement in reasonable detail, to
the knowledge of the Party. Procter & ▇▇▇▇▇▇ shall have the primary right, but
not the obligation to institute, prosecute, and control any action or proceeding
with respect to such infringement of such exclusively licensed Alexion Patent or
Joint Patent by counsel of its own choice, and Alexion shall have the right, at
its own expense, to be represented in any action involving an exclusively
licensed Alexion Patent or a
34
Joint Patent by counsel of its own choice. If Procter & ▇▇▇▇▇▇ fails to bring an
action or proceeding within a period of twenty-five (25) days after having
knowledge of infringement, Alexion shall have the right to bring and control any
such action by counsel of its own choice, and Procter & ▇▇▇▇▇▇ shall have the
right to be represented in any action by counsel of its own choice at its own
expense. If one Party brings any such action or proceeding, the other Party
agrees to be joined as a party plaintiff if necessary to prosecute the action
and to give the first Party reasonable assistance and authority to file and
prosecute the suit. If the Parties do not agree on a common course of action for
any other such Patent within sixty (60) days following the notice provided under
this Section 9.7, each Party may take such action as it determines to be in its
best interest with respect to such apparent infringement.
(e) Infringement of Procter & ▇▇▇▇▇▇ Patent by Third Parties with
Respect to Products. If a Procter & ▇▇▇▇▇▇ Patent appears to be infringed by a
Third Party in any country in connection with the manufacture, use, offer for
sale, sale or import of any Product, the Party to this agreement first having
knowledge of such infringement shall promptly notify the other in writing. The
notice shall set forth the facts of that infringement in reasonable detail to
the knowledge of the Party. Procter & ▇▇▇▇▇▇ shall have the right, but not the
obligation, to institute, prosecute, and control any action or proceeding with
respect to such infringement.
(f) Monetary Awards. Any damages or other monetary awards recovered
by reason of litigation under Section 9.7(b), 9.7(c) or 9.7(d) shall be
allocated first to the costs and expenses of the Party bringing suit, then to
the costs and expenses, if any, of the other Party. Any amounts remaining
designated as lost profits shall be allocated to the Parties in a manner such
that Alexion receives as nearly as possible the same amount as if Procter &
▇▇▇▇▇▇ had made Net Sales resulting in such lost profit. Any other amounts
remaining shall be allocated [*******] to the Party bringing suit and [*******]
to the other Party. No settlement or consent judgment or other voluntary final
disposition of a suit under Section 9.7(b), (c) or (d) may be entered into
without the consent of the Party not bringing the suit if such settlement,
judgment or other disposition shall waive or affect any rights of the Party not
bringing the suit or could result in the payment of money or impose any
obligation on the Party not bringing the suit.
35
9.8. Trademarks. Procter & ▇▇▇▇▇▇ shall file, prosecute and maintain all
trademark applications and registrations for trademarks to be used for Products
or Marketed Products. Procter & ▇▇▇▇▇▇ shall pay all expenses in connection with
filing and prosecution of such trademarks which shall be owned by Procter &
▇▇▇▇▇▇.
9.9. Trademark Infringement and Enforcement. Alexion shall promptly notify
Procter & ▇▇▇▇▇▇ of any infringement of a trademark under this Section 9.9 of
which they become aware. Procter & ▇▇▇▇▇▇ may, but shall not be required to,
prosecute any such alleged infringement or threatened infringement. Alexion
shall cooperate fully with Procter & ▇▇▇▇▇▇ in such action. Any recovery
obtained shall belong to Procter & ▇▇▇▇▇▇.
9.10. Unauthorized Use of Patent Rights. Neither Party shall willfully
take any action which would, directly or indirectly, infringe, or induce or
contribute to the infringement of, one or more claims of any issued Patent of
the other Party or its Affiliates, except to the extent such action is
authorized by a license granted under this Agreement. If either Party takes any
action, directly or indirectly, to challenge the validity of any issued patent
of the other Party or its Affiliates, then the other Party shall have the right
in its sole discretion to terminate the Research & Development Plan; provided,
however, in the circumstances where the challenged patent is included within the
patent rights of the other Party, the other Party additionally shall have the
right to terminate the licenses granted under Article V above, to the extent
permitted by law, on a country-by-country basis. A Party shall not be entitled
to withhold payment of any royalty accruing during any challenge to the validity
of a patent included within the patent rights of the other Party.
Article X - Confidentiality
10.1. Confidentiality and Non-Use Obligations. Each Party shall maintain
in confidence all information (herein "Information") which is:
36
(a) disclosed to it by the other Party pursuant to Section 9.1;
(b) developed by the Party during the Term in the course of
performance of the obligations under this Agreement;
(c) the terms of the Agreement; or
(d) other information ("Other Information") disclosed by the other
Party which is outside the Field or otherwise not within the scope of the
collaboration and which is considered confidential by the other Party, and so
designated as confidential in writing when first disclosed or within thirty (30)
days after disclosure if the first disclosure is oral (except for patent
applications and related correspondence which shall be deemed confidential
without being marked or any such designation).
The Party shall take all reasonable precautions to:
(a) prevent disclosure of such Information to Third Parties, except
as set forth in Section 10.3 and Section 14.10, or as may be necessary for the
filing or prosecution of patent applications pursuant to Article IX; and
(b) use Patents and Know-how pursuant to the rights and obligations
of the Party pursuant to Article II.
The Party shall not use Other Information for any purpose.
These restrictions upon disclosure and use of Information shall terminate
ten (10) years after the date of the termination of the Agreement, but shall not
apply to any specific portion of Information which:
(i) is Information which can be demonstrated by the recipient
to have already been in the possession of the recipient at the time
of disclosure by the other Party;
(ii) is or later becomes available to the public, as evidenced
by documents which were generally published, other than by default
by the Party;
(iii) is received from a Third Party having legitimate
possession thereof and the independent legal right to make such
disclosure;
(iv) is Other Information developed by the Party entirely
without reference or use of Information, as established by probative
documentary evidence; or
(v) is required to be disclosed by law or government
regulation.
37
10.2. Prior Non-Disclosure Agreements. The "Non- Disclosure Agreement"
dated July 16, 1998 between Alexion Pharmaceuticals, Inc. and Procter & ▇▇▇▇▇▇
have separately been rendered void and all Information to be kept confidential
under such agreements as of the Effective Date will be subject to the terms of
Section 10.1 as if disclosed under this Agreement.
10.3. Research Manuscripts and Abstracts. It is understood that either
Party may publish or otherwise disclose the results of the Research &
Development Plan or of development studies of Collaboration Inhibitor in a
reputable scientific forum (for example, as an abstract, poster presentation,
lecture, article, book, or any other means of dissemination to the public). Such
disclosures may be made to a Third Party with the approval of the Research &
Development Steering Committee regarding (x) preclinical research; (y) clinical
research disclosures after a final report exists, if disclosure presents no
significant risk to regulatory filings and serves a compelling business reason
for publication; and (z) other work by the Parties, upon approval by the
Research & Development Steering Committee. No such disclosure shall be made to a
Third Party until a patent application has been filed adequately describing and
claiming any patentable technology embodied in such disclosure, pursuant to
Article VII. A party wishing to make any such disclosure shall submit a complete
written draft of the disclosure to the other Party at least thirty (30) days
prior to submission for the disclosure to a Third Party. The Party shall
consider any comments from the other Party. Any disputes regarding the
appropriateness, content and authors of any such disclosure shall be resolved by
the Research & Development Steering Committee.
Article XI -- Representations and Warranties
11.1. Governmental Compliance. Both Parties shall comply with all laws,
rules and regulations applicable to the activities undertaken by both Parties
hereunder.
38
11.2. Alexion Representations and Warranties.
(a) Alexion represents and warrants to Procter & ▇▇▇▇▇▇ the
following, which shall be true and correct as of the Effective Date:
(i) Organization and Good Standing. Alexion is a corporation duly
organized, validly existing, and in good standing under the applicable
laws of incorporation and has full corporate power to own its properties
and conduct the business presently being conducted by it, and is duly
qualified to do business in, and is in good standing under, the laws of
all states and nations in which its activities or assets require such
status, except in any case where the failure to be so qualified and in
good standing would not be material.
(ii) Power and Authority. Alexion has full corporate right, power
and authority to perform its obligations pursuant to this Agreement, and
this Agreement and the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action on the part of
Alexion. This Agreement has been duly and validly executed by Alexion.
Upon execution and delivery of this Agreement, it will be the valid and
binding obligation of Alexion enforceable in accordance with its terms,
subject to equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditor's right and
remedies generally.
(iii) Violations and Consent. The execution, delivery and
performance of this Agreement does not, and the consummation of the
transactions therein contemplated will not violate any law, rule,
regulation, order, judgment or decree binding on Alexion or result in a
breach of any term of the certificate of incorporation or by-laws of
Alexion or any contract, agreement or other instrument to which Alexion is
a party, except in each case to an extent not material.
(b) Alexion represents and warrants to Procter & ▇▇▇▇▇▇ the following,
which shall be true and correct as of the Effective Date:
(i) to the best of Alexion's knowledge, Alexion has disclosed to
Procter & ▇▇▇▇▇▇ technical, scientific and regulatory information
relating to the Collaboration Inhibitor, and has not intentionally
withheld any such material technical, scientific or regulatory
information; and
39
(ii) it owns or Controls under valid licenses the requisite rights
to grant the licenses granted by it hereunder; and
(iii) Alexion has no actual knowledge of any information rendering
invalid or unenforceable any Patent licensed to Procter & ▇▇▇▇▇▇
under Article II. Alexion will promptly inform Procter & ▇▇▇▇▇▇
if it obtains such information after the Effective Date. Alexion has
no actual knowledge of any Patents and Know-how owned by a Third
Party that Alexion believes will prevent, inhibit, or limit the
Parties from conducting the research, development and
commercialization activities under this Agreement. Alexion warrants
that, except with respect to the agreements for the Licensed
Technology, it has not entered into any agreement with a Third Party
that Alexion believes will prevent, inhibit, or limit the Parties
from conducting the research, development and commercialization
activities under this Agreement.
EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, ALEXION MAKES NO
REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO THE ALEXION
PATENTS, ALEXION KNOW-HOW, COLLABORATION INHIBITOR OR OTHER LICENSED
TECHNOLOGY OR PRODUCTS, AND EXPRESSLY DISCLAIMS ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ANY OTHER IMPLIED
WARRANTIES WITH RESPECT TO THE CAPABILITIES, SAFETY, UTILITY OR COMMERCIAL
APPLICATION OF ALEXION PATENTS, ALEXION KNOW-HOW, COLLABORATION INHIBITOR
OR OTHER LICENSED TECHNOLOGY OR PRODUCTS.
ALEXION AND ITS LICENSORS SHALL NOT BE LIABLE FOR ANY DIRECT,
CONSEQUENTIAL OR OTHER DAMAGES SUFFERED BY PROCTER & ▇▇▇▇▇▇ OR ANY OTHERS
RESULTING FROM THE USE OF THE ALEXION
40
PATENTS, ALEXION KNOW-HOW, COLLABORATION INHIBITOR OR OTHER LICENSED
TECHNOLOGY OR PRODUCTS EXCEPT IN THE CASE OF ALEXION AS IT RELATES TO
DIRECT DAMAGE PURSUANT TO ARTICLE XII.
11.3. Representations and Warranties of Procter & ▇▇▇▇▇▇.
(a) Procter & ▇▇▇▇▇▇ represents and warrants to Alexion the
following, true and correct on the Effective Date:
(i) Organization and Good Standing. Procter & ▇▇▇▇▇▇ is a
corporation duly organized, validly existing, and in good standing under
the applicable laws of incorporation and has full corporate power to own
its properties and conduct the business presently being conducted by it,
and is duly qualified to do business in. and is in good standing under,
the laws of all states and nations in which its activities or assets
require such status, except in any case where the failure to be so
qualified and in good standing would not be material.
(ii) Power and Authority. Procter & ▇▇▇▇▇▇ has full corporate right,
power and authority to perform its obligations pursuant to this Agreement,
and this Agreement and the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action on the part of
Procter & ▇▇▇▇▇▇. This Agreement has been duly and validly executed by
Procter & ▇▇▇▇▇▇. Upon execution and delivery of this Agreement, it will
be the valid and binding obligation of Procter & ▇▇▇▇▇▇ enforceable in
accordance with its terms, subject to equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditor's rights and remedies generally.
(iii) Violations and Consent. The execution, delivery and
performance of this Agreement does not, and the consummation of the
transactions therein contemplated will not violate any law, rule,
regulation, order, judgment or decree binding on Procter & ▇▇▇▇▇▇ or
result in a breach of any term of the certificate of incorporation or
by-laws of Procter & ▇▇▇▇▇▇ or any contract, agreement or other instrument
to which Procter & ▇▇▇▇▇▇ is a party, except in each case to an extent
41
not material. No authorization is required by Procter & ▇▇▇▇▇▇ for the
execution, delivery, or performance of this Agreement by Procter & ▇▇▇▇▇▇,
except in each case to an extent not material.
(iv) Evaluation. Procter & ▇▇▇▇▇▇ possesses the expertise and skill
in the technical areas in which the Alexion Patents, Alexion Know-how,
Collaboration Inhibitor and Products are involved necessary to make, and
has made its own evaluation of the capabilities, safety, utility and
commercial application of the Alexion Patents, Alexion Know-how,
Collaboration Inhibitor and Products.
11.4. Limitation on Warranties. The Parties understand that the research
and development work to be conducted pursuant to this Agreement will involve
untested, experimental, and currently undeveloped technology and that neither
Alexion nor Procter & ▇▇▇▇▇▇ guarantees the safety or usefulness of any Product.
Except as otherwise provided in this Agreement, nothing herein shall be
construed as a representation or warranty by either Party to the other that any
Patent or Know-how or other intellectual property right owned or Controlled by
such Party is valid, enforceable, or not infringed by any Third Party, or that
the practice of such rights does not infringe any property right of any Third
Party or that any Patent will issue based upon a pending patent application or
that any such patent which issues will be valid.
11.5. Negative Covenants. Each Party hereby covenants to the other that
such Party shall not use or practice the other Party's Patents or Know-how in
any field or in any manner except as specifically licensed under this Agreement.
Article XII - Indemnification; Insurance
12.1. Indemnification.
(a) Research and Development Indemnification. Each party (the
"Indemnifying Party") shall indemnify, defend and hold the other Party (the
"Indemnified Party") harmless from
42
and against any and all liabilities, claims, damages, costs, expenses or money
judgments incurred by or rendered against the Indemnified Party and its
sublicensees incurred in the defense or settlement of a Third Party lawsuit or
in a satisfaction of a Third Party judgment arising out of any injuries to
person and/or damage to property resulting from (i) the gross negligence or
willful or intentional misconduct in the performance by it of its
responsibilities under the Research & Development Plan or otherwise under this
Agreement, or (ii) personal injury to the Indemnified Party employees or agents
or damage to the Indemnified Party's tangible property resulting from acts
performed by, under the direction of, or at the request of the Indemnifying
Party in carrying out activities contemplated by this Agreement. Notwithstanding
the above, each Party shall indemnify and hold the other Party harmless from and
against that portion of any and all Losses due to the gross negligence or
willful or intentional misconduct of such Indemnifying Party. Further, Procter &
▇▇▇▇▇▇ shall not indemnify, defend or hold harmless Alexion for any claims or
liabilities arising from the actions or inactions of Alexion prior to the date
of this Agreement.
(b) Indemnification for Marketing. With respect to Products
commercialized by Procter &Gamble under this Agreement, Procter & ▇▇▇▇▇▇ hereby
agrees to save, defend, indemnify, and hold harmless Alexion, its agents and
employees, and the principal investigator of the Licensed Technology and all
licensors thereof, their officers, directors, trustees, employees and agents and
all of their heirs, executors, administrators and legal representatives
("Indemnified Parties") from and against any and all such claims, actions,
demands, loss, liability, expense or damage (including investigative costs,
court costs and attorneys' fees) the Indemnified Parties may suffer, pay or
incur as a result of claims, demands or actions against any of the Indemnified
Parties to the extent arising or alleged to arise by reason of or in connection
with any and all personal injury, economic loss and property damage caused or
alleged to be caused or contributed to in whole or in part by the manufacture,
use, handling, storage, sale, sublicense or other disposition of Products by
Procter & ▇▇▇▇▇▇, its Affiliates, agents or sublicensees, whether asserted under
a tort or contractual theory or any other legal theory, including but not
limited to any and all claims, demands, and actions in which it is alleged that
(1) an Indemnified Party's negligence or representations about the Products
caused any defect in their manufacture, design, labeling or performance or (2)
subject to in the case of patents and in
43
respect to Alexion pursuant to Section 9.7, any alleged infringement of any
patent, trademark or copyright, causes or contributed in whole or in part to the
personal injury, economic loss of property damage.
(c) Affiliates; Sublicensees. Procter & ▇▇▇▇▇▇ shall be responsible
for and indemnify and hold Alexion and its licensors harmless from and against
all acts and omissions of its Affiliates and sublicensees, as if performed or
failed to be performed by it under this Agreement.
(d) Procedure. Subject to Section 9.7, in the event that an
Indemnified Party is seeking indemnification under Section 12.1(a), 12.1(b) or
12.1(c), it shall inform the Indemnifying Party of a claim as soon as reasonably
practicable after it received notice of the claim, shall permit the Indemnifying
Party to assume direction and control of the defense of the claim (including the
right to settle the claim solely for monetary consideration), and shall
cooperate as requested (at the expense of the Indemnifying Party) in the defense
of the claim.
12.2. Insurance.
(a) Without limiting Procter & Gamble's indemnity obligations under
Section 12.1. Procter & ▇▇▇▇▇▇ shall obtain or have obtained for it and it shall
maintain or have maintained for it throughout the term of this Agreement and for
at least ten (10) years after its termination or expiration (i) general
liability insurance in comprehensive form with a combined single limit of no
less than [*******], which shall cover at least bodily injury, personal injury,
liability, property damage and product liability claims with respect to any
technology licensed to it hereunder, Patents, or Product practiced, used,
manufactured or sold pursuant to any development, testing and commercialization
of technology, Patents, or Product, and (ii) contractual insurance in broad form
in amounts reasonable and prudent in light of the risks involved in development,
testing and commercialization of Products. All such policies shall include a
contractual endorsement naming the Indemnified Parties as additional insureds
and providing coverage for all liability which may be incurred by the
Indemnified Parties in connection with this Agreement and require the insurance
carrier(s) to provide Alexion with no less than thirty (30) days written notice
of any change in the terms or coverage of the policy(ies) or its cancellation.
In no event, however, shall Procter & ▇▇▇▇▇▇ be obligated to maintain any
44
insurance in respect of Products manufactured or sold by Alexion.
(b) Notwithstanding the provisions of Section 12.2(a), if and so
long as Procter & ▇▇▇▇▇▇ shall have a consolidated net worth of at least
[*******], then the insurance coverage may be substituted by self-insurance
provisions as such net worth and self-insurance shall be certified by a
responsible corporate financial officer of Procter & ▇▇▇▇▇▇. In such event,
Procter & ▇▇▇▇▇▇ shall hold Alexion, its agents and employees, the principal
investigators of the Licensed Technology and all licensors thereof, their
officers, directors, employees and agents and all of their heirs, executors,
administrators and legal representatives harmless from and against claims from
Third Parties and other liabilities in a manner and measure equivalent to the
insurance coverage otherwise required by this Section 12.2.
(c) Alexion has obtained insurance coverage customary for a company
of its size, engaged in the research and development of pharmaceutical products.
Article XIII - Term, Termination: Change of Control
13.1. Effective Date and Term.
(a) Effective Date. Within three (3) days of the date first written
above, the Parties shall file the appropriate documents with the U.S. Federal
Trade Commission and the U.S. Department of Justice pursuant to the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and including
such Act's enabling regulations (collectively "HSR"). This Agreement shall
become effective upon such date that the applicable HSR waiting period has
expired or is otherwise terminated ("Effective Date").
(b) Term. Unless terminated earlier by the Parties pursuant to
Sections 13.2 or 13.3, this Agreement shall commence on the Effective Date and
expire on the later of (i) the date of the last to expire Alexion Patent or
Joint Patent having a Valid Claim or (ii) the date when royalty payments are no
longer payable pursuant to Section 8.2(a). Upon expiration of this Agreement in
accordance with clause (i) or (ii) of this Section, each Party shall grant to
the other Party a non-exclusive worldwide license to use its Know-how, within
the Field; provided, that Procter & ▇▇▇▇▇▇ shall continue to be responsible for
milestone payments in accordance with
45
Sections 8.1 and 8.2(b) of this Agreement as if this Agreement shall not have so
expired.
13.2. Termination by Procter & ▇▇▇▇▇▇.
(a) Failure to Meet Success Criteria. Procter & ▇▇▇▇▇▇ may terminate
the Agreement upon [*******] prior written notice to Alexion if at any
time, in the reasonable judgment of the Research & Development Steering
Committee while in effect and thereafter in the reasonable judgment of Procter &
▇▇▇▇▇▇, the licensed technology or the Product fails to meet Success Criteria,
to be effective at any time at least [*******] after the Effective Date.
(b) Collapse of Working Hypothesis. If, within [*******] after the
Effective Date, Procter & ▇▇▇▇▇▇ shall reasonably determine, that the working
hypothesis or scientific rationale underlying the Collaboration has collapsed
and is no longer scientifically viable, then, unless Alexion shall agree in
writing, Procter & ▇▇▇▇▇▇ shall be entitled to have such matter determined by
peer review consensus. In such event, the Parties shall promptly submit such
matter for determination by peer review consensus conducted by three scientists
having expertise in the Field, one selected by Alexion, another by Procter &
▇▇▇▇▇▇ and the third by the two scientists so selected by the Parties. If
Alexion shall have so agreed in writing or if such peer review consensus shall
reasonably determine that the working hypothesis or scientific rationale
underlying the Collaboration has collapsed and is no longer scientifically
viable, then Procter & ▇▇▇▇▇▇ may terminate this Agreement by written notice to
Alexion. Such notice shall be effective to terminate the obligations of Procter
& ▇▇▇▇▇▇ under this Agreement upon receipt thereof by Alexion, except that, in
order to provide for the orderly transition of responsibilities from Procter &
▇▇▇▇▇▇ to Alexion, the following obligations shall continue and the following
shall occur: (i) the obligations and responsibilities of Procter & ▇▇▇▇▇▇ to
fund FTEs at the level then in existence prior to such notice and make other
payments contemplated by Section 4.2 shall continue until expiration of
[*******] after Alexion's receipt of such written notice of termination (subject
to the reduction of such FTEs by Alexion in accordance with the orderly wind
down by Alexion of such program), (ii) Procter & ▇▇▇▇▇▇ shall continue to be
responsible for care and monitoring of clinical patients and other patients
which have been dosed and (iii) Procter & ▇▇▇▇▇▇ shall assist Alexion in winding
down any trials in progress in accordance with applicable industry standards and
applicable governmental regulations.
46
13.3. Material Breach. Failure by either Party (the "Breaching Party") to
comply with any of the material obligations contained in this Agreement shall
entitle the other Party (the "Non-breaching Party") to give to the Breach Party
notice specifying the nature of the breach and requiring it to cure such breach.
(a) If such breach involves the payment of money and is not cured or
otherwise resolved by the Parties in writing within fifteen (15) days after
receipt by the Breaching Party of such notice, either Party shall be entitled to
initiate an audit under Section 8.8. In the event of such an audit, if the
Auditor shall render an award of monetary damages payable to the Non-Breaching
Party, and such amount shall remain unpaid for ten (10) days after the Breaching
Party receives a copy of such judgment from the Non-breaching Party, the
Non-breaching Party shall be entitled to terminate this Agreement.
(b) If such breach does not involve the payment of money, and is not
cured or otherwise resolved by the Parties in writing within sixty (60) days
after receipt by the Breaching Party of such notice, either Party shall be
entitled to initiate arbitration under Section 14.4 and at its sole discretion
suspend performance under this Agreement. If such breach is not cured or
otherwise resolved by the Parties in writing within such sixty (60) day period,
and neither Party initiates an arbitration, all licenses and other rights of the
Breaching Party under Patents and Know-how of the Non-breaching Party and all
rights thereunder shall terminate and revert to the Non-breaching Party.
(i) If the arbitrators find a material breach of this Agreement,
then the Breaching Party may pay to the Non-breaching Party an amount
[*******] of such award. If the Breaching Party makes such a payment
then the provisions of this Agreement shall continue in full force and
effect. If the Breaching Party does not make such payment as provided in
Section 13 .2(iii) below, this Agreement shall terminate and the Breaching
Party shall pay to the Non-breaching Party the amount of damages awarded
by the arbitrators.
(ii) If the arbitrators find a material breach of this Agreement,
then the
47
Breaching Party may offer to pay to the Non-breaching Party, in
consideration for the Non-breaching Party's election not to terminate the
Agreement, [*******]. If the Non-breaching Party accepts such offer, the
provisions of this Agreement shall continue in full force and effect. If
the Breaching Party does not make such offer or if the Non-breaching Party
rejects such offer, this Agreement shall terminate and the Breaching Party
shall pay to the Non-breaching Party the amount of damages awarded by the
arbitrators.
(iii) Any payment required under the terms of Sections 13.3(a) or
13.3(b) shall be made in USD to the bank designated by the Party to be
paid hereunder within ten (10) days after the determination of the audit
contemplated by Section 8.7 or the decision of the arbitrators, as the
case may be.
(iv) Notwithstanding anything herein to the contrary, each Party may
avail itself of the provisions of clause (i) and (ii), collectively, on a
single occasion only.
13.4. Bankruptcy. A Party may terminate (the "Terminating Party") this
Agreement upon written notice, at any time after the other party (the "Bankrupt
Party") is (1) dissolved (other than pursuant to a consolidation, amalgamation
or merger); (2) becomes insolvent or is unable to pay its debts or fails or
admits in writing its inability generally to pay its debts as they become due;
(3) makes a general assignment, arrangement or composition with or for the
benefits of its creditors; (4) institutes or has instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or any other relief
under any bankruptcy or insolvency law or other similar law affecting creditor's
rights, or a petition is presented for its winding-up or liquidation, and, in
the case of any such proceeding or petition instituted or presented against it,
such proceeding or petition (A) results in a judgment of insolvency or
bankruptcy or the entry of an order for relief or the making of an order for its
winding-up or liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or presentation
thereon (5) has a resolution passed for its winding-up, official management or
liquidation (other than pursuant to a consolidation, amalgamation or merger);
(6) seeks or becomes subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian
48
or other similar official for it or for all or substantially all its assets; (7)
has a secured party take possession of all or substantially all of its assets or
has a distress, execution, attachment, sequestration or other legal process
levied, enforced or sued on or against all or substantially all its assets and
such secured party maintains possession, or any such process is not dismissed,
discharged, stayed or restrained, in each case within thirty (30) days
thereafter; (8) causes or is subject to any event with respect to it which,
under the applicable law of any jurisdiction, has an analogous effect to any of
the events specified in clauses (1) to (7) (inclusive); or (9) takes any action
in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the foregoing acts.
13.5. Termination by Mutual Consent. This Agreement may be terminated by
mutual written consent of the Parties and rights hereunder divided as the
Parties agree in writing.
13.6 Certain Effects of Termination.
(a) Termination by Procter & ▇▇▇▇▇▇ for Scientific Reasons;
Termination by Alexion. Effective upon a termination under Section 13.2 or by
Alexion in accordance with Section 13.3 or 13.7(b), the following shall occur:
(i) Procter & Gamble's licenses under the Alexion Patents and
Alexion Know-how shall automatically be deemed to have terminated and all rights
thereunder shall automatically be deemed to have reverted to Alexion; and
Procter & ▇▇▇▇▇▇ shall be deemed to have transferred title to Alexion of all raw
data generated from any clinical or nonclinical studies conducted hereunder by
Alexion for Procter & ▇▇▇▇▇▇;
(ii) Procter & ▇▇▇▇▇▇ shall, at the option of Alexion, either
deliver to Alexion or discontinue to use and, with respect to materials other
than raw data and biologics, destroy, all copies of Alexion Confidential
Information and any other materials provided by Alexion to Procter & ▇▇▇▇▇▇
hereunder in the possession or Control of Procter & ▇▇▇▇▇▇, its Affiliates or
sublicensees, and shall furnish to Alexion an affidavit signed by a corporate
officer or the Associate General Counsel of Procter & ▇▇▇▇▇▇ certifying that
such delivery or destruction has been fully effected. Notwithstanding the
foregoing, and provided Procter &
49
▇▇▇▇▇▇ fulfills its obligations specified in this Agreement with respect to such
materials. Procter & Gamble's Associate General Counsel may continue to retain
solely for archival purposes a single copy of Alexion's Confidential Information
and any other materials provided by Alexion, except that all biologics and
original versions of raw data generated from any clinical or nonclinical studies
conducted hereunder by Alexion for Procter & ▇▇▇▇▇▇ shall be transferred to
Alexion.
(iii) Procter & ▇▇▇▇▇▇ shall be deemed to have granted to
[*******], to Procter & Gamble's entire right, title and interest in Joint
Patents, in the Field, which may be necessary for the sale of a Product and to
Procter & ▇▇▇▇▇▇ Know-how, to make, have made, use and have used, import and
have imported, offer for sale and sell and have sold Products, including all
inventions, discoveries and improvements to Alexion Patents, Alexion Know-how,
Collaboration Inhibitor and Products to which Procter & ▇▇▇▇▇▇ shall then have
any rights;
(iv) Procter & ▇▇▇▇▇▇ shall be deemed to have granted to
Alexion an [*******], to Procter & ▇▇▇▇▇▇ Patents, in the Field, which may be
necessary for the sale of Products. The royalty rate will be negotiated by the
Parties upon commercially reasonable terms, and will fairly reflect whether the
license is on an exclusive or non-exclusive basis. If the Parties are unable to
agree on such terms, either Party may submit such dispute to be settled by
arbitration in accordance with Section 14.4.
(v) Procter & ▇▇▇▇▇▇ shall transfer to the Alexion or its
designee title to and sponsorship of all Health Registrations, approvals and
rights with respect to the Product anywhere in the Territory, and if title to
and sponsorship of any such Health Registrations, approvals or rights is not
transferable, then Procter & ▇▇▇▇▇▇ shall use all Commercially Reasonable
Efforts to enable Alexion or its designee to make use of and prosecute such
Health Registrations, approvals or rights;
(vi) Procter & ▇▇▇▇▇▇ shall, if such termination shall occur
at any time after a trademark shall be used outside of Procter & ▇▇▇▇▇▇ for a
Product (in trials, pre-launch or otherwise), transfer to Alexion, or grant a
fully-paid royalty-free exclusive transferable license (with the right to
sublicense) to Alexion for use and control of, all trademarks for the Product
that
50
are owned by Procter & ▇▇▇▇▇▇ anywhere in the Territory; and
(vii) Take any other steps which can only be taken by Procter
& ▇▇▇▇▇▇, necessary for Alexion or its designee to be able to market, promote,
distribute, sell and manufacture Products in each country in the Territory
without undue delay; and
(viii) Procter & ▇▇▇▇▇▇ shall indemnify, defend and hold
Alexion harmless in accordance with Article XII above from the performance by it
of its responsibilities under Section 3.2 prior to the date of termination and
under Section 13.2(b) and this Section 13.6 after such termination.
(b) Breach by Alexion. If Procter & ▇▇▇▇▇▇ shall terminate this
Agreement in accordance with Section 13.3 due to a breach by Alexion, all
licenses and other rights granted by Alexion to Procter & ▇▇▇▇▇▇ shall terminate
and revert to Alexion, and Procter & ▇▇▇▇▇▇ shall continue to own the raw data
generated from any clinical or nonclinical studies theretofore conducted
hereunder by Alexion for Procter & ▇▇▇▇▇▇. Alexion shall be entitled, at its
option, to purchase such raw data from Procter & ▇▇▇▇▇▇ upon terms commercially
reasonable, to be negotiated by the Parties. If the Parties are unable to agree
on such terms, either Party may submit such dispute to be settled by arbitration
in accordance with Section 14.4.
13.7. Chance of Control. In the event of a Change in Control, as that term
is defined in Section 13.9(a), of either the Parties or their respective
Affiliates that are primarily responsible for undertaking the obligations under
this Agreement (each collectively or individually then referred to as the
"Acquired Company"), then the Party affiliated with the Acquired Company shall
notify the other Party of any such Change in Control as soon as the Change in
Control may publicly be announced. Upon receipt of any such notification, the
other Party or an Affiliate thereof (the "Electing Company") shall have the
unilateral right to give notice to the Acquired Company within thirty (30) days
after its next regularly scheduled board meeting, but in no event longer than
sixty (60) days after receipt of the Acquired Company's notification that, the
Electing Company:
(a) if the Electing Company shall be Procter & ▇▇▇▇▇▇, Procter &
▇▇▇▇▇▇ may elect as provided in clause (i) or (ii) below:
51
(i) Procter & ▇▇▇▇▇▇ may elect not to continue any one or more of
the three activities of Alexion under this Agreement specified below in
clauses (1), (2) and/or (3) (each an "Alexion Interest"), as follows:
(1) Research - [*******] or
(2) Co-Promotion - [*******] or
(3) Manufacturing - [*******]
52
[*******]
The rights set forth above to terminate or discontinue Alexion's Research,
Co-Promotion and/or Manufacturing Interests under the circumstances set
forth above shall in no event affect or impair any of the parties rights
or obligation with respect to Patents and Know-how under this Agreement,
including without limitation the continuing obligation of Procter & ▇▇▇▇▇▇
to make milestone, royalty and sublicense payments pursuant to Sections
8.1, 8.2 and 8.3 hereof, all of which shall survive any such termination
or discontinuance of Alexion's Research, Co-Promotion and/or Manufacturing
Interests. The right of Procter & ▇▇▇▇▇▇ to terminate such Interests is
divisible and can be exercised by Procter & ▇▇▇▇▇▇ with respect to one or
more of such Interests.
(ii) Procter & ▇▇▇▇▇▇ may elect to continue any one or more of
Alexion's Research, Co-Promotion and Manufacturing Interests, in which
case Procter & ▇▇▇▇▇▇ may [*******]
53
[*******]
(b) if the Electing Party shall be Alexion, Alexion may [*******]
54
13.8. Substantial Stock Accumulation. In the event of a Substantial Stock
Accumulation in either the Procter & ▇▇▇▇▇▇ Parent or the Alexion Parent, as
soon as the Party affiliated with the Affected Company has knowledge of the
Substantial Stock Accumulation, it shall give prompt notice to the other Party.
Such notice shall be separate from and in addition to the notice provided for in
Section 13.7 and must be given regardless of whether the Party affiliated with
the Affected Company regards the Substantial Stock Accumulation as being not in
the best interest of the collaboration. From the date on which the Party
affiliated with the Affected Company has notice of the Substantial Stock
Accumulation, the following provisions shall become effective and remain
effective until the Substantial Stock Accumulation is eliminated, unless
otherwise agreed:
(i) If the Party that is not affiliated with the Affected Company
reasonably determines in good faith that the person or entity making the
Substantial Stock Accumulation is [*******] such Party may so inform
the other Party in writing. Promptly after receipt of such notice, the
Party affiliated with the Affected Company shall establish a procedure
whereby no director or executive employee of the Affected Company who was
not a director or employee of the Affected Company prior to the
Substantial Stock Accumulation, and who was previously a director or
employee of the person or entity making the Substantial Stock Accumulation
(a "Tainted Director or Executive"), shall receive any of the following:
(x) confidential information of the other Party and its Affiliates; and
(y) of the collaboration, except that any such Tainted Director or
Executive confidential scientific Information can be given information as
to actual and projected sales and profits of the collaboration.
(ii) If the Party that is not affiliated with the Affected Company
does not give notice pursuant to this Section 13.8 the Party affiliated
with the Affected Company shall establish a procedure whereby no Tainted
Director or Executive shall receive confidential information of the other
Party and its Affiliates but need not place any restrictions on
confidential or other information of the collaboration.
(iii) In the event of a material violation of this Section 13.8, the
non-breaching Party may, without resort to the dispute resolution
procedure set forth in
55
Section 14.4, bring an immediate court action or enjoin such violation and
to recover any damages that it may have incurred by reason of such
violation.
13.9. Definitions.
(a) For purposes of this Agreement, a "Change in Control" of a
company shall be deemed to have occurred in the event of (i) a merger,
combination, reorganization or consolidation of the company with or into another
corporation with respect to which [*******], (ii) the sale of all or
substantially all of the properties and assets of the company and its
subsidiaries, or (iii) the acquisition by any individual, firm, corporation, or
entity (other than any profit sharing or other employee benefit plan of the
company or any Affiliate, or any employee or group of employees or former
officers an/or directors of the company or its Affiliates) of beneficial
ownership, directly or indirectly, of securities of the company representing
[*******] of the combined voting power of the company's then outstanding voting
securities; provided, however, that no such event referred to in clause (i) or
(iii) above with respect to Alexion may result in a Change of control of Alexion
unless [*******]. Notwithstanding the foregoing, for purposes of this Section
13.9(a), a Change in Control shall only be deemed to occur for Procter & ▇▇▇▇▇▇
if there is a Change in Control of The Procter & ▇▇▇▇▇▇ Company or Procter &
▇▇▇▇▇▇ Pharmaceuticals, Inc.
(b) A "Substantial Stock Accumulation" of a company shall be deemed
to have occurred in the event of the accumulation by any individual, firm,
corporation, or entity (other than any profit sharing or other employee benefit
plan of the company or any Affiliate, or any employee or group of employees or
former officers an/or directors of the company or its Affiliates) of beneficial
ownership, directly or indirectly, of securities of the company representing
[*******] of the combined voting power of the company's then outstanding voting
securities.
56
(c) The "Purchase Price" for purposes of Section 13.7 shall be
determined as follows:
(i) Purchase Price refers to such of Alexion's [*******] as
shall be the subject of an election by Procter & ▇▇▇▇▇▇ to purchase, and shall
be equal to the Valuation (as defined herein) of such Interest to be purchased
under this Agreement, determined as follows: Each Party shall designate an
investment banking firm of its choice, and each investment banking firm will be
asked to prepare an appraisal as to the fair market value of such of [*******]
that would be received in cash from a Third Party if a sale of such Interest or
Interests were made to a Third Party with the consent of the other Party, taking
into account any contractual obligation of either Party or its Affiliates to
refrain from manufacturing or marketing a product competitive with the products
in the Territory for any period, the value of the information, Patents and
Know-how, and other assets being licensed and the potential market for such
Products and Marketed Products in the Territory (a "Valuation"). For such
Valuation, Alexion shall be entitled (1) [*******] (2) to [*******]. The
investment bankers will be asked to submit their Valuations of Alexion's
Interest or Interests within thirty (30) days after the Purchase Date as defined
in Section 13.9(c)(v). In the event of a Party's failure to obtain an investment
banking firm's Valuation within thirty (30) days after the Purchase Date, the
Valuation will be the Valuation determined by the investment banking firm
appointed by the other Party.
(ii) If the difference between the lower Valuation and the higher
Valuation is [*******] of the higher Valuation, or if the Valuations are
equal, the final Valuation shall be the average of the Valuations. If the
difference between the two (2) Valuations is [*******] of the higher
Valuation, the investment bankers will select a third investment banking
firm from those known as major bracket investment banking firms, and that
firm shall also prepare a Valuation. The third investment banking firm
will not have access to the Valuations prepared by the
57
other investment banking firms. The two (2) Valuations that are the
closest in value then shall be averaged, and the resulting average shall
be the final Valuation.
(iii) The purchase of an Alexion Interest shall thereafter be
consummated by payment of the Valuation within sixty (60) days after
receipt of all investment bankers' valuations or such later date upon
which all necessary regulatory approvals have been obtained and/or
regulatory waiting periods have expired.
(iv) Each Party shall bear the expense of obtaining the Valuation of
the investment bankers selected by such Party, and if a third investment
banker is selected, the expense of obtaining its Valuation shall be borne
equally by the Parties.
(v) Unless otherwise agreed in writing by the Parties, the Valuation
for an Alexion Interest shall be calculated as of the date of the Electing
Company's notice that it elects to exercise its option to purchase such
Alexion Interest or Interests under Section 13.7(a)(i) (such date shall
be referred to as the "Purchase Date").
(vi) During the pendency of the option election and valuation
process, the Parties shall continue to perform their customary activities
under this Agreement.
13.10. Surviving Rights. Except as modified in Sections 13.1(b), 13.3 and
13.6 hereof, the obligations and rights of the Parties under Articles VIII, X,
XI, XII and XIII shall survive termination or expiration of this Agreement.
13.11. Accrued Rights. Surviving Obligations. Termination or expiration of
this Agreement for any reason shall be without prejudice to any rights which
shall have accrued to the benefit of either Party prior to such termination or
expiration, including, without limitation, the payment obligations under Section
4.2 and Article VIII hereof and any and all damages arising from any breach
hereunder. Such termination or expiration shall not relieve either Party from
obligations which are expressly indicated to survive termination or expiration
of the Agreement.
58
13.12. Termination Not Sole Remedy. Termination is not the sole remedy
under this Agreement and, whether or not termination is affected, all other
remedies will remain available except as agreed to otherwise herein.
13.13. Certain Injunctive Relief. Due to the important confidentiality
concerns of the parties, and for other reasons, the parties will be irreparably
damaged in the event that the provisions of Articles X and XIII hereof are not
specifically enforced. In the event of a breach or threatened breach of the
terms, covenants and/or conditions of either such Article by any of the parties
hereto, the other party shall, in addition to any other remedies it may have, be
entitled to a temporary or permanent injunction, without showing any actual
damage, and/or a decree for specific performance, in accordance with the
provisions of such Articles.
Article XIV - Miscellaneous
14.1. Force Majeure. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or loss on account of failure of
performance by the Defaulting Party if the failure is occasioned by government
action, war, fire, explosion, flood, strike, lockout, embargo, act of God, or
any other similar cause beyond the reasonable control of the Defaulting Party,
provided that the Party claiming force majeure has exerted all reasonable
efforts to avoid or remedy such force majeure and given prompt notice to the
other Party.
14.2. Notices. Any notices or communications provided for in this
Agreement to be made by either of the Parties to the other shall be in writing,
in English, and shall be made by prepaid air mail with return receipt addressed
to the other at its address set forth above. Any such notice or communication
may also be given by hand or facsimile to the appropriate designation with
confirmation of receipt. Either Party may by like notice specify an address to
which notices and communications shall thereafter be sent. Notices sent by mail
shall be effective upon receipt; notices given by hand shall be effective when
delivered.
59
Notices for Alexion shall be sent to:
Alexion Pharmaceuticals, Inc.
Attn: President
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With copy to:
Golenbock, Eiseman, Assor & ▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Notices for Procter & ▇▇▇▇▇▇ shall be sent to:
Procter & ▇▇▇▇▇▇ Pharmaceuticals, Inc.
Attn: President
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
With copy to:
Procter & ▇▇▇▇▇▇ Pharmaceuticals, Inc.
Attn: Associate General Counsel
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
14.3. Governing Law. This Agreement shall be governed by the laws of the
State of Delaware, as such laws are applied to contracts entered into and to be
performed within such state. Any claim or controversy arising out of or related
to this Agreement or any breach hereof shall be submitted to arbitration
pursuant to Section 14.4. The United Nations Convention on Contracts for the
International Sale of Goods will not apply to this Agreement.
14.4. Arbitration. Except as otherwise provided in Sections 8.8, 9.3,
9.7(a), 13.11 and 13.13 of this Agreement, disagreements shall be settled by
arbitration in accordance with the
60
commercial arbitration rules of the American Arbitration Association. However,
nothing contained herein shall prevent the party or parties hereinafter
indicated from pursuing any and all of their rights and remedies in the courts
of any competent jurisdiction, without submitting the same to arbitration or
consenting to the arbitration thereof as it relates to the following:
(i) Either Party, in the event of a default or alleged default
by the other Party in the payment of its monetary obligations under Section 4.2
or Article VIII hereof.
(ii) Either Party, in the event of the occurrence or alleged
occurrence of an event of a breach or alleged breach by the other of any of the
provisions of Article X or XII hereof.
The parties further agree that each such disagreement be submitted to a
panel of three (3) impartial arbitrators with each Party selecting one (1)
arbitrator within fifteen (15) days of a request for arbitration and the two (2)
selected arbitrators selecting a third arbitrator who is experienced in the
United States pharmaceutical industry within thirty (30) days after the request.
Any arbitration hereunder shall commence within thirty (30) days after
appointment of the third arbitrator and shall be held in Cincinnati, Ohio, if
such arbitration is requested by Alexion or New Haven, Connecticut, if such
arbitration is requested by Procter & ▇▇▇▇▇▇. Upon reasonable notice and prior
to any hearing, the Parties will allow document discovery and will disclose all
materials relevant to the subject matter of the dispute. The arbitrators shall
make final determinations as to any discovery disputes. The decision of the
arbitrators shall be rendered no later than sixty (60) days after commencement
of arbitration. The costs of arbitration shall be split by the parties unless
the arbitrators decide otherwise. Any judgment or decision rendered by the panel
shall be binding upon the Parties and shall be enforceable by any court of
competent jurisdiction.
14.5. Non-waiver of Rights. Except as specifically provided for herein,
the waiver from time to time by any of the parties of any of their rights or
their failure to exercise any remedy shall not operate or be construed as a
continuing waiver of same or of any other of such Party's rights or remedies
provided in this Agreement.
61
14.6. Severability. If any term, covenant, or condition of this Agreement
or the application thereof to any Party or circumstance shall, to any extent, be
held to be invalid or unenforceable, then (i) the remainder of this Agreement,
or the application of such term, covenant or condition to Parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant, or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law
and (ii) the Parties hereto covenant and agree to renegotiate any such term,
covenant, or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant, or condition of this Agreement or
the application thereof that is invalid or unenforceable, and in the event that
the Parties are unable to agree upon a reasonably acceptable alternative, then
the Parties agree that a submission to arbitration shall be made in accordance
with Section 14.4 to establish an alternative to such invalid or unenforceable
term, covenant, or condition of this Agreement or the application thereof, it
being the intent that the basic purposes of this Agreement are to be
effectuated.
14.7. Entire Agreement. This Agreement sets forth all the covenants,
promises, agreements, warranties, representations, conditions, and
understandings between the Parties hereto in the scope of the Collaboration,
with the exception of any agreements by the Parties executed at an even date
hereof, and supersedes and terminates all prior agreements and understanding
between the parties under this Agreement. No subsequent alteration, amendment,
change, or addition to this Agreement shall be binding upon the Parties hereto
unless reduced to writing and signed by the respective authorized officers of
the Parties.
14.8. Retained Rights. Nothing in this Agreement shall limit in any
respect the right of either Party to conduct research and development with
respect to and market products outside the Field using such Party's technology
including know-how and Patents.
14.9. Assignment.
(a) The Parties recognize that each may perform some of its
obligations hereunder through Affiliates; provided, however, that Procter &
▇▇▇▇▇▇ and Alexion shall
62
remain responsible and be guarantors of such performance by their Affiliates and
shall cause their Affiliates to comply with the provisions of this Agreement in
connection with such performance.
(b) Except as provided in Section 14.9(c) below, Procter & ▇▇▇▇▇▇
and Alexion may only assign their rights under this Agreement in any country of
the Territory to a Third Party with written permission of the other Party, which
permission will only be given at its sole discretion.
(c) Upon a Change of Control of Alexion, Procter & ▇▇▇▇▇▇ may assign
all but not less than all of its rights under this Agreement to a financially
responsible Third Party, on the terms and conditions set forth in this Section
14.9(c). If Procter & ▇▇▇▇▇▇ shall intend to assign its rights under this
Agreement, it shall give Alexion written notice thereof, and Alexion or a parent
thereof shall be entitled, [*******] to negotiate a purchase of such rights from
Procter & ▇▇▇▇▇▇.
If the Parties cannot agree within such [*******] and if Procter & ▇▇▇▇▇▇
shall intend to assign its rights under this Agreement to a Third Party, it
shall give Alexion prior written notice, specifying the intended assignee, the
terms and conditions of such assignment and the intended closing date. Alexion
or a parent thereof shall have the first and prior right of refusal with respect
to the rights and properties to be assigned, at the same price and upon the same
terms and conditions as offered by the proposed Third Party assignee. Alexion
shall have a period of [*******] from the receipt of such written notice (which
shall include a copy or, to the extent confidential, describe the terms and
conditions of such Third Party offer) within which to accept or reject the same.
If Alexion elects to accept the terms of the Third Party offer, it shall so
signify within such [*******] by notice to Procter & ▇▇▇▇▇▇. If Alexion fails to
accept such offer, Procter & ▇▇▇▇▇▇ shall have the right, during [*******] from
the date the last Third Party offer to Alexion expires, to assign its right
under this Agreement to the intended assignee, at the same price and upon the
same terms and conditions as were set forth in the notice of the proposed Third
Party assignee's offer last received by Alexion as herein provided, in a bona
fide transaction. If any of the price or terms offered to or by such intended
assignee shall change to be more favorable to the assignee, Procter & ▇▇▇▇▇▇
shall give Alexion written notice thereof and Alexion or a parent thereof shall
have the right to purchase
63
such rights and properties on such revised terms. If Alexion or a parent thereof
shall not accept any such revised offer within [*******] after receipt of the
latest revised offer, Procter & ▇▇▇▇▇▇ shall be entitled to make such assignment
to such Third Party on the terms last offered to Alexion. For such assignment to
be effective, such Third Party shall deliver to Alexion, prior to the effective
date of such assignment, a written confirmation of the agreement of such Third
Party to be bound by the provisions of this Agreement and its commitment to duly
and timely pay, perform and discharge all obligations of Procter & ▇▇▇▇▇▇ under
this Agreement, including without limitations, all of the obligations to be
performed by it under the existing Research & Development Plan, a copy of which
Plan shall accompany such written agreement. Such assignee shall not have the
right to further assign this Agreement under this clause (c).
14.10. Publicity.
(a) The Parties will jointly prepare and agree upon the public
announcements of the execution of this Agreement. Thereafter, Procter & ▇▇▇▇▇▇
and Alexion will jointly discuss, based on the principles of this Section 14.10,
any press releases and any other public statements (other than those
contemplated by Section 10.3 above) regarding the subject matter of this
Agreement, the research to be conducted under this Agreement or any other aspect
of this Agreement, subject in each case to disclosure otherwise required by law
or regulation. Each Party shall afford the other Party a reasonable opportunity
to review a press release prepared by it.
(b) In the discussion and agreement of Section 14.10(a), the
principles observed by Procter & ▇▇▇▇▇▇ and Alexion will be accuracy, the
requirements for confidentiality under Article X, the advantage a competitor of
Procter & ▇▇▇▇▇▇ or Alexion may gain from any statement under Section 14.10(a),
the requirements of disclosure under any securities laws or regulations of the
United States, including those associated with SEC and regulatory filings and
public offerings, the restrictions imposed by the Federal Food, Drug and
Cosmetic Act, and the standards and customs in the pharmaceutical industry for
such disclosures by companies comparable to Procter & ▇▇▇▇▇▇ and Alexion.
64
14.11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one in the same instrument.
Article XV - Execution
15.1. In witness whereof, the Parties have executed this Agreement in
duplicate originals by their proper officers as of the date and year first
written above.
The Procter & ▇▇▇▇▇▇ Company
By: /s/ ▇▇▇▇ ▇. Collar Form MPM
-------------------------------- --------------------------
▇▇▇▇ ▇. Collar Finance WCH
Vice President - Global Pharmaceuticals, -----------------------
Procter & ▇▇▇▇▇▇ Worldwide Execution AFM
---------------------
Alexion Pharmaceuticals, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇
President and Chief Executive
Officer
65
Schedule 1.5
Alexion Patents
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Schedule 1.25
Licensed Technology
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Schedule 4.1
Research & Development Plan Outline
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4. Communication by the Parties
Both P&G and Alexion agree on the importance of frequent communication
between the parties on progress and key learnings made during the conduct of the
Research & Development Plan. A communication process (meeting frequencies,
principal contacts, etc) will be developed by the Research & Development
Steering Committee).
5. Development and Modification of the Research & Development Plan for the
PRODUCT
The Parties will develop a detailed "Research & Development Plan" for the
PRODUCT. The content of the "Research & Development Plan" will include
study outlines for all noncliical and clinical studies, details of the
process development work to be undertaken, development milestones and
timings.
As indicated in Section IV, the Research & Development Steering Committee
has the
responsibility to determine the timing for all development milestones and
to modify this timing as appropriate if delays are encountered, and to
develop action steps to avoid delays if any of these development
milestones is judged to be in jeopardy and can be remedied by Commercially
Reasonable actions.
The "Research & Development Plan" is a working document developed by the
Parties and reviewed and approved by the Research & Development Steering
Committee together with study protocols. A key responsibility of the
Research & Development Steering Committee is to monitor progress of the
development against the development milestones, including but not limited
to the "Key Development Milestones" identified herein, and includes
monitoring the progress of key development activities, such as
investigator recruitment and patient enrollment in clinical studies.
6. Research & Development Steering Committee Guidelines
The Parties expect that the Research & Development Steering Committee will
have the primary role in managing the relationship and communication
between the Parties. In that role, the Research & Development Steering
Committee shall be responsible for managing all aspects of the
relationship between the Parties, including but not limited to: (a)
reviewing study protocols and making decisions on any proposed changes to
the Research & Development Plan; (b) monitoring and assisting progress of
clinical and non-clinical development consistent with the Research &
Development Plan timetable; (c) assessing the results of studies; and (d)
addressing any regulatory strategy and drug supply issues.
It is the desire of the Parties to reach decisions by consensus of the
Research & Development Steering Committee members or the co-chairs. The
Parties agree to work to promote effective communication between the
Parties and intend to frankly discuss and attempt to resolve in good faith
any conflicts, disagreements or disputes which may arise in ways which
will promote the continuing goodwill between the Parties. While the
Parties have set forth a dispute resolution process (Section 3.5), the
Research & Development Steering Committee will attempt to resolve issues
through discussion aimed at building consensus.
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Schedule 4.2(b)
CPI Adjustment
Alexion's FTE rate in Section 4.2(b) and Annual Contribution thresholds in
Section 8.2(a) and Net Sales threshold levels in Section 8.2(c) shall be
adjusted for inflation [*******] each Fiscal Year utilizing the change in
[*******] as published by the U.S. Bureau of Labor Standards from the base CPI
of January, 1999, to the CPI published for June of the immediately preceding
Fiscal Year.
Example:
Fiscal Year 2000/2001 inflation factor
Base January, 1999 CPI = [*******]
June, 2000 CPI = [*******]
Fiscal Year 2000/2001 inflation factor = [*******]
= [*******]
Base FTE rate = [*******]
Fiscal Year 2000/2001 FTE rate
[*******]
[*******]
[*******]
[*******]
(Example for illustration purposes only)
Schedule 7.3
Co-Promotion Agreement Terms
1. Alexion may only co-promote Marketed Products in the United States
pursuant to the terms and conditions of an agreed and executed
Co-Promotion Agreement meeting the requirements of Section 7.3 of the
Collaboration Agreement. The Parties shall negotiate such Agreement in
good faith, as quickly as possible after Alexion exercises its option to
participate pursuant to Section 7.3.
2. For any Fiscal Year during the term of such Co-Promotion Agreement (such
term to continue for the TERM), Alexion may make [*******] of the total
number of Details ( sum of first position Details plus second position
Details) forecast by Procter & ▇▇▇▇▇▇ for the promotion of the Marketed
Product in the United States for such year. The total number of Details
will be the sum of all Details planned for the Marketed Product. As the
term is used herein, "Detail" shall mean those activities normally
undertaken by a pharmaceutical company's sales force through an
interactive personal visit and discussion by a trained sales force
representative with a target physician prescriber during which a full
presentation is made to such health care professional on the Marketed
Product and the representative is fully equipped with all applicable
approved promotional materials such that the relevant characteristics of
the Marketed Product are described by the representative in a fair and
balanced manner consistent with the requirements of the FDA and of this
Agreement, and in a manner that is customary in the industry for the
purpose of promoting a prescription pharmaceutical product. A first
position Detail refers to a Detail in which the Marketed Product is the
first pharmaceutical product presented to the target physician prescriber
during an interactive personal visit, whereas a second position Detail
would refer to a Detail where the Marketed Product is the second
pharmaceutical product presented to the target physician prescriber during
such visit.
3. [*******] Details to be made by Alexion's sales force representatives, the
percent of such Details which are to be made in the first position and
second position, the target prescribing physician for such Details, the
promotional message to be delivered and the timing and frequency of
Details. [*******] a co-promotion coordination process and procedure so
that all of Alexion's Detail can be coordinated with [*******].
4. Procter & ▇▇▇▇▇▇ shall [*******]
[*******]
5. [*******] shall specify the level of training and will train Alexion sales
personnel through Procter & Gamble's normal sales training practices,
[*******]
6. [*******] shall provide to Alexion at no cost to Alexion the [*******] in
the promotion of the Marketed Products being co-promoted by Alexion in the
same proportionate quantities as are available to Procter & Gamble's own
sales force.
7. In accordance with Section 7.1, [*******] with respect to the marketing,
planning, strategy and Co-Promotion of the Marketed Products. [*******]
for establishing and modifying the terms and conditions of the sale of the
Marketed Products, including, without limitation, terms and conditions
such as the price at which the Marketed Products will be sold, whether the
Marketed Products shall be subject to rebates and any discounts, and the
channels of distribution of the Marketed Products.
8. The Co-Promotion Agreement shall also contain standard provisions found in
such agreements, including, but not limited to the following:
A. [*******]
B. [*******]
C. [*******]
D. [*******]
E. Adverse reaction reporting and other Regulatory matters.
F. Returned/recalled Marketed Product
G. Term and termination
Schedule 8.2
Annual Contribution Royalty Calculation
For the term of the contract, Procter & ▇▇▇▇▇▇ will pay to Alexion a Royalty on
[*******]. Royalties will be paid on a quarterly basis not later than fifty-five
(55) calendar days following the end of each Fiscal Quarter.
[*******] will be calculated in the fourth Fiscal Quarter of a specific Fiscal
Year. Royalty payments for the first three Fiscal Quarter of a specific Fiscal
Year will be based on the [*******] in the respective Fiscal Quarter. The fourth
Fiscal Quarter payment will include the outstanding royalty payment for the
fourth Fiscal Quarter, as well as a reconciliation payment, if royalty payments
on [*******] for the whole Fiscal Year exceed [*******] for the whole Fiscal
Year. The reconciliation payment will be adjusted to reflect the time value
(foregone interest) on the reconciliation payment for the difference between the
minimum royalty payments and the royalty payments on [*******] of the first
three Fiscal Quarters of a specific Fiscal Year.
Royalties on [*******] will be calculated as follows:
Royalties [*******] where
[*******]
[*******]
[*******]
[*******]
[*******]
[*******]
[*******]
[*******]
RR Royalty Rate on [*******] in the specific Fiscal Year based on the
[*******] and royalty rates stated in Section 8.2(a) of the
contract. [*******] will be adjusted [*******] by multiplying the
individual Annual Contribution threshold levels stated in the
contract by the percentage change in the [*******] to June of the
immediately preceding [*******] .
The determination of royalty payments for a specific Fiscal Year is demonstrated
in examples on the following pages.
[*******] Royalty Calculation - Payment Cycle
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[*******] Royalty Calculation - Example 1
[*******] Payment to Alexion
[THE CONTENTS OF THIS PAGE WERE OMITTED]
[*******] Royalty Calculation - Example 2
[*******] Payment to Alexion
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Schedule 8.2(c)
Additional Milestone Payments [*******]
Procter & ▇▇▇▇▇▇ will make one-time only payments which are triggered on the
first occurrence during the Term where Fiscal Year Net Sales for Products
[*******] specified in 8.2(c) with such [*******] as described in Schedule
4.2(b).
Fiscal Year A [*******]
Fiscal Year B [*******]
Fiscal Year C [*******]
Fiscal Year D [*******]