Sample Business Contracts
Co-Development and License Agreement - Neotherapeutics Inc. and GPC Biotech AG
Collaboration Forms
EXECUTION COPY
CO-DEVELOPMENT AND
LICENSE AGREEMENT
between
NEOTHERAPEUTICS, INC.
and
GPC BIOTECH AG
Dated as of September 30, 2002
1
CO-DEVELOPMENT AND
LICENSE AGREEMENT
This CO-DEVELOPMENT AND LICENSE AGREEMENT (this Agreement), dated as of September 30, 2002, is between Neotherapeutics, Inc., a company duly organized and existing under the laws of Delaware and having offices at 157 Technology Drive, Irvine, California, USA for and on behalf of itself and its Affiliates (NEOTHERAPEUTICS), and GPC Biotech AG, a company duly organized and existing under the laws of the Federal Republic of Germany and having offices at Fraunhoferstrasse 20, D-82152 Martinsried/Munich Germany, for and on behalf of itself and its Affiliates (together with its Affiliates, GPC).
PRELIMINARY STATEMENTS
A. NEOTHERAPEUTICS has entered into that certain License Agreement with Johnson Matthey PLC (J-M) dated August 28, 2001, pursuant to which NEOTHERAPEUTICS has been granted a license, with the right to sublicense, to certain patent rights and other know-how and technology owned by J-M.
B. NEOTHERAPEUTICS wishes to grant a sublicense to GPC, and GPC wishes to take a sublicense from NEOTHERAPEUTICS, under certain rights granted to NEOTHERAPEUTICS under the J-M License Agreement and under other relevant patent rights and know-how controlled by NEOTHERAPEUTICS, upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing preliminary statements and the mutual covenants and agreements of the Parties contained in this Agreement, the Parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have those meanings set forth in this Section 1 unless the context dictates otherwise.
1.1. Affiliate with respect to either Party, shall mean any Person controlling, controlled by, or under common control with, such Party. For the purpose of this Section 1.1, control shall refer to (i) the possession, directly or indirectly, of the power to direct the management or policies of such Party, whether through the ownership of voting securities, by contract or otherwise, or (ii) the beneficial ownership (as such term is defined in the 1934 Act) of at least fifty percent (50%) of the voting securities or other ownership interest of such Party.
1.2. Confidential Information shall have the meaning assigned to such term in Section 12.1.
1.3. Covered Product shall mean any Platinum Complexes formulated for administration to humans, the research, development, manufacture, sale or use of which in any country in the Territory is covered by a Valid Claim of any Patent included in the J-M Licensed Technology or the NEOTHERAPEUTICS Licensed Technology.
2
1.4. Effective Date shall mean the date first set forth above.
1.5. EMEA shall mean the European Agency for the Evaluation of Medicinal Products and any successor thereto.
1.6. FDA shall mean the United States Food and Drug Administration, or any successor thereto.
1.7. Field shall mean the FIELD, as such term is defined in the J-M License Agreement, as amended from time to time.
1.8. First Commercial Sale shall mean, with respect to any Covered Product, the first sale for use or consumption by the general public of such Covered Product in a country in the Territory after all required marketing and pricing approvals have been granted, or otherwise permitted, by the governing health authority of such country. First Commercial Sale shall not include the sale of any Covered Product for use in clinical trials or for compassionate use prior to the approval of an NDA.
1.9. GPC Development Technology shall mean all Inventions and Know-How first developed, reduced to practice or shown to have utility by one or more employees of GPC without the involvement of one or more employees of NEOTHERAPEUTICS in connection with the development of Covered Products, as well as any and all Patents covering the same.
1.10. Invention shall mean any new or useful method, process, manufacture, compound or composition of matter, whether or not patentable or copyrightable, or any improvement thereof.
1.11. J-M License Agreement shall mean that certain License Agreement dated August 28, 2001, by and between NEOTHERAPEUTICS and J-M, as amended from time to time. A copy of such Agreement, including all amendments executed prior to the execution of this Agreement, is attached hereto as Exhibit A.
1.12. J-M Licensed Technology shall mean the J-M Patent Rights, the LICENSORS INFORMATION and the LICENSORS ONGOING INFORMATION to which NEOTHERAPEUTICS has been granted a license under the J-M License Agreement, as such capitalized terms are defined in the J-M License Agreement, as amended from time to time.
1.13. J-M Patent Rights shall mean the PATENT RIGHTS, as such term is defined in the J-M Licensed Agreement. A list of all such J-M Patent Rights in existence on the Effective Date is included in Exhibit B attached hereto.
1.14. J-M Royalty Term shall mean the period beginning on the Effective Date and ending on the earlier of (i) the expiration of the TERM, as such term is defined in the J-M License Agreement, as amended from time to time, or (ii) the date on which NEOTHERAPEUTICS is no longer required to make royalty payments to J-M pursuant to the J-M License Agreement.
3
1.15. Joint Development Committee shall mean the entity organized and acting pursuant to Section 4.
1.16. Joint Development Technology shall mean all Inventions and Know-How first developed, reduced to practice or shown to have utility by one or more employees of GPC and one or more employees of NEOTHERAPEUTICS in connection with the development of Covered Products, as well as any and all Patents covering the same.
1.17. Know-How shall mean unpatented technical and other information which is not in the public domain including information comprising or relating to discoveries, inventions, data, designs, formulae, methods, models, assays, research plans, procedures, designs for experiments and tests and results of experimentation and testing (including results of research or development), processes (including manufacturing processes, specifications and techniques), laboratory records, chemical, pharmacological, toxicological, clinical, analytical and quality control data, trial data, case report forms, data analyses, reports or summaries and information contained in submissions to and information from ethical committees and regulatory authorities. Know-How includes rights protecting Know-How. The fact that an item is known to the public shall not be taken to exclude the possibility that a compilation including the item, and/or a development relating to the item, is (and remains) not known to the public.
1.18. MAA shall mean a Marketing Authorization Application or similar application filed with the EMEA after completion of human clinical trials to obtain marketing approval for a Covered Product in the European Union.
1.19. MHW shall mean the Ministry of Health and Welfare in Japan and any successor agency.
1.20. NDA shall mean a New Drug Application to be filed with the FDA, or the equivalent thereof in other countries or regulatory jurisdictions.
1.21. NEOTHERAPEUTICS Development Technology shall mean all Inventions and Know-How first developed, reduced to practice or shown to have utility by one or more employees of NEOTHERAPEUTICS without the involvement of one or more employees of GPC in connection with the development of Covered Products, as well as any and all Patents covering the same.
1.22. NEOTHERAPEUTICS Licensed Technology shall mean the LICENSEES ONGOING INFORMATION, as such term is defined in the J-M License Agreement, as amended from time to time, as well as all Patents owned or controlled by, or licensed to, NEOTHERAPEUTICS, and all Know-How and Inventions developed, owned or controlled by, or licensed to, NEOTHERAPEUTICS, on or after the Effective Date, other than the J-M Licensed Technology, which, by objective standards, is necessary for or may be useful in the development, manufacture, use or sale of Licensed Products in the Field in the Territory, all to the extent that NEOTHERAPEUTICS has the right to license or otherwise make available such Patents, Know-How and Inventions to GPC hereunder. A list of all such Patents in existence on the Effective Date is included in Exhibit B attached hereto.
4
1.23. Net Sales shall have the meaning ascribed to the term Net Sales Value in the J-M License Agreement, as amended from time to time.
Notwithstanding the foregoing, in the event a Covered Product is sold in conjunction with another proprietary component so as to be a combination product (whether packaged together or in the same therapeutic formulation), Net Sales shall be calculated by multiplying the Net Sales of such combination product by a fraction, the numerator of which shall be the fair market value of the Covered Product as if sold separately (determined in accordance with generally accepted accounting principles), and the denominator of which shall be the aggregate fair market value of all the proprietary active components of such combination product, including the Covered Product, as if sold separately. In the event no such separate sales are made by GPC or its Affiliates, Net Sales of the combination product shall be calculated in a manner to be negotiated and agreed upon by the Parties, reasonably and in good faith, prior to any sale of such combination product, which shall be based upon the respective estimated commercial values of the proprietary active components of such combination product.
GPCs or any of its Affiliates transfer of Covered Product to another Affiliate or a Sublicensee shall not result in any Net Sales, unless such Covered Product is consumed by such Affiliate or Sublicensee in the course of its commercial activities.
1.24. 1934 Act shall mean the U.S. Securities Exchange Act of 1934, as amended, and all regulations promulgated pursuant thereto from time to time.
1.25. Party shall mean NEOTHERAPEUTICS or GPC and, when used in the plural, shall mean NEOTHERAPEUTICS and GPC.
1.26. Patents shall mean all letters patent and patent applications throughout the Territory, as well as any and all substitutions, extensions, renewals, continuations, continuations-in-part, divisions, patents-of-addition and/or reissues thereof.
1.27. Person shall mean any natural person, corporation, firm, business trust, joint venture, association, organization, company, partnership or other business entity, or any government or any agency or political subdivision thereof.
1.28. Platinum Complexes shall mean the platinum co-ordination compounds that are the subject of the J-M Patent Rights.
1.29. Royalty Term shall mean the period beginning on the Effective Date and ending on the date of the expiration of the last to expire Valid Claim, if any, included in the Joint Development Technology or NEOTHERAPEUTICS Development Technology that covers the manufacture or sale of Covered Products. If, at the time of expiration of the J-M Royalty Term, there are no Valid Claims included in the Joint Development Technology or NEOTHERAPEUTICS Development Technology covering the manufacture or sale of a Covered Product, then the Royalty Term with respect to such Covered Product shall expire on the expiration of the J-M Royalty Term.
1.30. Satraplatin shall mean the platinum complex bis(acetato)amminedichloro(cyclohexylamine)platinum(IV).
5
1.31. Sublicensee shall mean a Third Party to which GPC has sublicensed rights under the NEOTHERAPEUTICS Licensed Technology or J-M Licensed Technology for the commercialization of Covered Products.
1.32. Sublicense Fees shall mean all payments made to GPC from a Sublicensee that relate specifically to the sublicense of rights granted to GPC hereunder, excluding (i) payments made in consideration of research and development efforts undertaken by GPC, (ii) payments made to reimburse GPC for expenses previously incurred by GPC in connection with the development of Covered Products, (iii) payments made in consideration of the purchase of equity of GPC by a Sublicensee to the extent that such payments do not exceed the fair market value of such equity, (iv) payments made in consideration of the manufacture or supply of Covered Products by GPC to the extent that such payments do not exceed CPCs costs of such manufacture and supply, (v) loans made to GPC or (vi) Sublicense Royalties.
1.33. Sublicense Royalties shall mean royalty payments made to GPC based on sales of Covered Products by a Sublicensee.
1.34. Territory shall mean the entire world.
1.35. Third Party shall mean any Person who or which is neither a Party nor an Affiliate of a Party.
1.36. Valid Claim shall mean (i) a pending claim in any patent application that has not been pending for more than five (5) years, which shall be treated as if such pending claim were issued in then-current form, or (ii) a claim of any issued letters patent that, in each case, has not been held invalid or unenforceable by final decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and that is not admitted to be invalid or unenforceable through reissue, disclaimer or otherwise.
2. REPRESENTATIONS AND WARRANTIES
2.1. Representations and Warranties of Both Parties. Each Party represents and warrants to the other Party that, as of the Effective Date:
(a) Such Party is duly organized and validly existing under the laws of the jurisdiction of its incorporation and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof;
(b) Such Party has taken all corporate action necessary to authorize the execution and delivery of this Agreement and the performance of its obligations under this Agreement; and
(c) This Agreement is a legal and valid obligation of such Party, binding upon such Party and enforceable against such Party in accordance with the terms of this Agreement, except as such enforceability may be affected by laws affecting creditors rights generally and general equitable principles. The execution, delivery and performance of this Agreement by such Party do not conflict with any agreement, instrument or understanding, oral or written, to which such Party is a party or by which
6
such Party may be bound, or violate any law or regulation of any court, governmental body or administrative or other agency having authority over such Party. All consents, approvals and authorizations from all governmental authorities or other Third Parties required to be obtained by such Party in connection with the execution, delivery and performance of this Agreement have been obtained. |
2.2. Additional Representations and Warranties of NEOTHERAPEUTICS. NEOTHERAPEUTICS represents and warrants to GPC that, as of the Effective Date:
(a) NEOTHERAPEUTICS and/or its Affiliates are the owner of, or have exclusive rights to, all of the Patents included in the J-M Licensed Technology (except as expressly provided in the copy of the J-M License Agreement attached as Exhibit A) and the NEOTHERAPEUTICS Licensed Technology in existence on the Effective Date, and have the exclusive right to grant the licenses or sublicenses, as the case may be, therefor granted under this Agreement;
(b) All such Patents consist of either patent applications that have been filed and are pending and actively being prosecuted as of the Effective Date, or issued letters patent that are in full force and effect and have been maintained through the Effective Date;
(c) NEOTHERAPEUTICS is not aware of any asserted or unasserted claim or demand which it believes can be enforced by a Third Party against any such Patents;
(d) To the best of NEOTHERAPEUTICSs knowledge and belief, the practice of such Patents and the exercise of the rights granted to GPC in Section 7 do not infringe upon or conflict with any patent, copyright or other proprietary right of any Third Party;
(e) NEOTHERAPEUTICS and/or its Affiliates have the right to grant the licenses or sublicenses, as the case may be, granted under this Agreement for all of the Know-How and Inventions included in the J-M Licensed Technology and NEOTHERAPEUTICS Licensed Technology in existence on the Effective Date;
(f) Such Know-How and Inventions were not obtained by NEOTHERAPEUTICS, and to the best of NEOTHERAPEUTICSs knowledge and belief were not obtained by J-M, in violation of any contractual or fiduciary obligation to which NEOTHERAPEUTICS, J-M or any of their respective employees or staff members are or were bound, or by the misappropriation of the trade secrets of any Third Party;
(g) NEOTHERAPEUTICS has not entered into any agreement with any Third Party which is in conflict with the rights granted to GPC under to this Agreement, and the execution and performance of this Agreement by NEOTHERAPEUTICS do not and shall not violate any agreement or undertaking to which NEOTHERAPEUTICS is a party; and
(h) To the best of NEOTHERAPEUTICSs knowledge and belief, all of the data and information that NEOTHERAPEUTICS has provided to GPC prior to the Effective Date relating to such Patents, Know-How and Inventions, and to Covered
7
Products in general, are reasonably accurate, and NEOTHERAPEUTICS has not omitted therefrom any material data or information in NEOTHERAPEUTICSs possession or control reasonably in advance of the Effective Date concerning the same.
2.3. Representations and Warranties of GPC. GPC represents and warrants to NEOTHERAPEUTICS that, as of the Effective Date:
(a) Experience. GPC acknowledges that it can bear the economic risk of its investment in the NEOTHERAPEUTICS Shares. GPC has by reason of its business or financial experience or the business or financial experience of its professional advisors who are unaffiliated with and who are not compensated by NEOTHERAPEUTICS or any affiliate or selling agent of NEOTHERAPEUTICS, directly or indirectly, has the capacity to protect its own interests in connection with its purchase of the NEOTHERAPEUTICS Shares. GPC has the financial capacity to bear the risk of this investment.
(b) Purchase Entirely for Own Account. The NEOTHERAPEUTICS Shares will be acquired by GPC for investment for GPCs own account not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and GPC has no present intention of selling, granting any participation in, or otherwise distributing the same. GPC does not presently have any contract, undertaking, agreement or arrangement with any Person to sell, transfer or grant participations to such Person or to any third Person, with respect to any of the NEOTHERAPEUTICS Shares. GPC has not been formed for the specific purpose of acquiring solely the NEOTHERAPEUTICS Shares.
(c) Disclosure of Information. GPC has received and reviewed information about NEOTHERAPEUTICS, and in particular about the Patents, Know-How, Inventions and Covered Products, and has had an opportunity to discuss NEOTHERAPEUTICSs business, management and financial affairs with its management and to review NEOTHERAPEUTICSs facilities. GPC understands and acknowledges that such discussions, as well as any written information issued by NEOTHERAPEUTICS (i) were intended to describe the aspects of NEOTHERAPEUTICSs business and prospects which NEOTHERAPEUTICS believes to be material, but were not necessarily an exhaustive description (except to the extent described in Section 2.2(h)), and (ii) may have contained forward-looking statements involving known and unknown risks and uncertainties which may cause NEOTHERAPEUTICSs actual results in future periods or plans for future periods to differ materially from what was anticipated and that no representations or warranties were or are being made with respect to any such forward-looking statements or the probability of achieving any of the results projected in any of such forward-looking statements. Nothing contained in this Section 2.3 shall limit in any respect NEOTHERAPEUTICSs representations and warranties contained in this Agreement.
(d) Restricted Securities. GPC understands that the NEOTHERAPEUTICS Shares have not been, and will not, prior to issuance under Section 9.1(c), be, registered under the Securities Act of 1933, as amended (the Securities Act), by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent and the accuracy
8
of GPCs representations as expressed herein. GPC understands that the NEOTHERAPEUTICS Shares are restricted securities under applicable U.S. federal and state securities laws and that, pursuant to these laws, GPC must hold the NEOTHERAPEUTICS Shares indefinitely unless they are registered with the SEC and qualified by state authorities, or an exemption from such registration and qualification requirements is available. GPC acknowledges that NEOTHERAPEUTICS has no obligation to register or qualify the NEOTHERAPEUTICS Shares for resale except as set forth in the Registration Rights Agreement to be entered into as provided in Section 9.1(c). GPC further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the NEOTHERAPEUTICS Shares, and on requirements relating to NEOTHERAPEUTICS which are outside of GPCs control, and which NEOTHERAPEUTICS is under no obligation and may not be able to satisfy. GPC acknowledges that NEOTHERAPEUTICS will make a notation on its stock books regarding the restrictions on transfers set forth in this Section 2.3 and will transfer securities on the books of NEOTHERAPEUTICS only to the extent not inconsistent therewith. |
(e) Residence. The office or offices of GPC in which its investment decision was made is located at the address or addresses of GPC set forth in the preamble.
(f) Further Restrictions on Disposition. GPC agrees not to make any disposition of all or any portion of the NEOTHERAPEUTICS Shares unless and until: (a) there is then in effect a registration statement under the Securities Act covering such proposed disposition and the disposition is made in accordance with such registration statement; or (b) (i) GPC shall have notified NEOTHERAPEUTICS of the proposed disposition and shall have furnished NEOTHERAPEUTICS with a statement of the circumstances surrounding the proposed disposition and (ii) if reasonably requested by NEOTHERAPEUTICS, GPC shall have furnished NEOTHERAPEUTICS with an opinion of counsel, reasonably acceptable to NEOTHERAPEUTICS, that such disposition will not require registration under the Securities Act.
(g) Legends. GPC understands that the NEOTHERAPEUTICS Shares, and any securities issued in respect of or exchange for the NEOTHERAPEUTICS Shares, may bear one or all of the following legends until they are no longer required by law or the provisions of this Agreement:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE SECURITIES ACT) PURSUANT TO AN EXEMPTION FROM REGISTRATION CONTAINED IN REGULATION S PROMULGATED UNDER THE SECURITIES ACT, AND MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO A REGISTRATION UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION. NO HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY BE CONDUCTED EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT.
9
Any legend required by the Blue Sky laws of any state to the extent such laws are applicable to the shares represented by the certificate so legended.
The legend set forth above shall be removed by NEOTHERAPEUTICS from any certificate evidencing NEOTHERAPEUTICS Shares upon transfer of such NEOTHERAPEUTICS Shares in compliance with Rule 144(k) under the Securities Act or upon delivery to NEOTHERAPEUTICS of an opinion, in form and substance and by counsel reasonably satisfactory to NEOTHERAPEUTICS, that a registration statement under the Securities Act is at that time in effect with respect to the legended security or that such security can be freely transferred without such a registration statement being in effect and that such transfer will not jeopardize the exemption or exemptions from registration pursuant to which the securities were issued.
(h) Foreign Investors. GPC hereby represents that it has satisfied itself as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the NEOTHERAPEUTICS Shares or any use of this Agreement, including (i) the legal requirements within its jurisdiction for the purchase of the NEOTHERAPEUTICS Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the NEOTHERAPEUTICS Shares. GPCs subscription and payment for and continued beneficial ownership of the NEOTHERAPEUTICS Shares, will not violate any applicable securities or other laws of GPCs jurisdiction and will not require NEOTHERAPEUTICS to obtain any permit, make any filing or take any other action in such jurisdiction.
(i) Offshore Transaction.
(i) GPC is not organized under the laws of or is not a citizen or resident of the United States and was not formed for the purpose of investing in Regulation S securities, does not have any of its securities registered under the Exchange Act, and is not owned by U.S. Persons as defined in Regulation S and herein.
(ii) At the time the buy order to purchase the NEOTHERAPEUTICS Shares was originated, GPC was outside the United States.
(iii) All subsequent offers and sales of the NEOTHERAPEUTICS Shares shall be made in compliance with Regulation S, pursuant to registration of the securities under the Securities Act or pursuant to an exemption from such registration.
(iv) GPC agrees that from the date hereof until after one year after the issuance of the NEOTHERAPEUTICS Shares hereunder (the Restrictive Period), GPC agrees, upon any offer, sale, or transfer of the NEOTHERAPEUTICS Shares (including any interests therein), GPC, or any successor, or any Professional under its direction (as defined below) (except for
10
sales of any NEOTHERAPEUTICS Shares registered under the Securities Act or otherwise exempt from such registration) (i) will not sell to a U.S. Person or to an account of or for the benefit of a U.S. Person or to anyone believed to be a U.S. Person; (ii) will not engage in any efforts to sell the NEOTHERAPEUTICS Shares in the United States; (iii) will, at the time the buy order or transfer is originated, believe the buyer or transferee is outside the United States; (iv) will send to any transferee who is a Professional, whether acting as agent or principal, a confirmation or other notice stating that the Professional is subject to the same restrictions on transfer to U.S. Persons or for the account of or benefit of U.S. Persons during the Restrictive Period as provided herein; and (v) will not in connection with the common stock of NEOTHERAPEUTICS engage in the United States in any short selling, option writing, equity swaps, or other types of hedging transactions or derivative transactions. NEOTHERAPEUTICS will not honor or register and will not be obligated to honor or register any transfer in violation of these provisions.
(v) For purpose hereof, in general, a U.S. Person means any natural person, resident of the United States; any partnership or corporation organized or incorporated under the laws of the United States or any state or territory thereof; any estate of which any executor or administrator is a U.S. Person; any trust of which any trustee is a U.S. Person; any agency or branch of a foreign entity located in the United States; any nondiscretionary account or similar account, other than estate or trust, held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident of the United States; and any partnership or corporation if organized or incorporated under the laws of any foreign jurisdiction and formed by a U.S. Person principally for the purpose of investing in securities and not registered under the Securities Act unless it is organized and incorporated and owned by accredited investors, as defined under Rule 501(a) under the Securities Act, who are not natural persons, estates or trusts. U.S. Person is further defined in Rule 902(o) under the Securities Act.
(vi) A Professional is a distributor as defined in Rule 902(c) under the Securities Act (generally any underwriter, or other person, who participates, pursuant to a contractual arrangement, in the distribution of the Shares); a dealer as defined in Section 2(12) of the Exchange Act (encompassing those who engage in the business of trading or dealing in securities as agent, broker, or principal); or a person receiving a selling concession, fee, or other remuneration in respect of the sale of the Shares sold.
2.4. Definition of Knowledge. As used in this Section 2, the phrases to the best of a Partys knowledge and belief, known to or similar phrases are intended to indicate that no information has come to the attention of senior management of the Party making the particular representation which would give such person actual knowledge of the existence or absence of such facts.
11
3. J-M LICENSE AGREEMENT
3.1. Representations and Warranties of NEOTHERAPEUTICS. NEOTHERAPEUTICS represents and warrants to GPC that, as of the Effective Date:
(a) The J-M License Agreement is in full force and effect and has not been modified or amended, except that no representation or warranty is made with respect to J-M or matters solely within the control or direction of J-M that are not known to NEOTHERAPEUTICS;
(b) To the best of NEOTHERAPEUTICSs knowledge and belief, neither J-M nor NEOTHERAPEUTICS is in default with respect to a material obligation under, and neither such party has claimed or has grounds upon which to claim that the other party is in default with respect to a material obligation under, the J-M License Agreement;
(c) To the best of NEOTHERAPEUTICSs knowledge and belief, the rights that J-M has licensed to NEOTHERAPEUTICS pursuant to the J-M License Agreement were not and are not subject to any restrictions or limitations except as set forth in the copy of the J-M License Agreement attached as Exhibit A; and
(d) NEOTHERAPEUTICS has not waived or allowed to lapse any of its rights under the J-M License Agreement, and no such rights have lapsed or otherwise expired or been terminated.
3.2. NEOTHERAPEUTICS Obligations. NEOTHERAPEUTICS agrees that during the term of this Agreement:
(a) NEOTHERAPEUTICS will use commercially reasonable efforts to fulfill its obligations under the J-M License Agreement to the extent such obligations have not been delegated to GPC and to the extent that failure to do so would adversely affect GPC or its rights hereunder;
(b) NEOTHERAPEUTICS shall not enter into any subsequent agreement with J-M that modifies or amends the J-M License Agreement in any way that could potentially adversely affect GPCs rights or economic interest under this Agreement without GPCs prior written consent, and shall provide GPC with a copy of all modifications to or amendments of the J-M License Agreement, regardless of whether GPCs consent was required with respect thereto; provided that, NEOTHERAPEUTICS may redact confidential portions of any such modifications and amendments, but only to the extent that any such redactions do not impair GPCs ability to take full advantage of its rights and benefits under this Agreement;
(c) NEOTHERAPEUTICS shall not terminate the J-M License Agreement in whole or in part, directly or indirectly, without GPCs prior written consent;
(d) NEOTHERAPEUTICS shall promptly furnish GPC with copies of all reports and other communications NEOTHERAPEUTICS receives from J-M that relate to the subject matter of this Agreement;
12
(e) NEOTHERAPEUTICS shall promptly furnish GPC with copies of all reports and other communications that NEOTHERAPEUTICS furnishes to J-M that relate to the subject of this Agreement, and to the extent any such reports or communications relate to the efforts of GPC under this Agreement, NEOTHERAPEUTICS shall give GPC a reasonable opportunity to review and comment upon such reports or communications before they are transmitted to J-M;
(f) NEOTHERAPEUTICS shall furnish GPC with copies of all notices received by NEOTHERAPEUTICS relating to any alleged breach or default by NEOTHERAPEUTICS under the J-M License Agreement within three (3) business days after NEOTHERAPEUTICSs receipt thereof and, if NEOTHERAPEUTICS cannot or chooses not to cure or otherwise resolve any such alleged breach or default, NEOTHERAPEUTICS shall so notify GPC within five (5) days thereafter and allow GPC, in GPCs sole discretion, to cure or otherwise resolve any such alleged breach or default; and
(g) NEOTHERAPEUTICS, acting as an intermediary between J-M and GPC, shall allow GPC to enjoy the direct benefit of all of NEOTHERAPEUTICSs affirmative rights, to the extent they relate to the J-M Licensed Technology.
4. JOINT DEVELOPMENT COMMITTEE
4.1. Members. The Parties shall establish a Joint Development Committee (the Joint Development Committee), which shall comprise three (3) representatives designated by each Party (or such other number as the Parties may agree in writing). The initial members of the Joint Development Committee are set forth on Exhibit C. Any Member of the Joint Development Committee may be represented at any meeting by a designee who is appointed by such member for such meeting and who has authority to act on behalf of such member, as evidenced by written notice from such Member to the chairperson of the Joint Development Committee. The chairperson of the Joint Development Committee shall be one of the representatives designated by GPC. The initial chairperson is designated on Exhibit C. Each Party shall be free to replace its representative members with new appointees who have authority to act on behalf of such Party on the Joint Development Committee, on written notice to the other Party.
4.2. Responsibilities. The Joint Development Committee shall be responsible for planning, overseeing and directing the development and commercialization of, and regulatory filings relating to, Covered Products.
4.3. Meetings. The Joint Development Committee shall meet quarterly until the achievement of the first milestone described in Section 9.2 and, thereafter, as frequently as the Parties deem appropriate, on such dates and at such times as the Parties shall agree, on ten (10) days written notice to the other Party unless such notice is waived by the other Party. The Joint Development Committee may convene or be polled or consulted from time to time by means of telecommunications, video conferences or correspondence, as deemed necessary or appropriate by the Parties. To the extent that meetings are held in person, they shall alternate between the offices of the Parties unless the Parties otherwise agree. The chairperson shall be responsible for sending notices of meetings to all members.
13
4.4. Decisions.
(a) A quorum for a meeting of the Joint Development Committee shall require the presence of at least one NEOTHERAPEUTICS member (or designee) and at least one GPC member (or designee) in person or by telephone. All decisions made or actions taken by the Joint Development Committee shall be made unanimously by its members, with the NEOTHERAPEUTICS members cumulatively having one vote and the GPC members cumulatively having one vote.
(b) In the event that unanimity cannot be reached by the Joint Development Committee with respect to a matter that is a subject of its decision-making authority within thirty (30) days after the matter is first brought before the Joint Development Committee, then the matter shall be decided by the chairperson of the Joint Development Committee in good faith.
4.5. Minutes. Within fifteen (15) days after each Joint Development Committee meeting, GPC shall prepare and distribute minutes of the meeting, which shall provide a description in reasonable detail of the discussions had at the meeting and a list of any actions, decisions or determinations approved by the Joint Development Committee at such meeting. GPC shall be responsible for circulation of all draft and final minutes. Draft minutes shall be circulated to all members of the Joint Development Committee sufficiently in advance of the next meeting to allow review and comment prior to the meeting. Minutes shall be approved or disapproved, and revised as necessary, at the next meeting. Final minutes shall be distributed to the members of the Joint Development Committee.
4.6. Term. The Joint Development Committee shall exist until the expiration of the Royalty Term for all Covered Products.
4.7. Expenses. Each Party shall be responsible for all travel and related costs for its representatives to attend meetings of, and otherwise participate on, the Joint Development Committee.
4.8. Additional Studies. NEOTHERAPEUTICS reserves the right, subject to the approval and oversight of the Joint Development Committee, which approval will not be unreasonably withheld, to propose additional studies of Satraplatin at its own expense.
5. CO-PROMOTION. In the event GPC determines to directly market Covered Products in the United States itself rather than licensing such Covered Products to a Third Party for commercialization, GPC shall notify NEOTHERAPEUTICS in writing reasonably in advance of the commencement of commercialization of any such Covered Product. If, within ten (10) days after receipt of such notice from GPC, NEOTHERAPEUTICS indicates in writing to GPC that it desires to co-promote such Covered Product with GPC, the Parties shall negotiate in good faith the terms of such co-promotion of such Covered Product. If GPC proposes to enter into an agreement with a Third Party that includes a grant of rights to such Third Party to market a Covered Product in the United States, GPC shall use commercially reasonable efforts to obtain co-promotion rights in the United States with such Third Party that include NEOTHERAPEUTICS.
14
6. OWNERSHIP; PATENT PROTECTION
6.1. Ownership of GPC Development Technology. Except as otherwise provided in this Agreement, the entire right, title and interest in and to all GPC Development Technology shall be owned solely by GPC, and all decisions regarding the protection of GPC Development Technology shall remain with GPC.
6.2. Ownership of J-M Licensed Technology, NEOTHERAPEUTICS Licensed Technology, NEOTHERAPEUTICS Development Technology. Except as otherwise provided in this Agreement, the entire right, title and interest in and to all NEOTHERAPEUTICS Licensed Technology and NEOTHERAPEUTICS Development Technology and, as between the Parties, J-M Licensed Technology shall be owned solely by NEOTHERAPEUTICS, and, except as otherwise set forth in this Agreement or the J-M License Agreement, all decisions regarding the protection of J-M Licensed Technology, NEOTHERAPEUTICS Licensed Technology and NEOTHERAPEUTICS Development Technology shall remain with NEOTHERAPEUTICS.
6.3. Ownership of Joint Development Technology. GPC and NEOTHERAPEUTICS shall jointly own all rights, title and interests in Joint Development Technology.
6.4. Patent Filing, Prosecution and Maintenance.
(a) Reasonably promptly after the Effective Date the Joint Development Committee, in consultation with the Parties respective patent counsel, shall agree upon a patent filing policy with respect to the NEOTHERAPEUTICS Licensed Technology, the Joint Development Technology and the NEOTHERAPEUTICS Development Technology. In addition, from time to time, the Joint Development Committee shall determine, in accordance with such policy, whether and in what jurisdictions patent applications should be filed with respect to any Know-How or Inventions included in the NEOTHERAPEUTICS Licensed Technology, the Joint Development Technology and the NEOTHERAPEUTICS Development Technology.
(b) Following a determination by the Joint Development Committee that a patent application should be filed with respect to any Know-How or Inventions included in the NEOTHERAPEUTICS Licensed Technology, NEOTHERAPEUTICS, through outside patent counsel (including, without limitation, foreign patent counsel and agents) reasonably acceptable to GPC, shall promptly file a patent application with respect thereto in the jurisdiction(s) selected by the Joint Development Committee, and thereafter NEOTHERAPEUTICS shall prosecute such application and maintain any letters patent issuing therefrom. NEOTHERAPEUTICS shall take all such actions in consultation with GPC and its patent counsel and shall keep GPC apprised as to the status of all pending patent applications. The out-of-pocket costs of filing, prosecuting and maintaining any Patents actually incurred by NEOTHERAPEUTICS under this Section 6.3(b) shall be reimbursed by GPC. NEOTHERAPEUTICS shall invoice GPC for such costs on a quarterly basis. Such invoices shall be payable forty-five (45) days after receipt thereof. If the Joint Development Committee determines to not have a patent application filed with respect to any Know-How or Inventions included in the NEOTHERAPEUTICS Licensed Technology, NEOTHERAPEUTICS may, notwithstanding anything else contained herein, file,
15
prosecute and maintain a patent application and any letters patent issuing therefrom at its own expense.
(c) The preparation, filing, prosecuting and maintenance of Patents included in the J-M Licensed Technology shall be accomplished as provided in the J-M License Agreement, subject to the provisions of this Agreement. Furthermore, the Parties respective rights and obligations under this Section shall be subject, in all events, to any superior rights of J-M under the J-M License Agreement regarding the J-M Licensed Technology.
(d) If J-M elects to abandon the prosecution or maintenance of any J-M Patent Right in any country pursuant to Section 1 of Article VII of the J-M License Agreement and NEOTHERAPEUTICS elects not to assume the prosecution or maintenance of such J-M Patent Right, NEOTHERAPEUTICS shall so notify GPC. If GPC notifies NEOTHERAPEUTICS that GPC wishes to assume the prosecution or maintenance of such J-M Patent Right, NEOTHERAPEUTICS shall exercise its right to assume such prosecution or maintenance on behalf of GPC, and NEOTHERAPEUTICS shall assign its rights to such J-M Patent Right in such country to GPC.
6.5. Termination of Support by GPC. GPC shall have the right to terminate its obligations, if any, under this Agreement in any country with respect to any Patent included in the NEOTHERAPEUTICS Licensed Technology, from time to time, upon notice to NEOTHERAPEUTICS; provided, however, that no such notice shall be effective with respect to any such Patent if it is given fewer than sixty (60) days prior to a deadline for taking any action that must be taken in order to preserve the owners rights in such Patent. Upon the delivery of any such effective notice, GPCs rights, licenses and obligations under this Agreement with respect to such Patent shall terminate in any such country, except those obligations that shall have accrued prior to the delivery of such notice.
7. GRANT OF LICENSES
7.1. Exclusive Sublicense Grant. NEOTHERAPEUTICS hereby grants GPC an exclusive royalty-bearing right and sublicense in the Field throughout the Territory, with the right to grant further sublicenses in accordance with the terms of this Agreement, under the J-M Licensed Technology to research, develop, make, have made, use, sell, offer for sale, have sold, import and export Covered Products.
7.2. Exclusive License Grant. NEOTHERAPEUTICS hereby grants to GPC an exclusive royalty-bearing right and license in the Field throughout the Territory, with the right to grant sublicenses in accordance with the terms of this Agreement, under the NEOTHERAPEUTICS Licensed Technology, the NEOTHERAPEUTICS Development Technology and NEOTHERAPEUTICSs interest in the Joint Development Technology to research, develop, make, have made, use, sell, offer for sale, have sold, import and export Covered Products.
7.3. Scope of Exclusivity. The licenses granted to GPC pursuant to Sections 7.1 and 7.2 shall be exclusive even as to NEOTHERAPEUTICS, except to the extent necessary for NEOTHERAPEUTICS to perform its obligations under this Agreement.
16
7.4. Provisions Regarding Sublicenses. Any sublicense by GPC of the rights granted to GPC hereunder shall be consistent with the terms of this Agreement and shall include an obligation for the Sublicensee to comply with the applicable obligations of GPC set forth in this Agreement. GPC shall provide to NEOTHERAPEUTICS a copy of any sublicense agreement of the rights granted herein with any Third Party promptly after entering into such sublicense; provided that, GPC may redact confidential portions of any such sublicense agreement, but only to the extent that any such redactions do not impair NEOTHERAPEUTICS ability to ensure compliance with the provisions of this Agreement.
7.5. Transfer of Information. Promptly following the Effective Date, NEOTHERAPEUTICS shall coordinate with the Joint Development Committee and provide copies of and access to all of LICENSORS INFORMATION, LICENSORS ONGOING INFORMATION and all other information relating to the J-M Patent Rights in its possession. Thereafter, NEOTHERAPEUTICS will continue to provide such information, as well as NEOTHERAPEUTICS Development Technology, to GPC as it becomes available to or is conceived by NEOTHERAPEUTICS as soon as practicable after it becomes available to or is conceived by NEOTHERAPEUTICS.
8. DEVELOPMENT AND COMMERCIALIZATION
8.1. Development Efforts by GPC. GPC shall, either itself or through its Affiliates or Sublicensees:
(a) at its own expense, or at the expense of its Affiliates or Sublicensees, diligently conduct the development of Covered Products within the Field using Platinum Complexes. GPC shall exercise in the performance of such development commercially reasonable technical skill and competence;
(b) use its commercially reasonable endeavors to obtain appropriate regulatory approvals for Covered Products in the United States or any of the countries currently comprising the European Union and Japan and to promote the distribution and sale of Covered Products in the Field in such countries where such regulatory approval is obtained;
(c) ensure that all literature prepared by GPC and relating to Covered Products bears an acknowledgement to the effect that they are subject to a license from J-M and NEOTHERAPEUTICS, and all protocols prepared by GPC and relating to Covered Products bears an acknowledgement to the effect that they are subject to a license from NEOTHERAPEUTICS and attach to all Covered Products a label quoting relevant patent numbers and stating that such Covered Products are made under license under J-M and NEOTHERAPEUTICS; and
(d) advise NEOTHERAPEUTICS promptly of all approvals granted with respect to Covered Product.
8.2. Delegation of IND Authority; Right to Reference. NEOTHERAPEUTICS acknowledges that a Phase II clinical trial of Satraplatin has been conducted pursuant to an Investigational New Drug Application Number 44,615 filed with the FDA (the Filed IND).
17
Promptly after the Effective Date, NEOTHERAPEUTICS shall prepare for filing with the FDA all documents necessary to designate and delegate to GPC all exclusive (even as to NEOTHERAPEUTICS) authority to take actions and receive all communications from the FDA with respect to the Filed IND and shall file such documents with the FDA following GPCs review and approval of such documents. NEOTHERAPEUTICS shall not take any action to revoke or limit the delegation described in the preceding sentence. In addition, in the event that the FDA, for any reason, fails to recognize and give full effect to the delegation described in this Section, NEOTHERAPEUTICS shall not take any action with respect to the Filed IND or the clinical trials conducted pursuant to the Filed IND without the prior approval of the Joint Development Committee. In addition to the foregoing, NEOTHERAPEUTICS hereby grants to GPC an irrevocable right to reference the Filed IND and all other regulatory submissions, approvals, clearances, data and other documents and information related to the Filed IND that NEOTHERAPEUTICS has filed or referenced with the FDA. Promptly after the Effective Date, the Parties shall begin planning and coordinating the transfer to the Joint Development Committee of all responsibilities regarding clinical trials conducted pursuant to the Filed IND. GPC shall promptly provide to NEOTHERAPEUTICS copies of all correspondence related to Covered Products delivered to or received from the FDA.
8.3. Ownership of Regulatory Filings. Except for the Filed IND, all INDs, NDAs and other regulatory filings made or filed by GPC with respect to any Covered Products shall be in the name of, and be owned solely by, GPC.
8.4. Reporting. (a) GPC shall promptly notify NEOTHERAPEUTICS concerning any happening or circumstance that GPC understands will result in NEOTHERAPEUTICSs loss of any of its rights under the J-M License Agreement, and GPC shall reasonably cooperate with NEOTHERAPEUTICS to prevent any such loss.
(b) Following any acquisition of or by NEOTHERAPEUTICS (whether through merger, consolidation, acquisition (directly or indirectly) of stock representing thirty percent (30%) or more of the outstanding voting stock or other of its equity securities, sale of all or substantially all of its assets, or otherwise) by or of any Third Party that is a substantial competitor of GPC, as determined by objective standards (which shall include, but not be limited to, a determination as to whether such Third Party is developing or marketing a drug of the same chemical class as the Covered Product or whether such Third Party is developing or marketing a drug targeted to the same tumor type as a any product under development or being marketing by GPC), GPC shall not be required to include in any report furnished by GPC pursuant to this Agreement, or provide to any representative of NEOTHERAPEUTICS (or any successor thereto), any information that GPC, acting in good faith, determines to be competitively sensitive or enabling information, unless such information is required for compliance with the obligations to J-M under the J-M License Agreement, in which event NEOTHERAPEUTICS or its successor, as the case may be, and J-M (if it shall receive such information) shall execute a nondisclosure agreement, satisfactory to GPC in form and substance, concerning all such information.
8.5. Trademarks. GPC shall market the Covered Products throughout the Territory under trademarks (collectively, the Trademarks) selected by GPC. GPC shall own all right,
18
title and interest in and to such Trademarks and shall bear all costs and expenses of registering, and maintaining the registration of, same.
9. MONETARY OBLIGATIONS
9.1. License Fee. In partial consideration of the rights and licenses granted to GPC under this Agreement, GPC shall pay to NEOTHERAPEUTICS the following license fees at the times indicated below:
(a) Within ten (10) days after the execution of this Agreement, or such later date as the First Amendment to the J-M License Agreement shall have been amended to (x) delete all references in the J-M License Agreement to the form sub-license agreement attached as Exhibit 1 to the J-M License Agreement and (y) change the references in Section (7) of the First Amendment to Paragraph 1 of Article IX in lieu of the references to Paragraph 6 of Article VII, GPC shall pay NEOTHERAPEUTICS a non-refundable, non-creditable, one-time license fee in the amount of US$2,000,000 in cash.
(b) Within thirty (30) days of the first dosing of the first patient in the first Phase III or registrational clinical trial of Satraplatin after the Effective Date (such date of dosing, the Dosing Date), GPC shall pay NEOTHERAPEUTICS a non-refundable, non-creditable, one time license fee in the amount of $2,000,000, $1,000,000 of which fee shall be payable in cash and $1,000,000 of which fee shall be payable through the purchase by GPC, for an aggregate payment of $1,000,000, of a number of shares of common stock, par value $.001 per share, of NEOTHERAPEUTICS equal to the lesser of (i) the quotient obtained by dividing (x) $1,000,000 by (y) one hundred and fifty percent (150%) of the average closing sale price of the NEOTHERAPEUTICS common stock, as reported by the Nasdaq quotation system for the twenty (20) consecutive trading days ending on the third trading day before the Dosing Date, or (ii) 19.9% of the number of shares of NEOTHERAPEUTICS common stock outstanding as of the Effective Date, or such other number of shares as Nasdaq may specify as the highest number of shares of common stock that NEOTHERAPEUTICS may issue hereunder without first obtaining stockholder approval (the NEOTHERAPEUTICS Shares); provided that, if the number of NEOTHERAPEUTIC Shares to be issued pursuant to this Section is determined pursuant to clause (ii) above, then, until GPC has purchased the number of shares of NEOTHERAPEUTICS common stock determined pursuant to clause (i) above and subject to NEOTHERAPEUTICS ability to issue additional shares without first obtaining stockholder approval pursuant to Nasdaq regulations, all milestone payments owed by GPC to NEOTHERAPEUTICS pursuant to Section 9.2 below shall be used to purchase additional shares of NEOTHERAPEUTICS common stock at the price determined as of the date of the achievement of the applicable milestone in accordance with the formula set in clause (i)(y) above, and such additional shares shall be considered to be NEOTHERAPEUTICS Shares hereunder. Concurrently with the first issuance of the NEOTHERAPEUTICS Shares, the Parties shall execute a Registration Rights Agreement in the form attached hereto as Exhibit D. GPC agrees that it shall be a condition of the issuance of the NEOTHERAPEUTICS Shares that GPC make the representations set forth in Section 2.3 as of the date of issuance of the NEOTHERAPEUTICS Shares. GPC represents that it has not engaged in any short selling, option writing, equity swaps, or
19
other types of hedging transactions or derivative transactions with respect to the common stock of NEOTHERAPEUTICS, and GPC further agrees that it will not engage in any such transaction with respect to the common stock of NEOTHERAPEUTICS at any time during the period commencing on the Effective Date and ending one year after the issuance of the NEOTHERAPEUTICS Shares.
9.2. Development Milestone Payments by GPC. (a) In partial consideration of the rights and licenses granted to GPC by NEOTHERAPEUTICS under this Agreement, GPC shall pay NEOTHERAPEUTICS the following milestone payments upon the first occurrence of each event set forth below achieved by GPC or its Affiliates:
(i) US$*** upon acceptance by the FDA of an NDA covering Satraplatin;
(ii) US$*** upon acceptance by the EMEA in the European Union of an application for marketing clearance covering Satraplatin;
(iii) US$*** upon FDA approval of Satraplatin for commercial sale for a first indication;
(iv) US$*** upon approval by the EMEA in the European Union of Satraplatin for commercial sale for a first indication;
(v) US$*** upon first approval by the MHW in Japan of Satraplatin for commercial sale;
(vi) US$*** upon FDA approval of Satraplatin for commercial sale for a second indication; and
(vii) US$***upon approval by the EMEA in the European Union of Satraplatin for commercial sale for a second indication.
Each of the foregoing payments shall be made within thirty (30) days after achievement of such milestone. For the avoidance of doubt, after GPC has made any of the foregoing payments with respect to any one Covered Product, GPC shall have no further obligation to make such payment with respect to any other Covered Product. As used in this Section 9.2, approval shall mean approval by the FDA, the EMEA or the MHW of a NDA, MAA or other application for regulatory approval to market and sell a Covered Product in the United States, the European Union or Japan, and with respect to the European Union shall also include any government pricing or reimbursement approval necessary to market or sell such Covered Product in the European Union.
9.3. Royalties. (a) Subject to Section 9.3(b), in partial consideration of the rights and licenses granted to GPC under this Agreement, GPC shall pay NEOTHERAPEUTICS a royalty on Net Sales of each Covered Product, commencing on the First Commercial Sale of each Covered Product by GPC or its Affiliates in each country in the Territory, in an amount equal to the applicable percentage of the world-wide Net Sales of such Covered Product by GPC and its
*** | Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
20
Affiliates throughout the Territory during each calendar year (or portion thereof) during the term of this Agreement:
(i) ***% on worldwide annual Net Sales up to $***
(ii) ***% on worldwide annual Net Sales between $*** and $***
(iii) ***% on worldwide annual Net Sales above $***.
Such incremental amounts shall be reduced on a Covered Product by Covered Product and country by country basis upon the expiration of the J-M Royalty Term and for the remainder of the Royalty Term by a percentage of Net Sales equal to *** of the percentage of Net Sales that NEOTHERAPEUTICS had paid to J-M with respect to sales of such Covered Product immediately prior to the expiration of the J-M Royalty Term and shall be reduced pro rated accordingly with respect to any partial calendar year during the term of this Agreement.
(b) Notwithstanding the foregoing, GPCs obligation to make payments with respect to each Covered Product in each country in the Territory under Sections 9.3 and 9.4 shall expire upon the expiration of the Royalty Term with respect to such Covered Product in such country.
(c) The obligation to pay royalties to NEOTHERAPEUTICS under this Section 9.3 is imposed only once with respect to the same unit of a Covered Product, regardless of the number of Patents pertaining thereto.
9.4. Sublicense Income.
(a) Subject to Section 9.3(b), GPC shall pay NEOTHERAPEUTICS (i) *** (***%) of all Sublicense Fees and (ii) *** (***%) of all Sublicense Royalties received by GPC, provided that, until the expiration of the J-M Royalty Term, the payments made by GPC to NEOTHERAPEUTICS under clause (ii) shall in any event not be ***%) of Net Sales of Covered Products by Sublicensees.
(b) Notwithstanding anything else contained herein, upon receipt by GPC of any payment from a Sublicensee upon the achievement of any applicable milestone (a Sublicensee Milestone), (i) if the Sublicensee Milestone is also a milestone described in Section 9.2, GPC shall make the applicable milestone payment under Section 9.2 to NEOTHERAPEUTICS and (ii) the payment received by GPC from such Sublicensee shall be treated as a Sublicense Fee and subject to Section 9.4(a), provided that GPC may deduct any payment made pursuant to clause (i) and all other payments previously made by GPC pursuant to Section 9.2 (to the extent not previously deducted pursuant to this clause) from such Sublicense Fee before calculating the percentage owed to NEOTHERAPEUTICS pursuant to Section 9.4(a) in determining GPCs obligation under such Section. As an example, if GPC received US$*** from a Sublicensee upon approval by the EMEA in the European Union of Satraplatin for commercial sale for a first indication, GPC would pay NEOTHERAPEUTICS US$*** pursuant to Section 9.2, and US$*** pursuant to Section 9.4(a) (***% of US$*** (US$*** less US$*** paid pursuant to Section 9.2)), for an aggregate payment of US$***.
*** | Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
21
9.5. Third Party Payments. (a) GPC, at its sole expense, shall pay all amounts owing to any Third Party to obtain rights to any Valid Claims of any issued patent or patent application issued to Third Parties determined by the Joint Development Committee to be necessary for GPCs exercise of its rights hereunder to research, develop, make, have made, use, sell, offer for sale, have sold, import or export any Covered Product (collectively, Third Party Payments). Except as provided in Section 9.5(b), GPC shall not be entitled to any credit under this Agreement on account of any Third Party Payments paid by GPC.
(b) GPC shall be entitled, on a country by country basis, to credit against payments due to NEOTHERAPEUTICS under this Agreement an amount equal to the Third Party Payments paid by GPC; provided, however, that the application of such credit shall not, prior to the expiration of the J-M Royalty Term, reduce the amounts payable by GPC under this Agreement with respect to any given calendar quarter to less than a percentage of Net Sales equal to *** (***%) above the royalties on Net Sales owed by NEOTHERAPEUTICS to J-M under the J-M License Agreement and, thereafter, such credit shall not reduce the amount payable by GPC under this Agreement by more than *** (***%). Notwithstanding the foregoing, if GPC is required to pay an award of damages or a settlement amount in the form of a reasonable royalty based on sales during any period of previous infringement (as opposed to the on-going payment of a running royalty), then such payment shall be allocated to the several calendar quarters during such period of infringement, and the limits set forth in the previous sentence shall apply to each portion of such payment allocated to a specific quarter and not to such payment as a whole.
9.6. Payments under J-M License. Notwithstanding anything else contained herein, NEOTHERAPEUTICS shall remain solely responsible to J-M for all payments due to J-M under the J-M License.
9.7. Reimbursement of NEOTHERAPEUTICS Development Expenses. Within thirty (30) days of receipt of invoices from NEOTHERAPEUTICS, which invoices shall be delivered by NEOTHERAPEUTICS no more frequently than quarterly, GPC shall reimburse NEOTHERAPEUTICS for all costs and expenses (including full reimbursement for NEOTHERAPEUTICS personnel) incurred by NEOTHERAPEUTICS in the development of Covered Products as approved in advance by the Joint Development Committee.
10. PAYMENTS AND REPORTS
10.1. Payment. Except as otherwise provided in this Agreement, all royalty and other payments due hereunder shall be paid quarterly within thirty (30) days after the end of each calendar quarter. Each such payment shall be accompanied by a statement, Covered Product-by-Covered Product and country-by-country, of the amount of Net Sales during such quarter, the amount of royalties due on such Net Sales, the amount of Sublicense Fees and Sublicense Royalties during such quarter and the amount owed to NEOTHERAPEUTICS on account of such Sublicense Fees and Sublicense Royalties.
10.2. Mode of Payment. GPC shall make all payments required under this Agreement as directed by NEOTHERAPEUTICS from time to time, in U.S. Dollars (except as provided in Section 10.6). All royalties due hereunder shall first be determined in the currency of the country
*** | Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
22
in which the Covered Products in question were sold and then converted into equivalent U.S. funds. The exchange rate for such conversion shall be that rate quoted in The Wall Street Journal on the last business day of the applicable reporting period.
10.3. Records Retention. GPC and its Affiliates shall keep complete and accurate records pertaining to the sale of Covered Products in the Territory in accordance with the obligations therefor set forth in the J-M License Agreement.
10.4. Audit Request. At the request and expense (except as provided below) of NEOTHERAPEUTICS, GPC and its Affiliates shall permit an independent, certified public accountant appointed by NEOTHERAPEUTICS and reasonably acceptable to GPC, at reasonable times and upon reasonable notice, to examine no more than once per year those records and all other material documents relating to or relevant to Net Sales in the possession or control of GPC and its Affiliates, for a period of three years after such royalties have accrued. The results of any such examination shall be made available to both Parties. If, as a result of any inspection of the books and records of GPC or its Affiliates, it is shown that GPCs royalty payments under this Agreement were less than the amount which should have been paid, then GPC shall make all payments required to eliminate any discrepancy revealed by said inspection within forty-five (45) days after NEOTHERAPEUTICSs demand therefor. Furthermore, if the aggregate royalty payments GPC made were less than ninety five (95%) of the amount which should have been paid made during the period in question, GPC shall also reimburse NEOTHERAPEUTICS for the reasonable out-of-pocket cost of such inspection and shall pay interest on the deficiency pursuant to Section 10.7.
10.5. Taxes. In the event that GPC is required to withhold any tax to the tax or revenue authorities in any country in the Territory in connection with any payment to NEOTHERAPEUTICS due to the laws of such country which payment is credited to NEOTHERAPEUTICSs tax liability, such amount shall be deducted from the royalty or other payment to be made by GPC, and GPC shall notify NEOTHERAPEUTICS and promptly furnish NEOTHERAPEUTICS with copies of any tax certificate or other documentation evidencing such withholding. Each Party agrees to cooperate with the other Party in claiming exemptions from such deductions or withholdings under any agreement or treaty from time to time in effect.
10.6. Blocked Currency. If at any time legal restrictions prevent GPCs prompt remittance of part or all of the royalties due with respect to any country where a Covered Product is sold, GPC shall convert the amount owed to NEOTHERAPEUTICS into U.S. funds and shall pay NEOTHERAPEUTICS directly from GPCs U.S. source of funds for the amount impounded. GPC shall then pay all future royalties due to NEOTHERAPEUTICS from GPCs U.S. source of funds so long as the legal restrictions of this Section 10.6 still apply.
10.7. Late Payments. In the event that any payment GPC is required to make hereunder is not made within thirty (30) days after such payment was originally due, GPC shall pay interest on the past due amount as follows:
(a) If GPCs late payment pertains to a payment NEOTHERAPEUTICS is required to make under the J-M License Agreement and causes NEOTHERAPEUTICS to become liable to pay interest with respect to such payment under the J-M License
23
Agreement, then GPC shall pay interest on the past due amount as provided under the applicable provision(s) of the J-M License Agreement.
(b) In all other events, GPC shall pay interest on the past due amount at the rate of twelve percent (12%) per annum, until payment in full is made.
11. MANUFACTURING. Promptly following the Effective Date, GPC and NEOTHERAPEUTICS shall negotiate in good faith the terms of a Supply Agreement regarding the supply of PLATINUM COMPLEXES (as defined in the J-M License Agreement) to GPC, which agreement shall provide for payments to NEOTHERAPEUTICS equal to *** and shall contain such other terms as are customary in such an agreement; provided that, nothing shall prevent GPC from approaching J-M directly to receive PLATINUM COMPLEXES or to receive a grant of rights to have a Third Party supply PLATINUM COMPLEXES, in which case, GPC shall pay to NEOTHERAPEUTICS the ***. If, despite good faith efforts, the Parties are unable to agree on the terms of a Supply Agreement within forty five (45) days of the Effective Date, then the terms of the Supply Agreement shall be submitted to arbitration pursuant to Section 17.13. Within five (5) days after both parties have appointed an arbitrator pursuant to Section 17.13, each party shall submit to the panel of arbitrators a form of supply agreement for consideration by the panel; provided that, such forms shall only be for the panels consideration, and the panel shall be free to resolve the dispute in any manner that it deems appropriate. NEOTHERAPEUTICSs Costs shall be determined on a shipment by shipment basis and shall be equal to the amount paid by NEOTHERAPEUTICS to J-M in accordance with Article VI of the J-M License Agreement.
12. CONFIDENTIALITY
12.1. Confidentiality; Exceptions. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing, the Parties agree that, during the term of this Agreement and for five years thereafter, each Party, its Affiliates and its Sublicensees, if any (collectively, a receiving Party), shall use their best efforts to keep completely confidential, shall not publish or otherwise disclose to any Third Party and shall not use for any purpose other than the performance of this Agreement both the financial terms of this Agreement and any information furnished to it by the other Party, its Affiliates or its Sublicensees, if any (collectively, a disclosing Party) (and shall ensure that its and its Affiliates and its Sublicensees respective directors, officers, employees or agents do likewise), except to the extent that it can be established by the receiving Party by competent proof that such information: (i) is, or hereafter becomes, generally available to the public other than by reason of any default by the receiving Party with respect to its confidentiality obligations hereunder; (ii) was already known to the receiving Party at the time of disclosure by the disclosing Party; (iii) was lawfully disclosed to the receiving Party by a Third Party who was not in default of any confidentiality obligation to the disclosing Party; or (iv) is independently developed by or for the receiving Party without reference to or reliance upon the information furnished by the disclosing Party (all such information to which none of the foregoing exceptions applies, Confidential Information). The NEOTHERAPEUTICS Licensed Technology and NEOTHERAPEUTICS Development Technology shall be the Confidential Information of NEOTHERAPEUTICS and
*** | Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. |
24
the GPC Development Technology shall be the Confidential Information of GPC. The Joint Development Technology shall be the Confidential Information of both Parties.
12.2. Exclusions to Confidentiality. The restrictions contained in Section 12.1 shall not apply to any Confidential Information in the hands of a receiving Party that (i) is submitted by the receiving Party to governmental authorities to facilitate the issuance of marketing approvals for a Covered Product, provided that reasonable measures shall be taken to assure confidential treatment of such information, if practicable; (ii) is provided by GPC to any Third Party under appropriate terms and conditions, including confidentiality provisions equivalent to those in this Agreement, for consulting, manufacturing development, manufacturing, external testing, marketing trials and sublicensing or potential sublicensing; or (iii) is otherwise required to be disclosed in compliance with applicable laws or regulations (including, without limitation, to comply with any governmental or stock exchange disclosure requirements) or an order by a court or other regulatory body having competent jurisdiction; provided, however, that if a receiving Party is required to make any such disclosure of the disclosing Partys Confidential Information such receiving Party shall, except where impracticable for necessary disclosures (for example to physicians conducting studies or to health authorities), give reasonable advance notice to the other Party of such disclosure requirement and, except to the extent inappropriate in the case of patent applications or otherwise, will use its best efforts to secure confidential treatment of such Confidential Information required to be disclosed. In addition, any press release or other public announcement permitted by the terms of Section 17.7 hereof shall be excluded from the provisions of Section 12.1.
12.3. Injunctive Relief. The Parties acknowledge that monetary damages alone would not adequately compensate the disclosing Party in the event of a material breach by the receiving Party of this Section 12, and that, in addition to all other remedies available to the disclosing Party under this Agreement, at law or in equity, it shall be entitled to injunctive relief for the enforcement of its rights under this Section 12, without the posting of a bond or other security.
13. INTELLECTUAL PROPERTY
13.1. Patent Enforcement. (a) Each Party shall notify the other promptly after such Party becomes aware of any alleged infringement of any Patent licensed to GPC under this Agreement in any country in the Territory. Except as provided in Section 13.3, GPC shall have the first right, but not the duty, to institute patent infringement actions against Third Parties with respect to any such alleged infringement. GPC shall take all such actions under this Section 13.1(a) (other than with respect to a Patent included solely in the GPC Development Technology) in reasonable consultation with NEOTHERAPEUTICS and shall keep NEOTHERAPEUTICS apprised as to the status of any such infringement action GPC institutes. NEOTHERAPEUTICS shall execute all reasonable, necessary and proper documents and take such actions as shall be appropriate to allow GPC to institute and prosecute infringement actions under this Section 13.1(a).
(b) The costs and expenses of bringing and maintaining any infringement action under Section 13.1(a) shall be borne solely by GPC.
25
(c) Any award or compensation (including the fair market value of non-monetary compensation) paid by Third Parties as a result of any infringement action brought by GPC under Section 13.1(a) (whether by way of settlement or otherwise) shall be allocated first to reimbursement of GPC for all expenses incurred by it in connection with such action. Any remaining award or compensation shall be used to pay NEOTHERAPEUTICS the royalty it would have been entitled to receive had the balance of such recovery or damages, to the extent attributable to sales of such infringing products, been attributable to sales of Covered Products by GPC hereunder.
(d) Except as provided in Section 13.3, in the event GPC elects not to, or fails to, exercise its rights under Section 13.1(a) with respect to any alleged infringement of a Patent licensed to GPC under this Agreement (excluding any Patent included solely in the GPC Development Technology) within one hundred twenty (120) days after receiving notice thereof, NEOTHERAPEUTICS shall have the right, but not the duty, to institute patent infringement actions against Third Parties with respect to any such alleged infringement NEOTHERAPEUTICS shall take all such actions under this Section 13.1(d) in reasonable consultation with GPC and shall keep GPC apprised as to the status of any such infringement action NEOTHERAPEUTICS institutes. GPC shall execute all reasonable, necessary and proper documents and take such actions as shall be appropriate to allow NEOTHERAPEUTICS to institute and prosecute infringement actions under this Section 13.1(d). Any award or compensation (including the fair market value of non-monetary compensation) paid by Third Parties as a result of any infringement action brought by NEOTHERAPEUTICS under this Section 13.1(d) (whether by way of settlement or otherwise) shall be allocated first to reimbursement of NEOTHERAPEUTICS for all expenses incurred by it in connection with such action. Any remaining award or compensation shall be allocated equally between the Parties.
13.2. Infringement Actions by Third Parties. (a) Each Party shall notify the other Party promptly in writing of any claim of, or action for, infringement of any Patents owned or licensed by Third Parties which is threatened, made or brought against either Party by reason of either Partys performance of its obligations under this Agreement or manufacture, use or sale of any Covered Products in the Territory in the Field.
(b) Except as provided in Section 13.3, in the event that such an action for infringement is commenced solely against a Party or both Parties jointly and/or any of their respective Affiliates or Sublicensees, as the case may be, with respect to any Covered Product developed and commercialized by GPC, its Affiliates and/or Sublicensees, GPC shall defend such action at its own expense, and NEOTHERAPEUTICS hereby agrees to assist and cooperate with GPC to the extent necessary in the defense of such suit, in accordance with Section 13.2(c). GPC shall have the right to settle any such action or consent to an adverse judgment thereto, and NEOTHERAPEUTICSs consent shall not be required unless such settlement or consent: (i) imposes any material obligation on NEOTHERAPEUTICS (including under Section 13.2(d)), or (ii) materially impairs NEOTHERAPEUTICSs rights in or to any J-M Licensed Technology, NEOTHERAPEUTICS Licensed Technology, NEOTHERAPEUTICS Development Technology and/or Joint Development Technology, in which event NEOTHERAPEUTICSs consent shall not be unreasonably withheld or delayed.
26
(c) The costs of defending any infringement action with respect to a Covered Product developed and commercialized by GPC, its Affiliates and/or Sublicensees shall be borne solely by GPC.
(d) During the pendency of any such action, GPC shall continue to pay all royalties due hereunder. Subject to Section 9.5(b), GPC shall be fully liable for the payment of any award for damages, or any amount due pursuant to any settlement entered into by GPC, to the extent that any such action pertains to a Covered Product developed and commercialized by GPC and/or its Affiliates or Sublicensees.
(e) Except to the extent that the provisions of Section 13.1 shall apply to any portion thereof, GPC shall retain any award or compensation (including the fair market value of non-monetary compensation) received by GPC as a result of any such action (i.e., as a result of a counterclaim).
13.3. Superior Rights of J-M. Notwithstanding any other provision of this Agreement, the Parties respective rights and obligations under this Section 13 shall be subject, in all events, to any superior rights of J-M under the J-M License Agreement regarding the J-M Licensed Technology.
14. INDEMNIFICATION
14.1. By GPC. GPC shall indemnify and hold NEOTHERAPEUTICS and its Affiliates and their respective directors, officers, employees and agents, harmless from and against any and all liabilities, damages, losses, costs and expenses (including the reasonable fees of attorneys and other professionals and other reasonable litigation expenses) arising out of or resulting from:
(i) the negligence, recklessness or intentional misconduct of GPC, its Affiliates or its Sublicensees and their respective directors, officers, employees and agents, in connection with the work performed by GPC in connection with the development of Covered Products or pursuant to Section 8 or in connection with GPCs exercise of any of its rights hereunder;
(ii) any and all product liability claims resulting from the development and/or commercialization of any Covered Product by GPC, its Affiliates or its Sublicensees;
(iii) any warranty claims, Covered Product recalls or any tort claims of personal injury (including death) or property damage relating to or arising out of the manufacture, use, distribution or sale of any Covered Product by GPC, its Affiliates or its Sublicensees due to any negligence, recklessness or intentional misconduct by, or strict liability of, GPC, its Affiliates or its Sublicensees, and their respective directors, officers, employees and agents, except, in each case, to the comparative extent such claim arose out of or resulted from the negligence, recklessness or intentional misconduct of NEOTHERAPEUTICS or its Affiliates and their respective directors, officers, employees and agents; or
(iv) any breach of any representation or warranty made by GPC in Section 2.1.
27
14.2. By NEOTHERAPEUTICS. NEOTHERAPEUTICS shall indemnify and hold GPC, its Affiliates and its Sublicensees and their respective directors, officers, employees and agents, harmless from and against any and all liabilities, damages, losses, costs and expenses (including the reasonable fees of attorneys and other professionals and other reasonable litigation expenses) arising out of or resulting from:
(i) the negligence, recklessness or intentional misconduct of NEOTHERAPEUTICS or its Affiliates and their respective directors, officers, employees and agents, in connection with the work performed by NEOTHERAPEUTICS under the development of Covered Products or pursuant to Section 5 or in connection with NEOTHERAPEUTICSs exercise of any of its rights hereunder; or
(ii) any breach of any representation or warranty made by NEOTHERAPEUTICS pursuant to Section 2 or 3.1.
14.3. Notice. In the event that any Person entitled thereto (an Indemnitee) is seeking indemnification under Section 14.1 or 14.2, such Indemnitee shall inform the indemnifying Party of a claim as soon as reasonably practicable after the indemnitee receives notice of the claim, shall permit the indemnifying Party to assume direction and control of the defense of the claim (including the sole right to settle it at the sole discretion of the indemnifying Party, provided that such settlement does not impose any material obligation on the indemnitee or the other Party) and shall cooperate as requested (at the expense of the indemnifying Party) in the defense of the claim (including, without limitation, granting the indemnifying Party limited access to pertinent records and making persons under such Indemnitees control available for interview and testimony).
14.4. Complete Indemnification. As the Parties intend complete indemnification, all costs and expenses incurred by any Indemnitee to enforce this Section 14 shall be reimbursed by the indemnifying Party.
15. TERM; TERMINATION
15.1. Term. This Agreement shall commence as of the Effective Date and, unless sooner terminated as provided hereunder, shall expire as follows:
(a) As to each Covered Product in each country in the Territory, this Agreement shall expire upon the expiration of the Royalty Term with respect to such Covered Product in such country.
(b) This Agreement shall expire in its entirety upon the termination of the respective Royalty Terms with respect to all Covered Products in all countries in the Territory.
15.2. Effect of Expiration. Following the expiration of this Agreement with respect to a Covered Product in a country in the Territory pursuant to Section 15.1(a), GPC shall have the royalty-free, perpetual right to continue to make, have made, use, sell, offer for sale, have sold and export such Covered Product in such country. Following the expiration of the term of this Agreement in its entirety pursuant to Section 15.1(b), GPC shall have the royalty-free, perpetual
28
right to continue to make, have made, use, sell, offer for sale, have sold and export all Covered Products in all countries in the Territory.
15.3. Termination by Either Party. Each Party shall have the right to terminate this Agreement, upon notice to the other Party, in the event that:
(i) Such other Party materially defaults with respect to any of its material obligations under this Agreement and does not cure such default within sixty (60) days after the receipt of a notice from the non-breaching Party specifying the nature of, and requiring the remedy of, such default (or, if such default cannot be cured within such sixty (60)-day period, if the breaching Party does not commence and diligently continue actions to cure same during such sixty (60)-day period); provided that, (x) if NEOTHERAPEUTICS is the Party claiming a default by GPC, GPC shall promptly following receipt of such notice of default notify NEOTHERAPEUTICS if it intends to seek to cure such default, (y) if the default relates to the payment of any amounts owed under this Agreement, the cure period described above shall be fifteen (15) days from receipt of notice of such default, and (z) if any such default is limited to the breaching Partys obligations with respect to a particular Covered Product and/or a particular country in the Territory, then any termination of this Agreement under this clause (i) due to such default shall be limited to the breaching Partys rights under this Agreement with respect to such Covered Product and/or country. Any termination pursuant to this clause (i) shall be without prejudice to any of the non-breaching Partys other rights under this Agreement, and in addition to any other remedies available to it by law or in equity;
(ii) The other Party shall have: (i) voluntarily commenced any proceeding or filed any petition seeking relief under the bankruptcy, insolvency or other similar laws of any jurisdiction, (ii) applied for, or consented to, the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator or similar official for it or for all or substantially all of its property, (iii) filed an answer admitting the material allegations of a petition filed against or in respect of it in any such proceeding, (iv) made a general assignment for the benefit of creditors of all or substantially all of its assets, (v) admitted in writing its inability to pay all or substantially all of its debts as they become due, or (vi) taken corporate action for the purpose of effecting any of the foregoing; or
(iii) An involuntary proceeding shall have been commenced, or any involuntary petition shall have been filed, in a court of competent jurisdiction seeking: (i) relief in respect of the other Party, or of its property, under the bankruptcy, insolvency or similar laws of any jurisdiction, (ii) the appointment of a receiver, trustee, custodian, sequestrator, conciliator, administrator or similar official for such other Party or for all or substantially all of its property, or (iii) the winding-up or liquidation of such other Party; and, in each case, such proceeding or petition shall have continued undismissed for sixty (60) days, or an order or decree approving or ordering any of the foregoing shall have continued unstayed, unappealed and in effect for thirty (30) days.
15.4. Termination by GPC. Notwithstanding any other provision of this Agreement, GPC shall have the right to terminate this Agreement, in its entirety or with respect to any
29
particular Covered Product and/or country in the Territory, at any time upon six (6) months notice (or less, at NEOTHERAPEUTICS discretion) to NEOTHERAPEUTICS.
15.5. Effect of Expiration or Termination. (a) Subject to Section 15.5(b), upon any termination of this Agreement by NEOTHERAPEUTICS pursuant to Section 15.3 or by GPC pursuant to Section 15.4, GPC shall (i) transfer and assign to NEOTHERAPEUTICS all of GPCs right, title and interest in and to any GPC Development Technology and all data, reports, records, materials and other intellectual property owned or controlled by GPC that relates exclusively to the Covered Products; (ii) grant NEOTHERAPEUTICS a non-exclusive license, solely for the purpose of NEOTHERAPEUTICSs developing, making, having made, using, marketing and selling Covered Products, under GPCs interest in any Joint Development Technology that does not exclusively relate to the Covered Products; and (iii) transfer and assign to NEOTHERAPEUTICS ownership of all INDs, NDAs and other regulatory filings made or filed with respect to any Covered Product (or, if such transfer and assignment is not permitted under the laws of any applicable jurisdiction, GPC shall take such other permitted actions with respect to such filings as may be reasonably requested by NEOTHERAPEUTICS), all upon commercially reasonable, arms length financial terms and conditions that the Parties shall negotiate in good faith and agree upon as soon as practicable after such termination of this Agreement; provided that, if this Agreement is terminated by GPC pursuant to Section 15.4, then NEOTHERAPEUTICS shall not be obligated to pay any amount for the licenses and transfers described in this sentence. In the event the Parties, despite the mutual use of good faith efforts, are unable to agree upon such terms and conditions, the Parties shall appoint an independent valuation expert who shall determine such terms and conditions, which determination shall be binding upon the Parties. If the Parties are unable to agree upon the appointment of such an expert, then each Party shall nominate an expert (the cost of whom shall be borne by such Party), and both experts appointed by the Parties shall jointly appoint the expert who shall make such determination. Any expert appointed pursuant to this Section 15.5(a) shall have at least fifteen (15) years experience in the business of pharmaceutical development and commercialization. Except as provided above, the costs and expenses of any expert acting under this Section 15.5(a) shall be borne equally by the Parties.
(b) Notwithstanding the foregoing:
(i) In the event of any termination of this Agreement by NEOTHERAPEUTICS pursuant to Section 15.3 or by GPC pursuant to Section 15.4 with respect to fewer than all of the Covered Products and/or fewer than all of the countries in the Territory, the rights, licenses and other benefits to be transferred, granted and otherwise assigned to NEOTHERAPEUTICS under Section 15.5(a) shall be expressly limited to those pertaining to the Covered Products and/or the countries in the Territory to which such termination applies; and
(ii) At any time prior to any transfer, granting and assignment of rights, licenses and benefits to NEOTHERAPEUTICS pursuant to Section 15.5(a), NEOTHERAPEUTICS may elect, upon notice to GPC, to waive the application of Section 15.5(a) with respect to such rights, licenses and benefits. Following any such waiver neither Party shall have any obligation or liability to the other with respect to such rights, licenses and benefits.
30
15.6. Right to Sell Stock on Hand. Provided that GPC is not in material breach of any obligation under this Agreement at the time of any termination of this Agreement, in whole or in part, GPC shall have the right for one year thereafter to dispose of all Covered Product then in its inventory and to complete manufacture of and dispose of any work-in-progress then being manufactured, as though this Agreement had not terminated. GPC shall pay royalties thereon, in accordance with the provisions of this Agreement, as though this Agreement had not terminated.
15.7. Survival of Sublicenses. Upon any termination of this Agreement, all sublicenses granted by GPC under this Agreement shall be automatically assigned to NEOTHERAPEUTICS, which shall thereafter receive all benefits and have all obligations under the sublicenses as in the place and stead of GPC.
15.8. Effect of Termination of J-M License Agreement. Upon any termination of the J-M License Agreement, GPC shall attorn to and accept J-M in place of NEOTHERAPEUTICS such that this Agreement shall be deemed to be an agreement between J-M and GPC.
15.9. Accrued Rights, Surviving Obligations. (a) Termination, relinquishment 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, relinquishment or expiration. Such termination, relinquishment or expiration shall not relieve either Party from obligations which are expressly indicated to survive termination or expiration of this Agreement. The rights of the Parties upon termination described in this Agreement shall not be exclusive of any other rights or claims at law or in equity that either Party may have against the other arising out of this Agreement.
(b) Termination, relinquishment or expiration of this Agreement shall not terminate each Partys obligation to pay all royalties, milestone payments and other monetary obligations that may have accrued hereunder prior to such termination. All of the Parties rights and obligations under Sections 6.1, 6.2, 8.5, 10, 12, 13 (solely with respect to actions pending at such time), 14, 15.2, 15.5, 15.6, 15.7, 15.8, 15.9, 17.1 (if in effect at such time), 17.3, 17.5, 17.12, 17.13 and 17.14 shall survive termination, relinquishment or expiration hereof.
16. FORCE MAJEURE
Neither Party shall be held liable or responsible to the other Party nor be deemed to be in default under or in breach of any provision of this Agreement for failure or delay in fulfilling or performing any obligation under this Agreement when such failure or delay is due to force majeure, and without the fault or negligence of the Party so failing or delaying. For purposes of this Agreement, force majeure shall be defined as causes beyond the control of the Party, including, without limitation, acts of God; acts, regulations, or laws of any government; war; civil commotion; destruction of production facilities or materials by fire, flood, earthquake, explosion or storm; labor disturbances; epidemic; and failure of public utilities or common carriers. In such event NEOTHERAPEUTICS or GPC, as the case may be, shall immediately notify the other Party of such inability and of the period for which such inability is expected to continue. The Party giving such notice shall thereupon be excused from such of its obligations under this Agreement as it is thereby disabled from performing for so long as it is so disabled
31
and for thirty (30) days thereafter. To the extent possible, each Party shall use reasonable efforts to minimize the duration of any force majeure.
17. MISCELLANEOUS
17.1. Relationship of Parties. Nothing in this Agreement is intended or shall be deemed to constitute a partnership, agency, employment or joint venture relationship between the Parties. Neither Party shall be entitled to, or shall, incur any debts or make any commitments for the other, except to the extent, if at all, specifically provided herein.
17.2. Assignment. (a) Each Party shall be entitled to assign this Agreement to any of its Affiliates upon sixty (60) days prior written notice to the other Party; provided, however, that in the event of any such assignment, the assigning Party shall remain jointly and severally liable with respect to all of its obligations hereunder, and in the event of any default relating to any such obligations, the other Party shall be entitled to proceed against either such Affiliate or directly against the assigning Party, as such other Party may determine in its sole discretion, to enforce this Agreement.
(b) Except as provided in Section 17.5(a), neither Party shall be entitled to assign its rights hereunder without the express written consent of the other Party, except that each Party may assign this Agreement to any assignee of all or substantially all of such Partys business (or that portion thereof to which this Agreement relates) or in the event of such Partys merger, consolidation or similar transaction.
(c) No assignment contemplated by this Section 17.3 shall be valid or effective unless and until the assignee/transferee shall agree in writing to be bound by the provisions of this Agreement.
17.3. Disclaimer of Warranties. EXCEPT AS EXPRESSLY PROVIDED IN SECTIONS 2 AND 3.1, THE PARTIES EXPRESSLY DISCLAIM ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT OF THIRD PARTY RIGHTS, OR ARISING FROM A COURSE OF DEALING OR USAGE OF TRADE PRACTICE.
17.4. Further Actions. Each Party shall execute, acknowledge and deliver such further instruments, and take all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.
32
17.5. Notice. Any notice or request required or permitted to be given under or in connection with this Agreement shall be deemed to have been sufficiently given if in writing and personally delivered or sent by certified mail (return receipt requested), facsimile transmission (receipt verified), or overnight express courier service (signature required), prepaid, to the Party for which such notice is intended, at the address set forth for such Party below:
(i) In the case of GPC, to:
GPC BIOTECH AG
Fraunhoferstrasse 20
D-82152 Martinsried/Munich
Germany
Attention: Chief Executive Officer
Facsimile No.: 011-49-89-8565-2610
With a copy to:
Ropes & Gray
One International Place
Boston, Massachusetts
USA
Attention: Marc A. Rubenstein, Esq.
Facsimile No.: 617-951-7050
(ii) In the case of NEOTHERAPEUTICS, to:
157 Technology Drive
Irvine, California 92618
USA
Attention:
Facsimile No.: 949-788-6706
or to such other address for such Party as it shall have specified by like notice to the other Party, provided that notices of a change of address shall be effective only upon actual receipt thereof. If delivered personally or by facsimile transmission, the date of delivery shall be deemed to be the date on which such notice or request was given. If sent by overnight express courier service, the date of delivery shall be deemed to be the next business day after such notice or request was deposited with such service. If sent by certified mail, the date of delivery shall be deemed to be the fifth (5th) business day after such notice or request was deposited with the postal service in the country of mailing.
17.6. Use of Name. Except as otherwise provided herein, neither Party shall have any right, express or implied, to use in any manner the name or other designation of the other Party or any other trade name or trademark of the other Party (including, without limitation, any Trademark) for any purpose in connection with the performance of this Agreement.
17.7. Public Announcements. (a) Except as required by law (including, without limitation, the applicable disclosure requirements of any relevant regulatory authority or stock exchange) and as permitted by Section 12.2, neither Party shall make any public announcement concerning this Agreement, any Covered Product or any other subject matter hereof without the prior written consent of the other Party, which shall not be unreasonably withheld or delayed. It shall not be unreasonable for a Party to withhold consent with respect to any public announcement containing any of such Partys Confidential Information. In the event of any
33
required or proposed public announcement, (i) the Parties shall consult with each other in good faith as to the timing thereof, and (ii) the Party making such announcement shall provide the other Party with a copy of the proposed text prior to such announcement sufficiently in advance of the scheduled release of such announcement to afford such other Party a reasonable opportunity to review and comment upon the proposed text. Notwithstanding the foregoing, the Parties agree to prepare a mutually agreeable press release that may be used by either Party in connection with this Agreement, and any further announcement containing substantially the same information may be used without the need to seek the consent of the other Party.
(b) Each Party acknowledges and agrees that the other Party needs to communicate with its investors regularly and keep them apprised of the development status of the products in which such Party has an interest. In order to facilitate this communication, promptly after the Effective Date each Party shall designate, from time to time, one employee who shall have primary responsibility for reviewing and approving all proposed investor communications of the other Party, to the extent that they pertain to this Agreement, any Covered Product or any other subject matter hereof. Each Party shall instruct such employee to review the content of such draft communications as expeditiously as possible and otherwise to cooperate with and assist the other Party in connection therewith, so long as the number of such communications and the timing thereof are reasonable.
(c) Following a Partys consent to or approval of the public announcement of any information pursuant to this Section 17.7, both Parties shall be entitled to make subsequent public announcements of such information without renewed compliance with this Section 17.7, unless the scope and/or duration of such consent or approval is expressly limited.
17.8. Waiver. A waiver by either Party of any of the terms and conditions of this Agreement in any instance shall not be deemed or construed to be a waiver of such term or condition for the future, or of any subsequent breach hereof. All rights, remedies, undertakings, obligations and agreements contained in this Agreement shall be cumulative, and none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of either Party.
17.9. Compliance with Law. Nothing in this Agreement shall be deemed to permit a Party to export, re-export or otherwise transfer any Covered Product sold under this Agreement without compliance with applicable laws.
17.10. Severability. When possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.
17.11. Amendment. No amendment, modification or supplement of any provisions of this Agreement shall be valid or effective unless made in writing and signed by a duly authorized officer of each Party.
34
17.12. Governing Law; English Original; Jurisdiction. (a) This Agreement shall be governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts without regard to its choice of law principles. The English original of this Agreement shall prevail over any translation hereof.
(b) Without prejudice to the rights and obligations of the Parties under Section 17.13, each Party hereby consents to the in personam jurisdiction of any state or federal court sitting in the Commonwealth of Massachusetts with respect to any matter arising in connection with this Agreement and further consents to the service of any process, notice of motion or other application to any such court or a judge thereof outside the Commonwealth of Massachusetts by registered or certified mail or personal service, provided that reasonable time is allowed for appearance. Each Party hereby waives, to the greatest extent it may do so, any defense it may have on the grounds of inconvenient forum with respect to any action or proceeding maintained in any state or federal court in Massachusetts.
17.13. Arbitration. (a) Any dispute arising out of or relating to any provisions of this Agreement shall be finally settled by arbitration to be held in Boston, Massachusetts, under the auspices and then current commercial arbitration rules of the American Arbitration Association (the AAA). Such arbitration shall be conducted by three (3) arbitrators. Within thirty (30) days after the commencement of any arbitration, each Party shall appoint one arbitrator, and these two arbitrators shall jointly appoint the third arbitrator, who shall have significant experience in pharmaceutical drug development and commercialization; provided, however, that if the two arbitrators appointed by the Parties are unable to agree upon the third arbitrator within thirty (30) days after their appointment, then the third arbitrator shall be appointed by the AAA. The Parties shall instruct such arbitrators to render a determination of any such dispute within four (4) months after their appointment. All arbitration proceedings shall be conducted in English. Judgment upon any award rendered may be entered in any court having jurisdiction, or application may be made to such court for a judicial acceptance of the award and an order of enforcement, as the case may be.
(b) Section 17.14(a) shall not prohibit a Party from seeking injunctive relief from a court of competent jurisdiction in the event of a breach or prospective breach of this Agreement by the other Party which would cause irreparable harm to the first Party.
17.14. No Consequential Damages. IN NO EVENT SHALL EITHER PARTY OR ANY OF ITS RESPECTIVE AFFILIATES OR SUBLICENSEES BE LIABLE TO THE OTHER PARTY OR ANY OF ITS AFFILIATES OR SUBLICENSEES FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER IN CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS OR REVENUE, OR CLAIMS OF CUSTOMERS OF ANY OF THEM OR OTHER THIRD PARTIES FOR SUCH OR OTHER DAMAGES.
17.15. Entire Agreement. This Agreement (together with the Exhibits hereto) sets forth the entire agreement and understanding between the Parties as to the subject matter hereof and merges all prior discussions and negotiations between them, and neither of the Parties shall be bound by any conditions, definitions, warranties, understandings or representations with respect
35
to such subject matter other than as expressly provided herein or as duly set forth on or subsequent to the Effective Date in writing and signed by a proper and duly authorized officer or representative of the Party to be bound thereby. Without limiting the generality of the foregoing, the terms and conditions of this Agreement shall supersede the terms and conditions of any confidentiality, non-disclosure or similar such agreement that the Parties may have executed prior to the Effective Date.
17.16. Parties in Interest. All the terms and provisions of this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Parties hereto and their respective permitted successors and assigns.
17.17. Descriptive Headings. The descriptive headings of this Agreement are for convenience only, and shall be of no force or effect in construing or interpreting any of the provisions of this Agreement.
17.18. Counterparts. This Agreement may be executed simultaneously in two counterparts, any one of which need not contain the signature of more than one Party, but both such counterparts taken together shall constitute one and the same agreement.
36
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed by its duly authorized officer as of the day and year first above written.
NEOTHERAPEUTICS, INC. | ||
By: |
/s/ Rajesh C. Strutriya | |
Name: |
Rajesh C. Strutriya | |
Title: |
CEO |
GPC BIOTECH AG | ||
By: | ||
Name: | ||
Title: |