Sample Business Contracts
Agreement - Schering Corp., Schering-Plough Ltd., ICN Pharmaceuticals and RibaPharm Inc.
AGREEMENT
This agreement (the "Agreement") is entered into as of the last date on the
signature page hereof (the "Effective Date") by and among Schering Corporation,
having offices at 2000 Galloping Hill Road, Kenilworth, New Jersey 07033 U.S.A.
and Schering-Plough Ltd., having offices at Toepferstrasse 5, CH6004 Lucerne,
Switzerland (hereinafter collectively referred to as "Schering"), and ICN
Pharmaceuticals, Inc., having offices at ICN Plaza, 3300 Hyland Avenue, Costa
Mesa, California 92626 (hereinafter "ICN") and RibaPharm Inc., having offices at
3300 Hyland Avenue, Costa Mesa, California 92626 (hereinafter "RibaPharm"). (ICN
and RibaPharm are individually and collectively referred to herein as "ICN-RP".)
All references in this Agreement to ICN, RibaPharm and/or ICN-RP shall include
all of their respective Affiliates (as defined below).
ARTICLE 1 - DEFINITIONS
The following capitalized terms as used in this Agreement, whether in the
singular or plural, shall have the meanings set forth below:
1.1 "Affiliate" shall mean any individual or entity directly or indirectly
controlling, controlled by or under common control with, a party to this
Agreement. For purposes of this Agreement, the direct or indirect
ownership of fifty percent (50%) or more of the outstanding voting
securities of an entity, or the right to receive fifty percent (50%) or
more of the profits or earnings of an entity shall be deemed to constitute
control. Such other relationship as in fact results in actual control over
the management, business and affairs of an entity shall also be deemed to
constitute control. In the case of ICN-RP, Affiliates shall also include,
without limitation, all subsidiaries, affiliates, joint ventures,
partnerships, as well as the successors and assigns of any of the
foregoing, as well as any third party (including but not limited to
contractors or collaborators) to which ICN-RP is providing ICN-RP Know-How
and/or funding for use in research and development programs in the Field
and/or the Option Field.
1.2 "Combination Product" shall mean a single Product which contains two (2)
or more active ingredients at least one (1) of which is a Compound.
1.3 "Compound" shall mean any and all compounds having potential utility in
the Field or the Option Field which are discovered or developed by or on
behalf of ICN-RP or their respective Affiliates (including, without
limitation, therapeutic proteins, antibodies and small molecules), but
excluding Ribavirin which is the subject of the 1995 Agreement between ICN
and Schering-Plough Ltd.
1.4 "Derivative" shall mean, with respect to a compound having potential
utility in the Field or the Option Field which is discovered or developed
by or on behalf of ICN-RP or their respective Affiliates, (i) any and all
structurally related compounds having potential utility in the Field or
the Option Field which are owned or controlled by ICN-RP or their
respective Affiliates and which are derived by [REDACTED], and (ii) all
[REDACTED] of such compound or structurally related compounds.
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1.5 "Field" shall mean the treatment or prevention of hepatitis C in humans or
animals, including, without limitation, through the use of gene therapy,
gene therapy vaccines, therapeutic proteins or other drug substances;
provided, however that the compounds Levovirin and Viramidine are excluded
from the Field.
1.6 "ICN-RP Know-How" shall mean any and all of ICN-RP's or their respective
Affiliates' information and materials, relating to the research,
development, registration, manufacture, marketing, use or sale of any
Compound and/or Product, and which prior to or during the term of this
Agreement are (i) developed by or on behalf of ICN-RP or their respective
Affiliates, or (ii) in ICN-RP's or their respective Affiliates' possession
or control through license or otherwise (provided that ICN-RP is permitted
to make disclosure thereof to Schering without violating the terms of any
third party agreement), and which are not generally known.
1.7 "License Patent Rights" shall mean any and all Patent Rights relating to
Compounds, Derivatives and/or Products which are subject to an exclusive
license granted to Schering and/or its Affiliates pursuant to Article 2 of
this Agreement.
1.8 "Net Sales" shall mean with respect to each country in the Territory, the
amounts actually received by Schering or its Affiliates, or their
respective sublicensees, from third parties (whether an end-user, a
distributor or otherwise) for the sale of Compounds and/or Products, and
exclusive of intercompany transfers or sales among Schering, its
Affiliates and/or sublicensees in the Territory, less the reasonable and
customary deductions from such gross amounts including:
(i) normal and customary trade, cash and quantity
discounts, allowances and credits;
(ii) credits or allowances actually granted for damaged
goods, returns or rejections of Product and
retroactive price reductions;
(iii) sales or similar taxes (including duties or other governmental
charges levied on, absorbed or otherwise imposed on the sale of
Product including, without limitation, value added taxes or other
governmental charges otherwise measured by the billing amount, when
included in billing);
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(iv) freight, postage, shipping, customs duties and
insurance charges, when included in billing;
(v) charge back payments and rebates granted to managed health care
organizations or their agencies, and purchasers and reimbursers or
to trade customers, including but not limited to, wholesalers and
chain and pharmacy buying groups;
(vi) commissions paid to third parties other than sales
personnel and sale representatives or sales agents;
and
(vii) rebates (or equivalents thereof) granted to or charged by national,
state or local governmental authorities in a country in the
Territory.
In the event that a Product is sold in the form of a Combination Product,
Net Sales for such Combination Product will be calculated by [REDACTED].
1.9 "Option Field" shall mean the treatment or prevention of viral, fungal or
bacterial infectious diseases or cancer, or other oncology indications, in
humans or animals, outside of the Field, including, without limitation,
through the use of gene therapy, gene therapy vaccines, therapeutic
proteins or other drug substances. The compounds Levovirin and Viramidine
are specifically included in the Option Field.
1.10 "Patent Rights" shall mean any and all patent applications and/or patents
in the Territory which are owned or controlled by ICN-RP and/or their
respective Affiliates, including any and all substitutions, divisions,
continuations, continuations-in-part, reissues, renewals, registrations,
confirmations, re-examinations, extensions, supplementary protection
certificates or any like filing thereof, and provisional applications of
any such patents and patent applications and any international equivalent
of any of the foregoing.
1.11 "Product" shall mean any form or dosage of pharmaceutical composition or
preparation in final form for sale by prescription, over-the-counter or
any other method, which is owned or controlled by ICN-RP and/or their
respective Affiliates and which contains as an active ingredient one or
more Compounds or Derivatives thereof.
1.12 "Territory" shall mean all of the countries and territories in the world.
ARTICLE 2 - GRANT OF RIGHTS
2.1 ICN-RP hereby grants to Schering an exclusive option to obtain an
exclusive (even as to ICN-RP), worldwide license to use the ICN-RP
Know-How and under the Patent Rights to make, have made, import, export,
use, offer for sale and sell Compounds and/or Products in the Field in the
Territory on and subject to the terms of this Agreement. Any such license
shall include the right to grant sublicenses and shall include the rights
to all Derivatives of the licensed Compounds. Schering's exclusive option
rights under this Section 2.1 shall remain in full force and effect until
such time as Schering has agreed to acquire exclusive licenses to three
(3) Compounds/Products in the Field under this Agreement, whereupon such
option rights shall be exhausted. Effective upon the
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exhaustion of Schering's option rights, ICN-RP shall have no further
obligations under Article 2 or Section 3.1 with respect to Compounds
and/or Products in the Field. Furthermore, upon the exercise of each such
option right, ICN-RP's obligations under Sections 3.6 and 3.7 shall be
transferred to and assumed by Schering in accordance with the terms of
Sections 3.6 and 3.8.
2.2 The option rights granted to Schering under Section 2.1 with respect to
any given Compound and/or Product shall be exercisable, in its sole
discretion, at any time prior to the start of Phase II clinical studies
for the Compound and/or Product [REDACTED] by providing written notice to
ICN-RP. ICN-RP shall notify Schering in writing at least [REDACTED] days
prior to the start of Phase II studies with respect to each Compound
and/or Product being developed by ICN-RP and/or their respective
Affiliates in the Field. Promptly after such notice, ICN-RP and/or their
respective Affiliates (as applicable) shall provide Schering copies of
and/or direct access to all preclinical and clinical data with respect to
the Compound and/or Product, and all other information and data in
ICN-RP's or their respective Affiliates' possession or control relating to
the Compound and/or Product, including but not limited to all information
relating to the safety and efficacy of the Compound and/or Product. ICN-RP
shall cooperate fully with Schering during its due diligence review of
such data by providing Schering in a timely manner with all information
necessary to conduct a thorough scientific and commercial evaluation of
the Compound and/or Product. Following receipt of all information
reasonably necessary to complete its due diligence review, Schering shall
have a period of [REDACTED] days in which to notify ICN that it intends to
exercise its option rights with respect to the Compound and/or Product. In
the event that ICN-RP fails to provide such information to Schering,
Schering will notify ICN-RP of any information that has not been provided
and ICN-RP shall have [REDACTED] days to provide such information;
provided that Schering's [REDACTED] day due diligence period shall be
tolled until the later of (i) the expiration of that [REDACTED] day period
or (ii) the date on which ICN-RP has provided to Schering all such
information requested by Schering. In the event that Schering does not
notify ICN-RP that it intends to exercise its option, then Schering's
option with respect to such Compound and/or Product shall expire upon the
expiration of the [REDACTED] day period and ICN-RP shall thereafter be
entitled to develop and commercialize the Compound and/or Product itself
or to license the Compound and/or Product to a third party.
2.3 Effective upon written notice by Schering to ICN-RP that it is exercising
its option under Section 2.1 with respect to a given Compound and/or
Product, ICN-RP shall grant to Schering and/or its designated Affiliate(s)
an exclusive (even as to ICN-RP), worldwide license to use the ICN-RP
Know-How and under the Patent Rights to make, have made, import, export,
use, offer for sale and sell the Compound, Derivatives and/or Products in
the Territory.
2.4 In the event that any time after exercising its option on any Compound
and/or Product, Schering decides to grant a sublicense to, or to enter
into a co-marketing agreement with, a third party (other than a Schering
Affiliate) in one or more countries in the Territory with respect to the
Compound and/or Product, ICN-RP shall have the right of first refusal to
sub-license and/or co-market the Compound and/or Product in such
country(ies) on
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commercially reasonable terms; provided that ICN-RP has in place an
existing sales force and marketing organization which is determined by
Schering, in its reasonable discretion, to be of sufficient size, training
and experience to enable ICN-RP to fulfill the obligations of the proposed
sublicense or co-marketing agreement in such country(ies). Following such
notice, ICN-RP shall have a period of [REDACTED] days in which to notify
Schering of its intent to exercise its right of first refusal. If ICN-RP
exercises its right of first refusal, the parties shall in good faith
negotiate and enter into a mutually acceptable license or co-marketing
agreement, as applicable. If ICN-RP does not exercise its right of first
refusal within such [REDACTED] day period, then Schering shall be free to
enter into such an agreement with a third party. If the parties are unable
to reach agreement on the commercial terms for the license or co-marketing
agreement within [REDACTED] days of ICN-RP exercising its right of first
refusal, then Schering shall be free to negotiate and enter into an
agreement with any third party on substantially similar terms to those
offered to ICN-RP.
2.5 Nothing in this Agreement, or any license agreements or other agreements
to be entered into by the parties pursuant to this Agreement, shall be
construed as conveying to ICN-RP, expressly, by implication, estoppel or
otherwise, any license or other right or interest in or to any
information, data, know-how, materials, patent applications, patents or
other forms of intellectual property owned or controlled by Schering
and/or its Affiliates.
ARTICLE 3 - DILIGENCE
3.1 During the term of this Agreement, ICN-RP shall use commercially
reasonable efforts, in the exercise of its good faith business judgment,
to conduct research and development to discover and develop Compounds
and/or Products in the Field. Such efforts shall be comparable to the
efforts expended by ICN-RP in the discovery and development of
pharmaceutical products in other fields in their internal research and
development programs.
3.2 ICN-RP and their respective Affiliates shall maintain complete and
accurate records of its research and development activities in the Field
and the Option Field. ICN-RP shall send to Schering (at the address and to
the individuals indicated in Section 10.1) reasonably detailed written
[REDACTED]reports of all research and development activities in the Field
and the Option Field. Such reports shall be provided to Schering under a
mutually agreed upon confidentiality agreement (attached hereto as Exhibit
A). Each such report shall contain sufficient data and information to
enable Schering to understand in all material respects the nature, scope
and status of all research projects and other research and development
activities being performed by ICN-RP and/or their respective Affiliates in
the Field and the Option Field (including, without limitation, any
Compounds and/or Products discovered and/or developed by ICN-RP in the
Field).
3.3 Promptly after the exercise of its option rights with respect to a given
Compound and/or Product in the Field, Schering shall assume sole
responsibility, at its expense, for all aspects of the development and
commercialization of such Compound and/or Product. ICN-RP and their
respective Affiliates shall transfer to Schering, under mutually agreed
upon confidentiality provisions, all ICN-RP Know-How related to such
Compound
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and/or Product. Schering shall thereafter use commercially reasonable
efforts, in the exercise of its good faith business judgment, to develop
and commercialize the Compound and/or Product, such efforts to be
comparable to those expended by Schering in the development and
commercialization of its own products that have similar commercial value,
status and potential to the Compound and/or Product. All business
decisions relating to the development and commercialization of the
Compound and/or Product, including, without limitation, decisions relating
to the manufacture, sale, design, price, distribution, marketing and
promotion of the Compound and/or Product, shall be within the sole
discretion of Schering. Schering shall promptly notify ICN-RP of any
abandonment of or decision by Schering to abandon or otherwise cease to
actively pursue such efforts with respect to a Compound and/or Product. In
any such event, all rights licensed to Schering hereunder with respect to
such Compound and/or Product shall terminate and revert to ICN-RP;
provided that nothing herein shall be construed as obligating Schering to
license, transfer, assign or otherwise convey to ICN-RP any rights, title
or interest in or to any of Schering's or its Affiliates data,
information, know-how, trademarks, patents, copyrights or other
intellectual property or assets in the Field.
3.4 Schering shall be solely responsible, at its expense, for obtaining and
maintaining regulatory approval to market and sell those Compounds and/or
Products which are exclusively licensed to Schering pursuant to this
Agreement. All such regulatory approvals shall be in Schering's or its
Affiliate's name and Schering shall be solely responsible for all
communications and meetings with regulatory authorities in the Territory
with respect thereto. Except as may be specifically requested by Schering,
in its sole discretion, ICN-RP shall not have any right to participate in
any such communications and/or meetings with regulatory authorities.
3.5 The obligations of Schering under Sections 3.3 and 3.4 with respect to a
Compound and/or Product are expressly conditioned upon the continuing
absence of any significant adverse condition or event which warrants, in
Schering's reasonable discretion, a delay in the development or
commercialization of the Compound and/or Product, including, but not
limited to, an adverse condition or event relating to safety or efficacy,
or unfavorable pricing, pricing reimbursement, labeling or lack of
regulatory approval. The obligation of Schering to develop or
commercialize any such Compound and/or Product shall be delayed or
suspended so long as (i) in Schering's opinion any such condition or event
exists, and (ii) such delay or suspension is consistent with the usual
practice followed by Schering in pursuing the development and
commercialization of its other pharmaceutical products of similar
potential value and status.
3.6 ICN-RP shall be primarily responsible, at their expense, for the filing,
maintenance, prosecution and defense of the Patent Rights in the
Territory. ICN-RP shall at all times use diligent efforts to fulfill its
responsibility with respect to the Patent Rights in all countries in the
Territory. ICN-RP shall consult with Schering with respect to the filing,
maintenance, prosecution and defense of any and all Patent Rights relating
to Compounds, Derivatives and/or Products which are subject to the option
rights, and rights of first and last refusal, granted to Schering or its
Affiliates under Articles 2 and 5 of this Agreement, and will use its best
efforts to obtain, maintain and defend such Patent Rights in the U.S.,
Canada, Mexico, Europe, Japan, China and Australia. ICN-RP shall give
written notice to Schering of any desire
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to cease prosecution and/or maintenance of any of the Patent Rights and,
in such case, shall permit Schering, at Schering's sole discretion, to
continue prosecution or maintenance at its own expense. If Schering elects
to continue prosecution or maintenance, ICN-RP, as applicable, shall
execute such documents and perform such acts, at Schering's expense, as
may be reasonably necessary to effect an assignment of such Patent Rights
to Schering. Any such assignment shall be completed in a timely manner to
allow Schering to continue such prosecution or maintenance. In addition,
with respect to each Compound and/or Product licensed to Schering pursuant
to Article 2 and effective as of the date on which Schering exercises its
option rights in accordance with Section 2.1 with respect thereto,
Schering shall assume all of ICN-RP's obligations under this Section 3.6
with regard to any and all Licensed Patent Rights relating to the
Compounds, Derivatives and/or Products licensed to Schering pursuant to
Article 2. At such time, ICN-RP shall promptly transfer and assign such
Licensed Patent Rights to Schering, shall execute and/or cause to be
executed all documents necessary to perfect Schering's interests therein,
and thereafter shall, upon request and at Schering's expense, reasonably
cooperate with Schering to enable Schering to file, prosecute, maintain
and defend such Licensed Patent Rights.
3.7 In the event that either party becomes aware of any alleged or threatened
infringement in the Territory of any issued patent within the Patent
Rights, it will notify the other party in writing to that effect. ICN-RP,
as applicable, shall be responsible, at its expense, for obtaining a
discontinuance of such infringement or bringing suit against the third
party infringer. Schering shall have the right, prior to commencement of
the trial, suit or action brought by ICN-RP, to join any such suit or
action, and in such event shall pay one-half of the costs of such suit or
action. In the event that Schering has joined in the action and shared in
the costs thereof as set forth above, no settlement, consent judgment or
other voluntary final disposition of the suit may be entered into without
the prior consent of Schering. In the event that Schering has not joined
the suit or action, Schering will reasonably cooperate with ICN-RP in any
such suit or action and shall have the right to consult with ICN-RP and be
represented by its own counsel at its own expense; provided that ICN-RP
shall periodically reimburse Schering for its out-of-pocket costs
(excluding the costs of retaining its own outside counsel) incurred in
cooperating with ICN-RP. Any recovery or damages derived from a suit which
Schering has joined and shared costs shall be used first to reimburse each
of ICN-RP and Schering for its documented out-of-pocket legal expenses
relating to the suit, with any remaining amounts to be shared equally by
the parties. Any recovery or damages derived from a suit which Schering
has not joined shall be retained by ICN-RP.
3.8 With respect to each Compound and/or Product licensed to Schering pursuant
to Article 2 and effective as of the date on which Schering exercises its
option rights in accordance with Section 2.1 with respect thereto, ICN-RP
shall transfer to Schering and Schering shall assume all of ICN-RP's
obligations under Section 3.7 with regard to enforcement of any and all
Licensed Patent Rights relating to the Compounds, Derivatives and/or
Products licensed to Schering pursuant to Article 2, including with
respect to any then ongoing litigation or other actions. ICN-RP shall
thereafter have no right to initiate, control, defend, settle or otherwise
participate in any suit or other action relating to the infringement,
validity, enforceability or defense of any such Licensed Patent Rights, or
any recovery or damages derived therefrom. ICN-RP shall promptly transfer
and assign such rights to Schering, shall execute and/or cause to be
executed all documents
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necessary to perfect Schering's interests therein, and thereafter shall,
upon request and at Schering's expense, reasonably cooperate with Schering
to enable Schering to enforce and defend such Licensed Patent Rights.
3.9 Any license agreement with respect to Compounds and/or Products in the
Option Field which is entered into by the parties pursuant to Article 5 of
this Agreement shall include provisions obligating ICN to transfer to
Schering, and obligating Schering to assume, all of ICN-RP's obligations
under Sections 3.6 and 3.7 of this Agreement with regard to filing,
prosecution, maintenance, defense or enforcement of any and all Patent
Rights relating to such licensed Compounds and/or Products.
ARTICLE 4 - CONSIDERATION
4.1 The parties acknowledge and agree that Schering shall not incur any
royalties, license fees, milestone payments or reimbursement obligations
to ICN-RP or their respective Affiliates in connection with the rights
granted to Schering hereunder or under any exclusive licenses granted
pursuant to Article 2 except for those expressly set forth herein.
Schering's sole financial obligation with respect thereto will be the
payment of the earned royalty on Net Sales of each Compound and/or Product
exclusively licensed to Schering pursuant to this Article 2 of this
Agreement and, as applicable, the milestone payments described below. Such
royalties and milestone payments shall be payable on Schering's and its
Affiliates' worldwide annual Net Sales of the Compound and/or Product as
follows:
As to the [REDACTED] exclusively licensed pursuant to Article 2:
(i) [REDACTED] of worldwide annual Net Sales up to [REDACTED]; and
(ii) [REDACTED] of worldwide annual Net Sales in excess of [REDACTED], up
to [REDACTED]; and
(iii) [REDACTED] of worldwide annual Net Sales in excess of [REDACTED].
As to the [REDACTED] exclusively licensed pursuant to Article 2:
(ii) [REDACTED] of worldwide annual Net Sales up to [REDACTED]; and
(iii) [REDACTED] of worldwide annual Net Sales in excess of [REDACTED], up
to [REDACTED]; and
(iv) [REDACTED] of worldwide annual Net Sales in excess of [REDACTED].
As to the [REDACTED] exclusively licensed pursuant to Article 2:
(i) [REDACTED] of worldwide annual Net Sales up to [REDACTED]; and
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(ii) [REDACTED] of worldwide annual Net Sales in excess of [REDACTED], up
to [REDACTED]; and
(iii) [REDACTED] of worldwide annual Net Sales in excess of [REDACTED];
and
(iv) milestone payments (including, if applicable, up-front payments) in
an amount equal to [REDACTED].
With respect to each country in the Territory, upon the expiration of the
last to expire of the Patent Rights in such country incorporating a Valid
Claim which covers the Compound and/or Product, Schering's royalty
obligation to ICN-RP under this Section 4.1 with respect to sales of the
Compound and/or Product in such country shall be reduced by [REDACTED].
For purposes of this Agreement, the term "Valid Claim" shall mean a
composition-of-matter or method-of-use claim of an issued and unexpired
patent included within the Patent Rights, which has not been revoked or
held unenforceable or invalid by a decision of a court or other
governmental agency of competent jurisdiction, unappealable or unappealed
within the time allowed for appeal, and which has not been disclaimed,
denied or admitted to be invalid or unenforceable through reissue,
disclaimer or estoppel.
In addition, all of Schering's royalty obligations under this Article 4
shall expire with respect to a given Compound and/or Product in any
country in the Territory at such time as a product containing the same
active ingredient as the Compound and/or Product being marketed by
Schering hereunder is being sold by any third party in such country.
4.2 Royalties shall be paid quarterly within [REDACTED] days after the close
of each calendar quarter. Concurrently with such payments, Schering shall
provide ICN-RP, as applicable, with a written report for the calendar
quarter showing the Net Sales of Product(s) and/or Compound(s) sold by
Schering, its Affiliates and its sublicensees in the Territory during such
calendar quarter and the royalties payable for such calendar quarter All
royalty payments shall be paid in U.S. dollars (to the extent that free
conversions to United States dollars is permitted) by bank wire transfer
in immediately available funds to an account designated by ICN-RP.
Royalties shall be deemed payable by the entity making the Net Sales from
the country in which earned in local currency and subject to foreign
exchange regulations then prevailing. The rate of exchange to be used in
any such conversion from the currency in the country where such Net Sales
are made shall be the rate of exchange used by Schering Corporation for
reporting such sales for United States financial statement purposes. If,
due to restrictions or prohibitions imposed by national or international
authority, payments cannot be made as aforesaid, the parties shall consult
with a view to finding a prompt and acceptable solution, and Schering will
deal with such monies as ICN-RP may lawfully direct at no additional
out-of-pocket expense to Schering. Notwithstanding the foregoing, if
royalties in any country cannot be remitted to ICN-RP for any reason
within [REDACTED] months after the end of the calendar quarter during
which they are earned, then Schering shall be obligated to deposit the
royalties in a bank account in such country in the name of ICN-RP, as
applicable.
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4.3 Schering and its Affiliates shall keep complete and accurate records in
sufficient detail to enable the royalties payable hereunder to be
determined. Upon [REDACTED] days prior written notice from ICN-RP,
Schering shall permit an independent certified public accounting firm of
nationally recognized standing selected by ICN-RP, at ICN-RP's expense, to
have access during normal business hours to examine pertinent books and
records of Schering and/or its Affiliates as may be reasonably necessary
to verify the accuracy of the royalty reports hereunder. The examination
shall be limited to pertinent books and records for any year ending not
more than [REDACTED] months prior to the date of such request. An
examination under this Section 4.3 shall not occur more than [REDACTED] in
any calendar year. Schering may designate competitively sensitive
information, which such auditor may not disclose to ICN-RP; provided,
however, that such designation shall not encompass the auditor's
conclusions. The accounting firm shall disclose to ICN-RP only whether the
royalty reports are correct or incorrect and the specific details
concerning any discrepancies. No other information shall be provided to
ICN-RP. All such accounting firms shall sign a confidentiality agreement
(in form and substance reasonably acceptable to Schering) as to any of
Schering's or its Affiliates' confidential information which they are
provided, or to which they have access, while conducting any audit
pursuant to this Section 4.3.
4.4 Schering shall include in each sublicense granted by it pursuant to this
Agreement a provision requiring the sublicensee to make reports to
Schering, to keep and maintain records of sales made pursuant to such
sublicense and to grant access to such records by ICN-RP's independent
accountant to the same extent required of Schering under this Agreement.
4.5 Upon the expiration of [REDACTED] months following the end of any calendar
year, the calculation of royalties payable under this Agreement with
respect to such year shall be binding and conclusive upon the parties, and
Schering, its Affiliates and its sublicensees shall be released from any
liability or accountability with respect to royalties for such calendar
year; provided that expiration of such [REDACTED] month period shall not
affect any claim which is already in dispute between the parties with
respect to royalties during such calendar year.
4.6 If at any time, any jurisdiction within the Territory requires the
withholding of income taxes or other taxes imposed upon payments set forth
in this Article 4, Schering shall make such withholding payments as
required and subtract such withholding payments from the payments set
forth in this Article 4, or if applicable, ICN-RP will promptly reimburse
Schering or its designee(s) of the amount of such payments. Schering shall
provide ICN-RP, as applicable, with documentation of such withholding and
payment in a manner that is satisfactory for purposes of the U.S. Internal
Revenue Service. Any withholdings paid when due hereunder shall be for the
account of ICN-RP, as applicable, and shall not be included in the
calculation of Net Sales. Payments of withholding taxes made by Schering
pursuant to this Section 4.6 will be made based upon financial information
to be provided to Schering by ICN-RP and, to the extent that such
information is incorrect or incomplete, ICN-RP shall be liable for any
fine, assessment or penalty, or any deficiency, imposed by any taxing
authority in the Territory for any deficiency in the amount of any such
withholding or the failure to make such withholding
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payment. If Schering is required to pay any such deficiency, or any such
fine, assessment or penalty for any such deficiency, ICN-RP shall promptly
reimburse Schering for such payments, which shall not be included in the
calculation of Net Sales.
ARTICLE 5 - RIGHT OF FIRST AND LAST REFUSAL
5.1 In addition to the rights granted to Schering in Article 2, ICN-RP hereby
grants to Schering the right of first refusal to obtain an exclusive (even
as to ICN-RP), worldwide license and/or other worldwide rights to use the
ICN-RP Know-How and under the Patent Rights to Compounds and/or Products
in the Option Field in the Territory as and to the extent provided in this
Article 5. If at any time during the term of this Agreement (i) Schering
wishes to license from ICN-RP a Compound/Product in the Option Field as
described in the semi-annual report referred to as Section 3.2 herein; or
(ii) ICN-RP intends to offer a license of any kind or to assign, transfer
or otherwise convey any other rights (e.g., distributorship, co-marketing,
co-promotion, etc.) to a Compound and/or Product in the Option Field in
any or all countries in the Territory worldwide, each party shall notify
the other in writing to that effect. Where ICN-RP notifies Schering of its
intent to offer a license or other rights to a Compound/Product, ICN-RP
shall provide Schering a detailed summary of all information with regard
to preclinical and clinical development of the Compound and/or Product,
including but not limited to all information relating to the safety and
efficacy of the Compound and/or Product. Similarly, where Schering
notifies ICN-RP in writing of its intent to exclusively license worldwide
or obtain other worldwide rights to use the ICN-RP Know-How and under
Patent Rights to Compounds/Products in the Option Field, ICN-RP shall
provide Schering a detailed summary of all information with regard to
preclinical and clinical development of the Compound and/or Product,
including but not limited to all information relating to the safety and
efficacy of the Compound and/or Product. In either instance, Schering
shall have a period of the [REDACTED] days (the "Evaluation Period") in
which to evaluate such information and to notify ICN-RP of its intent to
exercise its right of first refusal by providing written notice to that
effect. During the Evaluation Period, ICN-RP shall upon request and at
Schering's expense, provide Schering with reasonable access, in a timely
manner (i.e., within [REDACTED] days of such written notice) to all other
information and data in its or its Affiliates' possession or control
relating to the Compound and/or Product to enable Schering to complete a
due diligence review of the Compound and/or Product. In the event that
ICN-RP fails to provide such information to Schering, Schering will notify
ICN-RP of the information that has not been provided and ICN-RP shall have
[REDACTED] days to provide such information; provided that the Evaluation
Period shall be tolled until the later of (i) the expiration of that
[REDACTED] day period or (ii) the date on which ICN-RP has provided to
Schering all such information requested by Schering. Nothing contained
herein shall be construed as providing any right of first refusal or right
of last refusal to Schering with respect to any Compound and/or Product
that ICN-RP, in its sole discretion, decides to develop and commercialize
the Compound and/or Product itself, utilizing its own personnel and
resources.
5.2 In the event that Schering exercises its right of first refusal with
respect to a given Compound and/or Product, then the parties shall in good
faith exclusively negotiate the
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<PAGE>
terms of a mutually acceptable exclusive (even as to ICN-RP), worldwide
license or other form of agreement on commercial terms to be agreed upon
by the parties. If the parties are unable to reach agreement on the
commercial terms for the agreement within [REDACTED] days of Schering's
exercising its right of first refusal, then ICN-RP shall be free to enter
into negotiations with respect to such Compound and/or Product with a bona
fide pharmaceutical and/or biotechnology company (not affiliated with
ICN-RP or their respective officers, directors or employees) having
sufficient resources to develop and commercialize the Compound and/or
Product. ICN-RP shall not disclose to such pharmaceutical/biotechnology
company any information relating to the Compound and/or Product which has
not been previously disclosed to Schering. In the event that ICN-RP and
the pharmaceutical/biotechnology company agree upon the commercial terms
for licensing the Compound and/or Product, then ICN-RP shall disclose to
Schering the full and complete agreement between itself and the
pharmaceutical/biotechnology company, and offer substantially similar
commercial terms to Schering. The commercial terms presented to Schering
shall reflect in all respects a genuine offer made by such
pharmaceutical/biotechnology company in good faith with the intent of
developing such Compound and/or Product for commercialization. Schering
shall have [REDACTED] days in which to accept or reject such terms. If
Schering does not accept the terms offered by ICN-RP within such
[REDACTED] day period, then ICN-RP shall be free enter into an agreement
with the pharmaceutical/biotechnology company on substantially similar
terms that were offered to Schering. ICN-RP shall not offer to license the
Compound and/or the Product to any such pharmaceutical/biotechnology
company on commercial terms which are in the aggregate more favorable to
the pharmaceutical/biotechnology company than those last offered to
Schering without first offering Schering the rights on such terms.
ARTICLE 6 - TERM AND TERMINATION
6.1 This Agreement shall begin on the Effective Date and remain in full force
and effect, unless earlier terminated in accordance with Section 6.2,
until the later of (i) twelve (12) years from the Effective Date, or (ii)
the expiration of the Exclusive License and Supply Agreement between ICN
and Schering-Plough Ltd., dated July 28, 1995, as amended.
6.2 This Agreement may be terminated, in whole or in part, by Schering or by
ICN-RP upon written notice to the other parties in the event of a material
breach of this Agreement by the other party that is continuing [REDACTED]
days after the non-breaching party gives the breaching party notice of
such breach specifying in reasonable detail the particulars of the alleged
breach; provided, however, that if the breach is limited to a specific
Compound and/or Product, then such termination right shall only apply with
respect to that Compound and/or Product.
6.3 In the event of termination by ICN-RP under Section 6.2 with respect to a
given Compound and/or Product due to a failure by Schering to fulfill its
diligence obligations under Sections 3.3, 3.4 and 3.5 in one or more
countries in the Territory, all licenses granted to Schering with respect
to such Compound and/or Product in such country(ies) shall terminate and
revert to ICN-RP; provided that nothing herein shall be construed as
obligating Schering to license, transfer, assign or otherwise convey to
ICN-RP any rights,
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title or interest in or to any of Schering's or its Affiliates data,
information, know-how, trademarks, patents, copyrights or other
intellectual property or assets in the Field.
6.4 All exclusive licenses to Compounds and/or Products which are granted to
Schering pursuant to Section 2.3 of this Agreement shall survive the
expiration of this Agreement under Section 6.1 and, unless earlier
terminated pursuant to Sections 6.2 and 6.3, shall continue in full-force
and effect on a product-by-product and country-by-country basis on the
terms and conditions set forth herein until such time as Schering's
royalty obligations with respect to such Compound and/or Product expires
in the country. Upon expiration of each such license in a given country,
the license shall become a paid-up, irrevocable, royalty-free
non-exclusive license in the country.
ARTICLE 7 - INSOLVENCY
7.1 All rights and licenses granted under or pursuant to this Agreement by
ICN-RP to Schering are, for all purposes of Section 365(n) of Title 11 of
the United States Code ("Title 11"), licenses of rights to "intellectual
property" as defined in Title 11. ICN-RP agree during the term of this
Agreement to create and maintain current copies or, if not amenable to
copying, detailed descriptions or other appropriate embodiments, to the
extent feasible, of all such intellectual property. If a case is commenced
by or against ICN-RP under Title 11, then ICN-RP (in any capacity,
including debtor-in-possession) and its successors and assigns (including,
without limitation, a Title 11 Trustee) shall,
(1) as Schering may elect in a written request,
immediately upon such request:
(i) perform all of the obligations provided in this Agreement to
be performed by ICN-RP including, where applicable and without
limitation, providing to Schering portions of such
intellectual property (including embodiments thereof) held by
ICN-RP and such successors and assigns or otherwise available
to them; or
(ii) provide to Schering all such intellectual property (including
all embodiments thereof) held by ICN-RP and such successors
and assigns or otherwise available to them; and
(2) not interfere with the rights of Schering under this Agreement, or
any agreement supplemental hereto, to such intellectual property
(including such embodiments), including any right to obtain such
intellectual property (or such embodiments) from another entity.
If a Title 11 case is commenced by or against ICN-RP, and this Agreement
is rejected as provided in Title 11, and Schering elects to retain its
rights hereunder as provided in Title 11, then ICN-RP (in any capacity,
including debtor-in-possession) and its successors and assigns (including,
without limitation, a Title 11 Trustee) shall provide to Schering all such
intellectual property (including all embodiments thereof) held by ICN-RP
and such successors and assigns, or otherwise available to them,
immediately upon Schering's written request. Whenever ICN-RP, or any of
their successors or assigns provides to Schering any of the intellectual
property licensed hereunder (or any embodiment thereof)
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<PAGE>
pursuant to this Section 11.8, Schering shall have the right to perform
the obligations of ICN-RP hereunder with respect to such intellectual
property, but neither such provision nor such performance by Schering
shall release ICN-RP from any such obligation or liability for failing to
perform it.
All rights, powers and remedies of Schering provided herein are in
addition to and not in substitution for any and all other rights, powers
and remedies now or hereafter existing at law or in equity (including,
without limitation, Title 11) in the event of the commencement of a Title
11 case by or against ICN-RP. Schering, in addition to the rights, power
and remedies expressly provided herein, shall be entitled to exercise all
other such rights and powers and resort to all other such remedies as may
now or hereafter exist at law or in equity (including, without limitation,
Title 11) in such event. The parties agree that they intend the foregoing
Schering rights to extend to the maximum extent permitted by law,
including, without limitation, for purposes of Title 11:
(1) the right of access to any intellectual property (including all
embodiments thereof) of ICN-RP, or any third party with whom ICN-RP
contracts to perform an obligation of ICN-RP under this Agreement,
and, in the case of the third party, which is necessary for the
development, registration, manufacture and marketing of Licensed
Compounds and/or Licensed Products; and
(2) the right to contract directly with any third party described in (i)
to complete the contracted work.
In the event of any insolvency of ICN-RP and if any statute and/or
regulation in any country in the Territory requires that there be a
specific grant or specific clause(s) in order for Schering to obtain the
rights and benefits as licenses under this Agreement which are analogous
to those rights under Section 365(n) of Title 11 of the United States
Code, then this Agreement shall be deemed to include any and all such
required grant(s), clause(s) and/or requirements.
ARTICLE 8 - WARRANTY
8.1 Each of Schering and ICN-RP hereby represents and warrants to the other
parties that as of the Effective Date:
(a) it is a corporation or entity duly organized and validly existing
under the laws of the state or other jurisdiction of its
incorporation or formation;
(b) the execution, delivery and performance of this Agreement by such
party has been duly authorized by all requisite corporate action;
(c) it has the power and authority to execute and deliver this Agreement
and to perform its obligations hereunder;
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(d) the execution, delivery and performance by such party of this
Agreement and its compliance with the terms and provisions hereof
does not and will not conflict with or result in a breach of any of
the terms and provisions of or constitute a default under (i) a loan
agreement, guaranty, financing agreement, agreement affecting a
product or other agreement or instrument binding or affecting it or
its property; (ii) the provisions of its charter or operative
documents or bylaws; or (iii) any order, writ, injunction or decree
of any court or governmental authority entered against it or by
which any of its property is bound;
(e) this Agreement has been duly authorized, executed and delivered and
constitutes such party's legal, valid and binding obligation
enforceable against it in accordance with its terms subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to the availability of particular remedies under general
equity principles; and
(f) it shall comply with all applicable material laws and regulations
relating to its activities under this Agreement.
8.2 ICN-RP hereby represents, warrants and covenants to Schering that:
(a) as of the Effective Date, ICN-RP has not within the twelve (12)
month period immediately preceding the Effective Date of this
Agreement, assigned, transferred conveyed or otherwise encumbered or
disposed of (other than to an Affiliate as defined herein) any of
the know-how, patent applications, patents and other intellectual
property and assets arising in connection with research and
development in the Field and the Option Field which has been
conducted by or on behalf of ICN-RP (the "Existing Intellectual
Property");
(b) as of the Effective Date it has the full right, power and authority
to grant all of the right, title and interest in the option rights
granted under Articles 2 and 5 hereof;
(c) during the term of this Agreement and except as expressly permitted
under Sections 2.2 and 5.2, ICN-RP shall not take any action which
would (i) assign, transfer or otherwise convey to any third party
any right, title or other interest in or to the Existing
Intellectual Property; (ii) create any liens, charges or
encumbrances with respect to the Existing Intellectual Property or
(iii) give rise to any third party claim of ownership with respect
to the Existing Intellectual Property, whatsoever; and
(d) during the term of this Agreement, ICN-RP shall not commit any
actions or omissions which would diminish or otherwise be
inconsistent with the option rights granted to Schering hereunder.
8.3 With respect to each exclusive license obtained by Schering under Article
2 of this Agreement, ICN-RP shall represent, warrant and covenant that, as
of the date such license becomes effective pursuant to Section 2.3:
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(a) to the best of ICN-RP's knowledge, the relevant Licensed Patent
Rights are subsisting and are not invalid or unenforceable, in whole
or in part;
(b) it has the full right, power and authority to grant all of the
right, title and interest in the licenses granted under Article 2
hereof;
(c) it has not assigned, transferred, conveyed or otherwise encumbered,
and during the term of this Agreement will not assign, transfer,
convey of otherwise encumber, its right, title and interest in the
relevant Licensed Patent Rights or ICN-RP Know-How (except in
accordance with this Agreement);
(d) to the best of ICN-RP's knowledge, it is the sole and exclusive
owner of the relevant Licensed Patent Rights and ICN-RP Know-How,
all of which is free and clear of any liens, charges and
encumbrances, and no other person, corporate or other private
entity, or governmental entity or subdivision thereof, has or shall
have any claim of ownership with respect to such Licensed Patent
Rights and ICN-RP Know-How, whatsoever;
(e) during the term of this Agreement, ICN-RP shall not take any action
which would (i) create any liens, charges or encumbrances with
respect to the relevant Licensed Patent Rights and ICN-RP Know-How
whatsoever, or (ii) give rise to any third party claim of ownership
with respect to such Licensed Patent Rights and ICN Know How,
whatsoever;
(f) to the best of ICN-RP's knowledge, the relevant Licensed Patent
Rights and ICN-RP Know-How, and the development, manufacture, use,
distribution, marketing, promotion and sale of the Compound and/or
Product do not interfere or infringe on any intellectual property
rights owned or possessed by any third party;
(g) to the best of ICN-RP's knowledge, there are no third party pending
patent applications which, if issued, may cover the development,
manufacture, use, distribution, marketing, promotion or sale of the
Compound and/or Product; and
(h) it has disclosed to Schering all ICN-RP Know-How and other relevant
information required to be disclosed hereunder, including, without
limitation, information relating to the relevant Licensed Patent
Rights, and the Compound and/or Product.
8.4 Any license agreement entered into by the parties pursuant to Article 5
shall contain essentially the same representations, warranties and
covenants with respect to the Compounds and/or Products licensed
thereunder as are set forth in this Article 8.
ARTICLE 9 - INDEMNIFICATION
9.1 ICN-RP shall indemnify, defend and hold harmless Schering, its Affiliates,
and their respective directors, officers, employees and agents, and the
successors and assigns of any
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of the foregoing from and against any and all liability, damages, losses,
claims, actions, judgments and costs (including, without limitation,
reasonable legal fees) arising from or related to: (i) any negligent act
or omission or willful misconduct of ICN-RP (or their respective
Affiliates) in connection with any Compound and/or Product (including,
without limitation, product liability claims); and/or (ii) a material
breach of any of the representations or warranties ICN-RP hereunder.
Notwithstanding the foregoing, ICN-RP shall have no indemnification
obligations under this Agreement with respect to claims, demands, costs or
judgments to the extent caused by the gross negligence or willful
misconduct of Schering.
9.2 Schering shall indemnify, defend and hold harmless ICN-RP, their
respective Affiliates, and their respective directors, officers, employees
and agents, and the successors and assigns of any of the foregoing from
and against any and all liability, damages, losses, claims, actions,
judgments and costs (including without limitation, reasonable legal fees)
arising from or related to: (i) any negligent act or omission or willful
misconduct of Schering (or its Affiliates) in the development,
manufacture, distribution, sale, use or other exploitation of any Compound
and/or Product (including, without limitation, product liability claims);
and/or (ii) a material breach of any of the representations or warranties
of Schering hereunder.
9.3 Each party acknowledges and agrees that during the term of this Agreement
it shall maintain adequate insurance or self-insurance program for
liability purposes, including products liability and contractual liability
insurance, to cover such party's obligations under this Agreement. Each
party shall provide the other party with evidence of such insurance and/or
self-insurance program, upon request.
ARTICLE 10 - MODIFICATION AND WAIVER
10.1 No cancellation, modification, amendment, deletion, addition or other
change in this Agreement or any provision herein, or waiver of any right
or remedy herein provided, shall be effective for any purpose unless
specifically set forth in writing and signed by the party to be bound
thereby. No waiver of any right or remedy in respect of any occurrence or
event shall be deemed a waiver of such right or remedy in respect of such
occurrence or event on any other occasion.
ARTICLE 11 - NOTICE
11.1 Any notice required or permitted hereunder shall be communicated in
writing and shall be sent by registered mail, prepaid courier or facsimile
transmission to the addresses set out below or to such other address as
may be specified, in writing, by the party who changes its address.
To ICN: ICN Pharmaceutical Inc.
ICN Plaza
3300 Hyland Avenue
Costa Mesa, California 92626
Attention: President
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Facsimile: 714-641-7276
To RibaPharm: RibaPharm Inc.
3300 Hyland Avenue
Costa Mesa, California 92626
Attention: President
Facsimile:
To Schering: Schering Corporation
2000 Galloping Hill Road
Kenilworth, New Jersey 07033
Attention: Vice President, Business
Development
Facsimile: 908-298-7366
with copies to:
Attention: Legal Dept. - Staff Vice President, Licensing
Facsimile: 908-298-2739
All written communications shall be deemed to be received by the
addressees as follows: (i) by registered mail: five (5) business days
after dispatch by notifying party; (ii) by prepaid courier: two (2)
business days after dispatch by notifying party; or (iii) by facsimile
transmission: one (1) business day after dispatch by notifying party. A
copy of any notice sent by facsimile transmission shall thereafter be
dispatched by registered mail.
ARTICLE 12 - PUBLICITY
12.1 Neither party shall use the name of the other party nor the name of the
other party's Affiliates for any promotional purposes without the prior
written consent of the party whose name is proposed to be used. No news
release, publicity or other public announcement, either written or oral,
regarding the terms or existence of this Agreement or performance
hereunder, shall be made by either party without the prior written
agreement of the other party. Each of the parties further agrees not to
disclose to any third party the existence or terms of this Agreement
without the prior written consent of the other party hereto. Nothing in
the foregoing, however, shall prohibit a party from making such
disclosures to the extent required under applicable federal or state
securities laws or any rule or regulation of any nationally recognized
securities exchange; provided that in such event the disclosing party
shall notify and consult with the other party prior to such disclosure
and, where applicable, shall diligently seek confidential treatment to the
extent available.
ARTICLE 13 - GENERAL PROVISIONS
13.1 The relationship between ICN-RP and Schering established by this Agreement
is that of independent contractors. Nothing in this Agreement shall be
construed to create any other relationship between ICN-RP and Schering,
and neither party shall have any right,
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power or authority to assume, create or incur any expense, liability or
obligation, express or implied, on behalf of the other.
13.2 This Agreement shall be governed by and construed according to the laws of
New Jersey, without regard to conflicts of laws principles. In the event
of any dispute between the parties arising from or relating to this
Agreement, the parties agree to submit themselves, for the purpose of
resolving such dispute, to the exclusive jurisdiction of either the
Federal or State courts of New Jersey.
13.3 This Agreement shall be deemed to be jointly prepared by the Parties, and
any ambiguity herein shall not be construed for or against either party.
13.4 No account of the headings to the paragraphs of this Agreement shall be
taken when interpreting the meaning of this Agreement.
13.5 This Agreement may be executed in multiple counterparts, each of which
shall be deemed to be an original, and all such counterparts shall
constitute but one instrument.
13.6 This Agreement and each and every one of its provisions shall be binding
upon the executors, administrators, successors and permitted assigns of
the Parties hereto. Without limiting the foregoing, and for the avoidance
of doubt, ICN may, without the consent of Schering or any Affiliate of
Schering, assign to RibaPharm any of ICN's rights to receive payments
under this Agreement.
13.7 All terms and conditions of this Agreement are severable, and the
invalidity, illegality or unenforceability of any term or condition shall
not affect the validity, legality or enforceability of the remaining terms
and conditions.
13.8 This Agreement constitutes the entire agreement between the Parties hereto
respecting the subject matter herein and supersedes all prior or
contemporaneous negotiations, agreements and understandings, whether
written or oral. Neither party has relied upon any statements, promises,
representations or claims of the other party, other than those expressly
set forth in this Agreement, in agreeing to enter into and be bound by the
terms of this Agreement.
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IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute this Agreement.
SCHERING CORPORATION
By: /s/ David Poorvin
------------------------------
(authorized representative)
Name: David Poorvin, Ph.D.
------------------------------
Title: Vice President
------------------------------
ICN PHARMACEUTICALS, INC.
By: /s/ Jack L. Scholl
---------------------------------
(authorized representative)
Name: Jack L. Scholl
---------------------------------
Title: Executive Vice President
---------------------------------
SCHERING-PLOUGH LTD.
By: /s/ David Poorvin
------------------------------
(authorized representative)
Name: David Poorvin, Ph.D.
------------------------------
Title: Prokurist
------------------------------
RIBAPHARM INC.
By: /s/ Bill A. MacDonald
---------------------------------
(authorized representative)
Name: Bill A. MacDonald
---------------------------------
Title: Chief Financial Officer
---------------------------------
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EXHIBIT A
SECRECY AGREEMENT
EFFECTIVE DATE: The last date on the signature page hereof ("Effective Date")
BY AND BETWEEN: SCHERING CORPORATION, 2000 Galloping Hill Road, Kenilworth,
New Jersey 07033 ("SCHERING")
AND
DISCLOSING PARTY'S
NAME:
DISCLOSING PARTY'S
ADDRESS: ("COMPANY")
DISCLOSURE: Certain written technical data, materials, and/or information
provided by COMPANY to SCHERING which is (i) disclosed
pursuant to this Agreement and (ii) clearly identified in
writing as "Confidential" when disclosed; and which relates to
(the "Disclosure"). In the event the
Disclosure is in a manner other than in writing, it shall be
reduced to written form, marked "Confidential" and transmitted
to SCHERING within ten (10) business days of the Disclosure to
SCHERING.
In consideration for said Disclosure and the economic importance thereof
to COMPANY, such Disclosure shall be made on the following basis:
1. SCHERING agrees, for a period of five (5) years following the Effective
Date, to retain the Disclosure made to it by or on behalf of Company, in
confidence. SCHERING further agrees that it will not, without the written
consent of COMPANY, use the Disclosure for any purpose other than that indicated
herein. These restrictions shall not apply to information which:
(i) is or becomes public knowledge (through no fault of SCHERING), or
(ii) is made lawfully available to SCHERING by an independent third
party, or
(iii) is already in SCHERING's possession at the time of receipt from
COMPANY, or
(iv) is independently developed by employees of SCHERING or its parent
corporation or their respective affiliates and/or subsidiaries (and
such independent development can be properly demonstrated without
the aid or use of the Disclosure), or
(v) is required by law, regulation, rule, act, or order of any
governmental authority or agency to be disclosed.
<PAGE>
2. SCHERING shall only provide the Disclosure to those of its, its parent
corporation's, and their respective affiliates' and subsidiaries' officers and
employees who are directly concerned with the Disclosure.
3. COMPANY shall neither disclose to SCHERING nor induce SCHERING to use
any secret or confidential information or material belonging to others,
including former employers, if any.
4. SCHERING agrees to promptly return the Disclosure upon request;
provided, however, that SCHERING's legal counsel may retain one copy of the
Disclosure in a secure location for purposes of identifying SCHERING's
obligations under this Agreement.
5. This Agreement shall be construed in accordance with New Jersey law
without regard to the conflict of laws rules or principles thereof. It is
understood and agreed that both parties submit to the jurisdiction of New Jersey
state and federal courts.
6. This Agreement may only be amended by a written
instrument signed by both parties hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed,
by duly authorized representatives, as of the last date written below.
[Company Name]
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
Date:
----------------------------
SCHERING CORPORATION
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
Date:
----------------------------
2