<PAGE>
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
EXHIBIT 10.10
INSULIN INHALER
DEVELOPMENT
AGREEMENT
BY AND BETWEEN
BECTON, DICKINSON AND COMPANY
AND
AEROGEN, INC.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
<TABLE>
<S> <C>
1. DEFINITIONS..............................................................................................1
1.1 "AeroGen Know-How"..............................................................................1
1.2 "AeroGen Patents"...............................................................................1
1.3 "AeroGen Technology"............................................................................2
1.4 "Affiliate".....................................................................................2
1.5 "BD Cartridge"..................................................................................2
1.6 "BD Know-How"...................................................................................2
1.7 "BD Patents"....................................................................................2
1.8 "BD Percentage".................................................................................2
1.9 "BD Technology".................................................................................2
1.10 "Cartridge".....................................................................................2
1.11 "Confidential Information"......................................................................2
1.12 "Controlled"....................................................................................2
1.13 "Critical System Specifications"................................................................2
1.14 "Development Patents"...........................................................................2
1.15 "Development Invention".........................................................................2
1.16 "Development Technology"........................................................................2
1.17 "Development Term"..............................................................................2
1.18 "Drug"..........................................................................................3
1.19 "Field".........................................................................................3
1.20 "Final Specifications"..........................................................................3
1.21 "Information"...................................................................................3
1.22 "Inhaler".......................................................................................3
1.23 "Initial Phase II Trials".......................................................................3
1.24 "Interface".....................................................................................3
1.25 "Interface Technology"..........................................................................3
1.26 "Interim Technical Specifications"..............................................................3
1.27 "Joint Development Team" or "JDT"...............................................................3
1.28 "Joint Know-How"................................................................................3
1.29 "Joint Patents".................................................................................3
1.30 "Joint Technology"..............................................................................3
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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1.31 "Marketing Partner".............................................................................3
1.32 "NDA"...........................................................................................3
1.33 "Net Sales".....................................................................................4
1.34 "Partnering Agreement"..........................................................................4
1.35 "Patent"........................................................................................4
1.36 "Preliminary Final Specifications"..............................................................4
1.37 "Product".......................................................................................4
1.38 "Qualified Supplier"............................................................................4
1.39 "Retail Product"................................................................................4
1.40 "Royalty" or "Royalties"........................................................................4
1.41 "Specifications"................................................................................4
1.42 "Steering Committee"............................................................................4
1.43 "Stock Purchase Agreement"......................................................................4
1.44 "Supply Agreement"..............................................................................4
1.45 "Technical Development Plan"....................................................................4
1.46 "Technical Development Program".................................................................4
1.47 "Third Party"...................................................................................5
1.48 "Valid Claim"...................................................................................5
1.49 "Validation Studies"............................................................................5
2. OVERVIEW.................................................................................................5
2.1 Development of the Product......................................................................5
2.2 Commercialization...............................................................................5
3. MANAGEMENT...............................................................................................5
3.1 Joint Development Team..........................................................................5
3.2 Steering Committee..............................................................................6
3.3 Limitation of Powers............................................................................8
3.4 Liaisons........................................................................................8
4. TECHNICAL DEVELOPMENT PROGRAM............................................................................8
4.1 Technical Development Plan......................................................................8
4.2 AeroGen Development Activities..................................................................8
4.3 BD Development Activities.......................................................................8
4.4 Conduct of Technical Development Program........................................................9
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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4.5 Development of Product Specifications...........................................................9
4.6 Records and Reports.............................................................................9
4.7 Invention Assignment Agreements................................................................10
5. CLINICAL DEVELOPMENT....................................................................................10
5.1 AeroGen Responsibilities.......................................................................10
5.2 BD Participation...............................................................................11
6. COMMERCIALIZATION.......................................................................................11
6.2 BD Right to Secure Marketing Partner...........................................................11
6.3 Failure to Obtain a Marketing Partner..........................................................11
6.4 Services by BD.................................................................................12
7. MANUFACTURING AND SUPPLY................................................................................12
7.1 Supply of the Drug.............................................................................12
7.2 Manufacture and Supply of the Cartridge........................................................12
7.3 Exclusivity....................................................................................13
7.4 Use of AeroGen Intellectual Property...........................................................14
7.5 Cost Standards.................................................................................14
8. LICENSE GRANTS..........................................................................................14
8.1 To BD..........................................................................................14
8.2 To AeroGen.....................................................................................15
8.3 Use of the BD Cartridge Outside of the Field...................................................15
8.4 Reservation of Rights..........................................................................15
9. ROYALTIES...............................................................................................16
9.1 Royalties......................................................................................16
9.2 Pre-Paid Royalties.............................................................................16
9.3 Calculation of BD Percentage in Certain Circumstances..........................................16
9.4 Upfront Payments...............................................................................17
9.5 Payment of the BD Percentage...................................................................17
9.6 Audits.........................................................................................17
10. INTELLECTUAL PROPERTY...................................................................................18
10.1 Ownership......................................................................................18
10.2 Patent Matters.................................................................................19
10.3 Defense and Settlement of Third Party Claims...................................................20
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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10.4 Infringement By Third Parties..................................................................20
10.5 Settlements....................................................................................20
11. CONFIDENTIALITY.........................................................................................20
11.1 Treatment of Confidential Information..........................................................21
11.2 Publications...................................................................................21
11.3 Publicity......................................................................................21
11.4 Terms of the Agreement.........................................................................22
11.5 Required Disclosure............................................................................22
11.6 Survival of Confidentiality....................................................................22
12. REPRESENTATIONS AND COVENANTS...........................................................................22
12.1 Mutual Authority...............................................................................22
12.2 BD Representations and Warranties..............................................................22
12.3 AeroGen Representations and Warranties.........................................................23
12.4 Disclaimer.....................................................................................23
13. TERM AND TERMINATION....................................................................................23
13.1 Term...........................................................................................23
13.2 Termination For Other Than Cause...............................................................23
13.3 Termination For Breach.........................................................................26
13.4 Effect of Termination..........................................................................27
13.5 Bankruptcy Rights..............................................................................27
13.6 Survival.......................................................................................27
14. INDEMNIFICATION.........................................................................................27
14.1 By AeroGen.....................................................................................27
14.2 By BD..........................................................................................27
14.3 Apportionment..................................................................................28
14.4 Notice and Procedures..........................................................................28
15. MISCELLANEOUS...........................................................................................28
15.1 Entire Agreement; Amendment....................................................................28
15.2 Dispute Resolution.............................................................................28
15.3 Force Majeure..................................................................................29
15.4 Notices........................................................................................29
15.5 Limitation of Liability........................................................................30
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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15.6 Consents Not Unreasonably Withheld or Delayed..................................................30
15.7 Independent Contractors........................................................................30
15.8 Maintenance of Records.........................................................................30
15.9 United States Dollars..........................................................................30
15.10 No Strict Construction.........................................................................30
15.11 Assignment.....................................................................................30
15.12 Performance by Affiliates......................................................................30
15.13 Counterparts...................................................................................31
15.14 Further Actions................................................................................31
15.15 Severability...................................................................................31
15.16 Ambiguities....................................................................................31
15.17 Headings.......................................................................................31
15.18 No Waiver......................................................................................31
EXHIBIT 1 CRITICAL SYSTEM SPECIFICATIONS........................................................................33
EXHIBIT 2 TECHNICAL DEVELOPMENT PLAN............................................................................34
EXHIBIT 4 POTENTIAL INVENTORS...................................................................................43
EXHIBIT 5 FORM OF STANDARD EMPLOYMENT AGREEMENT.................................................................44
EXHIBIT 6 AEROGEN INHALER WITH BD CARTRIDGE.....................................................................45
</TABLE>
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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INSULIN INHALER DEVELOPMENT AGREEMENT
THIS INSULIN INHALER DEVELOPMENT AGREEMENT (the "Agreement") is
executed as of May 10, 2000 (the "Signing Date") and effective as of the 1st day
of January, 2000 (the "Effective Date") by and between AEROGEN, INC., a Delaware
corporation having its principal place of business at 1310 Orleans Drive,
Sunnyvale, CA 94089 ("AeroGen"), and BECTON, DICKINSON AND COMPANY, a New Jersey
corporation having its principal place of business at 1 Becton Drive, Franklin
Lakes, New Jersey 07417-1866 ("BD"). AeroGen and BD are sometimes referred to
herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, AeroGen has developed and possesses proprietary drug delivery
technology, including without limitation an aerosol generator device useful for
the systemic delivery of insulin as further described herein; and
WHEREAS, BD possesses extensive experience in the development and
commercialization of medical devices and components thereof, including without
limitation devices for the delivery of insulin; and
WHEREAS, AeroGen and BD desire to enter into a collaboration for the
development of a product for the systemic delivery of insulin to humans,
pursuant to the terms and conditions of this Agreement, with the goal of
achieving rapid, effective development and worldwide registration of a
pulmonary insulin inhaler with a titratable dosing mechanism that has broad
commercial appeal;
NOW, THEREFORE, in consideration of the foregoing and the covenants and promises
contained herein, the Parties hereby agree as follows:
1. DEFINITIONS
The following capitalized terms shall have the following meanings as
used in this Agreement:
1.1 "AEROGEN KNOW-HOW" means all Information Controlled by
AeroGen during the term of this Agreement that is necessary or useful for (a)
BD's conduct of its design and development activities with respect to the
Interface and the BD Cartridge hereunder, and/or (b) BD's manufacture or sale
of the BD Cartridge hereunder. "AeroGen Know-How" includes the Development
Technology solely owned by AeroGen pursuant to Section 10.1(a), but
specifically excludes the AeroGen Patents and the Joint Know-How.
1.2 "AEROGEN PATENTS" means all Patents Controlled by AeroGen
during the term of this Agreement to the extent that such Patents contain one
or more claims covering an invention that is practiced by BD (a) in the
conduct of its design and development activities with respect to the
Interface and the BD Cartridge hereunder, and/or (b) in the manufacture or
sale of the BD Cartridge hereunder. "AeroGen Patents" includes any Patents
covering the Development Technology that are solely owned by AeroGen pursuant
to Section 10.1(a), but specifically excludes the Joint Patents.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
1.
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1.3 "AEROGEN TECHNOLOGY" means the AeroGen Know-How and the
AeroGen Patents.
1.4 "AFFILIATE" means any company or entity controlled by,
controlling or under common control with a Party. As used in this Section 1.4,
"control" means that (a) an entity or company owns, directly or indirectly,
fifty percent (50%) or more of the voting stock of another entity, or (b) an
entity, person or group has the actual ability to control and direct the
management of the entity, whether by contract or otherwise.
1.5 "BD CARTRIDGE" means the Cartridge developed by BD pursuant
to this Agreement which interfits with the Inhaler, for example, as
illustrated in Exhibit 6 hereto.
1.6 "BD KNOW-HOW" means all Information Controlled by BD during
the term of this Agreement that is necessary or useful for the development,
manufacture, use or sale of the BD Cartridge, the Interface or any
improvements thereto. "BD Know-How" includes the Development Technology
solely owned by BD pursuant to Section 10.1(a), but specifically excludes the
Joint Know-How and the BD Patents.
1.7 "BD PATENTS" means all Patents Controlled by BD during the
term of this Agreement to the extent that such Patents contain one or more
claims covering an invention that is practiced by AeroGen (or its
sublicensees hereunder) in the development, manufacture, use, importation,
offer for sale or sale of the BD Cartridge, the Interface or any improvements
thereto. "BD Patents" includes any Patents covering the Development
Technology that are solely owned by BD pursuant to Section 10.1(a), but
specifically excludes the Joint Patents.
1.8 "BD PERCENTAGE" shall have the meaning ascribed in Section
9.1.
1.9 "BD TECHNOLOGY" means the BD Patents and the BD Know-How.
1.10 "CARTRIDGE" means a titratable container and dispensing
mechanism for pulmonary delivery of the Drug.
1.11 "CONFIDENTIAL INFORMATION" shall have the meaning ascribed in
Section 11.1.
1.12 "CONTROLLED" means, with respect to any material, Information
or intellectual property right, possession of the ability by a Party to grant
access, a license, or a sublicense to such material, Information or intellectual
property right as provided for herein without violating an agreement with a
Third Party as of the time such Party would be first required hereunder to grant
the other Party such access, license or sublicense.
1.13 "CRITICAL SYSTEM SPECIFICATIONS" means the critical design
and performance criteria for the Product set forth in Exhibit 1 hereto.
1.14 "DEVELOPMENT PATENTS" means any Patents claiming a
Development Invention; provided, however, that such Patents do not include
any continuation or division applications claiming priority to a parent
application or continuation-in-part application filed prior to the
commencement of the Development Term.
1.15 "DEVELOPMENT INVENTION" means an invention in the Development
Technology.
1.16 "DEVELOPMENT TECHNOLOGY" means all Information created or
developed pursuant to the Technical Development Program or thereafter pursuant
to this Agreement, either solely by a Party or jointly by the Parties, and all
Patents covering such Information.
1.17 "DEVELOPMENT TERM" means the period beginning on the
Effective Date and ending on the earlier of (a) December 31, 2001, or (b)
receipt by AeroGen of written certification by BD that BD is able to
manufacture and deliver to AeroGen a BD Cartridge that is qualified for use
in Phase III clinical trials in the Field, unless extended by mutual written
agreement of the Parties.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
2.
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1.18 "DRUG" means a solution or liquid suspension of
short-acting human insulin, including without limitation reconstituted powder.
1.19 "FIELD" means the treatment of diabetes mellitus in humans.
1.20 "FINAL SPECIFICATIONS" mean the final specifications for the
Product that are required for the use of the Product in Phase III clinical
studies in the Field, to be developed by the JDT pursuant to Section 4.5(c).
1.21 "INFORMATION" means (a) techniques, data, inventions,
practices, methods, knowledge, know-how, skill, experience, test data including
pharmacological, toxicological and clinical test data, analytical and quality
control data, regulatory submissions, correspondence and communications,
marketing, pricing, distribution, cost, sales, manufacturing, patent and legal
data or descriptions, and (b) compositions of matter, assays and biological
materials, and all intellectual property rights in and to any of the foregoing.
1.22 "INHALER" means AeroGen's proprietary aerosol generator and
related components (excluding the Cartridge) for the pulmonary delivery of
the Drug for use in the Field.
1.23 "INITIAL PHASE II TRIALS" means the first clinical study for
the use of the Inhaler in patients in the Field conducted in any location.
1.24 "INTERFACE" means the interface and/or interconnection
between the Inhaler and the BD Cartridge.
1.25 "INTERFACE TECHNOLOGY" shall have the meaning ascribed in
Section 10.1(a)(iii).
1.26 "INTERIM TECHNICAL SPECIFICATIONS" means the technical
specifications for the initial design pathway for the Product, to be
determined by the JDT pursuant to Section 4.5(a) based upon the Critical
System Specifications and the work conducted pursuant to the Technical
Development Plan.
1.27 "JOINT DEVELOPMENT TEAM" OR "JDT" means the joint development
team described in Section 3.1 that shall oversee the Parties' activities under
the Technical Development Program.
1.28 "JOINT KNOW-HOW" means all Information in the Development
Technology jointly owned by the Parties in accordance with Section 10.1(a),
provided that "Joint Know-How" shall specifically exclude the Joint Patents.
1.29 "JOINT PATENTS" means any Patents claiming a Development
Invention and jointly owned by the Parties in accordance with Section 10.1(a).
1.30 "JOINT TECHNOLOGY" means the Joint Know-How and the Joint
Patents.
1.31 "MARKETING PARTNER" means a Third Party with whom AeroGen has
entered into a Partnering Agreement.
1.32 "NDA" means a New Drug Application filed with the U.S. Food
and Drug Administration.
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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1.33 "NET SALES" means, with respect to each Partnering
Agreement, net sales of the Retail Product as defined in such agreement;
provided that in no event shall "Net Sales" include any deduction for any
discounts given for bundling the Retail Product with products other than the
Product, the Inhaler or the BD Cartridge.
1.34 "PARTNERING AGREEMENT" means a written agreement between
AeroGen and a Third Party for the commercial development, promotion,
manufacture (other than manufacture of a Cartridge), marketing and/or sale
and distribution of the Product in any country of the world.
1.35 "PATENT" means (a) unexpired letters patent which have not
been held invalid or unenforceable by a court of competent jurisdiction from
which no appeal can be taken or has been taken within the required time period,
including without limitation any substitution, extension, registration,
confirmation, inventor's certificate, reissue, re-examination, renewal or any
like filing thereof; and (b) pending applications for letters patent, including
without limitation any continuation, division or continuation-in-part thereof
and any provisional applications.
1.36 "PRELIMINARY FINAL SPECIFICATIONS" means the preliminary
final specifications for the Product required for the conduct of the
Validation Studies, to be developed by the JDT pursuant to Section 4.5(b).
1.37 "PRODUCT" means any product for the pulmonary delivery of the
Drug comprising the Inhaler and the BD Cartridge.
1.38 "QUALIFIED SUPPLIER" shall have the meaning ascribed in
Section 7.1(a).
1.39 "RETAIL PRODUCT" means either (a) the Product; (b) the BD
Cartridge filled with the Drug; or (c) the Inhaler, in such case packaged
separately for retail sale.
1.40 "ROYALTY" OR "ROYALTIES" means a percentage of Net Sales
actually received by AeroGen from a Marketing Partner pursuant to a Partnering
Agreement from sales of the Retail Product in any country covered by such
Partnering Agreement.
1.41 "SPECIFICATIONS" means the Critical System Specifications, the
Interim Technical Specifications, the Preliminary Final Specifications or the
Final Specifications, as applicable.
1.42 "STEERING COMMITTEE" means the committee described in Section
3.2 that shall oversee the commercialization activities of the Parties
hereunder.
1.43 "STOCK PURCHASE AGREEMENT" means that certain stock purchase
agreement entered into as of the Signing Date, whereby BD shall purchase from
AeroGen shares of AeroGen Series E Preferred Stock.
1.44 "SUPPLY AGREEMENT" means the agreement described in Section
7.2.
1.45 "TECHNICAL DEVELOPMENT PLAN" shall have the meaning ascribed
in Section 4.1.
1.46 "TECHNICAL DEVELOPMENT PROGRAM" means the collaborative
activities to be conducted by the Parties to develop the Product under the
direction of the JDT during the Development Term, as further described in
Article 4.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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1.47 "THIRD PARTY" means any entity other than AeroGen or BD or
their respective Affiliates.
1.48 "VALID CLAIM" shall mean a claim of an issued and unexpired
Patent that (a) is included within the AeroGen Technology, BD Technology or the
Joint Technology, (b) claims the manufacture, use or sale of the Product and (c)
has not been held unenforceable, unpatentable, or invalid by a court or other
governmental agency of competent jurisdiction, and that has not been admitted to
be invalid or unenforceable through reissue, disclaimer or otherwise.
1.49 "VALIDATION STUDIES" shall have the meaning ascribed in
Section 5.1(b).
2. OVERVIEW
2.1 DEVELOPMENT OF THE PRODUCT. Commencing promptly following
the Effective Date and during the Development Term, the Parties shall
undertake the Technical Development Program in accordance with the Technical
Development Plan, pursuant to which AeroGen shall develop the Inhaler and a
manufacturing process therefor, BD shall develop the BD Cartridge and a
manufacturing process therefor and the Parties shall jointly develop the
Interface, all as further described in Article 4. The Parties' efforts under
the Technical Development Program shall be overseen by the JDT, as further
described in Section 3.1.
2.2 COMMERCIALIZATION. AeroGen shall seek one or more Marketing
Partners for the commercialization of the Product, as further described in
Section 6.1. AeroGen shall be responsible for identifying and qualifying a
source of the Drug for use with the Product. BD shall exclusively supply to
AeroGen and its Marketing Partner(s), and AeroGen and its Marketing
Partner(s) shall exclusively purchase from BD, AeroGen's clinical and
commercial requirements for the BD Cartridge pursuant to the Supply
Agreement. AeroGen shall be responsible for manufacturing or having
manufactured the Product for clinical trials and commercial use. The Steering
Committee shall oversee the Parties' activities with respect to the clinical
and commercial supply of the Product, and shall advise the Parties with
respect to the commercialization of the Product hereunder, as further
described in Section 3.2.
3. MANAGEMENT
3.1 JOINT DEVELOPMENT TEAM.
(a) FORMATION. Within ten (10) days after the Effective
Date, AeroGen and BD shall establish the Joint Development Team ("JDT").
(b) PURPOSE AND PRINCIPLES. The general purposes of the
JDT shall be (i) to determine the overall technical strategy for the development
of the Product, including without limitation developing an integrated system
design for the Product and establishing appropriate specifications, (ii) to
develop the Technical Development Plan and to modify or amend it as necessary,
(iii) to develop and propose for the Parties' approval the Interim Technical
Specifications, the Preliminary Final Specifications and the Final
Specifications in accordance with Section 4.5 and to modify or amend them as
necessary, and (iv) to coordinate the Parties'
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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activities under the Technical Development Program, all based on the principles
of prompt and diligent development of the Product consistent with good
pharmaceutical and medical device practices. The JDT shall perform such other
functions as appropriate to further the purposes of the Technical Development
Program as determined by the Parties, including the periodic evaluation of
performance against goals.
(c) MEMBERSHIP. The JDT shall initially have three (3)
representatives of each Party with the requisite levels of skill and experience
in engineering and such other matters as the Parties may agree. The JDT may
change its size from time to time by written agreement of the Parties; provided
that the JDT at all times shall be composed of an equal number of
representatives appointed by each of AeroGen and BD. Each Party may replace its
JDT representatives at any time upon written notice to the other Party; provided
that each Party's representatives shall at all times be persons possessing the
appropriate level of skill, experience and familiarity with the Product.
(d) MEETINGS. The JDT shall hold meetings at such times
as the JDT elects to do so, but in no event shall such meetings be held less
frequently than once every calendar quarter. The JDT shall meet alternately at
AeroGen's facilities in Sunnyvale, CA and BD's facilities in Franklin Lakes, NJ
or at such locations as the Parties may otherwise agree. With the consent of the
representatives of each Party serving on the JDT, other representatives of each
Party or of Third Parties involved in the development, manufacture or
commercialization of the Product may attend meetings of the JDT as nonvoting
observers. Meetings of the JDT may be held by audio or video teleconference with
the consent of each Party, provided that at least half of the minimum number of
meetings set forth above shall be held in person. Each Party shall be
responsible for all of its own expenses of participating in the JDT. Meetings of
the JDT shall be effective only if a representative of each Party is present or
participating.
(e) CHAIRPERSONS. The JDT shall be chaired first by a
representative of AeroGen from the Effective Date through June 30, 2000, and the
Chairperson position shall rotate thereafter on a semi-annual basis with BD to
appoint the Chairperson for the six month period beginning July 1, 2000. The
Chairperson shall be responsible for calling meetings, preparing and circulating
an agenda in advance of each meeting, and preparing and issuing minutes of each
meeting within thirty (30) days thereafter. From time to time, the JDT may
establish subcommittees or subordinate committees (which may or may not include
members of the JDT itself) to oversee particular projects or activities, and
such subcommittees or subordinate committees shall be constituted and shall
operate as the JDT agrees.
(f) DECISION-MAKING. Each of AeroGen's and BD's
representatives shall have one vote. All decisions of the JDT shall be
unanimous. Any disagreement among the members of the JDT will be resolved in
light of the principles set forth in this Article 3. Should the JDT be unable to
reach a unanimous decision on an issue within thirty (30) days, such issue shall
be referred to the Steering Committee for resolution.
(g) TERM. The JDT shall remain in operation for the
duration of the Development Term unless otherwise agreed by the Parties in
writing.
3.2 STEERING COMMITTEE.
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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(a) FORMATION. Within thirty (30) days following the
Effective Date, the Parties shall establish the Steering Committee, which shall
advise the Parties with respect to the commercial development of the Product.
(b) PURPOSE AND PRINCIPLES. The general purposes of the
Steering Committee shall be (i) to play an advisory role with respect to the
Product positioning and the overall commercialization strategy, (ii) to
determine strategies for supply of the Drug for the Product, (iii) to oversee
the JDT, and (iv) to coordinate the Parties' manufacturing and supply activities
hereunder with respect to the initial commercial introduction of the Product,
all based on the principles of prompt and diligent development of the Product
consistent with good pharmaceutical and medical device practices. The Steering
Committee shall perform such other functions as appropriate to further the
purposes of this Agreement as determined by the Parties, including the periodic
evaluation of performance against goals. In addition to its overall
responsibility for the collaboration established by this Agreement, the Steering
Committee shall explore further collaborative opportunities between the Parties,
including use of the BD Cartridge outside of the Field.
(c) MEMBERSHIP. The Steering Committee shall initially
have three (3) representatives of each Party, provided that neither Party's
Chief Executive Officer may serve as a member of the Steering Committee. The
Steering Committee may change its size from time to time by written agreement of
the Parties; provided that the Steering Committee at all times shall be composed
of an equal number of representatives appointed by each of AeroGen and BD. Each
Party may replace its Steering Committee representatives at any time upon
written notice to the other Party, provided that each Party's representatives
shall at all times be persons possessing the appropriate level of skill,
experience and familiarity with the Product.
(d) MEETINGS. The Steering Committee shall hold meetings
at such times as the Steering Committee elects to do so, but in no event shall
such meetings be held less frequently than once every quarter. The Steering
Committee shall meet alternately at AeroGen's facilities in Sunnyvale, CA and
BD's facilities in Franklin Lakes, NJ or at such locations as the Parties may
otherwise agree. With the consent of the representatives of each Party serving
on the Steering Committee, other representatives of each Party or of Third
Parties involved in the manufacture or commercialization of the Product may
attend meetings of the Steering Committee as nonvoting observers. Meetings of
the Steering Committee may be held by audio or video teleconference with the
consent of each Party, provided that at least half of the minimum number of
meetings set forth above shall be held in person. Each Party shall be
responsible for all of its own expenses of participating in the Steering
Committee. Meetings of the Steering Committee shall be effective only if a
representative of each Party is present or participating.
(e) CHAIRPERSONS. The Steering Committee shall be chaired
by an AeroGen representative. The Chairperson shall be responsible for calling
meetings, preparing and circulating an agenda in advance of each meeting, and
preparing and issuing minutes of each meeting within thirty (30) days
thereafter. From time to time, each Committee may establish subcommittees or
subordinate committees (which may or may not include members of the Committee
itself) to oversee particular projects or activities, and such subcommittees or
subordinate committees shall be constituted and shall operate as the Committee
agrees.
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Notwithstanding the foregoing, BD shall have the right to call a special
meeting of the Steering Committee on two (2) weeks written notice to AeroGen.
(f) DISPUTE RESOLUTION. In the event that the Steering
Committee is unable to reach agreement on an issue within thirty (30) days,
including any dispute referred to it by the JDT, such issue shall be subject to
dispute resolution as set forth in Section 15.2.
(g) TERM. The Steering Committee shall remain in
operation for the period extending from its date of formation under
subsection (a) above until the longer of: (i) the date of first commercial
sale of the Product in any country of the world, or (ii) the date that a
Marketing Partner requests its dissolution, unless otherwise agreed by the
Parties in writing.
3.3 LIMITATION OF POWERS. The powers of the JDT and the Steering
Committee are limited to those expressly set forth in this Agreement. Without
limiting the generality of the foregoing, neither the JDT nor the Steering
Committee shall have the right to amend this Agreement. The actions of the JDT
and/or the Steering Committee shall not substitute for either Party's ability to
exercise any right, nor excuse the performance of any obligation, set forth
herein.
3.4 LIAISONS. Each Party will designate in writing to the other an
individual to serve as the liaison between the Parties to undertake and
coordinate any day-to-day communications as may be required between the Parties
relating to their activities under this Agreement. Each Party may change such
liaison from time to time during the term of this Agreement upon written notice
thereof to the other Party.
4. TECHNICAL DEVELOPMENT PROGRAM
4.1 TECHNICAL DEVELOPMENT PLAN. The specific tasks of each Party
under the Technical Development Program and a time-table therefor, i.e., the
"Technical Development Plan," is attached as Exhibit 2 hereto. Any changes or
modifications to the Technical Development Plan shall be agreed upon in writing
by the Parties.
4.2 AEROGEN DEVELOPMENT ACTIVITIES. AeroGen shall undertake its
assigned activities under the Technical Development Program in accordance with
the Technical Development Plan, at its own expense, and shall use commercially
reasonable, diligent efforts to (a) itself develop the Inhaler and (b) jointly
with BD develop the Interface, all in accordance with the applicable
Specifications and the timetable as set forth in the Technical Development Plan.
AeroGen shall have the overall responsibility for the development of the
Product, except with respect to the BD Cartridge and other development
activities assigned to BD under the Technical Development Plan. AeroGen shall
have the responsibility for final design review for the Product, including
without limitation system engineering and sign-off.
4.3 BD DEVELOPMENT ACTIVITIES. BD shall undertake its assigned
activities under the Technical Development Program in accordance with the
Technical Development Plan, at its own expense, and shall use commercially
reasonable, diligent efforts to (a) itself develop the BD Cartridge and (b)
jointly with AeroGen develop the Interface, all in accordance with the
applicable Specifications and the timetable as set forth in the Technical
Development Plan.
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4.4 CONDUCT OF TECHNICAL DEVELOPMENT PROGRAM. AeroGen and BD each
shall conduct their activities under the Technical Development Program in good
scientific and engineering manner, and shall use commercially reasonable
diligent efforts to achieve their objectives efficiently and expeditiously in
compliance in all material respects with all requirements of applicable laws,
rules and regulations and all applicable good laboratory practices and design
controls. AeroGen and BD shall each proceed diligently with the work set out in
the Technical Development Plan using their respective good faith efforts.
4.5 DEVELOPMENT OF PRODUCT SPECIFICATIONS.
(a) INTERIM TECHNICAL SPECIFICATIONS. The JDT shall
develop and recommend to the Parties for their approval the Interim Technical
Specifications, including any necessary and appropriate changes or
modifications to the Technical Development Plan. The target date for approval
of the Interim Technical Specifications by the Parties is [ * ].
(b) PRELIMINARY FINAL SPECIFICATIONS. The JDT shall
develop and recommend to the Parties for their approval the Preliminary Final
Specifications for the Product, including any necessary and appropriate
changes to the Technical Development Plan. The target date for approval of
the Preliminary Final Specifications is [ * ].
(c) FINAL SPECIFICATIONS. The JDT shall develop and
recommend to the Parties for their approval the Final Specifications for the
Product, including any necessary and appropriate changes or modifications to
the Technical Development Plan. The target date for approval of the Final
Specifications by the Parties is [*].
(d) RESPONSIBILITIES. BD shall be primarily
responsible for the development of such portion of each of such
Specifications as relates specifically to the BD Cartridge. AeroGen shall be
primarily responsible for the development of all other portions of each of
such Specifications, including such as relate specifically to the Inhaler,
except as relate specifically to the Interface. The Parties shall be jointly
responsible for the development of such portions of each of such
Specifications as relates specifically to the Interface. Each Party shall use
diligent, commercially reasonable, good faith efforts to expeditiously
develop and approve each of such Specifications pursuant to this Section 4.5
by the relevant target date.
(e) REVISION OR MODIFICATION. The Parties may revise or
modify the Specifications from time to time as necessary by mutual written
agreement.
(f) FAILURE TO AGREE ON FINAL SPECIFICATIONS. In the
event that the Parties are unable to agree upon the Final Specifications by
December 21, 2001, and following completion of the Parties' efforts to
resolve such dispute pursuant to Section 15.2, either Party may terminate
this Agreement pursuant to Section 13.2(a).
4.6 RECORDS AND REPORTS.
(a) RECORD KEEPING. AeroGen and BD each shall maintain
records which shall be complete and accurate and shall fully and properly
reflect all work done and results achieved in the performance of the Technical
Development Program in sufficient detail and in good scientific manner
appropriate for patent and regulatory purposes.
(b) INSPECTION. Each Party shall have the right, during
normal business hours and upon reasonable notice to inspect and copy all of the
records of the other Party described in
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subsection (a) above. Such records and the information disclosed therein shall
be deemed Confidential Information and subject to Article 11. Each Party shall
have the right to arrange for a reasonable number of its employees, agents and
outside consultants to visit the other Party at its offices and laboratories
during normal business hours and upon reasonable notice, and to discuss the
Technical Development Program and its results in detail with the technical
personnel and consultants of the other Party. All inspections, copying and
visits hereunder shall be conducted in a manner so as not to disrupt the other
Party's business or cause any disclosure of any other Party's confidential and
proprietary information.
(c) REPORTS. Within thirty (30) days following the end of
each calendar quarter during the Development Term, each Party shall provide to
the other Party a written progress report which shall describe the work
performed by such Party to date on the Technical Development Program, evaluate
the work performed by such Party in relation to the goals of the Technical
Development Program and provide such other information required by the Technical
Development Program or reasonably requested by the other Party relating to the
progress of the goals or performance of the Technical Development Program. Upon
request, each Party shall provide to the other Party copies of the records
described in subsection (a) above.
4.7 INVENTION ASSIGNMENT AGREEMENTS. Each Party hereby covenants
that each of such Party's employees, consultants and agents performing any work
under the Technical Development Program will have entered into a written
invention assignment agreement requiring that each such individual assign to
such Party all right, title and interest in any Information conceived of or
reduced to practice by such individual pursuant to the Technical Development
Program.
5. CLINICAL DEVELOPMENT
5.1 AEROGEN RESPONSIBILITIES.
(a) AeroGen shall be responsible for the preclinical
development and clinical development of the Product and its use with the Drug
in the Field, and for the development of an appropriate formulation of the
Drug for use with the Product, in collaboration with one or more Marketing
Partners; PROVIDED, HOWEVER, that BD acknowledges that it is not AeroGen's
intent to solely fund the clinical development of the Product beyond the
Initial Phase II Trials, and that AeroGen will have no obligations under this
Agreement with respect to such clinical development of the Product beyond the
Initial Phase II Trials in the event that AeroGen is unable to enter into a
Partnering Agreement that provides that the applicable Marketing Partner will
fund such further clinical development.
(b) Notwithstanding subsection (a) above, AeroGen
shall conduct, at its expense, the validation studies reasonably necessary to
qualify the BD Cartridge and Product for use in Phase III clinical trials in
the Field (the "Validation Studies"); provided that the foregoing obligation
shall not apply to such studies that are required due to a failure of the BD
Cartridge in a prior study and such failure was solely due to BD's negligence
or wrongful act.
(c) All clinical data (including, without limitation,
pharmacological, toxicological and other test data) generated by or on behalf of
AeroGen pursuant to its activities under this Section 5.1 shall be deemed
AeroGen's Confidential Information, and AeroGen shall retain sole ownership
thereof. BD shall not use such clinical data for any purpose other than its
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activities under the Technical Development Program and the Supply Agreement
without AeroGen's prior written consent.
(d) AeroGen (or its Marketing Partner) shall be
responsible for filing for, and obtaining all applications for regulatory
approval of the Retail Product, as further provided in the Supply Agreement.
5.2 BD PARTICIPATION. BD will furnish AeroGen with such
assistance and cooperation as AeroGen may reasonably request in connection
with the securing of regulatory approvals required for the conduct of
clinical trials and Product registrations in any country of the world
including, to the extent applicable, rights of reference to all regulatory
filings of BD, if any, regarding the BD Cartridge. AeroGen agrees to share
the protocol for any clinical trials with BD, to permit BD to observe such
clinical trials and to share results of each such clinical trials with BD, in
each case solely to the extent necessary for BD's compliance with its
regulatory obligations. All Information received by BD in connection with
such clinical trials shall be deemed to be AeroGen's Confidential Information
and subject to Article 11.
6. COMMERCIALIZATION
6.1 COLLABORATION WITH MARKETING PARTNER(S) AeroGen shall use
commercially reasonable efforts to identify potential Marketing Partner(s) and
to enter into Partnering Agreements therewith and to keep BD regularly apprised
of its progress on at least a monthly basis. BD will cooperate reasonably with
AeroGen in such efforts consistent with BD's lead responsibilities set forth in
Exhibit 2A. AeroGen may carry out any or all of its development and
commercialization obligations under this Agreement in collaboration with or
solely through its Marketing Partner(s). Notwithstanding the foregoing, BD
acknowledges that AeroGen may not enter into a Partnering Agreement, and that
such failure shall not be deemed to be a breach of this Agreement.
6.2 BD RIGHT TO SECURE MARKETING PARTNER. In the event that
AeroGen has not executed at least one (1) Partnering Agreement by eighteen
(18) months following completion of the Validation Studies, BD then shall
have the right, but not the obligation, to secure a Marketing Partner
reasonably acceptable to AeroGen on reasonable terms to be negotiated by such
potential Marketing Partner and BD and with AeroGen's reasonable assistance;
PROVIDED THAT AeroGen shall not be obligated to enter into any Partnering
Agreement, except on terms reasonably acceptable to AeroGen. BD may exercise
such right at any time following such 18 month period by providing AeroGen
thirty (30) days prior written notice thereof. Notwithstanding the foregoing,
BD may not exercise such right if at such time AeroGen is engaged in active
negotiations with a Third Party with respect to a Partnering Agreement, as
evidenced by a term sheet or letter of intent with such Third Party. BD shall
not have the right to enter into a Partnering Agreement except with AeroGen's
prior written consent.
6.3 FAILURE TO OBTAIN A MARKETING PARTNER. In the event that
AeroGen has not executed a Partnering Agreement as provided in Section 6.1
and BD has not secured a Marketing Partner as provided in Section 6.2 within
thirty-six (36) months following completion of the Validation Studies, then
either Party may terminate this Agreement as set forth in Section 13.2(b).
Notwithstanding the foregoing, neither Party shall have the right to
terminate this Agreement under this Section 6.3 at any time during which a
Party with the right to secure a Marketing Partner is engaged in active
negotiations with a Third Party with respect to a Partnering Agreement, as
evidenced by a term sheet or letter of intent with such Third Party.
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6.4 SERVICES BY BD. In the event that a Marketing Partner desires
that BD perform certain services in connection with a Partnering Agreement, BD
shall negotiate in good faith with such Marketing Partner the commercially
reasonable terms under which BD would provide such services, including without
limitation the reasonable compensation to be paid therefor. Upon reaching
agreement on such terms, BD shall enter into a written agreement with such
Marketing Partner for such services on such terms.
7. MANUFACTURING AND SUPPLY
7.1 SUPPLY OF THE DRUG.
(a) AeroGen shall be responsible for identifying and
qualifying a supplier of the Drug for use with the Product (a "Qualified
Supplier"), and shall use commercially reasonable, good faith efforts to
identify, qualify and enter into a supply agreement with a Qualified Supplier
for the Drug for use with the Product (a "Drug Supply Agreement").
Notwithstanding the foregoing, BD acknowledges that AeroGen may not be able to
identify or qualify a Qualified Supplier and/or may not enter into a Drug Supply
Agreement with a Qualified Supplier, and that such failure shall not be deemed a
breach of this Agreement.
(b) In the event that AeroGen has not executed a Drug
Supply Agreement, as described in subsection (a) above, by [*] following
completion of the Validation Studies, BD then shall have the right, but not
the obligation, to secure a Qualified Supplier reasonably acceptable to
AeroGen on reasonable terms to be negotiated by such potential Qualified
Supplier and BD and with AeroGen's reasonable assistance; PROVIDED that
AeroGen shall not be obligated to enter into any Drug Supply Agreement,
except on terms reasonably acceptable to AeroGen. BD may exercise such right
at any time following such [*] period by providing AeroGen written notice
thereof. Notwithstanding the foregoing, BD may not exercise such right if at
such time AeroGen is engaged in active negotiations with a Qualified Supplier
with respect to such a Drug Supply Agreement, as evidenced by a term sheet or
letter of intent with such Qualified Supplier. BD shall not enter into a
Drug Supply Agreement with any Qualified Supplier without AeroGen's prior
written consent.
(c) In the event that AeroGen has not executed a Drug
Supply Agreement as provided in subsection (a) above, and BD has not secured
a Qualified Supplier as provided in subsection (b) above within thirty-six
(36) months following completion of the Validation Studies, then either Party
may terminate this Agreement as set forth in Section 13.2(b). Notwithstanding
the foregoing, neither Party shall have the right to terminate the Agreement
under this subsection (c) at any time during which a Party with the right to
secure a Qualified Supplier is engaged in active negotiations with a
Qualified Supplier with respect to a Drug Supply Agreement, as evidenced by a
term sheet or letter of intent with such Qualified Supplier.
7.2 MANUFACTURE AND SUPPLY OF THE CARTRIDGE.
(a) The Parties agree to negotiate in good faith and
enter into, as soon as is reasonably practicable, a supply agreement under
which BD would agree to exclusively manufacture and supply AeroGen and its
Marketing Partner(s) with their requirements of Unfilled BD Cartridges, and
AeroGen and its Marketing Partner(s) would agree to exclusively purchase such
requirements from BD, on mutually acceptable terms and conditions (the
"Supply Agreement"). Neither Party shall be obligated to enter into such
Supply Agreement before finalization of the Final Specifications under
Section 4.5(c).
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(b) Such Supply Agreement shall include the terms, or
terms in accordance with the principles, set forth in Exhibit 3 attached hereto,
and shall include such other terms and conditions as are appropriate and
customary, including without limitation: (i) minimum purchase and supply
requirements to be agreed upon by the Parties in good faith following
finalization of the Final Specifications under Section 4.5(c); (ii) inventory
requirements, if applicable; and (iii) provisions to ensure continuity of supply
in the event of a catastrophe, BD's default or, if such a provision is agreed
upon by the Parties, BD's termination of the Supply Agreement for convenience.
In addition, AeroGen shall have the right to assign the Supply Agreement to a
Marketing Partner with BD's prior written consent, which consent shall not be
unreasonably withheld or delayed.
(c) Notwithstanding anything to the contrary contained
in either this Agreement or the Supply Agreement, either explicitly or by
implication, BD shall not be required to commit or otherwise expend capital
resources to expand production beyond the capacity of its pilot line for the
BD Cartridge unless and until, (i) AeroGen has [*], and (ii) AeroGen and/or
its Marketing Partner has [*].
7.3 EXCLUSIVITY.
(a) BD agrees that, during the Development Term and
for three (3) years thereafter (the "Exclusivity Period") it shall not:
(i) develop, have developed, manufacture,
have manufactured or sell and/or otherwise transfer to any Third Party,
directly or indirectly, either itself or on behalf of a Third Party, any
Cartridge (including, without limitation, the BD Cartridge) for use in the
Field, except as provided in this Agreement or the Supply Agreement; or
(ii) purchase any Cartridge (including,
without limitation, the BD Cartridge) from any Third Party directly or
indirectly, for use in the Field by BD or any Third Party; in each case,
without the prior written consent of AeroGen.
(b) AeroGen agrees that, during the Exclusivity Period it
shall not:
(i) develop, have developed, manufacture, or
have manufactured any Cartridge (including, without limitation, the BD
Cartridge) either itself or with or on behalf of a Third Party for use in the
Field (except as may otherwise be provided in the Supply Agreement in the
event of a supply default by BD); or
(ii) purchase from any Third Party any
Cartridge (including, without limitation, the BD Cartridge) either itself or
with or on behalf of any Third Party for use in the Field (except as may be
otherwise provided in the Supply Agreement in the event of a supply default
by BD); or
(iii) sell and/or otherwise transfer, directly
or indirectly, to any Third Party any Cartridge (including, without
limitation, the BD Cartridge) for use in the Field, except as is provided in
this Agreement and the Supply Agreement.
(c) Notwithstanding anything to the contrary contained
in either this Agreement or the Supply Agreement, either explicitly or by
implication, BD shall be free to manufacture, have manufactured, import, use,
offer for sale and/or sell, or otherwise transfer to any Third Party,
directly or indirectly, any titratable container and dispensing mechanism for
the pulmonary delivery of any drug solely for use outside of the Field,
subject to Section 8.3, Section 13.2(e)(i)(B), and Section 7.3(e).
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(d) The negative covenants set forth in this Section
7.3(a) and (b) shall not survive any early termination of this Agreement by
either Party.
(e) BD covenants that it shall not, during the
Exclusivity Period manufacture, have manufactured, sell, offer for sale or
import, directly or indirectly, any titratable container and dispensing
mechanism for the pulmonary delivery of a drug that interfits and is
compatible with the Inhaler, other than the BD Cartridge pursuant to this
Agreement. BD further covenants that it shall not, during the Exclusivity
Period manufacture any titratable container and dispensing mechanism for the
pulmonary delivery of any drug, which container is covered by a claim of an
issued and unexpired Development Patent claiming the manufacture, use or sale
of such titratable container, which claim (i) has not been held
unenforceable, unpatentable, or invalid by a court or other governmental
agency of competent jurisdiction, and (ii) has not been admitted to be
invalid or unenforceable through reissue, disclaimer or otherwise (a
"Development Patent Cartridge") with the intent that such Development Patent
Cartridge interfit and be compatible with any AeroGen inhaler device, for use
within or outside the Field, nor shall it have manufactured, use in Phase III
clinical trials, sell and/or otherwise transfer to any Third Party, directly
or indirectly, either itself or on behalf of a Third Party, any such
Development Patent Cartridge.
7.4 USE OF AEROGEN INTELLECTUAL PROPERTY.
(a) AeroGen shall notify BD in writing, prior to the
adoption of the Final Specifications for the BD Cartridge, to the extent any
AeroGen intellectual property is incorporated into the BD Cartridge. Promptly
following BD's receipt of such notice, the JDT shall discuss in good faith
whether it is appropriate and desirable for such intellectual property to be
incorporated into the BD Cartridge. If the Parties agree to so incorporate
such intellectual property, upon BD's request, the Parties shall also agree
in writing on a reasonable royalty or other compensation to be paid to
AeroGen by BD in the event that BD manufactures, has manufactured, imports,
uses, offers for sale or sells the BD Cartridge incorporating such AeroGen
intellectual property, for use outside of the Field.
(b) If AeroGen fails to notify BD of any AeroGen
intellectual property that is incorporated into the BD Cartridge as provided
in Section (a) above, BD's sole and exclusive remedy for such breach shall be
the grant of the following covenant, which covenant shall only apply to the
intellectual property for which AeroGen failed to provide such notice (the
"AeroGen Cartridge IP"): AeroGen shall covenant that it shall not, and shall
not permit its Affiliates and sublicensees to, bring suit against BD, its
Affiliates, its successors-in-interest, their customers or their respective
permitted sublicensees with respect to the infringement, misappropriation or
other wrongful use of AeroGen Cartridge IP in connection with the making,
having made, using, selling, offering for sale or importing of the BD
Cartridge (as the BD Cartridge is envisioned by the Parties as of the
Effective Date, and as the BD Cartridge may be developed in accordance with
the Specifications to be mutually agreed upon by the Parties pursuant to this
Agreement) or a Development Patent Cartridge to the extent incorporating the
AeroGen Cartridge IP that was incorporated in the BD Cartridge, throughout
the world by BD, its successors-in-interest or their respective permitted
sublicensees hereunder solely for use outside the Field.
(c) Except as expressly provided in this Section 7.4,
BD is not granted any license or rights to, or covenant not to sue under, any
intellectual property right of AeroGen covering the manufacture, use,
importation, offer sale, or sale of the BD Cartridge for use outside the
Field. AeroGen grants no license or rights to, or covenant not to sue under,
any intellectual property right of AeroGen covering any Cartridge other than
the BD Cartridge or a Development Patent Cartridge to the extent
incorporating the AeroGen Cartridge IP that was incorporated in the BD
Cartridge.
7.5 COST STANDARDS. Prior to entering into the Supply Agreement,
BD shall provide to AeroGen such information as AeroGen reasonably requests with
respect to BD's accounting practices as they relate to the calculation of the
cost of goods, including without limitation BD's standard costs and standard
methods of calculating costs.
8. LICENSE GRANTS
8.1 TO BD.
(a) DEVELOPMENT LICENSE. Subject to the terms and
conditions of this Agreement, AeroGen hereby grants to BD a non-exclusive,
worldwide, royalty-free license under the AeroGen Technology solely to conduct
its assigned activities under the Technical
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Development Program with respect to the Interface and the BD Cartridge. BD
may grant sublicenses under the foregoing license only with AeroGen's prior
written consent.
(b) MANUFACTURING LICENSE. Subject to the terms and
conditions of this Agreement and of the Supply Agreement, AeroGen hereby
grants to BD an exclusive, worldwide, royalty-free license under the AeroGen
Technology and AeroGen's interest in the Joint Technology to manufacture the
BD Cartridge and the Interface solely for AeroGen (or its assignee under the
Supply Agreement) or its Marketing Partners pursuant to the Supply Agreement.
BD may grant sublicenses under the foregoing license only with AeroGen's
prior written consent.
(c) BD COVENANT. BD hereby covenants that it shall not
use the AeroGen Technology for any purpose other than is expressly permitted
under this Section 8.1 and Section 7.4.
8.2 TO AEROGEN.
(a) DEVELOPMENT LICENSE. Subject to the terms and
conditions of this Agreement, BD hereby grants to AeroGen a non-exclusive,
worldwide, royalty-free license under the BD Technology solely to conduct its
assigned activities under the Technical Development Program with respect to
the Interface. AeroGen may grant sublicenses under the foregoing license only
with BD's prior written consent.
(b) AEROGEN COVENANT. AeroGen hereby covenants that it
shall not use the BD Technology for any purpose other than is expressly
permitted under this Section 8.2.
(c) BD COVENANT. BD acknowledges and agrees that it is
not BD's intent that AeroGen be prevented from developing, making, having
made, using, selling, offering for sale or importing the Product for use in
the Field in accordance with the terms of this Agreement, as the Product is
envisioned by the Parties as of the Effective Date, and as the Product may be
developed in accordance with the Specifications to be mutually agreed upon by
the Parties pursuant to this Agreement. Therefore, BD hereby covenants that
during the longer of (i) the term of this Agreement or (ii) the term of the
Supply Agreement, it shall not, and shall not permit its Affiliates and
sublicensees to bring suit against AeroGen, its Marketing Partner(s), its
successors-in-interest or their respective permitted sublicensees hereunder,
with respect to the infringement, misappropriation or other wrongful use of
any intellectual property right of BD in connection with the making, having
made, using, selling, offering for sale or importing of the Product for use
in the Field (as the Product is envisioned by the Parties as of the Effective
Date, and as the Product may be developed in accordance with the
Specifications to be mutually agreed upon by the Parties pursuant to this
Agreement) throughout the world by AeroGen, its Marketing Partner(s), its
successors-in-interest or their respective permitted sublicensees hereunder.
8.3 USE OF THE BD CARTRIDGE OUTSIDE OF THE FIELD. At AeroGen's
request, the Parties shall negotiate in good faith the commercially
reasonable terms under which BD would supply the BD Cartridge to AeroGen for
use outside the Field.
8.4 RESERVATION OF RIGHTS.
(a) BY AEROGEN. AeroGen reserves all rights under the
AeroGen Technology, except as otherwise expressly stated herein, including
without limitation the right to freely use, assign, transfer, grant licenses
thereunder and otherwise dispose of the AeroGen Technology for any purpose
consistent with the terms of this Agreement.
(b) BY BD. BD reserves all rights under the BD
Technology, except as otherwise expressly stated herein, including without
limitation the right to freely use, assign, transfer, grant licenses thereunder
and otherwise dispose of the BD Technology for any purpose consistent with the
terms of this Agreement.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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9. ROYALTIES
9.1 ROYALTIES.
(a) In partial consideration for the rights granted
hereunder, AeroGen shall pay BD a percentage of all Royalties received from each
Marketing Partner pursuant to the applicable Partnering Agreement (the "BD
Percentage"), in accordance with this Section 9.1. The BD Percentage with
respect to the Royalty paid by each Marketing Partner shall be calculated as
follows, except as otherwise set forth in Section 9.3 below:
(i) If the Royalty paid by such Marketing
Partner is less than or equal to [ * ] of Net Sales, then the BD Percentage
with respect to such Royalty shall be [*] of such Royalty. Solely for
purposes of example, if AeroGen receives a Royalty of [*], then the amount
due to BD with respect to such Royalty under this subsection (a) would be [*]
of Net Sales; and
(ii) If the Royalty paid by such Marketing
Partner is greater than [*] of Net Sales, then the BD Percentage with respect
to such Royalty shall be [*] of the first [ * ] of such Royalty, plus [*].
Solely for purposes of example, if AeroGen receives a Royalty of [*], then
the amount due to BD with respect to such Royalty under this subsection (a)
would be: [*] of Net Sales.
(b) Notwithstanding the foregoing, in no event will
the BD Percentage as calculated under this Section 9.1 be less than (i) [*]
of Net Sales by such Marketing Partner in the event that a Valid Claim exists
at the time of a sale of the Product in the country of sale, or (ii) [*] of
Net Sales by such Marketing Partner in the event that (A) no Valid Claim
exists at the time of a sale of the Product in the country of sale, and (B)
the Royalty paid to AeroGen on such sale is at a reduced rate because no such
Valid Claim exists.
(c) AeroGen's obligations under this Section 9.1 shall
expire concurrently with the last to expire obligation of a Marketing Partner to
pay Royalties to AeroGen.
9.2 PRE-PAID ROYALTIES. In the event that AeroGen receives any
Pre-Paid Royalties (as defined below), AeroGen shall pay to BD the BD
Percentage of such Pre-Paid Royalties as set forth in Section 9.1 in
accordance with Section 9.5 . As used in this Section 9.2, "Pre-Paid
Royalties" means any cash payment received by AeroGen from a Marketing
Partner pursuant to a Partnering Agreement, which payment or portion thereof
either (a) may later be credited by such Marketing Partner against royalties
due to AeroGen on Net Sales of the Product by such Marketing Partner pursuant
to such Partnering Agreement, or (b) is intended to be a lump-sum payment in
lieu of royalties that would otherwise be payable by such Marketing Partner
on sales of the Retail Product by such Marketing Partner pursuant to such
Partnering Agreement.
9.3 CALCULATION OF BD PERCENTAGE IN CERTAIN CIRCUMSTANCES.
(a) NO ROYALTY. In the event a Partnering Agreement
does not include payment of a Royalty, the BD Percentage shall be [*] of net
sales (as defined in subsection (d) below).
(b) NO MARKETING PARTNER. In the event AeroGen (or its
successor-in-interest) either alone or in combination with a Third Party
(E.G. a hired sales force), other than a Marketing Partner, commercializes
the Product, the BD Percentage shall be [*] of net sales (as defined in
subsection (d) below).
(c) ADJUSTMENTS TO BD PERCENTAGE. In the event that no
Valid Claim exists at the time of a sale of the Retail Product in the country
of sale, and (i) a Third Party is selling a competitive product for the
pulmonary delivery of the Drug for use in the Field in such country at such
time, and (ii) such competitive product is a copy of the Retail Product, then
the BD Percentage as calculated under subsections (a) and (b) above shall be
reduced by [ * ] with respect to such sale.
(d) DEFINITION OF "NET SALES." As used in this Section
9.3, "net sales" shall mean the gross sales of the Retail Product sold by
AeroGen and its Affiliates and its sublicensees to Third Party purchasers, less:
(i) sales returns (including for defective
products);
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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(ii) discounts given for volume purchases;
(iii) cost of distribution and freight, as billed
on the relevant invoice; and
(iv) sales, turnover applicable or value-added or
excise taxes (but not income taxes).
Sales between AeroGen, its Affiliates and its sublicensees shall not be
deemed a sale for the purposes of this subsection (d).
(e) TERM OF ROYALTY OBLIGATION. AeroGen's obligations
under subsections (a) and (b) above shall expire, on a country-by-country
basis, on the later of ten (10) years from the date of the first commercial
sale of the Product in such country, or the date of expiration of the last to
expire Patent in such country containing a Valid Claim.
9.4 UPFRONT PAYMENTS.
(a) In the event that a Partnering Agreement includes
an Upfront Payment (as defined below) to AeroGen, whether in addition to or
in lieu of a royalty on sales of the Product, AeroGen shall pay to BD [*] of
the amount of such Upfront Payment that is in excess of [ * ], within thirty
(30) days of the receipt by AeroGen of such Upfront Payment.
(b) As used in subsection (a) above, "Upfront Payment"
means a cash payment received by AeroGen in connection with the execution of
a Partnering Agreement, including such amounts designated as license fees or
technology access fees; PROVIDED THAT in no event shall an "Upfront Payment"
be deemed to include any (i) amounts intended for the support of further
research and development of the Product or the conduct of clinical trials for
the Product, (ii) milestone payments, (iii) amounts received in connection
with the purchase of equity, (iv) loans, (v) amounts allocable to the use or
license of technology other than technology directly related to the Product,
(vi) Pre-Paid Royalties (as defined in Section 9.2), or (vii) reimbursements
for amounts due to one or more Third Parties pursuant to a license agreement
between AeroGen and each such Third Party.
9.5 PAYMENT OF THE BD PERCENTAGE.
(a) AeroGen shall provide BD with a copy of a written
report of all Net Sales of the Retail Product as is provided by each Marketing
Partner for each calendar quarter following the first commercial sale of the
Product within fifteen (15) days of its receipt of such report. AeroGen shall
make payment to BD of the BD Percentage due BD on such Net Sales within ten (10)
days of receipt of any payments on sales of the Retail Product under Sections
9.1 and 9.3(a)-(c).
(b) In the event that a Marketing Partner, in breach
of the applicable Partnering Agreement, fails to pay to AeroGen any amount
due to AeroGen under such Partnering Agreement on Net Sales of the Product by
such Marketing Partner (the "Royalties Due"), and following AeroGen's (i)
good faith attempts to collect the Royalties Due, (ii) exhaustion of all
applicable contractual procedures under such Partnering Agreement with
respect to such Marketing Partner's failure to pay the Royalties Due, and
(iii) failure to timely initiate, or cessation of its pursuit of, any legal
or equitable remedies available to AeroGen with respect to such failure to
pay the Royalties Due, BD then shall have the right, but not the obligation,
to pursue all legal and equitable remedies available to it against such
Marketing Partner with respect to the Royalties Due as an intended third
party beneficiary under such Partnering Agreement. Any recovery by BD of the
Royalties Due shall first be applied to reimburse BD's reasonable costs and
expenses of such recovery; BD then shall pay to AeroGen any remaining amounts
less the BD Percentage of such amounts.
9.6 AUDITS. At the request (and expense) of BD, AeroGen shall
permit an independent certified public accountant appointed by BD and reasonably
acceptable to AeroGen,
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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at reasonable times and upon reasonable notice, but not more than once a year,
to examine only those records as may be necessary to determine the correctness
or completeness of any report or payment made under this Agreement, with respect
to any calendar year ending not more than two (2) years prior to BD's request.
Results of any such examination shall be (a) limited to information relating to
the Product, (b) made available to both Parties and (c) deemed Confidential
Information subject to Article 11. Such accountant shall not disclose any of
AeroGen's confidential or proprietary information. BD shall bear the full cost
of the performance of any such audit, unless such audit discloses a variance of
more than ten percent (10%) from the amount of the original report, royalty or
payment calculation. In such case, AeroGen shall bear the full cost of the
performance of such audit, as well as promptly paying any shortfall reported,
provided that BD shall promptly refund any overage to AeroGen. In addition,
AeroGen shall use commercially reasonable efforts to include a similar provision
in any Partnering Agreement so that upon the reasonable request of BD under this
provision, AeroGen will audit such Marketing Partner, at BD's expense.
10. INTELLECTUAL PROPERTY
10.1 OWNERSHIP.
(a) GENERAL. Each Party shall disclose to the other Party
all Development Technology. The rights of ownership in such Development
Technology shall be retained by the Party that employs or otherwise engages the
inventor. Inventorship shall be determined in accordance with the U.S. patent
laws. Accordingly, AeroGen shall own Development Technology invented solely by
employees of or persons otherwise engaged by AeroGen, BD shall own Development
Technology invented solely by employees of or persons otherwise engaged by BD,
and BD and AeroGen shall own jointly any Development Technology invented jointly
by employees of or persons otherwise engaged by BD and AeroGen, except as
follows:
(i) INHALER TECHNOLOGY. Development
Technology (including without limitation all Patents therein) relating solely
to the Inhaler, including without limitation its manufacture or use, whether
the same is invented jointly by employees of or persons otherwise engaged by
AeroGen and BD or solely by employees of or persons otherwise engaged by
AeroGen or BD, shall be owned solely and exclusively by AeroGen, and BD
hereby assigns all right, title and interest in such Development Technology
to AeroGen.
(ii) CARTRIDGE TECHNOLOGY. Development
Technology (including without limitation all Patents therein) relating solely
to the Cartridge, including without limitation its manufacture or use,
whether the same is invented jointly by employees of or persons otherwise
engaged by AeroGen and BD or solely by employees of or persons otherwise
engaged by AeroGen or BD, shall be owned solely and exclusively by BD, and
AeroGen hereby assigns all right, title and interest in such Development
Technology to BD.
(iii) Interface TECHNOLOGY. Development
Technology (including without limitation all Patents therein) relating solely
to the Interface, including without limitation its manufacture or use,
whether the same is invented jointly by employees of or persons otherwise
engaged by AeroGen and BD or solely by employees of or persons otherwise
engaged by AeroGen or BD ("Interface Technology"), shall be owned jointly by
BD and AeroGen.
(b) PREVIOUSLY OWNED TECHNOLOGY. AeroGen shall remain the
sole owner of the AeroGen Technology and any other intellectual property that it
owned as of the Effective Date. BD shall remain the sole owner of the BD
Technology and any other intellectual property that it owned as of the Effective
Date.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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10.2 PATENT MATTERS.
(a) BD PATENTS. BD shall have the sole right, but not the
obligation, to file, prosecute and maintain the BD Patents.
(b) AEROGEN PATENTS. AeroGen shall have the sole right,
but not the obligation, to file, prosecute and maintain the AeroGen Patents.
(c) JOINT PATENTS.
(i) Each Party shall be responsible for filing
and prosecuting patent applications covering Development Technology exclusively
owned by it and shall keep the other Party advised of the status of such patent
prosecution. However, with respect to Joint Technology, and except as described
in subsection (ii) below, the Parties shall mutually agree on whether and in
which countries to file and prosecute patent applications covering the Joint
Technology, and to maintain patents granted thereunder; with each Party having
an opportunity to review and comment on any such filings prior to submission and
to discuss the strategy for preparing, filing, prosecuting, maintaining and
defending of any such patent applications or resulting patents, and with the
Parties sharing equally any out-of-pocket costs and expenses incurred with
respect to such actions.
(ii) Notwithstanding subsection (i) above,
AeroGen shall have the first right, but not the obligation, to file and
prosecute patent applications covering the Interface Technology, and to
maintain patents granted thereunder. In the event that AeroGen fails to file
a patent application claiming a particular invention in the Interface
Technology in a particular country within one hundred and twenty (120) days
of its receipt of BD's written request, then BD shall have the right, but not
the obligation, to file and prosecute such patent application, and to
maintain patents granted thereunder. In any event, the Party that files and
prosecutes a patent application under this subsection (ii) shall provide the
other Party an opportunity to review and comment on any such filings prior to
submission and to discuss the strategy for preparing, filing, prosecuting,
maintaining and defending of any such patent applications or resulting
patents, and with the Parties sharing equally any out-of-pocket costs and
expenses incurred with respect to such actions.
(iii) Neither Party shall use any Confidential
Information solely owned by the other Party in filing and/or prosecution of any
patent application under this subsection (c) without such other Party's prior
written consent. In the event that a Party filing and/or prosecuting a patent
application under this subsection (c) wishes to use Confidential Information
jointly owned by the Parties in such filing and/or prosecution, such Party shall
give the other Party at least ten (10) days prior written notice thereof, and
shall consider any objections of such other Party reasonably and in good faith.
(d) COOPERATION. Upon request, each Party shall execute
and deliver to the other Party all descriptions, applications, assignments and
other documents and instruments necessary or proper to carry out the provisions
of this Agreement without further compensation; and the Parties shall cooperate
with and assist each other or their nominees in all reasonable ways and at all
reasonable times, including, but not limited to, testifying in all legal
proceedings,
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signing all lawful papers and in general performing all lawful acts reasonable,
necessary or proper, to aid the other Party in obtaining, maintaining, defending
and enforcing all lawful patent, copyright, trade secret, know-how and like
rights in the United States and elsewhere.
10.3 DEFENSE AND SETTLEMENT OF THIRD PARTY CLAIMS. If a Third Party
asserts that a patent or other intellectual property right owned by it is
infringed by a Party's activities under this Agreement, then such Party shall
immediately provide the other Party with notice of such claim and the related
facts in reasonable detail. The Party against whom the claim of infringement is
made shall have the right, but not the obligation, to control such defense, at
its expense. The Party not controlling such defense shall cooperate reasonably
with the Party controlling such defense and shall have the right to be
represented separately by counsel of its own choice. The Party that controls the
defense of a given claim shall also have the right to control settlement of such
claim, subject to Section 10.5.
10.4 INFRINGEMENT BY THIRD PARTIES. BD and AeroGen shall promptly
notify the other in writing of any alleged or threatened infringement of the
AeroGen Patents, BD Patents or Joint Patents relating to the manufacture, use or
sale or the Product of which they become aware. The Parties shall then proceed
as follows:
(a) AeroGen, or its Marketing Partner, shall have the
right, but not the obligation, to control the prosecution of any infringement
described in this Section 10.4 with respect to the AeroGen Patents.
(b) BD shall have the right, but not the obligation, to
control the prosecution of any infringement described in this Section 10.4 with
respect to the BD Patents.
(c) AeroGen shall have the right, but not the obligation,
to control the prosecution of any infringement described in this Section 10.4
with respect to Joint Patents, either itself or through its Marketing Partner.
In the event AeroGen decides not to control such prosecution, either itself or
through its Marketing Partner, BD then shall have the right, but not the
obligation, to control such prosecution. AeroGen may assign its rights under
this subsection (c) to a Marketing Partner with BD's prior written consent,
which consent shall not be unreasonably withheld or delayed.
(d) Each Party shall cooperate fully in any action
brought under this Section 10.4 by the other Party, including, if required to
bring such action, naming the other Party only if a court of competent
jurisdiction determines that the other Party is a necessary party to such
suit, in which event the Party shall hold the other Party free, clear and
harmless from any and all liability of such litigation, including costs,
expenses and attorneys' fees. In addition, each Party at all times shall have
the right to be represented separately in such action by counsel of its own
choice. Any recovery realized as a result of such litigation or related
settlement shall first be applied pro rata to reimburse the Parties' costs
and expenses of such litigation, and any remaining amounts shall be retained
by the Party bringing such action, except the Parties shall share equally any
remaining amounts recovered in connection with Joint Patents.
10.5 SETTLEMENTS. Neither Party may enter into any settlement or
consent judgment or other voluntary final disposition of a suit under this
Article 10 that would adversely affect the rights of the other Party without the
prior written consent of such Party.
11. CONFIDENTIALITY
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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11.1 TREATMENT OF CONFIDENTIAL INFORMATION. A Party receiving or
gaining access to Confidential Information, as defined below, (the "Receiving
Party") of the other Party (the "Disclosing Party") will (i) maintain in
confidence such Confidential Information to the same extent the Receiving Party
maintains its own proprietary information (but at a minimum the Receiving Party
shall use commercially reasonable efforts), (ii) not disclose such Confidential
Information to any Third Party without prior written consent of the Disclosing
Party, except for disclosures made in confidence to any Third Party pursuant to
a plan approved by the JDT or the Steering Committee, and (iii) not use such
Confidential Information for any purpose except as expressly permitted by this
Agreement. As used herein, "Confidential Information" shall mean all
Information, and any other information and materials, received by the Receiving
Party from the Disclosing Party pursuant to this Agreement. Without limiting the
generality of the foregoing, the AeroGen Technology shall be deemed Confidential
Information of AeroGen, the BD Technology shall be deemed Confidential
Information of BD, and the Joint Technology shall be deemed Confidential
Information of both Parties. Notwithstanding the foregoing, "Confidential
Information" shall not include any Information that:
(a) is at the time of receipt by the Receiving Party, or
later becomes, generally available to the public without restriction through no
breach of this Article 11; or
(b) was known to the Receiving Party, without obligation
to keep it confidential, prior to its receipt from the Disclosing Party; or
(c) is subsequently disclosed to the Receiving Party by a
Third Party lawfully in possession thereof without obligation to keep it
confidential; or
(d) has been independently developed by the Receiving
Party without the aid, application or use of the Disclosing Party's Confidential
Information.
11.2 PUBLICATIONS. Neither Party shall publish or present the
results of studies carried out under this Agreement without the opportunity for
prior review by the other Party. Each Party agrees to provide the other Party
the opportunity to review any proposed abstracts, manuscripts or presentations
(including verbal presentations) which relate to any Product at least thirty
(30) days prior to their intended submission for publication and agrees, upon
request, not to submit any such abstract or manuscript for publication until the
other Party is given a reasonable period of time to secure patent protection for
any material in such publication which it believes to be patentable. The Parties
agree to review and consider delay of publication and filing of patent
applications as appropriate. The Steering Committee will review such requests
and recommend subsequent action. Neither Party shall have the right to publish
or present Confidential Information of the other Party.
11.3 PUBLICITY. The Parties agree that the public announcement of
the execution of this Agreement shall be in the form of a press release mutually
agreed upon. Any other publication, news release or other public announcement
relating to this Agreement or to the performance hereunder, shall first be
reviewed and approved by both Parties, which approval shall not be unreasonably
withheld or delayed; provided, however, that any disclosure which is required by
law as advised by the disclosing Party's counsel may be made without the prior
consent of the other Party, although the other Party shall be given prompt
notice of any such
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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legally required disclosure and to the extent practicable shall provide the
other Party an opportunity to comment on the proposed disclosure.
11.4 TERMS OF THE AGREEMENT. The Parties agree that the material
terms of this Agreement will be considered Confidential Information of both
Parties. Notwithstanding the foregoing, each Party shall have the right to
disclose the material terms of this Agreement in confidence to any bona fide
potential investor, investment banker, acquirer, merger partner or other
potential financial partner (including without limitation a potential Marketing
Partner), and where reasonably practicable, shall obtain an adequate binder of
confidentiality consistent with the terms of this Agreement.
11.5 REQUIRED DISCLOSURE. If the Receiving Party is required by any
governmental agency, court or other quasi-judicial or regulatory body to provide
Confidential Information received under this Agreement, the Receiving Party
shall not be liable for such disclosure PROVIDED THAT the Receiving Party, as
promptly as reasonably possible, gives notice to the Disclosing Party of the
requirement in order that the Disclosing Party may contest the requirement to
provide such information and cooperates reasonably with the Disclosing Party in
such efforts. In the event that this Agreement is required to be filed with the
U.S. Securities Exchange Commission, the Party making such filing shall use
commercially reasonable, diligent efforts to avoid the public disclosure of as
much Confidential Information as possible, and to consult in good faith with the
other Party prior to making such filing.
11.6 SURVIVAL OF CONFIDENTIALITY. All obligations of
confidentiality and non-use imposed upon the Parties under this Agreement shall
continue indefinitely until such time as the information that is subject to such
obligations no longer comprises Confidential Information under one of the
exceptions set forth in Section 11.1.
12. REPRESENTATIONS AND COVENANTS
12.1 MUTUAL AUTHORITY. AeroGen and BD each represents and warrants
to the other that (a) it has the authority and right to enter into and perform
this Agreement, and (b) its execution, delivery and performance of this
Agreement will not conflict in any material fashion with the terms of any other
agreement to which it is or becomes a party or by which it is or becomes bound.
12.2 BD REPRESENTATIONS AND WARRANTIES. BD represents and warrants
to AeroGen that as of the Signing Date:
(a) To the best of BD's knowledge and belief, none of
the BD Technology has been misappropriated from any Third Party nor is the
result of any misuse of any Third Party's intellectual property;
(b) To the best of BD's knowledge and belief, there is
no action, suit or proceeding pending or that has been threatened, orally or
in writing, against BD, with respect to the infringement or misappropriation
of any Third Party's intellectual property rights through the use of the BD
Technology as contemplated hereunder; and
(c) To the best of BD's knowledge and belief, the
individuals listed on Exhibit 4 have signed BD's standard employment agreement,
a form of which is attached as Exhibit 5.
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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12.3 AEROGEN REPRESENTATIONS AND WARRANTIES. AeroGen represents and
warrants to BD that as of the Signing Date:
(a) To the best of AeroGen's knowledge and belief, the
practice of the inventions claimed in the AeroGen Patents as anticipated
herein will not infringe upon the intellectual property rights of any Third
Party;
(b) To the best of AeroGen's knowledge and belief,
none of the AeroGen Technology has been misappropriated from any Third Party
nor is the result of any misuse of any Third Party's intellectual property;
(c) To the best of AeroGen's knowledge and belief, all
inventors of the AeroGen Technology existing as of the Effective Date have
irrevocably assigned all right, title and interest in the AeroGen Technology
to AeroGen; and
(d) To the best of AeroGen's knowledge and belief,
there is no action, suit or proceeding pending or that has been threatened,
orally or in writing, against AeroGen, with respect to the infringement or
misappropriation of any Third Party's intellectual property rights through
the use of the AeroGen Technology as contemplated hereunder.
12.4 DISCLAIMER. EXCEPT AS SPECIFICALLY SET FORTH IN SECTION 4.7,
THIS ARTICLE 12, EXHIBIT 3, AND THE STOCK PURCHASE AGREEMENT, NEITHER PARTY
MAKES ANY WARRANTY CONCERNING ITS PATENT RIGHTS OR INFORMATION LICENSED UNDER
THIS AGREEMENT, INCLUDING WITHOUT LIMITATION THE VALIDITY OR SCOPE OF ITS PATENT
RIGHTS OR THAT PRODUCTS WILL BE FREE FROM INFRINGEMENT OF THE PATENT RIGHTS OF
THIRD PARTIES. EACH PARTY SPECIFICALLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO BOTH ITS TECHNOLOGY AND THE
PRODUCT.
13. TERM AND TERMINATION
13.1 TERM. This Agreement shall become effective on the Effective
Date and shall remain in effect until the later of (a) expiration of the last to
expire Valid Claim, or (b) expiration of all of AeroGen's payment obligations
under this Agreement unless terminated as earlier provided in Section 13.2 or
13.3 below. In addition, this Agreement may be extended by mutual written
consent of the Parties.
13.2 TERMINATION FOR OTHER THAN CAUSE.
(a) FOR FAILURE TO AGREE ON FINAL SPECIFICATIONS. Either
Party may terminate this Agreement upon thirty (30) days written notice to the
other Party in the event the Parties fail to agree upon the Final
Specifications, as set forth in Section 4.5(f).
(b) FAILURE TO SECURE A MARKETING PARTNER OR A QUALIFIED
SUPPLIER. Either Party may terminate this Agreement on thirty (30) days written
notice in the event that (a) neither Party secures a Marketing Partner, as set
forth in Section 6.3, or (b) neither Party secures a Qualified Supplier, as set
forth in Section 7.1.
(c) THIRD PARTY PATENTS. Either Party may terminate this
Agreement at any time in the event that such Party determines, in its sole,
reasonable, good faith judgment, that the BD Cartridge, Inhaler or Product
cannot be developed or commercialized under this Agreement or the Supply
Agreement because of a Third Party Patent that covers the manufacture, having
manufactured, use, importation, offering for sale or sale of the BD Cartridge,
Inhaler or Product in the United States, subject to the following:
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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(i) Prior to providing such notice, such
Party shall refer the issue to the JDT for its analysis of whether the
development, manufacture, use, importation, offer for sale or sale of the BD
Cartridge, Inhaler or the Product by a Party pursuant to this Agreement would
infringe such Patent, and if so, whether a license under such Patent can be
obtained on commercially reasonable terms (as determined in the sole
discretion of the Party required to obtain such license) and/or whether it is
commercially feasible to redesign the BD Cartridge, Inhaler and/or the
Product so that such Patent would not be so infringed, and shall recommend a
course of action to the Parties; and
(ii) Such Party shall take the JDT's
recommendation under good faith consideration, and if such Party still desires
to terminate this Agreement despite such recommendation and the other Party does
not desire such termination, then the Parties shall attempt to resolve such
dispute first through referral to the Steering Committee and then, if necessary,
pursuant to Section 15.2.
If the Parties are unable to resolve such issue as set forth in
subsections (i) and (ii) above, then such Party may terminate this Agreement
upon thirty (30) days written notice to the other Party.
(d) INABILITY TO DEVELOP A SAFE AND EFFECTIVE PRODUCT. In
the event that AeroGen and/or its Marketing Partner is unable to file an NDA for
the Product for use in the Field because the data from the Phase III clinical
trial for the Product will not support such an NDA, then either Party may
terminate this Agreement upon thirty (30) days written notice to the other
Party; PROVIDED THAT if the Parties disagree as to whether such data will
support such an NDA, such termination shall not be effective until such issue is
resolved by the Steering Committee, and, if necessary, through the dispute
resolution procedures set forth in Section 15.2.
(e) TERMINATION FOR CONVENIENCE. BD may terminate this
Agreement without cause and without explanation upon ninety (90) days written
notice to AeroGen; PROVIDED THAT in no event will such termination become
effective prior to the expiration of the Development Term.
(i) BD OBLIGATIONS. In the event of termination
by BD under this subsection (e), BD's only obligations and liabilities to
AeroGen with respect to such termination shall be to:
(A) Grant AeroGen a royalty-free,
fully paid-up, non-exclusive, sublicenseable, irrevocable license under the
BD Technology, [*] in the event BD has any rights thereto, and BD's interest
in the Joint Technology, limited to develop, use, make, have made, import,
offer for sale and sell the BD Cartridge for use with the Drug in the Field
world-wide to the extent legally permissible by BD and subject to any rights
or obligations placed upon BD; and
(B) Covenant (1) not to make, have
made, import, offer for sale and sell the BD Cartridge for use in the Field;
(2) not to make have made, import, offer for sale or sell any titratable
container and dispensing mechanism for the pulmonary delivery of any drug
which interfits and is compatible with, the Inhaler; and (3) not to
manufacture any Royalty-Bearing Cartridge (as defined below in subsection
(i)(F)) with the intent that such Royalty-Bearing Cartridge interfit and be
compatible with any AeroGen inhaler device, for use within or outside the
Field, nor to have manufactured, use in
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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Phase III clinical trials, sell and/or otherwise transfer to any Third Party,
directly or indirectly, either itself or on behalf of a Third Party, any such
Royalty-Bearing Cartridge;
(C) Promptly disclose to AeroGen all BD
Know-How necessary for the manufacture of the BD Cartridge, and upon AeroGen's
written request, BD shall provide diligent, commercially reasonable, good-faith
assistance and cooperation to enable a Third Party manufacturer to manufacture
and supply the BD Cartridge to AeroGen and its Marketing Partner(s) as rapidly
as possible;
(D) Provide AeroGen with any
dedicated tooling developed directly as a result of the Technical Development
Program necessary for making the BD Cartridge; and continue to manufacture
and supply to AeroGen those components of the BD Cartridge which require the
use of molding or tooling used for manufacture of the BD Cartridge as well as
other Products, for a period of twelve (12) months after the effective date
of each termination, at a price equal to [*]; and
(E) Pay to AeroGen one million
dollars ($1,000,000) within ten (10) business days of AeroGen's receipt of
such termination notice; and
(F) Pay to AeroGen a running royalty
equal to [*] of the net sales (as defined below) of any Drug-filled Cartridge
used in connection with the pulmonary delivery of the Drug in the Field sold
after the effective date of such termination by either BD or any licensee or any
other third party with which BD contracts and covered by a claim of an issued
and unexpired Patent as provided in subsection (ii)(B) below ("Royalty-Bearing
Cartridge"). As used herein, "net sales" shall have the meaning set forth in
Section 9.3(d), except that references to "AeroGen" therein shall be changed to
"BD".
(ii) TERM OF NON-COMPETE OBLIGATION & ROYALTY
OBLIGATION.
(A) BD's obligation under subsection
(i)(B) above not to make, have made, import, offer for sale and sell the BD
Cartridge for use in the delivery of Drug in the Field, or any Cartridge
which interfits with or is compatible with the Inhaler, or any
Royalty-Bearing Cartridge which interfits with any AeroGen inhaler shall
commence with the effective date of such termination and expire, on a
country-by-country basis, on the later of ten (10) years from the effective
date of such termination or the date of expiration of the last to expire
Patent in such country containing a claim of an issued and unexpired Patent
that (1) is included within the Development Patents, (2) claims the
manufacture, use or sale of the BD Cartridge, and (3) has not been held
unenforceable, unpatentable, or invalid by a court or other governmental
agency of competent jurisdiction, and that has not been admitted to be
invalid or unenforceable through reissue, disclaimer or otherwise; and
(B) BD's obligation under subsection
(i)(F) above to pay a royalty to AeroGen in connection with a Royalty-Bearing
Cartridge shall commence with and continue, on a country-by-country basis,
with the date of issuance of the first to issue until the date of expiration
of the last to expire Patent in such country containing a claim of an issued
and unexpired Patent that (1) is included within the Development Patents, (2)
claims the manufacture, use or sale of the BD Cartridge and the
Royalty-Bearing Cartridge, and (3) has not been held unenforceable,
unpatentable, or invalid by a court or other governmental agency of competent
jurisdiction, and that has not been admitted to be invalid or unenforceable
through reissue, disclaimer or otherwise.
(iii) AEROGEN'S RIGHTS OUTSIDE THE FIELD. In the
event of termination by BD under this Subsection (e), and notwithstanding
Section 8.3, AeroGen shall be granted the right and license by BD, to make, have
made, use, sell, offer for sale or import the BD Cartridge for the pulmonary
delivery of certain drugs (other than the Drug) as provided herein. Within
thirty (30) days following the effective date of termination of this Agreement
under this Section
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COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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13.2(e), AeroGen shall select no more than [ * ] specific drugs, i.e.,
distinct chemical entities with respect to which it desires a license under
this Subsection 13.2(e)(iii) and identify such drugs in writing to BD (the
"Initial Licensed Drugs"). Upon receipt of such notice of the Initial
Licensed Drugs by AeroGen, BD shall promptly inform AeroGen in writing as to
whether such drugs have not been exclusively licensed, exclusively optioned
or otherwise subject to any prior commitments to a Third Party and thus are
available for non-exclusive license grant to AeroGen (each, an "Available
Drug"). In the event any such identified drugs are not Available Drugs,
AeroGen shall have an additional thirty days in which to select a replacement
for each prior selected drug which was not an Available Drug. Such election
and notification period shall continue until AeroGen has identified [*]
Available Drugs, whereupon BD shall grant to AeroGen a royalty-bearing,
non-exclusive, worldwide license (with the right to sublicense to licensees
of the AeroGen technology only with respect to AeroGen's right to use, sell
and offer for sale the BD Cartridge), to make, have made, use, sell, offer
for sale or import the BD Cartridge for the pulmonary delivery of such
Available Drugs, including the right to modify the BD Cartridge to the extent
necessary to use it in connection with the pulmonary delivery of such
Available Drugs. In exchange for such license, AeroGen shall pay to BD a
royalty of [*] of the net sales of all BD Cartridges filled with Available
Drug. Notwithstanding the foregoing, such license shall expire and the rights
revert to BD, on an Available Drug by Available Drug basis, in the event
AeroGen or its sublicensee fails to both (i) [ * ] within [ * ] from the date
of such license grant and (ii) [ * ] within [ * ] from the date of such
license grant, with respect to a product incorporating such Available Drug.
BD further agrees that, in the event AeroGen desires to obtain a license
under the above described terms with respect to any other Available Drug
other than the initial [*] Available Drugs, AeroGen shall notify BD within
such thirty (30) day period described above, and each such license shall be
granted subject to the payment by AeroGen to BD of [*] at the time of grant
of such license, such fee to be creditable against royalties at the rate
provided above. As used in this Subsection (iii), "Net sales" shall be
defined as provided in Section 9.3(d). The royalty hereunder shall commence
with, and continue, on a country by country basis, with the date of issuance
of the first to issue until the date of expiration of the last to Expire
Patent in such country containing a claim of an issued and unexpired Patent
owned or controlled by BD and covering the manufacture, use, sale, offer for
sale or importation of the BD Cartridge.
13.3 TERMINATION FOR BREACH.
(a) If either Party believes that the other is in
material breach of this Agreement, then the non-breaching Party may deliver
notice of such breach to the other Party. In such notice the non-breaching Party
shall identify the actions or conduct that such Party would consider to be an
acceptable cure of such breach. The allegedly breaching Party shall have sixty
(60) days to either cure such breach or, if cure cannot be reasonably effected
within such 60-day period, to deliver to the other Party a reasonably acceptable
plan for curing such breach. Such a plan shall set forth a program for achieving
cure as rapidly as practicable. Following delivery of such plan, the breaching
Party shall use commercially reasonable diligent efforts to carry out the plan
and cure the breach, subject to the non-breaching Party's acceptance of such
plan.
(b) If the Party receiving notice of material breach
fails to cure such breach within the 60-day period, or the Party providing the
notice reasonably determines that the proposed corrective plan or the actions
being taken to carry it out is not commercially
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COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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practicable, the Party originally delivering the notice may terminate this
Agreement upon thirty (30) days advance written notice.
13.4 EFFECT OF TERMINATION. Except as provided in Section 13.2(e),
upon termination of this Agreement:
(a) All licenses granted by each Party to the other
pursuant to Article 8 shall terminate.
(b) Each Party shall, within sixty (60) days of such
termination, return all Confidential Information of the other Party in its
possession; PROVIDED, HOWEVER, that each Party may retain an archival copy of
such Confidential Information solely for determining the scope of its
confidentiality obligations hereunder.
13.5 BANKRUPTCY RIGHTS. In the event that this Agreement is
terminated or rejected by a Party or its receiver or trustee under applicable
bankruptcy laws due to such Party's bankruptcy, then all rights and licenses
granted under or pursuant to this Agreement by such Party to the other Party
are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the
Bankruptcy Code and any similar law or regulation in any other country, licenses
of rights to "intellectual property" as defined under Section 101(52) of the
Bankruptcy Code. The Parties agree that all intellectual property rights
licensed hereunder, including without limitation any patents or patent
applications of a Party in any country covered by the license grants under this
Agreement, are part of the "intellectual property" as defined under Section
101(52) of the Bankruptcy Code subject to the protections afforded the
non-terminating Party under Section 365(n) of the Bankruptcy Code, and any
similar law or regulation in any other country.
13.6 SURVIVAL. The following provisions shall survive termination
of this Agreement: Sections 7.3(c), 9.6, 12.4, 13.2(e), 13.4 and 13.6, and
Articles 10, 11, 14 and 15. Termination of this Agreement shall not relieve
either Party of any liability which accrued hereunder prior to the effective
date of such termination, nor preclude either Party from pursuing all rights and
remedies it may have hereunder or at law or in equity with respect to any breach
of this Agreement, nor prejudice either Party's right to obtain performance of
any obligation. The remedies provided under this Agreement are cumulative, and
are not exclusive of other remedies available to a Party in law or equity.
14. INDEMNIFICATION
14.1 BY AEROGEN. AeroGen hereby agrees to indemnify, defend and
hold harmless BD and its officers, directors, agents and employees from and
against any and all Losses from any Third Party claim resulting directly or
indirectly from (a) AeroGen's breach of any of its covenants or representations
and warranties hereunder, or (b) the negligence or wrongdoing of AeroGen, but
only to the extent such Losses do not result from the negligence or wrongdoing
of BD.
14.2 BY BD. BD hereby agrees to indemnify, defend and hold harmless
AeroGen and its officers, directors, agents and employees from and against any
and all Losses from any Third Party claim resulting directly or indirectly from
(a) BD's breach of any of its covenants or
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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representations and warranties hereunder, or (b) the negligence or wrongdoing of
BD, but only to the extent such Losses do not result from the negligence or
wrongdoing of AeroGen. Additional indemnification obligations of BD with respect
to its manufacture and supply of the BD Cartridge shall be set forth in the
Supply Agreement.
14.3 APPORTIONMENT. Consistent with the foregoing, in the event any
Losses from any Third Party relate specifically to the Interface, each Party
hereby agrees to indemnify, defend and hold harmless the other Party and its
officers, directors, agents and employees with respect to that portion of any
such Losses apportioned between the Parties based upon each Party's percentage
of all Royalties received from each Marketing Partner; provided, however, that
this Section 14.3 shall not apply to any such Losses arising from the
indemnifying Party's breach of any of its covenants or representations and
warranties hereunder.
14.4 NOTICE AND PROCEDURES. In all cases where one Party seeks
indemnification by the other under this Article 14, the Party seeking
indemnification shall promptly notify the indemnifying Party of receipt of any
claim or lawsuit covered by such indemnification obligation and shall cooperate
fully with the indemnifying Party in connection with the investigation and
defense of such claim or lawsuit. The indemnifying Party shall have the right to
control the defense, with counsel of its choice, provided that the
non-indemnifying Party shall have the right to be represented by advisory
counsel at its own expense. The indemnifying Party shall not settle or dispose
of the matter in any manner which could negatively and materially affect the
rights or liability of the non-indemnifying Party without the non-indemnifying
Party's prior written consent, which shall not be unreasonably withheld or
delayed.
15. MISCELLANEOUS
15.1 ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Supply
Agreement and the Stock Purchase Agreement sets forth the complete, final and
exclusive agreement between the Parties with respect to the subject matter
hereof, and all of the covenants, promises, agreements, warranties,
representations, conditions and understandings between the Parties hereto with
respect to such subject matter, and supersedes and terminates all prior
agreements and understandings between the Parties with respect to such subject
matter. There are no covenants, promises, agreements, warranties,
representations, conditions or understandings, either oral or written, between
the Parties with respect to such subject matter other than as are set forth
herein and therein. No subsequent alteration, amendment, change or addition to
this Agreement shall be binding upon the Parties unless reduced to writing and
signed by an authorized officer of each Party.
15.2 DISPUTE RESOLUTION. In the event of any controversy or claim
arising out of, relating to or in connection with any provision of this
Agreement, or the rights or obligations of the Parties hereunder, the Parties
shall try to settle their differences amicably between themselves by referring
the disputed matter to the Chief Executive Officer of AeroGen and the Vice
President and General Manager of BD Consumer Healthcare for discussion and
resolution. Either Party may initiate such informal dispute resolution by
sending written notice of the dispute to the other Party, and within ten (10)
days of such notice the Chief Executive Officer of AeroGen and the Vice
President and General Manager of BD Consumer Healthcare shall meet for attempted
resolution by good faith negotiations. If such personnel are unable to resolve
such
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COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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dispute within thirty (30) days of initiating such negotiations, each Party may
thereafter pursue any and all rights and remedies it may have at law or equity.
If mutually agreeable, the Parties may explore alternative forms of dispute
resolution, such as mediation and/or arbitration. Notwithstanding any other
provision of this Section 15.2, either Party may seek a temporary restraining
order or injunction against the other Party in the event of a breach of any
confidentiality obligation hereunder, or to prevent a Party's wrongful use of
any intellectual property hereunder.
15.3 FORCE MAJEURE. Both Parties shall be excused from the
performance of their obligations under this Agreement to the extent that such
performance is prevented by force majeure and the non-performing Party promptly
provides notice of the prevention to the other Party. Such excuse shall be
continued so long as the condition constituting force majeure continues and the
non-performing Party takes reasonable efforts to remove the condition. For
purposes of this Agreement, "force majeure" shall include conditions beyond the
control of the Parties, including without limitation, an act of God, voluntary
or involuntary compliance with any regulation, law or order of any government,
war, civil commotion, labor strike or lock-out, epidemic, failure or default of
public utilities or common carriers, destruction of production facilities or
materials by fire, earthquake, storm or like catastrophe; provided, however, the
payment of invoices due and owing hereunder shall not be delayed by the payor
because of a force majeure affecting the payor.
15.4 NOTICES. Any notice required or permitted to be given under
this Agreement shall be in writing, shall specifically refer to this Agreement
and shall be deemed to have been sufficiently given for all purposes if mailed
by first class certified or registered mail, postage prepaid, express delivery
service or personally delivered. Unless otherwise specified in writing, the
mailing addresses of the Parties shall be as described below.
For AeroGen: AeroGen, Inc.
1310 Orleans Drive
Sunnyvale, CA 94089
Attention: Chief Executive Officer
With a copy to: Cooley Godward LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306
Attention: Barbara A. Kosacz, Esq.
For BD: Becton, Dickinson and Company
1 Becton Drive
Franklin Lakes, NJ 07417-1866
Attention: VP and General Manager, BD Consumer Healthcare
With a copy to: Becton, Dickinson and Company
1 Becton Drive
Franklin Lakes, NJ 07417-1866
Attention: VP and General Counsel
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COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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15.5 LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY BE
LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, COLLATERAL, CONSEQUENTIAL, SPECIAL
OR PUNITIVE DAMAGES ARISING IN CONNECTION WITH THIS AGREEMENT.
15.6 CONSENTS NOT UNREASONABLY WITHHELD OR DELAYED. Whenever
provision is made in this Agreement for either Party to secure the consent or
approval of the other, that consent or approval shall not unreasonably be
withheld or delayed, and whenever in this Agreement provisions are made for one
Party to object to or disapprove a matter, such objection or disapproval shall
not unreasonably be exercised, unless expressly stated that such consent is to
be given in such Party's sole discretion.
15.7 INDEPENDENT CONTRACTORS. The status of the Parties under this
Agreement shall be that of independent contractors. Neither Party shall have the
right to enter into any agreements on behalf of the other Party, nor shall it
represent to any person that it has any such right or authority. Nothing in this
Agreement shall be construed as establishing a partnership or joint venture
relationship between the Parties.
15.8 MAINTENANCE OF RECORDS. Each Party shall keep and maintain all
records required by law or regulation with respect to the Product and shall make
copies of such records available to the other Party upon request.
15.9 UNITED STATES DOLLARS. References in this Agreement to
"Dollars" or "$" shall mean the legal tender of the United States of America.
15.10 NO STRICT CONSTRUCTION. This Agreement has been prepared
jointly and shall not be strictly construed against either Party.
15.11 ASSIGNMENT. Neither Party may assign or transfer this
Agreement or any rights or obligations hereunder without the prior written
consent of the other, except a Party may make such an assignment without the
other Party's consent to a successor-in-interest to substantially all of the
business assets of such Party to which this Agreement relates, whether in a
merger, sale of stock, sale of assets or other transaction. Any permitted
successor or assignee of rights and/or obligations hereunder shall, in a writing
to the other Party, expressly assume performance of such rights and/or
obligations. Any permitted assignment shall be binding on the successors of the
assigning Party. Any assignment or attempted assignment by either Party in
violation of the terms of this Section 15.11 shall be null and void and of no
legal effect. This Agreement shall be binding upon and shall inure to the
benefit of each Party's successors-in-interest and permitted assigns.
15.12 PERFORMANCE BY AFFILIATES. The Parties recognize that each
Party may perform some or all of its obligations under this Agreement through
one or more of its Affiliates, provided, however, that each Party shall remain
responsible for and shall guarantee such performance by its Affiliates and shall
cause its Affiliates to comply with the provisions of this Agreement in
connection with such performance. Each Party hereby expressly waives any
requirement that the other Party exhaust any right, power or remedy, or proceed
against an
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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Affiliate, for any obligation or performance hereunder prior to proceeding
directly against such Party.
15.13 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15.14 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
15.15 SEVERABILITY. If any one or more of the provisions of this
Agreement is held to be invalid or unenforceable, the provision shall be
considered severed from this Agreement and shall not serve to invalidate any
remaining provisions hereof. The Parties shall make a good faith effort to
replace any invalid or unenforceable provision with a valid and enforceable one
such that the objectives contemplated by the Parties when entering this
Agreement may be realized.
15.16 AMBIGUITIES. Ambiguities, if any, in this Agreement shall not
be construed against any Party, irrespective of which Party may be deemed to
have authored the ambiguous provision.
15.17 HEADINGS. The headings for each article and section in this
Agreement have been inserted for convenience of reference only and are not
intended to limit or expand on the meaning of the language contained in the
particular article or section.
15.18 NO WAIVER. Any delay in enforcing a Party's rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such Party's rights to the future enforcement of its
rights under this Agreement, excepting only as to an express written and signed
waiver as to a particular matter for a particular period of time.
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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IN WITNESS WHEREOF, the Parties have executed this Agreement in by
their proper officers as of the date and year first above written.
BECTON, DICKINSON AND COMPANY AEROGEN, INC.
By:/s/ Gary M. Cohen By: /s/ Jane E. Shaw
----------------------------------------- --------------------
Name: Gary M. Cohen Name: Jane E. Shaw
--------------------------------------- ------------------
Title: President - Worldwide Medical Systems Title: Chairman / Ceo
-------------------------------------- -----------------
EXHIBIT 1 CRITICAL SYSTEM SPECIFICATIONS
EXHIBIT 2 TECHNICAL DEVELOPMENT PLAN
EXHIBIT 3 SUPPLY AGREEMENT TERMS
EXHIBIT 4 POTENTIAL INVENTORS
EXHIBIT 5 FORM OF EMPLOYMENT AGREEMENT
EXHIBIT 6 DIAGRAM OF AEROGEN INHALER AND BD CARTRIDGE
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COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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EXHIBIT 1
CRITICAL SYSTEM SPECIFICATIONS
[*]
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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EXHIBIT 2
TECHNICAL DEVELOPMENT PLAN
[*]
[*]
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COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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EXHIBIT 3
SUPPLY AGREEMENT TERMS
1. PURCHASE AND SUPPLY OBLIGATIONS. AeroGen shall purchase its and its
Marketing Partners' requirements of BD Cartridges from BD, except as
provided herein in the event of a supply default. BD shall manufacture
and supply to AeroGen and its Marketing Partners their requirements for
the BD Cartridge in accordance with binding purchase orders provided by
AeroGen as described below.
2. EXCLUSIVITY.
During the term of the Supply Agreement, BD agrees that it shall not:
(i) manufacture, have manufactured, use in Phase
III clinical trials or sell and/or otherwise transfer to any Third
Party, directly or indirectly, either itself or on behalf of a Third
Party, the BD Cartridge for use in the Field;
(ii) manufacture, have manufactured, use in
Phase III clinical trials or sell and/or otherwise transfer to any
Third Party, directly or indirectly, either itself or on behalf of a
Third Party, any titratable container and dispensing mechanism for
the pulmonary delivery of any drug, which interfits and is
compatible with the Inhaler; and
(iii) manufacture, have manufactured, use in
Phase III clinical trials or sell and/or otherwise transfer to any
Third Party, directly or indirectly, either itself or on behalf of a
Third Party, any Development Patent Cartridge (as defined in Section
7.3(e) of the Development Agreement) with the intent that such
Development Patent Cartridge interfit and be compatible with any
AeroGen inhaler device, for use within or outside the Field.
3. TRANSFER PRICE.
BD will manufacture the BD Cartridge (unfilled with Drug) and
transfer the same to AeroGen for a [*] during the first year of
commercial sale; and for a [*] during the second year of commercial
sale.
Following the second full year following commercial sale of the
Retail Product and each subsequent year, provided that AeroGen
orders at least [*] BD Cartridges during such year, the Transfer
Price of the unfilled BD Cartridge shall be equal to BD's Cost of
Goods (as defined below) [ * ], but in no event greater than [*].
Any reduction in Cost of Goods of the unfilled BD Cartridge below [*]
shall be shared between BD and AeroGen as follows: (i) from [ * ]
to a Cost of Goods greater than or equal to [ * ], BD receiving [ * ]
and AeroGen receiving [ * ] of the benefit of such cost savings and
(ii) for any additional reduction in BD's Cost of Goods less than
[ * ], BD receiving [ * ] and AeroGen receiving [ * ]. For example,
should the Cost of Goods be reduced to [*], then BD would receive a
Transfer Price [ * ] for the unfilled BD Cartridge [ * ],
and, should the Cost of Goods be reduced to [ * ], then BD would
receive a Transfer Price of [ * ] for the unfilled BD Cartridge [ * ].
In the event the [*] or any subsequent year production volume is
less than [*] units, then the steady state transfer price shall be
the actual Cost of Goods [ * ] per unfilled BD Cartridge. In the
event BD sells or otherwise transfers to a Third Party any
Development Patent Cartridge filled with the Drug for use in the
Field, such [*] unit threshold shall be reduced proportionately.
In the event the titratable container of the BD Cartridge includes a
[*] shall be transferred to AeroGen as follows: (i) when BD's Cost
of Goods is equal to or greater than [ * ], at [*] and (ii) when
BD's Cost of Goods is less than [ * ], at BD's Cost of Goods [*].
For example, should the Cost of Goods equal [*], the transfer price
of [*] mechanism shall be [*].
"COST OF GOODS" means the cost of manufacturing, supplying and shipping
the BD
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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Cartridge, and shall consist of (i) in the case of products and/or
services acquired from Third Parties, payments to such Third Parties
(including, for example, charges by such Third Parties for an
allocation of overhead for production of components of the BD
Cartridge), and (ii) in the case of manufacturing services performed by
BD, including manufacturing services in support of Third Party
manufacturing, the actual unit costs of the manufacture, plus the
variances and other costs specifically provided for herein. Actual unit
costs shall consist of direct material and direct labor costs plus
manufacturing overhead attributable directly to the BD Cartridge, all
calculated in accordance with BD Financial Policies and Generally
Accepted Accounting Principles ("GAAP").
(a) As used herein, "direct material costs"
shall include the costs of materials (including waste), including
applicable taxes imposed thereon, shipping costs and customs duty and
charges levied by government authorities, and the costs of packaging
components.
(b) As used herein, "direct labor" shall include
the cost of employees engaged in direct manufacturing activities and
direct or indirect quality control and quality assurance activities who
are directly employed in the manufacture, testing and/or packaging of
the BD Cartridge.
(c) "Overhead attributable directly to the BD
Cartridge" shall include a reasonable and customary allocation of
indirect labor (not previously included in direct labor), a reasonable
allocation of administrative costs, and a reasonable allocation of
facilities costs (including but not limited to, electricity, water,
sewer, waste disposal, property taxes, and depreciation over the
expected life of buildings and equipment), unless otherwise agreed upon
by the Steering Committee. Such allocations shall be in accordance with
BD's general business practice, and GAAP. Attributable overhead shall
not include corporate overhead or plant start-up costs not otherwise
allocable to the manufacture of the BD Cartridge, nor shall
attributable overhead include costs associated with capacity not used
in the manufacture of the BD Cartridge. Actual costs shall exclude
costs associated with excess capacity not directly related to the BD
Cartridge.
(d) Cost of Goods shall also include
manufacturing variances and other attributable non-standard costs.
4. FORECASTS. In order to assist BD in its production planning, AeroGen
would submit to BD at least six (6) months prior to the commencement of
the market launch of the Product a non-binding forecast of its best
estimate of its purchase requirements of the BD Cartridge for the first
twelve (12) months of marketing of the BD Cartridge by month.
Thereafter, AeroGen would provide BD with an updated non-binding
rolling estimate of its purchase requirements for the BD Cartridge on a
monthly basis for the subsequent twelve (12) month period. Forecasts in
excess of BD's capacity would need to be mutually agreed upon between
BD and AeroGen.
5. ORDERS. Within thirty (30) days of signing a Supply Agreement,
AeroGen would submit to BD a binding purchase order for its
requirements for the BD Cartridge for the first [*] months of
marketing. Thereafter, AeroGen would provide BD with an updated binding
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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purchase order of its requirements for the BD Cartridge, each month, at
least [*] months before requested delivery ("Purchase Order"), and BD
would confirm all Purchase Orders within at least twenty (20) days of
receipt. In each Purchase Order for any month, AeroGen would state,
after consultation with BD, a reasonable delivery schedule for the BD
Cartridge to be delivered. BD would make a reasonable business effort
to comply with unplanned changes in Purchase Orders but would not be
required to accept orders for the BD Cartridge that are not within [*]
of the quantity forecasted subject to BD's capacity. Orders for the BD
Cartridge in excess of such amounts would be subject to acceptance by
BD in its reasonable discretion. However, BD would exercise reasonable
business efforts to meet any changes, including schedule and quantity
changes.
6. SHIPMENT AND DELIVERY. The BD Cartridge would be packed and shipped in
accordance with a shipping specifications to be mutually agreed to in
writing between the Parties. Each such shipment shall contain any
documents and/or information mutually agreed upon by the Parties in
connection with the manufacture and shipment of the BD Cartridge
(collectively, "Documentation"). The BD Cartridge would be shipped
F.O.B. point of origin, unless otherwise mutually agreed. Risk of loss
or damage would pass to AeroGen upon delivery to the common carrier.
AeroGen would specify in the applicable purchase order the destination
for each shipment. The quantity shipped may vary within [*] of the
confirmed order; provided that AeroGen shall only be required to pay
for those quantities actually shipped. No provision on AeroGen's
purchase order forms which may purport to impose different conditions
upon a Party, nor any other modifications of the Supply Agreement,
would be of any force or effect, unless in writing and signed by the
Parties claimed to be bound thereby. All Documentation required in
connection with a shipment would be forwarded to the attention of
AeroGen, unless otherwise specified in writing by AeroGen.
7. INSPECTION, REJECTION AND ACCEPTANCE.
(a) Within thirty (30) days of receipt of each shipment
of BD Cartridges, in addition to any usual and customary incoming
inspection including examination of the external appearance and
integrity of the packaging, and before any use of the BD Cartridge,
AeroGen or its designee, shall inspect each shipment of the BD
Cartridges, in accordance with a mutually agreed upon inspection
procedure. If AeroGen finds that the BD Cartridges do not conform to
the Final Specifications, AeroGen shall within ten (10) days after the
discovery of the non-conforming BD Cartridges, give BD written notice
of any claim setting forth the details of such non-conformity, or
otherwise shall be deemed to have accepted the BD Cartridges. BD in its
discretion shall either repair or replace any non-conforming the BD
Cartridge at BD's expense and at no cost to AeroGen. In accordance with
BD's request, any the BD Cartridge which does not conform to the
Specifications shall either be returned to BD or destroyed at BD's
expense.
(b) In the event the Parties disagree as to whether a
shipment of the BD Cartridges or a portion thereof conforms to the
Final Specifications, the rejected BD Cartridges would be submitted to
a mutually acceptable third party testing laboratory, which would
determine whether such BD Cartridges meet the Final Specifications. The
Parties agree that such testing laboratory's determination would be
final and
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COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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determinative. The Party against whom the testing laboratory rules
would bear the reasonable costs of the testing laboratory. If the
testing laboratory rules that the BD Cartridges meet the Final
Specifications, AeroGen would purchase the BD Cartridges at the
agreed-upon price, irrespective of whether BD has already replaced
same. If the testing laboratory rules that the BD Cartridges do not
meet the Final Specifications and the BD Cartridges were not replaced,
BD would credit AeroGen's account in an amount equal to the purchase
price of the rejected BD Cartridges, or refund that sum to AeroGen, as
appropriate.
8. TITLE. Title to the BD Cartridges shipped by BD for a given purchase
order would pass to AeroGen upon delivery to the common carrier. BD
shall warrant that upon such delivery, BD shall convey good title
thereto, free and clear from any lawful security interest or lien or
encumbrance.
9. INVOICES. BD would invoice AeroGen upon each shipment of the BD
Cartridge, and AeroGen would pay the full balance of each invoice in
U.S. Dollars, less any applicable credits for rejected goods or if
volumes rise so as to meet the next qualified price levels or charge
backs if volumes fall below quoted levels, including those within
thirty (30) days of delivery by BD to the common carrier. All such
invoices would be forwarded as specified by AeroGen.
10. INTELLECTUAL PROPERTY REPRESENTATIONS AND WARRANTIES.
(a) AeroGen represents and warrants that to the best of
its knowledge and belief the manufacture, use, sale, offer for sale or
importation of the Product will not infringe any valid and enforceable
claim of any third party patent.
(b) BD represents and warrants that to the best of its
knowledge and belief, the manufacture, use, sale, offer for sale or
importation of the BD Cartridge will not infringe any valid and
enforceable claim of any third party patent.
11. PRODUCT WARRANTIES AND DISCLAIMER.
(a) BD shall warrant to AeroGen that (a) all BD
Cartridges manufactured and supplied under the Supply Agreement (i)
will meet the Final Specifications, (ii) will be manufactured and
supplied in accordance with quality systems regulations and other
mutually agreeable standards, and (iii) will be free from defects in
materials and workmanship. Claims on account of quality, loss or damage
to the BD Cartridge will need to be made by AeroGen in writing within
thirty (30) days following delivery to BD, unless otherwise mutually
agreed to in writing between the Parties. AeroGen's sole and exclusive
remedy, and BD's sole obligation under the warranty (except with
respect to Latent Defects as defined in Sub-Section 15(c)) will be the
repair or replacement, at BD's sole option, of any defective BD
Cartridges. The warranty will not apply to (a) any BD Cartridge that
had been misused, neglected, altered, abused or used by a party other
than BD for any purpose other than the one for which it was
manufactured or (b) any damages or defects caused by unauthorized
repair or use of unauthorized parts or components. If no claim is made
by AeroGen within the thirty (30) day period of time, the BD Cartridge
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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will be deemed acceptable to AeroGen, and BD will no longer have any
liability with respect thereto.
(b) ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, ARE HEREBY DISCLAIMED. IN ADDITION, BD EXPRESSLY DISCLAIMS
ANY REPRESENTATIONS AND WARRANTIES REGARDING THE PERFORMANCE, SAFETY
AND EFFICACY OF THE BD CARTRIDGE IN COMBINATION WITH THE INHALER OR
ANY OTHER CARTRIDGE OR COMPONENTS.
12. CHANGES TO THE BD CARTRIDGE.
BD shall not make any material or process changes that would
affect any regulatory approvals obtained with respect to the BD
Cartridge. Notwithstanding the foregoing, BD may make such changes if
they would not have any material effect on the BD Cartridge or the
Product, solely to the extent permitted by QSR and other applicable
laws and regulations.
13. PRODUCT DISCONTINUANCE AND SUPPLY DEFAULT.
In the event BD wishes to discontinue the manufacture and
supply of the BD Cartridge, BD shall provide AeroGen with at least [*]
months prior, written notice of discontinuation. In addition, BD agrees
to continue to supply AeroGen with the BD Cartridge for at least [*]
months from the date of such notice, during which period of time, BD
shall provide AeroGen with diligent, commercially reasonable,
good-faith assistance and cooperation to enable a Third Party
manufacturer to manufacture and supply the BD Cartridge to AeroGen and
its Marketing Partner(s) as rapidly as possible.
14. REGULATORY MATTERS.
(a) AeroGen shall be responsible, at its expense, for
diligently filing and prosecuting any authorizations or approvals for
the commercial manufacture and sale of the Product, including the BD
Cartridge, and shall diligently respond to any comments or concerns
raised by such regulatory authorities. AeroGen shall provide BD with
any registration dossier or materials, and any amendment thereof, that
are in its possession or control in respect of the Product, including
the BD Cartridge. In addition, AeroGen shall promptly notify BD of an
inquires from or comments or concerns raised by any regulatory
authorities with respect to the Product or the BD Cartridge.
(b) BD shall have full access and the right of reference
to the other AeroGen's regulatory filings and approvals, but only to
the extent necessary and appropriate for the filing of any necessary
regulatory submissions.
15. INSPECTIONS AND AUDITS.
(a) Upon written request to BD, AeroGen shall have the
right to have representatives visit BD's manufacturing facilities
during normal business hours to
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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review BD's manufacturing operations and assess its compliance with QSR
and quality assurance standards and to discuss any related issues with
BD's manufacturing and management personnel.
(b) BD shall notify AeroGen within two (2) business days
of any planned inspection by any regulatory agency which may have an
impact on the manufacturing of the BD Cartridge. BD shall forward to
AeroGen copies of all regulatory communications with respect to the BD
Cartridge within two (2) business days of receipt of such
communications by BD.
16. ADVERSE EVENT REPORTING AND RECALLS.
(a) The Parties shall, throughout the duration of the
Supply Agreement, notify one-another within two (2) business days after
receiving any information concerning any complaint, injury, or
sensitivity reaction associated with the use of the Product or the BD
Cartridge, whether or not considered related to the Product or the BD
Cartridge. The information shall be collected by the recipient of such
information in accordance with a Standard Operating Procedure to be
agreed to by the Parties and provided to the other in the form of a
report. The report shall indicate if the performance of the Product or
the BD Cartridge contributed to the event. The Parties shall require
any third party under contract with either of the Parties to provide
such information to both Parties on an expedited basis, the receipt of
which information shall trigger the notification requirements set forth
in this Section. If the adverse event is serious (including an adverse
event that is fatal or life-threatening, is permanently or
significantly disabling, or requires or prolongs in-patient
hospitalization), then the recipient of such information shall use its
best efforts to notify the other Party within one (1) business day
after receipt of such information. In addition, moderately severe
adverse events requiring medical intervention such as significant
unexplained hypoglycemia, allergic bronchospasms requiring emergency
room treatment, new abnormal liver function tests or abnormal CBC shall
be reported to the other Party within three (3) business days. All
notifications pursuant to this Section shall be by facsimile with
confirmation copy by Certified or Registered mail and shall be written
out on designated adverse event forms to be agreed to by the Parties.
(b) If customer complaints other than those described
above are received by either Party regarding the performance of the
Product or the BD Cartridge, the Parties will exchange this information
within five (5) business days after receipt of such information.
Monthly reports summarizing any complaints or defects relating to the
performance of the Product or the BD Cartridge shall be exchanged by
the Parties. Efforts will be made to retrieve defective Product or the
BD Cartridge and return them in the case of the Inhaler to AeroGen and
in the case of the BD Cartridge to BD. All such reports and information
obtained by either Party or exchanged under this Section shall be
treated as Confidential Information in accordance with the terms of the
Insulin Inhaler Development Agreement.
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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(c) AeroGen shall notify BD promptly if any Product or
any BD Cartridge manufactured by BD hereunder is the subject of a
recall or correction, and AeroGen and/or its designee shall have the
sole responsibility for the handling and disposition of such recall or
correction. In the event that a recall is required during the
shelf-life of the BD Cartridge as a result of any non-compliance of the
BD Cartridge with the Final Specification and if such non-compliance
was not reasonably discoverable by AeroGen with the inspection
performed pursuant to Section 6 in accordance with the mutually agreed
inspection procedure (hereinafter referred to as "Latent Defect"), and
AeroGen recalls either the Product or the BD Cartridge primarily due to
such Latent Defect of the BD Cartridge, then, in addition to repair or
replacement, BD shall reimburse AeroGen for the reasonable costs and
expenses associated with such recall or correction, but only to the
extent that the foregoing costs and expenses are directly attributable
to BD's breach of its warranties under Sub-Section 10(a)(i). In all
other events of a recall, all costs and expenses incurred in connection
with such recall or correction shall be borne by AeroGen. AeroGen
and/or its designee shall serve as the sole point of contact with the
FDA or other applicable regulatory authority concerning any recall or
correction with respect to the Product and the BD Cartridge.
17. INDEMNITIES.
(a) INDEMNIFICATION BY AEROGEN. AeroGen shall indemnify,
defend (subject to Sub-Section (e) below) and hold BD harmless from and
against any and all claims, demands, actions, suits, causes of action,
damages and expenses (including but not limited to expenses of
investigation, settlement, litigation and reasonable attorneys' fees
incurred in connection therewith) which are hereafter made, sustained
or brought against BD by any third party (i) for the recovery of
damages to personal property or bodily injury, illness or death of any
third party caused or alleged to be caused by the use, distribution, or
sale of the Retail Product, or the BD Cartridge by AeroGen or its
sublicensees, or (ii) arising out of or resulting from allegations
against BD that the manufacture, use, offer for sale, sale or
importation of the Inhaler infringes a third party patent or trademark
to which BD has no ownership or license rights thereunder, unless in
each such case, such claims, demands, actions, suits, causes of action,
damages or expenses allegedly occurred as a result of BD's negligence,
willful misconduct, or breach of its representations and warranties
contained herein.
(b) INDEMNIFICATION BY BD. BD shall indemnify, defend
(subject to Sub-Section (e) below) and hold AeroGen harmless from and
against any and all claims, demands, actions, suits, causes of action,
damages and expenses (including, but not limited to expenses of
investigation, settlement, litigation and reasonable attorneys' fees
incurred in connection therewith) which are hereafter made, sustained
or brought against AeroGen by any third party (i) to the extent arising
out of or resulting from BD's negligence, willful misconduct or breach
of its representations and warranties contained herein, or (ii) arising
out of or resulting from allegations against AeroGen that the
manufacture, use, sale, offer for sale or importation of the BD
Cartridge infringes a third party patent or trademark to which AeroGen
has no ownership or license rights thereunder; provided, unless such
claims, demands, actions, suits, causes of action,
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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damages or expenses allegedly occurred as a result of AeroGen's
negligence, willful misconduct, or breach of its representations and
warranties contained herein.
(c) LIMITATION OF LIABILITY. Under no circumstances
shall either Party be liable to the other Party for any special,
indirect, consequential or incidental damages, including, but not
limited to, loss of profits or revenues or damage to or loss of
other products, property and/or equipment incurred by such Party or
AeroGen's Marketing Partner or Qualified Supplier, or any other
party seeking indemnification hereunder. In addition, BD shall not
be liable for any damages arising or resulting from any failure of
BD or AeroGen to warn, or to adequately warn, against the dangers of
the BD Cartridge or failure of BD or AeroGen to instruct or to
adequately instruct, about the safe and proper use of the BD
Cartridge, or any damages arising or resulting from the filling
and/or assembly of the BD Cartridge by AeroGen or any third party.
(d) APPORTIONMENT. Consistent with the foregoing, in the
event any and all such claims, demands, actions, suits, causes of
action, damages and expenses (including, but not limited to expenses of
investigation, settlement, litigation and reasonable attorneys' fees
incurred in connection therewith) relate to the Interface, each Party
hereby agrees to indemnify, defend and hold harmless the other Party
and its officers, directors, agents and employees with respect to that
portion of any such claims, demands, actions, suits, causes of action,
damages and expenses (including, but not limited to expenses of
investigation, settlement, litigation and reasonable attorneys' fees
apportioned between the Parties based upon each Party's percentage of
all Royalties received from each Marketing Partner.
(e) PROCEDURES. SHOULD A PARTY (THE "INDEMNIFIED PARTY")
INTEND TO CLAIM INDEMNIFICATION HEREUNDER, IT SHALL PROMPTLY NOTIFY
THE OTHER PARTY ("INDEMNIFYING PARTY") IN WRITING OF ANY LOSS, CLAIM,
DAMAGE, LIABILITY OR ACTION IN RESPECT OF WHICH SUCH INDEMNIFIED PARTY
INTENDS TO CLAIM SUCH INDEMNIFICATION, AND THE INDEMNIFYING PARTY SHALL
BE ENTITLED, BUT NOT OBLIGATED, TO ASSUME THE DEFENSE THEREOF WITH
COUNSEL SELECTED BY THE INDEMNIFYING PARTY, AND THE INDEMNIFIED PARTY,
INCLUDING ITS EMPLOYEES AND AGENTS, SHALL COOPERATE FULLY WITH
INDEMNIFYING PARTY AND ITS LEGAL REPRESENTATIVES IN THE INVESTIGATION
AND DEFENSE OF ANY ACTION, CLAIM OR LIABILITY COVERED BY THIS SECTION.
(f) EXCEPT AS PROVIDED HEREIN, BD MAKES NO OTHER
WARRANTIES AND ASSUMES NO OTHER OBLIGATIONS, EXPRESS OR IMPLIED, WITH
RESPECT TO THE BD CARTRIDGE OR THE PRODUCT. ALL OTHERS ARE HEREBY
DISCLAIMED BY BD.
18. TERM. The term of the Supply Agreement would be for an initial period
of five (5) years. The Supply Agreement would be automatically renewed
for additional two (2) year periods unless either Party provides the
other Party with written notice of its desire not to renew the Supply
Agreement at least eighteen (18) months before the expiration of the
term of such Supply Agreement or any renewal thereof.
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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EXHIBIT 4
POTENTIAL INVENTORS
[*]
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EXHIBIT 5
FORM OF STANDARD EMPLOYMENT AGREEMENT
EMPLOYEE AGREEMENT
BECTON DICKINSON
EMPLOYEE AGREEMENT
NOTE: YOU MAY WANT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS EMPLOYEE
AGREEMENT.
In consideration of my employment by Becton, Dickinson and company, including
any and all of its divisions, affiliates and subsidiaries (the "Company") and
of the compensation paid to me, I hereby agree as follows
1. I shall faithfully and honestly perform those duties which are assigned
to me and shall carefully, to the best of my ability, follow the
reasonable, lawful directions of my supervisors.
2. I agree not to discuss or use, either during my employment or
thereafter, any proprietary, business or information of the Company,
including but not limited to any confidential or unpublished
information, business plan, financial information, trade secret,
computer program, design, product, process, procedure, formulation,
research, improvement, work or authorship, or the like, whether of a
technical or non-technical nature, relating to the business of the
Company or to any activities as an employee of the Company which was
obtained or acquired by me during the term of any employment with the
Company ("Confidential Information"), unless authorized beforehand in
writing by the Company, except that I may use, but not disclose, such
information when necessary in the performance of any duties for the
Company. Notwithstanding the foregoing, Confidential Information shall
not include any information which is in the public domain or comes into
the public domain not as a result of any breach by me of any of the
terms or provisions of this agreement.
3. I hereby assign, and agree to assign, to the Company, without further
compensation, all my right, title, and interest in any idea, invention,
discovery, improvement, copyright, and the like (sometimes hereunder
called "Inventions"), relating to its business or to duties of my
employment conceived or made by me, alone or with others, at any time
during employment, whether or not during working hours, and whether or
not patentable, or copyrightable, and I shall have a continuing
obligation to execute and applications, assignments, and the like, which
the Company requires to secure, maintain, and protect its interests.
These obligations shall also bind my heirs and legal representatives.
4. I hereby assign, and agree to assign, to the Company without further
compensation, all my right, title, and interest in any innovation
relating to Confidential Information arising because of my employment
with the Company, conceived or made by me, alone or with others, at any
time for a period of one (1) year after employment whether or not
permissible, and I shall promptly disclose such to the Company and
shall execute any applications, assignments, and the like, which the
Company requires to maintain and protect its interests. Conception of
any of the foregoing during the one (1) year period shall be presumed to
have occurred during employment at the Company, if such conception is
based on or derived from knowledge gained from any employment at the
Company. These obligations shall also bind any heirs and legal
representatives.
5. I shall make and maintain for the Company adequate and written records
of all innovations.
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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In addition, I shall have a continuing obligation to sign any papers and
otherwise assist the Company, at its expense, during and subsequent to
any employment as needed to obtain statutory coverage and recognition
such as design representations, patents, inventor certification, and the
like and to otherwise secure, maintain and protect the Company's
interest. These obligations shall also be binding upon my heirs and
legal representatives.
6. With respect to works of authorship which I make and which are related
to my activities as an employee or to the business of the Company, I
agree that any such work shall be a work for hire, shall be the property
of the Company, and that the Company shall have the right to register
any such work as the author and owner of the copyright. I agree to sign
such documents as may be required by the Company in order to assure that
it shall be the owner of the copyright. To the extent that I shall be
held to retain any right in such works, I agree to and hereby do sell,
assign and transfer to the Company the entire right, title and interest
in and to such work including the copyright and any registration
thereof, further including the right to register and renew the copyright
and to sue for any past infringements, this assignment, sale and
transfer being for all the term of the copyright and any term thereafter
during which such work may be entitled to copyright, all without any
further compensation.
7. Upon termination of my employment with the Company, I shall promptly
deliver to the Company all documents, including such things as drawings,
research, notebooks, reports, customer and vendor lists, all samples,
all prototypes, all designs, and like material, and everything else
owned by the Company or to which the Company is entitled and which is in
my possession or under my control.
8. In the event of a breach or a threatened breach of the preceding
provisions, the Company shall, in addition to the remedies provided by
law, have the right and remedy to have such provisions specifically
enforced by any court having jurisdiction, it being acknowledged and
agreed that any breach of any of these provisions will cause irreparable
injury to the Company.
9. All rights reserved by me, including innovations, works of authorship
and the like conceived or obtained by me prior to my employment with the
Company, and therefore excluded from this Agreement, are described on
the back of this agreement. I am not aware of any obligations to others,
including other employers or clients, which would conflict with any
provisions of this agreement.
10. This agreement supercedes and replaces any prior or existing understanding
between the Company and me relating generally to the same subject matter.
11. If any of the above numbered provisions, in whole or in part, of this
agreement is declared void or unenforceable by a court of competent
jurisdiction, the remainder of the agreement or the remainder of such
provisions, shall remain in full force and effect. If any provision of
this agreement is so broad as to be unenforceable, such provision shall
be interpreted to be only so broad as to be enforceable.
12. The Law of the State of New Jersey shall govern this agreement. The
entire agreement has been read and understood by me.
Division Employee Signature
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
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Department Employee's Name - Typewritten
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Location Dated Employee's Social Security Number
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
46.
<PAGE>
EXHIBIT 6
AEROGEN INHALER WITH BD CARTRIDGE
[*]
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
47.
